Preview Newsletter
ACC PM 5/5/16
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(ACC Mentioned) Controversy Swirls Around TTIP Document Leak
May 5, 2016 | Chemical Watch
By Kelly Franklin
Leaked documents laying out EU and US positions in the ongoing Transatlantic Trade and Investment Partnership (TTIP) negotiations have raised concerns among NGOs. They say the EU's "precautionary principle" approach to managing chemicals is at risk. -
(ACC Mentioned) Industry Study Shows Variation in Hazard Assessment Tool Conclusions
May 5, 2016 | Chemical Watch
By Kelly Franklin
A newly released comparative analysis of several chemical assessment tools showed “a lack of concordance” among the hazard classifications generated by each tool, when evaluating the same set of chemicals. -
Industry Questions 'Bias' In EPA Literature Search For Arsenic Analysis
May 5, 2016 | Inside EPA
By Maria Hegstad
A coalition of industry groups concerned with EPA's long-running efforts to assess the human health risks of arsenic is questioning the agency's approach to searching for published studies on arsenic toxicity for use in the eventual assessment, suggesting that EPA's selection shows ignorance and bias by including some studies and excluding others. -
US EPA Releases RDX Draft for Scientific Public Meeting
May 5, 2016 | Chemical Watch
The US EPA has released a full public draft of the Integrated Risk Information System (IRIS) toxicological review of the explosive hexahydro-1,3,5-trinitro-1,3,5-triazine (RDX). -
Reverse Engineering Makes Fragrance Sector's Confidentiality Argument ‘Outdated’
May 5, 2016 | Chemical Watch
By Leigh Stringer
Protecting intellectual property in the fragrance industry is an outdated argument because companies have the ability to reverse engineer and analyse competitors' products, says NGO Women’s Voices for the Earth (WVE). -
Skip The Fabric Softeners
May 5, 2016 | Environmental Working Group
By Megan Boyle
Using fabric softeners sounds like a no-brainer. These common laundry products promise soft, fresh-smelling clothes, free of static and wrinkles, along with less stretching, fading and pilling. -
Pennsylvania Lawmakers Move to Stop New Oil/Gas Drilling Regs
May 5, 2016 | Natural Gas Intelligence
By Jamison Cocklin
The Pennsylvania House Environmental and Energy Resources Committee has approved a resolution to prevent a package of environmental regulations for the oil and natural gas industry from being implemented. -
Hydraulically Fractured Wells Provide Two-Thirds of U.S. Natural Gas Production
May 5, 2016 | U.S. Energy Information Administration (in Real Clear Energy)
By Jack Perrin and Troy Cook
For decades, hydraulic fracturing had been referred to as an unconventional completion technique, but over the past 10 years it has become the technique by which most natural gas is produced in the United States. -
Western States Get New CO2 Modeling Tool
May 5, 2016 | E&E Climatewire
By Emily Holden
A Colorado-based organization this week released a modeling tool for 12 Western states considering how they might meet power-sector carbon reduction goals under U.S. EPA's Clean Power Plan. -
Federal Underground Gas Storage Rules Coming Soon, PHMSA Chief Says
May 5, 2016 | Natural Gas Intelligence
By Jeremiah Shelor
Minimum federal standards for underground natural gas storage are in development, Pipeline and Hazardous Materials Safety Administration (PHMSA) Administrator Marie Therese Dominguez said Tuesday. -
Regulator Points to Corrosion in Pa. Gas Line Explosion
May 5, 2016 | E&E Energywire
By Mike Lee
Problems with anti-corrosion coating on a 30-inch-diameter gas pipeline may have triggered an explosion Friday in rural Pennsylvania that severely burned a man and destroyed his home. -
(ACC Mentioned) CTL Transportation Remakes Itself as a More Diversified Chemical Hauler with a Broader Operating Range
May 5, 2016 | Bulk Transporter
By Charles Wilson
Over the last four years CTL Transportation LLChas undergone an incredible transformation. And the process continues for the Auburndale, Florida-based company. -
Shippers Feeling Railroaded With Prices Up Even as Freight Falls
May 5, 2016 | Bloomberg
By Thomas Black
Customers often `don't have any other options,' analyst says. Railroads say high maintenance costs force price increases. Kevin Acker has both savored and suffered the pricing power of freight railroads. -
Attorneys General Urge EPA To Limit RMP Revisions
May 4, 2016 | Inside EPA
The Louisiana and Texas attorneys general are urging EPA to amend draft revisions to the agency's Risk Management Plan (RMP) facility accident prevention rule, arguing some of the proposed new requirements, such as for independent audits and information sharing, are outside the scope of the Clean Air Act and fail to make facilities safer. -
Academics Float Cost-Benefit Analysis As Tool For Issuing Stricter NAAQS
May 5, 2016 | Inside EPA
By Stuart Parker
A pair of environmental professors is suggesting that if EPA were to use cost-benefit analysis in deciding whether to revise its six national ambient air quality standards (NAAQS) -- currently prohibited by law -- it could lead to even stricter standards because tighter limits would likely yield projected benefits that far outweigh expected costs.
Industry and Association News
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(ACC Mentioned) Controversy Swirls Around TTIP Document Leak
May 5, 2016 | Chemical Watch
By Kelly Franklin
Leaked documents laying out EU and US positions in the ongoing Transatlantic Trade and Investment Partnership (TTIP) negotiations have raised concerns among NGOs. They say the EU's "precautionary principle" approach to managing chemicals is at risk.
The documents were released by Greenpeace Netherlands earlier this week, following the close of the 13th round of TTIP negotiations in New York.
In its analysis of the documents, the group notes the EU's "precautionary principle" was absent from the chapter on regulatory cooperation and from the other documents it released.
On the other hand, it says, "the US demand for a 'risk based' approach that aims to manage hazardous substances rather than avoid them, finds its way into various chapters."
This, it says, "undermines the ability of regulators to take preventive measures, for example regarding controversial substances like hormone disrupting chemicals".
David Azoulay, managing attorney at the Center for International Environmental Law (Ciel), told Chemical Watch: "Our fears are confirmed – the US is trying to use the negotiations to push for the EU to abandon its precautionary, hazard-based approach to the regulation chemicals in general, and pesticides in particular."
And the NGO ChemSec agrees that the leaked documents show that "fears of a lower level of protection and even an abandonment of the precautionary principle are actually well founded."
But responding to the leaks, EU Trade Commissioner Cecilia Malmström blogged: "it begs to be said, again and again: No EU trade agreement will ever lower our level of protection of consumers, or food safety, or of the environment."
A statement from the US Trade Representative added, "the interpretations being given to these texts appear to be misleading at best and flat out wrong at worst. TTIP will preserve, not undermine, our strong consumer, health, environmental standards."
Greg Skelton, senior director of global affairs at the American Chemistry Council (ACC), told Chemical Watch that the ACC "has not proposed – and understand[s] that the governments are not considering – changes to the current regulation of chemicals on either side of Atlantic."
He added that it was "difficult to see" how horizontal provisions such as improved regulatory transparency would be a threat to protections for human health and the environment.
Mr Azoulay pointed out that the leaked documents only lay out positions, and that a lot could change during future rounds of negotiations. Furthermore, the "growing sense of discontent" in EU member states may force the EU to push back more on US positions, while the tone of the US campaign may also force the US into more aggressive negotiation, he added.
Thirteenth round concludes
In a statement following the close of negotiations last week, US chief negotiator Dan Mullaney said there had been "fruitful discussion" on developing the framework for regulatory cooperation. This would "facilitate greater compatibility in future regulations, while at the same time maintaining the strong labour, environmental, and consumer protections that our citizens have come to expect".
Mr Azoulay said that, based on the limited information available following the most recent round of negotiations, chemicals remain covered by the regulatory cooperation chapter. This goes against the European Parliament's recommendation to exclude the implementation of existing chemical regulation from TTIP negotiations. But, he said, "the definitive scope of the regulatory chapter is still to be finalised".
