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ACC PM 1/25/2016

Industry and Association News

(ACC Mentioned) Plastic Pinch: Cheap Oil, Chinese Economy Hurt Recyclers
Jan 25, 2016 | Canton Repository
By Shane Hoover

Plunging oil prices and a weaker Chinese economy are stifling the market for recycled plastics.

Chemical Management News

(ACC Mentioned) Industries Call EPA Waste Generator Rule Changes Improper, Burdensome
Jan 25, 2016 | InsideEPA
By Suzanne Yohannan

Industry groups representing the paper, chemical, and other sectors are criticizing various facets of EPA's proposed update to regulations for hazardous waste generators, warning the changes could turn into...
(ACC Mentioned) The Case For Chemically Recycling Polyurethane Foam
Jan 25, 2016 | Chem.Info
By Meagan Parrish

It’s no secret that the renewable chemicals market is on the upswing. According to a report by Markets and Markets, the renewable chemicals market is projected to increase in terms of value from $49 billion in 2015 to $84.3 billion by 2020.

Chemical Security News

Let’s Make Security a Primary Issue
Jan 25, 2016 | The Hill - Congress Blog
By Jack Danahy

The 2016 election for president is in full swing as I can attest to personally from my vantage point here in scenic (if chilly) New Hampshire. Unfortunately, with the exception of tepid concerns about privacy and the CISA...
The Water Crisis in Flint, and the Strategy of Government Failure
Jan 25, 2016 | Washington Post
By Jared Bernstein

For better or worse—I’d guess for worse—I’m a hard-boiled policy wonk who’s been around the block enough times that I see little that surprises or shocks me.
Regulators order Shutdown of Calif. Well
Jan 25, 2016 | E&E - Greenwire

State regulators have ordered utility Southern California Gas Co. to permanently close and seal a storage well that has belched natural gas into the air in a Los Angeles neighborhood for months.

Transportation News - There are no clips to report at this time

Energy and Environment News

Obama Officials Rush to Curb Methane on Public Lands
Jan 25, 2016 | E&E - Greenwire
By Ellen M. Gilmer and Mike Soraghan

The Obama administration says it has no time to waste on finalizing efforts to curb the oil and gas industry's methane emissions.
5 Things to Know About BLM's Methane Rule
Jan 25, 2016 | E&E - Climatewire
By Brittany Patterson

The Obama administration has presented another prong of its climate agenda with a plan to reduce the venting, flaring and leakage of natural gas from more than 100,000 federal onshore oil and gas wells.
Comments Warn EPA Against Patchwork Effect of Federal Plan
Jan 25, 2016 | E&E - Interactive
By Emily Holden and Rod Kuckro

As a lower court rejected requests to halt the Clean Power Plan last week, U.S. EPA accepted thousands of comments on its model carbon trading rules and federal backup plan for states that don't comply.
EPA Approval Of EOR Monitoring Plan May Ease GHG Reporting Concerns
Jan 25, 2016 | InsideEPA
By Bridget DiCosmo

EPA's approval of a greenhouse gas (GHG) monitoring, reporting and verification (MRV) plan for an enhanced oil recovery (EOR) project that aims to also conduct carbon capture and sequestration (CCS) could ease...
Outlook: “Snowzilla” Sidelines House, Delays Senate
Jan 25, 2016 | National Journal
By Jason Plautz and Ben Geman

The “Snowzilla” storm has wreaked havoc on the congressional schedule, as the House has scrapped its entire session for the week—essentially creating an unplanned recess—while the Senate has pushed its own plans back a day.
Liquefied Natural Gas Policy Overdue for an Update
Jan 25, 2016 | The Hill - Contributors Blog
By Mark R. Maddox

Sen. Lisa Murkowski (R-Alaska), chairwoman of the Senate Energy and Natural Resources Committee, has included liquefied natural gas (LNG) export legislation in a broader energy package that the Senate...
Grid Upgrades Would Help Slash Emissions 78% in 15 years -- Study
Jan 25, 2016 | E&E - Greenwire
By Amanda Reilly

The U.S. power sector could cut its greenhouse gas emissions by more than three-quarters in the next 15 years compared with 1990 levels, according to new modeling by federal scientists.
Will Obama Issue Executive Action on Cap-and-Trade?
Jan 25, 2016 | Roll Call
By John T. Bennett

The Obama administration is refusing to make his final year in office as uneventful as Republicans would like. In fact, lawmakers expect executive action on everything from terrorist detention to campaign finance to environmental issues.
Spending Cap-and-Trade Money on Non-GHG Efforts Worthwhile -- Analyst
Jan 25, 2016 | E&E - Climatewire
By Anne C. Mulkern

California's fiscal watchdog is urging more scrutiny into how California spends the several billion dollars generated each year by its cap-and-trade program for carbon pollution.

Industry and Association News

(ACC Mentioned) Plastic Pinch: Cheap Oil, Chinese Economy Hurt Recyclers

Jan 25, 2016 | Canton Repository

By Shane Hoover

Plunging oil prices and a weaker Chinese economy are stifling the market for recycled plastics.
The bales of crushed plastic almost reach the rafters of the Jackson Township Recycling Station.
Among the stacks are 40 bales of No. 1 plastic, the type used in soda bottles. The tractor-trailer-sized load is worth about $360 at current prices.
A year ago, manager Steve DeJane could have sold the bales for more than $4,100.
Plunging oil prices and a weaker Chinese economy are stifling the market for recycled plastics. Already, recyclers have stopped taking some types of waste and could start charging to process recyclables if prices go lower.
“You try to weather the storm, but this storm’s just hanging out,” DeJane said. “All they keep talking about is how oil is getting cheaper and cheaper and cheaper.”
OIL AND CHINA
Most plastics in the United States are made from natural gas and related liquids, but plastics in other parts of the world are derived from crude oil.
With oil trading below $30 a barrel and natural gas around $2 per million British thermal units, making new plastic resin is cheaper than recycling.
Until about six months ago, plastics manufacturers had been using 75 percent recycled material and 25 percent virgin resin, said Brian Slesnick, vice president of S. Slesnick Co. The mix is closer to 50-50 now as countries, such as Saudi Arabia, sell virgin resin pellets for as little as 18 cents a pound.
“You can’t even buy (plastic), recycle it and do all that stuff for 18 cents a pound,” Slesnick said, “let alone ship it to China.”
And China is buying less. The country is the world’s largest importer of recycled plastics, but its economy grew 6.9 percent last year, the slowest rate in a quarter century, according to its government.
China had been importing 150,000 tons of recycled plastics a week, but in the last three months the amount has dropped 60 percent, Slesnick said.
FLOW CONTINUES
Recycled plastic prices have dropped before, said David Held, executive director of the Stark-Tuscarawas-Wayne Joint Solid Waste Management District
Prices were so low around 2006 that the district had to pay recyclers $26 a ton to take items besides paper and cardboard.
“But has it happened this quick and this strong before? I don’t think it has,” Slesnick said. “And who knows how long it’s going to last.”
Until prices rebound, companies are stockpiling plastic and buying plastic more carefully. But recycling won’t grind to a stop.
The amount of rigid plastics (tubs and food containers) recycled in the United States has nearly quadrupled since 2007, and 80 percent more plastic film (bags and wrapping) is being recycled now than in 2005, according to the American Chemistry Council’s Plastics Division.
Government and corporate policies, greenhouse gas emission targets and long-term contract help recyclers withstand slumps.
“We are mandated by the Ohio EPA to collect recycling whether we’re making money or not,” Held said.
The district generated slightly more than $300,000 in revenue last year on its sale of recyclables. Revenue is likely to drop as paper prices are down 40 percent and the price for other recyclables, including plastic, is down a third.
“But we’re able to absorb that,” Held said.
ADAPTING TO CHANGE
About 7,000 cars a month come through the Jackson Township Recycling Station, a not-for-profit organization independent of the township. Workers sort the paper, glass, aluminum, steel and plastic, which is then sold to processors.
Last year the station collected almost 2.6 million pounds of recyclables, but it ended the year in the red, said DeJane, who has worked at the station for 10 years and managed it the last three.
The recycling station stopped taking plastic foam in October — DeJane can’t give it away — and last month started charging $20 for every television or computer monitor. The station previously took them for free.
The station can manage for a year or two as things are, but if oil keeps driving prices down, there won’t be an incentive to keep waste out of landfills, DeJane said. “Why are you going to pay somebody to put bottles into a compactor and pay someone to store it and then ship it out and not get anything for it?”

