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Industry and Association News

1. (ACC Blog) Polystyrene Foam: Keeping Fall’s Favorite Flavors Hot

   Oct 15, 2015 | American Chemistry Matters

   This month, many of us will once again order our coffees and teas hot instead of the refreshing iced versions we enjoyed during the summer.

Chemical Management News

2. Sen. Whitehouse Praises Toxic-Chemicals Protection Bill

   Oct 14, 2015 | Providence Journal

   By Alex Kuffner
   
   
   The Toxic Substances Control Act was designed to protect the public from dangerous chemicals in consumer products.
3. Exclusive Interview: SOCMA's Bill Allmond

   Oct 15, 2015 | Chem.Info

   By Meagan Parrish
   
   
   I don't envy Bill Allmond's job. As the vice president and senior lobbyist for the Society of Chemical Manufacturers & Affiliates, Allmond spends his days attempting what can feel like the impossible: getting Democrats and Republicans to come together and compromise to pass meaningful reforms for the industry.
4. Land and Water Conservation Fund Divides Republicans

   Oct 15, 2015 | PoliticoPro (Morning Energy)

   By Eric Wolff
   
   
   The Land and Water Conservation Fund's authorization expired on Sept. 30, but there is an internecine battle among Republicans over its reauthorization.
5. US NTP Scientific Advisory Body To Discuss Substance Reviews

   Oct 15, 2015 | Chemical Watch

   The US National Toxicology Program (NTP) is accepting public comment on several substances in advance of the 2 December meeting of its Board of Scientific Counselors (BSC).
6. EPA Appears To Broaden Scope Of NAS' Low-Dose Tox Testing Committee

   Oct 15, 2015 | InsideEPA

   By Maria Hegstad
   
   
   EPA Science Advisor Thomas Burke appears to be asking a National Academy of Sciences (NAS) panel charged with studying whether the agency’s chemical toxicity testing approach sufficiently addresses potential risk to humans and wildlife from exposures to low doses of endocrine active chemicals to consider issues beyond its original charge.
7. Widely Used Flame Retardants May Affect Child Attention Behaviour

   Oct 15, 2015 | Chemical Watch

   Prenatal exposure to some common flame retardants is associated with attention problems in children ages three to seven.

Chemical Security News

8. Utility Conference Ponders Islamic State, A Mysterious Attack and Other Threats

   Oct 15, 2015 | E&E - Energywire

   By Peter Behr
   
   
   Headlines from a daylong briefing on cyberthreats to the electric power grid:
9. Utility 'Champions' Set out to Make Breaches Personal

   Oct 15, 2015 | E&E - Energywire

   By Blake Sobczak
   
   
   Lana Hillebrand has had to change her credit card number five times in as many years. Identity thieves recently filed false tax returns using the utility executive's information, a crime she described as a "major pain."
10. The Morning Risk Report: EPA Targets Small Cos Over Hazardous Waste

    Oct 15, 2015 | The Wall Street Journal

    By Ben Dipietro
    
    
    The U.S. Environmental Protection Agency is fining small companies for improper classification, recording or reporting of hazardous waste, through analyzing data those companies are providing to waste-disposal companies.

Transportation News

11. Alaska Company Gets First U.S. OK to Ship LNG By Rail

    Oct 15, 2015 | E&E - Energywire

    By Margaret Kriz Hobson
    
    
    The U.S. Transportation Department last week granted the Alaska Railroad Corp. permission to become the first U.S. company to transport liquefied natural gas tanks by rail.

Energy and Environment News

12. U.S. Shale Surge Saves Dying Chemicals Plant 3,300 Miles Away

    Oct 14, 2015 | Bloomberg Businessweek

    By Kelly Gilblom
    
    
    The U.K.’s largest closely held company has U.S. shale to thank for its survival.
13. Energy, Mining Companies Begin to Back Climate Talks

    Oct 14, 2015 | The Wall Street Journal

    By WIlliam Mauldin
    
    
    A major international agreement to reduce carbon-dioxide emissions is starting to draw in major energy and mining companies.
14. California Leads the Way on Climate Change

    Oct 14, 2015 | The New York Times

    By Robert B. Semple Jr.
    
    
    On the whole, state governments, especially those with Republican-dominated legislatures, have been remarkably passive and uninventive in recent years on the matter of climate change.
15. 5 States Face the Highest Clean Power Plan Costs -- Report

    Oct 15, 2015 | E&E - Energywire

    By Emily Holden
    
    
    Nebraska, Kansas, Tennessee, Missouri and West Virginia may experience the greatest challenges to complying with U.S. EPA's Clean Power Plan, according to rankings from financial analysts at Fitch Ratings.
16. EPA Urges District Courts To Halt CWA Rule Suits Pending 6th Circuit Ruling

    Oct 15, 2015 | InsideEPA

    By David LaRoss
    
    
    EPA is urging federal district courts to halt a slew of lawsuits over the agency's Clean Water Act (CWA) jurisdiction rule until the U.S. Court of Appeals for the 6th Circuit decides whether it has authority to hear appellate challenges to the rule, because if the 6th Circuit hears the case, then EPA will seek to dismiss the lower court lawsuits.

Full Text of Stories Below

Industry and Association News

1. (ACC Blog) Polystyrene Foam: Keeping Fall’s Favorite Flavors Hot

   Oct 15, 2015 | American Chemistry Matters

   This month, many of us will once again order our coffees and teas hot instead of the refreshing iced versions we enjoyed during the summer.

   As we welcome fall and all of its flavors, polystyrene foam foodservice products will help millions of us keep our favorite pumpkin-spiced or salted caramel lattes, cappuccinos and herbal teas hot – in a single cup, with no extra collar and without scalding our hands while we warm up at our favorite coffee and tea shops.

   Polystyrene foam foodservice products are a convenient and a very affordable way to make our on-the-go lifestyles more delicious and a little less messy. Polystyrene foam not only helps keep our food fresh, hot or cold and ready to eat so we can enjoy food the way it’s meant to taste, but it also has many other benefits.

   When it comes to hygiene, polystyrene foam foodservice products provide important sanitation benefits in restaurants, schools, nursing homes, hospitals and even at home – all places where we want to keep bacteria and germs to a minimum.

   Also, foam is lightweight (it is actually made of about 95% air) and often requires much less energy to produce and transport than its alternatives – which can save fuel and reduce greenhouse gas emissions.

   And it’s being recycled.

   In fact, more than 125 million pounds of expanded polystyrene (mostly used for protective and transport packaging) were recycled in 2013. Polystyrene foam foodservice products are condensed, bundled and sent to recyclers to make new products, such as moldings, picture frames, coat hangers, office products and even surfboard blanks.

   Scores of California cities are leading the way by collecting polystyrene foam (and non-foam rigid polystyrene) at curbsides, and this model could work elsewhere. For example, the Foam Recycling Coalition provided grants this year for polystyrene recycling programs in Denver, Colorado, and Colchester, Nova Scotia, so that residents will be able to toss polystyrene foodservice packaging, egg cartons, meat trays, protective packaging and other polystyrene products into their recycling bins.

   So enjoy your next hot cider, herbal tea or latte this autumn – and keep a look out for growing polystyrene foam recycling programs.

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Chemical Management News

2. Sen. Whitehouse Praises Toxic-Chemicals Protection Bill

   Oct 14, 2015 | Providence Journal

   By Alex Kuffner

   The Toxic Substances Control Act was designed to protect the public from dangerous chemicals in consumer products.

   But in the nearly four decades since its passage in 1976, only nine chemicals out of the 83,000 or so in use have been restricted under the law, according to U.S. Sen. Sheldon Whitehouse.

   Speaking at a news conference in Providence on Wednesday, the Rhode Island Democrat described the law as “ineffectual” and hailed legislation in the works in the Senate that would give the Environmental Protection Agency greater authority and funding to test chemicals and regulate those that could pose a risk.

   The bill, officially called the Frank R. Lautenberg Chemical Safety for the 21st Century Act, won the approval of the Senate Committee on Environment and Public Works — of which Whitehouse is a member — has broad bipartisan support, and is expected to be voted on in the coming weeks.

   “This is something that has momentum behind it … and can be expected to pass this year,” said Whitehouse, one of 60 cosponsors of the bill.

   He spoke at the Providence headquarters of Hasbro, the toy giant that is part of a coalition of manufacturers backing the Senate’s efforts. Coalition members argue the revised law would bring uniformity to the chemical industry by putting in place a national set of standards in place of a patchwork of state standards.

   “You can imagine how challenging it is to try to go to market ostensibly with 50 different sets of regulations,” said Brian Goldner, Hasbro president and chief executive. “We wanted to find a way to create a national standard.”

   The effort to reform the toxic substances act was started more than a decade ago by the late New Jersey Democrat Frank Lautenberg, and before his death in 2013, he had crafted legislation with Louisiana Republican David Vitter. The bill has since been extensively rewritten, and Tom Udall, a New Mexico Democrat, has taken Lautenberg’s place as a lead sponsor.

   The Senate bill has divided environmental groups. While the Natural Resources Defense Council and other organizations have said the bill goes too easy on chemical manufacturers, the Environmental Defense Fund has backed it.

   Richard Denison, lead senior scientist with the EDF, said that many believe the 1976 act was “broken from the start,” leaving the federal government powerless to regulate even known toxic substances, including asbestos and lead.

   “Americans are exposed to thousands of chemicals every day,” he said. “Only a small fraction of those chemicals have ever been tested for safety. That puts our health at risk because we know from scientific studies that some chemicals, certainly not all chemicals … but some chemicals can affect our health. They contribute to infertility, to cancers, Parkinson’s, even diabetes.”

    The new bill would mandate safety reviews, give the EPA the power to test new chemicals and make public more information about chemicals that are in use.

