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ACC AM 4/22
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(ACC Mentioned) Chemical Companies Steadily Gaining Strength
Apr 21, 2016 | Zacks
While the chemical industry still remains exposed to a slew of challenges including weak demand across agricultural and energy markets, slowdown in China and headwinds from a strong greenback, it is gradually gaining strength on the back of sustained healthy momentum in the automotive space and rebounding construction markets. -
TPP Something Clinton Can Support?
Apr 21, 2016 | Politico (Morning Trade)
By Matthew Korade
If Hillary Clinton wants increased jobs, higher wages and improved national security to be part of any U.S. trade deal, then by Tom Vilsack’s logic, she should support the Trans-Pacific Partnership. -
(ACC Mentioned) Industry, Advocates Rebut Conflicting Claims Over EPA Solid Waste Rule
Apr 22, 2016 | Inside EPA
Industry and environmentalists in consolidated litigation that challenges EPA's definition of solid waste (DSW) rule have filed their initial briefs in the case as intervenors, disputing each other on different aspects of EPA's rule, with environmentalists seeking to tighten requirements while industry argues most of environmental petitioners' arguments lack standing. -
Cracker Shutdown Due to Explosion at Pajaritos Petchems Complex: Source
Apr 21, 2016 | Platts
By Emmanuel Gallegos
A major explosion Wednesday at the vinyl chloride monomer plant in the Pajaritos petrochemicals complex in Mexico's southern Gulf state of Veracruz has caused Petroquimica Mexicana de Vinilo (PMV) to shut down its cracker there, a source with knowledge of business operations said Thursday. -
Clean Power Cuts Not Feasible, W.Va. Report Finds
Apr 22, 2016 | BNA Daily Environment Report
By Bebe Raupe
Power plants in West Virginia cannot feasibly meet the 29 percent mass carbon dioxide emissions reduction required by the Environmental Protection Agency's Clean Power Plan, according to a report mandated by the legislature. -
Measure to Block Water Rule Fails, Energy Bill Proceeds
Apr 22, 2016 | BNA Daily Environment Report
By Ari Natter
A Senate amendment that would have blocked the Clean Water Rule fell four votes short of passage April 21, but the measure's sponsor said he wouldn't give up on using the appropriations process to block the regulation. -
Spending Bill Requires Crude-by-Rail Response Plans
Apr 21, 2016 | BNA Daily Environment Report
By Ari Natter
The Transportation Department would be required to promulgate a rule mandating that railroads shipping crude oil file comprehensive oil spill response plans by December under legislation unanimously approved by the Senate Appropriations Committee April 21. -
Boxer Vows To Put SDWA Citizen Suits 'On Par' With CWA
Apr 21, 2016 | Inside EPA
Sen. Barbara Boxer (D-CA) secured in a new lead and water infrastructure bill a provision that would reform the Safe Drinking Water Act (SDWA) by allowing stronger provisions on citizens' rights to seek damages from local governments, putting the law “on par” with the Clean Water Act (CWA) and other environmental laws. -
EPA Plans To Complete PM NAAQS Review By 2021
Apr 21, 2016 | Inside EPA
EPA intends to complete its next Clean Air Act-mandated review of its particulate matter (PM) national ambient air quality standards (NAAQS) by 2021 -- four years beyond the air law's mandated five-year review cycle, which requires the agency to issue by 2017 a decision on whether to reassess the 2012 PM standards.
Industry and Association News
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Energy News
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Transportation News
Environment News
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(ACC Mentioned) Chemical Companies Steadily Gaining Strength
Apr 21, 2016 | Zacks
While the chemical industry still remains exposed to a slew of challenges including weak demand across agricultural and energy markets, slowdown in China and headwinds from a strong greenback, it is gradually gaining strength on the back of sustained healthy momentum in the automotive space and rebounding construction markets. There are a number of reasons to be optimistic about the broader chemical industry for both the short and long haul, which we have highlighted below:
Shale Bounty Driving Chemical Investments
The shale gas revolution in the U.S. has been a huge driving force behind chemical investment on plants and equipment in the country. According to the American Chemistry Council (ACC), abundant shale gas production is driving U.S. chemical exports. New methods of extraction such as horizontal drilling and hydraulic fracturing (or fracking) are boosting shale production, bringing down prices of ethane (derived from shale gas) in the process.
Leveraging the abundant natural gas supply, chemical makers are ratcheting up investment on shale gas-linked projects which is expected to beef up capacity. The shale revolution has incentivized a number of chemical companies to invest billions of dollars for setting up facilities (crackers) in the U.S. to produce ethylene and propylene in a cost-effective way.
Per a recent ACC report, domestic chemical investment related to shale gas has reached as high as $164 billion, more than 60% of which are from firms outside the U.S. Already 264 projects -- many backed by the Federal government -- have been announced by chemical makers to take advantage of ample natural gas supplies with 40% of them already complete or under construction. Such investments are expected to boost capacity and export over the next several years.
