Preview Newsletter
PM ACC 4/26/2016
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(ACC Mentioned) US Chemical Activity Index Accelerates in April
Apr 26, 2016 | Hydrocarbon Processing
The Chemical Activity Barometer (CAB), a leading economic indicator created by the American Chemistry Council (ACC) trade group, expanded 0.6% in April following a revised 0.1% increase in March and 0.2% decline in February. -
(ACC Mentioned) Study Finds Plastic Chemicals Leaching into Fast Food
Apr 26, 2016 | WXPI Pittsburgh
Is there plastic in your hamburger? A new study links a dangerous chemical from plastics to fast foods. -
Arguments Hot Up as TTIP Talks Restart
Apr 26, 2016 | Chemical Watch
As talks on a transatlantic trade agreement restart in New York, NGOs the Health and Environment Alliance (HEAL) and Center for International Environmental Law (Ciel) have launched a campaign to "protect European efforts to manage toxic chemicals and pesticides". -
Hazardous Chemical from Scented Products is Polluting the Great Lakes
Apr 26, 2016 | Safer Chemicals, Healthy Families
By Alexandra Gorman Scranton
The Great Lakes are under emerging threat from an unnecessary long-lasting fragrance chemical. Galaxolide, a synthetic musk frequently used in those scented cleaning products that give our home that pine-fresh or lemony-smell, is getting washed down the drain... -
4 Things to Look for in EPA's Methane Rule
Apr 26, 2016 | E&E Climatewire
By Niina Heikkinen
U.S. EPA is poised to release a new methane rule that will lay the groundwork for substantially cutting emissions of the potent greenhouse gas across the oil and gas sector. -
DRBC to Conduct Separate Public Hearings on Proposed PennEast Pipeline
Apr 26, 2016 | Natural Gas Intelligence
By Jeremiah Shelor
The Delaware River Basin Commission (DRBC) will be conducting an independent series of public hearings on the proposed PennEast Pipeline, the multi-state agency told FERC Monday. -
Ignoring the Shale Revolution
Apr 26, 2016 | Wall Street Journal
By R. Tyler Priest
On March 8, 1956, Shell Oil research geologist Marion King Hubbert delivered a keynote speech at an American Petroleum Institute meeting in San Antonio, Texas, and predicted that U.S. oil production would peak within 10 to 15 years. -
BLM Pressed on Oil Worker Safety
Apr 26, 2016 | E&E Climatewire
By Mike Soraghan
Worker safety advocates, labor unions and even industry are urging the Bureau of Land Management to take worker safety into account as it overhauls its 26-year-old oil measurement rules. -
'Sporadic' Handling of EMP Threat Needs Work -- GAO
Apr 26, 2016 | E&E Energywire
By Blake Sobczak
Federal agencies haven't pulled together to address the risk of an electromagnetic pulse (EMP) on the grid, according to a report by the U.S. Government Accountability Office. -
DiNapoli to Feds: Strengthen Safety Measures for Oil Trains
Apr 26, 2016 | Albany Times Union
By Matthew Hamilton
State Comptroller Tom DiNapoli has written to the head of the federal Department of Transportation urging the feds to increase oil train safety measures. -
State Plans Get 3-Year Delay Under Regional Haze Proposal
Apr 26, 2016 | E&E Greenwire
By Sean Reilly
U.S. EPA is pursuing a number of changes to the second phase of planning efforts to improve visibility in national parks and wildlife refuges. -
Green Groups, Democrats 'Go to the Mat' for Garland
Apr 26, 2016 | E&E Greenwire
By Hannah Hess
Democrats and environmental officials gathered on the steps of the Supreme Court today to rally for President Obama's nominee, Merrick Garland. -
State Regulators Crafting Model Policies to Boost CWA Trading Programs
Apr 26, 2016 | InsideEPA
By David LaRoss
State water regulators are working with advocates for water quality trading to craft model rules, permits and other regulatory text that would guide states crafting such mechanisms, saying that the new tools could allow states with relatively little technical expertise... -
Federal District Court Dismisses CWA Jurisdiction Rule Suit
Apr 26, 2016 | InsideEPA
The U.S. District Court for the Southern District of Ohio's Eastern Division has dismissed a challenge filed by three states over EPA's Clean Water Act (CWA) jurisdiction rule, granting a Justice Department (DOJ) motion for dismissal that noted the court is within the same appellate circuit... -
Murray Energy Files Quick Legal Challenge to EPA Mercury Rule
Apr 26, 2016 | E&E Greenwire
By Sean Reilly
Murray Energy Corp., which was first off the mark in litigating U.S. EPA's latest ozone standard last fall, is wasting no time in also challenging the agency's attempt to further justify the cost of its regulations to cut power plant mercury emissions. -
Cutting Carbon, Saving Jobs
Apr 26, 2016 | U.S. News & World Report
By David Brodwin
Last week, 175 world leaders inked an accord to slow climate change by cutting carbon emissions worldwide. The agreement commits the U.S. to reduce carbon emissions 26 percent by 2025. Other nations have made similar commitments.
Industry and Association News
Chemical Management News
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(ACC Mentioned) US Chemical Activity Index Accelerates in April
Apr 26, 2016 | Hydrocarbon Processing
The Chemical Activity Barometer (CAB), a leading economic indicator created by the American Chemistry Council (ACC) trade group, expanded 0.6% in April following a revised 0.1% increase in March and 0.2% decline in February.
All data is measured on a three-month moving average (3MMA).
Accounting for adjustments, the CAB remains up 1.8% over this time last year, a marked deceleration of activity from one year ago when the barometer logged a 2.7% year-over-year gain from 2014. On an un-adjusted basis, the CAB jumped 1.4%, following a solid 0.8% gain in March.
In April, production-related indicators were positive, with improvement in plastic resins used in packaging and trends in construction-related resins, pigments and related performance chemistry suggesting a housing recovery. Equity prices rebounded significantly in April, joined by a firming in product prices. Inventories and other downstream indicators were positive, the ACC said.
The Chemical Activity Barometer has four primary components, each consisting of a variety of indicators: 1) production; 2) equity prices; 3) product prices; and 4) inventories and other indicators.
The Chemical Activity Barometer is a leading economic indicator derived from a composite index of chemical industry activity. The chemical industry has been found to consistently lead the US economy's business cycle given its early position in the supply chain, and this barometer can be used to determine turning points and likely trends in the wider economy. Month-to-month movements can be volatile, so a three-month moving average of the barometer is provided. This provides a more consistent and illustrative picture of national economic trends.