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Chemical Management News

(ACC Mentioned) Industries Call EPA Waste Generator Rule Changes Improper, Burdensome

Jan 25, 2016 | InsideEPA

By Suzanne Yohannan

Industry groups representing the paper, chemical, and other sectors are criticizing various facets of EPA's proposed update to regulations for hazardous waste generators, warning the changes could turn into an "improper enforcement assault" and would increase the regulatory burden on industrial parties.
At the same time, the industry groups generally support EPA's objective to clarify and consolidate requirements for hazardous waste generators.
Comments from environmentalists generally are calling on EPA to tighten the rule and explain its proposed "deregulation" of hundreds of thousands of tons of hazardous waste annually.
EPA closed the comment period Dec. 24 on its Resource Conservation & Recovery Act (RCRA) proposedhazardous waste generator improvements rule. The rule proposes to make over 60 changes to its current regulations for generators, designed to improve the effectiveness of, and compliance with, the hazardous waste generator program.
The proposed changes stem from problems identified in 2004 and 2013 EPA evaluations of the hazardous waste generator program. The revisions also address responses to a 2014 notice of data availability that EPA issued on the retail sector asking for comment on hazardous waste management practices in that sector and on challenges they face in complying with RCRA, the rule's preamble says.
Among the proposed changes are replacing the phrase "conditionally exempt small quantity generator" (CESQG) with the phrase "very small quantity generator" (VSQG) so as to be consistent with the other two generator categories -- large quantity generators (LQGs) and small quantity generators (SQGs). Additionally the agency is proposing to allow CESQGs to send hazardous waste to an LQG that is under the control of the same person.
The proposal would also allow companies to maintain their smaller generator status if they have an episodic generation of waste that exceeds the small quantity limits.
While some measures, such as the episodic events are drawing support from industry, the sector is objecting to a number of other provisions.
'Burdensome Requirements'
A host of industry groups calling themselves "Industrial Generators" -- including the American Chemistry Council, American Forest & Paper Association, The Fertilizer Institute, among others -- say in Dec. 23 comments that the agency is using the proposed rule -- which it says is intended to reorganize and clarify existing regulations -- to instead "impose new burdensome requirements on hazardous waste generators."
Industrial Generators further say that "Unfortunately, in this proposed rule, EPA would expand and extend the generator rules in many significant ways without fully considering the cumulative burden that will be placed on generators from these additional rules."
And the National Mining Association (NMA) in Dec. 22 comments says it is "concerned that in its zeal to improve the generator rules EPA is proposing solutions to problems that do not actually exist and is overstepping its statutory obligations."
Retail sector groups including the Retail Industry Leaders Association remark in Dec. 23 comments that while a small portion of the proposed rule "would offer a small measure of regulatory relief to a small number of retailers, other portions of the proposal would actually increase significantly the regulatory burdens on virtually the entire retail industry."
One key measure drawing significant opposition among some industry groups is proposed language "that would cause a generator that fails to comply with any one of the many 'Conditions for Exemption' for its generator status to default to being 'an illegal [treatment, storage and disposal facility (TSDF)]' that 'becomes subject to full regulation,'" and would be viewed as a TSDF without a permit and in violation of storage standards, the Industrial Generators say, referencing the proposal.
EPA says that a VSQG, SQG or LQG violating any "condition for exemption" would now "be subject to all of the requirements that apply to a higher level generator or even to a TSDF that should have a RCRA permit, and that the generator can be penalized for violations of each one of those requirements with which it does not comply," the comments say.
This approach is "illegal because it is based on a premise that is contrary to the statute and congressional intent," as RCRA is clear it never intended to apply permitting to generators, they say.
The retail associations say in their comments that this measure would "unlawfully erase the fundamental statutory distinction between generators and TSDFs, and would be barred by the constitutional prohibition on 'grossly disproportionate' penalties for noncompliance."
And NMA, in commenting on this issue, warns against the agency turning its aim at regulatory clarity "into an improper enforcement assault on regulated stakeholders for minor regulatory violations." NMA explains that the conditions for exempting certain categories of generators from full-blown regulation as TSDFs "relate to the differences in risks present at these types of facilities because of the amount of hazardous waste generated and accumulated on site per month." Therefore, "it is imperative that EPA not simply assume that a CESQG, SQG, or even a LQG is purposefully evading regulation as a TSDF because it has violated a minor requirement that is more akin to a paperwork exercise (i.e., recordkeeping . . .) with no consequence to the environment or public health."
The proposal "would expose small, ostensibly-exempt facilities to an onslaught of criminal and civil liabilities the moment they suffered any lapse in compliance," NMA says.
Waste Determinations
Other provisions drawing concern among industry parties are measures related to waste determinations. For instance regarding recordkeeping for non-hazardous waste determinations, the retail associations say EPA lacks legal authority to require generators to keep records of determinations that wastes are non-hazardous. EPA claims minimal costs stemming from this proposal, but "the costs to the retail industry alone could very well be in the hundreds of millions of dollars in the first year alone," the retailers say.
Industry is also taking issue with other aspects of the waste determination changes, including that hazardous waste determinations be made at the initial point of generation and during management if the waste properties change in that time, and the addition of new language requiring that waste determinations be 'accurate." This latter requirement "is unnecessary, impermissibly vague, and potentially environmentally counterproductive (to the extent that it would discourage generators from being conservative in classifying their wastes)," the retailers say.
Industrial companies and trade groups that comprise the Federal Recycling and Remediation Coalition (FRRC), among many other criticisms, also point out concerns in Dec. 23 comments over provisions in the new rule for satellite accumulation areas (SAAs) that it says "erode away the original intent and purpose of establishing separate SAA requirements." Specifically, they undermine the view that SAAs be considered areas with low volumes of waste managed by operators such that less cumbersome management standards are appropriate, FRRC says.
Industry groups are generally supportive of some measures EPA is making such as its allowance for an increase in the generation of hazardous waste stemming from an episodic event without causing the generator to bump up in generator status. But some say additional modifications are needed, and the retail associations go so far as to say the measure "largely misses the mark." They say retailers generate most wastes in small quantities over a month and do not know when unusually large quantities will occur. EPA "should allow retailers to determine their generator status based on their average generation rates over time," they say.
Earthjustice, on behalf of Sierra Club, filed Dec. 24 comments calling for EPA to tighten the rule. In particular, they say the agency should strengthen requirements that apply to CESQGs. The agency should "revoke unlawful and arbitrary provisions allowing CESQGs to treat, store, or dispose of their hazardous wastes at non-hazardous waste sites," they say. These allowances circumvent RCRA's "cradle-to-grave" hazardous waste management requirements and Clean Air Act rules, they say, and are "inconsistent with EPA's own stated goal of improving environmental protection at CESQG sites through this rulemaking."
Further, they say even if EPA believes it can exempt very small quantity generators from hazardous waste requirements for generators, "it does not follow that wastes can also be excused from distinct Subtitle C transportation, storage, treatment, and disposal requirements."
The agency "must explain its rationale for allowing such 'cradle to grave' deregulation of hundreds of thousands of tons of hazardous wastes per year . . ., and how these allowances are protective of human health and the environment," particularly since EPA lacks data about CESQGs, the environmental groups charge.

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(ACC Mentioned) The Case For Chemically Recycling Polyurethane Foam

