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ACC PM 9/14
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(ACC Mentioned) Study to Examine Recovery of Flexible Packaging
Sep 15, 2015 | Recycling Today
An industry collaborative has announced new research aimed at recovering more packaging that is currently destined for landfill. -
(ACC Mentioned) I Was Diagnosed With Cancer at Age 11. A Factory Leaked Chemicals Near my Home
Sep 15, 2015 | The Guardian
By Gabriel Dunsmith
When an MRI of my spine revealed an enlarged thyroid instead of the scoliosis the doctors had feared, they whisked me away for a biopsy. -
(ACC Mentioned) As Bills Stall in Albany, Environmentalists Look to Counties
Sep 15, 2015 | Politico New York
By Scott Waldman
After growing frustrated with state lawmakers, environmental groups are turning to local county legislatures to pass laws. -
Day Of Reckoning For DuPont Over Teflon Chemical
Sep 15, 2015 | Environmental Working Group
By Bill Walker
More than 15 years after an attorney investigating mysterious cattle deaths in Parkersburg, W. Va., discovered that DuPont had polluted the area’s drinking water with a carcinogenic chemical used to make Teflon, the company is finally facing trial. -
Agency Should Consider Ending Chemicals Cleanup Awards
Sep 15, 2015 | E& Greenwire
By Sam Pearson
U.S. EPA should consider ending one of its most visible programs, which recognizes companies for their use of safer chemicals, the agency's inspector general said today. -
Enviros Move to Appeal N.J. Settlement with Exxon Mobil
Sep 15, 2015 | E&E Greenwire
New Jersey environmental groups took the first step yesterday to appeal the state's $225 million settlement with Exxon Mobil Corp., filing a motion in state Appellate Court to intervene. -
Cyberthreat Posed by China and Iran Confounds White House
Sep 15, 2015 | The New York Times
By David E Sanger
A question from a member of the Pentagon’s new cyberwarfare unit the other day prompted President Obama to voice his frustration about America’s seeming inability to deter a growing wave of computer attacks, and to vow to confront the increasingly aggressive adversaries who are perpetrating them. -
Sen. Hoeven Pins Export Hopes Tto Popular Chemicals Bill
Sep 15, 2015 | E&E Greenwire
By Hannah Northey
North Dakota Sen. John Hoeven wants to attach language that would lift a 40-year-old ban on exporting domestic crude to a chemicals bill that has broad support in the upper chamber. -
America's Shale Gas Supply Is Caught in its Longest-Ever Decline
Sep 15, 2015 | Bloomberg
By Naureen Malik
America’s shale gas boom hasn’t exactly been booming lately. -
Five-Year Lease Puts Shell's Drilling Future Firmly in Interior's Hands
Sep 15, 2015 | E&E Energywire
By Margaret Kriz Hobson
Late this month, as Royal Dutch Shell PLC begins to wrap up its controversial Arctic drilling operation, company officials are expected to let the world know whether they've discovered crude at their Chukchi Sea leases. -
Crude's Slump Is a Drag For Natural Gas, Too
Sep 15, 2015 | E&E Energywire
By Nathanial Gronewold
The oil price slump is beginning to bleed into natural gas markets, as well, leading some analysts to speculate that gas's future prospects may not be as rosy as many had originally assumed. -
OPEC Predicts Increased Demand in 2016
Sep 15, 2015 | E&E Energywire
The Organization of the Petroleum Exporting Countries predicted yesterday that demand for its product would rise next year. -
A Road Map for Navigating Oil and Gas Geopolitics
Sep 15, 2015 | E&E Energywire
By Blake Sobczak and Benjamin Hulac
U.S. policymakers should think twice before using new oil and gas supplies as a geopolitical weapon, according to a former State Department official. -
Enviros Return Industry Fire In Pr War Over Ozone Costs
Sep 15, 2015 | E&E Greenwire
By Amanda Peterka
Environmentalists issued a report today aimed at countering industry claims about economic risks posed by U.S. EPA's plan to tighten the national air pollution standard for ozone. -
Judge Rejects N.C. Bid to Stem Cleanup Scope
Sep 15, 2015 | E&E Greenwire
A North Carolina judge yesterday rejected an attempt by North Carolina regulators to block a settlement that would see Duke Energy Corp. remove more coal ash than required under state law. -
$3.8B Bakken Project Bets Heavy on Approval
Sep 15, 2015 | E&E Energywire
Midstream giant Energy Transfer Partners LP is stacking steel pipes across North Dakota, South Dakota, Iowa and Illinois in the hopes that all four states approve plans to build an 1,100-mile oil pipeline. -
Steyer Group Wants GOP Candidates to Be Like Reagan
Sep 15, 2015 | E&E Greenwire
By Jennifer Yachnin
The environmental activists at NextGen Climate Action unveiled a new tactic today in their efforts to push would-be Republican presidential nominees to back renewable energy policies: urging the GOP field to be more like the late President Reagan. -
Mich. Republican Ends Bid for 4th House Term
Sep 15, 2015 | E&E Greenwire
By Jennifer Yachnin
Republican Rep. Dan Benishek announced today he will end his re-election bid and opt to retire at the end of his term, a surprise decision that creates a competitive open-seat race in Michigan's 1st District. -
US, China Bring Climate Pledges to The Local Level
Sep 15, 2015 | The Hill
By Timothy Cama
Dozens of states, cities, counties and provinces in the United States and China are announcing pledges Tuesday to limit their greenhouse gas emissions. -
Tribal Lawsuit over Crude Transport to Stay in Federal Court
Sep 15, 2015 | E&E Energywire
By Ellen M. Gilmer
A federal judge last week rejected an attempt by one of the nation's biggest railroad operators to dodge a challenge from an American Indian tribe over land access.
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(ACC Mentioned) Study to Examine Recovery of Flexible Packaging
Sep 15, 2015 | Recycling Today
An industry collaborative has announced new research aimed at recovering more packaging that is currently destined for landfill. The project, Materials Recovery for the Future, brings together brand owners, manufacturers, and packaging industry organizations that are committed to enhancing recovery solutions for increasingly popular flexible film and packaging options. Some common forms of flexible packaging include resealable food packages, pouches for soups and tuna, pet food bags, and snack bags.
“Flexible packaging offers many benefits we take for granted. It typically uses less energy and materials than other packaging options, helps extend food shelf life and minimize spoilage, and reduces waste by preserving and protecting products until they are consumed,” says Jeff Wooster, global sustainability director, Dow Packaging and Specialty Plastics. “This new sortation research is critical in helping to close the recovery loop for flexible packaging, and we are committed to this collaboration to drive solutions for increased recovery rates.”
Resource Recycling Systems (RRS), Ann Arbor, Michigan, which developed the test methodology, will conduct the first phase of the research, which will include baseline testing of the existing sortation technologies commonly used in material recovery facilities, such as screens and optical scanners. A representative mix of the flexible packaging generated by consumers will be created and added at an appropriate concentration to single stream recyclables for testing. This mixed stream will be run through the sorters, and the amount of flexible packaging captured in the resulting bale will be measured to determine sorting effectiveness.
“The research is first to use this methodology to study the movement of films and flexible plastic packaging at material recovery facilities in the United States. We believe that data from this collaborative research will help us learn how to recover and divert more valuable resins from landfills,” says Diane Herndon, manager, sustainability, Nestlé Purina PetCare Co.
This research effort represents a first step in what will be a series of projects aimed at creating a mainstream recovery solution for flexible packaging. Results are expected to be published in the second quarter of 2016.
Project sponsors include The Dow Chemical Co., PepsiCo, Procter & Gamble, Nestlé Purina PetCare and Nestlé USA, Sealed Air, and SC Johnson, as well as the Association for Postconsumer Plastic Recyclers (APR), the Flexible Packaging Association (FPA), and SPI: The Plastics Industry Trade Association (SPI).
Materials Recovery for the Future is an initiative of the Research Foundation for Health and Environmental Effects (RFHEE), a 501(c)(3) tax-exempt organization established by the American Chemistry Council, Washington.
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(ACC Mentioned) I Was Diagnosed With Cancer at Age 11. A Factory Leaked Chemicals Near my Home
Sep 15, 2015 | The Guardian
By Gabriel Dunsmith
When an MRI of my spine revealed an enlarged thyroid instead of the scoliosis the doctors had feared, they whisked me away for a biopsy. I lay awake as the surgeon stuck a needle into my neck and wiped away the blood. The next day, my mom told me the test result when I got home from school: thyroid cancer. I was eleven years old.
As the surgeons put me under for an operation that would remove my thyroid, I hoped I would still be able to run around outside with my brother, to clamber through the groves and streams that surrounded my home in the mountains ofNorth Carolina.
While I lay on the operating table, an abandoned factory a mile from my house silently seeped toxic chemicals into the creeks and valleys.
