Preview Newsletter
ACC AM Dec 3
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(ACC Mentioned) Green Biologics Starts Construction Of Renewable Chemical Plant
Dec 2, 2015 | Ethanol Producer Magazine
Green Biologics Ltd., a U.K. based industrial biotechnology and renewable chemicals company, is moving forward with the construction of its 100 percent renewable, biobased n-butanol and acetone manufacturing facility in Little Falls, Minnesota. The existing manufacturing site, formerly known as The Central MN Ethanol Cooperative... -
(ACC Mentioned) Will Endlessly Recyclable Plastics Soon Be a Reality?
Dec 3, 2015 | Environment Leader
By Jessica Lyons Hardcastle
As the COP21 climate talks are underway in Paris, and government leaders work to hammer out a deal to limit global warming, French company Carbios has announced a technology that may pave the way to infinite plastic recycling — eliminating plastic waste and its impact on climate change. -
Being 'A Pain In The Neck' Worth It In TSCA Fight -- Boxer
Dec 3, 2015 | E&E Daily News
By Sam Pearson
California Sen. Barbara Boxer (D) credited her unflinching brand of environmental advocacy, including in her fight over chemical reform legislation, for helping her party and environmental groups hold the line against conservative efforts. She conceded, though, that her tough stance has made her, at times, unpopular among her peers. -
House Votes To Lift Oil Export Ban, Expedites Cross-Boundary Permits
Dec 2, 2015 | PoliticoPro - Whiteboard
By Darren Goode
The House today voted again to authorize oil exports and speed permit reviews for cross-boundary energy projects similar to the Keystone XL pipeline. Lawmakers debating a House energy bill (H.R. 8) voted 255-168 to approve an amendment from Rep. Joe Barton and fellow Texans that is nearly identical to a bill the House approved earlier... -
House Lines Up Energy Bill Amendments On Oil Exports, Pipeline Permits
Dec 2, 2015 | The Hill - E2 Wire
By Devin Henry
House members are set to vote this week on a slate of amendments to a Republican-backed energy reform bill, addressing oil exports and cross-border pipeline permits. One amendment, from Rep. Joe Barton (R-Texas), would repeal the ban on crude oil exports, a measure he pushed through the House in October.At the time, Barton’s bill... -
Court Halts Pipeline Suit With Enforcement Stay
Dec 3, 2015 | BNA Daily Environment Report
By Rachel Leven
A lawsuit challenging a “miscellaneous” pipeline safety rule was halted by a federal court Dec. 1, following the Transportation Department's agreement to temporarily not enforce the challenged provisions (Interstate Natural Gas Ass'n of Am. v. DOT, D.C. Cir., No. 15-01343, 12/1/15). -
Accidents on Trains Hauling Crude Decline as Prices Drop
Dec 3, 2015 | BNA Daily Environment Report
By Matthew Philips
It's been several months since an oil train accident grabbed big headlines—but not because there haven't been any. A single weekend in November saw two trains derail in Wisconsin. The first spilled about 20,000 gallons of ethanol into the Mississippi River, followed a day later by a spill of about 1,000 gallons of North Dakota Bakken crude. -
N.Y. Official Seeks Rulemaking on Crude Oil Vapor Pressure
Dec 3, 2015 | BNA Daily Environment Report
By John Herzfeld
New York's attorney general has called on the federal government to make a change in the safety rules for trains that carry crude oil to reduce the risk of the shipments exploding or catching fire. New York petitioned the Transportation Department's Pipeline and Hazardous Materials Safety Administration for a rulemaking to require crude oil... -
New York's Schneiderman Pushes For Increased Oil Train Safety
Dec 2, 2015 | PoliticoPro
By Scott Waldman
New York Attorney General Eric Schneiderman has petitioned the federal agency responsible for regulating oil trains to reduce the explosiveness of crude oil before it is shipped for transportation. Schneiderman announced on Wednesday that he will file a petition for rulemaking to the Pipeline and Hazardous ... -
New York AG Calls For Tougher Oil Train Rules
Dec 2, 2015 | The Hill - E2 Wire
By Timothy Cama
New York’s attorney general is calling on the federal government to close a “loophole” in the safety rules regarding crude oil transportation by rail. Attorney General Eric Schneiderman says the Transportation Department ought to limit the volatility of oil that can be transported on the nation’s rails.Citing recent disasters involving oil train derailments... -
Crude-By-Rail Rules, NEPA Streamlining In Highway Bill
Dec 3, 2015 | E&E Daily News
By Ariel Wittenberg
The conference report for the long-term surface transportation reauthorization bill would beef up safety requirements for crude-by-rail shipments beyond what the Department of Transportation mandated in new regulations this spring. The report, released Tuesday, would require new tank cars carrying crude to be equipped with "thermal blankets" to... -
Ayotte Opposes Controversial New Hampshire Gas Pipeline
Dec 2, 2015 | PoliticoPro - Whiteboard
By Elana Schor
While she left the door open to dropping her opposition if FERC and Kinder Morgan answer further questions, Ayotte's move puts her further to the left of Clinton and Gov. Maggie Hassan — both of whom have declined to take a firm stance. The pipeline would ship fracked natural gas from Pennsylvania to New England ... -
Political Battle Heats Up Around Northeast Gas Project
Dec 3, 2015 | E&E Daily News
By Hannah Northey
The announcement yesterday that two members of Congress from New Hampshire -- one a Republican, the other a Democrat -- are opposed to a large, new natural gas pipeline across the Northeast could throw a new loop into presidential energy politics. Republican Sen. Kelly Ayotte and Democratic Rep. Ann McLane Kuster ... -
Climate Activists Target Reputation of Oil, Gas Industry
Dec 3, 2015 | BNA Daily Environment Report
By Alex Nussbaum
A cartoon circulating on Twitter carries a warning for the oil industry. There's Joe Camel, retired tobacco spokes-animal, suave as ever in a tuxedo, cigarette dangling from his smiling snout. In his hand, a pack of smokes with a twist—an Exxon Mobil Corp. logo on the wrapper. “Big Oil: The New Big Tobacco,” -
Oil and Gas Pollution Delivers a One-Two Punch to Our Public Health
Dec 2, 2015 | BNA Daily Environment Report
By Felice Stadler
One of the country’s largest leaks ever of natural gas, which is primarily made up of the potent greenhouse gas methane, has been going on in California’s Aliso Canyon for over a month. The volume that’s been leaking has been staggering—and the impacts to local residents severe enough to warrant relocating hundreds of families. -
Federal Regulations Are Needed To Protect Water From Fracking Waste
Dec 3, 2015 | The Hill - Contributors
By Elizabeth Glass Geltman
The Environmental Protection Agency (EPA) has proposed federal regulations to establish pretreatment standards of performance for oil and gas wastewaters. These proposed standards are crucial to protect both public drinking water sources as well as workers at publicly owned treatment works (POTWs). -
SAB Panel Urges EPA To Better Quantify Water Impacts In Fracking Study
Dec 2, 2015 | InsideEPA
By Bridget DiCosmo
An EPA Science Advisory Board (SAB) panel reviewing the agency's draft study on hydraulic fracturing's drinking water impacts is poised to debate calling on the agency to better quantify specific local impacts, in particular the risk and severity of potential adverse impacts rather than rely on what the SAB panel calls “anecdotal” information. -
House Expected to Pass Energy Bill Despite Veto Threat
Dec 3, 2015 | BNA Daily Environment Report
By Ari Natter
The House was expected to approve a broad energy bill as soon as Dec. 3, but with Democratic lawmakers and the White House firmly opposed to the legislation, passage of the measure will likely be only a symbolic victory for Republicans. The bill (H.R. 8), which represents the first major re-write of energy policy... -
Advocacy Groups Urge EPA to Strengthen Methane Rules
Dec 3, 2015 | BNA Daily Environment Report
By Anthony Adragna
More than 125 environment groups from around the U.S. are asking the Environmental Protection Agency to strengthen and broaden its efforts to curb methane pollution from the oil and natural gas sectors. The EPA should improve proposed rules on methane emissions by regulating several additional pieces... -
D.C. Circuit MATS Decision Could Disrupt EPA Plans
Dec 3, 2015 | BNA Daily Environment Report
By Patrick Ambrosio
The Environmental Protection Agency's plan to reaffirm its “appropriate and necessary” finding on power plant emissions of mercury in response to a U.S. Supreme Court ruling could be significantly disrupted if a federal appeals court decides to vacate the agency's initial determination, several attorneys who are tracking the ligation said. -
Electric Utilities Warn EPA's MACT Cost Assessment Outdated, Unlawful
Dec 2, 2015 | InsideEPA
By Stuart Parker
Electric utilities opposed to EPA's maximum achievable control technology (MACT) air toxics rule for the sector are warning that the agency's proposed cost review for the rule -- designed to satisfy a Supreme Court mandate to weigh costs in determining the rule's necessity -- is outdated and unlawful, and say the MACT must be vacated. -
This is Awkward, Climate Edition
Dec 3, 2015 | National Journal
By Ben Geman
A House Republican who was carving out a reputation as one of the greener members of his party just got a little less green. Rep. Chris Gibson, leader of a small GOP band urging more action on global warming, joined almost every other Republican lawmaker Tuesday in voting to kill the Environmental Protection Agency’s sweeping carbon-emissions... -
Comment Period Opens on Ozone Transport Proposal
Dec 3, 2015 | BNA Daily Environment Report
The Environmental Protection Agency will accept comments through Jan. 19 on a proposed rule that would require power plants in 23 states to achieve additional reductions in ozone precursor emissions. The proposed rule, released Nov. 17 and scheduled for publication Dec. 3, is intended to address nitrogen oxides emissions that interfere with...
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(ACC Mentioned) Green Biologics Starts Construction Of Renewable Chemical Plant
Dec 2, 2015 | Ethanol Producer Magazine
Green Biologics Ltd., a U.K. based industrial biotechnology and renewable chemicals company, is moving forward with the construction of its 100 percent renewable, biobased n-butanol and acetone manufacturing facility in Little Falls, Minnesota. The existing manufacturing site, formerly known as The Central MN Ethanol Cooperative, was acquired by Green Biologics in December 2014 and re-named Central MN Renewables. Permitting was completed in late August and the construction began on Sept. 1. Commercial production is scheduled to commence in 2016.