Jan 25, 2016 | Chem.Info

By Meagan Parrish

It’s no secret that the renewable chemicals market is on the upswing. According to a report by Markets and Markets, the renewable chemicals market is projected to increase in terms of value from $49 billion in 2015 to $84.3 billion by 2020.
And Emery Oleochemicals is one of the many companies tapping into manufacturer’s desire to use chemicals that are both sustainable and rival petro-chemicals in performance.
Emery got its start 175 years ago by making candles and lamp oil from the meat industry’s discarded lard (check out the company’s nifty tribute to its storied history here). Now Emery offers a plethora of bio-based products for several industries. Headquartered in Malaysia with offices in USA (Cincinnati) and Europe (Loxstedt & Düsseldorf), Emery’s portfolio includes lubricants, additives and bio-based chemicals used in high-growth sectors such as home and personal care, construction, automotive, lubricants, packaging, food and beverage, pharmaceutical, textiles, electrical and electronics, and agriculture.
The company is also a leader in the emerging market for polyol made from scrap polyurethane foam and bio-based polyols, which is are used in mattresses, seat cushions and home insulation.
Since pu foam is generally made from non-renewable sources and doesn’t degrade in the environment, keeping it out of waste streams is a key issue. To meet this challenge, a variety of recycling options have been developed, including the use of scraps to make rebond material used in carpet underlay. In fact,according to the American Chemistry Council, nearly a billion pounds of the material were used for carpet underlay in 2010.
Emery, meanwhile, offers pu foam manufacturers a closed-loop recycling service that uses scraps to produce the company’s INFIGREEN polyols, which can be customized and then re-introduced into the pu foam process.
“Instead of companies having to take pu foam to a landfill, we can take their cuts and byproducts convert them back into polyols and they can feed it right back into their feed stream,” Jay Taylor, Emery’s Chief Manufacturing Officer and North America Regional Managing Director, told Chem.Info in a recent interview.
According to Emery, “This multi-award winning approach to recycling polyurethane foam is a first of its kind aromatic polyether/ester polyol and consists of a range of products manufactured via glycolysis.”
The INFIGREEN process starts with polyurethane foam scrap. The scrap can be either rigid or flexible foams based on either ether or ester chemistry. The glycolysis product is further worked to remove any residual solids that may have been introduced into the foam scrap stream and the hydroxyl value is adjusted to meet an application specification. In the closed loop process, the foam producer’s scrap is converted back to polyol and returned for reprocessing into the foam manufacturing process.
The process can also translate into real cost savings for the company. While the numbers vary, Mark Kinkelaar, Emery’s Global Business Director-Eco-Friendly Polyols, says he’s seen companies save 10 to 20 percent using closed-loop recycling versus other methods of handling scrap.
And with regulation shifting towards mandating more pu foam recycling, Emery’s technology is likely to be in higher demand.
“Five states in the U.S. have signed a law or are evaluating laws that will mandating recycling or post-consumer pu foam waste on the marketplace,” Taylor said. “There is increasing pressure to find an outlet for foam. We are ideally positioned to bring this technology forward.”

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Chemical Security News

Let’s Make Security a Primary Issue

Jan 25, 2016 | The Hill - Congress Blog

By Jack Danahy

The 2016 election for president is in full swing as I can attest to personally from my vantage point here in scenic (if chilly) New Hampshire. Unfortunately, with the exception of tepid concerns about privacy and the CISA, there is little to no noise around the massive and growing threats to our cybersecurity. This isn’t new or surprising, but my hope did recently spring anew when current events showed how demonstrably insufficient our security is around even our most critical infrastructure. The candidates are mostly intelligent folk, I rationalized, so maybe they just needed a reminder that would bring this issue top of mind.
Enter December’s massive Ukrainian blackout, the first power outage to be attributed to a cyber-attack, followed later that month by an Associated Press investigative report highlighting how frighteningly vulnerable the U.S. power grid is to foreign hacks. Surely these were the types of red flags that warranted heavy discussion on the campaign trail.
Sadly, to paraphrase candidate Trump, it looks like cybersecurity is a “low-energy” issue. People associate failings in security with the mainly annoying theft of credit card or private healthcare data. Both of these are important, but even the courts have continued to rule that actual damage and pain are relatively low.
In order to raise the energy level, we need to focus on the much larger ramifications of leaving our national infrastructure — specifically the grid that powers everything from our cellphones to our refrigerators to the internet — vulnerable to attack. If we do, then maybe the voters (and hence, the pandering pols) will understand why it’s important for us to spend more time addressing security.
A brief timeline of hacking the grid:
Generating destruction: The Aurora Exercise, March 2007
In a 2007 experiment, an Idaho National Lab researcher posed as an attacker, accessed a network-connected generator (which had been installed for this test), and caused it to rattle and burn itself to pieces by simply opening and closing breakers out of sync. The experiment proved that if malicious actors could access the networks that these systems connect to, and could use a cyber-attack to control the machine, that catastrophic and unrecoverable damage (generator destroyed in 3 minutes) could occur.
Fingerprints and finger pointing: Wall Street Journal, April 2009
In the spring of 2009, WSJ author Siobhan Gorman told of the weaknesses of the nation’s electrical grid, highlighting the presence of Chinese and Russian reconnaissance (among others) on our national power grid, indicating that these intruders had left behind software programs and tools that would make disabling power simpler, if they ever needed to.
NSA reports: “They’re here” in 2014
For those who pooh-poohed the WSJ article of 2009 as journalistic hyperbole, November of 2014 brought discomfiting confirmation in the person of NSA and Cyber Command head Admiral Mike Rogers, who told Congress, "There shouldn't be any doubt in our minds that there are nation states and groups out there that have the capability to do that, to shut down or stall our ability to operate our basic infrastructure, whether it is generating power across this nation, or moving water and fuel."
All access attacking: AP’s yearlong study in 2015
With an eye to the developing crisis, AP performed a yearlong study in 2015, investigating specific attacks and general weaknesses. It turns out that not only was Admiral Rogers correct, but that intruder capability had turned into activity. The AP arrived at a jarring conclusion: “About a dozen times in the last decade, sophisticated foreign hackers have gained enough remote access to control the operations networks that keep the lights on.” They also reported that investigators had seen indicators that a new player, Iran, likely had a role in one of the major attacks.
A power struggle in Ukraine: Election year update
Enter 2016, and about a month before the first primary vote is cast, Ars Technica reportsthat “about half the homes in the Ivano-Frankivsk region of Ukraine” had lost power due to an infection by an older common malware package called “Black Energy”. Black Energy made systems inoperable and even erased the disks on some affected systems. It was thought to have originated in Russia, but attribution is never very easy. The lights, though, were out, and the cause was a cyber-attack.
The future going dark? A look ahead
Enough about the past and present. Sara Peters writes in Dark Reading about the recentISACA study which shows that 84 percent of surveyed IT professionals expect to see critical infrastructure disrupted by a cyber-attack in 2016. ISACA is an organization of auditors and control-reviewers, and are not prone to hyperbole. So I think it fair to believe that this is likely a reasonable, or at least well-reasoned, prognostication.
So what are we waiting for?
Almost ten years ago, we saw the potential for damage from these attacks, and five years ago we had evidence that reconnaissance was underway. Two years ago the NSA told us that we had been compromised, and last year we saw evidence that the compromise was pervasive and spreading. Just last month, in another country with a similarly aging infrastructure, people lost power, control, and probably confidence because their systems were coopted and shown to be inferior to the challenges that attackers pose.
The world is clearly in a turbulent state. The rise of more aggressive nation states like Iran leveraging cyber-attacks and the increasingly sophisticated use of technology by terrorists make this not only a challenge for us to face over the next four years, but a problem we need to start addressing today. The leaders we elect to serve us in these times must be able to understand and articulate a strategy to protect us. None are talking about it now, and I don’t know if any of the current lot can. But we should be asking, and we must keep asking.
Cybersecurity is clearly a primary concern for our industries and our infrastructure. It is time to make it a primary issue for our candidates.
Danahy is CTO and co-founder of Barkly, a cybersecurity firm.

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The Water Crisis in Flint, and the Strategy of Government Failure