Yet no warnings were posted outside the gates. The polluted streams were not fenced off. Like the other neighborhood kids, I had no idea of the toxins lurking in our midst.
At its headquarters in Elkhart, Indiana, the company that polluted my hometown is alive and well. CTS Corporation set up its Asheville, North Carolina, factory in the 1950s to take advantage of right-to-work laws that kept workers from organizing, and it soon began to manufacture sensors and electronics components for the US military. When it finished electroplating, CTS dumped its leftover solvents out back. This desecration continued unabated for decades, until the company seized cheaper factories overseas and shut down its Asheville plant in April of 1986 – the very month that Chernobyl exploded.
The shuttering of the factory did not spell the end of the pollution, however, as chemicals continued to migrate from the dumping-ground into the local environment. In 1999, the carcinogen trichloroethylene (TCE), CTS’s primary solvent, tested in one woman’s well at far past the legal limit of five parts per billion: she was drinking 21,000. Thyroid cancer had struck her several years before.
The assault on human health did not end there: non-Hodkin’s lymphoma, birth defects, and liver and kidney disease showed up in droves. By the time of my diagnosis in 2005, such ailments had already taken a toll on my community. Over a single decade, one man lost ten family members to cancer.
When I woke from my surgery it was with a desire to get outside, to take to the woods as I had always done, for I had long found refuge on the mountaintops and deep in the glens. Affirming my relationship with the natural world was a healing process. And it would also be a healing process when, years later, I saw a news clip about the pollution in my backyard: coincidence crystallized into cause-and-effect, and I began to fight for cleanup. Just as my body had been rid of cancer, so too should the hills and waterways run clean.
In 2015, nearly three decades after CTS Corporation fled Asheville, precious little has been done to rectify the mess left behind. In 2012 the Environmental Protection Agency (EPA) placed the site on its Superfund inventory, a list of the most polluted sites in the country. But the agency has gone so far as to blame residents for the contamination, threatening to fine one man – whose well was polluted with TCE – $37,500 per day if he failed to release documents on materials in his house. The agency has also been slow to force CTS Corporation into any sort of action.
This is not just a problem in Asheville but at thousands of polluted sites across the country: the federal agency in charge of safeguarding human health and the environment panders to polluters and lacks the political wherewithal to make them rectify their injustices. The Superfund tax once held polluters liable for their refuse, but since it expired in 1996 Congress has failed to renew it.
Chemical legislation is no help either: when the Toxic Substances Control Act (TSCA) became law in 1976, it grandfathered in 60,000 untested chemicals.
Five years ago a handful of Asheville residents, no longer content to wait for the EPA to act while CTS’s pollution spread, sued the company. The lawsuit wound up at the Supreme Court last year. The Obama Administration, the American Chemistry Council and the American Petroleum Institute all lent their support to CTS, threatened by the prospect of millions of dollars of cleanup costs. Had we prevailed, we would have set a precedent for communities like ours to hold polluters – including the federal government – accountable for eradicating their toxic waste. The justices, however, voted against us.
Time and again, the United States steps in to safeguard corporate profit in the face of outrageous suffering, threatening millions of Americans with exposure to pollution. When we speak of American freedom, we don’t often think of freedom from toxic chemicals or freedom from cancer. But it is just these freedoms that we need.
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(ACC Mentioned) As Bills Stall in Albany, Environmentalists Look to Counties
Sep 15, 2015 | Politico New York
By Scott Waldman
After growing frustrated with state lawmakers, environmental groups are turning to local county legislatures to pass laws.
On Monday, Albany County lawmakers said they would soon vote on a bill to ban microbeads, the tiny plastic particles — found in many cosmetics and personal care products — that pass through water treatment plants and harm fish and other wildlife when they reach waterways.
The ban, which legislators hope to approve by year's end and have in place by next summer, would follow a similar Erie County bill. After a push from advocates, county legislatures in three other counties are considering similar measures.
For advocates tired of fighting the same battles in the Capitol year after year, turning to county legislators to pass bills that fail in the Legislature is a becoming a well-worn strategy. With an eye to past successes that spread beyond county confines — like a ban on trans fat, adopted by the federal government this year, six years after Albany County's — they hope counties' measures may spur broader action.
The current microbead push is similar to an effort in the last year to get county legislatures to pass a ban on certain chemicals in children’s toys, after the bill failed at the state level amid significant pushback from industry lobbyists. After the state ban failed, Albany, Suffolk and Westchester counties passed local versions, and now New York City is considering similar legislation.
“When lower levels of government, like counties, take action, it is heard by state government and it spurs them to take action,” Albany County legislator Bryan Clenahan said.
Advocates see county versions of their bills as first steps toward establishing passage at the state level, said Saima Anjam, environmental health director at Environmental Advocates of New York. She said the laws often help educate voters, who can then press their state representatives to action.
“When the state and federal government fail to take action, what other option do you have but local?” she said.
But the push at the local level can also make state passage more difficult, said Jordan Levine, spokesman for the League of Conservation Voters.
Industry pressure on state lawmakers over the ban on chemicals in toys intensified after the Albany County and other county legislatures prepare their own versions of the so-called Child Safe Products Act, he said. He said some industry groups, including the Toy Industry Association, were willing to talk about a modified version of the bill after county-level versions passed. Others, including the American Chemical Council, ramped up lobbying efforts to kill the bill and ultimately succeeded, he said.
“What we were doing on the local level freaked them out a little and made them spend more money,” he said.
Still, county executives are increasingly eager to make their counties laboratories for laws that will eventually expand to statewide, Levine said.
“You see a lot of county execs realizing the power they have, and it certainly made a difference,” he said.
Albany County Executive Dan McCoy said some of the state’s most significant bans in recent years started at the county level, citing as an example his county's 2009 trans fat ban, just implemented into federal law. He also pointed to other counties' bans on styrofoam and grocery bags.
And he said that in Albany, some county lawmakers are on the staff of state lawmakers see bills stalled in the state Legislature and use drafts to pass local versions of them.
“We take pride in it,” he said. “If you don’t try to fix it, who’s going to do it? Somebody has to be the first, the guinea pig, to see if it can work.”
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Day Of Reckoning For DuPont Over Teflon Chemical
Sep 15, 2015 | Environmental Working Group
By Bill Walker
More than 15 years after an attorney investigating mysterious cattle deaths in Parkersburg, W. Va., discovered that DuPont had polluted the area’s drinking water with a carcinogenic chemical used to make Teflon, the company is finally facing trial.
Approximately 3,500 residents of West Virginia and Ohio have sued DuPont in federal court in Columbus, Ohio, saying they got sick from drinking water contaminated with a chemical known as PFOA. The first trial – in the case of Carla Marie Bartlett, who has kidney cancer – began Monday. A second trial will start Nov. 30, and then the remaining cases will be consolidated into one proceeding.
For 50 years DuPont used PFOA, also known as C8, to make Teflon at its Washington Works plant in Parkersburg. Despite mounting evidence of the chemical’s dangers, DuPont continued to dump PFOA into the water, soil and air of the small towns and rural communities in the mid-Ohio River Valley.
In 1998, a Cincinnati attorney named Robert Bilott, hired by a Parkersburg family whose cows died after drinking from a stream that ran through a DuPont dump, discovered secret company documents revealing the pollution and the company’s failure to tell local, state or federal authorities. Bilott kept digging and found tens of thousands of damning documents telling a much wider story: The widespread use of PFOA and related chemicals (called perfluorinated compounds, or PFCs) in hundreds of consumer products, had polluted not only the environment but the blood of animals and humans all over the world.
In 2003-2004, the National Health and Nutrition Examination Survey, conducted by the Centers for Disease Control and Prevention, found PFOA and 11 other PFCs in 98 percent of a representative sample of the U.S. population. In 2005, EWG and the non-profit Commonweal tested umbilical cord blood from 10 newborns and found that all 10 had PFCs in their blood, confirming that the chemicals could be passed from mother to unborn child in the womb.
More recent research has found that PFCs are dangerous at much lower levels than previously thought. And nationwide water sampling by the Environmental Protection Agency found PFCs in water supplies in 27 states, serving 6.5 million Americans.
In 2001 attorney Bilott alerted the EPA to the pollution in Parkersburg, and four years later the agency fined DuPont $16.5 million for covering up the dangers of PFOA. In 2006, the company settled a class-action suit on behalf of 50,000 residents of the mid-Ohio Valley for $235 million, promising to filter the water supplies of six area utilities.
The trials that began Monday are individual personal injury lawsuits by people who drank the contaminated water, then developed one or more diseases that had been linked to PFOA by a scientific panel funded by the earlier settlement. That panel concluded there was a probable link between PFOA and six diseases: kidney and testicular cancer, ulcerative colitis, thyroid disease, pregnancy-induced hypertension and high cholesterol.
Even as the evidence of PFOA’s hazards has grown, the EPA never set a legal limit for how much should be allowable in drinking water, and agency officials say it could be 2021 before they even decide whether to set an enforceable standard.
