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PM ACC 5/30/2016
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Senate TSCA Vote Postponed
May 27, 2016 | Safer Chemicals, Healthy Families
By Andy Igrejas
As you may have seen, the Senate did not vote on TSCA reform yesterday after all. Senator Rand Paul of Kentucky objected to the procedure for a quick vote (known as “unanimous consent”). -
Congress' Grade So Far? Incomplete at Best
May 28, 2016 | AP (In The New York Times)
By Andrew Taylor
Congress is racing toward its summer break, but like a procrastinating college kid it has tons of work to catch up on to avoid a report card laden with grades of incomplete or even worse. -
Donald Trump’s Dangerous, Nonsensical Energy Plan
May 30, 2016 | Washington Post
By Editorial Board
Last week's Wall Street Journal/NBC News poll shows that voters think Donald Trump would handle the economy better than would Hillary Clinton. -
A Challenge to Donald Trump’s Energy Claims: Economic Reality
May 27, 2016 | New York Times
By Coral Davenport
In his pledge to aggressively expand American oiland gas production, and his framing of that push as a salvation for the nation’s economic and fiscal health, Donald J. Trump is following in the footsteps of decades of Republican politicians. -
US Crude Oil Exports: Exaggerations Giving Way To Market Reality
May 27, 2016 | Forbes
By Gaurav Sharma
Few expected the US government to end its four-decade-old ban on crude oil exports, which barred shipments to countries other than Canada, anytime soon. Despite impassioned lobbying by exploration and production (E&P) companies for years... -
Colorado is Test Site for Anti-Fossil Fuel Action, WEA Head Warns
May 27, 2016 | Natural Gas Intelligence
By Richard Nemec
Despite having recently struck down local hydraulic fracturing (fracking) bans, Colorado continues to be the test ground and launching pad for increasingly well-organized and funded national anti-fossil fuel campaigns... -
Rail Companies on Track to Install Technology by Deadline
May 30, 2016 | Columbus Dispatch
By Rick Rouan
Technology intended to prevent train derailments could be installed on most Ohio railroads before the 2020 deadline for the state’s two largest rail operators.
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May 27, 2016 | Safer Chemicals, Healthy Families
By Andy Igrejas
As you may have seen, the Senate did not vote on TSCA reform yesterday after all. Senator Rand Paul of Kentucky objected to the procedure for a quick vote (known as “unanimous consent”). Because the Senate is in recess through next week, the maneuver delays a vote until at least the week of June 6.
Senator Paul cited excessive preemption and new criminal penalties in his objection as well as a need for more time to review the bill. It is unclear if his critique of the preemption provisions mirrors our own.
Working with several offices, we were able to secure changes that softened the blow of the early preemption provisions in the final bill that was approved by the House on Tuesday. However, the preemption remains one of the issues that prevents the coalition from endorsing the bill. The others include limitations on the ability of EPA to intercept problem chemicals in imported products and over-reaching animal testing restrictions that will, ironically, potentially lead to more animals (and people) being exposed to toxic chemicals outside of the laboratory.
Leading researchers Leo Trasande and Bruce Lanphear cited these provisions in their own statement in Health Affairs this week. State officials in Washington, Minnesota, and Maine have also objected to the unprecedented early preemption embodied in the final legislation.
It seems unlikely that the postponement will alter the outcome of a Senate vote, but we will keep you posted. We also plan to publish fuller analysis of the final bill soon.
http://saferchemicals.org/2016/05/27/senate-tsca-vote-postponed/
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Congress' Grade So Far? Incomplete at Best
May 28, 2016 | AP (In The New York Times)
By Andrew Taylor
Congress is racing toward its summer break, but like a procrastinating college kid it has tons of work to catch up on to avoid a report card laden with grades of incomplete or even worse.
An abbreviated work period this month produced mixed results at best — Congress exited Washington without acting on funding the battle against the Zika virus, for starters — and a full plate awaits when lawmakers return next month from a weeklong Memorial Day recess for a six-week sprint to political convention season and the traditional August vacation.
