Preview Newsletter
PM ACC 5/13/2016
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(ACC Mentioned) April Was the Cruelest Month for Resin Buyers (Except PP)
May 13, 2016 | Plastics News
By Frank Esposito
Four of five major commodity resins tracked by Plastics News saw North America price increases take hold in April — with only polypropylene prices bucking the trend by declining. -
(ACC Mentioned) John Boehner's Got Just One Word for You
May 13, 2016 | Plastics News
By Gayle S. Putrich
You can take the Speaker of the House out of the plastics industry, but you can’t take the plastics out of the Speaker…. -
EPA Denies Need for Court-Ordered Perchlorate Water Standard Deadlines
May 13, 2016 | InsideEPA
By Maria Hegstad
EPA is denying that environmentalists are entitled to court-ordered deadlines by which the agency must propose and finalize a drinking water standard for the rocket fuel ingredient perchlorate, according to EPA's response to the suit, though the agency admits... -
Lawmaker Reintroduces Cleaning Products Labeling Bill
May 13, 2016 | E&E Greenwire
By Sam Pearson
A New York congressman has introduced a bill to require labeling of cleaning products. -
(ACC Mentioned) Methane Regs: A Gift Disguised as a Problem
May 13, 2016 | Bloomberg Government
By Mark Drajem
If you paid attention to all the emissions from industry groups and environmentalists after the EPA issued its first-ever methane rules, you might think the agency did something novel. Sure, it’s never regulated methane before, but in the rule issued yesterday EPA included... -
Industry Attacks New Rules by Questioning Their Effectiveness
May 13, 2016 | E&E Energywire
By Mike Soraghan
As oil and gas industry groups lambasted the Obama administration's new methane rules yesterday, they didn't charge that the rules will hurt job growth. Instead, they argued that the rules won't even help the climate very much. -
Will New Chemical Law Hide The Fracking Industry’s Toxic Secrets?
May 13, 2016 | Environmental Working Group
By Melanie Benesh
The makeup of hydraulic fracturing fluid – the slurry of chemicals, sand and water injected deep underground to free petroleum deposits trapped by bedrock – is a closely guarded secret of the oil and gas industry. -
How We Get Energy is Changing Fast — And it’s Sparking a Huge Fight over Forecasting the Future
May 13, 2016 | Washington Post
By Chelsea Harvey
For the first time since September 2014, the U.S. Energy Information Administration, the Department of Energy’s key data and forecasting branch, has released a set of long-range international energy projections aimed at helping inform public policy. -
America’s One Million b/d of Crude Oil for President
May 13, 2016 | Platts (In Real Clear Energy)
By Brian Scheid
Let’s call it the 1 million b/d race, even if such speculation may ultimately prove wildly wrong. In short: no one can accurately forecast the impact of the outcome of this November’s US presidential race. -
Bakken’s 1 Million b/d Production Unlikely to Hold
May 13, 2016 | Natural Gas Intelligence
By Richard Nemec
With the number of uncompleted wells continuing to rise in the Bakken Shale, it is doubtful the 1 million b/d production level can be maintained into next year, North Dakota chief oil/natural gas official Lynn Helms said Thursday in releasing the state's latest production statistics. -
Trump Taps Climate Change Skeptic, Fracking Advocate as Key Energy Advisor
May 13, 2016 | Reuters (In The New York Times)
By Valerie Volcovicii
Republican presidential contender Donald Trump has asked one of America's most ardent drilling advocates and climate change skeptics to help him draft his energy policy. -
(ACC Mentioned) Groups Lobby on Safety Rule as Comment Deadline Nears
May 13, 2016 | E&E Greenwire
By Sam Pearson
Interest groups and lawmakers are ramping up pressure on U.S. EPA with the close of a public comment period on a key chemical safety regulation today. -
Investigation Reveals Hazardous Chemicals at Every Turn
May 13, 2016 | Houston Chronicle (In E&E Greenwire)
By Mark Collette and Matt Dempsey
Across Houston -- the capital of the petrochemical industry -- hundreds of dangerous chemicals are stored at facilities unbeknownst to most neighbors. -
Shell, Coast Guard Work to Contain Gulf Spill off La.
May 13, 2016 | E&E Energywire
By Nathanial Gronewold
Another offshore oil spill has occurred in the Gulf of Mexico. Late yesterday afternoon, the Coast Guard said it was responding to a reported release of crude oil from equipment operated by Royal Dutch Shell PLC. -
Obama and Nordic leaders: Economic Activity in the Arctic Must Pass Climate Test
May 13, 2016 | Washington Post
By Juliet Eilperin
President Obama and the leaders of five Nordic nations will agree Friday to apply strict environmental standards and climate goals to commercial activities in the Arctic, a pledge that could have major implications for everything from future energy exploration... -
How America's Regions Learned from Europe's Mistakes
May 13, 2016 | E&E Climatewire
By John Fialka and Debra Kahn
n 2010, after the Democratic-led U.S. Senate failed to pass a federal emissions trading system, the measure was widely diagnosed as politically dead. New England states picked up some of the pieces and soldiered on, but in the West, the outlook...
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(ACC Mentioned) April Was the Cruelest Month for Resin Buyers (Except PP)
May 13, 2016 | Plastics News
By Frank Esposito
Four of five major commodity resins tracked by Plastics News saw North America price increases take hold in April — with only polypropylene prices bucking the trend by declining.
Polyethylene prices for April rose by an average of 4 cents per pound as oil prices recovered from less than $38 per barrel early in the month to around $45 when the month ended. Oil is a global price setter for PE, although natural gas is the most common PE feedstock in North America.
Regional PE prices now have risen in back-to-back months after dropping in the first two months of 2016. The 5-cent January/February drop had been canceled out by a 5-cent gain in March.
“Just about everyone in the PE market sees the massive wave of capacity starting to come online soon, and PE processors are anxious to start enjoying a multi-year buyers’ market,” said Phil Karig, managing director with Mathelin Bay Associates LLC consulting firm in St. Louis.
The 4-cent April hike was the result of “pure determination” on the part of North American PE makers, according to Mike Burns, a PE market analyst with Resin Technology Inc. in Fort Worth, Texas. “Without oil getting to $50, the increase should have been hard to get, but [PE makers] got it,” he said.
North American PE markets also could be tightened by the April 20 explosion at a plant in Mexico that made ethylene feedstock and other petrochemical products. The incident has resulted in at least 32 deaths and caused force majeure to be declared on products made there.
Through March, U.S./Canadian high density PE sales soared 9 percent vs. the same period in 2016, with linear low density PE sales up 7 percent, according to the American Chemistry Council in Washington. Regional LDPE sales were up just over 2 percent in the same comparison.
For HDPE, first-quarter domestic sales growth of almost 3 percent was amplified by a 34.5 percent jump in export sales. Regional LLDPE saw domestic sales growth of more than 6 percent for the quarter boosted by export sales gains of 10 percent. LDPE sales did not fare as well in that three-month period, with domestic growth of almost 4 percent softened by a 3 percent dip in export sales.
PVC suspension resin prices bumped up an average of 2 cents per pound in April, as warmer weather increased demand for construction-related products. Prices for the material had climbed 4 cents in March after being flat in February.
The Mexican outage also should have an impact on the regional PVC market, since the plant was a major supplier of vinyl chloride monomer feedstock. One industry source said that regional operating rates for suspension PVC resin already were above 90 percent before the accident.
U.S./Canadian PVC sales were off to a strong start in the first quarter of 2016, growing 8.3 percent. Domestic sales growth of 2.5 percent was bolstered by a surge of almost 23 percent in the export market.
North American PET bottle resin prices also ticked up 2 cents per pound in April, as warmer weather improved seasonal demand for bottled water and carbonated soft drinks. It’s the second straight monthly price hike for that material, following a similar 2-cent move in March.
Prior to these back-to-back increases, regional PET prices had fallen for six consecutive months.
In the solid polystyrene market, a surge in benzene feedstock prices sent North American selling prices for solid polystyrene resin up an average of 5 cents per pound in April.
Benzene settled at $2.16 per gallon for April, a 22 percent jump from March prices. The bounce was anticipated because of recent higher oil prices, according to Mark Kallman, a market analyst with RTI.
