Preview Newsletter
ACC PM 1/21/16
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(ACC Mentioned) U.S. Specialty Chemicals Market Slips
Jan 21, 2016 | Powder and Bulk Solids
The Specialty Chemicals Market Volume Index, a tool created by the American Chemistry Council (ACC) fell at the end of the 4th quarter, slipping back 0.1 percent on a three-month moving average (3MMA) basis in December after a 0.7 percent decline in November and a generally weak first half of the year. -
More Growth Ahead for Chemical Management Workloads, Says Survey
Jan 21, 2016 | Chemical Watch
Half of companies plan to increase the number staff working on chemical compliance in the next 12 months. And two thirds will do so over the next five years, according to preliminary results from this year’s Chemical Watch annual survey of global chemical management and control activities. -
Kaiser Permanente Bans PFCs from Its Building Projects
Jan 21, 2016 | Chemical Watch
By Kelly Franklin
Kaiser Permanente, one of the largest healthcare providers in the US, has banned the use of per-and polyfluorinated chemicals (PFCs) as additives in the furniture, finishes and materials it uses for building projects. -
Calif. Leak Raises Questions About Methane Regulations
Jan 21, 2016 | E&E Energywire
California's massive natural gas leak is unusual, but small leaks are not, prompting a closer look at methane regulations nationwide. -
Residents Urge Complete Shutdown of Los Angeles Facility
Jan 21, 2016 | E&E Greenwire
By Anne C. Mulkern
Residents who live near the California natural gas storage facility where methane has been leaking since October urged a hearing board yesterday to impose harsh penalties against the utility running the site. -
California PSM Rule Could Have Prevented Exxon Mobil Blast
Jan 21, 2016 | Bloomberg BNA
By Stephen Lee
While it is impossible to say whether California's pending process safety management rule would have prevented a recent explosion at an Exxon Mobil Corp. refinery, several of the rule's provisions go straight to the problems revealed by the accident, a state official said Jan. 13. -
As Water Problems Grew, Officials Belittled Complaints From Flint
Jan 21, 2016 | The New York Times
By Julie Bosman, Monica Davey, and Mitch Smith
A top aide to Michigan’s governor referred to people raising questions about the quality of Flint’s water as an “anti-everything group.” Other critics were accused of turning complaints about water into a “political football.” And worrisome findings about lead by a concerned pediatrician were dismissed as “data,” in quotes. -
State Was Slow to Implement Corrosion Control, Emails Show
Jan 21, 2016 | E&E Greenwire
By Tiffany Stecker and Sam Pearson
Michigan Gov. Rick Snyder's administration seemed caught off guard last fall when it became apparent that the state's environmental office had possibly misinterpreted a federal rule designed to ensure the safety of drinking water sources. -
2015 Was Record Year for Crude-by-Rail Regulator
Jan 21, 2016 | E&E Energywire
By Blake Sobczak
The Federal Railroad Administration collected its "highest-ever" rate of fines for rail safety violations in fiscal 2015, the agency announced yesterday. -
EPA to Finalize Suite of Methane Rules this Spring
Jan 21, 2016 | E&E Greenwire
By Amanda Reilly
U.S. EPA plans to roll out a suite of rules covering methane emissions from new oil and gas industry operations this spring as part of a broader post-Paris climate agenda, the agency's acting air chief said this week. -
Enviros Eye GHG Cuts in New Methane Rule
Jan 21, 2016 | E&E Climatewire
By Brittany Patterson
The Bureau of Land Management's pending plan to curb the wasteful release of natural gas from federally leased oil and gas wells could have big climate benefits. -
EPA's Opponents Claim Draft Utility MACT Cost Review Flawed, Unlawful
Jan 21, 2016 | Inside EPA
By Stuart Parker
EPA's critics claim that the agency's draft finding that its utility air toxics rule is "appropriate and necessary" (A&N) under the Clean Air Act even when costs are considered is procedurally flawed and unlawful, seeking to overcome some observers' claims that the finding will survive a legal fight as judges will defer to EPA's calculations. -
Va. Pipeline Foes Want to Keep Planners Off Their Property
Jan 21, 2016 | E&E Energywire
By Ellen M. Gilmer
Virginia landowners near the path of a proposed natural gas pipeline told federal judges this week that they have a constitutional right to keep project planners off their property. -
FERC Launches Probes on Four Natural Gas Pipelines
Jan 21, 2016 | Politico Pro - Whiteboards
By Darius Dixon
FERC gave the green light today to staff investigations involving four interstate natural gas pipelines for potential overcharging. -
FERC Approves Proposal to Allow Power Plants to Breach Price Caps to Meet Costs
Jan 21, 2016 | Politico Pro - Whiteboards
By Darius Dixon
FERC approved a proposed rule today that would allow power plants in competitive electricity markets to breach price caps if higher rates are needed to cover their operating costs. -
Carbon Caps Less Costly if Central States Cooperate -- MISO
Jan 21, 2016 | E&E Energywire
By Jeffrey Tomich
Capping carbon emissions is a less costly way to satisfy U.S. EPA's Clean Power Plan than the alternative rate-based strategy if Midwest states share the same approach. -
Senate Fails to Override Obama Veto
Jan 21, 2016 | The Hill - E2 Wire
By Timothy Cama
Senate Republicans fell short Thursday in their attempt to override a veto from President Obama and repeal a contentious water regulation from the Environmental Protection Agency. -
More Ethanol Means More Toxic Water Pollution
Jan 19, 2016 | Environmental Working Group
By Emily Cassidy
Some corn ethanol lobbyists are pushing to triple the amount of ethanol American fuel makers put into gasoline, moving from the current blend, called E10, of 90 percent gasoline and 10 percent corn ethanol to E30, which would be 70 percent gasoline and 30 percent corn ethanol. -
Why We're Seeing the Beginning of a Multi-Billion Dollar Ecosystem Marketplace
Jan 21, 2016 | Environmental Defense Fund
By Eric Holst
A little-noticed announcement by the U.S. Department of Interior in late 2015 reflects an emerging paradigm shift in natural resource conservation – and the role market-based solutions will play as the nation ramps up efforts to save America’s imperiled species and landscapes.
Industry and Association News
Chemical Management News
Chemical Security News
Transportation News
Energy and Environment News
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(ACC Mentioned) U.S. Specialty Chemicals Market Slips
Jan 21, 2016 | Powder and Bulk Solids
The Specialty Chemicals Market Volume Index, a tool created by the American Chemistry Council (ACC) fell at the end of the 4th quarter, slipping back 0.1 percent on a three-month moving average (3MMA) basis in December after a 0.7 percent decline in November and a generally weak first half of the year.
Weakness in 2015 was centered in oilfield chemicals and a few other segments that combined weighed on overall volumes. Although there was weakness beyond oil chemicals during December, market volumes excluding oilfield chemicals rose slightly, suggesting some stabilization of overall U.S. industrial activity.
“The moderate December decline, as compared to a month earlier, is encouraging,” said Kevin Swift, ACC’s chief economist and the index’s creator.
The overall specialty chemicals volume index was off 2.7 percent year-over-year (Y/Y) also on a 3MMA basis. Year-earlier comparisons were generally in the 4.0 percent to 6.8 percent range during 2012-2014 but since February they have fallen below that range as the downturn in the oil and gas sectors affected headline volumes. In addition, the strong U.S. dollar has adversely affected a number of export-oriented customer industries. Still, on a Y/Y basis, gains remain fairly widespread among most market and functional specialty chemical segments. With few exceptions, however, year-earlier comparisons have been moderating. Headline volumes are off 0.3 percent for 2015 as a whole. Excluding oilfield chemicals, volume was up 2.8 percent.
Specialty chemicals are materials manufactured on the basis of the unique performance or function and provide a wide variety of effects on which many other sectors and end-use products rely. They can be individual molecules or mixtures of molecules, known as formulations. The physical and chemical characteristics of the single molecule or mixtures along with the composition of the mixtures influence the performance end product. Individual market sectors that rely on such products include automobile, aerospace, agriculture, cosmetics and food, among others.
Specialty chemicals differ from commodity chemicals. They may only have one or two uses, while commodities may have multiple or different applications for each chemical. Commodity chemicals make up most of the production volume in the global marketplace, while specialty chemicals make up most of the diversity in commerce at any given time, and are relatively high value with greater market growth rates. Some areas where specialty chemicals are used include adhesives, cleaning materials, cosmetic additives, construction materials, food additives, fragrances and detergents
This data is the only timely source of market trends for twenty-eight market and functional specialty chemical segments. Chemistry directly touches over ninety-six percent of all manufactured goods, and trends in these specialty chemical segments provide a detailed view of trends in manufacturing. The data also sheds light on how various consumer end-use markets are performing compared to others in the marketplace. -
More Growth Ahead for Chemical Management Workloads, Says Survey
Jan 21, 2016 | Chemical Watch
Half of companies plan to increase the number staff working on chemical compliance in the next 12 months. And two thirds will do so over the next five years, according to preliminary results from this year’s Chemical Watch annual survey of global chemical management and control activities.
