Preview Newsletter
ACC Jan 11
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Wassenaar: Cybersecurity and Export Control
Jan 12, 2016 | Committee on Oversight and Government Reform
Location: 2154 Rayburn House Office Building/ 2:00 PM -
H.R.__, the EPS Improvement Act of 2016
Jan 12, 2016 | Energy & Commerce Committee
Location: 2322 Rayburn House Office Building/ 10:00 PM -
(ACC Mentioned) Chemical Outlook 2016 By Region
Jan 11, 2016 | Chemical & Engineering News
By Melody Bomgardner & Alex Tullo
The U.S. chemical industry faced plenty of economic headwinds in 2015. A strong dollar hampered exports. Trade partners Brazil, Japan, and Russia flirted with recession while growth in China slowed. Yet output increased by a healthy 3.8% last year, thanks in large part to consumers, according to the American Chemistry Council (ACC). -
(ACC Mentioned) Chemical Outlook 2016 By Market
Jan 11, 2016 | Chemical & Engineering News
By Marc Reisch
The outlook for specialty chemicals in 2016 is bright, according to the American Chemistry Council. The trade association expects specialties production to rise 3.9% globally in 2016 after a 3.8% increase in 2015. In the U.S., rising consumer spending on cars has been a definite plus for specialty chemicals, points out Ray K. Will... -
(ACC Mentioned) Commentary: An Inauspicious Start To 2016 For Chemicals And The Economy
Jan 11, 2016 | ICIS Chemical Business
By Will Beacham
It’s been a less than auspicious start to the New Year. Weak China manufacturing data triggered a 7% slide in China’s benchmark stock market and a trading halt on 4 January, along with a repeat on 7 January spurred by another 0.5% devaluation of the yuan, with the pain spreading across the globe. Crude oil continued its slide to below... -
(ACC Mentioned) Hamner Institutes Closes Its Doors
Jan 11, 2016 | Chemical & Engineering News
By Marc S. Reisch
The Hamner Institutes for Health Sciences in Research Triangle Park, N.C., ended operations on Dec. 31. Once known as the Chemical Industry Institute of Toxicology, it was founded by 11 chemical companies in 1974 to gauge the potential impact of chemicals on human health. In 2001, 90% of its $18 million budget came from the Long-Range... -
States Compare House, Senate TSCA-Modernization Bills
Jan 11, 2016 | BNA Daily Environment Report
By Pat Rizzuto
Chemical manufacturers' priorities should not control the Environmental Protection Agency's timetable to assess the risks of chemicals in commerce, according to a legislative analysis released by the Environmental Council of the States. ECOS, an association of state and territorial environmental agency officials, released Jan. 7... -
Agencies Seek Ideas To Improve Chemicals Testing
Jan 8, 2016 | InsideEPA
EPA and other agencies are launching a three-stage “challenge” to scientists and engineers to improve high throughout screening (HTS) assays to fully incorporate chemical metabolism and capture chemicals that become more toxic to humans when metabolized, offering up to $1 million in total award money for the projects. -
Surprise! Congress Just Passed A Bill Tackling An Environmental Problem.
Jan 8, 2016 | The Washington Post
By Philip Bump
Right before the new year, something unusual happened on Capitol Hill: Democrats and Republicans passed environmental legislation without any debate, and President Obama signed it into law. You will not be surprised to learn that the issue at stake was not climate change. It was "microbeads," tiny spheres of... -
Automotive Aftermarket Industry Seeks Prop 65 Exemption
Jan 11, 2016 | Chemical Watch
The Motor & Equipment Manufacturers Association (Mema) will seek an explicit exemption from providing warning requirements for aftermarket automotive parts under California's Proposition 65. The request will come as part of the trade group's testimony to the Office of Environmental Health Hazard Assessment (Oehha) on the agency's proposed... -
(ACC Mentioned) Shale Gas Catalysts Topic at National Academies Workshop
Jan 11, 2016 | BNA Daily Environment Report
By Pat Rizzuto
Catalysts available and needed to convert shale gas and other feedstocks into chemicals will be discussed at a March 7–8 workshop held at the National Academies of Sciences, Engineering and Medicine. Catalysts play a key role in breaking down complex molecules, such as those found in petroleum or shale gas, into chemicals, such as benzene... -
(ACC Mentioned) Litigation Tracker: EPA Awaits Boiler MACT Ruling, Preps Ozone Defense
Jan 11, 2016 | BNA Daily Environment Report
By Patrick Ambrosio
The Environmental Protection Agency begins 2016 awaiting a ruling from the U.S. Court of Appeals for the District of Columbia Circuit on the agency's air toxics standards for industrial boilers and solid waste incinerators. The agency in 2016 also will defend many of its recently issued air regulations, including the 2015 national ambient air quality... -
Obama's Keystone Saga Takes New Turn
Jan 10, 2016 | The Hill - E2 Wire
By Timothy Cama
A pair of legal challenges filed by the developer behind Keystone XL could end up being a big headache for President Obama, who tried to put the issue to rest in November. TransCanada Corp., which wanted to build the oil pipeline from Canada’s oil sands to Gulf Coast refiners, filed a dispute under the North American Free Trade Agreement (NAFTA)... -
Oil Plunge Sparks Calls For Congress To Act
Jan 10, 2016 | The Hill - E2 Wire
By Alexander Bolton
As the price of oil plunges to its lowest point in 12 years — and threatens to drag the broader U.S. economy down with it — lawmakers say Congress should consider helping teetering energy companies with policy fixes beyond the decision to lift the oil-export ban. -
SAB Panel Calls On EPA To Improve Fracking Water Study
Jan 11, 2016 | InsideEPA
An EPA Science Advisory Board (SAB) panel is calling on the agency to clarify the data limits and uncertainties that the adviser say hinder EPA's findings in a pending study of no evidence of widespread systemic impacts of hydraulic fracturing on drinking water, saying that the agency should focus more on local fracking impacts. -
EPA, DOT Urged To Clarify Jurisdiction Over California Methane Gas Leak
Jan 11, 2016 | InsideEPA
House Democrats are urging EPA and the Department of Transportation (DOT) to clarify the agencies' jurisdiction over responding to the Southern California Gas Company's (SoCalGas) leaking natural gas storage facility outside Los Angeles, questioning the role the agencies will play in addressing public health concerns about the massive leak. -
Aliso Canyon Gas Leak Illustrates Data Gaps
Jan 11, 2016 | BNA Daily Environment Report
By Alan Kovski
The ongoing methane leak in California highlights gaps in methods the Environmental Protection Agency uses to measure emissions of the pollutant, environmental advocates said. Mark Brownstein, a vice president in the climate and energy program at the Environmental Defense Fund, which has led a series of studies looking at methane... -
Erin Brockovich Enters Fray Over Massive Gas Leak
Jan 8, 2016 | E&E News PM
Activist Erin Brockovich warned residents of Porter Ranch, Calif., to brace for a long fight when she spoke at a public meeting near the site of a massive natural gas leak from an underground storage facility that has forced evacuations in the hills above Los Angeles. Southern California Gas Co., a Sempra Energy subsidiary, has been unable to stop... -
States in Early Stages of Clean Power Plan Compliance
Jan 11, 2016 | BNA Daily Environment Report
By Gerald B. Silverman
States will continue outreach to stakeholders in 2016 as they consider their compliance options with the Environmental Protection Agency's Clean Power Plan, which limits carbon dioxide emissions from power plants. They will need to make key decisions on how to comply, including whether they will set standards based on a carbon... -
Clean Power Plan Ruling May Come Before State Deadline
Jan 11, 2016 | BNA Daily Environment Report
By Andrew Childers
State regulators may know whether the Environmental Protection Agency's Clean Power Plan passes legal muster before the Sept. 6 deadline to submit their initial compliance plans, attorneys say. States and utilities challenging the rule are pressing the U.S. Court of Appeals for the District of Columbia Circuit to hear by May initial challenges over... -
Alabama Delays Clean Power Plan Work, Hoping for Stay
Jan 11, 2016 | BNA Daily Environment Report
By Chris Marr
Alabama is delaying work on its own strategy to implement the Environmental Protection Agency's carbon dioxide standards for power plants in hopes the rule will be stayed by a federal court, but that could leave the state vulnerable to having a federal plan imposed. -
Litigation Tracker: EPA to Defend Power Plant Carbon Limits
Jan 11, 2016 | BNA Daily Environment Report
By Andrew Childers
The Environmental Protection Agency's carbon dioxide standards for power plants are the backbone of President Barack Obama's push to limit greenhouse gas emissions domestically, and the agency faces the task in 2016 of defending the rules from an onslaught of legal challenges from states and industry groups (see related story). -
Environmental Groups: EPA Policy Supported by Precedent
Jan 11, 2016 | BNA Daily Environment Report
By Patrick Ambrosio
A recent federal appeals court decision and the text of the Clean Air Act both support the legality of the Environmental Protection Agency's decision to rely on enforcement discretion to address exceedances of federal air toxics standards for industrial boilers caused by malfunction, environmental groups said ... -
Mercury Rule Remand, Ozone Implementation on EPA Air Agenda
Jan 11, 2016 | BNA Daily Environment Report
By Patrick Ambrosio
The Environmental Protection Agency will work in 2016 to address a U.S. Supreme Court ruling on the legality of the Mercury and Air Toxics Standards for power plants while supporting efforts to implement the 2015 national ozone standards of 70 parts per billion. -
Civil Rights Groups Hit EPA For 'Environmental Discrimination'
Jan 8, 2016 | The Hill - E2 Wire
By Tim Devaney
The Environmental Protection Agency (EPA) is turning a blind eye to cases of "environmental discrimination” in a controversial rule it proposed last month, critics say. The so-called nondiscrimination rule could actually make it easier for the EPA to disregard civil rights complaints, they say. The agency already dismisses the vast majority... -
Massachusetts Must Implement Climate Law, Groups Argue
Jan 11, 2016 | BNA Daily Environment Report
By Martha W. Kessler
Massachusetts has failed in its obligation to adopt greenhouse gas regulations sufficient to implement the 2008 Global Warming Solutions Act, an attorney representing environmental groups and four teenage plaintiffs told the state's highest court (Kain v. Mass. Dep't. of Envtl. Prot., Mass., No. SJC-11961, oral argument 1/8/16). -
House To Vote On Blocking WOTUS, Stream Protection Rules
Jan 11, 2016 | E&E Daily News
By Tiffany Stecker
The House this week will vote on a pair of measures meant to block two top Obama administration water rules. The House Rules Committee today will take up S.J. Res. 22, a Congressional Review Act resolution disapproving of the Clean Water Act jurisdictional rule by U.S. EPA and the Army Corps of Engineers to define which streams and ... -
Court Weighs Late Addition Of Evidence To Suit Over CWA Permit Guidance
Jan 8, 2016 | InsideEPA
By David LaRoss
A federal district court in California is weighing competing arguments by EPA and state wastewater utilities over whether to grant the utilities' bid to add new evidence to their suit challenging an agency guide on Clean Water Act (CWA) wastewater testing procedures that they say is being unlawfully applied by regulators as if it were a binding...
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Full Text of Stories Below
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Wassenaar: Cybersecurity and Export Control
Jan 12, 2016 | Committee on Oversight and Government Reform
Location: 2154 Rayburn House Office Building/ 2:00 PM
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H.R.__, the EPS Improvement Act of 2016
Jan 12, 2016 | Energy & Commerce Committee
Location: 2322 Rayburn House Office Building/ 10:00 PM
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(ACC Mentioned) Chemical Outlook 2016 By Region
Jan 11, 2016 | Chemical & Engineering News
By Melody Bomgardner & Alex Tullo
U.S.: Amid Growth, Big Companies Clear The Decks For The Future
The U.S. chemical industry faced plenty of economic headwinds in 2015. A strong dollar hampered exports. Trade partners Brazil, Japan, and Russia flirted with recession while growth in China slowed. Yet output increased by a healthy 3.8% last year, thanks in large part to consumers, according to the American Chemistry Council (ACC).
This year, output will continue to expand, though the growth pace will slow a bit to 3.1%, ACC forecasts. “Consumer spending remains strong as further improvements in the labor market and rising confidence support growth,” says T. Kevin Swift, ACC’s chief economist.
Such continued recovery from the 2008 recession will boost demand for autos, construction materials, and business equipment, Swift says. Sales of light vehicles are expected to edge up with hiring and better availability of credit. Basic chemicals, synthetic rubber, and specialties will top the list of growth segments.
Chemical companies will likely see prices continue to slide in some product areas, but “even with the fall in oil prices, the U.S. industry still has a favorable competitive position with regard to feedstock costs as natural gas prices have fallen as well,” Swift suggests. Low prices for agricultural commodities as well as oil and gas have dampened demand for chemicals used in those industries, though ACC anticipates crop prices may rebound later this year.
But whereas this year’s economic drivers will be similar to those of 2015, the U.S. chemical industry will certainly feel different for those who work in it. The once-unimaginable merger of Dow Chemical and DuPont will be under way, and businesses—particularly in agriculture—will need to be cast off to satisfy antitrust regulations.
Last month, DuPont said it will cut 10% of its global workforce, or about 5,300 positions. That and other streamlining moves could negate earlier expectations of a slight increase in U.S. chemical employment, ACC says.
DowDuPont will break into three businesses for materials, specialty chemicals, and agriculture, kicking off a flurry of spin-offs, snap-ups, and portfolio reworkings. The only firms looking to get bigger, though, are likely to be agriculture rivals girding to compete with the new giant, according to investment bank Grace Matthews.
Latin America: Brazilian Chaos May Lead To ‘Depression’ In The Region
Brazil is a mess. A corruption scandal has engulfed the Brazilian government and its state-run oil company, Petrobras. President Dilma Rousseff may even face impeachment in 2016. After booming for the better part of the past decade, the country’s economy, by far Latin America’s largest, has hit a wall.
Brazil’s chemical industry has been pulled down by the turmoil, though its 2016 prospects are modestly better.
According to the International Monetary Fund, Brazil’s gross domestic product shrank 3.0% in 2015. IMF expects the country’s economy to slip another 1.0% this year. It blames deteriorating political conditions, declining investment, and fiscal tightening.
Alberto Ramos, chief Latin American economist at Goldman Sachs, paints an even bleaker picture for Brazil. “What started as a recession driven by the adjustment needs of an economy that accumulated large macro imbalances is now mutating into an outright economic depression,” he wrote last month.
Ramos expects an economic decline of 3.6% in 2015 followed by another 2.3% decrease this year. He pointed out that investment spending has dropped 21% since the second quarter of 2013. Other troubling issues for the country include high inflation, a weak labor market, high household indebtedness, and soft commodity prices.
Brazilian chemical production, meanwhile, declined 4.4% during 2015, according to the American Chemistry Council (ACC).
Plastic resin demand in Brazil was particularly hammered, according to Rina Quijada, senior director for Latin America at the consulting firm IHS Chemical. In 2015, demand for polyethylene, used in consumer packaging, dropped 4.5%. Demand for polypropylene, used in durable goods such as cars, declined 8.0%. And demand for polyvinyl chloride (PVC), used heavily in construction, plummeted 14%.