Automotive in Top Gear
The automotive sector is witnessing significant momentum. This major chemical end-use market is enjoying the fruits of low gasoline prices. Outlook paints a rosy picture as global automotive sales are expected to rise 2.7% to 89.8 million units in 2016 on the back of strong volume growth in the U.S. and Europe, according to IHS Automotive.
The U.S. auto industry also remains in high gear. U.S. light vehicles (a key end-user market for chemicals) sales hit all-time high of around 17.5 million units in 2015 and are expected to rise further this year, aided by an improving job market, rising personal income, lower fuel prices and attractive financing options. New car and light truck sales are expected to reach to 17.7 million units in 2016 on the back of reduced gasoline prices and low interest rate on auto loans, as per The National Automobile Dealers Association (NADA) estimates.
The Auto industry in Asian countries, especially China, is also expected to thrive over the next several years. As such, chemical makers are expected to gain from higher demand from this important end-market.
Strategic Moves
Chemical companies continue to shift their focus on attractive, growth markets (driven by megatrends) in an effort to cut their exposure on other businesses that are struggling with weak demand and input costs pressure. Moreover, cost-cutting measures -- including plant closures and headcount reduction -- and productivity improvement actions by chemical companies are expected to yield industry-wide margin improvements. Several chemical makers are also disposing non-core assets as they shift their focus on high-margin businesses.
M&A Activity Gathering Momentum
Chemical makers remain actively focused on mergers and acquisitions to diversify and shore up growth in a still-challenging economic environment. These companies continue to explore growth opportunities in the fast-growing emerging markets, particularly in the lucrative regions of Asia-Pacific and Latin America. The industry saw a pick-up in consolidation activities in 2014 and the momentum continued in 2015.
Albemarle Corp.’s (ALB - Snapshot Report) $6.2 billion buyout of Rockwood Holdings, Inc., Eastman Chemical Company’s (EMN - Analyst Report) purchase of specialty chemical company Taminco Corp. for $2.8 billion, PPG Industries Inc.’s (PPG - Analyst Report) acquisition of Mexican paint company Comex, Olin Corp.’s (OLN - Snapshot Report) acquisition of a significant portion of Dow Chemical’s (DOW - Analyst Report) chlorine business for $5 billion, Merck KGaA's $17 billion acquisition of Sigma-Aldrich, FMC Corp.’s (FMC) acquisition of Cheminova A/S, CF Industries’ (CF - Analyst Report) planned acquisition of certain assets of Netherlands-based OCI N.V. for around $8 billion, and the $130 billion proposed mega-merger of Dow Chemical and DuPont (DD - Analyst Report) -- the largest chemical deal of all time -- are among the major deals that have taken place in the chemical space in the recent past.
A Rebounding Construction Space
A recovery across housing and commercial construction -- major chemical end-markets -- has been another key positive factor for the chemical industry. After being hit hard in the recession, the construction industry is currently in the process of gradual healing.
The U.S. housing sector saw steady recovery in 2015 backed by stabilizing mortgage rates, improving job market and moderating home prices, and the momentum is expected to continue in 2016. The underlying demand trends in the housing space remain strong and homebuilding is expected to pick up pace in 2016, supported by an encouraging job picture, affordable interest/mortgage rates and an improving economy.
The renewal of long-stalled construction projects and long awaited access to credit from lending institutions has helped invigorate the commercial construction sector. U.S. architecture firm billings continue to rise. The US Architecture Billings Index (ABI), an indicator that offers a glimpse into the future of U.S. non-residential construction spending activity, clocked 50.3 in February 2016 (a reading above 50 indicates an increase in billings).
Moreover, the American Institute of Architects (AIA) expects a healthy growth in non-residential construction spending this year based on strong demand for hotels, office space, manufacturing facilities and amusement and recreation spaces. The AIA sees spending to go up 8.3% in 2016. This bodes well for demand for chemicals in the construction markets.
Wrapping Up
As you can see from the above-stated factors, there are a few good reasons to be optimistic about the chemical industry. Chemical stocks that are well placed in the current operating backdrop include The Dow Chemical Company, LyondellBasell Industries NV (LYB - Analyst Report), Air Products and Chemicals Inc. (APD - Analyst Report), Eastman Chemical Company and PPG Industries Inc.
Check out our latest Chemical Industry Outlook here for more on the current state of affairs in this market from an earnings perspective, and how the trend is looking for this important sector.http://www.zacks.com/commentary/78851/chemical-companies-steadily-gaining-strength
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TPP Something Clinton Can Support?
Apr 21, 2016 | Politico (Morning Trade)
By Matthew Korade
VILSACK DESCRIBES TPP AS MEETING CLINTON’S CRITERIA: If Hillary Clinton wants increased jobs, higher wages and improved national security to be part of any U.S. trade deal, then by Tom Vilsack’s logic, she should support the Trans-Pacific Partnership.
“Well, let me answer it this way and not necessarily in response to a question that’s posed based on what Secretary Clinton’s criteria is,” the agriculture secretary said in an interview with Pro Trade’s Doug Palmer ahead of a trip to Japan and Vietnam today. “I look at the [American] Farm Bureau evaluation from an agriculture perspective, and what that evaluation tells me is that exports will increase and farmer income will increase.”
