Preview Newsletter
ACC PM 12/16/15
-
(ACC Mentioned) U.S. Chemical Industry Renaissance Just Beginning, ACC Outlook Report Says
Dec 16, 2015 | Chemical Engineering
By Scott Jenkins
The business of American chemistry expanded 3.6 percent in 2015 despite global headwinds that included a strong appreciation of the U.S. dollar and a weakness in several key global markets, according to the Year-End 2015 Chemical Industry Situation and Outlook, a report released today by the American Chemistry Council (ACC; Washington, D.C.; www.americanchemistry.com). -
US Scientists Find Lung-Disease Compound in E-Cigarettes
Dec 16, 2015 | Chemical Watch
By Philip Lightowlers
A flavouring compound, implicated in an irreversible lung disease, has been found by US researchers in a large number of flavoured e-cigarettes. -
Echa Calls for Restriction on Lead Stabilisers in PVC
Dec 16, 2015 | Chemical Watch
By Geraint Roberts
Echa says there is a need to introduce a ban, in the EU, on the use of lead stabilisers used in PVC – possibly with an exemption for recycled products. -
A RoHS Approach in REACH?
Dec 16, 2015 | Chemical Watch
By Julian Schenten and Professor Martin Führ
The European Commission has launched a public consultation on its proposal to restrict 291 carcinogenic, mutagenic, reprotoxic (CMR) substances in textile articles and clothing for consumers. -
PTC: Extension Gives US Vital Breathing Space
Dec 16, 2015 | Railway Technology
By Gary Peters
With the original December deadline for installing positive train control systems across the US extended for a further three years, railroad companies have been given vital breathing space. So, how much work is yet to be completed and will the infrastructure be ready when the revised deadline looms? -
Omnibus Sets Deadline on DOT Oil Spill Planning Rule
Dec 16, 2015 | Politico Pro - Whiteboard
By Elana Schor
The $1.1 trillion spending deal released after midnight today gives the Transportation Department one year to finish work on rules that would require major crude-by-rail shippers to submit more comprehensive oil spill response plans. -
Paris Talks Shifted Emissions Trading Into High Gear
Dec 16, 2015 | E&E Climatewire
By Benjamin Hulac
The climate agreement that negotiators of 195 nations forged in Paris on Saturday represents significant advances for carbon pricing, the head of the International Emissions Trading Association said yesterday. -
Mayors Get Down to the Hard Part of the Paris Plan: Making It Work on Their Turf
Dec 16, 2015 | E&E Climatewire
By Camille von Kaenel
Mayors and staff from dozens of international and U.S. cities flew to Paris these past two weeks to trumpet their own efforts to cut back emissions as delegates from nearly 200 countries hashed out an agreement to do so internationally. -
Report Back from Paris: What the New Climate Deal Means – And Where We Go from Here
Dec 15, 2015 | Environmental Defense Fund
By Nat Keohane
The United Nations climate agreement in Paris, and the intense negotiations leading up to it, were a breakthrough in a number of important ways. -
Climate Policy Intact Though Agency Funding Stays Flat
Dec 16, 2015 | E&E Greenwire
By Amanda Reilly and Sean Reilly
The omnibus fiscal 2016 spending deal unveiled by congressional leaders last night would allow the Obama administration to go forward with a key international climate policy while keeping U.S. EPA's budget level. -
Sweeping Energy Deal Set for Spending Bill
Dec 16, 2015 | Politico Pro - Morning Energy
By Eric Wolff
After days of furious, up-and-down negotiations, congressional leaders yesterday agreed on the final terms of a massive energy deal that’s poised to hitch a ride on the must-pass legislation to fund the government until next fall. -
The Huge Political Horse Trade in the Budget That Will Change Where the U.S. Gets Its Energy
Dec 16, 2015 | Washington Post
By Steven Mufson
A deal on energy is playing a key role in the new budget proposal. -
Fla.'s Largest Utility Pushes State Toward Compliance
Dec 16, 2015 | E&E Energywire
By Kristi E. Swartz
Florida's largest electric utility wants the Sunshine State to comply with U.S. EPA's Clean Power Plan by requiring power plants to reach an average rate of emissions. -
Va. Stares Down Rough Road to Consensus on 'Trade-Ready' Carbon-Cutting Plan
Dec 16, 2015 | E&E Climatewire
By Emily Holden
Virginia's second meeting on the Clean Power Plan ended without consensus yesterday on some of the most basic compliance decisions the state must make. -
Industry Fights EPA Bid To Boost CISWI Air Rule Defense
Dec 16, 2015 | Inside EPA
Industry litigants are seeking to counter EPA’s use of a recent appellate court victory in a suit over an agency air rule to bolster its defense in pending litigation over its commercial and industrial solid waste incinerators (CISWI) emissions standards, saying EPA cannot rely on the opinion and erred by not raising it in briefing. -
Water Rule’s Foes Suffer Painful Blow with Defeat of WOTUS Rider
Dec 16, 2015 | Politico Pro
By Annie Snider
Efforts to block the Obama administration’s Waters of the U.S. rule in the year-end spending deal came up short Wednesday — the third and most disappointing legislative failure for opponents of the contentious regulation.
Industry and Association News
Chemical Management News
Chemical Security News - There are no clips to report at this time.
Transportation News
Energy and Environment News
-
(ACC Mentioned) U.S. Chemical Industry Renaissance Just Beginning, ACC Outlook Report Says
Dec 16, 2015 | Chemical Engineering
By Scott Jenkins
The business of American chemistry expanded 3.6 percent in 2015 despite global headwinds that included a strong appreciation of the U.S. dollar and a weakness in several key global markets, according to the Year-End 2015 Chemical Industry Situation and Outlook, a report released today by the American Chemistry Council (ACC; Washington, D.C.; www.americanchemistry.com).
“The U.S. chemical industry renaissance is just getting started,” said Kevin Swift, chief economist of the ACC and lead author of the trade group’s report. “The fundamentals are strong,” he added. “Key domestic end-use markets expanded, consumer spending accelerated, the job market began to firm, and households enjoyed extra savings from lower energy costs.”
Swift pointed to light vehicle sales, up 5 percent in 2015, and housing starts, up 12 percent in 2015, as two large, end-use markets that enjoyed banner years. Each light vehicle contains approximately $3,500 worth of chemistry, and each new home approximately $15,000 worth of chemistry products.
The annual publication forecasts a 2.9 percent increase in domestic chemical production in 2016, followed by a 4.4 percent expansion in 2017. During the second half of the decade, U.S. chemistry production is expected to expand at a pace of over 4 percent per year on average, outpacing that of the overall U.S. economy.
According to Swift, the momentum will continue as new capacity comes online in the next several years. As of December 15, 2015, more than 261 new chemical production projects had been announced since 2010 with a total value of more than $158 billion, and a full 34 percent already complete or under construction. “The United States is still the place for chemical companies to invest,” said Swift.
On a macroeconomic level, the global economy faltered in 2015 with geopolitical uncertainty and recessions in Brazil, Russia, Japan and other nations, as well as a pronounced slowdown in China. The economies of the United Kingdom and the Euro area advanced, as did that of the United States. U.S. GDP growth is expected to be in line with the underlying trend, about 2.6 percent. Growth is expected to moderate toward the end of the decade. For the business of chemistry, after a promising start top the year, it is likely that overall global production only advanced 2.8 percent in 2015, slightly lower than the 3.0 percent pace in 2014. Prospects will improve in 2016, with global output rising 3.3 percent, then gaining some momentum and hitting 3.7 percent in 2017. In the long-term, the most dynamic growth will be seen in the developing nations of Asia-Pacific and Africa and the Middle East. According to Swift, competitive advantages from shale gas will keep U.S. production strong as well, while these same issues, along with structural challenges, will cause Western Europe and Japan to lag helping the U.S. recapture global market share.
The business of chemistry is an $801 billion enterprise and one of America’s most significant manufacturing industries, accounting for more than 14 percent of all U.S. exports and 15 percent of the world’s chemicals. More than ninety-six percent of all manufactured goods are touched by products of chemistry.
Prepared annually by ACC’s Economics and Statistics Department, the “Year-End 2015 Chemical Industry Situation and Outlook” is the association’s annual review of the U.S. and global business of chemistry. It offers global and domestic chemical industry data related to production, trade, shipments, capacity utilization, R&D spending, capital spending, employment and wages.