It isn’t all bad news for Brazilian chemical makers. A 30% devaluation of the Brazilian currency, the real, against the dollar, has made the country’s imports more expensive and exports cheaper. Also, low oil prices have made the country’s petrochemical sector, which runs mostly on oil-derived naphtha instead of natural gas, more competitive globally. “Imports have dropped considerably,” Quijada says.
And this year should be better. ACC predicts 0.8% growth in Brazil’s chemical industry. Quijada expects the polyethylene industry will show modest growth, although she expects to see demand drops of 10% for PVC and 3% for polypropylene.
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(ACC Mentioned) Chemical Outlook 2016 By Market
Jan 11, 2016 | Chemical & Engineering News
By Marc Reisch
The outlook for specialty chemicals in 2016 is bright, according to the American Chemistry Council. The trade association expects specialties production to rise 3.9% globally in 2016 after a 3.8% increase in 2015.
In the U.S., rising consumer spending on cars has been a definite plus for specialty chemicals, points out Ray K. Will, a director at market research firm IHS Chemical. As a result, demand is growing for a host of specialties such as mobile air-conditioning refrigerants, plastic additives, and specialty lubricants.
The continuing oil glut and corresponding low price of fuel has helped propel growth in car and sport-utility vehicle sales. But low energy prices have prompted the oil drilling sector to trim its use of hydraulic fracturing, or fracking, which uses copious amounts of water treatment and other chemicals to extract hydrocarbons from underground wells.
Demand for fracking water treatment chemicals has slipped “significantly” from a high point just a few years ago, says Colin Frayne, a consultant at water chemical advisory firm Aquassurance. Still, he predicts that the much larger industrial and drinking water treatment market will grow between 5 and 7% worldwide in 2016.
One bright spot, Frayne says, is the need for chemicals to treat water for cooling towers that chill computer equipment at data processing farms. In addition, global shortages of water for drinking and industrial use will mean greater emphasis on desalination, water recycling, and rainwater capturing techniques. He anticipated mounting reliance on water treatment chemicals and reverse-osmosis membrane filtration systems to make those techniques safe and practical.
A robust automotive market is also helping push up demand for high-performance structural adhesives by some 5.5% annually, says Phil Phillips, president of Chemark Consulting. Rising use of such adhesives—including epoxies, urethanes, silicones, and cyanoacrylates—also comes from improving markets for housing and electronics, he says.
Increased car sales, low fuel prices, and good economic growth bode well this year for catalysts used in refineries, according to Al Beninati, president of Grace Catalysts Technologies. He predicts demand will increase by about 2% in the U.S. and a little higher globally.
Polyolefin catalyst demand will grow in the low single digits in 2016, Beninati predicts. Demand will be especially strong in the U.S., where low feedstock prices prevail. Automotive demand for plastic components will account for some of that growth, but a more significant driver will be the need for packaging materials, particularly in emerging markets, he says.
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(ACC Mentioned) Commentary: An Inauspicious Start To 2016 For Chemicals And The Economy
Jan 11, 2016 | ICIS Chemical Business
By Will Beacham
It’s been a less than auspicious start to the New Year. Weak China manufacturing data triggered a 7% slide in China’s benchmark stock market and a trading halt on 4 January, along with a repeat on 7 January spurred by another 0.5% devaluation of the yuan, with the pain spreading across the globe. Crude oil continued its slide to below $35/bbl for both Brent and WTI, boding ill for chemical prices.
And the “lower for longer” mantra applies not just to crude oil, but increasingly to the global economy.
Key themes going into 2016 are the China slowdown and currency devaluation, the commodities collapse led by crude oil, US interest rate hikes, recession in Brazil and Russia, and greater geopolitical risk.
Manufacturing activity is clearly slowing in China and the US. The Caixin/Markit China Manufacturing PMI (Purchasing Managers’ Index), released on 4 January, fell further to 48.2 for December versus 48.6 in November, representing the 10th consecutive month of contraction.
Any reading above 50 indicates expansion in the manufacturing economy; under 50 indicates contraction.
And US momentum has not only slowed through 2015, but has now turned negative for two months in a row. The ISM US Manufacturing PMI fell in lockstep with China to 48.2 for December from 48.6 in November.
The downdraft in US and Europe equity markets on 4 January from the China fallout resumed on 6 January, with the Euro Stoxx 50 Index down 1.9%, and the US S&P 500 index off 1.3%.
CHEMICAL STOCKS CRUSHED
Taking more than their fair share of lumps were chemical companies, part of the battered materials group. US firms suffered much worse than their European counterparts.
In the US, big stock price declines were seen on 6 January from Axiall, (-11.0%), Chemours (-5.5%), Trinseo (-5.0%), Ferro (-5.0%), Westlake Chemical (-4.9%), Methanex (-4.9%), Huntsman (-4.8%), LyondellBasell (-4.7%), Albemarle (-4.4%) and FMC (-4.2%). Further falls on the order of 3-6% for many chemical stocks were seen on the morning of 7 January.
Axiall’s outsized decline was exacerbated by a big cut in earnings estimates. Cowen analyst Charles Neivert cut his 2015 earnings per share (EPS) estimate on Axiall by a modest $0.03, to $0.75, but took the axe to his 2016 forecast by a whopping $0.89, to $0.93.
“The cuts are primarily a result of planned outages stemming from weak export markets and a well supplied [US] domestic market in caustic soda and PVC [polyvinyl chloride],” said Neivert.
POSITIVE US OUTLOOK?
American Chemistry Council chief economist Kevin Swift remains positive on the US chemical sector outlook even against the backdrop of slower global economic growth (see page 9).
Swift expects US chemical production (excluding pharmaceuticals) to rise 3.1% in 2016 after a 3.8% gain in 2015. Further gains of 4.7% in 2017 and 5.3% in 2018 are expected as major new capacity starts up.
“In the long term, the US chemical industry will grow faster than the overall US economy,” said Swift. US GDP is expected to rise just 2.6% annually in 2016-2018.
Paul Hodges, chairman of consultancy International eChem, sees crude oil prices collapsing further in 2016, with chemical prices falling in tandem, partly spurred by the removal of global monetary and fiscal stimulus.
“There will be an end to the tidal wave of lending of around $35 trillion over the past five-to-six years, which inflated values, and a return to the true fundamentals of supply and demand. Oil prices will return to their historical level of around $25-30/bbl,” said Hodges.
“Investments based on oil commanding a price premium over natural gas will have to be revisited,” he added.
And on that “lower for longer” theme applying to the global economy as well as oil, demographic headwinds will continue to weigh on demand, Hodges noted.
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(ACC Mentioned) Hamner Institutes Closes Its Doors
Jan 11, 2016 | Chemical & Engineering News
By Marc S. Reisch
The Hamner Institutes for Health Sciences in Research Triangle Park, N.C., ended operations on Dec. 31. Once known as the Chemical Industry Institute of Toxicology, it was founded by 11 chemical companies in 1974 to gauge the potential impact of chemicals on human health. In 2001, 90% of its $18 million budget came from the Long-Range Research Initiative of the American Chemistry Council. However, Hamner’s Institute for Chemical Safety Sciences will live on. SciMetrika, a . . .
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States Compare House, Senate TSCA-Modernization Bills
Jan 11, 2016 | BNA Daily Environment Report
By Pat Rizzuto
Chemical manufacturers' priorities should not control the Environmental Protection Agency's timetable to assess the risks of chemicals in commerce, according to a legislative analysis released by the Environmental Council of the States.
ECOS, an association of state and territorial environmental agency officials, released Jan. 7 an analysis of changes to the Toxic Substances Control Act that would be made by House and Senate bills modernizing TSCA and the effects those changes could have on states.
The 11-page analysis highlights specific sections of each bill that states would like legislators to retain as the two chambers negotiate a final bill.
It also mentions provisions states would like to add to or delete from whatever final legislation would be approved by the House and Senate.
The analysis is not an official ECOS position, the state organization said. The analysis resulted from discussions held by the Northeast Waste Management Officials' Association, the Massachusetts Toxic Use Reduction Institute, the Washington Department of Ecology and agencies in other states.
Two Bills
In a unanimous voice vote Dec. 17, 2015, the Senate passed the Frank R. Lautenberg Chemical Safety for the 21st Century Act (S. 697), which would overhaul TSCA for the first time since it became law in 1976 (244 DEN A-7, 12/21/15).
The House passed its TSCA Modernization Act (H.R. 2576) June 23, 2015, by a 398–1 vote (121 DEN A-1, 6/24/15).
House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) and Rep. John Shimkus (R-Ill.), chairman of the energy committee's Environment and the Economy Subcommittee, were scheduled to hold a private meeting Jan. 11 to discuss the subcommittee's 2016 priorities including how to merge the House and Senate TSCA-modernization bills, a committee aide told Bloomberg BNA Jan. 7 (05 DEN A-21, 1/8/16).
The state legislative analysis favors neither the House nor Senate bill, but identifies sections in each that would be preferable to states.
Preemption: Chemicals in Commerce
The first of these sections addresses preemption, or the question of when federal regulation of a chemical in commerce would trump the state's ability to regulate that same chemical.
Under the House bill, state regulation of a chemical in commerce would be preempted, after the EPA decides to regulate a chemical or decides it is safe and doesn't warrant regulation.
Under the Senate bill, state regulations would be preempted once the EPA publishes the scope of the safety assessment and safety determination it will conduct of a chemical in commerce. Those safety analyses would determine whether regulations or other controls were needed.
“The timing of preemption under the House bill is preferable to the approach taken in the Senate bill,” the state analysis said.
Preemption: New Chemicals
The House and Senate bills take different approaches to preemption of new chemicals regulated by the EPA.
Neither TSCA nor either of the two bills that would modernize the law would require chemical manufacturers to submit specific data to the EPA when the companies seek to introduce a new chemical into commerce.
The agency's regulations of such chemicals, therefore, often are based on predictive analyses it conducts rather than measured toxicity or exposure data.
The House bill would preempt state regulations of new chemicals once the EPA has examined them, despite the sparse data the agency likely would have.
The Senate bill takes a narrower approach and would preempt only certain types of state regulations for new chemicals.
“Many states believe it is important to preserve the ability to regulate a chemical that EPA has not yet analyzed in detail,” the analysis said.
“Many states believe the more limited approach in the Senate bill is preferable,” the analysis said.
Industry Funded Assessments
Both the House and Senate bills would require the EPA to assess the risks of chemicals in commerce.
Both provide mechanisms through which chemical manufacturers could request the EPA assess a particular chemical provided the company or consortia making that request paid for the agency's assessment.
An idea behind those provisions is that an EPA analysis of a chemical could be useful if divergent states are examining the same chemical and the states are reaching different conclusions about it.
The Senate bill sets a limit on the percentage of EPA's assessments that can be determined based on industry's preferences.
The House bill does not specify a limit.
“To ensure that EPA staff time is not consumed by responding to industry requests, it would be preferable to many states if the provision allowing industry requests for safety determinations were removed,” the state analysis said.
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Agencies Seek Ideas To Improve Chemicals Testing
Jan 8, 2016 | InsideEPA
EPA and other agencies are launching a three-stage “challenge” to scientists and engineers to improve high throughout screening (HTS) assays to fully incorporate chemical metabolism and capture chemicals that become more toxic to humans when metabolized, offering up to $1 million in total award money for the projects.
The challenge announced Jan. 8 aims to address one of the long-standing concerns with HTS assays. This newer toxicity screening method is faster and cheaper than traditional animal testing, allowing for many more chemicals to be screened without consuming laboratory animals, and exciting EPA managers by their ability to screen thousands of chemicals. But the tests are metabolically incompetent, meaning they are unable to provide data on a chemical's absorption, distribution, metabolism and excretion within a whole body.
“Current HTS assays do not fully incorporate chemical metabolism, so they may miss chemicals that are metabolized to a more toxic form in the body,” says EPA in a Jan. 8 press release on the awards program. “The challenge announced today, Transform Tox Testing Challenge: Innovating for Metabolism, is calling on innovative thinkers to find new ways to incorporate physiological levels of chemical metabolism into HTS assays. This will help researchers more accurately assess effects of chemicals and better protect human health,” EPA says.
EPA this year will continue several steps to advance the regulatory use of computational toxicology approaches. EPA speakers at the Society for Risk Analysis annual meeting last month outlined plans within the pesticides office to finalize guidelines for the use of alternative testing methods for certain acute testing requirements. The director of the agency's National Center for Computational Toxicology, Rusty Thomas, described a new project designed to assist the pesticides and Superfund offices. Thomas also indicated EPA scientists will be “trying to retrofit all assays with metabolic competence” in the agency's battery, known as ToxCast, over the next two years.
Under the HTS challenge, EPA is asking teams to compete in three stages to win cash prizes, with the first stage running from Jan. 8 to April 8 seeking “practical designs that may be fully implemented.” Up to 10 submissions may receive a prize of $10,000 each and an invitation to continue to the second stage.
For the second stage, participants would craft a prototype to demonstrate the proposed idea, with up to five participants being awarded up to $100,000 each, and one selected as a finalist.
In the third stage, the finalist would have to develop “a commercially viable method or technology for EPA and its partners to demonstrate and test. Based on this testing one participant may be awarded up to $400,000 for delivery of a method or device that will result in technologies that can provide metabolic competence to HTS assays,” EPA says. The various cash awards combine to the $1 million total awards funding.
Deadlines for the second and third phases of the competition are yet to be determined, according to the challenge's website. EPA's announcements calls on scientists from industry, government, academia and non-governmental organizations to enter the competition.
Challenge participants will be judged by a panel of five scientists, including one from the National Toxicology Program, one from the National Institutes of Health’s National Center for Advancing Translational Sciences, and three from EPA, including Thomas.
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Surprise! Congress Just Passed A Bill Tackling An Environmental Problem.
Jan 8, 2016 | The Washington Post
By Philip Bump
Right before the new year, something unusual happened on Capitol Hill: Democrats and Republicans passed environmental legislation without any debate, and President Obama signed it into law.
You will not be surprised to learn that the issue at stake was not climate change. It was "microbeads," tiny spheres of plastic that the cosmetics industry uses in products like face wash to give people a sense of texture. The problem with microbeads is that they are too small to be filtered out of the sewage system, meaning that they were passed into the environment. As NPR reported in 2014, they increasingly ended up in the Great Lakes, where fish would confuse them for food and ingest them.
There was an environmental problem; Congress stepped in to solve it. In a time when it seems as though the two parties are at loggerheads on everything, and particularly on issues pertaining to the environment, that seems remarkable. Why was this so easy when, say, regulating greenhouse gas emissions to help combat climate change is so hard?
Rep. Frank Pallone (D-N.J.) sponsored the legislation that will ban the manufacture of products containing microbeads as of July 2017. When we spoke with him by phone this week, he offered a few reasons for why the legislation didn't prompt much dispute.
First, he noted that the chairman of the committee where the bill originated, Energy and Commerce, is chaired by Rep. Fred Upton (R-Mich.), whose district abuts Lake Michigan. For Upton and others, that proximity to the Great Lakes made the problem a local one. What's more, Pallone said, the committee "makes a real attempt to work in a bipartisan fashion." On this issue, they found consensus.
Second, the bill had the support of the industry it would regulate. "The cosmetics industry is primarily impacted by this," Pallone said, an industry that is "designed to make people look good and feel good. They would rather not have products that are perceived in a negative way from an environmental or health point of view."