   The House of Representatives has passed a different bill that would replace the Toxic Substances Control Act, but both Whitehouse and Denison described the House legislation as weaker than the Senate version.

   Denison said that once the Senate bill passes, he expects negotiations to begin on a compromise between the two chambers. Even with uncertainty surrounding how those talks would play out, he called the current effort historic.

   “This would be the first major environmental law passed in the U.S. Congress in 25 years,” he said.

    

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3. Exclusive Interview: SOCMA's Bill Allmond

   Oct 15, 2015 | Chem.Info

   By Meagan Parrish

   I don't envy Bill Allmond's job. As the vice president and senior lobbyist for the Society of Chemical Manufacturers & Affiliates, Allmond spends his days attempting what can feel like the impossible: getting Democrats and Republicans to come together and compromise to pass meaningful reforms for the industry. 

   But despite the gridlock and political wrangling, Allmond and SOCMA are close to claiming victory in helping at least one major reform on chemical regulations get passed this year – all while facing long odds on other bills they’re trying to push forward.

   Last month, SOCMA released those goals in a “To-Do List For Congress,” and in this exclusive interview with Chem.Info, Allmond discusses what’s at stake for chemical manufacturers and why these reforms matter. 

   No. 1 on SOCMA’s List: “Reform the Toxic Substances Control Act. The House overwhelmingly approved the TSCA Modernization Act of 2015 on June 23, but the Senate has yet to pass S. 697, The Frank R. Lautenberg Chemical Safety for the 21st Century Act. Stakeholders are aligned on the need for Congress to reform TSCA, but further action is needed by Congress to achieve reform.”

   Meagan Parrish: How close is this bill to being passed? 
   Bill Allmond: There is a 60 senator proof list of sponsors of the bill at this point so we’re in a really good place for the bill’s ultimate passage in the Senate. Once it gets to the Senate floor we fully expect there will be north of 85 Senators that will vote in favor of it.

   The issue right now has to do with a couple of there is amendments – one in particular that’s not related to the bill at all. It’s an amendment has to do with re-authorizing the Land and Conservation Fund. This is a big issue with a couple of senators, especially Sen. Burr of North Carolina. So right now we’re trying to convince Sen. Burr that his bill would be voted separately if he would remove it from the Frank R. Lautenberg bill. 

   Once this bill is passed in the Senate, it still has to reconcile its changes with the House bill, and that will be another several weeks-long process, and then it goes to the president’s desk. I think we’ll pass it before the holidays. If not, maybe early 2016. 

   MP: One of the biggest criticisms of the bill is that it doesn’t ban asbestos. Do these new bills go far enough in balancing consumer safety with industry needs?
   BA: There has been a lot of consternation around asbestos. Our position is that the EPA has the authority to talk to companies about doing more about particular chemicals. From our perspective, the EPA erred when they tried to ban asbestos outright. The courts disagreed and said the EPA didn’t provide enough information about banning it outright, because asbestos does have some critical uses. I think the authors of the bill recognized that the EPA does have authority of some of those chemicals of concern – if it would only use it more effectively. 

   No. 2 on SOCMA's List: "Renew the Miscellaneous Tariff Bill. Specialty chemical manufacturers save substantially from duty suspensions on imported raw materials for which there is no domestic supplier. These savings help them be more competitive and grow their businesses. However, Congress has failed to agree on a path forward to renew or reform the MTB process and it is hurting our industry’s bottom line."

   MP: Where is this bill at in the legislative process?
   BA: This is stuck in the House. The House has a rule that no member of the House can introduce a bill that has a limited tariff benefit, and unfortunately duty suspensions that fall under the Miscellaneous Tariff Bill this falls into that definition. The concern was that House members would introduce bills that only benefit one constituent. SOCMA respectfully disagrees with this rule, and the House rules committee that duty suspensions qualify as a limited benefit. First of all, once a duty has been suspended for a chemical or raw material, any company that is importing that same chemical or raw material can have their duty suspended, so it’s not limited to one entity.

   But we’re stuck because the Senate has passed a bill that would allow companies to apply for duty suspensions that would start with the International Trade Commission, not Congress. SOCMA has been in support of that and both Democrats and Republicans came together to pass this bill under the Customs Reauthorization bill several months ago. The unfortunate thing is that the bill in the House did not include the changes to duty suspension. So we’re at a standstill.

   It’s unfortunate because you can really assign a quantitative benefit to it – a company can save $500,000 per year with one duty suspension and if they have multiple they could save millions. 

   No. 3 on SOCMA's List: "Extend and make permanent the R&D Tax Credit. Due to the highly innovative nature of specialty chemical manufacturing, significant R&D is devoted to developing a product before it’s sold in the marketplace. Temporary Congressional extension of the R&D tax credit creates uncertainty and impedes innovation. Congress needs to finish its efforts to make the tax credit permanent."

   MP: Why has Congress failed to make this tax credit permanent since it was introduced in 1981? It seems like a win for everyone.
   BA: This is one of those issues both Democrats and Republicans agree on, but they always disagree on whether or not the credit needs to be offset by revenue somewhere else. Both sides agree it should be permanent – but it’s how you get there. Republicans say that they don’t need to be offset because companies who get the credit are able to generate more revenue and more jobs, and tax revenue is generated by capital expenditures. Democrats feels that there’s needs to be some offset to make up for tax credits.

   The tendency has been to make a short-term extension to avoid the fight of offsets. This is so businesses can get the tax credit for R&D until Congress can figure out how to make it permanent – either with a huge reform of the tax code or agreeing on how to offset it. 

   MP: Aside from an uncertain business climate, what else is at stake in this debate?
   BA: There’s a chance chemical companies could move their R&D somewhere else. We have seen that happening in Canada and Europe where they provide very favorable tax credits. 

   Most likely change will come about with a major rewrite of the tax code. And we’re moving to the likelihood that the Congress might be split again after the next election, which will make changing this more difficult. 

   No. 4 on SOCMA'S List: "Reform the Surface Transportation Board. Railroad shipping rates have skyrocketed and have been the focus of numerous government reports detailing major deficiencies at the STB. The House needs to take the Senate’s lead and pass reforms that would reauthorize the STB for the first time ever and make the Board a more effective agency for handling freight rail issues."

   MP: Can you explain more about why this is such a critical issue? 
   BA: The Surface Transportation Board oversees railroads and issues that come up in the shipment of good through rail transportation. Our position is that the board doesn’t have much teeth. It can’t compel the railroad to do much when there’s a complaint about issues like the costs, or the unreliability. We really feel like Congress needs to step in and give them more authority. There are some chemicals that can only be shipped by rail so we’re beholden to the use of rail even when the costs are so high that’s it’s not feasible. 

   MP: What the most pressing rail issues facing the chemicals industry you want to see the STB tackle? 
   BA: Pricing. Some of their members are seeing their prices go up 15 or 20 percent each year. It’s hard for them to sustain their use of rail shipment when rates are going up that much. Rail companies justify the increase by talking about the expense of maintaining rails and the level of insurance and liability of shipping hazardous materials. If you look at the amount rail companies generate from shipping hazardous materials, we feel like we’re paying for some of these issues by being a major customer of the rail industry.  

   The Senate has passed a bill that would address some of these issues. The House is still trying to figure out what it’s going to do and how to pass it. So there’s some uncertainty on the House side. 

   MP: It this issue being overshadowed by the safety concerns?
   BA: Yes it is. I haven’t done much lobbying on this since the Positive Train Control popped up and eclipsed this one as the No. 1 transportation issue. Because with safety issue there’s a very hard deadline that Congress has to address and that’s coming up pretty quickly. So we’ve been busy with that. 

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4. Land and Water Conservation Fund Divides Republicans

   Oct 15, 2015 | PoliticoPro (Morning Energy)

   By Eric Wolff

   LAND AND WATER CONSERVATION FUND DIVIDES REPUBLICANS: The Land and Water Conservation Fund's authorization expired on Sept. 30, but there is an internecine battle among Republicans over its reauthorization. Pro's Elana Schor has the details: "The showdown now threatens a number of other priorities. Two Republican senators facing tough re-election fights next year are holding up a bipartisan deal to overhaul the Toxic Substances Control Act in a bid for leverage to reauthorize the fund, but they are running into resistance from states-rights' diehards who refuse to provide new authority without changing how the program operates to boost states' sway over the money and reduce federal land purchases."

   Story Continued Below

   So, can the fund go on anyway? While authorization has expired, there is a dispute over whether the fund has a $20 billion stash to keep buying land while Congress debates its future, as ME readers know well. Elana extracted a fascinating bit of related information: "The Interior Department's chief appropriator, Rep. Ken Calvert (R-Calif.), acknowledged in a recent interview that he could keep funding the program even without reauthorization, but he said he is deferring to Bishop on its future." http://politico.pro/1jCeXpY

   IT'S THURSDAY! I'm your host Eric Wolff, and if we all work together, we can totally get the hang of Thursdays. Even you, Arthur. As part of your mastering of Thursdays, send your tips, quips, and comments to ewolff@politico.com, or follow us on Twitter@ericwolff, @Morning_Energy, and @POLITICOPro.

   FEDS CLOSE THE BOOKS ON EXXON VALDEZ: The federal case against Exxon for the Valdez spill will end in court today, twenty six years after the tanker ran aground in Prince William Sound, spilling up to 750,000 gallons of oil, POLITICO alum Erica Martinson reports for Alaska Dispatch News. "The state and federal government will tell Anchorage federal Judge Russel Holland, who has overseen the case since 1991, that they are dropping any claim to a 'reopener fund' worth $100 million." The original settlement was for $900 million, but the extra money was left as an option in case there was additional environmental damage that could not be foreseen at the time. But the area harmed by the spill has largely recovered. “This is a success story,” U.S. Assistant Attorney General John Cruden told Martinson. “The long saga of Exxon Valdez, with regard to the federal government, is over.”

