Preview Newsletter
ET ACC PM 9/30/15
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Developing countries, NGOs call for Unep to publish EDCs list
Sep 30, 2015 | Chemical Watch
ourteen developing groups and two NGOs have tabled a draft Resolution at ICCM4 – this week’s UN chemicals summit – urging the UN Environment Programme (Unep) to draw up and publish a list of endocrine disrupting chemicals (EDCs) and "potential EDCs". -
Senators near deal to pass TSCA overhaul
Sep 30, 2015 | Politico Pro -- Whiteboard
By Darren Goode
Senators have nearly reached a long-sought deal that could clear the way for an update to federal oversight of dangerous chemicals, according to participants in the negotiations. -
Childhood Cancer: More Evidence Points To Chemical Exposure
Sep 30, 2015 | Environmental Working Group
By Curt DellaValle
September was national Childhood Cancer Awareness Month, reminding Americans of the sobering facts about this terrible disease: -
Open letter from a cyber terrorist
Oct 1, 2015 | The Hill -- Congress Blog
By Tom Wither
I am a cyberterrorist. I am an expert in computer cracking (hacking is a term that describes people who look for vulnerabilities in a computer system to patch or fix them, a cracker is someone who seeks only to compromise systems for data and identity theft, financial gain, misuse or destruction of automated systems). -
(ACC Blog) New study outlines a more targeted offense to tackle ‘ocean plastic’
Sep 30, 2015 | American Chemistry Matters
By Steve Russell
Strong, lightweight plastics are amazing materials that contribute to sustainability by helping to reduce energy use, waste and greenhouse gas emissions. -
EPA final rule brings fence-line refinery monitoring
Sep 30, 2015 | E&E Energywire
By Jenny Mandel
Federal and industry analysts presented warring cost estimates for a final rule issued yesterday to monitor emissions from refineries and reduce pollution from flares, storage tanks, pressure relief devices and certain coking operations. -
EPA finalizes long-awaited power plant discharge rule
Sep 30, 2015 | E&E Greenwire
By Katherine Ling
U.S. EPA today gave owners of coal-fired power plants a bit of breathing room under long-awaited final standards that raise the bar for cutting toxic metal discharge. -
New rule on oil refinery monitoring a long time coming
Sep 30, 2015 | E&E Greenwire
By Amanda Reilly
For environmentalists and community groups, the Obama administration's new refinery rule is the culmination of a movement that began more than 15 years ago. -
Final EPA Utility Effluent Rule Backs Advocates' Call For Stringent Limits
Sep 30, 2015 | Inside EPA
By Lara Beaven
EPA's final Clean Water Act (CWA) rule setting technology standards for power plants' effluent backs stringent limits championed by environmentalists, prompting praise from advocates who had warned that the rule -- one of the last major pending agency policies for the power sector -- would be unlawful if EPA selected weaker controls. -
EPA tightens limits on water pollution from power plants
Sep 30, 2015 | Politico Pro -- Whiteboard
By Alex Guillen
EPA today released its final effluents limitations guidelines limiting the waterborne emissions of a number of toxic pollutants from coal, gas and nuclear power plants. -
New rules boost agency's environmental justice efforts
Sep 30, 2015 | E&E Greenwire
By Tiffany Stecker
It's been a big week for environmental justice at U.S. EPA. -
EPA says ELG rule would reduce 843 megawatts of capacity
Sep 30, 2015 | Politico Pro -- Whiteboard
By Alex Guillen
EPA says its final effluent limitations guidelines will lead to a net reduction of 843 megawatts of capacity by 2030, about 0.2 percent of baseline capacity. -
NAM leader bashes mayors for supporting lower ozone limit
Sep 30, 2015 | E&E Greenwire
By Amanda Reilly
The head of the nation's manufacturing trade group this week chided 70 mayors who last week signed onto a letter supporting a tighter ozone standard. -
Court rejects latest salvo from EPA foes
Sep 30, 2015 | E&E Greenwire
By Robin Bravender
Federal judges have rebuffed the latest pre-emptive legal strike against U.S. EPA's landmark greenhouse gas standards for power plants. -
State officials caution against 'just saying no' to EPA
Sep 30, 2015 | E&E Energywire
By Emily Holden
States will gain nothing by refusing to draft their own carbon-cutting plans for U.S. EPA's power plant rules, the groups representing state energy and air officials told congressional staffers yesterday. -
Senate chemical bill draws fresh concerns from states
Sep 30, 2015 | Safer Chemicals, Safer Families
By Tony Iallonardo
With rumors swirling that the Senate could call a vote very soon on S.697, the Vitter-Udall chemical bill, four governors are raising fresh concerns about the bill, even as they encourage Congress to pass reform. -
Carbon-trading options -- and questions -- swirl in Ga.
Sep 30, 2015 | E&E Energywire
By Kristi E. Swartz
As Georgia continues to consider using a market-based approach to comply with U.S. EPA's Clean Power Plan, it's clear that those who would have to create such a market still have a lot of questions. -
Utilities turn up the heat on Missouri AG over EPA rule
Sep 30, 2015 | E&E Energywire
Utilities are pressuring Attorney General and Missouri gubernatorial candidate Chris Koster to join the legal fight against U.S. EPA's Clean Power Plan. -
GOP defeats host of Dem proposals to sweeping House package
Sep 30, 2015 | E&E Greenwire
By Hannah Northey
Republicans on the House Energy and Commerce Committee today defeated a slew of Democratic proposals for revising a comprehensive energy package as bipartisan relations continued to fizzle along with the bill's chances. -
Future of energy overhaul grim as lawmakers go partisan
Sep 30, 2015 | Politico Pro
By Eric Wolff
House lawmakers pulled the plug Tuesday on reaching broad bipartisan agreement on a four-part energy strategy, likely dooming any long-shot chance as well that this Congress will produce the first major update in energy law in at least eight years. -
Natural gas industry looks to carve out bigger role in Ill., Midwest
Sep 30, 2015 | E&E Energywire
By Jeffrey Tomich
In a state where nuclear power and coal dominate politics and electricity markets, can natural gas find a place at the table? -
Shale energy on both sides of the pond
Sep 30, 2015 | The Hill -- Congress Blog
By James Clad
Anglo-American attitudes towards shale energy can seem as wide as the Atlantic Ocean separating the U.S. and the UK. -
N.D. governor discusses two-track approach on power plan, shale oil's prospects amid price shift
Sep 30, 2015 | E&E TV
With a 45 percent emissions rate reduction in the final Clean Power Plan, what are North Dakota's plans for complying as it manages a power sector that runs primarily on coal? -
Bill would extend installation deadline for safety system
Sep 30, 2015 | E&E Greenwire
By Sean Reilly
Freight and commuter railroads would get another three years to implement the automated safety system known as positive train control under a bipartisan bill introduced today by leaders of the House Transportation and Infrastructure Committee.
Industry and Association News
Chemical Management News
Chemical Security News
Energy and Environment News
Transportation News
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Developing countries, NGOs call for Unep to publish EDCs list
Sep 30, 2015 | Chemical Watch
Fourteen developing groups and two NGOs have tabled a draft Resolution at ICCM4 – this week’s UN chemicals summit – urging the UN Environment Programme (Unep) to draw up and publish a list of endocrine disrupting chemicals (EDCs) and "potential EDCs".
The suggestion is opposed by the International Council of Chemical Associations (ICCA), which has more than 1,000 member companies and organisations in 95 countries (25 September 2015).
EDCs are a key topic at the conference, which has been convened to assess progress towards the UN target of achieving sound chemicals management globally by 2020.
On Monday, international science organisation the Endocrine Society published a scientific review which it said demonstrates that the evidence that some chemicals disrupt hormones, and thus cause a range of serious health problems "is more definitive than ever before” (CW 29 September 2015).
But ICCA says more research is needed to better understand "whether, how and to what effect" chemicals interact with the hormone system. It also says "rigorous reviews" have failed to prove the hypothesis that harmful effects can be caused by low exposure levels (CW 30 September 2015).
The draft Resolution says Unep should produce overview reports giving examples of "existing and potential EDCs" in:pesticides;textiles;children’s products;building products; and electrical and electronic products.
It should also identify potential health effects, exposure routes and "gaps in existing regulatory policy".
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Senators near deal to pass TSCA overhaul
Sep 30, 2015 | Politico Pro -- Whiteboard
By Darren Goode
Senators have nearly reached a long-sought deal that could clear the way for an update to federal oversight of dangerous chemicals, according to participants in the negotiations.
"We’re closer than we have ever been and just extremely optimistic," said a spokeswoman for Sen. Tom Udall, who is cosponsoring a bill with Sen. David Vitter to update the 1976 Toxic Substances Control Act.
Asked whether the TSCA bill would be headed to the Senate floor soon, Environment and Public Works Chairman James Inhofe said, “I am hopeful that is true, and I think you are going to hear that suspicion validated very soon.”
Environment committee ranking member Barbara Boxer has opposed Udall-Vitter bill over concerns that it would preempt state-level chemical regulations, but if she came on board it would substantially boost the bill's chances. The California Democrat told Bloomberg BNA Tuesday that a deal was "close."
Senate Majority Leader Mitch McConnell in recent days and weeks has singled out TSCA reform as a bipartisan bill that could be brought up soon. The Senate today passed a stopgap funding bill and plans to next move to a full-year spending bill for military construction and the Veterans' Administration.
The Udall-Vitter bill passed the Senate environment panel 15-5 in April and is named after the late-Sen. Frank Lautenberg, who made TSCA reform a legacy issue in his later years.
A narrower House TSCA-reform bill passed 398-1 in June.
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Childhood Cancer: More Evidence Points To Chemical Exposure
Sep 30, 2015 | Environmental Working Group
By Curt DellaValle
September was national Childhood Cancer Awareness Month, reminding Americans of the sobering facts about this terrible disease:Almost 16,000 American children and adolescents are diagnosed with cancer every year.The rate of new childhood cancer cases, including leukemia, has steadily increased over the last 40 years.Cancer kills more Americans under age 20 than any other disease.Advances in treatment have greatly increased the odds of survival, but death still claims almost one in five childhood cancer patients.
What causes childhood cancers is not fully understood, making prevention difficult. But as scientists and doctors seek answers for the steady rise of childhood cancer rates, more and more evidence points to environmental factors.
Children are particularly susceptible to exposure to harmful chemicals – in their homes, at school, in their food and many other pathways. Because they are smaller, children are more highly exposed for their weight than adults. Children’s bodies also are undergoing critical stages of development.
