ACC AM Jan 12

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Chemical Management News

1. (ACC Mentioned) Chemical Safety Reform Bill Could Cripple State Efforts At Regulation, Critics Say

   Jan 12, 2016 | RT

   Decades-old federal regulations for industrial chemicals are on the verge of being updated, but critics say the final legislation is bound to undercut more progressive chemical safety efforts in several states, including California, Maine, and Washington. The US Senate and House of Representatives passed similar bills last month in an effort ...
2. Advocates Want Toxic Toys Bill In State Budget Negotiations

   Jan 11, 2016 | Politico

   By Scott Waldman
   
   
   Advocates are pressing Gov. Andrew Cuomo to include restrictions on chemicals in children’s toys in the upcoming state budget negotiations. The Child-Safe Products Act has easily passed the Democrat-controlled state Assembly for years. However, it has never been brought for a floor vote in the Republican-controlled state Senate, even though...
3. California Agency Lists Ortho-Phthalates, PFASs As Candidate Chemicals

   Jan 12, 2016 | Chemical Watch

   California's Department of Toxic Substances Control (DTSC) has added two classes of substances to its list of candidate chemicals. They are: ortho-phthalates (CW 22 October 2015); and perfluoroalkyl and polyfluoroalkyl substances (PFASs) (CW 2 October 2015).
4. Inhofe Sees EPA Coal Ash Rule Overhaul As 2016 Priority For Senate EPW

   Jan 11, 2016 | InsideEPA

   By David LaRoss
   
   
   Senate Environment & Public Works Committee (EPW) Chairman James Inhofe (R-OK) says that pursuing a bill to overhaul EPA's final coal ash disposal rule is one of his panel's priorities for 2016, as well as advocating for regulatory reform legislation, a new water resources bill, and measures to spur “Good Samaritan” mine cleanups.
5. Despite Clear Dangers, DuPont Kept Using a Toxic Chemical

   Jan 12, 2016 | The New York Times - Opinion Pages

   An article in The Times Magazine on Sunday has laid bare the unconscionable decades-long efforts of the DuPont company to hide the dangers of an obscure chemical and bamboozle regulators into allowing toxic pollution to continue long after the dangers were known to the company. The article by Nathaniel Rich described how...
6. Will We Take This Best Chance Ever To Fix The Law That Helped Bring About Dupont's PFOA Debacle?

   Jan 11, 2016 | Environmental Defense Fund

   By Richard Denison
   
   
   A remarkable exposé in yesterday’s New York Times Magazine documents the “brazen, decades-long” withholding by DuPont of mounting evidence of widespread exposure to and health effects from one of its signature chemicals (nicknamed PFOA) used in manufacture of its line of Teflon brand products.

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Energy and Environment News

7. (ACC Mentioned) EWG’s Top 10 Enviroblog Stories Of 2015

   Jan 11, 2016 | Environmental Working Group

   By Elaine Shannon
   
   
   The EWG staff voted the landmark global climate accord approved on December 12 in Paris as the top environmental story of 2015. In our judgment, the achievement of the Paris pact is that, for the first time, representatives of 196 nations – large and small, rich and poor, heavily industrial and rural – agreed in principle that they must reduce...
8. Litigation Tracker: Challenges to BLM Fracking Rule

   Jan 12, 2016 | BNA Daily Environment Report

   By Alan Kovski
   
   
   Several states and an Indian tribe are challenging a 2015 rule issued by the Interior Department's Bureau of Land Management to regulate hydraulic fracturing on federal and tribal lands (see related story). The states and tribe argue that the BLM lacks legal authority for its action. Two oil and natural gas industry associations...
9. Prices, New Rules Concern Oil and Gas Producers in 2016

   Jan 12, 2016 | BNA Daily Environment Report

   By Tripp Baltz
   
   
   Regulatory environment in the states in 2016 is a major concern for oil and gas producers, but their biggest worry going into the new year is the commodity market. Crude prices fell to as low as $36 a barrel in early December, approaching a seven-year low, after the International Energy Agency said a global oil supply glut would keep prices...
10. California Proposals Target Los Angeles Gas Leak

    Jan 12, 2016 | BNA Daily Environment Report

    By Carolyn Whetzel
    
    
    California lawmakers Jan. 11 proposed legislation to halt new injections of natural gas and the use of older production wells at the reservoir near Los Angeles where a 1950s-era well has been leaking methane since October. The proposal would halt injections until state officials and outside experts can determine the facility doesn't pose...
11. Greens: Gas Developers Aren’t Telling Investors Of Methane Leaks

    Jan 11, 2016 | The Hill - E2 Wire

    By Devin Henry
    
    
    Natural gas developers are providing very restricted information about their methane emissions to investors, according to a report released Monday by a green group. According to an Environmental Defense Fund (EDF) analysis, only 18 of 65 major gas companies disclosed methane emissions to their investors, and none laid out emission...
12. Shareholders’ Bids for Action on Methane Emissions Climbing

    Jan 11, 2016 | Bloomberg

    By Jennifer A Dlouhy
    
    
    At least 21 U.S. oil and gas companies already face shareholder resolutions on environmental and social policies this year as investors raise concerns about how businesses are tackling climate change and pollution. Investors increasingly are pushing for action on methane, a powerful heat-trapping gas that contributes to climate change...
13. Past Programs May Shape State Plans for EPA Carbon Rule

    Jan 12, 2016 | BNA Daily Environment Report

    By Anthony Adragna
    
    
    States should look to successful components of existing emissions trading programs as ways to build their state implementation plans for the Environmental Protection Agency's landmark regulation to curb carbon dioxide from existing power plants, industry experts said Jan. 11.
14. Water Act Jurisdiction, Power Plant Rules Top Issues

    Jan 12, 2016 | BNA Daily Environment Report

    By Amena H. Saiyid
    
    
    The Environmental Protection Agency will spend much of 2016 in court defending rules to clarify Clean Water Act jurisdiction, exempt water transfers from permit requirements, and revise wastewater effluent limits and regulate criteria for building or retrofitting cooling water intake systems at power plants (see related litigation tracker).
15. Energy Issues Ahead Include Two FERC Supreme Court Cases

    Jan 12, 2016 | BNA Daily Environment Report

    By Rebecca Kern and Ari Natter
    
    
    This year could prove to be a busy one in the energy sector with two Federal Energy Regulatory Commission cases before the U.S. Supreme Court, regulations in the works addressing energy efficiency and energy price formation, and the possibility of the first broad energy bill in nearly a decade.
16. Litigation Tracker: Busy Year Ahead for FERC in Courts

    Jan 12, 2016 | BNA Daily Environment Report

    The Federal Energy Regulatory Commission has a busy year ahead in the legal arena. The Supreme Court is expected to rule in two cases involving FERC in 2016. In one, the court will decide whether FERC has authority to run its demand response program in the wholesale energy markets, which compensates large companies for not using...
17. States Say Sierra Club Lacks 'Harm' To Justify CWA Rule Suit Intervention

    Jan 11, 2016 | InsideEPA

    By Bridget DiCosmo
    
    
    A coalition of 14 states is fighting Sierra Club's bid to intervene in the states' lawsuit over EPA and the Army Corps of Engineers' joint Clean Water Act (CWA) jurisdiction rule, saying environmentalists lack legal standing to win a role in the litigation because they cannot show more than “speculative” harm from the agencies' regulation.

Full Text of Stories Below

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Chemical Management News

1. (ACC Mentioned) Chemical Safety Reform Bill Could Cripple State Efforts At Regulation, Critics Say

   Jan 12, 2016 | RT

   Decades-old federal regulations for industrial chemicals are on the verge of being updated, but critics say the final legislation is bound to undercut more progressive chemical safety efforts in several states, including California, Maine, and Washington.

   The US Senate and House of Representatives passed similar bills last month in an effort to update the Toxic Substances Control Act (TSCA) of 1976. The upper chamber’s bill, S 697, is named the Frank R. Lautenberg Chemical Safety for the 21st Century Act, while the lower one, HR 2576, is known as the TSCA Modernization Act. Congressional leaders are now ironing out the differences to set a bill up for final passage, opening the possibility that President Barack Obama could sign it into law in February.

   The American Chemistry Council (ACC), the largest lobbying organization for the industry, supports the Senate version, calling it “a watershed moment in the history of US environmental legislation” in a statement released last month.

   It “will protect human health and the environment, build confidence in the US chemical regulatory system, and address the commercial and competitive needs of the US chemical industry and the national economy,” ACC president and CEO, Cal Dooley, said.

   However, opponents say states such as California, Maine, Washington, Oregon, Vermont, and Minnesota will pay the price for the rare bipartisanship in Washington, DC. States which have taken action on their own ahead of the federal Environment Protection Agency (EPA) would be stopped in their tracks if the final bill produced in congressional talks comes out as expected. Troublesome provisions include restrictions on state powers to regulate chemicals that have already been evaluated by the EPA, as well as full cessation of state consideration of any chemical that is under investigation by the EPA at the time the law comes into effect.

   For example, the Washington state legislature is currently considering banning flame retardant compounds used in furniture and products for children. A bill passed the state house 95-3 and, while the state senate has yet to vote on its own version, the whole process could be rendered mute if the federal bill becomes law first.

   “We’re very close,” Randi Abrams-Caras, senior campaign director of the Washington Toxics Coalition, told The Intercept. “Our state would have to stop any work we’ve been doing.”

   A 2008, a Maine law eventually led to a list of 1,700 “chemicals of concern” that influenced how companies did business nationwide. For example, toymaker Hasbro ended its use of BPA, an organic synthetic industrial chemical, in all of its products. Actions carrying this magnitude of impact are celebrated by environmentalists, in stark contrast to their frustration with the slow moving EPA.

   Under the federal legislation, the EPA would be able to essentially forbid states from controlling chemicals deemed “high priority” by the agency. The Intercept notes that the EPA has kept PFOA, a chemical component of Teflon, categorized as “high priority” since 2002. The EPA has yet to add rules regarding the chemical which has been linked to cancer, though its practical danger remains contested.

   As states like California contemplate regulating methylene chloride, a paint removing chemical, or Maine moves to ban phthalates, a plastics reinforcer, the result of a new federal law could completely change the landscape of industry’s regulatory environment.

   During the 40 years the TSCA has been in force, approximately 200 chemicals have been listed by the EPA as requiring testing, but only five have become subject to stricter regulation by the feds. Environmental activists against the reform are suspecting more of the same, except with extra consequences for states.

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2. Advocates Want Toxic Toys Bill In State Budget Negotiations

   Jan 11, 2016 | Politico

   By Scott Waldman

   Advocates are pressing Gov. Andrew Cuomo to include restrictions on chemicals in children’s toys in the upcoming state budget negotiations.

   The Child-Safe Products Act has easily passed the Democrat-controlled state Assembly for years. However, it has never been brought for a floor vote in the Republican-controlled state Senate, even though a bipartisan majority of lawmakers have supported the measure.

   A group of 70 environmental, community and health groups are now pushing Cuomo to include $2 million in the budget to identify chemicals of concern, require manufacturers to identify the chemicals and phase them out. The move could give the measure more leverage in the gridlocked legislature.

   “To avoid falling behind other states and economies that are moving to fill the massive global demand for safer products produced by sustainable and responsible businesses, a leading state such as the Empire State has the economic power to drive innovation, provide incentives for healthy products, protect public health and the environment, and reduce the health care costs that are a significant drag on our government, health care and educational systems, and our overall economy,” the groups wrote.
   

   Groups supporting the measure include the American Academy of Pediatrics, Clean and Healthy New York, the New York State Professional Firefighter’s Association, Seventh Generation and the Sierra Club.

   Cuomo proposed the measure in his budget proposal last year, but it went nowhere in negotiations amid pressure from the toy industry and chemical lobbyists. The League of Conservation Voters invested more than $100,000 in an effort to pass the bill and it appeared close to passage late in the session. However, Senate Democrats dropped off their sponsorship after the original bill was substantially changed during negotiations and it was dropped from the final legislative agreement.

