Preview Newsletter
AM ACC 3/18/2016
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(ACC Mentioned) Why Significant But Balanced Changes Are Needed to TSCA's New Chemicals Provisions
Mar 18, 2016 | Environmental Defense Fund
By Richard Denison
key need for reform of the Toxic Substances Control Act (TSCA) is making enhancements to the law's provisions addressing new chemicals prior to their commercial manufacture. -
House GOP Ties Lack of EPA LCR Update to Flint, Asks McCarthy to Resign
Mar 18, 2016 | InsideEPA
By Amanda Palleschi
House Republicans are criticizing EPA for not updating its lead and copper drinking water rule (LCR) since 1991, saying the agency's “failure” to do so is among the reasons for the drinking water crisis in Flint, MI... -
The EPA’s Flint Abdication
Mar 18, 2016 | Wall Street Journal
By Editorial Board
This week’s Congressional hearings have shown that a series of government errors—local, state and federal—caused Flint’s lead-contaminated water. The state is fessing up, but the Environmental Protection Agency is... -
It’s Not Just Flint. Lead Taints Water Across the U.S., EPA Records Show
Mar 18, 2016 | Washington Post
By Darryl Fears
Lead contamination in drinking water is a problem that reaches far beyond the disaster in Flint, Mich., and threatens children’s health nationwide. -
Portland Becomes 7th City to Sue Monsanto over PCB Contamination
Mar 17, 2016 | EcoWatch
By Lorraine Chow
Portland, Oregon is suing Monsanto over contaminating the city’s waterways with polychlorinated biphenyls (PCBs), a highly toxic group of chemicals that endangers human health and the environment. -
IRS: Tax Credit Isn't Available for Non-Agricultural Chemicals
Mar 18, 2016 | BNA Daily Environment Report
By Erin McManus
A manufacturer can only claim the agricultural chemicals security credit for expenses related to a chemical that was intended for agricultural use, according to an Internal Revenue Service field attorney advice memorandum. -
Obama Admin Proposes Rules to Reduce Air Emissions
Mar 18, 2016 | E&E News PM
By Emily Yehle
The Interior Department is proposing to update its air quality regulations for offshore oil and gas operations, with the aim of having one set of requirements for both the Gulf of Mexico and the Arctic. -
Shifting Clean Power Plan Deadlines ‘Premature': McCabe
Mar 18, 2016 | BNA Daily Environment Report
By Andrew Childers and Anthony Adragna
The Environmental Protection Agency will continue some work on its Clean Power Plan programs despite a stay from the U.S. Supreme Court, but it has made no decisions on extending the rule's compliance deadlines... -
Low Oil Prices Affect Natural Gas, LNG Exports: FERC
Mar 18, 2016 | BNA Daily Environment Report
By Rebecca Kern
A 66 percent decline in crude oil prices between June 2014 and December 2015 has also triggered a drop in natural gas production, Federal Energy Regulatory Commission staff said. -
The Essence of a Deal
Mar 18, 2016 | The Hill - Congress Blog
By Fred H. Hutchison
Although we’re not even a full quarter into 2016, this year is shaping up to be the most momentous in decades, and we’re not talking just about the elections. We’re also talking about American energy exports. -
Bill Allows Leasing off N.C. Coast, Counters Obama's Plan
Mar 18, 2016 | E&E Daily
By Emily Yehle
At least one lawmaker is already trying to reverse the Obama administration's decision not to open up Atlantic waters to oil and gas leasing. -
TransCanada to Buy Columbia Pipeline Group in $10.2 Billion Deal
Mar 17, 2016 | New York Times
By Ian Austen
After failing to obtain approval for its Keystone XL oil sandspipeline, TransCanada said on Thursday that it would buy the Columbia Pipeline Group for $10.2 billion. -
The Shale Revolutionaries
Mar 18, 2016 | Wall Street Journal
By Philip Delves Broughton
When bombs go off in the U.S. economy, it takes more than an economist to grasp what is really happening. -
DOJ Urges Dismissal of Train Brake Challenges
Mar 18, 2016 | BNA Daily Environment Report
By David Schwartz
Industry challenges to a federal rule requiring a certain type of brakes on train cars carrying flammable material should not be held in abeyance until new rules potentially come into play at the end of 2017... -
Regulators Seek New Rules for Natural Gas Pipelines
Mar 18, 2016 | The Hill - E2 Wire
By Timothy Cama
The Department of Transportation is proposing new regulations for natural gas pipelines that would expand federal safety standards to a bigger group of pipelines. -
Pipeline Safety Bill Advances With Lawsuit Provision, For Now
Mar 18, 2016 | Natural Gas Intelligence
By Charlie Passut
The U.S. House Energy and Power Subcommittee unanimously approved a draft version of a bill to reauthorize the Natural Gas Pipeline Safety Act and decided to retain, for now, a controversial provision giving private individuals... -
Storing Crude Oil in Rail Cars: Not Widespread, But It Does Occur
Mar 18, 2016 | Philadelphia Inquirer
By Andrew Maykuth
With last year's crash in oil prices, less crude is moving by train, creating a surplus of idle rail cars that have become opportunistic vessels for some traders storing petroleum until prices recover. -
States, Utilities Attack EPA Authority For Rule to End SSM Air Exemptions
Mar 17, 2016 | InsideEPA
By Stuart Parker
Several states and utility industry groups are attacking what they say is EPA's lack of authority for its rule forcing dozens of states to revise their Clean Air Act compliance plans to scrap air pollution limit exemptions during periods of startup... -
House Refers EPA Coal Refuse Bill to Senate EPW
Mar 18, 2016 | InsideEPA
The House has referred to the Senate Environment & Public Works Committee (EPW) legislation that cleared the lower chamber in a 231-183 vote this week that seeks to ease compliance by coal refuse-to-energy utilities... -
EPA Disapproves Parts of South Coast Air Quality Plan
Mar 18, 2016 | BNA Daily Environment Report
By Carolyn Whetzel
The Environmental Protection Agency has issued a final ruledisapproving portions of a clean air plan designed to bring California's South Coast air basin into attainment with the 2006, 24-hour standards for fine particulates, or PM 2.5.
Industry and Association News - There are no clips to report at this time.
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(ACC Mentioned) Why Significant But Balanced Changes Are Needed to TSCA's New Chemicals Provisions
Mar 18, 2016 | Environmental Defense Fund
By Richard Denison
A key need for reform of the Toxic Substances Control Act (TSCA) is making enhancements to the law's provisions addressing new chemicals prior to their commercial manufacture. The Senate bill makes moderate but critical improvements to these provisions.
These improvements arose through extended negotiations that sought to carefully balance two legitimate competing interests: On the one hand, ensuring that the safety of new chemicals is carefully examined and a reasonable assurance of safety is provided before market entry – which the current law does not provide. On the other hand, ensuring an efficient short process is utilized that doesn’t unduly slow or create too high a bar for market entry or have the unintended consequence of impeding innovation – which the current law does provide.
That balance was struck through a set of provisions that:
require for the first time that EPA make an affirmative safety finding as a condition for market entry, but using a standard – that a new chemical is likely to meet the safety standard – that is lower than that applicable to existing chemicals undergoing full reviews;
maintain current TSCA’s typical 90-day review period for new chemicals, even shortening that period when EPA can make a positive safety determination more quickly;
ensure that new chemicals can’t enter the market when information is not sufficient to make an affirmative safety finding, while retaining TSCA’s lack of a requirement for a minimum up-front data set for new chemicals; and
require EPA to carefully consider the need to extend to other companies any conditions or restrictions it places on a company that first brings a chemical into commerce, and either do so or explain why that is not needed.
I believe that this compromise, while unlikely to please anyone completely, represents significant improvement over the status quo, retaining its positive features while addressing its shortcomings.
There is actually considerable support that has been voiced for this balanced approach, including from industry and from the Environmental Protection Agency (EPA), as well as groups like my own.
EPA has consistently offered testimony supporting these types of enhancements to the new chemicals program, noting that they are called for by the Administration’s principles for TSCA reform. See, for example, EPA testimony here, here and here. The Administration again reiterated this position earlier this year, in its January letter to House and Senate negotiators expressing preferences for or concerns about specific provisions in one or both of the bills.
Leading industry representatives have also supported the improvements made in the Senate’s legislation to TSCA’s new chemicals provisions. These include Cal Dooley, President and CEO American Chemistry Council (ACC) and Ernie Rosenberg, President and CEO of the American Cleaning Institute (ACI). In response to direct questioning from House Energy and Commerce Subcommittee Chairman John Shimkus at a hearing the House held on the Senate’s Chemical Safety Improvement Act (CSIA, the precursor for the Senate’s Lautenberg Act), they expressly supported the most significant of the changes to the new chemicals provisions made by the Senate legislation: a requirement for EPA to make an affirmative safety decision prior to commencement of manufacture.
Here is the relevant excerpt (emphases added):
SHIMKUS: Are the changes to TSCA Section 5 in the Senate bill needed and why? Cal, if you would start.
DOOLEY: ACC, you know, supports the provisions of the modifications of Section 5 in CSIA. We recognize that it is important, even with the new chemicals, that you do have provisions that do allow for EPA to make an affirmative determination that the new chemical will likely meet the safety standard, and that we accept that it is an obligation upon the industry and the manufacturer to provide that information to allow them to make that determination.
SHIMKUS: Mr. Rosenberg?
ROSENBERG: So the changes that are made in Section 5 in the bill do one important thing. They do what we're really looking for which is create a more credible program. And the fact that there's an affirmative determination gives at least most people a level of comfort that things haven't just gone through because the deadline expired.
I fully recognize there are some in industry who have argued no changes should be made to TSCA’s new chemicals provisions, just as there are health and environmental advocates who believe the Senate bill’s provisions don’t go far enough and seek a bigger overhaul.
Given the mixed views on this contentious issue, isn’t the right approach to find a balance between the competing concerns here? That is just what the Senate’s bill does – the result of careful negotiations and input from all of the stakeholders over the course of the past three years.
As I have reread the extensive testimony offered on TSCA reform over the past two Congresses, one point made over and over again by the business community jumps out: the need for reforms that are sufficient to restore confidence in the system.
That is one of the reasons why I so strongly believe that more credible oversight of chemicals before they reach the market must be a cornerstone of a new TSCA. Not to robustly address such a big issue is simply a recipe for renewed public concerns to be voiced over the new law starting the day it passes. And that would be good for no one – not legislators who have worked hard to address these issues, not for business, and certainly not for consumers.