Numerous studies have shown links between childhood cancers and exposure to chemicals such as pesticides, benzene and arsenic. EWG has found that not only are these substances widespread in a child’s living environment, they can also be passed on from mother to child during pregnancy and through breastfeeding. (Despite this, the health benefits of breastfeeding greatly exceed the risk of chemical exposure.) These prenatal and early life exposures occur during the most vulnerable period of a child’s development.
Now new research shows that environmental exposures can change how our genes are expressed – not genetic mutations, but whether genes are turned on or off and how they are read. These changes in gene expression, known as epigenetic changes, can also be passed on to future generations. This is not the legacy we want for our children – but it’s a future U.S. chemical law does little to head off.
There are more than 80,000 chemicals on the market today. The great majority has never been tested for safety and new chemicals are continually being put on the market without safety tests. This broken system is the opposite of how chemicals are regulated in Europe, where manufacturers must prove a chemical is safe before introducing it to commerce. Reform of the Toxic Substances Control Act, which has not been updated since it became law in 1976, must prioritize protection of public health, especially during critical developmental periods.
In the meantime, there are steps that parents and all of us can take to reduce exposure to pesticides around the home and harmful chemicals in our personal care products and the household items we use. With more consumer concern, stronger chemical laws and continued advances in treatment, the day may come when Childhood Cancer Awareness is a time to mark progress toward prevention instead of lamenting the grim reality of the disease.
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Open letter from a cyber terrorist
Oct 1, 2015 | The Hill -- Congress Blog
By Tom Wither
I am a cyberterrorist. I am an expert in computer cracking (hacking is a term that describes people who look for vulnerabilities in a computer system to patch or fix them, a cracker is someone who seeks only to compromise systems for data and identity theft, financial gain, misuse or destruction of automated systems).
I could be a radicalized member of any religious faith or political motivation. I could be one disenfranchised member of a society, anywhere in the world. I’m educated, not necessarily formally, in computer programming and networking. I elect the digital world as my battlefield, and malicious code as my weapon of choice. I tinker with electronic equipment of all kinds and understand how it actually works, not how the designers think they made it work.
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I may be a ‘hired gun’ who rents out his technical prowess on the Dark Web and I’ve been paid enough Euros or better yet, Bit Coins to aid Al-Nusra Front, Abu Sayyaf, Al-Shabaab, Aum Shinrikyo, Continuity Irish Republican Army, the Kurdistan Workers Party, the National Liberation Army, or any other small group with less prestige, press coverage, and resources than the Islamic State or Al-Qaeda, although I’ll work for them too.
Thanks to a helpful man named Edward Snowden, I’ve learned better ways to avoid the notice of the law enforcement and intelligence services in the United States, the United Kingdom and their allies, and I learn more every time a new story written from his theft of classified documents is published in the media.
I use encrypted communications and anonymous browsing on the Dark Web to plan my operations in cyberspace to affect the real world. I collaborate with fellow crackers and develop new tools and capabilities I can use to further my organization’s goals. I raise money for my organization through identity theft, blackmail, and credit card fraud; the cash pays for weapons, ammunition, and travel expenses for operatives I want to sneak into your country, as well as bringing ‘brides’ and radicalized volunteers from all over the world who want to join my cause to safe havens in many places.
Today, I’m searching for a way into the Department of Defense and UK Ministry of Defense’s transportation management systems. If I get in, and I will, I can disrupt flights of new weapons and other items to the troops in Iraq being trained to fight ISIS. Better yet, perhaps I can find the flight itinerary for the UK Defense Minister’s or U.S. Secretary of Defense’s next trip. We will be happy to send some of our members to meet their plane.
Once I’m done with that, I’ll move on to the largest utility company in the Mid-Atlantic. Once I’m in their systems, I’ll browse through the Supervisory Control and Data Acquisition (SCADA) network, and identify all the major substations – then turn them off before crashing the control computers with a tool that requires each machine to be physically replaced before they can regain control, and that might take weeks.
I’ll enter the billing system, delete the backups for the last 120 days, and then delete the entire active database. Then, I’ll order the new smart meters attached to every home to turn off electricity to the house via a backdoor in the equipment even the manufacturer hasn’t discovered yet. The company’s stock will tank, their customer service lines will jam, and hundreds of thousands will sit in the dark, growing colder in the late autumn air, and winter is just around the corner. Next up, the internet connected systems in their cars – maybe I’ll order the system to turn off the ABS and engage the brakes once the speed is over 60 M.P.H.
I am a cyberterrorist, and if you fail to develop secure hardware, firmware, software, and more importantly, a cybersecurity mindset, I will identify and destroy vital pieces of the infrastructure you rely on for your national security, business viability, and your family’s safety.
You can only protect against me with laws that keep pace with evolving technology and enable intelligence and law enforcement agencies to track and monitor my activities, enforced by a group of professionals educated and equipped with the tools needed to pursue me, operating in a transparent manner, and for now, I’m grateful for the lethargy exhibited by your governments and those that extoll privacy above all else.
I am a cyberterrorist, and I will exist for as long as we interconnect automated equipment and computers. Be willfully ignorant of me at your own peril.
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(ACC Blog) New study outlines a more targeted offense to tackle ‘ocean plastic’
Sep 30, 2015 | American Chemistry Matters
By Steve Russell
Strong, lightweight plastics are amazing materials that contribute to sustainability by helping to reduce energy use, waste and greenhouse gas emissions. But when plastics end up as ocean litter, their full sustainability benefits aren’t realized. No one wants to see trash of any kind in our environment. Plastics makers realize that ocean litter is a major, global problem and are committed to providing solutions. That’s why we’re pleased to partner in the global release of the Ocean Conservancy’s Stemming the Tide: Land-based strategies for a plastic-free ocean, a first-of-its-kind analysis conducted with the McKinsey Center for Business and Environment, that evaluates specific land-based solutions for plastic waste in the ocean.
Pinpointing the Origins of Waste
Recent research by Dr. Jenna Jembeck published inScience Magazine estimated that roughly 8 million tons of plastic enters the ocean each year and that 57% of it originates in five countries (China, Indonesia, Philippines, Vietnam and Thailand). These are rapidly developing economies (a good thing!) in areas where waste management infrastructure hasn’t yet caught up to a growing population’s ability to consume more goods. Similar factors could easily give rise to these conditions in other regions (e.g., Brazil, India or countries in Africa). Stemming the Tide builds on these findings by highlighting solutions to contain waste—in essence to stop the “leakage” at the source. Solutions like, containing landfill waste, stopping illegal dumping, increasing recycling, and incorporating energy recovery technologies, such as gasification and pyrolysis, are featured as possibilities for change. From the plastics industry’s perspective, Stemming the Tide is a welcome resource that helps us understand and prioritize solutions.
Global Plastics Industry In Action
In fact ACC’s Plastics Division has been working on solutions to marine debris for some time. In 2011 we developed and helped launch the Declaration of the Global Plastics Associations for Solutions on Marine Litter, which has been signed by over 60 companies in 34 countries—through which more than 185 projects have been planned, initiated, or completed. Some of our work in the United States includes providing recycling bins on beaches and in state parks, sponsoring marine debris research, promoting recycling and the recovery of energy from post-use plastics, and encouraging best practices for handling raw materials.
Working Together For Progress
In a video address released Wednesday, Catherine Novelli, Under Secretary of State for Economic Growth, Energy, and the Environment, acknowledged the important role that plastics play in our society today and, she also expressed confidence that by “working together we can create meaningful solutions” to keeping plastics out of our oceans. We couldn’t agree more, and we’re looking forward to taking the results of this data-driven work and putting the strategies into action. Please watch Under Secretary Novelli’s complete address below and check out www.marinedebrissolutions.org for more on the plastics industry’s work on ocean litter.
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EPA final rule brings fence-line refinery monitoring
Sep 30, 2015 | E&E Energywire
By Jenny Mandel
Federal and industry analysts presented warring cost estimates for a final rule issued yesterday to monitor emissions from refineries and reduce pollution from flares, storage tanks, pressure relief devices and certain coking operations.
Under the new rule, issued yesterday by U.S. EPA in compliance with a court-ordered deadline of today, refiners will be required to monitor benzene concentrations at multiple points along the fence line surrounding their facilities.
Other provisions require monitoring of flares and pressure release devices and the use of at least three pollution prevention measures for those emission sources, with any emission events triggering review and corrective actions.
In a call with reporters, EPA described the rule as a groundbreaking success in involving disadvantaged fence-line communities in a regulatory action and implementing real-time monitoring of an important air pollutant.
"These updated Clean Air Act standards will lower the cancer risk from petroleum refineries for more than 1.4 million people and are a substantial step forward in EPA's work to protect the health of vulnerable communities located near these facilities," said EPA Administrator Gina McCarthy, adding that the reduction translates to a 15 to 20 percent decline in cancer incidence associated with refinery emissions.
"This rule delivers on EPA's commitment to environmental justice by reducing toxic air pollutants that impact families living near refineries by requiring, for the first time ever in an EPA air rule, monitoring of emissions at the fence line and corrective action if standards are exceeded," she added.
EPA stressed the environmental justice components of the rule, noting that the 6.1 million people living within 3 miles of a petroleum refinery are disproportionately likely to be poor and members of a minority group.Industry cautiously receptive
While downplaying concessions to industry, EPA said some changes from the draft rule included rewarding sites with consistently low benzene emissions with relaxed monitoring requirements (Greenwire, Oct. 30, 2014).
The final rule also offers refiners greater flexibility in the technologies used to monitor emissions than the draft rule. EPA also replaced a requirement for additional flares with a requirement that refiners analyze flaring and unanticipated pressure release events and implement work practice changes.
EPA estimates a capital cost for the new rule of about $283 million, with an annualized cost of $63 million, and calculates that the final standards will have a negligible impact on the consumer prices for petroleum products.
In a statement, the American Petroleum Institute offered its own, far greater cost estimate.
"EPA has made substantial improvements in the final refinery sector rule over the proposal, but EPA's new regulations on refineries could still cost up to $1 billion," said Bob Greco, API downstream group director.
"EPA analyses, supported by extensive industry monitoring data, show that air emissions from refineries are already at safe levels," Greco added, though he lauded the "collaborative efforts by API and the EPA [that] led to final regulations that are more cost-effective than the proposal."
Still to come is the establishment of a data disclosure system for the emissions regime. EPA said that refinery fence-line communities had called on the agency to administer a disclosure database to be hosted on its website, and officials yesterday said that has yet to be built.
The agency says that when the rule is fully implemented in 2018, it will reduce emissions of benzene, toluene and xylene by about 1,300 tons per year and volatile organic compound emissions by 17,000 tons per year.
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EPA finalizes long-awaited power plant discharge rule
Sep 30, 2015 | E&E Greenwire
By Katherine Ling
U.S. EPA today gave owners of coal-fired power plants a bit of breathing room under long-awaited final standards that raise the bar for cutting toxic metal discharge.