   In the last year, local lawmakers in four counties have passed their own version of the chemical restrictions. New York City lawmakers are expected to take up the measure this week. If approved, it would mean that about half of the state’s children live in an area where the toys are restricted.

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3. California Agency Lists Ortho-Phthalates, PFASs As Candidate Chemicals

   Jan 12, 2016 | Chemical Watch

   California's Department of Toxic Substances Control (DTSC) has added two classes of substances to its list of candidate chemicals.

   They are:

   -ortho-phthalates (CW 22 October 2015); and

   -perfluoroalkyl and polyfluoroalkyl substances (PFASs) (CW 2 October 2015).

   Candidate chemicals may be considered for regulation under the state's Safer Consumer Products (SCP) programme.

   Both substance classes were added following their listing as priority chemicals under California's environmental contaminant biomonitoring programme (CW 23 December 2015).

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4. Inhofe Sees EPA Coal Ash Rule Overhaul As 2016 Priority For Senate EPW

   Jan 11, 2016 | InsideEPA

   By David LaRoss

   Senate Environment & Public Works Committee (EPW) Chairman James Inhofe (R-OK) says that pursuing a bill to overhaul EPA's final coal ash disposal rule is one of his panel's priorities for 2016, as well as advocating for regulatory reform legislation, a new water resources bill, and measures to spur “Good Samaritan” mine cleanups.

   The proposed coal ash legislation, S. 1803, would attempt to resolve what some EPA critics say are provisions in the rule that are either too strict or lead to regulatory confusion. The bill would create a state-led ash disposal permit regime while revising major parts of the rule including allowing alternatives to its groundwater protection requirements and closing what industry sees as “loopholes” regulating some beneficial reuse of ash.

   Democrats have generally opposed the changes, but the White House in a Statement of Administration Policy threatening a veto of the bill suggested changes that could make it acceptable to President Obama.

   “This year, the committee will also focus on . . . sensible environmental legislation such as giving EPA the authority to establish coal ash permitting programs, legislation to protect Good Samaritans, and important economic development legislation,” says Inhofe in a Jan. 11 press release that also touts EPW's work in 2015.

   EPA in December 2014 finalized its Resource Conservation & Recovery Act (RCRA) rule that regulates coal ash disposal under RCRA subtitle D solid waste provisions, rather than the subtitle C hazardous waste provisions that environmentalists claimed would have led to stricter disposal controls. Industry groups welcomed the subtitle D rule and said it would be just as strict as subtitle C, but they fault various provisions in the rule.

   For example, industry objects to the fact that the rule would not give states the lead on crafting permitting regimes for coal ash disposal facilities. Several power companies have filed suit over the rule in the U.S. Court of Appeals for the District of Columbia Circuit, but enactment of S. 1803 could make some of those challenges moot.

   S. 1803 is the Senate counterpart to H.R. 1734, which cleared the House July 22. The Senate version has failed to gain traction, prompting supporters to seek “must-pass” legislation that could serve as a vehicle for a revised version they hope can garner Democratic support. Industry is pressing for speedy reforms to the coal ash disposal ash rule before an April 2017 deadline arrives for closing down ash disposal facilities.

   EPW Priorities

   In the press release, Inhofe also said that another EPW priority for 2016 will be final passage by Congress of legislation to reform the Toxic Substances Control Act (TSCA).

   The Senate late last year approved its version of TSCA reform, S. 697, which must now be reconciled with the narrower House TSCA bill H.R. 2576 that cleared the lower chamber last year. Once the House and Senate agree on text for a final bill, they would then hold votes on that legislation.

   Inhofe also says that this year he will make an EPW priority of expanding protections for Good Samaritan mine cleanups, a move EPA has backed following an agency cleanup team's wastewater spill from a Colorado cleanup site in August.

   EPW will also consider a suite of regulatory reform measures, Inhofe said, including what EPA critics call “sue and settle” pacts through which environmentalists sue the agency to force a deadline for new rulemakings, and EPA then agrees to settlement deadlines for regulatory action to resolve the suits. The agency's opponents say these pacts effectively set its regulatory agenda without congressional or public input and should be open to participation by the public, especially regulated entities -- although a Jan. 14 report from the Government Accountability Office (GAO) found "limited" impact from the suit on EPA's rules.

   The House on Jan. 6 approved regulatory reform legislation adding new conditions for such settlements, though the bill faces Democratic opposition and a veto threat that could block its prospects in the Senate. Finally, Inhofe pledges to continue oversight of EPA's Clean Water Act jurisdiction rule, in particular the GAO's finding that the agency's social outreach campaign violated federal lobbying laws, and the administration's part in the recent Paris climate accords.

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5. Despite Clear Dangers, DuPont Kept Using a Toxic Chemical

   Jan 12, 2016 | The New York Times - Opinion Pages

   An article in The Times Magazine on Sunday has laid bare the unconscionable decades-long efforts of the DuPont company to hide the dangers of an obscure chemical and bamboozle regulators into allowing toxic pollution to continue long after the dangers were known to the company. The article by Nathaniel Rich described how a corporate lawyer, Rob Bilott, built a devastating case against DuPont, based on the company’s own studies and internal documents. The case illustrates the urgent need for Congress to complete its efforts to reform the Toxic Substances Control Act, which has allowed tens of thousands of untested chemicals to remain on the market with little more than the manufacturer’s say-so that they are safe.

   The chemical that DuPont was protecting is known as PFOA, or perfluorooctanoic acid. It is used in the production of Teflon for non-stick frying pans, a huge source of profits for DuPont. When the Toxic Substances Control Act was enacted in 1976, PFOA was one of a multitude of untested chemicals allowed to remain on the market. The act also made it extremely difficult for the Environmental Protection Agency to require safety tests or crack down on chemicals known to be hazardous. Only a handful have been restricted over the past 40 years.

   In the case of PFOA, DuPont brazenly dumped its toxic waste into a creek that ran through a pasture where farmers grazed and watered their cows, causing grotesque malformations and deaths among the animals. Meanwhile, the company hid evidence that the chemical had contaminated the local water supply well beyond what the company’s own scientists considered safe and far beyond what independent scientists considered safe.

   The Senate and the House have passed bills that would go a long way toward preventing such tragedies. What remains is for the two chambers to reconcile their versions into one bill that can be sent to the president for his signature. The Senate bill is the stronger of the two. Both would make it harder for companies to hide information from the public and from federal or state agencies by claiming it is confidential business information. Both bills would require companies to justify claims of confidentiality, but the stronger Senate bill would also require the E.P.A. to review such claims. The Senate bill would also require full public disclosure of any chemical that was found to be hazardous in testing.

   The Senate bill would eliminate a “Catch-22” provision in existing law that says the E.P.A. can’t require safety testing unless it has evidence, which companies often try to hide, that a chemical may present an unreasonable risk. That is virtually impossible to demonstrate without the data that required testing would provide.

   For regulatory purposes, the existing law divides chemicals into two groups — “existing chemicals,” more than 60,000, that were on the market when the first Toxic Substances Control Act was established in 1979, and “new chemicals,” more than 20,000, that entered commerce after 1979.

   Although the law theoretically gave the E.P.A. authority to review “new chemicals” before they entered the market, it allowed companies to sell an untested chemical within 90 days if the overburdened agency didn’t challenge them, as was usually the case. The Senate bill, but not the House version, would mandate that the E.P.A. find the chemical safe before it can be marketed.

   The current law has no requirements for the E.P.A. to review the safety of existing chemicals. The Senate bill would require it to prioritize all chemicals in active commerce and set deadlines for their review. The House bill would largely leave the status quo untouched.

   Both bills would allow industry to nominate chemicals for priority review, but the House bill would require the E.P.A. to evaluate any chemical a manufacturer submits, potentially eating up all of the agency’s time and effort, whereas the Senate bill caps industry requests and gives the E.P.A. greater power to set its own priorities.

   There is strong bipartisan support in Congress to reform the existing law. The frightening DuPont saga is further reason for Congress to choose the strongest possible reform.

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6. Will We Take This Best Chance Ever To Fix The Law That Helped Bring About Dupont's PFOA Debacle?

   Jan 11, 2016 | Environmental Defense Fund

   By Richard Denison

   A remarkable exposé in yesterday’s New York Times Magazine documents the “brazen, decades-long” withholding by DuPont of mounting evidence of widespread exposure to and health effects from one of its signature chemicals (nicknamed PFOA) used in manufacture of its line of Teflon brand products.

   The article is compelling in many respects, not the least of which is its scathing indictment of the federal laws that are supposed to protect Americans from toxic chemical exposures.  In particular, the article highlights the deep failures of the Toxic Substances Control Act (TSCA) – now limping into its 40th year of existence without ever having been substantially amended.  TSCA is the law that – in principle – regulates most uses of PFOA and other so-called “industrial chemicals,” thousands of which are widely used in everyday consumer products and materials ranging from household cleaners to furniture to paint to electronics.

   The article’s focus on TSCA is more than justified:  PFOA is one of 62,000 chemicals that were already on the market when TSCA passed in 1976.  All of these chemicals were “grandfathered” under the law, effectively presumed safe without any requirement that they be tested or reviewed for safety.  And while, as evidence of harm and widespread exposure mounted, the Environmental Protection Agency (EPA) did conduct a review of PFOA (which more than a decade later is still only in draft form), its authority under TSCA is so weak that it has not even attempted to use that authority to restrict any uses of the chemical, instead having to negotiate a gradual voluntary phase-out.  Indeed, EPA hasn’t tried to regulate any existing chemical under TSCA since 1991, when a court threw out its regulation of the known killer asbestos, on the grounds that EPA had not met its burden of proof of harm under TSCA.

   Not mentioned in the article, however, is that for the first time ever Congress is on the verge of finally reforming TSCA.  Reform bills have passed both the Senate and the House, and negotiations toward a final reconciled bill are expected to get underway any day now.

   While no single law could by itself have prevented the tragic story of PFOA from unfolding, provisions of one or both bills would go a long way to help prevent such events from happening again.  Let me mention some of the most important:

   -As the article notes, under current law EPA must first have evidence a chemical is harmful in order to require its maker to conduct testing – a Catch-22 that has meant EPA has required testing under TSCA for fewer than 300 of the 62,000 grandfathered chemicals. While both bills would give EPA new authority to order testing, the Senate bill actually strikes the Catch-22.

   -Both bills would eliminate the provisions of TSCA that stymied EPA’s efforts to regulate asbestos. They specify that when EPA is determining whether or not a chemical is safe, it is not to consider the costs of regulating it.  Both bills would also remove the TSCA requirement that EPA prove its regulation of a dangerous chemical is the “least burdensome” on all possible regulation, although the House version would add a new “cost-effective” test for EPA regulations.

   -The Senate bill would double penalties for criminal violations of TSCA and add a provision, found in other major environmental laws, that would subject anyone who willfully puts someone in imminent danger of death or serious bodily injury to imprisonment for up to 15 years, and any such company to a fine of up to $1 million per violation. The House bill makes no changes to this aspect of TSCA.

   -The article cited growing scientific concerns raised over new replacement chemicals DuPont introduced for PFOA. TSCA constrains EPA’s ability and mandate to conduct rigorous safety reviews of new chemicals.  The Senate bill would for the first time require EPA to make an affirmative safety finding before a new chemical would enter the market.  The House bill makes no changes to this aspect of TSCA.

   -The article noted how much safety information on PFOA DuPont hid from the public and state and federal agencies. The Senate bill would mandate, while the House bill would authorize, state government access to information deemed confidential.  Both bills would rein in companies’ ability to hide chemical safety information.  However, the House bill would weaken current TSCA by allowing a company, when submitting safety information to EPA, to hide the identity of the chemical in question from the public.