“The commencement of this construction project marks a significant milestone in our commitment to becoming a world class renewable specialty chemicals company,” said Sean Sutcliffe, chief executive of Green Biologics, Ltd.
In November, Green Biologics gained membership to the American Chemistry Council and started implementation of a comprehensive Responsible Care initiative.
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(ACC Mentioned) Will Endlessly Recyclable Plastics Soon Be a Reality?
Dec 3, 2015 | Environment Leader
By Jessica Lyons Hardcastle
As the COP21 climate talks are underway in Paris, and government leaders work to hammer out a deal to limit global warming, French company Carbios has announced a technology that may pave the way to infinite plastic recycling — eliminating plastic waste and its impact on climate change.
Yesterday Carbios announced that it has taken a major step forward in the development of its enzymatic depolimerization process of polyesters making it applicable to PET (polyethylene terephthalate), one of the most commonly used polymers.
Carbios’ recycling process enabled for the first time the depolymerization of 100 percent amorphous PET-based commercial products into its original monomers, TPA (terephthalic acid) and EG (ethylene glycol).
The company says the process allows the monomers to maintain the same quality and physicochemical properties as their petroleum-based counterparts. After separation and purification, the monomers extracted from the enzymatic recycling process could then be used for the synthesis of virgin PET — avoiding any loss in value of the recycled material and producing durable, sustainable plastics.
Carbios CEO Jean-Claude Lumaret says the company is working with “major players” to bring the recycling process to industrial scale. “These new progresses will enable us to pursue our efforts and undertake the development at the pilot scale of our PET recycling process and adapt this technology to the recycling of other plastic polymers,” Lumaret says.
Developing endlessly recyclable, durable plastics is the holy grail of polymers. Innovative chemistry companies and scientists are moving closer to making this dream a reality.
“Every day polymer scientists amaze us with new research and innovations in plastics that contribute to our safety, quality of life and ability to live more sustainably,” says Steve Russell, vice president of plastics for the American Chemistry Council.
Recyclable and Durable
In a recent IBM blog, IBM research scientist Jamie Garcia details how her “chance discovery sparked a quest for plastics that are both strong and recyclable.” She says she hopes her work in ploymers will result in plastics that are endlessly recyclable, longer lasting and more durable.
Her breakthrough makes even previously un-recyclable plastics, recyclable hundreds of times over because of a unique thermoset.
As Garcia explains in the blog: “The crosslinking chemical motif, the part that makes this polymer a strong network, has a special property that allows it to be hydrolyzed (the breakdown of a compound by chemical reaction with water) only at very low pH (pH ~ 0). We used computational chemistry alongside experiments to help guide us to the best synthetic method to make these materials, including cure conditions (this is absolutely critical!) and choice of monomer (also critical!) to access materials with the best properties. Usually you don’t get both properties in one material: this thermoset is both strong and revertible.”
But to produce and recycle these ploymers on an industrial scale, Garcia needs a chemical company and its equipment to scale up the process, plus an industrial-scale plant dedicated to chemical recycling for polymers. She says most plastics are recycled with an inexpensive melt-and-remold approach and the infrastructure isn’t in place for chemical recycling methods.
“That said, I still think that in the long run it would be worth it — we could recover more of our materials, and implementing chemical recycling for polymers would ultimately save on energy, resources, and landfill space,” Garcia says in the blog.
Plastics Recycling Increases
Meanwhile plastics recycling in the US continues to increase. Americans have increased the pounds of plastic bottles recycled every year since 1990, according to joint report by the Association of Plastic Recyclers and the American Chemistry Council.
Waste Management World says the report found plastic bottle recycling in the US grew by 3.3 percent or 97 million pounds (44,000 metric tons) in 2014, with the new total surpassing 3 billion pounds (1.36 million metric tons). Additionally, high-density polyethylene (HDPE, #2) bottle collection grew to nearly 1.1 billion pounds (500,000 metric tons), an increase of more than 62 million pounds (28,100 metric tons) from 2013.
“Plastics recycling has grown significantly in recent years thanks to the collaborative efforts of materials suppliers, researchers, retailers, brand owners, and the recyclers themselves,” Russell told Environmental Leader. “Together, we’ve built a foundation that will allow us to recover and use more of these valuable materials.”
Waste and Emissions Reductions
Carbios estimates demand for PET-based virgin plastics in Europe hit 3.2 million tons in 2013, of which 1.8 million tons (57 percent) are recycled. Applying the company’s biorecycling process to PET would allow for treatment of 100 percent of PET waste, equal to an addition volume of 1.4 million tons in Europe that is landfilled or burned for energy, instead of being recycled, the company says.
Carbios says by creating a circular economy model, its biorecycling processes would prevent the emission of 4.6 million tons of CO2e in Europe alone.
Says Russell: “Plastics’ light weight, strength and durability make possible environmental benefits ranging from waste reduction to energy savings and lower emissions — and those benefits can be enhanced when we recycle plastics.”
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Being 'A Pain In The Neck' Worth It In TSCA Fight -- Boxer
Dec 3, 2015 | E&E Daily News
By Sam Pearson
California Sen. Barbara Boxer (D) credited her unflinching brand of environmental advocacy, including in her fight over chemical reform legislation, for helping her party and environmental groups hold the line against conservative efforts.She conceded, though, that her tough stance has made her, at times, unpopular among her peers.
Boxer -- speaking last night to donors of the Environmental Working Group, a close ally, at their annual gala in Washington, D.C. -- said she knew she had been difficult for her colleagues to work with this year as she worked to slow down a controversial bill to overhaul the federal government's system of managing toxic chemicals.
The Golden State's junior senator, who is leaving office at the conclusion of her term, was on hand to accept EWG's inaugural Courage Award.
Boxer, speaking as law enforcement agencies were engaged in a manhunt for three shooters suspected of killing at least 14 people at a service center for people with disabilities in San Bernardino, Calif., about 60 miles from her Rancho Mirage, Calif., home, asked attendees to observe a moment of silence for the victims of "this horrific gun event."
Boxer said she viewed her oath of office to protect America from enemies foreign and domestic to mean more than just external threats. Truly protecting Americans means standing up for the environmental health and safety of families and children too, Boxer said.
"Courage means not folding even when you're told you don't have the votes," Boxer said. "Courage means using every tool at your disposal -- even when it makes people angry, and you become a pest."
Boxer acknowledged her reputation among some colleagues as difficult to work with emerged with recent action on S. 697, the "Frank R. Lautenberg Chemical Safety for the 21st Century Act."
But she said although "it's easier to go along and get along," she wasn't about to fold on her progressive principles.
Boxer said she did everything she could to stall industry-backed bills for 18 months before the loss of her chairmanship on the Environment and Public Works Committee left her unable to set the agenda. Then, she had to focus on pushing back on the most worrisome parts of the legislation, Boxer said.
The debate on how to update the Toxic Substances Control Act has been an especially difficult fight, Boxer said. For environmentalists, Boxer said, it's been confusing because some environmental groups and Democrats are "on the other side who shouldn't be on the other side."
"I was really a pain in the neck," Boxer said, "and one of my colleagues grabbed me after one of our lunches, Democratic lunches, and this colleague said to me, 'I have to tell you this -- you are the most unpopular member of the Democratic caucus right now.'"
Boxer said the news left her "a little taken aback."
"I said, 'What is this, high school?'" Boxer said. "Do I really care about this?"
She added it was true she was unpopular, but "I didn't come here to be popular." She said, "I came here to fight for the people I represent at home and all over the country."
Boxer repeated versions of previous comments that she did not plan on leaving public life after her term ends.
Speaking at San Francisco's Commonwealth Club recently, Boxer said she planned to convert her existing political action committee to a super PAC upon leaving office to be able to accept unrestricted sums from wealthy donors to further progressive causes (E&E Daily, Oct. 20).
Life as a private citizen will also free her to speak her mind more, Boxer said yesterday.
"Imagine me with fewer constraints," she said. "How much fun will that be?"
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House Votes To Lift Oil Export Ban, Expedites Cross-Boundary Permits
Dec 2, 2015 | PoliticoPro - Whiteboard
By Darren Goode
The House today voted again to authorize oil exports and speed permit reviews for cross-boundary energy projects similar to the Keystone XL pipeline.
Lawmakers debating a House energy bill (H.R. 8) voted 255-168 to approve an amendment from Rep. Joe Barton and fellow Texans that is nearly identical to a bill the House approved earlier this year lifting the oil export ban. Barton said such language may also be offered to other large bills that have a chance at moving through Congress.
The House, 263-158, also approved an amendment by Rep. Gene Green expediting cross-boundary oil, natural gas and electricity projects. Energy and Commerce ranking member Frank Pallone said the amendment was a means to bring projects like Keystone XL, which President Barack Obama rejected last month, "back from the grave."
Lawmakers rejected 172-246 an amendment from Rep. Don Beyer that would have blocked the repeal of a requirement for new and modified federal buildings to be designed to be free of fossil fuels by 2030. Other defeated Democratic amendments would have stripped out language helping FERC expedite permitting for interstate natural gas pipelines; expanded weatherization grants to states; authorized new Energy Department loan guarantees for local renewable thermal energy and waste heat; and required the Interior Department to tell landowners when federally owned minerals beneath their land have been leased for oil and gas development.
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House Lines Up Energy Bill Amendments On Oil Exports, Pipeline Permits
Dec 2, 2015 | The Hill - E2 Wire
By Devin Henry
House members are set to vote this week on a slate of amendments to a Republican-backed energy reform bill, addressing oil exports and cross-border pipeline permits.
One amendment, from Rep. Joe Barton (R-Texas), would repeal the ban on crude oil exports, a measure he pushed through the House in October.At the time, Barton’s bill won 261 votes in the House and buoyed supporters’ hopes that the measure could move through the Senate as well. Senators have not yet brought their bill to the floor.
Barton’s amendment is largely similar to the bill members passed in October.
Rep. Gene Green (D-Texas) is pushing an amendment that would reform the permitting process for cross-border pipelines, something that tangled up deliberations on the proposed Keystone XL pipeline before President Obama nixed the project last month.
“If we’re going to have a North American energy plan that includes production and trading of our products,” Green said, then pipeline approval for natural gas and crude oil and energy transmission lines needs to be improved.
“What happened with Keystone is it actually poisoned the well for other pipelines that are not as controversial,” he said Wednesday.