Applying the CAB back to 1919, it has been shown to provide a lead of two to 14 months, with an average lead of eight months at cycle peaks as determined by the National Bureau of Economic Research. The median lead was also eight months. At business cycle troughs, the CAB leads by one to seven months, with an average lead of four months. The median lead was three months. The CAB is rebased to the average lead (in months) of an average 100 in the base year (the year 2012 was used) of a reference time series. The latter is the Federal Reserve's Industrial Production Index.
http://www.hydrocarbonprocessing.com/Article/3548834/Latest-News/US-chemical-activity-index-accelerates-in-April.html
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(ACC Mentioned) Study Finds Plastic Chemicals Leaching into Fast Food
Apr 26, 2016 | WXPI Pittsburgh
Is there plastic in your hamburger?
A new study links a dangerous chemical from plastics to fast foods.
While most of us are aware that fast food is not the healthiest option, a new study by the CDC found people who eat a lot of fast food have higher levels of hormone disruptors in their system.
It's because some of the chemicals used in packaging and food processing can leach into what you're eating.
The hormone disrupter can cause infertility.
It's been linked to reduced IQ and behavioral problems in children exposed in the womb.
It can also raise the risk of diabetes in women and children.
The National Restaurant Association and the American Chemistry Council are working together to review the study.
They say the chemical levels found are "well below" the levels the Environmental Protection Agency deem likely to increase health risk.
CDC researchers argue the EPA's set limit is outdated.
http://www.wpxi.com/news/study-finds-plastic-chemicals-leaching-into-fast-food/242869985
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Arguments Hot Up as TTIP Talks Restart
Apr 26, 2016 | Chemical Watch
As talks on a transatlantic trade agreement restart in New York, NGOs the Health and Environment Alliance (HEAL) and Center for International Environmental Law (Ciel) have launched a campaign to "protect European efforts to manage toxic chemicals and pesticides".
They say a Transatlantic Trade and Investment Partnership (TTIP) is "likely to undermine the democratic regulatory process and the implementation of chemicals legislation in the EU".
They have written an open letter to EU trade commissioner, Cecilia Malmström, demanding the exclusion of the "Good Regulatory Practices" chapter from the European Commission’s TTIP proposals.
They also ask her to ensure no elements of the EU Better Regulation agenda are codified in a legally binding trade agreement.
The European Environmental Bureau (EEB) and ClientEarth have also signed the letter.
Cefic 'mythbuster'
In contrast, the European Chemical Industry Council (Cefic) says TTIP provides a strong foundation for regulatory cooperation on chemicals. A deal, it says, is "essential to long-term economic success".
It has published a "mythbuster" on its website. A framework for better regulatory cooperation addresses four "myths":
· that chemical companies want to harmonise European and American standards;
· that the only benefit of regulatory cooperation on chemicals in TTIP would be for companies to save costs;
· that consumer protection on chemicals would be weakened; and
· that consumers would not benefit at all.
It says TTIP will give an opportunity to raise standards, promote scientific cooperation saving costs and reducing unnecessary duplication.
"EU chemical companies, most of whom are SMEs, lose valuable resources relabelling and repackaging products and through the duplication of scientific work," Cefic says.
https://chemicalwatch.com/46939/arguments-hot-up-as-ttip-talks-restart
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Hazardous Chemical from Scented Products is Polluting the Great Lakes
Apr 26, 2016 | Safer Chemicals, Healthy Families
By Alexandra Gorman Scranton
The Great Lakes are under emerging threat from an unnecessary long-lasting fragrance chemical. Galaxolide, a synthetic musk frequently used in those scented cleaning products that give our home that pine-fresh or lemony-smell, is getting washed down the drain, sneaking past wastewater treatment plants and is putting the Great Lakes’ delicate ecosystem as risk.
How Hazardous is Galaxolide to the Great Lakes?
To determine its hazard level, Women’s Voices for the Earth commissioned a GreenScreen® for Safer Chemicals assessment of Galaxolide. GreenScreen® is an internationally recognized tool for comparing and assessing the hazards of chemicals in order to identify those of high concern and evaluate safer alternatives.
Galaxolide was assigned a score of Benchmark 1 – this score is assigned to chemicals of the highest concern whose use should be avoided. Galaxolide earned this score specifically because of its high persistent, bioaccumulative and aquatic toxicity properties. This means that Galaxolide does not break down easily in the environment, builds up over time, and is highly toxic to fish and other aquatic creatures. And it’s ending up in our Great Lakes, simply because it is used in products to make them smell nice
The numbers are concerning:
· One study found Galaxolide in 81% of water samples from tributaries that run through urban areas and drain into the Great Lakes.
· Another study found the chemical in 92% of water samples from Lake Michigan in addition to airborne pollution above the lake.
· Concentrations of Galaxolide were also found in the sediment in Lake Erie and Lake Ontario are doubling every 8-16 years.
Along with environmental concerns, Galaxolide raises red flags for human health risks. Studies show it may interfere with hormones and other chemical signals in the body which can result in developmental, reproductive, metabolic, brain, and behavior problems. And, emerging science shows that Galaxolide may break down the body’s natural defenses against other toxic chemical exposure.
Solutions
Scented products don’t have to contain Galaxolide to smell nice. In fact, several major manufacturers of household cleaners have already phased out their use of Galaxolide and other synthetic musks due to the environmental and health concerns associated with these chemicals.
All companies that make cleaning products should follow suit. These companies can play a critical role in protecting the Great Lakes from further chemical pollution by eliminating Galaxolide from their products now.
Since fragrance ingredients, like Galaxolide, are not required to be disclosed on a product label or website, it can be challenging to avoid when purchasing products. Here are some quick tips:
· Look for fragrance-free cleaning products (remember that “unscented” does not mean fragrance-free) or if you have a question about whether a fragranced product you use contains this chemical of concern, call the manufacturer and ask — if they don’t provide the answer you need, ask yourself whether or not it is a product you need, and voice your concerns about the hazards of Galaxolide.
· Make your own cleaning products. DIY (do-it-yourself) recipes abound. Here are some to get you started.
· Find other ways to get that “clean” smell without using fragranced cleaning products. Check out these tips for some ideas.Citations
1. Baldwin AK, Corsi SR, DeCicco LA, Lenaker PL, Lutz MA, Sullivan DJ and Richards KD. (2016) Organic contaminants in Great Lakes tributaries: Prevalence and potential aquatic toxicity. Science of the Total Environment. 554-555, 42-52. 2016.
2. Peck AM and Hornbuckle KC. (2004) Synthetic Musk Fragrances in Lake Michigan. Environmental Science and Technology. Vol. 38, No.2, pp. 367-372. 2004.
3. Peck AM, Linebaugh EK, Hornbuckle KC. (2006) Synthetic musk fragrances in Lake Erie and Lake Ontario sediment cores. Environmental Science and Technology. Vol.40, No. 18, pp:5629-35. September 15 2006.