   The good news is that we have the best chance in a generation to bring our nation’s main chemical safety law into the 21st century.  The substantial challenge that remains is to ensure that, in this home stretch of reconciling the Senate and House bills, the final bill that is sent to the President’s desk is strong and broad enough to fix the many key flaws in TSCA and protect the public health.

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Energy and Environment News

7. (ACC Mentioned) EWG’s Top 10 Enviroblog Stories Of 2015

   Jan 11, 2016 | Environmental Working Group

   By Elaine Shannon

   The EWG staff voted the landmark global climate accord approved on December 12 in Paris as the top environmental story of 2015. 

   In our judgment, the achievement of the Paris pact is that, for the first time, representatives of 196 nations – large and small, rich and poor, heavily industrial and rural – agreed in principle that they must reduce carbon emissions and that they will report on their progress every five years. 

   On the other hand, we all recognize that this accord alone will not halt global warming.  It amounts to a pledge that the nations of the world will try to hold the  “increase in the global average temperature to well below 2 °Celsius above pre-industrial levels, and to pursue efforts to limit the temperature increase to 1.5 °C above pre-industrial levels.” The agreement’s provisions are non-binding, and even if they are met, global warming may still inflict severe and widespread damage to the environment and society. 

   Ranked second in the EWG staff’s poll was journalist Mariah Blake’s chilling investigative account of how DuPont polluted Parkersburg, W. Va., with a hazardous industrial chemical known as perfluorooctanoic acid, or C8. The Huffington Post published Blake’s account last August.

   DuPont’s actions came to the attention of journalists and the public via an EWG investigative report, published last May, titled “Poisoned Legacy.” This report and others told how DuPont had failed to live up to the terms of its 2005 settlement with people of the Ohio River valley, whose drinking water had been polluted by decades of C8 emissions from a DuPont plant that manufactured Teflon and other non-stick, waterproof or stain-resistant materials used in thousands of household products.

   In a related development highlighted in the EWG staff ballot, last October a federal jury in Columbus found DuPont liable for emissions from its Washington Works plant. The jurors concluded that C8 contamination caused the kidney cancer of Carla Marie Bartlett, 59, who lived about 10 miles downriver from the plant. The company was ordered to pay Bartlett $1.6 million. Her case was the first of some 3,500 pending lawsuits filed against DuPont by residents of the Ohio River valley.

   The staff’s third-ranked pick: Congressional passage of the first overhaul of the Toxic Substances Control Act since its enactment in 1976. The Senate passed its version of the bill on December 17 in the closing days of its 2015 session. The House had passed its version on June 23. The measures are substantially different. Congressional leaders will have to negotiate an agreement to reconcile them on key points, and then send the result to President Obama for his signature.

   Both versions received strong backing from the American Chemistry Council, the trade group of the nation’s biggest chemical manufacturers, including Dow, DuPont, BASF and Chevron Phillips, but it was opposed by nearly all environmental and public health groups, including EWG. A chemical lobbyist with the American Chemistry Council was exposed as the author of an early draft of the Senate bill.

   “Without very substantial improvements, this bill simply will not protect America’s families or communities against the chemical onslaught, and EWG opposes any measure that will not accomplish that goal,” EWG president Ken Cook said of the Senate-passed bill.

   Among other flaws, as EWG’s Scott Faber and Melanie Benesh chronicled in a paper published last month, neither the House nor the Senate bill features a safety standard as tough as the one that federal law applies to pesticides. Instead, the bills propose a standard based on “unreasonable risk,” throwing the question of what is “reasonable” to the courts. 

   Both versions would prevent states from enacting their own laws and regulations to restrict dangerous chemicals. The House version also preserves a loophole in current law that essentially blocks the Environmental Protection Agency from asking a chemical manufacturer for crucial safety data about a new substance it intends to make or import. The agency’s investigations of potentially hazardous chemicals would proceed at a glacial pace: under either measure. EWG estimates that the EPA would take a century to assess the thousand most dangerous chemicals now on the market.

   Other top environmental stories scored by the EWG staff:

   4. An analysis by EWG’s Emily Cassidy, headlined “Corn ethanol is a climate disaster.”  Cassidy came to the disturbing conclusion that corn ethanol, the leading biofuel on the market today, is worse for the climate than gasoline. 

   5. The global Volkswagen emissions cheating scandal, which affects millions of cars and drivers and the air breathed by countless millions around the world. 

   6. Exxon’s decision to bury its own research that confirmed, a quarter of a century ago, that fossil fuels were accelerating global warming.    

   7. Federal Food and Drug Administration approval of genetically modified salmon for human consumption. 

   8. A groundbreaking research study by Duke University and EWG scientists that found that a potentially hormone-disrupting chemical in many brands of nail polish migrates almost instantly into the bodies of anyone using the polish, including vulnerable teens and pre-teens. 

   9. President Obama’s rejection of plans to build the Keystone XL oil pipeline from Canada to the Gulf Coast. Obama said the reason was the project’s likely impact on climate change.

    10. The FDA’s order, issued last June, to phase out partially hydrogenated oils, the major cause of artificial trans fats in food. The agency said the plan would help prevent 20,000 heart attacks and 7,000 deaths a year. But the FDA gave the processed food industry three full years to comply. And it did not indicate that it would close a loophole that allows manufacturers to label foods “zero trans fat” if they contain less than half a gram per serving.

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8. Litigation Tracker: Challenges to BLM Fracking Rule

   Jan 12, 2016 | BNA Daily Environment Report

   By Alan Kovski

   Several states and an Indian tribe are challenging a 2015 rule issued by the Interior Department's Bureau of Land Management to regulate hydraulic fracturing on federal and tribal lands (see related story).

   The states and tribe argue that the BLM lacks legal authority for its action. Two oil and natural gas industry associations are challenging the BLM's rule on grounds that it is impractical, making it arbitrary and capricious and therefore in violation of the Administrative Procedure Act.

   The two lawsuits have been consolidated in the U.S. District Court for the District of Wyoming.

   Hydraulic Fracturing

   Wyoming v. Dep't of the Interior, D. Wyo., No. 2:15-cv-43, 3/26/15

   Challenge by several states to BLM hydraulic fracturing rule. Lawsuit by oil and gas trade groups consolidated with this.

   Preliminary injunction blocking rule granted; further court action awaited.

   New Federal Fracking Rules Blocked by Judge in Wyoming (190 DEN A-8, 10/1/15)

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9. Prices, New Rules Concern Oil and Gas Producers in 2016

   Jan 12, 2016 | BNA Daily Environment Report

   By Tripp Baltz

   Regulatory environment in the states in 2016 is a major concern for oil and gas producers, but their biggest worry going into the new year is the commodity market.

   Crude prices fell to as low as $36 a barrel in early December, approaching a seven-year low, after the International Energy Agency said a global oil supply glut would keep prices down into the foreseeable future.

   “We don't know how much longer that will last,” Dan Haley, president and chief executive officer of the Colorado Oil and Gas Association in Denver, told Bloomberg BNA. “The typical down cycle is 24 months, which puts us near the end of 2016. We don't know how long producers can hold on to people or train new employees. Can they last a whole year? That remains to be seen.”

   Large and small producers have ceased much of their exploration and production activity in resource plays throughout the country, shutting down rigs, consolidating operations and laying off workers in many states.

   ‘Huge Thing.'

   “Low prices is a huge thing in Utah,” John Rogers, associate director in the oil and gas program of the Utah Division of Oil, Gas & Mining, told Bloomberg BNA. “Right now we have four active rigs. A year ago we had about 23.”

   Indeed, the number of rigs actively used to drill wells in 2015 had dropped from 2014 levels in every major oil and gas state except Alaska, where it had gone up by a single rig, according to Dec. 4 data disseminated by the field service provider Baker Hughes.

   “We don't know how much longer that will last.”

   Dan Haley, president and chief executive officer of the Colorado Oil and Gas Association in Denver

   In most states, the number of active rigs fell by more than half. Texas had 543 fewer rigs than in 2014, Oklahoma 127 fewer, North Dakota 120, and New Mexico 60. Wyoming had fallen from 59 active rigs to just 22, the data showed.

   Industry Hopes for Fewer Rules

   “We're hoping the regulatory effort slows down given the price environment,” Stan Dempsey, president of the Colorado Petroleum Association in Denver, told Bloomberg BNA.

   State rulemakings are under way on baseline water quality testing, increased bonding requirements, gas flaring, noise limits, seismic activity linked to oil and wastewater injection and other matters.

   “Regulations tend to roll through the country. They start in one state, and if it's a good idea, you'll see it sort of growing,” Mike Paque, executive director of the Ground Water Protection Council in Oklahoma City, told Bloomberg BNA.

   Even as the federal government begins to step into the arena of drilling oversight—the Bureau of Land Management fracking rule on public and tribal lands being one example—states will continue to take the lead in regulating the industry in 2016, he said.

   “The states are really the incubators for new rules,” he said. “The federal government can't move as fast as the states. If a state thinks earthquakes are an issue, they are going to get moving a heck of a lot faster on it than the federal government.”

   Debate Over Local Control

   In 2016, legal battles will continue over how much regulatory control local governments have over drilling. Colorado, Texas, Oklahoma and other states maintain that oil and gas development is a matter of state concern, and recent court rulings have said that state law preempts local ordinances that attempt to ban or restrict drilling. The issue has heated up with the boom in U.S. production due to hydraulic fracturing, or fracking, the high-pressure injection of water, sand and chemicals into tight shale formations deep underground to release natural gas and oils that would otherwise be uneconomical to produce.

   Local governments, often fueled by voter-approved ballot measures, say their land use authority gives them the power to decide where drilling can take place, especially in the case of siting large, multi-well facilities. Local governments also have demanded a say in other policy areas, including setting limits on noise, lighting and use of roads.

   The point of local land use authority through zoning is that communities “can separate industrial activities from the places where people live,” Dan Raichel, staff attorney and co-director of the Community Fracking Defense Project for the Natural Resources Defense Council in New York, told Bloomberg BNA. “There's an inherent logic to that. It makes sense to separate” fracking from residential living, he said. “They're not compatible.”

   In response to local governments asserting their authority to regulate fracking, “you have industry saying, ‘we have a right to drill wherever we want.' ” he said. “ ‘We don't have to respect local zoning, we don't have to respect the rights of the community. This is about mineral rights and the state trumping local rights.' If you changed it to some other industrial activity, say, junking, people would be up in arms if the junking industry just said they could put a junkyard wherever they want.”

   In 2016, if state regulators and the industry continue to fight cities and counties over local control, “they will leave municipalities with no choice,” he said. “You are going to see a backlash, whether in the courts or at the legislative level.”

   Anti-Fracking Efforts to Continue in California

   In California, environmental groups will continue to press for state legislation and rules designed to reduce impacts of existing operations on air and water quality. They also are supporting local ordinances and regulations imposing moratoriums on new oil and gas activities.

   Voters in Butte County will decide in November 2016 whether to prohibit hydraulic fracturing until more is known about the potential adverse impacts of fracking and other “unconventional” well stimulation activities. If passed Nov. 8, the ordinance would remain in effect until county officials determine that the “state has enacted and enforced regulations that provide sufficiently thorough protections to public health and safety, and natural resources of the state, including full and advance public disclosure and testing of all fracking sites and injection/disposal wells while allowing government access to and testing of the chemicals used in specific fracking and related operations.”

   Wastewater Disposal Wells

   The California Department of Conservation's Division of Oil, Gas and Geothermal Resources (DOGGR) will advance its multiyear effort to bring the state's Class II underground injection well program into compliance with the federal Safe Drinking Water Act (47 DEN A-15, 3/11/15).

   In January, DOGGR will begin a formal rulemaking to be completed by the year's end to improve regulations governing the wells used to dispose of oil wastewater. The rules will aim to clarify the quality of water to be protected when constructing wells and set standards for maximum allowable pressures for injection operations.