Lawmakers will consider 38 amendments to the energy bill in all. Others include a Republican push to ban the denial of energy export facilities before environmental reviews are completed and another to speed up legal challenges against energy development on federal land.
Democrats look to strip out sections of the underlying bill, including a Republican effort to end fossil fuel reduction targets for federal buildings. Democrats are also looking to block implementation of the bill until federal energy researchers determine its impact on carbon emissions.
Many amendments call for federal studies, including those on the use of carbon capture technology for power plants, security measures for the electric grid, battery energy storage and methane emissions.
Rep. Fred Upton’s (R-Mich.) energy overhaul bill hits the House floor Wednesday night, and members are set to vote on it Thursday.
The bill focuses on modernizing infrastructure, improving energy efficiency and updating other federal energy policies. The White House has threatened to veto the legislation over regulatory provisions within it.
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Court Halts Pipeline Suit With Enforcement Stay
Dec 3, 2015 | BNA Daily Environment Report
By Rachel Leven
A lawsuit challenging a “miscellaneous” pipeline safety rule was halted by a federal court Dec. 1, following the Transportation Department's agreement to temporarily not enforce the challenged provisions (Interstate Natural Gas Ass'n of Am. v. DOT, D.C. Cir., No. 15-01343, 12/1/15).
The department's Pipeline and Hazardous Materials Safety Administration and the petitioner—the Interstate Natural Gas Association of America—will instead seek to work out their issues over the rule (RIN 2137-AE59) administratively, as requested in a joint motion by the parties. The groups will file status reports with the U.S. Court of Appeals for the District of Columbia Circuit every 90 days starting Feb. 29, 2016.
The natural gas group's challenge largely centers on PHMSA's requirements such as test factors for “pressure vessels.” The group has previously said that the agency changed the test factor for these vessels rather than clarifying the existing rule and that its change should be reconsidered.
The interstate group's petition in court highlighted these issues but also requested that the court push the agency to reconsider a separate administrative petition on this rule. PHMSA delayed in August responding to the interstate group's petition—and others from the American Public Gas Association and the American Gas Association—due to the complexity of the issues raised (151 DEN A-16, 8/6/15).
In September, the agency formally denied reconsideration of the interstate group's petition but said it may create an exception for certain components concerning the group's request. PHMSA later told the group that in the meantime, it won't enforce the requirements related to the potentially exempt components.
“In light of the issuance of a stay of enforcement, INGAA and PHMSA believe it is appropriate to hold the proceedings in abeyance until the stay is terminated by PHMSA or PHMSA takes other action to resolve the issue raised by INGAA,” the joint motion filed by the parties in November said.
The court signed an order Dec. 1 to hold the case in abeyance. A separate lawsuit filed by the interstate group on this rule was dismissed by the same court in November (227 DEN A-16, 11/25/15).
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Accidents on Trains Hauling Crude Decline as Prices Drop
Dec 3, 2015 | BNA Daily Environment Report
By Matthew Philips
It's been several months since an oil train accident grabbed big headlines—but not because there haven't been any.
A single weekend in November saw two trains derail in Wisconsin. The first spilled about 20,000 gallons of ethanol into the Mississippi River, followed a day later by a spill of about 1,000 gallons of North Dakota Bakken crude.
This year has already been the costliest by far for crude train explosions. Derailments in 2015 have caused $29.7 million in damage, according to data from the U.S. Department of Transportation, a huge increase from $7.5 million in 2014. Most of this year's price tag can be attributed to two crashes within a three-week span.
The Feb. 16 derailment of a CSX train in West Virginia triggered a massive explosion near a cluster of homes along the Kanawha River and led to more than $23 million in damage (37 DEN A-3, 2/25/15).
A BNSF train that derailed and exploded in Illinois on March 5 caused an additional $5.5 million in damage. Both trains were carrying highly explosive crude from North Dakota (45 DEN A-15, 3/9/15).
The lesser-noticed recent accidents haven't come with explosions or towering fireballs. At least some of the ruptured tank cars were the newer-model CPC-1232, which are supposed to be less likely to split open.
Stricter Tank Standards Set
The U.S. and Canada earlier this year announced stricter tank car standards, mandating further improvements in the future. Those rules will cost companies—mostly those that ship crude—an estimated $2.5 billion from 2015 to 2034; government estimates suggest the benefits will range from $912 million to $2.9 billion, presumably from fewer accidents.
But even without changing safety standards, there's reason to suspect that costly train accidents will decline. While 2015 will go down as the worst year for disasters involving trains carrying crude, it's also shaping up to be the year crude-by-rail hit the brakes.
The crash in prices has slowed activity in the oil patch and reduced the amount of petroleum riding the rails. The number of train carloads carrying petroleum has fallen 30 percent through Nov. 20 since peaking in December 2014, according to the American Association of Railroads.
The monthly data on crude-by-rail shipments kept by the U.S. government lags a few months behind, but as of September those shipments had dropped 21 percent from their peak in January 2015.
First Sustained Decline in Traffic
This marks the first sustained decline in crude-by-rail traffic since it took off in 2009, jumping an astounding 5,000 percent in a little more than five years.
Putting oil on trains was never the most efficient way to move it. It's expensive and slow, not to mention dangerous. But in the places where the shale boom has unlocked the biggest amounts of crude, trains were often the only option.
That's especially true in North Dakota, home to the Bakken formation, where oil production has risen from about 200,000 barrels a day to more than 1 million. By 2013, 71 percent of Bakken crude was transported by train. North Dakota has almost single-handedly driven the crude-by-rail boom, accounting for 80 percent of all oil train traffic in the U.S. as of earlier this year.
Since the third quarter of 2014, however, two pipeline projects have been completed in North Dakota, increasing the amount of oil that can be piped out of the state by nearly 200,000 barrels a day.
There's also a new refinery that opened earlier this year, reducing the amount of oil that needs to be moved by rail down to the large refineries outside Chicago. Since 2011, North Dakota's combined pipeline and refining capacity has doubled, from 400,000 barrels a day to 800,000. By the end of 2017, it's slated to double again, to 1.5 million barrels a day.
Oil Traders Have New Options
Oil traders now have options for moving oil out of North Dakota.
But there's another reason they're pulling back on the amount they put on the rails: It's not as profitable as it used to be. Early on, the shale boom created an enormous glut of crude that ended up stuck in the middle of the country.
Getting it to market meant putting it on trucks and trains and barges, which was expensive and slow. So the price of U.S. crude fell compared with international prices. By October 2011, a barrel of U.S. oil pegged to the West Texas Intermediate (WTI) contract that trades in New York was $27 cheaper than an equivalent barrel priced against the Brent contract trading in London.
That differential led to one of the biggest arbitrage opportunities the oil market has ever seen. Savvy traders could buy cheap oil in the middle of the U.S., find a way to move it and sell it for higher prices along the coasts, where the market is more exposed to Brent prices.
The price to send a barrel of oil by rail from North Dakota down to the U.S. Gulf Coast was about $9 or $10; the rest became profit. Over the past few years, millions of barrels of oil in North Dakota got loaded onto trains bound for the East Coast and the Gulf.
Oil Price Spread Has Narrowed
But as the U.S. oil infrastructure reoriented around the shale boom and pipelines began moving domestic oil to the coasts instead of moving imports into the heartland, the spread between WTI and Brent has narrowed.
The crash in global oil prices has closed the gap even further, to the point that a barrel of WTI crude is now just $3 cheaper than a barrel of Brent. That's not enough to make money if it has to be shipped hundreds of miles on a train. Refineries in Texas and Louisiana have switched from railing oil in from North Dakota to importing more crude from West Africa.
As a result, there's now a glut of tank cars on the market. According to energy research firm Genscape, lease rates have fallen from $2,500 a month to about $500. Big refining companies, which are among the largest crude-by-rail shippers, are shifting their strategy and trying to lock in prices for three years and four years rather than for just a few months.
David Vernon, a transportation analyst at Sanford C. Bernstein, thinks crude-by-rail traffic has peaked. “The heyday is over,” he said. “The high-water mark has likely been set in terms of volumes.”
Canada Could Be Different Story
Canada, however, could be a different story. Although the country's oil sands industry is struggling against low prices, there are projects currently under construction that will be finished over the next few years.
That extra oil will have to move somehow, and as of now, trains are looking like a strong candidate. Canada's oil production is forecast to grow faster than pipelines can be built, especially now that the Keystone XL is officially dead (222 DEN A-2, 11/18/15).
So while the number of trains loaded with crude crisscrossing the U.S. may diminish in the next few years, rail may remain a viable option in Canada.
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N.Y. Official Seeks Rulemaking on Crude Oil Vapor Pressure
Dec 3, 2015 | BNA Daily Environment Report
By John Herzfeld
New York's attorney general has called on the federal government to make a change in the safety rules for trains that carry crude oil to reduce the risk of the shipments exploding or catching fire.
New York petitioned the Transportation Department's Pipeline and Hazardous Materials Safety Administration for a rulemaking to require crude oil transported by rail to maintain a vapor pressure of less than nine pounds per square inch to provide a “practical” and “necessary” safety margin, state Attorney General Eric T. Schneiderman (D) announced Dec. 2.
Schneiderman cited the risk of explosions and uncontrollable fires in seeking a federal standard to close what he said is a loophole that allows crude oil to be shipped by rail in highly flammable conditions.
He said that reducing vapor pressure, “a key driver of the oil's explosiveness and flammability,” would reduce the risks and minimize the severity of railroad tank car explosions.
“In New York, trains carrying millions of gallons of crude oil routinely travel through our cities and towns without any limit on its explosiveness or flammability, which makes crude oil more likely to catch fire and explode in train accidents,” Schneiderman said in a statement. “The federal government needs to close this extremely dangerous loophole, and ensure that residents of the communities in harm's way of oil trains receive the greatest possible protection.”
Crude oil moves through New York via “unit trains” consisting of 70 tank cars to 120 tank cars, passing 700 miles through the heart of population centers such as Buffalo, Syracuse, Rochester, Plattsburgh, Saratoga Springs, Albany, Kingston and Newburgh, and within a few miles of New York City, he said.
A New York oil train explosion of the size and intensity of an accident in Lac-Megantic, Quebec, that killed 47 people in 2013 “could imperil the safety of thousands of New York State residents who live, work, travel, and recreate along the way,” he said.