-
US Scientists Find Lung-Disease Compound in E-Cigarettes
Dec 16, 2015 | Chemical Watch
By Philip Lightowlers
A flavouring compound, implicated in an irreversible lung disease, has been found by US researchers in a large number of flavoured e-cigarettes.
Diacetyl, or butane-2,3-dione, is an artificial flavouring, used to give foods a buttery taste. It is blamed for an occupational health complaint known as ‘popcorn lung’, named after workers at a microwave popcorn plant in Missouri, who developed the disease after being exposed to diacetyl vapour.
Popcorn lung, or bronchiolitis obliterans, is a life-threatening disease caused by inflammation and scarring of the lung. Symptoms include severe shortness of breath and a dry cough.
Researchers from the Harvard T H Chan School of Public Health in Boston conducted a survey of 51 different e-cigarettes with flavours like butterscotch, toffee and praline. They found that 39 contained diacetyl at levels of up to 239 micrograms per e-cigarette. Two chemically similar flavouring compounds, 2,3-pentanedione and acetoin, were also frequently detected in these products.
The US National Institute for Occupational Safety and Health (Niosh) has proposed an occupational exposure limit for diacetyl and 2,3-pentanedione (CW 7 January 2014).
However, the Harvard scientists conclude in a paper in Environmental Health Perspectives that these limits were not designed to protect the general public or children. The limits assume healthy workers and do follow the usual US precautionary lower risk levels of 1 in 100,000 to 1,000,000 against adverse effects. Further research on the effects of these compounds is needed, they warn.
-
Echa Calls for Restriction on Lead Stabilisers in PVC
Dec 16, 2015 | Chemical Watch
By Geraint Roberts
Echa says there is a need to introduce a ban, in the EU, on the use of lead stabilisers used in PVC – possibly with an exemption for recycled products.
A risk management option analysis (RMOA), conducted by the agency and published on its site on 11 December, concludes that there is a need for a restriction to be introduced under REACH.
The European Stabiliser Producers Association (ESPA), whose members account for more than 95% of the stabiliser industry in Europe, says it is on course to substitute lead-based stabilisers in PVC across the EU, by the end of this year.
But a restriction would also apply to any EU companies not signed up to the ESPA’s voluntary target, as well as imported PVC products.
According to the ESPA, lead-based compounds have traditionally been used in many parts of the world to stabilise rigid PVC for construction industry products such as pipes, fittings and window frames, and in flexible PVC, mainly for wires and cables.
The RMOA notes that lead and lead compounds are classified, under the CLP Regulation, as category 1A substances toxic to reproduction, are toxic following prolonged and repeated exposure, and are hazardous to aquatic life.
There are nine lead compounds on the candidate list, which are potentially used as stabilisers, says Echa. Two of these were included in the agency’s draft seventh recommendation for Annex XIV (CW 18 November 2015).
Calcium-based stabilisers can be used as alternatives to those that are lead-based. Echa says it is possible to make the switch without making major changes to processing machinery, and that the lead industry has told it that the cost difference is very low.
The RMOA says a study, conducted for the PVC industry, concluded that a general concentration limit of 0.1% of lead in PVC – and with no exemptions for recycling – would lead to job losses and higher costs in the PVC recycling industry. But if an exemption was granted for construction products made from recycled PVC with a 1% lead concentration limit, there would be very little impact.
The potential scope of any restriction could include the use of lead stabilisers in PVC and in PVC articles, says the RMOA. But this would need further investigation as some PVC consumer articles will already be covered by the restriction on lead in articles, such as garden hoses, that children can place in their mouths. It would also need to be decided if all, or just certain, lead compounds are covered.
However, the RMOA says “issues, such as recycling, will need to be further considered in any final proposal, with the possible inclusion of a suitable exemption.” This could prove as controversial as the authorisation applications for recycled PVC, containing the phthalate plasticiser DEHP (CW 25 November 2015).
-
Dec 16, 2015 | Chemical Watch
By Julian Schenten and Professor Martin Führ
The European Commission has launched a public consultation on its proposal to restrict 291 carcinogenic, mutagenic, reprotoxic (CMR) substances in textile articles and clothing for consumers.
The consultation aims “to collect information on the presence, or likelihood of presence, of the identified CMR substances in relevant consumer articles and, in so far as is possible, also gather information on their concentration, function and on the availability of alternatives.”
However, this ‘fast-track’ restriction, pursuant to Article 68 (2) of REACH (introducing new, and amending current, restrictions) is limited to CMR categories 1A and 1B, thus excluding highly textile-relevant substances with persistent, bioaccumulative and toxic (PBT) or endocrine disrupting (ED) properties.
And even if all proposed restrictions enter into force, a high number of consumer articles will still contain substances of very high concern (SVHCs).
The reason for this alarming situation is quite simple: the protective effects of the REACH authorisation regime do not apply to imported articles. And most of those products, including toys and other presents to be found under the Christmas trees all over Europe, are manufactured abroad.
Thus, the question arises how to close this regulatory gap, taking into account the 2019 REACH Review.
Here, we summarise the recent debate and argue for a solution, based on the experience gained from the EU Directive on the Restriction of Hazardous Substances (RoHS) in electrical and electronic equipment. This offers a third option, beyond the choice between authorisation and restriction.
The case of SVHCs in (imported) articles
European legislation, including REACH, strives for a high level of protection of human health and the environment. Accordingly, SVHCs are subject to special attention.
However, a closer look at the provisions of REACH reveal issues concerning the regulation of SVHCs in imported articles. REACH establishes an authorisation requirement, included in Annex XIV (authorisation list) of REACH.
Pursuant to Article 56(1) of REACH, EU actors in the supply chain, including producers of articles, are not allowed to use such substances, unless this use is exempt from the authorisation requirement. Or if the actor, or their supplier, obtained an authorisation for that use.
The ban enters in force from a specified sunset date. To lift the ban, applicants are obliged to prove, prior to use, that the risks, posed by the substance, are adequately controlled or that the socio-economic benefits outweigh them. However, in cases where the same substance is incorporated in an article, outside the EU, the ban does not apply.
This legal omission might undermine the Regulation’s consumer and environmental protection goals. SVHCs, therefore, are likely to be found in most products, used in private homes, such as furniture, textiles, toys, books or electronic devices.
Moreover, from an economic perspective, domestic articles being subject to stricter requirements than those produced abroad, puts actors from within the EU at a competitive disadvantage. This, too, impedes the REACH objective of encouraging competitiveness and innovation.
Options for the regulator
To overcome this regulatory gap, the legislation includes an interface between the REACH authorisation and restriction schemes. Article 69(2) of REACH says that Echa “shall consider whether the use of REACH Annex XIV SVHCs in articles poses a risk to human health or the environment that is not adequately controlled.”
If this is the case, the substances may become subject to restrictions, irrespective of their origin. However, according to the legal text, Echa assesses the risks of SVHCs in articles only “after” the sunset date, provided for in the authorisation requirement, therefore, postponing regulatory action.
Moreover, a restriction may only be imposed if the agency has evidence that the risks, posed by the use of an SVHC, are not adequately controlled. The authorisation requirement, in contrast, is linked foremost to its hazard potential. Under these, the authorities, adding a substance to Annex XIV, do not have to refer to a specific risk and the question of whether it is “adequately controlled” or not is irrelevant. Consequently, the burden of proof lies with the applicant seeking authorisation.
In order to assure the level of protection, another option [to close the regulatory gap] could be to extend the legal effect of Annex XIV to SVHCs present in imported articles. A legal appraisal was published by the research group sofia, on behalf of the German Federal Environment Agency (UBA), in April (CW 30 April 2015). This determined that such an extended authorisation scheme would be consistent with the specifications of international trade and economic law, arising from the relevant World Trade Organization‘s (WTO) Technical Barriers to Trade (TBT) agreement.
By using this option, “domestic” and imported articles would be treated equally with positive effects, not only for human health and the environment, but also for the competitiveness of EU-based producers.
However, reservations, regarding the administrative feasibility of extending the authorisation requirement, have been expressed. According to Article 60 of REACH, the European Commission is responsible for deciding on applications for authorisations, supported by opinions by Echa’s Committees for Risk Assessment (Rac) and Socio-economic Analysis (Seac).