   Another year-long rulemaking DOGGR will launch in January targets cyclic steam operations used to heat formations to loosen oil so it flows more easily. The new rules will prevent damage to wells and the migration of fluids beyond injection zones, according to a two-year plan DOGGR released in October to overhaul oil and gas regulations.

   “Regulations tend to roll through the country. They start in one state, and if it's a good idea, you'll see it sort of growing.”

   Mike Paque, executive director of the Ground Water Protection Council

   Meanwhile, the state must defend against a lawsuit seeking to block the issuance of new permits for fracking and other well stimulation projects required under rules that took effect July 1 (Ctr. for Biological Diversity v. Calif. Dept. of Conservation, Cal. Sup. Ct., No 34-2015-8002149, 7/30/15) (147 DEN A-9, 7/31/15).

   Filed by the Center for Biological Diversity, the lawsuit alleged DOGGR violated the California Environmental Quality Act and other laws by certifying an analysis of the rules’ impacts a week ahead of the release of an independent science report on well stimulation activities. DOGGR's environmental analysis failed to consider the risks the peer-reviewed study identified, the complaint said.

   State, Local Tension in Colorado

   Colorado perhaps has been the biggest battleground in the dispute over local regulatory authority over drilling activities, particularly over hydraulic fracturing.

   Decisions are expected in the first half of 2016 in lawsuits against a voter-approved fracking ban in Longmont and a five-year fracking moratorium in Fort Collins. If the Colorado Supreme Court rules in favor of the industry and the Colorado Oil and Gas Conservation Commission, the ruling will invalidate bans, moratoriums and other fracking restrictions in Boulder, Broomfield, Erie and Lafayette, Mark Mathews of Brownstein, Hyatt, Farber & Schreck in Denver told Bloomberg BNA. Mathews represents the Colorado Oil and Gas Association in the lawsuits against the Longmont and Fort Collins measures.

   “We are absolutely confident in a positive outcome based on previous case history and state law,” said Haley, the Colorado Oil and Gas Association president and CEO. Lower court rulings said the state's Oil and Gas Conservation Act affirms the state as the dominant regulator of oil and gas activity and preempts local attempts to ban or restrict fracking.

   Ballot Proposals Brewing

   At least two groups are planning to seek voter approval of ballot measures in November. One, the Colorado Community Rights Network, would invalidate doctrines of state preemption and declare that local governments have the ultimate authority to decide what kind of industrial and corporate activity should be allowed in a particular community. The measure, if approved, would affect not only siting of oil and gas activities but also mining, agribusiness and other economic activity.

   “Oil and gas believes they should be the ones to make the decision about where and when to drill, and we believe it should be the people living in the communities,” Cliff Willmeng, an environmentalist in Lafayette, Colo., who supports the measure, told Bloomberg BNA. “This is something that has to be resolved at the ballot, because the legislature is atrophied by its ties to oil and gas.”

   Environmentalists and community activists in Colorado were frustrated with the outcome of a special task force convened by Gov. John Hickenlooper (D) to address siting of large oil and gas facilities in urban areas amid the larger issue of tension between state and local authority over drilling. The task force issued two recommendations that have become the basis of an ongoing rulemaking before the Oil and Gas Commission, but the rulemaking has been a disappointment, fracking opponents say.

   “The task force was a bust. We knew it would not give us any relief from the dangers of fracking,” Coloradans against Fracking said in a statement on its website. “Our governor and the COGCC don't care and won't act to protect us.” The group pledged to bring a ballot measure in November that will “send the fossil fuel industry into the fossil bin where it belongs.”

   Ballot Proposals Filed

   Fracking opponents filed at least 11 proposals in Colorado for the November 2016 ballot ranging from increasing local government control over drilling to outright fracking bans.

   “These latest ballot proposals, including a statewide ban on oil and gas development, represent the most extreme factions of the environmental movement,” said Peter Moore, chairman of Vital for Colorado, a group that supports the oil and gas industry.

   The proposed measures are necessary to protect homes, neighborhoods, schools and water supplies from the “dangers associated with fracking operations,” said supporters of the citizens’ initiatives.

   “If the state will not adequately protect Coloradans and communities, then we, the people of Colorado, must do it, and that requires a change to Colorado law,” said Tricia Olson, executive director of Coloradans Resisting Extreme Energy Development (CREED). Filing is first step in the ballot initiative process. A public hearing on the proposals was scheduled on Jan. 5.

   Other Colorado Rulemakings

   The COGCC rulemaking on the task force recommendations—both of which concern siting of oil and gas facilities—began in November but will continue into the new year, Matt Lepore, director of the commission, told Bloomberg BNA. The rules set forth processes for planning and collaborating on siting of wells and other oil and gas production facilities in urban areas, among other things. Lepore said he expects the commission to take final action on the rules at its Jan. 25-26 meeting.

   The commission also plans to initiate a rulemaking process in the second quarter of the year to set new limits on C-scale decibel noise, he said. C-scale noise given off by drilling activities has been described as having a very long wavelength. It's noise that a person is more likely to feel than to hear, Lepore said. The commission also is trying to reduce truck traffic and improve its local government liaisons with oil and gas producers and regulators.

   New York and Oklahoma

   Prospects for fracking in New York state essentially died in 2015 with no expectations that they will be revived in 2016. The double blow of a landmark court decision in June 2014 followed by an official ban from the state Department of Environmental Conservation (DEC) one year later has put the issue to rest in New York for the near future.

   New York's highest court upheld the right of local governments to ban the drilling practice, while the DEC ended years of litigation, regulation and study in 2015 by banning fracking because of public health and environmental safety concerns (126 DEN A-3, 7/1/14)(125 DEN A-9, 6/30/15).

   In Oklahoma, a bill (S.B. 809) signed into law in June 2015 by Gov. Mary Fallin (R) restricting local efforts to regulate oil and gas drilling makes the future prospects of local initiatives against fracking unlikely.

   In early 2016 environmental groups are likely to file a federal lawsuit against four Oklahoma oil and gas companies over the state's escalating seismic activity. The Sierra Club issued a notice of intent to sue letter in October 2015, alleging that earthquakes induced by wastewater injection in central Oklahoma and southern Kansas are resulting in environmental and property damage and personal injuries.

   ‘Completely Destroy Production.'

   In a statement, Chad Warmington, president of the Oklahoma Oil & Gas Association, said a lawsuit would “completely destroy the production of oil and gas in the United States.” He said the lawsuit was unnecessary, citing ongoing state efforts to address seismicity.

   Oklahoma Corporation Commission spokesman Matt Skinner told Bloomberg BNA that it was too early to tell whether oil and gas legislation would be proposed in the 2016 session of the Oklahoma Legislature, which convenes in February. Johnson Bridgwater, director of the Oklahoma Sierra Club, told Bloomberg BNA that environmentalists are concerned about the effect a 10 percent across-the-board state budget cut will have on agencies that regulate oil and gas.

   The state's budget crisis also has affected the industry, Warmington told Bloomberg BNA, citing delays in permits and “uncertainty regarding response to seismic activity due to the agency not having sufficient resources, staff to analyze data and software and hardware to manage data.”

   “Oil and gas believes they should be the ones to make the decision about where and when to drill, and we believe it should be the people living in the communities.”

   Cliff Willmeng, environmentalist in Lafayette, Colo.

   New legislation is expected to provide for longer drilling laterals in nonshale plays in Oklahoma, he said. In addition, an Oklahoma attorney general opinion was issued in early December 2015 on a law prohibiting local government bans on drilling. “There may be a need for some followup” legislation clarifying the prohibition, Warmington said.

   Pennsylvania Revising Regulations

   The Pennsylvania Department of Environmental Protection is nearing the end of a two-year process to revise existing regulations for oil and gas in response to environmental and community concerns about widespread fracking of the Marcellus Shale. The most recent version of the rulemaking on “Environmental Protection Performance Standards at Oil and Gas Well Sites” splits the old regulation into two parts, Chapter 78 for conventional oil and gas drilling and Chapter 78a for unconventional gas drilling.

   A final version must be submitted to the state's Independent Regulatory Review Commission by March or the rulemaking process will start over.

   Pennsylvania Gov. Tom Wolf (D) on Nov. 23 pledged to renew his push for a severance tax on the Marcellus Shale in 2016, saying he would include it in the next fiscal year's budget. Pennsylvania currently imposes an “impact fee” per well drilled, but does not tax the extraction of natural gas.

   “We are still the only major gas-producing state in the country without a tax on gas drillers,” Wolf said at a luncheon Nov. 23. “We need a severance tax.”

   Pennsylvania's Republican-controlled Legislature strongly opposes a severance tax, and it forced Wolf to eliminate it from his 2015 budget proposal.

   Pennsylvania Oil, Gas Pipelines

   The final report of the governor's Pipeline Infrastructure Taskforce is due to the governor in February. The 48-member group is developing guidelines and best practices for the expected build-out of pipeline infrastructure in Pennsylvania, which could affect as much as 1 percent of the state's land over the next decade.

   In a related development, the Rural Pennsylvania Pipeline Safety Act (Pa. S.B. 1044), currently in committee in the Pennsylvania Senate, would increase state oversight of gathering pipelines in rural areas, giving the Public Utility Commission safety jurisdiction over Class 1 unconventional gathering lines. The bill calls for the PUC to establish and maintain a registry of rural pipeline operators and would give the commission authority to inspect pipelines for safety.

   Bonds and Rules in Wyoming

   Producers in Wyoming will pay higher bonds on their wells in 2016 under an increase approved by the state Oil and Gas Conservation Commission Dec. 8. The commission unanimously voted to increase the rate of bonds from $25,000 to $100,000. The increase now goes to Gov. Matt Mead (R) for final review.

   The commission also is considering a new proposed rule designed to minimize the flaring and venting of natural gas. The proposal continues to authorize flaring up to 60,000 cubic feet of gas per day but limits venting to no more than 30,000 cubic feet per day. It also sets more stringent requirements for applying for authorization to flare in excess of 60,000 cubic feet per day and restricts venting of gas containing hydrogen sulfide content in excess of 50 parts per million. It includes new reporting requirements for both flaring and venting. Flaring releases carbon dioxide and venting releases methane, both planet-warming gases.

   “These latest ballot proposals, including a statewide ban on oil and gas development, represent the most extreme factions of the environmental movement.”

   Peter Moore, chairman of Vital for Colorado

   The public comment on the proposed rule ends Jan. 22, Tom Kropatsch, deputy oil and gas supervisor for the commission, told Bloomberg BNA. The commission likely will consider a final version of the rule at its hearing Feb. 9 and it would take effect in late March or April, he said.

   EPA Fracking Study Nears End

   The Environmental Protection Agency will receive a final peer review in 2016 of the agency's 998-page study of the risks posed by hydraulic fracturing to drinking water.

   The EPA Science Advisory Board will provide the review, probably sometime in the middle of the year, after which the EPA will be able to revise the study—if it chooses to do so—and issue it in final form. Work on the study began in 2011.

   The executive summary of the report said the agency had found no widespread, systemic harm to drinking water from fracking but that prominent phrasing may change. Environmental activists have decried the summary statement, and members of the scientific review panel had doubts about whether it was a sufficiently clear reflection of the study's findings (05 DEN A-2, 1/8/16).

   In their discussions of the body of the report, the science advisers found many places where the EPA was referring to risks without making clear the degree and likelihood of risks.

   One of the big court fights over fracking also will play out at the federal level. States, an Indian tribe and industry associations have sued to block the Bureau of Land Management from imposing new regulations on fracking on federal and Indian lands. A judge imposed a temporary injunction on the BLM rule (RIN 1004-AE26) in September while the case moves forward (Wyoming v. Interior, D. Wyo., No. 15-cv-43, 9/30/15; see related litigation tracker).