Some signs are promising; others, not so much:
...CHEMICAL REGULATION
Also left undone is a bipartisan measure that is the first major update of the nation's chief chemical safety law in 40 years. It would for the first time regulate tens of thousands of toxic chemicals in everyday products from household cleaners to clothing and furniture.
Supporters say the bill would clear up a hodgepodge of state rules and ensure that chemicals and products used by Americans every day are safer.
The House overwhelmingly approved the bill on Tuesday, but the measure ran into a snag in the Senate when Sen. Rand Paul, R-Ky., objected to its passage and said he'd not had time to read it....
Associated Press writers Matthew Daly, Alan Fram, Mary Clare Jalonick and Richard Lardner contributed to this report.
http://www.nytimes.com/aponline/2016/05/28/us/politics/ap-us-congress-report-card.html?_r=0
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Donald Trump’s Dangerous, Nonsensical Energy Plan
May 30, 2016 | Washington Post
By Editorial Board
Last week's Wall Street Journal/NBC News poll shows that voters think Donald Trump would handle the economy better than would Hillary Clinton. But from his destructive tax proposals to the illogical energy plan he detailed on Thursday, there is little basis for that belief.
Mr. Trump’s vision on energy, as on almost everything, starts with the premise that the country’s politicians have sold out the American people. President Obama has “done everything he can to keep us dependent on others,” he argued, with a policy of “death by a thousand cuts through an onslaught of regulations” on oil, gas and coal. Mr. Trump’s headline policy is “complete American energy independence” by “lifting these draconian barriers” so that “we are no longer at the mercy of global markets.”
Setting “energy independence” as an overriding policy goal is a policy mistake of long standing in Washington. In fact it is far less risky to participate in the global market than to erect barriers to energy imports or ban them entirely. If you rely only on yourself for your oil, you put all of your eggs in one supply basket. Disruptions due to a natural disaster or anything else that would be relatively localized in a global oil market would cause major volatility in a closed domestic one. The best way to insulate the country from oil price volatility would be to make the economy less dependent on oil, but Mr. Trump has no interest in doing so.
Mr. Trump’s error reflects a deeper contradiction in his thinking. He praises the unencumbered free market, insisting that, “the government should not pick winners and losers” and that he would “remove obstacles” in the way of private enterprises. At the same time, he promises energy independence, a renaissance for the coal industry and other goals that would require government interference in the market. The decline of coal, for example, has occurred in large part because under the Obama administration natural gas drilling has boomed, lowering the price of gas and spurring utilities to move away from coal.
Mr. Trump’s plan is dangerous as well as incoherent. In his zeal to revoke environmental regulations, Mr. Trump promises to kill the Environmental Protection Agency’s carbon dioxide rules and pull the country out of the Paris climate agreement. He also promised “clean air and clean water,” but over the past half-century, it has been government regulation, sometimes market-based, that has helped clear up the nation’s air and water. Mr. Trump’s plan would lead to dirtier air and water — and to a massive blow to the global fight against climate change. With great care and difficulty, President Obama persuaded major polluting countries such as China to listen to scientists and move with the United States toward cuts in emissions.
Future generations will suffer if Mr. Trump succeeds in reversing that progress.
https://www.washingtonpost.com/opinions/donald-trumps-dangerous-nonsensical-energy-plan/2016/05/29/c527cf04-2433-11e6-aa84-42391ba52c91_story.html
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A Challenge to Donald Trump’s Energy Claims: Economic Reality
May 27, 2016 | New York Times
By Coral Davenport
In his pledge to aggressively expand American oiland gas production, and his framing of that push as a salvation for the nation’s economic and fiscal health, Donald J. Trump is following in the footsteps of decades of Republican politicians.
But in a market where domestic oil production is already higher than it has been in 40 years, and natural gas production is at a historic high, those proposals have run up against a major problem: the global economy.
As the presumptive Republican nominee spoke in Bismarck, N.D., this week, in the booming Bakken oil fields not far away, oil and gas workers were actually being laid off, victims of their own success and the global energy glut they have helped produce. Plunging oil and gas prices have pointed to a fundamental flaw in Mr. Trump’s argument: At a certain point, production of oil and gas will push prices too low to justify even more production.