While applicants for authorisation of the same uses of a substance can group together, concerns have been voiced that, due to confidential business information (CBI) constraints or mere ignorance of the grouping option, only few companies would choose this. From the EU perspective, the administrative burden for Echa and the European Commission of an extended authorisation scheme could be significant.
The REACH restriction scheme, in contrast, allows all relevant prohibitions and exceptions to be regulated by means of one single legislative act, thereby avoiding complex case-by-case decisions.
However, compared to the authorisation scheme, and with a view to restrict SVHCs in (imported) articles, imposing restrictions has proved, in the last 10 years, a much more sluggish process. And, more importantly, it places the burden of proof “that the risk is not adequately controlled” on the strained shoulders of the authorities.
As a consequence, both approaches are not optimal, either in respect to their administrative burden or to their protective benefits. The question of alternative regulatory strategies, therefore, arises again. The state of the art in the implementation of the RoHS Directive deserves a closer look.
Reconciling approaches
RoHS restricts the use of hazardous substances, listed in Annex II of the Directive, in electrical and electronic equipment. However, economic operators in the supply chain may apply for an exemption from Annex II and, once granted, can invoke it.
In practice, most of the applications for exemptions are submitted by trade associations. Before amendments to the Annexes are possible, the Commission, technically assisted by external experts (recently the German Öko-Institut and Fraunhofer IZM), initiates a public consultation to determine whether the exemptions are justified due to, for example, absence of reliable substitutes.
More specifically, the consultations build on a two-tier approach, in which all relevant actors, such as economic operators, including competitors of the applicant, environmental organisations as well as trade unions and consumer associations, are notified via email about its launch and submitted contributions.
In addition, the external experts are actively seeking evidence on the alternatives available to substitute the problematic substance.
It is worth considering a similar process in the REACH context: the agency announces the EU‘s intention to restrict a substance and asks manufacturers and users to submit evidence on how the risks are adequately controlled and monitored, which might, therefore, justify a (temporary) exemption from the restriction.
One parallel to RoHS would be that all economic operators benefit from efforts of joint argumentation. This approach would, at least to some extent, shift the burden of proof to the economic operators before the standard restriction procedure, set out in Articles 69 to 73 of REACH, including another public consultation, starts.
This procedural approach could reconcile the ‘authorisation versus restriction’ discussion, by combining advantageous features of both instruments; with a scope not limited to the regulation of SVHCs in imported articles.
No legislative changes of the REACH Regulation are necessary to establish a respective two-tier consultation approach. It would, however, remain an informal procedure, comparable to the ‘call of evidence’ and the analysis of risk management options (RMOAs) that are already in practice, before regulatory measures are taken.
To yield a knowledge base that allows Echa to establish risk “not adequately controlled” in terms of the restriction regime (Article 69(1) REACH) and, at the same time, ensures that “adequately controlled” uses are not subject to the ban, a second parallel to RoHS appears advisable. The agency should learn from the experience of the Directive and actively approach potentially relevant “third parties”, instead of passively offering the opportunity to get involved via internet consultation. This approach would contribute to another aim of REACH, a stimulus to innovation.
In the end, the legislator is able to avoid a difficult situation: it is not the choice between Scylla and Charybdis (enhanced authorisation or restriction); it is worth considering a third option as well: a smart combination of restriction and exemption, without neglecting the benefits of the other options.
-
PTC: Extension Gives US Vital Breathing Space
Dec 16, 2015 | Railway Technology
By Gary Peters
With the original December deadline for installing positive train control systems across the US extended for a further three years, railroad companies have been given vital breathing space. So, how much work is yet to be completed and will the infrastructure be ready when the revised deadline looms?
In 2008, the Rail Safety Improvement Act, passed by Congress, put into practice a series of provisions. One of these was to have positive train control (PTC) systems installed on passenger railroads and Class 1 freight railroads on main lines used to transport passengers or toxic-by-inhalation (TIH) materials, by December 2015.
The mandate for PTC followed the Chatsworth train collision, in which a freight and commuter train collided, killing 25 people. In May, an Amtrak train derailed, again with significant casualties.
But now, with the scale of work apparent, the decision has been made to extend the deadline by three years.
Ed Greenberg, a spokesperson for the Association of American Railroads (AAR), says the industry had been telling Congress "for years that the original deadline was simply impossible to meet", and adds that it was "arbitrarily set and unfortunately in 2008, lacked the appreciation of how complex and challenging the mandated-PTC system was going to be".
This change in safety operations is vast; the AAR says it represents an "unprecedented technological challenge, on a scale that has never been attempted anywhere in the world". From a freight railroad perspective, it includes geo-mapping of more than 82,000 track-miles, as well as installing PTC technology on more than 22,000 locomotives.
"It is not off-the-shelf technology," says Greenberg. "It has had to be developed from scratch."
A welcome extension
The new legislation also allows the transportation secretary to put in place further extensions of up to two years for individual railways on a case-by-case basis.
When announcing the extension, Congresswoman Elizabeth Esty said: "Railroads are not ready to meet the deadline. And we can spend a lot of time blaming each other about why that is true, but my interest is in trying to get them on track as soon as possible."
Greenberg says: "Congress is to be commended for appreciating that more time was needed for the industry to fully develop, install, test and validate PTC, so it is fully operational across the US. Safety is built into every aspect of the rail industry and is a 24/7 focus."
This welcoming of the extension shouldn't be taken as a lack of action from the railroads, however.
Niren Choudhury, director of transportation, Americas at Alcatel-Lucent, says it is clear that there is full backing for PTC implementation from across the industry. "Everybody thinks that it should be done, because it's a matter of life. Everybody wants to save lives," he says.
Such commitment has seen around $6bn spent on PTC installation so far. When fully implemented in all its forms, this is expected to reach £10bn.
Safety is top priority
When looking at the complexities of PTC, it is clear that this huge financial backing is fundamental.
As a whole, PTC refers to technologies that are designed to automatically stop trains. A fully fledged PTC system will determine the location, direction and speed of trains, warn train operators of potential problems, and take action if the operator does not respond to the warning provided.
Federal accident investigators have stated that the technology could have prevented the Amtrak incident. Amtrak does have PTC in operation on its Northeast corridor, but not along the section of track where the train derailed.
"There will be one standardised system that is interoperable on both freight and passenger railroads," explains Greenberg.
"PTC technology that will be installed are overlay systems, meaning they will supplement existing train systems and safety protocols and technology already in place."
Despite its supplementary nature, PTC is no doubt a revolutionary jump forward. The system will have to analyse and incorporate a number of factors, such as speed, terrain, weight and length, and the number of locomotives, as well as upgrades to signaling and the implementation of wayside interface units, which will transmit information to locomotives and train dispatching offices from signal and switch locations along the right-of-way.
Edward R Hamberger, president and chief executive of the AAR, has written about this, stating back in 2013: "To make PTC work, freight railroads will use advanced signalling systems that require the installation of about 22,000 antennas, which requires Federal Communications Commission approval."
Track by track, step by step
How much of this mammoth task has been completed? Figures from the AAR show that, as of mid-2015, 14,300 locomotives were at least partially equipped with PTC; 22,000 will require it, while 19,000 wayside interface units had been deployed.
The Federal Railroad Administration states that Class 1 railroads have completed the majority of track mapping and completed - in some cases partially - PTC installation on more than half of the locomotives that will need it.
At the time of writing, Union Pacific has the necessary PTC hardware on 70% of its 6,500 locomotives, a process it expects to complete by next year, and hardware and software on 67% of its 20,000 miles of track. Metrolink has also begun PTC testing on its San Bernardino Line.
These statistics, along with the American Public Transportation Association's projection that only 29% of commuter railroads could feasibly complete PTC installation by the end of the year - full implementation is in fact expected in 2020 - underscore the necessity of the deadline.
Choudhury, who says that it's possible there will be "some spill over to 2019 of a few months", is working with Norfolk Southern, which has a 34,600km network, to upgrade its communication platform to IP/MPLS to give PTC the best chance of success.
"IP/MPLS is ideally suited to support PTC because it offers a single converged infrastructure with high network availability and resiliency ... [including] through native security services such as non-stop routing," says Choudhury.
This single infrastructure is deemed vitally important, as new radio systems designed for data transmission requirements are key parts of the PTC deployment.
And, while the intentions behind PTC and the commitment behind it are not in doubt, there's certainly a sense of relief that time is now on the industry's side.
