ACC AM 6/24

Industry and Association News

1. (ACC Mentioned) UK Polls Close on EU Brexit Referendum

   Jun 23, 2016 | ICIS

   By Al Greenwood
   
   
   Voting for a UK referendum on the EU ended on Thursday, with many fearing that currency fluctuations would follow a decision to leave the union, altering trade flows between the island nation and the US.
2. (ACC Mentioned) Pricing Front Quiet for Everything But PP in May

   Jun 24, 2016 | Plastics News

   By Frank Esposito
   
   
   The North American commodity resin market gave peace a chance in May, with all prices flat except for polypropylene.
3. (ACC Mentioned) DEEP Looks to Elevate Plastics Recycling

   Jun 23, 2016 | Hartford Business

   By Matt Pilon
   
   
   The Department of Energy and Environmental Protection has aligned itself with an industry-backed effort to increase the voluntary recycling of plastic bags, films and packaging.

Chemical Management News

4. (ACC Mentioned) Prop. 65 Celebrates 30 Years of Mounting Costs and Elusive Benefits

   Jun 24, 2016 | OC Register

   By David Fischer
   
   
   California’s chemical warning law, known as Proposition 65, turns 30 this year. I chose to mark the occasion by publishing an article in the Journal of Business & Technology Law detailing the fundamental flaws with the law’s consumer product warnings and bounty hunter provisions and by offering alternative approaches to Prop. 65.
5. (ACC Mentioned) Our Opinion: A Slightly Less Toxic System to Protect our Health

   Jun 23, 2016 | Bennington Banner

   On Wednesday, Pres. Barack Obama signed into law a sweeping overhaul of the nation's chemical safety standards.

Energy News

6. House GOP's Abrupt Recess Will Delay EPA Bills

   Jun 24, 2016 | Inside EPA

   House GOP leaders' abrupt decision to recess until after the July 4 holiday will delay action on the pending fiscal year 2017 spending bill for EPA and on legislation to cut back deference courts give the agency's legal interpretations, forcing the measures to compete with other legislative priorities in the chamber's brief July session.
7. Sit-in Casts Doubts about Legislative Prospects Before Election

   Jun 24, 2016 | E&E Daily

   By George Cahlink and Geof Koss
   
   
   House Speaker Paul Ryan (R-Wis.) hoped to head into the Fourth of July break touting bold GOP plans for achieving energy independence, repealing Obamacare and crafting a tax code overhaul in 2017.
8. Brexit Will Sidetrack Key Energy and Climate Reforms

   Jun 24, 2016 | PoliticoPro

   By Sara Stefanini
   
   
   The European Union’s far-reaching energy union project is likely to be hit by turbulence and delay in the wake of the U.K.’s vote to leave the bloc.
9. 5 Ways Brexit Will Transform Energy and Climate

   Jun 24, 2016 | Politico

   By Sara Stefanini
   
   
   Britain’s departure from the EU will force broad changes to the bloc’s energy and climate policies, and remove a crucial ally for Central Europeans — but it will also give London far more freedom to pursue nuclear projects.
10. EPA Asked to Clarify Clean Power Plan Compliance Dates

    Jun 24, 2016 | BNA Daily Environment Report

    More than 100 House members led by Rep. John Ratcliffe (R-Texas) asked the Environmental Protection Agency to clarify the agency's position on the Clean Power Plan compliance deadlines, given the Supreme Court's decision to halt the rule.
11. EPA's McCarthy Hails Energy Efficiency for Climate Fight

    Jun 24, 2016 | BNA Daily Environment Report

    By Alan Kovski
    
    
    The Environmental Protection Agency continues to work with states on voluntary measures including energy efficiency to help prepare for the Clean Power Plan, EPA Administrator Gina McCarthy told the Energy Efficiency Forum 2016.
12. EPA Chief Rejects 'Old, Tired Argument' that Regs Hurt Economy

    Jun 23, 2016 | E&E News PM

    By Emily Holden
    
    
    U.S. EPA chief Gina McCarthy at an industry conference today chided critics for arguing that curbing greenhouse gas emissions will damage the economy and cause job losses.
13. US Set to Become Major Global Natgas Supplier as Exports Soar: DOE Official

    Jun 23, 2016 | Platts

    By Jim Magill
    
    
    Demand for US natural gas for export -- including both pipeline and LNG exports -- is set to skyrocket through the next few decades, a US Department of Energy official said Thursday, adding the country was on a path to become a top supplier to the international market.
14. U.S. Oil Companies Crank Up Production in Gulf of Mexico

    Jun 23, 2016 | The Wall Street Journal

    By Lynn Cook and Erin Ailworth
    
    
    Oil companies are pumping more crude off the U.S. coast in the Gulf of Mexico, a surprising trend that shows the resilience of the nation’s energy industry.

Chemical Security News

15. EPA Chemical Security Overhaul Ripe for Challenge: Attorney

    Jun 24, 2016 | BNA Daily Environment Report

    By Brian Dabbs
    
    
    The Environmental Protection Agency's proposed overhaul of its chemical security risk management framework is likely to get hit with a range of legal challenges, a partner at Bracewell LLP said June 22.

Transportation News

16. Are Railroads Up to Speed? Investigators Say No

    Jun 23, 2016 | The Christian Science Monitor

    By Lucy Schouten
    
    
    A federal investigation is placing the blame on Union Pacific for a train that derailed June 3 along the Oregon-Washington border, recommending that the industry update an aging braking system – a move that companies have so far resisted.
17. Oil Pipeline Spills Thousands of Gallons Near California Coast

    Jun 23, 2016 | The Hill - E2 Wire

    By Timothy Cama
    
    
    An pipeline in southern California spilled up to 29,400 gallons of oil Thursday just a short distance from the Pacific Ocean.

Environment News - There are no clips to report at this time.

Industry and Association News

1. (ACC Mentioned) UK Polls Close on EU Brexit Referendum

   Jun 23, 2016 | ICIS

   By Al Greenwood

   Voting for a UK referendum on the EU ended on Thursday, with many fearing that currency fluctuations would follow a decision to leave the union, altering trade flows between the island nation and the US.

   But judging from financial markets, an exit seemed unlikely, as the major indices in the US rose by well over 1%. Results from the vote are expected early Friday morning.

   If the UK did vote to leave the EU, then a so-called Brexit would likely weaken the British pound against the US dollar.

   The UK is a major trade partner with the US, according to statistics compiled by the American Chemistry Council (ACC).

   In 2015, US chemical exports to the UK totalled $7.46bn, making it the seventh largest destination behind Brazil. Chemical imports from the UK totalled $13.3bn, the fifth largest provider for the US, behind China.

   While the ACC did not break down the UK imports by chemical group, many are pharmaceuticals, said Kevin Swift, chief economist of the trade group.

   Some of the products may have originally come from Ireland – the largest source of US imports – and later exported through Northern Ireland, which is part of the UK, he said.

   In the run-up to Thursday's vote, the British pound tended to weaken when polls showed voters favouring an exit from the EU. As such, leaving would likely cause the US dollar to strengthen against the pound, making US exports less competitive and UK imports more attractive.

   This could threaten the profitability of the INEOS cracker in Grangemouth, UK, since the plant would rely on US ethane. The cracker's capacity is 700,000 tonnes/year, according to ICIS plants and projects.

   Currency fluctuations are not the only fall-out from Brexit, Swift said. Financial markets also could become more volatile.

   
   Leave champion Nigel Farage votes Thursday at Biggin Hill, Kent, UK. (Grant Falvey/LNP/REX/Shutterstock)

   Petrochemical market participants in Europe brought up concerns that also could be shared by those in the US.

   A polycarbonate (PC) player said that several Belgian companies were worried about the UK imposing tariffs on their products if it left the EU.

   The uncertainty about the vote had delayed third-quarter contract negotiations for polymethyl methacrylate (PMMA), according to a  distributor based in the UK.

