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ACC AM Dec 29

Industry and Association News

(ACC Mentioned) PE Market Ready For Increased Capacity
Dec 28, 2015 | Plastics News
By Frank Esposito

For the North American polyethylene resin market, 2016 might prove to be the calm before the storm. Three new capacity projects are set to come on line that could add as much as 4 billion pounds of production capacity to the market next year. Similar projects expected in 2017 could boost capacity by another 6 billion pounds.

Chemical Management News

(ACC Mentioned) Market Forces and States as Laboratories—Not Always Desired by Business
Dec 28, 2015 | Lexology

In the wake of the December 17, 2015, passage of a Toxic Substances Control Act (TSCA) reform bill by the U.S. Senate, which followed the lead of the U.S. House of Representatives, one may ask: What is going on? The current Congress is supporting new federal environmental regulation?
(ACC Mentioned) Can Corporations Be Trusted To 'Do The Right Thing'?
Dec 28, 2015 | Sun Sentinel
By Katherine McFate

Some of my best friends run private businesses. My brother was a manager in the private sector. So let's dispense with this red herring: arguing that corporations need regulation is not charging everyone who works for a large enterprise with being greedy, or evil. But capitalism is competitive and profits equal winning.
Obama Signs Law Banning Microbeads in Personal Care Products
Dec 29, 2015 | BNA Daily Environment Report
By Lars-Eric Hedberg

President Barack Obama on Dec. 28 signed into law a bill that will require the Food and Drug Administration to ban the sale, distribution and manufacture of personal care products that contain microbeads—often advertised as abrasives that claim to “exfoliate and cleanse” skin or teeth.
Senate Passes Legislation to Reform Toxic Substances Control Act
Dec 28, 2015 | The National Law Review

On December 17, 2015, the United States Senate passed a bill by voice vote that updates the Toxic Substances Control Act (TSCA) of 1976. The bipartisan supported legislation would implement major changes to TSCA, which regulates the manufacturing and sale of chemicals.
NAFTA Body Focuses on Flame Retardants in Products
Dec 29, 2015 | BNA Daily Environment Report
By Alan Kovski

Two new reports on the use of flame retardants in consumer products in the U.S., Canada and Mexico should help governments and manufacturers better assess the environmental and human health risks of the chemicals, the Commission for Environmental Cooperation said.

Chemical Security News - There are no clips to report at this time.

Transportation News

PHMSA Warns of Criminal Liability for Hoverboard Issues
Dec 29, 2015 | BNA Daily Environment Report
By Rachel Leven

The nation's hazmat transport regulator issued a safety alert Dec. 24 urging shippers to properly prepare for the transport of hoverboards that contain lithium batteries, which can explode or be an ignition source for fires, and warning of significant civil penalties and potential criminal liability for violations.

Energy and Environment News

Q&A: Earthquakes Raise Liability Concerns For Oil And Gas Drillers
Dec 28, 2015 | Reuters
By Ayesha Rascoe

The underground disposal of wastewater resulting from hydraulic fracturing has been linked to an increase in earthquakes in states such as Oklahoma, raising questions about whether oil and gas drillers can be held legally responsible for the seismic activity.
Texas Joins Red State Revolt Against EPA Ozone Rule
Dec 28, 2015 | The Hill - E2 Wire
By Devin Henry

Texas has filed a lawsuit against the Obama administration over its new ozone rule, bringing the tally of states challenging the regulations to nine. Texas Attorney General Ken Paxton said Monday that the state opposes the stricter limit on surface-level ozone...
Paxton Sues EPA, Again, Over Pollution Rules
Dec 28, 2015 | The Houston Chronicle
By Brian M. Rosenthal

Texas Attorney General Ken Paxton has filed yet another lawsuit against the United States Environmental Protection Agency, this time over new restrictions on ground-level ozone. The new rules, unveiled in October, lower the limit of the smog-causing gas in standard air quality from 75 parts per billion to 70 parts per billion. Most areas have a decade...
Obama’s Climate Bucket List
Dec 29, 2015 | National Journal
By Jason Plautz

President Obama declared that 2015 would be a “year of action” on climate change. With the release of landmark emissions regulations, agreements with countries like China and Brazil, and the clinching of an international climate-change deal in Paris, it seemed to live up to the hype.
Draft Permits Wouldn't Need to Run in Newspapers in EPA Proposal
Dec 29, 2015 | BNA Daily Environment Report
By Andrew Childers

The Environmental Protection Agency is proposing to remove requirements for local regulators to publish notices of draft air permits in newspapers, extending a media-neutral policy it adopted for minor new source review permits in 2012. The EPA's proposed rule (RIN 2060-AS59), which will be published ...
EPA Extends CSAPR Update Rule Comment Deadline
Dec 28, 2015 | InsideEPA

EPA is extending from Jan. 19 to Feb. 1 the deadline for public comment on its proposed Cross-State Air Pollution Rule (CSAPR) emissions trading program update, following requests from utilities and some states who said they need more time to analyze the rule -- although they already say the rule might be unreasonably stringent.
U.S. Energy Policy Now Reflects Our Energy Reality
Dec 28, 2015 | Forbes
By Brigham A. McCown

From immigration to tax reform, it is natural for public policy to evolve and adapt in response to the current environment and today’s challenges. This month, Congress answered the need for change in its year-end omnibus deal by including language lifting the restrictions on crude oil exports from the United States.
Affirmative Defense Briefing to Take Most of 2016
Dec 29, 2015 | BNA Daily Environment Report
By Patrick Ambrosio

Briefing in litigation over an Environmental Protection Agency rule requiring 36 states to alter their implementation plans for addressing excess emissions during periods of facility startup, shutdown and malfunction will last through most of 2016 (Se. Legal Found. v. EPA, D.C. Cir., No. 15-1166, order issued 12/21/15).
2016 Will Accelerate Environmental Progress. Here Are 5 Reasons Why.
Dec 28, 2015 | Environmental Defense Fund
By Fred Krupp

2015 was a breakthrough year for our environment – one of the most important in decades. The nations of the world agreed to a climate deal that finally gives us a chance to turn the corner toward safety. America put in place the first-ever limits on carbon pollution from its largest source, power plants.