Plus, the legislation made things easier for the companies. Cosmetics manufacturer Procter & Gamble, for example, was already planning to eliminate microbeads on a similar timeline. (To Pallone's point about perception, the company's statement about phasing them out notes that "there is a growing preference for us to remove this ingredient.") Pallone noted that several states were developing legislation to address the problem; for companies, it was easier to deal with one federal bill than a number of potentially different state ones.
It's easy to say how those two points contrast with the political debate over climate change. Climate change is not the sort of thing that has led to bipartisan consensus — and is also not the sort of thing that translates neatly and directly into local politics. There's clearly a gap between how much the oil and gas industries spend on lobbying Congress and backing congressional candidates ($141 million on lobbying in 2014 and $31 million on the 2014 cycle) and the amount spent by cosmetics manufacturers. But that's a function of the long-term relationship between Capitol Hill and the industry. The climate change fight is so polarized at this point that even if oil and gas companies didn't spend a dime on Congress for four years, it seems unlikely that Congress would pass significant reforms.
What's more, the coal and oil industries broadly oppose strong action directed at cutting greenhouse gas emissions because it strikes at the heart of what they do. For Procter & Gamble, products with microbeads make up only a small part of what they have to offer. For ExxonMobil, restricting products made from oil has a much bigger effect.
Pallone noted that Congress had in fact taken recent action on combating climate change. In the recently-approved federal budget, tax credits for renewable energy production were continued, which will have the effect of increasing the use of wind and solar energy. Pallone suggested that there was a trick to it. Sure, the measures tackled climate change, he acknowledged. But "as long as you don't label it as such, you have a shot at it."
And that's how you pass environmental legislation on Capitol Hill.
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Automotive Aftermarket Industry Seeks Prop 65 Exemption
Jan 11, 2016 | Chemical Watch
The Motor & Equipment Manufacturers Association (Mema) will seek an explicit exemption from providing warning requirements for aftermarket automotive parts under California's Proposition 65.
The request will come as part of the trade group's testimony to the Office of Environmental Health Hazard Assessment (Oehha) on the agency's proposed reform to “right to know” provisions in Prop 65. The draft reform was issued in November. This replaced an earlier proposal (CW 26 November 2015).
According to Bill Long, president and chief operating officer of the Automotive Aftermarket Suppliers Association (AASA) – the light vehicle aftermarket division of Mema – industry is seeking the exemption because of the long shelf lives of replacement automotive parts. This, he says, would make complying with changing regulations challenging.
“Many replacement parts that are manufactured today – prior to the change in Proposition 65 requirements – could be on service and repair shop shelves for several years, even decades,” Mr Long says.
'Clarity and consistency' needed
The Oehha's new proposal no longer includes the controversial “List of 12” provision. This would have required manufacturers to disclose the presence of any of 12 specific substances on product labels (CW 14 January 2015).
Instead, it is proposing that labels disclose at least one chemical contained in the product that is listed under Prop 65.
However, Mema has raised concern at the lack of clarity in this provision. “The current proposed wording is unclear and could potentially be construed as requiring that the listing contain all the Proposition 65 chemicals for which the product is required to warn,” says Mr Long.
Steve Handschuh, Mema president and chief executive officer, says “the draft regulations leave too much uncertainty for businesses, leaving them open to increased liability risks.”
Mema will urge increased “clarity and consistency” under the new Prop 65 requirements.
It will give its testimony to the Oehha 13 January public hearing in Sacramento. The group will also submit written comments by the 22 January deadline.
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(ACC Mentioned) Shale Gas Catalysts Topic at National Academies Workshop
Jan 11, 2016 | BNA Daily Environment Report
By Pat Rizzuto
Catalysts available and needed to convert shale gas and other feedstocks into chemicals will be discussed at a March 7–8 workshop held at the National Academies of Sciences, Engineering and Medicine.
Catalysts play a key role in breaking down complex molecules, such as those found in petroleum or shale gas, into chemicals, such as benzene and needed by many different industries.
Catalytic technologies help reduce energy use in a variety of chemical processes, Mike Walls, vice president of regulatory and technical affairs at the American Chemistry Council, told Bloomberg BNA in an e-mail.
Beyond their energy-efficiency benefits, catalytic technologies are fundamental drivers for the economic contributions and environmental performance of the chemical industry, Walls said.
“The ‘shale revolution’ has created a competitive advantage in feedstock that is revitalizing the U.S. chemical industry,” Walls said.
“We believe even greater benefits are possible via the discovery of more efficient ways to convert shale-derived feedstocks into value-added products for the chemical industry and dependent sectors,” Walls said.
The National Academies workshop will help scope out the “art of the possible” in terms of research and development that academics, industries and national laboratories can conduct, he said.
The American Chemistry Council, Department of Energy, Dow Chemical Co., National Science Foundation and the Saudi Basic Industries Corp., more commonly known as SABIC, are hosting the workshop to spur research and development of new catalysts that can save energy, thereby reducing greenhouse gas emissions, a DOE spokeswoman previously told Bloomberg BNA (189 DEN A-29, 9/30/15).
The academies committee on the Changing Landscape of Feedstocks for Chemical Production: Implications for Catalysis recently posted the workshop agenda online. Topics to be discussed include:
• an overview of the shale gas boom and its impact on the chemical industry;
• the use of genetically engineered microbes to transform hydrocarbons into chemicals and fuels; and
• new ways to convert natural gas into chemicals.
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(ACC Mentioned) Litigation Tracker: EPA Awaits Boiler MACT Ruling, Preps Ozone Defense
Jan 11, 2016 | BNA Daily Environment Report
By Patrick Ambrosio
The Environmental Protection Agency begins 2016 awaiting a ruling from the U.S. Court of Appeals for the District of Columbia Circuit on the agency's air toxics standards for industrial boilers and solid waste incinerators.
The agency in 2016 also will defend many of its recently issued air regulations, including the 2015 national ambient air quality standards for ozone of 70 parts per billion (see related story).
The D.C. Circuit is reviewing the legality of a trio of regulations that established air toxics emissions standards for industrial boilers and solid waste incinerators. The challenged rules, including the maximum achievable control technology standards for major source boilers, commonly referred to as boiler MACT, have been challenged by both industry associations and environmental organizations.
A D.C. Circuit panel heard oral arguments Dec. 3 on all three regulations and is expected to issue its decision this year (233 DEN A-5, 12/4/15).
While the EPA is awaiting the ruling on the legality of its boiler MACT rule, the agency will begin defending its 70 ppb ozone standards, which were issued in October. The ozone standards are being challenged by Murray Energy Corp. and a coalition of five states led by Arizona and Texas.
The industry and state petitioners intend to ask the D.C. Circuit to consider whether the EPA violated the Clean Air Act by establishing ozone standards that are not attainable (231 DEN A-15, 12/2/15).
The rule is also being challenged by the Sierra Club and environmental groups for being insufficient to protect public health (247 DEN A-1, 12/28/15).
The Environmental Protection Agency begins 2016 awaiting a ruling from the U.S. Court of Appeals for the District of Columbia Circuit on the agency's air toxics standards for industrial boilers and solid waste incinerators.
The agency in 2016 also will defend many of its recently issued air regulations, including the 2015 national ambient air quality standards for ozone of 70 parts per billion (see related story).
The D.C. Circuit is reviewing the legality of a trio of regulations that established air toxics emissions standards for industrial boilers and solid waste incinerators. The challenged rules, including the maximum achievable control technology standards for major source boilers, commonly referred to as boiler MACT, have been challenged by both industry associations and environmental organizations.
A D.C. Circuit panel heard oral arguments Dec. 3 on all three regulations and is expected to issue its decision this year (233 DEN A-5, 12/4/15).
While the EPA is awaiting the ruling on the legality of its boiler MACT rule, the agency will begin defending its 70 ppb ozone standards, which were issued in October. The ozone standards are being challenged by Murray Energy Corp. and a coalition of five states led by Arizona and Texas.
The industry and state petitioners intend to ask the D.C. Circuit to consider whether the EPA violated the Clean Air Act by establishing ozone standards that are not attainable (231 DEN A-15, 12/2/15).
The rule is also being challenged by the Sierra Club and environmental groups for being insufficient to protect public health (247 DEN A-1, 12/28/15).
National Ambient Air Quality StandardsMurray Energy Corp. v. EPA, D.C. Cir., No. 15-1385, 10/26/15
Industry, state and environmental organizations are challenging the EPA's 2015 final rule that set the national ambient air quality standards for ozone at 70 parts per billion.
Procedural motions are due Jan. 22, 2016.
Ozone Litigation to Focus on Attainability Issues (231 DEN A-15, 12/2/15)
South Coast Air Quality Mgmt. Dist. v. EPA, D.C. Cir., No. 15-1115, 4/24/15
The South Coast Air Quality Management District and several environmental organizations are challenging the EPA's implementation rule for the 2008 ozone standards.
The court is considering a proposed briefing schedule, which would begin in 2016.
Los Angeles-Area Air Agency Seeks Review Of Implementation Rule for Ozone Standards (80 DEN A-20, 4/27/15)
Sierra Club v. McCarthy, 9th Cir., No. 15-15894, 5/1/15
Six states are challenging a federal district court's approval of a consent decree between the EPA and environmental groups that calls for the agency to take a phased approach to completing the attainment designations process under the 2010 sulfur dioxide standards.
Briefing in the litigation is complete, but the court has not yet scheduled oral argument.
Six States Want Appeals Court to Review EPA Schedule for Sulfur Dioxide Designations (85 DEN A-1, 5/4/15)
WildEarth Guardians v. EPA, D.C. Cir., No. 14-1145, 7/31/14
A coalition of environmental and public health advocacy groups, led by WildEarth Guardians, is challenging the EPA's implementation rule for the 1997 and 2006 fine particulate matter standards.
The case was argued Nov. 6, 2015.
Fine Particulate Arguments Focus on Practical Effect (216 DEN A-3, 11/9/15)
Startup, Shutdown, Malfunction SIP Call
Se. Legal Found. v. EPA, D.C. Cir., No. 15-1166, 6/12/15
Various states and industry organizations are challenging an EPA rule that requires 36 states to alter their implementation plans for startup, shutdown and malfunction to remove “affirmative defense” language that shielded industrial facilities from civil penalties related to unavoidable equipment malfunctions.
The court has consolidated 16 petitions for review of the rule but has not yet established a briefing schedule.
Texas Affirmative Defense Challenges Consolidated (210 DEN A-22, 10/30/15)
Mercury and Air Toxics Standards
Util. Air Regulatory Grp. v. EPA, D.C. Cir., No. 15-1013, 1/20/15
Environmental and power industry organizations are challenging an EPA reconsideration rule that established an alternative method for compliance with the Mercury and Air Toxics Standards during startup and shutdown.
The litigation has been held in abeyance since Aug. 18, 2015, pending the D.C. Circuit's Dec. 15 decision in White Stallion Energy Ctr. LLC v. EPA, D.C. Cir., No. 12-1100, 2/16/12
D.C. Circuit Halts Power Plant Startup Lawsuits (161 DEN A-1, 8/20/15)
White Stallion Energy Ctr. v. EPA, D.C. Cir., No. 13-1106, 4/3/13
Various industry groups are challenging a provision in the Mercury and Air Toxics Standards that requires power plants to comply with a work practice standard during startup and shutdown.
The litigation has been held in abeyance since Aug. 18, 2015, pending the D.C. Circuit's decision in White Stallion Energy Ctr. LLC v. EPA (No. 12-1100).
D.C. Circuit Halts Power Plant Startup Lawsuits (161 DEN A-1, 8/20/15)
ARIPPA v. EPA, D.C. Cir., No. 15-1180, 6/23/15
Utility, industry and environmental groups are challenging the EPA's denial of all remaining reconsideration requests on the Mercury and Air Toxics Standards.
The litigation has been held in abeyance since Aug. 19, 2015, pending the D.C. Circuit's decision in White Stallion Energy Ctr. LLC v. EPA.
More Groups Sue Over MATS Reconsideration (127 DEN A-15, 7/2/15)
Chesapeake Bay Found. v. EPA, D.C. Cir., No. 13-1200, motion filed 6/24/13
Environmental groups are challenging a reconsidered rule that set mercury and air toxics standards for new and modified power plants, known as the New Source MATS Reconsideration Rule.
Litigation has been held in abeyance since June 17, 2014, to allow for EPA reevaluation of numeric emissions standards promulgated under the rule.
Methodology Doubts Lead EPA to Seek Remand of Reconsidered Power Plant Rule (45 DEN A-8, 3/7/14)
Other Air Toxics Standards
U.S. Sugar Corp. v. EPA, D.C. Cir., No. 11-1108, 4/4/11
Industry and environmental groups are challenging the EPA's revised maximum achievable control technology standards for major source boilers, commonly referred to as Boiler MACT.
The case was argued Dec. 3, 2015.
Court Hears Arguments on Boiler, Incinerator Rules (233 DEN A-5, 12/4/15)
Am. Chemistry Council v. EPA, D.C. Cir., No. 11-1141, 5/17/11
Industry and environmental groups are challenging the EPA's revised air toxics standards for area source industrial boilers.
The case was argued Dec. 3, 2015.
Court Hears Arguments on Boiler, Incinerator Rules (233 DEN A-5, 12/4/15)
Am. Forest & Paper Ass'n v. EPA, D.C. Cir., No. 11-1125, 4/29/11
Industry and environmental petitioners are challenging the EPA's revised air toxics standards for commercial and industrial solid waste incinerators.
The case was argued Dec. 3, 2015.
Court Hears Arguments on Boiler, Incinerator Rules (233 DEN A-5, 12/4/15)
Sierra Club v. EPA, D.C. Cir., No. 15-1246, 7/31/15
Environmental groups are challenging the EPA's determination that it met legal obligations to regulate sources responsible for at least 90 percent of the emissions of seven hazardous air pollutants.
The court has not yet set a briefing schedule.
EPA Sued Over Toxics Standards Determination (148 DEN A-2, 8/3/15)
Am. Chemistry Council v. EPA, D.C. Cir., No. 15-1146, 5/18/15
The American Chemistry Council and Eastman Chemical Co. are challenging the EPA's national emissions standards for hazardous air pollutants for off-site waste and recovery operations.
The litigation has been held in abeyance since July 20, 2015, pending completion of EPA administrative reconsideration proceedings.
Pressure Relief Valve Provisions Focus Of Industry Lawsuit on Off-Site Waste Rule (121 DEN A-9, 6/24/15)
Felman Prod. LLC v. EPA, D.C. Cir., No. 15-1296, 8/28/15
The two companies that operate manganese ferroalloy production facilities in the U.S. are challenging the EPA's June 2015 revised air toxics standards for the source category.
Litigation has been held in abeyance since Nov. 30, 2015, to allow for settlement negotiations.
EPA Sued Over Ferroalloy Emissions Standards (169 DEN A-4, 9/1/15)
Am. Forest & Paper Ass'n v. EPA, D.C. Cir., No. 09-1312, 12/15/09
The American Forest and Paper Association is challenging the EPA's handling of emissions during periods of startup, shutdown and malfunction under both the 1998 air toxics standards for pulp and paper facilities and the EPA's 2012 revised standards for that source category.