Similar numbers will increase their use of external service providers over the two timeframes. As with the same survey last year, these figures suggest the global drivers for chemical regulation activity remain strong.
The survey – for which Chemical Watch is seeking more responses in order to provide a more accurate and granular analysis – is due to close on 31 January. Individuals participating will be entitled to a free copy of the results and a printed copy of the Chemical Watch Service Providers Guide 2016 when it is published in late spring.
Preliminary findings include:
Regulatory drivers and sector trends:
REACH and the CLP Regulation remain the main global drivers of chemical regulation (83% cited REACH, 45% mentioned CLP regulation);
within REACH, 2018 registration activities are cited by 61% of respondents, while 49% say the SVHC obligations are driving their current workload;
46% of the sample mentions at least one US-based regulation. The HazCom 2012 (GHS) standard tops the list, with 24% of respondents citing it; and
in Asia, China and South Korea remain the focus of activities, with 42% and 31% citing regulations in these countries as main drivers. A further 22% cite Taiwan and 18% specify regulations from Japan.
Careers and salary:
the average salary increase, at participants’ last pay review, is 2.6% (excluding promotions). In Europe, the average is 1.6%, in North America 2.4% and in the rest of world, 6.3%;
perception of job security is slightly down on last year with 19% saying their role is more secure than last year compared with 23% claiming the equivalent in the previous survey. Most say their role is similarly secure;
as with last year, 33% say the numbers of chemicals management and control professional staff will increase over the next 12 months compared with 9% who say the numbers will decrease; and
the proportion of respondents who say they are satisfied with their job has stayed stable at 57% this year. However only 35% feel opportunities to progress are good in their current role, compared with 61% who feel there are opportunities to progress in the wider market.
The average salary for a chemical management control professional is €46,600, up marginally on the previous year. For those that receive a bonus, the average is 11.7%, again up slightly on the previous year.
Service provider usage:
overall, 72% of participants are satisfied with their experience of service providers, similar to last year, but still down on our first survey in 2010 when 88% of respondents were satisfied;
users are most satisfied with technical knowledge (69%), meeting the brief (63%) and their personal relationship (59%), and least satisfied with the price of the service (28%), adding value on top of agreed deliverables (29%), the service provider should have experience in all countries in which the client operates (37%); and
60% claim they may possibly change suppliers in 2016, up from 53% in last year’s survey.
Emma Chynoweth, Chemical Watch managing editor, says: "The Chemical Watch annual benchmarking ‘state of the sector’ survey again suggests that the demands on global chemical compliance teams remain strong, as companies prepare for the REACH 2018 deadline, manage SVHC obligations, and seek compliance with regulations in other countries as they are enacted and implemented.
"Teams are still getting larger, job security and prospects are solid, and the use of external service providers is increasing."
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Kaiser Permanente Bans PFCs from Its Building Projects
Jan 21, 2016 | Chemical Watch
By Kelly Franklin
Kaiser Permanente, one of the largest healthcare providers in the US, has banned the use of per-and polyfluorinated chemicals (PFCs) as additives in the furniture, finishes and materials it uses for building projects.
PFCs provide water repellency and stain resistance in upholstery, and durability, UV resistance and anti-corrosive properties in building materials, according to the chemical industry trade group, FluoroCouncil.
However, there has been a call to phase out the use of long-chain PFCs amid concerns over their persistence and toxicity (CW 7 October 2014), and the safety of short-chain alternatives is disputed (7 May 2015).
Kaiser Permanente's ban extends not only to long-chain, C8 forms, but also to short-chain, C4 to C6 forms of fluorochemicals. It took effect at the beginning of the year and applies to new and remodelling projects.
According to Jennifer MacDaniel, Kaiser Permanente's facilities planning and design project principal, the company relied on internal research, input from NGOs and cues from chemical management plans of other organisations to target PFCs to phase out.
However, Ms MacDaniel says that “at this time, there's not a good substitute” for alternatives to fluorinated chemicals in the built environment.
The company has worked with its vendors to identify alternatives to PFCs in the absence of a suitable stain-resistance added chemical. For example, it is currently exploring the use of wipeable, PVC-free, non-woven furniture coverings, while ensuring that the new materials maintain the desired look and feel of the brand.
“There isn't a silver bullet,” says Ms MacDaniel. During this transitional period, the company is working to answer, “what are the best things that you can do until there's a viable option out there?”
But Jessica Bowman, executive director for the FluoroCouncil, says that fluorinated technologies “are crucial to the building and construction industry and can play a particularly important role in hospitals and health clinics”. She adds that their functionalities “provide an important layer of protection for patients and healthcare professionals”.
“We want hospital administrators and those working in the building and construction sector to know that the new generation of fluorotechnology has an improved environmental and human health profile,” says Ms Bowman.
Recently, Kaiser Permanente phased out the use of other substances of concern, including flame retardants in furniture (CW 5 June 2014), and 15 antimicrobials in fabric, furniture and finishes (CW 26 November 2015).
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Calif. Leak Raises Questions About Methane Regulations
Jan 21, 2016 | E&E Energywire
California's massive natural gas leak is unusual, but small leaks are not, prompting a closer look at methane regulations nationwide.
Around the Porter Ranch leak, thousands have evacuated the area, reporting symptoms of nausea, bloody noses and difficulty breathing, largely attributed to an odor additive. The long-term effects exist outside the suburb, though.
Natural gas's main component, methane, is invisible but dangerous when it gets into the atmosphere, causing a warming effect at 84 times the rate of carbon dioxide over 20 years.
Methane can escape anywhere in oil and gas production, from the drilling and fracking process to the pipeline to the intentional burn-off sites. For Porter Ranch, it's coming from a leaky well leading into an underground storage facility.
A 2014 Stanford University study estimated that methane emissions could be 50 percent higher than U.S. EPA estimates, prompting calls for added regulations. EPA has proposed some methane regulations for new equipment, though environmentalists point to oil and gas production's leaky infrastructure as a main driver.
"Meaningful progress in combating this potent climate pollutant will require an industry-wide cleanup -- from infrastructure new and old," said Meleah Geertsma, a senior attorney at the Natural Resources Defense Council, in a statement.
Industry groups argue that their own interests lie in stopping methane leaks to sell the product, so the government should work with them and their innovators instead of imposing regulations.
A recent EPA study found that methane emissions from fracked natural gas wells decreased 73 percent since 2011 and total methane emissions decreased 11 percent since 2005. Some of those improvements came in part from 2012 EPA standards for carbon-based air pollutants, though, which suggests regulation and innovation could work hand-in-hand.
As for Porter Ranch, the leak will likely continue through February as Southern California Gas Co. drills down to plug the well. Residents remain concerned over the invisible gas cloud.
"That's part of the problem; you see beautiful Porter Ranch, and that's all you see," said Matt Pakucko, president and co-founder of advocacy group Save Porter Ranch. "They'll maybe stop this, or maybe they'll make it worse. ... But when is it actually safe to move back in?"
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Residents Urge Complete Shutdown of Los Angeles Facility
Jan 21, 2016 | E&E Greenwire
By Anne C. Mulkern
Residents who live near the California natural gas storage facility where methane has been leaking since October urged a hearing board yesterday to impose harsh penalties against the utility running the site.
People from the affected Porter Ranch community spoke for more than two hours at a meeting of the South Coast Air Quality Management District's (AQMD) advisory hearing board. The board, which operates independently, is weighing sanctions against Southern California Gas Co.
"SoCalGas company, when it had the opportunity to replace the broken safety valve, chose not to do the right thing," resident Felicia Bander said, referring to equipment previously on the well that's now leaking. "It was easier for them to do nothing. It was cheaper to do nothing. They have forfeited their right to the public trust."
The leaking well is one of more than 100 at the site that is about the same age, she added.
"More broken wells and more uncontrolled emissions will follow," Bander said. "This is beyond a wake-up call. We must shut down the entire facility."
The hearing board is reviewing an AQMD request to require the utility to take a number of actions at the Aliso Canyon storage facility, a 3,600-acre site in the San Fernando Valley. AQMD oversees air matters in Los Angeles and Orange counties. The board did not take any action yesterday, instead adjourning until another meeting Saturday near Porter Ranch.
"We've heard from quite a few people. We've heard the complaints. We understand," said board Chairman Ed Camarena. "The situation is unbearable. And it's been going on for too long."
He added, "By issuing the order, an enforceable order, we'll get things started, to abate the problem that's been created."
Several speakers said the only safe solution is to shut down the facility. However, it's not clear that the board has any authority to shutter Aliso Canyon. AQMD's jurisdiction stems from its rules prohibiting any source from creating a public nuisance. The sulfur or "rotten egg" smell tied to the leak could be considered a nuisance.
Board member Julie Prussack, while questioning a SoCalGas representative, noted that the board's "only authority" is to abate a nuisance.