Jan 25, 2016 | Washington Post

By Jared Bernstein

For better or worse—I’d guess for worse—I’m a hard-boiled policy wonk who’s been around the block enough times that I see little that surprises or shocks me. But the recently publicized water crisis in Flint, Mich., did both. The depth of government failure, the neglect and mistreatment of an already deeply vulnerable population, the potentially permanent damage to children’s brains, and the series of events that led to this tragic debacle must be carefully examined for at least two reasons.
First, the fact that the richest economy on the globe failed to provide an essential public good is a symptom of government failure with which we must reckon. Second, such failure is not a benign accident. It’s not a passive failure of lazy oversight. It is a strategy to first break and then discredit the public sector, to undermine trust and inculcate disgust. The beneficiaries of this strategy are the wealthy who will then push for smaller government and tax cuts. Those who pay the price will be people much like those in Flint. And there are many more of the latter than the former.
Here are a few facts of the case, but if you do nothing else, read every word of this WaPo account of what happened in Flint. In early 2014, Michigan’s governor, Rick Snyder, put Flint, a city that lost its manufacturing base to globalization, under the control of an emergency manager. To save money, the city shifted its water supply from Lake Huron, for which it had to pay Detroit, to the Flint River. Critically, when the switch was made, the state ceased to add anti-corrosion chemicals to the water, and that, according to the Post, “allowed rust, iron and, most dangerous, lead from aging pipes to flow into residents’ homes.”
The citizens noticed the problem right away. “Their tap water was discolored and foul-smelling, they said, and skin rashes appeared after bathing in it.” At that point, the system failed the people of Flint at every level. Snyder’s staff argued that the people in Flint were trying to make the issue into a “political football.” Top regional EPA regulators suppressed a staff memo that raised alarms about lead levels in the water.
Meanwhile, a Flint pediatrician compared kids’ lead levels in their blood before and after the switch, and found that they’d doubled and tripled. State officials dodged once again, accusing the doctor of causing unnecessary hysteria. Finally, outside pressure forced the Michigan government to acknowledge the accuracy of the pediatrician’s data and reverse course.
That is decidedly not a happy ending. Brain damage from lead poisoning is irreversible.
Readers of this column know that I’m always on the lookout for market failures, and they’re not hard to find. The solution to such failures is, by definition, some form of government intervention, such as temporary stimulus to offset the collapse of private sector demand in a recession.
But those of us who advocate for such interventions cannot assume away government failure, any more than free-market conservatives can assume away market failures. Progressives can and should make the point that public goods, such as safe water, must be provided by governments as private firms will not adequately provide such goods to everyone. But we cannot go on blithely about the roles and responsibilities of government without confronting government failure.
But how do we do that? For one, we must recognize that government failure is not an accident. It is a strategy of those who benefit from less government. Though they don’t quite put it this way, trust me as someone down in the trenches in this fight when I tell you that I keep running into politicians whose message to their constituents is, in so many words, “Washington is broken. Send me there and I’ll make sure it stays that way.”
Fiscal cliffs, threats to default on the national debt, government shutdowns, the collapse of the budget process, unwillingness to compromise, ignoring facts and science that challenge ideology, and of course, as in Flint, the failure to provide basic public goods—all of these can make people say one of two things: 1) “the government is a corrupt mess of which I want nothing to do with,” or 2) “we cannot have a fair economy or decent society without a well-functioning government. So let’s get to work to make that happen.”
The problem with #1, of course, is that it denies the uncontroversial recognition that quality public goods are a hallmark of an advanced economy, not to mention social insurance, a safety net against poverty, laws against discrimination, and much more. The problem with #2 is it is not clear how to “make that happen.”
It is particularly hard to defend a functioning public sector when the concentration of wealth interacts with our uniquely money-fueled politics and policy. Forty percent of the wealth in this country is held by the top 1 percent of households, and political science has clearly shown that politics favors their preferences and protects their wealth. As Jane Mayer writes in an importantnew book on the political activities of the hyper-conservative Koch brothers: “…the political policies they embraced benefited their own bottom lines first and foremost. Lowering taxes and rolling back regulations, slashing the welfare state and obliterating the limits on campaign spending might or might not have helped others, but they most certainly strengthened the hand of extreme donors with extreme wealth.”
Meanwhile, 42 percent of Flint residents are poor, compared to 17 percent forthe state of Michigan. If money is to rule politics, those impoverished residents haven’t got a chance. Racism is also in play: 57 percent of Flint residents are black, compared to 14 percent statewide.
But here’s the thing. There are a lot more people who need a functioning government than exist in the top 1 percent. There’s also a general election in the offing. We need to hear candidates lay this out. Not just inveighing against the banks and the wealthy, but explaining why #2 above is the essential response, as #1 is untenable. And we need to hear a lot more about the unsexy business of what they’ll do to make the public sector work the way we need it to.
Flint is a wake-up call. The question is, now that we’re awake, what are we going to do about it?

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Regulators order Shutdown of Calif. Well

Jan 25, 2016 | E&E - Greenwire

State regulators have ordered utility Southern California Gas Co. to permanently close and seal a storage well that has belched natural gas into the air in a Los Angeles neighborhood for months.
At a hearing Saturday, the South Coast Air Quality Management District also ordered the utility to fund an independent health study for Porter Ranch residents and check 115 other wells at the storage site to make sure they don't leak, as well (see related story).
"As a result of this order, SoCalGas must take immediate steps to minimize air pollution and odors from its leaking well and stop the leak as quickly as possible," said Barry Wallerstein, the air district's executive officer.
Advocacy groups said the order is not enough and called for regulators to force the utility to shut down all the wells at the underground storage facility.
The air district's "failure to put Californians' livelihoods first is shameful, and Governor Brown should intervene swiftly," Sierra Club Executive Director Michael Brune said.
Southern California Gas hasn't commented on the order (AP/Fuel Fix, Jan. 24).

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Transportation News - There are no clips to report at this time

Energy and Environment News

Obama Officials Rush to Curb Methane on Public Lands

Jan 25, 2016 | E&E - Greenwire

By Ellen M. Gilmer and Mike Soraghan

The Obama administration says it has no time to waste on finalizing efforts to curb the oil and gas industry's methane emissions.
"We are going to push hard to get this done," Bureau of Land Management Director Neil Kornze said during a Friday press call announcing the release of a draft rule targeting natural gas waste. "Every day matters at this point, and this is a very high priority for us."
The daily twists and turns of the presidential campaign are a reminder that Obama has less than a year left in office. In the world of federal regulation, that's a very short period of time to enact a climate agenda, of which the methane rule is a key part.
So Kornze's message served as a warning to industry, which vehemently opposes the proposal and is expected to challenge the final version in court.
Congressional Republicans lambasted the announcement as one more hostile act toward fossil fuel industries by a lame-duck Democratic president. But they offered no threats to block or delay its progress.
The agency will hold public meetings on the draft rule in February and March and expects to finalize it by the end of the year.
Drillers say the draft rule, which aims to curb methane flaring, venting and leaking on public and tribal lands, fails to acknowledge the strides industry has already taken in reducing emissions of the potent greenhouse gas. Plus, they say, the proposal exceeds BLM's authority.
"We support the goal of capturing greater quantities of methane and reducing waste gas, but a command-and-control regulatory approach is not the most effective way to meet that goal, particularly one that exceeds BLM's jurisdiction," the Western Energy Alliance's Kathleen Sgamma said in a statement.
BLM's proposed rule -- part of a suite of changes designed to meet President Obama's Climate Action Plan -- would require oil and gas operators to limit natural gas flaring from oil wells, identify and repair methane leaks from wells and infrastructure, and generally prohibit direct venting of methane into the air. The requirements would phase in over three years. The proposal would also give the agency discretion to raise royalty rates in the future and would clarify when operators must pay royalties on flared gas.
Agency officials said they were confident the rule would stand up to legal scrutiny.
"Anyone could file a potential lawsuit," Interior Assistant Secretary Janice Schneider said during the press call. But, she said, "we feel very confident with our statutory authority here to require a reasonable suite of waste reduction methods under the Mineral Leasing Act and under the Federal Land Policy and Management Act."
But responsibility for defending it in court would likely fall to the next administration. A Democrat would be likely to offer a full-throated defense, a Republican far less so.
Interior and environmental allies say the rule is an essential tool to combat the powerful climate warming effects of methane, the main component of natural gas, and recover royalties the government would otherwise receive on the lost gas.
"The truth is, the ... costs of releasing natural gas into the atmosphere are clear, significant and dangerous," Schneider said. "If we're wasting that much energy, we're clearly not operating efficiently."
BLM estimates that 96 billion cubic feet of natural gas is wasted each year from venting, flaring and leaking. The new measures are designed to avoid about half of that, resulting in a $9 million to $16 million increase in royalties per year, a small percentage of the agency's roughly billion-dollar yearly revenue from oil and gas royalties.
Methane releases from the oil and gas industry have attracted close scrutiny in recent years, with some environmentalists arguing that the emissions undermine any environmental advantage of switching from coal to cleaner-burning natural gas as a fuel source.
"We applaud the Obama Administration for working to prevent venting and flaring of methane at new and existing operations on public lands," Earthworks Policy Director Lauren Pagel said in a statement. "The current inadequate rules allow the oil and gas industry to waste and pollute with impunity."
Still, many in the environmental community are calling for further action. To those in the "keep it in the ground" camp, Friday's announcement was too much like business as usual.
Natural Resources Defense Council attorney Meleah Geertsma said the administration should require increased use of available technology to curb emissions on both public and private lands. And, she said, Interior should follow its recent decision to pause coal leasing by establishing a broad ban on new fossil fuel development on public lands.

