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ACC AM Aug 26
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(ACC Blog) On The Road With #ACCaugust – Updated 8/25/15
Aug 25, 2015 | American Chemistry Matters
During the August recess, our state affairs and political mobilization teams will fan out across the country to create opportunities to further our industry’s advocacy goals in a grassroots initiative we’re calling #ACCaugust. Through plant tours, in-district meetings, and industry roundtable discussions, we will meet ...http://blog.americanchemistry.com/ -
(ACC Mentioned) Chemical Producers Signal Potential Slowdown in Materials, Industrials ETFs
Aug 25, 2015 | ETF Trends
By Tom Lydon
Materials sector exchange traded funds could stuck in a rough patch as chemical industry activity slows. The Chemical Activity Barometer (CAB), which tracks production, inventory and selling prices of numerous chemicals, along with prices of chemical stocks, only rose 1.8% in August year-over-year, the slowest pace since 2012... -
(ACC Mentioned) US Chem Index Slips Into Bear Market
Aug 25, 2015 | ICIS News
By Al Greenwood
An index measuring US chemical stocks slipped into a bear market on Tuesday as worries about a slowdown in China continue to roil the industry. The Dow Jones US Chemicals Index fell to 447.54, down nearly 21% from its 52-week high of 565.65. On Tuesday, stock markets ended lower after a massive rally fell through. -
(ACC Mentioned) US August PP Drops As Producers Gain Margin
Aug 25, 2015 | ICIS News
By Lane Kelley
US August polypropylene (PP) dropped 1 cent/lb as producers continued to gain margin as feedstock propylene continues to fall, sources said on Tuesday. Market talk favoured a rollover last week, but the continuing downturn in global markets and plunging propylene led to a slight PP price cut. Feedstock propylene fell 3.5 cents/lb in August. -
(ACC Mentioned) US PE July Inventories Up For All Major Grades
Aug 25, 2015 | ICIS News
By Lane Kelley
US polyethylene (PE) inventories in July rose for all three major grades, according to industry data released on Tuesday. The figures from the American Chemistry Council (ACC) confirmed initial estimates showing that inventories rose during the month and that supply has loosened. -
(ACC Mentioned) Chemical Makers Signal U.S. Manufacturing to Slow
Aug 25, 2015 | Bloomberg
By Anthony Feld
Chemical industry activity is slowing, which isn't a good sign for the future of U.S. industrial output. One of the big questions surrounding the outlook for the U.S. expansion is how slowing growth abroad and a strong dollar will affect U.S. exports and manufacturing. The Federal Reserve's index of industrial... -
Study Links Three Phthalates To Miscarriage
Aug 26, 2015 | Chemical Watch
By Philip Lightowlers
Chinese researchers have found that levels of three urinary phthalate metabolites in pregnant women are associated with a higher risk of miscarriage. The paper – published in Environmental Science and Technology – was written by a team from Peking University and the associated People’s Hospital in Beijing. -
Neurological, Immune Harm May Trigger Chemical Controls
Aug 26, 2015 | BNA Daily Environment Report
By Pat Rizzuto
Chemicals that permanently harm the neurological or immune systems may qualify as substances of very high concern under the European Union's REACH regulation. Some substances showing severe immunotoxic or neurotoxic effects following single or repeated exposure could present an “equivalent level of concern” as carcinogens,,, -
Big Electronics Brands Lead Conflict Minerals Reporting Efforts
Aug 25, 2015 | Chemical Watch
By Kelly Franklin
Electronics giants Microsoft, Blackberry and Intel have the highest levels of compliance with “conflict mineral” reporting, based on required and recommended metrics. This is among the findings of a report produced for consultancy Assent by Tulane University. The benchmarking study evaluated the 1,267 public “conflict mineral” ... -
Animas Spill Spurs Petition for Mining Law Changes
Aug 26, 2015 | BNA Daily Environment Report
By Tripp Baltz
Local governments, Native American tribes and environmental groups have filed a petition with the Interior and Agriculture departments calling for changes to mining regulations in the aftermath of the Animas River spill. The petition filed Aug. 25 seeks four changes to federal mining regulations to help protect Western water... -
GOP Lawmaker Knocks EPA Over Mine Spill Response
Aug 25, 2015 | The Hill - E2 Wire
By Devin Henry
The chairman of the House Committee holding the first hearing into this month’s Environmental Protection Agency (EPA) mine spill is hitting the agency for not handing over documents related to the incident. Rep. Lamar Smith (R-Texas) said “it is disappointing, but not surprising” that the EPA didn’t provide... -
Rep. Smith Says EPA Not Cooperating With Spill Probe
Aug 25, 2015 | E&E News PM
By Manuel Quiñones
House Science, Space and Technology Chairman Lamar Smith (R-Texas) today blasted U.S. EPA for failing to turn over documents related to agency actions that caused a polluted mine water spill in Colorado this month. On Aug. 10, Smith asked EPA to turn over information concerning water tests following the Gold King... -
Fracking Is Our Clean Power Plan
Aug 25, 2015 | Forbes
By Jacki Pick
As environmental groups gather to strategize maximum mileage from the president’s “Clean Power Plan,” they would do well to remember what they might regard as the greatest environmental triumph of this century: The U.S. already leads the world in carbon emissions reduction, with emissions down 26% since the shale boom... -
Give Us the Whole Truth About Fracking
Aug 25, 2015 | The Huffington Post - Green Blog
By Marc Ross
The facts are slippery when it comes to the great fracking debate in America, where truth, lies, and spin often collide and end up leaving us confused and dizzy. And sometimes we sadly get treated to the perfect mix of manipulation of fact and fiction, courtesy of the powers that be, that leaves us even more dazed and confused than we were... -
Sen. Menendez Defends Stance On Exports, Blasts New Ad
Aug 25, 2015 | E&E News PM
By Hannah Northey
New Jersey Democratic Sen. Bob Menendez shot back today at a new campaign that accuses him of wavering on whether to lift a 40-year-old ban on crude exports, arguing that his position hasn't changed. "The senator's record is crystal clear on this issue; he is a strong advocate for using U.S. resources... -
Greens Rally At Kerry's Home Over Alberta Clipper Expansion
Aug 25, 2015 | E&E News PM
By Manuel Quiñones
Dozens of environmental activists rallied outside Secretary of State John Kerry's Washington, D.C., home this morning to protest the administration's decision to allow Enbridge Inc. to transport more oil across the U.S. border with Canada. While the State Department scrutinizes Enbridge's request to expand its so-called Alberta Clipper... -
Troubled California Oil Field Regulator Faces Major Overhaul
Aug 25, 2015 | SF Gate
By David R. Baker
California’s embattled oil field regulatory agency will undergo a sweeping overhaul following revelations that the office for years let petroleum companies dump their waste water into federally protected aquifers. The state’s Division of Oil, Gas and Geothermal Resources will reorganize its staff into teams focused... -
Obama's Arctic Trip Seen as Pivotal for Climate Action
Aug 26, 2015 | BNA Daily Environment Report
By Andrea Vittorio
President Barack Obama's upcoming trip to the Arctic area, which is warming faster than any other place on Earth, could be a turning point for climate action, a former State Department official said Aug. 25. “The image of the president of the United States” standing by melting glaciers in Alaska “is one that may have an... -
In the Race for Arctic Energy, the U.S. and Russia Are Polar Opposites
Aug 25, 2015 | The Wall Street Journal
By Gary Roughead
In his message to the American people about his visit to Alaska next week, President Obama said “The alarm bells are ringing, and as long as I’m president, America will lead the world to meet this threat before it’s too late.” He was talking about climate change. But his words could just as well apply to the strategic moves that are being ... -
Charles Koch Blasts Barack Obama
Aug 25, 2015 | PoliticoPro
By Mike Allen
Charles Koch hit back at criticism of “the Koch brothers” during President Barack Obama’s energy speech in Las Vegas earlier this week, saying he was “flabbergasted” by the attack and charging that Obama made the dig as a favor to Senate Minority Leader Harry Reid (D-Nev.), who appeared with him. -
Lawsuits Seeking Stay of Clean Power Plan to Proceed
Aug 26, 2015 | BNA Daily Environment Report
By Anthony Adragna and Andrew Childers
A federal appeals court consolidated the two most recent challenges seeking an immediate stay of the Environmental Protection Agency's Clean Power Plan and ordered the agency to respond by Aug. 31 to the lawsuits (In re West Virginia, D.C. Cir., No. 15-1277, order filed 8/24/15). -
EPA Chief Says `Tremendous' Chance Offered for Carbon Capture
Aug 26, 2015 | Bloomberg
By Chisaki Watanabe
Gina McCarthy, the head of the U.S. Environmental Protection Agency, said the need to reduce carbon emissions offers a chance to push ahead with low-carbon technology such as carbon capture and storage. “In the U.S. even with our Clean Power Plan, every fuel will still continue to play a part” including coal and gas... -
2013 California Report Called Key in Climate Pacts
Aug 26, 2015 | BNA Daily Environment Report
By Laura Mahoney
A science-based document outlining the human impacts of global climate change, prepared at the request of Gov. Jerry Brown (D), has been the force behind California's pacts with other countries and states, as well as a call for action from U.S. military leaders, two scientists who helped prepare the document said Aug. 24. -
EPA to Respond by Aug. 28 on MATS Suspension Request
Aug 26, 2015 | BNA Daily Environment Report
By Patrick Ambrosio
A federal appeals court ordered the Environmental Protection Agency to respond by Aug. 28 to an emergency motion filed by the Tri-State Generation and Transmission Association Inc., which wants the court to suspend compliance obligations under the mercury and air toxics standards for the company's coal-fired Nucla Station... -
MATS Remand Time Frame Realistic, Attorneys Say
Aug 26, 2015 | BNA Daily Environment Report
By Patrick Ambrosio
The Environmental Protection Agency's target date of spring 2016 to address the U.S. Supreme Court's decision on the mercury and air toxics standards (MATS) would provide the agency with enough time to adequately consider the cost of regulation, several attorneys familiar with the litigation told Bloomberg BNA. -
EPA Approves Two New Monitoring Methods
Aug 26, 2015 | BNA Daily Environment Report
The Environmental Protection Agency has approved a pair of new air quality monitoring methods for use by state and local air regulators. In a notice scheduled for publication Aug. 26, the EPA designated a pair of new federal equivalent methods—one for measuring ozone and one for measuring fine particulate matter. -
6th Circuit Weighs Scope Of State 'Nuisance' Claims Under Clean Air Act
Aug 25, 2015 | InsideEPA
By Stuart Parker
Federal appellate judges are weighing the scope of state "nuisance" suits over air pollution that courts can allow under the Clean Air Act, raising questions at recent oral arguments over the extent such cases are barred by the air law's "savings clause" that preserves states' rights to regulate pollution sources covered by federal permits.
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(ACC Blog) On The Road With #ACCaugust – Updated 8/25/15
Aug 25, 2015 | American Chemistry Matters
During the August recess, our state affairs and political mobilization teams will fan out across the country to create opportunities to further our industry’s advocacy goals in a grassroots initiative we’re calling #ACCaugust. Through plant tours, in-district meetings, and industry roundtable discussions, we will meet with Members of Congress to raise awareness of the vital importance of our industry and showcase the economic benefits of the business of chemistry where it matters the most—in their districts. Take the #ACCaugust tour with us! Zoom in and out and pan around to see where we’ve been and where we’re going (don’t forget Alaska!)
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(ACC Mentioned) Chemical Producers Signal Potential Slowdown in Materials, Industrials ETFs
Aug 25, 2015 | ETF Trends
By Tom Lydon
Materials sector exchange traded funds could stuck in a rough patch as chemical industry activity slows.