Tied to Volatile Gases
Crude oils with the highest vapor pressures, including crude produced from the Bakken Shale formations in North Dakota, have the highest concentrations of propane, butane, ethane and other highly volatile gases, the attorney general said. Vapor pressures higher than nine pounds per square inch were found in the Quebec accident and in other instances, he said.
The move by Schneiderman adds to bids by New York Gov. Andrew Cuomo (D) to prod the federal government into expediting new tank car standards and operational controls (231 DEN A-5, 12/2/14).
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New York's Schneiderman Pushes For Increased Oil Train Safety
Dec 2, 2015 | PoliticoPro
By Scott Waldman
New York Attorney General Eric Schneiderman has petitioned the federal agency responsible for regulating oil trains to reduce the explosiveness of crude oil before it is shipped for transportation.
Schneiderman announced on Wednesday that he will file a petition for rulemaking to the Pipeline and Hazardous Materials Safety Administration to set a nationwide limit on the vapor pressure of oil before it is transported. Schneiderman wants the federal government to require oil shipped by rail to have a vapor pressure of 9.0 pounds per square inch. The vapor pressure increases the explosiveness of crude oil and may have contributed to the fatal accident in Canada that killed 47 people in July 2013, Schneiderman said.
Currently, dozens of oil trains of more than 100 cars each travel through New York each week. Virtually all pass through the Albany region, where most are offloaded to barges and ships that travel down the Hudson River.
“In New York, trains carrying millions of gallons of crude oil routinely travel through our cities and towns without any limit on its explosiveness or flammability — which makes crude oil more likely to catch fire and explode in train accidents,” Schneiderman said. “The federal government needs to close this extremely dangerous loophole, and ensure that residents of the communities in harm’s way of oil trains receive the greatest possible protection.”
Lawmakers from across the country have called on federal regulators to change vapor pressure requirements. Gov. Andrew Cuomo has pushed North Dakota regulators to require that volatile gases be removed from crude oil before it is shipped. That effort has not been successful thus far. The regulation of railroads is largely the purview of the federal government, though states have increasingly been calling on Washington to increase safety standards.
On Wednesday, Democratic Rep. Nita Lowey of Rockland County said she supported Schneiderman’s push. She has introduced a federal bill to ban interstate shipment via rail of the most volatile forms of crude oil.
“We need faster progress on crude transport safety to protect Americans who live and work near extensive railways — including my constituents in Rockland County,” Lowey said in a statement. “As ranking member of the House Appropriations Committee, I will continue working to pass my bill and implement other measures to prevent another crude transport disaster.”
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New York AG Calls For Tougher Oil Train Rules
Dec 2, 2015 | The Hill - E2 Wire
By Timothy Cama
New York’s attorney general is calling on the federal government to close a “loophole” in the safety rules regarding crude oil transportation by rail.
Attorney General Eric Schneiderman says the Transportation Department ought to limit the volatility of oil that can be transported on the nation’s rails.Citing recent disasters involving oil train derailments in the last two years, Schneiderman said volatility standards are necessary to reduce the chances of oil exploding or catching fire.
“Recent catastrophic rail accidents send a clear warning that we need to do whatever we can to reduce the dangers that crude oil shipments pose to communities across New York State,” he said in a statement.
“The federal government needs to close this extremely dangerous loophole, and ensure that residents of the communities in harm’s way of oil trains receive the greatest possible protection.”
The formal petition filed Wednesday with the Pipeline and Hazardous Materials Administration asks that the vapor pressure — a measure of the pressure exerted by the vapor coming off the crude oil — be limited to 9 pounds per square inch for oil movements by rail.
Volatility standards were left out of the Transportation Department’s suite of oil train safety regulations made final in May. Those rules focused instead on construction of the tank cars carrying oil and various operational rules, like speed and braking.
Officials had argued that they lack the authority under current law to regulate volatility of oil carried by train.
Safety and environmental groups, along with some Democrats, have pushed for legislation that would give regulators authority over volatility and obligate them to write rules.
Sens. Maria Cantwell (D-Wash.) and Tammy Baldwin (D-Wis.) led an effort earlier this year to require volatility standards for oil trains.
Crude oil can be more or less volatile depending, among other factors, on where it is drilled. Different research has come to different conclusions about whether oil from North Dakota’s Bakken formation — where the oil boom of recent years has been centered — is more volatile than other varieties, and the federal government is currently studying the issue.
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Crude-By-Rail Rules, NEPA Streamlining In Highway Bill
Dec 3, 2015 | E&E Daily News
By Ariel Wittenberg
The conference report for the long-term surface transportation reauthorization bill would beef up safety requirements for crude-by-rail shipments beyond what the Department of Transportation mandated in new regulations this spring.
The report, released Tuesday, would require new tank cars carrying crude to be equipped with "thermal blankets" to protect flammable liquids from exploding in case of a fire or spark outside the train. The bill also requires tanker cars to have protections for their pressure safety valves.
Those standards go a step further than regulations developed jointly between DOT and Transport Canada in May. Those regulations, developed as a North American standard, requires tank cars to have thicker steel and redesigned bottom outlet valves (Greenwire, May 1).
The Association of American Railroads (AAR) applauded the regulation for increasing rail safety last spring but also lamented that the new rule did not include a requirement for thermal blankets.
That gap has now been filled by the highway bill, which is expected to easily pass both the House and Senate this week.
Senate Commerce, Science and Transportation Chairman John Thune (R-S.D.) and ranking member Bill Nelson (D-Fla.) said the added precautions are meant to "close a potential loophole in Department of Transportation regulations."
AAR President and CEO Ed Hamberger agreed.
"The AAR's position has always been that the tank car rule was a good start but didn't advance safety as much as it could," he said in a statement.
The tanker language is among the conference report's several energy-and-environment provisions.
Congressional negotiators also landed on stronger language to streamline the National Environmental Policy Act, opting to include House provisions to begin a pilot program authorizing states to conduct environmental reviews for infrastructure projects under state, not federal, environmental laws (E&E Daily, Nov. 20).
The language was included over objections from Rep. Raúl Grijalva (D-Ariz.), who refused to sign the conference report in protest.
"By streamlining NEPA, you effectively render it impotent in a lot of these areas," he said.
Grijalva said he was particularly upset about a provision that would combine environmental impact statements and records of decision, effectively limiting the opportunities for public comment on major projects.
"Less public input, less analysis is not always good," he said. "Hopefully, whatever is left of NEPA will still be somewhat useful to communities, but this streamlining idea meant to expedite just took NEPA out of the process." Grid, air quality, NPS provisions
Another energy provision in the highway bill would allow the president to declare a "grid security emergency" if critical parts of the nation's electric grids go down.
The declaration would be akin to a state of emergency, and the president could use it whenever portions of the grid powering critical civilian or defense operations are either under a cyberattack or in "imminent danger."
Once declared, the emergency would allow the Department of Energy secretary to repair the grid without following NEPA regulations.
The conference report also tweaks the Congestion Mitigation and Air Quality Improvement (CMAQ) program, which pumps more than $2 billion annually into transportation projects to help communities reduce air pollution and traffic tie-ups.
Under the legislation, port-related freight projects could quality for CMAQ money, along with purchases of equipment needed to help vehicles and infrastructure communicate. The bill would also drop a requirement that CMAQ funding be set aside for some rural areas related to standards for fine particulate matter, known as PM2.5.
Bill Becker, executive director of the National Association of Clean Air Agencies, said in an email that both provisions are reasonable.
Lawmakers "clearly recognized that vehicles, both on-road and off-road, are a major source of fine particle pollution at ports," Becker said, adding that CMAQ funding would furnish "significant help" in reducing those emissions. In dropping the set-aside requirement, he said, the bill also acknowledges that some rural maintenance and nonattainment areas for PM2.5 may not need funding under the program.
The highway bill could also help the National Park Service chip away at its backlog of road projects, which make up nearly half of the agency's $11.5 billion deferred maintenance backlog.
NPS would get $268 million in fiscal 2016, about $15 million more than it currently receives. The agency's annual roads budget would then gradually increase to $300 million by fiscal 2020.
When asked about the bill at a House Natural Resources Committee hearing yesterday, NPS Director Jonathan Jarvis was especially excited about a provision that would establish a fund of $800 million in fiscal 2016 for nationally significant freight and highway projects, an amount that will increase to $1 trillion by fiscal 2020.
"The National Park Service will be able to compete for large construction projects like the Memorial Bridge," he said. Fixing the crumbling connection between Arlington, Va., and Washington, D.C., could "cost up to $250 million and take our entire annual allocation for one project," he said.
"We could certainly use more," Jarvis said, "but we feel wonderfully happy that the Congress has moved on a transportation bill, and we can plan out for five years on our road projects."
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Ayotte Opposes Controversial New Hampshire Gas Pipeline
Dec 2, 2015 | PoliticoPro - Whiteboard
By Elana Schor
Republican Sen. Kelly Ayotte is opposing a contentious natural gas pipeline plan that would cut through her home state of New Hampshire, putting pressure on both Hillary Clinton and the Democratic governor who's challenging her for reelection.
Ayotte came out against Kinder Morgan's $5 billion Northeast Energy Direct pipeline project during a conversation with constituents late yesterday and elaborated on her concerns in a letter to local officials today.
While she left the door open to dropping her opposition if FERC and Kinder Morgan answer further questions, Ayotte's move puts her further to the left of Clinton and Gov. Maggie Hassan — both of whom have declined to take a firm stance.
The pipeline would ship fracked natural gas from Pennsylvania to New England states that have struggled to meet demand.
Ayotte echoed previous questions raised by state officials about Kinder Morgan's decision to change the 419-mile project's route from a path to traverse more of New Hampshire and less of Massachusetts. The GOP incumbent pointed to lingering uncertainty about "the threshold need for this project, the safety concerns involved, and potential interactions with other projects," along with its impact on towns along the route.
"Unless and until these questions are sufficiently answered and the concerns of local residents are meaningfully addressed, I oppose this project going forward," Ayotte wrote.
Clinton's chief presidential primary opponent, Bernie Sanders, came out against the pipeline over the weekend. Clinton's campaign did not immediately respond to a request for comment.
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Political Battle Heats Up Around Northeast Gas Project
Dec 3, 2015 | E&E Daily News
By Hannah Northey
The announcement yesterday that two members of Congress from New Hampshire -- one a Republican, the other a Democrat -- are opposed to a large, new natural gas pipeline across the Northeast could throw a new loop into presidential energy politics.