Vilsack, a close political ally of Clinton, avoided directly challenging his former Cabinet colleague on the trade deal, which the former secretary of state opposes for reasons that include the lack of enforceable currency provisions and auto content rules she says are too weak to prevent benefits to non-TPP countries like China.
But Clinton also has set general criteria for trade agreements that match the Obama administration’s arguments for the TPP pact. “I will say ‘no’ to new trade agreements unless they create American jobs, raise wages and improve our national security,” Clinton reiterated this week in response to a questionnaire from the Pennsylvania Fair Trade Coalition. Read the rest of Doug’s story.
IT’S THURSDAY, APRIL 21! Welcome to Morning Trade, where you host is subbing for our crew of very talented — and very busy — trade reporters. Got some trade news to share? Send us a line at dpalmer@politico.com, vguida@politico.com ormkorade@politico.com.
CUSTOMS SHINDIG POSTPONED: Trade policy enthusiasts will have to find something else to do this afternoon: the Senate Finance Committee postponed its hearing on implementation of the new customs law, which was scheduled to feature Customs and Border Protection Commissioner Gil Kerlikowske, until further notice.
MTB MARCHING TOWARD (RE)BIRTH: The final piece of last year’s raft of trade bills cleared the House Ways and Means Committee on Wednesday, giving U.S. business groups hope that they’ll get a break from tariffs on hard-to-find manufacturing items.
The panel gave voice-vote approval to the bill (H.R. 4923), which would overhaul the process for selecting tariff waivers for inclusion in the miscellaneous tariff bill package. Under the legislation, the U.S. International Trade Commission, rather than lawmakers, would vet petitions from businesses asking for tariff reductions — a legislative work-around to avoid running afoul of the House’s earmark ban.
Ways and Means Chairman Kevin Brady, who sponsored the legislation along with ranking Democrat Sander Levin and several other committee members, said he’s expecting the bill to move quickly, though he wouldn’t say whether it had enough support to advance under suspension of the rules. “I feel like we're lining up pretty strong support going forward,” Brady told reporters after the committee reported out the legislation.
Read House Speaker Paul Ryan’s office’s positive take on the bill here: http://1.usa.gov/1XJmeTh.
BUSINESSES BOOSTER MTB: More than 200 trade groups and companies urged Congress to pass the MTB overhaul bill quickly, saying in a letter that U.S. manufacturers have faced annual tariffs of nearly $750 million since the last MTB expired in 2012, “undermining American competitiveness and the ability of these companies to retain and create manufacturing jobs in the United States.”
The American Chemistry Council, American Farm Bureau Federation, Biotechnology Innovation Organization, National Council of Textile Organizations and Outdoor Industry Association were among the signees of the letter, which was organized by the National Association of Manufacturers.
TRADE SECRETS BILL TEED UP IN HOUSE: In other legislative news, a bill to crack down on trade secret theft is close to becoming law. The House Judiciary Committee reported out the measure (S. 1890) with bipartisan support Wednesday, and Majority Leader Kevin McCarthy said the chamber will vote on the measure next week, Pro Tech’s Kate Tummarello reports. The bill passed the Senate earlier this month 87-0. The House companion (H.R. 3326) has 156 cosponsors at last count.
The legislation would fulfill a TPP provision requiring countries to ensure companies have the “legal means” to prevent trade secret theft. The pact also requires countries to put in place criminal remedies for such theft, which the U.S. already has at the federal level. Instituting a uniform federal approach to civil enforcement of trade secret theft could also make it easier for the U.S. to negotiate in that area in future trade deals; business groups on both sides of the Atlantic have expressed an interest in covering civil trade secret theft cases in TTIP.
U.S. DAIRY NERVOUSLY WATCHING CANADA: A Wisconsin-based dairy company on Wednesday called on the Obama administration to “publicly reject” new Canadian policies that it fears will shut down its sales to that country. In a letter to U.S. Trade Representative Michael Froman and Secretary Vilsack, the president and CEO of Grassland Dairy Products cite a new Canadian milk pricing policy that “intentionally discriminates against the use of imports,” as well as proposed changes to the country’s cheese standards “designed to limit U.S. ultra-filtered milk sales.” The company executives say those two policies could lead to a loss of $100 million in exports.
The letter comes as the dairy industry has cautiously endorsed the TPP with the caveat that Canada must make good on its commitment to provide the limited new market access it promised.
OBAMA WANTS HIGH-FIVE FROM BIG FOUR ON TTIP: President Barack Obama’s stop in Hanover, Germany, Monday will include a meeting with the leaders of Europe's four largest economies to discuss the status of U.S.-EU trade talks, which simultaneously will be entering their 13th round in New York City.
The discussion with French President Francois Hollande, Italian Prime Minister Matteo Renzi, United Kingdom Prime Minister David Cameron and the host, German Chancellor Angela Merkel, will also focus heavily on joint counterterrorism efforts and the need to share information more effectively, the White House said.
The United States and the European Union are striving to wrap TTIP up this year, but time is running out for the two sides to resolve difficult political issues without more of a push from the top.