"Much remains to be done before the system is fully installed, tested and operational across the country," says Greenberg. "[But] the rail industry will continue going all out to ensure PTC is fully developed, installed, tested and validated, so that when this complex technology is turned on across the country it works and enhances safety."
Ultimately, that is the conclusion to which everyone is now striving towards.
-
Omnibus Sets Deadline on DOT Oil Spill Planning Rule
Dec 16, 2015 | Politico Pro - Whiteboard
By Elana Schor
The $1.1 trillion spending deal released after midnight today gives the Transportation Department one year to finish work on rules that would require major crude-by-rail shippers to submit more comprehensive oil spill response plans.
The bill's year-long deadline to finalize regulations that "expand the applicability of oil spill response plans" also includes a 90-day deadline for DOT to start the process and comes after a year of intense scrutiny by the Obama administration of oil train safety.
DOT finalized a crude-by-rail rule in May, but oil trains currently are not subject to the same spill-response planning requirements that pipelines are.
A Democratic aide said that DOT was already expected to complete work on the regulations, which were first floated last year, within the time frame that the spending deal sets.
-
Paris Talks Shifted Emissions Trading Into High Gear
Dec 16, 2015 | E&E Climatewire
By Benjamin Hulac
The climate agreement that negotiators of 195 nations forged in Paris on Saturday represents significant advances for carbon pricing, the head of the International Emissions Trading Association said yesterday.
"We were extremely satisfied to see an openness to markets," Dirk Forrister, chief executive of IETA, said on a call yesterday morning, referring to the deal's final language.
"This is a breakthrough for us in the markets world," he said. "This is the signal that the business community was looking for."
Article 6 of the Paris accord includes two provisions to encourage nations to use emissions trading markets, said Nat Keohane, vice president for global climate at the Environmental Defense Fund.
"This is one of those provisions in the agreement that didn't get a lot of attention" but could leave a strong legacy, Keohane said.
The Kyoto Protocol, signed in 1997, established a top-down market for emissions, he said. But carbon markets have flagged, and the largest such market, in the European Union, has a glut of outstanding credits, limiting its effectiveness.
One provision notes that some countries may want to tap into carbon markets independently to achieve their greenhouse gas reduction targets, while the other acknowledges that governments may want to pursue "cooperative approaches that involve the use of internationally transferred mitigation outcomes toward nationally determined contributions."
85 nations plan for pricing greenhouse gases
Jeff Swartz, international policy director for IETA, said "internationally transferred mitigation outcomes" was the term for carbon trading. The language, he said, will be influential and ensures that carbon credits won't be counted twice.
"So finally, the carbon markets have a home in the UNF-triple-C," Swartz said, referring to the U.N. Framework Convention on Climate Change. "This is an international framework."
IETA, an advocacy group backing emissions trading, wrote in October to Christiana Figueres, the executive secretary of the UNFCCC, lobbying for provisions that would encourage the linking of carbon markets.
More than 85 nations said in their climate pledges that they wanted to access some type of emissions trading marketplace that would put a price on greenhouse gases, according to Swartz.
The New Zealand delegation issued a declaration this weekend in Paris in favor of more ambitious carbon markets. Eighteen nations supported the declaration, officials said.
"New Zealand wants to ensure development of a strong and robust global carbon market that has environmental integrity," Climate Change Issues Minister Tim Groser said in a statement. "The declaration signals the importance of markets in implementing the new agreement."
On Twitter, David Hone, the climate change adviser for Royal Dutch Shell PLC, one of several major oil and gas companies that have said they want a price on carbon emissions, lauded Article 6 over the weekend.
-
Mayors Get Down to the Hard Part of the Paris Plan: Making It Work on Their Turf
Dec 16, 2015 | E&E Climatewire
By Camille von Kaenel
Mayors and staff from dozens of international and U.S. cities flew to Paris these past two weeks to trumpet their own efforts to cut back emissions as delegates from nearly 200 countries hashed out an agreement to do so internationally. Now, with the final U.N. text signed, local leaders are trying to figure out how to build on global momentum back at home.
Green buildings or low-carbon public transportation won't take the world all the way to its emissions reductions goals -- but, city leaders say, they can get it partway.
"We are a force multiplier, if we help cities around the world do the same," said Austin Blackmon, the chief of environment, energy and open space for the city of Boston.
Urban areas account for around 70 percent of energy-related greenhouse gas emissions and house half of the world's quickly rising and urbanizing population, according to United Nations estimates. They are also feeling some of the most acute effects of climate change, like storm surges and flooding in coastal cities.
Hundreds of cities have already taken steps to cut emissions independently of national or international policies. That earned them a nod in the final deal text and a nudge from U.N. Secretary-General Ban Ki-moon. He told the mayors: "Your example can inspire national governments to act more boldly. ... You are the ones who will help turn this global agreement into reality on the ground."
Closing the emissions gap
In Paris, countries committed to keeping global warming below 2 degrees Celsius, but the plans they've put forward don't achieve that yet. And the international deal does not come into full force until 2020.
Cities can help bridge the gap, said Brendan Shane, the regional director for North America for the C40 Cities Climate Leadership Group.
Commitments cities have already made could lead to a drop in emissions of around 3 gigatons of CO2 by 2030, equivalent to the annual carbon output of India, according to a recentanalysis by C40. With ambitious steps, another analysis says that number could be pushed to 3.7 gigatons. That represents around one-third of the reductions still needed to reach 2 C of warming.
"Everyone knows there's gaps that still need to be filled," Shane said. "How quickly this happens will be one of the most fascinating questions coming out of the talks."
Shane is now focusing on rallying representatives from the State Department, the White House and cities in his network to follow through on the momentum from the summit. Aligning private-sector support -- like the new investment initiative Breakthrough Energy Coalition, launched by Bill Gates and other technology billionaires -- and federal support with current city actions will be key to following through on the Paris deal, he said.
"It's really going to be tough, nobody has the silver bullet," Shane said. "The message that came across quite clearly from Paris is that you've got to all move together."
Global networking in Paris City Hall
Cities banded together to share ideas, set emissions targets and meet them. Since the Compact of Mayors began a year and a half ago, 432 cities representing more than 377 million people have signed on.
They have made various pledges to seek out more renewable energy, spread clean transportation and boost building energy efficiency and must report back as they approach their goals. Michael Bloomberg, the U.N. secretary-general's special envoy for cities and climate change who helped spearhead the coalition, has called the system a template for international negotiators.
He helped host a Climate Summit for Local Leaders at the Paris City Hall with Paris Mayor Anne Hidalgo during the negotiations. Many mayors have long been collaborating through a variety of initiatives, like the E.U.-based Covenant of Mayors or C40 Cities.
Tommy Wells, the director of the Department of Energy & Environment in Washington, D.C., came away inspired by Copenhagen, Denmark's sustainable design efforts, including building a fully carbon-neutral district. The city of Washington is focusing on getting as much energy from renewable sources as possible and signed the largest municipal power purchase agreement with a wind farm earlier this fall. That sent a signal to negotiators in Paris, Wells said.
"We've got a country that's still debating climate change," Wells said. "As our nation's capital, it's important our city show leadership."
But city leaders also acknowledged they can't do everything on their own.
Boston, for example, has a target of reducing greenhouse gas emissions 25 percent by 2020 and 80 percent by 2050. Its efforts pursuing energy efficiency with building standards and retrofits and community engagement earned it a C40 award at the summit.
"We want to be mindful of what we want to implement and make sure it's cost-effective," said Blackmon, the environment chief for Boston. "Financing of energy solutions, whether it's coming up with innovations in clean energy or carbon capture, that's something that will be more difficult for the city of Boston to really inspire."
Austin, Texas, Mayor Steve Adler, who also went to Paris, agreed. His city has long embraced solar energy, pursuing a 55 percent renewable target by 2025 (EnergyWire, Dec. 15, 2014).
"When there is federal backing for a priority, resources flow to it. More innovation and research would happen than we can do on our own," Adler wrote in an email. "Local jurisdictions can make up their own climate rules but if the state decides they have gone too far they can act to take away that power."
Buoyed by environmentally friendly sentiment and California's advanced climate policies, Oakland has likewise taken strong steps to address climate change, including a recently passed green building ordinance, and Mayor Libby Schaaf flew to Paris to share that story. Yet the shipping of coal through the city remains a contentious issue (ClimateWire, Sept. 22), and one the city has little jurisdiction over, Schaaf said.