The Chemical Activity Barometer (CAB), which tracks production, inventory and selling prices of numerous chemicals, along with prices of chemical stocks, only rose 1.8% in August year-over-year, the slowest pace since 2012, reports Anthony Feld for Bloomberg.
Kevin Swift, chief economist for the American Chemistry Council and creator of the CAB index, warned that declines in chemical demand have historically preceded drops in industrial output.
“Recent declines in the chemical barometer, in part, reflect a stronger U.S. dollar and weaker growth abroad,” Swift told Bloomberg.
Swift argues that the chemical index’s recent weakness indicate that the pace of manufacturing could slow into 2016 – about 95% of manufactured goods are made from chemicals. Additionally, the chemical index leads the National Bureau of Economic Research’s peak business cycle by an average of eight months and its troughs by an average of four months.
Year-to-date, the Materials Select Sector SPDR (NYSEArca: XLB) declined 14.1%, Vanguard Materials ETF (NYSEArca: VAW) decreased 14.2% and iShares U.S. Basic Materials ETF (NYSEArca: IYM) dropped 17.9%.
Chemicals producers make up a significant portion of the materials sector, including 74.3% of XLB, 60.5% of VAW and 68.8% of IYM.
The manufacturing and industrials industry has also been underperforming this year. Year-to-date, the Industrial Select Sector SPDR (NYSEArca: XLI) fell 11.6%, Vanguard Industrials ETF (NYSEArca: VIS) decreased 10.2% and iShares U.S. Industrials ETF (NYSEArca: IYJ) dropped 9.0%.
Investors who believe the chemicals industry will continue to experience weakness ahead can look to inverse materials ETFs to hedge against a further dip. For instance, the ProShares Short Basic Materials (NYSEArca: SBM) follows the inverse or -100% daily performance of the Dow Jones U.S. Basic Materials Index and ProShares UltraShort Basic Materials (NYSEArca: SMN) reflects the inverse 2x or -200% performance of the basic materials sector. Additionally, if the weakness in chemicals is an indicator of potential slowdown in manufacturing, can hedge against further dips through the ProShares Short Dow30 ETF (NYSEArca: DOG), which tries to reflect the -100% daily performance of the Dow Jones Industrial Average. For the more aggressive traders, the ProShares UltraShort Dow 30 ETF (NYSEArca: DXD) takes the -200% of the Dow Jones and the ProShares UltraPro Short Dow30 (NYSEArca: SDOW) reflects the -300% of the Dow. The ProShares UltraShort Industrials (NYSEArca: SIJ) tracks the inverse 2x or -200% daily performance of the Dow Jones U.S. Industrials Index
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(ACC Mentioned) US Chem Index Slips Into Bear Market
Aug 25, 2015 | ICIS News
By Al Greenwood
An index measuring US chemical stocks slipped into a bear market on Tuesday as worries about a slowdown in China continue to roil the industry.
The Dow Jones US Chemicals Index fell to 447.54, down nearly 21% from its 52-week high of 565.65.
On Tuesday, stock markets ended lower after a massive rally fell through.
The Dow Jones Industrial Average was up by as much as 441 points before closing at 15,666.44, down 204.91 points.
Likewise, the S&P 500 was up by nearly 55 points before closing at 1,867.62 down 25.59 points.
The sharp declines in the stock market underscore the concerns about slower growth in China.
"Everyone is so used to 7% GDP growth," said Kevin Swift, chief economist for the American Chemistry Council (ACC). "In the long term, that is going to slow appreciably."
China's GDP outlook dims
Many already suspect that China's GDP growth has slowed to 3-5%, Swift said. In 10 years, its long-term potential growth rate will likely be 3%.
China is a big chemical export market for US producers, with 2014 exports worth $13.5bn or 7% of the nation's total, Swift said.
Likewise, US chemical imports from China reached $14.3bn in 2014, he said.
China, of course, buys and sells chemicals all over the world. If the country's economic problems become too pronounced, the subsequent drop in demand could pressure prices worldwide. Chinese exporters could cut prices and target foreign markets as they attempt to offset weak domestic demand.
The Chinese yuan has already weakened, boosting the price advantage of the country's exports.
In general, China is an important end market for countries dependent on commodities. The subsequent decline in Chinese demand for these products has slowed the economies in Brazil, itself an important US destination for chemicals.
Slower growth in itself will lower demand for petrochemicals. However, it could be especially harmful for US producers because it could further strengthen the dollar.
The US serves as a safe haven during times of economic trouble, and this trend strengthens the dollar. Not only does a stronger dollar make US exports less competitive, it also lowers oil prices – and petrochemical prices typically fall with oil.
China is already dragging down markets
Many of these factors converged in the Chemical Activity Barometer, an economic statistic kept by the ACC. It consists of production, equity prices, product prices, inventories and other economic statistics.
In August, the barometer fell by 0.3% from July on a three-month-moving average. The barometer rose 0.1% in July and 0.5% both in May and June.
The immediate outlook for global chemical prices is for continued declines, due to a new wave of negative sentiment and a drop in feedstock costs, said a representative in the US of a trading company based in Tokyo.
“Commodities are going lower,” he said, citing the prices of polymers in spot markets. “That seems pretty obvious, right now.”
US chemical markets react to slower Chinese growth
Already, US August polyethylene (PE) prices fell by 5 cents/lb.
For US PE producers, the problems in China outweigh lower oil prices or falling stock markets because companies need that country as an export market, a resin source said.
For polypropylene (PP), given the recent swings in the stock market, the outlook in China could become even more pessimistic, increasing price volatility for the resin, a source in Colombia said.
For US polycarbonate (PC) and acrylonitrile butadiene styrene (ABS), Asian exporters could become more aggressive, and a stronger dollar could give them an even greater cost advantage, another source said.
A distributor of oxo-alcohols – especially n-butanol (NBA) – to Asia says he is not yet struggling to find a destination for material, but he believes his business is headed for trouble unless he broadens his customer base internationally and alters his business plan to include more domestic customers.
“How long will it be bad in Asia?” he said. “There is no way to tell, but the export market is getting uncomfortable.”
Although he has limited exposure in China, with only one major customer there, he has heard from customers in southeast Asia that lower-priced material from China is readily available as an alternative to US material. He added that China could begin to dump material into the US market, but he has not seen that happen yet.
Activity in other markets have slowed because buyers are waiting for prices to bottom out. This is already happening in ethylene oxide (EO), a source said. "Demand is comparatively soft as buyers fret over China's malaise."
A nylon trader said it was able to maintain US prices for polyamide 6,6 (PA66).
"Prices are not going up, but we have not seen them go down yet either," the source said. "Cheaper oil might change all of that."
A US distributor in the domestic market said that he continues to expect most US exports of commodities chemicals to continue. Even with lower crude oil prices, US producers still enjoy a production-cost advantage.
US NGLs and crude remain low
Unlike most of the world, US producers rely on natural gas liquids (NGL) instead of oil-based naphtha as a feedstock. This gave the US an enormous cost advantage when oil prices exceeded $100/bbl.
That advantage has eroded because of the decline in oil prices. However, NGL prices have also fallen, allowing the US to maintain its cost advantage, albeit at a lower level.
For the NGLs ethane and propane, a large oversupply is the biggest trend affecting the market. Recently, normal butane and natural gasoline prices fell sharply on Monday, as they were much more influenced by the drop in crude oil prices.
Most petrochemical manufacturers expect oil prices to continue falling, the distributor said. Those he talked to expect oil to reach $25-30/bbl by the end of the year.
That will effectively shut down oil sands production in Canada, where costs are near $60/bbl, and exploration and development of US shale fields, where costs run $45/bbl.
That scenario holds that it will take 12-18 months to work through the supply-demand imbalance and begin a rise in oil prices again.
“But it will take three to four years for the oil sands and shale field exploration and production activity to get back to 2014 levels,” he said.
US olefins, refineries respond to low oil prices
The US olefins market responded to recent downturns in crude oil with continued low prices and expectations of long supply.
US front-month ethylene traded at 23.00 cents/lb ($507/tonne), up from a trade done a day ago at 22.75 cents/lb.
Market players continue to expect a price rebound despite long supply and falling demand, as an August versus September trade was done at 0.5 cent/lb in contango.
In the propylene market, prices continue to fall, with refinery-grade propylene (RGP) dipping to 16.5 cents/lb via trade, compared with bid/offer levels on 21 August at 17.0-22.5 cents/lb.
Polymer-grade propylene price expectations were also falling, although August activity was thin as selling interest remains muted.
The outlook for oil prices will depend in part on demand from refineries.
The industry is coming off of an exceptionally busy summer season, where utilisation rates were well above 90%.
Refiners typically scale back production and conduct turnarounds during the autumn, since fuel demand typically declines. An active turnaround season could lower demand for crude, putting even more pressure on prices.
So far, gasoline inventories for the US are similar to where they were last year, according to the Energy Information Administration (EIA), with consumption about 11% higher than last year.
For the week ending 14 August, jet fuel inventories are about 18% higher than the same week last year, and jet fuel consumption is 23% higher than the same time last year.
Nonetheless, NYMEX futures prices fell to multi-year lows for heating oil and reformulated blendstock for oxygenate blending (RBOB), the basis of jet-fuel and gasoline wholesale prices.
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(ACC Mentioned) US August PP Drops As Producers Gain Margin
Aug 25, 2015 | ICIS News
By Lane Kelley
US August polypropylene (PP) dropped 1 cent/lb as producers continued to gain margin as feedstock propylene continues to fall, sources said on Tuesday.
Market talk favoured a rollover last week, but the continuing downturn in global markets and plunging propylene led to a slight PP price cut. Feedstock propylene fell 3.5 cents/lb in August. The PP settlement shows producers kept most of the cost savings, considered a margin increase among market observers.
Sources said settlements varied based on the producer and that each producer offered customers a different deal, with resistance varied among customers. But most buyers had to take some amount of margin increase.
The oil plunge in late 2014 and the recent one this month have combined to provide five PP price cuts on the monthly contract this year. PP buyers and producers have pretty much split the savings from plunging propylene this year, with the feedstock’s monthly contract down by 28.50 cents/lb so far in 2015.
In previous years, whatever happened to propylene in a given month determined the monthly change in PP. Producers’ quest for more margin paid off only in a few pennies of extra margin early in 2014, but this year’s plunge in propylene has upended that formula.
PP producers have aggressively sought more margin by adding a condition in their increase announcements that the hike would be applied “in addition to” whatever happened with propylene.
“It’s been a very fortuitous first half of the year for producers,” a buyer said.
Including the slight drop in August, monthly PP contracts have dropped 15 cents/lb so far this year. Data from LyondellBasell showed that the producer gained 8 cents/lb in extra margin this year through the end of June through such hikes.
The August slippage puts US PP contract prices at 59.50-61.50 cents/lb DEL (delivered) for homopolymer injection and raffia-grade material.
More and larger margin increases are coming, with Phillips 66 issuing a nomination on 31 July to raise prices on all grades of PP by 6 cents/lb on 1 September. Braskem and Formosa also have issued similar notices.
Sources also said that tight supply and a flourishing housewares market have provided plenty of support for producers. Latest industry data from the American Chemistry Council shows that sales of housewares – which are the largest segment of the PP consumer products market – are up almost 19% so far this year.
A trader said the propylene drop has no doubt been significant, but equally important for the producers has been the continued tight supply of PP this year. “The key to higher margins is tight supply,” the trader said.
Even though North American PP inventory inched up in July, stocks still remained near a two-year low, according to industry data released this week.
Major North American PP producers include LyondellBasell, ExxonMobil, INEOS, Total, Formosa, Braskem Americas, Pinnacle Polymers, Phillips 66 and Flint Hills Resources.