Republican Sen. Kelly Ayotte and Democratic Rep. Ann McLane Kuster yesterday announced in a letter to local selectman and town officials in the Northeast that they oppose Kinder Morgan Inc.'s proposed Northeast Energy Direct (NED) pipeline.
The members said they had failed to get answers from the Federal Energy Regulatory Commission and the Energy Department's inspector general about the need for the project, safety concerns or potential interaction with other projects. FERC does not comment on cases pending before the agency.
"It is disappointing that despite requests from both the delegation and local residents, FERC and the DOE Inspector General have thus far failed to provide meaningful answers to these concerns, let alone provide assurance that they will take them into account," the lawmakers wrote. "These are important questions and New Hampshire residents deserve substantive answers. Unless and until these questions are sufficiently answered and the concerns of local residents are meaningfully addressed, I oppose this project going forward."
Sen. Bernie Sanders (I-Vt.) at a dinner in New Hampshire last month became the first presidential candidate to come out publicly against the project. Sanders said at the Jefferson-Jackson dinner in Manchester, N.H., that a project that would carry "fracked natural gas for 400 miles through 17 communities is a bad idea -- and should be opposed," according to a Nov. 30 article in The Boston Globe.
Broadly, the project seeks to capitalize on shale gas in Pennsylvania by building new pipe along existing pipeline and power-line corridors from the Keystone State through New York and New England to Maine, all with the goal of serving the Northeast.
Kinder Morgan, through subsidiary Tennessee Gas Pipeline Co. LLC, has estimated the cost of the project to be between $3 billion and $5 billion, which includes the "supply" and "market" segments, from Pennsylvania to Wright, N.Y., and from New York to Dracut, Mass., respectively. The company has said the line will use existing rights of way on 90 percent of the proposed route, and new sections will be built with either a 30- or 36-inch circumference (EnergyWire, Jan. 21).
Kimberly Watson, the president of Kinder Morgan's East Region Natural Gas Pipelines, acknowledged in a statement that there are outstanding questions about the NED project and vowed to work with lawmakers and landowners in New Hampshire. Watson said the pipeline would save New Hampshire residents $437 a year on electricity and enable customers to switch from oil to gas.
"We know and expect that the NED project will continue to draw close scrutiny and we will continue to conduct an open and ongoing dialogue about NED to answer questions and provide information at open meetings, on our website and in the frequent interactions with a wide range of stakeholders," Watson said.
The project -- and FERC's role in pipeline permitting -- has recently gained more attention on the national stage alongside a surge in opposition from landowners, climate activists and opponents of new infrastructure.
The growing opposition could put pressure on Democratic presidential front-runner Hillary Clinton to make her position on the project known.
Clinton, who in October criticized FERC for failing to fully weigh concerns about climate change and the impacts of energy development on communities, is being praised by environmentalists who have been protesting the agency's work on natural gas projects.
Clinton's comments came in response to a question about the NED project, which would intersect with 17 towns in the Granite State. Bipartisan New Hampshire lawmakers have urged federal watchdogs to make sure the public has a say in FERC's reviews.
But Clinton said she only became familiar with the opposition to FERC reviews after traveling through New Hampshire. Still, activists who have for months protested on FERC's doorstep in Washington, D.C., interrupted meetings and organized climate marches said her comments symbolized national recognition of the problem and are essentially a game changer (Greenwire, Oct. 21).
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Climate Activists Target Reputation of Oil, Gas Industry
Dec 3, 2015 | BNA Daily Environment Report
By Alex Nussbaum
A cartoon circulating on Twitter carries a warning for the oil industry.
There's Joe Camel, retired tobacco spokes-animal, suave as ever in a tuxedo, cigarette dangling from his smiling snout. In his hand, a pack of smokes with a twist—an Exxon Mobil Corp. logo on the wrapper. “Big Oil: The New Big Tobacco,” reads the caption.
Activists have been urging investors for years to pull money out of the fossil-fuel producers blamed for much of the world's warming. Joe Camel's new role shows the movement has an even broader target: not just the industry's money, but its reputation. With envoys gathered in Paris this week for a United Nations summit on climate change, there are signs—from coal-plant closures to the death of the Keystone XL pipeline—that the effort is bearing fruit.
“That pariah status is growing,” Bill McKibben, a founder of climate advocacy group 350.org, said in an interview. “The fossil-fuel industry remains incredibly strong—they are super-rich—but they are not so invincible as they thought they were.”
The Paris talks got under way Nov. 30 with more than 150 world leaders vowing to speed the world's shift away from fossil fuels. In one of the opening acts, the U.S. and about 40 other countries pledged to cut billions of dollars in industry subsidies. Insurers, cities and other investors controlling more than $3.4 trillion in assets have pledged to keep some or all of their money out of fossil-fuel companies—a high-water mark for the divestment movement, McKibben's group said in Paris on Dec. 2.
Legal Front
New York State Attorney General Eric Schneiderman has opened another front with an investigation into whether Exxon misled investors by supporting groups that question the danger of climate change, even as its own scientists briefed executives on the risks (215 DEN A-10, 11/6/15).
Schneiderman has subpoenaed documents from Exxon, the world's biggest oil explorer, dating back to the 1970s, according to a person familiar with the probe.
Those allegations inspired the Joe Camel cartoon and an #ExxonKnew campaign that's burgeoned online in the run-up to Paris.
Scott Silvestri, an Exxon spokesman, said allegations the company suppressed climate research are “inaccurate distortions.” Exxon has worked with government and academics to develop climate science “in an open and transparent manner” for more than 40 years, he said in a phone interview. That includes some 150 public research papers, he said.
Exxon acknowledges the risks of climate change and sees calls for divestment as “a diversion,” Silvestri said. “In view of the monumental scale of the world's energy needs, solutions are not easy and they're going to take time, huge investments and thoughtful policies.”
Risk Premium
Exxon and oil-industry peers have softened their stance on greenhouse-gas limits over the years. The company now supports a carbon tax and, like rivals, has invested in more climate-friendly natural gas.
The prospect of widening investigations may still add a risk premium to fossil-fuel stocks, said Gregory Elders, a Bloomberg Intelligence analyst.
“Even if proving wrongdoing is unlikely, the damage may be the uncertainty cast over coal, oil and gas,” Elders wrote in a Nov. 9 report. Energy and utility stocks have been the worst performers this year, he said. Moreover, the challenge is more comprehensive than in the case of tobacco, since divestment campaigners are arguing for the end of an industry rather than just a more tightly regulated one, Elders said in an interview.
As of November, money managers controlling trillions of dollars in assets had committed to keep out of fossil-fuel companies, according to Elders. The list has grown in the last year to include French insurance giant Axa SA, Norway's $900 billion sovereign wealth fund, the Church of England and California's state pension funds.
While such pledges probably have little impact on companies’ financial health, they contribute to a political climate that's getting stormier for fossil fuels, said Katie Bays, an energy specialist at Height Securities in Washington.
Companies that burn or mine coal have faced the most pushback, with power stations shuttered by new regulations or lawsuits.
‘Sea Change.’
“You've gotten these incremental changes because of the political sea change that we're seeing,” Bays said.
Divestment gathered steam after a low-point for U.S. climate advocacy in 2010, when Congress killed a cap-and-trade bill supported by President Barack Obama. Activists decided they needed to challenge the industry's legitimacy, not just push legislation. They took inspiration from the anti-apartheid movement of the 1980s, as well as the tobacco wars, McKibben said.
“The financial community increasingly understands we're entering a new realm for fossil fuels where it is a dangerous asset and past performance is no guide to its future prospects,” he said. “The message was that on rare occasions, there are some companies that go rogue and those companies have to be treated differently.”
In the U.S., a decades-long anti-tobacco campaign culminated with a legal settlement in 1998 between 46 states and the biggest cigarette makers, which required the companies to pay at least $206 billion to cover public health costs. Nine years later, a federal court found the industry guilty of a “massive, 50-year effort to defraud the public” by hiding the dangers of smoking, and ordered new warnings on tobacco products.
Public Opinion
Tobacco stocks mostly shrugged off the assault, helped by growing sales in developing countries. Since the 2006 judgment, Philip Morris parent Altria Group Inc. and R.J. Reynolds’ parent have seen their shares almost triple—while the Standard & Poor's 500 Index gained about 60 percent.
By another metric—public opinion—the case against tobacco has hit home. Polls suggest mixed results for U.S. climate campaigners on that front. Two-thirds of Americans see global warming as a serious problem and about half, 47 percent, say the government should do more about it, according to a Nov. 30 Washington Post-ABC News poll. But both figures have declined in the past few months.
Meanwhile, the oil industry's approval ratings have edged higher in recent years as gasoline prices fell. Still, 47 percent have a negative view of it, according to an August survey by Gallup.
Only the federal government had a lower rating.
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Oil and Gas Pollution Delivers a One-Two Punch to Our Public Health
Dec 2, 2015 | BNA Daily Environment Report
By Felice Stadler
One of the country’s largest leaks ever of natural gas, which is primarily made up of the potent greenhouse gas methane, has been going on in California’s Aliso Canyon for over a month. The volume that’s been leaking has been staggering—and the impacts to local residents severe enough to warrant relocating hundreds of families.
Major disasters like the one unfolding in Aliso Canyon have a tendency to grab our attention because the impacts are so acute and can be immediately documented—from the volume of methane that’s leaked (latest climate impacts estimate: equivalent to driving 160,000 cars/year) to the documented health impacts (bloody noses, headaches, breathing difficulties, nausea).
The Aliso Canyon leak, however, also provides us a good reminder of what communities across the U.S. who are close to oil and gas facilities have been increasingly concerned about—the ongoing environmental impact of air pollution that is being released into their neighborhoods, and the safety of those operations. Most of the pollution is invisible to the naked eye, but infrared cameras are bringing the problem into sharper focus, and with that a louder call for action and oversight by federal officials. EPA estimates that today, methane leaks from onshore oil and gas development is contributing climate impacts equivalent to driving nearly 130 million cars annually. And their emissions are contributing to unhealthy air for residents living next door and downwind of this development.
That is why the Environmental Protection Agency’s (EPA) first-ever proposed rules to limit methane pollution from the nation’s oil and gas industry under the Clean Air Act are a welcome development.