"It's an issue a lot of port cities and cities that have goods move through on rail or freeways are struggling with," Schaaf said. "It's hard for cities to directly impact those things, and that's why it's so important that this awareness not be just at the local level but percolate up to federal leadership."
-
Report Back from Paris: What the New Climate Deal Means – And Where We Go from Here
Dec 15, 2015 | Environmental Defense Fund
By Nat Keohane
The United Nations climate agreement in Paris, and the intense negotiations leading up to it, were a breakthrough in a number of important ways.
First of all, the agreement represents the coming of age of climate diplomacy. It was evident from the beginning that French Foreign Minister Laurent Fabius, who chaired the talks, had the full trust and confidence of the room.
He artfully identified a zone of agreement among 196 delegations that gave nearly everyone something they wanted without crossing red lines.
The agreement was also the culmination of months of bilateral diplomacy at the highest levels, most visibly between the U.S. and China. The direct involvement of President Obama and other world leaders was critical to success – and shows a strategic savvy and leader-level involvement that we haven’t seen in past climate talks.
But it’s the language of the agreement itself, and the broad backing it received, that makes it such a big deal. It means that we now have a chance – not a guarantee, but a chance – to put the world on a healthier path.
What COP21 achieved
We know that the COP21 commitments so far will not deliver all the emissions reductions we need. That’s why the heart of the deal is the process it establishes to review countries’ progress toward meeting their commitments, and to ratchet up ambition over time.
The Paris deal:
Lays out a common, transparent, and legally binding framework for countries to report their emissions regularly and undergo a technical expert review.
Includes regular assessments and strengthening of commitments every five years, beginning in 2020.
Includes strong provisions against double-counting of emissions reductions, to make sure that every ton of emissions reductions is only counted once — a critical safeguard for environmental integrity.
That strong framework for transparency and review is critical because it will provide the accountability needed to keep pressure on countries to meet their commitments. And it will send a strong signal to energy producers, world markets and governments that the future lies in clean energy.
As a result, it will drive investments, policy choices and a fundamental shift in decision-making. As an economist, I’ve seen it over and over again: Once strong rules are in place, the money follows.
188 countries, 99% of emissions onboard
Critics have complained that the deal does not penalize countries that don’t meet their emission targets. But the greater flexibility inherent in that non-binding approach made possible the most striking aspect of the Paris outcome: the broad participation underlying the agreement.
As of today, 188 countries covering almost 99 percent of global emissions have submitted commitments to take action on climate. Joining them were more than 120 states, provinces and cities that made strong commitments of their own – along with many of the world’s largest companies.
The Paris conference did not create this wave of momentum on climate action – but it will provide an important boost to keep it going.
With an eye toward markets
The unsung hero of the agreement, meanwhile, is a set of provisions that encourages the use of markets to drive up investment in clean energy and drive down pollution.
You won’t find the word “markets” in the text. But that is what the agreement is referring to, when it lays out clear rules for “cooperative approaches that involve the use of internationally transferred mitigation outcomes.”
By affirming a role for this powerful tool, the agreement recognizes the realities already on the ground, where emission trading systems are already at work in more than 50 places that are home to nearly 1 billion people.
What’s more, the deal strikes the right balance between “bottom-up” and “top-down.” Carbon markets will continue to be driven and shaped by national priorities. The UN’s role will be limited to providing clear guidance to ensure that when countries choose to use markets internationally, the emissions reductions are correctly tracked and accounted for.
The role of markets may not be in this week’s headlines – but a decade from now, it will be one of the enduring legacies of Paris.
Next: Keeping up the pressure
Over the course of the two-week long conference, I and my colleagues from Environmental Defense Fund walked the halls and worked the delegation rooms, talking with reporters, negotiators and fellow activists.
We pushed for accountability, transparency, forest protection, an opening for markets, regular strengthening of national commitments – and, above all, for an agreement that would actually make a significant difference for the climate.
Together, we made progress because the nations of the world – developed and developing, north and south, large and small – moved beyond the old excuses for delay and pledged substantial cuts in the pollution that is damaging our climate.
When Fabius finally brought the gavel down on Saturday evening, formally adopting the agreement, I was sitting with hundreds of other attendees in a packed meeting room at the conference site, watching on closed-circuit TV.
We were bone-tired after a week of late nights and little sleep, but the mood was ebullient.
Three days later, the exhaustion has begun to fade. But the ebullience remains, along with the sense that we were witness to a transformative moment.
Now it’s up to all of us to keep up the pressure on nations – and to deliver on the promise of the Paris agreement.
-
Climate Policy Intact Though Agency Funding Stays Flat
Dec 16, 2015 | E&E Greenwire
By Amanda Reilly and Sean Reilly
The omnibus fiscal 2016 spending deal unveiled by congressional leaders last night would allow the Obama administration to go forward with a key international climate policy while keeping U.S. EPA's budget level.
The bill would not explicitly prohibit the United States from funding the Green Climate Fund, a U.N.-launched fund to provide developing countries with money to curb their greenhouse gas emissions and address the effects of warming.
EPA would receive $8.1 billion, with the Superfund program also remaining stable and state revolving funds for water and sewer construction projects absorbing a slight cut.
While decrying congressional leaders' lifting of the 40-year-old crude oil ban, environmentalists are celebrating the decision to exclude a rider barring funding for the GCF, as well as other riders aimed at EPA programs.
"We're not celebrating something that happened," said Karen Orenstein, senior international policy analyst at Friends of the Earth. "We're celebrating something that didn't happen."
Climate funding
Last year, President Obama promised the international community ahead of the recently completed climate talks in Paris that the United States would provide $3 billion over four years for the Green Climate Fund. The president's fiscal 2016 request would have provided $500 million toward that total.
As the Obama administration headed to Paris to negotiate the new climate change agreement, congressional Republicans warned that they would exercise the "power of the purse" and seek to block the international climate aid.
While it did not directly appropriate money for the fund, the $1.1 trillion spending deal agreed to by congressional leaders early this morning -- just days after nations agreed to a historic climate deal in Paris -- would allow the Obama administration to use discretionary funding for its share of the GCF.
"This is a rebuke to those congressional extremists who tried to play politics with desperately needed money to help the world's poor take climate action," Orenstein said. "Morality and reason, rather than science-denying isolationism, prevailed in this case."
Orenstein said she would not rule out a scenario in which the administration provides its full $500 million request but said that the actual amount will remain unknown for some time. The most likely pot of money for the Green Climate Fund is the State Department's Economic Support Fund, Orenstein said.
According to policy consultant Paul Bledsoe, a former Clinton administration climate adviser, the deal's extension of wind and solar tax credits moreover represents the "first new policy helping to achieve the U.S. emissions targets made in Paris."
"This budget and tax deal shows that despite the partisan rhetorical firebombs on climate," Bledsoe said, "the transition toward a lower-emissions U.S. energy economy has become a business and investor reality which members of Congress on both sides must respond to."
Conservative organization the Heritage Foundation today characterized a vote for the omnibus as a vote for the Paris climate deal and urged members of Congress to oppose the deal in a "key vote" alert.
"The bill does not explicitly prohibit the administration from funding the Green Climate Fund, which was seen as a major priority for the left on the heels of the recent Paris agreement," the Heritage Foundation said in the alert.
The omnibus would provide about $171 million to the Clean Technology Fund and $50 million to the Strategic Climate Fund, two World Bank funds. Because those funds are due to soon sunset, it's possible that some of the money in those funds will shift to the Green Climate Fund.
The spending deal would also provide $168 million to the Global Environment Facility, which provides grants and financing for climate projects. It would allow the United States to contribute up to $10 million to the Intergovernmental Panel on Climate Change and the U.N. Framework Convention on Climate Change.
Congressional leaders, however, did not provide the Obama administration with several key climate asks, including a new infrastructure fund to benefit states that go above and beyond complying with the Clean Power Plan. The White House had requested $4 billion in addition to its proposed discretionary budget for the program. EPA had also requested additional grant money to help states write Clean Power Plan implementation strategies.
The omnibus would also bar any funding from being used to pay the salary and expenses of the position of assistant to the president for energy and climate change. Obama would be required to provide a comprehensive report to Congress on all government funding for climate change 120 days after the administration submits its fiscal 2017 budget request.
EPA
For fiscal 2016, Obama had proposed giving EPA its first overall budget increase in several years.