The litigation has been held in abeyance since Feb. 11, 2013, pending completion of EPA administrative reconsideration proceedings.
Paper Trade Association Challenges EPA Air Toxics Rule for Pulp, Paper Industry (221 DEN A-4, 11/16/12)
Cal. Cmtys. Against Toxics v. McCarthy, D.D.C., 1:15-cv-512, 4/8/15
Environmental groups are seeking a court order that would compel the EPA to review air toxics standards for various industries, including semiconductor manufacturing and municipal solid waste landfills.
The briefing schedule on a motion for summary judgment concludes Feb. 4.
EPA Overdue on Air Toxics Reviews, Complaint Says in Seeking Court Deadlines (68 DEN A-15, 4/9/15)
Georgia-Pacific v. EPA, D.C. Cir., No. 14-1267, 12/5/14
Georgia-Pacific LLC and the American Chemistry Council are challenging the EPA's 2014 revised air toxics standards for facilities that produce amino and phenolic resins.
The litigation has been held in abeyance since May 21, 2015, pending completion of EPA administrative reconsideration proceedings.
Georgia-Pacific Petitions EPA for Review Of New Amino, Phenolic Resin Standards (236 DEN A-12, 12/9/14)
Volkswagen Civil Litigation
In re Volkswagen “Clean Diesel” Mktg., Sales Practices and Prod. Liab., N.D. Cal., No. 3:15-md-2672, 12/8/15
Consumers are suing Volkswagen of America Inc. for alleged violations of consumer protection law related to the use of illegal emissions cheating software in the company's diesel engine vehicle fleet.
An initial pretrial conference was held Dec. 22, 2015.
Volkswagen Consumer Lawsuits Sent to California Court (236 DEN A-2, 12/9/15)
Vehicle Emissions Modeling
Kansas v. EPA, D.C. Cir., No. 14-1268, 12/5/14
Petitioners, including Kansas and Nebraska, are challenging the EPA's updated Motor Vehicle Emission Simulator (MOVES2014), which is used by states to craft state implementation plans to meet national ambient air quality standards.
Oral arguments are scheduled for Feb. 11, 2016.
Feb. 11 Arguments Set on Vehicle Emissions Model (226 DEN A-18, 11/24/15)
Urban Air Initiative Inc. v. EPA, D.D.C., No. 1:15-cv-1333, 8/17/15
Two advocacy groups are challenging the EPA's alleged failure to release documents related to the agency's EPAct/V2/E-89 Tier 2 Gasoline Fuel Effects Study, which was used as the basis for emissions factors included in MOVES2014.
The litigation was referred for mediation to Magistrate Judge Alan Kay on Dec. 21, 2015.
Groups Sue EPA Over Vehicle Modeling Documents (159 DEN A-5, 8/18/15)
Cross-State Air Pollution
Util. Air Regulatory Grp. v. EPA, D.C. Cir., No. 12-1342, 8/6/12
Environmental and industry petitioners are challenging an EPA rule that allowed states to use emissions trading under the Cross-State Air Pollution Rule to reduce regional haze as an alternative to requiring existing power plants to install best available retrofit technology.
Parties are directed to file motions to govern future proceedings by Feb. 1. The litigation had been held in abeyance pending a decision in litigation that challenged the cross-state rule.
EPA Faces Challenges to Rule Allowing States To Use Cross-State Trading to Reduce Haze (151 DEN A-2, 8/7/12)
Util. Air Regulatory Grp. v. EPA, D.C. Cir., No. 12-1346, 8/9/12
Various power industry groups are challenging an EPA rule that revised emissions budgets for 13 states under the Cross-State Air Pollution Rule.
The litigation is being held in abeyance pending the EPA's response to the D.C. Circuit's remand of certain cross-state rule emissions budgets in EPA v. EME Homer City Generation LP, 134 S. Ct. 1584, 78 ERC 1225, 2014 BL 118432 (2014).
Cross-State Emissions Budgets Case Put on Hold (189 DEN A-13, 10/1/12)
Other Emissions Standards
Hearth, Patio and Barbecue Ass'n v. EPA, D.C. Cir., No. 15-1056, 3/16/15
Industry groups, including the Hearth, Patio and Barbecue Association and the Pellet Fuels Institute, are challenging the EPA's revised new source performance standards for wood-burning heaters, which were updated in 2015 for the first time since 1988.
Procedural motions are due Feb. 25, 2016.
Pellet Fuel, Masonry Heater Provisions Highlighted in Lawsuits Over Wood Stove Rule (116 DEN A-6, 6/17/15)
Humane Soc'y of the United States v. McCarthy, D.D.C., No. 1:15-cv-141, 1/28/15
Environmental groups are seeking a court order that would require the EPA to respond to a 2009 petition requesting the regulation of concentrated animal feeding operations as a stationary source of air pollution.
The court is weighing a motion by the EPA to dismiss the litigation for lack of subject matter jurisdiction.
Lawsuits Seek Court Order Requiring EPA Response on Livestock Emissions (19 DEN A-12, 1/29/15)
Air All. Hous. v. EPA, D.C. Cir., No. 15-1210, 7/10/15
Air Alliance Houston and three other environmental groups are challenging the EPA's updated emissions factors for refineries and chemical manufacturing plants, which set a new value for estimated volatile organic compound emissions from flaring.
The litigation has been held in abeyance since Sept. 28, 2015, to allow for settlement discussions.
EPA Sued Over Refinery, Chemical Site Emissions (133 DEN A-1, 7/13/15)
Am. Forest & Paper Ass'n v. EPA, D.C. Cir., No. 14-1097, 6/3/14
The American Forest & Paper Association is challenging the EPA's performance standards for particulate emissions from new and modified kraft pulp mills.
The litigation has been held in abeyance since July 25, 2014, pending completion of EPA administrative reconsideration proceedings.
Trade Group Seeks Appeals Court Review Of EPA's Kraft Pulp Mill Emission Standards (109 DEN A-9, 6/6/14)
Portland Cement Ass'n v. EPA, D.C. Cir., No. 15-1310, 9/4/15
The Portland Cement Association is challenging the EPA's performance specification 18, which set requirements for assessing continuous monitoring systems for emissions of hydrogen chloride at cement kilns and power plants.
The litigation has been held in abeyance since Oct. 19, 2015, pending completion of EPA administrative reconsideration proceedings.
Court Asked to Halt Monitoring Specification Lawsuit (200 DEN A-7, 10/16/15)
Permitting
United States v. DTE Energy, 6th Cir., No. 14-2274, 10/6/14
The EPA is appealing a 2011 district court ruling that found DTE Energy Co. did not violate the Clean Air Act by renovating a Michigan power plant without first obtaining a new source review permit.
The case was argued Dec. 10, 2015.
Pre-Construction Emissions Estimates At Issue in DTE New Source Review Case (67 DEN A-5, 4/8/15)
Am. Petroleum Institute v. EPA, D.C. Cir., No. 15-1197, 6/30/15
The American Petroleum Institute is challenging an EPA rule that established general permits and permits by rule for use on tribal lands in permitting minor sources under the new source review program.
The litigation has been held in abeyance since Aug. 13, 2015, while the EPA completes work on a rule to establish a general permit for new and modified sources in the oil and natural gas production sector.
Court Asked to Stay Tribal Permitting Litigation (152 DEN A-4, 8/7/15)
Regional Haze
Nat'l Parks Conservation Ass'n v. EPA, 8th Cir., No. 12-2910, 8/13/12
Environmental groups are challenging the EPA's approval of Minnesota's regional haze plan, which utilized an emissions trading program rather than best available retrofit technology to reduce haze.
The case was argued Sept. 23, 2015.
Challenge to Minnesota Haze Plan Is Filed in Wrong Court, EPA Brief Says (22 DEN A-8, 2/3/15)
Yazzie v. EPA, 9th Cir., No. 14-73100, 10/7/14
Petitioners are challenging the EPAs' source-specific federal implementation plan to reduce nitrogen oxides emissions from the Navajo Generating Station to reduce regional haze at 11 national parks and wilderness areas.
The litigation has been fully briefed, but oral arguments have not yet been scheduled.
Briefs Challenge EPA Emissions Plan For Power Plant Near Grand Canyon (58 DEN A-3, 3/26).
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Obama's Keystone Saga Takes New Turn
Jan 10, 2016 | The Hill - E2 Wire
By Timothy Cama
A pair of legal challenges filed by the developer behind Keystone XL could end up being a big headache for President Obama, who tried to put the issue to rest in November.
TransCanada Corp., which wanted to build the oil pipeline from Canada’s oil sands to Gulf Coast refiners, filed a dispute under the North American Free Trade Agreement (NAFTA) and a separate federal lawsuit Wednesday challenging Obama’s rejection of a cross-border permit.Experts say that the NAFTA challenge, in which TransCanada is asking for $15 billion to compensate for losses from the cancellation, is the more likely of the challenges to succeed, while the domestic lawsuit is a broad constitutional claim with longer odds.
Nonetheless, the actions revive one of the most controversial environmental fights in recent memory. The issue pits environmentalists and Democrats against the oil industry and Republicans, with the side sparring over whether the United States’ energy future is one of clean, non-fossil-fuel energy or one of increased use of oil from friendly trading partners.
The State Department declined to comment on the challenges, citing a policy against commenting on pending litigation.
But White House Press Secretary Josh Earnest, while refusing to speak at length, generally defended the Obama administration’s seven-year-long consideration, and eventual rejection, of Keystone.
“We continue to be confident that the administration acted lawfully,” Earnest said, adding that the decision came “after extensive public outreach and consultation.”
As for the NAFTA process, known as an investor-state dispute settlement, Earnest said that he’s “confident that the decision that was made vis-à-vis the Keystone pipeline is entirely consistent with all of our international obligations, including our obligations under NAFTA.” He noted that the United States has never lost in any such dispute, NAFTA or otherwise.
But despite the United States’ history of success in investor-state disputes, the administration could still be at risk.
The dispute process allows companies from Mexico, Canada or the United States to be compensated from another government for a loss of the company’s investment that was due to a NAFTA violation by that country. TransCanada cannot force approval of Keystone, but it can get back the money it’s owed if it wins.
TransCanada’s dispute will be considered by a three-person panel, with one person appointed by the company, one by the United States and one by both parties.
The preliminary complaint filed Wednesday charges that the United States, through the Keystone rejection, discriminated against TransCanada for being a Canadian company, improperly took something that belongs to the company and did not subject TransCanada to “fair and equitable” treatment, a vague term that is often left to the tribunal panel to define.
The “fair and equitable” piece is where the Obama administration is most vulnerable, said David Gantz, a trade law professor at the University of Arizona College of Law.
“The issue becomes, if there is a very detailed procedure for approval or disapproval of pipelines, whether the U.S. followed those procedures or whether it went beyond the criteria or procedures,” Gantz said.
“I would say the U.S. is pretty vulnerable on that one issue,” he said, “in part because the White House staff and others essentially said, ‘we know we’re doing this politically and to make a statement,’ but the regulations don’t say you can make a statement in the most blatant sense.”
The fight will likely center on a 2004 executive order that governs how presidents judge cross-border energy infrastructure, which prescribes certain steps for public consultation and due process.
In its filing, TransCanada highlighted Obama’s statement that the primary reason for rejecting the pipeline was to show a strong United States climate policy in the run-up to the United Nations climate agreement negotiations in Paris.
“Stated simply, the delay and the ultimate decision to deny the permit were politically-driven, directly contrary to the findings of the administration’s own studies, and not based on the merits of Keystone’s application,” the company wrote. “The administration’s actions violated U.S. obligations under [NAFTA].”
The entire NAFTA process can take four to six years, and a recent United Nations report said governments spend an average of $8 million defending each claim.
As for the compensation, Gantz doubts that TransCanada could get anywhere near the $15 billion it seeks, since the total likely relies on speculation about future earnings.
But Robert Stumberg, an international law professor at Georgetown University Law Center, said NAFTA disputes can also serve important political and lobbying purposes that, in some ways, can be more important that the legal process itself.
He said TransCanada has important advocacy tasks both in Canada, with its new liberal government led by Justin Trudeau, and in the United States, with a Republican Congress and an upcoming presidential election.
“It could be understood as a campaign to rally the troops for the oil companies vis-à-vis the new government in Canada,” Stumberg said.
“Within the United States, having a claim like this and a big dollar amount attached to it, it’s a chance to rally the troops within the United States,” he continued, pointing out the impact the issue could have in the 2016 presidential campaign, where all the GOP contenders want to approve the project and all the Democrats oppose it.
The challenges also have the effect of keeping Keystone in the public eye, Stumberg said.
Canadian politics could play a big role in the issue as well. Trudeau said he was “disappointed” with the rejection, but he and Obama have pledged to move forward and cooperate on energy and climate more than Trudeau’s conservative predecessor Stephen Harper did.
Canada’s embassy in Washington declined to comment on TransCanada’s filings. The country could file a brief with the NAFTA panel if it chooses.
But the federal court challenge, filed in Houston, is more of a long shot attempt to force approval of Keystone, said Pat Parenteau, a law professor at the Vermont Law School.
It challenges the president’s authority to reject any cross-border oil pipelines at all, saying that the executive order dictating the process intrudes on a realm reserved for Congress.
“Basic principles of constitutional law establish that the president exceeds his authority where, as here, he purports to act without statutory authority and contrary to the expressed will of Congress to resolve an issue of domestic and international commerce that the Constitution authorizes Congress to address,” the company wrote.
Parenteau acknowledged that the Supreme Court has not reviewed such questions before, though other federal courts have affirmed the president’s authority, he said.
“Based on the law that we have so far, I don’t see a serious constitutional issue here,” Parenteau said. “But we don’t have a definitive word from the Supreme Court on the president’s foreign relations authority to require permits for pipelines.”
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Oil Plunge Sparks Calls For Congress To Act
Jan 10, 2016 | The Hill - E2 Wire
By Alexander Bolton
As the price of oil plunges to its lowest point in 12 years — and threatens to drag the broader U.S. economy down with it — lawmakers say Congress should consider helping teetering energy companies with policy fixes beyond the decision to lift the oil-export ban.
Senate Energy and Natural Resources Committee Chairwoman Lisa Murkowski (R-Alaska) and House Energy and Commerce Chairman Fred Upton (R-Mich.) will meet next week to discuss an energy package expected to move in both chambers later this year.
Among the proposals under discussion: Expediting the process for exporting liquefied natural gas, and upgrading infrastructure to move energy to market more quickly and cheaply.
Another top priority for the two Republicans is loosening environmental and other regulations. But moves in that direction are highly unlikely while a Democrat remains in the White House.
With oil currently below $33 a barrel, some on Capitol Hill are calling for quick action.
Some lawmakers are floating the possibility of taking retaliatory trade measures against Saudi Arabia, which has flooded the market with cheap oil in what some analysts see as a bid to drive America’s growing shale oil industry out of business.
The stock market slumped again on Friday, capping off the worst year-opening week in the history of the Dow Industrial Average and the S&P 500. Analysts blamed tumbling oil prices, after the stock market in China stabilized overnight.
“We’re trying to help the industry and we know that exports will help whether it’s crude oil or LNG,” Upton said, referring to liquefied natural gas. “I’m intending to sit down with Lisa next week.