   In the US, policymakers may have to negotiate new trade agreements with the UK for products that were previously covered by deals made with the EU.

   Financial and currency markets are in favour of the UK remaining in the EU, since they have risen and fallen based on polls showing voters favouring or opposing the EU.

   The UK government said the country "will be stronger, safer and better off by remaining as a member of a reformed EU".

   Even before Thursday's vote, uncertainty about the UK's membership in the EU caused companies to delay investments and purchases of petrochemicals, market participants said.

   British polls closed at 22:00 hours London time (21:00 hours GMT). The final results are due at about 07:00 Friday.

   http://www.icis.com/resources/news/2016/06/23/10010629/uk-polls-close-on-eu-brexit-referendum/
   

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2. (ACC Mentioned) Pricing Front Quiet for Everything But PP in May

   Jun 24, 2016 | Plastics News

   By Frank Esposito

   The North American commodity resin market gave peace a chance in May, with all prices flat except for polypropylene.

   Plastics News in May reported an additional 2-cent decrease on North American PP resin prices to reflect price erosion that took place between March and May. The PN resin pricing chart previously showed a 3-cent PP price drop for April.

   Conversations with resin buyers and other market watchers indicated that the total price drop for the March-April-May time period was 5 cents, with buyers seeing the decreases in varying amounts at various times over that period. The 5-cent decline has canceled out price gains from earlier in the year, leaving regional PP prices down a net of 1 cent per pound since Jan. 1, according to the PN chart.

   PP makers ExxonMobil Chemical Co. of Houston and Formosa Plastics Corp. USA of Livingston, N.J., already have announced price decreases for June. The ExxonMobil decrease ranges from 3 to 5 cents per pound, while the Formosa downward move is 5 cents.

   Domestic PP suppliers are facing competition from material imported from several regions. Import material has found a home in North America as the region’s PP production has struggled to keep up with demand. Operating rates for PP plants in North America are in the high 90s.

   Through April, North American PP sales were up almost 1 percent vs. the year-ago period, according to the American Chemistry Council in Washington. Domestic growth of 2.3 percent was curbed by a 44 percent drop in export sales.

   Regional polyethylene prices were flat in May after rising an average of 4 cents per pound in April. PE prices stayed the same even though crude oil prices moved up from $45 per barrel to $49 during the month. Oil is a global price setter for PE, although natural gas is the most common PE feedstock in North America.

   The April PE increase was the second consecutive monthly hike for the material. Prices had dropped in the first two months of 2016. A 5-cent January/February drop had been canceled out by a 5-cent gain in March.

   U.S./Canadian PE sales fared well in the first four months of 2016. Sales of high density PE surged almost 6 percent, with flat domestic sales magnified by gains of 30 percent in export sales. Linear low density PE sales were up just over 4 percent for the quarter with domestic sales gains of more than 3 percent boosted by 7 percent growth for exports. Low density PE managed first-quarter growth of just over 2 percent, as a domestic sales gain of more than 3 percent was softened by a 1.5 percent drop in export sales.

   PVC suspension resin prices were flat in May, even amid increased construction activity. Prices for the material had bumped up a combined 6 cents per pound in March and April. U.S./Canadian PVC sales were off to a strong start in the first four months of 2016, growing almost 9 percent. Domestic sales growth of almost 4 percent was bolstered by a surge of more than 21 percent in the export market.

   North American PET bottle resin prices also were flat in May, after ticking up 2 cents per pound in April, with warmer weather improving seasonal demand for bottled water and carbonated soft drinks. The April move was the second straight monthly price hike for that material, following a similar 2-cent move in March. Prior to those back-to-back increases, regional PET prices had fallen for six consecutive months.

   In the solid polystyrene market, May prices were flat after jumping an average of 5 cents per pound in April. A 4 percent price drop for benzene feedstock wasn’t enough to move the needle for PS prices.

   Benzene prices for June are expected to be down another 4 percent, which could put downward pressure on polystyrene. Solid PS prices had been flat in March after declining by an average of 2 cents per pound in February.

   North American PS sales fell 1.3 percent in the first four months of 2016, even as sales of the material into the food service/food packaging end market grew almost 2 percent and sales into electrical/electronic uses grew almost 3 percent.

   http://www.plasticsnews.com/article/20160624/NEWS/160629911/pricing-front-quiet-for-everything-but-pp-in-may
   

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3. (ACC Mentioned) DEEP Looks to Elevate Plastics Recycling

   Jun 23, 2016 | Hartford Business

   By Matt Pilon

   The Department of Energy and Environmental Protection has aligned itself with an industry-backed effort to increase the voluntary recycling of plastic bags, films and packaging.

   The Wrap Action Recycling Program (WRAP), which is a public awareness and outreach campaign organized by the American Chemistry Council, announced this week that it has partnered with DEEP to help it increase the proper recycling of those materials in the state.

   DEEP hopes the program will help it reach its goal of increasing the state's solid-waste diversion rate to 60 percent by 2024.

   Though they aren't supposed to, many Connecticut residents still throw plastic shopping bags into their single-stream recycling bins. Bags tangle sorting machinery at area sorting facilities, often requiring workers to stop machines to clean them out.

   But the materials, as long a they are dry and clean, are recyclable and even valuable. Manufacturers use recycled plastic film in outdoor lumber products and to make new packaging.

   "Cleaning up our single stream recycling and making our recyclables more marketable is a very high priority," DEEP Commissioner Robert Klee said in a statement.

   On its website, WRAP maintains a directory of drop-off locations for various flexible plastic films. The site lists at least several dozen Connecticut store locations, including many large retail chains.

   DEEP environmental analyst Sherill Baldwin, who is coordinating the state's interaction with WRAP, said Thursday that one goal of the partnership is to grow that list, and to ensure that the information is accurate.

   Baldwin said she is working to build a coalition of municipalities and retailers that want to offer plastic drop-off locations.

   The partnership aims to launch a public information campaign in the fall, which will include posters, mailers and other materials provided by WRAP. Baldwin said DEEP does not have marketing dollars for the campaign.

   The American Chemistry Council, which counts bag and packaging manufacturers among its membership base, has protested various proposals across the country for bag taxes and bans.

   A proposed bag ban in Connecticut didn't get through Connecticut's legislature last year.

   DEEP is the third state partner in the WRAP program, following Wisconsin and North Carolina.

   Retailers, local governments and others interested in WRAP can contact Baldwin at 860-424-3440.

   http://www.hartfordbusiness.com/article/20160623/NEWS01/160629958/deep-looks-to-elevate-plastics-recycling
   

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Chemical Management News

4. (ACC Mentioned) Prop. 65 Celebrates 30 Years of Mounting Costs and Elusive Benefits

   Jun 24, 2016 | OC Register

   By David Fischer

   California’s chemical warning law, known as Proposition 65, turns 30 this year. I chose to mark the occasion by publishing an article in the Journal of Business & Technology Law detailing the fundamental flaws with the law’s consumer product warnings and bounty hunter provisions and by offering alternative approaches to Prop. 65.

   By an overwhelming 63 to 37 percent margin, Californians voted to pass the Safe Drinking Water and Toxic Enforcement Act of 1986. The law created an explosion of warnings: Hotels, restaurants, ballparks, parking garages, office buildings, amusement parks and pools, along with thousands of consumer products, warn Californians of possible exposure to carcinogens or reproductive toxins. Prop. 65’s list has grown to more than 800 chemicals, with no end in sight. And more chemicals beget more ill-informed warning labels.

   The warnings lack the content necessary to ensure that the public receives useful information about potential exposures. But consumers should not assume that a warning means that they are at risk of harm. That’s because a warning may be required even if the risk is non-existent or vanishingly small. Warnings aren’t required if businesses can show that exposure to a listed chemical is below a so-called “safe harbor level.” But California’s penchant for listing chemicals has far surpassed its ability to promulgate safe harbor levels. Consequently, most chemicals listed under Prop. 65 have no safe harbor level to help businesses decide whether or not to warn. Thus, businesses often opt to over-warn by providing a warning even when consumers are exposed to few, if any, of the Prop. 65 listed chemicals.