4. Luckenbach, T. et.al. (2005) Nitromusk and polycyclic musk compounds as long-term inhibitors of cellular xenobiotic defense systems mediated by multidrug transporters. Environmental Health Perspectives. Vol 113. Number 1. January 2005.
http://saferchemicals.org/2016/04/26/hazardous-chemical-from-scented-products-is-polluting-the-great-lakes/
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4 Things to Look for in EPA's Methane Rule
Apr 26, 2016 | E&E Climatewire
By Niina Heikkinen
U.S. EPA is poised to release a new methane rule that will lay the groundwork for substantially cutting emissions of the potent greenhouse gas across the oil and gas sector.
The amended New Source Performance Standards (NSPS) are anticipated as early as this week, according to the Clean Air Task Force, which is closely following the process. The rule will cover methane emissions and expand regulations of volatile organic compound (VOC) emissions from new and modified sources.
CATF and other environmental groups say it is paramount for the final rule to be as comprehensive as possible. Under the Clean Air Act, the equipment EPA regulates now will define the scope of methane regulations for existing sources in the oil and gas industry. Members of the industry maintain that the regulations are unnecessary.
While the proposed rule does cover most equipment all the way through production, transmission and storage, advocates say there are still some significant gaps that need to be filled in the final rule in order to get to the Obama administration's target of cutting methane 40 to 45 percent below 2012 levels by 2025.
"I think the environmental community has really recognized that addressing methane is a critical part of addressing climate change. While we are very encouraged by the [new source rule] moving forward, the bulk of the problem will be addressed with existing source standards, we really want them to do this as quickly and robustly as possible," said Lena Moffitt, director of the Dirty Fuels campaign at the Sierra Club.
Here are some of the significant gaps environmental groups have identified in the proposal:
· Exemption for low-producing wells. The proposed rule does not require methane leak detection and repair for wells that produce less than 15 barrels of oil equivalent per day. "It's critical that the EPA remove the exemption because 24 percent of new well completions are below that, so they would not have to comply. When we look at existing wells, that number rises substantially to three-quarters of wells, accounting for three-quarters of methane emissions," said Sarah Uhl, program director for short-lived climate pollutants at CATF.
· Frequency of leak detection and repair. Most methane reductions come from finding and stopping methane leaks. The current proposed rule requires biannual leak detection and repair. Environmental organizations would like to see this changed to a quarterly, set schedule, said Moffit.
· Liquids unloading. In older gas wells where reservoir pressure is lower, the accumulated of liquids and debris can build up in the wellbore, slowing or even stopping production. When this happens, the liquids and debris have to be removed. The cleaning process, known as liquid unloading, is the third-largest source of methane emissions in natural gas production, yet it is not included in the proposed rule, said Andres Restrepo, a lead attorney at the Sierra Club.
· Storage tanks, underground storage facilities and pneumatic controllers.Neither storage tanks nor underground storage facilities, like the one responsible for the massive Aliso Canyon methane leak in California, are included in the proposal. Environmental groups would also like to see the scope of coverage strengthened for pneumatic controllers, which are used to maintain level, pressure and temperature of liquids.
Adding these measures would address or strengthen regulations on significant sources of methane emissions. Across the industry, leaks account for 38 percent of emissions, pneumatic controllers make up 28 percent, and storage tanks are the third-highest at 6 percent, according to CATF's analysis of EPA's most recent U.S. greenhouse gas inventory.
Establishing methane stricter controls now will make it possible under the Clean Air Act to create an even more impactful methane rule for existing sources, according to Conrad Schneider, advocacy director at CATF.
The methane rule was developed under Section 111(b) of the Clean Air Act, making it a "gateway" to existing source regulation under Section 111(d), Schneider said.
"EPA's current proposal doesn't fully open the 'gate' and, if not strengthened, will limit the scope of any ultimate rule 111(d) rule based on it," he wrote in an email.
Members of the oil and gas industry continue to maintain that they are able to effectively reduce methane emissions without government intervention that hurts job growth.
"It's a fact that air quality continues to sharply improve as more natural gas powers our economy. Driven by our industry's commitment to continuous operational improvements, methane emissions are likewise falling as more natural gas is responsibly delivered to families and small businesses across our nation in the form of affordable, cleaner energy," said Marcellus Shale Coalition President David Spigelmyer in a statement.
http://www.eenews.net/climatewire/2016/04/26/stories/1060036244
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DRBC to Conduct Separate Public Hearings on Proposed PennEast Pipeline
Apr 26, 2016 | Natural Gas Intelligence
By Jeremiah Shelor
The Delaware River Basin Commission (DRBC) will be conducting an independent series of public hearings on the proposed PennEast Pipeline, the multi-state agency told FERC Monday.
DRBC had initially asked the Federal Energy Regulatory Commission to conduct a joint public hearing on the Pennsylvania-to-New Jersey pipeline but opted to withdraw that request this week. In a letter to FERC Monday, DRBC said it will “conduct its public process independently of FERC’s.”
DRBC said it anticipates conducting multiple hearings “because of the high level of interest in the PennEast project.” Those meetings will be held along the route in Pennsylvania and New Jersey, but DRBC said it “does not currently anticipate holding hearings during calendar year 2016. These yet-to-be-scheduled hearings for the proposed PennEast project will be conducted separately from the DRBC’s regularly scheduled quarterly public hearings.”
DRBC’s four member states are New Jersey, Delaware, Pennsylvania and New York.
The DRBC’s announcement comes just as another Northeast Marcellus Shale takeaway project, the Constitution Pipeline, was denied a Clean Water Act permit by the New York Department of Environmental Conservation (see Daily GPI, April 25).
DRBC said planning for its public input process “will advance concurrently with DRBC’s ongoing technical review of PennEast’s application throughout 2016. A formal public comment period will be announced and comments will be actively solicited upon publication of the DRBC’s draft docket.” Additional details will be posted to www.drbc.net.
FERC has said it plans to issue a final environmental impact statement for PennEast on Dec. 16, with the 90-day deadline for coordinating agencies arriving March 16, 2017 (see Daily GPI, March 30).
The 114-mile, 36-inch diameter greenfield PennEast would transport 1.11 million Dth/d of eastern Marcellus Shale gas to markets in Pennsylvania and New Jersey. About 990,000 Dth/d of that capacity is spoken for, according to the company's filing at the Federal Energy Regulatory Commission [CP15-558] (see Shale Daily, Sept. 25, 2015). New Jersey Natural Gas Co. is the largest taker with 180,000 Dth/d. PSEG Power LLC and Texas Eastern Transmission each have 125,000 Dth/d. South Jersey Gas. Co. has 105,000 Dth/d, and Consolidated Edison Company of New York Inc., Elizabethtown Gas, and UGI Energy Services LLC each have 100,000 Dth/d.
PennEast is a joint venture owned by AGL Resources Inc. unit Red Oak Enterprise Holdings Inc. (20%); New Jersey Resources' NJR Pipeline Co. (20%); South Jersey Industries' SJI Midstream LLC (20%); UGI Energy Services LLC's UGI PennEast LLC (20%); PSEG Power LLC (10%); and Spectra Energy Partners LP (10%). The partnership is managed by UGI Energy Services.