Gov. Jerry Brown (D) has declared a state of emergency because of the leak. California's Public Utilities Commission and the Conservation Department's Division of Oil, Gas and Geothermal Resources separately have launched probes into the Aliso Canyon situation.
Proposed order seeks multiple changes
The AQMD hearing board meeting yesterday was the third at which it heard resident input on the effects of the methane leak. The leak has forced more than 2,000 people from their homes and has led to the relocation of schools. There have been myriad reports of ill people and pets.
SoCalGas said earlier this week that the relief well it's digging to stop the leak "is proceeding ahead of schedule and the company expects to stop the leak by late February, if not sooner."
The company has said it "stands willing and ready to cooperate with the governor's office, all state and local officials, and regulatory agencies."
AQMD is asking the hearing board to approve an order for abatement. That order seeks many requirements of SoCalGas, including that it continuously monitor the well site with an infrared camera. Also, once the leak at the well has ceased, that well could not be used for future natural gas injection or withdrawal.
The draft order additionally says SoCalGas would need to provide AQMD with the estimated amount of natural gas injected at the facility and into each of the 115 gas storage wells on a daily basis. It would also have to say how much is withdrawn daily from the reservoir and each of the wells. The facility is capable of holding 86 billion cubic feet of natural gas, according to the proposed order.
SoCalGas under the proposed order also would need to implement a continuous monitoring plan, including a methane monitor network. It would need to give a written commitment to fund a health study on the potential impacts of the exposure to the released natural gas.
Robert Wyman, an attorney representing SoCalGas, cited what he saw as a problem with that language. The utility would be funding the health study, but it would be done independently. The length of time it could take isn't clear, he said.
"Because of that, it just seems inappropriate to tie the determination of the abatement order to the execution of the health study given that they're pretty much entirely unrelated," Wyman said.
One speaker at the hearing earlier in the day said the potential health effects are worrisome.
"This is a long-term problem," said Leah Garland. "The health impacts at this point are still unknown. Residents might not know the true costs for another five to 10 years."
Marco Maldonado, a Porter Ranch resident, said that his wife is pregnant and that it's not clear whether they will return to the home.
Conflict of interest debated
There were some questions about whether SoCalGas attorney Wyman's role on an AQMD committee posed a conflict.
Wyman is on an advisory committee that narrows down potential nominees for the hearing board. Those are then forwarded to the AQMD governing board, which makes the decision.
"We hope that any potential conflicts of interest in this appointment does not influence your decision," resident Matt Pakucko told the board.
Wyman said that before taking the advisory committee post he sought advice on whether it would be an ethical conflict, or whether any hearing board members would have to recuse themselves from issues where he was involved as an attorney. He said AQMD counsel determined there was a "lack of any ethical constraint or concern."
Board members rejected the possibility of a conflict.
"This is not a political body," Prussack said. "We are administrative law judges. We take an oath."
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California PSM Rule Could Have Prevented Exxon Mobil Blast
Jan 21, 2016 | Bloomberg BNA
By Stephen Lee
While it is impossible to say whether California's pending process safety management rule would have prevented a recent explosion at an Exxon Mobil Corp. refinery, several of the rule's provisions go straight to the problems revealed by the accident, a state official said Jan. 13.
For example, the rule would have required managers at Exxon Mobil's Torrance, Calif., facility to do a more thorough hazard analysis, taking previous major incidents into account in a rigorous and transparent way, said Clyde Trombettas, a district manager specializing in process safety management at California's Division of Occupational Safety and Health (Cal/OSHA).
Trombettas was speaking at a public meeting convened at Torrance City Hall by the Chemical Safety and Hazard Investigation Board. Last February, two Exxon Mobil workers were injured in an explosion in the refinery's electrostatic precipitator, a piece of equipment that controls air pollution (45 OSHR 248, 3/12/15).
An interagency task force called on California in a February 2014 report to make specific rule changes to protect refinery workers. State regulators have since drafted a new rule that takes into account many of the recommendations the CSB made after a 2012 fire at a Chevron refinery in the San Francisco Bay area.
Mechanical Integrity, Culture Change
The proposed rule also contains tough provisions regarding the mechanical integrity of refinery equipment. These provisions could have prevented hydrocarbons from flowing through a leaking slide valve into a reactor at the Torrance refinery, where they found an ignition source and exploded, Trombettas told the CSB board members.
The rule further lets workers stop dangerous work without fear of reprisal, which also was at issue at the Torrance facility, where operators allegedly had concerns but were ordered to keep working anyway, Trombettas said.
Another provision requires employers to perform a process safety management culture assessment, which Trombettas said is “vital to safe operation.”
Trombettas said he believed the workers at Exxon Mobil are dedicated professionals who care about safety.
“What sometimes gets them in trouble is that there's a culture of ‘run baby run,' versus taking an opportunity and possibly having to shut a unit down,” he said. “Having a culture like that can be very burdensome, I believe, on really good workers who want to do the right thing but are getting pressure to make, instead of a good decision, maybe a poor decision.”
Next Steps for Rule
Cal/OSHA will kick off the formal rulemaking process by sending changes to its proposed PSM regulation, along with an economic analysis, to the Occupational Safety and Health Standards Board by the first week of February, Trombettas said. The public will then be allowed to comment.
After the board adopts the changes, the proposal will be sent to California's Office of Administrative Law for approval. The final revised standard is expected to go into effect by January 2017, Trombettas said.
“It's moving forward very well and I'm pretty proud of the process,” he said.
Steelworkers Support New Rule
During the same meeting, United Steelworkers health and safety specialist Kim Nibarger said the new rule is needed because the old rule “hasn't worked as well as we thought.”
As evidence, Nibarger offered the fact that the refinery industry self-reports an average of 44.5 fires per year. “That's pretty serious, when you have a process safety event that's allowing material to get outside of the pipes, almost a fire a week,” Nibarger said.
That statistic doesn't even include releases, leaks or other process-related events that, “outside of sheer luck, haven't found an ignition source or been more damaging,” Nibarger said.
He said the proposed rule doesn't include everything either labor or industry wanted. “But I think it's something we can live with,” Nibarger said, adding that it will lead to safer refineries.
Worker Input Provisions Hailed
Speaking on the same panel, Charlotte Brody, vice president of health initiatives at the Blue-Green Alliance, applauded the rule's provisions that give workers a greater voice in workplace decisions.
“You're not going to get the full value of both sets of problem-solving skills if the managers have all the big, cushioned decision-making chairs at the table and the workers are allowed to make suggestions from the little chairs at the back of the room,” Brody said.
Earlier in the meeting, Brian Ablett, manager of the Exxon Mobil Torrance refinery, defended the company, saying it has layers of protections in place that would mitigate the impact of any toxic release.
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As Water Problems Grew, Officials Belittled Complaints From Flint
Jan 21, 2016 | The New York Times
By Julie Bosman, Monica Davey, and Mitch Smith
A top aide to Michigan’s governor referred to people raising questions about the quality of Flint’s water as an “anti-everything group.” Other critics were accused of turning complaints about water into a “political football.” And worrisome findings about lead by a concerned pediatrician were dismissed as “data,” in quotes.
That view of how the administration of Gov. Rick Snyder initially dealt with the water crisis in the poverty-stricken, black-majority city of Flint emerged from 274 pages of emails, made public by the governor on Wednesday.
The correspondence records mounting complaints by the public and elected officials, as well as growing irritation by state officials over the reluctance to accept their assurances.
It was not until late in 2015, after months of complaints, that state officials finally conceded what critics had been contending: that Flint was in the midst of a major public health emergency, as tap water pouring into families’ homes contained enough lead to show up in the blood of dozens of people in the city. Even small amounts of lead could cause lasting health and developmental problems in children.
The emails were released late in the day, after Mr. Snyder’s State of the State address Tuesday night in which he profusely apologized to the residents of Flint and promised to help remedy the problem and get to the bottom of how it occurred. The Michigan House on Wednesday approved $28 million requested by the governor to assist the city.
Though Mr. Snyder issued the emails as part of an effort to reveal the administration’s transparency on the matter, the documents provide a glimpse of state leaders who were at times dismissive of the concerns of residents, seemed eager to place responsibility with local government and, even as the scientific testing was hinting at a larger problem, were reluctant to acknowledge it.
The messages show that from the moment Flint decided to draw its water from a new source, the Flint River, officials were discounting concerns about its quality and celebrating a change meant to save the cash-starved city millions of dollars. From 2011 to 2015, Flint was in state receivership, its finances controlled by a succession of four emergency managers appointed by Mr. Snyder’s administration.
That upbeat mood lasted for months, even as residents began complaining about the new water’s foul odor, odd color and strange health effects, and began showing up at events with “jugs of brownish water.”
A news release on April 25, 2014, from the City of Flint announcing the change to the water source acknowledged, “Even with a proven track record of providing perfectly good water for Flint, there still remains lingering uncertainty about the quality of the water” by the public.