Although government regulators have failed to protect Americans from the dangers of PFOA, the trials that began Monday may finally bring justice to thousands of people in West Virginia and Ohio. -
Agency Should Consider Ending Chemicals Cleanup Awards
Sep 15, 2015 | E& Greenwire
By Sam Pearson
U.S. EPA should consider ending one of its most visible programs, which recognizes companies for their use of safer chemicals, the agency's inspector general said today.
The Presidential Green Chemistry Challenge Awards lack transparency and should be evaluated to determine whether they can continue, according to the IG report. In the meantime, EPA should not include pollution reduction figures from products given green chemistry awards in its annual pollution prevention statistics, the IG recommended.
The awards are chosen by an independent panel of technical experts convened by the American Chemical Society Green Chemistry Institute, but EPA administers the program and has given out 104 green chemistry awards since the competition began 20 years ago.
The IG's report sought to verify whether EPA's reported pollution prevention statistics from products recognized by the program were accurate.
At this year's awards, EPA claimed that the winning technologies are responsible for reducing the use or generation of more than 826 million pounds of hazardous chemicals each year. The agency also said the products saved 21 billion gallons of water and eliminated 7.8 billion pounds of carbon dioxide equivalent releases to air.
However, EPA's figures "are not adequately supported or transparent," the IG alleged, and are self-reported by award recipients with no verification by the agency.
The figures also make their way to the agency's annual summary of pollution prevention program accomplishments, where they could skew assessments, the report said.
In fiscal 2012, the report said, EPA claimed it exceeded its target for metric tons of carbon dioxide equivalent pollution reduced by more than 200 percent, but most of the reductions stemmed from self-reported Green Chemistry Challenge Award data. In addition, EPA does not have procedures to distinguish to what extent the products reduce emissions in the United States rather than in other countries, the report said.
Even the program's name, which implies the prestige of a presidential endorsement, may be misleading, the IG's office said.
That's because the awards program was launched during the Clinton administration but "had not received that level of endorsement in several years," the report said.
However, EPA recently obtained renewed support from the White House Office of Science and Technology Policy in response to the IG's investigation, the report said, and a White House staff member participated in this year's awards ceremony.
EPA disagreed with some of the findings of the report.
Jim Jones, EPA's assistant administrator for chemical safety and pollution prevention, wrote in the agency's response to the evaluation that the awards "are an effective tool for publicly acknowledging innovative technologies that help solve important environmental problems."
The program accomplishes this "for a relatively minimal investment" by EPA, Jones wrote. He said some of the IG's conclusions "appear to be based on inaccurate data or a misunderstanding" of the program.
Jones disagreed that EPA should stop using pollution prevention statistics from the green chemistry awards in its annual metrics, arguing that the agency's existing process is sufficient.
An EPA spokeswoman said in a statement that the program "has spurred significant savings in the use of energy, hazardous chemicals, and water while cutting manufacturing costs and sparking economic investments."
EPA plans to solicit nominations for next year's awards in the weeks ahead and will formally respond to the IG's report within 60 days, the agency said.
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Enviros Move to Appeal N.J. Settlement with Exxon Mobil
Sep 15, 2015 | E&E Greenwire
New Jersey environmental groups took the first step yesterday to appeal the state's $225 million settlement with Exxon Mobil Corp., filing a motion in state Appellate Court to intervene.
The filing by the New Jersey chapter of the Sierra Club, Environment New Jersey, Delaware Riverkeeper and Clean Water Action said the amount agreed upon between the state and Exxon Mobil was "strikingly and suspiciously low in light of the resource devastation Exxon has wrought at the refinery sites."
The settlement also inappropriately proposes to absolve Exxon Mobil of responsibility at more than 1,700 gas stations and 16 additional sites in New Jersey, even though they were not part of the original case, the filing said.
State Superior Court Judge Michael Hogan signed off on the settlement last month amid opposition from environmental groups, even though it was far less than the $8.9 billion New Jersey had sought from the oil company.
Hogan called the deal "fair, reasonable, in the public interest, and consistent with the goals of the Spill Compensation and Control Act"
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Cyberthreat Posed by China and Iran Confounds White House
Sep 15, 2015 | The New York Times
By David E Sanger
A question from a member of the Pentagon’s new cyberwarfare unit the other day prompted President Obama to voice his frustration about America’s seeming inability to deter a growing wave of computer attacks, and to vow to confront the increasingly aggressive adversaries who are perpetrating them.
“Offense is moving a lot faster than defense,” Mr. Obama told troops on Friday at Fort Meade, Md., home of the National Security Agency and the United States Cyber Command. “The Russians are good. The Chinese are good. The Iranians are good.” The problem, he said, was that despite improvements in tracking down the sources of attacks, “we can’t necessarily trace it directly to that state,” making it hard to strike back.
While young people at other summer camps were enjoying weeks of swimming, crafts and more, the participants at this N.S.A.-sponsored camp in Arlington, Va., were learning tools and rules for cybersecurity.N.S.A. Summer Camp: More Hacking Than HikingJULY 17, 2015
Then he issued a warning: “There comes a point at which we consider this a core national security threat.” If China and other nations cannot figure out the boundaries of what is acceptable, “we can choose to make this an area of competition, which I guarantee you we’ll win if we have to.”
If Mr. Obama sounded uncharacteristically combative on the topic, it is because finding a way to deter computer attacks is one of the most urgent and confounding problems he faces in his last 16 months in office. The problem is all the more pressing because it is where the high-tension diplomacy surrounding the state visit, in just 10 days, of President Xi Jinping of China merges with the challenge of containing Iran in the aftermath of the recently completed nuclear agreement with Tehran.
Mustering the leverage to deter attacks is exactly what Mr. Obama is struggling to accomplish in the days leading up to Mr. Xi’s visit. For six weeks, American officials have warned that they are preparing sanctions against Chinese hackers, telling Chinese officials in private meetings that the combination of intellectual property theft and espionage on an unprecedented scale — the theft of the 22 million security dossiers from the Office of Personnel Management, for example — cannot go unanswered.
But an argument has broken out within the administration over whether to invoke those sanctions now and risk a blowup with Beijing before Mr. Xi’s arrival, or use the threat of them to try to extract something from the Chinese.
The White House revealed late Saturday that a high-level Communist Party envoy sent by Mr. Xi, Meng Jianzhu, spent four days in Washington last week meeting with intelligence and law enforcement officials in an effort to create some “rules of the road” for Internet actions between the United States and China before they derail an already fraught relationship.
Josh Earnest, the White House press secretary, described the talks with the Chinese as “pretty blunt,” and one of the officials who met with Mr. Meng, China’s domestic security chief, was less diplomatic, calling the talks “pretty ugly.”
The day Mr. Meng returned home, China’s official state news media quoted him as saying that the Chinese government would crack down on criminal hackers, though the statement was vague about what would happen to those acting on behalf of the Chinese government.
In classified sessions, American intelligence agencies have told members of Congress that while computer attacks on the United States emanating from Iran decreased during the negotiations over the nuclear accord, they believe that an Iran stymied in developing a nuclear ability over the next 10 to 15 years is likely to pour more resources into cyberweapons. Such weapons have already been used against the Navy, American banks, a Las Vegas casino and Saudi Arabia’s largest oil producer, without setting off significant retaliation.
The day before Mr. Obama spoke at Fort Meade, the director of national intelligence, James R. Clapper Jr., said at a congressional hearing that the United States lacked “both the substance and the mind-set of deterrence.” But he went on to say that he was far less worried about a “large Armageddon strike” that would take out America’s power systems than about the kind of smaller but persistent attacks that damaged Sony Pictures Entertainment.
With both Iran and China, Mr. Obama is struggling with variants of the same problem: How do you contain a rising power that has discovered the benefits of an anonymous, havoc-creating weapon that can also yield vast troves of secret data? And how do you convince them that actions for which “they have paid no price,” as the director of the N.S.A. and the Cyber Command, Adm. Michael S. Rogers, put it the other day, will no longer be cost-free?
“We have a deterrence deficit,” said David Rothkopf, the author of “National Insecurity: American Leadership in an Age of Fear.”
“The U.S. is very good at dealing with the gravest global challenges, like global thermonuclear war, and also very good at empty gestures and rhetoric,” he said. “The problem we have is with our middle game, and yet most of the challenges we face are, of course, in the middle.”
With Iran and China, of course, cyberwarfare is only part of those middle-game challenges. Containing Iran’s growing influence in Iraq, Syria, Yemen and throughout the region is central to the administration’s post-accord challenge. And containing China’s effort to reclaim islands in the South China Sea, a bet by Beijing that neither Washington nor Asian nations will stop it from developing a new base of operations and exclusive claims to air and sea territory, is the subtext of much of the tension with Mr. Xi’s government.