Full Text of Stories Below

Industry and Association News

(ACC Mentioned) PE Market Ready For Increased Capacity

Dec 28, 2015 | Plastics News

By Frank Esposito

For the North American polyethylene resin market, 2016 might prove to be the calm before the storm.
Three new capacity projects are set to come on line that could add as much as 4 billion pounds of production capacity to the market next year. Similar projects expected in 2017 could boost capacity by another 6 billion pounds.
Overall, 27 PE expansions have been announced for North America. If they all come to fruition, they’ll add more than 34 billion pounds of capacity — a 75 percent jump over current capacity of roughly 45 billion pounds.
This scenario has led to some concern. The domestic PE market is growing, but not at a rate high enough to handle that much material. That means a good chunk of that new PE will have to be exported outside North America.
For his part, Dow Chemical Co. executive Diego Donoso believes the PE market will be able to handle the new capacity, which is being made possible through low-priced feedstocks based on shale gas.
“You have to look at the impact of the world, because it’s all connected,” said Donoso, global packaging and specialty plastics business president with Midland, Mich.-based Dow. “And before you look at 2016, you need to look at 2013 and 2014 when we had a high oil price scenario. The market added [13 billion pounds] of new capacity globally and was able to absorb it. We had 20 cents in [PE price] increases without a single price drop, and the market stabilized because supply was tight.
“Then in 2015,” he added, “lower oil prices took the floor away and there were price corrections and an overcorrection of inventory. It was a very different world than in 2013 and 2014, but we didn’t give away all of our margin to the market.”
Chris Bezaire of PE maker Nova Chemicals Corp. also believes that those expecting chaos from the new PE capacity will be disappointed.
“There’s no question there will be a [PE] surplus, but it will be fleeting,” said Bezaire, PE vice president with Calgary, Alberta-based Nova. “We’ll work with that. We’re not afraid.”
“Between now and 2020-21, new supply add will find its way into the marketplace,” he added. “Not all of it will be in North America. A new supply/demand equilibrium will come into line and there might be a short-time 10 percent surge in exports. It’s natural ebb and flow.”
But Donoso and Bezaire might need to spend some more time convincing veteran industry consultant Robert Bauman that all will be well with the market once the new PE arrives.
“It’s going to be a bloodbath,” said Bauman, president of Polymer Consulting International in Spring, Texas. “We’re going to see inventory build with prices dropping. It will be one of the worst performance periods for the industry in a long time.”
Bauman added that PE export markets “don’t have a panacea in Latin America — the economy in Brazil is a disaster and Argentina isn’t good.”
Market analyst Mike Burns was taking a calmer approach to the PE situation at Resin Technology Inc. in Fort Worth, Texas.
“To keep a good balance [in North America], we have to compete with the global price,” Burns said. “As long as the North American price is within 10 cents of the Asia price, that will keep Asian resin from getting into the U.S. and will allow the U.S. to export to Latin America.
“We have to keep that balance of exports flowing and stopping imports from coming in. If our price gets too high outside that window, North American processors would call China,” Burns added. “The key to the whole thing is the price of oil and the cost to make pellets in other regions.”
2016 “is looking to be a transition year to the long awaited PE buyer’s market that should be fully in place during 2017 and 2018,” said Phil Karig, managing director of the Mathelin Bay Associates LLC consulting firm in St. Louis. 2016 PE demand growth “should be tepid at best,” he added, and PE exports from the U.S. to Mexico “will have to find another home as the massive Braskem PE joint venture comes on line.”
Profit margins for North American PE makers should still be “quite good” in 2016, according to market analyst David Barry at PetroChem Wire LLC in Houston. Producers “aren’t worried about margin in the near term,” he added. “But that will change when the new capacity comes on.”
Barry described the export market as “a wild card,” but he added that North American exports recently had some strong months at times when exports traditionally hadn’t been that strong.
Through October, U.S./Canadian sales of high density PE were up 6.6 percent, according to the American Chemistry Council in Washington. Domestic sales were up only 1 percent for the period, but export sales rocketed up almost 42 percent. Sales of HDPE into household chemical bottles provided a domestic bright spot, growing 7 percent.
Regional sales of low density PE through October improved 3.3 percent, with domestic growth of almost 4 percent lessened somewhat by growth of only 1.2 percent in export markets. Sales of LDPE into non-food packaging film soared more than 11 percent in that 10-month period.
For linear low density PE, 10-month sales grew 6.3 percent. Domestic sales growth of almost 6 percent was amplified by a 9 percent rise in export sales. Sales of LLDPE into all types of film — packaging and non-packaging — climbed almost 8 percent in that period.
Donoso recently met with several large food packaging companies who were moving more products into ready-to-eat snack packaging. “Even more food companies are going from rigid packaging to flexible,” he said.
“Packaging is strong,” added Bezaire at Nova. “More people are more eating out of the home. Families are smaller and they eat out more than we did as kids.”
Nova will do its part for new PE capacity with a 1 billion pound-capacity LLDPE line in Joffre, Alberta. Mechanical completion of the line is set for July 1, Bezaire said, with material expected to be available in the market in September and October.
The new line’s output “is an extension of what we currently produce,” he said. “We’re building what our customers want.” Nova also is considering building a new PE plant either in Ontario or on the U.S. Gulf Coast, Bezaire added.
North American PE demand also will be helped by new capacity making better-quality resins in volumes that previously were unavailable, he said. This will allow North American processors to make products that couldn’t be made with earlier resins.
“The PE being made in Joffre is the cleanest PE in North America when it comes to gels and clarity,” he said. “The future is bright — it’s maybe never been brighter in North America.”
Dow’s Donoso agreed that the quality of PE being made in North America has greatly improved. “All of our reactors are providing our highest-performing products,” he said. “To go from rigid to flexible packaging, you need better resins.”
He added that he’s doubtful that all of the PE capacity projects announced for North America will come online as scheduled, pointing out that previous waves of capacity expansion often had delays. Bauman agreed, saying welders, pipefitters and other specialty workers needed to build these new lines and plants are becoming scarce on the Gulf Coast.
Through October, PE makers in the U.S. and Canada were exporting about 21 percent of total LDPE and LLDPE production and about 18 percent of their HDPE output. RTI’s Burns and other market watchers say those numbers need to be closer to 30-35 percent to handle the new capacity.
“If you’re a [PE] seller, you’re going to see increased competition, more capacity chasing demand and price and margin pressure,” IHS Chemical analyst Nick Vafiadis said in October at the Global Plastics Summit 2015. “If you’re a buyer, you’re going to see more supply options, increased competition and increased quality demands.”
“The [North American PE] market is going to be very competitive in two to three years,” added Barry at PetroChem Wire. “Producers will need to cater to processors to get material sold. If they don’t, someone else will.”
Mathelin Bay’s Karig doesn’t see the new capacity affecting regional PE prices much in 2016. “Even with reduced exports, capacity utilization in 2016 will remain high enough to keep PE prices from cratering, unless oil prices turn sharply downward again,” he said.
At Dow, Donoso remains confident.
“The world will balance itself,” he said. “The market is very resilient.”