It went on to say that “in an effort to dispel myths and promote the truth” there had been repeated tests of the water. The release, which was shared with state officials, said that a state expert verified that “the water being put out meets all of our drinking water standards and Flint water is safe to drink.”
In October of that year, a memo from the Michigan Department of Environmental Quality addressing advisories for Flint residents to boil water still seemed to minimize the possibility of any serious problem, instead blaming cold weather, aging pipes and even the city’s population decline for the advisories.
“The city has taken operational steps to limit the potential for a boil water advisory to reoccur,” Stephen Busch, a district supervisor for the state’s Department of Environmental Quality, wrote.
In Michigan, public records laws do not require Mr. Snyder to release his emails, but he was under heavy pressure to do so, especially after aneditorial in The Detroit Free Press over the weekend.
The crisis has had repercussions stretching to Washington and the Democratic presidential contest. Mr. Snyder is a Republican.
In Washington on Wednesday, Flint’s mayor, Karen Weaver, who was attending the Conference of Mayors, said such lead contamination would never have been permitted had Flint been a rich suburb.
President Obama, who met with Ms. Weaver on Tuesday and declined to visit Flint while attending the annual car show in Detroit, also weighed in. He said that he “would be beside myself” if he were a parent in Flint. In an interview to be aired on CBS News on Sunday, Mr. Obama said, “The notion that immediately families were not notified, things were not shut down — that shouldn’t happen anywhere,”
Flint, led at the time by an emergency manager who was appointed by the state to help solve the city’s fiscal woes, switched water supplies in April 2014 — in part to save money, which the emails showed amounted to $1 million to $2 million a year.
For almost five decades, Flint drew its water from the city of Detroit’s water system, but concerns about high prices from Detroit helped lead to a switch. The city’s mayor at the time, Dayne Walling, encouraged leaders to “toast” the switch with a taste of the “regular, good, pure drinking” water, the governor’s emails show.
The mood grew less upbeat as time went on. People talked about smells and rashes. Residents carried jugs of brownish water to meetings. One state legislator warned the governor in a letter that his constituents were “on the verge of civil unrest.”
At points, the water was found to have bacterial contamination, and then disinfectant used to kill the bacteria caused a chemical contamination. Even after those problems were resolved, many residents said the water was bad.
Within months of the switch, a General Motors engine plant in Flint found that the city’s water had corroded parts, and stopped using it. A hospital saw that the water was damaging its instruments, and stepped up its own filtering and use of bottled water, as did a local university.
Still, officials seemed slow to respond. In one memo for the governor from February 2015, officials played down the problems and spoke of “initial hiccups.”
“It’s not ‘nothing,’ “ the memo said, adding that the water was not an imminent “threat to public health.” It also suggested that Flint residents were concerned with aesthetics.
“It’s clear the nature of the threat was communicated poorly,” the memo said. “It’s also clear that folks in Flint are concerned about other aspects of their water — taste, smell and color being among the top complaints.”
By September, state officials, hearing new concerns about the possibility of lead in the water, seemed eager to place responsibility for the pipes and the water firmly with local authorities.
Two state agencies responsible for health and environmental regulation “feel that some in Flint are taking the very sensitive issue of children’s exposure to lead and trying to turn it into a political football claiming the departments are underestimating the impacts on the populations and particularly trying to shift responsibility to the state,” Dennis Muchmore, then Mr. Snyder’s chief of staff, wrote in a Sept. 25, 2015, email to the governor and the lieutenant governor.
In the same email, he went on: “I can’t figure out why the state is responsible except that Dillon did make the ultimate decision so we’re not able to avoid the subject,” he said, in an apparent reference to Andy Dillon, then the state treasurer.
One memo to a state aide says an Environmental Protection Agency expert, Miguel Del Toral, said in February and April 2015 that the state was testing the water in a way that could profoundly understate the lead levels.
Referring to the state’s Department of Environmental Quality, the memo says that “staffers have essentially downplayed or ignored warning signs” from Mr. Del Toral — warnings that seemed “to lay out exactly what’s come to pass. ...”
According to the memo, Mr. Del Toral had written: “Given the very high lead levels found at one home and the preflushing happening in Flint, I’m worried that the whole town may have much higher lead levels than the compliance results indicated, since they are using preflushing ahead of their compliance sampling.”
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State Was Slow to Implement Corrosion Control, Emails Show
Jan 21, 2016 | E&E Greenwire
By Tiffany Stecker and Sam Pearson
Michigan Gov. Rick Snyder's administration seemed caught off guard last fall when it became apparent that the state's environmental office had possibly misinterpreted a federal rule designed to ensure the safety of drinking water sources.
For months, the Michigan Department of Environmental Quality had been under fire for not implementing corrosion controls for Flint's drinking water coming from the Flint River. The city of 100,000 switched its water source in April 2014 from Lake Huron to the higher-salinity river, a move that eventually resulted in the drinking water being contaminated by lead.
The agency insisted publicly that the controls would follow two rounds of six-month testing to characterize the water quality, according to emails released yesterday by Snyder (R). But by fall of 2015, it became clear that those controls should have been implemented from the beginning.
"We followed and defended that protocol. I believe now we made a mistake," wrote then-DEQ Director Dan Wyant in an Oct. 18 email to Snyder, his chief of staff, and other top officials. "For communities above 50,000, optimized corrosion control should have been required from the beginning."
Wyant, who resigned last month in the wake of the water crisis, wrote the note to prepare the governor for a Detroit News article on whether the state agency followed federal law in its corrosion control program. Wyant used the article as an opportunity to announce the reassignment of Liane Shekter Smith, who headed DEQ's drinking water program.
A month later, the state environmental agency released an outline of the Flint water crisis for the Flint Water Task Force, a panel of independent experts tasked to review the situation and provide recommendations. The panel asked DEQ whether the agency had misled U.S. EPA when it assured the federal regulators that Flint was operating corrosion control, as required under the federal Lead and Copper Rule.
DEQ was careful in its answer. The assurance, officials said, was a result of miscommunication.
"What was meant was that the City was performing the required monitoring to determine whether or not they were practicing optimized corrosion," they wrote, indicating that monitoring was in place but the actual actions to prevent corrosion were not.
"What the staff did would have been the proper protocol for a community under 50,000 people. None of the DEQ staff in this division had ever worked on a water source switch for a community over 50,000 people -- it's uncommon for our big communities to switch sources," former DEQ spokesman Brad Wurfel wrote in a lengthy explanation to the Detroit News.
Flint River water had been used as a backup to the Detroit utility's water several times in the past, but never for extended periods. City officials agreed in 2014 to switch its water source from Lake Huron via Detroit's water utility to the river. Rivers are higher in chlorides than lakes, due to the road salt that washes off into streams. The Flint river also contained naturally occurring bacteria with corrosive properties, according to Marc Gaden, an adjunct assistant professor at the University of Michigan's School of Natural Resources and Environment.
In instances where the drinking water source is potentially corrosive to pipes, utilities can add phosphates, which coat the service lines and prevent lead from leaching. This is done as a matter of course at the Detroit water treatment facility, said Gaden.
Still, Natural Resources Defense Council attorney Sarah Tallman said, the community could have bypassed the testing period, as officials were already required to maintain corrosion controls.
"They were just required to maintain it, and they completely failed to do so," she said.
NRDC and the American Civil Liberties Union of Michigan sent a notice of intent to sue to several official in the Snyder administration and with the city of Flint. The suit could be filed in federal court as early as next week.
EPA Administrator Gina McCarthy said this morning that EPA would work with all levels of government to solve the crisis in Flint.
"We're really taking a hard look at what EPA might have done differently so that we can prevent a situation like this from ever happening again," she said at the Conference of Mayors annual winter meeting in Washington, D.C., this week.
Earlier this week, McCarthy said that "EPA did its job" in terms of regulating drinking water in Flint.
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2015 Was Record Year for Crude-by-Rail Regulator
Jan 21, 2016 | E&E Energywire
By Blake Sobczak
The Federal Railroad Administration collected its "highest-ever" rate of fines for rail safety violations in fiscal 2015, the agency announced yesterday.
Freight and passenger rail companies are expected to pay $15 million in civil penalties for running afoul of regulations between October 2014 and September 2015, based on FRA estimates.
Of that total, nearly $3 million will be collected from shippers of hazardous materials such as crude oil and ethanol.
The Department of Transportation "will continue to take aggressive action against railroads who fail to follow safety rules," Transportation Secretary Anthony Foxx said in a statement. "A strong safety enforcement program is critical to prevent accidents, save lives and move our country forward."
When federal rail inspectors uncover violations, the FRA typically negotiates a settlement with each company involved rather than taking cases to court. Hazmat shippers often can reduce or eliminate fines by challenging a "notice of probable violation," or by meeting in the middle and agreeing to adopt extra safety measures in exchange for a lesser penalty.
FRA Administrator Sarah Feinberg said her agency collected a "record" 75 percent of the fines it had initially assessed, suggesting the agency is taking a tougher stance during negotiations. She called the rate an "important milestone" but emphasized that "it is just one element of FRA's broader effort to achieve a safer rail system."