But the escalating cyberconflict poses a particularly complex problem, because there is no equivalent of the Nuclear Nonproliferation Treaty for computer networks. That is exactly what makes the use of cybertechniques and weapons so attractive to the Russians, the Chinese, the Iranians and the North Koreans — and, to some extent, the United States.
So far, the administration’s response has seemed inconsistent, and to many incoherent.
When North Korea was identified as the country that attacked Sony, Mr. Obama — in possession of evidence gleaned from the N.S.A.’s yearslong penetration of North Korean networks — went to the White House press room, declared that the leadership in Pyongyang was responsible, and said the United States would retaliate at the time and in the manner of its choosing.
The public retaliation was a series of modest financial sanctions that did little additional damage to the most sanctioned country on earth. If there was a lasting response to the attack, only North Korea knows about it.
And when Unit 61398 of the People’s Liberation Army in China was exposed as the force behind the theft of intellectual property from American companies, the Justice Department announced the indictment of five of the army’s officers. Justice officials hailed that as a breakthrough. Inside the intelligence community and the White House, however, it was regarded as purely symbolic, and the strike on the Office of Personnel Management continued after the indictments were announced.
“The Chinese have discovered they can launch cyberattacks against us and that our officials seek to downplay them or offer up limp, ineffective responses, like indicting people behind them who will never ever see the inside of a U.S. court,” Mr. Rothkopf said. “This has added to the perception that we are weak, which in turn is an incentive to more opportunistic bad actors.”
Mr. Obama was determined to do more, his aides said. He issued an order in the spring, based on lessons learned in the Sony attack, enabling him to issue sanctions against individuals or organizations deemed responsible for computer attacks — similar to his powers to deal with nuclear proliferators or terrorists. But they have never been used.
The administration made it clear that Chinese hackers would be in the first wave. And when Susan E. Rice, the national security adviser, went to Beijing recently to prepare for the visit of Mr. Xi, computer warfare was a major source of contention. “That’s when they woke up and sent Meng,” said one senior official who would discuss private diplomatic conversations only on the condition of anonymity.
No one is expecting a simple solution. In testimony last week, Mr. Clapper went out of his way to correct members of Congress who called the personnel office episode an “attack,” noting that it was espionage, something the United States does often to the Chinese. And the intelligence agencies do not want any agreements that would limit their own ability to use cyberweapons for covert purposes, as the United States did against Iran in an operation aimed at disabling parts of its nuclear program.
And now Iran is part of the worry. Admiral Rogers told a House panel that while cyberattacks directed at the United States abated during talks over the nuclear deal, the country was now “fully committed” to using them as part of a revamped military strategy. The Iranians, another senior intelligence official said, discussing private intelligence assessments on the condition of anonymity, “will be looking intensely at how we handle the Chinese.”
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Sen. Hoeven Pins Export Hopes Tto Popular Chemicals Bill
Sep 15, 2015 | E&E Greenwire
By Hannah Northey
North Dakota Sen. John Hoeven wants to attach language that would lift a 40-year-old ban on exporting domestic crude to a chemicals bill that has broad support in the upper chamber.
The Republican told attendees at an event hosted by the American Petroleum Institute in Washington, D.C., that the measure to amend the Toxic Substances Control Act, S. 697, would serve as a good vehicle for lifting the country's 1970s ban on crude exports.
"I think [TSCA] would be a very good fit," Hoeven said. "I'm pushing it very hard because I think [TSCA] is something that's timely and I think it's something we could get done this year. I think it's a good fit."
Hoeven said just about any energy bill moving through Congress will need to include language to lift the export ban and that pairing will likely be a political necessity for Republicans to shore up Democratic support even though he ultimately favors a stand-alone measure.
But Hoeven also warned the majority has been reluctant to marry crude exports language to divisive underlying bills in fear of losing votes.
"If you pair it with something or add something else, you may potentially lose more votes than you gain," he said. "In the Senate, I believe you'd get every single vote on our side, that's 54 votes, that means we've got to pick up about seven Democratic votes, roughly because you've got to have a little extra in there."
Hoeven also commented on the Keystone XL pipeline, saying Oct. 19 is a date to watch.
"I think the president would have turned it down already, perhaps on his trip to Alaska, but it kind of got embroiled in the election in Canada," he said. "I would expect some time after [Oct. 19] it's very likely we'll see the administration turn down Keystone."
The TSCA bill is currently moving through the Senate and will likely receive a vote in the Senate Environment and Public Works Committee this fall (E&ENews PM, Sept. 9).
Exactly how the legislation will be debated on the Senate floor isn't clear. Opponents of the measure have pledged to introduce amendments or procedural obstacles as they seek to influence negotiations, such as by pushing lawmakers to consider modeling final legislation on a more limited House bill, H.R. 2576, or the "TSCA Modernization Act."
Earlier this year, Sen. Sheldon Whitehouse (D-R.I.) and other co-sponsors said they would ward off unrelated "poison pill" amendments that could threaten support of the legislation (Greenwire, May 7).
Talks of a deal to lift the export ban have been growing in the Senate.
Senate Minority Leader Harry Reid (D-Nev.) last month said he sees potential for an agreement on lifting the ban in exchange for extending renewable energy tax credits, a sentiment that other senators -- Sens. Angus King of Maine (I) and Martin Heinrich of New Mexico (D) -- have echoed (Greenwire, Aug. 25).
Sen. Heidi Heitkamp (D-N.D.) said negotiations are necessary to lift the ban, adding that Congress' current approach to renewable tax incentives has been highly disruptive. "We are very, very disruptive in how we deal with extenders; this is an opportunity to make an argument about certainty through tax incentives," she said.
But other liberal Democrats have signaled such negotiations are fruitless.
Sen. Ed Markey of Massachusetts cast doubt on any deal that would extend support for wind and solar, saying the fossil fuel industry would not ultimately cooperate.
"This is a permanent relaxation [of the export ban], so are you talking about permanent extension of the wind tax breaks, permanent extension of the solar tax breaks, are you talking about the oil industry not opposing the continued increase in the fuel economy standards of the vehicles we drive?" Markey said. "The oil industry wants to keep their tax breaks ... and make sure other tax breaks die."
Making renewable tax incentives permanent or passing a national clean energy standard, Markey said, would draw immediate opposition from the coal and auto industry, as well as the oil sector, and aren't realistic outcomes.
"Those are the kinds of concessions you would have to get," he said.
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America's Shale Gas Supply Is Caught in its Longest-Ever Decline
Sep 15, 2015 | Bloomberg
By Naureen Malik
America’s shale gas boom hasn’t exactly been booming lately.
Natural gas production from the seven largest U.S. shale deposits will drop for a fourth straight month in October to average 44.784 billion cubic feet a day, the lowest since March, based on an Energy Information Administration forecast released Monday. That’s the longest streak of monthly declines in government data going back to 2007.
The pullback follows a decade of surging gas production that created a glut of the heating fuel and sent prices plunging to record lows in some regions. The biggest declines forecast for October are in oil-rich deposits such as the Eagle Ford shale formation in Texas, where drillers are idling rigs in response to a collapse in crude prices.
Pipeline constraints in Appalachia aren’t helping either. Yield from the Marcellus shale of the eastern U.S., the nation’s biggest gas field, will fall 0.5 percent, the EIA said.
“Supply will finally fall short of demand next year,” Bank of America analysts led bySabine Schels and Francisco Blanch said in a report. The bank is forecasting that total output in the lower 48 states will shrink by 0.3 billion cubic feet a day next year.
More than 1 billion cubic feet of gas production went offline in the second quarter because of limited pipeline capacity and system outages, particularly in the northeastern Marcellus region, Adam Longson, an analyst with Morgan Stanley, said in a note to clients Monday.Uncompleted Wells
The number of drilled but uncompleted wells jumped almost 50 percent in January through June from the same period a year earlier, Longson said. While pipeline expansions in the fourth quarter may boost Northeast output, weak prices throughout the region may once again prompt producers to delay well completions, he said.
Natural gas prices have been trading in a narrow range of $2.50 per million British thermal units to $3 since late May on the New York Mercantile Exchange. Futures have fallen 30 percent in the last year. Gas for October delivery rose 0.4 cent to $2.763 at 10:43 a.m.
“Rising financial pressure on producers is our dominant storyline,” Breanne Dougherty, analyst with Societe Generale in New York, said in a note to clients. “Production remains the biggest wildcard — we see production as hinging heavily on the ability of producers to manage their balance sheets through the current sustained weak oil and gas price environment.”
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Five-Year Lease Puts Shell's Drilling Future Firmly in Interior's Hands
Sep 15, 2015 | E&E Energywire
By Margaret Kriz Hobson
Late this month, as Royal Dutch Shell PLC begins to wrap up its controversial Arctic drilling operation, company officials are expected to let the world know whether they've discovered crude at their Chukchi Sea leases.