Like many Northeast pipeline projects in recent years, PennEast has faced its share of opposition from environmental groups, such as a recently released study backed by the New Jersey Conservation Fund that asserted the pipeline isn’t needed and would create excess transportation capacity (see Shale Daily, March 22).
The Delaware Riverkeeper Network has also been fighting PennEast, with the group recently suing FERC over what it alleged is a bias towards approving natural gas projects due to the Commission’s fee-based funding structure (see Daily GPI, March 4).
Last year, in a FERC filing, PennEast’s backers responded in detail to a long list of the objections lodged against the project (see Shale Daily, Nov. 20, 2015).
http://www.naturalgasintel.com/articles/106186-drbc-to-conduct-separate-public-hearings-on-proposed-penneast-pipeline
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Apr 26, 2016 | Wall Street Journal
By R. Tyler Priest
On March 8, 1956, Shell Oil research geologist Marion King Hubbert delivered a keynote speech at an American Petroleum Institute meeting in San Antonio, Texas, and predicted that U.S. oil production would peak within 10 to 15 years. The reaction was dismissive. Hubbert was challenging an entrenched belief in American petroleum abundance. Fifteen years later, however, U.S. oil output did begin to decline, and Americans’ reliance on foreign oil soared.
The confirmation of his 1956 prediction transformed Hubbert from iconoclast to visionary. In the mid-2000s, as global oil production appeared to have peaked, he became the idol of environmentalists who dreamed of an end to the oil era.
A man who likened himself to Galileo, King Hubbert (1903-89) would have approved of the portrait painted in “The Oracle of Oil: A Maverick Geologist’s Quest for a Sustainable Future.” One of the most gifted geoscientists of his age but also one of the most contentious, Hubbert pursued scientific truth and his own legend with equal vigor. Instead of taking the full measure of the man and his impact, which would have required examining Hubbert’s compulsions and contradictions as an environmental thinker,Mason Inman, an environmental journalist, polishes the legend.
The more revealing half of this biography is about Hubbert’s life before 1956. A native of the austere Methodist community of San Saba, Texas, he displayed his iconoclasm early, rejecting religious fundamentalism for empirical science. A precocious and cocky student, he earned degrees in geology and physics from the University of Chicago and in 1930 began teaching at Columbia University.
Amid the intellectual ferment in New York City during the Great Depression, Hubbert fell under the spell of a magnetic charlatan namedHoward Scott, who envisioned a revolutionary future in which the “price system” would be replaced with “energy certificates” and scientists and engineers would manage government and industry across a North American “Technate.”
Scott, whose gray-uniformed disciples saluted him as the “Great Engineer,” enlisted Hubbert as the second-in-command of “Technocracy Inc.” The geologist’s 1934 Technocracy Study Course was circulated to local chapters across the country and articulated his growing conviction that there were immutable physical limits to economic growth and energy consumption.
Hubbert drifted away from Technocracy during World War II, when he was a researcher with the Board of Economic Warfare. In 1943 he landed a position as head of Shell Oil’s geophysical lab in Houston, where he was given freedom to pursue wide-ranging research. By the early 1950s, he had solved an age-old puzzle concerning the plastic flow of rocks in the Earth’s crust, overturned accepted notions about the movement of underground fluids, explained the physics of hydraulic well fracturing and revolutionized thinking about petroleum entrapment.His brilliant scientific attainments never eased his deep insecurities. It was not enough for him to be right. Someone had to be humiliated in the process. Mr. Inman appears uninterested in pondering the mixture of arrogance and resentment that shaped Hubbert’s personal interactions. There is one passage about the ritual abuse suffered by his technical assistant at Shell, Martha Lou Broussard, exemplified by his objections to her dress color and food preferences, but there are few other examples of the man’s well-known quarrelsomeness.
Instead, he is allowed to narrate his own story. Much of “The Oracle of Oil” reads like annotated transcripts from the 36 hours of interviews conducted by historian Ronald Doel with Hubbert just before his death in 1989. Mr. Inman never challenges self-serving tales or calls out errors. He quotes Hubbert denouncing optimistic projections of future oil discoveries in 1959: “I think we can rule out any radical improvement in geophysical techniques.” The lack of comment on this statement suggests that Mr. Inman is unaware of the digital breakthroughs in seismic surveying that shortly followed.
The second half of “The Oracle of Oil” recounts Hubbert’s peak-oil prediction and his campaign to discredit the inflated numbers peddled by both oilmen and the scientists at the U.S. Geological Survey. Retiring from Shell in 1964, Hubbert joined the USGS and feuded with its chief geologist, and eventual director, Vincent McKelvey, who clung to a dubious estimate of 590 billion barrels of ultimate U.S. crude-oil reserves. Hubbert placed the upper limit just above 200 billion barrels. When U.S. oil production fell during the 1970s energy crisis, Hubbert emerged the proud prophet, while McKelvey lost his credibility and eventually his job when Jimmy Carter became president.
Although Hubbert deserves credit for forcing new rigor upon official petroleum estimates, he was no oracle. His peak-oil prediction was accurate in the near term, but over the longer span it was wildly wrong. Mr. Inman never discusses the statistical and conceptual problems with Hubbert’s “curve-fitting” methods, such as their reliance on aggregate data, which work well only under special conditions, or failure to predict future discoveries and reserve growth. He insists that Hubbert remains correct about “conventional” oil (that which is drilled through traditional wells) and minimizes the importance of “unconventional” plays that have extended U.S. oil and gas reserves far beyond what Hubbert thought possible.
Had this book been published in 2007, at the height of oil prices and peak mania, it might have resonated. Unfortunately for Mr. Inman, McKelvey’s optimism no longer looks so outlandish. The technologies of the shale revolution have blurred the distinction between conventional and unconventional hydrocarbons and reversed the decline in U.S. oil and gas production that Hubbert insisted was terminal. Current U.S. oil production, at nearly nine million barrels per day, is nine times what Hubbert believed it would be in the 21st century.
Mr. Inman’s greater failure, however, is his reluctance to wrestle with the many paradoxes of King Hubbert. The geologist was an innovator who discounted the value of innovative technology. He was a dogmatic crusader for science over dogma. He was a relentless quantifier who dismissed economics as “hieroglyphics.” In the end, he expressed steadfast certainty about what can only ever be an uncertain future.
Mr. Priest is associate professor of history at the University of Iowa.
http://www.wsj.com/articles/ignoring-the-shale-revolution-1461623772
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BLM Pressed on Oil Worker Safety
Apr 26, 2016 | E&E Climatewire
By Mike Soraghan
Worker safety advocates, labor unions and even industry are urging the Bureau of Land Management to take worker safety into account as it overhauls its 26-year-old oil measurement rules.