The Organization of Petroleum Exporting Countries — especially its leading producer, Saudi Arabia — also gets a say. If it decides to keep the spigot cranked, the bar for profitable American production gets higher, investment falls and the sector contracts, regardless of Mr. Trump’s intentions.
“I don’t think he has any knowledge of global energy markets,” said Charles Ebinger, a senior fellow at the Energy Security and Climate Initiative at the Brookings Institution who watched Mr. Trump’s energy speech. “We’ve laid off thousands of workers in the oil service sector.”
Energy policy experts who followed Mr. Trump’s proposals said that while some hewed to standard Republican orthodoxy, others appeared implausible and ill considered.
“It’s a fairly standard Republican antiregulation, pro-production vision, but with no real details and some outlandish Trumpian flourishes,” said David Victor, director of the Laboratory on International Law and Regulation at the University of California, San Diego.Continue reading the main storyPresidential Election 2016Here’s the latest news and analysis of the candidates and issues shaping the presidential race.Can Donald Trump Win? These Battleground Regions Will DecideMAY 29Donald Trump and Bikers Share Affection at Rolling Thunder RallyMAY 29Success of Jerry Brown, and California, Offers Lesson to National DemocratsMAY 29Donald Trump’s Campaign Manager Brushes Off Concerns Over Staff SizeMAY 29Libertarians See Chance Amid Discontent Over Donald Trump and Hillary ClintonMAY 29
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One major consequence of the surge in domestic natural gas production has been a turn by electricity generators toward gas from coal. That has cost thousands of coal jobs. Yet Mr. Trump has both vowed to increase natural gas production even as he promises to restore coal jobs, scoffed Robert N. Stavins, director of the environmental economics program at Harvard.
“Trump will presumably support less regulation and other actions to encourage greater use of fracking. That would tend to lower natural gas prices,” Mr. Stavins wrote in an email. “And, therefore, Trump’s promised support of greater natural gas fracking would actually have the effect of lowering demand for coal, causing more mines to close.”
Mr. Stavins added, “He can’t have it both ways — talk up expanding natural gas supply when in North Dakota, and talk about bringing back coal mining jobs when in Kentucky!”
At a news conference before his North Dakota speech, Mr. Trump said he could bring the cost of coal down as well, by eliminating or easing environmental regulations.
Experts also questioned Mr. Trump’s claim that an aggressive push to expand oil and gas production would increase employment, economic growth and federal revenue.
Even with oil and gas production at or near record highs, the industry is not a large direct employer. Last year, there were 103,000 workers directly employed in oil and gas extraction, and 68,000 workers in coal mining, according to the Bureau of Labor Statistics. Yet in his speech, Mr. Trump claimed that the oil and natural gas industry “supports 10 million high-paying jobs.”
Citing research by the Institute for Energy Research, an organization partly funded by the billionaire libertarian brothers Charles and David Koch, Mr. Trump claimed that an aggressive expansion of oil and natural gas drilling would yield a $700 billion increase in annual economic output over the next 30 years, a $30 billion increase in annual wages over the next seven years, more than $20 trillion in additional economic activity over the next 40 years and $6 trillion in new tax revenue.
“This would suggest that his energy policies alone would give a 5 percent boost to the entire economy,” Mr. Victor said. “That strikes me as fantasy. The numbers seem off by an order of magnitude.”
Mr. Trump also laid out plans to spend new federal revenue that he claimed would be generated by new oil and gas drilling.
“We will make so much money with energy that we will start to pay down our $19 trillion debt,” he claimed. “We’ll use the revenue from energy for roads, schools, bridges and infrastructure.”
But energy economists dismissed the idea that new drilling could bring enough money to substantially fund such proposals. In 2015, coal, oil and gas companies paid the federal government $9.6 billion in fees and royalties for drilling on public lands and waters, in a budget of $3.8 trillion. Even with a large expansion of such drilling on public land, experts say it is difficult to predict a new such revenue stream at the scale envisioned by Mr. Trump.