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(ACC Mentioned) US PE July Inventories Up For All Major Grades
Aug 25, 2015 | ICIS News
By Lane Kelley
US polyethylene (PE) inventories in July rose for all three major grades, according to industry data released on Tuesday.
The figures from the American Chemistry Council (ACC) confirmed initial estimates showing that inventories rose during the month and that supply has loosened.
The inventory figures, combined with the general global market slump of the past week, contributed to the drop in August PE monthly contracts reported this week.
The total for high-density PE (HDPE) marked the second highest monthly inventory this year for that grade – 1.55m pounds. The HDPE total was 100,296 pounds more than in June.
Major US PE producers include Chevron Phillips Chemical, Dow Chemical, ExxonMobil, Formosa Plastics, LyondellBasell, NOVA Chemicals and Westlake.
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(ACC Mentioned) Chemical Makers Signal U.S. Manufacturing to Slow
Aug 25, 2015 | Bloomberg
By Anthony Feld
Chemical industry activity is slowing, which isn't a good sign for the future of U.S. industrial output.
One of the big questions surrounding the outlook for the U.S. expansion is how slowing growth abroad and a strong dollar will affect U.S. exports and manufacturing. The Federal Reserve's index of industrial production has slowed this year, rising 1.3 percent for the 12 months ending July, down from a 4.5 percent gain at the start of the year.
The Chemical Activity Barometer (CAB), whose indicators include the production, inventory and selling prices of numerous chemicals as well as prices of chemical stocks, rose 1.8 percent in August from a year ago (on a 3-month moving average basis), the slowest pace since late 2012.
That's concerning since declines in chemical demand have preceded drops in industrial output in the past, according to Kevin Swift, chief economist for the American Chemistry Council and creator of the index.
"Recent declines in the chemical barometer, in part, reflect a stronger U.S. dollar and weaker growth abroad," said Swift.
The chemical barometer's recent decline indicates the pace of manufacturing will slow further into 2016, making for sub-par growth ahead, Swift said.
About 95 percent of manufactured goods are made from chemicals, as the sector is a supplier to many other industries, Swift said. With $801 billion in annual sales last year, the chemical sector is essential to America's assembly lines, he said.
Since chemicals like chlorine and polyethylene are used at the very beginning of the manufacturing process, the industry identifies emerging trends of the broader economy, Swift said. As a leading indicator of the business cycle, the chemical index leads the National Bureau of Economic Research's peaks by an average of eight months and its troughs by an average of four months, according to Swift's analysis.
NBER's last business cycle peaked in December 2007 while bottoming in June 2009. By comparison, the CAB peaked in July 2007 and troughed in March 2009.
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Study Links Three Phthalates To Miscarriage
Aug 26, 2015 | Chemical Watch
By Philip Lightowlers
Chinese researchers have found that levels of three urinary phthalate metabolites in pregnant women are associated with a higher risk of miscarriage.
The paper – published in Environmental Science and Technology – was written by a team from Peking University and the associated People’s Hospital in Beijing.
Although some phthalates are widely recognised as toxic to reproduction, the researchers claim this is the first time that an increased risk has been clearly shown in non-occupationally exposed women.
One hundred and thirty two women from Beijing who suffered loss of clinical pregnancy were selected as cases and compared with 172 women controls from the same city that were in weeks 5-18 of pregnancy. All gave urine samples which were analysed for eight phthalate metabolites.
Five of the eight metabolites were found in at least 95% of all participants, indicating widespread exposure to phthalates. These were: mono ethyl phthalate (MEP);mono isobutyl phthalate (MiBP);mono n-butyl phthalate (MnBP);mono methyl phthalate (MMP); andmono (2-ethylhexyl) phthalate (MEHP).
The researchers note that levels of all of these five metabolites were greater in the case group than in the control group. But a statistical evaluation found that the difference was significant in only three cases – MEP, MiBP and MnBP.
A significant increasing risk of miscarriage was also observed from the first to fourth quartiles of each of these three metabolites.
The scientists concluded that increased urine levels of MEP, MiBP, and MnBP were associated with an increased risk of miscarriage. This implicates women’s exposure to diethyl phthalate (DEP), di-isobutyl phthalate (DiBP) and di-n-butyl phthalate (DnBP) respectively.
The authors say that DEP and DnBP are mainly used in cosmetics, personal care products and food packaging in China. DnBP and DEHP are also used in building products such as paints, flooring and PVC items.
They also note that the Chinese pattern of phthalate exposure was similar to that reported in Japan, but different from that in the US and Spain. Chinese MEP urine levels were a factor of ten lower than those reported in the USA and levels of MnBP and MiBP were higher. They suggest this reflects the gradual replacement of DnBP and DiBP in the west with DEP in many products since phthalates with carbon chains four to six carbons in length (DnBP, DiBP, and DEHP) are believed to be more toxic.
Phthalates have been linked to miscarriage in previous research, including a Danish study which pointed to di (2-ethylhexyl) phthalate (DEHP) metabolites (CW 6 February 2012). The researchers also mention a Russian study which found an increased spontaneous abortion rate in female factory workers exposed to high levels of phthalates.
Similar outcomes have also been observed in mice exposed to phthalates and metabolites including: DEP;DnBP;MnBP; andDiBP.
Phthalates are also known to affect concentrations of the hormone progesterone, which is involved in the implantation of embryos.
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Neurological, Immune Harm May Trigger Chemical Controls
Aug 26, 2015 | BNA Daily Environment Report
By Pat Rizzuto
Chemicals that permanently harm the neurological or immune systems may qualify as substances of very high concern under the European Union's REACH regulation.
Some substances showing severe immunotoxic or neurotoxic effects following single or repeated exposure could present an “equivalent level of concern” as carcinogens, mutagens and chemicals that harm reproduction and therefore be classified as substances of very high concern, the European Commission's Joint Research Center (JRC) said in an Aug. 21 Science for Policy Report, “Identification of Substances of Very High Concern (SVHC) under the ‘equivalent level of concern’ route (REACH Article 57(f)) - neurotoxicants and immunotoxicants as examples.”
If the commission adopts such an approach, it would mean that some metals and chemicals would need their specific uses authorized.
The commission would need to conclude that the chemicals cause an equivalent level of concern as do compounds having criteria described in article 57(f) of REACH, which stands for the EU's registration, evaluation and authorization of chemicals regulation ((EC) No 1907/2006).
Chemicals deemed to meet the criteria in article 57(f) may qualify for inclusion under Annex XIV of REACH, which lists chemicals subject to authorization.
Article 57(f)'s criteria include mutating DNA, causing cancer or harming reproduction and being persistent, bioaccumulative and toxic (PBT).
The JRC report examines whether neurotoxic and immunotoxic chemicals meet an additional criterion found in article 57(f).
The article says chemicals can be included in Annex XIV if there is “scientific evidence of probable serious effects to human health or the environment, which give rise to an equivalent level of concern” to the other types of hazards described.
Some chemicals that harm the neurological or immune system may pose such concern, the JRC said.
A final decision on whether a chemical would be listed as an SVHC would be based on a case-by-case analysis of the information about it, the report said.
Issues Raised; Examples Provided
That analysis would need to examine issues including whether damage is transient or irreversible and the sensitivity of some populations such as children or the elderly, the JRC said.
The report listed some types of chemicals that may harm the neurological or immune system in mild or severe ways.
The examples included methylmercury, a known neurotoxicant and aluminum. Welders have been exposed to aluminum fumes and reported tremors and cognitive defects. White spirit, a solvent and thinner in paints, was another example, because it has been associated with increasing the risk of chronic toxic encephalopathy, the report said. Symptoms of chronic toxic encephalopathy include dementia-like memory problems.
The report did not discuss whether these or other chemicals listed in the report could be substances of very high concern.
The report on whether article 57(f) could apply to neuro- and immunotoxic chemicals is part of a broader effort to understand what constitutes a toxicity of equivalent concern. The commission is reviewing whether toxicities, with characteristics other than those detailed in the article, may be SVHCs.
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Big Electronics Brands Lead Conflict Minerals Reporting Efforts
Aug 25, 2015 | Chemical Watch
By Kelly Franklin
Electronics giants Microsoft, Blackberry and Intel have the highest levels of compliance with “conflict mineral” reporting, based on required and recommended metrics.
This is among the findings of a report produced for consultancy Assent by Tulane University.
The benchmarking study evaluated the 1,267 public “conflict mineral” filings submitted to the US Securities and Exchange Commission (SEC) for 2014 – the second reporting year, under Section 1502 of the Dodd-Frank Act. The Act requires US-listed companies to disclose whether they use tin, tungsten, tantalum or gold (3TG), and whether these minerals originated in the DRC or an adjoining country (GBB April 2013).
Electronics companies continue to be compliance leaders, according to the study and other third-party reports (GBB July/August 2015). Ford Motor Company scored highest on the report's ranking system outside the electronics sector, occupying fourth spot.
The study ranked reporting companies based on their compliance with the minimum requirements of the SEC's Rule, as well as the extent to which companies complied with “good practice” metrics as defined by the NGO Responsible Sourcing Network (RSN) and investment research firm Sustainalytics, which go beyond the SEC's requirements.
The report says the “most noticeable” shortcomings of companies complying with the SEC's 15-point reporting criteria were that: 67% of the filers did not disclose the 3TG country of origin;58% of filers who were not “DRC conflict free” failed to disclose the facilities used to process the 3TG; and43% of companies did not define due diligence as five separate steps.
Carly Oboth, policy advisor to Global Witness, said the NGO is encouraged by the report's findings.
"It's not about perfection or about rushing to make determinations about specific products – it's about companies showing that they have the right processes in place along their supply chain, and that when they find red flags in their supply chain, that they're able to address them."
More than three quarters of companies who responded to a Tulane survey last year said a positive aspect of the reporting was that it helped them respond to conflict mineral-related customer inquiries.
But the study says many responding companies criticised the rule, saying: the cost burden makes affected companies less competitive;the desired impact in the DRC is not likely to be felt;it is “unrealistic” that requiring due diligence from only publicly traded companies will mitigate conflict in the region; andthe SEC serving as a social responsibility regulator is “inconsistent with the history of US securities law.”
The SEC enacted the rule to curb the flow of money to armed groups in the DRC region, amid “concerns that the exploitation and trade of conflict mineral ... is contributing to an emergency humanitarian crisis.”
But the study says that “to date we only have anecdotal evidence and divergent expert perspectives pointing to the law’s impact in the covered countries.”
Ms Oboth, however, says both public and private companies have made a greater effort to understand conflict minerals, and are asking more questions of suppliers. “Before Section 1502, that had never happened,” she said.
The law has also been “helpful in building policy and legal structures,” she says, both in the conflict region and elsewhere.
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Animas Spill Spurs Petition for Mining Law Changes
Aug 26, 2015 | BNA Daily Environment Report
By Tripp Baltz
Local governments, Native American tribes and environmental groups have filed a petition with the Interior and Agriculture departments calling for changes to mining regulations in the aftermath of the Animas River spill.
The petition filed Aug. 25 seeks four changes to federal mining regulations to help protect Western water resources from “environmental disasters” such as the Environmental Protection Agency's recent accidental release of 3 million gallons of mining waste and sediment into the Animas River watershed in southwestern Colorado.
“The Animas disaster only accentuates the urgency for federal agencies and the mining industry to do a much better job of protecting our precious land, air and water,” said Sherry Counts, chairwoman of the Hualapai Nation, in a statement Aug. 25.
Abandoned Mines
Hundreds of thousands of abandoned mines pollute an estimated 40 percent of streams in the headwaters of Western watersheds, the groups said. Most of them, including the mine involved in the Aug. 5 spill, the Gold King Mine near Silverton, Colo., exist because the 1872 Mining Law, still the law of the land, didn't require cleanup, they said.