They want the agency to allow companies drilling on public land to use more automated methods of measuring oil in tanks. That avoids workers needing to open tank hatches and peer in when they're "tank gauging."
At some sites, toxic gases in the oil whoosh out of the hatches, exposing the workers to dangerous levels of chemicals. Some workers have died (EnergyWire, Oct. 27, 2014).
It's particularly dangerous at sites with oil extracted from shale formations, which can be more volatile than conventional crude. Critics say hand measurement -- with manual gauges and devices called "sticks" -- is antiquated in the smartphone era.
"To me, it's amazing we allow this to continue," said Walter Jones, associate director of the Occupational Safety and Health Division of the Laborers' Health & Safety Fund of North America. "When we want know how much gas is in a car, we're not putting a stick in there. We've got a gauge."
There are safer, automated ways to gauge tanks that don't involve manually opening hatches. But current BLM rules require manual tank gauging unless operators employ a fairly expensive unit called a LACT (lease automatic custody transfer) or seek a variance to use another device.
BLM could decide by early summer whether to allow more expansive use of what's commonly called "automatic tank gauging." That decision would come as part of a final rule from the agency on oil measurement.
The agency is revising its rules for measuring oil and gas, contained in the agency's Onshore Orders 3, 4 and 5. The overhaul is driven by years of official criticism that BLM's outdated methods don't get taxpayers their money's worth for the publicly owned resources. The more than 63,000 wells on federal lands account for 11 percent of the country's natural gas supply and 5 percent of its oil.
Push for 'automatic tank gauging'
BLM began its revisions to the rules in 2013 with a series of meetings. Last year, it came out with a proposed rule.
The proposal allows one new kind of automatic measurement, called the Coriolis measurement. Among other changes, the overhaul also requires that measurements of oil on public land be accurate to an eighth of an inch instead of just a quarter inch.
But when BLM looked at those safer, remote methods, generally grouped as "automatic tank gauging," they decided they didn't have enough data to be sure it would meet their goals.
"We're looking for accuracy," said Steve Wells, chief of BLM's fluid minerals division.
But BLM asked industry to provide information about whether automated tank gauging can be accurate to meet the agency's needs.
"We acknowledge there might be other ways," Wells said.
The results of that data request haven't been released. But formal comments indicated that ConocoPhillips Co. and other producers submitted positive results about a measurement technology called "guided wave radar."
The agency tried to build in flexibility by establishing a task force of sorts that could approve new measurement technologies nationwide. Currently, variances are granted by local offices on an ad hoc basis.
Michael Machuca of Emerson Process Management, which supplies measurement devices, isn't assured by the proposed task force, called the "Production Measurement Team."
"How all that would work was not clear," said Machuca, the company's director of oil and gas marketing for upstream operations in North America. "There didn't seem to be sufficient resources within BLM to do that."
Emerson also says that a less stringent accuracy standard for smaller tanks would allow more small companies to move to automatic gauging.
'Inherently dangerous' work
Critics note that manual gauging has its own accuracy problems. It generally involves truck drivers and "flow testers" climbing up on catwalks atop tanks and dropping in a gauge.
In the past few years, evidence has emerged showing that the practice exposes workers to dangerous, even lethal levels of toxic petrochemicals.
All crude oil has compounds called volatile hydrocarbons such as benzene, butane and propane. Shale crude sometimes has more of these compounds than conventional oil. It's related to why shale oil is more prone to explode in rail cars.
The vapors can disorient people to the point that they're unable to escape the lethal effect of the vapors. And at high concentrations, the hydrocarbons can push oxygen out of the air to the point that they asphyxiate victims, even outdoors (EnergyWire, Sept. 14, 2015).
The National Institute for Occupational Safety and Health (NIOSH) identified at least nine deaths attributed entirely or in part to exposure to toxic gases at oil production sites (EnergyWire, Jan. 15).
Beyond the threat of immediate death, NIOSH testing has shown that tank gaugers can be exposed to unsafe levels of benzene, a carcinogen, and other petrochemicals (EnergyWire, Sept. 18, 2014).
The agency has gotten more than 100 comments on the rules for oil measurement, many from companies taking issue with the more stringent standard of accuracy.
But NIOSH weighed in and urged more consideration for safety. North America's Building Trades Unions wrote in support of NIOSH's concerns. So did the Laborers' Health & Safety Fund, which is affiliated with the Laborers' International Union of North America (LIUNA).
And so did industry. The American Petroleum Institute (API) joined with the Independent Petroleum Association of America in submitting comments that included a push for automatic tank gauging.
BLM officials need to recognize the significance of new measurement technology, added Jay Paul McWilliams, president of Logos Resources LLC, a small oil and gas company in Farmington, N.M.
McWilliams wrote that automatic tank gauging would "save lives by not forcing operators to open tank hatches thereby exposing employees to hazardous vapors and gasses."
API, which sets industry standards in addition to lobbying, is developing a new standard covering alternative methods of tank gauging.
API spokeswoman Sabrina Fang said the new standard "has been developed to standardize alternative practices in the area of custody transfer of crude oil from lease tanks to tank trucks."
Emerson's Machuca said API appears to be proceeding relatively quickly on the standard, Chapter 18.2 of API's "Manual of Petroleum Measurement Standards."
"They do realize that having people up on tanks is inherently dangerous and creates problems for accuracy," he said.
http://www.eenews.net/energywire/2016/04/26/stories/1060036126
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'Sporadic' Handling of EMP Threat Needs Work -- GAO
Apr 26, 2016 | E&E Energywire
By Blake Sobczak
Federal agencies haven't pulled together to address the risk of an electromagnetic pulse (EMP) on the grid, according to a report by the U.S. Government Accountability Office.
The government watchdog found that the lack of coordination among the Department of Homeland Security, the Department of Energy and other agencies with a hand in grid security could prevent the United States from understanding the full scope of the threat.
"These agencies take it very seriously, and there have been some efforts to address EMPs, but they've been pretty sporadic and disparate," Chris Currie, a director in GAO's Homeland Security and Justice team, said in a podcast yesterday released alongside the report.
He cited lingering questions around "one of the biggest, most critical parts of our electric infrastructure" -- large power transformers.
EMPs can be triggered by nuclear bombs detonated high in the atmosphere or by solar weather. Small pulses have been known to fry communications equipment and damage electrical components over broad swaths of the grid. In theory, a severe EMP could knock out power across wide areas for weeks or more, due to the time it takes to replace key equipment like large transformers. But the agencies GAO reviewed haven't identified equipment put most at risk by EMPs.
It's not always clear who is responsible for looking into electromagnetic risks, particularly in homeland security circles, GAO found. The independent agency recommended DHS identify internal roles to counter the threat, in addition to collecting more data on what worst-case scenarios could really look like.