   HIGH COURT GETS TO FERC: FERC's demand response rule got its day in court yesterday, and Pro's Darius Dixon reports a split decision is possible, though who can tell what kind of split it will be: "The Supreme Court appeared willing to support FERC's role in 'demand response' programs in the states, but some justices on the court questioned how much influence the federal agency would exert over retail electricity prices that fall under the states' purview ... Victory is possible for FERC, but a loss can come in one of two ways. First, a decision to scrap the compensation scheme but preserve FERC's jurisdiction, while certainly triggering a laborious process at the agency to address tariff changes, would still be a considerable victory depending on the wording of the court's decision. But a loss on both counts — whether FERC loses outright or the court splits 4-4 — could trigger a flood of requests to undo demand response-related tariffs setup in wholesale power markets."

   Recuuuuse me — Alito out: The Supreme Court doesn't explain why justices may recuse themselves from a particular case, as Justice Samuel Alito did in the FERC case. With no conflict among his immediate family, the likely reason is his financial holdings. His2014 disclosure notes he or his wife held assets with several electric sector companies, including AES, Black Hills, ITC Holdings and OGE Energy. (He also has oil and gas holdings in Chevron, ConocoPhillips, ExxonMobil, Apache, Kinder Morgan and Schlumberger.) None of the other justices reported holding anywhere near as many direct energy assets as Alito, who similarly recused himself from the court’s 2014 review of EPA’s Cross-State Air Pollution Rule.

   Split decision could short circuit the case: With Alito's recusal, a 4-4 tie is possible. SCOTUSblog opines, "If the Court does cast a four-to-four vote at its private Conference on Friday, and decides that [it's] the most that it can do, that result would be announced promptly, perhaps as early as next Monday."

   ** A message from Covestro: Covestro makes energy efficiency happen. Our high-tech polymer materials insulate buildings and appliances, make cars and trucks more fuel efficient, allow wind turbine blades to operate more effectively, and have helped turn LED lights on across America. Sustainable solutions from Covestro support energy efficiency. Learn more at Covestro.com. **

   TODAY’S FERC MEETING — SCOTUS AFTER-PARTY EDITION: Just when you thought you’d had your fill of FERC for the week after yesterday’s Supreme Court arguments over the agency’s demand response rule, we hope you didn’t forget about today’s monthly meeting. There are 27 electric items on today’s agenda but nothing seemed particularly eyebrow-raising. Still, now that it’s officially fall — and actually feels as such — FERC leadership is scheduled to receive a briefing on winter market prep today. And regulators are also expected to issue a follow-up decision to an order meant to improve coordination between the electric and natural gas markets.

   This is also Philip Moeller’s last meeting as an agency commissioner. By our count, his nine-year-plus run makes him the second-longest-serving leadership member since it was reorganized in 1977 (Bill Massey, who served for more than a decade, holds that record). Moeller plans to leave at the end of the month and pursue a new career in the energy field, but hasn’t said what that will be. So, now who’s going to tweet amazingly Photoshopped FERC-relevant material!?! But seriously, we wish him well. The White House hasn’t nominated anyone yet to replace him. The meeting starts at 10 a.m. at FERC HQ: 888 First St. NE. Webcast: http://bit.ly/1vU2yyB

   PRITZKER HAS POWER WHILE MONIZ AND MCCARTHY CHILL: The White House is deploying its top people tomorrow to announce the winners of an economic resiliency grant program and a plan to reduce global-warming causing refrigerant, hydrofluorocarbons. At 12:40, Commerce Secretary Penny Pritzker and White House Senior Advisor Brian Deese will announce the POWER grants, intended to help retrain former coal workers. Now pity the beleaguered energy reporter who will require Star Trek technology to beam over to the Department of Energy by 1 p.m. to see Energy Secretary Ernest Moniz, EPA Administrator Gina McCarthy, and senior White House climate change aide Dan Utech. The group will, according to a DOE spokeswoman, unveil an Oak Ridge National Laboratory analysis of HFC alternatives, as well as executive actions and new private sector commitments.

   IS FRED UPTON FEELING LIKE STEALERS WHEEL? Rep. Fred Upton, chairman of the House Energy and Commerce Committee, had a dream of a sweeping, bipartisan energy reform bill. The dream may be dead. Negotiations with Democrats collapsed at the end of September. Now H.R. 8, loaded with Republican priorities and few provisions Democrats can support, is taking flack from the right. Heritage Action for America yesterday said the bill "embraces some of the same stale thinking that has plagued America’s energy policy for decades. The federal government is not capable of creating plans for the private sector to flourish and conservatives cannot pretend otherwise.”

   SIERRA CLUB WAS NOT RAISED IN A BARN, SAYS THANK YOU: Sierra Club will send run digital ads to thank 16 senators in 11 states for supporting the Democratic energy bill introduced last month. The ads will run in flagship newspapers in each state, including the Boston Globe (for Sens. Ed Markey and Elizabeth Warren), the Las Vegas Sun (for Sen. Harry Reid), and the Chicago Tribune (for Sen. Dick Durbin). The campaign will run into November.

   POINT — TALENT RFS GROUP FIRES SHOT ACROSS OBAMA’S BOW: The new pro-Renewable Fuel Standard group founded by former Sen. Jim Talent (R-Mo.) is coming out swinging with a web ad attacking President Barack Obama and EPA as hypocritical on biofuels. The spot, which may eventually migrate to a TV buy, notes that Obama has called the RFS an important part of his energy strategy and slams him for last spring's proposal rolling back mandates. "Obama has proposed gutting the RFS and going backward. There is a word for that: hypocrisy," says the spot.

   COUNTERPOINT — REPORT SAYS RFS FALLS SHORT ON INNOVATION, ENVIRONMENT: In a study commissioned by the American Council for Capital Formation, part of the RFS-critical Smarter Fuel Future coalition, two University of Tennessee researchers conclude that the RFS has kept the U.S. too reliant on corn ethanol, the most common type of biofuel and the type critics say drives up corn prices without providing significant environmental benefits. “We have had 10 years under the RFS, and a commercially viable, next generation biofuels technology has not emerged. It is time to rethink the design of the RFS2 and develop a new set of policies that places the U.S. on track to achieve significant advanced biofuels market penetration in the next 10 years that are aimed at achieving meaningful environmental benefits.” http://bit.ly/1hEF91H

   TRIBES CALL FOR BEARS EARS TO BE PROTECTED: Not literally. Well, yes, literally, actually, in that a coalition of tribes believe the Bears Ears area in Utah, so-called because of a pair of buttes that look like the ears of a bear, should be a national monument. The tribes are holding a press conference today at the National Press Club asking the White House and the Utah Congressional delegation to protect the culturally sensitive area from oil and gas development as well as what they consider abuse by some kinds of tourists. Google image search "Bears Ears" to find adorable bears and children wearing bear ears costumes.

   
   
   Read more: http://www.politico.com/tipsheets/morning-energy/2015/10/morning-energy-wolff-210741#ixzz3oeomxm5x
   

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5. US NTP Scientific Advisory Body To Discuss Substance Reviews

   Oct 15, 2015 | Chemical Watch

   The US National Toxicology Program (NTP) is accepting public comment on several substances in advance of the 2 December meeting of its Board of Scientific Counselors (BSC).

   The BSC is the external scientific advisory group to the NTP, which advises the agency on technical matters and makes programming recommendations.

   It will discuss:the peer review of NTP's technical report on pentabromodiphenyl ether (DE-71);the peer review of the draft Report on Carcinogens monograph for cobalt and cobalt compounds; andthe developmental neurotoxicity properties of fluoride.

   Written comments are accepted until 17 November; registration to attend meeting and make public comment open until 24 November.

   The 2 December meeting will be webcast.

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6. EPA Appears To Broaden Scope Of NAS' Low-Dose Tox Testing Committee

   Oct 15, 2015 | InsideEPA

   By Maria Hegstad

   EPA Science Advisor Thomas Burke appears to be asking a National Academy of Sciences (NAS) panel charged with studying whether the agency’s chemical toxicity testing approach sufficiently addresses potential risk to humans and wildlife from exposures to low doses of endocrine active chemicals to consider issues beyond its original charge.

   “I know that much of the thought for this committee and some of the words in the statement of task are really focused toward endocrine-mediated effects. But are the effects that we see in endocrine-mediated effects, are they relevant, are the approaches, is the science relevant to other kinds of endpoints?” Burke said Oct. 13 at the NAS panel's first meeting. “For example, one of our biggest challenges is neurodevelopment and neurological effects.”

   In addition to asking the committee to think beyond the endocrine effects that are a focus of the committee and its charge questions from the agency, Burke also encouraged the committee members to think beyond the mere data and consider its use in regulatory and public health decisionmaking at EPA.

   One committee member, Weishueh Chiu, a toxicology professor at Texas A&M University and a former EPA risk assessor, asked Burke, “It's not the narrow question of 'Is this test adequate?' it's more the larger question . . . also the use of the data?”

   “That's the hope,” Burke replied.

   Burke and EPA colleagues met with the committee EPA is sponsoring to consider whether the agency needs to change its regulatory testing and risk assessment approaches in response to concerns that the status quo misses important health risks that occur from routine, low exposures that are regularly encountered in the environment. The committee follows an earlier NAS panel that reviewed an EPA white paper on a similar topic, non-monotonic dose-response curves.

   The 2014 NAS committee urged EPA to redo its draft paper that found that the agency's current test methods are adequate to account for the unusual non-monotonic dose-responses of some chemicals, finding that EPA's scientific review practices were too shoddy for the agency to be able to justify its conclusions. NAS’ critical review was EPA’s impetus to create this new committee.

   “I realize there's some history before us with the agency and nonmonotonic work and . . . the academy’s review of that,” Burke said. “Hopefully now we're moving forward and getting a better handle on the science and particularly asking the right questions.”