Solid PS prices had been flat in March after declining by an average of 2 cents per pound in February. Prior to the February drop, regional PS prices had been flat for four consecutive months. Looking ahead, regional benzene prices are expected to settle near $2.07 per gallon for May, down 4 percent vs. April.
North American PS sales grew just under 1 percent in the first quarter of 2016, according to ACC. Sales of the material into the food service/food packaging end market grew 2.2 percent in that period. Food service/food packaging accounted for almost 65 percent of regional sales of solid PS for the quarter.
Polypropylene goes down
Like an unruly child, PP prices just had to be different in April, falling while other commodity resin prices rose. The regional market for that material surprised some by posting a 3-cent price drop. Prices had climbed in five of the previous six months, raising prices a total of 11 cents per pound.
Market watchers said the April drop was the result of increased competition coming from PP imported into North America from other parts of the world. Growing PP demand and limited supplies have created the opportunity for foreign suppliers to enter the region, sources said.
The decrease occurred even though prices for propylene monomer feedstock increased slightly in April, according to Scott Newell, a PP market analyst with RTI. “It’s a very competitive [PP] marketplace all of a sudden,” he said. “The domestic guys have to compete with material from [South] Korea, Brazil and other places.
In addition to South Korea and Brazil, sources told Plastics News that Saudi Arabia, Colombia, Thailand and Singapore also have been active in importing PP into North America. A PP buyer in the Midwest U.S. said that he expects more price drops as increased summer gasoline production lifts supplies of propylene monomer feedstock.
Through March, North American PP sales were up almost 2 percent, with a 3 percent domestic sales gain softened by a 44 percent drop in export sales.
http://www.plasticsnews.com/article/20160513/NEWS/160519901/april-was-the-cruelest-month-for-resin-buyers-except-pp
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(ACC Mentioned) John Boehner's Got Just One Word for You
May 13, 2016 | Plastics News
By Gayle S. Putrich
You can take the Speaker of the House out of the plastics industry, but you can’t take the plastics out of the Speaker….
Wait, what?
Speaking at the SkyBridge Alternatives conference in Las Vegas May 12, former Speaker of the House John Boehner suggested Wall Street take a page out of the plastics industry’s PR playbook.
Banking needs a pitch something along the lines of The American Chemistry Council’sPlastics Make it Possible campaign to boost its image, Boehner said.
“Over the course of a few years, it convinced the American people that plastics were really good,” said Boehner, according toBusiness Insider and other outlets covering the annual hedge fund shindig in Las Vegas. “And the whole issue went away.
Boehner thinks Wall Street should take a similar approach and take its “Banking Is Good!” message straight to the voters. He suggested bankers focus on the importance of credit for investment and job creation, and argue that too many banking regulations coming out of Washington could harm the expansion of credit.
For what it’s worth, Boehner was president of a plastics and packaging firm during his first campaign for the U.S. Congress back in the early 1990s.
And just for you, my plastics industry friends, I will NOT link to the (infamous) clip from The Graduate. You can thank me later.
http://www.plasticsnews.com/article/20160513/BLOG11/160519905/john-boehners-got-just-one-word-for-you
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EPA Denies Need for Court-Ordered Perchlorate Water Standard Deadlines
May 13, 2016 | InsideEPA
By Maria Hegstad
EPA is denying that environmentalists are entitled to court-ordered deadlines by which the agency must propose and finalize a drinking water standard for the rocket fuel ingredient perchlorate, according to EPA's response to the suit, though the agency admits that it has missed its statutory deadline to propose such a rule.
“Defendants admit that EPA has not published a maximum contaminant level goal nor promulgated a national primary drinking water regulation for perchlorate,” the agency states in its May 10 reply to environmentalists' suit in the U.S. District Court for the Southern District of New York. But EPA says, “Defendants deny that Plaintiff is entitled to any of the relief sought in the Complaint.”
No hearing date or further action in the case, Natural Resources Defense Council (NRDC) v. EPA and Gina McCarthy, has been scheduled.
NRDC sued EPA in February for failing to craft a perchlorate maximum contaminant level (MCL) drinking water standard within the two-year Safe Drinking Water Act (SDWA) deadline, arguing that the Flint, MI, drinking water crisis shows the needs to curb toxics in water. The environmental group's suit asks the court to set deadlines by which EPA must propose and finalize a perchlorate drinking water rule.
An industry source calls EPA's reply “underwhelming,” but adds that it “may be a strategic legal” decision. EPA is considering some possible options to shorten its intended time line to try to appease NRDC, the source says, though there is “no way that EPA is going to get a proposed MCL [out] before the end of this administration -- what NRDC wants.”
The source says NRDC may be concerned that a new administration would reconsider whether EPA should regulate perchlorate nationally -- as the Obama administration did. George W. Bush's EPA determined that EPA should not regulate perchlorate nationally, a decision that the Obama EPA overturned in February 2011, setting the two-year clock running to propose a drinking water standard -- which EPA failed to do.
If EPA could propose an MCL before a new administration comes in, “that confines what the next administration, whether Hillary or Donald . . . what they can do,” the source says.
MCL Delays
EPA's effort to craft both the health-based maximum contaminant level goal (MCLG) and the enforceable MCL, which takes into account treatment feasibility and other factors, has faced a series of delays, in part due to challenges in determining how to develop the standard.
Despite an unusually advanced understanding of how the chemical can cause harm -- EPA often has far less information about industrial chemicals' toxicity -- the agency has struggled to set an MCLG, because scientists lack a clear understanding of the exposure levels and duration at which harm occurs.
The agency's Science Advisory Board recommended in 2013 that agency regulators use new pharmacokinetic-phramacodynamic models to determine harmful exposure levels, rather than using EPA's traditional algebraic approach to setting the goals and advisories. Per SAB's recommendation, EPA set out to expand the model to better explore at what levels and what duration of perchlorate causes harms, and exercise which has taken longer than SAB anticipated.
Perchlorate is used in rocket fuels and munitions, and also occurs naturally in some fertilizers. Drinking water sources across the country have been contaminated, often from the chemical's use at military and aerospace sites. Perchlorate can inhibit the body's uptake of iodine, a necessary nutrient that ensures proper regulation of the thyroid. Such regulation is extremely important to fetuses, which are dependent upon the mother's iodine and thyroid hormone levels during critical stages of development. Improper thyroid regulation for a sufficient amount of time can result in neurological impairments to the infant.
It appears that EPA is considering different options to speed its peer review of the extensions to the model and overall approach for crafting the MCLG, as a way to appease NRDC, sources say. These options revolve around making changes to the type and number of peer reviews to which the agency submits its analysis, the sources say.
EPA announced in a March 1 Federal Register notice that it was seeking experts to serve on a contractor-managed peer review panel for the model, and that it would release the model and underlying code “in the near future.”
Quicker Reviews
EPA's plan before the suit had been to undergo two separate, public peer review panel meetings, the industry source explains. The first peer review panel would consider the model EPA intends to use in the rulemaking process, and whether “the methodology is sound,” the source says. Then, the plan was for a second peer review panel to consider the “applicability of the model for determining the MCLG,” the source says.
“I've heard now they're talking about one option [that] would be to reduce the timing [by combining] two panels into one,” the source says. “Another option would be to totally do away with the public peer review [meeting] and do a letter peer review,” the least stringent type of peer review that EPA undertakes, usually for less consequential matters. The source adds that a letter review is the least desirable and least transparent approach EPA could take, should it choose to adjust its original peer review plan.
“A number of folks have expressed concerns that if you curtail the process,” it prevents EPA from meeting the “best available science” standard of the SDWA, the source adds. “I would think that EPA would be more concerned about getting the best available science than” meeting a deadline.
http://insideepa.com/daily-news/epa-denies-need-court-ordered-perchlorate-water-standard-deadlines
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Lawmaker Reintroduces Cleaning Products Labeling Bill
May 13, 2016 | E&E Greenwire
By Sam Pearson
A New York congressman has introduced a bill to require labeling of cleaning products.
The bill, H.R. 5205 -- or the "Cleaning Products Right to Know Act" -- would address long-standing concerns of chemical safety advocates, who worry that consumers lack sufficient information to avoid products containing harmful chemicals.
The bill would require companies to provide a full list of product ingredients online and on product labels.