“The two of us have worked together already and I remain confident that if she can get a bill out of the Senate…that we can a get a bill that is in fact bipartisan that the president can sign,” he added.
Upton said the House version of the energy legislation includes language to expedite natural gas exports.
Sen. John Hoeven (R-N.D.) claimed the Obama administration has proposed nearly 100 regulations for the oil and gas industry, ranging from restrictions on methane and carbon dioxide to limits on operating on federal land.
“We really are right now locked in a global battle between OPEC and Russia, countries like Venezuela — we’re really battling out to see who’s going to provide oil and gas,” he said. “That’s why it’s so important that government create an environment where we can compete.”
Legislation passed last month to lift the four-decade ban on oil exports is expected to boost exports by 500,000 barrels a day but so far it has had little impact on prices.
An energy package is one of the few major pieces of legislation expected to pass the Senate this year after Majority Leader Mitch McConnell (R-Ky.) did his best to clear the decks before the election year.
A wave of bankruptcies in the energy sector have spread alarm on Capitol Hill and Wall Street, where plunging oil prices, along with China’s fluctuating currency, set off a round of stampede selling this week.
Goldman Sachs has warned that oil may sink as low as $20 a barrel, which would shake financial markets by sinking energy stocks, driving companies into bankruptcies and setting off a round of junk-bond defaults.
Third Avenue Investment, a New York-based fund, last month blocked clients from pulling their money, prompting a sell-off of high-yield bonds and evoking memories of the 2008 meltdown.
Growing tensions between Saudi Arabia and Iran over the execution of a Shiite cleric might have been thought to have boosted prices by raising the specter of regional conflict. But that had little effect on oil prices this past week.
Bankruptcies among oil and gas companies have hit the highest quarterly level since the midst of the 2008 financial crisis, Bloomberg Business reported last month.
Oil and gas companies have laid off more than 250,000 workers and that number could swell in the months ahead.
North Dakota Rep. Kevin Cramer (R) said lawmakers could begin to mull retaliatory tariffs against Saudi Arabia in the future but emphasized he is not advocating for that yet.
“I’m very hesitant to go down that path at this time but clearly that would be a possible option should the Saudis not play fair. Because as much as I advocate for free and open markets, I also advocate for fair markets,” he said.
Saudi Arabia, taking advantage of its low extraction costs, has refused to curb oil production in a bid to expand market share and undercut competitors. This has raised the prospect of the U.S. government taking action to level the playing field for domestic companies.
“I’m not prone to a lot of government intervention in terms of propping industry up, per se. What would be the most helpful is to roll back regulations that get in the way of further development and profitability,” said Cramer, who cited the Endangered Species Act as one burdensome regulation.
“Obviously they have access to our market and I suppose to some degree there is a role that can be played there. I’m not at the point where I’m ready to advocate tariffs or restricting their access necessarily,” he added.
If the energy industry continues to sink, other proposals will pop up in the energy negotiations due to kick off next week.
Hoeven said he wants to help the energy industry by pushing legislation to allow companies to gather natural gas from oil wells on federal land.
“The other thing of course is infrastructure. We also have to help our industry compete by having infrastructure. That means the right mix of pipelines, transmission lines, rail, roads,” he said.
He has introducted the North American Energy Infrastructure Act to expedite the construction of pipelines.
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SAB Panel Calls On EPA To Improve Fracking Water Study
Jan 11, 2016 | InsideEPA
An EPA Science Advisory Board (SAB) panel is calling on the agency to clarify the data limits and uncertainties that the adviser say hinder EPA's findings in a pending study of no evidence of widespread systemic impacts of hydraulic fracturing on drinking water, saying that the agency should focus more on local fracking impacts.
“For example, the impacts of water acquisition will predominantly be felt locally at small space and time scales,” says the SAB panel in a Jan. 7 draft letter to EPA. “These local-level hydraulic fracturing impacts can be severe, and the draft Assessment Report needs to do a better job of recognizing the importance of local impacts,” the letter says.
The panel is slated to discuss the draft letter during a Feb. 1-2 teleconference, with additional meetings scheduled for March 7 and March 10 if necessary. The advisers previously outlined their concerns over the draft study in documents and teleconferences in December.
The panel must craft consensus advice in response to the set of eight charge questions and the chartered SAB will then review the panel's draft advice before issuing a final report.
EPA conducted the massive study at the behest of a federal budget law, examining findings across five phases of the fracking-water lifecycle for potential impacts: water acquisition, chemical mixing, well injections, flowback and produced water and wastewater management.
The draft assessment, released in June, is not intended to be a quantitative risk assessment, but instead identifies mechanisms by which fracking could potentially impact drinking water, but the SAB panel is taking issue with the agency's draft conclusion that “We did not find evidence that hydraulic fracturing mechanisms have led to widespread, systemic impacts on drinking water resources in the United States."
In the draft letter, the panel says that the statement does not clearly describe the drinking water systems examined in the draft study, does not define “systemic,” widespread,” or “impacts,” and fails to reflect uncertainties and data limitations in the draft assessment. “The statement is ambiguous and requires clarification and additional explanation,” the draft letter says.
In a recent letter to EPA, the Independent Petroleum Association of America urged the agency against revising the draft conclusion saying "[t]he conclusion of no widespread, systemic impacts appropriately describes EPA's findings, which show that while oil and natural gas development (or indeed any kind of energy development) is certainly not risk free, the risk of water contamination is not pervasive."
The draft SAB panel letter also calls for the agency to clarify the risk associated with fracking injection well failure scenarios and provide more data on the potential extent that chemical mixing could effect drinking water, the extent and duration of impacts from spills of wastewater, and toxicologoical properties of chemicals used in fracking.
The panel says EPA should “include an additional major finding that: (a) large severe hydraulic fracturing flowback and produced water-related contaminant release incidents such as blowouts, and smaller common incidents (usually containment leaks), may cause effects on drinking water resources on a volume basis; and (b) blowouts are more severe in terms of impact due to the high-volume, short-duration characteristics of the release.”
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EPA, DOT Urged To Clarify Jurisdiction Over California Methane Gas Leak
Jan 11, 2016 | InsideEPA
House Democrats are urging EPA and the Department of Transportation (DOT) to clarify the agencies' jurisdiction over responding to the Southern California Gas Company's (SoCalGas) leaking natural gas storage facility outside Los Angeles, questioning the role the agencies will play in addressing public health concerns about the massive leak.
“As of January 5, over 79,000 metric tons of methane are estimated to have escaped, the equivalent of burning more than 737 million gallons of gasoline,” says a Jan. 6 letter to the agencies from House Energy & Commerce Committee ranking member Frank Pallone (D-NJ), oversight subcommittee ranking member Diana DeGette (D-CO) and energy subcommittee ranking member Bobby Rush (D-IL).
The lawmakers ask EPA and DOT for a briefing by Jan. 13 on the agencies' responsibilities under the Clean Air Act and Pipeline Safety Act for responding to the leaking field, which since October is believed to have released as much as 40 to 64 tons of methane every hour. “It is our understanding that the jurisdiction of this matter may involve both state and federal agencies” under the pipeline safety and air laws, they write.
The letter raises concerns about adverse health effects associated with the leak reported by nearby residents, including nausea, nosebleeds, headaches, and vomiting from chemicals included in the emissions, pointing out that the releases might include benzene, hydrogen sulfide and other air toxics.
The leak is estimated to contributed so far as much as one quarter of the state's annual emissions of methane, a potent greenhouse gas that EPA is seeking to regulate at new drilling sources.
The House lawmakers' letter follows California Gov. Jerry Brown's (D) call for state air board officials to quickly develop a plan for full mitigation of GHG releases from the leak.
Brown Jan. 6 issued an "emergency" proclamation that requires, among other things, the California Air Resources Board (CARB) to "develop a program to fully mitigate the leak's emissions of methane by March 31,” to be funded by SoCalGas and limited to in-state projects that reduce short-lived climate pollutants.
Methane Emissions
CARB officials are still in the process of seeking additional data from the company about how much methane could ultimately leak from the facility, and awaiting a response from the company expected to clarify the levels of emissions that have occurred since October when the leak was discovered; whether other wells at the facility could be leaking; and how much methane might be lodged in the soil at the site.
The leak was discovered Oct. 23 and has already prompted environmentalists to urge CARB and other state officials to strengthen their GHG control policies by prioritizing reductions of short-lived "fugitive" gases such as methane and using a higher global warming potential factor in assessing the gas's impacts to climate change.
The leak is also prompting comparison to the Deepwater Horizon oil spill, which drew increased scrutiny to measures governing safety and environmental risks from offshore drilling.
Mitchell Englander, the Los Angeles city councilman who presents Porter Ranch, the community closest to the leaking facility, told the New York Times on Jan. 6, “This is the equivalent of the BP oil spill, except it’s on land, in a populated community,” calling the leak “one of the most disruptive, catastrophic environmental events that I’ve seen.”
Environmentalists are already citing the leak in their calls for EPA to strengthen its proposed requirements for leak detection and repair that are part of its proposed emissions standards setting first-time limits on methane emissions from new and modified sources in the oil and gas sector. The proposed rules, which EPA took comment on through Dec. 4, would update the new source performance standards issued for the sector four years ago in order to set first-time controls for methane in addition to expanding the current limits for volatile organic compounds.
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Aliso Canyon Gas Leak Illustrates Data Gaps
Jan 11, 2016 | BNA Daily Environment Report
By Alan Kovski
The ongoing methane leak in California highlights gaps in methods the Environmental Protection Agency uses to measure emissions of the pollutant, environmental advocates said.
Mark Brownstein, a vice president in the climate and energy program at the Environmental Defense Fund, which has led a series of studies looking at methane emissions from the natural gas sector, said Jan. 8 it is unknown whether the Aliso Canyon incident is the highest-volume gas leak that has occurred in the U.S., a reflection of the statistical gaps on the problem.
The EDF studies have found that methane emissions are dominated by a relatively small number of high-volume leaks that come from malfunctioning equipment, said Anthony Marchese, a Colorado State University engineering professor who has helped with some of the studies.
The environmental advocacy group has sponsored 16 studies of methane leak rates over the last five years and has contributed to improvements in the EPA's annual inventories of emissions, but the agency's calculations remain underestimates because they rely too much on extrapolations from standard conditions, Brownstein and Marchese said (63 DEN A-6, 4/2/15).
More Measurements Wanted
Marchese suggested the annual emission estimates might be reasonable if they were extrapolated from many thousands of measurements that include a number of big leaks.
“Counting up the number of sources and multiplying by the emission factor doesn't really work,” Marchese said, referring to an emission factor derived from standard operations.
The Aliso Canyon facility is one of 412 U.S. gas storage sites. The leak there has most recently been estimated to release about 17.1 million cubic feet a day (04 DEN A-14, 1/7/16).
The well failure occurred about 1,000 feet underground, Brownstein said. More than 2,300 people have been displaced from their houses in the community of Porter Ranch, said Timothy O'Connor, an EDF senior attorney.
Brownstein and O'Connor said state regulators need to require regular well integrity testing that looks not just for leaks but for the likelihood of leaks through such means as measuring the thickness of pipe walls. Each state regulator also needs to review its rules and enforcement to guard against leak risks, Brownstein said.
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Erin Brockovich Enters Fray Over Massive Gas Leak
Jan 8, 2016 | E&E News PM
Activist Erin Brockovich warned residents of Porter Ranch, Calif., to brace for a long fight when she spoke at a public meeting near the site of a massive natural gas leak from an underground storage facility that has forced evacuations in the hills above Los Angeles.
Southern California Gas Co., a Sempra Energy subsidiary, has been unable to stop the leak, which is the fourth largest source of methane in California (Greenwire, Jan. 7).
"It's like a volcano that keeps erupting and won't stop. I call it the BP oil spill on land. I think we'll see the fallout for many, many years," Brockovich told the crowd of 500 people gathered at a local Presbyterian church Wednesday.
It also happens to be 20 miles from Brockovich's home in Agoura Hills, ominous news for Southern California Gas.
Brockovich rose to national prominence for helping residents of Hinkley, Calif., win the largest ever direct-action lawsuit settlement from Pacific Gas & Electric Co., inspiring the film named after her starring Julia Roberts.
Southern California Gas is in the midst of drilling relief wells in the hopes of plugging the leak by late February at the earliest. "We know the community and our neighbors in Porter Ranch are frustrated, and we are highly motivated to end the impact on the community and the environment as quickly as possible," the company said in a statment (Rory Carroll, London Guardian, Jan. 8)
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States in Early Stages of Clean Power Plan Compliance
Jan 11, 2016 | BNA Daily Environment Report
By Gerald B. Silverman
States will continue outreach to stakeholders in 2016 as they consider their compliance options with the Environmental Protection Agency's Clean Power Plan, which limits carbon dioxide emissions from power plants.
They will need to make key decisions on how to comply, including whether they will set standards based on a carbon dioxide emissions rate for power plants or whether they will establish mass-based caps on the amount of carbon dioxide that can be emitted from that sector before initial submissions are due to the EPA by Sept. 6.
States also are grappling with whether to pursue trading programs and how that may interact with their neighbors and whether they should include new natural gas-fired units under trading programs, an option the EPA allows.
The states that are farthest along in the compliance process are California, which proposed a compliance strategy based largely on existing programs, and the nine states in the Regional Greenhouse Gas Initiative: Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island and Vermont.
The political divide between so-called red and blue states that has emerged in the legal battle over the plan also will affect state efforts to determine the best compliance pathway (see related story).
Twenty-seven states filed lawsuits to overturn the rule, and 18 states intervened to defend it (214 DEN A-3, 11/5/15).
The goal of the Clean Power Plan (RIN 2060-AR33) is to reduce overall carbon dioxide emissions from the power sector by 32 percent below 2005 levels by 2030. The plan requires states to meet emissions targets, which will be phased in between 2022 and 2030 (149 DEN B-1, 8/4/15).
While states are tasked with developing their own compliance plans, the EPA also will issue a federal plan for those that choose not to develop their own implementation strategy. That plan also is intended to guide states in the development of their own compliance strategies.
The final federal plan is expected in August, and in the interim the EPA is continuing its outreach to states. Janet McCabe, the EPA's acting assistant administrator for air and radiation, told Bloomberg BNA the agency has fielded questions from states, particularly on the rate-based versus mass-based compliance options.
“That's one of those first key questions: Does a state want to look at a mass-based approach or a rate-based approach, and what should they think about?” McCabe said.
RGGI States Agree on Framework
The Regional Greenhouse Gas Initiative (RGGI) states have agreed on a fundamental framework for compliance, recognizing that each individual state still will have to approve its own plan and that changes are possible before the final plans are approved. Under this framework, the RGGI states will use mass-based emissions goals, not rate-based goals, and their plans will cover both new and existing units.
None of the nine RGGI states are expected to leave the seven-year-old cap-and-trade program, Lois New, acting director of the Office of Climate Change at the New York Department of Environmental Conservation, said at a RGGI meeting in November.The RGGI states expect to hold at least three stakeholder meetings before the September deadline. They are seeking input from electricity generators, environmental groups and others on how the RGGI program will need to be fine-tuned to comply with the Clean Power Plan.
Among the key issues that will be addressed are: adjustments to the RGGI emissions cap, potential expansion of the program to other states, trading with other states and adjustments to the program's cost containment reserve (223 DEN A-3, 11/19/15).