The petition, submitted under the Administrative Procedure Act, urges the Bureau of Land Management and Forest Service to amend existing mining rules by limiting the lifetime of a mine permit, imposing enforceable reclamation deadlines and groundwater monitoring requirements on mines, requiring regular monitoring and inspections, and limiting the number of years that a mine may remain inactive.
“The Animas River disaster must mark the end of the days where irresponsible mining threatens our region's livable future,” said Anne Mariah Tapp, energy program director for the Grand Canyon Trust, one of the groups filing the petition.
The petition was prepared by the Stanford Environmental Law Clinic and was supported by the Grand Canyon Trust, the Center for Biological Diversity, Earthworks, the Sierra Club, the Information Network for Responsible Mining, Uranium Watch, San Juan Citizens Alliance, the Havasupai Tribe, the Hualapai Tribe, the Zuni Tribe, Coconino County, Ariz., and Miguel County, Colo.
Failure to Provide Information
Also on Aug. 25, Rep. Lamar Smith (R-Texas), who chairs the House Committee on Science Space and Technology, said the EPA has failed to provide information requested concerning the agency's involvement in the spill.
Smith said the requested documents are essential to the committee's ongoing investigation and upcoming hearing on Sept. 9 (163 DEN A-1, 8/24/15).
More importantly, he said, “this information matters to the many Americans directly affected in Western states, who are still waiting for answers from the EPA.”
In an Aug. 10 letter, Smith requested the documents and materials from the EPA relating to the agency's on-site investigation that triggered the spill from the Gold King Mine. The committee is also seeking information about potential risks that chemicals and toxins could pose to animals and humans.
While the EPA publicly released some of the documents Aug. 21, it has failed to turn over the majority of the requested information, Smith said. Smith has asked EPA Administrator Gina McCarthy and the president of the EPA contractor at Gold King, Environmental Restoration LLC, to testify at the hearing.
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GOP Lawmaker Knocks EPA Over Mine Spill Response
Aug 25, 2015 | The Hill - E2 Wire
By Devin Henry
The chairman of the House Committee holding the first hearing into this month’s Environmental Protection Agency (EPA) mine spill is hitting the agency for not handing over documents related to the incident.
Rep. Lamar Smith (R-Texas) said “it is disappointing, but not surprising” that the EPA didn’t provide the House Science, Space and Technology committee with a string of documents he requested earlier this month. Smith sent EPA administrator Gina McCarthy a letter on Aug. 10 asking her to provide information related to the Aug. 5 incident, which sent 3 million gallons of toxic sludge into Colorado’s Animas River.
The request included documents related to the chemicals present at the Gold King Mine before the spill, EPA water analysis conducted in the Animas River and other information.
Smith set a Monday deadline for the EPA to respond, and he slammed for the agency for missing the deadline on Tuesday.
“It is disappointing, but not surprising, that the EPA failed to meet the House Science Committee’s reasonable deadline in turning over documents pertaining to the Gold King Mine spill,” he said in a statement.
“These documents are essential to the committee’s ongoing investigation and our upcoming hearing on Sept. 9th. But more importantly, this information matters to the many Americans directly affected in western states, who are still waiting for answers from the EPA.”
EPA spokeswoman Melissa Harrison said officials are still collecting the information they intend to provide the committee and noted the agency has released some documents on its website.
“Since the Gold King Mine incident, EPA has been inundated with requests for documents related to the response,” she said.
“EPA has posted a large number of documents on our response website, many of which are responsive to the committee’s request. EPA is continuing to identify additional documents responsive to the request and will provide them to the committee as soon as they are available.”
Smith called McCarthy to testify during September’s hearing, which is likely to be just the first of many congressional inquires into the spill.
Also Tuesday, local officials in Colorado formally requested federal funds to help clean up the site of the mine, the Associated Press reports.
San Juan County and Silverton, Colo. officials have long resisted a Superfund designation for the site, but they said Tuesday that federal funding was necessary to help clean up the mine.
"We recognize that this is a regional problem and that it starts in our neighborhood," San Juan County Commission Chair Willy Tookey said in a statement.
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Rep. Smith Says EPA Not Cooperating With Spill Probe
Aug 25, 2015 | E&E News PM
By Manuel Quiñones
House Science, Space and Technology Chairman Lamar Smith (R-Texas) today blasted U.S. EPA for failing to turn over documents related to agency actions that caused a polluted mine water spill in Colorado this month.
On Aug. 10, Smith asked EPA to turn over information concerning water tests following the Gold King mine spill and substances found, plus information related to EPA's work at the site. Today, Smith said the agency failed to comply by yesterday's deadline.
"It is disappointing, but not surprising, that the EPA failed to meet the House Science Committee's reasonable deadline in turning over documents pertaining to the Gold King mine spill," Smith said. "EPA Administrator Gina McCarthy is currently crusading on climate change action in Japan while President Obama, who has yet to visit the areas affected by the spill, is touring the U.S. to tout EPA's latest regulation that will do little to impact climate change and will only further burden Americans with higher electric bills."
Lawmakers on both sides of the aisle have asked EPA for information and demanded scrutiny of the incident. But Republicans have been particularly critical of the agency, whose agenda they oppose.
EPA has accepted responsibility for the spill and has been releasing testing information on its website. It has also posted some documents related to work at the site. But critics are not satisfied.
Smith has asked McCarthy to testify about the spill during a hearing next month. He has also invited the head of Environmental Restoration LLC, an EPA contractor.
In the Senate, the Indian Affairs Committee is planning a hearing on the spill's impact to Indian Country. EPA last week said tests showed water quality in the San Juan River in the Navajo Nation at pre-spill levels.
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Fracking Is Our Clean Power Plan
Aug 25, 2015 | Forbes
By Jacki Pick
As environmental groups gather to strategize maximum mileage from the president’s “Clean Power Plan,” they would do well to remember what they might regard as the greatest environmental triumph of this century: The U.S. already leads the world in carbon emissions reduction, with emissions down 26% since the shale boom hits its stride in 2007. Why? Because of the use of natural gas, a fossil fuel, now produced in historic volumes made possible through fracking, or hydraulic fracturing.
Fracked natural gas has been key to reducing U.S. carbon emissions to their lowest levels since 1988, the U.S. Department of Energy recently announced.
Over the same 27 year time-frame, figures from the U.S. Bureau of Economic Analysis show the U.S. economy nearly doubled, growing about 50% when gross domestic product is adjusted for inflation.
With the shale boom, lower emissions and economic growth need not be at odds
Our economic growth was largely the result of cheap fossil fuels. They feed our electric grid, enable the digital revolution, run our transportation sector, manufacture American durable goods and electronics, and produce petrochemicals and pharmaceuticals. Fracking was key to our growth in fossil fuels production; the Independent Petroleum Association of America notes that more than 1.2 million wells have been fracked in the U.S. Because of historic production through fracking, the U.S. was the top natural gas and petroleum producer on earth in 2014, and our energy costs have fallen. U.S. industrial electricity costs are now 30-50% lower than those of our foreign competitors, resulting in a manufacturing renaissance and the “reshoring” of perhaps millions of American jobs, according to a new report by the Boston Consulting Group. By 2018, enhanced fossil fuel production through fracking will enable the U.S. to manufacture goods cheaper than in China.
Americans, using American ingenuity with advances in fracking and horizontal drilling, harnessed the free market to accomplish what the president, the EPA and the environmental groups have failed to achieve: America’s status as the top carbon emissions reducer in the world, simultaneous with a doubling of the economy. We should not be surprised; the U.S. oil and gas industry invests more in carbon emissions reduction tech than the U.S. government and all other industries combined, according to the American Petroleum Institute.
Carbon emissions reduction through fracking is significantly more impressive than the results promised in the President’s new job-killing “Clean Power Plan,”—and his promises often do not match his outcomes. Politicians must be evaluated by what they do, not what they say they will do.
How does the President’s plan compare to the frackers’ record?
Obama’s unproven plan would yield less carbon reduction than fracking over twice the time frame. This plan, built on nonsensical assumptions and costly, inferior energy production methods, outlines a 32% reduction in carbon emissions from 2005 levels, and demands this outcome by 2030. Since frackers have already achieved a 26% reduction in carbon emissions since 2007, the job is mostly done. If the president would simply stay out of the way, the remainder of his goal would come about on its own through market forces (continued displacement of other fuels by natural gas) and greater efficiency through innovation.
And can the president’s plan match the 50% GDP growth rate that our fossil fuels economy produced over the past decades? He promises unrealistic numbers of green jobs (flashback to Solyndra and “shovel ready” fantasies of his first term), but growth across the rest of the economy would seem to be nearly impossible since this plan is a manifestation of the president’s vow to make energy prices “skyrocket,” as we learned from the Cap and Trade—or “Cap and Tax”—viral videos from his first term. The consulting firm NERA warned that the Clean Power Plan, even in its original, less ambitious form, would be the most expensive regulation ever imposed upon the power sector (passed on to consumers). Energy Ventures Analysis estimated that industrial electricity rates could double. This could easily force manufacturers overseas again, killing jobs. Worst of all, the hardest hit by these crushing energy bills will be fixed-income Americans, such as seniors and single moms. To top it off, Commissioner Moeller of the Federal Energy Regulatory Commission (FERC) opined that the president’s approach threatens to bring “widespread rotating blackouts,” sporadically killing whatever productivity remains and leaving Americans vulnerable during the most severe weather events.
Fracking is the answer to carbon emissions reduction
Enough already. Fracking for natural gas is the answer to carbon emissions reduction, and even Obama’s top officials such as his EPA Administrator, Gina McCarthy, and Secretary of Energy, Ernest Moniz, have spoken publicly about the safety of fracking.
If you like your clean air, do not thank the President. Thank the membership of the American Natural Gas Association and the pioneers of hydraulic fracturing and horizontal drilling.
One great lesson of the success of U.S. carbon emissions reduction is that government is not the answer. If the president and environmental groups are serious about lowering carbon emissions, they will begin to promote what works by getting out of the way, rather than trumpeting that which fills the coffers with carbon tax dollars and Big Green contributions.
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Give Us the Whole Truth About Fracking
Aug 25, 2015 | The Huffington Post - Green Blog
By Marc Ross
The facts are slippery when it comes to the great fracking debate in America, where truth, lies, and spin often collide and end up leaving us confused and dizzy.
And sometimes we sadly get treated to the perfect mix of manipulation of fact and fiction, courtesy of the powers that be, that leaves us even more dazed and confused than we were before we got that dose of unreality. That's what we're often subjected to in the fracking debate, and it even makes us engage in what George Orwell called "doublethink" -- the perverse ability to hold two contradictory beliefs as correct in our minds without noticing the contradiction.
But the latest example of the fracking doublethink has major implications for our health and our nation: the EPA's recently released landmark assessment on the "Potential Impacts of Hydraulic Fracturing for Oil and Gas on Drinking Water Resources." The assessment concludes that fracking has contaminated many drinking water sources while also concluding that no evidence was found to declare that fracking poses "widespread, systemic impacts on drinking water resources in the United States."
That's just ludicrous.
We hoped the EPA report would finally give us an unequivocal statement about fracking in America and ideally a roadmap to help us make sure this industry poses no threat to our drinking water, our health, and our communities.
Instead, the EPA gave us an assessment on the current state of fracking in America -- based as they say on the "state-of-the-science" -- that is woefully inadequate: It is incomplete, premature, rushed and filled with so many caveats that it is hard to take it seriously with all due respect to an agency that is charged with protecting our health and our environment while contending with politicians who want to eradicate it.
To their credit, the EPA is quite clear about the assessment's constraints, or what it deems "limiting factors," which is a nice way of saying the credibility of the study suffers as well as their findings (including the conclusion that no evidence was found to declare fracking poses "widespread, systemic impacts on drinking water resources.")