Critics of the U.S. rail regulator claim FRA has failed to keep up with safety hazards posed by a recent spike in crude oil traffic. While crude-by-rail shipments have fallen slightly from 2014 highs, last year still brought fiery oil train derailments in Heimdal, N.D., and Mount Carbon, W.Va., similar to an oil train disaster in Lac-Mégantic, Quebec, that killed 47 people in July 2013.
Since then, FRA has pursued several new safety regulations, including a May 2015 rule that would upgrade the older-model tank cars involved in the Lac-Mégantic crash. But 2015 was still marked by 883 hazardous materials infractions, based on FRA's latest data, including accidental releases of crude oil, loose tank car closures and missing placards.
The most frequent offenders in fiscal 2015 were Union Pacific Corp. and BNSF Railway Co., with 1,473 and 1,129 total violations, respectively. Non-hazmat violations can involve faulty equipment, failure to report accidents, drug and alcohol abuse, track defects and a range of other problems.
Fred Millar, a hazardous materials safety consultant who has worked with environmental groups including Friends of the Earth, said regulators "could be doing a much more vigorous job in many ways."
FRA "should have been doing positive train control about 20 years ago; they should have designed a safer tank car 20 or 30 years ago. ... In terms of the crude oil trains, the infrastructure was really not ready for this," he said.
Ed Greenberg, spokesman for the Association of American Railroads, said he is not in a position to comment on the FRA report's details, as the industry group isn't keyed into specific cases.
But he said rail safety "has been dramatically improving" over recent decades and pointed to railroads' actions, "including ongoing operational reviews, increased track inspections and the use of trackside technology."
FRA has also cited slow but steady declines in freight rail accidents -- down roughly 80 percent since 1980 -- while justifying its approach to regulation. But the agency has also acknowledged that tougher enforcement doesn't necessarily lead to safety improvements.
"FRA cannot determine from the data whether detectable safety improvements are directly attributable to discrete civil penalties," the agency noted in its latest report.
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EPA to Finalize Suite of Methane Rules this Spring
Jan 21, 2016 | E&E Greenwire
By Amanda Reilly
U.S. EPA plans to roll out a suite of rules covering methane emissions from new oil and gas industry operations this spring as part of a broader post-Paris climate agenda, the agency's acting air chief said this week.
But Janet McCabe indicated the agency is not currently looking into national rules for existing facilities, a key ask of environmentalists in the wake of the massive methane leak from a natural gas storage facility in Southern California.
McCabe said EPA's role in California was making sure "people are bringing all the appropriate and technical tools." She was responding to a question about whether rules for existing facilities were on the table.
"I think it is an example of why we all need to be working together and with the industry," McCabe said in a Greenwire interview at EPA headquarters, "to make sure that we understand where the vulnerabilities are with these systems and what are the best tools, at what level of government to help make sure they get addressed."
McCabe outlined an aggressive agenda for EPA's air office in 2016 as President Obama attempts to cement his legacy of fighting climate change before leaving office.
The Obama administration has pledged that the United States will reduce greenhouse gas emissions between 26 and 28 percent by 2025 compared with 2005 levels. In Paris, more than 190 nations agreed to limit global warming to 2 degrees Celsius and to pursue efforts to limit warming to 1.5 C.
Implementation of the Clean Power Plan will figure high in the acting air chief's work this year. Along with the methane rules, EPA is also poised in the first half of the year to finalize greenhouse gas regulations for heavy-duty vehicles, evaluate fuel efficiency standards for light-duty vehicles and finalize a finding that greenhouse gas emissions from airplanes are an endangerment under the Clean Air Act.
McCabe said the Paris agreement didn't necessarily change her work but rather created a "renewed interest in making sure that we finish the things that are still partway done."
Of the remaining items on the Obama administration's climate agenda, reducing methane emissions from the oil and gas sector is getting a sharp look as the potent greenhouse gas continues to leak from Southern California Gas Co.'s Aliso Canyon storage facility in the Porter Ranch area of Los Angeles.
The Interior Department is set to soon release rules covering methane emissions from hydraulic fracturing operations on federal lands.
4 proposals
EPA in August issued four proposals targeting methane emissions from the oil and gas sector.
The regulations would require the oil and gas industry to find and repair leaks in new equipment, capture natural gas from the completion of hydraulically fractured oil wells, limit emissions from new and modified pneumatic pumps on well pads, and limit emissions from several types of equipment used at natural gas transmission compressor stations.
EPA also put forth a proposed rule to require gas wellheads that also produce oil to use so-called green completion technology, and a measure to tighten restrictions for wellheads in ozone nonattainment areas. A fourth proposal would limit emissions from operations on American Indian lands.
Activists have used the California leak to call on EPA to extend its proposed methane regulations to existing oil and gas equipment and facilities, arguing that the California incident dramatically highlights the natural gas production and supply chain's emissions through leaks (Greenwire, Jan. 11).
Dozens of environmental activists Friday protested in front of EPA headquarters, calling on the agency to shut down the Aliso Canyon facility (E&ENews PM, Jan. 15).
McCabe acknowledged that the facility is "not one that is covered by our current rules or by our proposed rules." But she said it was "more other agencies" that are responsible for ensuring that leaks like that don't happen.
"The situation out there is clearly very, very serious," she said, "and there are a number of agencies at the state level and at the federal level that are focused on working with the company to try to address it."
McCabe said the agency would likely finalize the four proposals for new operations as a package in the spring. EPA will likely finalize a voluntary "methane challenge" program for oil and gas companies to reduce their emissions ahead of the rules, McCabe said.
The proposed program would allow companies with natural gas and onshore oil operations to make and track methane reduction commitments. EPA will name as partners companies that make commitments, allowing them public recognition as methane reduction leaders.
McCabe did not say whether EPA was considering changes to the rules. The agency received nearly 1.3 million comments on the new source performance standards during a public comment period that ended in December.
"We obviously got a lot of input and a lot of it very robust in terms of factual information, because, as you know, there's a lot of interest and a lot of work being done across the range of stakeholders," McCabe said.
The air chief said the rule would be responsive to that input. "As a general matter," she said, "I don't think I worked on a single rule at EPA that didn't respond in a few or a lot of ways to the input that we get."
EPA not capitulating
McCabe, though, suggested the agency would not capitulate to oil and gas industry demands that EPA completely scrap its rulemaking. Recent trends show producers are lowering their methane emissions already through voluntary measures.
The American Petroleum Institute wrote in a December comment that direct regulation of methane was both unlawful and unnecessary because EPA could accomplish the same goals just through the regulation of volatile organic compounds.
"There is no rational basis for taking the wholly discretionary action of regulating methane or GHGs from this part of the oil and natural gas sector," API wrote, "where EPA would achieve no additional methane reductions beyond those achieved through existing VOC standards."
McCabe, however, argued that methane on its own is an air pollutant that endangers public health and welfare.
"It's always great when you can use the same kinds of approaches to address and reduce multiple pollutants," she said. "But it's the straightforward and appropriate thing to do for our rules to acknowledge all the air pollutants that are being emitted by these activities and the reductions that you can achieve by them."
After Paris, the oil and gas industry has doubled down on its contention that companies using natural gas can help reduce carbon emissions. Industry has pointed to the United States as a "model" for other countries, linking the increase in domestic gas production in the last several years with reductions in the electricity sector's greenhouse gas emissions.
McCabe said that the EPA rules stipulating the use of certain technologies can help ensure that natural gas production driven by market forces is developed in a way that is safe for humans and the environment.
"What's important for people to feel comfortable with is the fact that use of these resources be done in a way that doesn't harm public health," she said, "and that's one of the things that EPA regulations can assure."
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Enviros Eye GHG Cuts in New Methane Rule
Jan 21, 2016 | E&E Climatewire
By Brittany Patterson
The Bureau of Land Management's pending plan to curb the wasteful release of natural gas from federally leased oil and gas wells could have big climate benefits.
The rule, which environmental groups say they expect to be released soon, is driven by the agency's mandate to minimize the waste of publicly owned oil and gas. But cutting down on the venting and flaring of natural gas -- the main ingredient of which is the potent greenhouse gas methane -- could be the equivalent of taking 3.1 million cars off the road annually, according to figures in a 2010 GAO report.
Details are slim, but the rule, now five years in the making, is expected to play a role in helping the Obama administration meet its 2025 goal of slashing methane emissions by 40 to 45 percent from 2012 levels. Experts this week also called it a key part of the broader climate change agenda in the wake of a global agreement struck in Paris at the end of last year.
That deal, which calls for keeping global temperatures from rising more than 2 degrees Celsius above preindustrial levels, will require cutting more than just tons of carbon dioxide.
"The most critical is this issue, if we want to meet the Paris COP 21 targets, is that we've got to reduce methane," said Robert Howarth, a professor of ecology at Cornell University.