For those wanting more background on TSCA’s new chemicals provisions and their shortcomings, I provide additional detail below.
Background on TSCA and new chemicals
TSCA divided the universe of chemicals into two groups: “Existing chemicals” are those on the market at the time the first TSCA Inventory was established (1979), numbering some 62,000 chemicals. These chemicals were grandfathered in by the original law, with no mandate for them to be tested or reviewed for safety. “New chemicals” are those that entered commerce at some point since 1979, numbering some 23,000 chemicals. Between 500 and 1,000 new chemicals enter commerce in a typical year.
Under TSCA, a company is generally free to start making and selling a new chemical at the end of a 90-day review period, unless EPA finds the chemical “may present an unreasonable risk.” That is, no affirmative safety decision is required, and the burden is on EPA to find a concern even when safety data are wholly lacking. In addition, Section 5 of TSCA provides no mandate for EPA to review new chemicals prior to market entry.
I have blogged extensively about the limitations of EPA’s new chemicals reviews. Let me briefly summarize the key problems here, and refer readers to these blog posts for more detail.
No data, no problem: No up-front testing requirement or minimum data set applies to new chemicals.
Guessing game: EPA is forced to heavily rely on limited models and methods to predict the toxicity or behavior of a new chemical.
Catch-22: While EPA can require testing of a new chemical on a case-by-case basis, it must first show the chemical may pose a risk – not an easy task without any data in the first place!
One bite at the apple: EPA typically gets only a single opportunity to review a new chemical.
Crystal-ball gazing: EPA has to try to anticipate a new chemical's for-all-time future production and use.
Black box: New chemical reviews lack transparency.
Anti-precaution: In deciding whether to require testing or controls for a new chemical, EPA effectively equates lack of evidence of harm with evidence of no harm.
How would TSCA reform legislation address these problems?
The Lautenberg Act mandates for the first time that EPA make an affirmative finding of safety for each new chemical as a condition for market access. It makes clear that manufacture of a new chemical can only start if EPA determines it is likely to meet the safety standard. Where EPA determines the chemical is not likely to meet the safety standard, it must preclude manufacture or impose restrictions sufficient for EPA then to find the chemical is likely to meet the safety standard.
If EPA finds it has insufficient information to make a determination, it can suspend the review pending receipt of the information, or impose restrictions sufficient for it to make the likely-safe determination even in the absence of the information. While the bill does not require up-front safety data sets for new chemicals, EPA can require testing of new chemicals as needed. It can do so by issuing orders as well as through negotiating consent agreements. And it need not first show potential risk or high release or exposure in order to require testing.
Once a new chemical enters commerce, it becomes subject to the bill’s prioritization process. EPA can review the chemical at any time based on new information that it develops or obtains after the chemical is on the market. The bill also requires EPA to make public all documents relating to new chemicals and EPA reviews, subject to the bill’s confidential business information (CBI) protections.
The new chemicals provisions of the Lautenberg Act go far to address the fundamental problems with TSCA’s Section 5.
The TSCA Modernization Act makes no changes to section 5 of TSCA.
http://blogs.edf.org/health/2016/03/17/why-significant-but-balanced-changes-are-needed-to-epas-new-chemical-reviews-under-tsca/#more-4936
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House GOP Ties Lack of EPA LCR Update to Flint, Asks McCarthy to Resign
Mar 18, 2016 | InsideEPA
By Amanda Palleschi
House Republicans are criticizing EPA for not updating its lead and copper drinking water rule (LCR) since 1991, saying the agency's “failure” to do so is among the reasons for the drinking water crisis in Flint, MI, and they are calling for EPA Administrator Gina McCarthy to resign, while Democrats counter that Michigan officials are more to blame.
In the second day of testimony from EPA, Michigan and Flint officials, majority members on the House Oversight & Government Reform Committee March 17 sought to place the majority of blame for the Flint drinking water crisis on McCarthy and EPA. Republican members, including committee Chairman Jason Chaffetz (R-UT), grilled McCarthy on why EPA did not act more swiftly once it became aware of the extent of elevated lead levels in Flint's drinking water supply, including failing to update the LCR.
While Republican lawmakers also acknowledged Snyder and the Michigan Department of Environmental Quality (MDEQ)'s central role in allowing the crisis to continue, Democrats on the panel were more blunt in their criticism of the state, and the GOP lawmakers' primary focus on EPA, echoing sentiments expressed during aMarch 15 hearing.
“Let's be clear, this is not just on the EPA,” the committee's ranking member, Rep. Elijah Cummings (D-MD) said. “Governor Snyder's administration had prime responsibility under the Safe Drinking Water Act, not the EPA. They chose to switch sources of water, not the EPA. The administration ignored warnings not to go forward with the switch, not the EPA. Governor Snyder's administration falsely told Flint that corrosion control was unnecessary, not the EPA. His administration delayed corrosion control, not the EPA.”
The League of Conservation Voters (LCV), in a statement issued after the hearing, also criticized Republican lawmakers for failing to press Snyder for answers, and for what the group says is Snyder's “refusal to take full responsibility for the lead poisoning of the residents of Flint.”
“We commend those members of Congress who stood up today and tried to get real answers and accountability from the Governor,” LCV Legislative Representative Madeleine Foote said. “It's beyond disappointing that other members of Congress are still trying to shift the blame and are unwilling to even provide critical federal assistance to the city, instead choosing to play politics with peoples health.”
While Republican members of the committee called for McCarthy's resignation, and Democratic members called for Snyder to step down, Rep. Tammy Duckworth (D-IL) said both should step down over their role in Flint.
“I also think McCarthy should resign and so should the governor. I'm certainly not on the governor's side, but I'm not on your side in this,” Duckworth told McCarthy. “As a Region 5 member, I'm extremely troubled by how EPA failed in its duty to serve as the last line of defense. I'm deeply concerned that communities all around this country are at a similar risk.”
EPA's Role
During his testimony, Snyder repeated his apology for the crisis, first made during his state-of-the-state address earlier this year, and outlined steps the state and city are currently taking in Flint, including using funds from a state budget surplus.
Chaffetz in his call for McCarthy's resignation, pointed to EPA's “refusal to apologize” and McCarthy's refusal to say whether she would have removed EPA Region 5 Director Susan Hedman had Hedman not resigned -- as well as the agency's “failure” to “significantly update” the LCR.
Other Republicans echoed that line of questioning.
“Here's my concern,” Rep. Mark Meadows (R-NC) said to McCarthy. The Safe Drinking Water Act (SDWA) “requires rules to be updated every six years. Do you know how many times the [LCR] has been updated fully since 1991. The answer is zero. Here we have SDWA standards that needed to be updated and EPA did nothing about it.”
Meadows cited a 2006 Government Accountability Office (GAO) report calling for EPA to quickly update the LCR. “Do you not see a problem with the fact the law requires EPA to do a rule every six years and you haven't revisited it in 10 years and you keep changing the goal post?”
McCarthy clarified that SDWA requires the agency to review, not necessarily to change, the rule every six years, and noted that its National Drinking Water Advisory Council (NDWAC), in final recommendations on how to revise the rule, “actively told us we cannot make tweaks to this, we have to make substantive changes. That does take more time than making small tweaks.” EPA is currently reviewing the NDWAC recommendations and deciding how it will update the LCR.
Furthermore, McCarthy said that the agency did not “need any change to the rule in order to have prevented this problem from happening. It was how [MDEQ] interpreted it. If they had properly interpreted the law as it currently exists, we wouldn't be sitting here today.”
But Chaffetz countered, “You're in charge of the LCR. You think the Governor is in charge? You're in charge.”
Monitoring Requirements
Snyder in his testimony also called for quick changes to the LCR, though neither he nor the lawmakers specified what changes were warranted.
“The truth is, there are many communities with potentially dangerous lead problems,” Snyder said. “And if the DEQ and EPA do not change . . . and if the dumb and dangerous federal lead and copper rule is not changed . . . then this tragedy will befall other American cities.”
Under both the current rule and the NDWAC recommendations, water systems are not specifically required to conduct any additional testing when they switch water sources -- as Flint did when it switched from the Detroit water system to the Flint River -- but such testing is advised. Some drinking water sources are more corrosive than others, increasing the likelihood that lead and copper from water pipes will leach into treated water.
"I don't know that there's an up-front testing requirement" in the rule for a circumstance like Flint, where the water source was switched, one drinking water expert previously told Inside EPA. "Part of that gets left to the engineers to say, 'if our water source is going to be x, it's our obligation to do the work up front to figure out [if that will have lead]."
McCarthy during questioning said the agency never expected a drinking water utility not to conduct this type of testing when switching water.
“We couldn't figure out for the life of us, in our guidance, we never thought anyone would go from a treated system to an untreated system and not treat it. I never thought anyone would,” McCarthy told the lawmakers.
SDWA Authority
Republican lawmakers questioned McCarthy on why the agency didn't act sooner to issue a SDWA Section 1431 order to require Flint to lower the lead levels in its drinking water.
“Looking back, from Flint Day 1, MDEQ provided confusing, incomplete and absolutely incorrect information,” McCarthy said. “They were transient, misleading and contentious. EPA staff had insufficient information to understand the potential scope of the lead problem until more than a year after that water supply was switched.”
But Chaffetz and other GOP panel members charged that EPA had attempted to “cover up” a June 24, 2015, draft report prepared by Region 5 drinking water official Miguel Del Toral, who conducted testing in Flint at the behest of Flint residents. The report indicated that the city had not stepped up its corrosion control treatment when it switched water sources. And they also pointed to September 2015 emails from Marc Edwards, a civil engineering professor at Virginia Tech who led private investigations into the water crisis, including obtaining several key documents and emails under the Freedom of Information Act, which summarized and documented the lack of corrosion control treatment in Flint.
“If you received email documenting all of these problems, why didn't you act until January 21?” Rep. Tim Walberg (R-MI) asked.
McCarthy said EPA's hands were tied at that time, because there was insufficient evidence to prove EPA met the legal requirements of SDWA Section 1431: “If there was any switch I could turn on that would have allowed us to go further, I would have pulled that switch. Were we late in getting it done? Yes. Are there consequences to that, absolutely. The administration worked very hard to get MDEQ to do their job, there was nothing else I could have ordered that could have made that move faster.”