The Anglo-Dutch oil giant is hoping its seven-year, $7 billion gamble will pay off with the discovery of world-class oil reserves. If Shell sees promise in its Arctic find, the company will immediately gear up for a second drilling season in 2016.
Ultimately, however, the long-term future of U.S. Arctic oil and gas development lies in the hands of the Interior Department's Bureau of Safety and Environmental Enforcement (BSEE).
Regardless of whether the company finds a mother lode of oil or a dry hole, Shell's Chukchi Sea leases are due to expire in a scant five years unless regulators extend the lease deadline or the company begins producing hydrocarbons at the site.
Shell officials say five years isn't enough time to fully explore their Arctic leases, build the pricey infrastructure needed to carry the crude to market and then begin oil production. Shell CEO Ben van Beurden told reporters this summer that the company wouldn't start Chukchi production until 2030 -- a decade after the company's oil leases are due to lapse.
To gain more breathing room, Shell formally petitioned the Obama administration last year to extend its Chukchi and Beaufort seas leases by an additional five years. ConocoPhillips Co. and Statoil USA, which also hold leases in the Arctic, filed similar requests.
So far, only Shell has moved forward with Arctic drilling. Both ConocoPhillips and Statoil had considered Chukchi exploration but bowed out after Shell's unsuccessful 2012 drilling season. That effort, which included drilling operations in both the Chukchi and Beaufort seas, was marred by equipment failures and environmental violations and ended in the grounding of the company's Kulluk drill rig.
While the clock counts down on Shell's Chukchi leases, Interior Secretary Sally Jewell has been holding her cards close to her chest.
Alaska Republican Sen. Lisa Murkowski said in an interview that the administration doesn't plan to issue a verdict on the lease extension requests until Shell's summer drilling operation ends.
"What I believe you have happening is a secretary who is not willing to commit to a discussion about the lease extensions until Shell safely executes the season," said Murkowski, who chairs the Senate Energy and Natural Resources Committee.
"I was very direct with the secretary in asking her when we might expect it. And she was very direct in saying you shouldn't expect it until after Shell is out of the [Arctic] waters."
Murkowski warns that further regulatory delays could cripple Arctic oil development in the United States. "In honesty, I don't know that Shell or the others can wait for another year," she said.
"You've got decisions that need to be made by your board about whether or not you go forward. And you cannot move if your leases are set to expire. You need the assurance that they're going to be renewed, because that's a big high-risk decision."
To give the oil companies more time, Murkowski has introduced legislation allowing federal regulators to extend Arctic leases to up to 20 years, twice the current maximum of 10 years.
That provision is part of Murkowski's energy package, which would lift the 40-year-old U.S. ban on crude exports (E&E Daily, July 31).
Meanwhile, opponents of Arctic oil development are fighting Murkowski's legislation and lobbying the Interior Department to stick to its current deadline for developing the Arctic leases.
In a July letter to the Senate, a coalition of state and national environmental groups insisted that Shell and other international oil companies knew about the risks and delays of drilling in the remote Arctic waters when they bid on their Beaufort and Chukchi leases.
The letter, signed by Oceana, the Wilderness Society, the Sierra Club, Greenpeace and 15 other groups, asserts that a lease extension "would be a blatant giveaway of taxpayer dollars ... and would set a dangerous precedent encouraging risky development despite safety and environmental concerns."
"Shell simply ignores the fact that much of the delay in development of Arctic leases was due to its own lack of preparedness and technical failure," the coalition said.
Michael LeVine, Pacific senior counsel for Oceana, agreed that regulators may decide to extend the lease terms when they revamp the drilling regulations for future Arctic oil exploration projects.
"But that doesn't mean the current leases should be changed," he insisted.Progress despite delays
Shell's 2015 Arctic drilling season has hit its share of bumps, though nothing like the brick walls that plagued the company's 2012 effort.
In early July, the company's icebreaker MSV Fennica suffered a long gouge along the side of its hull while sailing in uncharted waters near Dutch Harbor.
To repair the icebreaker, Shell send the vessel to Portland, Ore., where environmental protesters dangled from ropes under a bridge, delaying the Fennica's exit from the harbor.
In late August, the company's Chukchi drill site was hit by 11-foot waves and gale-force winds, forcing the Transocean Polar Pioneer drill rig to temporarily halt operations and anchor off site until weather conditions eased days later.
Despite those delays, Shell officials say they're making steady progress at their Burger prospect.
This year's operation began in late July, when the Obama administration cleared the way for Shell to sink a top hole at the company's Chukchi Sea leases, but not into the potential oil-bearing zone on the site.
To take that critical step, Shell was required to bring the Fennica to the drill site. The icebreaker is a critical part of Shell's drilling operation because it carries the oil spill containment equipment mandated by federal regulators.
On Aug. 17, the Fennica was in place and BSEE gave the company the green light to begin drilling into the oil resources at its Burger prospect in the Chukchi Sea (E&ENews PM, Aug. 17).
Under the terms of Shell's federal drilling permit, the company has only six weeks to drill into the oil-rich rock at the site.
In fact, the full Arctic drilling season runs barely four months long.
The Interior Department didn't allow Shell's oil armada to sail north of the Bering Strait until July 1. And the company must pull out of the oil zone by Sept. 28. All rigs and support vessels must clear out of the region by late October.
The deadlines are designed to give Shell time to drill a relief well should an oil spill emergency occur at the end of its drilling operations.Looking for crude clues
As Shell's drilling operation quietly continues, five other international oil giants and an industry partnership are on the sidelines closely watching for any hint of Shell's findings.
These companies -- ConocoPhillips; ENI Petroleum U.S. LLC; Iona Energy Inc.; Repsol SA; Statoil; and a partnership of ConocoPhillips, Statoil and the Chinese company OOGC America Inc. -- also own 10-year oil and gas leases in the Chukchi Sea.
The companies were the successful bidders in a raucous 2008 Chukchi Sea lease sale that earned the government $2.6 billion for 448 tracts of land. Shell alone spent $2.1 billion for its leases, including a record-breaking $105.3 million for one 3-by-3-mile area.
Even before the Interior Department auctioned the Chukchi leases, the Arctic drilling program came under fire from environmentalists who flooded the courts with lawsuits seeking to stop the exploration projects.
Twice the federal courts ordered Interior to rewrite portions of the environmental impact statement used to back up the government's 2008 lease sale. Forced to go back to the drawing board on the environmental review, federal regulators also suspended the timelines for the leases.
As a result, Chukchi Sea leases now extend until 2020-21.
The deadline is even tighter for the offshore Beaufort Sea oil and gas leases that Interior sold in 2003 and 2005. Those prospects lapse in 2017.
The vast majority of Beaufort leases are owned by Shell, with the other leases controlled by an industry coalition made up of Shell, ENI Petroleum and Repsol, and a separate partnership between ENI and Repsol.
Shell had sought to explore on its Beaufort and Chukchi leases during the company's unsuccessful 2012 drilling season but was never permitted to drill into the oil-rich zone in the region.
This summer, the company limited its scope to the potentially more promising Chukchi oil fields in Alaska's frigid Arctic waters.Calls to stop the clock
With BSEE's five-year lease deadline looming large, the Chukchi lease holders are pressing Washington, D.C., for more time to develop their offshore leases.
In November 2013, ConocoPhillips argued that the Interior Department should suspend the clock while regulators craft the first-ever standards for Arctic offshore oil and gas development.
Arguing that the government was changing the ground rules in the middle of the company's lease term, ConocoPhillips said it would be "unable to proceed with planning and executing its Chukchi Sea strategy" until federal drilling regulations are completed.
"Further, after the new regulations are finalized, ConocoPhillips will need time to analyze and adapt its planning and engineering to the new standards," the petition argued.
Four months later, regulators denied ConocoPhillips' request, and the company appealed the decision. The two sides are still in talks over a settlement.
In July 2014, both Shell and Statoil sent separate requests asking BSEE for more time to develop their leases. The Obama administration has not formally responded to those letters.
Shell said it needs more time because of the uncertainties and delays caused by the string of environmental legal challenges filed against the Interior Department. The company also accused regulators of imposing "unexpected and unprecedented" limits on the amount of time Shell could drill into the reservoir zone each summer.
"Circumstances Shell could not have anticipated at the time it acquired its leases significantly impede Shell's utilization of its lease rights," the company stated in its petition.
Meanwhile, Statoil asked federal regulators to stop the clock for its 10-year leases during the nine months each year when no drilling is permitted in the Arctic. That approach would stretch the 10-year leases to 30 years.
Copies of those requests were obtained by the environmental group Oceana through a Freedom of Information Act request (EnergyWire, Oct. 28, 2014).
The companies' demands for more time were backed by a March report by the National Petroleum Council. That report, requested by the Energy Department, compared the truncated Arctic drilling season to the year-round oil exploration available in the Gulf of Mexico.