The final rule announced today updates for the first time in 30 years federal limits on toxic metals in power plant discharge wastewater but allows industry more time to coordinate how it will comply with these new standards and a rule governing coal ash released at the end of last year, EPA said.
The original 1982 rule focused on solid particulates rather than dissolved pollutants like mercury, lead, selenium and other heavy metals, many of which do not break down for years.
The new rule is "strong but achievable" and "provides flexibility" by creating a phased-in approach to the new requirements between 2018 and 2023, Ken Kopocis, EPA's deputy assistant administrator for water, said today during a call with reporters about the new rule.
It will "allow industry to make rational decisions" about where to make investments related to fuel changes or how to handle waste, Kopocis said.
Steam electric power plants are responsible for more than half of all toxic pollutants poured into surface waters by all industrial categories regulated by the Clean Water Act, or about 5.5 billion pounds of wastewater, according to EPA.
The agency estimates the new rule will cut 1.4 billion pounds of toxic pollutant discharge from electric power plants at a price tag of $480 million per year. It will also reduce water withdrawal by power plants by 57 billion gallons per year, providing an estimated annual benefit of $463 million.
A proposed rule issued in 2013 would have cut up to 2.6 billion pounds of pollutants, but compliance costs for industry could have skyrocketed to $954 million per year.
The final rule borrows heavily from what was described at "option 4" under the proposed rule, controversially including the need for plants producing more than 50 megawatts of power to put fly ash and "bottom ash" -- waste left at the bottom of the boiler -- in landfills, known as dry handling, and providing additional compliance time if owners put in more advanced technology (Greenwire, Sept. 29).
"This is a major step forward for protecting the health of American families, especially our kids," Kopocis said.
It is "based on readily available technology that many in the industry already use today while producing affordable power," Kopocis said, noting that 134 plants of 1,080 current plants would incur costs to meet the new requirements, and the requirements would add "pennies" to monthly household power bills.
Environmental groups welcomed the new rule.
"We don't drive cars or fly airplanes based on 1982 safety standards, so why should we allow power plants to dump poisons into our waters under such outdated standards?" Earthjustice attorney Thomas Cmar said in a statement. "Today's rule finally ends the decades-old industry practice of using massive amounts of water to move toxic waste out of power plants and into unlined impoundments, which ultimately goes into our rivers, lakes and streams. This rule is a big step forward, and we stand prepared to help defend against any industry attempts to weaken it."
Dalal Aboulhosn of the Sierra Club said the rule is "a major step in making sure our waterways are not only safe to swim and boat in, but also safe to fish from and use as drinking water."
A 2013 report from a coalition of green groups found that 70 percent of coal-fired power plants' permits had no discharge limits for toxins that are linked with neurological damage, cancer and fish die-offs. More than a quarter of the plants the groups looked at were releasing such metals into waterways that were already declared impaired (E&ENews PM, July 23, 2013).
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New rule on oil refinery monitoring a long time coming
Sep 30, 2015 | E&E Greenwire
By Amanda Reilly
For environmentalists and community groups, the Obama administration's new refinery rule is the culmination of a movement that began more than 15 years ago.
In the final rule released yesterday, U.S. EPA will begin requiring oil refiners to surround their properties with air monitors that give benzene readings every two weeks.
Since the 1990s, community groups in industrial areas -- particularly in California, Texas and Louisiana -- have been pushing for fence-line monitoring of air pollution stemming from refineries. They've had limited success; many have resorted to conducting their own monitoring.
To be sure, environmentalists and community advocates say they are disappointed with some aspects of EPA's final rule, including the lack of a requirement for real-time monitoring and the benzene threshold that triggers corrective action.
But, said Adrian Shelley, executive director of Air Alliance Houston, "there's no doubt that we are celebrating. A lot of us have been working on this for many, many years."
The movement for fence-line monitoring of air pollution at refineries began with the 1994 release of the chemical Catacarb from a refinery in Rodeo, Calif., according to Gwen Ottinger, a professor of science and technology studies at Drexel University who is working on a project on the history of refinery community advocacy.
The Rodeo release lasted 16 days and brought together local groups that called for heightened monitoring.
"Fence-line monitoring would have prevented that if it had been real-time monitoring," Ottinger said. "After that, that community and others started to really advocate for fence-line monitoring."
Community groups began conducting their own monitoring. Anne Rolfes, for example, founded the Louisiana Bucket Brigade in 1999 to train local citizens to take air samples with inexpensive monitors that draw air samples into buckets.
The group has advocated for a nationwide requirement for fence-line monitoring at refineries.
"There have been roadblock after roadblock thrown up about why it can't happen," Rolfes said, "and yet there have been times after we have made a big, big fuss, when we give them the results of our samples, that they will start their own sampling."
A handful of refineries across the country have put in place monitoring systems at their fence lines, mostly prompted by community action and lawsuits, Ottinger said.
"You can point to instances around the country," she said, "but the idea that every refinery would have the obligation to provide people next door with information about what's in the air is just unprecedented."
Shelley of Air Alliance Houston said that efforts to add fence-line monitoring provisions in Texas have fallen flat because of a law that state air pollution regulations can't be more stringent than federal rules.
"The Texas Commission on Environmental Quality takes the position that it legally cannot put a term in a state permit that goes in excess of the federal floor," he said.
EPA's refinery rule arose out of a lawsuit filed by Earthjustice and the Environmental Integrity Project on behalf of community groups, including the Louisiana Bucket Brigade and Air Alliance Houston. The groups charged that EPA had missed a Clean Air Act deadline to review its hazardous air pollution standards for oil refineries.
The final rule requires petroleum refineries to install up to two dozen canisterlike monitors surrounding their properties.
"The primary benefit of the rule is, for the first time, communities will know how much benzene is falling from refineries to their communities' air," said Earthjustice attorney Emma Cheuse.
EPA added flexibilities in the final rule to appease oil refiners, including simplified flare requirements. According to the American Petroleum Institute, the final rule will cost refiners up to $1 billion -- expensive, but a far cry from the oil industry's initial estimate of a $20 billion cost for the proposed rule.
EPA, on the other hand, says that the final requirements will cost refiners $283 million in capital costs and $63 million annually.
While the oil industry yesterday applauded the changes in the final rule, the sector says that the requirements are unnecessary in the first place because refineries have already reduced their air pollution.
"Companies have already spent billions of dollars to reduce emissions by installing flare gas recovery and flare minimization systems to reduce greenhouse gas emissions," said Bob Greco, API's downstream director, "and air quality continues to improve as a result of these voluntary programs and existing regulations."
EPA officials yesterday said the fence-line monitoring provisions were specifically prompted by discussions with community groups (E&ENews PM, Sept. 29).
These groups say they'd like to see EPA eventually require real-time readings of air pollution. Real-time monitoring technology exists but doesn't capture benzene levels at the low concentrations that EPA is targeting in its final rule.
"We want something that will allow us to set off alarms and send text messages," Shelley said.
Community groups say they plan to use the data gathered through the rule to conduct their own independent analyses. They also plan to continue advocating for more stringent requirements and are leaving all options on the table, including future litigation.
"This is sort of a foot in the door. We now have a precedent for monitoring at refinery fence lines," Drexel University's Ottinger said. "Now, I think activists groups are unlikely to leave it at that. They'll keep advocating for better and more sophisticated monitoring."
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Final EPA Utility Effluent Rule Backs Advocates' Call For Stringent Limits
Sep 30, 2015 | Inside EPA
By Lara Beaven
EPA's final Clean Water Act (CWA) rule setting technology standards for power plants' effluent backs stringent limits championed by environmentalists, prompting praise from advocates who had warned that the rule -- one of the last major pending agency policies for the power sector -- would be unlawful if EPA selected weaker controls.
In the final rule, released Sept. 30 ahead of its publication in the Federal Register, the agency also includes voluntary incentives for industry to use alternative technology that would result in zero liquid discharge of one category of wastewater. It is unclear whether the sector will sue over the rule, but advocates are offering praise.
“We applaud the Administration for taking significant steps toward ending the power plant industry’s unlimited free pass to put downstream communities at risk and pollute our nation’s water resources with arsenic, lead, mercury, selenium and other harmful chemicals,” Clean Water Action Water Programs Director Jennifer Peters said in a Sept. 30 statement. “Polluters lobbied hard for the weakest possible controls which would have allowed the power plant industry to continue to dump billions of pounds of pollution into our nation’s water resources every year.”
The power plant steam electric effluent limitation guidelines (ELG) is the last remaining rule of a major suite of Obama administration utility sector regulations that also includes its greenhouse gas standards for utilities and its Resource Conservation & Recovery Act rule for disposal of coal combustion residuals from power plants.
On a Sept. 30 call with reporters to announce the ELG, EPA's de facto water chief Ken Kopocis said the agency is coordinating compliance deadlines under the water and waste regulations to provide certainty sought by industry. EPA delayed the implementation dates of the ELG -- between 2018 to 2023, depending on when power plants need a new CWA permit -- in order to coordinate with the coal ash rule's deadlines, he said.
More broadly, EPA is touting the ELG's projected benefits of reducing the amount of toxic metals, nutrients and other pollutants discharged by power plants by 1.4 billion pounds and reducing water withdrawal by 57 billion gallons. The agency estimates benefits of $451 million to $566 million per year and annual estimated costs of $480 million per year. “Analysis shows that the rule will have minimal impacts on electricity prices and the amount of electricity generating capacity,” an EPA fact sheet says.
“These cost-effective, achievable limits will provide significant protections for our children and communities across the country, including minority and low-income communities, from exposure to pollutants that can cause neurological damage in children, cancer, and other serious health problems,” EPA Administrator Gina McCarthy said in a Sept. 30 press release on the rule.
Pollutant Discharges
Kopocis on the call noted that approximately 30 percent of toxic pollutants discharged under CWA permits come from the steam electric industry, adding, “It's clear for our health and the health of our environment we need to take action.”
While the rule establishes “a high level of protection,” Kopocis said, its “requirements reflect technologies [already] in use” and “reinforces the trend toward cleaner, more modern power plants.”
EPA's draft version of rule considered eight regulatory options, and environmentalists pressed repeatedly for the two most stringent ones, known as options 4 and 5, saying those options were essential to put industry on a path to eventually meeting a zero liquid discharge target.
Industry, however, argued that nearly all waste treatment requirements in the proposed ELG are not cost effective and said EPA can justify “little additional regulation” for most waste streams from power plants.
EPA considered six options in the final rule, choosing “option D,” which is a variant of the proposed option 4 and requires chemical precipitation followed by biological treatment for flue gas desulfurization (FGD) wastewater.
