Preview Newsletter
PM ACC 1/26/2016
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(ACC Mentioned) Chemical Activity Barometer Inches Upward
Jan 26, 2016 | Powder Bulk Solids
The Chemical Activity Barometer (CAB), a leading economic indicator created by the American Chemistry Council (ACC), ticked up slightly in January, rising 0.1 percent following a downward adjustment of 0.1 percent in December. -
(ACC Mentioned) Morning Digest: Democrats beware: The Top-Two Primary May be Coming to Arizona
Jan 26, 2016 | Daily Kos
By Daily Kos Elections
Ugh. Terry Goddard ought to know better. Goddard, a Democrat and former state attorney general, is teaming up with Chuck Coughlin... -
(ACC Mentioned) 5 Things You Should Know About DuPont Chemical Company
Jan 26, 2016 | U.S. PIRG
By Anna Low-Beer
The New York Times Magazine recently published an in-depth story titled "The Lawyer Who Became DuPont's Worst Nightmare." -
(ACC Mentioned) California Approves Prop 65 Website over Industry Objections
Jan 26, 2016 | Chemical Watch
By Kelly Franklin
California's Office of Environmental Health Hazard Assessment (Oehha) has adopted a regulation that will create a “Lead Agency website”, intended to provide information to the public on exposure to chemicals... -
(ACC Mentioned) Industry Targets Recycling for Marine Debris
Jan 26, 2016 | Plastics News
By Gayle S. Putrich
A new report claims that by the middle of this century there will more plastic than fish, by weight, in the world’s oceans. -
TSCA Principles to Limit State Preemption Set Out
Jan 26, 2016 | Chemical Watch
Twelve attorneys general have set out “core principles” to limit state preemption that they say Senate and House negotiators should adhere to as they work to reconcile competing measures... -
U.S. Grid Rule Falls Short in Wake of Ukraine Hack -- Report
Jan 26, 2016 | E&E - Energywire
By Blake Sobczak
New cybersecurity regulations for the U.S. power grid fail to guard against the type of cyberattack that likely knocked out electricity to parts of Ukraine recently, according to a New Hampshire-based group. -
California Gas Leak Spotlights Shoddy Regulation of Aging Storage Wells
Jan 26, 2016 | Reuters (In The New York Times)
By Nichola Groom
Long before a natural gas storage well sprung a disastrous leak near Los Angeles, California, utilities and national industry groups were raising alarms about the danger of aging underground storage infrastructure. -
Regulatory Gaps Persist After Deadly Texas Blast, Board Finds
Jan 26, 2016 | E&E - Greenwire
By Sam Pearson
Dangerous regulatory gaps in chemical safety remain nearly three years after a massive explosion at a fertilizer storage facility in West, Texas, killed 15 people and injured 260 others, the U.S. Chemical Safety Board said today. -
Time for FERC to Pipe Down
Jan 26, 2016 | The Hill - Congress Blog
By Maya K. van Rossum
This month, more than 165 organizations and 2000 concerned people from across America sent a letter to Sens. Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.) asking for justice. -
High Court Hands FERC Major Victory in Demand-Response Case
Jan 26, 2016 | E&E - Energywire
By Rod Kuckro and Ellen M. Gilmer
Federal electricity regulators scored a huge win yesterday when the Supreme Court upheld a controversial rule aimed at encouraging energy conservation in wholesale power markets through a practice known as demand response. -
Supreme Court Rules In Favor Of Demand Response: A Boon To Smart Grid
Jan 26, 2016 | Forbes
By Peter Kelly-Detwiler
This morning, the U.S. Supreme Court overturned a decision of the D.C. Circuit Court of Appeals that had vacated FERC Order 745. -
Industry, Enviros Spar over Carbon Trading Methods
Jan 26, 2016 | E&E - Climatewire
By Emily Holden and Elizabeth Harball
The nation's power companies are advocating for a large and flexible carbon trading system under a federal plan to cut greenhouse gas emissions, but environmental advocates say certain restrictions are needed... -
BLM's Proposed Rule Opens New Battle Over Efforts To Address Methane
Jan 26, 2016 | InsideEPA
The Interior Department's (DOI) just-issued proposed rule regulating venting, flaring and leaks at oil and gas operations on federal lands opens a new battle over the Obama administration's efforts to limit emissions of methane... -
Greens Press for Tougher Action on Methane
Jan 26, 2016 | E&E - Greenwire
By Amanda Reilly
Environmentalists are warning the Obama administration about a gap between its goals to reduce methane emissions from the oil and gas sector and potential reductions that proposed regulations will actually achieve. -
EPA's Treatment Of Biomass In ESPS FIP Faces Threats Of Dueling Lawsuits
Jan 26, 2016 | InsideEPA
By Dawn Reeves
EPA is facing threats of dueling lawsuits from supporters and opponents of biomass energy over whether the power source should qualify as renewable energy under the federal implementation plan (FIP)... -
Mary Fallin: A Conservative Trailblazer Takes on Obama, EPA
Jan 26, 2016 | Roll Call
By Ed Felker
Oklahoma Gov. Mary Fallin is no stranger to Washington insiders. She’s a conservative who rose through the state’s Republican ranks to win two terms in the House, before being elected the state’s first... -
Going Geen Can Add Value to Your Home
Jan 26, 2016 | Washington Post
By Kenneth R. Harney
What is going “green” worth in Washington home real estate? If you rehab a house to exacting energy and environmental standards, or install a solar-panel array on your roof, does your house command more when you sell?
Industry and Association News
Chemical Management News
Chemical Security News
Transportation News
Energy and Environment News
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(ACC Mentioned) Chemical Activity Barometer Inches Upward
Jan 26, 2016 | Powder Bulk Solids
The Chemical Activity Barometer (CAB), a leading economic indicator created by the American Chemistry Council (ACC), ticked up slightly in January, rising 0.1 percent following a downward adjustment of 0.1 percent in December.
All data is measured on a three-month moving average (3MMA). Accounting for adjustments, the CAB remains up 1.6 percent over this time last year, a marked deceleration of activity from one year ago when the barometer logged a 3.2 percent year-over-year gain from 2014. On an unadjusted basis the CAB fell 0.1 percent and 0.2 percent in December and January, respectively, raising concerns about the pace of future business activity through the second quarter of 2016.
The CAB has four primary components, each consisting of a variety of indicators: 1) production; 2) equity prices; 3) product prices; and 4) inventories and other indicators.
In January, as reflected by markets around the world, equity prices were hard hit. Flat inventories and production also added drag to the barometer.
The CAB is a leading economic indicator derived from a composite index of chemical industry activity. The chemical industry has been found to consistently lead the U.S. economy's business cycle given its early position in the supply chain, and this barometer can be used to determine turning points and likely trends in the wider economy. Month-to-month movements can be volatile so a three-month moving average of the barometer is provided. This provides a more consistent and illustrative picture of national economic trends.
Applying the CAB back to 1919, it has been shown to provide a lead of two to 14 months, with an average lead of eight months at cycle peaks as determined by the National Bureau of Economic Research. The median lead was also eight months. At business cycle troughs, the CAB leads by one to seven months, with an average lead of four months. The median lead was three months. The CAB is rebased to the average lead (in months) of an average 100 in the base year (the year 2012 was used) of a reference time series. The latter is the Federal Reserve's Industrial Production Index.
The CAB comprises indicators relating to the production of chlorine and other alkalies, pigments, plastic resins, and other selected basic industrial chemicals; chemical company stock data; hours worked in chemicals; publicly sourced, chemical price information; end-use (or customer) industry sales-to-inventories; and several broader leading economic measures (building permits and new orders). Each month, ACC provides a barometer number, which reflects activity data for the current month, as well as a three-month moving average. The CAB was developed by the economics department at the American Chemistry Council.
The next CAB is currently planned for February 23, 2016. -
(ACC Mentioned) Morning Digest: Democrats beware: The Top-Two Primary May be Coming to Arizona
Jan 26, 2016 | Daily Kos
By Daily Kos Elections
Leading Off:
● AZ Ballot: Ugh. Terry Goddard ought to know better. Goddard, a Democrat and former state attorney general, is teaming up with Chuck Coughlin, who was once a top advisor to former GOP Gov. Jan Brewer, to promote a ballot measure that would require Arizona to use a California-style "top-two" primary. In a top-two system, all candidates from all parties run together on a single ballot; the top two vote-getters, regardless of party, then advance to the general election.
But while goo-goo types try to claim (without much evidence) that such an approach yields more moderate candidates—as if that's an unalloyed good—California's experience shows that it mostly just means that Democratic voters get disenfranchised. That's because lower Democratic turnout in primaries means there's a greater chance that two Republican candidates can secure general election spots, even in blue districts. In fact, this is exactly what happened in California's 31st Congressional District in 2012 and then again in the 25th in 2014.
Fortunately, Arizona voters resoundingly rejected a similar measure by a two-to-one margin in 2012, and the state Republican Party has already expressed its sharp opposition to this effort. Conservatives, it turns out, aren't very interested in helping more moderate candidates carry the GOP banner. The big difference this time, though, is that this campaign's been bankrolled with $1 million from retired hedge fund manager John Arnold, a Texas billionaire (and former Enron executive) who has previously funded efforts to roll back public employee pensions. Hopefully, though, Arnold's money won't change Arizonans' opinions on top-two.
4Q Fundraising:
● AZ-Sen: Ann Kirkpatrick (D): $850,000 cash-on-hand
● DE-Gov: John Carney (D): $504,000 raised (July 8 to Dec. 31); Colin Bonini (R): $38,000 raised, $25,000 loaned (July 8 to Dec. 31)
● DE-AL: Sean Barney (D): $81,000 raised (in one month)
● FL-13: Charlie Crist (D): $500,000 raised
● IA-01: Monica Vernon (D): $200,000 raised, $608,000 on hand
● ME-02: Bruce Poliquin (R-inc): $330,000 raised, $1.55 million cash-on-hand
● MN-08: Stewart Mills (R): $258,000 raised
Senate:
● AL-Sen: Marine veteran Jonathan McConnell has a very tough task ahead of him if he's going to deny longtime Sen. Richard Shelby the GOP nod, and so far, he's not getting any significant outside support. While the Senate Conservatives Fund spent big last cycle to try and unseat Sens. Thad Cochran and Mitch McConnell, SCF Grand Poobah Ken Cuccinelli doesn't sound interested in aiding McConnell.
While Cuccinelli didn't rule out getting involved, he did note that "we only get in a small number of races every year," and he even praised Shelby for opposing the Obama administration on guns. If anyone's going to come to McConnell's aid in the March 1 primary, they'll need to do it very soon. Unfortunately for McConnell, other big anti-establishment groups like the Club For Growth haven't given any hint that they'll play here.
McConnell raised $750,000 over the past few months and loaned himself $250,000. That's not nothing, but it's a drop in the bucket compared to what Shelby can deploy. Indeed, Shelby has already spent millions on positive ads (though Shelby's opening spot had one hilarious continuity glitch), and he's out with another one. The commercial stars a small business owner who praises Shelby for being "a lead Republican voice" against bank bailouts, which is certainly a good way for the Senate Banking Committee chair to find common ground with tea partiers.
Shelby is also getting some air support from Citizens Super PAC. The group spent $260,000 promoting Shelby as someone who fights Obama's agenda. (Hat-tip Greg Giroux)
● IL-Sen: Does Jesse Jackson, Sr. still have much pull in Democratic politics? I suppose we'll soon find out. Jackson, who twice ran for president in the 1980s, just gave his endorsement to former Chicago Urban League president Andrea Zopp, who faces an uphill battle in Illinois' Democratic primary for Senate. Limited polling has shown Zopp trailing Rep. Tammy Duckworth by large margins, and she's far behind in fundraising, too. In addition, state Sen. Napoleon Harris is also running, and he could split the black vote with Zopp.
House:
● AZ-02: A new PPP poll for former state Rep. Victoria Steele finds her trailing freshman GOP Rep. Martha McSally 48-39, while Steele's Democratic primary opponent, ex-state Rep. Matt Heinz, faces a wider 48-35 deficit. In its polling memo, Steele's campaign makes it clear that it's releasing this survey to highlight that gap between Steele and Heinz, but a 4-point gap is pretty meaningless this early on. (Arizona's primary isn't until Aug. 30.) What's more, in the primary, both candidates are tied at 29 apiece, so no one has any real advantage.