"It's a natural reaction to be very scared when you hear the details of an EMP and their potential effects -- life without power for a long period of time could get really, really bad," Currie said.
However, he added that the EMP threat was just one of many grid risks on the government's plate. "So what's most important is that DHS really weigh the risks of an EMP versus these other risks and take appropriate action," he said.
DHS spokesman Scott McConnell said the agency agrees with GAO's findings. He pointed out that the watchdog credited DHS for generally aligning its actions with recommendations from a landmark 2008 Electromagnetic Pulse Commission report.
"The Department of Homeland Security is committed to working with our partners to further address threats associated with electromagnetic pulse and geomagnetic disturbance events," he said in an emailed statement.
DHS is also teaming up with DOE to investigate the impact such events could have on the bulk power grid, but the study is still in its infancy.
http://www.eenews.net/energywire/2016/04/26/stories/1060036226
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DiNapoli to Feds: Strengthen Safety Measures for Oil Trains
Apr 26, 2016 | Albany Times Union
By Matthew Hamilton
State Comptroller Tom DiNapoli has written to the head of the federal Department of Transportation urging the feds to increase oil train safety measures.
“Any train accident involving crude oil or other hazardous materials creates the risk of
significant human trauma and disruption to communities,”DiNapoli wrote in a seven-page letter to USDOT Secretary Anthony Foxx. “The possibility of an accident on the scale of the Lac-Mégantic (Quebec) tragedy is not only a significant hazard to New York residents and environmental resources — it is also a financial threat. A higher consequence incident would not only deplete the state’s mechanism for funding cleanup of petroleum spills, but could also divert funding from other vital services.”DiNapoli oversees the state Environmental Protection and Spill Compensation Fund, which is authorized to hold up to $40 million for spill-related issues. Disaster costs that fall to the state that are higher than the $40 million, however, would need to be covered by the state general fund.
DiNapoli wrote that Securities and Exchange Commission filings for CSX and Canadian Pacific — the two major crude oil rail transporters in New York — leave “open questions about the companies’ insurance coverage for large-scale accidents.”
What’s more, DiNapoli wrote that while federal resources may be available to address oil spills under the Oil Spill Prevention Act of 1990, Stafford Act or Federal Oil Spill Liability Trust Fund, it’s not clear that funding would be adequate to cover the full range of damages from a serious oil train accident.
“Given the limitations upon potential federal responses under current law, New York’s fund could be liable for damages not addressed by federal assistance,” DiNapoli wrote. “If any accident approaching the scale of the Lac-Mégantic derailment were to occur in New York, even a small fraction of the damages would overwhelm the fund’s current resources.”
DiNapoli called on the federal government to consider expanding the number of municipalities where reductions in train speed are required, rerouting trains carrying hazardous materials around population centers ,and requiring that railroads acquire insurance or provide financial security that adequately addresses emergency response, remediation and liability costs associated with “higher consequence” accidents, among other things.
http://blog.timesunion.com/capitol/archives/248613/dinapoli-to-feds-strengthen-safety-measures-for-oil-trains/
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State Plans Get 3-Year Delay Under Regional Haze Proposal
Apr 26, 2016 | E&E Greenwire
By Sean Reilly
U.S. EPA is pursuing a number of changes to the second phase of planning efforts to improve visibility in national parks and wildlife refuges.
Under the proposed amendments to its regional haze rule, signed yesterday by agency Administrator Gina McCarthy, states would get a three-year extension -- from 2018 to 2021 -- to rework their implementation plans, according to an agency fact sheet.
The proposal would also strengthen federal land manager consultation requirements to ensure that any issues "are raised early in the planning process," the fact sheet said, while "all states" would have to address situations where park visibility is being affected by either a single source or a small number of sources.
Under EPA's Regional Haze Rule, which dates back to 1999, states have to come up with air quality programs to improve visibility in national parks and wildlife refuges. The first round of state plans, due in 2007, covers the period from 2008 to 2018.
The proposed changes would affect the second planning period, according to EPA. In seeking a three-year extension in the deadline for submittal of state implementation plans (SIPs), an agency spokeswoman had previously cited the desire to coordinate haze planning with implementation of the Clean Power Plan and other air quality initiatives (Greenwire, Feb. 5).
The draft signed yesterday will have a 60-day public comment period following publication in the Federal Register, with a May 19 public hearing scheduled at EPA's Washington, D.C., headquarters.
The new proposal got a mixed reception today from two environmental groups.
While some of the proposed changes will hold states accountable for steadily reducing park pollution, others "would allow known polluters to delay cleaning up their act and set back efforts to clean up the air in national parks by years," Stephanie Kodish, senior director and counsel for the National Parks Conservation Association's clean air program, said in a news release.
"We are pleased to see that EPA is proposing to require earlier involvement of the National Park Service and others in the development of haze control plans," David Baron, managing attorney at Earthjustice, said in a separate release. But the environmental law organization opposes the proposed delay in the next round of state plans, Baron said.
http://www.eenews.net/greenwire/2016/04/26/stories/1060036278
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Green Groups, Democrats 'Go to the Mat' for Garland
Apr 26, 2016 | E&E Greenwire
By Hannah Hess
Democrats and environmental officials gathered on the steps of the Supreme Court today to rally for President Obama's nominee, Merrick Garland.
Arguing that the vacancy needs to be filled, Sen. Ed Markey (D-Mass.) said that if the current 4-4 split on the court had occurred in 2007, the key environmental case Massachusetts v. U.S. EPA, which affirmed the agency's authority to regulate greenhouse gases, might never have happened.
It likewise could have affected Bush v. Gore, the ruling that settled the 2000 presidential election, he noted.
"If a seat on the Supreme Court had been vacant, resulting in a 4-4 vote, the Florida recount would have gone forward -- Al Gore might have become president, not George W. Bush," Markey said. "Think about what that would have meant for the course of the history of environmental protection in our nation and the planet."
Green groups and some of the chamber's most vocal environmentalists are backing the White House in a broad push to get Senate Republicans to hold hearings and a vote on Obama's pick (E&E Daily, March 15). Republican leaders maintain that the nomination process should be put off until after the November election.
Forty-one days after Obama nominated Garland, chief judge for the U.S. Court of Appeals for the District of Columbia Circuit, Markey joined Environment and Public Works Committee ranking member Barbara Boxer (D-Calif.) and Sens. Martin Heinrich (D-N.M.) and Brian Schatz (D-Hawaii) for a news conference organized by NextGen Climate.
The lawmakers touted recent successes in passing energy legislation, such as wind and solar tax credits included in the year-end appropriations bill, and the sweeping energy package that cleared the chamber last week (E&E Daily, April 20).