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5 Things to Know About BLM's Methane Rule

Jan 25, 2016 | E&E - Climatewire

By Brittany Patterson

The Obama administration has presented another prong of its climate agenda with a plan to reduce the venting, flaring and leakage of natural gas from more than 100,000 federal onshore oil and gas wells.
The nearly 300-page proposed rule dropped Friday as the first major snowstorm of the year bore down on the capital. Here's what you need to know about the rule, what it could mean for the climate and what happens next:What does this rule do?
Proposed by the Interior Department's Bureau of Land Management, the rule sets out to cut the amount of natural gas both intentionally and unintentionally being released from oil and gas wells on federal public lands by about 50 percent. The proposed rule would reform current regulations, more than three decades old, by requiring oil and gas operators to adopt best practices and technologies to limit the amount of natural gas that is released into the atmosphere or burned off, also known as flaring.
Venting, or releasing natural gas into the atmosphere, will be prohibited almost entirely.
The main component of natural gas is the greenhouse gas methane, which is about 25 times more potent than carbon dioxide. BLM has a mandate to reduce the waste of public resources, including natural gas, and to get a fair return on taxpayer resources.
The agency also announced it would be updating regulations to give it more flexibility to raise the existing 12.5 percent royalty rate for onshore production, although no royalty hike is currently planned.What is the scope of the problem?
Data from the Office of Natural Resources Revenue show that 375 billion cubic feet of natural gas was vented, leaked or flared by federal and American Indian lessees and operators between 2009 and 2014. That, the agency estimated, is enough gas to power 5.1 million households, or every home in Nevada, for a year.
"If we're wasting that much energy, we're obviously not operating efficiently," Assistant Secretary for Land and Minerals Management Janice Schneider said on a call with reporters.
If the rule is finalized, BLM expects the amount of natural gas leaked annually to be halved. That could result in a greenhouse gas emissions savings of about 164,000 to 169,000 tons of methane, or the equivalent emissions of about 760,000 vehicles. The changes also would cut other air pollutants, reduce noise and light pollution for communities near wells, and bring in up to $188 million annually, according to Schneider.
According to U.S. EPA data, oil and gas methane emissions from federal and tribal lands are about 4 percent of total domestic methane emissions. Methane accounts for about a tenth of overall domestic greenhouse gas emissions, and direct emissions on federal and tribal lands are estimated to be about 0.4 percent of the nation's greenhouse gas portfolio.What will change for oil and gas well operators?
Quite a lot, but not all at once.
"The main things that are going to change on the ground right away will be a greater reporting requirement for testing for methane leaks, requirements to replace certain components of oil and gas infrastructure that are old and outdated and perhaps sources of leaks," said David Babson, a senior engineer in the Clean Vehicles Program with the Union of Concerned Scientists.
"The regulations extend up and down the supply chain, more so than they have in the past, to pneumatic controls and different parts of the process, including well completion and other components," he said.
Pneumatic controls are basically switches that control whether gas is released.
The proposed rule does away with BLM's existing policy of determining on a case-by-case basis whether a well operator can flare natural gas because it cannot be "economically captured." It will clarify when royalties should be collected.
Routine flaring, or the burning of natural gas, will be limited. Reductions will be phased in over a three-year period, with 7,200 thousand cubic feet of flaring allowed the first year, an amount that would be halved the second year and then halved again the third year.
Overall, Babson praised the rule, but questioned whether a three-year rollout would be necessary, adding, "We believe some of the technology for capturing and mitigating methane are available right now."
In addition, the agency proposes an end to venting of natural gas into the atmosphere, except in limited circumstances.
BLM is proposing to require specified best management practices to minimize venting both new and existing wells. Specifically, well operators would be required to be on-site during well purging events, unless the well has an automatic control system, and the operator would also be required to document when liquid hydrocarbons are brought up.
Operators will also be subject to a leak detection and repair policy. Pneumatic controllers and pumps, storage tanks, well drilling activities and processes that bring liquids up from a well would need to be monitored for leaks of natural gas and fixed if leaks were found.
Joshua Mantell, carbon management campaign manager for the Wilderness Society, said a surprising addition to the proposed rule is a provision mandating that before a new lease will be approved, operators must submit a gas capture plan.
"That way, BLM can be assured operators have in place a plan to stop the venting and flaring and a leak, detection and repair program before they even start drilling," Mantell said. Previously, gas capture plans were preferred but not mandated.
"Something like this in place for new leases will be instrumental," he added.
Industry groups say additional regulations are unnecessary and harmful.
The American Petroleum Institute's director of upstream and industry operations, Erik Milito, said the rule would lead to "less federal revenue, fewer jobs, higher costs for consumers and less energy security."
The Western Energy Alliance called the rule "redundant and not necessary." Kathleen Sgamma, the alliance's vice president of government and public affairs, added, "Industry has achieved dramatic emission reductions without federal regulations. Through technological innovation driven by market forces, industry has greatly increased gas capture and reduced leakage rates."Doesn't EPA also have a proposed rule? How is this one different?
BLM's rule follows the release last August of a similar one by EPA to reduce methane emissions from new and modified oil and gas facilities. Those rules would require companies to find and repair leaks, capture 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 crafted its rule under the Clean Air Act and is seeking to limit methane for its air pollution and climate contributions.
BLM Director Neil Kornze said the EPA regulations apply only to new or modified oil and gas wells, whereas BLM's proposed rule would cover everything on federal and tribal lands. He stressed that the agency is working closely with EPA to make sure the rules are "complimentary and not duplicative."
The Union of Concerned Scientists' Babson argued that because BLM's mandate is to reduce waste, the agency's proposed rule can go further than EPA's in order to capture as much natural gas as possible because it is worth royalties.
"They're not doing this through a climate angle, although the end result will be the same," he said. "The rule can be more expansive because certain activities like flaring that the EPA allows to reduce the potency of methane is not as acceptable for in the BLM rule."What happens next?
Once the proposed rule is submitted to the Federal Register, interested parties will have 60 days to submit comments. Then BLM will review the comments, revise if necessary and issue the final rule "toward the end of the year," Schneider said.
Once the final rule has been released, it could be subject to litigation.
"It's quite possible we could be challenged in court," she said.

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Comments Warn EPA Against Patchwork Effect of Federal Plan

Jan 25, 2016 | E&E - Interactive

By Emily Holden and Rod Kuckro

As a lower court rejected requests to halt the Clean Power Plan last week, U.S. EPA accepted thousands of comments on its model carbon trading rules and federal backup plan for states that don't comply.
EPA officials have said they intend to finalize the model trading rules in the summer before the Sept. 6 deadline for states to submit compliance plans or ask for two-year extensions. The agency will not produce a final federal plan unless a state requires one.
Each Monday, Power Plays previews upcoming moves on the way to Clean Power Plan compliance and recaps the week's developments.
One key question that surfaced from the comments is whether EPA's federal plan would employ rate- or mass-based standards for all noncompliant states.
Rate-based standards require a state's power fleet to reach an average level of carbon emissions, while mass-based standards cap emissions outright. States with differing standards are not allowed to operate in the same carbon trading regimes.
Environmentalists, industry groups and at least some states called on EPA to not lock all states into either a rate- or mass-based compliance option through the federal plan, Greenwire's Amanda Reilly reports (Greenwire, Jan. 22).
Stay tuned this week for more analysis on the comments from ClimateWire andEnergyWire.
In events, today:Nevada's Division of Environmental Protection holds a second communityinformation session on the Clean Power Plan in Reno.The Environmental and Energy Study Institute hosts an event on environmental justice under the Clean Power Plan at 11 a.m. in the Rayburn House Office Building.
Wednesday:The Center for Strategic and International Studies has a discussion about the 2016 outlook for the rule at 10 a.m. Speakers include the Rhodium Group, the Georgetown Climate Center, Van Ness Feldman and ClimateWire reporter Emily Holden.Resources for the Future and the Electric Power Research Institute host aseminar at 12:30 p.m. with environment and utility experts speaking about the comments EPA has received on the federal implementation plan and model trading rules.Colorado's Department of Public Health & Environment has a meeting in Brush focusing on rural low-income communities and the Clean Energy Incentive Program.
Thursday and Friday:Duke University's Nicholas Institute for Environmental Policy Solutions holds a workshop at the Southeast Energy and Environmental Leadership Forum in Orlando, Fla.
In case you missed it:A federal appeals court declined to halt the Clean Power Plan, and challengers vowed to take the battle to the Supreme Court (ClimateWire, Jan. 22).The Federal Energy Regulatory Commission's sole Republican member, Tony Clark, is stepping down. In an exclusive interview with E&E Publishing, Clark warned about Clean Power Plan costs and offered states advice (EnergyWire, Jan. 22).At least 20 states are considering carbon trading regimes to comply with the regulation (ClimateWire, Jan. 19).Even in West Virginia, stakeholders urge state leaders to craft a compliance plan that includes carbon trading (ClimateWire, Jan. 21).The Midwestern grid operator finds that capping carbon would be the least costly way to comply with the EPA rule (EnergyWire, Jan. 21).Indiana's governor is carefully weighing options for the Clean Power Plan (EnergyWire, Jan. 21).The U.S. grid monitor outlined challenges facing states as they comply with EPA standards (EnergyWire, Jan. 21).
Reporter Amanda Reilly contributed.