She added that “even after all of this, the order I issued [in January] was still questioned by this state.”
http://insideepa.com/daily-news/house-gop-ties-lack-epa-lcr-update-flint-asks-mccarthy-resign
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Mar 18, 2016 | Wall Street Journal
By Editorial Board
This week’s Congressional hearings have shown that a series of government errors—local, state and federal—caused Flint’s lead-contaminated water. The state is fessing up, but the Environmental Protection Agency is trying to pretend it had nothing to do with it.
“Looking back on Flint, from day one, the state provided our regional office with confusing, incomplete and incorrect information,” EPA chief Gina McCarthy told Congress on Thursday. “As a result, EPA staff were unable to understand the potential scope of the lead problem until a year after the switch.” Far from being an innocent bystander in Flint, the EPA obfuscated and played down the scope of the lead problem.
As Ms. McCarthy noted, federal law gives states primary responsibility for enforcing drinking water rules, “but the EPA has oversight authority,” which includes setting maximum limits on contaminants and monitoring compliance. After a change in Washington, D.C.’s water treatment in 2001 resulted in dangerously high lead levels, Congress keelhauled the EPA for lax oversight.
In 2006 the Government Accountability Office concluded that “EPA’s data on water systems’ violations of testing and treatment requirements are questionable” and flagged “weaknesses in the regulatory framework” for the 1991 Lead and Copper Rule. Virginia Tech researcher Marc Edwards told Congress on Tuesday that the EPA for a decade has ignored recommendations to revise its lead rule to reflect best scientific practices.
The EPA also ignored warnings from its own staff. On Feb. 25, 2015—about 10 months after the city switched its water source to the corrosive Flint River—a parent called EPA Region 5 complaining about high lead levels. On March 19, an EPA official called the Michigan Department of Environmental Quality “expressing concern.”
In a detailed internal EPA memo dated June 24, staffer Miguel Del Toral documented the high lead levels discovered at the parent’s home plus other water problems in Flint including excessive Coliform bacteria, Legionella bacteria and the low-level carcinogen TTHM. Mr. Del Toral also flagged the absence of “optimal corrosion control” and exhorted the EPA to intervene. Federal law allows the EPA to review “treatment determinations made by a State” and take emergency action when a contaminant presents an “imminent and substantial endangerment to the health of persons.”
EPA Region 5 Administrator Susan Hedman, who resigned in February, explained to Congress on Tuesday that “during the summer and fall of 2015 the Region 5 Flint team actively evaluated and reevaluated the enforcement options available.” But she chose not to intervene in September because she worried that the Michigan Attorney General might sue the agency. When have legal risks ever stopped the EPA?
Mr. Del Toral shared his memo with the parent, who gave it to the ACLU. Ms. Hedman and former Flint Mayor Dayne Walling then tried to suppress the story. On July 1, Ms. Hedman wrote to Mr. Walling that the “preliminary draft report should not have been released” until it had “been revised and fully vetted by EPA management.”
The mayor who was up for re-election replied, “It would be helpful if this same information could be shared with the ACLU, at least the aspects of determinations still needing to be made and the City being in the right.” Ms. Hedman answered: “At this point, I am not inclined for my staff to have any further communications with the ACLU representative . . . however, I have no objection to the City letting him know that the report he was given was a preliminary draft and that it would be premature to draw any conclusions based on that draft.” Nothing to see here, folks!
After Mr. Walling’s challenger Karen Weaver called for a federal investigation of Flint’s water in September, the mayor declared “it’s dangerous for a candidate to make allegations that are not based on fact.” Two days later—and after Virginia Tech researchers published water tests showing elevated lead levels that conflicted with the city’s results—the EPA issued a nonchalant statement to the local press that while Flint water was within allowable levels, corrosion control should be implemented “as soon as possible.”
Mr. Walling thanked Ms. Hedman “for the continued support” and later invited her to a joint press conference with state officials. He explained that “I have cooperated with this particular press effort under the assumption that city, state and federal officials would all be standing together. If you are not able to be there it great [sic] changes the event.” Ms. Hedman initially agreed but later cancelled her trip to Flint as state and city officials came under increasing scrutiny.
On Jan. 21, three months after the city and state agreed to revert back to Lake Huron water and implement corrosion treatment, the EPA issued an emergency order—another vivid illustration of the Obama Administration leading from behind. The EPA often claims credit when it’s not due while ducking blame for failures such as the Gold King Mine toxic waste spill in Colorado last summer. It’s clear that the EPA disregarded and then tried to hide the red flags in Flint, even as Ms. McCarthy now tries to duck responsibility.
http://www.wsj.com/articles/the-epas-flint-abdication-1458258027
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It’s Not Just Flint. Lead Taints Water Across the U.S., EPA Records Show
Mar 18, 2016 | Washington Post
By Darryl Fears
Lead contamination in drinking water is a problem that reaches far beyond the disaster in Flint, Mich., and threatens children’s health nationwide.
On Thursday, USA Today reported that “hundreds of schools across the nation” have lead-tainted water, exposing children to “excessive amounts of an element doctors agree is unsafe at any level.” The story relied on an analysis of Environmental Protection Agency data, which it said revealed that “about 350 schools and day-care centers failed lead tests a total of about 470 times from 2012 through 2015.”
“That represents nearly 20% of the water systems nationally testing above the agency’s ‘action level’ of 15 parts per billion,” according to the story.
The paper’s investigation echoes a report last month by Washington Post reporter Yanan Wang, who wrote that 12 states found “a greater percentage of kids under six years old met or surpassed” blood-lead levels of at least 5 micrograms per deciliter — the threshold requiring public health action, as defined by the federal government. “The most egregious example is Pennsylvania, where 8.5 percent of the children tested were found to have dangerously high levels of lead in their blood,” wrote Wang, who noted that such poisoning can be traced not just to water but to paint in old homes.]
In New Jersey, a coalition led by a community development nonprofit, Isles, Inc., last month pressed New Jersey Gov. Chris Christie (R) to increase funding of a program to control lead after an analysis of state data found 11 cities had a higher proportion of children with dangerous lead levels than Flint.
“While lead levels in children in the suburbs have plummeted, the harsh fact is that minority children in urban communities continue to be poisoned,” Isles environmental health director Elyse Pivnick told Wang. “If you’re a mother in Trenton or Newark, we do not think the problem has been solved.”
Seven years ago, a study concluded that hundreds of young children in Washington, D.C., suffered potentially damaging amounts of lead in their blood because of contamination in the city’s tap water. The toxin can cause permanent developmental and behavioral issues.
The study contradicted the past public assurances of federal and D.C. health officials. In 2004, although officials conceded that the amount of lead in city water was at record levels, they said repeatedly that they found no measurable impact on the general public’s health.
Flint’s water was contaminated when a state-appointed emergency manager, in a cost-cutting move, switched the city’s water supply from the Detroit system to the Flint River. State environmental officials failed to ensure that anti-corrosive chemicals were added to the water, allowing lead to leach from aging pipes.
Michigan Gov. Rick Snyder (R) acknowledges the state agency’s inaction, but he also blames the Environmental Protection Agency for failing to do due diligence in protecting Flint residents as they began to raise concerns about their tap water. In a House oversight committee Thursday, EPA Administrator Gina McCarthy put the responsibility squarely back on the state, as Post reporter Lenny Bernstein reported.
“The crisis we’re seeing was the result of a state-appointed emergency manager deciding that the city would stop purchasing treated drinking water and instead switch to an untreated source to save money,” McCarthy said. “The state of Michigan approved that decision.”
Lead poisoning has a variety of sources, nearly all of them household items. The most common source of is peeling paint in older houses or apartment buildings. David Rosner, a public health and history professor at Columbia University and the author of “Lead Wars,” told The Post’s Philip Bumpthat lead was a once considered a “gift of God,” a statement attributed to a General Motors representative in the early 20th century, when industrialists considered it “essential to modern production.”
The full scope of lead contamination in public drinking water may be impossible to determine. As the USA Today story notes, the federal government only requires about one in 10 schools to test for it.
https://www.washingtonpost.com/news/energy-environment/wp/2016/03/17/its-not-just-flint-lead-taints-water-across-the-u-s-the-epa-says/
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Portland Becomes 7th City to Sue Monsanto over PCB Contamination
Mar 17, 2016 | EcoWatch
By Lorraine Chow
Portland, Oregon is suing Monsanto over contaminating the city’s waterways with polychlorinated biphenyls (PCBs), a highly toxic group of chemicals that endangers human health and the environment.
Portland City Council unanimously passed a resolution Wednesday authorizing city attorney Tracy Reeve to sue the biotech giant.
“Portland’s elected officials are committed to holding Monsanto accountable for its apparent decision to favor profits over ecological and human health,” Reeve said in a statement. “Monsanto profited from selling PCBs for decades and needs to take responsibility for cleaning up after the mess it created.”
Portland is now the seventh West Coast city to sue Monsanto over PCB contamination, joiningSeattle, Spokane, Berkeley, San Diego, San Jose and Oakland.
According to a statement from the plaintiff’s law firm Gomez Trial Attorneys, Portland has spent and will continue to spend significant public funds to investigate and clean up PCB contamination in the Willamette River and Columbia Slough. The chemical is also one of the main targets of the massive Portland Harbor Superfund cleanup project.
Travis Williams, executive director of Willamette Riverkeeper, explained to KGW: “In our case there are PCBs widely distributed throughout Portland Harbor and that’s one of the main reasons it was listed as a superfund site back in December of 2000.”
The city has spent more than $1 billion cleaning up the Willamette, Portland mayor Charlie Hales told OPB.
“The citizens of Portland dug deep in order to pay for cleaning up our mess, and other businesses should be held to that standard,” Hales added.
As EcoWatch mentioned recently, PCBs were once used to insulate electronics decades ago. Before switching operations to agriculture, Monsanto was the sole manufacturer of the compound, raking a reported $22 million in business a year.
The law firm said that Monsanto manufactured more than 1 billion pounds of PCBs between the 1930s and the 1970s, adding that Monsanto’s own documents show that it continued to sell PCBs long after it allegedly knew of the dangers they presented to human health and the natural environment.
As the Portland Tribune reported:
Documents show Monsanto knew as far back as 1969 that PCBs led to contamination of fish, oysters and birds, said John Fiske, a senior trial attorney with Gomez Trial Attorneys, in a presentation before the City Council on Wednesday. The company realized its product might cause “global contamination,” Fiske said, yet continued to peddle its product, “choosing profits over environmental health.”