These "limiting factors" include: insufficient data regarding drinking water quality in places before they were fracked and after they were fracked; the scarce number of long-term, comprehensive studies about fracking; and the "inaccessibility of some information on hydraulic fracturing activities and potential impacts." Regarding the latter of that series of limitations, we can thank the Halliburton loophole for that, which helps keep many of the chemical-laced fracking recipes a secret and prevents federal oversight of the industry.
Littered throughout the nearly 1,000-page report are other direct acknowledgments by EPA that a "lack of data" hampered its ability to assess the true impacts of fracking. These statements from the assessment are revealing:
This assessment used available data and literature to examine the potential impacts of hydraulic fracturing for oil and gas on drinking water resources nationally. As part of this effort, we identified data limitations and uncertainties associated with current information on hydraulic fracturing and its potential to affect drinking water resources. In particular, data limitations preclude a determination of the frequency of impacts with any certainty.
And that's a tremendous flaw.
How can we declare "we did not find evidence" to support the statement that fracking does not appear to pose a widespread, systematic threat when there is limited data (a lack of scientific studies) on hand to make that determination? Not to mention that the "facts" reviewed by EPA were derived from state and industry studies that are subject to political and economic bias and undermined by data not so easily attainable (i.e. proprietary fracking formulas).
With all of these data gaps and potential avenues for bias, of course the EPA found it difficult to determine with certainty as to whether fracking posed a widespread threat. Yet amid these issues, the assessment still noted instances of drinking water contamination including "spills of hydraulic fracturing fluid" that "reached drinking water resources," as well as "below ground movement of fluids, including gas, most likely via the production well" that "have contaminated drinking water resources," not to mention fracking fluids that were "directly injected into drinking water resources."
And that's the issue: a problem exists, a big problem. We shouldn't have to rely on doublethink to get us by when it comes to fracking. We shouldn't be OK with it being somewhat dangerous (reported contaminations) and somewhat safe (apparently not widespread).
Also looking at how haphazard this fracking assessment appears to be, there's little question in my mind that it was rushed out the door by EPA (with pressure from industry) because industry knew the data, or lack of it, worked in their favor. Undoubtedly, it was also expedited due to the pressure from other interests, including environmentalists, because those opposed to fracking needed evidence delivered as quickly as possible to persuade Congress to pass tougher regulations on fracking.
But something that is incomplete, rushed and mired with a thousand caveats and excuses does not serve us well. We're not going to solve this issue -- or be able to differentiate between fact and fiction -- unless we collect hard facts backed by evidence to work from and act on.
But we can still fix it, so we know the whole truth and hopefully persuade Congress to enact laws that ensure the best regulations and regulators are in place to watchdog the industry. We can persuade the EPA to do the right thing and take the bold steps it needs to take: namely, conduct a more thorough and more honest assessment that also avoids citing questionable studies as evidence.
So here's what we must do next: The agency is accepting public comments on the assessment until August 28. We need to make sure the science -- and thus the evidence -- is right to ensure the great fracking debate is suffused with truth -- not spin, lies, distortion, half-formed truths, or worse, doublethink.
If we are to persuade Congress to regulate fracking nationally -- which, as a precautionary measure and even in the absence of comprehensive scientific evidence seems like a good thing to do -- we might stand a chance of protecting human health and the environment. And I say this knowing that we have already racked up quite a bit of evidence about fracking.
This assessment is a major step in the right direction. But the assessment must be bolder and more truthful. It must rely more so on the EPA's own analysis of fracking to draw its conclusions rather than the findings of others including the industry. Most importantly, it must be complete -- free of caveats and excuses about limited data and other so-called constraints.
That's all we ask: the truth and not the state-of-the-science or any other euphemisms we've come up with to politely explain that what we are still far from the truth.
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Sen. Menendez Defends Stance On Exports, Blasts New Ad
Aug 25, 2015 | E&E News PM
By Hannah Northey
New Jersey Democratic Sen. Bob Menendez shot back today at a new campaign that accuses him of wavering on whether to lift a 40-year-old ban on crude exports, arguing that his position hasn't changed.
"The senator's record is crystal clear on this issue; he is a strong advocate for using U.S. resources to keep gas prices down and rebuild American jobs," Allyson Kehoe, a spokeswoman for the senator, said in an email. "There is no change in the senator's position regarding the export ban, as this type of exportation is already allowed under current law as a 'national interest' exception."
Kehoe was responding to a 30-second ad on cable television in New Jersey that Allied Progress is running, the first of a weeklong campaign that will eventually target several senators on both sides of the aisle (Greenwire, Aug. 25).
Allied Progress, a group run by syndicated columnist and Democratic strategist Karl Frisch, is focused on taking on the political influence of payday lenders, energy companies and major financial institutions.
The group's ad shows Menendez backing the export ban in 2012. The spot then shows a speech the senator made Aug. 18 at Seton Hall University's School of Diplomacy and International Relations, in which he called on Congress to consider exemptions to the ban in an attempt to curb Iran's power (Greenwire, Aug. 19).
During that speech, Menendez proposed a "strategic" export program and came out against the Iran nuclear agreement that's headed for a vote in Congress next month.
Iran could begin exporting 700,000 additional barrels of crude per day and eventually ramp up daily production to 1 million barrels if economic sanctions against the country are lifted as part of a final nuclear deal.
Menendez said the United States would be better off rejecting the deal, keeping the sanctions in place and exporting domestic crude to its allies instead.
But Kehoe said the senator's speech doesn't changes his steadfast position on the crude export ban.
"In no way does he support a blind expansion of crude exports to enhance the profits of Big Oil and possibly force U.S. consumers to pay even more at the pump," she said.
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Greens Rally At Kerry's Home Over Alberta Clipper Expansion
Aug 25, 2015 | E&E News PM
By Manuel Quiñones
Dozens of environmental activists rallied outside Secretary of State John Kerry's Washington, D.C., home this morning to protest the administration's decision to allow Enbridge Inc. to transport more oil across the U.S. border with Canada.
While the State Department scrutinizes Enbridge's request to expand its so-called Alberta Clipper pipeline to carry Canadian oil sands crude, the department is allowing the company to route some of the fuel through an existing line. Greens call it an illegal circumvention of the review process.
"For two years we have sent petitions, called the White House, and brought thousands of people to rally against this scandal, but Secretary Kerry has still not responded or done anything to stop it," Kendall Mackey, Energy Action Coalition national tar sands campaign manager and rally organizer, said in a statement.
In June, dozens of groups asked the administration to put Alberta Clipper under a strict review comparable to that of the Keystone XL pipeline. Greens have also sued State over its oil routing approval.
In court documents, Enbridge argues that State never took a final agency action subject to judicial review. Company attorneys say groups "failed to demonstrate that the Department did anything more than concur that Enbridge already possessed the necessary authorizations."
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Troubled California Oil Field Regulator Faces Major Overhaul
Aug 25, 2015 | SF Gate
By David R. Baker
California’s embattled oil field regulatory agency will undergo a sweeping overhaul following revelations that the office for years let petroleum companies dump their waste water into federally protected aquifers.
The state’s Division of Oil, Gas and Geothermal Resources will reorganize its staff into teams focused on specific technical areas, such as hydraulic fracturing or wastewater disposal. The division’s nine field offices will be consolidated into four, each staffed with members of the different technical teams.
“We have a renewal plan that will put a sharp focus on all the activities we’re doing,” the division’s supervisor, Steven Bohlen, told legislators Tuesday during a hearing in Sacramento. “Our field staff are very, very busy, and I’m holding them to a higher standard.”
The division has come under intense criticism this year for allowing oil companies to drill hundreds of wastewater disposal wells into aquifers that could have been used for drinking or irrigation — groundwater that was supposed to be protected under federal law. The problem, which stretches back decades, was explored in a Chronicle investigation in February.
So far, investigators have found no drinking water supplies contaminated by the wastewater injections. But as a precaution, the division has shut down 23 injection wells deemed to pose the greatest threat to drinking or irrigation water supplies.
Even before the wastewater injections came to light, some California officials began questioning the 100-year-old division’s competence. Legislators complained that the office had been oblivious to the widespread use and potential pitfalls of fracking in the state, at a time when the drought made protecting groundwater a higher priority than ever before. The Legislature passed a law in 2013 regulating fracking and other well-stimulation techniques, regulations that the division must now enforce.
Gov. Jerry Brown brought in Bohlen last year to reform the division, which is part of the California Natural Resources Agency. And lawmakers, despite vocal misgivings, approved adding 70 employees to the division, boosting its staff by 35 percent.
“We are bringing new leadership to the organization,” Bohlen said Tuesday, during a hearing on fracking and other well-stimulation techniques. “It’s a very big job. We have some very bad habits. I have spent a year … putting the challenges of the division in a clear light on the table in front of you.”
Bohlen developed the reorganization plan in consultation with the governor’s office, and announced it to his staff on Thursday. He emphasized that the changes would be phased in, rather than implemented suddenly. The consolidation of field offices, for example, could take a year or more, Bohlen wrote.
Key to the plan is reorganizing the staff into program teams, each with its own regulatory and technical focus. An organization chart provided by the division shows teams specializing in underground injection wells, well-stimulation techniques, aquifers, abandoned wells, data management, training, environmental review and emerging technologies.
The Western States Petroleum Association, which represents California oil companies, did not return a call seeking comment. But environmental critics who want a statewide fracking ban were unimpressed.
“Reshuffling the deck won’t fix the huge problems at California’s scandal-plagued oil agency,” said Hollin Kretzmann, staff attorney with the Center for Biological Diversity. “To start restoring faith, Gov. Brown’s regulators must heed scientists’ recommendations to halt dangerous oil industry practices.”
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Obama's Arctic Trip Seen as Pivotal for Climate Action
Aug 26, 2015 | BNA Daily Environment Report
By Andrea Vittorio
President Barack Obama's upcoming trip to the Arctic area, which is warming faster than any other place on Earth, could be a turning point for climate action, a former State Department official said Aug. 25.
“The image of the president of the United States” standing by melting glaciers in Alaska “is one that may have an enormous amount of power going forward,” said Rafe Pomerance, who served as deputy assistant secretary of state for environment and development during the Clinton administration.
Obama's multi-day tour of the Alaskan Arctic, the first for a sitting president, is scheduled to include stops in Seward, Dillingham and other communities feeling climate impacts firsthand. The president will also speak at an Aug. 31 State Department meeting of scientists, policy makers and businesses from around the world focused on how rising temperatures are reshaping the region.
“As a result of that visit, it's possible that there'll be a change in the perception of the climate issue,” Pomerance, now a member of the National Research Council's Polar Research Board, said in an online briefing organized by the Union of Concerned Scientists. “It will no longer be seen as something where action can be postponed or approached with a minimalist agenda. Rather, the message of the unraveling Arctic is urgency.”
Arctic Changes Impact Globe
Rapid changes in the Arctic could have implications for the world's coastlines, the fish sticks in your freezer and maybe even our weather, according to work by the National Research Council (79 DEN A-8, 4/24/15).
That is why the State Department hopes one of the main themes that will emerge from its Arctic meeting is an understanding that what happens in the Arctic doesn't stay in the Arctic.
“It's not just a question of here are some of the significant changes that are occurring as a result of climate change but also here's why those things have particularly significant effects...in terms of their impacts elsewhere in the world,” Karen Florini, deputy special envoy for climate change at the State Department, said during the webinar.
Carbon Trapped in Arctic
Vast stores of greenhouse gases trapped in the Arctic's permanently frozen ground also have the potential to add to global climate change as the ground thaws and they are released.
“There's a lot of carbon trapped in the permafrost, and we don't have a very good idea of how quickly that will be released into the atmosphere,” said Brenda Ekwurzel, a senior climate scientist at UCS.