   While excessive labeling does not help consumers, it’s often necessary for businesses to ward off lawsuits.

   Unlike most environmental and health statutes, Prop. 65 shifts the burden onto businesses to prove that an exposure to a listed chemical is below the safe harbor level. Exacerbating the problem, lawyers collect a portion of the civil penalties, on top of attorney fees. Thus, for many, the “bonanza for private lawyers” foreseen by those arguing against Prop. 65 in 1986 has come to fruition. Because the cost of taking a Prop. 65 lawsuit to court is expensive, time-consuming and difficult to win, most businesses opt to settle. Lawyers have collected more than $150 million in attorney fees alone since 2000.

   Meaningless warnings and out-of-control litigation are serious problems that Gov. Jerry Brown has acknowledged and vowed to fix. Unfortunately, the state’s latest proposed solution to make the warnings more useful and meaningful may be worse than the status quo.

   The proposed changes would make warning labels more alarming. Labels would come with a “hazard” symbol and would name at least one listed chemical, but businesses would be barred from providing consumers with factual information that puts warnings in context for consumers – even information from the U.S. Food and Drug Administration. Consumers looking for more information will be referred to a state-run website that offers little helpful context about health risks.

   After 30 years, it is time to ask whether the ubiquitous Prop. 65 warnings should remain, or whether they should be sunset to give way to a different approach. Prop. 65 emerged out of a climate of frustration that state agencies were not doing enough to enforce environmental laws and to protect the citizenry from hazardous substances. It is unclear whether this climate persists, or if Prop. 65, as currently drafted, would overwhelmingly pass again.

   There are undoubtedly other approaches that could serve to redress Prop. 65’s warnings and its other infirmities. Until that occurs, however, Prop. 65’s fundamental flaws remain unaltered, bounty hunting lawyers continue to thrive, benefits remain elusive, and the costs on businesses, consumers and taxpayers continue to mount.

   David Fischer is senior director at the American Chemistry Council.

   http://www.ocregister.com/articles/prop-720370-warnings-businesses.html
   

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5. (ACC Mentioned) Our Opinion: A Slightly Less Toxic System to Protect our Health

   Jun 23, 2016 | Bennington Banner

   On Wednesday, Pres. Barack Obama signed into law a sweeping overhaul of the nation's chemical safety standards.

   "Here in America, folks should have the confidence to know that the laundry detergent we buy isn't going to make us sick, that the mattresses our babies sleep on aren't going to harm them," Obama said at a signing ceremony.

   The law has been long overdue. In fact, it took 10 years to write, due to wrangling over how much power the Environmental Protection Agency should have in testing and regulating the more-than-80,000 chemicals used in the United States. It's kind of frightening to learn that only about 7 percent of the roughly 3,000 chemicals that are in high use have been tested for safety.

   The bill revises the Toxic Substances Control Act of 1976, which prevented the Environmental Protection Agency from regulating even the most harmful chemicals, such as carcinogenic asbestos.

   "The measure is the most significant environmental law in more than a quarter-century," wrote The Hill's Timothy Cama. "It promises to completely revamp the way the federal government oversees thousands of potentially toxic chemicals sold to millions of Americans every day in common products."

   The bill, a miracle of legislative sausage making, had the support of major business groups such as the American Chemistry Council and the National Association of Manufacturers, as well as safety and health groups like the Environmental Defense Fund. But to get that support, noted Cama, the bill blocked states from taking action to control chemicals, which is bound to be controversial in states that had taken the lead in regulating substances.

   The International Business Times' Maria Gallucci, noted that because the sausage had so many chefs, the bill is pretty bland and not as strong as it could be when it comes to protecting our health.

   "The EPA will still face substantial hurdles in reviewing the tens of thousands of chemicals currently on its plate," wrote Gallucci. "Some organizations, such as the U.S. Public Interest Research Groups and Physicians for Social Responsibility, said that while the updated law is better than the original, the reforms don't do enough to ensure EPA has sufficient funding or staffing power to review potentially toxic chemicals."

   Chemical companies will initially pay $25 million in annual fees to help cover the costs of EPA's reviews of thousands of chemicals, but that funding is not nearly enough to test and regulate all the chemicals in use today.

   "Even the best law will be meaningless if EPA doesn't have the resources needed to review the hundreds of dangerous chemicals already on the market," wrote Melanie Benesh for the Environmental Working Group. "Under the best-case scenario, scores of chemicals could be regulated within a decade. Under the worst-case scenario, chemical companies use litigation to limit EPA's authority — which is exactly what happened 25 years ago, when the courts overturned EPA's attempt to ban asbestos."

   Richard Denison, writing for the Environmental Defense Fund, noted that despite the bill's flaws, it "held the seeds of many of the reforms we sought even as it had many provisions we did not support." EDF was also concerned that if the bill wasn't approved, the nation would lose another opportunity to reform TSCA.

   "We believed that the best way to fix the serious problems with the bill was to help get it moving through the legislative process, work diligently to find solutions to those problems that could still retain bipartisan support, and encourage the engagement of additional lawmakers to make those changes in exchange for their support for the bill."

   As Denison noted, now the real work — implementing the law — begins. "It's vital that its implementation lead to improved public health protection as well as a restoration of public confidence, after decades of erosion of that confidence under a badly broken chemical safety system. That means the EPA needs to be given some breathing room, to get a new system up and running, and to get some points on the board early that demonstrate its ability to make decisions and take needed actions."

   http://www.benningtonbanner.com/editorials/ci_30050973/our-opinion-slightly-less-toxic-system-protect-our
   

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Energy News

6. House GOP's Abrupt Recess Will Delay EPA Bills

   Jun 24, 2016 | Inside EPA

   House GOP leaders' abrupt decision to recess until after the July 4 holiday will delay action on the pending fiscal year 2017 spending bill for EPA and on legislation to cut back deference courts give the agency's legal interpretations, forcing the measures to compete with other legislative priorities in the chamber's brief July session.

   The House was originally scheduled to begin its holiday recess June 27, but Speaker of the House Rep. Paul Ryan (R-WI) changed that plan and adjourned the chamber early on June 23, in response to Democrats' "sit-in" protest that aimed to force votes on gun control legislation.

   Cutting the June session short means the House members are leaving Capitol Hill without acting on the FY17 EPA spending bill that would fund the agency at $7.98 billion -- a $164 million cut from its current $8.14 billion, and $122 million below the Senate's proposed $8.1 billion level.

   Also unresolved is H.R. 4768, a pending bill that would reverse the Supreme Court's long-standing doctrine ofChevron deference, under which judges will defer to agencies' readings of ambiguous statutory text as long as that reading is "reasonable."

   The Chevron precedent has been decisive in many environmental challenges, including the recent high court suits over EPA's mercury and air toxic standards for power plants and its greenhouse gas permitting program. But critics of the agency, including House Republicans, have argued that courts should enforce the best reading of a law rather than backing any "reasonable" interpretation by an agency, and say offering deference erodes the separation of powers.

   >When the House does return on July 5 it will have little time to deal with those and other pending bills, because it is scheduled to adjourn again for the summer on July 18, not returning until Sept. 6. At that point there will be just 17 legislative days before funding for the federal government expires at the end of FY16.

   Despite those hurdles, before ending its session the House passed a controversial Clean Water Act (CWA) measure to temporarily exempt pesticide sprayers from discharge permitting.

   The provision was included in an FY17 funding bill for the Department of Veterans Affairs and military construction activities. The bill passed by a 239-171 vote.

   The funding bill's CWA language would establish a 180-day window, starting with the date of its enactment, where pesticide sprayers would not be subject to CWA permit mandates -- a measure Republicans are saying would aid efforts to kill mosquitoes that may carry the Zika virus.