“We're in very good shape in meeting the requirements of the Clean Power Plan,” Jared Snyder, assistant commissioner of the New York Department of Environmental Conservation, said at a recent stakeholders meeting. “But we're not done. We have a number of program elements that may not be a perfect fit in the Clean Power Plan.”
Pennsylvania, Virginia Eyed for RGGI
States in the Northeast have been looking closely at Pennsylvania since 2014, when Gov. Tom Wolf (D), as a candidate for office, indicated that the state was interested in joining RGGI (163 DEN B-1, 8/22/14).
Department of Environmental Protection Secretary John Quigley has said Pennsylvania hasn't decided if it will join RGGI. The department is holding “listening sessions” to gather input on the best path to compliance. Natural gas companies and others are pushing the state to adopt a mass-based credit system that facilitates emissions trading and are calling for new generation to be included in the state's compliance plan (199 DEN A-6, 10/15/15).
Another state that has been closely watched is Virginia, where environmental advocates have urged the commonwealth to join RGGI. The Virginia Department of Environmental Quality is drafting a compliance plan and recently closed an informal public comment period held to inform its work.
Legislation (H.B. 2) pre-filed for the 2016 General Assembly session would require legislative approval before the state could send its Clean Power Plan compliance program to the EPA, but it faces an uncertain future. In 2015, the Republican-dominated House of Delegates approved almost identical legislation, but it failed to pass the Senate, narrowly held by Republicans. If H.B. 2 manages to make it through the legislature in 2016, it could be vetoed by Gov. Terry McAuliffe (D).
California Builds on Existing Programs
California has proposed a mass-based compliance strategy based largely on its economy-wide greenhouse gas emissions cap-and-trade program and renewable energy and energy efficiency standard.
“We do think our programs will provide a good path for compliance with the [Clean Power Plan], and just need to make sure any differences are clearly identified and determine how best to address them,” David Clegern, a spokesman for the California Air Resources Board, told Bloomberg BNA in an e-mail. “In the end, we are going to have to discuss with stakeholders, our linked partner, Quebec, and U.S. EPA to see how best to align the program with [Clean Power Plan] requirements.”
The Canadian province of Quebec linked its trading program to California's in 2015.
The state's existing climate and energy programs make them a good fit to achieve the final mass goal of 96.8 million short tons of carbon dioxide the EPA established for the state, the California Air Resources Board said in a 14-page discussion paper released in September.
The state's cap-and-trade program “appears to be generally consistent” with the EPA's expectations for trading programs under the Clean Power Plan, but agency staff is reviewing provisions of the law to identify relevant differences, according to the paper.
Other state climate, air pollution and energy standards may also need to be revised to ensure compliance, CARB said. The board has launched a series of workshops to gather input on policy options and other information, including potential modifications to existing regulations and permitting programs. The agency is expected to release a draft compliance plan in June and present it at CARB's governing board in July.
Governors, Attorneys General Divided
Political disagreements between attorneys general and governors over the Clean Power Plan are happening in as many as eight states: Colorado, Iowa, Maine, Maryland, Massachusetts, Michigan, New Mexico and North Carolina (217 DEN B-1, 11/10/15).
Michigan Attorney General Bill Schuette (R) is part of a group suing to block the plan. That effort is “totally separate” from the implementation work, which is authorized by Gov. Rick Snyder (R), who supports the plan, Grether said. Some assistant attorneys general are working with Schuette on the lawsuit, while others are helping state officials with the compliance effort, Heidi Grether, the deputy director of the Michigan Agency for Energy, said.
Michigan hasn't decided whether to pursue mass-based or rate-based compliance, Grether said. “We're working on finalizing our stakeholder process” with the aim of making a decision based on input from utilities, businesses and others, as well as results from a modeling process currently underway, she told Bloomberg BNA.
“It's safe to say all options are on the table because we don't have enough information otherwise yet,” Grether said. “Nothing has yet been discounted.” The state expects to have the modeling done in the first quarter of 2016.
Ultimately, the plan will be adopted through the state's rulemaking process, which generally takes about two years, Grether said. No legislative input will be needed, she said.
Colorado is developing its plan through a public stakeholder process, Will Allison, director of the Air Pollution Control Division of the Colorado Department of Public Health and Environment, told Bloomberg BNA. No decisions have been made regarding a rate-based or mass-based plan, a new source complement or emissions trading, Allison said.
“We will solicit input from all stakeholders to enable Colorado to design a cost-effective plan that achieves our emission reduction targets and responds to the needs of our state,” he said. “Colorado intends to meet applicable plan submittal deadlines.”
New Mexico Environment Department spokeswoman Allison Scott Majure told Bloomberg BNA that while the state views the plan as “a bit of an overreach” on the part of the federal government, the state nonetheless is participating in the public involvement phase. New Mexico does not want to lose its authority and discretion to develop a state implementation plan, Majure told Bloomberg BNA.
Opponents Weigh Options
The states that have joined the lawsuit against the EPA are expected to take different approaches in 2016.
Some states, including Kentucky, Oklahoma and West Virginia, have said they are planning to protest by refusing to submit compliance plans to the EPA.Oklahoma Gov. Mary Fallin (R) has said the federal rule “represents one of the most expansive and expensive regulatory burdens ever imposed on U.S. families and businesses” (85 DEN A-11, 5/4/15).
State regulators in Texas are keeping their options open. The Texas Commission on Environmental Quality is working with the governor's office and other state agencies to examine possible ways to implement the Clean Power Plan, even though it contends that the rule is illegal, Bryan Shaw, the commission chairman, told Bloomberg BNA.
“We're preparing to be able to implement and look at what it would take to implement some or all of the Clean Power Plan,” Shaw said (215 DEN A-4, 11/6/15).
The Texas Legislature's speaker of the house, Joe Straus (R), formed a committee tasked with looking at new EPA rules, including the Clean Power Plan, and how they will affect the state. The new committee will consider the implications of creating a state plan to comply with the Clean Power Plan versus the federal plan, as well as possible legal recourse as part of the state's response, Straus's office said in a statement.
North Carolina has released draft rules for comment that only cover the operating efficiency piece of the Clean Power Plan, contending that the other approaches in the federal rule are not legal. The state will craft an alternative plan in case it loses the court battle (215 DEN A-10, 11/6/15).
Georgia Looks Toward Trading
Georgia, another state that has joined the suit, is working on a state plan and intends to have a draft ready for submission to the EPA in September, said Karen Hays, chief of the air protection branch of Georgia's Environmental Protection Division. Emissions trading is likely to be a part of the plan, but the state hasn't decided yet whether to take a mass-based or rate-based approach, Hays told Bloomberg BNA.
“At this point, we're focused on learning all we can about the energy sector and hearing from people who have got the knowledge to help us understand what will work best for Georgia,” she said.
The final Clean Power Plan, unlike the proposed rule, allows Georgia to get credit for the future startup of two new nuclear power plants now under construction, Hays said. Beyond that, carbon reductions are likely to come from a combination of increased use of natural gas generation, along with more renewable energy and energy efficiency projects. Some coal-fired units have already been scheduled for retirement in the state, so it isn't clear yet whether the plan will lead to any more coal unit retirements, she said.
Minnesota Doesn't Anticipate Drastic Changes
Minnesota says it is ahead of the curve in terms of compliance with the Clean Power Plan. The state hasn't decided if it will use a rate-based or mass-based approach, but it's unlikely to need any drastic changes to its energy plan to meet the requirements of the Clean Power Plan, Melissa Kuskie, the Clean Power Plan coordinator for the Minnesota Pollution Control Agency, told Bloomberg BNA.
State planners are confident the state is either already in compliance with the plan or nearly compliant, Kuskie said. The state intends to submit a trading-ready plan and is getting input from stakeholders and looking at what other states are doing to comply, she said.
The agency said it is using a number of strategies to reduce power plant emissions, including using more natural gas instead of coal and pushing for greater use of renewables.
The state has begun the rulemaking process for compliance with the Clean Power Plan, Kuskie said, but it could take 18 months to complete. The state is likely to ask EPA for an extension on filing, she said.
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Clean Power Plan Ruling May Come Before State Deadline
Jan 11, 2016 | BNA Daily Environment Report
By Andrew Childers
State regulators may know whether the Environmental Protection Agency's Clean Power Plan passes legal muster before the Sept. 6 deadline to submit their initial compliance plans, attorneys say.
States and utilities challenging the rule are pressing the U.S. Court of Appeals for the District of Columbia Circuit to hear by May initial challenges over the legality of the plan, which is the backbone of President Barack Obama's push to curb greenhouse gas emissions domestically (see related litigation tracker).
“The states have already indicated in filings to the D.C. Circuit that they'd like to see this resolved before the end of this term precisely because they don't want to expend those resources” to develop compliance plans should the rule be overturned, Thomas Lorenzen, a partner at Crowell & Moring LLP representing the National Rural Electric Cooperative Association in the lawsuits, told Bloomberg BNA.
In addition to defending the Clean Power Plan (RIN 2060-AR33), which sets carbon dioxide limits on existing power plants in each state, the agency will have to defend its new source performance standards (RIN 2060-AQ91), which set similar carbon dioxide limits for new and modified power plants. However, lawyers anticipate the new-plant litigation will proceed on a slower track than the Clean Power Plan challenges.
While defending the Clean Power Plan, the EPA will also work with states in 2016 to implement the rule (see related story).
Petitioners Seek Speedy Resolution
States and industry groups opposed to the Clean Power Plan are urging the D.C. Circuit to set an expedited briefing schedule for the lawsuit that could see the case argued by May, which the EPA has opposed (West Virginia v. EPA, D.C. Cir., No. 15-1363, motion filed 12/8/15; 237 DEN A-2, 12/10/15).
As part of that motion, the petitioners urged the court to address fundamental legal issues with the rule first, severing challenges to the Clean Power Plan's implementation and placing them in a separate docket.
At the heart of the lawsuits is the question of whether the EPA even has the Clean Air Act authority to issue the Clean Power Plan. One of the key challenges to the rule is the argument that the EPA is barred from regulating carbon dioxide from power plants under Section 111(d) of the act because the agency already has regulated toxic pollutants from power plants under Section 112.
When the Clean Air Act was last amended in 1990, conflicting amendments were adopted to Section 111(d). The House amendment prevents the EPA from regulating industrial sources such as power plants under Section 111(d) if they already are subject to hazardous air pollutant standards under Section 112. The Senate amendment only blocks the EPA from regulating pollutants under Section 111(d) if they already are regulated under Section 112.
While both amendments appear in the statutes at large, only the House amendment is reflected in the U.S. Code, and petitioners argue it should take precedence, which would mean the Clean Power Plan is illegal because power plants already are subject to the EPA's Mercury and Air Toxics Standards under Section 112.
Stay Decisions Expected Soon
The first decision facing the court will be whether to stay the rule while the litigation plays out, and attorneys say that ruling could come as early as January or February. Even though initial state compliance submittals are not due until Sept. 6 with the option for a two-year extension, and the first emissions reductions are not required until 2022, states and utilities say they must begin planning to comply with the rule, and those requirements impose immediate resource burdens on them.
“Very few can afford to sit on the sidelines and wait for the court do something, and that's precisely the bases for the stay motions,” Lorenzen said.
Richard Revesz, director of the Institute for Policy Integrity at the New York University School of Law, which has filed as an amicus curiae in the case on the EPA's behalf, anticipated the court will deny requests to stay the Clean Power Plan. However, that decision could provide “more urgency” to resolve the litigation quickly, he told Bloomberg BNA.
“I think it's conceivable by June or so the court could hear arguments,” Revesz said.
However the court rules, the litigation is expected to end up at the U.S. Supreme Court, which could reach its own decision before the 2018 deadline to submit compliance plans for states that seek the two-year extension, attorneys said.
Litigation Affects State Planning
States are closely watching the lawsuits to determine how they will affect their compliance plans (see related story).
for Policy Integrity at the New York University School of Law
“There's great interest in when the D.C. Circuit will be making a decision on the stay and when they'll be briefing it and mapping that to all of the things states have to do before September,” Clint Woods, executive director of the Association of Air Pollution Control Agencies, which represents 18 state agencies, told Bloomberg BNA.
Most states are expected to seek a two-year extension, and the EPA has promised getting additional time will not be a “heavy lift” (204 DEN A-12, 10/22/15).
However, states say even that initial submittal requires them to map out their plans to ultimately comply with the rule.
“I think a lot of our members and air directors at least want to have a plan and talk to their legislatures and governors,” Woods said.
Revesz said that even the states banking on the court overturning the Clean Power Plan are likely to prepare their initial submittal to the EPA.
“My guess is states are already giving serious thought to what they will do,” he said. “States tend to like having control over their destiny.”
Performance Standards Case
Regulating carbon dioxide from new and modified power plants under Section 111(b) is a prerequisite for the EPA setting standards for existing facilities under Section 111(d). However, litigation over the new source performance standards is expected to proceed at a slower place than Clean Power Plan challenges, attorneys said.
Petitioners, led by North Dakota, have not yet requested that the D.C. Circuit stay the rule or expedite the lawsuit (North Dakota v. EPA, D.C. Cir., No. 15-1381, statement of issues filed 11/27/15; 230 DEN A-19, 12/1/15).
Given the push for a speedy resolution to the Clean Power Plan, it is unlikely the existing-plant lawsuits will be coordinated with challenges to the performance standards for new and modified power plants, attorneys said.
Although both rules seek to curb carbon dioxide emissions from power plants, the legal issues at the heart of the new source performance standards litigation are distinct from lawsuits targeting the Clean Power Plan, which largely focus on the EPA's Clean Air Act authority to issue the rule at all.
“If no one asks for a stay in 111(b), the court may treat it as a run-of-the-mill case,” according to Revesz, who said the two power plant rules present “totally different legal issues and totally different power plants” to the judges.
The D.C. Circuit in 2012 coordinated challenges to the EPA's endangerment finding for greenhouse gases with challenges to its initial greenhouse gas limits for vehicles and permitting requirements for stationary sources.
“As with the first suite of greenhouse gas regulations, I could conceive of the court not consolidating them but coordinating them,” Lorenzen said. But, he said, “I think [coordination] is increasingly unlikely because of the efforts to expedite consideration” of the Clean Power Plan.
North Dakota in its statement of issues indicated it plans to challenge the feasibility of the 1,400 pounds of carbon dioxide per megawatt-hour performance standard for new coal-fired power plants, which would effectively require some form of carbon capture.
While successfully overturning the performance standards would effectively eliminate the Clean Power Plan, petitioners so far are content to let the litigation proceed slower.
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Alabama Delays Clean Power Plan Work, Hoping for Stay
Jan 11, 2016 | BNA Daily Environment Report
By Chris Marr
Alabama is delaying work on its own strategy to implement the Environmental Protection Agency's carbon dioxide standards for power plants in hopes the rule will be stayed by a federal court, but that could leave the state vulnerable to having a federal plan imposed.
The Alabama Department of Environmental Management is postponing work toward drafting a state plan until mid- to late spring, with the hope that the U.S. Court of Appeals for the District of Columbia Circuit will grant a stay of the new federal rule by then, Ron Gore, the air division chief for ADEM, told Bloomberg BNA Jan. 7.