The chemical compound is estimated to be 24 to 36 times more effective at trapping heat in the atmosphere than carbon dioxide over a 100-year timeline, although it does not last as long as carbon dioxide.
"The No. 1 source in the U.S. is undoubtedly the oil and gas industry," Howarth said. Methane accounts for about 10 percent of domestic greenhouse gas emissions, and about a third of methane emissions come from the oil and gas sector.
The last time BLM looked at the rules stipulating when natural gas can be intentionally released by venting or flaring was more than three decades ago. Environmentalists say updates are needed to protect public resources from going up in smoke.
But oil and gas industry officials argue that the rule is sure to add more government red tape.What's avoidable?
The scope of the problem is hard to pin down. The GAO report found that estimates of the amount of natural gas vented and flared on federal lands varied widely across data sources.
For onshore federal leases, operators reported to the Interior Department that about 0.13 percent of produced gas was vented or flared. Estimates from EPA and the Western Regional Air Partnership showed volumes released at 30 times higher. The report found oil and gas operators could reduce the amount of natural gas vented and flared by 40 percent, which would increase federal royalty payments by about $23 million annually and reduce greenhouse gas emissions by an amount equivalent to about 16.5 million metric tons of CO2.
At the heart of the updated rule will be how the agency chooses to define "avoidably" and "unavoidably" lost gas.
Unavoidably lost gas, which in BLM's estimation cannot be economically captured, is not subject to royalties. It will also determine what gas companies may use on-site free of charge to power their operations.
Joshua Mantell, carbon management campaign manager with environmental group the Wilderness Society, said the public should be getting a fair return on its public fossil fuel resources. But by cutting waste, the public also receives a significant climate benefit.
"The fact is that these are public resources," he said. "We don't think they should be wasted because it's just easier."
Mantell said his group is advocating for BLM to release technology guidelines that industry should use to reduce leaks as well as the need to vent and flare. Updating technology, although potentially costly upfront, overall will cost oil and gas drillers pennies on the dollar, he said.
A 2014 ICF International report found that achieving a 40 percent methane reduction would cost about one penny per metric ton of natural gas.Industry decries 'command and control' regs
But industry officials said regulations would be onerous. A spokesman for the oil and gas trade association American Petroleum Institute (API) said whatever BLM proposes is "not necessary."
"Industry is now finding innovative ways to capture more methane and sell it to consumers," said Carlton Carroll, a spokesman for API. "If you implement a one-size-fits-all command-and-control infrastructure mandate, you take away the flexibility of the industry."
Some states have felt voluntary industry regulations have not been enough. Five states have adopted some sort of regulations to reduce natural gas pollution from oil and gas wells, most recently Pennsylvania.
Pennsylvania Democratic Gov. Tom Wolf's administration announced Tuesday that it will revise its permitting process for new gas wells and pipelines by the end of 2016 and will also submit new regulations on methane from existing sources (EnergyWire, Jan. 20).
Dan Grossman, national director of state programs for the Environmental Defense Fund's oil and gas program, worked closely with the industry in Colorado to draft the state's methane regulations on oil and gas wells. Passed in 2014, they were the first in the country and require well operators to check rigs for leaks on an annual basis and fix any they find. In addition, the regulations call for some well technology to be retrofitted and establish maintenance best practices.
He argued that a "hallmark" of the BLM rule could be a similar leak detection and repair component. "This would be a regulatory framework that sets the bar for all operators," Grossman said.
BLM's rule was received by the White House Office of Management and Budget last September. Currently, the rule is being reviewed by the OMB's Office of Information and Regulatory Affairs.
As to when it will be released, industry and environmentalists are anxiously waiting.
"Frankly, we're hoping sooner rather than later," Mantell added. "We've been waiting on this one a long time."
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EPA's Opponents Claim Draft Utility MACT Cost Review Flawed, Unlawful
Jan 21, 2016 | Inside EPA
By Stuart Parker
EPA's critics claim that the agency's draft finding that its utility air toxics rule is "appropriate and necessary" (A&N) under the Clean Air Act even when costs are considered is procedurally flawed and unlawful, seeking to overcome some observers' claims that the finding will survive a legal fight as judges will defer to EPA's calculations.
Coal industry officials, academics and Ohio's attorney general (AG) all outline arguments in recent commentsto EPA that could potentially form the basis for a legal challenge to the final version of the cost finding, which is due in mid-April. However, any challenge would likely receive push-back from supporters of the air toxics rule and the cost finding, including from a coalition of Northeast states and a group of Wyoming environmentalists that filed comments on the review.
EPA published in the Dec. 1 Federal Register its review of the costs of its utility maximum achievable control technology (MACT) rule, also known as the mercury & air toxics standards (MATS). The rule responds to a Supreme Court decision faulting EPA for not weighing costs in the A&N review for the rule in 2011, which reaffirmed an earlier December 2000 finding.
The high court in its 5-4 ruling from June in Michigan v. EPA said the agency should have considered costs upfront, rather than later on when it set the rule's actual emissions limits. The court then remanded the issue to the U.S. Court of Appeals for the District of Columbia Circuit, which has agreed to leave the rule in place while the agency works on crafting the cost review.
The A&N finding required under air toxics section 112(n)(1)(A) of the law is unique to the electric generating unit (EGU) sector, and therefore there is no direct precedent for EPA to follow on how to craft a cost review. As a result, some observers have suggested that appellate judges in eventual expected litigation over the final version of the cost assessment will likely defer to the agency's discretion on how it did the review.
In the draft cost review, which EPA took comment on through Jan. 15, the agency says that nothing in the air law mandates that it conduct a sweeping new analysis of the costs and benefits of regulating power plants with its MACT rule. Instead, the agency finds it is still A&N to regulate utilities with a MACT, based on analysis conducted for its original regulatory impact assessment which reviewed the costs and benefits of the rule.
However, in Jan. 13 comments, Ohio AG Mike DeWine (R) says the proposed cost assessment "appears to represent a preordained conclusion to justify an already promulgated regulatory regime."
DeWine claims EPA issued the cost review "without entertaining the possibility of a different MATS final rule" and instead intended to underscore the need for its existing MACT. DeWine says this violates "the plain language of the statute and the clear mandate of the Supreme Court by placing the proverbial cart before the horse -- regulating EGUs without first considering all relevant costs." He indicates that other states AGs will also submit comments making similar arguments. DeWine implies, but does not explicitly state, that the MACT rule itself is therefore invalid, arguing that "final standards need to be informed by cost conclusions that were not preordained."
Cost Analysis
DeWine further says that EPA's cost analysis methodology is flawed. The agency in its proposed finding looked at costs of compliance to the utility industry, but intentionally stopped short of a full cost-benefit analysis, having conducted such an analysis once already as part of the MACT rulemaking itself. The agency said the Supreme Court does not require such a full accounting, but DeWine faults the agency's approach.
"Because there currently is no valid appropriate and necessary finding, if EPA intends to regulate EGUs under [air law section 112] it needs to conduct a proper and thorough analysis -- using all current, relevant, and available data -- as to whether regulation is necessary and appropriate," he writes.
He further takes issue with EPA's reliance on "co-benefits" to justify the MACT rule, which apply to a pollutant -- fine particulate matter -- that is not targeted as a hazardous air pollutant (HAP) by the air law's air toxics provisions. Also, DeWine argues that the agency has failed to examine the interplay between the MACT rule and its Clean Power Plan, the agency's greenhouse gas standards for power plants.
Another critic of EPA's approach is Susan Dudley, a former White House official under President George W. Bush and now director of the George Washington University Regulatory Studies Center. In her Jan. 11 comments, Dudley also takes issue with EPA's limited cost analysis and reliance on co-benefits.
EPA in its revised finding divides the estimated compliance cost ($9.6 billion per year) by overall power sector retail sales and overall power sector capital expenditures. It concludes that costs would be between 2.7 percent and 3.5 percent of sales, and between 3.0 percent and 5.9 percent of capital expenditures. The agency also estimates that the retail price of electricity will increase on average 3.1 percent, with a range of 1.3 percent to 6.3 percent, Dudley notes. "Based on these statistics, EPA concludes that costs to the power sector are reasonable."
However, EPA's choice to analyze the electric generating sector as a whole, rather than the mainly coal-fired power plants affected by the rule, in addition to its reliance on co-benefits, undermines the agency's position and does not comply with the Supreme Court's opinion, Dudley writes.
EPA's "preferred method of comparing [power plant] costs to total power sector sales or capital expenses not only appears to have methodological problems that bias the resulting percentages, but it does not address the Court's direction to balance the harm of the regulation against the good," Dudley writes.
The National Mining Association (NMA) in Jan. 15 comments echoes DeWine's observation that EPA cannot rely on a post-hoc rationalization of implementation costs in its A&N finding, and also Dudley's observation that EPA spreads the costs across the power sector to dilute the impact on coal generation. "EPA cannot mask the impact of the rule by spreading those impacts over the entire power sector," NMA says.