   The GOP has long sought to pass similar exemptions in stand-alone bills and legislation to amend the CWA and Federal Insecticide, Fungicide and Rodenticide Act. A version did pass the House in the 113th Congress, after initially failing to gain enough votes, but died in the Senate.

   http://insideepa.com/news-briefs/house-gops-abrupt-recess-will-delay-epa-bills
   

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7. Sit-in Casts Doubts about Legislative Prospects Before Election

   Jun 24, 2016 | E&E Daily

   By George Cahlink and Geof Koss

   House Speaker Paul Ryan (R-Wis.) hoped to head into the Fourth of July break touting bold GOP plans for achieving energy independence, repealing Obamacare and crafting a tax code overhaul in 2017.

   Instead, Ryan has spent the past few days scrambling to respond to a nearly 26-hour, unruly Democratic protest on the House floor and salvage any hopes for moving legislation in this session of Congress.

   Ryan sought to look forward yesterday morning as the protest, aimed at forcing votes on gun legislation, neared its conclusion.

   "We are not going to allow stunts like this to stop us from carrying out the people's business," he asserted.

   But lawmakers and aides from both sides of the aisle said this week's turn of events underscore how partisan Capitol Hill has become this election season. They say partisan tensions from the protest will leave an already polarized Congress even more hard-pressed to pass any significant legislation, including an energy overhaul and the annual spending bills, before this November's general elections.

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   House Energy and Commerce Chairman Fred Upton (R-Mich.) told E&E Daily this week that "everyone looks to be constructive" on reconciling competing House and Senate energy bills but said there's little chance of a deal before Congress leaves for a seven-week break on July 15.

   "It's a pretty comprehensive bill -- lots of different issues, many different disagreements. I am one who believes we can get there, but it's going to take some hard work and clearly will not be done overnight," Upton said.

   Rep. Frank Pallone (D-N.J.), the ranking member on the Energy and Commerce Committee, expressed serious doubts about whether any deal can get done on energy. He called the House-backed energy bill "awful" and "counterproductive" because it favors fossil fuels over renewables.

   "Unless this is a very minimal, watered-down bill, it's highly unlikely that we can accomplish much," said Pallone, a visible figure during the House floor protest pounding out chants of "no bill, no break" on the House rostrum.

   Senate and House leaders of the energy panels met this week but did not schedule another meeting nor did they set a timeline for a deal (Greenwire, June 22).

   Some lawmakers say an early morning decision yesterday by House Republicans to pass a partisan $1.1 billion Zika aid package, despite efforts at conference negotiations, is not a promising sign for other accords.

   "Certainly my colleagues will have doubts," said Washington Sen. Maria Cantwell, the top Democrat on the Senate Energy and Natural Resources Committee, when asked about how that failed Zika conference would affect a potential one dedicated to the energy bill.

   Republicans defended the $1.1 billion Zika legislation as fair and overdue to address an emerging public health crisis. They said they had no option but to push it through early yesterday morning only hours before the recess because of the floor protest and a need to act before adjourning for the Fourth of July.

   "You think we are going to have a civilized conversation about the Zika virus? You think [Democrats] were interested in coming to the mic, and debating Zika? Of course not. They were screaming and shouting over each other," Ryan said in defending his move.

   Democrats criticized the bill over its call for spending offsets and its inclusion of several policy riders, including one offering a six-month waiver of U.S. EPA permits for spraying mosquito pesticides.

   Senate Minority Leader Harry Reid (D-Nev.) called the Zika bill a "disgrace" and said it would allow more pesticides into the environment. Senate Democrats are expected to be united in opposing cloture on the bill, meaning the measure will lack the 60 votes needed to advance in the Senate.

   Work on annual spending bills was also complicated by the Democrats' protest. The House had hoped to finish the annual financial services spending bill this week and then take up the Interior-Environment bill the week of July 5.

   Ryan, who has repeatedly made passing all 12 spending bills this year a priority, seemed resigned yesterday that the House would not be able to do so before the new fiscal year begins Oct. 1.

   "I want to move as much appropriations product through the House floor -- as much as possible," Ryan said. "And I don't want to talk about [stopgap funding bills] because that means we are shortchanging the process we're trying to get going."More protests possible

   Democrats, meanwhile, are not ruling out new protests when the House comes back next month.

   "I'm saying that [while] we are going to leave here today, this protest will not end," said Assistant House Democratic Leader Jim Clyburn of South Carolina, who helped coordinate the sit-in.

   House Minority Leader Nancy Pelosi (D-Calif.) did not promise more floor protests but said to expect more "spontaneity" from Democrats who have yet to get the votes they want on gun legislation. She added the effort showed Democrats were in a "whole new world" in trying to force legislative action.

   New York Sen. Chuck Schumer, a party leader who like most other Democratic senators visited the House floor during the protest, sounded a discordant note when asked what the protest might signal for future legislative prospects.

   "I think the Republican leadership on both sides is letting the [National Rifle Association] run the show," he said.

   Ryan for his part dismissed the protest as a "publicity stunt" and "fundraising scheme." He said he's "reviewing everything" to make sure similar floor takeovers do not occur again.

   And in yet another sign of congressional disunity, Senate Democrats in a press release used last night's charitable congressional baseball game to make a political point. They called on the GOP to field only eight players, not the standard nine, since they have not confirmed a ninth Supreme Court Justice.

   "If eight is enough for the Supreme Court, it's enough for your baseball team," the Democrats' release chided.

   http://www.eenews.net/eedaily/2016/06/24/stories/1060039353
   

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8. Brexit Will Sidetrack Key Energy and Climate Reforms

   Jun 24, 2016 | PoliticoPro

   By Sara Stefanini

   The European Union’s far-reaching energy union project is likely to be hit by turbulence and delay in the wake of the U.K.’s vote to leave the bloc.

   The second half of next year is a crucial period for the EU’s energy union plan — which aims to knock down national borders so that gas and electricity can flow freely from one corner of Europe to another, all while cutting emissions. Many of the most important elements of the program have to be pushed through during what was supposed to be the U.K.’s presidency of the Council of the EU, running from July to December 2017.

   In theory, Britain could still take the reins while continuing negotiations for exit. In practice, the remaining 27 countries will likely be averse to giving the rotating seat to a country that won’t be around to feel the effects of decisions taken by EU leaders, and even London may shirk the extra workload, EU diplomats said, asking not to be named.

   “At the institutional level it should be allowed. The presidency, however, is a primarily a political exercise,” said one.

   Either way, energy and climate policies for 2020 to 2030 are likely to be put on the back-burner until more pressing issues, such as a new U.K.-EU relationship, are worked out.

   “It’s a substantial risk to the energy union legislation, being bogged down by a presidency that’s not fully designed to be ramping things forward as quickly as possible,” said Jonathan Gaventa, director of the environmental analysis group E3G.

   The list of policies includes the Emissions Trading System (ETS) reform; an overhaul of the bloc’s electricity market rules and design; targets for renewable energy, energy efficiency and emissions reductions in agriculture, transport, buildings and other sectors; and, possibly, the Paris climate agreement’s ratification.

   “To make this happen, we need strong presidencies, and the U.K. presidency would have been the right one at the right moment,” said Wendel Trio, director of the NGO Climate Action Network Europe, adding that the U.K. would have been able to close some of the files and move others forward. “The results of the referendum will make it more difficult to play that role.”

   If the U.K.’s presidency is canceled, the EU’s energy and climate targets for the next decade might not be finalized in time for 2018, when the 196 governments that signed the Paris agreement meet for the first time to re-evaluate their targets and progress, Trio added.

   But even if the U.K. doesn’t step down from the presidency, it will find it difficult to take a tough stance on any issues on the table.

   An emissions trading void

   The ETS reform is likely to take the biggest hit from the U.K.’s exit.

   Britain has long been a champion of using market-based pricing to curb emissions. It had a national voluntary system before the EU’s market was even created. It is also the only country in the EU to have set its own floor price for carbon emissions from power plants, back in 2011 — something France is now looking to emulate.