Rep. Steve Israel (D-N.Y.) last introduced the plan more than two years ago (Greenwire, April 15, 2014). His first legislative attempt on the issue was made in 2011.
Each time the bill was introduced, it has struggled to attract GOP support and is opposed by the cleaning products industry.
Brian Sansoni, a spokesman for the American Cleaning Institute, said the group believes the legislation is unnecessary.
ACI members offer consumers "more information than ever before" through a voluntary initiative, the Consumer Product Ingredient Communication Initiative, which was launched in 2010, Sansoni said.
http://www.eenews.net/greenwire/2016/05/13/stories/1060037241
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(ACC Mentioned) Methane Regs: A Gift Disguised as a Problem
May 13, 2016 | Bloomberg Government
By Mark Drajem
If you paid attention to all the emissions from industry groups and environmentalists after the EPA issued its first-ever methane rules, you might think the agency did something novel. Sure, it’s never regulated methane before, but in the rule issued yesterday EPA included two main components, neither radical: It took a regulation issued in 2012 on fracked natural-gas wells and applied it to oil wells, and it told producers to check for leaks in their equipment twice a year (four times a year for compressors). If the latter sounds to you like something that should already be an industry standard, well, that would make two of us.
So, what’s going on? Why is the industry warning that this rule, in the words of the American Chemistry Council, “is troubling news for American households and businesses that rely on abundant and affordable energy”? It can’t be the price of the reg; EPA estimates it will cost just north of $500 million a year, which sounds like a lot until it’s compared to the $2.5 billion in Arctic leases the industry has walked away from or the $3.5 billion just one company, Halliburton, is on the hook to pay Baker Hughes after that merger failed.
Two things are behind the agita, it seems. One is just the reaction to the pile of new regulations — toxic emissions, ozone, venting and flaring, etc., etc., — that the Obama administration has imposed or will impose on the industry. Second, the industry is softening up the agency for the regulation that could really be a big burden: methane rules for existing sources. Along with the rules issued yesterday, the agency issued its request for data so that it can issue those standards. While many groups hinted at this, the chemical group was explicit: “By finalizing rules for new sources in the oil and gas sector, EPA paves the way for regulation of existing sources, which number in the hundreds of thousands. The vast new costs imposed on our nation’s oil and gas supply chain would be passed along to consumers.”
Is there another approach industry could take? John Hanger, the former Pennsylvania environmental regulator who often criticizes the industry’s P.R. approach but praises fracking, said producers should embrace these regulations, not run from them. “EPA methane rule makes gas cleaner than ever and an even better way to fight climate change,” he said in an e-mail. “It is time to substitute gas for coal.”
The good news for the industry is that handling methane is going to spill into the next administration, and both Hillary Clinton and Donald Trump will pursue broadly pro-fracking policies, Bloomberg Intelligence’s Rob Barnett writes. “While Clinton generally advocates for more government oversight of fracking, her policy proposals tend to favor natural gas over coal,” he wrote. “She is unlikely to support policies to halt fracking because the trade-off would likely mean more coal use.”
http://about.bgov.com/blog/methane-regs-a-gift-disguised-as-a-problem/
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Industry Attacks New Rules by Questioning Their Effectiveness
May 13, 2016 | E&E Energywire
By Mike Soraghan
As oil and gas industry groups lambasted the Obama administration's new methane rules yesterday, they didn't charge that the rules will hurt job growth. Instead, they argued that the rules won't even help the climate very much.
"EPA's new rules will have virtually no impact on global temperatures," said Lee Fuller, executive vice president of the Independent Petroleum Association of America (IPAA).
Todd Staples, president of the Texas Oil & Gas Association, said the rules have "virtually no climate impact." The industry, by contrast, "continues to make historic gains in improving our environment."
Beyond that, they said the rule could hinder the industry's efforts to reduce leaks by locking in certain emissions reduction technologies and suppressing development of others.
It's a view not shared by environmental groups, which lauded the climate and environmental benefits of the suite of rules targeting methane emissions from new and heavily modified oil and gas operations.
"Methane reductions from the oil and gas industry are the most cost-effective tons on the planet -- many of which pay for themselves in only a few years," said Conrad Schneider, advocacy director at the Clean Air Task Force.
A jobs argument might have been difficult for industry groups to make, since their members have been laying off workers by the hundreds amid a prolonged price slump. Still, congressional Republicans made the argument for them.
"I refuse to let the Obama EPA's political agenda get in the way of our Louisiana livelihoods," said Sen. David Vitter (R-La.). He said the rules are part of an effort to "shackle and shut down" oil and gas companies.
The American Petroleum Institute focused on the economic benefit delivered to consumers from low oil and gas prices, saying burdensome regulations could jeopardize that. The group cited figures showing that low gasoline prices saved drivers about $550 each last year.
IPAA's assertion that the rules won't help the climate are based on an analysis by its public relations arm, Energy in Depth, using data from the Cato Institute.
"Public data show that the amount of global warming avoided by imposing costly new methane regulations on oil and natural gas activities would be almost zero," wrote Energy in Depth's Steve Everley.
In North Dakota, Lynn Helms, the state's top oil regulator, had a similar take.
"Even the most conservative climate change models show this rule won't move the needle in terms of its impact," Helms said on a conference call with reporters. "We're going to be concerned if there's a lot of climate-change benefit claimed in the cost-benefit analysis."
EPA says the rules will reduce methane emissions by 11 million metric tons of carbon dioxide equivalent in 2025, according to EPA. Administration officials say the rules keep the administration on track with its goal to cut methane emissions from the oil and gas sector by 40 to 45 percent from 2012 levels by 2025 (Greenwire, May 12).
Petroleum industry groups have long argued that the methane rules aren't needed because producers have been steadily reducing methane emissions at their facilities.
Beyond that, gas producers note, they have a financial incentive to reduce methane emissions. It's not just pollution prevention for them. It's plugging leaks and getting more of their product to market.
But last month, EPA released a new greenhouse gas inventory finding that the oil and gas industry was the largest source of methane in 2014, accounting for a third of total emissions of the potent greenhouse gas.
Environmentalists don't dispute that industry has reduced methane emissions. But they say that shows how much more progress can be made, relatively easily, in reducing greenhouse gases.
Reporter Mike Lee contributed.
http://www.eenews.net/energywire/2016/05/13/stories/1060037179
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Will New Chemical Law Hide The Fracking Industry’s Toxic Secrets?
May 13, 2016 | Environmental Working Group
By Melanie Benesh
The makeup of hydraulic fracturing fluid – the slurry of chemicals, sand and water injected deep underground to free petroleum deposits trapped by bedrock – is a closely guarded secret of the oil and gas industry.
Fracking has contaminated drinking water and is linked to health problems in people living near drilling sites, and also to triggeringearthquakes. But federal law doesn't require drillers to disclose what's in their fracking fluid. Although some states have disclosure laws – California's is the most comprehensive – most still allow some form of "trade secret" protection and don’t require the generation, submission or publication of health and safety data.
What exactly is in that toxic stew of fracking chemicals? What chemicals are used at which drill sites? What potential health risks do nearby communities face? The answers are hard to come by because of deficiencies in our federal toxics law, the Toxic Substances Control Act of 1976.
First, the law does not require companies to conduct any health testing on chemicals before they are manufactured or used. Second, it permits generous confidentiality protections—allowing industry to claim just about anything is a trade secret including chemical name, company name, production volume, mixtures, likely exposures and sometimes even health and safety data. Even basic information such as how the chemical is used can be claimed as confidential.
Last month the Partnership for Policy Integrity released an exposé that captures the scope of the problem. Through a Freedom of Information Act request, the organization obtained Environmental Protection Agency data on 105 different chemicals reportedly used in fracking and drilling. The report found:
· Health studies were only available for just two of the chemicals.
· EPA expressed concerns about 88 chemicals related to health effects such as skin and eye irritation, respiratory effects, neurotoxicity, kidney toxicity and development toxicity. However, EPA requested health studies for only five of the chemicals.
· Industry claimed trade secret protection on things like chemical name, product names, chemical uses, production volumes and likely exposures for 75 of the chemicals.
· Almost all of the chemicals were approved for manufacturing, despite EPA’s health concerns.
This confidentiality comes at a steep cost. It keeps communities in the dark and undermines efforts by advocates seeking to better understand the toll fracking might take on both the environment and public health.