The agency notes in the final rule's preamble that a few commenters on the proposed rule questioned the feasibility of biological treatment at some power plants, claiming in part that the efficacy of biological systems in unpredicatable. But EPA says its “record does not support these assertions for a well-designed and well-operated chemical precipitation and biological treatment system.”
The major difference between option 4 and option D is that option D allows combustion residual leachate to be treated in impoundments rather than by chemical precipitation as option 4 proposed.
EPA in its proposal noted that this wastestream has only a small amount of pollutants compared to other power plant wastestreams and asked for additional information on the use of chemical precipitation to treat it.
But commenters did not provide the information EPA needed to set best available technology limitations based on chemical precipitation, the agency says in the final rule's preamble.
EPA had previously signaled that it was unlikely to require FGD wastewater to be treated by evaporation, the most stringent of the considered options, because of cost concerns.
Voluntary Incentives
But the final rule includes a voluntary incentives program that gives plants until Dec. 31, 2023, to implement the ELG if they choose to use evaporation technology to treat their FGD wastewater, an option EPA says “offers significant environmental protections beyond those achieved by . . . chemical precipitation plus biological treatment because evaporation technology is capable of achieving significant removals of toxic metals, as well as” total dissolved solids (TDS).
EPA says it expects that over time the costs of evaporation will decrease, making it an even more attractive option for plants, noting that some facilities are already using this technology.
One reason a plant may opt to use evaporation is to meet stringent water quality standards, EPA says, noting that “some power plant discharges containing TDS (including bromide) that occur upstream of drinking water treatment plants can negatively impact treatment of source waters at the drinking water treatment plants.”
Drinking water utilities and environmentalists had urged EPA to address bromide in the final ELG, raising concerns that bromides can interact with treatment processes at public drinking water intake systems to form disinfection byproducts (DBPs), which are linked to some cancers, creating major compliance problems for drinking water plants.
EPA says in the final rule that bromide loadings into surface water could potentially increase in the future as more power plant operators use bromide addition to improve the control of mercury emissions.
The agency says it agrees with drinking water utilities “that permitting authorities should carefully consider whether water quality-based effluent limitations on bromide or TDS would be appropriate for FGD wastewater discharges from steam electric power plants upstream of drinking water intakes.”
The agency recommends that CWA permitting authorities collaborate with drinking water utilities and SDWA regulators to determine the concentration of bromides at the drinking water intake needed to ensure that levels of bromate and DPBs do not exceed applicable SDWA standards.
Clean Water Action's Peters in her statement on the final rule said that “EPA should especially be commended for standing firm against polluter lobbyists while listening to the hundreds of thousands of Americans who implored them to protect our communities and drinking water sources.”
Abel Russ, an attorney for the Environmental Integrity Project, said in a separate statement that the final rule “will make a huge dent in the nation's largest source of toxic water pollution.” While the coal industry will undoubtedly complain that the regulations are too burdensome, the new EPA standards simply require the industry to catch up and install modern, affordable technology, he said. -- Lara Beaven(lbeaven@iwpnews.com)
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EPA tightens limits on water pollution from power plants
Sep 30, 2015 | Politico Pro -- Whiteboard
By Alex Guillen
EPA today released its final effluents limitations guidelines limiting the waterborne emissions of a number of toxic pollutants from coal, gas and nuclear power plants.
Click here for the final rule and here for an EPA fact sheet.
EPA estimates the annual cost at $480 million per year, and pegged benefits at $451 million to $566 million per year. Power plants, the largest source of industrial pollutants released into surface waters, have until between 2018 and 2023 to comply.
The rule sets requirements several different wastewater streams, including flue gas desulfurization, fly ash, bottom ash and flue gas mercury control. It limits emissions of pollutants like arsenic, mercury, selenium and nitrogen, which are linked to a variety of neurological disorders, cancers and other diseases.
EPA says the rule will reduce pollutants by 1.4 billion pounds per year and save 57 billion gallons of water annually.
“These cost-effective, achievable limits will provide significant protections for our children and communities across the country, including minority and low-income communities, from exposure to pollutants that can cause neurological damage in children, cancer, and other serious health problems,” EPA Administrator Gina McCarthy said in a statement.
EPA says the rule means 134 of the nation’s 1,080 steam electric power plants will have to install upgrades.
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New rules boost agency's environmental justice efforts
Sep 30, 2015 | E&E Greenwire
By Tiffany Stecker
It's been a big week for environmental justice at U.S. EPA.
The agency recently finalized two rules intended to protect the poorest sectors of the population from toxic substances. EPA began the week by announcing an overhaul of pesticide regulations to protect farmworkers -- many of whom are undocumented and do not speak English -- to include the first age restrictions on pesticide applicators and an annual requirement for safety training.
The agency followed up yesterday with a long-awaited refinery rule, which sets tough standards on petroleum refineries to cut toxic air emissions. The rule requires refineries to monitor emissions on site and publicly disclose those levels for the first time, creating, in EPA Administrator Gina McCarthy's words, "a kind of neighborhood watch for refinery pollution" (see related story).
Along with climate change, environmental justice -- the alleviation of pollution in poor and underserved communities -- was one of McCarthy's top priorities when she came on as EPA chief in 2013, following in the footsteps of her predecessor, Lisa Jackson.
"Environmental justice is at the heart of EPA's mission to protect public health - especially for vulnerable communities dealing with risks associated with pesticide exposure," McCarthy wrote in a blog post ahead of the agricultural Worker Protection Standard revisions (E&ENews PM, Sept. 28).
Matthew Tejada, director of EPA's Office of Environmental Justice, wrote his own blog post to highlight how the refinery rule will improve overall health of residents living around the facilities. The approximately 6.1 million people living within 3 miles of a petroleum refinery are disproportionately likely to be poor and members of a minority group, according to EPA (EnergyWire, Sept. 30).
"The emission reductions from this final rule will lower the cancer risk from refineries for 1.4 million people. That's not just good for the communities that live in and around refineries -- it'soutstanding," he wrote.
But despite EPA's vocal loyalty to environmental justice, some critics have knocked the agency for not addressing claims from poor and minority areas. EPA's Office of Inspector General recently found that the agency was three years late in issuing guidance for considering environmental justice in rulemaking. An investigation from the Center for Public Integrity found EPA's Office of Civil Rights has dismissed 95 percent of complaints of environmental discrimination under Title VI of the Civil Rights Act of 1964.
Other cases, like the complaint filed by the community living around Flint, Mich.'s wood-fired Genesee Power Station, have languished for years (Greenwire, Feb. 19).
But farmworker advocacy groups, which have called on EPA to update its standards over the past two decades, acknowledged that the updated worker protection standard represented a greater focus on environmental justice.
"The EPA has been very engaged with the farmworker community organizations to correct the deficiencies in the Worker Protection Standard," said Virginia Ruiz, director of occupational and environmental health for Farmworker Justice.
"The new final rules are a first important step, but we want to see EPA engaged just as strongly in the implementation and the education and enforcement to make sure they are meaningful," Ruiz added.
The addition of a farmworker representative on EPA's National Environmental Justice Advisory Council (NEJAC) was a significant step, said Jeannie Economos, pesticide safety and environmental health project coordinator at the Farmworker Association of Florida.
"This isn't just a regulation, this isn't just something on paper, it affects the next generation," Economos said.
For Vernice Miller-Travis, a longtime environmental justice advocate and member of NEJAC, the recent actions represent a long departure from how the agency used to view civil rights.
"Is it everything? No. Is it a significant improvement from what it was? Absolutely," she said. "I feel that our representation is more valued at this moment than it has been heretofore."
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EPA says ELG rule would reduce 843 megawatts of capacity
Sep 30, 2015 | Politico Pro -- Whiteboard
By Alex Guillen
EPA says its final effluent limitations guidelines will lead to a net reduction of 843 megawatts of capacity by 2030, about 0.2 percent of baseline capacity.
That’s essentially the power generated by a single plant, the agency noted.
EPA considered early retirements and partial plant shutdowns and the change in production costs following compliance in its calculations. The relatively small loss of capacity means the rule “will have little economic consequence for the steam electric power generating industry and the electricity market and is, therefore, economically achievable," according to the final rule.
The agency also calculated relative stability at the plants subject to the rule. Just 17 power plants would see capacity utilization, a measure of how much of its capacity plants actually generate, drop by more than 1 percent, while 25 plants would increase their capacity utilization by over 1 percent.
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NAM leader bashes mayors for supporting lower ozone limit
Sep 30, 2015 | E&E Greenwire
By Amanda Reilly
The head of the nation's manufacturing trade group this week chided 70 mayors who last week signed onto a letter supporting a tighter ozone standard.
In a letter to each of the mayors, National Association of Manufacturers President and CEO Jay Timmons said that the level they supported "would result in devastating economic consequences."
The mayors' letter last week, which was circulated by the Sierra Club, expressed support for a new standard at 60 parts per billion -- the low end of the range recommended by U.S. EPA's scientific advisers and the level called for by public health advocates (Greenwire, Sept. 22).
"If your city happens to fall out of compliance with the new standard," Timmons wrote, "the challenges for manufacturers become even greater -- and so do the challenges for your local government and citizens."
EPA is required to sign a new ozone standard by tomorrow under a court-ordered deadline. In November, the agency proposed to lower the standard from 75 ppb -- the limit set in 2008 during the George W. Bush administration -- to between 65 and 70 ppb. According to sources, EPA is poised to finalize a 70 ppb standard.
In their letter, the mayors from 24 states urged EPA to follow advice from the medical science community, which has recommended a 60 ppb standard based on studies that have linked higher levels to adverse health effects.
The manufacturing group has waged an aggressive campaign against a tighter standard. In his response to the mayors, Timmons enclosed a copy of a report that NAM commissioned last year that found a 60 ppb standard would cost the economy $270 billion a year.
"Manufacturers wanted to be sure you had all the facts about the 60 ppb standard and its negative impact on economic development and quality of life in your locality," Timmons wrote.
Outside experts and environmentalists have questioned the NAM study (Greenwire, Sept. 15). EPA's own analysis shows that a tighter standard would cost much less.
The Center for Regulatory Solutions, a group opposed to a tighter ozone standard, has also raised issues with the mayors' letter, noting that some of the signatories have previously called on EPA to retain the existing 75 ppb standard.
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Court rejects latest salvo from EPA foes
Sep 30, 2015 | E&E Greenwire
By Robin Bravender
Federal judges have rebuffed the latest pre-emptive legal strike against U.S. EPA's landmark greenhouse gas standards for power plants.
The U.S. Court of Appeals for the District of Columbia Circuit yesterday denied requests from states and industries to reconsider the court's decision allowing the Obama administration to move ahead with its high-profile, contentious power plant regulations.