   The ETS is the EU’s primary tool for meeting the Paris agreement’s goals. The problem is that the market is significantly oversupplied with emissions permits, and prices are much too low to encourage a shift to cleaner technologies.

   “The U.K. is a major center for Europe’s carbon, energy and financial markets, so its involvement in European policymaking in these areas is essential,” said Dirk Forrister, president and CEO of the International Emissions Trading Association, a business group. “A large pro-markets void risks emerging in Brussels if the U.K. were to leave.”

   The U.K.’s exit would further complicate the ETS reform because it raises new questions about whether the country remains a part of the EU’s emissions market, and the rules around its membership, he noted.

   It’s already been nearly a year since the European Commission presented its long list of proposed ETS fixes. Under an optimistic timeline, EU environment ministers would reach an agreement when they meet under the Slovakian presidency on December 19. The file would go into negotiations between the Council, Commission and European Parliament in about March 2017.

   But timelines have a tendency to slip, and emissions trading is an especially complicated and divisive issue.

   On the ETS and other climate policies, the U.K. tends to vote with a bloc of progressive countries such as Germany, France and Sweden. But on energy questions about the Commission’s power to monitor country progress towards their 2030 targets for renewables and efficiency, or on whether to allow nuclear energy, it tends to be allied with Central and Eastern European countries.

   For either side, the U.K.’s exit means the loss of 29 votes in the Council. France, Germany and Italy are the only others with that many.

   https://www.politicopro.com/energy/story/2016/06/brexit-will-sidetrack-key-energy-and-climate-reforms-122142
   

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9. 5 Ways Brexit Will Transform Energy and Climate

   Jun 24, 2016 | Politico

   By Sara Stefanini

   Britain’s departure from the EU will force broad changes to the bloc’s energy and climate policies, and remove a crucial ally for Central Europeans — but it will also give London far more freedom to pursue nuclear projects.

   The U.K. has often been an energy outlier in the EU, advocating nuclear power and shale gas sources shunned by others. Its alliances tend to shift, always with the aim of keeping interference from Brussels to a minimum and taking an ambitious yet financially minded approach to tackling climate change.

   But there’s a lot to lose on both sides of the Channel after Thursday’s vote.

   A post-Brexit U.K. will still be tied to the rest of Europe through gas and electricity links and an emissions trading market it is unlikely to ditch, but it will have lessinfluence on the bloc’s decisions. The EU, instead, will lose a strong pro-free market voice, which has historically helped tone down some more statist schemes coming from Continental capitals.

   Leaving the EU will relegate the U.K. to a sort of lobby group in Brussels, Swedish Liberal MEP Fredrick Federley told a POLITICO conference a few days before the referendum.

   “It would be sad to see the old empire of the United Kingdom reduced to another Norway,” said Federley, who leads the Emissions Trading System (ETS) reform discussions in the European Parliament’s Industry and Energy Committee. Norwegians “are now lining up outside my office to meet because they want to affect the policies of the ETS — companies, ambassadors, ministers and members of the national parliament.”

   Here are the five ways a Brexit will impact energy and climate:1. Climate recalibrations

   The U.K. has traditionally been a leader on climate policies, in 2008 becoming the first country to set a long-term binding law cutting emissions by 80 percent by 2050 and creating a voluntary carbon emissions market before the EU launched its own  bloc-wide system. But if Prime Minister David Cameron steps down (as he’s expected to do), there’s no promise that leading Leave politicians will follow that high-ambition track.

   “While not all Euroskeptics are climate skeptics, few climate skeptics are not also Euroskeptics,” the environmental analysis group E3G said in a private briefing note on the possible effects of the referendum. This means any new government could, for instance, scrap the country’s renewable energy targets and tax on high-polluting power plants.

   A post-Cameron leadership could also change the country’s approach to the Paris climate agreement. “It could potentially submit a highly ambitious [nationally determined contribution] to the U.N., it could ramp down its ambition, or it could ignore it, which would be a blow to the whole process,” said Will Nichols, a senior environment and climate change analyst at the risk advisory firm Verisk Maplecroft.

   Christiana Figueres, the U.N.’s outgoing climate secretariat chief, agreed earlier this week that a Brexit would force a revisit of the plan EU countries submitted in Paris as a 28-member bloc. “From the point of view of the Paris agreement, the U.K. is part of the EU and has put in its effort as part of the EU, so anything that would change that would require then a recalibration,” she said.

   Even if the U.K. wants to continue shoring up global climate change efforts, it will have a harder time doing so as a stand-alone country that only produces 2 percent of worldwide emissions, said Barry Gardiner, the Labour Party’s shadow climate and energy minister.

   Asked about the interplay between London and Brussels climate policies at a U.K. parliamentary hearing in January,  Cameron agreed that climate is an issue on which the two sides work well together, stressing that his government “played a key role” in getting the EU to high ambition. The U.K. takes a “strong view” on sustainable development and climate change, he said. “So we’re able to lead by example in these forums, including in the European Union.”2. Security in numbers

   Energy security was at the core of the Brexit energy and climate debate, with the Remain camp arguing that leaving the EU would weaken the U.K.’s bargaining power at a time when its domestic oil and gas is waning.

   The U.K.’s Energy and Climate Change Secretary Amber Rudd put the argument in simpler terms: strength in numbers.

   “I’m old enough to remember the power cuts of the 1970s, when Britain was the sick man of Europe,” she said in a speech in March on the benefits of staying in the EU. Rudd pointed to the threat of “countries such as Putin’s Russia,” which uses its ability to cut off deliveries or hike prices as a foreign policy tool. “As a bloc of 500 million people, we have the power to force Putin’s hand.”

   But the European Commission’s latest package of energy proposals — focused on securing and diversifying the bloc’s gas supplies — do the very opposite, countered Andrea Leadsom, Rudd’s deputy as minister of state for energy and climate change.

   The Commission’s desire to get a look at intergovernmental energy agreements between EU and non-EU countries before they’re signed would leave the U.K. “possibly reliant on a group of unelected eurocrats,” she said in a speech in May.

   Of even bigger concern is the proposal to require countries to help out their regional neighbors if they have a gas supply crisis, she added. “If we remain to become part of the energy union, and another member state faces problems with their gas security — perhaps because of a political dispute with a supplier — we will be required to deprive our own small businesses of energy here at home.”3. Energy bills go up… or down?

   Both sides of the Brexit debate argued their position would ensure lower household power and gas bills.

   An independent report commissioned by the British power and gas grid operator National Grid fell in the Remain camp’s favor. Leaving the EU could cost the U.K. up to £500 million per year in the 2020s, as a result of uncertainty over energy and climate investments, it found.

   Staying in the EU would have kept down the energy sector’s cost of finance, but on the other hand leaving will free Britain of bloc-wide targets that constrain the choice of energy technologies, the report said.

   British energy prices depend on EU policies, Iain Conn, CEO of the British energy company Centrica, told POLITICO in May. The country imports about 6 percent of its electricity from the Continent, and 50 percent of its gas from inside and outside the EU.

   “If the U.K. is not around the table in the EU, influencing how efficient the European energy market can be, how much competition there is in the European energy market, then the probability is that our customers in the U.K. will see higher energy costs,” he said.

   Leavers disputed these claims, arguing that without the cost of being an EU member, the government will have more money to help the U.K.’s poorest.

   “If you vote to leave, the hundreds of millions of pounds that we give every week to the European Union come back to Britain,” Justice Secretary Michael Gove told the Independent in May. “One of the ways in which we can help those most in need is by cutting VAT on domestic fuel. Because fuel bills are 10 percent of the average weekly outgoings of working families.”4. Central and Eastern Europe loses a friend

   As an EU member, the U.K. formed a partnership with Central and Eastern Europeans in debates over how much say the Commission, and other members, should get in a country’s climate and energy policies.

   Brexit will be a loss for the eastern nations, not just because the U.K.’s presence diversified the group, but because it brought voting numbers in the Council of the EU — where Britain, Germany, France and Italy have the greatest weight thanks to their large populations.