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Chemical Management News

(ACC Mentioned) Market Forces and States as Laboratories—Not Always Desired by Business

Dec 28, 2015 | Lexology

In the wake of the December 17, 2015, passage of a Toxic Substances Control Act (TSCA) reform bill by the U.S. Senate, which followed the lead of the U.S. House of Representatives, one may ask: What is going on? The current Congress is supporting new federal environmental regulation?
The answer lies in two facts: (1) the existing statute was simply outdated and unworkable for industry, and (2) the existence of a dysfunctional federal regulatory program had spawned the equally disliked (principally by industry, but also by environmentalists) evolution of differing regulations in different states. Thus, the American Chemistry Council (ACC), after acknowledging the need for public confidence in federal regulation of chemical safety, noted: “This lack of confidence has created pressure on individual state legislatures to create their own chemicals management laws and on retailers to pull products from the shelves, often based on the claims of activists rather than scientific conclusions.”
When both the ACC and People for the Ethical Treatment of Animals (PETA) agree on the need for regulatory reform, and work together (with many other stakeholders) to get bills through both the House and Senate, it is apparent there was a problem with the status quo.
The House and Senate bills will likely go to a joint conference committee.

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(ACC Mentioned) Can Corporations Be Trusted To 'Do The Right Thing'?

Dec 28, 2015 | Sun Sentinel

By Katherine McFate

Some of my best friends run private businesses. My brother was a manager in the private sector. So let's dispense with this red herring: arguing that corporations need regulation is not charging everyone who works for a large enterprise with being greedy, or evil. But capitalism is competitive and profits equal winning. Some managers ignore wage and hour rules and/or safety standards because this allows them to cut costs and gain a competitive advantage over responsible businesses.
We need regulations to keep capitalism safe for the good guys — for the managers who want to pay their workers a fair wage, keep their workplaces clean, and produce safe, quality products. Unfortunately, not all do.
America is facing two kinds of regulatory problems today. First, we're not adequately enforcing the rules on the books. Our legal wage and hour protections are adequate — but there has been an epidemic of "wage theft" in this country in past decades. New York state alone recovered $25 million in wages for 22,600 employees in the first 10 months of this year.
A big part of this is because there are fewer unions representing workers and able to stand up for them at the workplace. And millions of Americans more are improperly classified as "independent contractors" so employers aren't responsible for their taxes and benefits.
Our workplaces are much less dangerous than they used to be thanks to workplace safety rules, but the number of OSHA inspectors is about the same as it was in 1981 even though the number of workplaces they are supposed to monitor has more than doubled. So we may have an epidemic of safety violations, too.
Second, our rules aren't keeping up with science — because large corporations are able to block and weaken the regulation of certain sectors of our economy by hiring lobbyists (increasingly ex-Congress members or ex-staff at regulatory agencies) and by providing sitting members of Congress, especially those on regulatory oversight committees, with campaign contributions.
Even though regulatory agencies are supposed to be independent of political and external pressure, the truth is that the most powerful corporations too often have outsized power with the agencies that regulate them.
Perhaps the best example is the chemical industry, responsible for toxic sippy cups, flame-retardant pajamas and fracking fluids. Of the more than 80,000 chemicals registered for commercial use in the United States today, only about 250 have been tested to determine their health effects on human beings; only nine of these have been restricted or banned.
Unlike drug companies that have to prove their products are safe before they can be marketed, the law regulating dangerous chemicals forces the government to prove a chemical is unsafe to take it off the market.
And, using the playbook from the tobacco industry, chemical companies are brilliant at funding studies that create just enough doubt to prevent stricter regulations.
Some of the plants that manufacture toxic chemicals have been called "stationary weapons of mass destruction." Chemical plants are in every area of the country, in rural areas (pesticide and fertilizer and food processing) and in cities (water and waste treatment plants). There is some kind of accident at a chemical plant every other day. The West Texas explosion that killed 15 people, including 12 first responders, in 2014 would have killed hundreds of people if it had happened during the day — three schools and an apartment building were destroyed.
Yet a recent analysis conducted by the Center for Effective Government found that only 42 percent of the facilities with the highest amount of the most toxic chemicals had been inspected by OSHA or EPA in the past three to five years. Twenty-five percent of the ones that had been inspected had a serious safety or health violation.
The major lobbying group for the chemical industry, the American Chemistry Council, says no more regulation is needed because it has a robust voluntary safety program that its members support and follow. Really? Our study found seven of the ACC's board members were among corporations operating facilities with large numbers of serious violations.
It isn't that these companies are filled with bad people. It's that big profits create huge incentives to look the other way. That's why we need strict standards, universally enforced, to protect our families, our natural resources, and responsible businesses. Strong and effective oversight levels the playing field and ensures that we can trust in corporations.
Katherine McFate is president and CEO of the Center for Effective Government. foreffectivegov.org. She wrote this for InsideSources.com.