NMA also says EPA ignores the wave of coal plant retirements that can be attributed to the MACT. "Four years after MATS was issued, with the damage the rule caused in the coal industry all but complete, EPA maintains its preposterous view reached in the MATS Regulatory Impact Analysis that the rule will have little effect on coal. EPA has no new analysis to support this assertion as no such analysis can be constructed," the group says.
Groups' Support
Despite the criticisms, some of the comments offer support for the cost finding. For example, the Northeast States For Coordinated Air Use Management (NESCAUM), a regional air regulators' body, in Jan. 14 comments says, "NESCAUM supports EPA's cost approach in the proposed supplemental finding, as it is not unlike what a number of states have done in their own similar rulemakings that pre-date EPA's Mercury and Air Toxics Standards."
Implementation costs for the rule were if anything overstated in EPA's early analysis, the group says. "EPA's prospective technology cost estimates for MATS are conservative. Actual costs for power plants that are coming into compliance with MATS by April 2016 are now estimated to be about $2 billion annually, which is less than one-quarter of EPA's prospective annual cost estimate of $9.6 billion," NESCAUM says.
Further, states acknowledge EPA's argument that some of benefits of reducing HAPs such as mercury are too difficult to express in monetary terms in a cost-benefit analysis.
The Wyoming Outdoor Council, an environmental group, in Jan. 8 comments agrees with NESCAUM's overall conclusion that the A&N finding is correct, backing the agency's approach.
"The EPA has done a careful and thorough analysis of the costs that would be entailed in implementation of its previously developed [MATS] rule, and appropriately concluded that based on this analysis it is 'appropriate and necessary,' to regulate these emissions," the group says.
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Va. Pipeline Foes Want to Keep Planners Off Their Property
Jan 21, 2016 | E&E Energywire
By Ellen M. Gilmer
Virginia landowners near the path of a proposed natural gas pipeline told federal judges this week that they have a constitutional right to keep project planners off their property.
Five Nelson County landowners are appealing a September decision from the U.S. District Court for the Western District of Virginia that upheld a state law allowing private property access for projects like Dominion Resources Inc.'s Atlantic Coast Pipeline, a proposed 550-mile line that would carry natural gas from shale fields in West Virginia to markets in Virginia and North Carolina.
"The District Court, in a decision that should deeply concern any property owner, concluded that [the statute] was not unconstitutional and that property owners in Virginia have no right to bar Dominion from intruding upon their property solely for its own business convenience," the landowners told the 4th U.S. Circuit Court of Appeals on Tuesday.
While the company seeks federal approval for the pipeline, it must survey the route and do preliminary environmental studies. Project planners have run into steep opposition from landowners in West Virginia and Virginia, where some have tried to block surveyors from entering their land. Dominion notified holdouts last year that it had the right to access their land with or without permission.
The district court agreed, upholding a state law that allows government entities and certain private companies supporting "legitimate state interests" to enter private land without landowner permission, so long as they give notice (EnergyWire, Oct. 2, 2015).
"There can be no doubt that the right to exclude is one of the essential sticks in the bundle of property rights," the court found at the time. "But, as defendants and the Commonwealth maintain, it is not absolute. Quite the contrary. The common law has long recognized exceptions to the right."
Dominion has since changed the proposed route of the pipeline, avoiding the litigants' property, but could not guarantee that it will not change back. The landowners are now pressing the appeals court to reverse the lower court's decision and instead strike down the contested Virginia law as unconstitutional. The landowners argue that common law and precedent allow the government and private companies to enter private lands only after eminent domain proceedings that establish public interest.
"Neither the sovereign nor private entities have the right to enter and conduct surveys unless they are antecedent to eminent domain proceedings," the landowners told the court this week. "There is no free floating right to survey simply because it would be helpful or convenient to the government's ongoing operations."
Pipeline opponents are also lobbying Richmond lawmakers to repeal the law.
The dispute over property access for pipeline planners is one of many playing out across the country. In West Virginia, where state eminent domain law is not as favorable to industry, a court recently ruled against planners of the Mountain Valley Pipeline, who sought to establish their right to enter private property without permission.
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FERC Launches Probes on Four Natural Gas Pipelines
Jan 21, 2016 | Politico Pro - Whiteboards
By Darius Dixon
FERC gave the green light today to staff investigations involving four interstate natural gas pipelines for potential overcharging.
After reviewing 2013 and 2014 company filings from Columbia Gulf Transmission, Iroquois Gas Transmission System, Empire Pipeline and Tuscarora Gas Transmission, FERC “became concerned that each pipeline company is collecting revenue substantially in excess of the pipeline’s actual cost of service,” the agency said in a statement.
The return on equity for the pipelines range from 15.8 percent to 24.9 percent, leading FERC staff to believe the pipelines were “over-recovering,” James Sarikas, of the agency’s energy market regulation office, said. The probes are being conducted under FERC’s authority in Section 5 of the Natural Gas Act.
Each pipeline is being directed to file a cost and revenue study and each case has been sent to a FERC administrative law judge for evidentiary hearings.
Since 2009, FERC has initiated ten Section 5 proceedings, Sarikas said. Eight ended in settlements and two were terminated.
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FERC Approves Proposal to Allow Power Plants to Breach Price Caps to Meet Costs
Jan 21, 2016 | Politico Pro - Whiteboards
By Darius Dixon
FERC approved a proposed rule today that would allow power plants in competitive electricity markets to breach price caps if higher rates are needed to cover their operating costs.
The draft rule would allow power plants to retrieve prices above $1,000 per megawatt-hour if they can demonstrate a cost-based need.
Those caps on how much power plants could sell their electricity for on the wholesale markets got attention during the winter of 2013/2014 when a “polar vortex” and natural gas-induced price spike in PJM meant that some power plants wouldn't be able to cover their operating costs under the existing price cap.
“The current offer caps may impair price formation in several ways. They may suppress locational marginal prices to a level below the marginal cost of production,” FERC said in a statement. Essentially, FERC is concerned that capping prices at $1,000/MWh in five out of six markets may be suppressing those prices during high demand periods because many plants won’t bid in without losing money.
Before accepting a cost-based incremental energy offer above the cap, a grid operator or market monitor would be required to verify a power producer’s costs.
The NOPR doesn’t seek to eliminate the $1,000/MWh offer cap entirely because comments FERC staff received from the market operators felt the figure provided “a backstop role in mitigation,” Emma Nicholson, of FERC’s energy policy and innovation office, said. “While we seek to improve price formation, we also want to ensure that we have just and reasonable rates.”
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Carbon Caps Less Costly if Central States Cooperate -- MISO
Jan 21, 2016 | E&E Energywire
By Jeffrey Tomich
Capping carbon emissions is a less costly way to satisfy U.S. EPA's Clean Power Plan than the alternative rate-based strategy if Midwest states share the same approach.
The Midcontinent Independent System Operator (MISO) drew this conclusion during its latest round of economic modeling of compliance options. MISO manages the power grid across 15 central states from the Gulf Coast to Canada.
The Carmel, Ind.-based grid operator is conducting short-, medium- and long-term planning as part of its effort to help state policymakers craft compliance plans that ensure grid reliability at the lowest cost. Its latest research was presented yesterday to members of its Planning Advisory Committee.
States must submit to EPA their preliminary plans for slashing carbon dioxide emissions from existing fossil plants by Sept. 6. Most have indicated they'll seek two-year extensions.
States will still be required to tell EPA this summer which compliance strategy they'll shape their plans around: a mass-based approach that caps carbon by allowing power plants to emit a certain number of tons of CO2, or a rate-based plan that reduces emissions to a certain rate per megawatt-hour of electricity generated.
To a lot of state regulators in the Midwest, a mass-based plan is simpler and preferable (EnergyWire, Oct. 20, 2015). That's especially true in coal-dependent states because retirements of aging, less-efficient units are happening regardless of the EPA rule. Those retirements count toward compliance.
Air regulators in Missouri, for instance, have said they are almost certain to draft a mass-based compliance plan because it is the approach that utilities in the state prefer (EnergyWire, Dec. 3, 2015).
While MISO's analysis presented yesterday points to mass-based plans being cheaper, the analysis comes with several key caveats. First, it assumes that states adopt the same compliance approach and can freely trade carbon allowances or credits. It also assumes a natural gas price of $4.67 per million British thermal units in 2015 and doesn't include costs related to new electric transmission or natural gas pipelines that might be required.
MISO's most recent analysis looked at how Clean Power Plan compliance would affect the system based on the current fuel mix and forecast changes. The model was then tweaked to see what would occur under "alternative resource scenarios," such as a larger build-out of natural gas or renewable generation.
Checking the cost gap
In all, MISO modeled 66 scenarios, including three "business as usual" cases.
Assuming states choose the same compliance approach and there was a liquid market for carbon allowances, mass-based plans are less expensive and the cost gap only increases over time, said Jordan Bakke, a senior policy studies engineer at MISO.
Nationwide, the Clean Power Plan requires states to cut CO2 emissions from existing power plants by almost one-third over the next decade and a half. The reductions must begin in 2022 with states assigned interim targets.