The U.S. Environmental Protection Agency (EPA) banned PCBs in 1979, due to its link to birth defects and cancer in laboratory animals. PCBs can also have adverse skin and liver effects in humans. PCBs linger in the environment for many decades.
The EPA estimates that 150 million pounds of the chemicals are dispersed throughout the environment, including air and water supplies; an additional 290 million pounds are located in landfills in this country.
Monsanto stopped production of PCBs in 1977 over human health and environmental concerns. The St. Louis-based company released a statement following Portland’s move:
We are reviewing the lawsuit and its allegations. However, Monsanto is not responsible for the costs alleged in this matter. Monsanto today, and for the last decade, has been focused solely on agriculture, but we share a name with a company that dates back to 1901.
That company manufactured and sold PCBs that at the time were a lawful and useful product that were then incorporated by third parties into other useful products. Various municipalities built landfills on their bays and operated them for decades to deposit city waste and PCB-containing products into those waterfront landfills. Manufacturing and industrial facilities also operated in these areas, contributing to PCBs in the general area. If the third-party disposal or municipal disposal practices of the past have led four decades later to the state’s development of lawful limits on future PCB discharges into various bays and rivers through storm water, then those third parties and municipal landfill operators bear responsibility for these additional costs.
The seven cities suing Monsanto each filed separate lawsuits against Monsanto in federal court, but will be represented by the same two law firms, California-based Gomez Trial Lawyers and Texas-based Baron & Budd. According to the Portland Tribune, the firms plan to file a motion March 31 in a federal court in Santa Barbara, California, to ask that one judge handle all seven cases.
Meanwhile, a current House bill could give Monsanto permanent immunity from liability for injuries caused by PCBs. The New York Times reported last month that Republicans in Congress have inserted a clause into the Toxic Substances Control Act (TSCA) reauthorization bill that would effectively exempt Monsanto from liability for injuries caused by PCBs.
Environmental attorney Robert F. Kennedy, Jr., who has sparred over PCBs for three decades, wrote this week that the “so-called “Monsanto Rider” would shield the chemical colossus from thousands of lawsuits by cities, towns, school districts and individuals, who have been injured by exposure to PCBs.
“If Monsanto gets its way, the American people will pay a high price for corporate greed and political corruption,” Kennedy said.
http://ecowatch.com/2016/03/17/portland-sue-monsanto-pcbs/
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IRS: Tax Credit Isn't Available for Non-Agricultural Chemicals
Mar 18, 2016 | BNA Daily Environment Report
By Erin McManus
A manufacturer can only claim the agricultural chemicals security credit for expenses related to a chemical that was intended for agricultural use, according to an Internal Revenue Service field attorney advice memorandum.
The IRS Office of Chief Counsel said in FAA 20161102F, released March 17, that a chemical manufacturer could only claim the credit under tax code Section 45O for security expenses it incurred related to a chemical used in a pesticide intended for agricultural use as documented by the chemical's registration with the Environmental Protection Agency.
The office said the taxpayer couldn't claim the credit for expenses related to two other chemicals, because there was “no objective evidence indicating that they were intended to be used or actually used as pesticides, or as an active or inert ingredient thereof.”
The memorandum said that the statute was clear that the credit “was intended to provide relief to the agricultural industry only. The taxpayer's position would provide a credit to every business that manufactures or distributes any chemical that could be used as a pesticide.”
The credit is limited to $100,000 per facility where the expenses related to the registered pesticide were incurred, and the taxpayer could only claim the credit for the tax years when the pesticide was registered with the EPA, the memorandum said.
The memorandum was dated Nov. 4, 2015.
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=84903800&vname=dennotallissues&fn=84903800&jd=84903800
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Obama Admin Proposes Rules to Reduce Air Emissions
Mar 18, 2016 | E&E News PM
By Emily Yehle
The Interior Department is proposing to update its air quality regulations for offshore oil and gas operations, with the aim of having one set of requirements for both the Gulf of Mexico and the Arctic.
The proposed changes come more than four years after Congress gave Interior's Bureau of Ocean Energy Management authority to control air emissions off Alaska's northern coast. At the time, Alaska lawmakers hoped the move would speed up permit applications that languished for years under U.S. EPA (Greenwire, Dec. 22, 2011).
Today's proposal, however, also comes with a suite of changes that BOEM says will reduce emissions of volatile organic compounds, nitrogen oxide, sulfur oxide, carbon monoxide and particulate matter.
"This proposal takes a balanced approach to modernize BOEM's regulations and ensure compliance with today's air quality standards," Interior Assistant Secretary Janice Schneider said in a statement. "These proposed improvements will minimize harm to human health and the environment from oil and gas activities."
Environmentalists -- once critical of BOEM's new role in Arctic air quality -- applauded the proposed regulations as a step forward in protecting coastal communities.
"The companies who have sought to drill in the Arctic Ocean are some of the biggest and most profitable in the world," said Susan Murray, deputy vice president for the Pacific at Oceana. "They can and should be required to meet precautionary limits on pollution to protect the public's right to clean air and water."
BOEM regulates air quality emissions as part of its review of exploration and development plans, as well as right-of-use and right-of-way applications in federal waters. According to the agency, the new rule would allow officials to more accurately account for emissions.
BOEM would require operators to use the most current EPA standards for pollutants and to add together emissions from multiple facilities that are located close together.
Proposed changes also include measuring air quality impacts from the state-federal water boundary -- usually 3 nautical miles offshore -- rather than only at the coastline.
Emissions from support vessels would also be more accurate, according to BOEM, because the proposed rule would account for emissions during their entire transit. Currently, BOEM limits consideration of emissions to trips within 25 miles of a facility.
http://www.eenews.net/eenewspm/2016/03/17/stories/1060034232
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Shifting Clean Power Plan Deadlines ‘Premature': McCabe
Mar 18, 2016 | BNA Daily Environment Report
By Andrew Childers and Anthony Adragna
The Environmental Protection Agency will continue some work on its Clean Power Plan programs despite a stay from the U.S. Supreme Court, but it has made no decisions on extending the rule's compliance deadlines as the litigation moves forward, the agency's top air official said.
“It's actually a little premature to be speculating specifically about the compliance dates in the Clean Power Plan,” Janet McCabe, the EPA's acting assistant administrator for air and radiation, said March 17 during the American Council on Renewable Energy policy conference. “We need to see how the litigation goes.”
Originally, states were required to submit their preliminary compliance plans to the EPA by Sept. 6, but that deadline is no longer in effect, McCabe said. The rule was intended to take effect in 2022 with emissions reductions being phased in through 2030.
Despite the U.S. Supreme Court halting implementation of the Clean Power Plan (RIN 2060-AR33), which limits carbon dioxide emissions from the power sector in each state, McCabe said the EPA will continue to develop its Clean Energy Incentive Program and model trading plans during the upcoming litigation. Agency officials also are continuing to provide voluntary assistance to states seeking to move forward with efforts to address climate change, she said.
EPA Continues Work
“We are continuing to work on those programs in a way that I want to emphasize is consistent to the stay, but will help provide tools to states to the extent that they are looking for them and also mean that we will lose as little time as possible when the litigation is finally resolved,” McCabe said.
The Supreme Court stepped in Feb. 9 to take the unprecedented step of staying implementation of the Clean Power Plan even before the rule could be litigated before an appellate court (West Virginia v. EPA, U.S., No. 15A773, 2/9/16).
The model plans, which would apply to states opting not to submit their own compliance plans, are a separate rulemaking (RIN 2060-AS47; 80 Fed. Reg. 64,966) from the broader Clean Power Plan. As proposed, the EPA's federal plan would establish either a mass-based trading system, which would cap total carbon dioxide emissions from each state's power sector, or a rate-based trading system that would limit emissions per megawatt-hour of electricity generated. Though the EPA has proposed two options, it has indicated it may finalize only one.
The Clean Energy Incentive Program rewards states for early investment in wind and solar power generation and demand-side energy efficiency measures in low-income areas as part of the Clean Power Plan compliance strategies.
While McCabe and EPA Administrator Gina McCarthy have repeatedly said they will respect the stay decision, they also have said they will continue to work on a voluntary basis with those states that still want to pursue carbon dioxide reductions in anticipation that the rule will ultimately be upheld. Sen. James Inhofe (R-Okla.), chairman of the Senate Environment and Public Works Committee, has said, however, that the EPA is pressuring states to continue compliance work even though the rule has been stayed, using the threats of shortened deadlines if the rule withstands judicial review (48 DEN A-18, 3/11/16).
Speedy Resolution Expected
Though the U.S. Court of Appeals for the District of Columbia Circuit had declined to stay the Clean Power Plan before the Supreme Court halted the rule, the appellate court has set an expedited review that could see the case resolved by the end of the year and possibly before the Supreme Court in 2017.
The Clean Power Plan is being challenged by 27 states in addition to several utility and industry groups. The case is scheduled for oral argument before the D.C. Circuit on June 2. McCabe said she hopes the expedited briefing schedule set by the D.C. Circuit will allow the EPA to “keep this process moving so we that we lose as little time as possible in getting to the important work of implementing that program” once the Supreme Court completes its likely review of the Clean Power Plan.
A quick resolution could leave the original 2022 compliance date in place, Gary Guzy, senior of counsel at Covington & Burling LLP, said. He noted the EPA's strong track record before the Supreme Court, which has repeatedly reaffirmed the agency's authority to regulate greenhouse gases under the Clean Air Act.
“EPA is operating in an area where the Supreme Court has already expressed itself a whole bunch of times,” Guzy said.
A ruling against the Clean Power Plan, however, will not stop states and municipalities that are taking action to address climate change, said Bill Becker, executive director of the National Association of Clean Air Agencies. That “patchwork” approach, ironically, could spur a new call for a national greenhouse gas program even by opponents of the Clean Power Plan, he said.
“In a very perverse way, those states who do want to play will continue moving ahead, will expand programs, learn, do analyses and will ultimately be able to share their experiences with those who have stood down. Some of them may be shamed in not taking advantage of the economic opportunities,” Becker said.
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=84903780&vname=dennotallissues&fn=84903780&jd=84903780
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Low Oil Prices Affect Natural Gas, LNG Exports: FERC
Mar 18, 2016 | BNA Daily Environment Report
By Rebecca Kern
A 66 percent decline in crude oil prices between June 2014 and December 2015 has also triggered a drop in natural gas production, Federal Energy Regulatory Commission staff said.