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Obama Signs Law Banning Microbeads in Personal Care Products

Dec 29, 2015 | BNA Daily Environment Report

By Lars-Eric Hedberg

President Barack Obama on Dec. 28 signed into law a bill that will require the Food and Drug Administration to ban the sale, distribution and manufacture of personal care products that contain microbeads—often advertised as abrasives that claim to “exfoliate and cleanse” skin or teeth.
Environmental groups and wastewater communities have raised concerns about plastic microbeads because the tiny pieces of spherical plastics swirl down the drains of U.S. households, flow unimpeded through wastewater treatment plants and spill into rivers, lakes and estuaries, accumulating in ever-increasing quantities where people fish and swim.
The Microbead-Free Waters Act of 2015 amends Section 301 of the Federal Food, Drug and Cosmetic Act (21 U.S.C. 331).
The law provides a staged approach for banning the manufacture and sale of products containing microbeads defined as “any solid plastic particle that is less than five millimeters in size and is intended to be used to exfoliate or cleanse the human body or any part thereof,” including toothpaste.
Under the law, the manufacture of products containing microbeads must cease beginning July 1, 2017, and introduction of the products must stop a year later.
The manufacture of rinse-off cosmetics must stop by July 1, 2018, and introduction of the products into interstate commerce must end a year later.
The bill was introduced as H.R.1321 by Rep. Frank Pallone Jr. (D-N.J.) and as S.1424 by Sen. Kirsten E. Gillibrand (D-N.Y.).
“It is a commonsense solution to this little-known but serious problem of plastic microbeads seeping into waterways and threatening the environment and ultimately our health,” Pallone said in a statement after the bill made its way to Obama's desk. “The ban will spur an important transition from plastic microbeads to non-synthetic alternatives in personal care products.”
Several states have considered legislation this year to ban the manufacture and use of microbeads (184 DEN B-1, 9/23/15).
California enacted legislation in October 2015 barring the sale and distribution of personal care products containing plastic microbeads beginning Jan. 1, 2020 (197 DEN A-7, 10/13/15).

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Senate Passes Legislation to Reform Toxic Substances Control Act

Dec 28, 2015 | The National Law Review

On December 17, 2015, the United States Senate passed a bill by voice vote that updates the Toxic Substances Control Act (TSCA) of 1976. The bipartisan supported legislation would implement major changes to TSCA, which regulates the manufacturing and sale of chemicals.
TSCA requires the Environmental Protection Agency (EPA) to regulate new and existing chemical substances in commerce that present an “unreasonable risk of injury to health or the environment.” See 15 U.S.C. § 2601 et seq. In general, before manufacturing a new chemical substance, companies must submit a Pre-Manufacture Notice (PMN) to EPA, which allows the agency to assess potential risks with the substance. EPA then maintains a list of approximately 85,000 existing chemicals on the “TSCA Inventory,” which may include certain manufacturing or use restrictions.
Despite this general framework, many consider TSCA to be outdated and ineffective. For example, when TSCA was originally implemented, thousands of existing chemicals were published on the TSCA Inventory and EPA did not determine whether they presented an unreasonable risk. Several states have also implemented tighter restrictions, which has made it more difficult for companies to achieve regulatory compliance due to inconsistencies in the law.
As a result, Congress launched a bipartisan effort to modernize TSCA. Under the current version of the Senate’s reform bill, S. 697, EPA must assess the potential risks of existing chemicals substances. Companies can also ask EPA to prioritize the review of certain chemicals. Finally, the bill is expected to create more uniform standards between state and federal law.
The House of Representatives passed its own version of the bill earlier this year. Based on the strong bipartisan support for the legislation, which many view as long overdue, it is expected that some version of the bill will eventually become law. The differences between the House bill and Senate bill will now be reconciled before a final bill is expected to be voted on and sent to the President. - See more at: http://www.natlawreview.com/article/senate-passes-legislation-to-reform-toxic-substances-control-act#sthash.uYpJmukA.dpuf

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NAFTA Body Focuses on Flame Retardants in Products

Dec 29, 2015 | BNA Daily Environment Report

By Alan Kovski

Two new reports on the use of flame retardants in consumer products in the U.S., Canada and Mexico should help governments and manufacturers better assess the environmental and human health risks of the chemicals, the Commission for Environmental Cooperation said.
The reports follow growing public concern over the use of flame retardants in products, the Montreal-based agency that administers the environmental side agreement to the North American Free Trade Agreement said in a statement accompanying release of the reports Dec. 23.
“It is hoped that the results of these studies will be used to enhance risk management efforts and the reduction of human and environmental exposure to flame retardant chemicals in North America,” it said.
One report, “Supply Chain Analysis of Select Flame Retardants Contained in Manufactured Items Used in Indoor Environment,” identifies flame retardants used in the three countries and provides supply chain information for 16 emerging flame retardants that have been developed as substitutes for older or restricted chemicals.
The second report, “Analysis of Select Flame Retardants Contained in Office and Household Furniture,” confirmed the presence of at least one emerging flame retardant chemical in nearly 50 percent of 132 tested consumer products.
The most common chemical identified was TCPP (2-propanol, 1-chloro-phosphate, mixture of isomers), primarily found in the foam used in chairs, ottomans and sofas, the report said.

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Chemical Security News - There are no clips to report at this time.

Transportation News

PHMSA Warns of Criminal Liability for Hoverboard Issues

Dec 29, 2015 | BNA Daily Environment Report

By Rachel Leven

The nation's hazmat transport regulator issued a safety alert Dec. 24 urging shippers to properly prepare for the transport of hoverboards that contain lithium batteries, which can explode or be an ignition source for fires, and warning of significant civil penalties and potential criminal liability for violations.
The Pipeline and Hazardous Materials Safety Administration released the alert after investigators intercepted more than 30 cargo containers of hoverboards containing lithium batteries that it found were inappropriately prepared for shipment. More than 80 percent of the shippers associated with the cargo couldn't prove that the lithium batteries had been properly tested and prepared for transport, the agency said.
“Hoverboards are among the top gifts of the 2015 holiday season and DOT [the Transportation Department] is working to ensure that hoverboards containing lithium batteries are safely transported,” Transportation Secretary Anthony Foxx said in a news release.
The alert builds on rapidly increasing public and private sector concerns related to the movement and general safety of hoverboards with lithium batteries.
In December alone, the Consumer Product Safety Commission launched an investigation into the safety of these toys, several major airlines such as Delta Air Lines banned them from their aircraft, and Rep. Steve Israel (D-N.Y.) urged the Energy Department to research the lithium batteries contained in the boards.
The U.S. Postal Service has also said it will only ship hoverboards by ground transportation because of the potential hazards associated with lithium batteries.
The debate is not only about the safety of built-to-regulation products but the safety of those that have been willfully faked or mislabeled. The U.S. Customs and Border Protection announced Dec. 11 that it has seized more than 160 hoverboards that had fake batteries or counterfeit markings. Delta said it has found that some hoverboards have contained batteries above the 160 watt hour government limit.
“Blaming reputable battery manufacturers for the hoverboard's safety problems is incorrect and unfair,” George Kerchner, executive director for the PRBA—the Rechargeable Battery Association, said in a statement Dec. 18, following the announcements by Delta, the customs agency and others.
“We do have concerns about a handful of companies willing to manufacture and ship products containing poorly manufactured lithium ion batteries rushed to market in order to meet consumer demand during the holiday season.”