Congress has the opportunity to finally remove the shroud of secrecy surrounding fracking chemicals. Key members are currently working to reconcile two bills passed by the House and the Senate last year that would update the law.
A good final bill must allow EPA to get more health and safety data on fracking chemicals before they can be manufactured or used, would scale back trade secret protections on fracking chemicals, particularly as they relate to health and safety studies, and would fully preserve efforts by states to require disclosure.
http://www.ewg.org/enviroblog/2016/05/will-new-chemical-law-hide-fracking-industry-s-toxic-secrets
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How We Get Energy is Changing Fast — And it’s Sparking a Huge Fight over Forecasting the Future
May 13, 2016 | Washington Post
By Chelsea Harvey
For the first time since September 2014, the U.S. Energy Information Administration, the Department of Energy’s key data and forecasting branch, has released a set of long-range international energy projections aimed at helping inform public policy. But at a time of major transition in the energy sphere, some critics are suggesting that the agency has failed to include key information in its models — and as a result, critics are questioning both the accuracy and the usefulness of the report.
The projections span the time period from 2012 to 2040. Under a “business as usual” scenario, EIA forecasts that even 24 years from now, the world will still be burning a great deal of coal and that carbon dioxide emissions will have grown by about 34 percent. This is, naturally, a nightmare scenario for those concerned about climate change — who note the currently strong progress away from coal and toward renewables, and say they simply don’t believe EIA’s projections.
The preface to the EIA report is careful to note that all of these scenarios “generally assume that current laws and regulations are maintained throughout the projections.” And therein lies the problem, according to some environmentalists. They’re arguing that proposed or pledged policy changes — namely, the Obama administration’s Clean Power Plan and certain international commitments included in the newly signed Paris Agreement — were not included, and that the report could provide a misleading view of the future as a result. They’re also saying that projecting out 20 or more years while assuming no new policies doesn’t make any sense at a time of clear global momentum to address climate change.
“Today the EIA has failed to provide real insight into the future of energy, by blindly assuming the failure of world governments to achieve the commitment made in Paris last December to keep global warming well below 2 degrees Celsius,” said David Turnbull, campaigns director of Oil Change International, in a statement.
What EIA did
To more closely examine this controversy, let’s first look at the agency’s projections themselves. Under the agency’s “reference case” — a business-as-usual scenario, in which current trends are assumed to continue to the year 2040 — the report has projected an increase in total world energy consumption of about 48 percent, with much of the growth coming from nations outside the Organization for Economic Cooperation and Development (OECD). By 2040, the projections suggest that nearly two-thirds of all primary energy consumption will occur in non-OECD economies, particularly in Asia.
It’s not surprising that, with growing populations and the extension of electricity to hundreds of millions of people, energy use will grow in the future. But the report suggests that energy-associated carbon dioxide emissions will also grow by about 34 percent — meaning that that growth will be satisfied by a significant amount of fossil fuels, rather than by renewables.
Granted, the projections indicate that renewables will be the fastest-growing energy source through 2040, with renewable consumption increasing by about 2.6 percent each year throughout the study period. But by 2040 the projections indicate that fossil fuels will still account for about 78 percent of global energy use, with natural gas as the fastest-growing fossil fuel in this scenario and coal plateauing around the year 2030.
What the critics say
he problem here, according to some critics, is that the report fails to take into account certain international policy commitments — proposals that would further reduce the growth of fossil fuels and that would result in a more optimistic future.
This was an issue acknowledged by Adam Sieminski, administrator of the EIA, during his presentation of the new report on Wednesday at the Center for Strategic and International Studies. “We’ve been asked, well, how much of Paris is included in this [report] and how is that going to look going forward,” Sieminski said at the event. “That’s a complicated question.”
Some countries’ pledges under the Paris agreement reflect policies that already exist in these nations, Sieminski noted. Those would have been rolled into the projections. But others have not yet been implemented or enforced, he said, and those will have to be addressed in later projections. Additionally, he noted, the outlook addresses much of the world by region rather than by country, meaning that each nation’s specific policies or commitments cannot be addressed.
Jonathan Cogan, a spokesperson for the EIA, reiterated those points in an email to The Washington Post, affirming that the outlook generally reflects existing policies and does not incorporate regulations that are not already in place.
“Within the context of international modeling, incorporating existing policies and regulations and interpreting announced country targets can be complex,” he said. According to Cogan, analysts at the EIA also factor in assessments of the likelihood of certain nations to meet the goals described in their own policies based on their previous track records.
An even deeper issue, though, is that the Paris agreement isn’t expected to be the end of things — it is already known that the world will have to adopt more ambitious climate goals, and fast, to hold warming below 2 degrees Celsius. So the EIA not only doesn’t take into account current levels of ambition, but also possible future ones.
“The EIA’s Reference Case is a recipe for disaster, and indicates that we need a new set of ingredients to create the clean energy economy necessary to solve the climate crisis,” Turnbull of Oil Change International said in his statement. “The time is now for the Obama Administration to implement a real climate test and require the EIA to chart the course of climate action rather than plot the status quo of climate failure.”
But the EIA has countered that its report shouldn’t be taken as a prediction at all, but rather a set of scenarios that policymakers can use as a baseline to see how changing certain assumptions might affect the future.
“It’s hugely valuable to the public to try to understand what doing things or what changing assumptions means to the numbers,” Sieminski said. “You might find that you change an assumption and it doesn’t change very much, and that tells you something. Or you change an assumption, it makes a big difference, and that gives you another story.”
However, the risk of misunderstanding on this front has worrisome policy implications, according to some experts.
“There is a large risk of confusion, and some of that is due to deliberate misrepresentation,” said David Hawkins, director of the climate program at the Natural Resources Defense Council. “In the past, fossil fuel producers have pointed to these EIA analyses as though they were a prediction of the future … and of course that’s not right.” Such misrepresentations might indicate that a large fossil-fuel share in energy consumption is inevitable in the future, when nations around the world are working to ensure that this is not the case.
He pointed to the American Petroleum Institute’s 2016 State of American Energy Address in January, which included this: “According the EIA, fossil fuels will account for 80 percent of U.S. energy consumption through 2040 and the agency estimates that even under the best-case scenario for alternative fuel use, fossil fuels will still account for 78 percent of our energy needs. This is just another data point in support of a long-standing tenet of energy policy held by most economists, academics and government analysts: Fossil fuels will remain the foundation upon which our modern society rests for decades to come.”
The problem with energy forecasting
This isn’t the first time the EIA’s outlooks have come under fire. Some experts have suggested that the agency’s projections — particularly when it comes to the growth of renewables — are consistently inaccurate. It’s a problem with energy forecasting in general that has been pointed out frequently during the past couple of years (here, here and here are some examples), and most recently again by David Roberts at Vox.
But the bigger issue, Roberts writes, is not so much that energy modeling is tricky (and the results often prove wrong) — it’s that reporters and policymakers alike haven’t learned how to treat the resulting reports with the proper caution.
“It is not a prediction,” he writes of the EIA’s reference case. “It is not even meant to be taken as any more probable than any other scenario. It is just the center in a range of scenarios. But journalists and pundits can’t help treating it as a prediction. What’s worse, utility executives and energy investors treat it that way. It distorts their decisions, causing them to underestimate wind and solar growth.”
The most important issue, then, is to be sure that these issues are transparently presented and then correctly interpreted by policymakers — as hypothetical scenarios meant to be used as supplemental tools, rather than true forecasts.
“It does raise the question of whether these kinds of reports that assume no policy change are increasingly irrelevant in a world where we know there is going to be policy change,” Hawkins said. “The real issue is the speed of that change and whether we’ll be smart enough to act faster in the future than we have in the past.”
https://www.washingtonpost.com/news/energy-environment/wp/2016/05/13/how-we-get-energy-is-changing-rapidly-and-its-sparking-a-huge-fight-over-forecasting-the-future/
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America’s One Million b/d of Crude Oil for President
May 13, 2016 | Platts (In Real Clear Energy)
By Brian Scheid
Let’s call it the 1 million b/d race, even if such speculation may ultimately prove wildly wrong.