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EPA Approval Of EOR Monitoring Plan May Ease GHG Reporting Concerns

Jan 25, 2016 | InsideEPA

By Bridget DiCosmo

EPA's approval of a greenhouse gas (GHG) monitoring, reporting and verification (MRV) plan for an enhanced oil recovery (EOR) project that aims to also conduct carbon capture and sequestration (CCS) could ease concerns about how the agency intends to apply its GHG reporting mandates to joint EOR-CCS operations, industry sources say.
Observers say there has long been uncertainty about what kind of compliance the agency would require for such operations, and whether they would have to strictly adhere to certain requirements in the GHG reporting rules or if alternative plans could qualify for compliance. But there are lingering questions about how to craft a GHG monitoring plan for EOR, whether one could be approved fairly easily, and how long EPA approval might take.
Occidental Permian Limited, which operates the joint CCS and EOR "Denver" unit in the Permian Basin in southwestern Yoakum and northwestern Gaines counties in West Texas, submitted an MRV plan to the agency outlining how it plans to conducting monitoring for the project from 2016 through 2016. The primary purpose of the project is for conducting EOR, but during the 10-year time frame the project will have a "subsidiary purpose" of also conducting CCS at the site.
EPA approved the MRV plan on Dec. 22, in a decision letter that acknowledges it is in compliance with its GHG reporting rule subpart RR rules requiring GHG reporting from facilities that inject carbon dioxide (CO2) underground for geologic sequestration. That decision could offer long-sought clarity on the steps that EOR facilities that also conduct CCS must meet in lieu of strictly adhering to the subpart RR rules, sources say.
In contrast to the subpart RR's requirements for CO2 injection facilities, the GHG reporting subpart UU rules require GHG reporting from all other facilities that inject CO2 underground for any reason, including EOR.
EOR operators typically report their GHG emissions under the less-onerous subpart UU requirements, which do not include crafting an MRV plan that must be subject to EPA approval, oversight, potential future revisions. But there is major uncertainty about which GHG reporting requirements apply to joint EOR-CCS operations.
"In CCS land there has been a lot of speculation about what it would take to meet the reporting requirements under subpart RR," one industry source says, noting that EPA's approval Occidental plan seems to suggest it might not be necessarily more onerous to meet the subpart RR requirements than the subpart UU requirements because much of the modeling and data needed is already being gathered as part of the normal EOR operations.
A second industry source acknowledges that are doubts that the subpart RR requirements "just don't fit" with oil wells and EOR operations, and that it was unclear whether an MRV plan would suffice.
Reporting Requirements
EPA's approval of the Occidental plan might help address some of the concerns, as it finds the plan meets subpart RR requirements. "For example, in examining existing well bores as a potential leakage pathway, Oxy provides tabulations of active and inactive wells that are completed in or penetrate the Denver Unit; summarizes regulatory requirements for the wells, and describes operational practices for mitigating potential risks," the decision says.
Although the MRV plan took effect Dec. 27, the second industry source says there remain several questions about the feasibility of subpart RR requirements for EOR, including whether the agency's decision is indicative of how other applications will be managed and how much latitude there will be in other MRV plans to deviate from the measures EPA approved in the Occidental plan. "More importantly, other companies have concerns that even with EPA's approval of this plan, there are conflicts between State law and subpart RR," that source adds.
How to regulate the transition of EOR projects to CCS has been a major sticking point in discussions on how to expand use of of CCS to a more commercial scale, including in litigation over EPA's Resource Conservation & Recovery Act (RCRA) waiver for CCS and Safe Drinking Water Act (SDWA) permitting requirements.
In April 2015, EPA in response to industry concerns backed away from its plan to require existing EOR wells to transition from their current SDWA Class II permits or oil and gas activities to stricter Class VI permits for CCS, declaring in part that CO2 can be safely stored under Class II rules.
Oil and gas sector officials also also raised concerns about EPA's new source performance standards (NSPS) for cutting greenhouse gases from power plants, which included provisions that allow operators to meet the NSPS' requirements by sending captured CO2 to EOR wells, but only if the EOR project increases its Clean Air Act obligation by voluntarily agreeing to comply with subpart RR of the GHG reporting requirements.
EPA finalized the NSPS rules in 2015, but they have been subject to a number of legal challenges, in part because they essentially require partial CCS, which states and industry say is not commercially available.
In May 9, 2014 comments filed on the Jan. 8, 2014 proposed version of the power plant NSPS, the American Petroleum Institute (API) raises several concerns about the applicability of the MRV plan requirements, including that "There are no standards governing what may constitute an incomplete or otherwise unacceptable plan, nor any timeline for approval, creating a completely open-ended and undefined regulatory framework."
The comments also raised concerns that once approved, an MRV plan must be maintained under the rule for a duration determined by EPA rather than the operator and that subpart RR indicates that operational changes, such as the drilling of a new injection well, can re-start the MRV approval process, which could hinder the EOR operation because they typically involve drilling of multiple wells or reconfiguration of wells.
Moreover, the comments charged that adherence to the subpart RR requirements may be seen as an admission of intent to conduct CCS instead of continuing to conduct EOR activities.

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Outlook: “Snowzilla” Sidelines House, Delays Senate

Jan 25, 2016 | National Journal

By Jason Plautz and Ben Geman

The “Snowzilla” storm has wreaked havoc on the congressional schedule, as the House has scrapped its entire session for the week—essentially creating an unplanned recess—while the Senate has pushed its own plans back a day.
Instead of starting its work Tuesday, as originally scheduled, the Senate will vote Wednesday night on the nomination of John Michael Vazquez for a U.S. District Court judgeship. Then the Senate is set to dive back into the high-intensity energy debate with expected floor consideration of a bipartisan energy bill, covering issues such as energy efficiency, infrastructure modernization, and critical-minerals mining.
But it’s unclear whether cooperation on energy that marked the end of 2015, when Congress and the White House struck a deal on allowing crude-oil exports while extending green-electricity tax breaks, will carry over into the new year.
The bill arrives on the floor with support across party lines. Last year, it cleared the Energy and Natural Resources Committee on a bipartisan 18-4 vote, but the floor debate could get tricky (a similar House bill lost its Democratic cooperation on its path to passage). Majority Leader Mitch McConnell has promised an open amendment process, which means the bill could see debates over tough issues like climate change, fossil fuel development and the Obama administration’s decision to put the brakes on new coal leases on federal lands.
Already, GOP Sen. John Barrasso, a member of the Republican leadership team, has signaled that he wants a floor battle over President Obama’s coal-leasingmoratorium. And Heritage Action, a prominent conservative political group, came out swinging against the bill Friday. The group says provisions on energy-efficiency job training, electric vehicles, and other measures are inappropriate, taxpayer-backed intrusions into energy markets.
Republican Sen. Lisa Murkowski, the chairwoman of the Energy Committee, made the case for the bill when she gave the GOP’s weekly address released Saturday. She touted provisions to expedite liquefied-natural-gas exports, promote hydropower, overhaul the Energy Department’s controversial loan programs, and more.
“It will help America produce more energy. It will help Americans pay less for energy. And it will firmly establish America as a global energy superpower,” she said.
HEALTH
The Senate Judiciary Committee is scheduled to take a look Tuesday at Majority Whip John Cornyn’s mental health proposal—just one of several bills that have been introduced this congressional session. Reforming the mental-health system is a top issue this year, and the Senate Health, Education, Labor, and Pensions Committee held a hearing last week on the matter.
On Wednesday, the Senate Judiciary Committee will tackle another hot-button issue—heroin and prescription-drug abuse. It’s one that’s cropped up quite often on the campaign trail, as several candidates, such as Carly Fiorina and Jeb Bush, have talked openly and intimately about their children’s struggles with addiction.
WHITE HOUSE
Obama won’t stray far from the White House this week while Washington digs out from the weekend’s massive snowstorm. He’ll be indoors until Wednesday when he goes to a ceremony at the Israeli Embassy for a ceremony presenting the prestigious “Righteous Among the Nations” award. On Thursday, he is scheduled to go to Baltimore to address House Democrats at their annual Issues Conference

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Liquefied Natural Gas Policy Overdue for an Update