Ekwurzel said there is also a lot of carbon trapped in the Arctic in the form of oil and natural gas. “We do have more control over extracting that,” she said.
The Obama administration has been criticized by environmental advocates for granting Royal Dutch Shell permission to drill for oil in the Arctic waters of the Chukchi Sea north of Alaska, which they say goes against the president's commitment to tackling climate change (159 DEN A-3, 8/18/15).
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In the Race for Arctic Energy, the U.S. and Russia Are Polar Opposites
Aug 25, 2015 | The Wall Street Journal
By Gary Roughead
In his message to the American people about his visit to Alaska next week, President Obama said “The alarm bells are ringing, and as long as I’m president, America will lead the world to meet this threat before it’s too late.” He was talking about climate change. But his words could just as well apply to the strategic moves that are being made in the vast Arctic region to secure its resources and potential.
Russia is taking the lead in Arctic offshore oil production. Russia began producing offshore oil at the Prirazlomnaya field in the Pechora Sea in 2014, and last year it delivered roughly 2.2 million barrels. Gazprom Neft expects to more than double oil production this year from the country’s only offshore Arctic oil project.
China isn’t far behind. Between 2009 and 2013, Chinese companies—mainly the big three, China National Petroleum Corp., Sinopec and China National Offshore Oil Corp. (Cnooc)—were the largest buyers of international oil assets. Several of these acquisitions were made with the Arctic in mind, such as Canada’s Nexen and Russia’s Yamal LNG. Early last year, Cnooc obtained an exploration license for Iceland’s Dreki region in the Norwegian Sea. The company is also expected to be involved in Norway’s 2016 licensing round in the Barents Sea.
Russian and Chinese activity goes beyond a scramble for resources. Russia has added a 6,000-soldier permanent military force, including radar and sensing networks, in the Arctic’s northwest Murmansk region. Russia recently submitted a large extended continental-shelf claim for the Arctic, which, if accepted, will give Russia rights to seabed resources beyond its 200 nautical-mile exclusive economic zone. China’s maritime activity in the region has increased, and it is making significant investments in Arctic research, infrastructure and natural-resource development. Although not an Arctic nation, China sees the value in building modern icebreakers to support its activity in the polar regions—north and south.
The dominant posture Russia and China are assuming with regard to Arctic oil and gas stands in contrast to the U.S. After holding a record-breaking lease sale in the Chukchi Sea in 2007, (and collecting billions of dollars for federal coffers), the federal government has failed consistently to demonstrate it has the political will and agency know-how to allow Arctic offshore oil-exploration to move forward.
It may be convenient to take a “why bother” approach. After all, the cost of energy is down and we see a bright future in the shale boom. However, the U.S. continues to import 40% of its crude-oil needs—nearly half of which comes from OPEC members—at a cost of $23.5 billion a month.
Alaskan energy production from the outer continental shelf can come online in 10 to 15 years, when experts predict shale-oil production in the lower 48 states will plateau and crude-oil production in the Gulf of Mexico will begin to decline.
But the dithering must end soon. According to a recent report by the National Petroleum Council (NPC) and a diverse group of government regulators, nongovernmental organizations, environmentalists, industry leaders and Alaska Native representatives, the federal government needs to facilitate exploration in the offshore Alaskan Arctic now. Failure to act immediately risks a renewed reliance on imported oil and jeopardizes America’s global competitiveness, leadership and influence in the Arctic.
President Obama did the right thing in August by finally allowing energy exploration to proceed in the Chukchi Sea. But the approved drilling permit for Royal Dutch Shell remains the only exploration activity in U.S. waters in the Arctic. Now is the time to ensure that responsible energy exploration and production in the region proceeds at a pace that matches Russia’s and China’s aggressive efforts.
The U.S. recently assumed a two-year term as chairman of the Arctic Council, the world’s primary intergovernmental forum on the region. The council focuses on a broad range of issues but not on defense and security. The U.S. can use its chairmanship to take a leadership position on shipping, resources and fisheries standards and practices. It can also set the stage for constructive regional engagement and cooperative investment to enhance overall maritime domain awareness in the Arctic, including joint search-and-rescue and environmental responses.
The U.S. should also use its leadership role to ensure responsible energy exploration and production in the region, bringing to bear America’s higher standards of operations, more-stringent safety standards, and a more finely tuned risk-management culture than is practiced on the other side of the Arctic Ocean.
As the NPC report revealed, the U.S. needs Arctic energy exploration. Yet by repeatedly putting the brakes on the development of natural resources in the Arctic, Washington has injected uncertainty into its Arctic policy and threatened the future energy security of U.S. citizens. If we subject energy companies to death by a thousand paper cuts that put stifling bureaucracy over national strategic needs, we will cede this critical strategic region to others with grave economic, security and environmental implications for generations to come.
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Charles Koch Blasts Barack Obama
Aug 25, 2015 | PoliticoPro
By Mike Allen
Charles Koch hit back at criticism of “the Koch brothers” during President Barack Obama’s energy speech in Las Vegas earlier this week, saying he was “flabbergasted” by the attack and charging that Obama made the dig as a favor to Senate Minority Leader Harry Reid (D-Nev.), who appeared with him.
“It’s beneath the president, the dignity of the president, to be doing that,” Koch said during a phone interview Tuesday.
Koch’s blistering comments came as he and his brother David, whose conservative political network plans to spend hundreds of millions of dollars on the 2016 election, have spoken out more frequently in an attempt to blunt Democratic attacks on their political influence and insinuations about their motives.
Reid has been particularly relentless, calling the Kochs “shadowy billionaires” who seek to “rig the system to benefit themselves and the wealthiest 1 percent,” among many other charges. At the National Clean Energy Summit at the Mandalay Bay Resort Convention Center on Monday, Obama joined the fray.
The president drew applause when he said: “[Y]ou start seeing massive lobbying efforts backed by fossil fuel interests, or conservative think tanks, or the Koch brothers pushing for new laws to roll back renewable energy standards or prevent new clean energy businesses from succeeding — that’s a problem.”
But Koch, who is chairman and CEO of Koch Industries, said his opposition to subsidies for clean energy companies — or any other private businesses — doesn’t mean he’s against their success. Rolling back corporate welfare is one of the top issues Koch is pursuing with his richly funded political network.
Koch said his company also opposes subsidies for fossil fuels.And he portrayed Obama’s remarks as an unwarranted personal attack.“I was absolutely flabbergasted that he could say so many things about us that were the opposite of the truth,” Koch said. “I was really dumbfounded. And I know he was there with Harry Reid. So we expect that with Harry Reid, but I didn’t expect that from the president.”
Koch said he has never met Obama. “The only thing I can think of is he was there with Harry Reid, and it was kind of a farewell gesture to help Harry Reid,” Koch added. “I can think of no other reason to single us out in his remarks in his efforts to promote his favorite forms of energy.”
Koch said his company is “opposed to renewable energy subsidies of all kinds — as we are all subsidies, whether they benefit or help us.”
“We are not trying to prevent new clean energy businesses from succeeding,” Koch continued. “Any business that’s economical, that can succeed in the marketplace, any form of energy, we’re all for. As a matter of fact, we’re investing in quite a number of them, ourselves — whether that’s ethanol, renewable fuel oil. … We’re investing a tremendous amount in research to make those more efficient and create higher-value products.”
Koch added: “But it’s not going to help the country to be subsidizing uneconomical forms of energy — whether you call them ‘green,’ ‘renewable’ or whatever. In that case, the cure is worse than the disease. And there is a big debate on whether you have a real disease or something that’s not that serious. I recognize there is a big debate about that. But whatever it is, the cure is to do things in the marketplace, and to let individuals and companies innovate, to come up with alternatives that will deal with whatever the problem may be in an economical way so we don’t squander resources on uneconomic approaches.”Obama said of those who try to thwart policies intended to boost clean energy: “That’s not the American way. That’s not progress. That’s not innovation. That’s rent seeking, and trying to protect old ways of doing business and standing in the way of the future.”
Obama continued: “I mean, think about this. Ordinarily, these are groups that tout themselves as champions of the free market. If you start talking to them about providing health care for folks who don’t have health insurance, they’re going crazy: ‘This is socialism, this is going to destroy America.’ But in this situation, they’re trying to undermine competition in the marketplace, and choke off consumer choice, and threaten an industry that’s churning out new jobs at a fast pace.”
Koch shot back: “I don’t know whether he knows what that phrase means, but ‘rent seeking,’ of course, is, in economic terms, is getting the government to rig the system in your favor. And that’s exactly what these so-called ‘renewable energy’ proponents are doing.”
Clean-energy advocates argue that government incentives have helped cut the cost for solar power by 75 percent in the past decade — making it competitive with fossil fuels in many places in the country. The resistance, they say, now comes from utility monopolies that fear their profits will disappear as the clean power sources on customers’ rooftops displace big fossil-fuel plants.
For his part, Koch said he’ll continue speaking out on the issue.
“In the days ahead, we’re trying to show that corporate welfare wastes resources,” he said. “The country — or the government — is headed for bankruptcy. … So we’re going to be continuing to speak out against corporate welfare as something that hurts everybody except those direct beneficiaries.”
Koch’s latest comments are part of an ongoing attempt by the billionaire brothers to raise their public profiles. Most notably, they dramatically expanded access to the media for the summer meeting of Freedom Partners, their political network. At the meeting, this reporter had on-the-record interviews with five presidential candidates.
Charles Koch expounded on his crusade against “crony capitalism” and his political philosophy in a POLITICO interview on July 31.
“Any of the social changes in American history are because people thought there was injustice,” he said. “We have to show that this corporate welfare and cronyism is unjust — and that it’s not only rigging the system so people get wealthy who don’t deserve to get wealthy, but … many aspects of it are undermining the opportunities for the poor and the disadvantaged.”
Koch said he has been “working on this issue since the ’60s,” and said his zeal on it has not been popular with some of his corporate friends.
“In the ’70s, I set up an organization called Council for a Competitive Economy, and I tried to recruit business people to oppose subsidies and corporate welfare,” Koch recalled. “And everybody had a rationalization for getting subsidies, protection from foreign competition, whatever. … [I]t doesn’t make our friends … happy. … I mean, so what? You’ve got to do the right thing.”Asked if Koch Industries benefits from federal subsidies, the CEO replied: “Oh, tremendously. … The whole economy is so rife with cronyism and corporate welfare. I mean, take a look at all the import tariffs. We would do away with them all — and, believe me, a lot of our products are protected by it.”
Koch continued: “You say, ‘Well, why are you doing it if it is going to cost Koch Industries so much money to have these reforms?’ We take a long-term perspective. So it isn’t just altruism or we’re into self-sacrifice. No, we’re into win-win. We’re into a society that’s mutually beneficial.”
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Lawsuits Seeking Stay of Clean Power Plan to Proceed
Aug 26, 2015 | BNA Daily Environment Report
By Anthony Adragna and Andrew Childers
A federal appeals court consolidated the two most recent challenges seeking an immediate stay of the Environmental Protection Agency's Clean Power Plan and ordered the agency to respond by Aug. 31 to the lawsuits (In re West Virginia, D.C. Cir., No. 15-1277, order filed 8/24/15).
The petitions for an extraordinary writ to block implementation of the carbon dioxide emissions standards for power plants, filed separately Aug. 13 by 15 states and Peabody Energy Corp., were consolidated by the U.S. Court of Appeals for the District of Columbia Circuit.
Any responses to the EPA's filing would be due by Sept. 4 and could be no longer than 15 pages, according to the Aug. 24 order from Judges David Tatel and Brett Kavanaugh.
Separately, another federal appellate court denied Oklahoma's bid to delay implementation of the Clean Power Plan until legal challenges can be resolved.