McSally's numbers are concerning, though. Forty-eight percent is awful close to 50, so if these numbers are accurate, Steele would need to win more than 80 percent of undecided voters to prevail. And, of course, this is also an internal campaign poll. That's not to impugn PPP's accuracy, but as all political observers know, candidates seldom release polls when the results aren't favorable. So if this is the best that Steele is seeing, then McSally, who won the closest House race in the nation in 2014, is in pretty decent shape.
● GA-03: Two more Republicans who had expressed interest in this safely red seat have decided not to go for it. Ex-state Rep. Jeff Brown formed an exploratory committee a little while ago, but says the race would have been too expensive. Matt Brass, the chief of staff to retiring Rep. Lynn Westmoreland, didn't rule out a bid a few weeks ago, but he will run for the state Senate instead.
Right now, state Sen. Mike Crane has the primary to himself, and no other notable Republicans have publicly expressed interest yet. But the Atlanta Journal-Constitutionrecently reported that Mac Collins, who represented a previous version of this seat until he ran for the Senate in 2004, is considering. The Journal-Constitution also says that two more names have been "floated": state Labor Commissioner Mark Butler and ex-Rep. Paul Broun.
Broun held a neighboring seat until he ran for the Senate last cycle, and he certainly made an impression. Among many other things, he called evolution and the Big Bang Theory (the scientific idea, not the show) "lies straight from the Pit of Hell." Broun's 2014 Senate campaign utterly bombed, but Broun seems like exactly the type of guy who would try to resurrect his career in a different seat.
● IL-15: Yeah Mr. Shimkus! Yeah science! The American Chemistry Council loves to spend big to help establishment Republicans, and they're coming to Rep. John Shimkus' aid. The group is spending about $290,000 on a spot praising Shimkus as someone who fights for jobs and against regulations. (Fun fact: The ACC is headed byCal Dooley, a former California Democratic congressman.) Shimkus faces a primary with state Sen. Kyle McCarter in this safely red seat.
● IN-09: Businessman Trey Hollingsworth has been running for the GOP nod for months with little fanfare, but a new group called Indiana Jobs Now has started airing TV spots for him. Politico says the total buy is $36,000, which isn't very much, but it's a bit more than you'd expect for someone who appeared to be little more than a Some Dude. Hollingsworth faces Attorney General Greg Zoeller and state Sens. Erin Houchin and Brent Waltz in the May 3 primary for this 57-41 Romney seat.
● NC-09: Former CIA agent George Rouco is challenging Rep. Robert Pittenger in the GOP primary, and he recently picked up an endorsement from ex-Rep. Sue Myrick. Pittenger's family's real estate company is being investigated by the FBI, and Rouco is hoping that questions about the congressman's ethics will propel him to victory in the March 15 race. But last week, Pittenger's camp released a Public Opinion Strategies poll showing him in a dominant position in the GOP primary.
The poll was conducted Nov. 30 to Dec. 2, before the Myrick endorsement but after the FBI investigation became public knowledge. The survey has Pittenger beating Rouco 68-12, and gives the congressman a 61-20 favorable rating with GOP voters. There's no indication that Rouco has the money to hit Pittenger, and no major outside groups have come to his aid.
Pittenger is also airing a new TV ad touting his efforts to help fight terrorism. It also features a clip that we're likely to see often this cycle: President Obama telling George Stephanopoulos that "we have contained" ISIS. One thing to keep an eye on, though, is whether this line gets resurrected in ads targeted at a general election audience, or if it remains confined to GOP primaries.
● NY-03: On Sunday, former North Hempstead Supervisor Jon Kaiman announced that he would seek the Democratic nod for this open swing seat. About one-third of the district lives in North Hempstead, which Kaiman ran until he retired in 2013 (supervisor is the equivalent of mayor), so he'll likely start with some good name recognition. Kaiman is leaving his posts as Nassau Interim Finance Authority chair and as an advisor to Gov. Andrew Cuomo on Hurricane Sandy relief.
North Hempstead Town Councilwoman Anna Kaplan and Suffolk County Legislator Steve Stern are also running in the primary, while lobbyist Brad Gerstman and ex-Nassau County Executive Tom Suozzi have formed exploratory committees. A number of other Democrats have also expressed interest in running to succeed retiring Rep. Steve Israel, but DNC member Robert Zimmerman took his name out of contention on Sunday.
However, local Democratic leaders have another name in mind for this Obama 51-48 seat: North Hempstead Town Supervisor Judi Bosworth. Nassau County Democratic chair Jay Jacobs told Newsday that "[i]t would be foolish to think anyone could beat her in a primary," and predicted she would clear the field if she got in. Even prospective foe Suozzi called her a tough candidate, and declined to say if he'd stay out if she ran, though few Democrats think he'd defer for her. (This is the guy who insisted on running against Eliot Spitzer in the 2006 gubernatorial primary and got destroyed 82-18.)
However, Newsday says that Bosworth hasn't given any indication that she wants to run for Congress. Bosworth is also 68, which is a bit old to begin a House career in a swing seat. Bosworth hasn't said no to a bid and the filing deadline isn't until April, but it doesn't appear that she's chomping at the bit to campaign here.
● NY-19: Law professor Zephyr Teachout, who was recently endorsed by the chairs of the 11 Democratic county parties than make up the 19th District, announced on Monday that she would indeed run for this open seat in the Hudson Valley. That immediately followed a declaration from another Democrat over the weekend, Ulster County Comptroller Elliott Auerbach, that he would sit the race out. But Teachout, as we've noted, doesn't have much of a connection to the district: Originally from Vermont, she's only rented a home in Dutchess County for less than a year, and she was also renting an apartment in Brooklyn as recently as last month, according to Politico New York.
And while she performed well here when she challenged Gov. Andrew Cuomo in 2014, that was in a Democratic primary, where she ran explicitly to Cuomo's left. In a general election, that sort of record will play differently, especially in a swingy seat such as this one. By way of illustration, the Democrats who represented this area before retiring GOP Rep. Chris Gibson won the old 20th District in 2010, Kirsten Gillibrand and Scott Murphy, both had much more moderate profiles at the time. (Only once she became senator did Gillibrand move to the left.)
Perhaps for these reasons, Livingston Town Councilman Will Yandik, who says he's been in touch with the DCCC, responded to Teachout's entry by saying that he's still considering a bid. However, Yandik didn't offer a timetable for his decision, and seeing as Teachout has the support of the local establishment, he'll need to move quickly if he wants to put up a serious fight.
● PA-07: National Democrats sound excited about pastor Bill Golderer's campaign against Rep. Pat Meehan, and they'd be even more excited if Meehan had to waste some money in the GOP primary. Meehan does face an intra-party challenge from real estate developer Stan Casacio, but we'll need to see if Casacio is actually capable of causing the incumbent any grief.
Casacio led the GOP in the small township of Whitemarsh, so he may have some useful political connections. It's also possible that his real estate company has given him the ability to self-fund, or access to influential donors. Of course, he could just turn out to be a Some Dude who gets crushed and goes unmentioned in even the nerdiest of political trivia games. In any case, it's going to be very hard for Casacio to unseat a tough candidate like Meehan. Romney carried this district 50-49.
● PA-08: Last week, former FBI agent Brian Fitzpatrick announced he'd seek the Republican nomination for the seat his older brother, GOP Rep. Mike Fitzpatrick, is vacating at the end of this term. Should the younger Fitzpatrick prove successful, it naturally got us to wondering: Have any brothers ever directly succeeded one another in the House? The source to turn to for such information is always the University of Minnesota's Smart Politics site, which says this phenomenon has happened on a number of occasions—16, in fact.
Most cases of fraternal succession took place long ago, with just a handful since World War II. The most recent instance took place in 2010, when Mario Diaz-Balart succeeded his brother Lincoln in what was then Florida's 21st Congressional District, but Mario was already a member of Congress: He simply slid over from the 25th District to his brother's seat after Lincoln announced his retirement. Prior to that, Arkansas' Asa Hutchinson (now the state's governor) won the seat his brother Tim left open to run for Senate in 1996.
The other two post-war cases happen to involve some well-known figures: Arizona's Mo Udall, who followed his brother Stewart in 1961, and North Carolina's Sam Ervin, who won a special election in 1946 after his brother Joseph died. Sam didn't seek re-election to the House but later was appointed to the Senate, where he became famous for leading the committee that investigated Watergate. For the full run-down on all of the brother-to-brother handoffs throughout U.S. history, click through for UMN's complete roundup.
And if you were wondering, no brother-sister or sister-sister pairs have ever been involved in any sibling successions. While many voters profess to dislike congressional legacies, it'll actually be a sign of a certain type of progress when we see women succeeding their sisters in office.
● VA-05: On Monday, former congressional aide Ericke Cage dropped his bid for the Democratic nomination for this 53-46 Romney seat. Albemarle County Supervisors Chair Jane Dittmar has the Democratic side to herself, but she'll need a whole lot to go right if she wants to have a shot here.
● VA-10: Real estate developer LuAnn Bennett kicked off her bid against freshman GOP Rep. Barbara Comstock a month ago, and it sounds like she won't face any credible opposition for the Democratic nod. While State Sen. Jennifer Wexton didn't rule out a bid back in April, she recently endorsed Bennett. Loudon County Board of Supervisors Chair Phyllis Randall and EMILY's List are also in Bennett's corner. Romney narrowly carried this Northern Virginia seat, though Comstock is a very tough candidate.
Legislative:
● WA State House: Democrat Darcy Burner emerged as a netroots hero when she challenged (and nearly beat) GOP Rep. Dave Reichert in 2006. However, she then went on to lose two more races for Congress, including a rematch with Reichert in 2008 and an open-seat bid in 2012. Now, says PubliCola, she's preparing to return, with her sights set on a more realistic target: an open state House seat. The district she's reportedly interested in is being vacated by GOP state Rep. Chad Magendanz, who is running for state Senate. Barack Obama carried it by a 53-44 margin, so it should be winnable for a Democrat in a presidential year.
The Daily Kos Elections Morning Digest is compiled by David Nir and Jeff Singer, with additional contributions from David Jarman, Steve Singiser, Daniel Donner, and Stephen Wolf.
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(ACC Mentioned) 5 Things You Should Know About DuPont Chemical Company
Jan 26, 2016 | U.S. PIRG
By Anna Low-Beer
The New York Times Magazine recently published an in-depth story titled "The Lawyer Who Became DuPont's Worst Nightmare." The story follows Rob Bilott, a lawyer who took on an environmental suit that would completely alter his career and expose a decades-long cover up of toxic pollution. DuPont is one of the largest chemical companies in the world, holding tremendous power despite its numerous wrongdoings.1
Here are five things you should know about the industry giant:
1. DUPONT KNEW IT WAS POLLUTING COMMUNITIES WITH A TOXIC CHEMICAL, BUT KEPT IT QUIET FOR DECADES.
In 1951, DuPont began purchasing a chemical called perfluorooctanoic acid (PFOA) for use in manufacturing Teflon. DuPont was given specific instructions on how to dispose of this chemical — it was to be incinerated or sent to chemical-waste facilities.2 But in the following decades, DuPont pumped hundreds of thousands of pounds of the chemical from its Parkersburg, West Virginia plant into the Ohio River. DuPont also dumped thousands of tons of PFOA sludge into pits, where it seeped straight into the ground and contaminated the drinking water of nearby communities.2
As they continued to pollute, DuPont was conducting research on PFOA, and as early as the 1960s knew that it could cause organ damage in animals.2 In the 1970s, DuPont found that there were high concentrations of the toxic chemical in the blood of their workers employed at Washington Works, a waste landfill where they disposed of PFOA. They failed to tell their workers about this discovery.2
In the 1980s, after learning that PFOA causes birth defects in rats, DuPont confirmed that the chemical was affecting their workers' health. They tested the children of pregnant employees in their Teflon division, and found that of seven births, two had eye defects.2 Even then, DuPont did not make the information public.
By the 1990s, DuPont understood that PFOA caused cancerous testicular, pancreatic and liver tumors in lab animals. And in 1993, they created a slightly safer alternative to PFOA, but decided not to switch to the new compound because they worried it would jeopardize their profit.2
In 2006, after years of legal battles, DuPont reached a $16.5 million settlement with the Environmental Protection Agency (EPA) for concealing its knowledge of PFOA's toxicity and presence in the environment. This fine, while a huge civil penalty (the largest the EPA has obtained in its history at that point), was a drop in the bucket for DuPont, representing less than two percent of the company's profits earned by PFOA that year.2
2. AS OF OCTOBER 2015, 3,535 PLAINTIFFS HAVE FILED PERSONAL-INJURY LAWSUITS AGAINST DUPONT FOR HARM FROM PFOA.
The first of 3,535 plaintiffs went to court last fall, arguing that DuPont had leaked PFOA into drinking water in Ohio and West Virginia, causing her kidney cancer. DuPont was found liable for Carla Bartlett's cancer, and Bartlett was awarded $1.6 million in damages.