   Another federal rule, still at the proposal stage, would set federal standards and guidelines for wastewater sent from unconventional oil and gas operations—typically meaning fracked shale wells—to publicly owned water treatment plants. Such wastewater can have a heavy load of minerals (“salts”) and sometimes radionuclides. The EPA is writing that rule (RIN 2040-AF35) with an expectation that it will be finalized in the summer of 2016.

    

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10. California Proposals Target Los Angeles Gas Leak

    Jan 12, 2016 | BNA Daily Environment Report

    By Carolyn Whetzel

    California lawmakers Jan. 11 proposed legislation to halt new injections of natural gas and the use of older production wells at the reservoir near Los Angeles where a 1950s-era well has been leaking methane since October.

    The proposal would halt injections until state officials and outside experts can determine the facility doesn't pose a threat to public health or safety.

    State Sen. Fran Pavley (D) announced the bill (S.B. 875) and other measures related to the ongoing leak at a news conference held near the scene of the leaking gas, a facility in Aliso Canyon operated by Southern California Gas Co.

    Meanwhile, the South Coast Air Quality Management District has asked its hearing board to approve an agreement negotiated with SoCalGas allowing installation of equipment to partially capture and incinerate some of the natural gas leaking from the field while the utility continues to work on a permanent way to stop the leak.

    SoCalGas, a subsidiary of Sempra Energy, has said it needs at least another two months to stop the leak, a complicated project that involves drilling a relief well (248 DEN A-9, 12/29/15).

    California Gov. Jerry Brown (D) declared the natural gas leak an emergency Jan. 6 and directed state and local agencies to take steps to address the leak, mitigate its impacts and reduce the risk of more leaks (04 DEN A-14, 1/7/16).

    Los Angeles City Attorney Mike Feuer said Jan. 11 that the county has joined its lawsuit, filed in December, to hold SoCalGas accountable for the leak (People of the state of Cal. v. S. Cal. Gas Co., Cal. Sup. Ct., No. BC602973, 1/7/16).

    “L.A. County joining our suit is an important development in continued push to end this disaster, get relief for residents and ensure nothing like this happens again,” Feuer said in a written statement.

    SoCalGas is paying to relocate Porter Ranch residents affected by the leak.

    Regulatory Proposal

    The SCAQMD hearing board met Jan. 9 to consider the proposed abatement order and take public comment.

    If issued, the order would clear the way for SoCalGas to build “an interim gas capture and control system,” the proposal said. Some of the leaking gas would be collected and routed to portable control equipment for treatment or destruction.

    SCAQMD spokesman Sam Atwood told Bloomberg BNA in a Jan. 11 e-mail that more information would become available on the gas capture and disposal plan, perhaps later this week.

    “We're in the process of reviewing the portable equipment permits,” Atwood said.

    The abatement order aims to address a notice the SCAQMD issued against SoCalGas in November, alleging violations of state Health and Safety code Section 41700 and the air district's Rule 402 for creating a public nuisance by discharging emissions into nearby communities.

    Under the proposed order, SoCalGas must, as quickly as possible: stop the leak; capture all leaking gas; use all gas from the reservoir; stop all leaks; inspect and maintain all wells; monitor all emissions from the well and reservoir; hire a third party to conduct a health study; and fund projects to mitigate the greenhouse gas impacts and restore value to the surrounding community.

    Legislative Package

    Along with imposing a moratorium on new injections of natural gas at the facility, the legislative package Pavley and other lawmakers have proposed would require the utility to use its profits, not ratepayer funds, to cover the cost of relocating residents and mitigating the leak. It also would designate the California Office of Emergency Services as the lead agency to respond to future natural gas leaks. The bills also seek to strengthen existing laws for natural gas storage facilities and well standards and requirements to guard against similar leaks.

    The bills “will ensure this kind of tragedy won't happen again,” Pavley said. “And we are taking steps to ensure the return of homes and business to Porter Ranch so they can have a safe place to live and work.”

    In a written statement, the environmental group Food & Water Watch said the legislation “is an important first step toward the complete shutdown of Aliso Canyon.” Closing the facility is “the only real way to prevent” future harm to the residents, the group said.

     

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11. Greens: Gas Developers Aren’t Telling Investors Of Methane Leaks

    Jan 11, 2016 | The Hill - E2 Wire

    By Devin Henry

    Natural gas developers are providing very restricted information about their methane emissions to investors, according to a report released Monday by a green group.

    According to an Environmental Defense Fund (EDF) analysis, only 18 of 65 major gas companies disclosed methane emissions to their investors, and none laid out emission reduction targets. Among companies that do disclose emissions, the report said, there was “vague, qualitative information that is not actionable.” The report said there is no standardized methodology for methane reporting across various financial disclosure forms, from Securities and Exchange Commission filings to reports with the sustainability not-for-profit CDP. 

    The study suggests companies and regulators need to do more to increase methane leak reporting. 

    “Some leading companies are already instituting best practices to reduce emissions, but without rigorous, consistent data, investors can’t gauge progress, manage risks, or compare company performance,” said Sean Wright, a manager in EDF’s Corporate Partnerships Program and the report’s lead author.

    The study comes as both the gas industry and federal regulators look to crack down on methane emissions. 

    Methane, the chief component of natural gas, has 25-times the global warming potential of carbon dioxide. Gas companies say they have a financial incentive to reduce emissions because the more methane they capture, the more gas they can put on the market. 

    The industry reports reducing its emissions by 11 percent since 2005 and says it has endorsed voluntary programs to reduce those emissions further. 

    The Environmental Protection Agency proposed in August a plan to cut methane emissions across the oil and gas drilling sector. The industry has warned against new federal methane regulations, but environmentalists and regulators say they’re necessary for reducing especially powerful emissions.

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12. Shareholders’ Bids for Action on Methane Emissions Climbing

    Jan 11, 2016 | Bloomberg

    By Jennifer A Dlouhy

    At least 21 U.S. oil and gas companies already face shareholder resolutions on environmental and social policies this year as investors raise concerns about how businesses are tackling climate change and pollution.

    Investors increasingly are pushing for action on methane, a powerful heat-trapping gas that contributes to climate change, after prodding more companies to produce sustainability reports and disclose their carbon dioxide emissions.

    Some resolutions would press executives to detail plans for limiting methane leakage from wells, pipelines and other energy equipment. Investors need more information about those emissions, including details on the extent of the problem and what companies are doing about it, according to a report being released Monday by the Environmental Defense Fund.

    “Methane presents short-term risks to investments in the oil and gas industry in the form of economic losses and existing and future regulations,” the New York-based environmental group said in its report. “There are practical and cost-effective solutions to minimize methane emissions, many of which will increase the bottom line for companies.”

    No companies have disclosed plans for reducing methane emissions, and few report any data about it, according to the EDF analysis. When they do, the information tends to be vague and qualitative, making it ill-suited for judging how well a company is doing in managing the issue.New Importance

    Methane has taken on new importance in President Barack Obama’s fight against climate change as his administration moves on multiple fronts to clamp down on the oil and gas industry’s emissions of the potent greenhouse gas. Methane, the primary component of natural gas, is 84 more times powerful than carbon dioxide at warming the atmosphere over a 20-year period.

    Investors in late 2015 and early 2016 have filed 10 shareholder resolutions to press U.S. energy companies on the issue before annual meetings this year.

    The international climate agreement reached in Paris in December, the potential for stranded assets and low oil prices are “really coming together to drive more of these resolutions,” Gregory Elders, an environmental, social and governance analyst for Bloomberg Intelligence, said in an interview. Low oil and coal prices also are underscoring the need for energy companies to consider the risk of stranded assets, including fossil fuel reserves, that could become harder to produce in a world with more stringent carbon dioxide limits.Provoking Discussion

    Companies faced 167 shareholder resolutions in 2015 related to climate change, up from six in 2001, according to Ceres, a Boston-based coalition of investors that tracks them. 

    Investors view the resolutions as a way of provoking negotiations with executives, said Rob Berridge, director of shareholder engagement at Ceres. Initially, the focus was on forcing companies to disclose their carbon dioxide emissions.

    “So many companies started doing that that investors have shifted from ‘disclose your emissions’ to ‘set goals to reduce your emissions,’” Berridge said in an interview. “The work has been getting more specific, and you’ve seen these sub-topics crop up, like methane.”

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13. Past Programs May Shape State Plans for EPA Carbon Rule

    Jan 12, 2016 | BNA Daily Environment Report

    By Anthony Adragna

    States should look to successful components of existing emissions trading programs as ways to build their state implementation plans for the Environmental Protection Agency's landmark regulation to curb carbon dioxide from existing power plants, industry experts said Jan. 11.

    The Northeast's Regional Greenhouse Gas Initiative (RGGI), California's economywide greenhouse gas emissions cap-and-trade program and the EPA's decades-old Acid Rain Program are examples of market-based programs that have, for the most part, worked well, according to various panelists at the Bipartisan Policy Center.

    While aspects of those programs should be useful in developing state implementation plans for the EPA's Clean Power Plan, individual states will have to customize their strategies based on their own needs and goals, Bruce Phillips, director at the consulting firm NorthBridge Group, said.

    “I would caution against just blindly trying to replicate in the future what we did in the past, because we're in a particular economic environment right now,” Phillips said. “We need to look at the lessons from past programs, but we need to apply them to the economic environment that we find ourselves in today.”

    State regulators will have to consider, for example, whether their top priorities are keeping electricity rates low, preventing market distortions like nuclear energy retirements and encouraging the deployment of new low carbon technologies, according to Phillips. Depending on their priorities, individual states may structure their programs differently.

    Structure of Programs Unsettled

    State regulators must determine whether to measure compliance with the EPA's carbon dioxide standards for power plants based on emissions mass or rate. A rate-based system would set limits on the amount of carbon dioxide that can be emitted per kilowatt hour of electricity produced, while a mass-based program would set a tonnage cap on carbon dioxide emissions from regulated power plants.

    For states that elect to pursue a mass-based approach—the main focus of the panel's discussion—the key question will be whether to allocate or auction off the right to emit carbon dioxide.

    The EPA's Clean Power Plan (RIN 2060-AR33), which was formally published in October (80 Fed. Reg. 64,662), sets carbon dioxide emissions limits for the power sector in each state that would then be implemented by state regulators.

    Most states around the U.S. have begun initial outreach on how they might comply with the massive regulation but remain the early stages of the decision-making process (06 DEN B-4, 1/11/16).

    Disagreement From Power Producers

    Representatives from Duke Energy Corp. and Dynegy Inc. disagreed over whether auctioning or allocation was preferable for implementing a mass-based plan, but both said they had begun informal discussions with various states.

    Venu Ghanta, environmental and energy policy director for Duke Energy, said his company preferred allocations based on historical emissions patterns. Auctions risk potentially abrupt spikes in power prices that could negatively affect consumers without any significant additional environmental gains, he said.

    Bruce Wilcoxon, director of environmental affairs at Dynegy, disagreed and said the market should be given a chance to work through auctions. Part of the problem with allocations, he said, is they may give the perception of regulators picking “winners or losers either in reality or in perception.”

    “Complexity equals cost,” Wilcoxon said.

    ‘Not an End.'

    Dallas Burtraw, a senior fellow with Resources for the Future, said a key virtue regulators should consider when creating their state implementation plans is keeping the programs as simple and transparent as possible.

    He noted the EPA's carbon pollution rule marked a turning point in the electricity industry, but also said states should keep in mind it likely would not be the last federal action to address climate change.

    “The Clean Power Plan is not an end. It's the beginning of a process,” Burtraw said. “I think we're entering a carbon-constrained economy now and the electricity sector is the chosen one. That's the key point that states need to take home. Position themselves where they want to be in 2025 and beyond, because the electricity sector is positioned to grow enormously.”