In that request, Obama had asked lawmakers to give EPA about a 6 percent increase to almost $8.6 billion in comparison with the preceding year. Under that umbrella, environmental programs and management would have risen from $2.6 billion to $2.8 billion; Superfund spending would have climbed slightly to $1.15 billion; and state and tribal assistance grants would have gotten a small boost from $3.55 billion to $3.6 billion.
Instead, the omnibus bill released last night would keep the Superfund approximately at last year's $1.09 billion benchmark, while state and tribal assistance grants would be pared to $3.52 billion. Environmental programs and management would remain at $2.6 billion. In opting to nick the popular Clean Water and Drinking Water state revolving funds by about 1 percent to $2.3 billion, the bill follows the White House's request.
In a summary, the House Appropriations Committee touted the legislation for keeping EPA's budget below its fiscal 2010 threshold and noted that the size of the agency's workforce is at its lowest level since 1989.
For Rep. Gerry Connolly, a Northern Virginia Democrat whose district includes a heavy share of federal workers, that austere approach has left him undecided on whether to support the bill.
"Unfortunately, the Republican majority continues to disinvest in personnel and resources in agencies they philosophically don't like," Connolly told reporters this morning, mentioning EPA, the IRS and other regulatory bodies. "We ought not to be running government that way. These are established agencies, and they need to be funded adequately. We've been starving both of them, and regulatory bodies, for the entire time they've been in the majority."
House and Senate appropriators bucked Obama's attempts to trim spending on the Diesel Emissions Reduction Act (DERA) program and the Great Lakes Restoration Initiative. The White House had sought to cut DERA from $30 million in fiscal 2015 to $10 million; the bill would boost funding to $50 million. The measure would also keep funding for the Great Lakes program stable at $300 million; Obama had proposed paring funding to $250 million.
According to the Appropriations Committee summary, other provisions would:
Bar EPA from regulating lead content in ammunition or fishing tackle;
Exempt livestock producers from greenhouse gas regulations;
And strengthen congressional oversight of the agency's review of mining permits.
In a reminder of the continuing fallout from the August spill at the Gold King mine in Colorado, EPA will have to work with affected states and tribes to develop "a robust, long-term plan for independent monitoring," according to a report accompanying the omnibus measure. And in the wake of the Government Accountability Office's conclusion this week that EPA officials broke the law in attempting to drum up support for the controversial Waters of the U.S. rule (E&ENews PM, Dec. 14), the agency must work with the Office of Management and Budget to make sure that the GAO findings are distributed to communications offices governmentwide.
-
Sweeping Energy Deal Set for Spending Bill
Dec 16, 2015 | Politico Pro - Morning Energy
By Eric Wolff
After days of furious, up-and-down negotiations, congressional leaders yesterday agreed on the final terms of a massive energy deal that’s poised to hitch a ride on the must-pass legislation to fund the government until next fall (Republican summary here, Democratic summary here). As ME readers know, Republicans have jostled for leverage over emboldened Democrats who insisted on a high price in exchange for agreeing to end the oil export ban — and it looks like the GOP mostly gave in to President Barack Obama’s party.
What’s in the deal? In addition to unrestricted oil exports for the first time since the 1970s, the spending deal is also set to include a five-year extension of the production tax credit for wind energy with a phaseout to 40 percent by 2019, as well as a five-year ratcheting down of the investment tax credit and the “commence construction” eligibility that solar producers craved. The Land and Water Conservation Fund would see a three-year restoration following its expiration in September. The bill funds the EPA at $8.1 billion, which is down $100 million from last year, and also holds down staffing to beneath 1989 levels, according to the Republican summary.
Riding the Omnibus: Republicans planned on packing the must-pass legislation with dozens of policy riders, including many to block EPA and Interior rules. But the deal would remove nearly all major House riders that would have blocked EPA greenhouse gas, ozone and Waters of the U.S. rules and regulations governing fracking. Other riders dropped would have blocked the stream buffer rule, prevented wolves from being listed under the Endangered Species Act and blocked the social cost of carbon from being used. At least one controversial rider did survive: The U.S. Fish and Wildlife Service may not list the Greater Sage Grouse for any of the protections provided under the ESA.
Refiners get help: Democrats extracted many of the above concessions in exchange for lifting the export ban, but they also had to get some help for domestic refiners who were about to lose their source of cheap domestic crude. The omnibus provided a tax credit for the transportation costs incurred by refiners that will last until the end of 2021.
But where was the deal? Text of the legislation finally appeared at 2 a.m. this morning, but Capitol Hill was a-tizzy late last night when the actual text of the spending package failed to reach the public eye before midnight, a move that may well bump final votes to Friday given GOP leaders’ vow to adhere to a three-day advance notice rule for release of major legislation. The House does plan today to take up a stopgap plan that keeps the government funded until Dec. 22, giving itself a cushion to finalize the text of its last to-do for 2015. Bleary-eyed journalists weren't the only ones cranky about delayed release. Rep. Justin Amash offered a grumpy tweetsoon after midnight: "A few thousand pages of legislation will be unveiled late tonight. At 10 a.m. tomorrow, leadership will ask us how we're voting. #Congress"
How about taxes? Washington also got a look late last night at a huge tax deal, which hands out goodies like Christmas elves to other parts of the energy industry: It gives two-year extensions through next year for a $1.00 per gallon credit for biodiesel; a 50-cent per-gallon alternative fuel tax credit; new qualified fuel-cell vehicles; manufacturers of energy-efficient homes and commercial buildings; nonbusiness energy property; installation of alternative fuel vehicle refueling property; two-wheeled plug-in electric vehicles and cellulosic biofuel producers and plant property.
-
The Huge Political Horse Trade in the Budget That Will Change Where the U.S. Gets Its Energy
Dec 16, 2015 | Washington Post
By Steven Mufson
A deal on energy is playing a key role in the new budget proposal.
After 40 years, Democrats are giving up the fight over lifting crude oil export restrictions that have effectively banned most sales of U.S. crude oil abroad. In return, Republicans are dropping their opposition to lengthy extensions of the solar and wind tax credits that will give huge boosts to renewable energy projects.
The omnibus budget bill released Tuesday night would allow all crude oil exports except in certain economic or national security emergencies.
The budget compromise also includes a five-year extension of the investment tax credit for solar and an extension of the production tax credit for wind retroactively to last year and ending in 2019. The wind credits are pegged to the start of construction rather than the start of production, extending the benefits for companies. But the deal would phase down the credits 20 percent each year.
The change in oil export rules is a triumph for the American Petroleum Institute, shale oil producers in states like Texas and North Dakota, free trade economists from both parties, and Sen. Heidi Heitkamp (D-N.D.), whose home state producers – battered by the recent plunge in oil prices — will be able to get somewhat higher prices abroad.
Many Republicans also argued that if the United States were going to lift restrictions on Iranian crude oil exports as part of the deal limiting Iran’s nuclear program then limits on U.S. crude oil exports should also be lifted.
The budget’s solar and wind tax credits also extend support for renewable energy central to President Obama’s push to lower greenhouse gas emissions as part of the international climate deal struck in Paris last weekend. The tax credit for wind is also favored by Great Plains lawmakers from both parties.
The Solar Energy Industries Association said that the extension of the investment tax credit, due to expire at the end of 2016, would lead to $125 billion in new private sector investment in the United States and that solar power would triple by 2022 to 95 gigawatts, equal to about 3.5 percent of U.S. electricity generation, offsetting emissions equivalent to 26 coal-fired power plants.
Despite rapid reductions in the cost of wind and solar, both still rely heavily on government subsidies. Bloomberg New Energy Finance has estimated that without the extension of the investment tax credit, solar installations would fall 70 percent in 2017 whereas an extension would boost solar projects by 50 percent through 2022.
The end of the crude oil export ban has been a symbolic as well as economic issue for Congress. First imposed in 1975 in the wake of the Arab oil embargo, the ban directed the president to draw up rules “prohibiting” crude oil exports. The president was allowed to make exceptions in cases of national interest, and minor exceptions largely included some sales to Canada that made logistical sense. As domestic oil production sank steadily through 2009, there was no outcry for export permits.
But the boom in shale oil production since 2009 has changed that. The United States still imports more than 9 million barrels a day, but there has been a surge in shale oil, which is a high-quality oil in demand in Europe and elsewhere, where many refineries cannot handle low-quality crudes. By contrast, U.S. refineries especially along the Gulf coast have been mostly upgraded to handle low-quality crude that can be imported from Canada, Venezuela and Saudi Arabia.