"But these things are just a bridge -- a bridge to the Clean Power Plan that lays out the future of energy infrastructure investment in this country in an era of climate disruption," Heinrich said. "That policy is stayed, and we all realize that it is likely to land in the lap of the Supreme Court, possibly an eight-member court that could be hamstrung by a 4-4 decision."
Looking at decisions in which he deferred to agencies on other environmental regulations, experts have said Garland's record hints at a favorable view of EPA's climate rule if he does ultimately join the Supreme Court (E&E Daily, April 20).
However, Democrats and climate advocates said the current uncertainty could hurt the energy industry.
"Whether you love it or you hate it, the specter of our energy future being decided by a hamstrung Supreme Court will create enormous uncertainty in the energy sector, right when we need to define the path to a cleaner future," Heinrich said. "Our Republican Senate colleagues can prevent this."
Van Jones, Obama's former green jobs adviser, said the stalemate in the Senate qualifies as a "state of emergency with our democracy." Jones also called on media outlets, including the "furry predator" that he later identified as Fox News, to "stand up for the Constitution" and the tradition of having a nine-member Supreme Court.
League of Conservation Voters Senior Vice President Tiernan Sittenfeld announced that 143,000 members have signed a petition calling on Senate Majority Leader Mitch McConnell (R-Ky.) and Judiciary Chairman Chuck Grassley (R-Iowa) to move forward with consideration of the nomination. LCV members also organized events in Iowa, Wisconsin and other states represented by GOP senators.
"We will continue to go to the mat because the stakes absolutely could not be higher," Sittenfeld said.
http://www.eenews.net/greenwire/2016/04/26/stories/1060036270
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State Regulators Crafting Model Policies to Boost CWA Trading Programs
Apr 26, 2016 | InsideEPA
By David LaRoss
State water regulators are working with advocates for water quality trading to craft model rules, permits and other regulatory text that would guide states crafting such mechanisms, saying that the new tools could allow states with relatively little technical expertise on the subject to implement functional trading regimes more easily.
The model documents could help overcome what observers have said are verification questions and other barriers that have prevented states from more broadly adopting novel water trading regimes.
EPA's most current policy on trading is a 2003 guidance that generally allows trading of pollution credits, but leaves it to individual states to craft trading policies, in part because the agency believes it lacks authority under the water law to require trading.
Sources at the Association of Clean Water Administrators (ACWA) and the Willamette Partnership -- which has worked with trading advocates on a handbook for state agencies -- say the groups are working together on five model documents, which are set to be unveiled at a May 25 interstate meeting in St. Louis, MO.
"What we're trying to do is make that more manageable for states, assuming that they're not going to pore through the whole resource. These models will make it a little easier for those states that may be interested in developing a program to wrap their heads around these pieces," says an ACWA source.
The models under development include sample rules, non-binding guidance, overall frameworks, and terms for individual permits that states could adapt to their own Clean Water Act (CWA) policies in order to facilitate trading within their borders, the source adds.
The models will be based on the "options and considerations" guide crafted in 2015 by The National Network for Consistency & Integrity in Water Quality Trading, which includes Willamette, sources say. That document outlines advantages and disadvantages of existing water quality trading regimes throughout the country, including explorations of states' market mechanisms, methods for protecting water quality, verification techniques and other aspects of the programs.
In a March 29 interview with Inside EPA, the Willamette Partnership's Carrie Sanneman said, "The goal is to develop a toolkit of templates for the state agencies to take what's in the options and considerations guide and put it in relevant forms for state agencies."
Water Trading
While many states and some independent groups are working to advance water quality trading programs, where point sources may exceed CWA permit limits if they buy "credits" for pollution reductions made elsewhere in the watershed, they have struggled to implement those programs and to craft compatible regimes that would allow for trading across state borders.
For instance, Chesapeake Bay states are actively working toward an interstate trading system that would ease implementation of the landmark multi-state CWA cleanup plan for the bay, but regulators continue to wrestle with how to verify that reductions in one state can satisfy trading criteria in another, as well as advocates' claims that Pennsylvania's program is unacceptably lax.
Meanwhile, industry in Ohio has sought to develop water quality trading markets, with some trades already permitted, but the nascent program still faces hurdles. Most notably, the Electric Power Research Institute decided in 2015 to indefinitely postpone its planned first-time "live auction" of water quality credits for the Ohio River Basin due to low demand from buyers.
Although those programs and others around the country have focused in part on trading between point sources subject to CWA permit limits like wastewater treatment plants and "nonpoint" sources such as farms, the ACWA source says the association's model policies deal with trades between point sources. Such trades are "the easiest thing to do" for states just starting to develop a trading program, the source says.
Sanneman told Inside EPA that the creators of the model documents are working to keep the templates open to modification by the states that adopt them, even if it means the resulting policies might not be perfectly suited for interstate trades. "There are a number of different paths to take, so those groups can tailor it to their watershed dynamic," she said.
Model Policies
While interstate trading "is certainly a focus for ACWA," it is not the immediate goal of the model policies, Sanneman continued.
The ACWA source says draft templates "are almost done," and will be circulated to state regulators "so we can see if we got it right."
"The goal is to get some feedback and then put the templates in front of states who can take them home and use them" at the May meeting, the source continues.
While ACWA is actively working toward new state policies to facilitate water quality trading, the source there says it is not currently seeking a new federal law or rule on the subject. "It's just not something that we've thought is necessary in this particular moment."
http://insideepa.com/daily-news/state-regulators-crafting-model-policies-boost-cwa-trading-programs
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Federal District Court Dismisses CWA Jurisdiction Rule Suit
Apr 26, 2016 | InsideEPA
The U.S. District Court for the Southern District of Ohio's Eastern Division has dismissed a challenge filed by three states over EPA's Clean Water Act (CWA) jurisdiction rule, granting a Justice Department (DOJ) motion for dismissal that noted the court is within the same appellate circuit that has said appeals courts have power to hear suits over the rule.
Due to the U.S. Court of Appeals for the 6th Circuit's Feb. 22 decision to take cases over the regulation, “this Court lacks jurisdiction over this case,” Chief U.S. District Judge Edmund Sargus, Jr., said in an April 25 order to dismiss filed in State of Ohio, et al., v. EPA, et al.
DOJ argued in a March 14 motion that because the 6th Circuit in its divided Feb. 22 ruling confirmed its jurisdiction to review initial challenges to the CWA rule, the states that filed the district court case are now barred under the Administrative Procedure Act from pursuing a duplicative challenge to the rule in the lower court.
The 6th Circuit also denied six petitions filed by challengers seeking en banc review by the full court, with none of the judges in the circuit voting to rehear the case according to an April 21 order issued by the appeals court.
DOJ has cited both the Feb. 22 ruling that the appeals courts have authority to hear initial challenges to the rule and the en banc denial in a number of district court cases challenging the rule, while state and industry opponents to the rule have argued that the ruling is not controlling outside of the 6th Circuit.