Almost one-sixth of U.S. natural gas production is a byproduct of crude oil production, so a decline in oil output will directly reduce associated natural gas output, FERC staff said in their presentation of the State of the Markets Report: 2015 during a March 17 meeting.
They noted that the price of liquefied natural gas in most long-term contracts is indexed to the price of oil, and that low LNG prices may reduce U.S. LNG exports. The long-term success of U.S. LNG exports also remains uncertain, they added. The U.S. could add about 15 percent to the global LNG capacity market, which is already oversupplied.
Additionally, in 2015, $380 billion worth of global investment was postponed in oil and natural gas projects, and the U.S. oil rig count dropped by 807 rigs, which is a 61 percent decline. There also has been a loss of 17,000 jobs in the upstream (or the exploratory sector) of the U.S. oil and natural gas industries, FERC staff said.
When asked by FERC Chairman Norman Bay what important developments from 2015 would likely carry into 2016, Alex Ovodenko, an energy industry analyst in FERC's Office of Enforcement, said the “significant decline” in the price of natural gas will continue into 2016.
Natural Gas Plateaus, Then Declines
While U.S. natural gas production has increased 3.6 percent per year since 2010, it is starting to hit a plateau and may begin to decline, FERC staff said.
“The North American natural gas market will likely remain oversupplied and prices low in the near term, pushing high-cost producers out of the market,” they wrote in the report.
Staff also noted that the supply of natural gas has outgrown demand, which also has contributed to low prices, with the U.S. demand only growing 1.3 percent in 2015. The lower demand was partially due to the mild 2015-2016 winter.
The one exception on demand is in the Southeast, where 6.5 gigawatts of gas-fired electric generating capacity was added in 2015 and the demand in the region increased by 5.2 percent. By 2020, FERC staff predicts an additional 17 gigawatts of gas-fired capacity to be added in the Southeast.
Also, electricity demand fell by 1.1 percent in 2015 due to a decline in the usage of electricity in the industrial sector and small or zero growth on the residential and consumer sides. FERC staff attributed the flattening of electricity consumption to low economic growth and increased energy efficiency of household appliances and industrial processes.
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=84903791&vname=dennotallissues&fn=84903791&jd=84903791
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Mar 18, 2016 | The Hill - Congress Blog
By Fred H. Hutchison
Although we’re not even a full quarter into 2016, this year is shaping up to be the most momentous in decades, and we’re not talking just about the elections. We’re also talking about American energy exports.
Since the beginning of the year, tankers laden with U.S. crude oil, ethane (a natural gas liquid), and liquefied natural gas (LNG) were loaded at American ports and shipped around the globe.
Such shipments would have been inconceivable ten years ago.
Before the shale energy revolution, America seemed destined for a future of energy scarcity characterized by decreasing oil and gas production and increasing imports. Now, thanks to technological innovations—such as horizontal drilling, subsurface modeling, and hydraulic fracturing—we’re more energy secure than we’ve been in decades and global energy markets are no longer so easily manipulated by cartels and autocrats.
Besides American entrepreneurship, the other principal reason for America’s oil and gas renaissance is the relatively “hands-off” approach that the U.S. government takes to our energy markets.
One of two major exceptions to that approach was the crude oil export ban originally enacted in the 1970s. Fortunately, Congress and the Obama administration came together in December 2015 to lift the ban, and the first tanker of U.S. crude set sail for foreign markets a few days later.
The remaining free market restriction is the requirement that LNG exports to most foreign countries (free trade agreement nations excepted) must be authorized by the U.S. Department of Energy (DOE) after a review to ensure that they are consistent with “the public interest.”
Having observed DOE’s public interest review process for many years, I know that it could be shortened a bit if Congress were to set a tight—but realistic—deadline on DOE decision-making.
The House of Representatives has twice passed legislation that would set such a deadline and the Senate has been debating a bipartisan energy policy bill that would do so as well. Although the Administration continues to say that they are already acting “promptly” on LNG applications, DOE Secretary Ernest Moniz has also said that DOE could implement a shorter timeline if Congress requires one.
It is estimated that a such a statutory change could speed up the LNG review process by six months or more. And, while that may not seem like a big deal, it can make a real difference for U.S. companies who await DOE approval before finalizing multi-billion-dollar investments.
In addition to this commonsense change in the law, America’s energy diplomats must continue to work with their counterparts around the globe to assure that U.S. LNG can flow freely to and within these markets. Providentially, there is a dedicated team within the U.S. Department of State—the Bureau of Energy Resources (ENR)—that is doing just that.
Led now by Amos Hochstein, ENR has been actively supporting the European Union and EU member states such as Lithuania, Poland, and Croatia as they put in place the LNG import terminals, pipeline interconnectors, and market reforms needed to bring enhanced energy competition to a region that has long been dominated by Gazprom, Russia’s state-controlled natural gas monopolist.
Much progress is already being made. Lithuania’s import terminal has been operational for more than a year and Poland’s facility will be fully functional within a few months. And, many of the key “missing” interconnectors are either under construction or in advanced planning.
Even Croatia’s long-discussed LNG import facility has gained renewed momentum since the new Croatian government was formed a few weeks ago. Forward-thinking leaders such as Croatian Ambassador to the United States, Joško Paro, have been tireless in their pursuit of a terminal on Croatia’s Krk Island, but there is only so much that a dedicated diplomat like Paro can do (beyond working closely with U.S. government officials) to influence what is—ultimately—a commercial proposition.
And, that leads to the message in this missive. At the end of the day, when it comes to energy trade, willing sellers have to find willing buyers and vice versa. That’s the essence of a deal. Nonetheless, as the Czech Republic’s Ambassador to the United States, Petr Gandalovič, said in support of lifting the U.S. crude oil export ban: “In today’s dangerous world, democracies ought to stick together.”
When it comes to energy security, the single most important thing that democracies can do right now is to eliminate market barriers that impede commercial transactions.
Hutchison is the executive director of LNG Allies, a nonprofit organization in Washington, DC.
http://thehill.com/blogs/congress-blog/energy-environment/273411-the-essence-of-a-deal
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Bill Allows Leasing off N.C. Coast, Counters Obama's Plan
Mar 18, 2016 | E&E Daily
By Emily Yehle
At least one lawmaker is already trying to reverse the Obama administration's decision not to open up Atlantic waters to oil and gas leasing.
Rep. Richard Hudson (R-N.C.) introduced a bill this week that would direct the Interior secretary to conduct one lease sale off North Carolina's coast every five years. H.R. 4749 is unlikely to go far, but it reflects Republican frustration with the administration's surprise decision this week to take the Atlantic out of its five-year leasing plan.
Hudson, who helped form the Atlantic Offshore Energy Caucus last year, said he will "continue to work to get North Carolina into the energy business."
"Today's legislation is crucial to open our state to energy exploration, unlock North Carolina jobs and strengthen our energy security while protecting our environment," he said.
The bill would allow the Department of Defense to make areas off limits to exploration, a nod to the Pentagon's concerns over how drilling activities would affect military operations. Interior Secretary Sally Jewell cited that concern -- along with opposition from coastal communities -- when she announced the Atlantic decision Tuesday (Greenwire, March 15).
H.R. 4749 would also require that 37.5 percent of new leasing revenues go to nearby coastal states.
http://www.eenews.net/eedaily/2016/03/18/stories/1060034252
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TransCanada to Buy Columbia Pipeline Group in $10.2 Billion Deal
Mar 17, 2016 | New York Times
By Ian Austen
After failing to obtain approval for its Keystone XL oil sandspipeline, TransCanada said on Thursday that it would buy the Columbia Pipeline Group for $10.2 billion.
The all-cash deal will make the Canadian company a major force in the distribution of natural gas produced in the northeastern United States through hydraulic fracturing, or fracking.
Russ Girling, the chief executive and president of TransCanada, said in a brief conference call that the deal was “a rare, attractive opportunity that will create one of North America’s largest natural gas businesses.”
Gas recovered in the Northeast through fracking has been taking some markets for Canadian natural gas that TransCanada delivers to North American customers.
Columbia’s largest major assets include 11,300 miles of pipelines and 286 billion cubic feet of natural gas storage facilities in the Marcellus and Utica shale gas regions, the center of northeastern fracking. After the acquisition closes, TransCanada will own about 57,000 miles of gas pipelines.
Columbia, which is based in Houston, is in the process of several expansions and renewals of its network. In another sign of the growing importance of natural gas from fracking, it is reversing a pipeline that traditionally moved gas from the Gulf Coast to the Midwest. That line will now carry gas from the Northeast southward.
A majority of Columbia’s business is regulated, Mr. Girling noted. While that eliminates the possibility of sharp growth during expansionary times, it also means that the pipeline company will not face pressures to cut its fees because of the currently depressed energy market.
Mr. Girling said that the combined company would have contracts or revenue guaranteed by regulations of 23 billion Canadian dollars.
Under the terms of the deal, Columbia shareholders will receive $25.50 a share — a premium of 10.9 percent to Columbia’s closing stock price as of Wednesday. TransCanada will also assume $2.8 billion of Columbia’s debt.
TransCanada, which has its headquarters in Calgary, Alberta, plans to raise 4.2 billion Canadian dollars in new equity to partly finance the transaction. RBC Dominion Securities and TD Securities will lead that financing.
Until last year, TransCanada had been focusing its expansion efforts on theoil transportation side of its business.
In addition to the collapse in oil prices, the company was hit by the decision of the Obama administration in November not to grant a permit for Keystone XL, which was intended to bring oil sands production down to refineries on the Gulf Coast in the United States.
The project became a lightning rod for American environmentalists who argued that the oil sands in Alberta were a particularly dirty source of energy. President Obama also expressed the opinion, which was rejected by the Canadian oil industry, that the project was also a way to get the oil-bearing oil sands’ bitumen from landlocked Alberta onto tankers destined for export to countries beyond the United States.
TransCanada’s backup plan for its oil sands business is an all-Canadian pipeline it calls Energy East. Based partly on converting a natural gas pipeline to Ontario and Quebec to carry oil, it would open up the oil sands to refineries in eastern Canada that now largely rely on imported oil.
If built, it would also expand the oil sands’ presence in the United States in two ways. Tankers could complete the oil’s American journey from ports in Eastern Canada. And the pipeline would service a refinery owned by privately held Irving Oil in New Brunswick, which ships a substantial portion of its gasoline production to New England.
But like Keystone XL, Energy East has become politically volatile, particularly in Quebec. That province plans to conduct its own review of the plan in additional to the federal approval process.