Obama also plans to stop at the Hannover Messe, Europe’s largest industrial trade fair, on April 24 and 25, and POLITICO Europe Brief reporter Ben Oreskes will be there on the ground. Europe Brief will also put out a special Sunday edition on April 24. Let Ben know if you'll be there: boreskes@politico.com.
SIEMENS EXEC: TRADE FAIR COULD BE ‘WATERSHED’ FOR U.S., EU: Siemens USA CEO Eric Spiegel believes the trade fair could be a “watershed moment,” where Merkel and Obama play up the huge steps the two countries have taken to revive manufacturing, Europe Brief reports.
But he’s a little more muted in his hopes for TTIP. “I don’t think anything is going to happen in the near term,” he told Europe Brief. “There is a lot of pushback, it seems, on both sides of the aisle around trade, and maybe trade has come to symbolize some of this anger we see out there about taking away jobs.”
Spiegel pushed back against the anti-trade messages dominating the U.S. primary season and significant opposition to free trade deals in Europe, arguing the U.S. and the EU account for the lion's share of the industrialized world's exports. “This is a time to take advantage of what we can do if we harmonize things between the EU and U.S., and we can leverage that to take advantage of the growth that's going to occur around the world,” he said. “Otherwise those economies are going to take advantage of the growth in their own markets, and the U.S. and the EU are going to lose out on tremendous growth opportunities.”
ALUMINUM INDUSTRY, WORKERS DIVIDED ON OVERCAPACITY: The United Steelworkers’ push to slap a 50 percent duty on aluminum imports to prevent global overcapacity from causing more harm to U.S. companies hasn’t won over the aluminum industry just yet.
“The overcapacity issue ... requires urgent attention by the U.S. government,” Heidi Brock, head of the Aluminum Association, told reporters at a press conference in Miami, where the group was meeting. “What the right tool is and what the right path is for that is very complex.”
The steelworkers union filed a petition this week asking for emergency duties on primary aluminum imports from around the world, blaming China’s excess capacity for depressing global prices and the loss of the more than 6,000 U.S. jobs. But Canada, not China, is by far the biggest foreign supplier of primary aluminum to the United States, accounting for about 66 percent of U.S. imports.
“That’s part of what we need to very carefully understand: the impact of the petition on the various supply chains,” Brock said. "That’s why we want to take some time in carefully reviewing this petition.”
USW SOOTHES CANADIAN WORRIES: But the United Steelworkers say Canada shouldn’t be worried. The petition specifically requests a “capped tariff,” meaning the duty would only apply to aluminum sold below a certain price, which would be determined by the ITC as “sustainable for the domestic industry” for each grade of aluminum.
“The goal here is to restore prices, not impose tariffs,” USW President Leo Gerard said in a statement to POLITICO. “If a foreign producer sells at that price, they will also help enhance their own profitability. If they chose to sell at the depressed prices caused by Chinese overcapacity, then the U.S. government will collect any tariffs authorized by the president. That's up to the producer. I know what I would do if I were them.” Gerard reiterated that global overcapacity was “primarily fueled by China” and called for international negotiations to resolve the issue.
CONAWAY ANGRY OVER COTTON: House Agriculture Committee Chairman Michael Conaway backed up the National Cotton Council on Wednesday in its criticisms of new Turkish anti-dumping duties on U.S. cotton fiber. He called the duties “blatant retaliation,” adding that the procedure violated World Trade Organization rules. “The findings are baseless, and the duties should be dropped immediately,” he said.
But it’s not just Turkey he’s mad at. “Just last week, China announced it will start selling off government-owned stockpiles, a result of their reckless policy that has depressed world cotton prices and that continues to hang over the market,” the Texas Republican said. “Add to that the fact that India’s minimum support price and input subsidies have resulted in India topping China as the world’s largest producer.” Cotton growers, he said, are “under assault.”
INTERNATIONAL OVERNIGHT
China’s state-run media is overlooking Donald Trump’s threats of a trade war and embracing the candidate for his willingness to undercut U.S. alliances in the region, which pro-Beijing writers see as a strategic opportunity, The Daily Beast reports:http://thebea.st/20YJKNS.
Maine Rep. Bruce Poliquin says that after reviewing the thousands of pages of the TPP, he has concluded the pact is bad for the state, Maine public radio says: http://bit.ly/1TkeQwl
President Obama is expected to warn during his visit to London that Brexit would endanger Britain’s special relationship with the United States, The Guardian reports: http://bit.ly/1U6Otw4
India has appealed the World Trade Organization’s Appellate Body to dismiss a lower panel’s ruling striking down New Delhi’s local content requirements for solar cells, Livemint says: http://bit.ly/1qEkFv1
Reuters opines about the clash of economic ideologies behind the steel spat with China — and questions whether a trade war is looming: http://reut.rs/1SbQWUC
UPI analyzes the sad state of U.S.-Russia trade and the danger it poses to small and medium-sized businesses: http://bit.ly/1SlnY1p
The Diplomat calls TPP a win for Vietnam’s workers: http://bit.ly/1Sum6Wj
Harley-Davidson’s CEO is all vroom-vroom about TPP, telling Fox Business Network, “The big opportunity for Harley, growth-wise, is in Asia, and a lot of the work with the TPP addresses some of the barriers that are in the way of our growth in Asia”:http://fxn.ws/1Qn4APa
http://www.politico.com/tipsheets/morning-trade/2016/04/tpp-something-clinton-could-support-mtb-marches-forward-trade-secrets-bill-teed-up-213884
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(ACC Mentioned) Industry, Advocates Rebut Conflicting Claims Over EPA Solid Waste Rule
Apr 22, 2016 | Inside EPA
Industry and environmentalists in consolidated litigation that challenges EPA's definition of solid waste (DSW) rule have filed their initial briefs in the case as intervenors, disputing each other on different aspects of EPA's rule, with environmentalists seeking to tighten requirements while industry argues most of environmental petitioners' arguments lack standing.