   Data Types

   Burke and colleagues acknowledged that there can be differing results from different types of data, and that sometimes effects are seen in human epidemiology data that are not seen in animal toxicology data, but the animal data are more often used as the basis for EPA decision-making because it is easier to use in regulatory risk assessment and decision-making. Such circumstances seem to further advance questions about low-dose effects and their adversity.

   The Endocrine Society and other critics have charged that toxicology tests upon which EPA and other agencies base their assessments of some chemicals' human health risks could be missing effects that are not occurring at the relatively high doses traditionally used in regulatory toxicology testing. They are increasingly concerned that nonmonotonic chemicals that can disrupt the hormone, or endocrine, system may be less predictable by existing testing methods because their dose-response curves can change direction and may not follow the predictable upward slope seen in many chemicals' dose-response curves.

   Current EPA test methods do not account for such outcomes and could incorrectly predict chemicals' risks, they say. Several of the society's members also faulted the agency's draft white paper for misrepresenting key studies the researchers conducted, leading to flawed conclusions in the draft white paper.

   Burke challenged the NAS committee, saying that members have “an opportunity to transform the way we think about chemical safety science. It's an enormous opportunity, really, to present the information in a new way.”

   Burke further broadened his expectations for the committee by raising questions about the traditional design of regulatory risk assessments, and suggesting the committee consider aspects that remain thorny for risk assessors, such as the validity of a safe threshold for evaluating doses, dose levels in regulatory testing, the complexity of cumulative exposures along with the population’s makeup.

   'Right Endpoints'

   “It's been pointed out in much of the literature that maybe we're not looking at the right endpoints. Let's face it, an awful lot of regulatory science has been dominated by a small number of endpoints. Some would say that carcinogenicity really held sway in the regulatory arena for almost three decades . . .” Burke said.

   “This also challenges us to look at the study design limitations for evaluating doses that are in the range of human exposure. I think it also challenges us to think about threshold. Are we going to continue to think about the toxicity data from high exposure studies in terms of bench mark dose dose and the assumptions of threshold and how do we factor into that the low dose, multiple exposure issue and population variability and susceptibility,” he added.

   Burke also encouraged committee members to consider the question of cumulative exposures, saying that he hoped this issue would be on committee members’ radar as they select the two chemicals for case studies that will address how best to perform a systematic review of evidence. Systematic review is a method for collecting and evaluating scientific literature, intended to answer specific questions in a transparent and methodical way that has gained traction at EPA and more broadly in the environmental health world in recent years.

   The charge asks the committee to perform two such reviews of two chemicals, applying the agency’s questions about low dose effects to the data for these example chemicals. The committee is also tasked with conducting a public workshop on relevant topics, expected to take place in 2016

   Committee Charge

   Committee members peppered Burke and his EPA colleagues David Dix, director of the agency toxics office’s policy shop, and Tina Bahadori, director of the research office’s chemical safety research program, with questions about the charge.

   Ruthann Rudel, director of research at the Silent Spring Institute, pressed them to provide suggestions of chemicals that EPA would like to see the committee to perform the systematic reviews of. Burke indicated that the trio would do so.

   Another committee member, Sheela Sathyanarayana, an associate professor of pediatrics at the University of Washington’s medical school, questioned the EPA representatives about their definition of adverse effects -- an important issue to the broader debate over endocrine-mediated effects.

   Endocrinologists have been reluctant in their definitions of effects to define adversity, arguing that some effects, particularly at early or otherwise susceptible developmental stages, may not show evidence of adversity until later in life. But toxicologists have pushed for specificity in the definition, as these determinations are necessary to toxicology testing practices.

   EPA, in its draft white paper, concluded that there is sufficient evidence to acknowledge that nonmonotonic dose responses exist, and effects caused by these chemicals exist, but that does not require altering the existing regulatory toxicity testing regime because many of the resulting effects were adaptive rather than adverse, Bahadori said.

   'Adaptive' Effects

   Bahadori reminded the committee members of EPA’s conclusion in the draft white paper that “very senior toxicologists evaluated this issue . . . and opined that the majority of those effects are not adverse at low dose, they’re adaptive,” adding that “those are the words that we have to work with.”

   Chiu, however, noted that this was an issue raised in the NAS review of the white paper, which, he said, indicated that EPA’s review left out context. “There are comments about issues with the definition of adverse and lacking context and that effects may not be adverse in one person are in another person, depending on lifestage, susceptibility, etc.,” Chiu said. “That was raised in the [NAS] review.”

   Burke acknowledged that the adverse effect definition remains an issue that the committee will grapple with.

   Committee chairman David Dorman, a toxicology professor at North Carolina State University, asked EPA representatives where they see the weaknesses in their current strategies -- places that that the committee could provide assistance with.

   Dix replied that while the agency has robust methods for incorporating animal toxicity data into risk assessment, staff are at the early stages with alternative toxicity data and also at the very early stages of incorporating human epidemiology data.

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7. Widely Used Flame Retardants May Affect Child Attention Behaviour

   Oct 15, 2015 | Chemical Watch

   Prenatal exposure to some common flame retardants is associated with attention problems in children ages three to seven.

   This is the finding of a study of polybrominated diphenyl ethers (PBDEs) conducted by researchers at the Columbia Center for Children’s Environmental Health.

   PBDEs are found in:textiles;plastics;wiring; andfurniture containing polyurethane foam to reduce flammability.

   They were phased out in 2004, but remain in the environment. Humans are often exposed to them through ingested house dust and by eating meat, dairy, and fatty fish with accumulated PBDEs.

   The researchers followed 210 mother-child pairs, a subset of the Center’s World Trade Center study, from birth through to early childhood.

   They found that at ages three, four and seven years, children with the highest exposure to certain PBDEs had approximately twice the number of maternally-reported attention problems, compared to the other children in the study.

   “These findings reinforce the decision to phase-out the use of PBDEs in consumer products, and support the need to develop programmes for safely disposing of products containing PBDEs that are still in use,” says senior author Julie Herbstman, assistant professor of Environmental Health Sciences.   

   The Center is part of Columbia’s Mailman School of Public Health. The study results appear in the journal Neurotoxicology and Teratology.

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Chemical Security News

8. Utility Conference Ponders Islamic State, A Mysterious Attack and Other Threats

   Oct 15, 2015 | E&E - Energywire

   By Peter Behr

   Headlines from a daylong briefing on cyberthreats to the electric power grid:The Islamic State group is now using the Internet to launch cybersecurity attacks at U.S. targets.The startling April 2013 sniper assault that knocked out a Pacific Gas and Electric Co.'s Metcalf substation is looking like the work of an insider.In just a year, the number of cyberattacks using sophisticated concealment techniques tripled, to 90 percent.But on the other side: A cybersecurity defensive screen developed by the Pacific Northwest National Laboratory has achieved a "breakthrough" in threat detection for U.S. electric power companies.

   As speaker followed speaker at the conference here yesterday, hosted by the North American Electric Reliability Corp., the evidence mounted of an escalating arms race between attackers and their targets that is compelling government and private-sector defenders to stand together closer than ever before.

   Caitlin Durkovich, Department of Homeland Security assistant secretary for infrastructure protection, warned that U.S. critical infrastructure was a terrorist target. The Islamic State group "is beginning to use the Internet, and to perpetrate cyberattacks, and they understand the importance of critical infrastructure," she told the NERC conference. Other experts said terrorists aren't believed to have the technical capability to take down parts of the grid.

   She also disclosed the first clue from U.S. officials about the source of the late-night substation attack outside San Jose, Calif., in which the attacker or attackers cut fiber-optic communications cables connecting to the 911 emergency service before unleashing a high-power rifle fusillade that riddled an essential cooling system for the station's transformers.

   Publicity about the attack prompted the Federal Energy Regulatory Commission to direct NERC to come up with new physical security regulations for critical power sector infrastructure on a rush schedule. Jon Wellinghoff, then FERC's chairman, called it the most significant terrorist attack ever against the power grid, but the Federal Bureau of Investigation challenged that conclusion, saying it had no evidence of any motive.

   Durkovich told the NERC conference yesterday, "This is something that is still under investigation, but if you look at the Metcalf attack that happened in Silicon Valley, the knowledge of the individual or individuals who perpetrated that attack -- where the cyber lines were, where transformers were, what they needed to do to potentially disable and disrupt the operation of that substation -- required some significant knowledge.

   "And while we have not identified who perpetrated that, there is some indication that it is an insider," she said. She did not elaborate on either the Islamic State activity or the Metcalf investigation.

   She advised the industry representatives, "Think about who you hire."

   Mark Fabro, president and chief security scientist for the cybersecurity firm Lofty Perch, stressed the increasing threat from advanced cyberattack programs with sophisticated features to hide from cyberdefenses.

   "From the beginning of last year to the end of last year, you went from a 30 percent to almost a 90 percent usage of what is going to be in excess of 500 unique evasive techniques that are now in malware," Fabro said.

   The evasion techniques include timing features designed to keep attack software programs dormant when investigators are looking for them, and malware with auto-start features that can go into action without an incoming command, he said.

   Gerry Cauley, NERC's president and CEO, reiterated U.S. security officials warnings that cyberattackers had succeeded in implanting reconnaissance programs inside control room systems.

   "There really hasn't been a significant operational impact on the grid, despite the threats and the risks," Cauley said. Instead, incursions that have gotten through have been intended to map control systems, a possible prelude to a future attack.

   State-sponsored cyberattackers and terrorists "are really taking a long-term view," he added. "They are actually in our control systems. ... They are embedded."'A lot of activities going in the right direction'

   But Cauley also reported a major step by the utility sector to protect itself from attacks entering via the Internet.