In another blow to EPA's opponents, judges also rejected a procedural maneuver that appeared to be aimed at keeping the same three Republican-appointed judges overseeing legal challenges to the rule.
In short orders issued yesterday, the court rejected requests for a rehearing en banc -- before all of the circuit's judges -- after a three-judge panel decided in June that the court wouldn't rule on the legality of the standards until they were finalized. The court rarely grants such rehearings, and the request was seen as a long shot (Greenwire, June 9).
The EPA rule has since been finalized but hasn't yet been published in the Federal Register, which will trigger a timeline for challenging the rule in court.
The appeals court judges also rejected requests to effectively put the legal challenges to EPA's proposed rule on ice until the final rule is published. EPA's challengers, including more than a dozen states led by West Virginia, said they plan to eventually challenge the final rule, and that keeping state and industry cases alive would save "substantial resources" for the court and the parties involved and allow for a speedier resolution.
That request, however, was widely viewed as an attempt by challengers to retain the three judges involved in the challenges to EPA's proposed rule. Brett Kavanaugh, Thomas Griffith and Karen Henderson were appointed by Republican presidents, and Kavanaugh in particular has a track record of ruling against EPA in high-profile cases (Greenwire, Aug. 14).
The court said in separate short orders yesterday that the challengers' request for a "stay of the mandate" in the case was denied.
Attorneys representing EPA told the court last month that despite petitioners' arguments that they wanted to "consolidate their planned future challenges to the final rule with these challenges to the proposed rule," they had offered "no legitimate basis for departing from established jurisdictional and judicial review principles in this manner."
The administration urged the court to dismiss the case, warning that linking challenges to EPA's final rule and previous court proceedings would "only invite all manner of premature challenges to proposed agency rules with the aim of gaining some perceived tactical advantage."
The court also last month denied states' "emergency motion" to consolidate another court challenge to EPA's power plant rule with the challenge to the proposal -- another effort to keep the three-judge panel overseeing the issue (Greenwire, Aug. 20).
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State officials caution against 'just saying no' to EPA
Sep 30, 2015 | E&E Energywire
By Emily Holden
States will gain nothing by refusing to draft their own carbon-cutting plans for U.S. EPA's power plant rules, the groups representing state energy and air officials told congressional staffers yesterday.
At least half of the states are weighing challenging the Clean Power Plan in court, but many of them are already reaching out to the public and beginning the planning process among agencies, according to the executive directors of the National Association of Clean Air Agencies, National Association of Regulatory Utility Commissioners and National Association of State Energy Officials. A few states, including Oklahoma and Kentucky, are poised to follow Senate Majority Leader Mitch McConnell's advice to "just say no" to writing state compliance plans.
But "even states that don't particularly care for the Clean Power Plan are going to work on plans," NARUC Executive Director Chuck Gray said.
NACAA Executive Director Bill Becker told the Capitol Hill audience at a briefing by the Environmental and Energy Study Institute that electric utilities are telling state officials they don't want their states to forgo writing a plan and get stuck with EPA's federal version.
"It's by definition going to be less flexible than a state program, and by being less flexible it will be more costly," Becker said. "There is nothing to be gained by implementing -- or by being subject to -- a federal plan, other than calling attention to oneself."
Not submitting a plan would also give EPA federal enforceability over carbon cuts, threatening state autonomy, Becker said.
He suggested that states at least use EPA's federal plan as a model that they can adapt to meet their own specific needs. NACAA is also working on a model plan that will be more expansive than EPA's proposed federal plan and will be published by the end of the year, he said.
NACAA members are responsible for implementing federal Clean Air Act regulations. NARUC's electric regulators must approve utility plans that could affect bills for ratepayers. And NASEO's officials are mostly appointed by governors and tasked with spearheading state energy and economic development plans.
The three groups said they're working together more than ever, even though they "hardly knew each other" a few years ago, according to Becker (ClimateWire, Nov. 26, 2014).
They also commended EPA for its outreach on the Clean Power Plan.Perils and promise of 'choice'
Joe Goffman, senior counsel for EPA's Office of Air and Radiation, ran through a list of changes the agency made to the rule after hearing from states and power companies to ease difficult interim goals and allow states to trade compliance credits with one another without entering formal agreements.
"This, folks, is what choice looks like," Goffman said, pointing to a PowerPoint slide with a complex flowchart of all the different types of plans states can choose.
States are thinking through key decisions about whether to work with other states, how quickly to submit a plan and whether to pick a rate-based or mass-based goal, to reduce the power fleet rate of emissions or cap CO2 at a specific level, among many other issues.
Several have already started holding listening sessions and stakeholder meetings (ClimateWire, Sept. 28).
NASEO Executive Director David Terry said his main advice to states is not to predetermine which path to take.
Many states are still analyzing the 1,560-page rule, and NASEO recently launched a service for states to submit questions for the organization to ask EPA and share responses with members.
Becker said that while about a dozen states got tougher goals under the final Clean Power Plan than in the draft rule, about 30 of them saw requirements eased. He said many states are already on track to achieve EPA's standards, although "a lot more work needs to be done by a bunch of states."
That said, Becker said many states still have legitimate concerns about EPA's schedule for submitting a plan. States must submit a plan or request a two-year extension by September 2016. That could be difficult in states whose legislatures meet every other year, he said.
Regulators also have limited budgets for working on Clean Power Plan blueprints, and Congress may not approve supplementary funding requested by the Obama administration, Becker added. And states are disappointed they won't receive credit for action to reduce carbon emissions before 2012, he noted.
While cap and trade may be a politically loaded concept, Becker said state officials should listen to members of the Regional Greenhouse Gas Initiative in the Northeast and Mid-Atlantic that are touting the benefits of their system.
"If this program was called 'peanut butter and jelly' and not 'cap and trade,' it would take off like gangbusters," he said.
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Senate chemical bill draws fresh concerns from states
Sep 30, 2015 | Safer Chemicals, Safer Families
By Tony Iallonardo
With rumors swirling that the Senate could call a vote very soon on S.697, the Vitter-Udall chemical bill, four governors are raising fresh concerns about the bill, even as they encourage Congress to pass reform.
They wrote to Senate leaders today expressing “significant continued concern with a number of elements” of the bill that’s intended to update the nation’s chemical safety policy. It expresses particular concern about sections that would limit the ability of states to rein in toxic chemicals: preemption, grandfathering of statutes, and getting federal waivers. Previously, the National Conference of State Legislatures, the National Governors Association and nine state AGs have been on record with concerns about S.697.
With so much concern from so many quarters, one has to wonder why the bill hasn’t been fixed to address these serious flaws. Help us get the message across to your senators, click here to send them an email now!
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Carbon-trading options -- and questions -- swirl in Ga.
Sep 30, 2015 | E&E Energywire
By Kristi E. Swartz
As Georgia continues to consider using a market-based approach to comply with U.S. EPA's Clean Power Plan, it's clear that those who would have to create such a market still have a lot of questions.
The state already intends to ask for a two-year extension when it files an initial plan on how it will meet EPA's carbon-reduction goals, said Karen Hays, Air Protection Branch chief of the state's Environmental Protection Division. At a town hall meeting about the EPA rule Monday, she also said Georgia will develop a flexible state plan that allows for interstate trading of carbon emissions (EnergyWire, Sept. 29).
Georgia must cut its power-sector carbon emissions rate 34 percent from 2012 levels by 2030 to meet targets set by the Clean Power Plan. The state's goals roughly fall in line with others in the Southeast, and the region is home to major electric companies that cross state lines.
"It provides more regulatory certainty, particularly in the Southeast where you have a number of large utilities that cover many state borders, they would be looking to be able to do the same thing across all state borders, of course," said Katie Southworth, a consultant with the Natural Resources Defense Council.
But that doesn't mean that the logistics are easy.
"If states have to work together, they usually have to make compromises," she said.
Georgia first has to decide whether it wants to pursue a mass-based plan or a rate-based one.
A rate-based plan would require the power fleet to adhere to an average amount of carbon per unit of power produced. A mass-based plan would cap the total tons of carbon the power sector could emit each year.Unintended consequences
Participants at a small discussion focused on regional cooperation voiced concerns about setting up a regional market and then being able to change course if there were unintended consequences.
"You've got to structure this thing correctly to get the benefits," said Tracy Hawkins, Georgia Power Co.'s environmental affairs general manager. "I think you've got to be able to opt in and opt out."
Georgia Power is owned by Atlanta-based Southern Co., which also operates electric companies in neighboring Alabama, Florida and Mississippi. The company's wholesale unit, Southern Power, has operations all over the country, adding another layer of complexity.
"This could get complicated very quickly," she said.
Ken Mitchell, with EPA's Region 4, based in Atlanta, said the trading options go beyond a geographic region. But there are limits as well.
"If you wanted to trade with, let's say, Iowa ... they have to have similar instruments for trading," he said. "If you create a regional approach that's part of the Southeast, you're increasing that pool with your neighbors, and there's positive benefits to doing that."
There is another option that doesn't require regional cooperation, Mitchell said. The "trading ready" program allows states that meet certain basic criteria to trade emission credits with other states that have met those same specifications.
"If you're going to trade wind power, for example, you have to make sure what you are trading is equivalent," he said.'Big hill to climb' in the Southeast
Chief among challenges in the Southeast is that some states already have said they will sue to fight the Clean Power Plan. And state legislatures have considered various laws on the path they will take toward compliance.
Both of those make it difficult politically for the region to work together.
Mitchell suggested state officials talk with members of the Northeast's Regional Greenhouse Gas Initiative. This is in part because when state officials, regulators and utilities started to form the regional carbon market 10 years ago, they had the same concerns as many critics of the proposed EPA rule.
"We are incentivizing trading, and then we give you options for what you pick depending upon what you believe is best for your needs," Mitchell said. "So you can have this grand bargain with your neighbors, for example, or you can stick to Georgia and make yourself 'trading ready,' and you can trade with Washington state, or New Hampshire ... or whomever you need to without entering into that complicated legal binding."
Georgia Public Service Commission Chairman Chuck Eaton said the basic challenge goes back to the fact that each state, including its regulators, is accustomed to doing things one way. There's apprehension over making a mistake that nobody thought about in the planning process.
"I think if we can make it work, it seems like a big hill to climb, but a regional approach may be the way to go," he said.
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Utilities turn up the heat on Missouri AG over EPA rule
Sep 30, 2015 | E&E Energywire
Utilities are pressuring Attorney General and Missouri gubernatorial candidate Chris Koster to join the legal fight against U.S. EPA's Clean Power Plan.
They sent the Democratic attorney general a letter Monday outlying why he should join 16 other states that are vowing to fight the carbon regulations in court.