In short: no one can accurately forecast the impact of the outcome of this November’s US presidential race. This is partly because neither Hillary Clinton, the Democrat’s likely candidate for the White House, nor Donald Trump, the presumptive Republican nominee, have laid out the specifics of their energy policy hopes. Nor is it clear how many of these policies may bear fruit.
More importantly, the race for the White House and its subsequent effect on global crude oil market fundamentals will not happen in a vacuum. A coordinated supply cut by OPEC, a collapse of Venezuela’s economy, even a pronounced return of Libyan oil to the world market will likely impact fundamentals deeper than whatever happens in November’s election. In addition, if oil prices sink below $30/b again or return to levels above $70/b, the new White House tenant’s influence on crude supply and demand may ultimately be inconsequential.
There are so many variables that the US Energy Information Administration, which forecasts everything from where Brent spot prices will be trading next year to how much a single Eagle Ford rig may produce next month, does not forecast the impact of election outcomes on oil, or any other energy markets.
Several analysts cautioned that trying to predict the market impact of the likely race between Clinton and Trump was a fool’s errand at best and pretty much impossible. But they did offer a best case/worst case view that a Clinton win would broadly decline production, by as much as 500,000 b/d, and a Trump win could boost production by as much as 500,000 b/d. So, the election could have a 1 million b/d swing, even if such a prediction is informed speculation, or, as some might more accurately put it: a guess.
That being said, this presidential race is shaping up to have a major impact on the direction of US and, possibly, global oil supply and may have the most significant impact on oil policy of an election in American history. This is partly due to the increasing move away from middle ground in American politics which has clearly been accelerated amid the presidential primary races. This has caused candidates who may have a more nuanced view on energy policy, such as conditions on fracking on public lands, to a more extreme view, such as an all-out fracking ban.
Factor in the likelihood that the partisan balance of Congress and the Supreme Court will also be decided by voters in November, the possible shift in US oil policy may be unprecedented.
With all these moving parts and potential variables, here are some of the key possibilities for crude markets if Clinton or Trump win in November.If Trump wins
While Trump has offered few specifics on his energy policy goals, he has indicated that several extreme possibilities, such as a ban on Saudi Arabian crude imports, are being considered.
Possibly the bigger crude policy game changer is the possibility that Trump could void the historic nuclear deal with Iran, a result which could put a massive sanctions regime back in place and might limit access by US allies to the US financial system.
President Obama has made efforts to combat climate change a legacy goal. This includes new rules to cut methane emissions from oil and gas wells, making it harder to drill on federal lands and, arguably, more expensive to drill anywhere else. He’s also limited the offshore areas where production can take place and has come up with strict new technical standards for drilling both on and offshore.
As president, Trump would likely try to gut all that. The costs, the burdens of federal regulations on oil and gas drilling could go away. In essence, it would be easier and less expensive for a US producer to produce.
Trump could also look to weaken fuel economy standards set by the Obama administration, creating a major demand boost, and might look to open more federal waters to oil and gas production.
The Obama administration seems to want to concentrate offshore production to only one area: the Gulf of Mexico. They recently took a planned oil and gas auction for parcels in the Atlantic Ocean out of their upcoming five year lease sale plan. And after Shell’s missteps in the Arctic, they seem to be taking great pains to keep any drilling from taking place offshore Alaska. In October, the administration cancelled two planned sales of Arctic oil and gas leases: a sale planned for this year in the Chukchi Sea and one planned for next year for parcels in the Beaufort Sea.
Trump could put everything on the table: Atlantic lease sales, Arctic lease sales, more Gulf drilling, maybe even the Pacific. There are some timing issues with that, since they couldn’t undo Obama’s leasing plan through 2022 without considerable delay and effort. But all available US waters could conceivably be opened up to oil and gas drilling within a decade.
Just because those waters are available, however, doesn’t mean producers would necessarily want to develop them. Like the impact of the election, there are a lot of variables at play.
In addition, if Trump moved to open more public land to drilling, as many expect he would do, it’s unclear if such a move would be met with much enthusiasm from producers.
If Clinton wins
If elected, Clinton has pledged to, within a decade, “reduce American oil consumption by a third through cleaner fuels and more efficient cars, boilers, ships and trucks,” according to her campaign website.
While the potential path isn’t entirely clear, the oil and gas industry is nervous that Clinton could move toward banning fracking on public lands, cutting off the possibility of future production. Clinton has outlined conditions for fracking on public lands, including needed approvals from states and municipalities and chemical disclosures, but industry lobbyists stress these conditions could become a de facto ban.
The main view on a Clinton, or Senator Bernie Sanders, presidency, is that it would essentially continue and push President Obama’s efforts to combat climate change further. So a plan to limit methane emissions from new oil wells gets expanded to emissions limits on all wells.
Maybe a $10-per-barrel tax on oil that Obama pitched earlier this year, but went nowhere, gets resurrected in a Clinton White House. In addition, elimination of tax incentives oil companies get for drilling in the US would likely get a hard look.
Perhaps a Clinton White House would get more ambitious with federal gas mileage standards, going beyond 54.5 miles per gallon goal in 2025, further decreasing gasoline demand.
A big difference will likely be offshore drilling. Instead of keeping the Atlantic Ocean free of oil and gas drilling for the next five years as the Obama administration has proposed, it would likely be kept out of there for 10 or 15 years by a Clinton administration.
More parcels offshore Alaska would likely be taken off the table; maybe US producers never return to offshore Alaska until a Republican wins the presidency. Maybe future lease sales in the Gulf of Mexico are cancelled. This is major from a supply standpoint.
Despite the impact that prices have had on the US shale revolution, Gulf of Mexico production is expected to hit record highs in 2017, averaging 1.63 million b/d in 2016 and 1.79 million b/d in 2017.
If you’re enacting policy that potentially cuts US Gulf production then you’re talking about cutting into one of the few sources of US supply that increases even in a bust cycle.
Even without specifics, this election matters deeply to fundamentals and will be a key moment for US producers and the path of supply. Who wins in November may dictate if the US shale renaissance peaked 9.75 million b/d in April 2015 or if this year has been a dip ahead of a new high.
Of course, if oil returns to $100/b, even $70/b, it may not matter much to producers who is in the White House.
Brian Scheid spoke this week at the Platts Global Crude Oil Summit in London and gave some insight into one of the biggest variables around US oil: the next president.
http://blogs.platts.com/2016/05/12/us-one-million-bd-crude-oil-president/
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Bakken’s 1 Million b/d Production Unlikely to Hold
May 13, 2016 | Natural Gas Intelligence
By Richard Nemec
With the number of uncompleted wells continuing to rise in the Bakken Shale, it is doubtful the 1 million b/d production level can be maintained into next year, North Dakota chief oil/natural gas official Lynn Helms said Thursday in releasing the state's latest production statistics.
Noting that he expected a bigger drop than 10,000 b/d in the latest statistics for March, Helms, director of the state’s Department of Mineral Resources, said he expects future months to show reductions in the 30,000-35,000 b/d range.
Given the continuing low commodity prices, "I keep expecting the kinds of [oil] production declines we saw in December and January," Helms said. "Perhaps the small increases we have seen in oil prices and the problems with Canadian oilsands production has strengthened people’s resolve a little bit, because we're still seeing ever-higher inactive and uncompleted well counts.
"We should start seeing drops of 30,000 b/d to 35,000 b/d. I continue to wait for that shoe to drop. You can't have too many months at 27 rigs and less than 60 completions a month and maintain production, so I still think we are looking at 1 million b/d or slightly below that by the end of the year."
Overall oil production was 34.38 million bbl (1.10 million b/d) in March, compared to 32.4 million bbls (1.11 million b/d) in February. The Bakken's all-time monthly high was 1.22 million b/d in December 2014.
Conversely in March, natural gas production was up about 1% at 53 Bcf (1.7 Bcf/d), compared to 48.9 Bcf (1.68 Bcf/d) in February. Helms attributes the increasing gas production as oil production drops to the fact that low prices have forced producers to focus only on the Bakken core area or sweet spot for all 27 rigs still operating.
"That area has the highest gas-to-oil ratio," Helms said. "The wells there also are the most productive [3,000 b/d], and the gas-to-oil ratios are two to four times what they are in other areas.
"Gas production continues to increase, and, fortunately, the operators have invested in a lot of gathering and processing infrastructure in the core, so that is why you see the enormous amounts of gas now being captured [90% for most recent month]. I think you have to credit 100% of the increased capture to increased investment in infrastructure and technology," he said.