   A cybersecurity defensive screen developed by the Pacific Northwest National Laboratory has achieved a "breakthrough" in threat detection for U.S. electric power companies, he said.

   PNNL's Cybersecurity Risk Information Sharing Program (CRISP) has been deployed to monitor public Internet traffic into and out of a group of utilities, to provide a new level of screening and analysis of probes and attacks on utilities, he said. He did not identify the companies.

   "We've got a lot of activities going in the right direction," he said. He urged the conference audience to maintain vigilance and treat even the smallest sign of attack as if it were the tip of an invasion. "It's like Whac-A-Mole on a continuing basis," he said.

   Durkovich listed several DHS initiatives to protect the power sector: a recently concluded review of the most critical substations on the high-voltage grid and completion of a "playbook" to guide utility operators and first responders in confronting an armed attack on grid facilities, or a combined physical and cyberattack. The manual will be tested at NERC's GridEx III attack simulation exercise next month, she said.

   She also promised that DHS would push harder to declassify threat information. "We are living in an age where we cannot operate in a classified environment. The threat is too dynamic."

   Tim Roxey, vice president and chief operating officer of the Electricity Information Sharing and Analysis Center at NERC, offered encouragement. "From an adversary's perspective ... it's not extremely easy. No single operating environment is exactly like another," he said. "Many substation environments are different. There needs to be some level of knowledge to make a successful attack.

   "You can certainly exfiltrate data. You can disrupt," he said, adding, "To have a high confidence [that] you know what is going to happen when you start this attack ... and you can repeat that over and over, is very difficult to achieve.

   "You do have the upper hand," he said. "Defense is doable. You can win."

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9. Utility 'Champions' Set out to Make Breaches Personal

   Oct 15, 2015 | E&E - Energywire

   By Blake Sobczak

   Lana Hillebrand has had to change her credit card number five times in as many years. Identity thieves recently filed false tax returns using the utility executive's information, a crime she described as a "major pain."

   Hillebrand, senior vice president and chief administrative officer for American Electric Power Company Inc., opened up about her misadventures in front of several dozen AEP employees at an internal security event last week.

   "We're all affected by this," she said of security breaches. "Whether it's you personally or we corporately, we are the target."

   Before long, workers in the audience began sharing their own stories of tax fraud, credit card theft and computer crime. Speakers from the local police station, the regional FBI bureau and even the IRS listened and offered advice.

   At first glance, the company's daylong event last Thursday seemed geared toward helping individual workers and their families. But organizers say the end game protects the company and the grid.

   "If an employee makes a mistake, clicks on a link, goes to a malicious website -- that's where the doors get opened" into AEP systems, said Deana Elizondo, manager of cybersecurity programs and awareness at the major investor-owned utility. "The more they learn about what they should be doing at home ... that makes them think about [security] a little more at work.

   "You have to make it personal," she added.

   That's no easy task for a company with 18,500 employees and additional contractors spread across 11 states. The geographically far-flung nature of the electricity business makes it especially hard to spread the word about cybersecurity, Elizondo said. Utility line and substation workers use trucks more often than laptops and may only occasionally log onto AEP networks.

   "How do we get to that group of people who say, 'I don't use a computer a lot, so I'm one of your lower risks?'" Elizondo said. "They could be the higher risk because they're the ones who don't hear as much about [security]."

   This year, Elizondo and her team developed a new way to get news out to the many AEP subsidiaries involved in generating, transmitting and distributing power to 5.3 million customers.

   The program recruits volunteer "champions" from all business units to share messages from "ambassadors" based in AEP's Columbus headquarters. The goal is to quickly relay important security information -- both physical and cyber -- via individuals who are known and trusted in their own regions.

   "I share my story as often as I can and try to keep the word out that this threat is real, that it is happening, and most of us have co-workers or family members that have been attacked," said Byron Combs, a distribution engineer at Kentucky Power who has served as a security champion since this spring.

   Combs, who used to work in power generation at AEP, said champions do their part to help guard the broader U.S. electric grid from danger. "Here at the distribution companies, the threat is not so much as at the bulk electric system because we only control the smaller substations," he said. Still, he cited a "rumor" that nation-states such as China may "already have lines and Trojans installed in our system" to use in case wider conflict breaks out. "Those things we have to be very aware of and make sure antivirus software [programs] are up to date and try to catch things before all heck breaks loose."Ditching the 'cloak and dagger'

   Champions don't have to worry about zeroes and ones, instead focusing on the human aspect of cybersecurity. To augment its defenses, AEP employs a cadre of technical experts at its cybersecurity operations center, nestled behind heavy doors plastered with security warnings. Specialists analyze malicious code in-house and keep the center staffed around the clock. Night shifts in Ohio aren't always quieter, one cybersecurity professional noted, as that's when hackers in time zones halfway across the world are most active.

   AEP has had a dedicated cybersecurity team since 1999 that now numbers around 65 employees. The unit was recently merged with AEP's physical security group, with both falling under the supervision of chief security officer Stan Partlow (EnergyWire, Aug. 26).

   Partlow has made a point of keeping employees informed about his latest efforts through the champions program and via traditional outreach events like last Thursday's "Security Fest."

   "If people in our company think that we're all cloak and dagger ... if people perceive us like that, we're not going to have the level of cooperation that we desperately need to stay in front of this stuff," he said of the security team. "So we need to be transparent. We need to make sure people know what we're doing and understand why we're doing it."

   That can mean explaining why a certain email was blocked or why the company is phasing out unencrypted thumb drives among its subsidiaries.

   "We don't try to go out and say, 'Hey, we need you to do this because it's a best practice,'" said Kevin Stogran, AEP's managing director of cyber risk and security services. "We try to put it in terms of why people should care about this."

   Stogran cited AEP's "very aggressive" phishing awareness program, designed to get employees to think twice before clicking links or opening email attachments. Hackers often use carefully crafted, seemingly legitimate emails to fool workers into opening backdoors on their computers, a practice known as spear-phishing. AEP hires good-guy hackers to probe the company for vulnerabilities, including testing employees' susceptibility to spear-phishing attacks. Toy fish stress balls can also be spotted on desks in the utility's Columbus headquarters bearing the warning, "Don't Get Hooked!"The front of the alphabet

   Despite these initiatives, AEP's cybersecurity leaders are the first to admit that people will, sooner or later, get hooked. Company networks are infected, computers are dissected or reset, and negligent employees are disciplined, if needed.

   AEP has failsafes to keep intruders away from its most sensitive databases: personal information or billing details for AEP customers, internal business documents, or computers facing the industrial control systems that keep the power grid running.

   "Parties that wish to disrupt the U.S. bulk power system or our operations could view our computer systems, software or networks as targets for cyber attack," AEP said while outlining risks in filings with the U.S. Securities and Exchange Commission.

   Partlow elaborated on that warning, noting that there is "no doubt" the company is a target. "If you were a nation-state actor, and you wanted to find a power company that's interesting, ours is first in the listing alphabetically," he pointed out during the Security Fest. (Virginia-based AES Corp. is a close second among big investor-owned utilities.)

   Like most large electric utilities, AEP enforces an "air gap" to separate critical operating systems from Internet-facing computers. A spokeswoman for the company noted that the computers that run generating equipment and the grid are on a dedicated system that is not directly linked to he computer network that the vast majority of employees use to conduct day-to-day business. But in SEC filings the company has acknowledged that "the computer systems that run our facilities are not completely isolated from external networks."

   The caveat is a nod to security researchers who have warned for years that air gaps aren't foolproof. The Stuxnet computer worm that targeted Iranian nuclear centrifuges in the late 2000s laid bare this "myth of the air gap." During that cyberattack, supposedly isolated computers at Iran's Natanz nuclear enrichment facility were infected with code that caused centrifuges to spin out of control.

   Stuxnet was widely believed to be the work of American and Israeli intelligence agencies seeking to curb Tehran's nuclear ambitions. Regardless of its author, the worm marked the first real-world example of a cyberattack causing physical damage to an industrial system. Grid operators took note, and many investor-owned utilities shored up their cybersecurity budgets in the wake of the attack.

   There is no publicly known case of a cyberattack causing a power outage -- or even threatening to disrupt electricity -- in the United States. Physical sabotage and vandalism are more common but still pale when held up to weather-related outages (EnergyWire, July 16, 2014). Still, Stogran said that during his five years with AEP's cyber team, he has never had to convince the C-suite of cybersecurity's importance.

   "They're very much in tune with what we do," he said of Chairman, President and CEO Nick Akins and of AEP's Executive Vice President and Chief Operating Officer Bob Powers. "They're not just receptive -- they're our biggest supporters."Back to basics

   Partlow, credited for launching the company's security champions program, dubbed the initiative a team effort. Stogran, who heads AEP's cyber team, called attention to training help from the SANS Institute and emphasized that the company is constantly looking for ways to improve.

   Any large business can encounter pitfalls when discussing cybersecurity, but bulk power providers tend to be especially wary of the topic. Big electric utilities are among the only U.S. companies to face enforceable cybersecurity standards, set through the nonprofit North American Electric Reliability Corp. (NERC) and Federal Energy Regulatory Commission.

   Reveal too much about certain practices and persistent attackers could find a way to exploit the information. Hold cyber-related data too close and risk upsetting investors or running afoul of NERC Critical Infrastructure Protection reporting requirements. Lay claim to being completely secure or having the best policies and hackers will want to try their luck at exposing hypocrisy.

   Despite rapid technological change, including the onslaught of connected devices known as the "Internet of Things," AEP officials emphasized simple ways of reducing cyber and physical risks. Paul Johnson, AEP's managing director for transmission operations and a 34-year veteran of the company, told attendees at the company's Security Fest last week that grid reliability is typically threatened by "a failure at the basics: a clicked link ... a simple password, a verbal miscommunication or a needed maintenance unperformed."