At an October event hosted by the Center for American Progress, Gina McCarthy, administrator of the EPA reiterated the need for these important standards, reminding the audience that reducing climate pollution—and the greenhouse gases that cause it, like methane—is a public health issue. “That’s been one of the big surprises to me, how little [people] have made the connection between climate and public health…” said Administrator McCarthy.
Methane pollution from the oil and gas industry packs a double whammy to our health because, as Administrator McCarthy reminded us, its emissions are not only climate forcers, but are also “bottled up” with other pollutants like volatile organic compounds and toxics like benzene. This should give us double the motivation to reduce this unnecessary pollution.
Here’s how methane emissions are delivering that one-two punch when it comes to our health:
Methane speeds up climate change, exacerbating its health impacts
Potent methane pollution leaks throughout the oil and gas supply chain. The amount released annually has the same short-term impact on our climate as 160 coal fired power plants. In fact, our analysis based on data from the world’s leading scientists suggests that more than half of the warming we will experience over the next 20 years will be due to the continued release of methane and other powerful, short-lived pollutants into the atmosphere.
By now, the health impacts (and associated costs) attributed to climate change are well understood. Heat waves, for example, increase the risk of heat stroke and heart problems. And warmer winters are contributing to the spread of pests like mosquitos and, posing greater risks to people and wildlife.
Maybe less well known is that rising temperatures can make local air pollution worse by contributing to faster formation of ground-level ozone, also known as smog. Smog is a dangerous air pollutant that can aggravate asthma and other lung diseases. Breathing unhealthy levels of smog pollution can also increase the likelihood of heart attacks or other cardiovascular problems. Children, who spend a greater share of their time outdoors, are more prone to these consequences, especially the 6.8 million children across the U.S. diagnosed with asthma.
Don’t just take it from me: The American Lung Association warns us that “climate change is already taking a toll on the lung health of millions of Americans from worsened air quality, extreme heat events, wildfires and more.” And just last month, the American Academy of Pediatrics affirmed that “climate change poses threats to human health, safety, and security, and children are uniquely vulnerable to these threats.”
Oil and gas methane pollution is mixed with smog-forming pollutants and toxic chemicals
Over 50 million Americans live in a county home to oil and gas operations that also has measured air pollution levels exceeding the federal health standard.* In states around the country, including rural regions in Wyoming and Utah, increased smog levels have been directly tied to nearby oil and gas operations.
As Administrator McCarthy said, “When you look at methane from the oil and gas sector, you are looking at opportunities to reduce ozone forming chemicals.” That’s because methane is released alongside other toxic chemicals – like benzene, a known human carcinogen. With low-cost solutions available today to cut methane and these other pollutants, this is an easy problem to fix.
The EPA has an opportunity to not only protect communities living near oil and gas operations, but to protect all of us who are impacted by climate change, by securing comprehensive rules to limit methane pollution from the oil and gas industry. As the American Academy of Pediatrics said “failure to take prompt, substantive action [on climate change] would be an act of injustice to all children.”
Learn more in our health fact sheet, and add your support for these important rules today.
*70 parts per billion is the new ozone standard per the recent EPA announcement. EPA, in partnership with states, is in the process of determining areas that meet or exceed the standard.
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Federal Regulations Are Needed To Protect Water From Fracking Waste
Dec 3, 2015 | The Hill - Contributors
By Elizabeth Glass Geltman
The Environmental Protection Agency (EPA) has proposed federal regulations to establish pretreatment standards of performance for oil and gas wastewaters. These proposed standards are crucial to protect both public drinking water sources as well as workers at publicly owned treatment works (POTWs).
While growing a robust domestic energy supply is a national security interest, ensuring clean, safe drinking water is also an elemental human right and need. Promulgating pretreatment regulations for new and existing oil and gas sources that limit discharge of pollutants is an extremely important step in maintaining public health and safety.
Drilling in the Marcellus Shale using unconventional technology such as hydraulic fracturing (aka fracking) transformed the East Coast landscape. Large swathes of rural agrarian land are now peppered with oil and gas operations that require vast quantities of water mixed with sand and a list of unnamed proprietary chemicals. In addition to added chemicals, flowback water from oil and gas operations typically include total dissolved solids (TDS) and radionuclides from the earth.
Discard of contaminated produced and flowback waters from oil and gas operations presents an important challenge that must be addressed to protect public health. Studies demonstrate significant environmental and health risks associated with current disposal methods for flowback and produced waters. Underground injection is strongly correlated with increased seismic activity. TDS are elevated in waters by POTWs accepting oil and gas wastes. Technologically enhanced naturally occurring radioactive materials (TENORM) are often found in wastewaters and in muds, sludges and fill from oil and gas operations sent to landfills.
The World Nuclear Association reports that TENORM from produced waters in the Marcellus Shale may be "300 times the Nuclear Regulatory Commission limits for industrial wastewater discharge."
Americans cannot rely on state oil and gas laws to protect the water supply of downstream neighbors. Federal regulation is needed. For example, although Pennsylvania promulgated wastewater treatment effluent standards that targeted TDS and chloride in 2010, Chapter 95 regulations of the Pennsylvania state code only applied to new or renovated facilities. Facilities permitted prior to the promulgation of Chapter 95 were exempt. POTWs in Pennsylvania can — indeed, must — continue accepting oil and gas wastewater from grandfathered facilities even if acceptance results in a discharge of effluent high in TDS and exceeding the limits set by Chapter 95.
Federal pretreatment standards should clearly specify that TENORM is a regulated pollutant requiring discharge no greater than levels accepted by EPA and the World Health Organization as safe. To protect workers, drilling operators should be required to survey wastewater for radioactivity before delivery to the POTW.
Federal pretreatment standards should not differentiate between conventional and unconventional oil and gas drilling operations. Rather, the standards should require limited discharge of pollutants from oil and gas operations, regardless of source. The EPA's emphasis should be on ensuring that oil and gas operators pretreat wastes to ensure water safety and not on what type of oil and gas operation is delivering the wastes. Simply said, all wastes delivered to POTWs from oil and gas operations should be subject to pretreatment standards regardless of whether the source is conventional or unconventional wells.
With regard to effective date, all discharges from oil and gas operations should be covered. The lesson from Pennsylvania Chapter 95 is that if existing sources are excluded, the public may be left without adequate protection of the water supply.
EPA regulations establishing pretreatment standards for wastes coming from oil and gas operations are an important step in protecting both the nation's water supply and the workers who keep our water supply safe.
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SAB Panel Urges EPA To Better Quantify Water Impacts In Fracking Study
Dec 2, 2015 | InsideEPA
By Bridget DiCosmo
An EPA Science Advisory Board (SAB) panel reviewing the agency's draft study on hydraulic fracturing's drinking water impacts is poised to debate calling on the agency to better quantify specific local impacts, in particular the risk and severity of potential adverse impacts rather than rely on what the SAB panel calls “anecdotal” information.
The recommendation is included in a draft consensus report that the panel will discuss on a Dec. 3 teleconference in a bid to reach final agreement on suggestions for EPA. The document also includes a prior call from some panelists for the agency to drop the fracking report's finding of “no widespread, systemic impacts” to drinking water from fracking, which the panelists said EPA lacked the data or other adequate explanation to justify.
Separate from the push to scrap the report's conclusion on systemic impacts, the panel's draft response faults the EPA study's findings on impacts associated with injection of fracking fluids in oil and gas wells.
“The anecdotal data is not statistical in nature, and therefore conclusions as to severity and true risk are difficult to assess. The reader is left to wonder if anything can happen any where at any time. Given the millions of wells which have been hydraulically fractured, we know this is not the case, but there are issues which have arisen and for which the public demands answers. If not properly addressed and prioritized, we run the risk of solving the wrong problems and fixing what is not broken while leaving alone issues that do need improvement. The section on frequency and severity needs to have a much better focus on risk and probability than we have seen,” the panel says.
The response suggests EPA bolster its evaluation of factors on well integrity, commit to conduct additional research with more local and prospective case studies the agency had originally planned to include in the study and thoroughly discuss three high-profile groundwater investigations in Wyoming, Pennsylvania and Texas.
The SAB panel says that cement integrity is crucial both initially and over time, and is critical to ensure well integrity, yet this is not “well-defined” in EPA's draft study. “There is little information on aging, re-fracturing and use of acids in old wells. . . . Does that degrade old cement? Can any statement be made in respect of this concern?”
The panel recommends that EPA include more information about design principles, expand the scope of its examination of wellfile reports to limit some of the uncertainties and encourage industry to share specific data as needed.
The report also says that in order to better understand the potential scale of impacts stemming from accidental spills and releases of wastewater and flowback, the study should quantify the frequency of the different types of possible releases, including whether the spilled material impacts ground or surface waters.
“The description of the frequency and severity of impacts is highly generalized and qualitative,” the report says. “Though the statements are reasonable, the report could be strengthened with specific and quantitative results.”
Case Studies
On the case studies, the panel says EPA should expand discussion of the retrospective case studies conducted to include examination of their strength and weaknesses, and resume planned prospective case studies that could provide a better understanding of exposure to constituents by providing adequate baseline data to show pre-drilling conditions.
The studies would have allowed researchers to track changes in the water quality near the site as drilling progressed and thus accumulate valuable "baseline" data, but those were hindered by setbacks, including difficulties identifying appropriate sites and a failure to reach legal agreements with operators.
But Jeffrey Frithsen, of EPA's National Center for Environmental Assessment, said during an Oct. 28-30 SAB meeting in Washington, D.C., that EPA currently has no plans to continue working toward prospective studies, saying, "The resources are such that we don't think even if the partner or sites came to pass," the agency would be able to conduct them.
During that meeting, Susan Brantley, of Pennsylvania State University's Earth and Environmental Systems Institute noted that the prospective studies "would have been helpful in addressing some of the uncertainty, perhaps," and suggested that EPA should clarify in the final study whether it believed the prospective studies to be essential to the study, and if not, to clarify its rationale.
The panelists also appear to be backing a recommendation that EPA include more focus in its draft report on three high-profile groundwater investigations the agency conducted in Parker County, TX; Dimock Township, PA; and Pavillion, WY that were later dropped without finalizing the studies. The draft report says the panel would “recommend including explicit summary of studies in Dimock PA, Parker County TX and Pavillion WY.”