"Given the severe limitations on the length of the useful annual exploration season, the greater time required for Arctic exploration programs, and the extremely high costs of drilling in remote, icy Arctic conditions, the current 10-year lease term is inadequate to support developing" Alaska's offshore oil, the report said.Another round?
While the debate continues over extending the timeline for BSEE's Arctic leases, federal regulators are also pondering whether to open the Chukchi Sea to a new round of oil and gas lease sales.
Under the Interior Department's 2012-17 oil and gas leasing program, the Bureau of Ocean Energy Management could sell leases in the Chukchi Sea in 2016 and in the Beaufort Sea in 2017 (E&ENews PM, June 28, 2012).
Another round of Arctic lease sales was also included in the White House's proposed leasing plan for 2017-22.
Released in January, that five-year proposal would permit "targeted leasing," allowing some Arctic development but banning drilling on nearly 10 million acres of the Beaufort and Chukchi seas.
Alaska oil industry officials suggest that if Shell's summer drilling program is successful, Chukchi lease sales could be hot properties in future lease sales. "It could be Katie-bar-the-door time," said one industry observer.
But questions remain concerning the Obama administration's willingness to offer leases at a time when oil prices are low and the 2016 presidential election is on the horizon.
Democratic presidential candidate Hillary Clinton opposes exploratory drilling in Arctic waters, asserting that potential damage to the area is "not worth the risk." Republican presidential candidate Jeb Bush has come out in favor of Arctic oil development.
For the immediate future, however, the fate of American Arctic drilling now rests with a single Shell drill rig exploring for oil in 140 feet of water, 70 miles northwest of the Alaskan village of Wainwright.
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Crude's Slump Is a Drag For Natural Gas, Too
Sep 15, 2015 | E&E Energywire
By Nathanial Gronewold
The oil price slump is beginning to bleed into natural gas markets, as well, leading some analysts to speculate that gas's future prospects may not be as rosy as many had originally assumed.
Crude oil markets remain volatile as weekly swings match frantic moves in stock markets, with traders seemingly paying attention to daily headlines for reasons to move prices up or down. Economists are revising downward their average oil price expectations for 2015 and 2016 as fall approaches and West Texas Intermediate (WTI) values dipped below $45 per barrel during trading yesterday.
Recent volatility has been driven to a great extent by poor news from China, suggesting the world's second-largest economy is slowing more quickly than expected and the country's appetite for commodities is stalling somewhat along with slower economic growth. This news, along with low oil prices, is raising questions over huge bets taken on natural gas.
Internationally, liquefied natural gas (LNG) pricing is indexed to the crude oil price. Lower value crude makes expensive LNG export projects less profitable. But the effect is also being felt in North America, where export projects here were counting on being cost competitive with alternative LNG export hubs, as LNG shipped from North America will have a close link to lower Henry Hub prices.
"As oil prices have come down and stayed down, the degree of that advantage has shrunk, which I think has led to some postponement of investment in the U.S. industrial sector," explained Christopher Click, oil and gas strategy leader at KPMG.
Natural gas's biggest supporters are also becoming weary.
On top of the weaker pricing for international LNG brought about by lower oil prices, gas project developers are also concerned about low coal prices, with coal being the historic competition for natural gas. Despite policy moves addressing climate change that would likely disadvantage coal, analysts of natural gas markets seem convinced that low coal prices will inevitably push developing countries to eschew gas in favor of the black rock, diminishing market growth prospects.
At the World Gas Conference held this summer in Paris, pessimism reigned. The International Energy Agency has also downgraded its forecast for gas. In its medium-term outlook, which looks at potential growth in gas demand and supply out to 2020, IEA analysts declared that for natural gas "the growth in demand will fall short of previous forecasts."
IEA Director Maria van der Hoeven said in a statement that the principle driver of the more cautious assessment of natural gas's future has been "weak Asian demand." Given slower economic growth in China and the attractiveness of cheap coal, gas boosters can no longer assume that Asian economies will readily absorb whatever quantity of LNG that producers might throw at them. Japan's decision to restart much of its nuclear energy capacity also plays into this changing mood.
Van der Hoeven sees cheaper renewable energy also challenging natural gas producers. IEA believes that gas demand globally will expand by 2 percent out to 2020. The agency also thinks higher gas prices in the recent past has propelled some nations to seek alternatives, momentum that's continuing even as gas prices have fallen sharply.
"The experience of the past two years has opened the gas industry's eyes to a harsh reality: In a world of very cheap coal and falling costs for renewables, it was difficult for gas to compete," said van der Hoeven.Lots of LNG poised to enter market
New supply of LNG will probably swamp demand growth if IEA's projections hold true.
In North America, Cheniere Energy Inc. leads the pack with its LNG export projects at Sabine Pass and Corpus Christi. Sabine Pass may come online later this year. Other projects seen as likely to enter in the LNG export market include a development underway at Freeport and two East Coast projects.
Internationally, Australia is poised to become a major LNG supplier.
The Australian Petroleum Production & Exploration Association (APPEA) counts six projects under construction in that country to add to four existing LNG export operations. Gorgon and two other projects may enter into operation this year. The rest are slated to enter the marketplace in 2016 and 2017. When completed, Australia's total LNG export capacity will reach approximately 85.4 million metric tons per year, according to APPEA.
Currently, Qatar, the largest single source of LNG, has a capacity to produce about 77 million metric tons a year. The new projects from Australia alone slated to begin operations from this year on to 2017 would expand global LNG capacity by 52.6 million metric tons a year.
This is one of the reasons analysts at Bentek Energy see a tough road ahead for North American LNG.
"Bentek has moderated its view on both global demand and U.S. LNG exports," analysts there said in a third-quarter 2015 assessment. "Largely, the reduction has come from a reduced view on demand growth in South Korea and China, where U.S. LNG faces strong competition from alternative supply."
Click at KPMG remains somewhat optimistic on natural gas's longer-term prospects, pointing out that demand growth from North America's power sector could be more robust than many skeptics believe. Demand growth in Asia may also come in stronger than some current forecasts should governments move more aggressively to deal with climate change.
But Click agreed that the picture emerging for LNG and natural gas in general is murkier than before.
"I think we will continue to see some challenges during the near term, so we'll have to watch how the sources of incremental demand come online over time," he said.
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OPEC Predicts Increased Demand in 2016
Sep 15, 2015 | E&E Energywire
The Organization of the Petroleum Exporting Countries predicted yesterday that demand for its product would rise next year.
OPEC's forecast is in keeping with its view that allowing crude prices to fall would mellow U.S. shale production and drain surplus supplies. The group also said a weaker economic outlook for China would dampen global demand growth in 2016.
"U.S. oil production has shown signs of slowing," OPEC wrote in its report. "This could contribute to a reduction in the imbalance of oil market fundamentals, however, it remains to be seen to what extent this can be achieved in the months to come."
OPEC expects average daily demand for its crude to reach 30.31 million barrels next year, up 190,000 barrels per day from last month. Supply from non-member countries will increase by 160,000 bpd next year, down from growth of 880,000 bpd in 2015, according to the report.
The organization cut its expectations for U.S. tight oil production by 100,000 bpd.
OPEC's reductions fall short of those published last week by the International Energy Agency. IEA estimated that U.S. shale would fall by 385,000 bpd next year (Greenwire, Sept. 11; Alex Lawler, Reuters/Toronto Globe and Mail, Sept. 14). -- PK
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A Road Map for Navigating Oil and Gas Geopolitics
Sep 15, 2015 | E&E Energywire
By Blake Sobczak and Benjamin Hulac
U.S. policymakers should think twice before using new oil and gas supplies as a geopolitical weapon, according to a former State Department official.
Or rather, they should think six times.
Carlos Pascual, senior vice president at IHS and State's former special envoy and coordinator for international energy affairs, devised a checklist for resource-rich nations hoping to intervene in global energy markets. His "Rules of Six" are relevant to American leaders still grappling with a recent surge in domestic oil and gas production, Pascual said in a reportpublished today by the Center on Global Energy Policy at Columbia University.
The new framework "helps us understand when and how such interventions could succeed," the report reads, but the rules "also remind us that market realities will limit the ambitions of geopolitically-driven interventions." The longtime diplomat goes on to describe the major shifts that renewable energy developments could bring to markets in Asia and worldwide.
Pascual's six rules warn U.S. politicians eager to project oil and gas wealth on the global stage by, for example, exporting liquefied natural gas to Ukraine to ease its energy dependence on Russia. Pascual suggests first considering the speed and scale of the move -- "big interventions are always harder and riskier," he observes -- the ability to form coalitions, the long-term sustainability of any action, domestic risks and, finally, investment flows that could sidestep the intervention.
If that seems complex, it is.
"No country can escape the complicated intersection of energy geopolitics and national security, but for the United States there is a unique challenge -- and an opportunity," the report reads.