Mr Azoulay said that he does not expect the issue to be resolved until a final deal is revealed. The European Commission may use this as a bargaining chip later on in the negotiations, he said.
Mr Mullaney said he believes "there remains sufficient time to complete an ambitious, comprehensive and high-standard TTIP agreement this year."
However, finalising the agreement prior to the end of the Obama administration will "likely be very challenging", according to Mr Azoulay.
The next round of negotiations is expected in July.
https://chemicalwatch.com/47175/controversy-swirls-around-ttip-document-leak
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(ACC Mentioned) Industry Study Shows Variation in Hazard Assessment Tool Conclusions
May 5, 2016 | Chemical Watch
By Kelly Franklin
A newly released comparative analysis of several chemical assessment tools showed “a lack of concordance” among the hazard classifications generated by each tool, when evaluating the same set of chemicals.
The study – whose co-authors’ affiliations include the American Chemistry Council (ACC), the Dow Chemical Company and consultancy Cardno ChemRisk – found that “classifications of the same chemical varied widely between the tools, ranging from little or no hazard or toxicity to very high hazard or toxicity.”
According to a statement from the ACC: “Such discrepancies may call into question the extent to which such tools can provide stakeholders ... with definitive and actionable information about chemical substances in consumer products, without further analysis and contextual information.”
The assessment evaluated the following tools:
GreenScreen Full Assessment;
US EPA Design for the Environment (DfE) / Safer Choice;
GreenSuite;
SciVera Lens; and
GreenWERCs (including its GreenScreen List Translator, GreenScreen Scoring Model, Walmart Scoring Model and a user-defined ChemRisk Model).
The study compared the scores and hazard classifications, designated by each tool's assessment of seven substances. These were:
HBCD;
ethylene glycol;
dibutyl phthalate;
benziothiazolinone (BIT);
glycolic acid;
caffeine; and
citric acid.
The co-authors say that based on this pilot study, hazard assessment tools “should not be generalised to fit all situations because their evaluations are context-specific”. They add that the results “highlight the need for transparency in describing the basis for the tools' hazard scores”.
Clean Production Action, the provider of GreenScreen, could not be reached for comment by the story's deadline.
The ACC says it is in the process of conducting a follow-up study, evaluating chemical ingredients in the context of a finished product and its intended use.
https://chemicalwatch.com/47173/industry-study-shows-variation-in-hazard-assessment-tool-conclusions
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Industry Questions 'Bias' In EPA Literature Search For Arsenic Analysis
May 5, 2016 | Inside EPA
By Maria Hegstad
A coalition of industry groups concerned with EPA's long-running efforts to assess the human health risks of arsenic is questioning the agency's approach to searching for published studies on arsenic toxicity for use in the eventual assessment, suggesting that EPA's selection shows ignorance and bias by including some studies and excluding others.
In a recent letter, the Arsenic Science Task Force (ASTF) raises these concerns to Ken Olden, director of EPA's National Center for Environmental Assessment, who oversees EPA's influential Integrated Risk Information System (IRIS) program. IRIS assessments are used worldwide to inform risk management decisions such as drinking water standards and cleanups at contaminated sites.
"We write to express concerns regarding studies identified in the Health and Environmental Research Online (HERO) database, as key studies on which your office will rely for development of the [IRIS] assessment of inorganic arsenic," ASTF writes Olden.
The group outlines a series of concerns, including opacity; lack of expertise; "failure to appropriately incorporate mechanistic information in evaluating papers for hazard identification"; "avoidance of reviews, meta-analyses, letters to the editor, commentaries, or any studies which do not have primary data"; and "introduction of bias," providing examples for each.
Olden has acknowledged receipt of the letter but has not otherwise responded to it, sources with the group say.
EPA's update to its existing IRIS assessment of inorganic arsenic, published in 1991, has been in progress for years, following concerns that EPA's drinking water standard for arsenic might be too weak. Since then, EPA has sought to update the assessment to assist its water office in determining whether it should strengthen its 10 ppb standard.
EPA in December told the National Academy of Sciences (NAS) committee that is scheduled to peer review the draft assessment that it would be six to nine months before the assessment is ready for internal agency review. NAS will receive a copy of the draft assessment after it has been through this internal review process and public comment, IRIS Director Vincent Cogliano said.
ASTF's letter questions the individuals selecting studies for consideration in the IRIS assessment, with one ASTF source describing them as two young and relatively inexperienced EPA biologists. The letter indicates that this inexperience with arsenic has led to some irrelevant studies being included in the evidence tables in EPA's HERO database, such as publications on "arsine gas . . . [which] are completely unrelated to the behavior of inorganic arsenic," the letter states.
Arsenic exists in many forms, and arsine gas "has a very short half-life and it gets into the lungs and is vaporized internally," a second ASTF source says. "It is believed not relevant to other forms" of arsenic.
Secondary Publications
The letter also questions EPA's apparent decision not to use meta-analyses, or other secondary publications in the assessment -- information that NAS in a 2013 report recommended EPA use for the assessment, in part because of the large number of studies published on arsenic. The letter states that the researchers have left out some studies published by EPA researchers at the agency's Research Triangle Park campus.
"There is no clear indication why certain literature publications are included in the final list of the HERO database and why others are not included," ASTF writes. "The selection criteria should be clear and transparent for each study that was included as well as for those studies that were not included. A prioriscreening criteria were to have been applied to the journal articles, however we have not been able find a clear and concise statement of the criteria used."
The group also protests what it considers evidence of bias in the literature that EPA has collected. "We are most troubled by the pattern whereby studies that support a particular view are included, but studies indicating a different view are excluded," the group writes.
As an example, the group points to studies finding micronuclei in cells following exposure to high levels of arsenic, which the first ASTF source says EPA considers evidence of genotoxicity. The source says "some claim arsenic is genotoxic and others claim it is not."
ASTF questions the EPA researchers' decision to exclude studies indicating they are not micronuclei but rather cellular debris. The letter cites two studies explaining the cellular matter is debris, both by Sam Cohen of the University of Nebraska Medical Center, who has long published work cited by ASTF, and his students and colleagues.
But a source familiar with arsenic issues says a search of the scientific literature database PubMed indicates that numerous researchers use micronuclei as biomakers of arsenic exposure, suggesting that they consider the linkage to be sufficiently strong to do so.
ASTF says the determination of whether the cells are micronuclei or not "could have a significant impact on the interpretation of the possible genotoxicity of inorganic arsenic."
Genotoxicity Finding
A finding of genotoxicity is likely to lead EPA to use the more stringent linear cancer risk modeling approach to extrapolate from studies of lab animals or individuals exposed to high levels of arsenic to lower levels that the general public is anticipated to experience in the environment. This linear approach assumes that there is no safe level of exposure to the modeled environmental contaminant. EPA's risk assessment guidelines indicate that agency risk assessors should use this approach when a contaminant's mode of action (MOA) is mutagenic or unknown.
An MOA explains how a chemical causes cancer. Industry groups, such as ASTF, have long argued that arsenic's MOA is both known and non-mutagenic, and that EPA should use a threshold or non-linear approach to assess arsenic's cancer risk.
ASTF also protests EPA's decision to exclude studies of people with leukemia who were treated with arsenic trioxide as part of a clinical trial. The first ASTF source explains that this information is important to understanding how people excrete arsenic, and how it is cleared and metabolized from the body.
This ASTF source also criticizes one of the key recommendations in the 2013 NAS report, which recommended that EPA use low-dose epidemiology study data to attempt to assess arsenic's risk without extrapolating the data. NAS described the approach as one that was possible given the large volume of information about arsenic, and one that would move EPA and its critics beyond arguing about how to extrapolate the risk.