"This is not a run-of-the-mill case. This was allegedly a systematic behavior. It doesn't sound like an accident. It sounds worse than an accident," said Carl Tobias, a professor of law at the University of Richmond in Virginia about the personal-injury lawsuit.3
DuPont's lawyer, Damond Mace, denied the causal link between PFOA and cancer, saying it is not harmful or regulated by the EPA's National Primary Drinking Water Regulations list of contaminants. "There were no laws restricting the use of it," said Mace.3 This point speaks to how weak our federal regulation of toxic chemicals is; sadly, it's no surprise that PFOA is not restricted. There is so little regulatory oversight of these chemical companies that toxic chemicals can easily slip through the cracks. "We see a situation that has gone from Washington Works, to statewide, to the United States, and now it's everywhere, it's global. We've taken the cap off something here. But it's not just DuPont. Good God. There are over 60,000 unregulated chemicals out there right now. We have no idea what we're talking," said Joe Kiger, a resident of Parkersburg, West Virginia, whose drinking water was contaminated with PFOA.2
Rob Bilott, the lawyer who uncovered DuPont's decades-long cover up and fought for appropriate repercussions, is currently litigating Wolf v. DuPont, the second of the personal-injury cases against DuPont. The plaintiff, John Wolf of Parkersburg, West Virginia, argues that PFOA in his drinking water caused him to develop ulcerative colitis, and his trial begins in March.2
3. DUPONT NEVER ADMITTED LIABILITY
When DuPont reached a settlement with the EPA in 2006 after being accused of concealing its knowledge of PFOA's toxicity and presence in the environment, it had to pay up millions, but never had to admit liability. Throughout the decades, DuPont has continued to deny, deny, deny. They've denied the toxicity of PFOA, they've denied their knowledge of the subject, and they've denied wrongdoing in case after case after case.4
In fact, in July of 2015, DuPont created the Chemours Company, a spinoff from DuPont's Teflon unit. Residents of Ohio and West Virginia view this spinoff as an attempt to separate DuPont from Teflon-related legal troubles. In 2004, DuPont agreed to pay $235 million to monitor the health of residents around Parkersburg, Virginia. Now, with Chemours in debt and assuming DuPont's PFOA liabilities, there is concern that DuPont is evading its responsibilities.5
4. SAFETY RECORDS AT DUPONT PLANTS ARE INEXCUSABLE
On November 15th, 2014, four employees were killed in an incident at a DuPont plant in La Porte, Texas. The U.S. Chemical Safety Board's investigation found lapses and failures in DuPont's safety planning and procedures that regularly put workers and the surrounding community at risk, and concluded that with appropriate safety procedures, the fatal toxic leak could have been prevented.6
DuPont is not alone — many of the largest chemical companies in the country have had similar safety problems — but the company is a crucial illustration of the larger problem. Powerful chemical companies fail to implement adequate safety regulations, they are investigated and eventually fined, and nothing changes. Fines aren't changing safety behavior because even the largest ones mean nothing to these companies. In their 2015 report "Blowing Smoke," the Center for Effective Government (CEG) explains the ineffectiveness of fines: "DuPont reported $3.6 billion in profits in 2014, or around $6,849 per minute. At that rate, the company would have been able to pay off the two OSHA penalties with just under an hour's worth of profits."7 Fine after fine may come, but the pattern remains the same. CEG's report found that DuPont has had 125 serious safety violations, resulting in more than $3 million in penalties.7
In the face of all its problems, DuPont remains a big player, serving on the board of the American Chemistry Council. The company spent more than $24 million between 2012 and 2014 lobbying Congress and federal agencies, so it's no surprise that no serious attempt to improve safety regulations for DuPont or any chemical manufacturer have been made.75. DUPONT RECENTLY MERGED WITH DOW TO BECOME A $130 BILLION CHEMICAL GIANT
DuPont and Dow Chemical Co. announced a mega-merger in December of last year that will create chemical giant DowDuPont.8 DowDuPont will break into three separate companies in the next two years, each one specializing in one area: agriculture, material science, and specialty products.9 As a result of the merger, DuPont announced it expects $650 million of "employee separation costs," meaning thousands of employees will be laid off.9 The merger will cut $3 billion in annual costs — good news for the company, but bad news for employees in some areas like Delaware, where job losses will be huge.10
Ron Ozer, an engineer for DuPont in Delaware, lost his job this month after 25 years with the company, and said the atmosphere among DuPont workers has been "depressing" since the announcement.11 DuPont is expected to lay off around 10 percent of its global workforce — close to 5,000 people.
1New York Times, "Despite Clear Dangers, DuPont Kept Using a Toxic Chemical," 1/12/2016.
2New York Times Magazine, "The Lawyer Who Became DuPont's Worst Nightmare," 1/6/2016.
3Bloomberg, "DuPont Found Liable in First of 3,500 Toxic Water Lawsuits," 10/7/2015.
4Center for Effective Government, "Ten Years After Toxic Chemical Settlement, DuPont Failing to Keep Its Promises," 5/7/2015.
5Bloomberg, "DuPont's Teflon Neighbors Worry Chemours Won't Pay Bills," 5/7/2015.
6KPRC Houston, "Report finds series of errors caused deadly DuPont plant accident in La Porte," 9/30//2015.
7Center for Effective Government, "Blowing Smoke: Chemical Companies Say 'Trust Us,' But Environmental and Workplace Safety Violations Belie Their Rhetoric," 10/22/2015.
8CNN Money, "Meet DowDuPont: The new $130 billion chemical mega-company," 12/11/2015.
9Fortune, "Dow Chemical and DuPont Announce Mega-Merger," 12/11/2015.
10The Motley Fool, "The DuPont-Dow Chemical Merger: A Lot of Hype or a Long-Term Opportunity," 1/4/2016.
11Delaware Online, "'Depressing' atmosphere envelops DuPont as layoffs begin," 1/4/2016. -
(ACC Mentioned) California Approves Prop 65 Website over Industry Objections
Jan 26, 2016 | Chemical Watch
By Kelly Franklin
California's Office of Environmental Health Hazard Assessment (Oehha) has adopted a regulation that will create a “Lead Agency website”, intended to provide information to the public on exposure to chemicals that require warning disclosure under Proposition 65 (CW 1 October 2015).
The website has been agreed, despite continued protest from a coalition of more than 170 businesses and trade groups, including the California Chamber of Commerce and the American Chemistry Council (ACC).
They have said that the agency lacks the statutory authority to mandate that companies furnish supplemental information.
Under the Regulation, which takes effect on 1 April, a manufacturer, producer, distributor or importer of a product, giving a Prop 65 warning, will be required to provide, within 90 days of the agency's request:the name of the listed chemical(s) for which warning is given;the location of the chemical(s) in products that require warning under Prop 65;the concentration of the chemical(s) in these final products;anticipated routes or pathways of exposure to listed chemicals; andestimated levels of exposure to the chemical(s).
In response to comments submitted during the consultation, Oehha added a provision to clarify that the rule “does not require a business to perform any new or additional testing or analysis, for the purpose of responding to a request made by the lead agency”.
It also added certain protections for information designated as trade secret, and also clarified the process by which a person could request a correction of information appearing on the website.
However, several stakeholder requests were left unadopted, including that:manufacturers should be notified and have the opportunity to review data about their products, before it is publicly posted to the website;Oehha should determine a de minimis reporting threshold; andcompanies should be granted six months – rather than 90 days – to respond to agency requests for information.
Industry objections over the agency's statutory authority also remained.
In September comments, the coalition said that “Proposition 65 does not empower Oehha to require manufacturers, producers, importers and distributors to provide it with information related to their products ... or regarding their decisions to provide Proposition 65 warnings for listed chemicals.”
In separate comments, the ACC also said that the "website proposal, as currently drafted, likely [violates] the First Amendment of the US Constitution with respect to compelled speech principles.”
However, in its final statement of reason, Oehha said that Prop 65 is a right-to-know law, and that the agency is responsible for implementing rules that “further its purposes”.
The information to be provided on the website “ is inextricably linked to the statutory right of the people of California to be informed about exposures to listed chemicals”, it added.
The ACC told Chemical Watch: “In a dynamic and changing marketplace, there are many open questions whether [Oehha] will be able to maintain this yet-to-be created website in a manner that provides accurate, meaningful and up-to-date information to consumers.”
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(ACC Mentioned) Industry Targets Recycling for Marine Debris
Jan 26, 2016 | Plastics News
By Gayle S. Putrich
A new report claims that by the middle of this century there will more plastic than fish, by weight, in the world’s oceans. But from the plastics industry perspective, it’s really revenue swimming away.
The World Economic Forum/Ellen MacArthur Foundation study, “The New Plastics Economy: Rethinking the future of plastics,” released at WEF’s annual meeting in Davos, Switzerland, says that while delivering many benefits, “the current plastics economy has drawbacks that are becoming more apparent by the day.”
The report’s projections estimate that “by 2050 oceans are expected to contain more plastics than fish [by weight], and the entire plastics industry will consume 20 percent of total oil production and 15 percent of the annual carbon budget. In this context, an opportunity beckons for the plastics value chain to deliver better system-wide economic and environmental outcomes, while continuing to harness the benefits of plastic packaging.”
The 118-page report claims that 95 percent of plastic packaging — worth between $80 and $120 billion — is lost to the economy every year.
“A staggering 32 percent of plastic packaging escapes collection systems,” it says, “generating significant economic costs by reducing the productivity of vital natural systems such as the ocean and clogging urban infrastructure.”
Plastic packaging heavy hitters, from Unilever and Coca-Cola to Nestle and Sealed Air, were part of the study, as well as scores of academics, environmentalists and waste management experts. But the growing peril of marine plastics is hardly news to anyone in the plastics industry, especially on the packaging side.
The American Chemistry Council noted in a Jan. 19 statement that the U.S. plastics industry already is working to increase recycling — with 6 billion pounds recycled annually now — and recover energy from plastics that cannot be easily recycled.
“Plastics makers actively support programs designed to dramatically increase plastics recycling, especially for newer categories such as rigid plastics and film,” ACC said, citing the international Declaration for Solutions on Marine Litter, a 2011 manifesto signed by more than 60 plastics industry-related associations in 34 countries that has helped launch more than 185 projects addressing marine litter, as an effort to do something about the problem.
“If anyone hates seeing these materials wasted, it’s the plastics industry, and conversely, no industry wants to see these materials put to their highest, best use more than we do,” said Patty Long, senior vice president of industry affairs at the Washington-based Society of the Plastics Industry Inc. “That’s why SPI is engaging the entire plastics supply chain to find, develop and implement market-driven solutions to the collection challenges that prevent plastic materials from having more than one life, whether that’s through recycling, energy conversion or any other technology that derives value from plastics that would otherwise become litter or landfill fodder.
“We look forward to working with world policymakers and thought leaders to move toward a world in which none of these valuable materials are ever wasted,” she said.
Solving the problemEllen MacArthur FoundationThe study notes that most of the waste is coming from developing regions in Asia.
While such hand-wringing studies as the latest from WEF/Ellen MacArthur Foundation sometimes seem to present a desperate problem with rigid and prohibitively expensive solutions, there are plenty of small-scale projects popping up around North America and the world with the potential to stem the tide of the ocean’s plastics problem — and the plastics industry’s losses — with government help.
Cited in the report as an example of a successful program in which industry and governments are working together to recover and recycle plastics in order to keep materials out of the environment, is Multi-Material BC (MMBC), a non-profit organization fully financed by industry to manage residential packaging and printed paper recycling programs in Canada’s British Columbia province.
Though it was the first government in the world to establish a container deposit and recycling system, British Columbia has spent two years reimagining a legacy recovery and recycling system designed for paper, glass, tin and aluminum and better equipping it for plastics, said MMBC Managing Director Allen Langdon. Sorting all containers in one central, high-performing facility rather than investing to retrofit four or five traditional material recovery facilities has saved the province money as well as enabled MMBC to drive efficiencies and start using the 2-year-old system as a platform to engage producers in real-time trials and studies to test packaging innovations.
“What we’ve done is not just the right decision for today but right for 10 years from now,” Langdon said.
“It’s a total paradigm shift from looking at it as a bunch of individual operations to looking at the entire stream it as an entire system,” he said. “But because we now have oversight over the entire system, we can make more rational decisions at every stage.”