Peabody, W.Va. Challenges Consolidated
Peabody, the largest private-sector coal company in the world, filed its Aug. 13 petition in a separate lawsuit, where a D.C. Circuit panel had previously rejected challenges to the Clean Power Plan as premature because the regulation had not been finalized. The company hoped to get its latest challenge before the same panel In re Murray Energy Corp. , 788 F.3d 330, 2015 BL 180996 (D.C. Cir. 2015).
The court declined that option and instead decided to create a new docket for the Peabody challenge. The judges then consolidated that new case with the existing lawsuit from 15 states, led by West Virginia (In re Peabody Energy Corp., D.C. Cir., No. 15-1284, 8/24/15).
Issued Aug. 3, the final Clean Power Plan (RIN 2060-AR33) sets unique carbon dioxide emissions rates or alternatively mass-based targets for the power sector in each state. State regulators will be tasked with developing plans to meet the targets, which will be phased in through 2030.
Peabody and the 15 states argue that the D.C. Circuit should step in now, because “irreparable harm” is already occurring to the power sector in each state. They have also argued that the final rule violates the Clean Air Act because statutes bar it from regulating carbon dioxide emissions from power plants under Section 111(d) when those units are already subject to hazardous air pollutant limits under Section 112.
EPA Administrator Gina McCarthy and other administration officials have repeatedly expressed confidence in the Clean Power Plan's legality, though they acknowledge years of litigation are sure to follow. Congress is expected to consider several attempts to block or outright kill the regulation this fall (155 DEN A-4, 8/12/15).
Oklahoma Stay Denied
The U.S. Court of Appeals for the Tenth Circuit also denied Oklahoma's request to stay implementation of the Clean Power Plan pending litigation over the rule (Oklahoma v. McCarthy, 10th Cir., No. 15-5066, order issued 8/24/15).
The Tenth Circuit said Oklahoma has not shown that it is likely to win its lawsuit or that it would be irreparably harmed by implementing the Clean Power Plan—the criteria for granting the stay—in an Aug. 24 order denying the request.
Oklahoma appealed after its challenge to the Clean Power Plan in the 10th Circuit after its prior lawsuit was dismissed by the U.S. District Court for the Northern District of Oklahoma for lack of jurisdiction (144 DEN A-3, 7/28/15).
Oklahoma has also joined 15 other states in asking the EPA to administratively stay implementation of the rule while it faces legal challenges. Most recently, Texas filed its own separate petition asking the EPA to stay the rule (163 DEN A-4, 8/24/15).
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EPA Chief Says `Tremendous' Chance Offered for Carbon Capture
Aug 26, 2015 | Bloomberg
By Chisaki Watanabe
Gina McCarthy, the head of the U.S. Environmental Protection Agency, said the need to reduce carbon emissions offers a chance to push ahead with low-carbon technology such as carbon capture and storage.
“In the U.S. even with our Clean Power Plan, every fuel will still continue to play a part” including coal and gas, she said at a town hall meeting in Tokyo Wednesday. The Clean Power Plan, an initiative announced earlier this month, would require the American power sector to cut carbon pollution 32 percent by 2030 from 2005 levels.
“There’s a tremendous opportunity today to accelerate our progress on cleaner combustion and carbon capture and storage,” McCarthy said.
Her remarks came as the U.S. Department of Energy and China’s National Energy Administration agreed to share their results as they refine technologies to capture the greenhouse gases produced from burning coal, according to a report by the Associated Press late Tuesday, which cited Christopher Smith, the Energy Department’s assistant secretary for fossil energy.
“Over time, higher levels of capture will be available as CCS technology advances,” McCarthy said.
McCarthy is in Japan to meet with officials, including Yoshio Mochizuki, Japan’s environment minister.
CCS is a technology that promises to absorb the pollution blamed for global warming before it reaches the atmosphere. CCS is designed to capture and bury the carbon dioxide byproduct from burning fossil fuels.
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2013 California Report Called Key in Climate Pacts
Aug 26, 2015 | BNA Daily Environment Report
By Laura Mahoney
A science-based document outlining the human impacts of global climate change, prepared at the request of Gov. Jerry Brown (D), has been the force behind California's pacts with other countries and states, as well as a call for action from U.S. military leaders, two scientists who helped prepare the document said Aug. 24.
Since Brown released the so-called consensus statement in 2013, it has been translated into five languages and been at the center of agreements reached in 2015 with Mexico, China, several U.S. states, and other state and provincial governments in Brazil, Germany, Spain, the U.K. and Canada, Anthony Barnosky, professor of integrative biology at the University of California, Berkeley, said (97 DEN A-19, 5/20/15).
Under the agreements, the signatories agree to work to limit the increase in global average temperature to below 2 degrees Celsius (3.6 degrees Fahrenheit).
Nepal is considering including the statement in a new constitution. The CNA Military Advisory Board, a panel of retired high-level U.S. military officials, put climate change at the center of its most recent report as one of the nation's largest security threats, due in part to the consensus statement, said Elizabeth Hadly, a Stanford University biology and geological and environmental sciences professor.
The Pope and the White House
The document played a key role in Brown's meeting with Pope Francis in July and in recent discussions with White House officials, Barnosky and Hadly said at the California Climate Change Symposium held in Sacramento, Calif.
Brown has led the way, giving the report to leaders he meets, Barnosky said.
“When he gives it to people he says ‘Do you believe in climate change? If not, why? If so, what are you going to do about it?’ ” Barnosky said.
The document, authored by 18 scientists and titled “Scientific Consensus on Maintaining Humanity's Life Support Systems in the 21st Century: Information for Policy Makers,” outlines five impacts of human-caused climate change. The authors of the said science unequivocally demonstrates human quality of life will suffer because of climate change, extinctions of species, wholesale loss of diverse ecosystems, pollution and human population growth and consumption patterns.
Brown's leadership and the relationship he has forged with scientists has assured that California's climate change policies are founded on solid science and helped push others to act, Hadly said.
“We're lucky to be in a place where our policy is founded on good science,” Hadly said.
New Goals
California is working toward reducing greenhouse gas emissions to 1990 levels by 2020 under the Global Warming Solutions Act adopted in 2006, and lawmakers are debating measures that would set new reduction goals for 2030 and 2050.
S.B. 32 by Sen. Fran Pavley (D) would codify a 2005 executive order from former Gov. Arnold Schwarzenegger (R) to reduce greenhouse gas emissions to 80 percent below 1990 levels by 2050, and S.B. 350 by Senate President Pro Tempore Kevin de Leon (D) and Sen. Mark Leno (D) would set a 2030 goal to cut petroleum use by 50 percent and increase renewable energy use and energy efficiency in existing non-residential buildings by 50 percent. Brown proposed the 50/50/50 goals in his January State of the State address (03 DEN A-8, 1/6/15).
Both measures won support Aug. 24 and 25 from nine former leaders of the legislature, as well as businesses and business groups including Silicon Valley Leadership Group, Dignity Health, Gap Inc., and zero-emissions vehicle manufacturer Proterra Inc. They have passed the Senate and are pending in the Assembly Appropriations Committee.
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EPA to Respond by Aug. 28 on MATS Suspension Request
Aug 26, 2015 | BNA Daily Environment Report
By Patrick Ambrosio
A federal appeals court ordered the Environmental Protection Agency to respond by Aug. 28 to an emergency motion filed by the Tri-State Generation and Transmission Association Inc., which wants the court to suspend compliance obligations under the mercury and air toxics standards for the company's coal-fired Nucla Station in southwestern Colorado (White Stallion Energy Ctr. LLC v. EPA, D.C. Cir., 12-1100, order issued 8/25/15).
In an emergency motion filed Aug. 24 in the U.S. Court of Appeals for the District of Columbia Circuit, Tri-State said judicial action is needed because the company cannot receive timely administrative relief from federal and state regulators.
Tri-State asked the court to suspend the Nucla plant's compliance obligations by Sept. 1, the date by which the company said it must decide whether to shut down the power plant or invest millions of dollars to meet hydrochloric acid emissions limits under the MATS rule.
Tri-State, based in Westminster, Colo., is a wholesale electric power supplier owned by the 44 electric cooperatives that it serves in Colorado, Nebraska, New Mexico and Wyoming.
Tri-State asked the D.C. Circuit to issue a decision on the emergency motion by Sept. 1, which the court is on schedule to do. The court issued an order Aug. 25 requiring the EPA to respond to the emergency motion by Aug. 28, with any reply from Tri-State due by noon Aug. 31.
Supreme Court Decision
The D.C. Circuit will decide whether the mercury and air toxics standards (RIN 2060–AP52, RIN 2060-AR31) will be vacated or remain in place while the EPA works to address a June decision by the U.S. Supreme Court, which held the agency was required to consider compliance costs when deciding it was “appropriate and necessary” to regulate mercury emissions from power plants (Michigan v. EPA, 135 S. Ct. 2699, 80 ERC 1577, 2015 BL 207163 (U.S. 2015); 125 DEN A-1, 6/30/15).
The emergency motion specifically asked the court to suspend the Nucla Station's obligations to meet the hydrochloric acid limit established under MATS until the EPA addresses the Supreme Court's decision in Michigan v. EPA. The plant has come into compliance with most of the standards but obtained a one-year extension from Colorado to meet the hydrochloric acid limit.
Administrative Remedy Unavailable
This is the second time that Tri-State has asked the court to address the compliance issue with Nucla Station.
The D.C. Circuit on Aug. 17 denied the initial request but said the company could file another motion if “timely relief” could not be obtained from the EPA or Colorado authorities (159 DEN A-1, 8/18/15).
After that decision, Tri-State formally requested relief from the EPA and the Colorado Air Pollution Control Division, according to the emergency motion. Tri-State said the EPA indicated it would not provide any relief and that Colorado officials informed the company the state environmental agency does not have the authority to suspend the plant's compliance obligations.
“Tri-State has done everything possible to obtain a remedy from EPA and APCD [the Colorado Air Pollution Control Division] but to no avail,” the company said in its motion.
The EPA already told the D.C. Circuit that it plans to address the Supreme Court's ruling by spring 2016 and anticipates doing so before the April 16, 2016, compliance deadline for Nucla Station and other power plants that received a one-year extension.
Although Tri-State has until April 16 to bring the Nucla Station plant into compliance, terms of the compliance extension and the plant's operating permit require the company to make a decision by Sept. 1 on whether to shutter the plant.
The power supplier said in its motion that shutting down Nucla Station would have a “devastating” effect on Nucla, Colo., a town of about 700 residents that receives most of its tax revenue from the power plant.
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MATS Remand Time Frame Realistic, Attorneys Say
Aug 26, 2015 | BNA Daily Environment Report
By Patrick Ambrosio
The Environmental Protection Agency's target date of spring 2016 to address the U.S. Supreme Court's decision on the mercury and air toxics standards (MATS) would provide the agency with enough time to adequately consider the cost of regulation, several attorneys familiar with the litigation told Bloomberg BNA.
While there was no consensus on how the agency will address the Supreme Court's decision, attorneys agreed that there is no reason to doubt the EPA's claims that it could meet what the agency itself described as an “ambitious schedule.”
John Walke, clean air director at the Natural Resources Defense Council, said one reason to believe that the EPA can meet its planned schedule is that the action the agency must take is much more limited in scope than a full-blown rulemaking, a process that can take years to complete. The NRDC is one of the environmental groups that is involved in the MATS litigation as intervenors on behalf of the EPA.
“This undertaking is far more modest and focused than a full scale rulemaking,” Walke said. “I think this faster schedule is entirely realistic.”
The EPA on Aug. 10 told the U.S. Court of Appeals for the District of Columbia Circuit that the agency plans to “complete the required consideration of costs for the ‘appropriate and necessary finding' ” before an April 16, 2016 compliance deadline for power plants that had received a one-year extension under the mercury and air toxics standards (White Stallion Energy Ctr. LLC v. EPA, D.C. Cir., No. 12-1100, opposition filed 8/10/15; 154 DEN A-4, 8/11/15).