“We're optimistic about a stay. We don't see any sense in working on it now until there's a ruling on that,” Gore said. He added that ADEM staff members have met for early discussions with three of the largest utilities in the state that would be affected by the carbon limits.
However, Keith Johnston, managing attorney for the Southern Environmental Law Center in Birmingham, Ala., said the strategy of delaying action, along with limiting stakeholder input thus far to only a few of the regulated utilities, is risky.
States must submit at least their initial plans to implement the carbon dioxide standards, known as the Clean Power Plan (RIN 2060-AR33), by Sept. 6. States that don't submit a satisfactory plan will be forced to operate under a federal plan.
“For a state that seems so concerned about federal overreach, it seems an odd tack to take,” Johnston told Bloomberg BNA Jan. 8. “It makes us very vulnerable to having to use a federal plan.”
Litigation Pending
Alabama is one of 27 states suing the EPA in an attempt to overturn the carbon dioxide standards (West Virginia v. EPA, D.C. Cir., No. 15-1363, response filed 12/21/15).
If the court doesn't grant a stay by mid- to late spring, ADEM will move through a quick process of public hearings and develop an outline of its plans to submit to the EPA by the Sept. 6 deadline, Gore said. Along with the initial outline, ADEM plans to submit a request for a two-year extension before it has to file a full plan draft.
“We think we can get it done between spring and September,” he said.
Alabama Power, the state's largest electric utility, wouldn't comment specifically on the state's delay in drafting a plan, but a spokeswoman did agree implementation of the EPA rule seems likely to be inhibited by pending litigation.
Expect Plan to be Tied Up for Some Time
“We are conferring with ADEM, but we anticipate the Clean Power Plan will be tied up in the courts for some time, considering a majority of states have filed legal challenges to the plan,” spokeswoman Katie Bolton told Bloomberg BNA Jan. 8.
Alabama Power also has filed a motion with the court to stay the rule, and Bolton reiterated the company's position that it sees the EPA as overstepping its authority and imposing significant costs on the company's customers.
While planning thus far has been preliminary, Gore said a few major utilities have told ADEM that a regional carbon dioxide trading program—if not a geographically broader program—will be needed to enable compliance with the required carbon limits. Initial discussions also indicate a mass-based program, which caps carbon dioxide emissions from the power sector, would be the simpler option, rather than a rate-based approach that limits carbon dioxide per megawatt-hour of electricity generated, he said.
Perhaps the EPA's vision in writing the carbon dioxide rule was to push the states and major utilities into creating a nationwide carbon trading program, Gore suggested.
“That's what they wanted Congress to pass for CO2 a couple of years ago, but they wouldn't,” he said.
Alabama Power Studying Carbon Trading
Alabama Power is studying the potential for carbon dioxide trading, Bolton said.
“We've participated in trading programs before, in connection with acid rain and the Cross-State Air Pollution Rule. We also participate in the renewable energy credit (REC) market,” she said. “We are still examining the plausibility and the options for carbon trading under the Clean Power Plan.”
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Litigation Tracker: EPA to Defend Power Plant Carbon Limits
Jan 11, 2016 | BNA Daily Environment Report
By Andrew Childers
The Environmental Protection Agency's carbon dioxide standards for power plants are the backbone of President Barack Obama's push to limit greenhouse gas emissions domestically, and the agency faces the task in 2016 of defending the rules from an onslaught of legal challenges from states and industry groups (see related story).
The EPA's Clean Power Plan, which sets carbon dioxide limits on the power sector in each state, faces challenges from a majority of states and industry groups that argue the EPA is barred from regulating carbon dioxide under Section 111(d) of the Clean Air Act because power plants already are subject to hazardous air pollutant limits under Section 112.
Additionally, they argue the EPA's rule oversteps its legal authority and would force states, which have regulatory authority over the power sector, to fundamentally reorganize how electricity is generated and distributed.
The federal agency's carbon dioxide new source performances standards for new and modified power plants face similar challenges from states and coal companies that argue the EPA hasn't demonstrated that carbon capture systems, which would effectively be required for new coal-fired power plants under the rule, have been adequately demonstrated as required by Section 111(b) of the Clean Air Act.
West Virginia v. EPA, D.C. Cir., No. 15-1363, 10/23/15A majority of states and several industry groups and unions are challenging the Clean Power Plan, which sets carbon dioxide emissions limits on the fleet of existing power plants in each state.
Motions to govern proceedings and expedite briefing have been filed.
Court Should Review Clean Power Plan Legality First (237 DEN A-2, 12/10/15)
North Dakota v. EPA, D.C. Cir., No. 15-1381, 10/23/15
North Dakota and mining companies are among those challenging the EPA's carbon dioxide new source performance standards for new and modified power plants.
Statements of issues are due Jan. 11.
North Dakota Argues Carbon Capture Not Demonstrated (230 DEN A-19, 12/1/15)
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Environmental Groups: EPA Policy Supported by Precedent
Jan 11, 2016 | BNA Daily Environment Report
By Patrick Ambrosio
A recent federal appeals court decision and the text of the Clean Air Act both support the legality of the Environmental Protection Agency's decision to rely on enforcement discretion to address exceedances of federal air toxics standards for industrial boilers caused by malfunction, environmental groups said (U.S. Sugar Corp. v. EPA, D.C. Cir., No. 11-1108, letter filed 1/7/16).
The Sierra Club, the Clean Air Council and the Partnership for Policy Integrity, in a Jan. 7 letter to the U.S. Court of Appeals for the District of Columbia Circuit, argued the EPA made a reasonable interpretation of statutory language when it decided to rely on case-by-case discretion, rather than setting a separate emissions standard that would be applicable during malfunctions. The U.S. Sugar Corp. and other industry petitioners have argued the major source boiler standards are flawed in their handling of emissions during equipment malfunctions because the Clean Air Act requires national hazardous air pollutant standards to be achievable.
The case was argued Dec. 3, and the court has not yet issued its opinion.
During oral arguments, Judges Janice Rogers Brown and Thomas Griffith questioned why the EPA hadn't collected the necessary data to set a distinct standard for malfunctions, when emissions are likely to be higher than during normal operations. Griffith said the EPA's decision to utilize its enforcement discretion to address malfunctions is a “tough way to go” for industry because it would make it more difficult for companies to plan (233 DEN A-5, 12/4/15).
The environmental groups said in their letter that a 2015 D.C. Circuit decision on the legality of a security fee imposed on travelers by the Transportation Security Administration confirms that when a statute does not require a particular result, an agency's interpretation is allowable if it is reasonable, even if a court determines it is not the most reasonable possible interpretation (Airlines for Am. & Int'l Air Transp. Ass'n v. Transp. Sec. Admin., 780 F.3d 409, 2015 BL 63152 (D.C. Cir. 2015)).
“Here, even if industry petitioners' preferred approach of accommodating malfunctions at the standard-setting stage were permissible, nothing in the statute requires it,” the groups said. “Thus, EPA's reasonable interpretation governs.”
The EPA's past attempts to address emissions during times of startup, shutdown and malfunction have been found to be illegal by the D.C. Circuit. Most recently, the court ruled that the EPA didn't have the authority under the Clean Air Act to include affirmative defense provisions in its air toxics standards that shielded industry from being subject to civil penalties for violations that resulted from unavoidable malfunctions (NRDC v. EPA, 749 F.3d 1055, 78 ERC 1369, 2014 BL 108218 (D.C. Cir. 2014)).
Penalty Criteria Also Cited
The environmental groups also cited the Clean Air Act's penalty assessment criteria, which require the EPA to consider a violator's “full compliance history and good faith efforts to comply” in enforcement decisions, as supporting the agency's interpretation that it need not address excess emissions resulting from malfunctions when it set the boiler standards.
The major source boiler standards apply to more than 14,000 existing boilers found at petroleum refineries and other industrial facilities. Facilities must come into compliance with those standards, which the agency estimates will cost $1.6 billion annually, by Jan. 31.
Industry and environmental petitioners are challenging the stringency of the major source boiler standards (RIN 2060-AQ25, RIN 2060-AR13), as well as standards covering area source boilers (RIN 2060-AM44; RIN 2060-AR14) and commercial and solid waste incinerators (RIN 2060-AO12; RIN 2060-AR15).
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Mercury Rule Remand, Ozone Implementation on EPA Air Agenda
Jan 11, 2016 | BNA Daily Environment Report
By Patrick Ambrosio
The Environmental Protection Agency will work in 2016 to address a U.S. Supreme Court ruling on the legality of the Mercury and Air Toxics Standards for power plants while supporting efforts to implement the 2015 national ozone standards of 70 parts per billion.
The agency also will continue work on updates to the Cross-State Air Pollution Rule and exceptional events rule, both of which are expected to help states meet the strengthened ozone standards.
State and local air regulators will implement several major environmental regulations, including the national standards for ozone and other criteria pollutants.
In the U.S. Court of Appeals for the District of Columbia Circuit, the EPA will defend recent air pollution regulations, including the ozone standards (see related litigation tracker).
MATS Remand on Schedule
One major rulemaking that the EPA Office of Air and Radiation intends to issue in the first half of 2016 is a supplemental finding on the Mercury and Air Toxics Standards (MATS) rule for power plants.
The supplemental finding is needed to respond to a June 2015 Supreme Court ruling that said the EPA was required to consider cost in determining whether it was “appropriate and necessary” to regulate power plant emissions of mercury, a finding that triggered promulgation of power plant standards under section 112 of the Clean Air Act (Michigan v. EPA, 135 S. Ct. 2699, 80 ERC 1577, 2015 BL 207163 (2015)).
In November, the agency proposed (RIN 2060-AS76) to reaffirm its “appropriate and necessary” finding after considering cost, including a comparison of the cost of the regulation to total revenue from the power sector and an analysis of the effect that increased costs would have on electricity prices. A comment period on that proposal ends Jan. 15.
Janet McCabe, EPA acting assistant administrator for air and radiation, told Bloomberg BNA in a Dec. 16 interview that she is “very confident” that the supplemental finding will be issued by April 15. While most power plants have installed pollution controls to come into compliance with MATS or shut down, plant operators that received a one-year deadline extension available under the rule have until mid-April to attain the standards.MATS, which the agency estimated to cost industry $9.6 billion per year, is still in effect despite the Supreme Court's ruling against the EPA. The D.C. Circuit on Dec. 15 issued an order to remand the standards to the EPA without vacatur (White Stallion Energy Ctr. LLC v. EPA, D.C. Cir., No. 12-1100, order issued 12/15/15; 241 DEN A-9, 12/16/15).
While the Michigan v. EPA decision required the EPA to quickly launch a formal rulemaking with notice and comment, McCabe said the shifting of resources to work on the MATS remand will not affect progress on any other planned work by the Office of Air and Radiation.
“All of our important, priority work is moving forward,” McCabe said. “This is well within our resources to make sure that we tie up this one loose end of this important rule.”
Ozone Implementation Underway
One of the highest profile actions the EPA air office will take in 2016 is the implementation of the new 70 ppb national ambient air quality standards (NAAQS) for ozone.
EPA Administrator Gina McCarthy in October decided to revise (RIN 2060-AP38) the previous ozone standards of 75 ppb, set in 2008 under former President George W. Bush (191 DEN A-1, 10/2/15).
McCabe said issuing the new standards starts “a chain of activities” on both the federal and state level. While nonattainment designations under the 2015 ozone standards will not be made until October 2017, states will need to submit recommendations for areas that don't meet the 70 ppb standards in October 2016.
Bill Becker, executive director of the National Association of Clean Air Agencies, told Bloomberg BNA the 70 ppb ozone standards will require many nonattainment areas to do more than they have done in the past to address emissions of ozone precursors and will require some areas that have never been in nonattainment to “start from scratch” on implementing the standards.
The EPA modeling on the final ozone rule, which projected that only 14 counties outside of California will be in nonattainment in 2025, “glosses over” the effort that states will need to exert to bring emissions down, Becker said.
“A lot of what EPA has projected in its new ozone standard talks about what the world will look like 10 years from now,” Becker said.
Over the next few years, Becker said, state regulators will need to conduct air monitoring, negotiate with the EPA over area designations, develop an implementation plan and adopt enforceable state measures to reduce pollution.
Additional Guidance Planned
The EPA will support efforts to attain the standards by issuing implementation rules and guidance for state and local regulators.
“We are working on guidance to help them,” McCabe said. “Fortunately, over the last couple of years, we have updated a lot of our NAAQS implementation guidance in a very thoughtful way so that each guidance can serve as the starting point for states when a NAAQS is revised.”
The EPA in October initiated a rulemaking covering various implementation requirements for the 2015 ozone standards, which will include guidance on attainment demonstrations, new source review permitting, emissions inventories and how states can demonstrate reasonable further progress in their implementation plans. A proposed rule is expected in the latter half of 2016.
The agency also is working on several guidance documents intended to assist states in implementing the 2015 ozone standards, including guidance on pollution that crosses state lines and a white paper on how to handle elevated background levels of ozone.
Background ozone, which includes naturally occurring ozone, pollution that is transported from elsewhere and pollution that results from uncontrollable events, was highlighted by many states, predominately in the Western U.S., as a factor that could make it difficult to attain more stringent ozone standards (98 DEN A-5, 5/21/15).
McCabe said while background ozone was not a “deciding consideration” in McCarthy's decision to set more stringent ozone standards, the EPA acknowledges that it is an “issue of concern” for some states. The agency is planning a technical discussion in early 2016 on background ozone, McCabe said.
Ozone Transport, Exceptional Events Updates
The agency in 2016 will continue work on two additional rules that are expected to help states address ozone pollution.
The EPA released a proposed rule (RIN 2060-AS05) in November 2015 to address power plant emissions of nitrogen oxides that cross state lines and affect air quality in downwind areas. The proposed rule, which the EPA calls the Cross-State Air Pollution Update Rule, is projected to cut nitrogen oxides emissions by 85,000 tons in 2017. The EPA's fall 2015 regulatory agenda projects the final version of the CSAPR update will be released by August.
McCabe said the proposed update rule is based on the framework of the original Cross-State Air Pollution Rule, which utilized an emissions trading program. The structure of CSAPR (RIN 2060-AP50) was upheld by the Supreme Court in 2014, a development that McCabe said allows the EPA to continue using the same framework to address interstate transport under future ozone standards (EPA v. EME Homer City Generation LP, 134 S. Ct. 1584, 78 ERC 1225, 2014 BL 118432 (2014); 83 DEN A-1, 4/30/14).
“The fact that the framework and the approach has been essentially sanctioned by the court, I think, is a really good development for everybody because we can focus on the environmental improvements that need to be made,” McCabe said.
In addition, the EPA is working on a rulemaking (RIN 2060-AS02) to overhaul the agency's exceptional events policy, which allows for data influenced by wildfires, volcano eruptions and other uncontrollable pollution incidences to be excluded from consideration in determining compliance with national air quality standards. Many states have urged the EPA to streamline the process for obtaining an exceptional events designation, which the states say is too costly and unpredictable (124 DEN B-1, 6/29/15).
“It was time, everybody agreed, to take a look at those rules,” McCabe said.
The agency in November issued a proposal that would make changes to the exceptional events policy, including the removal of the criterion that states must show a regulatory violation wouldn't have occurred “but for” the event in order to receive an exceptional events designation (219 DEN A-4, 11/13/15).