Industry parties, including the American Petroleum Institute (API), National Association of Manufacturers, American Chemistry Council and a host of others, filed their first intervenor-respondents' brief April 18 in API v. EPA -- consolidated litigation in which the same industry parties are challenging EPA's 2015 DSW rule. Relevant documents are available on InsideEPA.com. (Doc. ID: 190677)
Environmental groups -- which include Sierra Club, Clean Air Council and others represented by the law firm Earthjustice -- also filed their first intervenor-respondents' brief April 18, and are also petitioners in the case. Both sets of intervenors attempt to shoot down each others' arguments made as petitioners.
The litigation is before the U.S. Court of Appeals for the District of Columbia Circuit.
At issue is a rule long in the making that EPA issued last year to respond to earlier litigation by environmental groups over a Bush-era rule. It attempts to close what the Obama EPA saw as regulatory gaps in the 2008 version of the rule by mandating use of all four of the agency's criteria for determining that recycling of hazardous waste is legitimate, rather than just two under the Bush-era rule. Exempting hazardous secondary materials from the definition of solid waste also exempts them from hazardous waste regulation under RCRA.
According to EPA's supporting documents for the 2015 rule, the rule also "retains the exclusion [from the solid waste definition] for recycling under the control of the generator, including recycling on site, within the same company, and through toll manufacturing agreements."
It also eliminates a 2008 transfer-based exclusion from the solid waste definition, replacing it with a stricter "verified recycler exclusion," allowing those who meet certain criteria an alternative to meeting strict hazardous waste rules.
In addition, the final rule affirms the legitimacy of 32 pre-2008 DSW exclusions, and applies the codified version of the agency's definition of legitimacy to these exclusions, rather than guidance-based legitimacy criteria that EPA says are substantively the same.
Environmental petitioners in their challenge to the rule have asked the court to vacate the verified recycler exclusion and the pre-2008 exclusions in the rule, saying the verified recycler exclusion exceeds EPA's authority and that leaving the pre-2008 exclusions in place was unlawful and arbitrary.
But industry intervenors say in their April 18 brief that the environmentalists' petition is flawed on both jurisdictional and substantive grounds.
On the pre-2008 exclusions, industry says EPA's decision to defer action on proposed containment and notification conditions for the exclusions does not create judicial jurisdiction on this issue and charges the court ""lacks jurisdiction to hear most of Environmental Petitioners' arguments because Environmental Petitioners lack standing to challenge the majority of the Pre-2008 Exclusions."
On the verified recycler exclusion, the industry parties say environmentalists failed to identify "any procedural or substantive defect in EPA's action finalizing the Verified Recycler Exclusion," and say "that action did not suffer from the procedural or substantive defects that Environmental Petitioners assert." Industry contends that the verified recycler exclusion "is an enhanced version of the Transfer-Based Exclusion," with the agency choosing "not to wholly abandon" the latter because it agreed that doing so would be arbitrary and capricious and could lead to more landfillng.
Further, industry says, "By failing to press the precise argument during the rulemaking, Environmental Petitioners waived their argument that materials that generators 'pay to have hauled away' are 'discarded' under the term's plain meaning."
As petitioners, the industry parties nonetheless criticize the verified recycler exclusion, saying it "purports to define 'solid waste' in the context of secondary materials sent to third parties for reclamation, [but] at least two of its conditions bear no reasonable relation to 'discard.'" Instead, industry says, those conditions affirmatively regulate materials that have not been discarded, "thus effectively rendering the exclusion a 'sham' definition of 'solid waste.'"
In their April 18 intervenor brief, environmentalists say the court "need not address Industry Petitioner's challenge to specific conditions in the Verified Recycler Exclusion if it determines that the Exclusion itself must be vacated as unlawful or arbitrary, as Environmental Petitioners contend."
But if it does address these arguments, the court should reject them, the brief says, giving three reasons. "First, Industry Petitioners misrepresent EPA's rationale for these conditions as based on the notion that 'transfer equals discard,' and their attack on this straw-man rationale is irrelevant and without merit," they say.
Second, industry attacks studies that back EPA's decision to withdraw the 2008 transfer-based exclusion, but industry's criticisms "merely reflect their disagreement over the agency's methodology, but do not undermine the record support for EPA's decision or show that the decision is, in any way, unlawful or arbitrary."