The ASTF source, however, argues that some of these studies are not truly low doses of exposure, and should not be approached in this fashion. Further, the source says that EPA has preferenced epidemiology studies over animal toxicology studies, resulting in limited information about MOA in EPA's evidence tables.
http://insideepa.com/daily-news/industry-questions-bias-epa-literature-search-arsenic-analysis
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US EPA Releases RDX Draft for Scientific Public Meeting
May 5, 2016 | Chemical Watch
The US EPA has released a full public draft of the Integrated Risk Information System (IRIS) toxicological review of the explosive hexahydro-1,3,5-trinitro-1,3,5-triazine (RDX).
The agency will convene a public science meeting on 10 May to discuss the draft, and obtain input from the scientific community, stakeholders and the general public, prior to external peer review.
A formal consultation ends on 9 May.
https://chemicalwatch.com/47170/us-epa-releases-rdx-draft-for-scientific-public-meeting
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Reverse Engineering Makes Fragrance Sector's Confidentiality Argument ‘Outdated’
May 5, 2016 | Chemical Watch
By Leigh Stringer
Protecting intellectual property in the fragrance industry is an outdated argument because companies have the ability to reverse engineer and analyse competitors' products, says NGO Women’s Voices for the Earth (WVE).
As reported in an article in this month’s Global Business Briefing, the NGO’s director of science and research, Alexandra Scranton, says anecdotal evidence points to a “veil of secrecy” at fragrance houses which are refusing, with some exceptions, to disclose their ingredients.
“A simple list of ingredients is clearly ascertainable by independent means and, thus, simply does not meet the definition of a trade secret,” she says.
Given today’s ability to analyse competitors’ products, she says, disclosure would not have a negative impact on the industry and poses a harmful barrier to the public’s right to know.
In response to the article, the International Fragrance Association (Ifra) agreed that reverse engineering is at the “core of the fragrance industry's business model” – but it becomes an issue when information obtained this way is used to produce “unfair copies”.
However, the industry is starting to disclose more of its ingredients, says the trade body, for example, through its own "transparency list" of substances used by the sector or the cleaning product industry’s ingredient disclosure programme.
It also points to some product manufacturers which have agreed, with their suppliers, to list most of the ingredients in certain products. In February, SC Johnson introduced a product line that discloses all of its fragrance ingredients.
“The intention of all these initiatives is to provide the consumer with meaningful information. Simply putting a long list of chemical names on a label is not really meaningful for most consumers,” it says.
Ms Scranton observes that while a long list of chemicals may not mean much to every consumer, it is “absolutely crucial” for some, who have a specific interest in particular chemicals they may be looking to avoid.
“Whether the concern is avoiding a skin reaction to a fragrance ingredient, avoiding a potential endocrine disruptor during pregnancy, avoiding carcinogen exposure while in treatment for cancer, for example – there are many valid reasons for certain consumers to want the full list of ingredients found in products they use every day."
In addition to this full list, says Ms Scranton, it would also help consumers to have easier to understand “quick guides to ingredients”. These would clearly indicate what chemicals are not included in products, or give a highlighted list on the label of chemicals known to cause allergies, making this information easier to find.
“This is similar in concept to the nutrition box panel found on food labels, which adds information, but would never be considered sufficient on its own to replace an ingredients list,” she adds.
“While we agree that there should be creative ways of presenting ingredient information that is meaningful to more consumers, this should only be in addition to disclosure of the full list of chemicals, not instead of [it].”
Some US state legislatures have considered, or are considering, bills for full ingredient transparency in certain products. The California bill (AB 708), defeated earlier this year, would have required full disclosure of fragrance ingredients in cleaning products. And a Vermont bill (H 706) is also under consideration that would require such disclosure in cosmetics.
https://chemicalwatch.com/47153/reverse-engineering-makes-fragrance-sectors-confidentiality-argument-outdated
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May 5, 2016 | Environmental Working Group
By Megan Boyle
Using fabric softeners sounds like a no-brainer. These common laundry products promise soft, fresh-smelling clothes, free of static and wrinkles, along with less stretching, fading and pilling.
But in-wash fabric softeners and heat-activated dryer sheets pack a powerful combination of chemicals that can harm your health, damage the environment and pollute the air, both inside and outside your home.
EWG recommends skipping fabric softeners entirely. Here are the worst chemicals to watch for in your laundry basket – and what to use instead.
“Quats”
Quaternary ammonium compounds make clothes feel soft and wearable right out of the wash, but they’re known to trigger asthma and may be toxic to our reproductive systems.
Check labels and product websites for these ingredients: distearyldimonium chloride, diethyl ester dimethyl ammonium chloride, variants of hydroxyethyl methyl ammonium methyl sulfate or the vague terms “biodegradable fabric softening agents” and “cationic surfactant.” Avoid them all.
Fragrance
There are more than 3,000 fragrance ingredients in common household products – and scarcely any way to know what they are.
Your fabric softener may contain phthalates, which disperse the scent; synthetic musks such as galaxolide, which accumulate in the body; and much more. Fragrance mixes can cause allergies, skin irritations such as dermatitis, difficulty breathing and potential reproductive harm. Research indicates that scents also cause irritation when vented outdoors, especially for asthmatics and those sensitive to chemicals. Not worth it.
Preservatives and Colors
Like fragrance, the terms “preservatives” and “colors” or “colorants” on an ingredient label may refer to any number of chemicals. The most worrisome preservatives in fabric softeners include methylisothiazolinone, a potent skin allergen, and glutaral, known to trigger asthma and skin allergies. Glutaral (or glutaraldehyde) is also toxic to marine life. Among artificial colors, D&C violet 2 has been linked to cancer. Others may contain impurities that can cause cancer.
So skip fabric softeners and conditioners in any form – pellets, crystals, bars or single-dose packs. You won’t notice the difference.
Or you can try these ideas instead:Try adding half a cup of distilled white vinegar to your washing machine during the rinse cycle. Don’t worry: the smell doesn’t linger on clothes.If you’re not line-drying, run the drying machine with just your clothes inside. (To reduce static, do not over-dry.) Not only do dryer sheets contain a variety of chemicals, but neither plant-based nor polyester types are reusable, creating extra waste.Try 100 percent wool dryer balls. Makers of these solid balls of felted wool, or felted wool wrapped around a fiber core, say wool or its natural lanolin soften laundry and reduce static. Generally safe for sensitive skin and babies, the balls also lift and separate clothes in the dryer, shortening drying time and saving energy.
You can buy ready-made balls or make your own with wool batting or wool yarn. Look for unscented versions and always be leery of essential oils, which can cause allergic reactions after just few contacts.
http://www.ewg.org/enviroblog/2016/05/skip-fabric-softeners
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Pennsylvania Lawmakers Move to Stop New Oil/Gas Drilling Regs
May 5, 2016 | Natural Gas Intelligence
By Jamison Cocklin
The Pennsylvania House Environmental and Energy Resources Committee has approved a resolution to prevent a package of environmental regulations for the oil and natural gas industry from being implemented.
The committee voted along party lines 19-8 on Tuesday to approve the resolution, which claims the regulations violate state law and ignore a 2013 state Supreme Court ruling that struck down parts of a law about which the Pennsylvania Department of Environmental Protection (DEP) based some of its proposals (see Shale Daily, Dec. 20, 2013). Three Democrats from the southwestern part of the state, where unconventional oil and gas development is heavy, joined Republicans in approving the resolution.
More than four years in the making, the new rules include separate standards for the conventional and unconventional industries. They would, among other things, reduce impacts on public resources, such as schools and parks, help prevent spills, strengthen waste management and require stronger well site restoration standards (see Shale Daily, Jan. 6)
But the proposed rulemaking has met opposition at nearly every step of the way. Conventional producers and the trade organizations that represent them have accused DEP of writing ambiguous regulations for both segments of the industry (see Shale Daily, April 18). They have also claimed that the DEP ignored Act 126 of 2014, which required the agency to adopt separate regulations for the conventional and unconventional industries.