    Separately Jan. 11, the EPA held a general information session on emissions trading programs. Agency staff did not delve into specifics of how such regulatory schemes would work under the Clean Power Plan.

     

     

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14. Water Act Jurisdiction, Power Plant Rules Top Issues

    Jan 12, 2016 | BNA Daily Environment Report

    By Amena H. Saiyid

    The Environmental Protection Agency will spend much of 2016 in court defending rules to clarify Clean Water Act jurisdiction, exempt water transfers from permit requirements, and revise wastewater effluent limits and regulate criteria for building or retrofitting cooling water intake systems at power plants (see related litigation tracker).

    The Clean Water Rule (RIN 2040-AF30), which the EPA and the U.S. Army Corps of Engineers jointly promulgated in June 2015 to clarify the regulatory reach of the act, faces multiple lawsuits in federal appellate and district courts from many states and industry groups representing home builders, farmers and miners.

    “A top priority for us in the coming year is defending the Clean Water Rule,” Joel Beauvais, EPA acting deputy assistant administrator for water, told Bloomberg BNA. He added that the EPA “feels good” about the rule's consistency with the act.

    States in ‘Holding Pattern.'

    States, which as co-regulators will be in the vanguard for implementing the water jurisdiction rule, remain in “a holding pattern” until the litigation on the rule is settled, Julia Anastasio, general counsel and executive director of the Association of Clean Water Agencies (ACWA), told Bloomberg BNA.

    Among the states, 32 are challenging the rule, while seven states—Connecticut, Hawaii, New York, Massachusetts, Oregon, Vermont and Washington—and the District of Columbia are supporting it in the courts.

    In the most recent court action, the U.S. Court of Appeals for the Sixth Circuit held oral arguments Dec. 8 on which court venue should take the lead in resolving all the lawsuits (Ohio v. U.S. Army Corps of Eng'rs., In re EPA and Dep't of Def. Final Rule, 6th Cir., No. 15-3799, 10/9/15; 236 DEN A-1, 12/9/15).

    Because of the venue dispute, Anastasio said it will take the federal courts at least three to six months before they can even get around to addressing substantive questions regarding the legality of the Clean Water Rule, also known as the “waters of the U.S. rule.”

    Jon Devine, senior water attorney for the Natural Resources Defense Council, told Bloomberg BNA that he also envisions a similar scenario, but he hopes the courts will get to the merits of the rule soon, where he expects the government to prevail.

    Congress Gets Involved

    Meanwhile, the Republican-controlled Congress plans to move ahead with efforts to overturn the rule using all the legislative tools at its disposal. In November, the Senate secured a simple majority to pass a joint resolution (S.J. Res. 22) that seeks to overturn the rule. The House plans to vote on a similar measure the week of Jan. 11 ((05 DEN A-13, 1/8/16)

    If that measure passes, both the House and Senate would both need a two-thirds majority to override President Barack Obama's inevitable veto.

    Republican lawmakers plan to use the upcoming budget resolution for fiscal year 2017 and related appropriation bills to target the jurisdiction rule. They failed in their attempt to include a policy rider on the rule in the omnibus spending bill for fiscal year 2016.

    A coalition of home builders, contractors, miners, agriculture and other industry groups led by the American Farm Bureau Federation told Bloomberg BNA that they will continue to lobby against the Clean Water Rule until either the courts overturn it or congressional efforts to block the rule are successful.

    Other Issues on Horizon

    Other major issues on the horizon regarding water pollution in 2016 include:

    •  The EPA is expected to comply with a court-approved agreement to finalize revised rules by November for stormwater reporting requirements in communities with fewer than 100,000 people. As part of the settlement, the agency will be required to determine by May whether stormwater rules are needed for forest roads.

    • Despite opposition from states and wastewater utilities, the EPA also expects to issue a final pretreatment rule to regulate discharges of mercury from dental clinics.

    • The EPA will try to persuade the Supreme Court to reject a petition to overturn the 2010 Chesapeake Bay restoration plan.

    • The EPA will defend its rationale not to set numerical water quality standards for nitrogen and phosphorus for states in the Mississippi River Basin.

    • The Army Corps of Engineers will try to persuade the U.S. Supreme Court to affirm rulings by two out of three federal appeals courts holding that nonbinding jurisdictional determinations under the Clean Water Act are not subject to judicial review.

    • On the infrastructure front, the EPA is expected to develop a rule to govern the distribution of U.S.-backed loans and loan guarantees from the five-year pilot Water Infrastructure Finance and Innovation Act (WIFIA) program.

    Water Transfers, Power Plants

    Beyond the water jurisdiction rule, the EPA expects the U.S. Court of Appeals for the Second Circuit to rule on the legality of the 2008 rule exempting water transfers from National Pollutant Discharge Elimination System permitting program.

    This rule has pitted 21 states against each other. The Second Circuit heard arguments Dec. 1 in which the judges appeared to explore the question of deferring to the EPA on this rule (231 DEN A-19, 12/2/15).

    The EPA also is defending its power plant effluent guidelines rule (RIN 2040-AF14), published Nov. 2, in the Fifth Circuit where four separate cases were consolidated Dec. 8. A coalition of power plants represented by the Utility Water Act Group filed petitions for review in both the Eighth and Fifth circuits over concerns about compliance cost estimates and power plant data used to set limits.

    The Sierra Club filed a petition in the Ninth Circuit, while the Waterkeeper Alliance and the Environmental Integrity Project filed another petition in the Second Circuit. The environmental groups have been largely supportive of the final rule, except for a provision that allowed wastewater generated prior to Jan. 1, 2018, to be exempt from the new requirements (237 DEN A-6, 12/10/15).

    The purpose of the agency's revised effluent limits is to regulate wastewater associated with flue gas desulfurization, fly ash, bottom ash, flue gas mercury control, combustion residual leachate from landfills and surface impoundments, nonchemical metal cleaning wastes, and gasification of fuels such as coal and petroleum coke.

    Defending Cooling Water, Mixing Zones

    The agency also faces multiple lawsuits over its cooling water intakes regulation issued under Section 316 (b) of the Clean Water Act that covers 1,065 power plants and industrial facilities.

    The Second Circuit is expected to consider briefs from the power sector and environmental groups through August 2016 (Cooling Water Intake Structure Coal. v. EPA, 4th Cir., No.14-1931, 12/17/14).

    In the D.C. Circuit, the EPA is defending its decision to limit a ruling from the Eighth Circuit that struck down the agency's ban on certain wastewater treatment practices during wet weather (Ctr. for Regulatory Reasonableness v. EPA, D.C. Cir. 2015, ; 207 DEN A-3, 10/27/15).

    The agency essentially prohibited the use of “mixing zones” at wastewater discharge points and the blending of partially treated wastewater with treated flows unless there is no feasible alternative.

    The EPA has said the Eighth Circuit decision only invalidates the ban in the states within that court's jurisdiction, but the agency will continue to apply it in the rest of the country, a move that wastewater utilities have pledged to challenge. The EPA's response to the center's opening brief is due Jan. 27, after which the center will have one more opportunity to rebut the arguments on March 9.

    Revising Stormwater Rule

    Stormwater runoff remains one of the most significant sources of water pollution in the nation, transporting a host of contaminants such as metals, sediments, algae-promoting nutrients, trash, used motor oil, sewage and toxic compounds into streams, rivers, lakes and estuaries, according to the EPA.

    Under a settlement approved by the U.S. Court of Appeals for the Ninth Circuit in September 2015, the EPA must issue a final revised rule by Nov. 17, 2016, for cities and suburbs with up to 100,000 people (Envtl. Def. Ctr., Inc. v. EPA, 9th Cir., No. 14-80184, settlement approved, 9/15/15; 180 DEN A-1, 9/17/15).

    At issue are the 1999 regulations governing Phase II stormwater discharges from small municipal separate storm sewer systems (MS4s) that the Ninth Circuit overturned in 2003. The EPA ignored the ruling until it was sued in 2014 by the NRDC represented by the Environmental Defense Center Inc. Those overturned regulations allowed MS4s to meet their general NPDES permit obligations by merely filing notices of intent to discharge stormwater without any subsequent reviews by either the EPA or the state permitting authority.

    The Ninth Circuit also asked the EPA to determine by May 26 whether stormwater runoff from forest roads needs to be regulated.

    EPA proposed three options Dec. 17, 2015, for MS4s to seek public input on their NPDES permits and to ensure that they include controls that reduce pollutants in stormwater to the maximum extent practicable, the standard established under the Clean Water Act (244 DEN A-13, 12/21/15).

    The onus of implementing the revised stormwater rule will fall upon states, which are not exactly keen to go through a prolonged review process, Anastasio said.

    Larry Levine, NRDC staff attorney, told Bloomberg BNA the group was still reviewing the rule. He noted that the EPA's directive to include “clear, specific, and measurable” goals in the MS4 permits was currently only met by five states.

    Pretreatment Rule for Dentists

    In June, the EPA plans to issue the long-awaited final pretreatment rule (RIN 2040-AF26) regulating discharges of mercury in dental amalgam to wastewater treatment plants. Originally, the plan was to publish the rule in the fall of 2015, but agency officials said they needed time to address the comments concerning the inadvertent regulatory burden that has been placed on dental offices and publicly owned treatment plants, which would be charged with enforcing the standards (94 DEN A-6, 5/15/15).

    The pretreatment rule, which was proposed in October 2014, would apply to about 120,000 dental offices that would be required to install dental amalgam separators (79 Fed. Reg. 63,258).

    The National Association of Clean Water Agencies, which also represents the publicly owned wastewater sector, along with many states and cities, have urged the EPA to withdraw the rule, saying it's not necessary. At the 2015 National Pretreatment Workshop, the EPA was urged to reconsider the decision to pursue a rulemaking, but Beauvais said the agency remains on track to complete the rule.

    Defending Nutrient Standards, Bay TMDL

    Nutrients, which is the collective name for nitrogen and phosphorus pollution, continue to pose a challenge for federal and state regulators.

    This year EPA will find itself continuing to defend its rationale in the U.S. District Court for the Eastern District of Louisiana for refusing to set water quality standards for nitrogen, phosphorus and sediment in states within the Mississippi River Basin and the Gulf of Mexico. The case is on remand from the Fifth Circuit (Gulf Restoration Network v. EPA, E.D. La., No. 12-00677, brief filed, 11/20/15; 227 DEN A-8, 11/25/15).

    The farm bureau also is seeking Supreme Court review of the 2010 total maximum daily loads that the EPA set for the Chesapeake Bay for nitrogen, phosphorus and sediment pollution.

    In its Nov. 6 petition to the court, the farm bureau argued the TMDL is too prescriptive in its loadings and reduction limits for point and nonpoint sources (see related outlook).

    The EPA's response opposing this petition is due Jan. 19. The Chesapeake Bay Foundation also will file a brief in opposition to the farm bureau's petition (Amer. Farm Bureau Fed'n. v. EPA, U.S., No. 15-599, 11/6/15; 216 DEN A-12, 11/9/15).

    Anastasio of ACWA said, however, that she does not think the Supreme Court will accept the petition on the Chesapeake Bay TMDL because there is no split decision. Both the district and appellate courts have upheld the TMDL.

    National Inventory of Wetlands

    Beyond rulemaking, the EPA is planning to issue its overdue National Wetland Condition Assessment for 2011 in the coming year. The agency took comment until Jan. 6 on a draft version.

    The EPA said the draft report represents the first national assessment of the ecological condition of the nation's wetlands. It is part of a collaborative program among the EPA, states, and tribes to assess the quality of the nation's coastal waters, lakes and reservoirs, rivers and streams, and wetlands using statistical surveys.

    According to the EPA, the 2011 assessment collected data to characterize biological, chemical, and physical features of each site. Characteristics such as vegetation, soil, hydrology, water chemistry, algae and buffers were used to reflect the ecological condition of wetlands as well as serve as key indicators of stress that may influence condition across broad national and regional scales.