Third, the environmentalists point out that the conditions in the verified recycler exclusion cannot be severed from the exclusion itself. Therefore, even if the court accepts industry's challenge to the conditions included in the verified recycler exclusion, "it should reject their request to strip out or invalidate those conditions and leave in place an exclusion that EPA plainly would not have promulgated on its own."
In the same brief, movant-intervenor Gulf Chemical and Metallurgical Corporation also refutes industry petitioners' challenge related to EPA's 1998 determination that spent catalysts from petroleum refinery operations were "discarded" solid wastes. Industry's "attempt to challenge this determination in this proceeding is an untimely 'back-door' challenge barred by [the Resource Conservation & Recovery Act]," the brief says.
Suzanne Yohannan
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Cracker Shutdown Due to Explosion at Pajaritos Petchems Complex: Source
Apr 21, 2016 | Platts
By Emmanuel Gallegos
A major explosion Wednesday at the vinyl chloride monomer plant in the Pajaritos petrochemicals complex in Mexico's southern Gulf state of Veracruz has caused Petroquimica Mexicana de Vinilo (PMV) to shut down its cracker there, a source with knowledge of business operations said Thursday.
"The cracker is located in the same complex but was not affected," the source said. The cracker is stopped, the source said, adding that there was no timetable when it would restart.
PMV, a joint venture between state-owned energy company Pemex and PVC maker Mexichem, uses the bulk of its ethylene for the production of VCM, which is used in PVC applications.
PMV sold the ethylene occasionally during 2015, due to either maintenance at the VCM plant or, more commonly, due to a surplus.
The cracker at the Pajaritos complex in Veracruz has an estimated capacity of 184,000 mt/year.
The cause of the blast Wednesday is still unknown, a Pemex official said Thursday.http://www.platts.com/latest-news/petrochemicals/houston/cracker-shutdown-due-to-explosion-at-pajaritos-21318072
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Clean Power Cuts Not Feasible, W.Va. Report Finds
Apr 22, 2016 | BNA Daily Environment Report
By Bebe Raupe
Power plants in West Virginia cannot feasibly meet the 29 percent mass carbon dioxide emissions reduction required by the Environmental Protection Agency's Clean Power Plan, according to a report mandated by the legislature.
The study contains a “comprehensive analysis” of potential effects on West Virginia, its people and its economy resulting from the Clean Power Plan (RIN 2060-AR33), which was issued under Section 111(d) of the Clean Air Act. Under the limitations of W.Va. Code §§ 22-5-20(e) and (f) and present technology, an improvement in a plant's efficiency in converting heat into electric power is the only type of carbon dioxide emissions reduction measure feasible at each unit without switching fuels or limiting utilization, said the report.
The West Virginia Department of Environmental Protection (WVDEP) was required to complete the report by H.B. 2004, which passed in 2015 (203 DEN A-21, 10/21/15).
Power Plants Already Efficient
“[The] EPA's optimistic estimate of what might be available through such efficiency gains is limited to a 4.3 percent improvement,” said the report.
But data provided by the owners of West Virginia's coal-fired power plants, which the report said “are already among the most efficient in the country,” indicates improvements of only 1 percent to 2 percent are reasonably available, the WVDEP said.
The WVDEP said it will not develop a state plan to comply with the Clean Power Plan unless the U.S. Supreme Court lifts its stay of the rule.
If a state plan is developed, the agency would be charged with drafting it and submitting it to the legislature for approval before submitting it to the EPA.
“Should the 111(d) rule be upheld, West Virginia may have difficulty developing a timely state plan submission due to all of the legislative approvals required,” said the report. Over three successive legislative sessions, WVDEP would have to obtain legislative approval of state statute changes needed to develop a state plan, gain approval of legislative rules that would comprise the enforceable portion of the state plan, and have lawmakers approve of the state plan itself.
West Virginia Attorney General Patrick Morrisey (R) has been a leading figure in the fight against the Clean Power Plan (201 DEN B-1, 10/19/15) (190 DEN B-1, 10/1/15) (186 DEN BB-1, 9/25/15).
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=87901239&vname=dennotallissues&fn=87901239&jd=87901239
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Measure to Block Water Rule Fails, Energy Bill Proceeds
Apr 22, 2016 | BNA Daily Environment Report
By Ari Natter
A Senate amendment that would have blocked the Clean Water Rule fell four votes short of passage April 21, but the measure's sponsor said he wouldn't give up on using the appropriations process to block the regulation.
The measure by Sen. John Hoeven (R-N.D.) would have blocked the Environmental Protection Agency and Army Corps of Engineers from moving forward with the waters of the U.S. regulation (RIN 2040-AF30), which clarifies the reach of the Clean Water Act.
The amendment to the energy and water spending bill (H.R. 2028) fell by a vote of 56-42. It also would have blocked the EPA's Interpretive Rule, which narrowed a Clean Water Act agriculture exemption.