"One clear challenge to EPA's [Clean Power Plan] is that it has significantly overreached its authority granted under the Clean Air Act," the letter said.
Utilities behind it include Ameren Missouri, Kansas City Power & Light, Empire District Electric Co. and several smaller state utilities and energy co-ops.
Koster still hasn't released a decision.
In response to a St. Louis Post-Dispatch inquiry, Koster's office wrote, "We appreciate the input from the power companies and other interested parties, and take seriously comments from all Missouri stakeholders."
Missouri's carbon emissions were supposed to decrease to 21 percent under the Clean Power Plan's draft, but that was hiked to 37 percent when EPA issued the final rule. The state burns coal for 80 percent of its electricity, and utilities are estimating it will cost the state $6 billion to reach the EPA benchmarks by 2030.
Natural Resources Defense Council energy economist Ashok Gupta argues for people to stand behind the regulations because "investment that's driven by the Clean Power Plan trumps whatever rate impacts there are."
If Koster does sign on, he will be one of two Democratic attorneys general to do so (Jacob Barker, St. Louis Post-Dispatch, Sept. 29). -- MB
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GOP defeats host of Dem proposals to sweeping House package
Sep 30, 2015 | E&E Greenwire
By Hannah Northey
Republicans on the House Energy and Commerce Committee today defeated a slew of Democratic proposals for revising a comprehensive energy package as bipartisan relations continued to fizzle along with the bill's chances.
Energy and Commerce Chairman Fred Upton (R-Mich.) repeatedly said he was hopeful the package would make it to President Obama's desk despite opposition from top Democrats on the committee.
"If it somehow gets stalled, I will come back to it," Upton said. "Let's just try and get this done."
But Energy and Commerce ranking member Frank Pallone (D-N.J.) shot back, saying the bill is not headed to the president's desk. He expressed concern again with a manager's amendment Upton unveiled yesterday to H.R. 8, the "North American Energy Security and Infrastructure Act of 2015," with a host of changes addressing exports of domestic gas, the nation's power markets and grid reliability (Greenwire, Sept. 29).
"What the committee is doing with the substitute today is going in the direct opposite direction if you're looking to get the president to sign the bill," Pallone said.
Bipartisan efforts to move the bill forward appeared to wane weeks ago after the committee delayed a markup of the bill, with top Republicans outlining sticking points. Those divisions were on full display today as Pallone and other Democrats opposed proposals from their Republican colleagues.
At publication time, the panel was still debating the more than 40 amendments filed to the bill, the majority of which are sponsored by Democrats.Grid reliability
The committee today voted 27-22 to defeat language Pallone proposed to scrap a provision in the bill that would require the Federal Energy Regulatory Commission and the country's grid operators to analyze the effects of complying with any proposed or final federal rule costing more than $1 billion and affecting generating units.
Those rules would include environmental rules such as the Clean Power Plan, which has become a target for Republicans. Under the bill, FERC and system operators would need to complete an independent review of how a rule would affect reliability, the nation's energy mix, wholesale markets, and infrastructure like transmission and gas pipelines.
Pallone argued that U.S. EPA's rules had not caused reliability issues and shouldn't be the target of the energy bill.
But Energy and Power Subcommittee Chairman Ed Whitfield (R-Ky.), who yesterday announced plans to retire at the end of the 114th Congress, argued the language was critical to securing the country's energy supplies. Whitfield said the section was one of four that caused bipartisan collaboration on the bill to fail.
EPA, he added, has been active in an unprecedented way because of Obama's climate goals, and the final bill should look at reliability.
"FERC has come up here and testified on these regulations -- from EPA and other agencies -- and said EPA particularly doesn't talk to them about the impact on reliability of these rules," Whitfield said.Capacity markets
Republicans defeated 26-22 an amendment Democratic Rep. Joe Kennedy of Massachusetts introduced to scrap language in the bill that would require FERC to study whether the country's capacity markets are ensuring that sufficient generation is built.
Kennedy argued that language in the manager's amendment requiring the FERC study would do much more, possibly entering new data into the filing process at FERC and requiring grid operators to make changes before such markets are fully understood. Capacity prices in New England, Kennedy said, have surged from $1 billion to $4 billion in recent years without significant new construction. He said the language requiring the study was too vague and could do more harm than good.
Rep. Peter Welch (D-Vt.) supported Kennedy's amendment and called for additional oversight hearings on capacity markets, noting that the American Public Power Association opposed the original language and agreed the FERC "study" could force grid operators to make changes based on what they find. Welch also said the language was skewed toward fuels that Republicans favor.
"The definition is clearly skewed to favor coal and nuclear resources," he said.
House Republicans, on the other hand, argued that they had significantly watered down the language to appease Democrats and that it was critical to touch on reliability in the final energy bill.
The committee also defeated 27-22 an amendment from Rep. Paul Tonko (D-N.Y.) that would have added an impact analysis to the original study the bill calls for, which he said would allow grid operators to comment on any problems with adopting the energy bill's definition of reliability.
Rep. Mike Doyle (D-Pa.), who voted against Tonko's amendment, said the committee should have had more time and warned the issue is critical because nuclear reactors competing with cheap natural gas are retiring. That, in turn, could degrade his state's ability to meet new climate goals under the Clean Power Plan. Doyle said many Democrats are sensitive to the issue of baseload generation but had little time to digest more than 100 pages of amendments added within the past 24 hours.
"If this bill has any chance of becoming law, and as it's written right now it doesn't, sometime between now and floor time ... we need to sit down" and discuss reliability, Doyle said.Consumer-side technologies
The committee approved 28-21 an amendment from Rep. Mike Pompeo (R-Kan.) that would require state utility regulators to evaluate -- and make public within 90 days -- whether any subsidies for consumer-side technologies such as rooftop solar or electric vehicle charging stations are providing benefits for consumers.
Pompeo argued that ratepayers deserve to know what benefits they are receiving. "Rooftop solar and energy charging stations are fine," Pompeo said, adding that "we just need to be honest" with ratepayers about the costs.
But Pallone said the amendment would hinder the development of a technology that cuts carbon emissions.
"I think we need to encourage and support the solar industry," he said.Hydropower
The committee approved by voice vote a bipartisan amendment that Reps. Cathy McMorris Rodgers (R-Wash.) and Jerry McNerney (D-Calif.) introduced to bolster hydropower, but only after Pallone voiced his opposition.
McMorris Rodgers and McNerney argued that federal licensing of hydro projects is taking too long even though they provide valuable, carbon-free power. McNerney said the language reflected compromise on both sides of the aisle that stands to make licensing move faster.
The amendment, a result of months of negotiations, would direct FERC to consult with agencies and tribes in developing a schedule for all federal approvals of nonfederal hydropower, and would authorize the U.S. courts of appeals to grant limited extensions of time as may be requested by agencies and tribes. The bill would also, among other things, expedite the licensing process for closed-loop pumped storage projects and establish an expedited FERC license amendment approval process for increasing hydropower capacity or efficiency.
But Pallone voiced his objection to the amendment, saying the language would give too much authority to FERC and other agencies while overlooking critical environmental protections.
"The problem is the language in this amendment has not been the subject of hearings or even circulated in the public prior to this hearing," he said, adding that farmers', conservationists' and other stakeholders' interests would be trampled. "This is a massive expansion of federal authority."Strategic Petroleum Reserve
The committee rejected a Pallone amendment that would have increased authorized spending levels to modernize the Strategic Petroleum Reserve and for a grant program to boost the resiliency of electric infrastructure.
Pallone said increasing the funds may help eventually sway the White House toward signing the bill.
Upton said that Pallone's plan "was not a bad amendment" but that he was unable to support the proposed levels at the time.
"I'll let you know the door is definitely not shut," he told Pallone.
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Future of energy overhaul grim as lawmakers go partisan
Sep 30, 2015 | Politico Pro
By Eric Wolff
FUTURE OF ENERGY OVERHAUL GRIM AS LAWMAKERS GO PARTISAN: House lawmakers pulled the plug Tuesday on reaching broad bipartisan agreement on a four-part energy strategy, likely dooming any long-shot chance as well that this Congress will produce the first major update in energy law in at least eight years.
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We had a deal! Chairman Fred Upton and Energy and Commerce ranking member Frank Pallone initially had a bargain that the two sides would agree on all changes to the bill. But in the end, Democrats wanted stronger language addressing climate change and Republicans may not have felt compelled to push hard on even a modest bipartisan agreement ahead of next year’s elections. “Now, were faced with a contentious markup that could have been a bill with a very bipartisan product,” Pallone said yesterday in his opening statement at a committee meeting. Panel Republicans, including Energy and Power Subcommittee Chairman Ed Whitfield, retorted that Democrats were not being honest brokers. “I think we all had great hopes and expectations,” the Kentucky Republican said. “And to be truthful about it, the fact that we were not able to reach an agreement says a lot about this institution and where we found ourselves for whatever reason.”
I am altering the deal. Pray I don't alter it any further: In giving up on their efforts to sign up Democrats, the new version of the bill Republicans put out contains 113 more pages (it’s now 208 pages) that Democrats couldn’t quite stomach. Yet, it doesn’t include flashy items like the Keystone XL pipeline or shutting down the EPA’s rules for power plant emissions. All in all, there are more than a dozen sections not previously included in the bill and many of them are, while controversial in their niche, ones that only a wonk could love. Many had originally been included in the Republican discussion drafts and excised by Democrats, but have now been resurrected, such as requiring FERC to conduct a “reliability analysis” on any proposed or final federal regulation that may affect power plants, and the repeal of a program to phase out federal buildings’ use of fossil fuels. Issues like shortening the amount of time the Energy Department has to decide on certain LNG applications have been slipped in. And the chapters on energy efficiency saw big changes and additions, particularly on building codes. How DOE churns out efficiency standards got attention too, including new language requiring that assumptions and models be based on material available to the public — a point of contention industry has had with the agency.
We like this deal! The American Petroleum Institute, America's Natural Gas Alliance and the Air Conditioning, Heating, and Refrigeration Institute sent letters to the committee yesterday offering full-throated support for the new bill. ANGA and API in particular supported the provisions on LNG terminal approvals.
WHITFIELD RETIREMENT TRIGGERS CHAIRMANSHIP SHUFFLE: Rep. Ed Whitfield announced yesterday he would not seek re-election, ending a two-decade career in the House. His departure, which he told Pro's Darius Dixon, has nothing to do with an ethics investigation, leaves a vacancy at the top of the Energy & Commerce Subcommittee for Energy and Power, not to mention taking out a leading contender for the leadership of the full committee. When it comes to the E&P chairmanship, Darius says that Rep. Pete Olson, currently vice chairman of the subcommittee, has voiced interest in that post. Meanwhile, Rep. John Shimkus, who has seniority after Whitfield, plans to make his case for being atop the full committee in the next Congress. Rep. Greg Walden is also seen as a contender for the job, though he remains tight-lipped on whether he'll run.