The Supreme Court ruling at issue is a 5-4 opinion that concluded the EPA failed to complete a required consideration of costs when it decided it was “appropriate and necessary” to regulate mercury emissions from power plants, a finding that triggered promulgation of the MATS rule (Michigan v. EPA, 135 S. Ct. 2699, 80 ERC 1577, 2015 BL 207163 (2015); 125 DEN A-1, 6/30/15).
The Supreme Court remanded the litigation to the D.C. Circuit, which will decide whether the mercury and air toxics standards (RIN 2060–AP52, RIN 2060-AR31) remain in place or are vacated while the EPA addresses the cost issue. Motions to govern future proceedings before the D.C. Circuit are due by Sept. 10, and the EPA has indicated it will ask the court to leave the MATS rule in full effect.
Internal Work Underway
James Rubin, counsel in the Global Energy Sector at Dentons US LLP, agreed that the EPA should be able to meet a spring 2016 deadline for addressing the Supreme Court's ruling.
“I would take the agency at its word,” Rubin told Bloomberg BNA.
He noted that the EPA has had notice of this for “several months” and has no reason to wait for the D.C. Circuit to rule on the status of the mercury standards before starting the work needed to address the Michigan v. EPA decision.
Walke said it would have been “ill advised” for the EPA to wait for the appeals court ruling before moving ahead with the internal work that is needed to address the Supreme Court's ruling.
Rubin added that if the EPA is unable to act by spring 2016, it would increase the likelihood that the D.C. Circuit would stay compliance with the MATS rule for power plants that received an extension. One utility, Tri-State Generation and Transmission Association Inc. filed an emergency motion with the court seeking a court order suspending compliance obligations for the Nucla Station power plant in Colorado by Sept. 1, the date by which the company must decide whether to close the plant or install pollution controls in order to come into compliance by April 2016 (see related story).
The EPA confirmed in an Aug. 14 e-mail to Bloomberg BNA that the agency “is working” to address the issue raised in the Michigan v. EPA ruling.
EPA Keeps Options Open
Rubin said that based on a reading of the EPA's filing to the D.C. Circuit, the EPA is “keeping its options open” on how it will address the Supreme Court's ruling.
The agency specified in its filing that although it intends to address the court's decision by spring 2016, the agency “has not yet determined how it will do so.” The agency also noted that the Supreme Court did not limit the EPA's discretion as to how to consider costs.
Rubin said that although the EPA did not commit to a specific process, the agency did suggest it will undertake a narrow process to consider cost, though they are not precluded from doing something more expansive.
The EPA pointed to “extensive documentation” of the cost of the mercury and air toxics standards as a reason the agency can complete the required cost consideration by spring 2016. The EPA prepared a regulatory impact analysis for the mercury and air toxics standards, which estimated the rule would cost the power industry $9.6 billion annually while providing as much as $90 billion in estimated public health benefits.
Analysis Could Be ‘Beefed Up'
Brian Potts, a partner at Foley & Lardner LLP, told Bloomberg BNA that the EPA will likely go back and reconsider the cost analysis that was completed for the MATS rule, though that analysis can be updated. For example, Potts said, the EPA could try to “beef up” its cost-benefit analysis of the MATS rule by changing some of the assumptions used to make cost estimates.
“They could probably do that in that amount of time,” Potts said.
The EPA also could attempt to quantify additional benefits from the regulation of mercury, toxic metals and acid gases, the hazardous air pollutants regulated under MATS. The initial cost-benefit analysis for the MATS rule only quantified between $4 million and $6 million in benefits to reductions of those pollutants, with the rest of the benefits attributed to reductions in fine particulate matter and other pollutants.
During oral arguments in Michigan v. EPA, Chief Justice John Roberts questioned the legitimacy of counting benefits from reductions of pollutants regulated under other sections of the Clean Air Act, but the court's opinion did not rule on the legality of doing so.
Potts said the EPA might quantify extra benefits from reducing hazardous air pollutants, but noted that the agency previously said it was limited in its ability to quantify additional benefits.
One thing that the EPA will not have time to do if it intends to complete its cost consideration by spring 2016 is collect and analyze additional data from utilities, Potts said. The EPA in 1999 issued an information collection request to all coal-fired power plants for data on plant emissions, an action that helped inform the initial “appropriate and necessary” finding that was made by the agency in 2000.
“There is no way they're going through that process between now and the spring,” Potts said.
Public Input Possible
Rubin of Dentons said that under the EPA's proposed schedule it would be “very hard” to solicit and consider public comment in a limited amount of time, but two environmental attorneys involved in the litigation said the proposed schedule would not necessarily preclude the EPA from considering additional information on cost.
Sean Donahue, an attorney representing the Environmental Defense Fund in litigation over the MATS rule, said that the existence of a regulatory impact analysis prepared alongside the 2012 MATS rule and the EPA's consideration of cost during the standards-setting process means that the agency is “not starting from a blank slate” as it considers cost through the lens of an “appropriate and necessary finding.”
Donahue told Bloomberg BNA that the timeframe for action proposed by the EPA would offer a reasonable amount of time for the agency to solicit public input. He said that he would not be surprised if, given the legal situation with MATS, the EPA proposes something and opens a public comment period on the proposal.
Walke of the NRDC agreed that the proposed schedule would provide enough time for the EPA to accept public comments. He said that he expects the EPA to solicit additional information from the public to supplement the cost analysis that was already performed when the EPA issued the final MATS rule.
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EPA Approves Two New Monitoring Methods
Aug 26, 2015 | BNA Daily Environment Report
The Environmental Protection Agency has approved a pair of new air quality monitoring methods for use by state and local air regulators. In a notice scheduled for publication Aug. 26, the EPA designated a pair of new federal equivalent methods—one for measuring ozone and one for measuring fine particulate matter. Equivalent methods are based on different technology than federal reference methods, which the agency describes as the “gold standard” for ambient air monitoring but are just as accurate. The EPA periodically approves new air quality monitoring methods for use by state and local agencies in charge of collecting data that is used to determine an area's compliance with national ambient air quality standards. The new fine particulate equivalent method is based on a sampler made by Met One Instruments Inc. The ozone method is based on an analyzer marketed by 2B Technology Inc., which is based on non-dispersive ultraviolet absorption photometry. The prepublication version of the Aug. 26 notice is available at https://s3.amazonaws.com/public-inspection.federalregister.gov/2015-21203.pdf.
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6th Circuit Weighs Scope Of State 'Nuisance' Claims Under Clean Air Act
Aug 25, 2015 | InsideEPA
By Stuart Parker
Federal appellate judges are weighing the scope of state "nuisance" suits over air pollution that courts can allow under the Clean Air Act, raising questions at recent oral arguments over the extent such cases are barred by the air law's "savings clause" that preserves states' rights to regulate pollution sources covered by federal permits.
Whatever the three-judge panel of the U.S. Court of Appeals for the 6th Circuit decides will determine whether Kentucky residents are successful in their pending suit raising emissions nuisance claims against a whiskey manufacturer in the state. The judges' eventual ruling will also add to growing case law on air nuisance cases, following at least one other circuit court that has said the air law does not prevent nuisance claims at the state level.
Industry lawyers argue that allowing nuisance claims to proceed will undermine Clean Air Act permitting by setting pollution control requirements on a case-by-case basis whenever a facility loses a nuisance claim brought against it for its air pollution, creating unpredictable, divergent requirements and therefore regulatory chaos.
In the 6th Circuit case, Bruce Merrick, et al. v. Diageo Americas Supply, Inc. the residents are seeking injunctive relief and damages for harm done to their properties by ethanol emissions from whiskey aging facilities owned by Diageo. At recent oral arguments judges pressed both sides on the extent to which the federal air law's savings clause might preempt or alternatively allow the suit to proceed, according to a recording of the arguments.
The savings clause says, "nothing in this chapter shall preclude or deny the right of any State or political subdivision thereof to adopt or enforce (1) any standard or limitation respecting emissions of air pollutants or (2) any requirement respecting control or abatement of air pollution," if state measures are not weaker than federal mandates.
Ryan Shores, representing Diageo, claims that under the Clean Air Act, states may only introduce tougher controls on industry than the federal statute requires by "positive" and "additional" action.
Shores said the language of the air law's savings clause is most naturally read to require positive action by a state regulator or legislature to add requirements to federal mandates. That would preclude nuisance claims because such cases would have the potential of leading to a ruling in which a court -- rather than the state -- determines how to control or abate air pollution from a source at the center of a state nuisance suit.
Shores said that the "Clean Air Act reflects a very careful judgment that regulators, agencies are supposed to determine the appropriate amount of regulation," rather than judges in nuisance cases.
Nuisance Law
However, Judge John Rogers asked Shores why the air law does not allow legal action under state nuisance law -- whether through the common law or state statutes -- under the authority of state constitutions.
Shores replied that the Clean Air Act's savings clause language preserves states' rights to add regulatory mandates to federal requirements, but "that is very different than saying courts can impose retrospective liability."
The U.S. District Court for the Western District of Kentucky in a March 19, 2014, ruling found in favor of the Kentucky residents on their nuisance claims, prompting Diageo to appeal the case to the 6th Circuit. Shores said the lower court in its decision committed a "legal error" by failing to apply the principles of "conflict prevention" to the case. Had the court done so, it would have found the federal law preempts state nuisance law claims, Shores said.
Judge Jane Brunstetter Stranch also asked Shores tough questions regarding the ability of courts to impose pollution controls under nuisance law. The judge noted that Shores in his statements relied on the Supreme Court's 2011 ruling in American Electric Power (AEP) v. Connecticut, a case in which the high court unanimously rejected the state's effort to sue AEP over alleged harm from greenhouse gas emissions. The high court held that the Clean Air Act preempts such action -- however, AEP involved the federal common law, not state common law.
Attorney William McMurry, representing the Kentucky plaintiffs in the case, said that the AEP decision is not relevant in the Diageo case, despite the seemingly similar issues it raises. The AEP case involved interstate pollution issues, whereas the Kentucky litigation is exclusively about local issues, he said.
Stranch questioned Shores on why states would be limited to imposing tougher pollution controls by regulation or legislation alone, rather than nuisance litigation being another option.
Shores replied that regulators have an obligation to take competing regulatory requirements into account, while courts under nuisance law have no obligation to consider the Clean Air Act at all.
"I am struggling with your argument," Stranch told Shores.
Savings Clause
The savings clause has been at the heart of several recent lawsuits testing the power of citizens to bring suits under state common law of public nuisance, seeking either injunctive relief, money damages, or both from industry. In one high profile example, Bell v. Cheswick Generating Station, the 3rd Circuit in 2013 upheld residents' rights to bring nuisance claims, in principle, against a Pennsylvania power plant.
Industry groups appealed that ruling to the Supreme Court, which declined to hear the case, frustrating industry attorneys seeking to establish preemption of nuisance law by the federal air law.
Industry groups have filed amicus briefs in support of Diageo, underscoring the ongoing importance of the issue to industry because of the precedent the eventual ruling could establish. The U.S. Chamber of Commerce, the National Association of Manufacturers and the American Fuel and Petrochemical Manufacturers in a Dec. 3 amicus brief also cite the conflict of the district court decision with the high court's holding in AEP.
"Reversal of the district court's decision is urgently needed. If that decision is allowed to stand, it will encourage litigants to use the nearly limitless range of liability theories available under state common law to try to impose their own preferred emissions restrictions on enterprises and businesses," the groups say. The Utility Air Regulatory Group, a group representing investor-owned utilities, also filed an amicus brief Dec. 3 to make similar arguments.
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