Without being able to export, large portions of the North Dakota shale oil has been shipped by train to older East Coast refineries able to drive harder bargains because the shale oil producers have fewer choices.
Most economists say that lifting the export restrictions would have little impact on U.S. consumers. While high-quality U.S. crude prices will rise slightly, the price of imported low-quality crudes should fall by a similar amount.
“We have a long history of believing that export restrictions are not an appropriate policy tool,” Lawrence H. Summers, former Treasury Secretary, Harvard University president and head of President Obama’s national economic council said at a Brookings Institution event in September 2014.
He said: “The merits [of lifting restrictions] are as clear as the merits with respect to any significant public policy issue that I have ever encountered.”
The tradeoff on energy was made easier for the Obama administration by language inserted in the budget compromise that would give the president the ability to impose restrictions on oil exports, like licensing requirements, for up to one year under certain special circumstances – and if necessary, the ability to extend those requirements or restrictions annually. Some of these special circumstances include: national security threats, national emergencies, sustained crude oil shortages, and when supply shortages or price increase are likely to negatively impact employment. (There are no restrictions on the export of refined petroleum products and refiners have long sold gasoline and diesel fuel abroad.)
Although the administration has long opposed the lifting of crude oil restrictions, earlier in the week White House spokesman Josh Earnest had refused to say the president would veto a budget bill over the item. Instead he said the White House opposed the change on “procedural” grounds because the executive branch should be responsible for making the decision.
The companies most likely to benefit are the big North Dakota producers including Continental Resources, Hess, EOG, Whiting and Statoil. The Obama administration had already made certain export exceptions of some very light crude oil, known as condensate, mostly produced in Texas.
But with the recent plunge in the price of crude oil, now selling for barely a third of its peak price, many of those companies remain under financial pressure and all have cut back on drilling for new resources.
Heitkamp, who sat at the head table of an API event the week she took office, hailed the energy deals in the budget.
“This deal to lift the 40-year old ban on exporting oil is a huge win for North Dakota and it reinforces the importance of good-faith, bipartisan negotiations and legislating,” she said in a statement.
-
Fla.'s Largest Utility Pushes State Toward Compliance
Dec 16, 2015 | E&E Energywire
By Kristi E. Swartz
Florida's largest electric utility wants the Sunshine State to comply with U.S. EPA's Clean Power Plan by requiring power plants to reach an average rate of emissions.
This is because Florida Power & Light Co.'s carbon emission rate is already cleaner today than what EPA wants the state to meet by 2030, utility officials say.
"Because we are in a growth state and we are a growth utility, FPL supports Florida implementing a rate-based program," FPL spokeswoman Sarah Gatewood said.
Florida needs to cut its power plant-sector emissions rate by 24.7 percent by 2030 to meet EPA's carbon targets. The majority of the state already is fueled by natural gas. When it comes to FPL, the utility gets 23 percent of its electricity from emissions-free nuclear, as well.
"We're in compliance today," Juno Beach-based FPL CEO Eric Silagy told EnergyWire in an October interview.
Silagy touts that in part because it means the utility also isn't among those arguing that the Clean Power Plan will make electric bills increase.
"A lot of my brethren in the industry complain about how it's going to be expensive, that utility bills are going to go up for customers," Silagy said. "All of that is true, except for FPL customers. The cost for FPL customers to comply with the Clean Power Plan is zero."
States continue to review the Clean Power Plan, and Florida is no different. One key decision is choosing a rate-based compliance path, which requires generators to meet a specific rate of emissions, or a mass-based one, which means the state would cap emissions and allow generators to purchase allowances to run power plants.
Gatewood at FPL said that if Florida decides to choose a mass-based program, the utility is still well-positioned. FPL has plans to add more utility-scale solar and natural gas. The utility also continues to pursue a federal license to build more nuclear reactors, though actually building them will be based on economics, company executives have said (EnergyWire, Oct. 16).
Even with its cleaner emission profile, Florida is one of 27 states that sued EPA over the Clean Power Plan. The state's Department of Environmental Protection is working on submitting an initial plan, required by all states in September 2016, an agency spokeswoman said. It is considering all compliance options, which means it has yet to settle on rate- or mass-based plans. States can ask for a two-year extension to file their plans.
Florida will submit a final plan in 2018.
Making mixed plans work
FPL may be Florida's largest electric company, and it indeed holds significant political sway. But Florida is home to a number of large municipal and electric cooperatives as well as subsidiaries of energy giants Duke Energy Corp. and Southern Co.
This is key when it comes to a significant feature of the Clean Power Plan: trading carbon emissions. States that pick one type of compliance plan cannot trade emissions with states that pick another one. That could put utilities such as Duke and Southern in a tricky position if certain states in their service territories choose one path but others pick another one.
A Duke Energy spokeswoman said the company would comment on specific states once those plans have been finalized, which will take months. Southern Co. did not respond to inquiries about Florida by deadline.
Most states that are filing plans are waiting for extensive modeling data to come out before making any major decisions, said David Hoppock, a senior policy associate with Duke University's Nicholas Institute for Environmental Policy Solutions.
Then the significance of one state choosing a rate-based option, for example, depends upon how many others pick the same path and whether there is a common utility that shares those boundaries.
"It's hard to say how all of that plays out," he said.
The Nicholas Institute is one of several groups running models to help states make those major decisions. None of the data has been made public, however, he said.
-
Va. Stares Down Rough Road to Consensus on 'Trade-Ready' Carbon-Cutting Plan
Dec 16, 2015 | E&E Climatewire
By Emily Holden
Virginia's second meeting on the Clean Power Plan ended without consensus yesterday on some of the most basic compliance decisions the state must make.
Members of a group of 14 electricity industry and consumer stakeholders in the very early stages of compiling recommendations for Gov. Terry McAuliffe (D) mostly agree that the state's carbon-cutting plan should be "trade-ready." It should allow plant owners to purchase credits or allowances from an interstate market in order to meet their goals, they said.
But they disagree about specifics that could influence the amount of power Virginia can generate from natural gas in the coming decades, as well as how much the Clean Power Plan might cost utilities and consumers.
Virginia's largest utility -- Dominion -- wants the state to work toward an average rate of power-sector carbon emissions.
In a rate-based system, Dominion believes it could produce credits from its own natural gas plants to account for emissions from its coal facilities. Dominion, or other companies, could also potentially build more new natural gas plants down the line to meet growing power needs or replace retiring nuclear power, explained Lenny Dupuis, Dominion's environmental manager.
Other power companies, including the utility American Electric Power Co. Inc. and owners of various coal plants, think Virginia should cap emissions outright. They worry that a rate-based trading market might be smaller and yield more expensive credits because fewer states are considering writing rate-based plans.
Environmental advocates at the meeting also preferred a mass-based standard, and they said the state should include new sources of emissions in that cap.
The group may not reach a firm conclusion about the best path before finalizing a report for the governor, said Michael Dowd, director of the Air Division for Virginia's Department of Environmental Quality.
"It's like peeling back the skins of an onion," Dowd said, employing a phrase used repeatedly by DEQ staff during the daylong meeting at agency headquarters. "You start large, and you work your way down."
Modeling the future to explore costs
Virginia's stakeholder group includes the major utilities, power cooperatives and coal plant owners, as well as green energy companies and environmental and health advocates.
To keep the discussion moving, DEQ doles out red, green and yellow note cards and occasionally asks participants to use them to signal how close the group is to agreement and whether it should transition to a new topic of discussion.
At an early point in the talks, the environmental justice advocate in the room -- Jalonne White-Newsome of WE ACT -- noted that she disagrees with carbon trading as a mechanism for reducing emissions and worries that it could lead to localized pollution and health problems from plants that stay online. But for the sake of collaboration, she held up her green card and agreed to move on.
At the end of the meeting, when agency officials asked for thoughts on rate- and mass-based plans and capping new sources of emissions, a blur of colors shot up.
The group has a long road ahead, especially when it comes to reaching agreement on the type of standard to pursue. The stakeholders will be examining modeling from the firm M.J. Bradley & Associates and using a tool developed by Advanced Energy Economy to help states calculate how much potential compliance options might cost.
But the most detailed modeling will not come for months, when regional grid organizations finish running dozens of scenarios.