The chief source of federal revenue from coal, oil and gas extraction comes from taxes and fees paid by companies drilling and mining on federal lands and waters, but most oil and gas production takes place on state or private land. Mr. Trump has declared that he will lift regulatory barriers to drilling on federal lands and waters, but experts say that will not be easy.
“It’s not like you just sit in the Oval Office and press a ‘rigs’ button,” Mr. Victor said. “There are tremendous legal and bureaucratic challenges and an extremely long time horizon.”
And as long as the global market remains glutted, companies will be disinclined to lease federal land for new drilling. With the lifting of sanctions under the nuclear deal, Iranian oil is only beginning to enter the world market in a big way.
Economists also derided Mr. Trump’s repeated calls for “energy independence” — a phrase commonly used by politicians to suggest that the United States could isolate itself from global energy markets, producing and consuming only what it needs.
Several economists pointed out that the best way to wean the nation from imported oil is to lower the dependence on oil over all, with policies designed to reduce oil demand.
Tom Kloza, the global head of energy analysis for the Oil Price Information Service, a research firm, pointed to Environmental Protection Agency regulations to increase vehicle fuel efficiency, which require automakers to build vehicles that travel farther on less gasoline.
“The oil supply side will take care of itself, through the market,” Mr. Kloza said. “The demand side is where progress can be made through policy. The best thing a president could do, given the market, would be to lower oil demand.”
He added, “I doubt if Trump understands that.”
http://www.nytimes.com/2016/05/28/us/donald-trump-energy-economy.html?_r=0
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US Crude Oil Exports: Exaggerations Giving Way To Market Reality
May 27, 2016 | Forbes
By Gaurav Sharma
Few expected the US government to end its four-decade-old ban on crude oil exports, which barred shipments to countries other than Canada, anytime soon. Despite impassioned lobbying by exploration and production (E&P) companies for years, few analysts expected any movement on that front before the next occupant of the White House arrived in 2017.
In a note to clients on 23 June, 2015, investment bank Goldman Sachs wrote: “Our Washington research suggests the highest probability of the export ban being lifted is in 2017 or beyond.” So when President Barack Obama, repealed the ban on 18 December last year, in exchange for opponents agreeing to a $1.8 trillion government spending and tax relief bill, advocates of lifting the ban quite literally felt Christmas had come early.
Predictably, commentators flooded the airwaves claiming there would be a flurry of US exports, while newswires and data aggregators bombarded subscribers’ mailboxes with reports of oil tankers from the country heading just about everywhere from France to Israel, Germany to China, and to infinity and beyond.
Within the next quarter, we were informed that Exxon Mobil had become the first major US oil company to ship domestic crude from Beaumont, Texas, US to its own refinery in Sicily, Italy. However, if sheer volume is your thing; nothing beats Platts’ revelation of Geneva-based commodities trader Gunvor’s move to ship 600,000 barrels of US crude to a storage terminal in Panama.
Thereafter, akin to a disappearing trick only the fictitious Keyser Söze – a central character in the cult classic movie The Usual Suspects – would be capable of pulling, these overtly familiar headlines and analysts’ notes on a flood of US exports vanished.
For in an already saturated global crude oil supply pool, evidence from Houston, Texas – America’s Oil & Gas capital – suggests less than 400,000 barrels per day (bpd) is currently being exported by US producers. That is nothing to either write home about or anything the market needs to get spooked about as claimed in the last quarter.
Even the lifting of the ban was not a surprise, unless you happened to be on the outside, says Natalie Regoli, Partner at Baker & McKenzie.
Speaking on the sidelines of the law firm’s Oil & Gas Institute, Regoli added: “Industry participants working toward this goal had been doing so for some time. It surprised only those not involved. Frankly, with the crash in oil prices, it came much too late.”
Furthermore, given the wider climate in the oil market, there are really no great incentives or competitive advantages for exporting crude from the US.
Vincent Kaminski, Professor in the Practice of Energy Management at Rice University’s Jones Graduate School of Business, says, “Brent and Louisiana Light Sweet are trailing each other, and the West Texas Intermediate currently has a narrow premium over the global benchmark. It is also important to recognize that the US was already exporting crude indirectly, because there was no ban on exports of refined products. Given that backdrop, predictions of a dramatic jump in oil export volumes was never really on the horizon.”