    “One of the ongoing challenges is to be able to accurately reflect how the condition of wetlands is changing over time,” Beauvais said.

    Bacteriophage Criteria

    The EPA is still gathering information to develop recreational water quality criteria for viruses using coliphage, a type of bacteriophage, to indicate the presence of a pathogenic virus at levels that could make people sick.

    The agency plans to issue draft criteria toward the end of 2016 following a meeting of public health experts in April to discuss the latest research on bacteriophages. The panel of experts will meet under the aegis of the 2016 Recreational Waters Conference, which runs April 12-15 in New Orleans.

    According to the EPA, viruses are more difficult than bacteria to treat and inactivate in the wastewater disinfection process.

    Viruses also are of concern to municipalities engaging in water recycling or reuse, and particularly in those communities that are considering direct potable reuse.

    The publicly owned wastewater utility sector remains concerned because the EPA hasn't yet conducted studies to determine how hard or easy it is to treat wastewater to achieve sufficient reductions in the bacteriophage to meet the upcoming criteria, Chris Hornback, NACWA chief technical officer, told Bloomberg BNA.

    Minnesota Wetlands Case

    The corps also will be in the Supreme Court defending its jurisdictional determinations over wetland parcels, owing to a split in the circuit courts.

    The Supreme Court will be considering the narrow question of whether a Clean Water Act jurisdictional determination over a tract of wetlands constitutes a final agency action subject to judicial review in U.S. Army Corps of Eng'rs v. Hawkes Co. Inc. (U.S., No. 15-290, cert granted, 12/11/15; 239 DEN A-9, 12/14/15).

    The court accepted the petition by Hawkes Co. Inc., a peat farming company in Minnesota. A portion of the company's land was declared jurisdictional under the act, and the petition asserts the Fifth, Eighth and Ninth circuits are now at odds over whether a jurisdictional determination amounts to a final agency action that can be reviewed by a court under the Administrative Procedure Act.

    The Supreme Court has chosen not to rule on a petition for rehearing on the same question by Kent Recycling Services in Louisiana.

     

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15. Energy Issues Ahead Include Two FERC Supreme Court Cases

    Jan 12, 2016 | BNA Daily Environment Report

    By Rebecca Kern and Ari Natter

    This year could prove to be a busy one in the energy sector with two Federal Energy Regulatory Commission cases before the U.S. Supreme Court, regulations in the works addressing energy efficiency and energy price formation, and the possibility of the first broad energy bill in nearly a decade.

    The Supreme Court likely will decide whether FERC has the authority to run a program that compensates large companies for not using energy during peak demand periods in the wholesale energy markets (see related litigation tracker).

    The Energy Department is working on efficiency standards for gas furnaces that could have big impacts on the energy industry. And the Nuclear Regulatory Commission is developing nuclear plant safety and security strategies in response to the Fukushima nuclear disaster in 2011.

    In Congress, a broad energy policy bill passed the House in 2015, but the Senate version didn't make it to the floor. Sen. Lisa Murkowski (R-Alaska), the author of that bill, plans to try to get it to the floor for a vote this year.

    Demand Response in Supreme Court

    FERC has two cases before the Supreme Court, which, depending on the outcomes, could clarify the line between federal and state authority in the energy markets.

    The case about whether FERC has authority to run its demand response program in the wholesale energy markets was argued in October 2015, and a decision is expected early this year(FERC v. Electric Power Supply Ass'n, U.S., No. 14-840, oral arguments, 10/14/15)(199 DEN A-15, 10/15/15).

    The Electric Power Supply Association, which represents electricity generating companies, argued in the Supreme Court that FERC doesn't have authority under the Federal Power Act to regulate demand response payments.

    The outcome could have significant regulatory, economic and reliability effects. Demand response programs in the wholesale markets have led to billions of dollars in savings for large businesses and have protected against blackouts and brownouts. In the PJM Interconnection LLC market alone, it's estimated that electricity charges could increase by $9 billion for the 2017-2018 period if demand response resources were removed from the market, FERC said in its arguments.

    FERC's demand response program, known as Order 745, involves paying industrial and large business customers in the real-time and day-ahead energy markets for their power reductions in dollar amounts comparable to actual generation. Third-party companies such as EnerNoc Inc. now provide energy software and services to manage demand response for large energy customers.

    Possible Outcomes

    Christi Tezak, managing director of research at ClearView Energy Partners LLC, told Bloomberg BNA that if FERC's demand response program is upheld, “the status quo is probably going to continue along the lines of what PJM has done, which is to be more particular about what qualifies as demand response.”

    PJM took steps in its market to make demand response more similar to generation, Tezak said. “If it wants to be paid like generation, it's got to act more like generation, and it needs to be more accountable like generation,” she said.

    However, she said “it is a very real possibility” that FERC could lose the case and the ruling from the U.S. Court of Appeals for the District of Columbia Circuit would be upheld. That ruling vacated Order 745. Eight justices will decide, since Justice Samuel Alito recused himself. Some observers have predicted a 4-4 split.

    “If FERC loses, then what you see happening is the shift of putting demand response as a service that is provided by utilities, as opposed to provided by third-party companies like EnerNoc,” Tezak said.

    Second FERC Supreme Court Case

    Several days after the Supreme Court heard the oral arguments in the demand response case, it agreed to take up two cases from Maryland. The two were combined into one case dealing with a subsidy program that compels electricity companies to enter into long-term contracts with generators selected by the state(Hughes v. PPL EnergyPlus, U.S., No. 14-614, brief filed, 12/8/2015)(236 DEN A-20, 12/9/15).

    PPL EnergyPlus, a large energy company, sued, saying that the program is preempted under the Federal Power Act, which grants exclusive authority over interstate rates to FERC.

    Joel Eisen, a law professor at the University of Richmond School of Law, said the timing of the court granting review may have been intentional so that it could issue a ruling on state and federal authority in the energy markets.

    “The court may see this case as a better vehicle for making some pronouncements on state and federal jurisdiction than the demand response case,” he told Bloomberg BNA.

    Oral arguments have been set for Feb. 24, and a ruling is expected before the end of the court's term in June.

    Energy Price Formation Fixes Could Aid Nuclear

    FERC is developing a rulemaking in 2016 to fix how prices are set in the wholesale energy markets to compensate generators more accurately for the energy they provide. The ruling could be a boon for the nuclear industry, which has been struggling to compete in these markets.

    FERC issued a proposed rule in September 2015 that would require each regional transmission organization (RTO) and independent system operator (ISO) to change the compensation system so that generators are paid on the basis of short time intervals instead of an hourly average (181 DEN A-5, 9/18/15).

    Separately, in November 2015, FERC issued an order directing RTOs and ISOs to submit reports to the agency by mid-February on how they establish energy price formation in their energy and ancillary services markets(224 DEN A-10, 11/20/15).

    Nuclear Industry Having Trouble Competing

    The nuclear industry has said it's having difficulty competing in the deregulated energy markets because the price of natural gas is so low(207 DEN A-8, 10/27/15).

    Entergy Corp. announced last year that its Fitzpatrick nuclear reactor in New York would prematurely close in 2017, and its Pilgrim nuclear reactor in Massachusetts would close in 2019. In all, three reactors in the U.S. plan to close by 2020, and five new reactors are expected to open in the same period.

    Entergy cited trouble competing in the deregulated markets as one of the reasons for the closures.

    NRC Chairman Stephen Burns said he thinks that there could be more reactors announcing premature retirements in the future.

    “There's some uncertainty over the next few years, as particularly merchant plants face this question about their economics in the context of low [natural] gas prices and the structure of the electricity market itself,” he told Bloomberg BNA. “So I think you will see some other decisions coming in the next couple of years about continued operation of merchant plants in the deregulated market.”

    Challenge Seen With Price Formation

    Matt Crozak, the senior director of business policy of the Nuclear Energy Institute, an industry group, told Bloomberg BNA the challenge with price formation is “that you want the clearing price to represent the true cost of delivering energy to the system.”

    However, he said historically low natural gas prices have depressed the prices generators, including nuclear operators, get paid in competitive wholesale markets.

    Crozak said he's happy to see FERC start to address price formation.

    “There are these shortcomings in some of the markets where the full value of providing the service doesn't show up in the price and are dealt with by some other mechanism,” he said.

    NRC Considers Reactor Safety

    The Nuclear Regulatory Commission issued a proposed rule last fall to limit damage at reactors in cases of severe events such as major earthquakes.

    The proposed rule would establish requirements for nuclear reactor licensees and applicants to plan for ways to reduce the damage from what's known as “beyond-design-basis events.” Among other things, it calls for improvements in emergency response capabilities and in the ability to assess the release of radioactive material(219 DEN A-21, 11/13/15).

    However, safety advocates say the rule doesn't go far enough to protect the plants, in part because it doesn't require severe accident management guidelines. The industry follows SAMGs on a voluntary basis.

    Edwin Lyman, a senior scientist with the Union of Concerned Scientists, told Bloomberg BNA that requiring the SAMGs “makes sense because they are an integral part of the emergency response to a beyond-design-basis accident.”

    Separately, the NRC is in the early stages of establishing rulemaking on the decommissioning of nuclear reactors. Right now, reactors have to file exemptions from emergency planning and/or security requirements that operating reactors are required to follow(225 DEN A-11, 11/23/15)(225 DEN A-11, 11/23/15).

    Gas Furnace Standard Negotiations

    An efficiency standard expected in 2016 deals with changing the standards for residential non-weatherized gas furnaces. The Energy Department's proposed standard, issued in March 2015, met with objections from the natural gas industry.

    The proposed standard would increase the minimum annual fuel utilization efficiencies (AFUE) of gas furnaces from 80 percent to 92 percent by 2021(48 DEN A-3, 3/12/15).

    The natural gas industry has said the standards are too costly to implement and that the department's rulemaking process and analysis haven't been transparent(218 DEN A-14, 11/12/15).

    “If the rule wasn't properly constructed, it could have the impact of actually pushing people away from using natural gas furnaces and adopting other alternatives that in the long run actually would cost consumers more money,” Kathryn Clay, American Gas Association vice president of policy strategy, told Bloomberg BNA.

    Furnace Alternatives Called More Polluting

    Clay said that the alternatives consumers could choose—oil or electric furnaces—are more polluting but cheaper to install. The more energy-efficient condensing gas furnaces often require new ventilation systems to be installed.

    As a result, an informal stakeholder working group made up of industry trade associations, manufacturers, contractors, distributors and energy efficiency groups was formed to create an alternative standard that they plan to provide for the Energy Department.

    The working group so far has agreed to divide the standard into two separate standards: one for smaller furnaces, which could maintain the 80 percent AFUE efficiency, and a second for larger furnaces, which would be required to meet the more stringent 92 percent AFUE efficiency.

    They also have agreed to two compliance periods, with the 92 percent AFUE standard going into effect for furnaces sizes 75,000 British thermal units and larger between 2015 and 2021, and a 95 percent AFUE standard for furnaces sizes 60,000 Btu and larger going into effect between 2027-2032, said Clay, who participates in the group.

    Offshore Oil, Gas Standards

    The Interior Department's regulatory agencies for offshore oil and natural gas exploration and production will update regulations and issue a proposed five-year leasing program in 2016.

    The Bureau of Safety and Environmental Enforcement is likely to complete three final rules in the first quarter. One, a consequence of the 2010 Deepwater Horizon tragedy, will tighten standards for well control during exploratory drilling. It is often called the “blowout preventer rule.”

    Another final rule from BSEE will update safety standards for production wells. Like the well control rule for exploratory work, the production well rule will draw much of its regulatory detail from industry's best practices and most up-to-date voluntary rules—but make them mandatory.