Another offshoot of the continuing low commodity prices is that the cost of drilling wells has been reduced dramatically, Helms said, adding that this in turn has increased the number of counties now in which it is economic to drill new wells. In some cases the new economic favorability is only found in certain parts of the county.
"Drilling and operating costs combined have dropped about 65%," Helms said. "So this makes the economics a little bit better, and it speaks to what the industry has been saying -- above $60/bbl WTI, the Bakken is the best place to spend money."
Bakken natural gas prices were $1.57/Mcf in March for deliveries into the Northern Border Pipeline at Watford, ND, an 11-cent/Mcf increase.
Rigs dropped from 40 in February to 29 in April and 27 on Thursday, the lowest North Dakota rig count since July 2005. There were 13,024 producing wells in March, up by seven from February and 920 wells were awaiting completion at the end of the month in which 1,523 wells were inactive, an increase of 84 since February.
http://www.naturalgasintel.com/articles/106414-bakkens-1-million-bd-production-unlikely-to-hold
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Trump Taps Climate Change Skeptic, Fracking Advocate as Key Energy Advisor
May 13, 2016 | Reuters (In The New York Times)
By Valerie Volcovicii
Republican presidential contender Donald Trump has asked one of America's most ardent drilling advocates and climate change skeptics to help him draft his energy policy.
U.S. Republican Congressman Kevin Cramer of North Dakota - a major oil drilling state - is writing a white paper on energy policy for the New York billionaire, Cramer and sources familiar with the matter told Reuters.
Cramer was also among a group of Trump advisers who recently met with lawmakers from western energy states, who hope Trump will open more federal land for drilling, a lawmaker who took part in the meeting said.
Cramer said in an interview his paper would emphasize the dangers of foreign ownership of U.S. energy assets, burdensome taxes, and over-regulation. Trump will have an opportunity to float some of the ideas at an energy summit in Bismarck, North Dakota on May 26, Cramer said.
A spokeswoman for Trump's campaign did not comment.
While the ultimate size and makeup of Trump's energy advisory team is unclear, Cramer's inclusion suggests the presumptive Republican presidential nominee's oil policy could emphasize more drilling, less regulation and taxes, and curbs on efforts to combat climate change.
Cramer has said he believes the Earth is cooling, not warming, and he has opposed efforts by the Obama administration to regulate greenhouse gas emissions.
Trump has been light on details of his energy policy so far, though he recently told supporters in West Virginia that the coal industry would thrive if he were in the White House. He has also claimed global warming is a concept "created by and for the Chinese" to hurt U.S. business.
Trump only recently started building up teams of advisors on the economy, foreign policy and other issues to flesh out his platform for the Nov. 8 presidential election.
Cramer, North Dakota's only congressman and an early Congressional Trump supporter, encountered Trump when they were guests on a radio show last month and Trump spoke about relaxing regulation and expanding drilling. Trump's political team later asked Cramer to write the energy policy paper, the lawmaker said.
"The real opportunity for prosperity in this country has been to produce more because you have access to more markets," Cramer said, referring to the recent lifting of a decades-old ban on oil exports. "The last thing we need is more rules."
On foreign ownership of U.S. oil assets, Cramer said: "One-third of refining capacity is owned by OPEC countries. How does this fit into his (Trump's) America first policy?"
OPEC members Saudi Arabia and Venezuela both have large stakes in U.S. refining capacity.
Cramer said he expected energy policy to be a vulnerability for Hillary Clinton, the frontrunner for the Democratic presidential nomination, in an election year where energy companies are going broke.
Clinton has advocated shifting the country to 50 percent clean energy by 2030, promised heavy regulation of fracking, and said her prospective administration would put coal companies "out of business."
(Editing by Richard Valdmanis and Ross Colvin)
http://www.nytimes.com/reuters/2016/05/13/us/politics/13reuters-usa-election-trump-energy.html
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(ACC Mentioned) Groups Lobby on Safety Rule as Comment Deadline Nears
May 13, 2016 | E&E Greenwire
By Sam Pearson
Interest groups and lawmakers are ramping up pressure on U.S. EPA with the close of a public comment period on a key chemical safety regulation today.
EPA's proposed rule to update the risk management program, which was authorized under the Clean Air Act Amendments of 1990, stems from an executive order President Obama issued in 2013 in the wake of the West Fertilizer Co. explosion in West, Texas.
The agency is trying to finalize the rule before the end of the year.
Industry groups and friendly lawmakers have attacked the proposal as burdensome and duplicative, while chemical safety groups have lamented it does not go further to require safer operations at chemical facilities. Industry is also pushing, without success so far, to extend public comment periods and ask EPA to defer to a slower-moving Occupational Safety and Health Administration rulemaking on a similar subject.
Outside EPA headquarters this morning, activists with the Coalition to Prevent Chemical Disasters wheeled in two boxes with thousands of public comments on the rulemaking.
They tried to take a picture outside an entrance to the William Jefferson Clinton South building on Constitution Avenue Northwest but were first stopped by a guard after they unfurled a banner reading: "Prevent Chemical Disasters Now!"
"If he takes a picture, I'll detain him and I'll detain everyone here and call Federal Protective Services," the security guard said, though a supervisor later relented and allowed the photo.
"This is the kind of protection we need for our communities," countered Michele Roberts, co-coordinator of the Environmental Justice Health Alliance for Chemical Policy Reform.
The coalition also filed comments with EPA noting that the Clean Air Act required regulations that "provide, to the greatest extent practicable, for the prevention and detection of accidental releases."
That means, Greenpeace Legislative Director Rick Hind said, EPA should take more aggressive action than its proposal.
"It's the kind of thing that will position the coalition for litigation if the EPA is not taking the comment seriously," Hind said
.Lawmakers try to put the brakes on EPA
Lawmakers on Capitol Hill are also weighing in against the plan.
In a letter to EPA sent Wednesday, Senate Environment and Public Works Chairman Jim Inhofe (R-Okla.) warned the agency was moving too fast with proposals that are "unproven and are not sufficiently justified by EPA."
His letter was also signed by Republican Sens. David Vitter of Louisiana, John Barrasso of Wyoming, Shelley Moore Capito of West Virginia, Deb Fischer of Nebraska, Mike Rounds of South Dakota, Dan Sullivan of Alaska and Bill Cassidy of Louisiana and Democratic Sen. Joe Manchin of West Virginia.
Inhofe said EPA had identified concerns with existing provisions such as the use of auditors when OSHA had found them sufficient in its own program. Meanwhile, EPA is adopting a more relaxed attitude toward the disclosure of site information than the Department of Homeland Security uses, Inhofe noted.
In public comments filed last month, William Erny, a senior director for regulatory and technical affairs at the American Chemistry Council, argued the White House Office of Management and Budget should reject EPA's information collection request for the proposal on the grounds that it violates the Paperwork Reduction Act.
EPA has not shown the proposal is necessary or deserves to be considered separate from OSHA's rulemaking, Erny wrote. In addition, the plan claims as much as $205.5 million in annual benefits that are incorrectly assigned to the proposed rule, he said.
The U.S. Chemical Safety Board, which makes nonbinding recommendations for chemical incidents it investigates, also weighed in. The board said in a public comment EPA's plan "includes new and important provisions to help prevent chemical incidents and to enhance emergency planning and response" but must "further emphasize the prevention of chemical incidents."
Former EPA Administrator Christine Todd Whitman also submitted a public comment urging EPA to "seize this opportunity while it is still at hand" to require plants to implement inherently safer technology.
Mathy Stanislaus, EPA's assistant administrator for land and emergency management, has defended the plan as the product of compromise and more than two years of public outreach (Greenwire, March 30).
Retail exemption questioned again
Lawmakers also took new action against a controversial OSHA action they previously blocked in an annual appropriations bill (Greenwire, Dec. 17, 2015). This time, some Democrats were on board with the move.
House lawmakers introduced a bill yesterday, H.R. 5213, or the "Fertilizer Access and Responsible Management Act." The bill would bar OSHA from reinterpreting its existing process for safety management regulations in a way that limits an exemption to fertilizer retailers unless it conducts a formal notice and comment period.