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Energy and Environment News

Q&A: Earthquakes Raise Liability Concerns For Oil And Gas Drillers

Dec 28, 2015 | Reuters

By Ayesha Rascoe

The underground disposal of wastewater resulting from hydraulic fracturing has been linked to an increase in earthquakes in states such as Oklahoma, raising questions about whether oil and gas drillers can be held legally responsible for the seismic activity.
Hydraulic fracturing, popularly known as fracking, is an oil and gas production method that involves injecting at high pressure large amounts of water, chemicals and sand underground to extract fuel. Drillers often inject the wastewater by-product back into the ground to get rid of it.

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Texas Joins Red State Revolt Against EPA Ozone Rule

Dec 28, 2015 | The Hill - E2 Wire

By Devin Henry

Texas has filed a lawsuit against the Obama administration over its new ozone rule, bringing the tally of states challenging the regulations to nine.
Texas Attorney General Ken Paxton said Monday that the state opposes the stricter limit on surface-level ozone because compliance with the rule would hurt business in the state.“Areas of the country that fail to comply with these impossible standards will be subject to costly new regulations that will harm our economy and kill jobs,” Paxton said in a statement.
“Texas has proven that we can reduce ambient ozone concentrations without stifling growth, and my office will continue to defend our state from the EPA’s harmful and overreaching regulations.”
The Environmental Protection Agency (EPA) this year finalized a plan to cut the amount of acceptable surface-level ozone from 75 to 70 parts per billion.
The rule change drew fierce criticism from Republicans and business groups, which have argued that the new level will be difficult and costly to comply reach. Business and manufacturer groups sued the government over rule last week.
Environmentalists and public health organizations have defended the change against those challenges, but they’ve sued as well, saying the EPA should have limited ozone even more.
Paxton challenged the rule in federal court last week, ahead of a Christmas Day deadline for lawsuits against it.
Another group of states, led by Arizona, challenged the rule in October, questioning whether the EPA conducted an appropriate scientific review before issuing the new standards. Nine states in total — Texas, Arizona, Arkansas, Kentucky, New Mexico, Oklahoma, North Dakota, Utah and Wisconsin — are fighting the ozone standards.

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Paxton Sues EPA, Again, Over Pollution Rules

Dec 28, 2015 | The Houston Chronicle

By Brian M. Rosenthal

Texas Attorney General Ken Paxton has filed yet another lawsuit against the United States Environmental Protection Agency, this time over new restrictions on ground-level ozone.
The new rules, unveiled in October, lower the limit of the smog-causing gas in standard air quality from 75 parts per billion to 70 parts per billion. Most areas have a decade or more to comply.
The lawsuit Paxton filed over the Christmas holiday in a Washington, D.C.-based federal court blasted the restrictions as "inappropriate and unrealistic."
"The EPA's new ozone rule is not supported by scientific data," the Republican attorney general said in a news release Monday. "Areas of the country that fail to comply with these impossible standards will be subject to costly new regulations that will harm our economy and kill jobs.
" Texas has proven that we can reduce ambient ozone concentrations without stifling growth, and my office will continue to defend our state from the EPA's harmful and overreaching regulations," Paxton stated.
An EPA spokesman declined comment, saying he could not talk about pending litigation.
The new restrictions, while controversial, have had in recent days plenty of defenders. Many air pollution experts have argued the old standard of the so-called National Ambient Air Quality Standards, set in 2008 by former President George W. Bush's administration, was way too high and that the new standard is still too high.
Smog is a major type of air pollutant that has been linked to everything from asthmas to heart disease. The EPA has said the restrictions could cost the economy nearly $1.5 billion per year but would still save the country billions through increased productivity as fewer residents experience health problems.
The agency said it examined nearly 2,300 scientific studies and considered more than 430,000 public comments before making the rules. Along the way, the agency's scientific panel recommended a smog standard of between 60 and 70 parts per million.
But the rules have also drawn fierce criticism from industry groups and some state officials, especially because they came at roughly the same time as new regulations on greenhouse gas pollution and a major deal struck earlier this month in Paris about how to tackle climate change.
At least seven states sued over the restrictions before Texas: Arizona, Arkansas, Kentucky, New Mexico, Oklahoma, North Dakota, Utah and Wisconsin.
It was the 23rd lawsuit filed by Texas against the EPA since President Barack Obama took office, according to the Texas Tribune.
The most recent, announced in October, targeted the agency's "Clean Power Plan," which aims to dramatically reduce carbon emissions from electric-generating plants by 2030.
Overall, Texas now has sued Obama's administration 40 times, according to a Houston Chronicle tally.
The state has definitively won six of those cases and lost 10 others, according to the tally. The remaining either are pending or were withdrawn.

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Obama’s Climate Bucket List

Dec 29, 2015 | National Journal

By Jason Plautz

President Obama declared that 2015 would be a “year of action” on climate change. With the release of landmark emissions regulations, agreements with countries like China and Brazil, and the clinching of an international climate-change deal in Paris, it seemed to live up to the hype.
The Paris agreement—which sets nearly 200 countries on the path to combat climate change—could be a walk-off-the-field moment, the culmination of years of climate work.
But Obama’s still got a full year left and has promised to “leave it all on the field.” Even as the clock runs down and the regulatory calendar empties, he has more climate work in mind.
“We have a 390-day plan,” said White House climate adviser Brian Deese at a panel earlier this month. “We’ve got to continue implementing aggressively our domestic agenda.”
Top on Deese’s list was getting states on board with the Clean Power Plan, the massive rule finalized in August to limit carbon emissions from the power sector. States have to start submitting their compliance plans this summer, although built-in extensions would allow states to push back their submissions another two years.
The Environmental Protection Agency is bolstering its Clean Power Plant preparedness by releasing a model for states interested in using a carbon-trading mechanism for compliance. The EPA will also prepare a model federal plan for any states that choose not to comply.
At the same time, the White House will be working to fend off an avalanche of legal attacks on the climate rules from states and industry groups, although that process is sure to stretch on for years.
And while getting the Clean Power Plan off the ground—and protecting it from legal challenges by states and industry groups—is likely to be the focus of most environmentalists, they say there’s room for Obama to go beyond his successes in 2015.
“It’s hard to find any other area of policy with this administration in the second term that’s come with more coordination across the Cabinet, more events, and more drive than climate change,” said David Doniger, director of the climate and clean-air program for the Natural Resources Defense Council. “I would expect to see more of that in 2016. I don’t think he’ll follow a year of action with a year of rest.”
According to the regulatory agenda released in November, the Department of Energy will keep moving forward on several energy-efficiency rules meant to make appliances greener, including rules on heat pumps, electric motors, portable air conditioners, dishwashers, and ceiling fans. That’s part of a DOE pledge to cut 3 billion metric tons of carbon pollution by 2030 through energy-conservation standards.