Some politicians and others in Western Canada are already demanding that the federal government approve Energy East if it agrees to a request from the Quebec-based Bombardier for $1 billion in assistance for its troubled program to compete directly against Boeing and Airbus in the market for airliners.
http://www.nytimes.com/2016/03/18/business/dealbook/transcanada-to-buy-columbia-pipeline-group-in-10-2-billion-deal.html?_r=0
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Mar 18, 2016 | Wall Street Journal
By Philip Delves Broughton
When bombs go off in the U.S. economy, it takes more than an economist to grasp what is really happening. The numbers alone could never fully explain the ugly shenanigans of subprime mortgage lending and securitization leading up to the financial crisis of 2008. Equally, the U.S. shale revolution is not a story just for those capable of reading a geological survey. Its aftershocks have transformed everything from the economy of North Dakota to the power dynamics among America, Russia and the Middle East. Not to mention forecasts about climate change.
It’s a complicated yarn that Gary Sernovitz, a novelist and energy investor, spins in “The Green and the Black” and one that is still revealing fresh plot twists. Just last week, the shale boom’s most Shakespearean figure, Aubrey McClendon, died in a car crash the day after he was indicted on charges that he had rigged bids for oil and gas leases in Oklahoma. McClendon was dazzlingly ambitious and persuasive, if perhaps blithe to humdrum legalities.
Other pioneers of America’s new energy age have been equally vivid. George Mitchell of Mitchell Energy was a Greek immigrant who began wildcatting in the 1950s and fracked the Barnett Shale in Texas for nearly two decades before he could make it work financially. By that time he was 77. Harold Hamm of Continental Resources, the 13th child of Oklahoma sharecroppers, became a multi-billionaire by fracking the Bakken formations across Montana and North Dakota. It was men like these, willing to keep buying land and drilling whether they were nearly bankrupt or billionaires, that Mr. Sernovitz credits for the shale revolution.
One great mystery of economic history is why certain people in certain places show more entrepreneurial vigor than others. We still reach desperately for Keynes’s tired phrase about “animal spirits” guiding economic behavior, ignoring abundant evidence that free people guaranteed by a free society given free rein to chase gold generate the highest returns.
There are energy deposits to be found all over the world. But the opportunity to drill oil and gas out of once-inaccessible shale was pursued with greater vigor in the United States than anywhere else. The financial incentives available in a thriving capitalist economy were significant. But so too was the character of the men and women who led the way. Mr. Sernovitz writes that they showed “a fearlessness in the face of risk, a scrappy creativity in keeping businesses running, a grit to try again after failures, and a sense of fun in getting all the meat off the bone in a market declared spent.”
But the money, some $2 trillion added to the U.S. economy since 2004 by Mr. Sernovitz’s estimate, is only one part of this epic. The dispute over the environmental impact of shale production infects even the name used for the most controversial technique, “fracking” rather than “hydraulic fracturing.” “Some in the oil industry are comically sensitive about the spelling of the word,” he writes, “suspecting that the ‘k’ is a way for environmentalists . . . to turn it into a cousin of you-know-fricking-what. . . . Others insisted that the shorthand should be spelled fracing or fraccing . . . like a European beauty treatment or an invasive medical procedure.”Mr. Sernovitz’s book is structured as a series of essays rather than built around a single propulsive narrative. This works especially well as he tiptoes through the arguments linking our consumption of fossil fuels to climate change. He is keen to avoid the theological ravings he hears on both sides, from the energy executives he spends his professional life with to his friends and neighbors who berate him for even the most nuanced defense of fracking and its rewards.
The author applauds Harvard’s President Drew Gilpin Faust for her 2013 rejection of demands that Harvard abandon its investments in fossil fuels. At the time, she wrote that she found “a troubling inconsistency in the notion that, as an investor, we should boycott a whole class of companies at the same time that as individuals and as a community, we are extensively relying on those companies’ products and services for so much of what we do every day.” The scientific accounts of climate change today may be entirely accurate, but the forecasts, like forecasts in any field, tend to get tied up with questionable assumptions.
Shifting from one set of energy sources to another is a complicated business with profound consequences, and Mr. Sernovitz is careful not to over-simplify them. But already the geopolitical effects have been profound. In 2004 the United States produced 15% less oil and gas than Russia, then the world’s largest energy supplier. In 2014 the United States produced 16% more. Such a dramatic shift may create a certain swagger and indifference in Washington toward parts of the world that used to be essential to keeping America’s lights on, notably the Middle East. But a poorer Middle East may not be good for America in the long run.
It is refreshing to have such contentious issues sieved through Mr. Sernovitz’s inquisitive mind, balancing the most pessimistic and optimistic visions of change. He writes: “For those who lament that America no longer makes anything but bond traders, for those who think that ‘maker’ culture only exists in a bearded guy pickling compassionately farmed okra in Austin, spend some time with oil industry engineers to absorb their enthusiasm, empiricism, technical inventiveness, and fearlessness to try and err.” This book is ultimately a call for us to trust our native spirit of enterprise: The very ingenuity that led to America’s shale boom will allow us to meet the challenges that it has thrown up.
http://www.wsj.com/articles/the-shale-revolutionaries-1458257430
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DOJ Urges Dismissal of Train Brake Challenges
Mar 18, 2016 | BNA Daily Environment Report
By David Schwartz
Industry challenges to a federal rule requiring a certain type of brakes on train cars carrying flammable material should not be held in abeyance until new rules potentially come into play at the end of 2017, as the challengers request, but should be dismissed altogether, the Department of Justice arguedMarch 15 (Am. Petroleum Inst. v. United States, D.C. Cir., No. 15-1131, response to petitioners' motions 3/15/16).
Changes to the rule are inevitable, the government said in its response to the industry motion, so industry should wait and see what those changes are before filing challenges. The petition was filed in the U.S. Court of Appeals for the District of Columbia Circuit.
A group of railroad companies, known as the Railroad Petitioners, as well as the American Petroleum Institute, is challenging a rule issued by the Pipeline and Hazardous Materials Safety Administration (PHMSA), which sets certain requirements for transporting hazardous material by rail (RIN 2137-AE91).
After the Railroad Petitioners filed petitions for review, however, President Barack Obama signed into law last December the Fixing America's Surface Transportation (FAST) Act (Pub. L. No. 114-94), which rendered moot some, but not all, of the industry challenges (234 DEN A-21, 12/7/15).
As explained in the March 15 filing from Justice, both sides agree that one component the FAST Act didn't eliminate was the industry challenge to a requirement that certain trains transporting highly hazardous and flammable material be equipped with electronically controlled pneumatic brakes.
The sides also agree, however, that the FAST Act requires that the secretary of transportation determine by Dec. 4, 2017, whether modifications to the brake requirement are necessary.
Pausing Litigation
On Feb. 8, the D.C. Circuit granted the government's motion to pause the litigation in the interests of determining how the FAST Act would affect the PHMSA rule (28 DEN A-14, 2/11/16).
In a March 1 motion, industry moved that its petitions for review be put on hold until the secretary determines at the end of next year what additional action on the pneumatic brakes is required.
In its response to that motion, the government argued that industry hasn't shown why abeyance would be appropriate. It noted that the D.C. Circuit has put petitions on hold in cases when there was a chance that a challenged administrative action would become effective and therefore eligible for review by the court.
In the case of the FAST Act, however, the government argued that the very reason the action isn't eligible for review now is the secretary of transportation will make changes in December 2017 that will supersede the current requirements. Because this action will give “rise to a second opportunity for judicial review,” industry's premature petition “should be dismissed for lack of jurisdiction.”
Inevitably, the government concluded, industry will have an opportunity to file new petitions addressing whatever issues the secretary raises in a review at the end of next year.
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=84903773&vname=dennotallissues&fn=84903773&jd=84903773
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Regulators Seek New Rules for Natural Gas Pipelines
Mar 18, 2016 | The Hill - E2 Wire
By Timothy Cama
The Department of Transportation is proposing new regulations for natural gas pipelines that would expand federal safety standards to a bigger group of pipelines.
The Pipeline and Hazardous Materials Safety Administration's (PHMSA) proposal would implement new assessment and repair criteria and apply them to gas lines in moderately populated areas. The rules previously only applied to densely populated areas.
It would also make pre-1970 pipelines, previously left out of the regulatory reach, subject to many of the same rules older structures must follow.
PHMSA said the proposal stems from a number of lessons learned through investigations and major disasters, like a 2010 gas pipeline explosion in San Bruno, Calif., that killed eight people.
“The significant growth in the nation's production, usage and commercialization of natural gas is placing unprecedented demands on the nation's pipeline system,” Transportation SecretaryAnthony Foxx said in a statement. ”This proposal includes a number of commonsense measures that will better ensure the safety of communities living alongside pipeline infrastructure and protect our environment.”
PHMSA Administrator Marie Therese Dominguez said the San Bruno explosion was a major reason for the new rules, along with the 2011 pipeline safety law.
“The proposal's components address the emerging needs of America's natural gas pipeline system and adapt and expand risk-based safety practices to pipelines located in areas where incidents could have serious consequences,” she said.
Thursday’s standards do not mandate automatic shut-off or leak detection systems, one of the major remaining regulations from the 2011 law and a top ask of pipeline safety advocates.
Rep. Jackie Speier (D-Calif.), whose district includes San Bruno, was nonetheless pleased.
“I’m relieved to see that PHMSA is finally introducing a rule to get rid of the Grandfather Clause, which allowed pipes installed before 1970 to go uninspected,” she said.
“But I’m still disappointed it took them four years to make this simple change after Congress required them to do so by law. This is a long overdue step for public safety, so that other communities don’t have to suffer like the people of San Bruno have suffered,” Speier continued.
Speier said she’ll continue pushing for the shut-off and leak detection standards, and that PHMSA has assured her they’re under development as part of a separate rule.
http://thehill.com/policy/energy-environment/273485-regulators-seek-new-rules-for-natural-gas-pipelines
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Pipeline Safety Bill Advances With Lawsuit Provision, For Now
Mar 18, 2016 | Natural Gas Intelligence
By Charlie Passut
The U.S. House Energy and Power Subcommittee unanimously approved a draft version of a bill to reauthorize the Natural Gas Pipeline Safety Act and decided to retain, for now, a controversial provision giving private individuals the right to sue the Department of Transportation's (DOT) Pipeline and Hazardous Materials Safety Administration (PHMSA).