   The U.K. and the CEE want a flexible system for ensuring countries do their part to meet the bloc’s emissions, renewables and efficiency targets for 2030, all while keeping the Commission’s monitoring to a minimum. That puts them at odds with countries such as Germany, Denmark and Sweden, which want to make sure laggards are held accountable.

   Without London’s banking, Central Europeans will have a tougher time resisting efforts to give Brussels more say in national energy policies.5. Investors in the lurch

   Investors like long-term predictability, so the U.K.’s exit will likely cause upheaval for businesses planning to build renewable energy plants or drill for shale gas in the U.K., at least for a couple of years.

   The chiefs of oil and gas majors BP, Shell and Centrica were among the 200 business leaders who signed a letter in February warning that a vote to leave “put the economy at risk.”

   Ambiguity about the new U.K.-EU relationship will raise uncertainty about changes in energy and climate policies, leaving investors in limbo. “And investor uncertainty often comes with a risk premium,” said Antony Froggatt, a senior research fellow at the London-based think tank Chatham House.

   Leaving the single market could also open the U.K. to new import taxes, adding cost to equipment such as foundations for offshore wind farms or parts for the French-led Hinkley Point C nuclear power plant project in Somerset. But it would also eliminate the EU’s trade duties on Chinese solar equipment imports, exposing domestic companies to much cheaper panels and modules, according to Bloomberg New Energy Finance, an analysis firm.

   “You could imagine the U.K. would work rapidly on free trade agreements with the European Union, but that would take some time,” said Dario Traum, a policy adviser at Bloomberg New Energy Finance. “And over that period of uncertainty, you would probably see big investors holding back until they know for sure what environment they would be operating in.”

   http://www.politico.eu/article/5-ways-brexit-will-transform-energy-and-climate/
   

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10. EPA Asked to Clarify Clean Power Plan Compliance Dates

    Jun 24, 2016 | BNA Daily Environment Report

    More than 100 House members led by Rep. John Ratcliffe (R-Texas) asked the Environmental Protection Agency to clarify the agency's position on the Clean Power Plan compliance deadlines, given the Supreme Court's decision to halt the rule.

    The June 23 letter to EPA Administrator Gina McCarthy argues that the court stay necessarily delays compliance deadlines, in contrast to a recent statement by McCarthy that the ruling didn't address the issue.

    The letter, signed by 112 lawmakers, expressed concern that McCarthy's statements could undermine the certainty the Supreme Court “was seeking to provide when it granted applications to stay” the rule to control carbon dioxide emissions from fossil-fuel-fired power plants.

    The lone Democrat to sign the letter was Rep. Collin Peterson (D-Minn.).

     http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=92488160&vname=dennotallissues&fn=92488160&jd=92488160

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11. EPA's McCarthy Hails Energy Efficiency for Climate Fight

    Jun 24, 2016 | BNA Daily Environment Report

    By Alan Kovski

    The Environmental Protection Agency continues to work with states on voluntary measures including energy efficiency to help prepare for the Clean Power Plan, EPA Administrator Gina McCarthy told the Energy Efficiency Forum 2016.

    “It's still consistent with the court stay,” McCarthy said June 23 at the forum, sponsored by Johnson Controls Inc. and the United States Energy Association.

    She was referring to the stay imposed by the Supreme Court on the EPA's carbon dioxide standards for existing power plants. The stay was imposed even before argument could be heard by the U.S. Court of Appeals for the District of Columbia Circuit, which has scheduled argument before the entire court Sept. 27.

    Rosy Outlook

    McCarthy said it was just as well that the circuit court will handle the case through an en banc panel rather than taking the extra three or four months that would have been required for a three-judge panel decision followed by an en banc review.

    “We're hopeful that it will be resolved next year. The exact timing I'm not sure,” McCarthy said. She expressed absolute confidence that the plan will survive the court fight.

    Compliance does not begin until 2022, “so we gave ourselves a lot of lead time,” she added.

    Numbers Behind Effort

    Energy efficiency is “central to our fight against climate change,” McCarthy said.

    McCarthy acknowledged that she was preaching to the choir in such a forum. She offered some numbers to arm the choir against any skepticism about the practicality of energy efficiency.

    The market for energy efficiency in buildings was $63.6 billion in 2015, she said. The government's Energy Star program to promote efficient equipment now has 16,000 partners, including more than half of the Fortune 500 companies, she said. Twenty-three states now have mandatory energy efficiency requirements, she said.

    She said energy efficiency work would lead to an estimated 250,000 new hires in 2016 alone.

     http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=92488141&vname=dennotallissues&fn=92488141&jd=92488141

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12. EPA Chief Rejects 'Old, Tired Argument' that Regs Hurt Economy

    Jun 23, 2016 | E&E News PM

    By Emily Holden

    U.S. EPA chief Gina McCarthy at an industry conference today chided critics for arguing that curbing greenhouse gas emissions will damage the economy and cause job losses.

    "If someone's making that old, tired argument that what's good for the environment is bad for the economy, can you remind them that that's so yesterday?" McCarthy said to laughter at the annual Energy Efficiency Forum in Washington, D.C.

    She lauded energy efficiency as both an economic growth policy and an environmental protection strategy and thanked a ballroom full of industry experts at the National Press Club for "making negawatts the new megawatts."

    EPA points to advances in energy savings as a main way to limit costs and bolster employment while states reduce power-sector carbon levels under the Clean Power Plan. But opponents say EPA is overestimating how much energy efficiency could help.

    Republicans in Congress have been citing reports from the U.S. Chamber of Commerce that EPA's rosy estimates of electricity prices under the rule are inconsistent with the 3 percent higher prices the U.S. Energy Information Administration projects, for example (ClimateWire, June 23).

    But McCarthy cited the rapid growth of energy efficiency and renewable power and emphasized that the regulation is flexible enough for states to find ways to implement it without tanking their economies.

    "Innovative local projects can make a tremendous difference, especially in low-income communities," McCarthy added.Clean energy growth outpaces projections

    An increasing number of studies show the United States is largely on track to comply with the rule, although regions that are dependent on coal power could feel the greatest impacts.

    At a separate Washington conference yesterday, Sarah Dunham, director of EPA's Office of Atmospheric Programs, noted that clean energy and power-saving programs are growing faster than projected -- bringing down carbon levels years before the Clean Power Plan is even set to begin. That's because of technological improvements, renewable power tax incentives and other reasons "separate and apart" from the Clean Power Plan, she said.

    But David Terry, executive director of the National Association of State Energy Officials, said although the energy markets writ large are telling a positive story, consumers and businesses in coal-producing states are still being profoundly affected -- mostly by a shift from coal to cheaper natural gas that has little to do with environmental regulations.

    McCarthy said energy efficiency is one way to help those communities. She applauded the 23 states that have mandatory energy efficiency requirements and said a handful more also allow efficiency to count toward clean energy goals.

    "It's even more amazing when you consider that states aren't taking these steps because they have to," McCarthy said. "They are taking these steps because it's smart to do, and EPA agrees. That's why energy efficiency is such a crucial part of our Clean Power Plan to cut carbon pollution from the U.S. power sector."

    The agency recently released additional details about its Clean Energy Incentive Program -- a part of the Clean Power Plan meant to spur early renewable power development and investments in energy efficiency in low-income communities.

    Opponents of the rule have criticized EPA for continuing to offer assistance to states that are voluntarily still planning for the rule, despite a Supreme Court stay on its implementation.

    Fourteen states wrote a letter to EPA asking for specific information (EnergyWire, April 29).

    "Many states are in this boat. They have asked us to provide the tools so they can continue to move forward, and that is exactly what we're doing," McCarthy said.

    She said the work is "consistent with the court stay" and will allow EPA to make sure that when the stay is lifted -- which she is confident will happen -- states will "have an ability to start running as soon as the race starts again."Planning on track

    McCarthy insisted Clean Power Plan planning has not stalled, adding that much of it is happening at the regional level -- where states must work together to sort out interstate electricity issues.