Fracking Impacts
The draft response also echoes the concerns from some panelists that EPA cannot justify its conclusion about “no widespread, systemic impacts” to drinking water from fracking. Some oil and gas groups have cited that finding to reject environmentalists' long-running concerns about water harm from fracking.
For example, during the October meeting, James Bruckner, of the University of Georgia's pharmaceutical and biomedical sciences department, said that the draft conclusion, as written, makes "too strong a statement" given "fragmented and insufficient information."
The panel in the draft response says, “Of particular concern is the statement of no widespread, systemic impacts on drinking-water resources. Neither the system of interest nor the definitions of widespread, systemic or impact are is clear, and it is not clear how this statement reflects the uncertainties and data limitations” in the draft study.
The panel says in the draft report that EPA should revise its findings to more specifically and precisely draw data from the study.
EPA conducted the massive study at the behest of a federal budget law, examining findings across five phases of the fracking-water lifecycle for potential impacts: water acquisition, chemical mixing, well injections, flowback and produced water and wastewater management.
For example, on chemical mixing, EPA found that the frequency of on-site spills from hydraulic fracturing activities could be estimated for two states, Colorado and Pennsylvania, from approximately 0.4 to 12.2 spills per 100 wells, but not nationally due to data availability constraints.
The draft assessment, released in June, is not intended to be a quantitative risk assessment, but instead identifies mechanisms by which fracking could potentially impact drinking water.
These mechanisms include water withdrawals in areas of low water availability; spills of fracking fluids and wastewater; fracking directly into underground sources of drinking water; underground migration of liquids and gases; and inadequate wastewater management, according to the agency's draft assessment. The panel must craft consensus advice in response to the set of eight charge questions and then draft a report that summarizes its recommendations for the agency. The chartered SAB will then review the panel's draft advice before issuing a final report, and the agency anticipates a final report some time in 2016.
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House Expected to Pass Energy Bill Despite Veto Threat
Dec 3, 2015 | BNA Daily Environment Report
By Ari Natter
The House was expected to approve a broad energy bill as soon as Dec. 3, but with Democratic lawmakers and the White House firmly opposed to the legislation, passage of the measure will likely be only a symbolic victory for Republicans.
The bill (H.R. 8), which represents the first major re-write of energy policy in years, would expedite the Energy Department's consideration of licenses to export liquefied natural gas, increase security of the nation's electric grid and speed up the review time for federal permitting of natural gas pipelines.
“Ensuring access to affordable and reliable energy for decades to come should be an idea we can all rally around,” the bill's author, House Energy and Commerce Committee Chairman Fred Upton (R-Mich.), said Dec. 2.
But, the bill, likely to be Upton's last broad energy measure before term limits force him from chair at the end of the 114th Congress, drew Democratic opposition after bipartisan talks broke down and controversial measures that had been excluded from the bill were added via a managers amendment the day before the committee approved it by a vote of 32-20 (190 DEN A-9, 10/1/15).
Amendments Approved
“The administration strongly opposes H.R. 8 because it would undermine already successful initiatives designed to modernize the nation's energy infrastructure and increase our energy efficiency,” the White House said in a veto threat issued Nov. 30.
During consideration of the bill Dec. 2 the House adopted by voice vote several minor amendments such as a measure by Rep. Sheila Jackson Lee (D-Texas) requiring an Energy Department report on ways to increase resilience of the nation's electricity grid.
The House was also expected to adopt an amendment late Dec. 2 by Rep. Joe Barton (R-Texas) that would repeal the 40-year-old ban on most crude oil exports.
The measure was similar to legislation (H.R. 702) by Barton that passed the House on a 261-159 vote in October under a veto threat from the Obama administration and was considered as a way of drawing attention to the issue, which has yet to be acted on in the Senate.
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Advocacy Groups Urge EPA to Strengthen Methane Rules
Dec 3, 2015 | BNA Daily Environment Report
By Anthony Adragna
More than 125 environment groups from around the U.S. are asking the Environmental Protection Agency to strengthen and broaden its efforts to curb methane pollution from the oil and natural gas sectors.
The EPA should improve proposed rules on methane emissions by regulating several additional pieces of equipment, require more frequent mandatory inspections, shorten the amount of time operators have to make repairs, implement a citizen complaint system so residents can report possible leaks to the agency and mandate captured gas be used or brought to market except in exceptional circumstances, the groups said in a Dec. 2 letter to Administrator Gina McCarthy.
Beyond those improvements to the proposed rules, which would apply only to future operations, the EPA should use its authority under the Clean Air Act to regulate existing oil and gas wells, the groups said. Doing so would be consistent with the Obama administration's efforts to combat climate change, they argue.
“Voluntary standards are insufficient to cut harmful, climate-disrupting methane pollution from oil and gas operations and they will not adequately protect impacted communities,” the letter, signed by groups including 350.org, Earthjustice, the Center for Biological Diversity and Clean Water Action, said. “We urge the EPA to make the changes needed to ensure that these rules are sufficiently strong to protect public health and tackle climate change.”
The proposed rules would set the first new source performance standard for methane emissions from new oil and gas wells (RIN 2060-AS30), determine when oil and gas facilities should be aggregated for permitting purposes (RIN 2060-AS06) and outline a proposed federal implementation plan (RIN 2060-AS27) for minor emissions sources on Indian lands. The public comment period is scheduled to close Dec. 4 (160 DEN A-1, 8/19/15).
Methane is an extremely potent greenhouse with an impact 25 times greater than carbon dioxide when measured over a 100 year period, according to the EPA.
Latino Leaders Urge Strong Standards
Eighteen organizations representing the Latino community sent a letter to McCarthy Dec. 1 also urging the promulgation of the strongest possible standards to curb methane emissions.
“We look forward to seeing the strongest possible methane standard finalized alongside a rule to limit methane pollution from existing sources, to achieve the full methane emissions reductions goal from the oil and gas industry announced by the White House,” the letter said.
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D.C. Circuit MATS Decision Could Disrupt EPA Plans
Dec 3, 2015 | BNA Daily Environment Report
By Patrick Ambrosio
The Environmental Protection Agency's plan to reaffirm its “appropriate and necessary” finding on power plant emissions of mercury in response to a U.S. Supreme Court ruling could be significantly disrupted if a federal appeals court decides to vacate the agency's initial determination, several attorneys who are tracking the ligation said.
If the U.S. Court of Appeals for the District of Columbia Circuit decides to vacate the finding, and the mercury and air toxics standards (MATS) that were promulgated as a result of that determination, attorneys said, it could force the EPA to undertake a more extensive rulemaking process to address the Supreme Court's ruling that the agency was required to consider cost in its assessment of whether it was appropriate and necessary to regulate power plant emissions under Section 112 of the Clean Air Act. The Supreme Court in June ruled the EPA erred by not considering cost, but it remanded the litigation to the D.C. Circuit to determine whether the rulemaking should be vacated or left in place while the EPA addresses that issue (Michigan v. EPA, 135 S. Ct. 2699, 80 ERC 1577, 2015 BL 207163 (2015); 125 DEN A-1, 6/30/15).
The EPA in November released a proposed supplemental finding (RIN 2060-AS76) that cost consideration doesn't alter its appropriate and necessary finding. The agency largely relied on its existing cost analysis for its mercury and air toxics standards, which it projected would cost the power industry $9.6 billion annually (225 DEN A-13, 11/23/15).
Sean Donahue, an attorney representing the Environmental Defense Fund and other environmental and public health groups that have intervened in the litigation, told Bloomberg BNA that although it is possible that the EPA could act to get the mercury standards (RIN 2060–AP52, RIN 2060-AR31) back in place quickly if the D.C. Circuit vacates them, it is possible that a more elaborate rulemaking process might be required, which would create a delay.
“If the rule were vacated, there would be a question of whether EPA has to propose a whole new rule,” Donahue said.
Arguments on Dec. 4
The D.C. Circuit will hold Dec. 4 oral arguments on whether the mercury and air toxics standards should be vacated or remain in place on remand. The arguments will be heard by Chief Judge Merrick Garland and Judges Judith Rogers and Brett Kavanaugh (White Stallion Energy Ctr. LLC v. EPA, D.C. Cir., No. 12-1100, order filed 11/20/15).
The EPA argued in briefs that the rule should be remanded without vacatur, citing a “serious possibility” that the appropriate and necessary finding will quickly be reaffirmed. Several petitioners who challenged MATS, including a coalition of 21 states led by Michigan and the National Mining Association, argued that the standards should be vacated because the EPA failed to adequately address the threshold question that Congress required the agency to answer before issuing power plant standards under Section 112.
James Rubin, a partner at Dorsey & Whitney LLP, said the EPA will argue that it only needs to address a “ministerial administrative matter” raised by the Supreme Court's decision, but he questioned whether the court will be amenable to that argument since the appropriate and necessary finding was a threshold regulatory decision that underpins the MATS rule.
“I think the court is going to wrestle with this one,” Rubin told Bloomberg BNA.
Rubin agreed with Donahue's assessment that vacatur of the appropriate and necessary finding could require the EPA to engage in a full rulemaking process to reissue MATS.
Court to Weigh Possible Disruptions
The Dec. 4 arguments could be significant in “fleshing out” the debate over whether regulations should be vacated or left in place while federal agencies address legal deficiencies, Thomas Lorenzen, a partner with Crowell & Moring LLP said.
“The court will undoubtedly be considering how much disruption it will cause if it vacates versus if it remands while leaving the rule in place,” Lorenzen told Bloomberg BNA.
The D.C. Circuit has remanded several major environmental regulations back to the EPA without vacating them, including the Clean Air Interstate Rule, a Bush-era regulation on air pollution that crosses state lines that was left in place while the EPA worked on a valid replacement (North Carolina v. EPA, 531 F.3d 896, 67 ERC 1151, 2008 BL 146717 (D.C. Cir. 2008)).
Donahue, who will argue on behalf of environmental and public health intervenors during the Dec. 4 oral argument, said a decision to vacate the MATS rule would be disruptive because power plants would be able to turn off pollution controls and emit more hazardous air pollution than they would if the standards were left in place. Those intervenors submitted testimony from numerous public health scientists describing the issues that would be caused if power plant emissions increased.