A discussion draft of the bill -- also known as the Pipeline Safety Act of 2016 -- passed the subcommittee on Wednesday. Dan Schneider, a spokesman for the House Energy and Commerce (E&C) Committee, told NGI on Thursday that the bill is expected to go through the full committee in the coming weeks.
"We've built upon the draft that we discussed in the legislative hearing and made some significant improvements," the subcommittee's chairman, Rep. Ed Whitfield (R-KY), said in a statement. "The discussion draft considered today contains targeted mandates for PHMSA to increase transparency and accountability, complete overdue regulations, and improve safety."
E&C Committee Chairman Rep. Fred Upton (R-MI) called Wednesday's hearing on the bill "a starting point.
"As we've done before, we're working on a bipartisan basis to identify weaknesses in our pipeline safety laws and develop solutions," Upton said. "I believe it's particularly important to tighten inspection requirements for certain underwater oil pipelines...We can do better to improve pipeline safety. This draft is an important step forward, but we still have more work to do."
The bill still includes Section 15, which would amend the pipeline safety act by stipulating that "a person may bring a civil action in an appropriate district court of the United States for an injunction against the United States government for failure to perform any non-discretionary duty under this chapter."
The oil and gas industry has urged lawmakers to strike Section 15 (see Daily GPI, March 2). During Wednesday's hearing, Rep. Joe Barton (R-TX) introduced an amendment to strike the provision, but he withdrew it at the request of Upton and Whitfield and "in the spirit of bipartisanship," Barton said.
During the hearing, Barton said Section 15 "gives extraordinary orders" to the DOT secretary.
"It basically gives the secretary a tool to use, if he or she is so inclined, to blackmail the industry," Barton said. "This is a very serious issue...I fully intend to vigorously work to make sure that the language that's in the draft before us is either dropped or radically changed so that we don't give such open-ended authority to the secretary."
In a statement Thursday, Interstate Natural Gas Association of America (INGAA) CEO Don Santa said his organization was committed to eliminating pipeline incidents altogether, with or without federal regulation, through its own plan, called Integrity Management Continuous Improvement (IMCI).
"We are encouraged that the long-awaited proposal has been released, and we intend to submit comments to PHMSA by its deadline," Santa said. "Our initial analysis will focus on whether PHMSA's proposal is consistent with the voluntary pipeline safety program INGAA's members undertook in 2012."
Santa added that the IMCI "included several provisions that we anticipate will be addressed in this new [PHMSA] rule, including expanding the federal pipeline integrity management program and ensuring that all pipelines are fit for service."
Dave McCurdy, CEO of the American Gas Association (AGA), also welcomed the news that the bill was advancing. He said AGA would analyze any proposed regulatory changes and submit comments soon.
“We have worked closely with PHMSA over the past five years as the agency has developed this proposed rule and we are pleased that it is finally out,” McCurdy said Thursday. “We appreciate PHMSA’s efforts and look forward to continuing to work with them to help ensure that the final rule is technically-based, reasonable and cost-effective.”
Last December, the Senate Committee on Commerce, Science and Transportation passed a similar bill -- S2276, also known as the Securing America's Future Energy (SAFE PIPES) Act -- but it did not contain the lawsuit provision (see Daily GPI, Dec. 9, 2015).
http://www.naturalgasintel.com/articles/105735-pipeline-safety-bill-advances-with-lawsuit-provision-for-now
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Storing Crude Oil in Rail Cars: Not Widespread, But It Does Occur
Mar 18, 2016 | Philadelphia Inquirer
By Andrew Maykuth
With last year's crash in oil prices, less crude is moving by train, creating a surplus of idle rail cars that have become opportunistic vessels for some traders storing petroleum until prices recover.
"There are a lot of people looking to do it," said Dennis A. Hoskins, managing partner of crude marketing at Energy Midstream, a Texas trading company that recently stored a light crude-oil derivative called condensate in rail cars for 15 days before shipping it to Canada.
Though no government agency maintains data on the practice, the use of so-called rolling storage for crude oil does not appear to be widespread. But it has gotten some attention this year, much as "floating storage" of crude oil in barges and tankers was a hot topic last year.
"There's definitely a lot of rail cars that are idle right now," said Philip Rinaldi, chief executive of Philadelphia Energy Solutions, which operates the South Philadelphia refining complex. He said most East Coast refiners, including PES, have cut oil-train deliveries since foreign crude imported on ships became more competitively priced.
Still, Rinaldi said, "I don't know of anybody who's storing crude oil in rail cars." PES has plenty of crude-storage capacity at its Point Breeze refinery, where it can hold 1.8 million barrels, about as much as 25 oil trains combined.
With oil prices rising in recent weeks after more than a year on the skids, the arithmetic might favor stashing some crude into storage: This week's barrel is likely to fetch a higher price next week.
But storage is not free. And many owners of rail sidings don't want the liability of storing a hazardous material like crude oil.
While the cost of leasing rail cars has plummeted in the last year, the price of leasing track to store the loaded rail cars has increased, according to Genscape, an industry news service.
Storage of loaded tank cars was recently being offered at prices from $11 per day per car in Snowflake, Ariz., up to $52 per day in Cedar Rapids, Iowa, according to a Genscape blog post. A crude-oil tank car typically holds about 700 barrels.
"It's really more of an opportunistic play if you're sitting on a bunch of rail cars," said Ernie Barsamian, a principal of The Tank Tiger, a Princeton broker of oil and fuel storage.
"If you are looking to lease the cars or have to lease the track, it's not as attractive," he said. It could cost up to $5 a barrel per month to store crude oil in a rail car, which means that a trader would lose money if the price failed to rise enough to cover the storage costs.
Fully laden tank cars can't be stored just anywhere. "If you want to leave a train sitting in a neighborhood, it's probably not a good idea," said Barsamian.
Major railroads, which do not own the tank cars, say they will move cars containing hazardous materials, but not store them.
"CSX does not provide storage for crude-oil trains," said Rob Doolittle, a spokesman for the rail line, one of the major carriers in the region.
Under federal regulations, rail cars loaded with hazardous materials like crude oil can only be stored on "private track," not railroad main lines or switching yards. The federal rules require the owners of private tracks to have security plans that prevent unauthorized access to the materials.
While in storage, the materials also would come under state or federal environmental controls. But Fred Millar, a hazardous-materials consultant in Virginia, suspects that some transporters escape regulatory oversight by claiming the cargoes are "storage in transit."
The Federal Railroad Administration said it is alert to the issue. "FRA is closely monitoring the transportation of crude oil and other energy products, and if we find that additional steps are necessary to address safety concerns, we will take them," said Matthew Lehner, an agency spokesman.
Last year, rail car manufacturers delivered 36,065 new tank cars to shippers, according to the Railway Supply Institute. At the same time, the number of carloads of crude oil fell by 16.8 percent, according to the Association of American Railroads. That means there are more railcars chasing less business.
Empty oil cars began turning up on sidings of some short-line railroads last year, attracting the attention of local media. Wayne Michel, president of the Reading & Northern Railroad, told the Reading Eagle in October that the railroad had 2,000 cars parked on a Berks County siding along the Schuylkill between Leesport and Hamburg.
Michel declined to respond to questions this week about whether the short line was storing loaded cars.
Brokers estimate there are about 20,000 idle rail tank cars in the country now, which would represent a potential storage capacity of about 14 million barrels. It's a relatively small amount compared to the nation's crude-storage capacity of 650 million barrels at refineries and tank farms, and the 727 million barrels in the Strategic Oil Reserve.
"It's not of any significance," said Hoskins of Energy Midstream.
Most of the loaded oil cars, he noted, are stored on sidings in oil-producing areas or at oil terminals along the Gulf Coast.
http://www.philly.com/philly/business/energy/20160318_Storing_crude_oil_in_rail_cars__Not_widespread__but_it_does_occur.html
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States, Utilities Attack EPA Authority For Rule to End SSM Air Exemptions
Mar 17, 2016 | InsideEPA
By Stuart Parker
Several states and utility industry groups are attacking what they say is EPA's lack of authority for its rule forcing dozens of states to revise their Clean Air Act compliance plans to scrap air pollution limit exemptions during periods of startup, shutdown and malfunction (SSM), urging a federal appeals court to scrap the rule.
The argument is one of several attacks on the SSM regulation outlined in briefs filed March 16 with the U.S. Court of Appeals for the District of Columbia Circuit in Walter Coke, Inc., et al. v. EPA, et al., which consolidates challenges to the rule. The D.C. Circuit is hearing the case after the U.S. Court of Appeals for the 5th Circuit rejected a bid by Texas and some industry groups to hear a parallel challenge to the rule in that court.
EPA's June 12 rule says that 36 states must revise their state implementation plans (SIPs) -- blueprints for Clean Air Act compliance -- to remove the waivers for air pollution spikes during SSM periods.
The agency is taking steps to scrap the SSM exemptions from its various regulations in response to prior D.C. Circuit rulings that said the waivers are unlawful, and that also rejected a subsequent similar “affirmative defense” for pollution limit violations during such periods. The regulation issued in June, known as a “SIP Call,” sets a deadline of Nov. 22 for the affected states to submit revised SIPs to EPA.
But states and industry groups opposed to the SIP Call say in their new legal filings that EPA is overreaching its air law authority with the rule. They claim that the agency has unlawfully based the rule on the mere assertion that the SIPs are currently inadequate, rather than a more substantive showing that they violate the air law.
EPA based its SIP Call on the prior finding of the D.C. Circuit in 2008 in Sierra Club v. EPA that blanket SSM exemptions are unlawful, and its subsequent 2014 ruling in Natural Resources Defense Council (NRDC) v. EPA that affirmative defenses for excess air emissions during malfunctions are not permissible either. An affirmative defense creates a shield from civil liability for industry facilities that experience an unavoidable malfunction, as narrowly defined by EPA.
The agency advocated affirmative defenses as an alternative to blanket exemptions, but the D.C. Circuit found that the approach denies courts the ability to adjudicate air law cases and impose penalties as they see fit. As a result, EPA is now advocating case-by-case “enforcement discretion” for pollution spikes during SSM.
Environmentalists and EPA argue that eliminating SSM exemptions is necessary to ensure that air law emissions limits apply continuously, but industry and states counter that this is not a Clean Air Act requirement.
Industry groups sued over the rule, saying SSM exemptions are vital to operation of industrial facilities, and that most of EPA's air rules were written when the waivers existed. Without SSM exclusions, emissions standards would have to be substantially weakened, some industry sources argue, as it would otherwise be impossible for companies to comply.