Plastic film has been a particular success, he said. It used to end up in mixed bales and be sent overseas, “now we’re able to recycle it reasonably in North America. And a clean stream means a better price, too.”
Now that the paradigm shift has been made, and industry is being dealt in on decision-making and development, the model could be portable, Langdon said.
According to the report, 80 percent of the plastic “leakage” into the oceans is coming from developing countries, particularly in Asia. As overall consumption in developing nations grows, the plastic product and packaging implications seem almost overwhelming — unless it’s viewed by the industry and local governments as an opportunity.
“There are opportunities where there aren’t systems in place already, in developing countries, for them to make a wholesale leap forward and go beyond some of the struggles of the developed world,” Langdon said.
Sister publication PRW contributed to this report.
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TSCA Principles to Limit State Preemption Set Out
Jan 26, 2016 | Chemical Watch
Twelve attorneys general have set out “core principles” to limit state preemption that they say Senate and House negotiators should adhere to as they work to reconcile competing measures to modernise the Toxic Substances Control Act (TSCA).
“To the extent that TSCA reform legislation contemplates preemption of state and local regulation, any such preemption should be limited as possible and consistent with the fundamental principles regarding the vital, complementary roles that the states and federal government play … in chemicals regulations,” they said in a letter to the chairmen and ranking members of key House and Senate committees.
They conceded that progress has been made on several preemption “concerns” in the final versions of the Senate House bills.
Both allow states to co-enforce federal standards and exempt longstanding state chemical programmes from preemption, the attorneys general said. But in areas such as the timing of preemption and the requirements for a waiver, the bills “differ in the extent to which they have made progress on our core concerns”, they said.
Explaining their core principles, the attorneys generals said state regulation should not be preempted, until the EPA takes final action on a chemical that it has selected for risk assessment. The House bill and existing TSCA take this approach. This avoids “problematic ‘regulatory void preemption’, where the federal government has yet to reach a determination and states are nonetheless prevented from taking action.”
After the EPA takes final action, the scope of preemption should be limited to this. And states should not be constrained from establishing requirements on chemicals, pursuant to longstanding state laws, they said.
States should be able to get a waiver to impose requirements that are more protective than the EPA’s, “if the requirements do not unduly burden interstate commerce and do not make it impossible to comply with both state and federal law”, they added.
But the Senate measure lays down two additional conditions for such.
“We are concerned that the Senate bill’s proposed waiver requirements adds unnecessarily to the number of issues that might be litigated in a challenge to either a grant or a denial of state’s waiver application.”
Preemption of state actions, “beyond that of existing TSCA, is counterproductive”, they said.
The letter was signed by the attorneys general of California, Massachusetts, Hawaii, Iowa, Maine, Maryland, New Hampshire, New York, Oregon, Rhode Island, Vermont and Washington.
Bills to reform TSCA passed the House by a 398-1 vote, last June (CW 24 June 2015), and the Senate by a unanimous voice vote, last month (CW 18 December 2015).
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U.S. Grid Rule Falls Short in Wake of Ukraine Hack -- Report
Jan 26, 2016 | E&E - Energywire
By Blake Sobczak
New cybersecurity regulations for the U.S. power grid fail to guard against the type of cyberattack that likely knocked out electricity to parts of Ukraine recently, according to a New Hampshire-based group.
The nonprofit Foundation for Resilient Societies, which researches worst-case scenarios for the power grid such as cyberthreats and electromagnetic disturbances, said a Dec. 23 blackout in western Ukraine signals weaknesses in a ruling last week from the Federal Energy Regulatory Commission.
In Ukraine, early reports indicate that remote attackers were able to send malicious commands to substations in the western part of the country, cutting off power to 80,000 people for several hours.
"The attack against Ukraine's grid clearly shows that substations are a point of cyber vulnerability," said Thomas Popik, chairman of Resilient Societies, claiming that FERC Order 822 falls short of protecting communication links among similar U.S. substations.
On Thursday, FERC directed the federally appointed grid overseer, the North American Electric Reliability Corp., to come up with new safeguards for data flows between critical control systems, such as those operated by regional transmission organizations (EnergyWire, Jan. 22).
But FERC stopped short of requiring new security standards for all "communications networks," including the constant back-and-forth between control centers and substations at big utilities. That oversight could leave information from far-flung electric substations vulnerable to attack, according to Popik.
He added in an interview that his group is considering filing a request for an administrative hearing on FERC Order 822 because of "gross defects" in the rule.
"All communication networks are supposed to be protected -- but what FERC has done is carve out in the order a very small subset of communication networks" that merit closer attention, Popik said.
In its ruling, FERC acknowledged the foundation's request that it mandate baseline security measures for all data flowing across the bulk electric power system. The regulator said that "the record in the immediate proceeding does not support such a broad requirement at this time."
"However, if in the future it becomes evident that such action is warranted, the Commission may revisit this issue," FERC said.
Electric industry groups have also opposed such far-reaching communication rules on cost and reliability grounds, arguing that encryption devices or other security technologies may have unintended consequences.
Popik said bulk electric power operators should have tackled the substation communication issue years ago, following Congress' passage of the Energy Policy Act in 2005. Since then, the problem has become "much greater ... because now the electric grid is increasingly reliant on public networks, such as the Internet," he said.
"If there's a ruling either by FERC or in the D.C. Circuit [Court of Appeals] that these substation communication networks have to be protected, it may be much, much more costly to the industry than if it had been done correctly 10 years ago."
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California Gas Leak Spotlights Shoddy Regulation of Aging Storage Wells
Jan 26, 2016 | Reuters (In The New York Times)
By Nichola Groom
Long before a natural gas storage well sprung a disastrous leak near Los Angeles, California, utilities and national industry groups were raising alarms about the danger of aging underground storage infrastructure.
The leaking well’s owner, Southern California Gas Co, warned state utility regulators in 2014 of “major failures” without a rate hike to pay for comprehensive inspections of 229 storage wells.
Twenty-six of its wells were “high risk” and should be abandoned - even though they complied with state regulations, the utility wrote in a rate filing.
The previous year, Pacific Gas & Electric pointed to an absence of safety standards for storage wells as reason to launch its own monitoring program that went beyond state rules, according to an internal document obtained by Reuters.
The industry’s rising concern underscores the scant oversight of 400 underground natural gas storage facilities in 30 U.S. states. Most storage fields are regulated by states, but national industry groups have pushed for federal oversight - unusual in an industry better known for fighting regulation.
Jurisdiction over facilities storing gas to be transported across state lines falls to the U.S. Pipeline and Hazardous Materials Safety Administration. But the agency has never written rules for gas storage despite two decades of sporadic calls for regulation - and at least two deadly explosions.
"We agree that federal regulations would improve safety in this area and are working through our options to develop regulations," agency spokeswoman Artealia Gilliard said.
Under state oil and gas regulations, Southern California Gas faces a maximum penalty of $25,000 for the leak near Los Angeles, which is unprecedented in scale. The well has spewed methane - a potent greenhouse gas - since October and displaced thousands of people in nearby Porter Ranch.
A bill introduced Tuesday by State Senator Fran Pavley calls for penalties of up to $25,000 per day for active leaks. It would also require the installation of automatic shutoff systems on all wells and continuous monitoring of wells within 10,000 feet of homes and schools.
Utilities and regulators have been “gambling” with wells that in many cases were drilled in the 1950s, Pavley said. She described their standard practice as, “Don’t fix it until it leaks or cracks or breaks.”
METHANE CLOUD
Southern California Gas, a division Sempra Energy , said it has inspected wells more rigorously since 2014, even though state utility officials have not approved a rate hike to cover the cost, said company spokeswoman Kristine Lloyd. The inspections, she said, “exceed traditional industry practices and regulatory requirements.”
Lloyd said she did not know if the leaking well in Aliso Canyon was among the 26 wells the company said should be abandoned because they are too old or “mechanically unsound,” as the rate filing described them.
A month before the well failed, the nation’s leading oil and gas lobbying group, the American Petroleum Institute, published 60 pages of guidelines for monitoring and maintenance of storage wells. Other industry groups have supported having the API standards adopted as federal regulation
It’s telling that the industry is inviting more oversight, said Tim O'Connor, director of California oil and gas programs for the Environmental Defense Fund.
“Up and down, the general consensus is that the regulations that exist in California are wholly insufficient.”
The fracking boom has intensified pressure on the nation’s aging system of underground storage. About 20 percent of gas used in the U.S. during winter now comes from storage fields, according to the American Gas Association.
Many of the facilities are depleted oil or gas reservoirs that have been converted to store natural gas, which is then pulled from the ground by wells.
The Aliso Canyon leak increased the state’s methane emissions by 25 percent in its first month, estimated the California Air Resources Board. Methane is 72 times more potent as a greenhouse gas than carbon dioxide in the 20 years after it is emitted, according to CARB.
Initial efforts to plug the well with mud and brine failed. The utility is now drilling two relief wells more than 8,500 feet below the surface and planning to pump in water and cement. The utility said on Monday that it expects to stop the leak by late February.
WARNING SIGNS
In its 2014 rate filing, the utility sought $180 million in rate increases over six years to evaluate its storage wells. The California Public Utility Commission has made no decision in the rate case.
The CPUC also has not decided on a request from PG&E for more than $1 billion in rate increases to finance maintenance of its gas pipeline and storage infrastructure.
The commission did not respond to repeated requests for comment for this story.
PG&E, in a 2013 internal document, expressed little faith in state monitoring of gas storage wells, noting “an absence of industry standards.”
The company said it was working to fill this “gap” by helping API develop its guidelines. The industry group’s recommendations go into minute detail on matters including how storage facility data should be collected, how staff should be trained and how emergencies should be handled.
PG&E is working to incorporate those practices into its operations, spokesman Greg Snapper said.
Concerns about the nation’s natural gas infrastructure have intensified since 2010, when a PG&E pipeline exploded, leveling an entire neighborhood in San Bruno, California and killing eight people.
The National Transportation Safety Board later blamed PG&E for lax pipeline safety and faulted both the California PUC and the federal pipeline regulator for weak oversight
SELF-REGULATION
California's oil and gas regulator - the Division of Oil, Gas and Geothermal Resources - acknowledged problems with oversight but pointed to an effort launched before the leak to update regulations.
The industry also has an incentive to police itself, said agency spokesman Don Drysdale.
"Regardless of the regulations, it's in an operator's interest not to have leaks, because that means they're losing their product," he said.
Earlier this month, Governor Jerry Brown ordered the agency to issue emergency safety regulations for underground gas storage. Last week, it proposed requiring facilities to submit plans for inspections and leak detection and to test all safety valve systems every six months.
The lack of federal oversight has been debated sporadically for more than two decades.
Federal regulators declined to assume authority over gas storage facilities after three people were killed in a 1992 explosion at an underground cavern operated by Seminole Pipeline Co near Brenham, Texas.
That decision was criticized after a 2001 gas leak in underground salt caverns in Kansas caused explosions that killed two people.
The facility fell under federal jurisdiction, but federal and state regulators hit legal snags when they explored how to penalize the facility's operator, ONEOK Inc, which sent its gas across state lines.
Kansas was forbidden from regulating interstate commerce - and the federal agency had not written rules it could enforce.
A decade later, in 2011, the federal Pipeline and Hazardous Materials Safety Administration asked industry groups whether they supported federal regulation of storage facilities in such cases. The industry supported oversight, but the agency has still not crafted regulations. New rules on the safety of gas transmission pipelines, which may or may not encompass gas storage facilities, are expected to be finalized by the agency this year.
Last year, U.S. Senator Pat Roberts, a Republican from Kansas, introduced a bill targeting "a dangerous lapse in the oversight” and proposing that states take over regulating all stored gas, even when it is slated for interstate transport.
A separate safety bill including the same provision passed a key Senate committee in December. It also directs the federal government to craft national safety standards for underground gas storage within two years.
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Regulatory Gaps Persist After Deadly Texas Blast, Board Finds
Jan 26, 2016 | E&E - Greenwire
By Sam Pearson
Dangerous regulatory gaps in chemical safety remain nearly three years after a massive explosion at a fertilizer storage facility in West, Texas, killed 15 people and injured 260 others, the U.S. Chemical Safety Board said today.
The board released a preliminary version of its final report on the West Fertilizer Co. explosion, which has galvanized calls for action among safety groups since the April 17, 2013, blast. But despite the massive disruption and loss of life in the small town, few state or federal regulations have changed since the explosion, which the agency called "one of the most destructive incidents" it has ever investigated.