Bakke said compliance during the early years can be achieved largely through new wind and solar generation that's already being developed because of state renewable portfolio standards as well as greater use of existing natural gas plants.
"We have gas on the system that is not running at very high capacity factors, and we have that ability for compliance to switch from coal to gas," he said.
Longer term, however, new generation will be required to comply with the rule, Bakke said. And because of long lead times needed to develop and build new generation and transmission, there's urgency to begin work.
"Planning needs to start now so we can meet these obligations in the mid- to late 2020s," he said.
Bakke said the compliance approach chosen by states will heavily influence what type of new generation gets built. "Under rate-based compliance, you're more likely to see greater number of [renewables], and under mass-based you're more likely to see an increase in new gas generation," he said.
The MISO analysis also showed that while there would initially be more coal megawatts retired if states all chose mass-based approaches, the opposite is true over time.
Within MISO's footprint, the Clean Power Plan would reduce systemwide CO2 emissions to less than 350 million tons annually from a current level of greater than 500 million tons.
MISO's initial modeling has suggested that between 7 and 14 gigawatts of coal generation could be at risk of retirement as a result of the Clean Power Plan. That's on top of 12.6 GW expected to be retired as a result of EPA's Mercury and Air Toxics Standards.
Last month, MISO's analysis showed the cost of complying with the carbon rule within MISO's footprint could range widely depending on numerous variables. The single biggest variable is the price of natural gas (EnergyWire, Dec. 17, 2015). But Bakke said most of the coal plants that are shut down will be the result of a requirement to reduce CO2 emissions, not squeezed out by lower gas prices.
"Mostly, coal is backed out because it's necessary for compliance, not because of cost," he said.
MISO officials plan to refine the analysis in the coming months, looking at what new transmission infrastructure may be required.
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Senate Fails to Override Obama Veto
Jan 21, 2016 | The Hill - E2 Wire
By Timothy Cama
Senate Republicans fell short Thursday in their attempt to override a veto from President Obama and repeal a contentious water regulation from the Environmental Protection Agency.
Fifty-two senators voted to move forward with an attempt to override Obama’s veto of the resolution, short of the 60 votes needed.
Democratic Sens. Heidi Heitkamp (N.D.), Joe Donnelly (Ind.) and Joe Manchin (W.Va.) joined Senate Republicans in voting to proceed with the veto override. Sen. Susan Collins (Maine) was the only Republican to vote against.
Even if the Senate had achieved cloture on the resolution, final passage would have required a two-thirds majority in both chambers of Congress — a steep climb.
The 52-40 Thursday vote closes the latest chapter in the GOP’s push to stop the Environmental Protection Agency’s (EPA) attempt to assert power over small waterways like streams and wetlands. The Clean Water Rule or “waters of the United States” was made final last year.
The legislation at issue was written under the Congressional Review Act, which gives lawmakers the power to overturn regulations. But resolutions blocking federal rules are subject to a presidential veto and require a two-thirds majority for to be overridden.
The GOP argues the water rule can be interpreted to give the EPA power over nearly all land in the country, requiring federal permits under the Clean Water Act for any action that changes or harms the land, including digging ditches.
“The administration has tried to spin WOTUS as some ‘clean-water measure,’ but a bipartisan majority of Congress understands it’s really a federal power grab clumsily masquerading as one,” Senate Majority Leader Mitch McConnell (R-Ky.) said of the regulation on the Senate floor.
“WOTUS would grant federal bureaucrats dominion over nearly every piece of land that touches a pothole, ditch, or puddle. It could force the Americans who live there to ask federal bureaucrats for permission to do just about anything with their own property,” he said.
Democrats say the rule is necessary to ensure that vulnerable waterways are protected from pollution and harm, after Supreme Court rulings that put their protections at risk.
Senate Minority Leader Harry Reid (D-Nev.) accused Republicans of wasting time on the override vote.
“Today, my Republican colleagues have chosen to once again attack clean water protections that millions of Americans depend on,” Reid said.
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More Ethanol Means More Toxic Water Pollution
Jan 19, 2016 | Environmental Working Group
By Emily Cassidy
Some corn ethanol lobbyists are pushing to triple the amount of ethanol American fuel makers put into gasoline, moving from the current blend, called E10, of 90 percent gasoline and 10 percent corn ethanol to E30, which would be 70 percent gasoline and 30 percent corn ethanol. They argue that using more of their so-called renewable fuel would benefit the environment.
But in reality, more ethanol means more carbon emissions, more toxic pollutants into drinking water, more toxic algae blooms and higher water bills for Midwestern residents.
Ironically, the ethanol industry’s efforts to increase the ethanol content of American fuel comes as the Des Moines Water Works is pursuing an intense lawsuit against upstream Iowa counties for polluting local waterways with billions of tons of nitrate pollution.
The principle culprit behind that pollution is nitrogen in fertilizers and manure, which are being spread on millions of acres of Iowa corn fields cultivated mostly for ethanol production.
In 2007, Congress enacted a federal mandate to require vehicle fuel makers to blend ethanol into gasoline. The motive behind the measure was energy security – to reduce U.S. dependence on Middle Eastern oil – and to reduce carbon emissions. As much as 40 percent of the corn now grown in the U.S. is used to make ethanol. But the mandate had serious unintended consequences. As farmers plowed up grasslands and wetlands to grow corn, they released carbon stored in the soil, contributing to climate-warming carbon emissions.
Planting massive amounts of corn to make corn ethanol is not just a climate disaster. The practice has also led to increased fertilizer run-off, polluting local waterways, making water too toxic for swimming and too toxic to drink. The state of Iowa had arecord number of beach closures last year due to the rampant algae blooms caused by farm pollution.
High concentrations of nitrates in drinking water are associated with certain cancers and with blue baby syndrome, a condition that reduces an infant’s blood capacity to carry oxygen.
Thankfully, the federal Safe Drinking Water Act requires water utilities to filter out most nitrates, down to 10 milligrams per liter of drinking water.
But ridding water of so much pollution isn’t cheap The Des Moines Water Works contends that it used its nitrate removal facility for 74 days in 2013, at a cost of close to a million dollars. Last year, the situation was far worse: the water utility said it used the nitrate removal facility for 177 days, costing $1.5 million.
The expenses of cleaning farm pollution out of drinking water end up in the water bills of Des Moines residents. They have essentially been footing the bill for corn and ethanol producers for almost a decade.
It’s well past time to rein in the corn ethanol mandate, to protect American waters from toxic pollution and to curb rising water treatment costs.
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Why We're Seeing the Beginning of a Multi-Billion Dollar Ecosystem Marketplace
Jan 21, 2016 | Environmental Defense Fund
By Eric Holst
A little-noticed announcement by the U.S. Department of Interior in late 2015 reflects an emerging paradigm shift in natural resource conservation – and the role market-based solutions will play as the nation ramps up efforts to save America’s imperiled species and landscapes.
The new initiative to launch a Natural Resource Investment Center comes as the federal government seeks to develop creative private-sector financing opportunities for environmental protection that will, in turn, spur economic development.
The center will tap markets to boost landscape-wide conservation efforts. It will primarily focus on water resources, but also seek private-sector investments to protect habitats on public and private lands.
Today’s conservation programs fall short
Today, the bulk of mitigation for environmental impacts occurs through programs that allow industries to pay a fee or purchase a credit through a mitigation bank, designed to offset the impact elsewhere.
While many of these programs deliver environmental benefits, uneven accounting and a lack of public transparency make it uncertain whether the result is a “no net loss” of the natural resources affected.
But other solutions are emerging today that could deliver more conservation benefits and more accountability – and eventually help build the major ecosystem marketplace America needs. The first building blocks are already in place.
The ecosystem marketplace of tomorrow
Case in point: habitat exchanges that encourage farmers, ranchers and other landowners to create, maintain and improve wildlife habitat on their property, while earning financial credits for their efforts.
Habitat exchanges are unique from other programs in that they use the same scientific accounting tool to quantify both impacts and offsets. With more robust accounting and much needed transparency, they seek to go one step farther and guarantee a net benefit to the ecosystems that have been affected.
Other solutions are emerging today that could deliver more conservation benefits and more accountability.
By offering a new revenue stream for landowners, and a faster and more standardized process for industry to move projects forward, habitat exchanges have already proven they can create a win for people, wildlife and the economy.
And as the nation begins to approach conservation in new ways, we think they are the right thing at the right time.
A new mindset for environmental protection
Secretary Sally Jewell, the former president and chief executive officer of outdoor equipment retailer REI and a former commercial banker, understands why the private sector is key to solving America’s environmental challenges.
Her announcement in December came on the heels of President Obama’s new conservation strategy, and at a time when the federal government is increasingly looking to private investments to support conservation projects.
With more advanced tools and more attractive investment opportunities headed our way, this nation will begin to drive more dollars into the ecosystem marketplace and generate returns that benefit us all.
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