The Clean Water Rule is opposed by a large swath of the business community, including oil and gas companies, which say the regulation would expand the scope of the Clean Water Act and hamstring development, but similar efforts to block the rule have failed to garner enough votes for passage.
Hoeven previously said a White House statement of administration policy warning that the president would veto the bill if “problematic ideological provisions” were added to it, would make it a challenge to receive the 60 yes votes needed for passage.
“While I am disappointed that the vote failed, I will continue my work to stop this burdensome regulation through the appropriations process,” Hoeven said in a statement.
‘Umpteenth' Failed Try
Environmental advocates meanwhile cheered the votes's outcome.
“For the umpteenth time, they failed, thanks in part to those in Congress who've stood up for our drinking water time after time,” John Rumpler, senior attorney for Environment America, said in a statement. “It's time for Congress to start protecting our drinking water instead of attacking it.”
The underlying $37.5 billion energy and water spending bill is expected to pass early the week of April 25, Sen. John Cornyn (R-Texas), the Senate's No. 2 Republican, told reporters April 21.
The measure would appropriate $30.7 billion for the Department of Energy, $6 billion for the Army Corps of Engineers, and $1.2 billion for the Interior Department's Bureau of Reclamation. The total amount for energy and water programs recommended by the Senate Appropriations Committee totals $38.4 billion, but the actual cost of the bill was reduced to $37.5 billion because of scoring adjustments (77 DEN A-1, 4/21/16).
Other bill highlights include language that would authorize interim nuclear storage sites and a provision sought by Alpha Natural Resources and other mining companies that prohibits any changes to the definition of “fill material” and “discharge of fill material” under the Clean Water Act.
Vehicles Amendment Defeated
In addition to the Hoeven measure, the Senate also voted April 21 to defeat a measure by Sen. Dan Coats (R-Ind.), that would have limited the Energy Department's Advanced Technology Vehicles Loan Program by making applications submitted after the bill's enactment ineligible.
The amendment, which Coats said would save $300 million over the next 10 years, failed by a vote of 48-49. Sixty votes were needed for passage.
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=87901236&vname=dennotallissues&fn=87901236&jd=87901236
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Spending Bill Requires Crude-by-Rail Response Plans
Apr 21, 2016 | BNA Daily Environment Report
By Ari Natter
The Transportation Department would be required to promulgate a rule mandating that railroads shipping crude oil file comprehensive oil spill response plans by December under legislation unanimously approved by the Senate Appropriations Committee April 21.
The rule, which would affect railroads such as BNSF Railway Co. and Canadian Pacific Railway Ltd., would probably require more thorough response plans, specific shipping information and alternative tests to better prepare for and deal with spills.
The legislation would mandate that the Pipelines and Hazardous Materials Safety Administration initiate a rulemaking by June and issue the final regulation by Dec. 18, the same date required by omnibus funding legislation enacted in December 2015, according to a committee bill report.
The rule (RIN 2137-AF08) was the subject of an advanced notice of proposed rulemaking issued by PHMSA in July 2014, but the agency has yet to begin a rulemaking, the report said.
Artealia Gilliard, a spokeswoman for the agency, said in an e-mail to Bloomberg BNA that PHMSA has begun the rulemaking process, and a notice of proposed rulemaking is undergoing interagency review at the White House Office of Management and Budget.
Seismic Safety Concern
The Transportation Department has said it anticipates the rule will be promulgated in June 2017, though Rep. Peter DeFazio (D-Ore.), the top Democrat on the House Transportation and Infrastructure Committee, has urged the department to act sooner (15 DEN A-8, 1/25/16).
The bill, which would appropriate $259 million for PHMSA, also requires a congressional briefing related to natural gas and petroleum pipelines that cross fault lines and “the potential for installing automatic shut-off valves that can be coordinated with a future earthquake early warning system,” according to the report.
“The Committee is concerned that insufficient attention has been paid to seismic safety of pipelines,” the report said.
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=87901228&vname=dennotallissues&fn=87901228&jd=87901228
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Boxer Vows To Put SDWA Citizen Suits 'On Par' With CWA
Apr 21, 2016 | Inside EPA
Sen. Barbara Boxer (D-CA) secured in a new lead and water infrastructure bill a provision that would reform the Safe Drinking Water Act (SDWA) by allowing stronger provisions on citizens' rights to seek damages from local governments, putting the law “on par” with the Clean Water Act (CWA) and other environmental laws.
“It would be a huge change to SDWA. It's probably about time. There's absolutely no accountability of local systems in SDWA,” a legal observer source says, adding that it is a legitimate idea to have SDWA mirror the citizen suit provisions that exist in the CWA.
Boxer's provision included in the water bill S. 2821, would “amend [SDWA] to allow concerned citizens to act in emergency situations to address drinking water contamination and stop an immediate threat to public health,” according to a summary of the bill provided by its head sponsor Sen. Ben Cardin's (D-MD) office.
The bill -- and Boxer's provision -- respond in part to the drinking water crisis in Flint, MI, and other concerns about the United States' water infrastructure. It would boost state revolving fund levels, authorize the Water Infrastructure Finance and Innovation Act, create a new grant program for projects that reduce lead in tap water and help schools test for lead and speed up implementation of EPA's Lead and Copper Rule.