The comment period on the exceptional events proposal ends Feb. 3. The fall 2015 regulatory agenda projects the final rule will be issued by August.
Busy Year for States
Becker said that although states will need to start work on implementing the 2015 ozone standards in 2016, state agencies face similar implementation responsibilities with other criteria pollutants. That includes implementation of past ozone standards, as well as standards for fine particulate matter and sulfur dioxide.
“This would be a busy year in 2016, even without the Clean Power Plan.”
Clint Woods, Executive Director of the Association of Air Pollution Control Agencies
In addition, state agencies in 2016 will focus on implementing the Clean Power Plan (RIN 2060-AR33) for existing power plants (see related story).
“We're juggling a number of balls in the air,” Becker said.
Clint Woods, executive director of the Association of Air Pollution Control Agencies, told Bloomberg BNA that states are seeing a “real confluence” of deadlines for implementing various air rules, including national ambient air quality standards, the Clean Power Plan and a rule (RIN 2060-AR68) that gives 36 states until Nov. 22 to revise their state implementation plans for startup, shutdown and malfunction to remove language that shielded industry from civil penalty liability related to regulatory violations resulting from unavoidable equipment malfunctions. AAPCA has released a timeline that highlights 21 different deadlines that state air agencies must meet between 2016 and 2021.
Woods said states are all “being asked to do a little bit more” even as their resources are stretched thin with so many projects.
“This would be a busy year in 2016, even without the Clean Power Plan,” Woods said.
McCabe said the EPA is working closely with the 36 states that need to remove affirmative defense provisions from their state implementation plans (SIPs). That work is being handled by regional offices, with a coordinated support system run out of EPA headquarters, she said.
“We want to make sure to do everything we can to help the states deliver changes to their SIPs that will be approvable in light of the rule we put out,” McCabe said.
McCabe said there is “a lot of very, very important” additional activities being conducted by the Office of Air and Radiation, including a multi-year process for designating areas under the 2010 national sulfur dioxide standard of 75 ppb. The agency in 2013 designated areas in 16 states as being in nonattainment, but it delayed action on the rest of the country due to inadequate monitoring. The agency is expected to complete its next round of attainment designations under the sulfur dioxide standard by July 2 as it works toward completing all area designations by Dec. 31, 2020.
Other Regulatory Actions
The Office of Air and Radiation is expected to issue several additional air regulations in 2016, including:
• A proposal to update the agency's regional haze program, which aims to improve air quality and visibility in national parks and wilderness areas. McCabe said a proposal should be released “relatively early” in 2016, and the agency plans to issue a final rule before the end of the year.
• A final rule to revise the EPA's regional consistency regulations, which would allow regional offices to implement policies differently based on federal court decisions that aren't national in scope. The final rule is projected to be released by April.
• A final decision (RIN 2060-AQ44) on whether to revise or retain the current national lead air standards of 0.15 microgram per cubic meter. The agency in December 2014 proposed to retain the current standards. A final decision is expected by June.
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Civil Rights Groups Hit EPA For 'Environmental Discrimination'
Jan 8, 2016 | The Hill - E2 Wire
By Tim Devaney
The Environmental Protection Agency (EPA) is turning a blind eye to cases of "environmental discrimination” in a controversial rule it proposed last month, critics say.
The so-called nondiscrimination rule could actually make it easier for the EPA to disregard civil rights complaints, they say. The agency already dismisses the vast majority of these cases, according to reports.
“You would think at a time of increased national focus on civil rights and racial justice on the part of the Obama administration and the Black Lives Matter movement that the EPA would see an opportunity to do more on civil rights, not less,” said Marianne Engelman Lado, attorney for Earthjustice, which is teaming with civil rights advocates in opposition to the rule.
Environmental discrimination can be difficult to quantify. Civil rights advocates allege that “communities of color face a disproportionate burden of environmental pollution.”
They’re concerned about states that send facilities with high levels of pollution to low-income neighborhoods.
The EPA is responsible for reviewing environmental discrimination complaints such as this. But the proposed rules would remove the procedural deadlines by which the agency is currently bound to decide the cases.
Critics fear this could lead to massive delays in resolving civil rights complaints.
It’s not as if these concerns are without precedent, according to Earthjustice. Environmental and civil rights groups sued the EPA last July because it had not issued a decision in five civil rights complaints that lingered on for more than 10 years.
“They should be doing more to prevent discrimination on the basis of race, not looking for a way to avoid taking action in a timely way,” said Ronald Smith, who represents the nearly all-black Ashurst Bar/Smith Community, which is a party to the lawsuit.
An agency spokeswoman defended the draft rule.
"The proposed amendments to EPA’s nondiscrimination regulation are just that — proposed," he said. "We are currently in a public comment period and look forward to engaging with the public on the proposal."
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Massachusetts Must Implement Climate Law, Groups Argue
Jan 11, 2016 | BNA Daily Environment Report
By Martha W. Kessler
Massachusetts has failed in its obligation to adopt greenhouse gas regulations sufficient to implement the 2008 Global Warming Solutions Act, an attorney representing environmental groups and four teenage plaintiffs told the state's highest court (Kain v. Mass. Dep't. of Envtl. Prot., Mass., No. SJC-11961, oral argument 1/8/16).
“Massachusetts has a landmark law on the books to make us a national leader in reducing carbon pollution,” Conservation Law Foundation attorney Jennifer Rushlow told the Massachusetts Supreme Judicial Court Jan. 8. “But that law is meaningless if our leaders continue skirting their obligation to enforce it.”
The Global Warming Solutions Act is intended to address the effects of climate change in the state by promoting “green” economic initiatives and reducing greenhouse gas emissions. The Conservation Law Foundation and the other groups are seeking to compel the state to issue additional regulations under the law.
However, Assistant Attorney General Jo Ann Kaplan argued that the state is a nationally recognized leader in combating climate change and that the Department of Environmental Protection (MassDEP) has met its mandates under the law. She argued that the case is not about whether Massachusetts will reduce greenhouse gas emissions but is instead about the proper interpretation of one of many statutory and regulatory provisions that will together result in the necessary emission reductions.
Statute Requires Regulations
The case focuses on Section 3(d) of the act which requires the department to promulgate regulations establishing a desired level of declining annual aggregate emission limits for source or categories of sources that emit greenhouse gas emissions.
The Conservation Law Foundation, the Mass Energy Consumers Alliance and four teenage plaintiffs filed the lawsuit filed in 2014 arguing that the MassDEP failed to fulfill its statutory obligations to promulgate limits on greenhouse gas emissions that satisfy the specific requirements required by the legislature in Section 3(d). The plaintiffs argued that the regulations were supposed to be adopted by Jan. 1, 2012, and were to have taken effect by Jan. 1, 2013.
Kaplan told the Supreme Judicial Court that the MassDEP has met its mandate through three separate regulatory schemes, including prescribed limits on sulfur hexafluoride (SF6) leaks, a regional cap-and-trade market—the Regional Greenhouse Gas Initiative—to manage carbon dioxide emission allowances and a low-emission vehicle program.
But Rushlow said the state failed to enact specific regulations to meet the greenhouse gas emissions levels specified under the act. No such regulations have been adopted, she said, much less implemented, she argued.
Justices Seek Report
Justices expressed interest in how the state was doing in terms of meeting annual aggregate emission limits and asked the state to submit a report specifying those numbers. Justices also quizzed both attorneys regarding the impact of existing regulations on state efforts to address emissions and what additional impact further regulatory actions would have.
The lawsuit was appealed to the Supreme Judicial Court after a lower court in 2015 denied the environmental groups' request that MassDEP be ordered to promulgate regulations under the act, saying that the agency had met its obligations (Kain v. Mass. Dept. of Envtl. Prot., Mass. Super. Ct., No. 14-02551, 3/23/15; 59 DEN A-19, 3/27/15)).
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House To Vote On Blocking WOTUS, Stream Protection Rules
Jan 11, 2016 | E&E Daily News
By Tiffany Stecker
The House this week will vote on a pair of measures meant to block two top Obama administration water rules.
The House Rules Committee today will take up S.J. Res. 22, a Congressional Review Act resolution disapproving of the Clean Water Act jurisdictional rule by U.S. EPA and the Army Corps of Engineers to define which streams and wetlands receive automatic protection under federal law.
The Rules Committee will also discuss floor debate parameters for H.R. 1644, a bill meant to kill the Office of Surface Mining Reclamation and Enforcement's proposed stream protection rule.
The House will vote on the Senate version of the CRA resolution, which passed the upper chamber in November with a 53-44 vote (Greenwire, Nov. 4, 2015). The House also voted last year on a separate anti-rule bill, which passed 261-155.
Supporters of the rule say the new guidelines are necessary to clarify which waters are indeed "waters of the U.S." following separate landmark Supreme Court decisions. Opponents, on the other hand, argue the rule could leave landowners on the hook for certain activities, like plowing or dredging on their property.
President Obama has vowed to veto any attempts to nullify the Clean Water Act rule, also known as the Waters of the U.S. rule, or WOTUS. Opponents of the measure need 67 votes in the Senate and 290 in the House to override the president.
Republican opponents of the WOTUS rule are said to be courting Democrats in agriculture-heavy states who have expressed concerns about it previously.
Still, many opponents of the rule see the vote as an opportunity to get members' stances on the record and spark discussion, rather than a chance to change policy (E&E Daily, Jan. 8).
House Oversight and Government Reform Committee Republicans pressed a White House official last week to pinpoint when EPA and the corps would hand over documents related to the WOTUS rulemaking. The committee requested the documents under subpoena last summer.
Though the committee has received hundreds of pages to date, most of the information is either duplicate or publicly available online, said Rep. Mark Meadows (R-N.C.).
Tamara Fucile, associate director for legislative affairs for the Office of Management and Budget, told members the ongoing litigation on the rule, cross-agency communications and privacy concerns made the process of releasing documents more cumbersome.
"We can't give you a [release] date, sir, because the breadth of the subpoena is so broad," she told Chairman Jason Chaffetz (R-Utah) during a hearing.
Beyond Congress, a federal appeals court has stopped EPA and the corps from implementing the regulation pending a ruling to decide which courts have jurisdiction to hear the multiple industry and state challenges to the rule.
Separately, West Virginia Republican Rep. Alex Mooney's H.R. 1644 would halt OSMRE's stream protection rule pending research into the effectiveness of current guidelines.
The stream rule would boost monitoring and bonding requirements, among numerous provisions. The agency took several years to develop the standards, as critics warned they would lead to thousands of lost mining jobs, a claim the agency denies (E&E Daily, Dec. 9, 2015).
Schedule: The Rules Committee meeting is Monday, Jan. 11, at 5 p.m. in H-312.
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Court Weighs Late Addition Of Evidence To Suit Over CWA Permit Guidance
Jan 8, 2016 | InsideEPA
By David LaRoss
A federal district court in California is weighing competing arguments by EPA and state wastewater utilities over whether to grant the utilities' bid to add new evidence to their suit challenging an agency guide on Clean Water Act (CWA) wastewater testing procedures that they say is being unlawfully applied by regulators as if it were a binding rule.
Plaintiffs in the suit, Southern California Alliance Of Publicly Owned Treatment Works (SCAP), et al., v. EPA, are asking the court to accept a set of state-crafted permits as evidence of officials' use of the contested agency guidance, which outlines methods for testing toxicity levels in water as part of the permit-writing process.
But the Department of Justice (DOJ) on EPA's behalf in a Jan. 7 brief counters that the time to make those requests has long passed, and the utilities now can only raise additional evidence if they file a new lawsuit.
The plaintiffs “could have, but did not, present some of their new evidence before or during merits briefing, including the 2012 permit for a Plaintiff SCAP member that pre-dates the March 2014 [approved testing procedure (ATP)] Approval by almost two years, which was also publicly available,” DOJ says in its new brief.
The department argues that the utilities are trying to “circumvent” the Administrative Procedure Act (APA), which requires challenges to agency actions to be decided based on a stable administrative record, by adding materials late in the case and without proper notice to EPA or its litigation team.
In their most recent joint briefs to the court, dated Dec. 15, the utilities downplay DOJ's claims that their requests are untimely and instead focus on the permits' relevance to a dispute over the test of significant toxicity (TST) method they say EPA is unlawfully requiring. The plaintiffs argue that connection is undeniable and justifies entering the documents into the case record through judicial notice.
“EPA cannot meet this high standard of proving that the Plaintiffs' documents have no possible bearing on this case. The documents are highly relevant to demonstrating that EPA has ignored the law and promulgated rules, and instead utilized its preferred TST testing approach,” the Dec. 15 brief says.
CWA Permits
SCAP and its co-plaintiff Central Valley Clean Water Association (CVCWA) originally sued over an ATP certification by EPA that allowed for the use of the TST in Clean Water Act (CWA) discharge permits. They argued that the state was treating the approval as a binding requirement for all permits to use the TST, and sought a ruling on when regulators can rely on ostensibly non-binding guidance to justify enforceable mandates such as permit limits.
But EPA withdrew the ATP memo during litigation, leading U.S. District Court for the Eastern District of California Chief Judge Morrison C. England Jr. to dismiss the case as mooted on May 15.
The utility plaintiffs are now asking England to reconsider that decision, arguing that internal memos written by California regulators, and now six state-crafted CWA permits that include the method, show that permit writers are still mandating TST use despite EPA withdrawing its approval.
DOJ is arguing that the groups are seeking to shift the focus of their suit from the 2014 TST approval letter to EPA's earlier guidances that first outlined the test as an option for permit writers.
In the Jan. 7 brief and past filings, the government has said that SCAP and CVCWA did not address those guides in their original complaint and so are barred from raising the issue later.
SCAP and CVCWA are hoping that a decision on the merits of their case will mirror Iowa League of Cities v. EPA, where the U.S. Court of Appeals for the 8th Circuit ruled unanimously in 2013 that EPA officials, in letters to states and members of Congress, effectively revised the agency's rules on wastewater treatment in wet-weather events without notice and comment as required by the APA.
New Testimony
In addition to challenging the discharge permits, the plaintiffs are also asking the court to consider testimony by Los Angeles County environmental scientist Phil Markle claiming the TST is inaccurate and tends to produce false reports of permit exceedences even in controlled toxicity tests.
DOJ is asking the court to “strike” Markle's declaration, arguing that the utilities have failed to establish his credentials as an “expert” witness, and that his declaration to the court includes little documentation that would support his statements. “Plaintiffs’ assertion in their opposition and the Markle Declaration do not sufficiently describe the underlying data or results, the study conditions, when and how the samples were prepared, the analyses conducted, or the reliability of how Mr. Markle applied the study to the facts of this case,” DOJ says in its Jan. 7 brief.
DOJ is hoping to counter arguments by the utilities in a Dec. 2 brief that Markle's testimony shows scientific uncertainty surrounding the TST, even if it is not conclusive proof that the test is invalid. “EPA had access to this data as well and was free to interpret the data and provide its own interpretation to the Court in rebuttal. However, EPA really had nothing to rebut since the data is what it is, and so EPA chose to instead file a motion to strike the data instead. This action is telling and yet another attempt by EPA to shield its TST approach from close scrutiny,” that brief says.
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