Lorenzen said another factor the court could consider is whether vacating the MATS rule would create a “fair playing field” for power plants, since most, but not all, plants were required to come into compliance by April 2015. However, if the standards were vacated, there would be no obligation for power plants that received a one-year compliance extension to comply until the EPA re-promulgated MATS, Lorenzen said.
Vacatur Would Be ‘Stinging Rebuke' for EPA
Harold Blinderman, a partner with Day Pitney LLP, said the D.C. Circuit's decision will largely depend on how much deference the court decides to give the EPA. The language used by the Supreme Court in the Michigan v. EPA opinion gave the D.C. Circuit “every opportunity” to choose the route of remanding the rule without vacating it, Blinderman said.
Blinderman said the EPA was smart to release its proposed supplemental finding in advance of oral argument to support its conclusion that cost analysis would not have changed the EPA's decision to issue the MATS rule.
“To me that was a brilliant strategic gambit ... It was a chess move,” Blinderman told Bloomberg BNA.
However, Blinderman said a D.C. Circuit decision to vacate the standards would represent a “stringing rebuke” for the agency. If the court decides to vacate the MATS standards, they could be requiring the EPA to start over on regulating power plant emissions, he said.
Lorenzen said the Supreme Court left many open questions on how the EPA should consider cost. While Lorenzen predicted that “differing views” on what the Supreme Court's decision means may be brought up during the Dec. 4 oral arguments, he said the D.C. Circuit may decide to “wait and see” what the EPA's final action on remand looks like before engaging on those issues.
Attorneys agreed that if the D.C. Circuit remands MATS back to the EPA without vacatur, there would be additional litigation over the final supplemental appropriate and necessary finding that EPA is working on.
Blinderman said the EPA's action on remand will “spawn another avenue of litigation” on the mercury standards, while Rubin said the Dec. 4 oral arguments could serve as a “kind of preview” of eventual arguments over how EPA conducted its cost analysis.
One potential legal issue identified by Rubin is the EPA's citation of its formal cost-benefit analysis for MATS, which counted co-benefits of the rule attributed to reductions of pollutants that were not directly regulated. While the Supreme Court's opinion in Michigan v. EPA did not weigh in on the use of co-benefits to justify regulations, Chief Justice John Roberts was critical of that process during March oral arguments (58 DEN A-1, 3/26/15).
Possible Implications on Climate Rules
Lorenzen said the D.C. Circuit's decision could have effects that reach far beyond the regulation of mercury and other hazardous air pollutants.
If the court were to vacate MATS, the EPA would be presented with some “very interesting choices” related to the Clean Power Plan, which limits carbon dioxide emissions from existing power plants, Lorenzen said.
Opponents of the Clean Power Plan (RIN 2060-AS47) have argued that the EPA does not have the authority to regulate carbon emissions from power plants under Section 111(d) of the Clean Air Act because power plants are already regulated by MATS under Section 112.
Lorenzen said if MATS were to be vacated, there would be many new questions on how that decision affects litigation over the Clean Power Plan and how quickly the EPA would act to re-promulgate Section 112 standards for power plants.
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Electric Utilities Warn EPA's MACT Cost Assessment Outdated, Unlawful
Dec 2, 2015 | InsideEPA
By Stuart Parker
Electric utilities opposed to EPA's maximum achievable control technology (MACT) air toxics rule for the sector are warning that the agency's proposed cost review for the rule -- designed to satisfy a Supreme Court mandate to weigh costs in determining the rule's necessity -- is outdated and unlawful, and say the MACT must be vacated.
EPA in the Dec. 1 Federal Register published its proposed finding that the air toxics rule is “appropriate and necessary” under the Clean Air Act, even with consideration of costs. The agency avoided a full cost-benefit review of regulating the utility industry with a MACT. Instead, it relied on a more limited assessment of implementation costs using existing data to say that it is still appropriate and necessary to regulate utilities with a MACT.
The proposal responds to the Supreme Court's 5-4 ruling from June in Michigan v. EPA that agreed with industry that the agency erred by not considering costs in its initial determination that crafting the utility MACT was appropriate and necessary. EPA said the law was not explicit on when it needed to weigh costs and said it considered costs in setting the actual emissions limits in the rule, but the justices said the cost review should have been done upfront.
The court remanded litigation over the rule back to the D.C. Circuit, which previously issued a 2-1 ruling in April 2014 in White Stallion Energy Center, LLC, et al., v EPA, that rejected all industry attacks on the rule.
The same three-judge panel is poised to hear oral argument Dec. 4 on motions to govern how to proceed in the suit. EPA is urging the court to leave the rule in place while it takes comment on the proposed cost finding and develops a final version, slated for issuance in May. But industry wants the court to vacate the rule.
In a Dec. 2 letter to the court, the Utility Air Regulatory Group (UARG) faults the agency's recent cost proposal, saying its reliance on old data means the finding is “frozen in the past” and therefore unlawful.
EPA argues that the cost finding satisfies the high court's requirement to weigh costs in deciding to regulate power plants under Clean Air Act section 112(n)(1)(A), a provision that is unique to electrical generating units (EGUs). But UARG disagrees, saying that the high court ruling undermines the entire basis for the rule.
UARG says that the “Supreme Court's decisional criteria governing [section] 112 (n)(1)(A) findings requires a new rulemaking record that supports a new threshold decision. EPA may not rely on an outdated record to justify EGU regulation at a cost that it says is 'per se reasonable,' regardless of amount.”
EPA has not followed Justice Antonin Scalia's majority opinion in Michigan, which requires EPA to determine whether air toxics regulation generally is “appropriate,” UARG says.
Instead, EPA in the cost finding adopts a narrower interpretation that the agency must consider costs in its decision on whether to “list” EGUs as a source category for regulation, UARG says. Industry legal sources have, however, indicated their view that the Supreme Court's opinion affords EPA a lot of “latitude” in its incorporation of costs into the appropriate and necessary finding.
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This is Awkward, Climate Edition
Dec 3, 2015 | National Journal
By Ben Geman
A House Republican who was carving out a reputation as one of the greener members of his party just got a little less green.
Rep. Chris Gibson, leader of a small GOP band urging more action on global warming, joined almost every other Republican lawmaker Tuesday in voting to kill the Environmental Protection Agency’s sweeping carbon-emissions rules for the nation’s power plants.
The vote was a surprise because Gibson in recent years voted against other GOP bills that would kill the regulations, which are a centerpiece of President Obama’s climate agenda.
But on Tuesday, he joined 237 other Republicans in support of a resolution that would halt the rules, which aim to cut carbon emissions from the nation’s existing fleet of power plants by 32 percent over the next 15 years.
Gibson did join Democrats in opposing a separate resolution that would have blocked a related EPA rule that sets carbon-emissions limits for newly built plants, but that rule is less consequential than the rule to slash pollution from the current fleet. Both measures passed.
The upstate New York Republican had won praise from some green groups for his votes earlier this year and in 2014 in defense of EPA’s rules.
Activists also cheered a resolution he introduced in September with 10 Republican cosponsors (an 11th signed on last month) that warns of the threats from climate change and calls for “economically viable and broadly supported private and public solutions.”
The League of Conservation Voters ran a digital ad campaign last summer thanking Gibson for voting against one of the GOP bills to derail the EPA power plant rules. EDF Action, which is the political arm of the Environmental Defense Fund, supported Gibson’s 2014 reelection campaign with a $234,000 TV ad buy.
The bills to kill EPA’s rules that cleared the House on Tuesday have also passed the Senate, but face certain vetoes. They’re part of an effort by GOP leaders to undercut the Obama administration’s negotiating position at the Paris climate talks by trying show that his emissions-cutting pledges are vulnerable back home.
Yesterday, Gibson and nine others who cosponsored his climate-change resolution voted in favor of thwarting EPA’s rules to cut emissions from existing power plants. Two—Robert Dold and Richard Hanna—voted with almost every Democrat in favor of upholding the rules.
The vote was a disappointment to EDF Action. “It’s unfortunate that they voted against the only plan for reducing pollution from power plants without having one of their own,” said Tony Kreindler, an official with the group. He declined to comment on Gibson specifically.
Tiernan Sittenfeld, a senior official with LCV, said the group is “perplexed” and “very disappointed” with Gibson’s vote, especially in light of his past leadership on climate change. LCV strongly supports EPA’s rule, called the Clean Power Plan, calling it a vital way to cut carbon emissions while offering states flexibility.
“Since Congressman Gibson acknowledges that climate change is real, it then begs the question of what solutions does he support?” she said.
Gibson says that a major element of EPA’s final regulation left him little choice.
It’s a wonky issue, but basically the rule requires states to create plans to slash power-plant carbon emissions within their borders. However, if states don’t craft their own plans, EPA has a version that it will require states to adopt, and that so-called “federal implementation plan” relies on cap-and-trade; that is, trading of pollution permits under an overall emissions limit. The rule also encourages states to explore carbon trading in the plans they craft on their own, but does not require it.
Gibson, however, dislikes cap-and-trade.
“While I have strongly and consistently supported the Clean Power Plan, and continue to do so, I cannot and will not support a proposal for a cap-and-trade system. Cap-and-trade is a dangerous policy fraught with the potential for significant corruption and it would hurt my constituents and our economy by raising energy costs,” he said in a statement.“I call on the Environmental Protection Agency to immediately recall the proposed rule for a federal plan and to reissue it without a cap-and-trade system as its foundation. I hope the EPA will listen to the many votes over the years in Congress opposing cap-and-trade and rescind that proposed rule,” he said.
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Comment Period Opens on Ozone Transport Proposal
Dec 3, 2015 | BNA Daily Environment Report
The Environmental Protection Agency will accept comments through Jan. 19 on a proposed rule that would require power plants in 23 states to achieve additional reductions in ozone precursor emissions. The proposed rule, released Nov. 17 and scheduled for publication Dec. 3, is intended to address nitrogen oxides emissions that interfere with the ability of downwind areas to meet the 2008 national ambient air quality standards for ozone of 75 parts per billion (222 DEN A-11, 11/18/15). The agency estimated the proposal (RIN 2060-AS05) would cover 913 power plants and cost the power industry $93 million in annual compliance costs starting in 2017. In addition to the public comment period, the EPA will hold a Dec. 17 hearing in Washington, D.C., on the proposal. Comments can be filed at http://www.regulations.gov under Docket No. EPA-HQ-OAR-2015-0500. A copy of the proposal is available at http://src.bna.com/bkR.
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