“This legislation empowers citizens who are receiving contaminated water to obtain injunctive relief from a court or to petition [EPA] to act to address an imminent and substantial endangerment to their health,” says the summary, putting SDWA “on par with other environmental statutes that allow citizens to address such threats.”
The Clean Water Act (CWA), for example, includes language specifying that citizens as well as EPA, may, among other appropriate actions, file suit on behalf of the United States in cases of “imminent and substantial endangerment” to health and welfare, while SDWA, in its current form, includes no such authority.
Instead, SDWA says that in cases of imminent and substantial endangerment, parties wishing to bring suit “consult with the state and local authorities in order to confirm the correctness of the information on which action proposed to be taken . . . is based and to ascertain the action which such authorities are or will be taking.”
Those actions, according to SDWA section 1431, including issuing emergency orders and “commencing a civil action for appropriate relief, including a restraining order or permanent or temporary injunction.”
In Flint, many critics and observers say EPA Administrator Gina McCarthy's January use of this authority came too late. The source notes that the main result of implementing Boxer's plan would create “an enormous amount of litigation” from citizens and environmental groups against local governments.
The difference between SDWA and the CWA, the source explains, is that the majority of CWA cases typically involve plaintiffs' lawyers representing environmental groups bringing suits against an industry, whereas a substantial portion of drinking water is provided by local governments rather than private water companies: “so if this provision goes through, you're going to have a lot of local governments sued by citizens.”
In Flint, U.S. District Court Judge John Corbett O'Meara dismissed April 19 one such citizen claim ruling that the plaintiffs lacked subject matter jurisdiction because they made their claims against Flint and Michigan officials under the Constitution, not SDWA. Another pending claim, also now in O'Meara's court in the U.S. District Court for the Eastern District of Michigan, seeks “equitable relief” in the form of repairs to property, a medical monitoring fund and a new monitor to oversee Flint's water operations, includes some SDWA claims.
While Boxer's provision is sure to be controversial, Sen. James Inhofe (R-OK), chairman of the Senate Environment & Public Works Committee, along with its ranking member Boxer, pledged during an April 7 hearing to advance many water infrastructure measures through legislation -- either as part of the Water Resources Development Act bill due out in the coming days, or as a standalone package.
http://insideepa.com/news-briefs/boxer-vows-put-sdwa-citizen-suits-par-cwa
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EPA Plans To Complete PM NAAQS Review By 2021
Apr 21, 2016 | Inside EPA
EPA intends to complete its next Clean Air Act-mandated review of its particulate matter (PM) national ambient air quality standards (NAAQS) by 2021 -- four years beyond the air law's mandated five-year review cycle, which requires the agency to issue by 2017 a decision on whether to reassess the 2012 PM standards.
In a draft integrated review plan (IRP) for the review, announced in the April 19 Federal Register, EPA details how it plans to approach the review of fine particulate matter (PM2.5) and larger coarse particulate matter (PM10) standards .
EPA last modified the PM2.5 NAAQS in 2012, tightening the prior annual “primary,” or health-based standard set in 1997 from 15 micrograms per meter cubed (ug/m3) down to 12ug/m3. In the previous PM2.5 NAAQS review rule issued in 2006, EPA tightened the 24-hour NAAQS from 65 ug/m3 down to 35/m3.
The secondary, or welfare-based PM2.5 NAAQS, designed to protect the environment, remains at 15 ug/m3 annually, having been set at the same level as the old primary standard.
The PM10 NAAQS, meanwhile, currently stands at 150 ug/m3 over 24 hours for both primary and secondary standards.
Under the air law, EPA must conduct periodic reviews of NAAQS and issue rules either modifying them or leaving them unchanged every five years. However, the agency has repeatedly failed to meet this schedule, resulting in environmentalist lawsuits asking courts to force EPA to issue NAAQS rules.
For example, EPA issued its latest ozone NAAQS rule Oct. 1 under a court-ordered schedule seven years after the air law's deadline for reviewing whether to update its previous ozone limit issued in 2008.
The draft IRP for the PM review foresees EPA releasing a draft integrated science assessment (ISA) by spring 2017, to collate and synthesize the latest science on PM, with a final ISA due in spring 2019 after review by the agency's Clean Air Scientific Advisory Committee.
A final risk and exposure assessment outlining scientific data on PM and its effects would be due in winter 2019, and a final policy assessment (PA) due in winter 2020. The PA document presents the EPA administrator with policy choices for the NAAQS rule. The timetable says a proposed new NAAQS rule would be due in 2020, with a final rule to follow in 2021. The air law schedule, however, requires that rule to be issued in 2017.
The draft IRP sets out a wide array of questions the NAAQS review will address, including issues related to scientific uncertainty surrounding PM's health effects, and also other environmental impacts such as climate impacts. PM can have both cooling and heating effects on climate, depending on the context.
EPA is taking comment on the IRP through June 23.
http://insideepa.com/news-briefs/epa-plans-complete-pm-naaqs-review-2021
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