The agency's board members are set to vote to approve the final report at a public meeting in Waco, Texas, on Thursday. The agency makes only safety recommendations and can't issue new regulations on its own.
Echoing the findings of previous reports, the CSB found that West Fertilizer's storage of 40 to 60 tons of ammonium nitrate fertilizer in a wooden building that lacked a sprinkler system posed a risk to residents.
The emergency response, in which 12 volunteer firefighters were killed, also exposed dangerous training gaps, the report said. In addition, West Fertilizer held insurance for only $1 million, far short of the estimated $230 million in total insurance-related losses from the explosion.
The federal government has tried to address the issues raised by the West explosion through an interagency process launched under a 2013 executive order President Obama issued on chemical security. Texas Gov. Greg Abbott (R) signed a bill last year to increase state oversight of ammonium nitrate dealers, the Waco Tribune-Herald reported, though several other state proposals have died amid industry opposition.
Though McLennan County, Texas, had a local emergency planning committee, West Fertilizer had not attended any of its meetings in at least 21 years, the CSB found. The site also had a history of not communicating with local officials, like in early 2013 when it conducted a controlled burn without telling the nearby West Intermediate School, leading school officials to scramble an evacuation of the building, the CSB found. The school was heavily damaged in the explosion and was later demolished.
The CSB report also lauds a stalled Occupational Safety and Health Administration policy change that Congress has put on hold, saying it could have encouraged more attention to safety at the West facility.
The report said the CSB supports a scrapped OSHA policy to reinterpret an existing exemption from its process safety management rules for retail facilities. Congress put the reinterpretation on hold when a policy rider in last year's omnibus spending bill barred the agency from proceeding unless it did so through a slower formal rulemaking. Sen. John Hoeven (R-N.D.) later took credit for the change (E&ENews PM, Jan. 14).
Had the reinterpretation been in place, West Fertilizer "might have recognized" that its storage of anhydrous ammonia was subject to OSHA's process safety management rules, the report said, prompting consideration of safety measures.
West's fertilizer site wasn't the only such facility, the CSB noted. According to nonpublic data obtained from the Department of Homeland Security's Chemical Facility Anti-Terrorism Standards program, 1,351 facilities in the United States store ammonium nitrate at quantities large enough to trigger reporting requirements, the report said.
The CSB report identified "several shortcomings in federal and state regulations and standards" that could affect the risk of a future incident.
Proposed fixes include tightening OSHA's process safety management and explosives and blasting agents rules, U.S. EPA's risk management program, Emergency Planning and Community Right-to-Know Act reporting, and training made available to firefighters in Texas.
The report also suggested that cities consider land-planning initiatives to avoid placing sensitive structures such as schools and homes directly adjacent to facilities where high-risk chemicals are stored, as occurred in West.
EPA could update its risk management program to include fertilizer-grade ammonium nitrate as a substance required to be included in a risk management plan, the CSB suggested, among other changes.
EPA is working on updating the risk management program, and a small-business review panel got underway late last year (Greenwire, Nov. 17, 2015).
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Jan 26, 2016 | The Hill - Congress Blog
By Maya K. van Rossum
This month, more than 165 organizations and 2000 concerned people from across America sent a letter to Sens. Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.) asking for justice. Not justice for any one individual – justice for the country and the environment. As key members of the Senate Committee on Energy and Natural Resources, Sanders and Warren have the ear of the Government Accountability Office and the power to successfully call for an investigation into what has become a rogue federal agency: the Federal Energy Regulatory Commission (FERC).
Does “rogue” sound harsh? Well, FERC’s actions are harsher. The agency is supposed to regulate pipeline companies, but recent history shows it is behaving more like an advocate acting on their behalf, helping to grease the wheels for the pipeline companies regardless of the value of their projects or the harms they inflict on communities and the environment. Of all of the agencies in the entire federal government, FERC has the highest approval rate for the projects submitted to it for approval: 100 percent. That’s right, since 1986 FERC has green-lighted every single proposal the pipeline industry sent its way and up to its Commissioners. That’s not a regulatory agency, that’s a rubber stamp.
FERC’s approval rate should not come as a surprise. Unlike any other federal agency, FERC is funded entirely by the industries it regulates — that’s right, FERC gets its entire budget from the industry it is supposed to oversee. No other independent federal agency has a similar funding structure.
How does it work? Basically, FERC issues charges on the industry it regulates calculated to cover all of its costs, including an agency budget that has grown 50 percent, from $200 million to $300 million, in just a 10-year period from 2004 to 2014. This means that the more pipelines, gas delivery, and LNG facilities FERC approves the more fees it is able to collect to support its fast ballooning budget.
This industry-financing mechanism not only encourages a biased approval process for proposed projects, but it also provides FERC with a significant degree of insulation from Congress and the legislative branch of government that no other independent federal agency enjoys.
It gets worse. FERC has never in its history issued a civil penalty for violations related to construction activity for any pipeline project. And yet we know for a fact that violations of FERC-issued pipeline construction approvals border on routine. For example, the Tennessee Gas Pipe Line Company’s 300 Line Upgrade Project was found to have major failures ranging from improperly installed erosion controls that impacted resources to disturbances resulting from stormwater discharges. Who recorded these failures? FERC. And what were the penalties the company incurred from FERC? None. FERC didn’t even issue a stop-work order to make sure the company fixed the problems it was causing before allowing it to continue with its damaging construction.Once a pipeline project receives FERC approval, the problems are compounded. The pipeline company receives the power of ‘eminent domain,’ the right to take private property for its own use. In addition, pipeline projects are exempted from the state and local environmental and community protection laws that apply to every other industry.
What this means is that projects like Kinder Morgan’s Northeast Energy Direct (NED) pipeline can force homeowners, families and businesses in Massachusetts, New Hampshire, and beyond to relinquish part of their property to allow for the construction and operation of this 400-plus-mile pipeline. Despite opposition and concerns voiced by so many, including Sens. Sanders, Kelly Ayotte (R-N.H.), Jeanne Shaheen (D-N.H.) and Reps. Ann McLane Kuster (D-N.H.) and Frank Guinta (R-N.H.), the project proceeds towards approval. Despite Kinder Morgan submitting an application to FERC that it admitted was missing critical information, FERC marked the application as “complete” because use the company promised to provide the information eventually.
Among the problems with the NED pipeline, as with so many others like it, is that FERC fails to force the company to address the need for the gas the pipeline will carry – the agency simply requires the company to consider different paths to cut for its project, rather than answering the threshold question of whether the project is necessary. In fact, the findings of the Massachusetts Attorney General that no new natural gas pipelines are needed to supply the Commonwealth is apparently being ignored in the NED FERC review process. Similarly, expert analysis documents that the gas to be carried through the PennEast Pipeline from the shale fields of Pennsylvania to (the company claims) communities in New Jersey is not needed in Pennsylvania, where there is a gas glut, and would create a 53 percent surplus in New Jersey. FERC officials don’t seem to care.
What can be done about all of this? Well, fortunately there is an agency in the government that can reveal the depth of this toxic mess and help us identify solutions: the Government Accountability Office (GAO). As the investigative arm of Congress charged with auditing the federal government, the GAO can examine the way FERC is working—or rather, the way it is not working. An objective GAO review is clearly needed because neither Congress nor the president has the authority necessary to hold FERC accountable for their abuses of the public trust. A thorough and objective review is clearly warranted, and can only be brought to bear by the GAO, which can initiate a dialogue with FERC and bring about the reforms the agency so desperately needs. That’s why more than 165 organizations, from environmental nonprofits to religious groups, have stood up and asked for a review. The future and well-being of our communities and environment depends on it.
Van Rossum is the Delaware Riverkeeper and leads the Delaware Riverkeeper Network (DRN).
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High Court Hands FERC Major Victory in Demand-Response Case
Jan 26, 2016 | E&E - Energywire
By Rod Kuckro and Ellen M. Gilmer
Federal electricity regulators scored a huge win yesterday when the Supreme Court upheld a controversial rule aimed at encouraging energy conservation in wholesale power markets through a practice known as demand response.
In a 6-2 opinion (No. 14-840), the high court reversed a May 2014 lower court decision that knocked down the Federal Energy Regulatory Commission's 2011 rule (Order 745) requiring that power users be paid for committing to scale back electricity use at times of peak demand at the same rate as electric generators.
The decision marks a win for the Obama administration, environmentalists and clean energy backers who supported the FERC rule.
It gives "broader jurisdiction to the Federal Power Act and the federal government vis-à-vis states' rights over the energy industry," said Stephen Humes, a partner with Holland & Knight in New York.
"This decision means that consumers will continue to see the significant benefits of demand response, which enhances competition in the markets, reduces wholesale prices and helps make the grid more reliable," said FERC Chairman Norman Bay.
It also bolsters the business of companies such as Opower, EnerNOC Inc. and Johnson Controls that have aggressively crafted product offerings for commercial and industrial customers, especially in the nation's organized electricity markets run by independent system operators.Future disputes
At the heart of the court's analysis in yesterday's decision is whether the demand-response rule actually regulates retail electricity sales, an area reserved for state overseers under the Federal Power Act.
The court found that the rule does not stray into the off-limits retail territory. Writing for the majority, Justice Elena Kagan reasoned that FERC designed the demand-response rule to reduce wholesale electricity rates; the effect of that policy on retail sales is merely incidental.
"Yet a FERC regulation does not run afoul of [federal law] just because it affects -- even substantially -- the quantity or terms of retails sales," the opinion says. "It is a fact of economic life that the wholesale and retail markets in electricity, as in every other known product, are not hermetically sealed from each other."
Every aspect of the demand-response rule governs the wholesale market, Kagan wrote, adding that the rule rightly advances the agency's core mission of holding down prices and ensuring electric reliability.
Chief Justice John Roberts and Justices Anthony Kennedy, Ruth Bader Ginsburg, Stephen Breyer and Sonia Sotomayor joined in the majority. Justice Samuel Alito recused himself from the case.
Justices Antonin Scalia and Clarence Thomas disagreed, arguing that the fact that most demand-response participants are consuming electricity rather than reselling it undermines FERC's assertion that it is not meddling in the retail market.
"The demand-response bidders here indisputably do not resell energy to other customers," Scalia wrote in the dissent. "It follows that the rule does not regulate electric-energy sales 'at wholesale,' and [federal law] therefore forbids FERC to regulate these demand-response transactions."
Legal experts noted that the majority's movement away from a "bright line" test separating state and federal jurisdiction may be influential in future disputes over FERC's regulatory authority.
"Traditionally, courts have applied a 'bright line' analysis to distinguish FERC's role ... and the states' role," said Dorsey & Whitney LLP attorney Joseph Hall in an email. "Those lines are becoming increasingly more difficult to distinguish because of the inter-relationship between wholesale and retail markets, development of RTOs/ISOs and increasing federal involvement in generation resource planning."
In separate litigation, the Supreme Court is considering whether state incentive programs for new power generation infringe on FERC's authority over wholesale markets. Government lawyers handling that case have generally favored the bright-line approach to determining state and federal jurisdiction, arguing that a retail program in Maryland affects wholesale markets and therefore oversteps state authority.
Scalia noted in his dissent yesterday that the government's bright-line position in the Maryland case seems to square with his own.
But ClearView Energy Partners analysts wrote in a memo yesterday that the decision does not "provide definitive insight into how the Court will rule on that case."'Probably helps states'
Officials at the nation's largest grid operator, PJM Interconnection, said in a statement that while they will have to study the court's decision, "the ruling supports the continued participation of demand response in competitive wholesale markets."
"We're pleased with that outcome," PJM continued. "Certainty and continuity are important in markets. Demand response brings value to competitive wholesale markets and is a vital component of electric system reliability."
The Electric Power Supply Association, which was the lead plaintiff in the case, is "not commenting" for now, said President and CEO John Shelk.
The American Public Power Association, another leading plaintiff, expressed disappointment.
Joe Nipper, senior vice president of regulatory affairs, said, "Retail rates are the responsibility of state and local jurisdictions. APPA and the utilities it represents strongly support demand response and energy efficiency, but we will continue to argue against federal agencies overstepping the limits of their jurisdiction."
"The court's decision appears to stand for the proposition that energy conservation measures can be valued in both a retail context and, in different circumstances, a wholesale context," said Travis Kavulla, president of the National Association of Regulatory Utility Commissioners.
"Personally, I believe that to be true, although as a legal precedent it may serve to blur the already fuzzy line between state and federal jurisdiction. As the court observes, the respective province of FERC and state utility commissions generates a steady flow of jurisdictional disputes because -- in point of fact if not of law -- the wholesale and retail markets in electricity are inextricably linked," he said.