The EPA will set final emissions standards for heavy trucks, building on a June proposal to limit pollution from trucks, buses, and trailers. Also under consideration is starting a review of the fuel-economy standards on light-duty cars, an opportunity for automakers and regulators to see what progress has been made on the administration’s requirement that cars reach 54.5 miles per gallon by 2025. The review, however, could be a trouble spot, as low gas prices have blunted sales of clean cars and could give automakers leverage to try to reduce standards.
Greens are especially hopeful that Obama will use his final year to get the ball rolling on a crackdown of methane emissions from existing oil and gas wells, complementing a rule on new and modified wells that’s set to be wrapped up in 2016. Methane is a potent greenhouse gas that traps 20 times as much heat as carbon dioxide, a nasty byproduct of the natural-gas boom that’s buoyed the nation’s energy sector.
“Finalizing existing-source methane regulations would cement the Obama administration’s climate legacy by locking in mandatory reductions meeting the U.S. targets, demonstrating to the world that the U.S. intends to meet its commitments,” said Conrad Schneider, advocacy director of the Clean Air Task Force.
The White House has said it would like to cut methane emissions by up to 45 percent of 2012 levels by 2025, but the most meaningful rules have been the proposal to slash methane and volatile organic compounds emissions from new gas wells. With the natural-gas boom not going away anytime soon, expect a renewed focus from environmentalists to undo its harmful side effects.
In a USA Today editorial, the Safe Climate Campaign also called on Obama to use his final term to start regulating emissions from previously untouched industries like cement manufacturing. And greens are looking for the EPA to continue the rulemaking process to cut greenhouse gases from airplanes.
Deese said the White House plans to use the afterglow of the Paris deal “to build and deepen our bilateral and multilateral climate cooperation,” potentially striking more individual climate deals with major emitters. Already, Obama has been working the phones to talk to leaders in China, India, and Brazil.
While any White House typically ticks off a bucket list in its final term, advocates say there’s an added urgency to dealing with the climate agenda before Obama leaves office. Democratic front-runner Hillary Clinton has vowed to go even beyond the current White House on climate change and has said she opposes Arctic and some offshore drilling, but she hasn’t fully articulated a climate plan.
The Republican candidates have all said they’d immediately overturn the climate rules. But the gears of the regulatory process—and the momentum of the clean-energy industry—are hard to stop, so any movement in 2016 could continue to pay dividends down the road.
“It makes sense for this president to plan for continuity and think about not just what’s going to get finished in 2016, but what I can get started,” said Doniger. “What are the next steps on climate change?”

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Draft Permits Wouldn't Need to Run in Newspapers in EPA Proposal

Dec 29, 2015 | BNA Daily Environment Report

By Andrew Childers

The Environmental Protection Agency is proposing to remove requirements for local regulators to publish notices of draft air permits in newspapers, extending a media-neutral policy it adopted for minor new source review permits in 2012.
The EPA's proposed rule (RIN 2060-AS59), which will be published in the Federal Register on Dec. 29, would allow the agency as well as state and local air regulators to provide public notice of draft new source review, Title V and Outer Continental Shelf permits electronically, eliminating a mandatory requirement to publish the notices in newspapers.
The proposed rule would require draft major source permits that are issued by the EPA or delegated air agencies implementing federal rules to be published electronically. States would have the option of continuing to publish notices in newspapers for draft major source permits issued under their own rules that have been approved by the EPA. However, the proposal would require states to adopt a consistent approach, meaning all draft permits must either be published electronically or in newspapers.
Posting draft permits online is a more effective method of public engagement than notices that appear in a newspaper for a single day, the EPA said.
“The EPA believes that having the notice of availability and the draft permit remain electronically available on an agency's website for an extended period of time, as compared to a one-time publication in an area newspaper that directs the public to a reading room at the permitting agency, or at a library or other location near the source, results in a significant increase in public awareness of the proposed permitting action and access to the draft permit,” the agency said. “Even without this additional electronic access to the draft permit, posting the notice for the duration of the public comment period provides more widespread public notice than a single-day publication in a newspaper of general circulation.”
The EPA adopted a similar media-neutral approach for publicizing minor source permits in a 2012 memorandum.
The EPA does not have a schedule for issuing the final rule, according to the fall regulatory agenda.
The EPA will accept comments on the proposed rule until Feb. 29. Comment can be made at http://www.regulations.gov and should reference docket No. EPA-HQ-OAR-2015-0090.

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EPA Extends CSAPR Update Rule Comment Deadline