The states challenging in the Ohio district court suit -- Ohio, Michigan, and Tennessee -- in a March 4 briefing acknowledged the likelihood that the suit would get dismissed, saying, “The States therefore recognize that this Court may conclude that it lacks jurisdiction here in light of the Sixth Circuit ruling, and may therefore dismiss this action (without prejudice and on jurisdictional grounds only).”
But the states preserved the potential for an appeal of any dismissal, saying they “respectfully object to any such dismissal even while understanding that this Court must act in accordance with its view of the law as guided by controlling Sixth Circuit precedent.”
In the April 25 order, Sargus says that the states may opt to re-file the suit in the event that the “circumstances surrounding this Court's jurisdiction change,” suggesting the possibility of Supreme Court review.
http://insideepa.com/news-briefs/federal-district-court-dismisses-cwa-jurisdiction-rule-suit
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Murray Energy Files Quick Legal Challenge to EPA Mercury Rule
Apr 26, 2016 | E&E Greenwire
By Sean Reilly
Murray Energy Corp., which was first off the mark in litigating U.S. EPA's latest ozone standard last fall, is wasting no time in also challenging the agency's attempt to further justify the cost of its regulations to cut power plant mercury emissions.
In a lawsuit filed yesterday, the Ohio-based coal giant asked the U.S. Court of Appeals for the District of Columbia Circuit to review EPA's "supplemental finding" for its Mercury and Air Toxics Standards. The final version of the finding was published in yesterday's Federal Register, starting a 60-day clock for legal challenges to be taken to the D.C. Circuit Court.
As it did with EPA's ambient air quality standard for ozone released last October, Murray filed its suit on the first possible day. EPA had issued the final version on the supplemental finding earlier this month in response to last year's Supreme Court ruling that the agency had failed to adequately consider cost factors in making its initial decision to crack down on emissions of mercury and other pollutants from coal- and oil-fired power plants.
The finding reaffirmed the agency's original decision, stressing the regulations' high level of expected health benefits. They also noted that power producers' shift toward natural gas and renewable energy sources has already cut release of mercury and other toxics associated with coal-fired plants (Greenwire, April 15).
In a news release announcing the lawsuit, however, Murray called the final finding "flagrantly arbitrary," adding that it fails to comply with the Supreme Court's mandate. Under the Obama administration, EPA "plainly refuses to consider the costs of its decision in light of the reasonable and available alternatives to inflexible and cost-blind federal standards that Murray Energy identified in its comments," the release said.
"This is a fatal error that will require the courts to strike down this finding," the company added.
In the comments submitted in January on the finding's initial version, the company accused EPA employees of failing to fully address cost questions on a variety of fronts, including the impact on displaced workers, on coal-producing regions and on state and local governments.
Murray also blamed the mercury regulations for inflicting "devastating reductions" in coal demand that have set off a wave of bankruptcies that include large producers. "You must consider this especially concerning consequence rather than ignore it," the company added.
But in an interview, Graham McCahan, a senior attorney with the Environmental Defense Fund, predicted that the suit will fail. EPA did "a really outstanding job" in responding to the Supreme Court's decision from last June, McCahan said. Compliance costs have been much lower than what EPA originally predicted, he said, while more recent studies have shown that the health benefits are "very, very significant."
http://www.eenews.net/greenwire/2016/04/26/stories/1060036271
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Apr 26, 2016 | U.S. News & World Report
By David Brodwin
Last week, 175 world leaders inked an accord to slow climate change by cutting carbon emissions worldwide. The agreement commits the U.S. to reduce carbon emissions 26 percent by 2025. Other nations have made similar commitments.
But even as the ink dries, a debate rages about how to achieve the reductions. Some believe it should be done top-down, by regulation, directing the industries that emit most of the carbon pollution to make specific cuts. Others believe that the government should refrain from industry-by-industry directives and instead tax carbon uniformly across the entire economy. Proponents of a carbon tax (including the American Sustainable Business Council) argue that it a tax is simpler, easier to administer, harder to cheat and less disruptive of healthy market competition than any other approach.
Conservative politicians continue to doubt climate change, but the evidence grows. Behind the scenes, some conservatives are quietly discussing how to back away from denial and what to propose in its place. Some conservatives are beginning to consider a "revenue-neutral, border-adjusted carbon tax." They see this option as the most market-friendly, limited-government approach to climate change.
Let's focus on the two words "border-adjustment." These two words are essential for political support of a carbon tax. Border adjustment means that that the U.S. would apply a tax on products and services from countries that don't put a price on carbon.
Without border adjustment, if the U.S. imposes a carbon tax and the countries that we trade with don't, then U.S. companies (and workers) suffer a disadvantage. U.S.-made goods and services will be more expensive than the same goods produced elsewhere. Jobs and profits will move to countries that refuse to address climate change. The threat is greatest for industries that use a lot of energy such as the metals, cement and paper industries.
The bad news is that border adjustment may not be legal. Existing trade agreements like NAFTA and the General Agreement on Tariffs and Trade prohibit most tariffs on international trade, and the World Trade Organization enforces these restrictions. New agreements in formation like the Trans-Pacific Partnership carry these limits even further.
Economists and policy experts disagree on whether a border-adjusted carbon tax can withstand legal challenge. It's a murky area, without clear precedent. Tabitha Benney, a professor at the University of Utah, writes, "Under current international law ... border adjustments are illegal." She points out that international bodies like the WTO have the legal muscle to force the U.S. to roll back a carbon tax if it does not comply with existing international trade agreements.
This is more than an abstract threat. The WTO has already flexed its muscle to undermine climate progress. In February it struck down a plan by India to install 100 gigawatts of solar capacity, because India's plan required that some of the solar cells and panels be made locally. (The ruling is under appeal, with China taking India's side against the U.S.)
Others claim a border adjust for carbon can survive WTO scrutiny. Jennifer Hillman is a former member of the WTO Appellate Body (a group within WTO that judges claims of unfair trade practices) and argues that a carbon tax can be designed in a way that complies with existing trade agreements. "The key is to structure [it] as a straightforward extension of domestic climate policy to imports. If so designed, there should be few questions about the measure's consistency with the WTO rules." The American Action Forum, a self-described "center-right" think tank, expands on Hillman's argument, showing that the question of border adjustment cuts across the usual partisan lines in the climate debate.
The hotly debated question of border adjustments may seem arcane and technical, but it is central to the fight against climate change. Without a legally defensible way to handle border adjustments, any country that trims carbon faces intense and unrelenting opposition from its energy-intensive businesses and their employees. Trade negotiators and the WTO must find a way to accommodate border adjustments. Otherwise, the accords signed last week with so much fanfare won't be worth the paper they're written on.
http://www.usnews.com/opinion/articles/2016-04-26/could-plan-to-cut-carbon-emissions-in-climate-agreement-hurt-american-jobs
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