The decision was praised by the Natural Resources Defense Council, Advanced Energy Management Alliance, Advanced Energy Economy, Sierra Club and Environmental Defense Fund, among others.
Holland & Knight's Humes said the ruling could very well have other effects.
It "probably helps states" as they weigh compliance options for U.S. EPA's Clean Power Plan. Even though efficiency measures such as demand response are not explicitly a tool EPA suggested for states to meet emissions reduction goals for carbon, if the ruling had gone the other way, "we would have been left with a fractured state-by-state approach to bring the benefits of demand response to the market," Humes said.
The decision should also push down electric capacity prices in wholesale markets, he said.
"There was no one in the case that argued that demand response did not help electric reliability and did not lead to lower wholesale capacity prices," Humes said. "Everyone agreed in the case that demand response has a positive effect on the cost of rates to customers."
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Supreme Court Rules In Favor Of Demand Response: A Boon To Smart Grid
Jan 26, 2016 | Forbes
By Peter Kelly-Detwiler
This morning, the U.S. Supreme Court overturned a decision of the D.C. Circuit Court of Appeals that had vacated FERC Order 745. Well, that summary sounds pretty boring, doesn’t it?
Except, if you live in the world of electricity, smart grids, batteries EVs, and energy efficiency, it’s not. In fact, it is pretty exciting. Because, at its heart, the ruling (Justices Thomas and Scalia dissenting, Alito abstaining) firmly establishes an economic equivalency between actions that take place on the customer side of the meter with those that take place in wholesale electric markets. Which means that suppliers of demand response, energy efficiency and different types of electric storage can feel much more confident in their economic future.
The Decision:
Let’s take a step back to understand why. The appeals court ruling stated that the Federal Energy Regulatory Commission (FERC) had overstepped its bounds in allowing demand response (i.e., customer curtailment of consumption that relieves pressure on the grid and thereby acts as a ‘virtual’ power plant) to participate in wholesale power markets.
Technically, it was the way the customers were compensated for the kilowatt hours not consumed during a demand response event (they got paid the spot market price for power while also not having to pay for the energy they no longer consumed) that was at issue.
The Circuit Court of Appeals had initially found that FERC did not have authority to act here with respect to energy, and that this was a retail market issue falling under state jurisdiction (to make the matter more complex, the issue of capacity – the ability to generate, or reduce consumption of electricity at a specific moment in time – was not at stake here. However, there were concerns that upholding the Circuit Court decision would eventually unravel the entire construct equating curtailed customer capacity with the capacity of generating plants. Today, in some markets, customer and generator capacity compete in auctions). The Circuit Court also stated that the FERC Rule 745 compensation scheme was “arbitrary and capricious under the Administrative Procedures Act.”
However, the Supreme Court disagreed, finding that the Federal Power Act – which allows FERC to regulate the ‘sale of electric energy at wholesale in interstate commerce’ including wholesale rates – gave the FERC power to oversee demand response. Specifically, the Court ruled that the “practices at issue directly affect wholesale rates. Second, FERC has not regulated retail rates. Third, the contrary view would conflict with the FPA’s purposes.”
The Court further went on to find that the practices of rewarding demand response in such a fashion directly affect wholesale rates and that FERC has a duty “to ensure that rules or practices ‘affecting’ wholesale rates are just and reasonable” and does so here by displacing high priced supplier bids that set marginal wholesale energy prices.
The decision – written by Justice Kagan – is worth reading, if for no other reason to observe a justice clearly amused by the need to come to grips with the economics, practices, and terminology of electric power markets. For example, she writes “FERC calls that cost (in jargon that will soon become oddly familiar) the locational marginal price, or LMP.”
The Implications
The first implication is obvious – the ability of consumers to be paid under the existing formula (“LMP” without subtracting what one would have paid per kilowatt-hour) continues to remain the same. Existing demand response programs will not have to change or be eliminated.
Perhaps more important is the fact that the decision establishes a firm bulwark protecting the smart grid. It supports the critical principal that promoting behavior on the consumer side of the meter is a desirable outcome if it reduces overall wholesale power prices. Such behaviors and activities will likely fall within FERC jurisdiction if they lead to ensuring that wholesale rates are “just and reasonable.”
The Supreme Court ruling thereby accelerates the progress towards a more efficient grid. It empowers customers. It obviously helps demand response providers. But it also removes some of the potential regulatory and market uncertainty for companies that supply smart grid tools such as batteries, EVs, and software.
In short, today’s Supreme Court decision smoothes the way for the essential two-way conversation between wholesale markets, and the consumers and devices that interact with the power grid.
The referees have now fairly well clarified the power market rules at the federal level: let the games begin.
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Industry, Enviros Spar over Carbon Trading Methods
Jan 26, 2016 | E&E - Climatewire
By Emily Holden and Elizabeth Harball
The nation's power companies are advocating for a large and flexible carbon trading system under a federal plan to cut greenhouse gas emissions, but environmental advocates say certain restrictions are needed to ensure the best climate outcomes.
U.S. EPA will need to weigh both sets of concerns in finalizing model trading rules and determining what to do in states that don't write their own blueprints for cutting emissions under the Clean Power Plan, comments submitted to the agency last week made clear.
Hundreds of pages of feedback from key groups reveal a brewing battle over how companies should be able to use carbon trading to meet their individual emissions standards -- one that could divide the country into a patchwork of different trading systems that might result in higher costs.
EPA says trading would lower costs, add flexibility and facilitate compliance, the investor-owned utility trade group Edison Electric Institute points out.
"However, full attainment of these benefits is dependent on the development of a broad, transparent and competitive emissions trading market," EEI said in comments. The group says the model rules "take many steps" to do that but also may need to be strengthened to "fully realize competitive markets" and to "not constrain state flexibility."
The American Public Power Association urged similar revisions. If the rule holds up in court, "the workability of the trading programs may be the only economic protection left for many consumers," APPA said.
Environmental advocates, on the other hand, argue EPA should favor certain kinds of carbon trading that would encourage more carbon cuts and greater investment in green energy over time.
The Sierra Club said the flexibility for states to craft their own emissions reduction strategies may help ensure against power outages and limit costs, but it "comes with a price."
"Some compliance pathways achieve greater emission reductions than others, and many states may well choose state plans that do not yield the same quantity of emission reductions that might occur under other plan forms," the Sierra Club wrote.Fighting the rule -- with backup plans
EPA proposed the model rules and federal plan in August while issuing the final version of the Clean Power Plan, which asks states to find ways to scale back greenhouse gas emissions from power plants starting in 2022.
It's unclear at this point whether any states might require a federal plan. Even many of the 27 states that are challenging the rule in court are working on backup options and will request a two-year extension in September to send EPA a plan.
States supporting and opposing the Clean Power Plan used the comment deadline as another chance to further their legal cases.
North Dakota, which faces some of the toughest carbon reduction targets under the final rule, laid out a seven-point argument against the regulation, saying "the flaws with EPA's proposed rule are many."
But South Dakota, which is suing along with North Dakota and other states, offered someconstructive criticism, expressing concern about the agency's "one-size-fits-all" approach in the federal plan.
Rather than impose an inflexible regulation, South Dakota recommended that the agency "conduct a case-by-case analysis of all options to ensure what EPA implements in a state will provide reliable and affordable electricity not only in that state but the neighboring states."
Both industry interests and environmental groups shared that concern.One-size-fits-all vs. a tailored approach
States are exploring using various kinds of trading systems, regardless of whether they adopt EPA's model rules or get stuck with a federal plan (ClimateWire, Jan. 19).
Coal plant operators that fall short of their goals could pay to take credit for emissions reductions made in other parts of the power sector by shifting to natural gas or building up renewable energy, for example. The trading systems would incentivize the least expensive compliance paths, economists say.
States can pick between capping emissions or achieving an average rate of carbon based on the amount of power produced. And the two types of systems cannot link.
EPA would like to pick one type of plan as the federal version.
EEI, like South Dakota, says EPA should tailor any federal plan required in a state to account for regional differences in how neighboring states eventually decide to comply.
Environmental advocates argued the same. They said any federal plans should be tailored to a state's specific regional situation.
At the same time, the Natural Resources Defense Council, the Sierra Club and other environmental groups widely favor capping emissions, or using what is known as "mass-based" trading. They want to limit emissions from both existing and new plants to avoid a natural shift to new facilities that might undermine the regulation. And they believe trading systems should auction allowances and use the proceeds to further climate goals, rather than distributing them based on historical generation.Green groups: no free allowances
All of those arguments could be political sticking points in states writing plans, and they could lead to incompatible trading systems.
For example, the nine-state Regional Greenhouse Gas Initiative, a Northeast cap-and-trade program, wants EPA to encourage all of those same elements environmental advocates support. They want EPA's federal plan to look like the RGGI system, according to comments. RGGI may only link with states that assimilate to their sort of trading regime.
EPA's Thursday public comment deadline was the first chance for a wide variety of interests to weigh in on carbon trading's role in the Clean Power Plan -- which EPA greatly expanded under the final rule.
Though united in their support for the climate regulation, major environmental groups outlined a series of concerns with the agency's proposed framework.
For one, they objected to EPA's proposal to give out emissions allowances to power plants based on how much electricity they historically have produced.
Reviving a long-standing debate in the cap-and-trade world, the NRDC argued that freely allocating "creates the potential for windfall profits" and "fails to promote investment in non-emitting resources."
Advanced Energy Economy said EPA might be rewarding "utilities locked into the electricity system of the 20th century and [penalizing] those moving towards the electricity system of the 21st century."Grid operators share market worries
The groups want EPA to require states to auction carbon allowances and use the money toward achieving further emissions reductions.
They also are urging the agency to guard against carbon "leakage," a situation where utilities might shift electricity generation to the new natural gas plants that are not being regulated along with existing sources of carbon, rather than turning to renewable energy.
Under the Clean Power Plan, states writing their own plan must either show they will prevent that shift or use a "new source complement" to limit carbon from new plants by using a higher cap that includes them. The Sierra Club says EPA should require that new source complement.
Environmental justice groups, meanwhile, have been ramping up attacks on carbon trading, raising concerns that it will help keep coal plants online in low-income and minority communities.
The New York-based WE ACT for Environmental Justice wrote in its comments that "any type of trading, allowances or credits should be prohibited from being exchanged in any areas where the air is already compromised."
Grid organizations have been big proponents of carbon trading as a way to prevent localized power shortages as the sector continues a yearslong transition away from fossil fuels and toward renewable energy.
But they also issued their concerns about the trading rules.Disputing reliability
In the final rule, EPA required states to conduct reliability reviews as they write their plans.
A coalition of grid organizations -- including the PJM Interconnection LLC, Midcontinent Independent System Operator, California Independent System Operator and Southwest Power Pool -- said in comments that a federal plan should do the same. They also argued for a "reliability safety valve," a backstop in case allowances or credits for some reason are not available or are too expensive for companies in states operating under a federal plan.
MISO said in separate comments that EPA must consider "the availability of functioning carbon trading markets."
"A trading ready plan is only as good as the trading options that exist to facilitate the ability to obtain allowances or credits, especially if they are needed to manage a reliability issue," MISO said.
The National Rural Electric Cooperative Association similarly argued for more reliability protections. NRECA has insisted trading might work for big utilities with diverse power portfolios, but it won't be as easy for small, coal-reliant co-ops.
On that point, environmental groups and renewable energy advocates disagreed.
"The proposed federal plan will not create reliability problems and thus no additional reliability provisions are necessary," NRDC wrote. "Indeed, additional unnecessary provisions could prove counterproductive by unnecessarily delaying compliance."
Reporter Daniel Cusick contributed.
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BLM's Proposed Rule Opens New Battle Over Efforts To Address Methane
Jan 26, 2016 | InsideEPA
The Interior Department's (DOI) just-issued proposed rule regulating venting, flaring and leaks at oil and gas operations on federal lands opens a new battle over the Obama administration's efforts to limit emissions of methane and other greenhouse gases that are released from the sector.
The department's Bureau of Land Management (BLM) issued the proposed rule Jan. 22, with officials saying it will limit unnecessary releases of methane and associated GHGs, while resulting in more natural gas being captured and available for consumers.
“These updated regulations, which would be phased in over several years to allow operators to make the transition more cost efficiently, would not only get more of our nation’s natural gas into pipelines and delivered to market but also reduce pollution and cut greenhouse gas emissions that are contributing to climate change,” said Janice Schneider, DOI's assistant secretary for land and minerals management.