Until then, the stakeholders are meant to use the information available to find an affordable and straightforward way to cut Virginia's emissions rate 32 percent below 2012 levels by 2030.
Walton Shepherd, an attorney with the Natural Resources Defense Council, argued that under a rate-based or mass-based standard, Virginia does not have a heavy lift to achieve. The state has made progress toward its goal since 2012. That progress must be considered in figuring out how much more Virginia needs to do, he said.
While a rate-based standard might be more favorable to Dominion, companies with smaller portfolios said they worry about the availability and cost of credits in a rate-based system.
Several Southeastern states seem poised to adopt rate-based standards, and a major utility in Florida is also pushing for a rate-based plan (EnergyWire, Dec. 16).
Dupuis, of Dominion, noted that the state may need a large amount of zero-carbon replacement generation in the coming decades if nuclear plants go offline.
About 40 percent of the state's generation comes from nuclear power, he said, and all of it is up for relicensing between 2030 and 2040. The Clean Power Plan requires states to continue meeting carbon goals after its 2030 deadline.
Who will dominate markets?
But mass-based proponents said they are uneasy about a rate-based market. Generators won't know how many credits are available until they materialize. An emission rate credit, or ERC, is not created until a unit of emissions is avoided, they said.
"People with the larger portfolios potentially can control those markets," said Will Poleway, a representative for the 242-megawatt coal plant in King George, Va.
In a mass-based market, there would be one tradable allowance for every ton of carbon produced or avoided, Shepherd noted.
The group must also weigh in on whether to cap emissions from new sources of power. U.S. EPA says states that don't include those sources in their mass-based standards most prove they aren't shifting generation and emissions to new plants that aren't regulated by the Clean Power Plan. Or they must adopt one of several policies to incentivize against that type of leakage.
Even if Virginia adopts a mass-based plan and policies to trade carbon with other states, those other states might not play ball, Shepherd said.
Pennsylvania would likely only trade with Virginia if the state agreed to cap new sources of emissions, he said. The Regional Greenhouse Gas Initiative -- a nine-state cap-and-trade program -- seems to be leaning in the same direction (ClimateWire, Dec. 11).
Shepherd said Virginia has plenty of room under an alternative "new source complement" cap laid out by EPA to bring new gas plants online and meet demand for years to come. Dominion's Dupuis disagreed, saying EPA was not generous enough in predicting load growth.
The group, however, is still sifting through a range of estimates about how much power demand might grow and how many coal plants might go offline, including data from EPA, the U.S. Energy Information Administration and the PJM Interconnection grid organization.
-
Industry Fights EPA Bid To Boost CISWI Air Rule Defense
Dec 16, 2015 | Inside EPA
Industry litigants are seeking to counter EPA’s use of a recent appellate court victory in a suit over an agency air rule to bolster its defense in pending litigation over its commercial and industrial solid waste incinerators (CISWI) emissions standards, saying EPA cannot rely on the opinion and erred by not raising it in briefing.
In a Dec. 14 letter to the U.S. Court of Appeals for the District of Columbia Circuit, law firm Foley & Lardner on behalf of industry petitioners outlines its arguments for why the agency cannot rely on the prior D.C. Circuit win. The petitioners, as well as other groups, are challenging the agency's package of Clean Air Act combustion rules that includes the CISWI standards, as well as air toxics regulations for “major” and “minor” boilers.
One of industry’s arguments against the CISWI rule is that EPA requires that boiler operators prove through recordkeeping that the product being burned in a facility is in fact “fuel” for use under the boiler air toxics rules, and not “waste” that must be incinerated under the tougher CISWI rule. If operators cannot furnish the necessary paperwork, they are assumed to be CISWI. Industry groups say this is unreasonable and unlawful.
At Dec. 3 oral argument in the combustion air rules suit, EPA countered industry's claim by citing the court’s unpublished ruling from June 3 in related litigation in Eco Services Operations LLC v. EPA, also known asSolvay USA, Inc. v. EPA. In that case, the court rejected environmentalists’ and industry’s petitions for review of a related rule on non-hazardous secondary materials that established the definition of “waste” versus “fuel."
However, Foley & Lardner's letter to the court following oral argument says that EPA failed to follow the rules of the court by raising the claim during argument but not in earlier briefing in the suit. The firm also argues that the Eco Services ruling has no precedential value because it is “unpublished.”
“EPA counsel quoted from Solvay stating there is a ‘burden on the regulated entity to show’ its material is not a waste, and that EPA may assume a material is a waste ‘unless an interested party demonstrates’ it is not. But under the CISWI rule, a party that had in fact created the requisite records, or could otherwise conclusively show its material is not a waste, could suffer the draconian consequences described in our briefs simply by failing to produce records on the day an inspector shows up. Nothing in Solvay supports this harsh result,” the letter says.
-
Water Rule’s Foes Suffer Painful Blow with Defeat of WOTUS Rider
Dec 16, 2015 | Politico Pro
By Annie Snider
Efforts to block the Obama administration’s Waters of the U.S. rule in the year-end spending deal came up short Wednesday — the third and most disappointing legislative failure for opponents of the contentious regulation.
Even the 11th-hour finding from an independent watchdog that EPA broke the law with a social media campaign to promote the water rule failed to change the political dynamic. Monday's report from the Government Accountability Office apparently arrived too late to overcome momentum toward a deal to end the oil export ban, in exchange for which Democrats demanded any "poison pill" environmental riders be stripped from the omnibus.
Despite a rocky rollout and fierce opposition from the agricultural, homebuilding, energy and other sectors, the administration and its backers squeaked through enough support among moderate Democrats to protect the rule during negotiations over the $1.1 trillion omnibus spending bill.
Their efforts were carried over the finish line by a deal struck to lift the ban on oil exports, a top priority for Republican leaders who agreed as part of the deal to drop environmental riders from the $1.1 trillion omnibus spending bill.
A spending bill rider was the last major legislative shot critics had to squash the regulation, also called the Clean Water Rule, after direct attacks failed to gain the necessary traction on Capitol Hill, even as a federal appeals court said challenges had a substantial likelihood of success and blocked implementation for now.
Democrats last month successfully filibustered a measure from Sen. John Barrasso (R-Wyo.) that would have forced EPA to scrap the rule and start over, although four of them crossed the aisle to side with Republicans. And while the Senate did pass a filibuster-proof Congressional Review Act resolution to block the rule, critics lack enough votes to overcome a veto.
The rule’s foes had hoped that a more modest spending bill rider could win the backing of farm-state Democrats who have expressed concerns about the regulation but were reluctant to directly oppose the administration.
Although it’s not clear that a policy rider would have had any immediate practical effect, given the court's injunction, both sides believed it would have been a political death sentence for the regulation.
Environmental groups were quick to declare victory Wednesday.
“Due to overwhelming public support, the Clean Water Rule has now withstood every attack that polluters could muster in Congress,” said John Rumpler, an attorney with Environment America. “Polluters and their allies have played all their dirty water cards in Congress and lost.”
Don Parrish, senior director for regulatory affairs at the American Farm Bureau Federation, said his group "will continue to throw the kitchen sink" at the rule.
“I am stunned quite frankly,” he said by email Wednesday. “This was not a heavy lift and it’s a new low for Congress — the courts have signaled that the rule is illegal and GAO just issued a legal opinion finding that EPA broke the law during the comment period.”
But with lawmakers’ positions on the rule now hardened, the rule’s fate appears to rest with the courts, where dozens of states, industry groups and environmental nonprofits are challenging it.
The legal battles promise to be a years’ long saga stretching beyond the Obama administration and almost certainly to the Supreme Court.
But if the 6th Circuit Court of Appeals claims the case, as judges there hinted they were inclined to last week, top Obama administration lawyers could have the chance to shape the initial legal arguments for an appeal to the high court.
To be sure, while the major legislative brawls over the water rule may be done, the issue is not likely to disappear from the political stage.
Already it has caught the attention of Republican presidential candidates — one of whom could end up holding the ultimate say over the rule’s destiny. While the rule was not mentioned during Tuesday’s GOP debate, candidates including Donald Trump, Marco Rubio and Rand Paul have singled it out on the campaign trail in recent months and pledged to repeal it if elected.
Industry and Association News
Chemical Management News
Chemical Security News - There are no clips to report at this time.
Transportation News
Energy and Environment News
Add recipients
Suggested