"These one-size-fits-all drilling regulations are nothing short of a death sentence for many of the independent oil and natural gas producers who have been safely operating in our region for more than 150 years and thousands of family-sustaining jobs," said Republican Rep. Kathy Rapp of Northwest Pennsylvania, where conventional drillers have traditionally operated. "Time and time again, the out-of-touch Harrisburg bureaucrats who have written and rammed these overreaching regulations through the process have demonstrated a severe lack of understanding when it comes to forcing smaller, conventional operators to follow the same regulations as unconventional operators, such as the Marcellus Shale industry."
The DEP sent the package to the state’s Environmental Quality Board, which gave its approval, and last month the Independent Regulatory Review Commission also approved them (see Shale Daily, April 22). The DEP maintains that the rulemaking process was a balanced and transparent one, with several public hearings and tens of thousands of public comments submitted.
The general assembly now has 30 days -- or 10 legislative days -- to adopt the resolution or it will pass both chambers and head to the state Attorney General's office before being implemented. If lawmakers vote to approve the resolution and block the rules, Democratic Gov. Tom Wolf may veto the resolution. His administration, however, has not said that he would do so.
"Gov. Wolf believes the natural gas industry is an important part of the commonwealth's economy and we must support its growth by focusing on the development of important infrastructure like pipelines," said spokesman Jeffrey Sheridan. "The governor also believes the new oil and gas regulations are important to protecting the health of our environment and residents. The regulations have been under development for five years, through three separate administrations and have benefited from an unprecedented process of engagement and public participation."
Sheridan added that Wolf is prepared to work with the legislature "to further his administration's goal of improving the protection of water and public resources."
Rapp, like other lawmakers on the House energy committee, questioned the rulemaking process calling it "heavily flawed" and saying the regulations are "punitive."
While there are separate regulations in the package, both conventional and unconventional producers would be required to adhere to some of the same rules, such as closer regulatory scrutiny for wells near public resource protection zones. All operators would be required to conduct reviews of abandon and active wells near their pads prior to drilling, among other things.
The House is scheduled for votes on May 16, while the Senate returns to session on Monday (May 9).
http://www.naturalgasintel.com/articles/106310-pennsylvania-lawmakers-move-to-stop-new-oilgas-drilling-regs
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Hydraulically Fractured Wells Provide Two-Thirds of U.S. Natural Gas Production
May 5, 2016 | U.S. Energy Information Administration (in Real Clear Energy)
By Jack Perrin and Troy Cook
For decades, hydraulic fracturing had been referred to as an unconventional completion technique, but over the past 10 years it has become the technique by which most natural gas is produced in the United States. Based on the most recent data from states, EIA estimates that natural gas production from hydraulically fractured wells now makes up about two-thirds of total U.S. marketed gas production. This share of production is even greater than the share of crude oil produced using that method, where hydraulic fracturing accounts for about half of current U.S. crude oil production.
Hydraulic fracturing, often in combination with horizontal drilling, involves forcing a liquid (primarily water) under high pressure from a wellbore against a rock formation until it fractures. The fracture lengthens as the high-pressure liquid in the wellbore flows into the formation. This injected liquid contains a proppant, or small, solid particles (usually sand or a manmade granular solid of similar size), that fills the expanding fracture. When the injection is stopped and the pressure is reduced, the formation attempts to settle back into its original configuration, but the proppant keeps the fractures open. This allows hydrocarbons to flow from the rock formation back to the wellbore and then to the surface.
EIA created a profile of marketed natural gas production using well completion and production data from IHS Global Insight and DrillingInfo Inc. that shows a dramatic increase in production associated with hydraulic fracking. In 2000, approximately 26,000 hydraulically fractured wells produced 3.6 billion cubic per day (Bcf/d) of marketed gas in the United States, making up less than 7% of the national total. By 2015, the number of hydraulically fractured wells had grown to an estimated 300,000, and production from those wells had grown to more than 53 Bcf/d, making up about 67% of the total natural gas output of the United States. These results may vary from other sources because of the types of wells included in the analysis, update schedules of source databases, and the specific types of natural gas volumes analyzed.
EIA measures natural gas production in three ways. Gross withdrawals are the full volume of compounds extracted at the wellhead, which includes all natural gas liquids and nonhydrocarbon gases after the oil, lease condensate, and water have been removed. Marketed natural gas production excludes natural gas used for repressuring the well, vented and flared gas, and any nonhydrocarbon gases. Marketed gas is further processed into dry natural gas, also known as consumer-grade natural gas. This process involves not only extracting valuable hydrocarbon gas liquids such as ethane and propane, but also removing impurities such as water vapor and noncombustible gases that would interfere with pipeline operations or end-use applications.
Natural gas production from hydraulic fracturing has primarily come from shale and other tight rocks in the Marcellus and Utica formations of the Appalachian Basin, the Bakken formation in Montana and North Dakota, the Eagle Ford formation in Texas, and the stacked Permian Basin formations in Texas and New Mexico. Monthly natural gas production by geologic formation can be found at EIA's Natural Gas Weekly Update. Production and other drilling metrics by geographic area can be found in EIA's Drilling Productivity Report.
Hydraulic fracturing is not limited to natural gas-containing formations such as shales or other source rocks, nor is it limited to horizontal wells. Hydraulic fracturing has been successfully used in directional and vertical wells, natural gas and oil wells, and in non-tight formations and reservoirs. To date, most natural gas from hydraulically fractured wells has come from Lower 48, onshore tight rock formations.
http://www.eia.gov/todayinenergy/detail.cfm?id=26112&src=email
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Western States Get New CO2 Modeling Tool
May 5, 2016 | E&E Climatewire
By Emily Holden
A Colorado-based organization this week released a modeling tool for 12 Western states considering how they might meet power-sector carbon reduction goals under U.S. EPA's Clean Power Plan.
The Center for the New Energy Economy at Colorado State University coordinated development of the tool for Western states that have been meeting to hash out planning efforts.
Built by the firms Energy Strategies LLC and Fovea LLC, the modeling tool uses validated information from 17 Western electric utilities. It reviews integrated resource plans for coal plant retirements and new renewable energy projects to calculate emissions trajectories without the Clean Power Plan.
It allows states and utilities to see their "compliance gaps," or how much they must cut carbon in order to comply with the federal standards, said Jeff Lyng, a senior policy adviser for CNEE. They can then look at how various policy decisions -- like shutting down a plant or ramping up gas use -- might impact their progress.
Earlier versions of the modeling platform included information for five and then seven states.
The modeling tool is one of a dozen being used by industry interests and state officials, but it is unique because it relies on utility-verified data, Lyng said. It's also important because it allows states to use a common data set, although many utilities are also conducting their own modeling and using more sophisticated systems for making power decisions.
The tool does not include California and does not estimate the costs of various policy decisions. It does cover the other 12 states that have been exploring the rule with CNEE: Washington, Oregon, Idaho, Nevada, Utah, Arizona, Colorado, New Mexico, Wyoming, Montana, North Dakota and South Dakota.
CNEE's multistate group last met on April 5, although only 10 of the original 13 state members attended. Before that, the group met most recently in November, said Patrick Cummins, the project lead.
At the meeting last month, state officials heard updates on Washington state's regulatory and legislative efforts to reduce greenhouse gases, Nevada's New Energy Industry Task Force, Oregon's 50 percent renewable energy target and coal phaseout legislation, and California's cap-and-trade program.
"A lot of the meeting was a roundtable, where the states updated each other on all of these activities," Cummins said.
The states are hoping to hear more from EPA about whether the agency will release updated model carbon-trading rules, Cummins said.
Doug Scott, the vice president of strategic initiatives at the Great Plains Institute who is coordinating regional meetings on the rule, said Midwest states are also looking for that information. A group of 14 states coordinated by the Georgetown Climate Center also recently requested that and other details from the agency (ClimateWire, April 29).
Scott also noted that states within the Midcontinent Independent System Operator (MISO) and the PJM Interconnection LLC grid organizations have met separately to discuss compliance since the Supreme Court halted implementation of the rule.