The proposal adds to a suite of other measures being developed by the administration to address emissions from the sector. EPA, for example, is crafting a rule to regulate methane releases from new and modified sources, a voluntary program to address methane releases from existing sources and a mandatory guideline for states in ozone nonattainment areas to limit releases of volatile organic compounds -- measures that could also have a co-benefit of reducing methane.
In addition, some states are implementing or developing new rules. Officials in Pennsylvania, the second largest gas producer after Texas, recently announced plans to strengthen their rules for both new and existing sources.
The federal efforts are aimed at achieving administration goals of reducing methane, a significantly more potent GHG than carbon dioxide, by 40-45 percent -- though environmentalists have charged that until EPA regulates existing sources, the administration is unlikely to achieve its goal.
But industry groups and their supporters have long criticized the administration's efforts, warning that multiple requirements for several agencies are duplicative and unnecessary -- a point they reiterated in comments on the BLM proposal.
The American Petroleum Institute (API) promised in a statement to fight the proposed rule, arguing it is unnecessary given new and existing policies and declining emissions in the face of increasing production.
“Another duplicative rule at a time when methane emissions are falling and on top of an onslaught of other new BLM and EPA regulations could drive more energy production off federal lands,” API said in a statement. “That means less federal revenue, fewer jobs, higher costs for consumers, and less energy security.”
The group called on the administration and Congress “to reexamine the avalanche of new regulations now under consideration or court review,” while also promising to “work with BLM to show how industry leadership is already reducing emissions without new regulations.”
Programmatic Review
Environmentalists, while welcoming the proposed rule and its scope, are calling on the administration to go even further and promising to work hard to ensure the BLM plan is strictly implemented in field offices.
“The proposed rule only begins to get a handle on the massive amount of methane being deliberately or accidentally leaked from natural gas operations on America’s public lands,” Bill Snape, senior counsel at the Center for Biological Diversity, said in a statement.
“Plugging existing leaks is important and we’re glad it’s finally happening, but this rule is too weak and riddled with unnecessary exemptions and loopholes and does not get us off the hook in fighting climate pollution,” he said.
Snape added that if the administration is serious about limiting GHGs, it would move quickly to block new oil and gas leasing on federal lands, an approach that other environmentalists are urging the administration to adopt following DOI's decision to “pause” new coal leasing.
WildEarth Guardians submitted a Jan. 20 petition under the Administrative Procedure Act (APA) asking BLM to undertake a programmatic environmental study of the climate and other impacts of oil and gas leased on public lands and to place a moratorium on new leases in the interim.
“The climate change rationale for programmatic review of Interior's coal leasing program applies with an equally great urgency to the agency's oil and gas leasing program,” says the petition, which was written on the group's behalf by the University of California-Irvine Environmental Law Clinic.
The oil and gas leasing program encompasses more acreage than the coal program and is responsible for more than 200 million metric tons of carbon dioxide equivalent emissions per year, the petition charges. It also argues that a programmatic climate study is “legally required” yet has never been done.
The formal petition follows a Jan. 14 letter from WildEarth Guardians and five other groups that asked Obama to order a programmatic oil and gas leasing review of onshore and offshore programs.
The petition also points to President Obama's final State of the Union address, where he promised “to change the ways we manage our oil and coal resources so that they better reflect the costs they impose on taxpayers and our planet.”
WildEarth Guardians notes in a press release that shortly after Obama's speech, DOI announced plans to “pause” new coal leasing while it launched a programmatic review of that program, a move that is now prompting the petition for a similar action over the oil and gas program.
“Every bit of the logic behind shutting down new coal leasing applies equally to the federal oil and gas leasing program,” WildEarth Guadians' Tim Ream said.
Venting, Flaring & Leaks
The proposed rule is aimed at limiting both venting, intentional releases of methane, and flaring -- the combustion of natural gas that results in CO2 releases -- of natural gas at wells on federal lands.
According to a DOI fact sheet, the proposed rule requires producers to adopt currently available technologies, processes and equipment that would limit the rate of flaring at oil wells on public and tribal lands, and would require operators to periodically inspect their operations for leaks.
The proposal would require producers to replace outdated equipment that vents large quantities of gas into the air.
Operators would also be required to limit venting from storage tanks and use best practices to limit gas losses when removing liquids from wells.
The new measures would also clarify when operators owe royalties on flared gas, and ensure that BLM’s regulations provide congressionally authorized flexibility to set royalty rates at or above 12.5 percent of the value of production.
Similar to leading state regulations in Wyoming and Colorado, the rule would require replacement of “high-bleed” pneumatic devices with “low-bleed” devices.
Regarding flaring, the proposal would phase in, over three years, a limit on the amount of gas an operator can flare each month from a well. The first year's limit would be 7,200 thousand cubic feet (Mcf) per month, while the second year's limit would be 3,600 Mcf/month and the third-year limit would be 1,800 Mcf/month.
DOI estimates it would affect 16 percent of existing wells, which account for 87 percent of gas that is currently flared.
The proposal includes exceptions for exploration or wildcat wells, and it would also not enforce the limit if it would require an operator to “cease production and abandon significant recoverable oil reserves under a lease.”
DOI estimates that the rule would cost between $117 million and $134 million, assuming that EPA finalizes its methane rule for new facilities, according to the regulatory impact analysis.
That estimate also assumes a 3 percent discount rate. The department uses slightly higher figures for a 7 percent discount rate.
The primary benefits of the rule stem from cost savings to industry from selling captured gas, as well as climate benefits calculated using EPA's social cost of methane values. The proposal would produce between $255 million and $357 million in benefits, with roughly a third coming from industry cost savings and the rest from climate benefits.
The department estimates the proposal would reduce methane emissions by 164,000-169,000 tons per year, assuming EPA finalizes its methane rule.
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Greens Press for Tougher Action on Methane
Jan 26, 2016 | E&E - Greenwire
By Amanda Reilly
Environmentalists are warning the Obama administration about a gap between its goals to reduce methane emissions from the oil and gas sector and potential reductions that proposed regulations will actually achieve.
That "emissions gap" is about 75 million metric tons of carbon dioxide equivalent, said the Boston-based Clean Air Task Force in a new analysis, which surveyed a suite of proposed and final methane-related rules.
While voluntary actions by oil and gas companies may decrease the gap, the group said the administration would likely not meet its stated goal of reducing the sector's methane emission between 40 and 45 percent by 2025 compared to 2012 levels.
Conrad Schneider, CATF advocacy director, said today the report was not meant as a critique of the administration but rather as a "rallying cry" for national rules covering methane emissions from existing oil and gas facilities across the country.
"Our message to the administration today is you can do this," he said today. "There is a way for you to get all the way to your goal."
CATF's analysis took into account U.S. EPA's 2012 standards targeting emissions of volatile organic pollutants from oil and gas drilling, which also led to some methane reductions.
From that baseline, CATF looked at how far the Obama administration's proposed rules would go toward meeting methane reduction goals, Schneider said.
EPA last year proposed methane pollution standards for new operations in the oil and gas sector, as well as guidelines for addressing air pollution in wellheads located in ozone nonattainment areas.
The Bureau of Land Management on Friday proposed to cut down on the loss of natural gas from about 100,000 wells located on federal and tribal lands (Greenwire, Jan. 22).
Together, the administration's actions would cut annual methane pollution from the oil and gas industry by about 28 million metric tons of carbon dioxide equivalent, CATF found. The vast majority of those reductions would come from EPA's proposed rule.
"And yet, these concrete steps forward still won't reduce methane emissions to the levels targeted by the administration," the group said.
Environmentalists are calling on EPA to target methane emissions from existing oil and gas equipment. In its analysis, CATF found EPA could close the emissions gap completely by issuing regulations for existing leaky and older equipment, curbing the intentional release of gas from wells.
The agency, however, has indicated that voluntary activities will be sufficient to tackle emissions from existing operations. Oil and gas companies have backed such an approach (Greenwire, Jan. 21).
But CATF said that even if all oil and gas operations voluntarily achieved a lower average rate of emissions intensity, as called for by the Our Nation's Energy (ONE) Future voluntary program, they would still fall far short of the Obama administration's methane goal.
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EPA's Treatment Of Biomass In ESPS FIP Faces Threats Of Dueling Lawsuits
Jan 26, 2016 | InsideEPA
By Dawn Reeves
EPA is facing threats of dueling lawsuits from supporters and opponents of biomass energy over whether the power source should qualify as renewable energy under the federal implementation plan (FIP) and model rule for states to comply with its power sector greenhouse gas (GHG) rule, underscoring the agency's continuing uncertainty over how to proceed.
In contrasting comments filed on EPA's proposed FIP ahead of a Jan. 21 comment deadline, environmentalists generally urged the agency to drop its plan to allow some biomass to qualify as renewable energy under the FIP while the industry and its supporters urged the agency to broaden its proposed approach.
The Center for Biological Diversity (CBD) says in its comments that all biomass must be excluded from eligibility for renewable allowance set-asides and emission reduction credits (ERCs) because it is not “'zero carbon' generation and cannot reliably result in [carbon dioxide] reductions during relevant compliance periods” under the rule. “EPA also should refrain from adopting a list of pre-approved 'qualified biomass' feedstocks.”
In contrast, the National Alliance of Forest Owners (NAFO) urges EPA in its comments to finally provide certainty on biomass GHGs by allowing its use for compliance as long as forest stocks remain stable.
The group added in a statement that “EPA's mixed signals on biomass are out of step with other U.S. and global regulatory authorities. . . It should not be difficult for the agency to align its guidance to the states with these positions and recognize the long-standing scientific consensus on the carbon neutrality of biomass.”
EPA has long been conflicted on how to treat emissions from biomass energy. Industry argues it is carbon neutral because regrowth resequesters GHGs, but environmentalists say the initial release of carbon when trees are burned for energy can take hundreds of years to replace through new growth.
The agency has taken a tortured path on the issue, especially in its existing source performance standards (ESPS), where it said it would accept sustainably produced biomass as carbon neutral.
But the agency has yet to define those fuels and has deferred many of the tricky biomass issues in the final ESPS to the FIP, even as states are now drafting their plans to comply with the rule.
Rather than give states the go-ahead to use biomass as a compliance tool in the final ESPS, the agency is instead seeking comment on an unidentified pre-approved list of such materials in the proposed FIP.
This appears likely to defer final action on the issue until after the agency's Science Advisory Board (SAB) completes a final review of the agency's revised biomass accounting framework that is intended to help officials estimate carbon dioxide emissions from biomass combustion.
A SAB panel has ended its review and drafted a final report, but that document does not appear to have been forwarded to the full board for approval and return to EPA. The report backed some of EPA's revised draft framework but also included some strong criticisms, including EPA's insistence that the framework remain policy neutral.
Litigation Certainty
The final FIP and model trading rule should be when EPA reaches clarity on biomass GHGs, but the agency appears to face legal action no matter what course of action it takes.
The biomass industry is already suing the agency over its handing of biomass in the final ESPS, but recently asked the court to put the issue aside while it addresses the merits of other claims.
The industry is also threatening to sue over the FIP.
NAFO says EPA's FIP exacerbates hurdles for biomass “by actually excluding biomass energy entirely” from the FIP and model trading rule, and “by failing to provide states with sufficient guidance on opportunities to incorporate biomass into state implementation plans in a simple and cost-effective manner that will not jeopardize the potential for biomass to serve as an option for [ESPS] compliance.”
The group says that forests must be harvested to optimize their climate benefits, and that should provide a clear pathway for biomass in the ESPS.
Also, the American Forest & Paper Association (AFPA) and American Wood Council (AWC) say in theircomments that biomass must be recognized in the final FIP as an “eligible” renewable measure. “EPA is only considering wind, solar, geothemral power, hydropower, and new nuclear units and capacity uprates as eligible measures. . . It would be arbitrary and capricious for EPA to exclude biomass energy as an eligible measure under the federal plan.”
The groups added in a statement that the agency “needs to fully recognize the carbon neutrality of biomass energy across their regulations.”
While environmentalists have not yet sued over the ESPS, some have warned they may challenge it later, saying that because the agency has not provided criteria for approving state plans that include biomass, its approach is arbitrary.
CBD's comments also tee up a likely legal challenge should the agency decide to allow biomass to be GHG neutral in the FIP.
“The only lawful course of action is for EPA to finalize its proposed regulatory language excluding bioenergy generation from both rate-based and mass-based FIPs and to adopt final [model trading rules] that similarly exclude allowances and ERCs based on bioenergy generation,” the group says.