Jan 25, 2016 | The Hill - Contributors Blog

By Mark R. Maddox

Sen. Lisa Murkowski (R-Alaska), chairwoman of the Senate Energy and Natural Resources Committee, has included liquefied natural gas (LNG) export legislation in a broader energy package that the Senate is expected to consider shortly. This is welcome news. It is time to put the export of LNG, which is natural gas cooled to its liquid form and loaded onto tankers for regasification at its destination, on a similar regulatory footing as oil.
An energy package incorporating LNG export legislation modeled after the oil export bill and which includes provisions allowing for emergency suspensions, sanctions and exemptions for "trading with the enemy," and certainty for industry on permitting, would strengthen our environment, grow our economy and enhance our national security. It would also do the same across the globe.
But don't just take my word for it.
The U.S. Department of Energy recently released a report, "The Macroeconomic Impact of Increasing LNG Exports," that was conducted by Oxford Economics and Rice University. According to the report, "the overall macroeconomic impacts of LNG imports are marginally positive, a result that is robust to alternative assumptions for the U.S. natural gas market." It then projected additional growth of 0.3 to 0.7 to the national gross domestic project (GDP) under a high-export scenario.
This is good news, for sure. But even better is the information buried in the report that discusses the positive environmental impacts and national economic and security benefits that would occur under a high-export scenario. On these points, I would argue that the Department of Energy underestimates the value of robust LNG exports.
First, the authors calculate that under the various scenarios, on average, prices will rise by approximately 4.5 percent, or 25 cents, for natural gas in the United States and drop an average of 7.5 percent, or $1.30, for LNG in Asia. Since Europe is dependent on Russian gas, North Sea production and LNG imports, there is no predicted change in its prices. But these calculations do not factor in Asia's dependency on Russian gas and the potential disruption to gas supplies.
Further, the report, which was written before the U.N. climate meetings in Paris, presciently notes that a primary driver in support of U.S. LNG imports to Asia, in particular China, India and South Korea, is a forced shift from coal to natural gas or LNG to help the region achieve its climate goals. But the report does not calculate for the economic benefits of cushioning this transition.
Regarding global economic stability and security, the high-export scenario outlined in the report is most likely to occur if there is a major disruption in the gas supply to Asia; for example, if Russia does not follow through on its commitments to supply China, India and others through natural gas pipelines now in the planning stage or, even worse, if Russia decides to shut off supply in a geopolitical power play. As has been reinforced in recent days and to anyone with a 401(k) account, economic disruptions in China pose serious problems for the U.S. and the global economy. The alternative to economic turmoil and the key to moderating Sino-Russian tensions will be U.S. LNG.
Reflected in the report is concern that individual industries will be impacted. For the most part, the impacts are relatively small. However, it should be noted that industry also stands to benefit — most notably, the chemical industry, which suffered considerably in the early years of the century when the cost of natural gas doubled. In a footnote, the report states that not included in its modeling is the positive benefit of the coproduction natural gas liquids (NGL), a critical feedstock for the industry, and the potential for a cost savings even greater than the one that has occurred during the recent gas production surge.
Finally, it should be noted that any high-export LNG case will require extraordinary events and is not easily identified. To put this scenario in perspective, Qatar, the world's largest LNG exporter, only exports 4 bcf (billion cubic feet) per day and has a world market share of roughly 30 percent.
Still, even with a scenario that is seemingly unlikely to be reached, all indications from the Department of Energy's report support lawmakers' inclusion of the LNG streamlining provisions in the Senate energy bill, and an acknowledgment that as in the case of oil, the scarcities of the 1970s have been replaced by today's overabundance of natural gas.
Maddox has held several senior positions at the Department of Energy and is a consultant to the Livingston Group.

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Grid Upgrades Would Help Slash Emissions 78% in 15 years -- Study

Jan 25, 2016 | E&E - Greenwire

By Amanda Reilly

The U.S. power sector could cut its greenhouse gas emissions by more than three-quarters in the next 15 years compared with 1990 levels, according to new modeling by federal scientists.
The researchers found that power producers could achieve up to a 78 percent emission reduction while keeping up with increased electricity demand. But they said investment in transmission infrastructure would be key to keeping future electricity costs down.
The nation would need to move away from a power system that's divided into regions to a national "interstate for electrons," said Alexander MacDonald, one of the study's lead authors and former director of the National Oceanic and Atmospheric Administration's Earth System Research Laboratory.
"Our research shows a transition to a reliable, low-carbon, electrical generation and transmission system can be accomplished with commercially available technology and within 15 years," MacDonald said in a statement today.
Scientists from NOAA and the NOAA-affiliated Cooperative Institute for Research in Environmental Sciences at the University of Colorado, Boulder, designed the computer model. The results were published online today in the journal Nature Climate Change.
The model employs NOAA's meteorological data and takes into account demand for energy and the costs of supplying electricity through fossil fuels and renewable energy sources. The researchers looked at various price scenarios, including ones in which the price of renewable energy is higher than is currently predicted.
In what the researchers said was the expected future scenario -- one with lower renewable energy costs and higher natural gas costs -- the model predicted that the power sector could cut carbon dioxide emissions by 78 percent by 2030 compared with 1990 levels. Electricity would cost 10 cents per kilowatt-hour, up from its 2012 level of 9.4 cents.
Another scenario with higher renewable energy costs predicted that the system could achieve a 33 percent cut in greenhouse gas emissions and deliver electricity at 8.6 cents per kilowatt-hour. Including coal in the future energy mix meant lower costs -- 8.5 cents per kilowatt-hour -- but higher emissions.
Reducing the cost of using renewable energy would require upgrades in transmission infrastructure, the scientists said. Their model assumes the creation of a new high-voltage direct-current (HVDC) transmission grid, which lowers the chance of energy losses.
Such a grid would reduce the need for utilities to build up reserves of excess capacity through natural-gas-powered generators, according to the authors.
"With an 'interstate for electrons,' renewable energy could be delivered anywhere in the country while emissions plummet," MacDonald said. "An HVDC grid would create a national electricity market in which all types of generation, including low-carbon sources, compete on a cost basis. The surprise was how dominant wind and solar could be."
Stanford University environmental engineer Mark Jacobson, who was not affiliated with the study, said today in a statement that it "pushes the envelope" on greenhouse gas emissions and the power sector.
"The need for new energy storage is often seen as an obstacle to integrating renewable electricity into national power systems," he wrote in an editorial today in Nature Climate Change. "Modelling shows that existing technologies could provide significant emissions reductions in the US without the need for storage."

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Will Obama Issue Executive Action on Cap-and-Trade?