Dec 28, 2015 | InsideEPA

EPA is extending from Jan. 19 to Feb. 1 the deadline for public comment on its proposed Cross-State Air Pollution Rule (CSAPR) emissions trading program update, following requests from utilities and some states who said they need more time to analyze the rule -- although they already say the rule might be unreasonably stringent.
In a notice slated for publication in the Dec. 29 Federal Register EPA announces the extension, which is shorter than the 45 extra days sought by some states and industry for providing input on the proposal.
The proposed update, published in the Dec. 3 Federal Register, would adjust states’ caps, or “budgets,” for ozone-forming nitrogen oxides (NOx), in order to cut ozone pollution and help states come into attainment with EPA’s 2008 ozone national ambient air quality standard (NAAQS) of 75 parts per billion (ppb). The rule does not address states' obligations to meet EPA's stricter 70 ppb ozone limit issued in October.
The original CSAPR, issued in 2011, was designed to mitigate interstate transport of both ozone and fine particulate pollution (PM2.5) from power plants under earlier NAAQS limits, including the weaker 1997 ozone NAAQS that is expressed as 84 ppb. The CSAPR update does not affect budgets for PM2.5-forming sulfur dioxide emissions.
In recently filed comments, several utility industry groups and also some state air regulators asked EPA for more time -- in many cases an additional 45 days -- to comment on the CSAPR update.
The comments cite the complexity of the rule and the lack of available personnel over the holiday period to review both the CSAPR update and other major air regulations also open for public comment, such as EPA’s federal plans for states’ power plant greenhouse gas controls. They also reference EPA's proposed “streamlining” of the “exceptional events” rule, which allows regulatory exemptions for high-pollution periods caused by dust storms, wildfires of other unusual occurrences, on which the agency is taking comment through Jan. 19.
SESARM, representing Southeastern air pollution control agencies, in Dec. 18 comments asked for a 45-day comment deadline extension, saying, “The states’ ability to offer meaningful comments depends upon their ability to access, review, and analyze the technical and legal bases of EPA’s proposed rule, and additional time is necessary.”
The Utility Air Regulatory Group (UARG), representing electric utilities, in its Dec. 8 comments made similar observations, but also adds that “UARG’s preliminary review suggests that the proposed emission budgets in fact reflect unrealistic and unsupported assumptions and projections of dramatic near-term changes in [power plant] operations,” such as predictions of power plant retirements that UARG says are questionable.
In its Dec. 14 request for a 45-day comment deadline extension, law firm Baker Botts on behalf of some 30 utility sector companies in the “Class of 85” coalition says the proposal as written would tighten states’ budgets by “between 12 and 72 percent.” The group notes that the update would for the first time subject the state of Kansas to ozone season requirements. “Overall, the total program budget would shrink by 43 percent, despite the addition of Kansas to the program.” This will have “serious implications,” the firm says.

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U.S. Energy Policy Now Reflects Our Energy Reality

Dec 28, 2015 | Forbes

By Brigham A. McCown

From immigration to tax reform, it is natural for public policy to evolve and adapt in response to the current environment and today’s challenges. This month, Congress answered the need for change in its year-end omnibus deal by including language lifting the restrictions on crude oil exports from the United States. By acknowledging the seismic shift in our nation’s energy landscape – from scarcity to abundance – we now have the potential and the means to define the future of energy in America.
The heightened scrutiny surrounding this policy in recent years has stemmed from drastic changes to the structure of our country’s energy portfolio since the ban’s enactment in the 1970s. Today, the U.S. is producing more than nine million barrels of crude oil per day and inventories are higher than they have been in 80 years. The days of oil shortages and foreign energy embargos are behind us, and accessing the global marketplace will keep the energy industry investing in the U.S. economy, strengthening our infrastructure, and improving technological advancements.
In fact, the energy industry is generating more revenue for this country than ever before. A recent report released by the Progressive Policy Institute (PPI) showed six out of the top 25 companies that invested in the U.S. are energy companies. In all, those six companies, “had a total domestic capital expenditure of $43.6 billion, which is an increase of nine percent from last year.” While the U.S. economy most greatly benefits from the direct financial investments that the energy industry has produced to date, removing the final prohibition to trading oil on the global markets will produce positive externalities. These benefits will manifest as innovative enhancements to safety and security for domestic infrastructure, which will ultimately increase efficiency and generate energy savings.
These energy and infrastructure investments will deliver real, tangible benefits. One of the greatest challenges that the nation currently faces is the need to improve our aging energy infrastructure. Whether energy is transported by pipeline, rail, or waterborne craft, the private sector has the means to enhance our outdated system. Infrastructure improvements and expansion take time and are costly. IHS Global consulting has estimated that the oil and natural gas industry will invest almost $900 billion in infrastructure over the next 12 years. This investment is dependent on a legislative framework and regulatory climate that is conducive to a growing energy sector. Removing the ban on crude oil exports is one tool in a whole toolbox of policies that will contribute to a strong and vibrant cycle of investment and growth.
Lifting the ban also broadens the opportunity for thousands of new jobs and will generate millions of dollars in new income for American families. One report prepared by IHS looked not only at the direct industry jobs that would be created as a result of crude oil exports, but also the thousands of peripheral jobs created annually throughout the industry’s vast supply chain. Overall, the study found nearly 859,000 new jobs would be created nationwide every year as a result of revising this energy policy for this century. The U.S. economy will prosper as the energy sector is bolstered through construction, manufacturing, and services jobs.
In fact, the energy industry is generating more revenue for this country than ever before. A recent report released by the Progressive Policy Institute (PPI) showed six out of the top 25 companies that invested in the U.S. are energy companies. In all, those six companies, “had a total domestic capital expenditure of $43.6 billion, which is an increase of nine percent from last year.” While the U.S. economy most greatly benefits from the direct financial investments that the energy industry has produced to date, removing the final prohibition to trading oil on the global markets will produce positive externalities. These benefits will manifest as innovative enhancements to safety and security for domestic infrastructure, which will ultimately increase efficiency and generate energy savings.
These energy and infrastructure investments will deliver real, tangible benefits. One of the greatest challenges that the nation currently faces is the need to improve our aging energy infrastructure. Whether energy is transported by pipeline, rail, or waterborne craft, the private sector has the means to enhance our outdated system. Infrastructure improvements and expansion take time and are costly. IHS Global consulting has estimated that the oil and natural gas industry will invest almost $900 billion in infrastructure over the next 12 years. This investment is dependent on a legislative framework and regulatory climate that is conducive to a growing energy sector. Removing the ban on crude oil exports is one tool in a whole toolbox of policies that will contribute to a strong and vibrant cycle of investment and growth.
Lifting the ban also broadens the opportunity for thousands of new jobs and will generate millions of dollars in new income for American families. One report prepared by IHS looked not only at the direct industry jobs that would be created as a result of crude oil exports, but also the thousands of peripheral jobs created annually throughout the industry’s vast supply chain. Overall, the study found nearly 859,000 new jobs would be created nationwide every year as a result of revising this energy policy for this century. The U.S. economy will prosper as the energy sector is bolstered through construction, manufacturing, and services jobs.