The Midcontinent States Environmental and Energy Regulators, the group of MISO states, had a webinar recently to review modeling results with the Bipartisan Policy Center.
The PJM states will hold a similar meeting soon to discuss modeling with Duke University's Nicholas Institute for Environmental Policy Solutions. Several state officials, including from Georgia, plan to attend a Nicholas Institute meeting in Charlotte, N.C., on May 11, according to travel approval requests.
The states are mostly attending "to try to get information" and "look at potential compliance pathways," said Scott, who couldn't disclose which states are involved.
Reviewing 'set it and forget it' energy policies
CNEE, in partnership with the Nature Conservancy, yesterday also launched a website to track state progress on various clean energy policy goals.
The "State Policy Opportunity Tracker" (SPOT) incorporates public data from 18 organizations that follow energy efficiency programs, state legislative action and renewable power development. The tool took more than a year to produce with a team of eight researchers, Lyng said.
It rates states on 38 clean energy policies, divided into three areas: market preparation, creation and expansion.
"This isn't a letter grade or a number grade for states," said Lyng. "We're just trying to address where is there further work that could be done."
For example, Texas gets about 3.5 out of 5 for its renewable portfolio standard but might be able to do better, compared with other states, by making the renewable portfolio standard target higher or providing incentives for utilities that comply.
SPOT links to full policy briefs that explain each issue and how other states stack up.
The tool is meant for policymakers, whether in legislatures or state energy offices, Lyng said.
They may want to revisit some policies or consider "cleanup" legislation, he said.
"There's some set it and forget it when it comes to these policies," he said, and officials should re-evaluate them as the power sector develops.
http://www.eenews.net/climatewire/2016/05/05/stories/1060036745
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Federal Underground Gas Storage Rules Coming Soon, PHMSA Chief Says
May 5, 2016 | Natural Gas Intelligence
By Jeremiah Shelor
Minimum federal standards for underground natural gas storage are in development, Pipeline and Hazardous Materials Safety Administration (PHMSA) Administrator Marie Therese Dominguez said Tuesday.
The Department of Transportation agency currently is hammering out the details of a rule to regulate underground gas storage as part of its work on an interagency task force formed by the Obama administration last month (see Daily GPI, April 4).
“As part of the work of the task force, PHMSA is moving forward with regulations for underground natural gas storage, which will provide minimum safety and operating standards for all states and improve oversight of interstate facilities,” Dominguez said.
The interagency task force was formed in the wake of the months-long leak at the Aliso Canyon storage field operated by Sempra Energy’s Southern California Gas Co. (see Daily GPI, Feb. 18). The leak, which began last fall at the 86 Bcf capacity facility, made national headlines and drew intense scrutiny from environmentalists (see Daily GPI, Nov. 12)
Dominguez made her remarks during an event hosted by the Center for Strategic & International Studies, a bipartisan Washington, DC, think-tank. PHMSA is working on a “fairly aggressive” timetable to advance the rulemaking and is currently determining “what are those standards that we can put in place,” she said.
After visiting the site of the Southern California storage leak, Dominguez said she feels “like we have an opportunity now to set some minimum federal standards...addressing potentially some of the concerns on aging infrastructure, recognizing that there are vastly different geological formations that are out there across the country, but recognizing that the work that’s been done accounts for a lot of that.”
In developing the storage rulemaking, PHMSA is making use of research work conducted at the Department of Energy’s various national laboratories across the United States, she said. The planned rules for underground storage come a little more than a month after PHMSA proposed an expansion of its safety regulations covering natural gas pipelines (see Daily GPI, March 28; March 21). The agency has also been waiting on Congress to approve a reauthorization of the Natural Gas Pipeline Safety Act (see Daily GPI, April 27).
Meanwhile, the Obama administration has been pushing through an “unprecedented” number of new oil and gas regulations in the president’s last year in office, according to analysts and industry experts (see Daily GPI, April 25).
http://www.naturalgasintel.com/articles/106313-federal-underground-gas-storage-rules-coming-soon-phmsa-chief-says
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Regulator Points to Corrosion in Pa. Gas Line Explosion
May 5, 2016 | E&E Energywire
By Mike Lee
Problems with anti-corrosion coating on a 30-inch-diameter gas pipeline may have triggered an explosion Friday in rural Pennsylvania that severely burned a man and destroyed his home.
Federal inspectors found corrosion at a weld where the failure occurred on Spectra Energy Corp.'s Texas Eastern pipeline and additional corrosion in the same section of pipe, the Department of Transportation's Pipeline and Hazardous Materials Safety Administration (PHMSA) said in an order yesterday.
"The pattern of corrosion indicates a possible flaw in the coating material applied to the girth weld joints," the order says. Girth welds are the welds that join two sections of pipe.
The pipeline was inspected in 2005 and 2012 with in-line tools known as smart pigs that are used to check for weaknesses. Those tests didn't find any problems, the company said earlier this week (EnergyWire, May 3).
That underscores a point that safety advocates have been pressing.
"Smart pigs don't always pick up corrosion, especially along girth welds," said Carl Weimer, executive director of the nonprofit Pipeline Safety Trust. "If that was the problem, that's another indication that we need smarter smart pigs."
Spectra said in a statement it's cooperating with the investigation. The pipeline has been shipped to a lab for testing.
The line, known as Line 27, is one of four that Spectra operates in the area, all within 25 to 28 feet of one another. It was operating near its maximum pressure of 1,050 pounds per square inch when the explosion happened Friday near Delmont, Pa., about 25 miles east of Pittsburgh.
The blast left a 12-foot-deep crater and threw a 24-foot section of pipe about 100 feet, the order says. The injured man, identified by local newspapers as James Baker, 26, was burned over 75 percent of his body. His home was destroyed and three others were damaged by the fire.
PHMSA ordered Spectra Energy to dig up and inspect all four of its pipelines in the area and repair or replace any damaged coating.
http://www.eenews.net/energywire/2016/05/05/stories/1060036741
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May 5, 2016 | Bulk Transporter
By Charles Wilson
Over the last four years CTL Transportation LLChas undergone an incredible transformation. And the process continues for the Auburndale, Florida-based company.
A subsidiary of Comcar Industries, the 52-year-old tank truck carrier transitioned from supporting the phosphate industry in Central Florida to a diversified $40 million chemical hauler with a national focus. More than 75% of its operations are now outside of Florida.
Operations are especially strong across the Southeast and Gulf Coast, where a majority of CTL Transportation’s 10 terminals are located. Dispersed throughout the terminal network are the carrier’s 180 tractors and 240 tank trailers.
“In a sense, we have become a hybrid chemical hauler with short-haul, regional, and long-haul capability,” says Joseph J Morrissey, CTL Transportation president and chief executive officer. “We have upwards of 100 loads a week moving longhaul. We want to keep our trucks moving and keep them loaded. We have a 75% loaded ratio right now, and it is increasing.
“Whether it is local, regional, or long-haul cargo, we have the ability to meet the needs of our chemical-industry customers. We are a hazardous materials specialist, and 85% of our loads are hazmat. As a Responsible Care Partner, we provide our customers with what we believe are some of the best trained and safest hazmat drivers in the industry. We have a lean management team with just 33 employees in non-driving roles.
“We are running one of the youngest tractor fleets in the industry, with most of the vehicles under 15 months old with an average age of seven months. These tractors are equipped with the latest in safety technology and are maintained in-house at our own network of maintenance shops.”
Core strengths
Azalia Tennis, CTL Transportation’s vice-president of Gulf Coast operations, adds that the carrier’s strong driver network, central dispatch, and lean management team has helped attract a diversified customer base. It is certainly a growing customer base.
“Even with the general slowness in the trucking market at the beginning of this year, January and February were two really good months for us,” Tennis says. “Looking forward, we believe there is plenty of reason for optimism, especially along the Gulf Coast. Numerous chemical plant expansions are coming on line over the next couple of years, and we should see significant incremental growth. We definitely believe CTL Transportation is in the right place for growth.”