   He drew a comparison between the rapid advance of phone technology and the grid's transformation over the past three decades.

   "Maybe we really don't see the change because we experience change bit by bit," he said. "Perhaps we don't see increased dangers because we live that also bit by bit. But yet the way we live our lives has changed, and we need to be mindful of our vulnerabilities."

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10. The Morning Risk Report: EPA Targets Small Cos Over Hazardous Waste

    Oct 15, 2015 | The Wall Street Journal

    By Ben Dipietro

    The U.S. Environmental Protection Agency is fining small companies for improper classification, recording or reporting of hazardous waste, through analyzing data those companies are providing to waste-disposal companies. The EPA is “looking at data mining, at new monitoring techniques…to help target and enforce,” the rules, said Suzanne Murray, a partner at Haynes and Boone who wrote a client memo on this area of regulation. “It’s probably going to catch other folks; the net will be wider,” she said. “Folks who were not traditionally concerned about this probably should become educated about what they have at their operations.”

    The EPA has found many of these companies are either incorrectly classifying themselves and don’t really understand the quantities of hazardous waste they are generating or they are not really reporting themselves at all, said Ms. Murray. In the worst-case scenario, this can result in a disaster like the explosion at a Texas fertilizer storage facility that killed 15 people and injured 200 others, she said. “The local emergency response people didn’t know the facility was even there, or what was stored,” she said. Companies that traditionally handle large quantities of chemicals aren’t being affected as they have proper classification and reporting systems in place, while those that don’t see themselves as substantial hazardous waste generators—such as small hospitals, medical labs and retailers—are increasingly coming under EPA scrutiny. “They are not meeting these requirements, not keeping records, not filing biannual reports to EPA, not making local emergency response people aware of the hazardous materials they have,” said Ms. Murray. “EPA is finding pretty widespread noncompliance.”

    EPA has proposed some rules changes covering hazardous waste collection, storage and recordkeeping, and these could help clarify the situation, said Ms. Murray. Regardless of what rules changes occur, she said companies need to get a handle on their hazardous waste data. “Look at what you’re using, make sure you understand the quantities and requirements and, if in fact you are not reporting correctly, you need to register and report,” she said.

    Readers can subscribe to The Morning Risk Report here: http://on.wsj.com/MorningRiskReportSignup. Follow us on Twitter at @WSJRisk.

    EXCLUSIVE ON RISK AND COMPLIANCE JOURNAL

    GE investigations team to play key role. As General Electric Co. prepares to absorb a unit of Alstom ALO.FR +0.57% and scrutinize its compliance, the U.S. company will rely on a combined team of investigators formed two years ago. GE cleared regulatory hurdles in Europe and the U.S. last month to acquire part of Alstom’s power unit, not long after Alstom settled criminal bribery charges. GE’s top lawyer, Senior Vice President and General Counsel Brackett Denniston, said the company faces a challenge in investigating Alstom’s compliance, and he expects more internal investigations to follow the closing of the acquisition.

    COMPLIANCE

    Daily fantasy sports face U.S. probe. The U.S. Justice Department and the Federal Bureau of Investigation are probing whether the business model of daily fantasy-sports operators violates federal law, people familiar with the matter told the WSJ. FBI agents from the Boston office have been contacting customers of DraftKings Inc. to ask them about their experiences with the Boston-based company, one person familiar with the matter said. The probe is in the preliminary stage, two people said. It is part of an ongoing discussion within the Justice Department about the legality of daily fantasy sites.Bloomberg News

    Valeant announces drug-pricing probe. Valeant Pharmaceuticals International Inc. said late Wednesday it had received subpoenas from federal prosecutors seeking information related to how it prices drugs, distributes them and helps patients afford the medicines, the WSJ reports. The subpoenas also seek information and documents from the Canada-based drug company regarding information it provided to the Centers for Medicare and Medicaid Services.

    U.K. banks need permission to pay dividends. U.K. “ringfenced” banks will need permission from the Bank of England to pay dividends to their parent companies and will have to pay market rates for services provided by other parts of their organizations, the central bank said Thursday, the WSJ reports. Big U.K. banks are required under new laws to separate their retail banks from investment-banking activities. The guidelines represent draft guidance for banks on how to apply the rules.

    Germany orders VW recall. Germany’s ministry for transport has ordered Volkswagen AG to conduct a mandatory recall of diesel models installed with software that cheats emission tests, Transport Minister Alexander Dobrindt said on Thursday, the WSJ reports. The recall is set to begin in 2016, and the car manufacturer must present technical details on its remedy for the vehicles by the end of November, he added.

    Carlyle fires exec for insider trading. Carlyle Group LPCG -0.16% has fired a managing director in Indonesia who was penalized by Singapore’s central bank for insider trading, a person familiar with the matter told the WSJ. Vincent Rajiv Louis, who was leading the private-equity firm’s investment advisory activities in Indonesia, had admitted to using nonpublic information while at a different firm to buy shares of a listed bank that was the target of an acquisition three years ago. Mr. Rajiv at the time was working as the head of investment-banking operations at UBS Group AG in Indonesia. He joined Carlyle in May 2013. Mr. Rajiv couldn’t be reached for comment. A UBS spokeswoman declined to comment.Getty Images

    Boeing BA +2.09% penalized over government work. Defense contractor and aerospace giant Boeing Inc. paid the U.S. $18 million to settle whistleblower allegations that it submitted false claims for labor charges to the U.S. Air Force, the Justice Department said on Wednesday, Reuters reports. The federal government had alleged Boeing knowingly charged the United States for time its mechanics spent on extended breaks and lunch hours while working on the C-17 Globemaster aircraft at its Long Beach Depot Center in California.

    Indian bank probes wrongdoing. HDFC Bank sa500180.BY +1.10%id it is looking into possible wrongdoing after a staff member was arrested as part of a money laundering probe, The Economic Times reports. The Central Bureau of Investigation and the Enforcement Directorate arrested six people including one from HDFC Bank in connection with the probe.

    DATA SECURITY

    Hackers target colleges. While college students hit the books, hackers are stealing their private information. Universities are the third most-hacked industry behind health care and retail. Reuters explores the cyber threat across America’s academic landscape via video.

    GOVERNANCE

    TeliaSonera TLSN.SK -3.00% hammered by critical report. TeliaSonera AB shares fell the most in more than three years after Muddy Waters LLC, the research firm founded by short seller Carson Block, published a report questioning the extent of the Swedish phone company’s transparency about its Eurasian businesses, Bloomberg reports.

    REPUTATION

    Testing company struggles with technology. Theranos Inc. offers more than 240 tests, ranging from cholesterol to cancer and claims its technology can work with just a finger prick. But Theranos has struggled behind the scenes to turn the excitement over its technology into reality, the WSJ reports. At the end of 2014, the lab instrument developed as the linchpin of its strategy handled just a small fraction of the tests then sold to consumers, according to four former employees.

    OPERATIONS

    Crew member family sues over disappearance. The family of a crew member missing from the El Faro cargo ship is seeking $100 million in a negligence and wrongful death lawsuit against the owners and captain of the ship that sank off the Bahamas in a hurricane two weeks ago, Reuters reports.The El Faro is shown in this undated handout photo provided by Tote Maritime in Jacksonville, Florida, Oct. 2. Reuters

    STRATEGY

    Starbucks SBUX +0.03% deal costly for Square. Payments company Square once touted its deal with Starbucks as the first step to gaining massive scale. It ended up getting scalded, the WSJ reports. The accord to process credit and debit card payments for the world’s largest coffee retailer brought Square $309.8 million in sales since it was signed in 2012, but cost it $380.4 million, according to its IPO filing Wednesday.

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Transportation News

11. Alaska Company Gets First U.S. OK to Ship LNG By Rail

    Oct 15, 2015 | E&E - Energywire

    By Margaret Kriz Hobson

    The U.S. Transportation Department last week granted the Alaska Railroad Corp. permission to become the first U.S. company to transport liquefied natural gas tanks by rail.

    In a letter to the Alaska company, the Federal Railroad Administration opened the door for the rail line to carry a limited number of LNG shipments over the next two years.

    The railroad is seeking to move LNG from southern Alaska to energy hungry consumers in Fairbanks and North Pole, who are now paying high prices for electricity.

    Alaska Railroad COO Doug Engebretson described the Transportation Department's decision as "a wonderful opportunity for the railroad and the state of Alaska. For FRA to give us approval as the first carrier in the United States to be able to move LNG is a huge step forward."

    The Alaska railroad company, an independent corporation owned by the state, applied for permission to haul LNG last November in part to make up for declining shipments of other commodities, specifically bulk petroleum and coal (EnergyWire, March 13).

    Federal regulators had no comment on the status of similar requests pending from Union Pacific, BNSF Railway and Florida East Coast Railway. But industry insiders say regulators are working closely with at least one other rail company that is seeking to transport LNG.

    The letter to Alaska Railroad stressed that approval of Alaska's request "should not be construed by other rail carriers as a requirement that they accept these [LNG] tanks for transportation."

    Engebretson said no decision has been made on just when the Alaska shipments might begin or whether the gas would come from Alaska's Cook Inlet region or from LNG imports.

    The details will depend on the Alaska Industrial Development and Export Authority's ongoing effort to select a company to move natural gas to interior Alaska. AIDEA, the state development corporation, is currently in discussions with five potential candidates and is expected to announce a final decision in December.

    FRA's permit for Alaska Railroad to carry LNG, which took effect Oct. 9, includes several training and inspection requirements. It limits the number of shipments allowed along the railroad's 656 miles of track that connects ports in southern Alaska with Anchorage, Fairbanks and North Pole.

    FRA's notice also gives Alaska Railroad the right to seek modifications to the terms of the permit.

    Under the terms of the agreement, the company can operate up to two trains per week containing no more than eight portable tanks of LNG. The rail cars carrying the LNG must be located at least nine cars back from the train's locomotive.