Legal Arguments
In a March 16 brief filed in the SIP Call suit, a coalition of 17 states led by Florida says that EPA in the rule “did not set out to address threats to air quality. The only basis EPA identified for the calls was the SIPs’ alleged failure to meet certain legal requirements of the [air law] as EPA now interprets it.”
However, “the SIP call process is not designed to address any and all perceived shortcomings,” the states say, arguing that EPA has failed to make any specific finding of “substantial inadequacies” in SIPs. Such a finding must be based on facts, not speculation as in the SIP Call, the states say.
“EPA refused to consider simultaneously operating general-duty requirements that limit emissions during SSM periods just because they were not cross-referenced in the SSM provisions EPA deemed inadequate,” the states say.
They also claim the agency “incorrectly applied its definition of emission limitation to determine that certain SSM provisions did not limit emissions, even though, on their face, those provisions require sources to limit emissions at all times, including SSM periods, to avoid a violation.”
The states argue that “among other errors, EPA incorrectly interpreted provisions that guide State air agencies’ exercise of their enforcement discretion to preclude EPA and citizen enforcement, notwithstanding those States’ comments pointing out the incorrect interpretation.”
The states further say EPA wrongly relies on the 2014 ruling in NRDC to conclude the air law prohibits states from including affirmative defenses against monetary penalties for air law violations in their SIPs as some states have done, “notwithstanding that the Act specifically gives States the authority to design an enforcement regime for their SIPs, that NRDC explicitly does not address affirmative defenses in SIPs, and that the Fifth Circuit previously specifically approved the affirmative defenses that EPA now claims are impermissible,” referring to a 2013 ruling by the 5th Circuit in Luminant v. EPA.
Affirmative Defense
The 5th Circuit's 2013 opinion in Luminant is the foundation of the argument brought against the SIP Call by the state of Texas and industry associations in the state.
In Luminant, the 5th Circuit found that affirmative defenses under the Texas SIP are lawful, Texas says, and the circuit court's opinion is therefore binding and precludes EPA's inclusion of Texas in the SIP Call. EPA may not litigate the same point twice, the Texas petitioners say in their March 16 filing with the D.C. Circuit.
“In its new SIP Call, EPA targets the exact same affirmative defense provisions it approved in 2010 and the Fifth Circuit upheld in Luminant in 2013. The sole ground EPA asserts for its Texas SIP call is its mere speculation, contrary to the Fifth Circuit’s binding precedent, that 'these provisions impermissibly purport to alter or eliminate the jurisdiction of federal courts to assess penalties for violations of SIP emission limits,'” the Texas petitioners say.
“EPA’s Texas SIP Call is unlawful because it directly contradicts the Fifth Circuit’s holding in Luminant,” they say. “Because the Fifth Circuit conclusively decided the issue, and because no other grounds in the record support a finding that Texas’s SIP is 'substantially inadequate,' EPA’s Texas SIP call must be vacated.”
The Texas petitioners further point to two recent rulings from federal district courts “in which the courts exercised their jurisdiction and fully adjudicated citizen suits on their merits where the Texas affirmative defenses were invoked.” This contradicts EPA's rationale in issuing the SIP Call, the Texas groups say.
The two cases are Sierra Club v. Energy Future Holdings Corp. et al., decided by the U.S. District Court for the Western District of Texas in 2014, and Environment Texas Citizen Lobby, Inc. v. ExxonMobil Corp., decided by the U.S. District Court for the Southern District of Texas also in 2014. Both were losses for environmentalists in civil suits brought against industry for alleged Clean Air Act violations.
Industries' Criticisms
Meanwhile, a broad power industry coalition including individual electric utilities and the Utility Air Regulatory Group in its March 16 brief echoes the state coalition's claim that EPA has failed to identify any tangible air quality problems that would be resolved by the SIP Call.
The SIP Call “will force more than two-thirds of the states to reassess and revise SIPs previously approved by EPA and re-submit them for EPA approval. This broad mandate is not based on any new statutory requirement or on EPA’s issuance of new regulations.”
The brief adds, “Nor is it mandated by any court decision or tied to any demonstrated air quality problem. Rather, it is based solely on EPA’s erroneous legal conclusions that isolated provisions of those SIPs, adopted by states in recognition of the limitations of even well-designed and operated control technology, are 'facially inconsistent' with the structure of the air law.
http://insideepa.com/daily-news/states-utilities-attack-epa-authority-rule-end-ssm-air-exemptions
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House Refers EPA Coal Refuse Bill to Senate EPW
Mar 18, 2016 | InsideEPA
The House has referred to the Senate Environment & Public Works Committee (EPW) legislation that cleared the lower chamber in a 231-183 vote this week that seeks to ease compliance by coal refuse-to-energy utilities with EPA's Cross-State Air Pollution Rule (CSAPR) and its utility maximum achievable control technology (MACT) air toxics rule.
It is unclear when, or whether, EPW plans to consider the bill referred March 16, but the measure already faces a White House veto threat over concerns that it would undermine air pollution cuts from the rules.
The bill, H.R. 3797, would ensure that more sulfur dioxide (SO2) allowances are available for coal-waste burning plants under the CSAPR emissions trading program that aims to reduce SO2 and nitrogen oxide emissions. The legislation would also relax the acid gas emissions limits in the utility MACT.
In a statement following the March 15 vote to approve the bill, the House Energy & Commerce Committee's GOP majority said the bill -- introduced by Rep. Keith Rothfus (R-PA) -- “would ensure that environmentally beneficial coal refuse-to-energy facilities, currently threatened by EPA rules, continue to operate.”
The statement adds that “Coal refuse-to-energy facilities have been developed to help clean up communities and recycle coal refuse by using it as an energy source to generate affordable and reliable electricity. Currently there are 19 coal refuse-to-energy facilities located throughout the United States but two EPA rules containing emissions limits threaten these facilities and their communities.”
But the bill drew opposition from energy panel ranking member Rep. Frank Pallone (D-NJ) who said in a March 15 floor speech said it is “an unnecessary bill that undermines public health and the environment.”
That echoes comments from acting EPA air chief Janet McCabe, who said in written testimony to a Feb. 3 House Energy & Commerce Committee hearing that H.R. 3797 would “remove economic incentives to reduce emissions at coal refuse units,” she writes. “The bill would interfere with and manipulate market conditions, since the allowances allocated to this set of [power plants] would be unavailable for use by any other sources and would be surrendered at retirement. The result would be in the aggregate a less efficient and more costly compliance with the CSAPR.”
Further, the bill would seemingly interfere with states' ability to allocate SO2 allowances to sources under their state plans for CSAPR compliance, she warned.
The White House reiterated these concerns in its March 14 Statement of Administration Policy threatening a veto of the bill. “Specifically, H.R. 3797 would restrict the market-based approach currently used to allocate sulfur dioxide emission allowances issued under the CSAPR, thereby raising the costs of achieving the pollution reduction required by the rule. The bill also would undermine the emissions limits for hazardous acid gases from those established under the MATS, leading to increased health and environmental impacts from increased emissions of hydrogen chloride, hydrogen fluoride, other harmful acid gases, and sulfur dioxide,” the statement says.
Ahead of the floor vote, the League of Conservation Voters also sent a March 14 letter to lawmakers urged the to vote against the bill, calling it “an assault on public health safeguards that would exempt power plants burning 'coal refuse' or waste from complying with certain clean air protections required by current law.”
http://insideepa.com/news-briefs/house-refers-epa-coal-refuse-bill-senate-epw
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EPA Disapproves Parts of South Coast Air Quality Plan
Mar 18, 2016 | BNA Daily Environment Report
By Carolyn Whetzel
The Environmental Protection Agency has issued a final ruledisapproving portions of a clean air plan designed to bring California's South Coast air basin into attainment with the 2006, 24-hour standards for fine particulates, or PM 2.5.
Issued March 15, the decision found deficiencies in portions of the plan involving the Regional Clean Air Incentives Market, the emissions trading program the South Coast Air Quality Management District launched in 1993 to reduce industrial emissions of nitrogen oxides and sulfur oxides.
The version of the RECLAIM program the air district submitted “does not satisfy the Clean Air Act's Reasonably Available Control Measure and Reasonably Available Control Technology requirements” for certain sources of nitrogen oxides, the EPA said in a March 16 letter to the district.
To win approval of the plan, South Coast and the state must show RECLAIM, either as adopted in 2010 or as subsequently amended, achieves the same emissions reductions as anticipated under direct control of the sources, the EPA said.
“EPA disapproved the plans' analysis showing that the region requires the imposition of “reasonably available control technology, or RACT for sources of PM 2.5 or its precursors,” the air district said in a March 16 written statement. “This disapproval is based on a technicality, which staff expect to be remedied by submitting the December RECLAIM amendments to EPA, along with any additional technical information EPA needs.”
The EPA based its decision on information presented during the air district's December 2015 rulemaking that revealed earlier amendments to RECLAIM hadn't achieved the expected level of installation of control equipment at several facilities, the air district said. Also, the EPA cited the air district's information that found a surplus of credits in the market had prompted some facilities to delay installing controls.
State Could Step In
“We're glad that the EPA is scrutinizing the deep flaws in the South Coast AQMD's air pollution program,” Earthjustice attorney Adrian Martinez said in a March 17 e-mail.
Even the California Air Resources Board is questioning the adequacy of the revisions. At a March 17 meeting in El Monte, CARB Executive Officer Richard Corey said the agency is evaluating the December RECLAIM amendments. If the amendments are determined to be inadequate, CARB will work with the air district to ensure sufficient reductions are provided.
Should the air district fail to address any problems discovered, the state will step in, CARB Chairman Mary D. Nichols said at the meeting.
The EPA did approve other key elements of the 2012 clean air plan including the emissions inventories and agreed to reclassify the region from moderate to serious nonattainment status for nonattainment with the PM 2.5 standards. As a result, the South Coast now has until 2019 to attain the standards, rather than by the end of 2015.
The EPA final rule comes just two weeks after the South Coast air district refused to reconsider amendments to RECLAIM its governing board approved in December that conflicted with a staff recommendation seeking to curb more nitrogen oxides reductions and faster.
Environmental groups have filed a lawsuit challenging the air district's revisions to the program, alleging the changes conflict with state law (48 DEN A-19, 3/11/16).
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=84903805&vname=dennotallissues&fn=84903805&jd=84903805
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