    She repeatedly emphasized that she is sure the Clean Power Plan will survive legal challenges.

    "There are many issues that have been raised, as you can guess because it's a complicated, large rule," she said. "We fully expected that it would be litigated. We've had some unexpected turns as well, but I think we feel pretty confident about it."

    She also added that because the U.S. Court of Appeals for the District of Columbia Circuit decided to skip straight to hearing the challenge en banc -- with all the participating judges -- litigation could be resolved two to four months sooner than originally anticipated.

    "We're hopeful that it will be resolved next year," she said.

    Regardless, because the Clean Power Plan requirements would not begin until 2022, the temporary stay should not be a problem, she said. "We did give ourselves plenty of lead time," McCarthy said.

    McCarthy stressed that the next EPA administrator -- whomever "she" might be, she joked -- will need to continue the momentum necessary to get greenhouse gas levels under control.

    She said her advice would be to "just continue to make sure that you're following the science and the law."

    "We have seen the transition here in the energy world. The path is actually very much set. You just need to continue to make sure that you're moving the momentum forward," McCarthy said. "We need to recognize we're on the right path. We all know that Paris is great, but we've got to keep the momentum, and we've got to set ourselves the ability for the next generation of technology that is going to continue the progress moving forward."

    The power industry is increasingly concerned as market forces push nuclear power plants offline while the need for zero-carbon electricity grows.

    Asked how the United States will achieve carbon goals if many large nuclear plants retire, McCarthy said Energy Secretary Ernest Moniz is "sort of bullish" in his belief that the next generation of nuclear power is key to climate goals.

    "I don't have to pick and choose," McCarthy said. "There's been a lot of concern about making sure that people know if they shift away from nuclear that there will be a makeup that's necessary. You've got to get more zero-carbon systems in the process. But it's my job to make sure that the flexibility is there that you can get there a zillion different ways."

    That way, McCarthy said, she meets her goals but she lets the markets and states decide how to achieve carbon cuts.

    Noting that environmental and energy concerns are increasingly converging, McCarthy said, "Hopefully, we're headed to federal agencies working together so that we're aligning our missions and instead of asking people whether they want to breathe clean air or have good electricity -- reliable and affordable -- you do both."

    "That is exactly what people want, and I think that is finally what the federal government's finally figuring out how to deliver," she said, adding that she thinks President Obama has done a "remarkable" job pulling agencies together to collaborate.Boosting efficiency

    Energy efficiency has been a central plank of the Obama administration's climate strategy, particularly through the Department of Energy's efficiency standards on appliances and buildings. To date, the administration has released more efficiency rules than the previous two administrations combined, covering equipment ranging from dishwashers to air conditioners (Greenwire, April 8).

    Separately, Johnson Controls Inc., a co-sponsor of the event today, released a survey of efficiency investments from 1,000 executives in the United States, Brazil, China, Germany and India.

    Fifty percent of respondents in the survey said their organizations are paying more attention to energy efficiency than a year ago, with 72 percent anticipating increased investments in energy efficiency and renewable energy over the next year. The company noted that in 2013, 37 percent of respondents said they were paying attention to the issue, with 42 percent planning to increase investments.

    Similarly, the report found that 64 percent of U.S. organizations have a carbon reduction goal, compared with 41 percent three years ago.

    "As in the past, respondents report lack of funding, insufficient payback, savings uncertainty and a lack of technical expertise as the most significant barriers to investment," the survey found.

    http://www.eenews.net/eenewspm/2016/06/23/stories/1060039338
    

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13. US Set to Become Major Global Natgas Supplier as Exports Soar: DOE Official

    Jun 23, 2016 | Platts

    By Jim Magill

    Demand for US natural gas for export -- including both pipeline and LNG exports -- is set to skyrocket through the next few decades, a US Department of Energy official said Thursday, adding the country was on a path to become a top supplier to the international market. "We're going to have substantial increase in pipeline exports to Mexico and LNG exports are going to explode," Carmine Difiglio, DOE deputy director for energy security, said at Hart Energy's DUG East Conference in Pittsburgh.
    
    US gas production peeked last year at an average of around 80 Bcf/d before beginning to decline somewhat. However, the production drop-off is expected to be short-lived as demand for gas for export increases, Difiglio said.
    
    "We expect the growth will resume on a fairly steady basis and reach 83 Bcf/d by the end of 2017," he said.
    
    Difiglio noted that the dramatic increase in shale gas production over the last decade and a half is responsible for growing gas supplies beyond what is needed to meet US demand. Shale gas has grown from being less than 5% of total US gas supplies in 2000 to 56% of supplies today, he said.

    "The Marcellus and Utica shale basins continue to be the most productive for natural gas and especially impressive is the increase between last July and now," Difiglio said.
    
    "Year-on-year growth from 2015 to 2016 was greatest in Pennsylvania, Ohio, West Virginia, Oklahoma and North Dakota, but production was declining in the rest of the United States."
    
    While natural gas prices, which over the past several years have declined substantially in line with oil prices, are starting to come back up, Difiglio said there were signs that the increase would be gradual over the span of several years.
    
    "As production has been maintained and prices have been coming down, our storage now is very high and this will be a factor going forward in price recovery," he said.
    
    Difiglio said that as pipeline imports from Canada decline, the US is poised to become a major gas exporter.
    
    "A number of important LNG export projects are underway," he said, predicting that US gas exports would reach 10 Bcf/d by 2022 and double that volume to 20 Bcf/d by 2040.
    
    "We're expected to become one of the biggest gas exporters by 2022, only second to Qatar."
    
    By comparison, the US in 2015 exported 1.78 Tcf (4.88 Bcf/d), according to the Energy Information Administration.
    
    Difiglio warned, however, that even as US LNG export capacity begins to come online it will do so in a softening international LNG market.
    
    "In Asia, gas prices, the Japanese contract, has come down since the post-Fukushima spreads and now is very similar to European gas prices, but considerably higher than US prices, of course," Difiglio said.
    
    "We expect the spread will come back to more normal levels, with the Asian prices being the highest, Europe in middle and the US prices being lowest, but we're not going to see the kind of spread we saw after the Fukushima [nuclear] accident."
    
    Nonetheless, US exports will be very competitive, he predicted, as US LNG enjoys several advantages over global rivals.
    
    "US LNG projects are brownfield projects; they already have pipeline connections to gas supply, they have marine terminals, relatively efficient transition from regasification facilities to liquefaction," he said.
    
    He noted that in Australia, gas projects are "extremely expensive."
    
    "In Australia they have to have new offshore fields," he said. "They have to have pipelines coming from those fields. They have to have greenfield construction of the LNG facilities."
    
    So although US Henry Hub gas prices are expected to increase from their current levels, prices are still expected to remain very competitive compared with other potential LNG exporting countries, he said.
    
    In addition, the US enjoys a high elasticity of supply, something not found in much of the rest of the world.
    
    "If gas prices rise, production increases, so as we export more LNG the gas to supply the LNG terminals is coming from new production. It's not taking away from new consumption," Difiglio said.
    
    Difiglio also said that despite the substantial decline in international gas prices that is expected to impact the US LNG export market just as it begins to get underway, the global supply/demand picture still favors US LNG exports.
    
    This is reflected in the way that US LNG export contracts are written, which works to the benefit of the customer.
    
    "Firms that decline to take LNG deliveries have to take the tolling cost, the liquefaction cost of the facilities themselves. They're not obligated to pay for the natural gas," he said.
    

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14. U.S. Oil Companies Crank Up Production in Gulf of Mexico

    Jun 23, 2016 | The Wall Street Journal

    By Lynn Cook and Erin Ailworth

    Oil companies are pumping more crude off the U.S. coast in the Gulf of Mexico, a surprising trend that shows the resilience of the nation’s energy industry.