The broader chemical market was never a consideration when the trucking company that became CTL was founded in 1964 with a sole focus on agricultural chemicals—especially phosphates mined in central Florida for use in fertilizer. Based initially in Tampa, Florida, the carrier later moved to Mulberry, Florida, in the heart of the phosphate mining and processing operations.
By 1974, Karel Konicek had been named president of the tank truck carrier. Konicek is particularly noteworthy as an engineer for Butler Manufacturing Co, because he played a significant role in developing the pneumatic dry bulker that is in widespread use today for a wide range of products. Konicek also developed the combo trailer that includes a hopper for phosphate and a cargo tank for molten sulfur.
Comcar acquisition
The specialized trailer fleet was a big selling point for Comcar, which purchased CTL in 1985 and reorganized it as CTL Distribution Inc. At its peak, CTL’s phosphate operation employed more than 200 drivers, who kept more than 100 tractors running 24/7 hauling loads between central Florida and the Port of Tampa.
“Much of that phosphate was destined for export,” Morrissey says. “Better than 50% of CTL’s revenue came from the phosphate business, and we were primarily an intrastate carrier. We had very few loads going to other states.
“In recent years, the phosphate industry underwent significant consolidation, and our involvement began to shrink. With the decline of the phosphate business, we realized we needed to make some major changes.”
CTL began a major marketing push into the broader chemical market. Last year, the carrier became an American Chemistry Council Responsible Care Partner Company sponsored by Dow Chemical Company and Solvay. CTL should complete its Responsible Care certification before the end of 2016.
“We are a chemical hauler today, and we believe it is important to maintain Responsible Care certification,” Morrissey says. “This is something that helps a mid-sized bulk carrier differentiate itself from like-sized competition. It is helping us to pull away from the old phosphate hauling mindset, and it is a reflection of where we are going today.
“We now transport a full range of chemicals, and a majority of that business is outside Florida. We don’t handle any dry bulk, and we don’t haul foodgrade products. We are purely a chemical hauler.”
The carrier hauls industrial and specialty chemicals. “Our legacy cargoes were acids, caustic, sulfur, and bleach, and we still haul a lot of that,” Morrissey says. “Diversification has brought coatings, resins, base oils, solutions, and water treatment products.”
Service area
CTL offers nationwide service, but most operations take place in the eastern half of the United States. “Our main operating area today is the Southeast and along the Gulf Coast,” Morrissey says. “Our terminal footprint runs north as far as St Louis (Missouri) and Cincinnati (Ohio).”
The fleet operates out of 10 CTL terminals, including three that are shared with other Comcar operations. Four CTL terminal locations are leased from commercial wash rack operators: Express Container Service in Morrow (Atlanta), Georgia, and Houston, Texas; Tank Trailer Cleaning in East St Louis, Illinois; and Premier Container Services in Angleton (Freeport), Texas.
Fleet operations are directed by CTL’s central dispatch office at the carrier’s Tampa terminal. Fleet management is facilitated by McLeod dispatch software and Omnitracs on-board computers that provide communications with dispatchers and handle electronic driver logs.
Key dispatcher responsibilities are to keep the equipment loaded and the drivers busy. In the CTL system, any driver can handle local, regional, or longhaul movements. Drivers make just a two-week commitment to shift from shorthaul to longhaul, but it gives them an opportunity for a quick boost in income while giving the company capacity flexibility.
Driver force
Keeping CTL’s trucks manned with drivers is the responsibility of parent company Comcar Industries, which handles driver recruiting and screening for all of the fleet operations. Other shared services include human resources, fleet maintenance, accounting, and legal services.
Based on requests from CTL terminal managers, Comcar recruiters select drivers meeting CTL requirements—which include minimum age of 21 and in possession of a valid commercial driver license with tanker and hazardous materials endorsements and a Transportation Worker Identification Card (TWIC).
Truck driver applicants are examined closely in a 60-step hiring process. Standards are so high that only 1% to 2% of the applicants are hired. Comcar officials point out that each applicant’s work history is reviewed in detail, and the vetting process includes a criminal background check. Functional capacity testing is required to ensure applicants have the physical ability to perform the job.
Just 30% of the drivers hired already have tank truck experience, according to Su Melchiorre, CTL vice-president of safety services. In addition, the company is hiring increasing numbers of drivers just out of truck driving schools.
Training program
With its driver-training program, CTL is finding it relatively easy to integrate these drivers into its system. New hires are sent to CTL’s Tampa or St Gabriel, Louisiana, terminals for a three-day orientation, followed by three days of CTL’s Advanced Driver Training Program (ADTP).
Classes typically have two to three students. The three-day orientation includes the DOT physical, drug screen, and agility testing. Instructors Joan Pfeiffer and Tony Passafiume cover DOT-mandated training and company policies.
During the three-day ADTP training that follows, driver trainers work one-on-one with new hires to improve backing skills and the pre-trip/post-trip inspection process. “Most of our driving incidents occur during backing, and this training has cut those incidents by more than half,” Melchiorre says.
Drivers fresh out of truck driving school spend at least another four weeks with a driver trainer. “We want to make sure they are comfortable with the equipment and can perform the job reliably before we send them out on their own,” Melchiorre says.
These initial weeks of training are just the beginning for CTL drivers. Ninety days after going to work for the carrier, new hires are given a one-day skills evaluation by a certified driver trainer.
“We have found that after 90 days, new hires can become a little complacent,” Melchiorre says. “We also see a return of complacency after around 18 months. During the reviews, our driver trainers look at how the new hires are performing, and we identify and address any issues. We schedule additional retraining as needed.
“Retraining is mandated after a safety event, and driver trainers also handle periodic performance improvement training. Each driver goes through the improvement training twice a year, and sessions last four hours to a full day. We are always working with our drivers to help them work as safely as possible.”
To provide the necessary training, CTL has at least two certified driver trainers per terminal with a total of 31 across the system. Drivers can be recommended for the program by their terminal manager or they can submit a request for consideration to the safety department.
Randy Dieter, CTL manager of safety and training, interviews each candidate by phone. “We’re always looking for more driver trainers, and we want individuals who can be held to a higher standard,” he says. “We’ve had good luck finding the right people.”
To qualify for the program, a driver must have at least one year of experience driving for CTL with a good safety record with good hours-of-service compliance and no preventable incidents or accidents. “Our ideal candidate needs patience and good communication ability,” he says. “His first priority must be that he wants to train other drivers. It doesn’t appeal to everyone.”
Those selected as certified driver trainers complete two days of initial one-on-one training with Pfeiffer or Passafiume. Annual recertification also is required.
Quarterly breakfast safety meetings at each terminal address driver issues along with other safety concerns. Each meeting is conducted by safety department staffers and includes PowerPoint presentations, as well as hands-on training when applicable.
Safety audits
Driver performance gets regular attention during DOT-style safety audits that are performed across the Comcar organization every nine months by a retired US DOT officer. “The audits are to make sure all of the Comcar operations are meeting or exceeding DOT regulations,” Melchiorre says. “It’s part of wanting to be the best. We take special pride that CTL has one of the best safety records within the bulk industry and within Comcar Industries group. These audits are part of an effort to send a consistent safety message.”
The safety department’s involvement in the CTL operation goes well beyond the drivers. The safety department also is involved in preventive maintenance compliance and critical event reporting through the Omnitracs and Bendix Wingman Advanced technology that includes collision avoidance and roll stability systems specified on all of the tractors.
Critical events include a hard braking rate in excess of nine miles per hour, according to Melchiorre. Alerts go to the terminal manager, driver manager, vice-president of operations, vice-president of safety services, and Comcar officials. The driver receives an alert message to call the safety department.
“The terminal manager contacts the driver, and usually will schedule a test ride.” Melchiorre says. “We determine what additional training is needed.”