WILL ABSENCES MAKE VOTERS GROW FONDER OF BUSH ENERGY PLAN? Jeb Bush released his energy policy vision yesterday, detailing what has become the regular checklist from the GOP field: back Keystone XL, lift the crude oil export ban, kill EPA regulations. But as Pro's Darren Goode reports, it left some gaps that he may need to fill in the coming months. "His big energy rollout didn't mention the term 'climate change.' And while he promises to stop President Barack Obama's climate regulations 'in their tracks,' he didn't repeat his previous concerns that the climate is changing 'and humans are contributing to it,' or that Republicans who deny global warming risk being viewed as 'anti-science.'" He also invited states to judge for themselves whether to allow oil drilling off their coasts, and he didn't bring up his past position opposing offshore drilling while he was Florida governor.
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Natural gas industry looks to carve out bigger role in Ill., Midwest
Sep 30, 2015 | E&E Energywire
By Jeffrey Tomich
In a state where nuclear power and coal dominate politics and electricity markets, can natural gas find a place at the table?
A national trade group tasked with finding new markets for America's abundant supply of natural gas thinks so.
That state is Illinois. And while natural gas powered just a tiny fraction of the electricity generated there last year, Washington-based America's Natural Gas Alliance is making the case for it to play a much larger role in the state and elsewhere in the Midwest as regulators look to slash carbon dioxide emissions under the Obama administration's Clean Power Plan.
ANGA has taken its message on the road to Illinois and other states across the Midwest to speak with state officials about the advantages of diversifying their fuel mixes to include more natural gas as a way to help comply with the carbon rule issued Aug. 3.
Their pitch in a nutshell: Natural gas can help achieve CO2 emissions reduction while maintaining reliability and affordability.
"Gas is the one fuel that can achieve all three," said Amy Farrell, vice president of regulatory affairs for ANGA.
While the group's ambitions to increase gas use in Illinois might not be shared by coal, nuclear and renewable energy advocates, there is little doubt that the state is one where gas has plenty of room to grow.
The fuel represented almost a third of the state's generating capacity in 2013 but was 3 percent of the electricity produced. By contrast, coal and nuclear dominated with 91 percent of the megawatt-hours.
Part of the reason is that much of the 13,000 MW of natural-gas-fired generation in Illinois is less efficient combustion turbines that run only during periods of peak demand. Even so, ANGA says the utilization rate for the 3 gigawatts of combined-cycle capacity in Illinois was 11 percent last year.Ill. already has pipelines, infrastructure
ANGA's message to state policymakers and regulators begins with a bullish long-term outlook for U.S. natural gas supplies and prices.
In the case of Illinois, it's also to drive home the geographic and infrastructure advantage as a natural gas consumer.
With its central location, Illinois is a crossroads for more than a dozen interstate natural gas pipelines, with gas arriving from Canada, the Gulf Coast, the Rockies Express Pipeline to the west, and the Marcellus and Utica shale formations. The state also has more than 1 trillion cubic feet of annual natural gas storage in 28 separate fields, according to ANGA.
Frank Brock, a senior energy market specialist at ICF International, said proximity to Eastern shale formations, pipelines and gas storage leaves it well-positioned. Initially, that could mean just ramping up use of existing combined-cycle gas generation and longer-term development of new plants.
"Certainly, gas has room to gain in Illinois, and it's a well-piped state," Brock said. "What players are looking for in the placement of new combined-cycle units is the trifecta" of proximity to gas supplies, pipeline capacity and electric grid access.
David Kolata, executive director of the Citizens Utility Board, a Chicago-based utility watchdog group, said energy efficiency, demand response and distributed energy are the best paths to help Illinois slash CO2 emissions. But natural gas will play a role, too.
Relatively stable and inexpensive natural gas has been a good thing for electric and gas utility customers in recent years. But as with any commodity, prices can be fickle.
"You just don't want to be in a position of being too dependent on gas because of its historic volatility," Kolata said.
The steep and sudden prices shocks of the early 2000s, or more recently the 2014 polar vortex, continue to provide fodder for the gas industry's critics.
But today's natural gas industry is vastly different from what existed in the early 2000s because of the shale gas revolution, Farrell said.
"It's not the same game," she said.
And just as important as the uptick in gas prices during the polar vortex was the response by gas producers to that increase.
ANGA points to the quick price response as proof. Natural gas averaged $4.91 per million British thermal units in the first half of 2014 as inventories were drawn down. But prices subsided to $3.85 in the second half of the year and were sub-$3 by the following January, Farrell said.
Longer term, the U.S. Energy Information Administration forecasts Henry Hub spot prices of $4.88 per MMBtu in 2020 and $7.85 in 2040 in its "business as usual" case, with a range in a high oil price environment.Nuclear industry seeks a low-carbon standard
Even armed with a bullish supply outlook for gas and Illinois' geographic and infrastructure advantages, the natural gas industry faces no easy task influencing public policy in Illinois, where a robust debate is underway about how to achieve a low-carbon future.
In terms of electric generation, coal's share of the market will only shrink in the years to come, and some of Exelon Corp.'s nuclear plants are merely trying to hang on. That means power from gas, wind and solar will be the options for utilities.
The state's wholesale electricity market is competitive, but two key energy bills under consideration in Springfield could help shape its direction.
Exelon is asking for support to help its nuclear fleet by creating a low-carbon portfolio standard that would require 70 percent of generation for much of the state to come from zero-carbon resources such as nuclear plants or renewables. The Chicago-based company said it will continue to push for the measure even though one of the plants considered to be the most at-risk will operate at least through mid-2017 (EnergyWire, Sept. 11).
Meanwhile, a coalition of clean energy and consumer advocates are lobbying for a separate bill that would expand the state's renewable portfolio standard to 35 percent by 2030, the date for the Clean Power Plan carbon reduction target. The bill would also expand Illinois' energy efficiency standard (EnergyWire, Feb. 20).
ANGA said it doesn't view renewable energy expansion as competition for natural gas. Rather, the association says expanding gas-fired generation provides quick-ramp capability that can help support more renewables.
"We don't see it as a competition," Farrell said. "From our standpoint, you can't have more renewables without gas."
ANGA said it is not looking for special treatment in the form of state policies; it is only looking to ensure that energy sources compete for market share based on economics when it comes to Clean Power Plan compliance. On that basis, the group said, natural gas should fare well.
Said Farrell: "As those states look to the options, they need to look at the relative cost of those options."
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Shale energy on both sides of the pond
Sep 30, 2015 | The Hill -- Congress Blog
By James Clad
Anglo-American attitudes towards shale energy can seem as wide as the Atlantic Ocean separating the U.S. and the UK.
Initially favorable to shale energy’s surging supply, the Obama administration more recently has been veering towards new regulations for the process of the hydraulic fracturing of shale formations, as well as for methane capture and ozone emissions.
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Across the pond, it’s a different story. David Cameron’s Conservative government has begun to intervene in localities to fast-track British shale development.
In some ways, the UK finds itself in similar circumstances the US experienced just a few years ago. British dependence on foreign energy hasn’t lessened. Falling levels of oil and natural gas production, expensively extracted from the UK’s North Sea fields, are now intersecting with ambitious coal reduction targets. The upshot: Rising UK consumer energy prices, and potentially even more dependence on Russian natural gas.
Less than a decade ago, the U.S. faced a similar conundrum. Domestic oil production seemed in terminal decline. Domestic natural gas supplies lagged behind rising demand. In the early 2000s, US natural gas prices had climbed to prices about four times higher than they are now – cost levels which even made a renaissance in nuclear energy seem briefly plausible.
The turnaround came with the U.S. shale revolution. Though hit by plummeting prices since mid-2014, the U.S. producers of the ‘tight oil’ extracted from America’s vast shale formations have mauled OPEC’s market power. Since last year, the U.S. has become the world’s largest oil and natural gas producer.
This homegrown shale industry now hopes the U.S. can become a major oil exporter. U.S. natural gas exports would augment the global supplies China and India need to shift their electricity generation away from coal, bringing down Asia’s heavy carbon footprint and reducing their horrific air pollution.
In Britain, the Cameron government sees how the U.S. shale boom created hundreds of thousands of jobs – even as the American economy succumbed to deep recession. The British have seen how U.S. shale energy has resuscitated many segments of U.S. manufacturing which now, thanks to low natural gas prices, have become more competitive than many firms in Europe and, this year, have come close to beating overall manufacturing costs in China as well.
Just as in Asia, UK shale advocates also realize how electricity generation using low-cost gas can accelerate atmospheric cleansing when companies shift away from coal. North American carbon emissions have reached their lowest levels in nearly 30 years.
Begrudgingly and periodically appreciative of shale energy, the Obama administration has yet to signal political support for the infrastructure needed to capitalize further on the shale revolution.
By contrast, the Cameron government in Britain wants to share in this success, and is applying unambiguous support for shale. However, though blessed with substantial shale resources, Britain faces more public mistrust than now exists in the U.S.
UK public opinion towards hydraulic fracturing has a decidedly downbeat tone, much of it informed by modern day Luddites. True, some U.S. states, such as New York, have banned fracking – as hydraulic fracturing is commonly known – but most American jurisdictions now think the process works safely. A recent, exhaustive Environmental Protection Agency study confirms this.
Science aside, spirited U.S. opposition to fracking has been slowly abating as local incentives, the employment effect, and a deeper familiarity with the industry become more widely known.
A major difference with Britain lies in private ownership of subsurface rights in the U.S.: in the UK, the Crown (i.e., the central government) retains that right. Shale production took off when private landowners negotiated compensation with drillers, especially after the mid-2000s. Yet even without private subsurface rights, the UK can sway the doubters with the plausible promise of new manufacturing jobs, potentially much lower energy prices, and contemporary science.
As we watch the first steps in British shale energy development, we would do well to remember that what can be done may just as easily be undone also. While preponderant sentiment within the U.S. now sees the shale revolution as broadly beneficial, this doesn’t guarantee a problem-free future. One can only hope that the next U.S. administration, Republican or Democrat, will see in shale energy an epochal opportunity – a perception incompletely grasped by the current administration.
Clad, a former U.S. deputy assistant secretary of defense, advises energy companies in the U.S. and Asia.