    Trains carrying LNG across the state must stick with a maximum speed of 50 miles per hour and slow down to 40 mph when traveling through the Alaska towns of Healy, Nenana, Talkeetna and Wasilla.

    FRA is requiring Alaska Railroad to conduct regular inspections of the railroad tracks and to provide special training for its employees and local emergency response personnel.

    Federal regulators also require the railroad to:Notify FRA at least 60 days before beginning to ship LNG tankers and provide information on all shipping equipment.Provide a monthly report on the number of LNG shipments transported.Report within 24 hours any accident or incidence involving a train carrying an LNG tank, regardless of whether a release of LNG occurs.

    Engebretson said the federal restrictions are aimed at ensuring the safety of LNG shipments by rail.

    "The FRA is sensitive to the safety issues within the industry," he said. "That's a huge thing for all of us to consider.

    "Ever since Canada, there's been a spotlight on rail safety," he explained, referring to the 2013 oil train derailment and explosion that killed 47 people in the town of Lac-Mégantic, Quebec.

    "Rail's a much safer method of transportation than other options," Engebretson asserted. "We've done nothing but get better in the industry. We've seen huge improvements safety-wise."

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Energy and Environment News

12. U.S. Shale Surge Saves Dying Chemicals Plant 3,300 Miles Away

    Oct 14, 2015 | Bloomberg Businessweek

    By Kelly Gilblom

    The U.K.’s largest closely held company has U.S. shale to thank for its survival.

    Ineos Group Ltd., which manufactures chemicals used to make jet fuel to yogurt pots, was running equipment at its biggest plant, in Grangemouth, Scotland, at less than half capacity. That’s because its sources of raw materials -- oil and gas fields in the North Sea -- were depleting and the volume of fuel heading to the facility dwindling.

    Hoisting the roof in July onto an ethane storage tank large enough to hold 560 double-decker buses was a sign of the company’s reviving fortunes. Amid a $1 billion overhaul -- a life or death revamp for the plant -- the biggest such container in Europe will store feedstock originating not from fields off Britain’s coast, but from as far away as Pennsylvania; gas produced amid the shale-fracking boom.

    “We had to convince the site and the government that this is a workable plan,” John McNally, chief executive officer of Ineos Olefins & Polymers U.K., said in a telephone interview. “It was the only plan, the survival plan for Grangemouth chemicals.”Changing Landscape

    The story of Ineos shows how the U.S. shale-drilling frenzy is altering the global energy landscape, and points to one possible future for Europe’s chemical and manufacturing industries. Output of crude oil and liquid fuels in the North Sea has fallen by 50 percent since 2005, while U.S. exports of natural gas liquids and liquid refinery gases surged 16-fold in the period. The boom has driven the price of U.S. ethane down 86 percent from a 2008 peak. It now costs about half as much as the same fuel in Western Europe.An Ineos ethane storage tank stands in Scotland. Source: Ineos

    Ethane, a natural gas similar to methane, is extracted from wells including shale, and is an ingredient for producing ethylene, a key component in plastic and cables.

    The U.S.-sourced fuel -- exported from a Sunoco Logistics Partners LP terminal in Marcus Hook, Pennsylvania -- will feed plants including Ineos’s cracker, a machine that converts oil and gas into ethylene. The company is also seeking access to onshore British supplies, having acquired 12 shale gas exploration licenses. It will apply for permits, and will buy hydraulic fracking expertise if it wins permission to drill, McNally said.North Sea

    On Sunday, Ineos said it will buy North Sea fields from a unit of LetterOne Holdings SA -- the investment firm founded by Russian billionaire Mikhail Fridman -- to further shore up supplies. The fields provide as much as 8 percent of the U.K.’s gas, according to Ineos. Financial terms weren’t disclosed.Ethane prices have tumbled amid the shale boom

    Ineos’s investment plan also includes eight tankers built in China to zip ethane across the Atlantic Ocean, a new Scottish head office and two import terminals. The deal with Sunoco will give it access to a 100-mile U.S. pipeline from the Marcellus shale formation, which spans states including Pennsylvania, West Virginia, Ohio and New York. Shipments from the U.S. will probably start by January, while the storage tank will be ready in the first quarter, according to the company.

    Grangemouth was facing closure as recently as 2011, losing money “hand over fist” amid the drop in raw input materials, McNally said. The site generates about 3 percent of Scotland’s gross domestic product. If the plant’s pipes were laid end-to-end, they would stretch from Edinburgh to Nice, France, and back, according to the company’s website.

    Ineos was the first European chemicals maker to seek U.S. shale gas to replace North Sea fuel, according to Wood Mackenzie Ltd.

    “Grangemouth was losing a lot of money on that cracker,” Alex Lidback, vice president for chemical research at the energy consultant, said from London.Ethane Purchases

    Ineos isn’t alone in tapping U.S. gas. Borealis AG is spending $135 million upgrading its cracking facilities in Sweden. It plans to source about two-thirds of its ethane from the North Sea, with the remainder coming from the U.S., Markku Korvenranta, executive vice president for base chemicals, said by e-mail. The Vienna-based petrochemicals company will also import U.S. propane, he said.

    QUICKTAKEFracking in Europe

    The Ineos plan is not without risk. A renewed drop in oil prices could reduce the cost advantage for ethane versus naptha, a crude product that can also be refined into ethylene. A decade ago, importing U.S. gas for use in European chemical production was unthinkable, with companies shutting down ethane crackers in favor of naphtha.

    The biggest danger is that the “large price difference that has existed for the better part of the last five years goes away,” Lidback said.

    U.S. ethane production jumped 24 percent in the first half from the same period in 2010, the start of the shale boom, according to the Energy Information Administration. The gas was trading at about 20 cents a gallon on Wednesday, DTN Energy and Liquidity Partners data compiled by Bloomberg show. It reached 17.25 cents a gallon in March, the cheapest since Bloomberg began collecting the statistics in 2001, after the price slid 32 percent last year.

    “We really do believe U.S. ethane will be cheap -- forever is a long word -- but for a long time,” Charles Blanchard, an analyst at Bloomberg New Energy Finance, said by phone from Houston.

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13. Energy, Mining Companies Begin to Back Climate Talks

    Oct 14, 2015 | The Wall Street Journal

    By WIlliam Mauldin

    A major international agreement to reduce carbon-dioxide emissions is starting to draw in major energy and mining companies.

    Some global companies, especially those that face heavy environmental regulation, say they are supportive of nearly 200 countries’ efforts to reach an accord in Paris in December at negotiations sponsored by the United Nations.

    On Wednesday, a dozen companies, including oil giant BP PLC and global mining giant BHP Billiton Ltd. released a statement touting the Paris climate talks as a “critical opportunity to strengthen efforts globally addressing the causes and consequences of climate change.”

    Many of the companies, based in highly developed economies, are eager to see poorer countries and the loosely regulated national champions in those nations operate under a similar set of rules as those the richer nations have already embraced domestically.

    Large companies are looking for predictability and global standards to help shape their long-term strategies, including plans for natural gas and other lower-carbon fuels.

    “These companies need to navigate their way through the low-carbon transition and are looking for clearer, more consistent guidance from governments, which is why they see benefits in a Paris agreement,” said Elliot Diringer, executive vice president at the Center for Climate and Energy Solutions, a nonpartisan think tank that organized statement.

    While the Paris talks aren’t likely to result in a global price on carbon, individual countries aresubmitting their own plans that could lead to market opportunities for major players.

    “ Calpine believes that this flexible, market-based solution will reward companies that invest and have invested in cleaner generation,” said Calpine Corp. spokesman Brett Kerr. Power company Calpine is the U.S. leader in natural-gas generation, avoids coal—a target of new regulations from the Obama administration—and operates a major geothermal energy project.

    A system of carbon pricing generally taxes polluters, which then pass costs onto consumers and can lower demand. Another system is a so-called cap-and-trade plan that would set some limits on what polluters could emit.

    The chief executive of another company on the list, Ben van Beurden of oil major Royal Dutch Shell PLC, this month told a major gathering of industry executives in London that Shell will promote a carbon-pricing plan that encourages investment in renewable energy and cleaner-burning natural gas rather than coal.

    Some of the companies have previously embraced efforts to reduce emissions linked to climate change. But for many, Wednesday’s statement was the first embrace of the UN-led talks, a major policy focus for President Barack Obama and other world leaders.

    Other major energy and commodity firms on the list are San Francisco-based utility PG&ECorp., Anglo-Australian miner Rio Tinto PLC and cement giant LafargeHolcim Ltd.

    Absent from the list were leading U.S. coal companies, which along with allies in Congress have criticized the Paris talks and the Obama administration for a launching a war on coal.

    Exxon Mobil Corp. and Chevron Corp. also didn’t endorse Wednesday’s statement and were also absent from a June endorsement by European energy companies of global carbon pricing.

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14. California Leads the Way on Climate Change

    Oct 14, 2015 | The New York Times

    By Robert B. Semple Jr.

    On the whole, state governments, especially those with Republican-dominated legislatures, have been remarkably passive and uninventive in recent years on the matter of climate change. Indeed, at least a dozen states have challenged the Obama administration’s new rule regulating carbon dioxide emissions from power plants and have vowed to do everything they can to see it overturned in court.

    And then there is California, which stands apart in its commitment to a healthier, cleaner and less carbon-intensive energy future. Its demanding effficiency rules for appliances and equipment have become a de facto national standard by driving manufacturers to improve their products. The same is true of the state’s fuel economy standards, which have long been more aggressive than any other state’s and which played a decisive role in establishing the landmark federal fuel economy standards finalized by the Obama administration in 2012.