It adds: “Given that EPA has not yet made (much less adequately justified or explained) any final decision on the use of biomass in [ESPS] compliance, it bears repeating here that biomass energy generation is not 'zero carbon' generation. Combustion of biomass produces large amounts of CO2. Measured at the stack, biomass combustion produces significantly more CO2 per megawatt-hour than fossil fuel combustion. As a result, replacing fossil fuels with biomass will increase smokestack CO2 emissions. “
This shows that any conclusion that regrowth avoids emissions is “far removed in space and time from combustion of the materials themselves,” CBD argues, and adds that allowing biomass to serve as the basis for allowances or ERCs would “undermine the statutory purpose (and contradict the purpose of the Clean Power Plan) by crediting an emissions increase as an emissions reduction.”
The group also notes that it would be “impossible” to ensure resequestration occurs within the ESPS compliance period, which is from 2022-2030. And it says treating bioenergy as reducing emissions based on carbon cycle considerations is functionally equivalent to allowance reliance on out-of-sector offsets, which EPA prohibits.
CBD also argues the agency cannot justify adopting pre-approved qualified biomass feedstocks, as suggested, and references the SAB panel's conclusion that a comparison must be made between bioenergy emissions with emissions that would otherwise occur if the materials were not used for energy. This type of analyses requires inclusion of a long resequestration time frame while the ESPS requires covered utilities to “demonstrate emissions reductions during specific compliance periods.”
Similarly, the Partnership for Policy Integrity argues in its comments that “biomass should not be an eligible measure” in the rule, and that EPA should not specify a list of pre-approved qualified biomass. “EPA should particularly give a wide berth to any implication that 'sustainably managed' lands can produce qualified biomass.”
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Mary Fallin: A Conservative Trailblazer Takes on Obama, EPA
Jan 26, 2016 | Roll Call
By Ed Felker
Oklahoma Gov. Mary Fallin is no stranger to Washington insiders. She’s a conservative who rose through the state’s Republican ranks to win two terms in the House, before being elected the state’s first female lieutenant governor and then the first female chief executive.
In addition to breaking the state’s gender barriers, Fallin has become known nationally among Republican governors who have consistently opposed President Barack Obama’s policies, notably his signature Clean Power Plan carbon emissions limits on existing power plants.
Fallin, 61, the first Republican woman to lead the National Governors Association, projects a polite but firm stance in her dealings with Washington, saying that she is looking out for her state.
“I’m one of these governors who believe in states’ rights, (who) believe that many times the federal government overreaches in their regulatory authority or in their policy, and that a lot of these things should be reserved back to the states,” she says.
Fallin has also opposed Obama over new Clean Water Act rules on pollution of wetlands and streams, known as the Waters of the U.S., on Medicaid expansion under Obamacare, and the resettlement of Syrian refugees in the U.S.
Her prominent role as a fossil fuel defender prompted House Republicans to have Fallin give their weekly video address in February 2015, in which urged Obama to approve the Keystone XL oil pipeline from Canada.
She’s also made headlines over the state’s controversial death penalty method, which led to a 5-4 Supreme Court decision last year that upheld the use of an alternative lethal drug that inmates challenged as cruel and unusual.
Now in her second four-year term, her staunch anti-Obama record has earned her applause from conservatives — and brickbats from liberals and environmental groups.
She will have a chance to burnish her anti-Republican record even further in 2016 over the Clean Power Plan, which Fallin has called a “politically charged war against utility consumers across the country.”
Last year, she became the first governor — and so far the only one — to heed the call by Senate Majority Leader Mitch McConnell, R-Ky., that states not comply with the rule.
Even before the rule was finalized last year, she signed an executive order that barred Oklahoma state agencies from writing an initial compliance plan to submit to the Environmental Protection Agency that is due by September 2016.
There is still time to reverse that order.
Fallin has been coy about what she would do so if a federal appeals court in Washington does not stay the rule while it hears a suit by Oklahoma and 26 other states to overturn it. The coal industry, some utilities and trade groups also have filed suits.
A three-judge panel on Jan. 21 rejected stay petitions by opponents, though the judges also put the suits on a fast track for a decision, with oral arguments set for June 2. But if the rule is not overturned by early September, EPA would impose its own federal plan on the states that don’t draft their own.
Oklahoma gets a third of its electricity from coal, and is required under the rule to lower its power plant carbon emissions rate by about 32 percent below 2012 levels by 2030.
“That’s something we’ll work with our attorney general on, and certainly with our consumers and our various utilities in our state to determine what the best plan of action is,” Fallin said before the stay was denied.
“Of course we’re going to keep it close in hand at this time until we get an order from the court — but we are certainly aware that there are different options on the table for us to look at.”
The order was part of Fallin’s agenda to support the use and production of fossil fuels, particularly oil and gas, a linchpin in the state’s economy. She signed legislation in 2015 that barred towns and counties from restricting hydraulic fracturing of oil and gas wells — a move that solidified siting authority in the state’s Corporation Commission.
Her pro-drilling and pro-coal stances have earned Fallin praise from fellow opponents of Obama, particularly Sen. James M. Inhofe, R-Okla., who got behind her when she was in the state legislature in the early 1990s and urged her to run for lieutenant governor, a post she held for three terms.
Inhofe has led unsuccessful attempts in the Senate to stop the carbon rule and the Waters of the U.S. rule, which expanded EPA authority over streams and wetlands that feed drinking water sources.
The state was the nation’s fifth-ranking oil producer in 2013, according to the Energy Department, and is home to the central oil pipeline and storage hub in Cushing. It’s also been hit hard by the crash in oil prices.
In an interview, Inhofe stressed that every Oklahoma governor must have a firm grasp on energy issues. Fallin’s long career in state politics may have given her the most oil and gas knowledge of any state executive in the U.S., he added.
“There’s no hiding place for someone who’s in the governor’s seat,” Inhofe said. “Mary is doing a very good job, but it’s expected that she does. I’ve served with her in so many different capacities, and energy has been one of our closest issues to deal with, because it has such an effect on us.”
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Going Geen Can Add Value to Your Home
Jan 26, 2016 | Washington Post
By Kenneth R. Harney
What is going “green” worth in Washington home real estate? If you rehab a house to exacting energy and environmental standards, or install a solar-panel array on your roof, does your house command more when you sell?
If you seal up all the energy-leaking areas in your house, install a highly efficient heating and ventilating system, new windows and a long list of other green improvements, will a future buyer pay you a premium price for your efforts?
A new study conducted by national appraisal experts says the answer most probably is yes — often tens of thousands of dollars more.
Funded by the D.C. Department of Energy and Environment and assisted by the nonprofit Institute for Market Transformation, the study employed a sophisticated “paired sale” analysis of homes sold in the District between February 2013 and June 2015.
Appraisers matched individual “high-performance” energy and resource-conserving houses against multiple homes similar in type and location but without green improvements. They then calculated the extra dollar increments buyers were willing to pay for the green features and found they ranged from $10,343 to $53,000, or an average premium of 3.46 percent. Some premiums on individual houses ranged as high as 6 percent to 7.7 percent, and were enhanced when properties had photovoltaic solar arrays to slash electricity costs.
According to the study, green features in renovations and new construction represent “a growing trend” in the District. As of September, there were 457 LEED-certified homes and 329 Energy Star homes as of August. LEED stands for Leadership in Energy and Environmental Design. LEED certification involves independent evaluation and verification that a building or an entire neighborhood meets high energy efficiency and resource conservation rating standards set by the U.S. Green Building Council. Energy Star certified homes must meet rigorous energy-savings standards prescribed by the Environmental Protection Agency.
Research published in 2015 documented strong demand for high-performance homes in the District: 18 percent of total residential sales and 29 percent of sales in the Friendship/Chevy Chase area (Zip code 20015) had one or more green features associated with the house. The high-performance homes used for paired sale analysis in the new study were scattered among neighborhoods in Northeast and Northwest and consisted of renovated older row houses, detached single-family homes and one high-rise condo unit. The median sale price was just over $693,000, though two homes sold below $500,000 and one went for $817,000.
Kevin Perry and his wife, Susanne Nobles, purchased one of the houses in the study this past May. It’s a 90-plus-year-old Craftsman-style single-family home in Petworth and cost “in the mid-$700,000” range, he said. Like all the owners of houses that were included in the appraisal study, Perry had no idea that his house had been selected as one of the high-performance properties. The study’s appraisers, who obtained pricing and detailed transaction data from MRIS, the Washington region’s multiple-listing service, say they were prohibited by privacy rules from publicly disclosing information about the names or addresses of sellers or purchasers of any of the properties. Perry’s house was identified to me by an independent source.
Perry, who teaches Latin at the National Cathedral School, says he and his wife weren’t even shopping for a house with green features. “We were mainly just looking for something that we could afford and that was old and had a good location,” Perry told me. Though they visited and considered a number of competing, non-green but comparable houses in roughly the same price category, they ultimately found the case for the Petworth property compelling.
“We were really intrigued by the solar panels and with the possibility of savings on utilities,” Perry said. The closer they looked at the green features, the more they saw: energy-efficient new windows, a commercial-grade air exchanger to keep the interior air fresh and recirculated at all times, super-heavy insulation, a heat recapture system that employs waste hot water to save on the energy costs of heating water, to name just a few. The solar array was bigger than the average system used for houses of this size and promised to cut electricity bills drastically, which it has in the months since they moved in. “We really like it,” Perry said, but he conceded that he has not quite figured out the “net metering” system that adjusts their bills based on how much energy they have been contributing to Pepco.
Even better, according to the study, Perry’s five-kilowatt photovoltaic equipment on the roof could be eligible for between five and eight Solar Renewable Energy Credits (SRECs) per year over a three-year contract. “Over this time period, the study reported, “the SRECs are valued at $7,500. Besides the energy produced by this [solar] system, the owner may receive income for three years.”
Tanya Topolewski, a D.C.-based green real estate developer who rehabilitated and sold two of the other houses appraisers selected for the study, says it is not surprising that Perry and his wife were not shopping specifically for a high-performance house. “The vast majority of people who come to see our houses are just interested in real estate,” she said in an interview. But once they see the advantages of buying a home with extraordinary energy efficiency, fresh air 24/7 and a positive environmental impact, “it’s kind of a no-brainer.” Topolewski says creating a truly high-performance home can be daunting, especially converting old, leaky rowhouses in the District. Both of her houses in the study are certified LEED Platinum, the highest rating possible.
But, she says, “there’s quite a bit of building science involved when you do a renovation from a low-performance home to a high-performance one. This has a name, actually — a deep energy retrofit” — and it is usually not a do-it-yourself type of project.
Cliff Majersik, executive director of the Institute for Market Transformation, noted that previous research studies on green price premiums in California and the Pacific Northwest have shown that high-performance houses and solar arrays command more at resale. Some premiums have ranged significantly higher than what was found in the D.C. study but did not use the same methodology, and some focused on newer houses, not necessarily retrofits of older homes.
Majersik says the D.C. study demonstrates that “buyers are willing to pay more” for high-performance features, even when they have not been emphasized by sales agents in marketing materials. One of the homes in the study was LEED certified, but the marketing information on the multiple listing service (MLS) provided only minimal information about the green features and failed to note the presence of a cost-saving solar array serving the condominium. It commanded a lower-than-average sales premium.
Sandra Adomatis, the Florida-based appraiser who was the principal author of the study, emphasized in an interview that for the value of green features to be properly understood — especially by mortgage lenders who lay out the cash for their financing — real estate agents will need to fully detail them in MLS listings. The Metropolitan Regional Information Systems (MRIS) has multiple searchable “green fields” on listing forms that allow agents to describe these features and for shoppers to ask to be shown houses that offer them.
Yet Adomatis found that listing descriptions of virtually all the high-performance homes in the study “rarely included more than a comment indicating the property has a green certification” such as LEED. But most home shoppers do not really know what LEED means, and agents only infrequently have the training needed to properly list and describe all the value-enhancing features in a high-performance home for sale.
What’s needed, Adomatis said, is for green certifications to be attached to MLS listings, and for sellers or their agents to show any home-energy rating-system report that may exist to prospective buyers. The study lists other recommendations for the local real estate community and can be found atwww.imt.org/resources/detail/what-is-green-worth-unveiling-high-performance-home-premiums-in-washington .
Majersik says the bottom line for sellers of homes with green features is to promote them prominently in their marketing — “otherwise, they are leaving money on the table.”
The message to buyers: Even though you may pay a modest premium for a high-performance house, it will probably save you substantial money over a period of years in energy costs and almost certainly will be a healthier place to live.
Kenneth R. Harney writes “The Nation’s Housing” column.
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