Safety advocates say the change could delay the regulation by years.
OSHA took the action in a bid to improve safety at fertilizer storage facilities, but lawmakers have warned it could make it hard for companies to sell needed anhydrous ammonia fertilizer to farmers.
"Anhydrous ammonia plays a crucial role in Nebraska agriculture as the most common source of nitrogen fertilizer for farmers," Rep. Adrian Smith (R-Neb.), who introduced the bill, said in a statement. "The compliance costs of this rule would likely force small retailers to stop selling anhydrous ammonia, restricting producers' access to this important input."
Joining Smith in backing the bill were Reps. Stephen Fincher (R-Tenn.), Collin Peterson (D-Minn.) and Jim Costa (D-Calif.).
http://www.eenews.net/greenwire/2016/05/13/stories/1060037242
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Investigation Reveals Hazardous Chemicals at Every Turn
May 13, 2016 | Houston Chronicle (In E&E Greenwire)
By Mark Collette and Matt Dempsey
Across Houston -- the capital of the petrochemical industry -- hundreds of dangerous chemicals are stored at facilities unbeknownst to most neighbors.
For the most part, these storehouses are not policed by government at any level, according to a yearlong Houston Chronicle investigation.
Just outside Pearland, there's a theater that's within 200 feet of a warehouse that stores a pesticide so toxic, it leaked into a family's house in Utah and killed two children.
Half a mile from Cy-Fair High School, a metal company stockpiles 27 chemicals, including one that was responsible for blowing up a golf club in Los Angeles, leveling a whole city block.
And in Crosby, there's a sports complex that sits near a plant that stores explosive organic peroxides. These were the chemicals used in the recent Paris and Brussels terrorist attacks.
The Occupational Safety and Health Administration rarely inspects these facilities. And U.S. EPA disregards many classes of dangerous chemicals when it decides which sites to inspect.
In addition, Texas, along with other states, has made it difficult to access information about these chemical stockpiles (Collette/Dempsey, Houston Chronicle)
http://www.eenews.net/greenwire/2016/05/13/stories/1060037213
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Shell, Coast Guard Work to Contain Gulf Spill off La.
May 13, 2016 | E&E Energywire
By Nathanial Gronewold
Another offshore oil spill has occurred in the Gulf of Mexico.
Late yesterday afternoon, the Coast Guard said it was responding to a reported release of crude oil from equipment operated by Royal Dutch Shell PLC. Oil reportedly leaked from a subsea tieback line. A massive oil sheen alerted workers to the accident.
Shell confirmed the incident and said that it occurred at a tieback system linked to its Brutus platform southwest of Louisiana. The spill happened about 100 miles south of Port Fourchon, La.
More than 2,000 barrels of oil was released into the Gulf.
The spill's distance from the shoreline and the volume of oil leaked leave hope that responders can clean it up before any oil reaches the coastline. The Bureau of Safety and Environmental Enforcement (BSEE) is also at the scene and is responding with Coast Guard and Shell officials.
Production from the fields at the Brutus project has been shut down, and the leak was isolated and contained, Shell official Kimberly Windon said in an email.
"The likely cause of the sheen is a release of oil from subsea infrastructure and, in response, Shell has isolated the leak and shut-in production at both fields," Windon said. "At this time, Shell estimates that 2,100 barrels of oil were released. There are no drilling activities at Brutus, and this is not a well control incident."
No injuries or accidents were reported, and no evacuations were underway or planned at this time.
The Coast Guard put the size of the spill at about 88,200 gallons. Damage assessment was occurring late yesterday, and the Coast Guard said it will launch an investigation into the spill.
Meanwhile, cleanup is underway. BSEE put the size of the visible sheen at 2 miles wide and 13 miles long.
"Marine Spill Response Corporation and Clean Gulf Associates have been contracted by Shell to begin cleanup and containment operations," Coast Guard's regional press office said.
Shell is actively mobilizing its response.
"The company has made all appropriate regulatory notifications and mobilized response vessels, including aircraft, in the event the discharge is recoverable," Windon said. "No release is acceptable, and safety remains our priority as we respond to this incident."
http://www.eenews.net/energywire/2016/05/13/stories/1060037203
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Obama and Nordic leaders: Economic Activity in the Arctic Must Pass Climate Test
May 13, 2016 | Washington Post
By Juliet Eilperin
President Obama and the leaders of five Nordic nations will agree Friday to apply strict environmental standards and climate goals to commercial activities in the Arctic, a pledge that could have major implications for everything from future energy exploration to fishing and shipping in the region.
The communique the group will issue comes a month and a half after the United States and Canada agreed to impose a similar litmus test on future Arctic activities, meaning that Russia now stands as the sole nation that has not agreed to integrate these standards as a matter of routine policy.
Speaking to reporters Thursday, White House press secretary Josh Earnest said the fact that the leaders of Denmark, Finland, Iceland, Sweden and Norway were coming to the White House would give them and Obama “the opportunity to talk about climate change.”
“These countries in some cases are dealing with more persistent and severe impacts than we are here in the lower 48,” Earnest said. “And demonstrating our ongoing commitment to implementing the international agreement to fight carbon pollution … will also be a subject of some discussion.”
Carter Roberts, president and chief executive of the World Wildlife Fund, said in an email that the communique “includes all the key pieces from conserving the Arctic, to aviation, to energy, to sustainable development, to the role of nature in fighting climate change.”
“The Nordic countries share with us an exquisite place — one that suffers from, and contributes to, climate change unlike any other,” Roberts said. “These bilateral and regional agreements will be fundamental to making forward progress.”
The Arctic warms between two and three times faster than regions in more southern latitudes, and it is experiencing record sea ice and glacier loss that could alter sea levels and weather patterns across the globe for centuries to come.
While it remains unclear what sort of restrictions these new standards could prompt —the United States still allows oil and gas drilling in the Arctic, as do Russia and Norway, though many firms are pulling out due to recent market and regulatory pressures — the announcement highlights Obama’s eagerness to advance his climate goals during his final months in office. Every bilateral meeting he has had since a major global climate accord was reached in Paris in December has featured a new climate commitment.
“It is quite significant that you now have seven out of eight Arctic nations, representing more than half the Arctic’s territorial waters, basically conditioning future economic activity on world-class environmental standards and international climate goals,” said a senior administration official, who asked for anonymity because the announcement was not yet public. “That’s reflective of both the possibility of Paris, and the president’s leadership on climate.”
While Russia has not made a similar pledge, the official said “that absolutely will be the next part of the conversation” about how to conduct Arctic policy.
Rafe Pomerance, who heads a coalition of nongovernmental organizations researching Arctic climate science and policy known as Arctic 21, said the announcement represents a new recognition of the urgency to shore up the Arctic “I don’t think this was there, a year or two ago,” he said, adding policymakers are now asking, “What is the Arctic we have to have, how can we maintain its functions?”
The Nordic Summit agreement will include other climate-related steps, including a memorandum of understanding between the United States and Denmark to harmonize their regulations for offshore wind energy projects in order to make it easier for manufacturers to produce for both markets, and a pledge by Norway and the United States to do more to reduce deforestation.
Under the global climate accord struck late last year, more than 190 nations pledged to limit warming to well below 2 degrees Celsius or 3.6 degrees Fahrenheit compared to pre-industrial levels. As part of Friday’s announcement, Iceland will say that it will sign the accord this year, and other nations will make commitments aimed at reaching the global goal.
So far, the accord has been signed by 35 countries, whose greenhouse gas emissions account for 49 percent of global output; to come into force, a total of 55 countries accounting for at least 55 percent of the world’s carbon emissions must sign. Russia generates roughly 7 percent of global emissions; Japan and India each account for about 4 percent.
Roberts said the world’s leaders realize “we need to get there soon.”
https://www.washingtonpost.com/news/energy-environment/wp/2016/05/13/obama-and-nordic-leaders-economic-activity-in-the-arctic-must-pass-climate-test/
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How America's Regions Learned from Europe's Mistakes
May 13, 2016 | E&E Climatewire
By John Fialka and Debra Kahn
n 2010, after the Democratic-led U.S. Senate failed to pass a federal emissions trading system, the measure was widely diagnosed as politically dead. New England states picked up some of the pieces and soldiered on, but in the West, the outlook, compounded by the recession and newly elected Republican governors who insisted the measure was a hidden tax, looked dismal.