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N.D. governor discusses two-track approach on power plan, shale oil's prospects amid price shift
Sep 30, 2015 | E&E TV
With a 45 percent emissions rate reduction in the final Clean Power Plan, what are North Dakota's plans for complying as it manages a power sector that runs primarily on coal? During today's OnPoint, North Dakota Gov. Jack Dalrymple (R) discusses his state's compliance and litigation plans for the Clean Power Plan. He also talks about the challenges facing his state's shale oil industry following the rapid decline of oil prices.Transcript
Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. With me today is Gov. Jack Dalrymple, Republican of North Dakota. Governor, thank you for joining me.
Gov. Jack Dalrymple: Thank you, Monica. Glad to be here.
Monica Trauzzi: Governor, North Dakota has experienced a dramatic shift on energy this decade. Let's talk a bit about what the current landscape is looking like in your state with low oil prices at play and no signal from the international market that we could see a rebound in prices.
Gov. Jack Dalrymple: Well, I'm getting that question pretty frequently these days. North Dakota, as you know, has experienced a true oil boom in the Bakken Shale formation. We've gone from off the map to the No. 2 producer in the United States second only to Texas.
Producing about 1.2 million barrels of crude a day now and everyone is asking, "What's going to happen at lower prices?" So far, we've seen a significant reduction in rig count. Probably about half the rig count that we had last fall. We're down to about 68 rigs, but interestingly enough, our production has really not dropped yet. The rigs are going into the very best prospects that are out there. The production per well is extremely high so the production levels are staying about the same.
Monica Trauzzi: But the fact is we have more supply than demand. That is the critical issue here. You really encouraged aggressive expansion and growth of the industry within your state. Do you ever consider yourself responsible for encouraging all of that growth and now finding ourselves in the United States in a position where there is more supply than demand?
Gov. Jack Dalrymple: Well, not really. We think we are producing a huge amount of oil at 1.2 million barrels a day, but the world market is 100 million barrels a day. Even in North Dakota with our great success up there, we're not all by ourselves rocking the boat in the world's supply and demand.
But shale oil has been a factor worldwide. We're not the only place to find productivity in shale oil. That definitely has an effect. I think OPEC has looked at that and said this is more significant than we originally thought. It's going to be part of the world supply and demand scene and we're going to have to operate at a lower price level.
Monica Trauzzi: When did you begin hearing concerns in your state capital about a shale oil bust?
Gov. Jack Dalrymple: Well, we don't consider it a bust. The Bakken formation is unusual. The productivity is so high that, as I said, the production is staying steady even at these prices. We feel that nationwide or globally we will be very competitive on a cost-per-barrel basis.
Other areas of the country not so much. Oil sands certainly are not going to be competitive at these prices. So changes are taking place and our rig count is down, but by no means is it a bust.
Monica Trauzzi: So what do you see is the future of your state's economy as it relates to energy production?
Gov. Jack Dalrymple: I think our state economy is going to continue to do well because we have diversified our economy tremendously in North Dakota over the last 15 years. We're very strong in agriculture, very strong in technology, advanced manufacturing is a big deal in North Dakota, and all of those industries are doing well.
So we don't feel that we're overreliant on oil and gas. Actually less than 5 percent of our state general fund revenue comes from oil and gas taxes. So we don't need oil and gas revenue to run our state government, and that's a testament I think to the cautious attitude that our legislators have taken in this.
Monica Trauzzi: To run your state government, but there could potentially be a lot of people out of work.
Gov. Jack Dalrymple: Well, you have layoffs taking place. There's no question about it, especially the oil field services companies have laid people off, but we had going in the lowest unemployment rate in the United States. We had 25,000 unfilled jobs at one time. We're down to about 20,000 now.
Many people coming out of the oil field are finding other jobs in North Dakota. So to some extent we're catching up to the demand for employment that's been there for quite some time.
Monica Trauzzi: You've decided to not run for re-election in 2016. How much of that decision was due to the dramatic downswing that the shale oil industry has encountered?
Gov. Jack Dalrymple: Oh, none whatsoever. We're doing great in North Dakota. If I am not running it is 100 percent personal decision.
Monica Trauzzi: Let's talk about the Clean Power Plan. I know you're in town speaking with EPA about that. Following the release of the Obama administration's final Clean Power Plan, I had energy analyst Kevin Book on this show. He said that the natural gas bridge had been cut much shorter with that final rule.
Do you think the Obama administration has shifted away from its long-standing support of natural gas?
Gov. Jack Dalrymple: Oh, I don't know. All I know is that the Clean Power Plan has a set of rules proposed that really overreach we believe the authority of EPA. We feel that the rulemaking process itself was severely flawed and for that reason we are planning, preparing a lawsuit against EPA.
I don't know exactly what the master plan is. Many people have said so far the only thing they can really decipher is a war on coal coming out of this administration, but down the road, if it isn't going to be coal it's going to have to be something else. It appeared that natural gas was the next choice, but already there are some people saying that that's the next place that people will start hearing about CO2 reductions.
Monica Trauzzi: So you are planning a lawsuit, but you're also working on having conversations towards creating a compliance mechanism.
Gov. Jack Dalrymple: That's true. We're taking a dual track in that sense. We feel that the rules process was flawed and was not properly conducted, but at the same time, our power companies want us to begin work on a state plan. It takes a long time. We are committed to carbon reduction in North Dakota, but it has to be realistic. The original rule for North Dakota proposed an 11 percent reduction. On the last day when the rules were finalized that turned into a 45 percent reduction; about a four-times increase from the original proposal.
So we need to find out how in the world they expect us to deal with that because as of now our power companies are saying it is simply not doable.
Monica Trauzzi: Well, and because you function on majority coal. So how are you looking at potential compliance options and how will you manage that majority coal power generation?
Gov. Jack Dalrymple: Well, that's the big question. The development of a state implementation plan would put us on a course to eventually reduce CO2 emissions substantially, but it does take time. Part of it is better technology. Part of it is sequestration of carbon, but at the moment those technologies do not exist. So you need time to develop like means to reduce carbon.
The other part of it that's a problem is we're supposed to receive credits for investments we've made in renewable energy, but the final rule said anything that you've spent up until now gives you no credit whatsoever.
Monica Trauzzi: But your state also has a huge wind energy potential. You can grow that industry. How are you looking at the clean energy incentive program, which you just referenced, in order to potentially build on what you've already done on wind energy and continue that growth?
Gov. Jack Dalrymple: There is potential for much more wind energy being developed in North Dakota, but in order for that to work North Dakota would have to receive credit for developing that wind energy, not the state that we sell the electricity to.
At the same time, it's only going to really cover a fraction of the amount of reduction that we're being asked to do. You cannot build enough wind farms to replace the amount of electricity that we're talking about.
Monica Trauzzi: An emissions trading mechanism with other states could make things easier, right?
Gov. Jack Dalrymple: Well in theory, it appears that there's a kind of cap-and-trade-type model at play here where one state could sell credits by shutting down plants to another state that wants to continue to operate. In theory that could be where we eventually wind up, but no one has any idea what the cost of those credits might be. All of that cost has to be passed on to the consumer. That means higher power costs for everybody without any question.
Monica Trauzzi: But this is an option that your state is considering participating in.
Gov. Jack Dalrymple: Well, our power companies have no idea whether credits are going to be available or what the price will be.
Monica Trauzzi: In my conversations with various stakeholders on the Clean Power Plan, it's clear that there are more questions than answers at this point. What are your main questions for EPA?
Gov. Jack Dalrymple: Well, our first question in a meeting that we have coming up tomorrow will be how did you arrive at 45 percent when the original was proposed as an 11 percent reduction. That was the basis of all the comments that were received from thousands of different entities.
When all was said and done, suddenly it's 45 percent. What's the rationale? What thinking went into that? What changed that it would go from 11 to 45? We need to understand that.
Monica Trauzzi: Well, we'll end it right there. Thank you for coming on the show. I appreciate your time.
Gov. Jack Dalrymple: You bet, Monica. Good to be with you.
Monica Trauzzi: Thanks for watching. We'll see you back here tomorrow.
[End of Audio]
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Bill would extend installation deadline for safety system
Sep 30, 2015 | E&E Greenwire
By Sean Reilly
Freight and commuter railroads would get another three years to implement the automated safety system known as positive train control under a bipartisan bill introduced today by leaders of the House Transportation and Infrastructure Committee.
The bill, H.R. 3651, would push back this year's Dec. 31 implementation deadline until the end of 2018; under somewhat different conditions, the Senate has already approved a three-year extension as part of H.R. 22, a reauthorization of road, rail and transit programs passed in July.
Congress set the current deadline in a 2008 law signed soon after a collision between freight and commuter trains killed 25 people in the Los Angeles area. Despite the seven-year window, most railroads can't meet the existing timetable, with some large freight carriers warning they will halt passenger traffic and some chemical shipments on their tracks after December for fear of the potential liability (E&E Daily, Sept. 17).
In a news conference yesterday, Transportation Secretary Anthony Foxx said many of the industry's concerns appear to be legitimate but reiterated that his agency will enforce the existing deadline "absent some congressional action."
In news releases accompanying today's bill introduction, House T&I leaders described more time for positive train control implementation as essential. They are proceeding with stand-alone legislation after hopes of moving a broader surface transportation authorization measure that would include an extension faltered over money issues.
"Railroads must implement this important but complicated safety technology in a responsible manner, and we need to give them the necessary time to do so," said Rep. Bill Shuster (R-Pa.), the committee's chairman.
The panel's top Democrat, Rep. Peter DeFazio of Oregon, voiced disappointment that the extension is needed, adding that he hoped the committee would soon take up the broader reauthorization measure that would include further safeguards on transportation of hazardous materials.
Also co-sponsoring the bill are Reps. Jeff Denham (R-Calif.) and Michael Capuano (D-Mass.), the chairman and ranking member, respectively, of the T&I Subcommittee on Railroads, Pipelines and Hazardous Materials.
Positive train control (PTC) is an umbrella term for an approach that uses a central dispatch office and wireless signals to stay in touch with a locomotive's computer and thus serve as an automated safety backup to the engineer. Railroads have cited the cost, regulatory snarls and technological hurdles as reasons for their inability to meet the existing deadline.
The new House bill would also grant the Department of Transportation the authority to phase in PTC implementation, an option the Obama administration prefers in lieu of a blanket rollback of the current deadline. Under certain conditions, individual railroads could qualify for additional extensions up until the end of 2020.
In a statement, Senate Commerce, Science and Transportation Chairman John Thune (R-S.D.), who has been leading the legislative push for an extension, said he is committed to working out a deal.
"Our country's economy cannot afford the significant disruptions that will occur if we don't act soon," Thune said. "Reaching an agreement and passing legislation in the coming weeks is the only way to avert a rail service shutdown."
In a separate statement, Ed Hamberger, the head of the Association of American Railroads, said he looked forward to working with House and Senate leaders "to quickly get the PTC extension across the finish line and to the President's desk for signature."
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