    BSEE also will complete its Arctic drilling rule, a set of regulations for offshore oil and gas exploration that will be tailored to Arctic conditions. That rule, like the well control and production safety rule, probably will be completed in the first quarter, but it's anyone's guess how long the rules will then spend in interagency review at the White House Office of Management and Budget.

    The Bureau of Ocean Energy Management issues five-year programs for offshore oil and gas leasing, and the next will start in July 2017. Early in 2015, BOEM released a draft proposed program for 2017-2022 and took much comment on it, especially on the question of allowing exploration off the Atlantic Coast from Virginia to Georgia. The proposed program is to be released for public comment sometime in 2016.

    Broad Energy Bill Could Re-emerge

    In addition to legislation on oil exports, a broad Senate energy bill (S. 2012) that stalled in 2015 may re-emerge this year, analysts said.

    The bill, known as the Energy Policy Modernization Act of 2015, was approved by the Senate Energy and Natural Resources Committee on an 18-4 vote but never received floor time amidst a crowded floor schedule and weeks spent on legislation to approve the Keystone XL pipeline (S. 1) at the beginning of 2015 (147 DEN A-4, 7/31/15).

    The last energy bill Congress passed was in 2007.

    “I think you will see a concerted effort by Murkowski and [House Energy and Commerce Committee Chairman Rep. Fred] Upton to move along comprehensive energy legislation,” Joseph P. McMonigle, a senior energy analyst at Potomac Research Group, told Bloomberg BNA in an e-mail. “It's not clear it can get done in an election year, but [House Speaker Paul] Ryan and [Senate Majority Leader Mitch] McConnell are proving to be an effective team, and therefore it's certainly a possibility.”

    Bill Would Expedite DOE's LNG Review

    The 423-page bill would expedite the Energy Department's review of applications to export liquefied natural gas. Groups such as the U.S. Chamber of Commerce and the Business Roundtable support it. Environmental groups criticize it for not doing enough to promote renewable energy.

    Other provisions in the bill include measures that would strengthen building codes, increase cybersecurity protections for the electricity grid and expedite the licensing process for hydropower projects.

    “The chairman is committed to moving her bipartisan energy bill at the earliest possible opportunity,” Robert Dillon, a spokesman for Murkowski and other Republicans on the Energy Committee, told Bloomberg BNA in an e-mail.

    The House version of the legislation (H.R. 8) passed mostly along party lines in December under a veto threat from the White House, which said the Republican bill would “undermine already successful initiatives designed to modernize the nation's energy infrastructure and increase our energy efficiency.”

    Ethanol in Election Year

    Lawmakers have been unable to reach consensus on any changes that should be made to the decade-old requirement that billions of gallons of ethanol and other renewable fuels be blended into the nation's supply of motor vehicle fuel.

    The Environmental Protection Agency set a final rule in November (RIN 2060-AS22) requiring 18.11 billion gallons of renewable fuel in 2016, raising objections from refiners and the oil industry, who called the targets unrealistic (230 DEN A-20, 12/1/15)(12 DEN A-2, 1/17/14).

    Previous efforts by Congress to legislate changes to the renewable fuel standard have failed.

    “Before we make any changes, we need to be mindful of the impact on the agricultural sector, renewable fuel producers, refiners, automakers, fuel retailers and other affected parties, and most importantly of all we need to do what is best for American consumers,” Upton said in a statement issued after the EPA released its final rule Nov. 30.

     

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16. Litigation Tracker: Busy Year Ahead for FERC in Courts

    Jan 12, 2016 | BNA Daily Environment Report

    The Federal Energy Regulatory Commission has a busy year ahead in the legal arena. The Supreme Court is expected to rule in two cases involving FERC in 2016. In one, the court will decide whether FERC has authority to run its demand response program in the wholesale energy markets, which compensates large companies for not using energy during peak demand periods.

    FERC also is involved in four cases at the U.S. Court of Appeals for the District of Columbia Circuit related to its approval of liquefied natural gas export terminals. In two cases argued in November and awaiting a ruling, the Sierra Club is suing FERC for not doing a thorough environmental assessment before approving two LNG export terminals (see related story).
    

    FERC v. Electric Power Supply Ass'n, U.S., No. 14-840, 1/16/15

    Whether FERC has authority to run its demand response program in the wholesale energy markets.

    Awaiting Supreme Court ruling after oral arguments in October 2015.

    Supreme Court Questions FERC Demand Response Authority (199 DEN A-15, 10/15/15) 

    Hughes v. PPL EnergyPlus, LLC, U.S., No. 14-614, 11/26/14

    Whether states with competitive power markets have authority to run subsidy programs to develop new power plants.

    Supreme Court oral arguments set for Feb. 24.

    Maryland Defends Energy Action in Supreme Court Brief (236 DEN A-20, 12/9/15) 

    Sierra Club v. FERC, D.C. Cir., No. 15-1133, 5/11/15

    Whether FERC violated the National Environmental Policy Act because it didn't discuss the long-term environmental impact of Cheniere Energy's Corpus Christi LNG project.

    Final briefs are due to the U.S. Court of Appeals for the District of Columbia Circuit Jan. 12.

    Cheniere Defends FERC Review of Texas LNG Terminal (232 DEN A-17, 12/3/15) 

    Sierra Club v. FERC, D.C. Cir., No. 14-1249, 11/17/14

    Whether FERC violated the National Environmental Policy Act because it didn't discuss the long-term environmental impact of Cheniere Energy's Sabine Pass LNG expansion project.

    Awaiting D.C. Circuit ruling after oral arguments in November 2015.

    Sierra Club Contests FERC Reviews of LNG Exports (221 DEN A-12, 11/17/15)

    Energy

    Sierra Club v. FERC, D.C. Cir., No. 14-1275, 12/10/14

    Whether FERC violated the National Environmental Policy Act because it didn't discuss the long-term environmental impact of Cheniere Energy's Freeport LNG project.

    Awaiting D.C. Circuit ruling after oral arguments in November 2015.

    Sierra Club Contests FERC Reviews of LNG Exports f LNG Exports (221 DEN A-12, 11/17/15) 

    EarthReports, Inc. v. FERC, D.C. Cir., No. 15-1127, 5/7/15

    Whether FERC's decision to approve the Dominion Resource's Cove Point LNG terminal violated the Natural Gas Act.

    The joint brief for intervenors in the case is due Jan. 19.

    FERC: Dominion LNG Facility's Impacts Fully Assessed (05 DEN A-16, 1/8/16) 

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17. States Say Sierra Club Lacks 'Harm' To Justify CWA Rule Suit Intervention

    Jan 11, 2016 | InsideEPA

    By Bridget DiCosmo

    A coalition of 14 states is fighting Sierra Club's bid to intervene in the states' lawsuit over EPA and the Army Corps of Engineers' joint Clean Water Act (CWA) jurisdiction rule, saying environmentalists lack legal standing to win a role in the litigation because they cannot show more than “speculative” harm from the agencies' regulation.

    The legal fight over the rule is ongoing at the same time as lawmakers push legislation that would undo the policy. The House is expected to vote later this week to approve a Congressional Review Act (CRA) resolution to scrap the CWA rule, though President Obama has previously issued veto threats over bills targeting the rule.

    EPA and the Corps issued the rule last year in order to resolve confusion about the law's reach following Supreme Court rulings that created competing tests for jurisdiction. But GOP lawmakers and industry groups say the rule is a vast regulatory overreach, while some environmentalists say that the rule is not expansive enough.

    The CWA is unclear on whether challenges to the rule must be filed in either federal district or appellate courts, and myriad lawsuits over the rule are pending in both. The U.S. Court of Appeals for the 6th Circuit is crafting a decision on whether it has authority to hear consolidated challenges to the rule, and has stayed implementation of the policy nationwide in the interim. If the court takes the cases, it would moot a slew of district court suits.

    But if the 6th Circuit decides that the challenges must be heard first in district court, that would shift attention to the lower court suits -- including the case filed by the 14 states in which Sierra Club wants to intervene.

    The states in a Jan. 8 opposition brief urge the U.S. District Court for the District of South Dakota's Southeastern Division to reject intervention.

    They argue that Sierra Club's motion is untimely because it was filed nearly six months after the start of the district court case, that it cannot overcome the legal presumption that the federal agencies involved in the suit adequately represent their own interests, and that allowing intervention would unduly delay the litigation.

    “Although Plaintiff States do not believe any Sierra Club participation is warranted, if the Court were to allow Sierra Club to participate in this case, it should condition such participation or limit Sierra Club’s to participation to amicus curiae,” says the brief.

    Legal Standing

    Sierra Club is seeking to intervene in State of North Dakota, et al., v. EPA, et al., on behalf of EPA and the Army Corps of Engineers because it is pushing a broad interpretation of EPA's authority under the law to justify a regulation broader than the one the agency finalized.

    But the states in the suit are arguing that Sierra Club cannot establish “Article III” legal standing, which requires that a party must show “injury in fact,” a causal link between that injury and the conduct at issue, and that a favorable decision is likely to redress the injury.

    The states argue in the brief that Sierra Club's asserted injures, including that its members have “concrete interests in specific water bodies” that injunctive relief for the plaintiff states would strip of protections afforded by the rule, are “speculative” and cannot satisfy the required elements of standing.

    “Sierra Club’s claims are flawed because none of its members claim a sufficient interest in any waters at issue in this litigation -- those waters located in the Plaintiff States,” the states argue. “Merely claiming injury to water bodies they care about is insufficient.”

    The states cite Lujan v. National Wildlife Federation, a 1990 Supreme Court decision in which the court held that “vague allegations of a connection between the environmental group members and lands with which they were concerned were not sufficient to convey standing.”

    In a footnote in the brief, the states point out that Sierra Club's only indication of a member's connection to a plaintiff state is a Sierra Club member in Minnesota who frequently travels to various wildlife refuges and parks throughout the West and Midwest, including North Dakota.

    The states involved in the suit are North Dakota, Alaska, Arizona, Arkansas, Colorado, Idaho, Missouri, Montana, Nebraska, Nevada, New Mexico, South Dakota and Wyoming, with Iowa intervening on behalf of the states.

    Disapproval Resolution

    Meanwhile, House lawmakers are expected to hold a floor vote this week to approve their version of S.J.Res. 22, a CRA disapproval of the CWA rule that cleared the Senate on Nov. 4 in a 53-44 vote.

    The CRA gives Congress 60 days after finalization of an agency rule to block it, but a veto from Obama would require two-thirds of Congress to overcome. The administration previously said that the president's senior advisers would recommend a veto of S.J.Res. 22 back when the Senate was poised to vote on it.

    A Nov. 3 Statement of Administration Policy on the CRA resolution said it would “nullify years of work and deny businesses and communities the regulatory certainty needed to invest in projects that rely on clean water. EPA and Army have sought the views of and listened carefully to the public throughout the extensive public engagement process for this rule.”

    It concluded, “Simply put, S.J. Res. 22 is not an act of good governance. It would sow confusion and invite conflict at a time when our communities and businesses need clarity and certainty around clean water regulation.”

    While blocking the currently proposed version of the rule could address GOP lawmakers' fears that the rule unlawfully expands the scope of the CWA, it may also bar the Obama administration or a future GOP or Democratic administration from crafting a replacement rule -- despite bipartisan agreement on the need for a definitive rule on the scope of the water law following the high court rulings that created competing tests for jurisdiction.

    The law says a rule blocked under the CRA "may not be reissued in substantially the same form, and a new rule that is substantially the same as such a rule may not be issued, unless the reissued or new rule is specifically authorized by a law enacted after the date of the joint resolution disapproving the original rule." Congress has only used the CRA successfully once before to undo a Clinton-era workplace ergonomics rule, and votes on other EPA rules have failed. For example, senators in a 53-46 vote in June 2012 rejected Sen. James Inhofe's (R-OK) CRA resolution to disapprove EPA's air toxics rule for power plants.

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