In addition to the Bendix Wingman Advanced, the newest Mack Pinnacle tractors in the CTL fleet were specified with Mack MP8 engines rated at 475 horsepower and mDrive automated transmissions. Governors limit the maximum speed of the trucks, which are currently set at either 62 or 65 miles per hour, with 65 slowly becoming the new standard. Most of the tractors have 70-inch sleepers.
Product handling equipment includes Roper pumps and Holset 32-cfm compressors. Product hoses and fittings are stored in Sturdy-Lite aluminum cabinets mounted behind the cab. Product hoses are supplied by Hart Industries.
CTL hauls a wide range of chemicals in a diverse tank trailer fleet. Stainless steel general chemical DOT407 tanks with a 7,000-gallon capacity account for 75% of the trailers in the fleet. Most of the rest are DOT412 stainless steel trailers with a 4,500-gallon capacity. Tank hardware includes Betts valves and domelids and Girard pressure-relief vents.
The trailer fleet was specified with a wide range of running gear, including suspensions from Hutch, Reyco, and Fruehauf. Some of the newer trailers were specified with Hendrickson’s air suspension system. About 65% of the trailer fleet has the PSI tire inflation management system, which CTL has been specifying since the 1990s. Steel wheels are used throughout the fleet for uniformity.
CTL also operates a number of customer-owned tank trailers that are used for specialized products such as hydrogen peroxide and hydrofluoric acid.
Today’s CTL is a bulk carrier with a strong southern footprint bringing solid value to chemical shippers. As a mid-sized tank truck carrier, CTL is very nimble and can bring its customers capacity scale, deployment speed, and service and safety consistency.
The carrier has evolved far beyond the central Florida phosphate industry that defined its operations for nearly a half a decade. Today, CTL’s focus is on building partnerships with chemical shippers across the United States.
http://bulktransporter.com/fleet-management/ctl-transportation-remakes-itself-more-diversified-chemical-hauler-broader-operatin
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Shippers Feeling Railroaded With Prices Up Even as Freight Falls
May 5, 2016 | Bloomberg
By Thomas Black
Customers often `don't have any other options,' analyst says.
Railroads say high maintenance costs force price increases.
Kevin Acker has both savored and suffered the pricing power of freight railroads.
The manager at Chemours Co. depends on a single railroad that serves 80 percent of the chemical maker’s facilities, hauling bulky cargo that trucks can’t move efficiently. In his previous career as a railroad executive, he had the upper hand in shipper contract talks.
“On this side of the fence, I’m begging,” said Acker, who had worked 15 years for Norfolk Southern Corp. and Consolidated Rail Corp. “On the other side of the fence, I’m telling.”
All major North American railroads pushed through rate increases earlier this year even as freight fell the most since 2009. Limited competition and favorable regulations provide pricing power -- the envy of truckers and maritime shippers -- that’s helped them reverse a share slide despite tumbling oil, coal and intermodal shipments.
Rail companies “benefit from the market power that they wield, which is different from other modes of transportation,” said Mark Levin, an analyst with BB&T Capital Markets. “In many cases, customers have to take the price that’s offered when they don’t have any other options.”
$600 Billion
Railroads counter that freight rates remain about 40 percent lower than before the current regulations were enacted in 1980 to save the industry, which was teetering on bankruptcy. The new rules sparked investments that have topped $600 billion in the last 35 years and improved service and safety on a rail system where the tracks were so shoddy trains would tip over while not even moving.
“By and large, most of our customers feel they’re getting good value,” Mike Ward, chief executive officer of CSX Corp., which operates in the east. “You’ll find that it’s a fairly small vocal minority that has those concerns.”
Freight tariffs jumped 27 percent after adjusting for inflation in the 11 years ending in 2013, ending an era of declining prices that began in 1980, according to a study by the Transportation Research Board.
In the first quarter of this year, CSX boosted average freight prices 3.1 percent while its carloads tumbled 5.1 percent. Union Pacific Corp., the largest publicly traded railroad, raised rates by 2.5 percent even as cargo sank 8.4 percent.
Renewed Interest
The ability to increase prices even as shipments decline has bolstered railroad earnings and helped mitigate the drop in their shares, said David Vernon, an analyst with Sanford C. Bernstein. That’s led to renewed interest from investors who are more used to industries that have to reduce rates to stem a drop in business. A Standard & Poor’s index tracking the four largest publicly-traded U.S. railroads has climbed 26 percent since hitting a three-year low on Jan. 25, more than doubling the return of the S&P 500.
“Investors are increasingly comfortable that price isn’t going to come rattling down because of a volume decline,” Vernon said.
The high cost of laying track keeps out new rail competition, unlike maritime shippers and trucking companies that can see rivals add vessels or vehicles fairly easily. The result is a North American rail network that operates three regional duopolies, with two carriers in the eastern U.S., two in the west and two in Canada. The seventh major rail company, Kansas City Southern, runs a line from the Midwest to the Gulf Coast and into Mexico.
Difficult Appeals
Railroads can boost spot rates with 20 days’ notice. Customers can challenge the increases by appealing to the Surface Transportation Board, which regulates the rail industry. But it can take years and millions of dollars to pursue a case. DuPont Co. disputed rates from Norfolk Southern in October 2010 and the board ruled in favor of the railroad in March 2014. The case wasn’t finalized until December.
Railroads need to charge prices that enable them to maintain the North American rail freight system, which is the “the envy of the world,” Vernon said. In 2015, the railroads invested 42 cents of every dollar of revenue back into operations, according to theAssociation of American Railroads.
No Discount
“We’ve got a special service offering,” said Hunter Harrison, chief executive officer of Canadian Pacific Railway Ltd. “We don’t have to go into the marketplace and discount it to sell it.”
The railroad is playing catch up with rate increases ranging from 2.5 percent to 5 percent after going decades without higher prices, he said. That has enabled Canadian Pacific to extend side tracks that allow for longer trains and to invest in centralized traffic control technology, leading to the fastest average speeds this year since 2012.
Rail service isn’t always improving, said Randy Gordon, chief executive of the National Grain and Feed Association. In 2013 and 2014 a surge of volume left grain shippers waiting weeks for trains, said Gordon, who called the price increases amid traffic declines a market “anomaly.”
“The rail carriers are using their pricing power to keep prices stable or increasing primarily for the benefit of shareholders and Wall Street,” he said.
Some railroads also are now charging fees for services that once were free, such as moving empty tank cars or storing railcars at rail yards, said Acker, whose company spent $154 million on rail transportation last year. Large companies such as Chemours, the world’s biggest producer of titanium-dioxide pigment, have teams armed with data to push against the railroads’ demands during contract talks. Small shippers are more vulnerable, he said.
Even so, Chemours agreed to rate increases of about 5 percent last year, when U.S. consumer prices rose less than 1 percent and U.S. rail traffic fell 2.5 percent.
“There’s the real world and then there’s the rail world,” Acker said.
http://www.bloomberg.com/news/articles/2016-05-05/shippers-feeling-railroaded-with-prices-up-even-as-freight-falls
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Attorneys General Urge EPA To Limit RMP Revisions
May 4, 2016 | Inside EPA
The Louisiana and Texas attorneys general are urging EPA to amend draft revisions to the agency's Risk Management Plan (RMP) facility accident prevention rule, arguing some of the proposed new requirements, such as for independent audits and information sharing, are outside the scope of the Clean Air Act and fail to make facilities safer.
EPA is currently taking comment through May 13 on its Feb. 25 proposed rule revising RMP as part of a broad federal effort to implement President Obama's Aug. 1, 2013, Executive Order 13650 on improving the safety and security of the nation's industrial facilities.
Currently, the RMP program established under section 112(r) of the Clean Air Act requires companies to craft a plan to submit to the agency that outlines how they will reduce risks from releases.
The proposed revisions would mandate that certain facilities consider safer chemicals or processes in their hazard assessments that inform plans; require third party audits after a reportable release to reduce risk of future accidents; and aim to improve coordination and information sharing between facilities and local communities.