Pascual pointed to the 2012 ramp-up of sanctions on Iran's oil business as an example of a successful energy intervention viewed through the Rules of Six.
By contrast, attempts to punish Russia's oil and gas sector over that country's invasion and annexation of parts of Ukraine have been less effective, he argues in his report, owing to the "slow speed in scaling up the sanctions."
Pascual claims that understanding and managing the impacts of changing energy markets may take an effort "similar to the investment made during the Cold War to avoid nuclear disaster."Asia's sway
China invests more than $60 billion in renewable energy annually, more than any other nation, yet still consumes about half the coal on the planet, the report reads.
While demand for coal from the world's second-biggest economy slowed in the first half of the year -- down about 40 percent from the same period in 2014, according to Chinese customs data -- fuel sources in Asia "overwhelmingly trend toward coal," the report reads (ClimateWire, July 21).
"Even when prices of solar and wind power are competitive with coal and gas, the transition to clean and renewable energy is not proceeding rapidly enough," Pascual says in the report.
The Paris-headquartered International Energy Agency forecasts that investors will pour $16.4 trillion into power-sector assets worldwide between 2014 and 2035. What type of energy sources that money is spent on "will determine whether globally all nations can succeed in combating climate change," Pascual states.
Investors will put a little less than two-thirds of that sum ($9.5 trillion) into the power-generating sector, the IEA projects, and renewable energy systems will be the most common destination for that money.
Still, energy developers put their money behind what energy sources provide the greatest rate of return, and the fact that solar and wind installations produce electricity intermittently deters more investment, the report reads. Overall costs, not just electricity rates, attract investors, Pascual says in the report.
"In China, the state will play a heavy role in determining the fuel mix allocation," Pascual said in an interview. In most other Asian nations, steps to cut emissions will likely fail unless large-scale renewable energy projects and assets become extremely financially attractive, he said.
Considering renewables' sporadic nature, coal remains the leading source of power generation, accounting for about 57 percent of power generation, the report reads.
"Combine this technical reality with trends toward coal use in Asia and exceeding the [Intergovernmental Panel on Climate Change's] global carbon budget, we can see the geopolitical battles that will underpin climate negotiations," it reads.
The Intergovernmental Panel on Climate Change has said global carbon dioxide levels cannot surpass 450 parts per million in order to stave off the worst climate impacts. Under a business-as-usual trajectory, CO2 emissions will more than triple the threshold the IPCC has said is acceptable.
"As much as developing nations might want to attribute blame to industrialized nations, excluding the developing world from the solution guarantees failure," the report reads. "Unless all nations radically alter their path of emissions, we cannot succeed."
Asked if U.S. EPA's Clean Power Plan is a geopolitical tool in the United States and abroad, Pascual was unequivocal.
"Absolutely," he said in an interview. "It is those emission standards that will be the foundation for the U.S. pledge when it goes to the climate change negotiations in Paris."
With that regulation, he said, American negotiators will be able to cite specific "programmatic" steps to cut domestic emissions.
But it will be the decisions that either simplify, or complicate, investing in renewable energy infrastructure and the adoption of emissions-cutting programs within developing countries that will be the most critical element to curbing emissions worldwide, he said.
"Energy has become an existential issue of equal consequence," the report concludes.
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Enviros Return Industry Fire In Pr War Over Ozone Costs
Sep 15, 2015 | E&E Greenwire
By Amanda Peterka
Environmentalists issued a report today aimed at countering industry claims about economic risks posed by U.S. EPA's plan to tighten the national air pollution standard for ozone.
The report commissioned by Earthjustice says industry has inflated the amount of emission reductions needed to meet a tighter standard and relied on an unrealistic rebate program for older-model cars -- also known as "cash for clunkers" -- to achieve those reductions.
The environmentalists' report by Synapse Energy Economics Inc. maintains that a tighter ozone standard than the lowest number being considered by EPA would cost $1.4 billion less than agency estimates.
The industry analysis "grossly overstates compliance costs, due to major flaws, math errors and unfounded assumptions," Synapse says.
EPA has proposed tightening the standard for ground-level ozone from 75 parts per billion -- the level set by the George W. Bush administration -- to between 65 and 70 ppb. Ozone helps form smog, and EPA said a more stringent limit was needed to protect the public against negative health effects associated with the pollutant.
The target of the Earthjustice-backed report: an analysis done for the National Association of Manufacturers that found a 65 ppb standard would cost the economy up to $140 billion a year from 2017 through 2040 (Greenwire, Feb. 26).
The NAM report by National Economic Research Associates (NERA) Economic Consulting has fueled an industry campaign against a tighter ozone standard.
The industry cost estimate is orders of magnitude larger than EPA's own cost estimate.
In its regulatory impact analysis, EPA found a new standard set at 70 ppb would cost the nation $3.9 billion a year by 2025, though that figure excludes California. A 65 ppb standard would cost $15 billion a year, EPA said.
NERA based its report on a proprietary computer model and the cost of "unknown" controls -- pollution curbs that have yet to be conceived.
EPA estimated that states would need a reduction of about 750,000 tons of nitrogen oxide emissions through the use of these unknown controls. NOx is a key component of ground-level ozone.
"This study uses the most up-to-date available EPA information and a state-of-the-art model of the economy to assess the compliance costs and economic impacts of a stricter ozone standard," NERA Economic Consulting Senior Vice President and Environment Practice Co-Chairman David Harrison said in July. "The EPA needs to greatly expand the scope of its analyses if it is to thoroughly assess the cost and impacts of a revised ozone standard."
But Massachusetts-based Synapse says the NERA report increased the amount of "unknown" NOx emission reductions needed to 1 million tons. The Earthjustice-commissioned report also says the use of a car-allowance rebate system (CARS) to base the cost of per-ton NOx reduction on greatly overestimated the cost of achieving those reductions.
"The CARS program was not designed to reduce NOx specifically, and therefore was probably an ineffective mechanism towards targeting this specific pollutant," Synapse said.
Synapse also charged that the industry estimate relied on double-counting the costs of emission reductions at coal-fired power plants.
The NAM-commissioned report also did not take into account EPA's Clean Power Plan for reducing carbon dioxide emissions from existing power plants. When releasing the report, NERA said it did not take into account reductions tied to the Clean Power Plan because it was unclear whether and how EPA would finalize the rule.
But the Earthjustice analyst says taking into account the Clean Power Plan would have lowered the amount of emission reductions needed to comply with a tighter ozone standard.
"We find that NERA's assessment of emission reductions needed from unknown controls is unsupported by evidence, is vastly overestimated and double-counts much of the cost of compliance," Synapse says.
Synapse estimates that the total cost of a 65 ppb standard by the year 2025 would be $13.6 billion -- a figure that includes both known and unknown controls.
EPA's final limit is currently at the White House Office of Management and Budget for interagency review. EPA is under a court-ordered Oct. 1 deadline for releasing the standard.
Under the Clean Air Act, EPA is required to consider only public health -- and not costs -- when setting a new national ambient air quality standard
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Judge Rejects N.C. Bid to Stem Cleanup Scope
Sep 15, 2015 | E&E Greenwire
A North Carolina judge yesterday rejected an attempt by North Carolina regulators to block a settlement that would see Duke Energy Corp. remove more coal ash than required under state law.
North Carolina Superior Court Judge Paul Ridgeway rejected the request by the North Carolina Department of Environment and Natural Resources to stop Duke Energy from excavating coal ash from more than four sites. The agency had argued that Duke Energy has limited resources and shouldn't get to choose which sites receive remediation first and that it might pass the increased costs on to customers (Emery Dalesio, AP/St. Louis Post-Dispatch , Sept. 14).
The judge's decision means Duke, state regulators and the Southern Environmental Law Center will work to reach a settlement over lawsuits brought against the utility for its leaking coal ash ponds, the groups said.
The parties pledged to reach a settlement by Oct. 30, a deputy attorney general representing the Department of Environment and Natural Resources said at a hearing in Wake County Superior Court.
State regulators said they were reluctant to approve the agreement between Duke Energy and the Southern Environmental Law Center because in some cases, the state wanted stricter restrictions and fines imposed on Duke and the authority to take additional action.
Duke and SELC, however, said the outcome would be the same under a settlement or through a new state law meant to regulate coal ash disposal.
A settlement with Duke could be a "historic opportunity" to resolve the status of the company's coal ash ponds, SELC attorney Frank Holleman said (Craig Jarvis, Raleigh News & Observer, Sept. 14).
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$3.8B Bakken Project Bets Heavy on Approval
Sep 15, 2015 | E&E Energywire
Midstream giant Energy Transfer Partners LP is stacking steel pipes across North Dakota, South Dakota, Iowa and Illinois in the hopes that all four states approve plans to build an 1,100-mile oil pipeline.
But the company's costly preparations could be for naught if regulators deny the proposed $3.8 billion, 450,000-barrels-per-day Dakota Access pipeline.