In fact, the so-called ‘halo effect’ of the removal of the ban got muted even before things really got going, after the oil price momentarily slipped below $30 per barrel in January within weeks of export restrictions being lifted, opines Mitchell Fane, Principal, Transaction Advisory Services at EY’s Houston Practice.
“There were a lot of impassioned speeches within the industry that US producers should be allowed the same access to the global market as every other country in the world. So, when the ban was lifted, E&P producers were generally pleased with it. However, macroeconomic permutations of a lower oil price meant benefits of exporting to a different market went away. Now, we’ve slipped to a point where the move appears to be largely symbolic,” Fane adds.
Charles Dewhurst, International Liaison Partner at BDO USA, feels that market rebalancing – widely expected stateside over the next three years – needs to be taken into account. “The US is still by far a net importer of oil and we must not lose sight of that. Over the next three years, domestic supply is going to decrease. While rebalancing takes places, it is natural to assume we are looking at a rise in US imports, rather than barrels going in the opposite direction in any meaningful volumes.”
“Ultimately, I view the lifting of the ban as one of those things that was needed to be offered to the Republican side by the Obama administration during a political stalemate.”
The outside world may have viewed it differently, but many industry pragmatists in Houston never lost sight of the bigger picture. Kaminski notes: “If you seek positives, you need to go downstream. Crude cargoes dispatched from the US to other markets represent an experiment in many ways. Foreign refiners who have not processed US crude for decades are currently testing the waters by cracking it.
http://www.forbes.com/sites/gauravsharma/2016/05/27/us-crude-oil-exports-exaggerations-giving-way-to-market-reality/#5ee2dbdf4fa7
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Colorado is Test Site for Anti-Fossil Fuel Action, WEA Head Warns
May 27, 2016 | Natural Gas Intelligence
By Richard Nemec
Despite having recently struck down local hydraulic fracturing (fracking) bans, Colorado continues to be the test ground and launching pad for increasingly well-organized and funded national anti-fossil fuel campaigns, the head of the Western Energy Alliance (WEA), Tim Wigley, told an audience at the Williston Basin Petroleum Conference on Wednesday in Bismarck, ND.
Sounding an alarm and encouraging the oil/natural gas industry to get active, Wigley said the anti-fossil fuel group Keep It in the Ground has infiltrated the Democratic Party establishment with the announcement recently that national environmental writer/activist Bill McKibben, co-founder of350.org, has been named to the political party platform committee heading toward the national convention this summer in Pennsylvania.
Wigley reminded the industry audience that earlier this month the Keep It in the Ground movement carried out demonstrations in Colorado, one unsuccessfully attempting to block a U.S. Bureau of Land Management (BLM) oil/gas lease sale (see Shale Daily, May 13;April 14 ). Along with attempting to block the entrances to BLM lease sales, he alleged that the activists have had some of their supporters pose as news media representatives in the actual sales to gather information for the protest movement.
"In watching this effort, it is amazing how well organized and well funded it is," Wigley said, claiming that California billionaire Tom Steyer, a climate change activist, has helped support Keep It in the Ground. "This is a challenge that the industry is going to see, especially in the last few months of the Obama administration, because there are a lot of folks in that administration that sympathize with these groups."
For 2016, Wigley urged people to keep a close eye on Colorado because the anti-fossil fuel groups have zeroed in on the state since they worked to get five local fracking bans enacted, only to have them struck down earlier this month by the state Supreme Court (see Shale Daily, May 3).
Wigley said the local bans were established four years ago when the industry in the state was less aware and organized to counter the groups. As a result, WEA helped launch Coloradans for Responsible Energy Development (CRED). The local bans, along with some WEA opinion polling, were a wakeup call for the industry.
At the time, 90% of voters in Colorado had read or heard something about fracking, and more than two-thirds had a negative opinion of it, Wigley said. "Anytime you have a 90% awareness of anything, it is pretty impressive, and that is when we began educating the public about what we do and how we do it."