Jan 25, 2016 | Roll Call

By John T. Bennett

The Obama administration is refusing to make his final year in office as uneventful as Republicans would like. In fact, lawmakers expect executive action on everything from terrorist detention to campaign finance to environmental issues.
One possibility is an executive action setting up a carbon cap-and-trade system, says Senate Environment and Public Works Chairman James M. Inhofe, R-Okla. President Barack Obama “has legacy things and he doesn’t have as much time as he would like to have,” Inhofe said in an interview. “Cap-and-trade and closing Gitmo, those are the things he wants to do.”
“If it doesn’t work through regulation,” Inhofe said of Obama’s desired carbon-reduction effort, “executive action is all that’s left for him.”
Installing a system to cap carbon emissions and give companies incentives to emit below their allocated carbon limits has been a goal of Obama’s since before he took office. But it also has been a political dead end, with some moderate Democrats joining Republicans in 2010 to sink an Obama cap-and-trade proposal.
To GOP members such as Inhofe, such a system constitutes a national energy tax because, they argue, companies would pass the cost of required carbon permits onto customers.
But some sources expect Obama likely would not stop with cap-and-trade, and predict action on other environmental issues about which he feels strongly.
Then there is the expected two-step dance surrounding the president’s desire to close the terrorist detention facility at Guantánamo Bay.
First up will be a Pentagon-crafted closure plan, which could be submitted to Congress any day. After that, since the proposal will be dead on arrival due to staunch GOP opposition, the White House is expected to take some kind of action on its own toward drastically reducing the prison’s population or shutting it down without lawmakers’ blessing.
“This is a case where the law says what the president cannot do,” former Senate Majority Leader Trent Lott, R-Miss., said in a telephone interview, referring to years of congressional restrictions on closing the prison contained in defense policy bills that Obama has signed into law.
“If he uses an executive order, I think McCain and others will take him to court,” Lott said. “And I think he’ll lose.
Republican’s ire over Obama’s use of his executive powers appears tied less to the number of instances in which he has acted alone and more tied to the kind of politically charged issues that have been the subject of his actions.
So far, Obama has issued 228 such orders, according to the American Presidency Project at the University of California-Santa Barbara. That’s fewer than the 381 issued by GOP hero Ronald Reagan and the 291 used by George W. Bush, another GOP chief executive. Among recent Democratic presidents, both Bill Clinton (364 executive orders) and Jimmy Carter (320) turned to executive orders more often than Obama, according to the UCSB data.
Ever since Obama vowed recently to “leave it all on the field,” and his Chief of Staff Denis McDonough predicted a number of “audacious” moves in his final year in the White House, some Republican lawmakers have renewed their threats of immediate legal action.
A senior administration official said Obama has “laid out a number of issues he wants to work with Congress on.” That list includes some items that appear to need congressional authorization or lawmakers’ allocation of resources, including congressional approval of a sweeping trade pact with Asian countries, authorizing the fight against the Islamic State and funding Obama’s proposed “moonshot” to cure cancer.
Other initiatives the senior official mentioned — changing the criminal justice system and addressing heroin abuse and poverty — may not require congressional action.
“The president has also been clear that he’s not going to hesitate to act when Congress fails to do so,” the senior administration official said. “The president wants to make sure his administration is doing everything possible to advance the national security interests of the country and to support hardworking families across the country.”
But even the few Republicans who appear allied with him on certain issues continue threatening to sue over already issued and potential executive actions.
“All of us take an oath to uphold the Constitution of the United States,” said GOP Sen. John McCain of Arizona, who favors closing Guantánamo and supports campaign finance changes. (The New York Times reported recently that the White House is seriously considering an action on the latter.)
“What he does is he gives ammunition to the opponents, and then they have great difficulty when it comes time to sit down and work on things,” McCain said in a brief interview. “If he’s going to use an executive order [on campaign finance changes], it’s probably going to have to go right to the courts.”
When asked what’s different about the 44th president’s solo moves, McCain said previous Oval Office-dwellers’ actions were “not like this.” He said a big difference is Obama has “bragged about it.”
Speaker Paul D. Ryan, R-Wis., said, “The president’s executive overreach has undermined the Constitution and damaged the people’s trust.”
The U.S. Supreme Court says it will hear a challenge to Obama’s solo move on immigration, which is intended to protect about 5 million undocumented individuals from being deported. And Attorney General Loretta Lynch told a Senate panel that his moves to tighten gun-control laws are legal.
Obama’s Senate Democratic allies, such as Claire McCaskill of Missouri, note that the partisan bickering over executive actions is nothing new: “The party that’s not in the White House always hates it. It’s as predictable as the sun coming up.”

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Spending Cap-and-Trade Money on Non-GHG Efforts Worthwhile -- Analyst

Jan 25, 2016 | E&E - Climatewire

By Anne C. Mulkern

California's fiscal watchdog is urging more scrutiny into how California spends the several billion dollars generated each year by its cap-and-trade program for carbon pollution.
The money for two years has funded efforts that cut greenhouse gas pollution, an approach the state Legislature sanctioned. But there are drawbacks with that restriction, the nonpartisan Legislative Analyst's Office (LAO) said.
"Spending auction revenue on GHG reductions is likely not necessary to meet the state's GHG goals, and likely increases the overall costs of emission reduction activities," the LAO said. That's because there's some duplication between the cap's effect and the programs funded with auction revenues, the LAO said.
"Second, the requirement to spend on GHG reductions limits the Legislature's flexibility to use the revenue in ways that could achieve other goals," the LAO added.
Those other goals could include "offsetting higher costs for households and businesses associated with higher energy prices," "promoting other climate-related policy goals, such as climate adaptation activities," or "promoting other legislative priorities unrelated to climate policy."
Cap and trade is bringing in lots of money for the state. The report comes as Gov. Jerry Brown's (D) draft fiscal 2016-17 budget proposes spending $3.1 billion in cap-and-trade revenues. That total includes $700 million from last year that was not spent and $2.4 billion that's expected to be generated from auctions this coming fiscal year.
The LAO does not directly advocate spending the money in areas other than reducing greenhouse gases, but presents it as an alternative. Environmental group representatives pushed back against the idea.
"The great bulk of the climate revenues should continue to be spent on programs that reduce pollution and provide other important benefits," like helping disadvantaged communities, creating jobs and improving local air quality, said Bill Magavern, policy director at the Coalition for Clean Air. "Those are important goals that the Legislature has set."
Magavern said he liked the idea of giving more money back to consumers. He noted that some dollars already are returned through electric bills. There's a twice-yearly "climate credit" for ratepayers of the biggest utilities. But keeping the bulk of the money focused on greenhouse gas reductions is equitable, he said.
"It's important to remember that this is money that is raised on big carbon polluters, based on their emission of greenhouse gases," he added. "It's a good idea to have the spending of that revenue tied to the source of that money."
The Golden State wants to cut greenhouse gas emissions 40 percent by 2030 and 80 percent by 2050. Under its economywide trading system, it auctions pollution permits to businesses with the highest greenhouse gas emissions. Those allowances now run about $13 a carbon ton.
Under a deal struck with the Legislature, Brown through his budgets allocates 60 percent of the money to fixed categories, including development of a high-speed rail line; upgrades to intercity rail; and building low-income housing near subways, light rail and bus lines. The Legislature allocates the rest of the money. In total, about 45 percent goes to transportation-related efforts.Repassing climate law
The LAO notes that there would be challenges to spending cap-and-trade revenue in areas other than greenhouse gas reduction. There are lawsuits pending that question the state's authority to auction allowances. Until the courts resolve that issue, it probably is safest to put the dollars toward lowering carbon pollution, the report said.
The Legislature could opt to pass again the state's climate law, A.B. 32, with a two-thirds vote. State law requires a two-thirds vote for any new tax, and some of the legal challenges to cap and trade say that it's a tax and needed to be passed with that larger majority.
"Reauthorizing cap-and-trade with a two-thirds vote would provide greater flexibility to use the funds in a way that efficiently promote its highest priorities whether those are climate change related or not," the LAO said.
It also would remove debate about whether programs under A.B. 32 can be extended past 2020, the LAO said.
Alex Jackson,, an attorney at the Natural Resources Defense Council (NRDC), said that the green group "would welcome a bipartisan vote to reinforce California's climate policies and remove any uncertainty about their ability to continue beyond 2020." But, he said, "legally I don't think it's necessary."
The two-thirds vote is a very high bar to clear, Magavern said.
"Getting a two-thirds vote on anything in the Legislature is difficult, especially something as controversial as cap and trade," Magavern said. He added that "A.B. 32 passed in the Legislature with the vote of one Republican. ... I don't see a lot of signs that Republican legislators have grown more fond of A.B. 32 in the 10 years since then."
In addition, there are moderate Democrats who have pushed back against climate rules. S.B. 350, which increases to 50 percent the amount of electricity that must come from renewable sources by 2030, passed last year only after language was removed that sought to cut petroleum consumption in half by that year.Spending outside the 'cap'
The Legislature might want to look more closely at how the cap-and-trade money is spent within the category of reducing greenhouse gases.
The LAO said there are issues with spending the money in areas that already are under the program's "cap." That cap forces companies to lower their emissions. So using auction revenues for programs in those areas limits how much the auction proceeds power additional cuts in greenhouse gas pollution, the LAO said.
For example, distributors of motor fuels are under the cap and must submit allowances for greenhouse gas emissions tied to in-state gasoline and diesel sales. Meanwhile, the state -- using auction revenues -- funds incentives to buy electric cars, said Jackson with NRDC. When people buy EVs, that lowers demand for gasoline. If less gasoline is sold because of EVs, those distributors need to buy fewer allowances. So greenhouse gases aren't cut in two places.
The LAO said the Legislature should look at spending the money in areas outside the cap, like agriculture, landfill methane emissions and emissions from refrigerants.
Jackson and Magavern disagreed with that premise. The state has spent money on waste diversion, wetlands restoration, sustainable forests, and energy and water efficiency in agriculture, Jackson said. Those are all outside the cap.
But also, he said, the state needs to spend auction revenue on transportation and programs under the cap because the emissions reductions will not happen quickly enough otherwise.
The high-speed rail line to connect Los Angeles and San Francisco, he said, "relying on private, capped entities to be making investments like that is never going to happen."
Spending on revenues on programs like transportation accelerates the move to non-fossil fuels, Jackson said.
"Yes, in theory, from an economics perspective, if you just lower the cap, over time we're going to get to our goal one way or another," Jackson said. But in the meantime, "that's going to involve very high prices for fossil energy that may not be viable."
Just relying on the cap to create emissions reductions also means the money won't be directed toward disadvantaged communities most affected by carbon pollution. State law requires right now that 25 percent of program proceeds go toward efforts that help that group.
Without the state ordering it, "benefits are less likely to accrue to those most in need," Jackson said.

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