"What the company does is at their own risk," said Julie Fedorchak, chairwoman of the North Dakota Public Service Commission, which, despite her warning, is expected to OK the pipeline's longest portion.
Vicki Granado, spokeswoman for Energy Transfer Partners, said the Dallas-based company is optimistic about getting all permits in time to break ground on the project late this year or in early 2016. She noted that the company has acquired nearly three-quarters of the easements along the route and can use eminent domain laws if necessary.
If approved, the Dakota Access pipeline would open a new route for crude from the prolific Bakken Shale play, which has largely been shipped by rail rather than pipeline in recent years. Ron Ness, president of the North Dakota Petroleum Council, suggested that the risks associated with moving oil in mile-long trains may make it more likely for Energy Transfer Partners' proposal to move forward.
"There will always be naysayers, but this is a great project, and it will improve safety," he said (James MacPherson, AP/Toronto Globe and Mail, Sept. 11). -- BS
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Steyer Group Wants GOP Candidates to Be Like Reagan
Sep 15, 2015 | E&E Greenwire
By Jennifer Yachnin
The environmental activists at NextGen Climate Action unveiled a new tactic today in their efforts to push would-be Republican presidential nominees to back renewable energy policies: urging the GOP field to be more like the late President Reagan.
The political group, backed by California billionaire Tom Steyer, rolled out a new 15-second digital spot that highlights remarks Reagan made in his 1984 State of the Union address.
"Preservation of our environment is not a liberal or conservative challenge -- it's common sense," Reagan states in grainy footage used in the video. "Let us be sure that those who come after us will say of us, in our time, we did everything that could be done."
The ad, which will run on news websites including CNN and Fox, is timed to coincide with the second set of GOP primary debates set to take place at the Ronald Reagan Presidential Library in California tomorrow night. The debates will air on CNN.
In a statement, NextGen Climate also encouraged CNN moderators to ask GOP candidates about their support for renewable energy.
Steyer has called for the presidential contenders to back a plan to shift more than 50 percent of the nation's power generation to renewable sources by 2030 and a full conversion to renewable sources by 2050.
Reagan made his original remarks in the 1984 speech to explain his request for additional funds for U.S. EPA, "one of the largest percentage budget increases for any agency," he said at that time.
Reagan's request included funds to clean up the Chesapeake Bay, address "the threat posed by abandoned hazardous waste dumps" and research acid rain.
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Mich. Republican Ends Bid for 4th House Term
Sep 15, 2015 | E&E Greenwire
By Jennifer Yachnin
Republican Rep. Dan Benishek announced today he will end his re-election bid and opt to retire at the end of his term, a surprise decision that creates a competitive open-seat race in Michigan's 1st District.
Benishek, 63, didn't provide specifics about his change of heart in a statement released by his campaign, stating only he would serve out the rest of his third and final term.
"I know we have a lot of talented individuals that care about the people up here and our nation that will step forward to look at serving in Congress," Benishek said in a statement to theDetroit Free Press. "There is a lot of work still to be done and I'm looking forward to these last 16 months to continue representing the families and veterans of northern Michigan."
Benishek had planned to seek a fourth term despite making a pledge to serve only three terms following his first election in 2010.
His departure is expected to prompt a competitive open-seat race for the seat, which Democrats have unsuccessfully sought to regain since former Rep. Bart Stupak (D) retired from the district.
National Republican Congressional Committee spokesman Chris Pack vowed that the GOP would be able to retain the seat.
"The liberal policies of Barack Obama and Nancy Pelosi remain incredibly unpopular in northern Michigan, and we will continue reminding the voters that Democrats Lon Johnson and Jerry Cannon are a rubber stamp for those failed policies. We are confident this northern Michigan district will remain in the GOP column," Pack said.
Numerous Republican state lawmakers are expected to consider bids, including former state Sen. Jason Allen, who lost the 2010 Republican primary to Benishek by 15 votes. The Free Press reported that state Sens. Tom Casperson and Wayne Schmidt are also contemplating bids.
Both Johnson, former Michigan Democratic Party chairman, and Cannon, former Kalkaska County sheriff, had already announced their bids for the Democratic nomination and the right to take on Benishek. Cannon unsuccessfully challenged Benishek in 2014, falling to the incumbent by 7 points.
But Benishek's margins of victory proved smaller in the 2012 cycle, when he won by 1,900 votes. Although Benishek took 48 percent in that election, then-GOP presidential nominee Mitt Romney took 54 percent in the same cycle.
A member of the Natural Resources Committee, Benishek was a perennial target for environmentalists during his previous re-election bids. But groups including the League of Conservation Voters proved unable to oust him from the northern Michigan seat, which includes both the state's Upper Peninsula and the northern end of the Lower Peninsula.
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US, China Bring Climate Pledges to The Local Level
Sep 15, 2015 | The Hill
By Timothy Cama
Dozens of states, cities, counties and provinces in the United States and China are announcing pledges Tuesday to limit their greenhouse gas emissions.
The pledges are meant to help each country achieve the pledges they made to each other in November of last year, as well as the pledges they made to the United Nations as part of the negotiations toward a global climate pact.
The promises range from Seattle’s plan to be entirely carbon dioxide-neutral by 2050 to the Hainan Province’s goal to stop increase its emissions before 2030. They are due to be made final Tuesday at a Los Angeles meeting of municipal leaders from both countries, organized under the agreement President Obama and Chinese President Xi Jinping made last year.
Vice President Joe Biden is planning to speak at the event Wednesday, where he'll talk about the local pledges and other climate topics.
The White House said the pledges are one of the first steps toward implementing last year’s pact, in which the United States promised to cut its greenhouse gases 26 percent to 28 percent, and China agreed to stop increasing its emissions by 2030, the first time China has ever said it would limit its greenhouse gases.
“Having made those ambitious targets and put our two countries … in a leadership role on climate change, this year needs to be a year of implementation, a year when our two countries demonstrate our commitments to implementing and executing against those goals with ambitious, concrete steps to reduce our carbon emissions in a way that moves our economies forward,” top Obama adviser Brian Deese told reporters Tuesday.
It also serves as an important indicator that the United States and China intend to make due on their pledges, which congressional Republicans and other opponents of Obama’s climate agenda have panned as overly ambitious.
Such an indicator can be a key to convincing world leaders to make strong commitments and fulfill their goal to limit global warming to 2 degrees Celsius above pre-industrial levels.
To that point, Deese defended Obama’s 26 percent to 28 percent pledge.
“We’re quite comfortable that, if you look across the range of actions that the administration has already undertaken or has announced our intention to undertake, that there is a path to hitting the targets that we set,” Deese said.
“That will require continuing to be diligent and aggressive about implementing the policies that we’ve put in place.”
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Tribal Lawsuit over Crude Transport to Stay in Federal Court
Sep 15, 2015 | E&E Energywire
By Ellen M. Gilmer
A federal judge last week rejected an attempt by one of the nation's biggest railroad operators to dodge a challenge from an American Indian tribe over land access.
The U.S. District Court for the Western District of Washington on Friday denied a request by BNSF Railway Co. to dismiss a lawsuit from the Swinomish Indian Tribal Community.
The 900-member tribe claims that BNSF has been illegally transporting crude oil across tribal land in northwest Washington, near Skagit Bay. BNSF has an easement agreement with the tribe that allows the company to bring one 25-car train per day in each direction through the reservation. According to attorneys for the Swinomish tribe, BNSF began running 100-car trains carrying crude oil through the easement almost daily.
In a lawsuit filed in April, the tribe said it was "gravely concerned" about the impact of the high volume of oil transport on traffic, tribal land and nearby waterways (EnergyWire, April 9).
"We told BNSF to stop, again and again," tribal Chairman Brian Cladoosby said in a statement at the time. "We also told BNSF: convince us why we should allow these oil trains to cross the Reservation. And we listened for two years, even while the trains kept rolling. But experiences across the country have now shown us all the dangers of Bakken Crude."
Washington state has been at the center of several crude-by-rail battles in recent years, as the rail and oil industries work to improve connections from oil fields, like North Dakota's Bakken Shale, to refineries and ports. Crude transport facility expansions proposed in Skagit County, Grays Harbor County and Vancouver, Wash., have all faced recent legal challenges.
In the Swinomish case, BNSF countered that the tribe does not have the authority to regulate the volume of traffic on the rail line and asked the court to dismiss the case so the federal Surface Transportation Board could decide the issue instead. With expertise regarding the duties of common carriers, the agency is best suited to determine whether the tribe's claim will prevent BNSF from carrying out those duties, the company said in legal filings.
The court rejected that argument last week, finding that the tribe's breach-of-contract claims are squarely in the court's jurisdiction.
"Defendant offers no reason to believe that the relevant facts related to its operations are complex or that an intimate knowledge of transportation policy is required to adjudicate the preemption issue," Judge Robert Lasnik wrote in the opinion.
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