In a May 3 letter to EPA Administrator Gina McCarthy, Attorneys General Jeff Landry (R) of Louisiana and Ken Paxton (R) of Texas urge EPA to modify its proposal, arguing the proposed revisions would drastically alter the current regulatory framework without bringing new benefits. Both states are home to chemical manufacturing facilities.
“The record that exists today regarding safety and security at the nation's chemical facilities does not indicate that weak or ineffective regulations are the problem,” the letter says. “This unauthorized expansion of the program does not make facilities safer, but it does subject facilities to even more burdensome, duplicative and needless regulation.”
The two attorneys general say the Clean Air Act requires that agency rules seek to prevent accidental releases and minimize the consequences of those releases, and argue that many proposed revisions would actually increase risk and so fall outside of the scope of the law.
Specifically, they fault EPA proposals to revise the definition of “catastrophic release”; to require third-party audits, including a provision that would limit who qualifies as an auditor; and to increase requirements for sharing or improving access to certain facility information.
The officials argue that EPA's proposed revision of the definition of “catastrophic release” to specifically include emissions that result in death, injuries or damage on-site is an improper intrusion on the authority of the Occupational Safety and Health Administration, and also outside the scope of the Clean Air Act.
Echoing industry arguments, the attorneys general say EPA's proposed requirement for third-party audits, along with strict independence requirements, is overly burdensome and would fail to improve facility safety. Additionally, the authors say new information-sharing requirements increase rather than reduce risks to facilities.
“In light of recent and significant terrorist attacks that have resulted in the loss of life, as well as the perpetual cyber-attacks and data breaches on and from our federal government that are leading to disclosure of personal and sensitive information, we are dumfounded as to why you would like to acquire and then make readily available sensitive information pertaining to chemical facilities to the public at large,” the letter says.
http://insideepa.com/news-briefs/attorneys-general-urge-epa-limit-rmp-revisions
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Academics Float Cost-Benefit Analysis As Tool For Issuing Stricter NAAQS
May 5, 2016 | Inside EPA
By Stuart Parker
A pair of environmental professors is suggesting that if EPA were to use cost-benefit analysis in deciding whether to revise its six national ambient air quality standards (NAAQS) -- currently prohibited by law -- it could lead to even stricter standards because tighter limits would likely yield projected benefits that far outweigh expected costs.
The argument, outlined in an article for the Environmental Law Institute (ELI) and presented at an ELI event in Washington, D.C., last month, runs counter to claims from industry groups, GOP lawmakers and others that EPA should consider costs in setting the NAAQS because it would show that tighter standards will impose excessive costs.
Under the Clean Air Act and the Supreme Court's 2001 ruling in Whitman v. American Trucking Associations, EPA can only revise its NAAQS based on scientific data about a criteria pollutant's impacts on human health and the environment -- and cannot weigh costs in that determination. EPA can consider costs later in the NAAQS process when it crafts regulations directing states on how to craft plans for implementing the various standards.
EPA's opponents say that not considering costs leads to ever-stricter standards regardless of the potential adverse economic impacts of such limits. For example, the agency on Oct. 1 tightened its ozone standard from the 2008 limit of 75 parts per billion (ppb) down to 70 ppb. Critics said this would place many areas out of attainment with the NAAQS, forcing them to impose costly pollution controls on industry that could harm those areas' economies. They argued that if the agency had considered the potential economic harm, it should have left the 2008 limit unchanged.
However, Michael Livermore of the University of Virginia Law School and Richard Revesz of the New York University Law School argue in their new paper that consideration of costs in the initial NAAQS-setting process could have the opposite effect and potentially help EPA to justify even stricter ambient air standards than EPA would otherwise issue.
In their article, "Health-based Environmental Standards and Cost-Benefit Analysis," the two scholars suggest that use of cost-benefits analysis be expanded. The article updates an earlier version, "Rethinking Health-Based Environmental Standards," which appeared in 2014 in the New York University Law Review.
"[W]hen costs cannot be considered, it is difficult to justify any stopping point other than zero" pollution -- a physical and economic impossibility, the paper says. "The result is an elaborate obfuscation of the true reasoning underlying the agency's decision, undermining the core values of the administrative state."
Contrary to "the conventional account, the requirement that EPA set the NAAQS without considering costs, hasnot led to more stringent environmental standards. We examine the regulatory impact analyses conducted for the most recent NAAQS rulemakings and find that, in all of the cases where the relevant data is available, the standards set by EPA were less stringent than those that would have resulted from the application of cost-benefit analysis," it adds.
Cost-Benefit Analysis
For example, when EPA in November 2014 proposed to tighten the ozone standard it projected that a 70 ppb standard would provide benefits everywhere except California of $6.4 billion to $13 billion annually with estimated costs of $3.9 billion in 2025. A stricter 65 ppb standard would have significantly higher benefits of $19 billion to $38 billion annually with estimated costs of $15 billion, EPA found.
In the final regulatory impact analysis for the Oct. 1 rule, EPA updated the projections to estimate that its 70 ppb limit would have costs of $1.4 billion, excluding California, compared to health benefits of $2.9 billion to $5.9 billion, and that a 65 ppb limit would have costs of $16 billion compared to health benefits of $15 billion to $30 billion.
Industry groups dispute EPA's cost-benefit numbers included in the RIA for the ozone standard, arguing that EPA has dramatically underestimated the true adverse economic impacts of its NAAQS.
But EPA "has the discretion to use cost-benefit analysis as a regulatory floor," and because it would result in tougher standards than the agency's current health-based approach, this would be consistent with Whitman, the scholars argue in their paper, which they presented at the April 1 ELI event.
However, panelists at the briefing were skeptical, with former White House environmental official Gary Guzy -- now an attorney in private practice -- saying that the NAAQS system is "basic and revolutionary," a "technology-forcing" method that sets standards then challenges industry and states to innovate to meet them. He said that in light of Whitman, there are "very clear decisional constraints" imposed by the Supreme Court. In his written response, Guzy argues that health-based clean air standards "function well and serve important ends."
Sally Katzen, former Clinton administration head of the Office of Information and Regulatory Affairs (OIRA) within the White House Office of Management and Budget, was also dubious. Katzen, an advocate of cost-benefit analysis in general, defended EPA's NAAQS-setting process, assuring the audience that during her tenure, EPA set NAAQS based purely on the science and policy judgment -- not costs.
Katzen called cost-benefit analysis in general "informative, not dispositive," stressing the policy discretion of agency officials when making important regulatory decisions.
General Permits
Meanwhile, in a paper presented to the same ELI event, "The Permit Power Revisited: the Theory and Practice of Regulatory Permits in the Administrative State," Professors Eric Biber of the University of California at Berkeley and J.B. Ruhl of Vanderbilt University Law School argue that environmental regulators in all media, including air and water, should consider using more "general" permits where circumstances allow.
General permits contain generic terms that apply to certain types of activity, unlike specific permits that are tailored to individual circumstances but are much more onerous to both apply for and for state and federal regulators to write. General permitting is favored, for example, when "using the specific permit model would place undesirably disproportionate entry barriers on small business," and "when there is no substantial need for new information about instances of the activity."
Ethan Shenkman and Aditi Prabhu, of EPA's Office of General Counsel, however, took issue with Biber and Ruhl's "overly generalized assumptions" about the limits of individual permits.
They said that EPA in fact makes extensive use of general permitting, especially under the Clean Water Act, and sought to debunk the notion that general permits are "easy and noncontroversial."
The EPA officials denied what they say are widespread false accusations that the agency uses permitting regimes to attempt a "power grab," for example in the greenhouse gas (GHG) permitting provisions of the Clean Air Act, where they say EPA has in fact sought to limit the application of GHG permits to fewer sources than the law would otherwise suggest. GOP lawmakers and industry groups have made such accusations in the past.
They further argued that individual permits are not inflexible, and can serve as drivers of technological innovation, for example in air quality monitoring.
http://insideepa.com/daily-news/academics-float-cost-benefit-analysis-tool-issuing-stricter-naaqs
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