California, which fancied itself the centerpiece of what was to become the Western Climate Initiative (WCI), seemed to be in the most trouble. It had done much of the planning for this regional coalition, learning from the European Union's mistakes and taking more time to design a system of measurements and rules to put an effective cap on its biggest sources of emissions. The plan of the state's Air Resources Board started with electricity generators and large-scale manufacturing in 2013 and then spread by 2015 to cover 85 percent of the state's greenhouse gas emitters.
On paper, California would become the world's first economywide cap-and-trade system, a feat that impressed some of the pioneers of U.S. emissions trading.
One of them, Robert Stavins, a Harvard University economist, noted that it had rules that protected against scary market price gyrations and issuing too many allowances to emit greenhouse gases, which had crippled the launch of the European Union's system.
"Those systems that are newer do tend to be better, and that's good. If they were worse, that would be very bad news," said Stavins.
At the start, though, the stage for what was to become a new period of political and economic innovations looked like a war zone after the battle.
Political forces in the West were aligned against it. First, the six states that had planned to link with California's system in WCI -- Oregon, Washington, Arizona, Utah, New Mexico and Montana -- had all dropped out or fallen off in their planning.
On top of that came a statement by California's bipartisan Legislative Analyst's Office that predicted "near term" damage to California's economy if other states and some Canadian provinces didn't join with it in WCI.
Polls showed that the average Californian knew almost nothing about cap and trade, which uses a market to help companies reduce their emissions. The European Union's trading system was supposed to reward companies that find relatively cheap, innovative ways to reduce their emissions below a government-assigned cap by allowing them to sell unneeded carbon dioxide emissions allowances. The theory turned the state's role into more of a market manager and less of an arbitrary regulator, but it was hard to explain on a bumper sticker.
Moreover, it didn't always work in Europe. Dallas Burtraw, an economist and senior fellow for Resources for the Future, a Washington, D.C.-based environmental research group, attended a university forum in England in 2007 and watched the university's red-faced plant manager greet a group of economists in the audience by swearing at them. He had convinced the university to buy more efficient boilers to heat its buildings, assuring the school that it could help pay for them by selling unneeded emission allowances when their price went up. Instead, their value dropped to zero.
Screaming at the economists at the forum, he said: "You made me look like a fool!" Burtraw began working out plans for a price floor if the European program were adopted in the United States.
The state's environmental groups were split over California's use of cap and trade in 2008. Carl Pope, then chairman of the Sierra Club, recalled the case he made against it: It favored local polluters by giving some of them free allowances. A simpler approach would be to just slap a tax on all carbon emissions. Environmental justice groups, also powerful in California, insisted that more of the state's income from trading had to be steered toward poorer communities.
California's Chamber of Commerce painted emissions trading as a "job killer," and most oil companies mounted a ballot initiative in November 2010 to delay the climate law from taking effect.
But then a funny thing happened. Republican governors hoping to run for president in 2012 were backing away from climate change, but California's governor, Arnold Schwarzenegger,> who had signed California's plan into law in 2006, threw his political muscle into implementing it, joining with his Democratic successor, Gov. Jerry Brown, in building a powerful coalition that included environmental groups, the state's growing clean energy industry and most electric utilities.
Links to Canada
Pope, who retired from the chairmanship of the Sierra Club in 2011, said that Schwarzenegger's staunch defense of the state's climate approach "meant a lot" to its survival.
Brown oversaw some key compromises that helped bring California's program to life. Having watched the European Union's struggle with crashing emissions prices, state officials set a starting price floor of $10 per ton of CO2, with annual increases to keep pace with inflation. The floor price is currently just under $13 per ton.
The auctions have generally been fetching slightly above the floor, and all sales have sold out, except the most recent auction in February.
To ease the burden on industry, California also gave a significant percentage of allowances -- about half, in 2016 -- to emitters for free, based on their potential to use part of the incentive to defend their market against out-of-state competitors in the energy sector. Utilities and natural gas suppliers also receive their allowances gratis, on the condition that they put them up for auction, then distribute the proceeds to customers. That resulted in a bill credit averaging about $60 last year.
Since then, California has held 14 auctions of emissions credits, producing a total of just over $4 billion in state revenue and providing the most tangible outcome yet. The so-called Greenhouse Gas Reduction Fund has already handed out $1.6 billion to projects around the state that promise to reduce emissions, including electric buses, rail upgrades, housing near transit stations and Brown's planned high-speed rail line.
Last year, the state began holding joint auctions with Quebec. Ontario issued draft regulations in February that envision an initial solo auction in March 2017 and joining up with California and Quebec soon thereafter. Manitoba announced in December that it would link to Quebec and Ontario, a move that would implicitly link the province to California.
Ontario's government pointed to California's success at maintaining economic growth while capping emissions.
"After introducing its cap-and-trade program and putting a price on carbon, California's economy grew at a pace that exceeded the growth of the rest of the U.S. economy," Ontario Environment and Climate Change Minister Glen Murray pointed out. Jobs grew by 3.3 percent in the first 18 months of the program, outstripping the national growth rate of 2.5 percent.
Envisioning a 'global hybrid' of markets and taxes
While the full extent of the program's effect on the California economy remains impossible to measure, it certainly helped fend off charges that it would be a job killer or harm low-income neighborhoods. The program coincided with an economic uptick even after emissions trading expanded last year to cover transportation fuels. The state's unemployment rate has sunk to 5.5 percent, down from 9.4 percent when the program launched in January 2013.
Some environmentalists say the linked and continuing success of California and Quebec will inspire other provinces and states to follow suit.
"Some oil interests had warned for years that regulating fossil fuels would be disastrous for the economy, but California saw healthy job growth that was more than double the rate in oil-friendly Texas," noted Erica Morehouse, an attorney with the Environmental Defense Fund, the main environmental group pushing emissions trading.
Meanwhile, Gov. Brown is continuing to expand California's climate diplomacy, most recently signing 123 subnational governments to a pledge to limit emissions to between 80 and 95 percent below 1990 levels by 2050, ahead of the U.N. talks in Paris in December last year.
There have also been signs that President Obama's Clean Power Plan for existing power plants could attract more states to link with California's expanding market. Before the current court-imposed stay, New York Gov. Andrew Cuomo (D) proposed linking California's system with the Regional Greenhouse Gas Initiative (RGGI) in the Northeast.
After California took its initial plunge into emissions trading, starting with the planning stage in 2006, the nine RGGI states, extending from New England to Maryland, created a simpler program restricted to power plants in 2009. It was the first to include a price floor, like a reserve price at an auction, that helped prevent allowance prices from going too low and damaging investors and companies who relied on their value. Another version of this plan was adopted later in California.
Since 2014, RGGI claims to have been on course to reduce its emissions by 45 percent and to have created $1.3 billion in net economic benefits. There have been few hiccups in RGGI's operations (which has kept it mostly out of the news).
Meanwhile, another newcomer to emissions trading, Canada's province of British Columbia, has been building a kind of hybrid system, which includes a carbon tax covering over 70 percent of the province's emissions and a cap-and-trade program on provincial and local governments. So far, the carbon tax has cut the use of petroleum fuel in the province, while in other provinces it has risen. Meanwhile, British Columbia's gross domestic product grew by 9.2 percent.
The province's governments have reduced their emissions by the equivalent of taking 767,000 cars off the road in a year. Thirty of them, governing about a third of the province's population, have used energy efficiency programs to stop their annual increase in emissions.
Pope, who spent part of his career at the Sierra Club as a sharp-tongued critic of emissions trading, now admits he's somewhat baffled by its recent successes, particularly in the northeastern United States and in British Columbia. He said studies show that the programs have performed "much better than economic theory predicted they would." He's puzzled by that, but thinks emissions trading seems to work in "non-rational ways. Carbon prices should not be high enough to have as many impacts as have occurred, but they are."
Where does Pope think all this is headed? "I think we'll end up with some kind of global hybrid, with taxing systems linked with trading systems. It might happen much faster than most people think," he said.
Does that mean he's still skeptical about emissions trading? "I'm still a skeptic," insisted Pope, "but somewhat less skeptical than I was."
http://www.eenews.net/climatewire/2016/05/13/stories/1060037170
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