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Affirmative Defense Briefing to Take Most of 2016

Dec 29, 2015 | BNA Daily Environment Report

By Patrick Ambrosio

Briefing in litigation over an Environmental Protection Agency rule requiring 36 states to alter their implementation plans for addressing excess emissions during periods of facility startup, shutdown and malfunction will last through most of 2016 (Se. Legal Found. v. EPA, D.C. Cir., No. 15-1166, order issued 12/21/15).
The U.S. Court of Appeals for the District of Columbia Circuit Dec. 21 issued a schedule that calls for seven months of briefing over the EPA rule, which found the state plans to be legally deficient because they contain affirmative defense language that shields power plants and other industrial facilities from being subject to civil penalties over violations related to unavoidable equipment malfunctions.
The petitioners, which include 19 states and various power sector groups, intend to challenge the EPA's authority under the Clean Air Act to require the states to remove the affirmative defense language from their pollution plans. Several petitioners told the D.C. Circuit in November filings that they will ask the court to consider whether the EPA is allowed to require state implementation plan revisions without showing that the identified deficiencies actually interfered with compliance under a national ambient air quality standard or other Clean Air Act program (221 DEN A-4, 11/17/15).
The briefing schedule issued by the court set the following deadlines:
• March 16 — petitioner briefs;
• July 14 — EPA response brief;
• Aug. 15 — environmental intervenor brief;
• Sept. 14 — petitioner reply briefs;
• Oct. 19 — final briefs.
The court is allowing three separate briefs from petitioners: one brief from a coalition of industry petitioners, a brief from the states and state environmental agencies, and a brief from Texas and industry petitioners who intend to raise specific challenges to the EPA's decision to find Texas's plan deficient.
One issue the Texas-based industry associations, which include the BCCA Appeal Group and the Texas Oil and Gas Association, intend to raise is whether the EPA's finding that Texas's plan is inadequate contravenes a 2013 decision by the U.S. Court of Appeals for the Fifth Circuit. That ruling upheld the EPA's initial approval of the Texas plan that the agency now determined to be inadequate (Luminant Generation Co. v. EPA, 714 F.3d 841, 76 ERC 1575, 2013 BL 79999 (5th Cir. 2013)).

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2016 Will Accelerate Environmental Progress. Here Are 5 Reasons Why.

Dec 28, 2015 | Environmental Defense Fund

By Fred Krupp

2015 was a breakthrough year for our environment – one of the most important in decades.
The nations of the world agreed to a climate deal that finally gives us a chance to turn the corner toward safety. America put in place the first-ever limits on carbon pollution from its largest source, power plants. And the Senate passed sweeping bipartisan legislation that promises to fix our chemical safety system, which has been broken for 40 years.
At Environmental Defense Fund, we’re proud to have played key roles in all of these breakthroughs.
Still, even with all that we accomplished, I expect 2016 to top the year now coming to an end.
The twin drivers of progress in the next 12 months will be ambition and accountability – two mutually dependent qualities the environmental movement must have to thrive.
Ambition without accountability is just rhetoric, and accountability without ambition is merely record keeping. Together, though, they are what made the recent Paris talks such a success, and they are how we’ll ratchet up global action in the year ahead.
Here’s why:
1. Paris set the tone
For the first time, the world got the message: Climate change is the race of our lives. And leaders responded with action on a global scale.
In support of the latest Conference of the Parties, or COP21, 187 countries covering almost 99 percent of global emissions submitted commitments to take action on climate.
The agreement reached in Paris doesn’t solve climate change, but it created a framework through which the world can take measurable, verifiable action to see emissions peak, stabilize and eventually decline.
And it requires countries to track progress and increase ambition over time, further improving the odds that we can keep warming below catastrophic levels.
In other words, Paris is the starter’s gun.
2. Markets are ramping up
The Paris agreement sent a powerful, immediate signal to global markets that the clean energy future is open for business. It’s a message markets are primed to receive: Emissions trading systems are already at work in more than 50 places that are home to nearly 1 billion people.
With the Paris framework in place, momentum for bottom-up, decentralized market-based policies will only increase – and at the core of such systems are transparency and integrity.
It’s a principle of economics that as participation grows, activity accelerates. We reach economies of scale, new investment is drawn in, and businesses come to depend on the new market tools.
3. Private sector is coming onboard
The corporate world is ready to play a larger role, too.
More than 100 savvy businesses ran an ad in The Wall Street Journal just before the Paris talks, supporting action to reduce United States emissions that achieve or exceed national commitments, “and increase ambition in the future.”
By pledging, these companies also invite us to hold them accountable.
4. Clean energy investments are rising
Domestically and internationally, 2015 was a breakthrough year for clean and efficient energy, and 2016 should see the amplification of smart policies and investments.
On the domestic front, the U.S. Department of Energy released a new standard to cut emissions from commercial air conditioners and furnaces. It’s expected to save more energy than any other standard the agency has issued so far.
The promise of clean energy is global, and another critical piece of the Paris agreement is that it invites the developing world to participate in the rising flow of clean energy investments.
Emerging economies such as China and India are expected to spend $2.7 trillion on renewable energy between 2015 and 2040, far outpacing industrialized nations.
Now all nations, rich and poor, will be able to show that these investments pay off.
5. Market solutions grow on land, at sea
The “no net loss” habitat standards the Obama administration announced in late 2015, and is set to ramp up in 2016, call for landscape-scale, market-based solutions that bring net benefits for wildlife on working lands.
At the same time, successes in the U.S. commercial fishing sector are expanding globally. Fishing rights management programs are transforming the industry, increasing prosperity in fishing communities and abundance in fish populations.
These two, ambitious initiatives are built on demonstrable results. Look for more progress in 2016 as they continue to expand. 2016: A year of opportunity
While we’re making extraordinary environmental gains, there is, of course, still much to be done.
We need to continue to work with government and industry partners to identify and mitigate methane leaks from the oil and gas sector. We know it can be done at low cost and have tremendous impact.
We also need to ensure that a strong bill to reform the Toxic Substances Control Act emerges from the House-Senate negotiations and is signed into law. Americans deserve to know their everyday products are safe to use.
The era of delay is over. We must be ambitious and hold our public officials, our business leaders, and ourselves accountable. We need smart, flexible solutions that can ratchet up environmental protection over time.
Ambition plus accountability accelerates progress.

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