Active in both the mining and timber industries in the past, Wigley is convinced that voters will side with industries when they know what they do, how they are regulated and what the industry does for the general consumer.
http://www.naturalgasintel.com/articles/106575-colorado-is-test-site-for-anti-fossil-fuel-action-wea-head-warns
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Rail Companies on Track to Install Technology by Deadline
May 30, 2016 | Columbus Dispatch
By Rick Rouan
Technology intended to prevent train derailments could be installed on most Ohio railroads before the 2020 deadline for the state’s two largest rail operators.
Reports released by the Federal Railroad Administration show that Norfolk Southern already has installed some “positive train control” pieces on its Ohio lines.
CSX redacted the same information from its report, but a spokesman said the railroad expects to have the technology in all its Ohio subdivisions by 2019.
The National Transportation Safety Board has been calling for years for a nationwide rollout of positive train control — technology that could slow speeding trains before they hit a curve or prevent them from running past stop signals. The technology is designed to prevent train crashes caused by human error.
Regulators and industry critics have a renewed verve for ensuring that technology is installed in the wake of several fiery derailments of commuter trains and others carrying volatile crude oil from North Dakota.
“Our industry is working all out to move this complex safety system from concept to nationwide reality as quickly as possible without sacrificing safety,” said Ed Greenberg, spokesman for the Association of American Railroads.
Railroads were supposed to finish installing the systems by the end of last year, but Congress granted a three-year extension when it became clear that they couldn’t meet the deadline.
In some cases, railroads could push installation to 2020, and both Norfolk Southern and CSX have said they would need until then to finish their systems.
Railroads now have to file quarterly progress reports with the railroad administration detailing their rollout of positive train control, and those show that the two railroads that account for most of Ohio’s 5,200 miles of track are on pace in the state.
A Norfolk Southern representative did not respond to a request for comment. The company’s report shows that it isn’t operating positive train control on any of its 8,000 route miles of track in the U.S., but it has started installing equipment on locomotives, track segments and radio towers.
In its Columbus district, it has installed almost all of the equipment it needs, but it still needs to acquire the communication backbone — fiber-optic cables, ground wires and other infrastructure — to make it work.
Regulators allowed CSX to censor information from its report showing what equipment has been installed in each of its divisions. Rail administration officials have questioned similar redactions in the past and eventually published the information. The agency is raising similar questions about CSX marking route-specific progress in positive train control as confidential.
CSX spokesman Rob Doolittle wrote in an email that the company redacted the information because it is “security-sensitive.” Rail lines receiving positive train control could carry hazardous materials, and releasing the information “might inadvertently jeopardize the security of other sensitive data,” he wrote.
All of CSX’s rail lines in Ohio should have hardware for positive train control by the end of 2018, and the technology should be operating in the state by the end of 2019, Doolittle wrote.
CSX is not operating positive train control on any of its 9,600 route miles in the U.S. that will be required to have it.
The safety board began calling for a nationwide system in 1969, and it has said the system could have prevented at least 145 derailments.
Installing the system will cost the freight rail industry about $10.6 billion, Greenberg said. It has spent $6.5 billion.
“As an industry, our focus is positive train control,” Greenberg said. “There’s a major full-time focus on ensuring this technology is fully installed, fully tested and fully operational as quickly as possible.”
Investigators recently concluded that not having positive train control contributed to an Amtrak derailment that killed eight people in Philadelphia last year.
Installation of the systems got more attention when several trains carrying Bakken crude — many of which pass through Ohio on their way to East Coast refineries — derailed and exploded.
Production in the North Dakota shale fields boomed for several years, but it slowed as oil prices fell. The 410,000 carloads of crude oil transported on U.S. rail lines in 2015 was nearly 17 percent less than a year earlier, according to the Association of American Railroads.
Reports that the railroads filed with the state last year showed that 45 million to 137 million gallons of crude oil rolls through Ohio each week, including about 25 million gallons through Franklin County.
http://www.dispatch.com/content/stories/local/2016/05/30/rail-companies-on-track-to-install-technology-by-deadline.html#
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