    As for comprehensive climate change legislation, in 2006, while Congress continued to flounder in its ultimately unsuccessful efforts to cap carbon emissions, California passed a landmark bill known as AB 32, committing the state to reduce its greenhouse gas emissions to 1990 levels by 2020, a substantial reduction over business-as-usual trajectories. The California Air Resources Board later put in place a series of regulations and strategies to meet this goal, including mandates for renewable energy and a market-based cap-and-trade program to limit emissions. In 2010, a well-financed coalition of right-wing ideologues and out-of-state oil and gas interests, chiefly Valero and Tesoro and Charles and David Koch, tried to kill the law with an initiative on the state ballot. They failed miserably.

    California continues its forward march. Last week, Governor Jerry Brown signed a new climate law — SB 350 — that represents the most significant act of energy and climate policy leadership in any state since AB 32. There was much handwringing (some by Mr. Brown) over the legislature’s failure to approve a provision requiring a 50 percent reduction in petroleum use by 2030. But this was essentially a feel-good, aspirational goal that even some moderate Democrats were leery of. What survived was the real stuff: three concrete and legally binding clean-energy initiatives. One provision doubles down on efficiency, mandating a 100 percent increase in energy savings in California’s homes, businesses and factories — an ambitious goal that, by some estimates, could reduce statewide energy needs by nearly a third by 2030. Another requires utilities to purchase half of their power from renewable sources like wind and solar by 2030, with penalties for non-compliance; still another provides new incentives for utilities to install additional charging stations, the shortage of which is a major roadblock to what appears to be a growing appetite for electric vehicles.

    One remarkable aspect of the bill was its broad support — the major utilities, labor unions, consumer advocates and the environmental community all wheeled in behind it. The world is in need of hopeful signs as it heads into the global climate summit in Paris in December. California’s continued commitment to a de-carbonized economy is surely one of them.

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15. 5 States Face the Highest Clean Power Plan Costs -- Report

    Oct 15, 2015 | E&E - Energywire

    By Emily Holden

    Nebraska, Kansas, Tennessee, Missouri and West Virginia may experience the greatest challenges to complying with U.S. EPA's Clean Power Plan, according to rankings from financial analysts at Fitch Ratings.

    Under the final rule issued in August, other states must make steeper reductions in power-fleet carbon emissions by 2030, but those five might see the highest costs in the country, Fitch said in a report released yesterday.

    That's because of a combination of variables specific to each state, including the stringency of a state's goal compared to the amount of energy it produces, the cost of available carbon-cutting measures, the average retail electricity rates and the cost of electricity as a percentage of median household income.

    States with similar goals might see vastly different costs, explained report co-author and power analyst Dennis Pidherny.

    For example, West Virginia and Alabama would have to eliminate comparable tons of CO2 emitted by power plants each year. But West Virginia generates half as much electricity as Alabama and will feel the impact more, Pidherny said.

    Fitch ranks West Virginia 43rd and Alabama 25th for ease of compliance, out of 47 states that must meet Clean Power Plan goals.

    Fitch prepared a similar analysis in January based on the draft Clean Power Plan. Under the final rule, several states received much less stringent targets and got better rankings in Fitch's second report. Those states include Arizona, Minnesota, New Hampshire and South Dakota.'Aggressive' assumptions from EPA?

    The report relies on EPA's estimates of how much carbon reductions might cost in each state but cautions that the agency may have lowballed those figures.

    In total, EPA expects rule compliance to cost $8.4 billion if states choose rate-based standards to lower the amount of carbon they emit per megawatt-hour of power produced. The agency expects the regulation to cost $5.1 billion under a mass-based approach.

    But those numbers are based on assumptions that natural gas prices will decline, states can pursue renewable energy projects outside their own borders and utilities will be able to encourage customers to use less power, Pidherny said.

    The Fitch report says EPA's assumptions are "aggressive," and should they prove overly optimistic, "compliance costs could soar."

    Pidherny said EPA's cost estimates also seem to assume some states will work regionally to bring down emissions, perhaps by using compliance credit trading to achieve goals.

    Washington, Oregon, Virginia and Maine are in the best position under Fitch's rankings and may be able to exceed emissions targets and sell credits to states that fall short of their goals.

    Jeff Holmstead, an industry lawyer for Bracewell & Giuliani, said at a D.C. Bar panel discussion yesterday that EPA's assumption that states can use measures outside their borders to comply may be a legal weakness in the rule.

    EPA has argued that multistate and regional compliance strategies are optional and would bring down costs and give states more flexibility.

    North Dakota and Wyoming, however, have said they might not be able to meet their goals at all without trading (ClimateWire, Oct. 5).

    A handful of states have floated the idea of submitting plans for only what they think is achievable within their state or only what can be accomplished by improving the efficiency of coal plants. EPA would then have to reject the plans, setting up future court battles.

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16. EPA Urges District Courts To Halt CWA Rule Suits Pending 6th Circuit Ruling

    Oct 15, 2015 | InsideEPA

    By David LaRoss

    EPA is urging federal district courts to halt a slew of lawsuits over the agency's Clean Water Act (CWA) jurisdiction rule until the U.S. Court of Appeals for the 6th Circuit decides whether it has authority to hear appellate challenges to the rule, because if the 6th Circuit hears the case, then EPA will seek to dismiss the lower court lawsuits.

    The Department of Justice (DOJ) on the agency's behalf filed briefs in at least eight district courts on Oct. 13 and 14 asking judges to hold proceedings until the 6th Circuit decides which courts have the power to consider suits over the CWA rule -- which the appellate court has said could come as soon as November. The 11th Circuit in a related case is also weighing whether challenges to the rule belong in federal district or appeals court.

    “As the court designated to hear all of the petitions for review, the Sixth Circuit’s decision on whether it has jurisdiction . . . will have a direct bearing on the question of district court jurisdiction, and its schedule for briefing of this issue allows for prompt resolution. Therefore, this Court should enter a stay of proceedings until the Sixth Circuit decides this issue,” DOJ says in an Oct. 13 brief filed with the U.S. District Court for the District of North Dakota, where a suit is pending from an alliance of 13 states critical of the CWA rule.

    Substantively identical petitions from DOJ are also pending in other courts including two district courts in Texas, two in Oklahoma, and one each in Ohio, North Dakota, California and Georgia.

    DOJ's push to temporarily stay the district litigation over the rule mirrors its request this week to the 11th Circuitto halt further briefing in a pending appeal of another district court challenge until the 6th Circuit issues a decision on which courts can properly review the CWA jurisdiction rule.

    Under the CWA only challenges to specific types of rules must be initiated at the appellate level, while others should be brought to district court. But it is unclear which category a rule governing the reach of the act falls under, which has led challengers to file an array of suits at both levels of federal courts.

    Pending Challenges

    Petitions for appellate review of the CWA rule have been consolidated in the 6th Circuit, while a host of district court cases are pending across the country after the panel of judges that weighs multi-district litigation ruled Oct. 13 against EPA's request to consolidate the lower court suits.

    EPA and the U.S. Army Corps of Engineers jointly crafted the rule to end confusion about the water law's reach stemming from a 2006 Supreme Court decision that created competing tests for jurisdiction. While the agencies say that the rule provides long-sought clarify on the law's scope, industry and state critics say it is unlawful and extends the agencies' reach far beyond what Congress intended when it crafted the water law.

    The 6th Circuit, which is hearing consolidated petitions for appellate review of the rule, has set a Nov. 4 deadline for parties' briefing on the question of which court has authority to hear suits over the rule, and has said a decision could follow in a matter of weeks.

    DOJ in the new district court briefs says the prospect of a quick ruling means there is little harm in staying the district court suits -- especially after the appeals court stayed the rule nationwide on Oct. 9. EPA is currently using George W. Bush-era policy on CWA jurisdiction in lieu of implementing its rule.

    “Plaintiffs’ interests are protected because the Sixth Circuit has issued a nationwide stay of the Clean Water Rule pending further order of that court. The Agencies seek only a temporary stay of proceedings in this Court until the Sixth Circuit decides whether it has jurisdiction,” DOJ says in its brief to the U.S. District Court for the Southern District of Ohio, where Ohio, Michigan and Tennessee are seeking review of the rule.

    An EPA spokeswoman in response to the nationwide stay of the regulation says the agency and the Corps “respect the court’s decision to allow for more deliberate consideration of the issues in the case and we look forward to litigating the merits of the Clean Water Rule. . . . The agencies’ prior rule will remain in effect nationwide and we will continue to apply the best science and technical data on a case-by-case basis to waters at issue.”

    Challengers' Objections

    However, challengers to the rule are already arguing that there is no reason to wait for a 6th Circuit ruling because a decision from a circuit court is only binding on judges within that circuit, and the only district court challenge pending within the 6th Circuit is the Ohio case. In every other suit, the 6th Circuit's opinion will be merely advisory.

    For instance, in an Oct. 13 brief to the North Dakota court on scheduling -- filed ahead of DOJ's latest request for a stay -- the 13 state plaintiffs there urge the court to quickly advance their suit.

    “This Court has already established the basis for its jurisdiction and need not wait for the Sixth Circuit to concur with its ruling to allow this case to proceed,” the brief says.

    In the North Dakota case, Chief District Judge Ralph Erickson in August held that district courts have authority over the rule and granted an injunction against the rule's implementation that applies only within the borders of the 13 states suing in North Dakota.

    Two other district courts have also ruled on jurisdiction but reached the opposite conclusion, with U.S. District Court for the Southern District of Georgia Judge Lisa Wood and U.S. District Court for the Northern District of West Virginia Judge Irene M. Keeley holding that appellate court is the proper venue and dismissing challenges by states and industry, respectively.

    Wood's decision led to the appeal now before the 11th Circuit, State of Georgia, et al., v. EPA. The 11 state plaintiffs in that suit are seeking a swift determination from the 11th Circuit that it lacks authority to hear suits over the rule and sending their case back to the district court.

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