    Despite the worst price downturn in a generation, so much oil is starting to pour forth from offshore fields near Louisiana and Texas that it is partially offsetting declining output from shale regions on shore and propping up total American oil output.

    The U.S. is currently pumping about 8.7 million barrels a day, 480,000 less than at the end of last year, according to the Energy Information Administration, as low prices spur companies to shut down new exploration and some existing shale-oil wells begin to peter out.

    Production is forecast to drop further to 8.5 million barrels a day later this year.

    But well over 500,000 barrels a day of new Gulf crude is set to come online this year and next, according to a Wall Street Journal analysis of government data, company presentations and regulatory filings.

    The Gulf surge threatens to prolong the glut of crude that has built up in storage around the U.S. and helped push down prices, said Roger Diwan,vice president of financial services at IHS Energy.

    “The projects are coming faster and sometimes bigger than expected,” he said. “The ramp-up seems to have accelerated during low prices.”

    Gulf production is rising in part because a handful of massive oil fields sanctioned for development years ago by companies like  Freeport McMoRan Inc. and BP PLC when prices were higher are starting to pump oil this summer and fall. 

    But it is also going up because companies are finding that smaller satellite fields can be tapped relatively cheaply by linking them to existing offshore oil platforms by way of underwater pipelines.

    While production from many of these so-called tieback wells is reflected in forecasts from banks and analysts, the Journal analysis found that some of it appears to have been undercounted.

    American offshore oil production is on track to set a record in 2017, with 1.91 million barrels flowing out of the Gulf by year’s end, according to the U.S. Energy Department. That would be a 24% surge over 2015’s offshore oil output of 1.54 million barrels a day and would beat a previous high of 1.56 million barrels a day set in 2009, the year before BP’s Deepwater Horizon oil spill disaster temporarily shut down drilling, federal data show.

    While the conventional wisdom in the energy industry was that deep-water oil development was too expensive at current prices of around $50 a barrel, producers looking to squeeze out profits from existing investments have rushed to tap tiny wells offshore and connect them to oil platforms.

    One of them is Exxon Mobil Corp. It started pumping 13,000 barrels a day at the end of April from a well 200 miles south of New Orleans known as Julia, whose production is being piped back to Chevron Corp.’s Jack/St. Malo platform. Exxon expects Julia’s production to eventually hit 34,000 barrels a day.

    Big oil companies, including BP and Royal Dutch Shell PLC as well as independent exploration outfits like Anadarko Petroleum Corp. and Noble Energy Inc., are pursuing tiebacks. None would quantify how much production they expect to add from the projects, citing competitive reasons.

    Noble, which has prioritized tiebacks over some shale development, nearly doubled its Gulf output in the first quarter and has another offshore well starting to pump later this summer. Anadarko has more than 30 tieback well prospects in satellite fields, and will drill up to seven this year, according to Bob Gwin, chief financial officer.

    “At $60 oil, which hopefully is on the horizon, these opportunities have better than a 70% rate of return,” Mr. Gwin told analysts at the UBS Global Oil and Gas Conference in Austin last month.

    Tieback wells are drilled in fields not large enough to justify the hefty expense of building new giant floating installations in the Gulf. Some tieback wells are profitable when oil trades as low as $25 to $30 a barrel, and many more can make money when crude is between $30 and $40 a barrel, according to analysts at Wood Mackenzie, a consulting firm in Houston.

    Constructing the massive offshore oil platforms that bob in thousands of feet of water and suck crude up from beneath the ocean floor can take nearly a decade and billions of dollars. Once built, “you might as well make the most of it” by maximizing the oil each platform pumps and processes, said Terry Yen, an analyst with the U.S. Energy Information Administration.

    Deep-water drilling costs have fallen and will continue to drop as long-term contracts on rigs expire, according to IHS Petrodata.

    Companies are also getting better at accessing deep-water finds. Shell saved $1 billion drilling its Stones project in ultra-deep waters 200 miles southwest of New Orleans, which will start up next year, by using a slim-well design offshore engineers borrowed from onshore shale operations.

    Chevron recently executed a tieback to its Tahiti platform 190 miles south of New Orleans using a technique that allowed it to tap two oil reservoirs stacked on top on each other, resulting in a well that will produce 50% more oil and gas than originally thought, the company said in a recent earnings call.

    Gulf production has also grown thanks to the ingenuity of smaller players such as LLOG Exploration Co., a private deep-water driller based in Covington, La.

    It pioneered a platform-building process that it can bring new projects online in half the time it takes bigger rivals, said Gordon Loy, a researcher at Wood Mackenzie.

    http://www.wsj.com/articles/u-s-oil-output-to-get-boost-from-gulf-of-mexico-1466703667
    

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Chemical Security News

15. EPA Chemical Security Overhaul Ripe for Challenge: Attorney

    Jun 24, 2016 | BNA Daily Environment Report

    By Brian Dabbs

     The Environmental Protection Agency's proposed overhaul of its chemical security risk management framework is likely to get hit with a range of legal challenges, a partner at Bracewell LLP said June 22.

    The American Petroleum Institute and other industry groups will likely challenge the proposal, known as the Accidental Release Prevention Requirements: Risk Management Programs Under the Clean Air Act (RIN:2050-AG82), immediately following finalization, said Matt Paulson, who represents companies in the chemical manufacturing sector.

    Those groups are poised to litigate against what they see as statutory overreach and unauthorized enforcement authority on EPA's part, he said.

    The Obama administration's Spring Unified Agenda projected the release of a final rule in December, but Paulson suggested that could come sooner. He spoke at the Air and Waste Management Association conference in New Orleans.

    ‘Lock This Down.'

    “They are probably going to try to lock this down within the next two weeks in order to have six months before the new administration takes over, which makes it much harder for the next administration to change this rule in the seemingly unlikely hypothetical where there is a Republican administration taking over,” Paulson said.

    EPA officials, however, wrapped up the comment period for the proposal only six weeks ago, and the agency hasn't yet submitted the tentative final rule to the Office of Management and Budget for final review. The budget office typically takes months to finalize their review.

    The proposal requires chemical facilities to conduct analyses of inherently safer technologies and coordinate third-party audits, while revising language on emergency preparedness, public access to information on the facilities and disaster response coordination.

    Industry Auditing Complaints

    Christine Kurtz, environmental regulatory assurance manager at 3M, outlined a laundry list of industry complaints, echoing those issued during the comment period and an EPA hearing on the proposal.

    They say the rule requires too stringent competency and independency qualifications for potential auditors, which would limit the pool of available personnel, Kurtz said.

    “The third-party auditor could not have worked for your facility in the past three years and then won't be able to work at your facility for the next three years after,” she said. “It might make some consultants say ‘I'm not going to be an auditor' because probably the work is more valuable than just that single audit, and also it's probably going to mean that, well let's say a person hasn't worked at your facility in three years, than how can they be really all that familiar with your process?”

    Industry also criticizes the proposal for including safer technology language, which it says would unreasonably burden industry. The public disclosure mandates, meanwhile, would elevate the risk of terrorism, industry critics have argued.

    ‘Unauthorized Enforcement Authority.'

    The rule has legal “vulnerabilities,” but judicial annulment is no guarantee, Paulson said.

    The proposal's certification mandates, however, may mark a breach of enforcement authority, he said.

    “EPA does not have the resources to do a full Risk Management Plan inspection program and enforce it, and so what they've done here is they've outsourced it and forced industry to pay for it,” Paulson said. “That's what's going on here; that's what this rule is. It's brilliant. They're not stupid.”

    The U.S. Court of Appeals for the District of Columbia is expected to field the litigation because of the air regulation statute's national applicability language.

    Further, the existing statute requires the EPA to consult with the Occupational Safety and Health Administration, but the agency neglected to meet that obligation, Paulson said.

    The 2013 West, Texas, fertilizer explosion, which killed 15 people including 12 first responders, precipitated a chemical security Executive Order directing the EPA, along with occupational health and homeland security agencies, to reexamine the risk management program.

    Changes Unlikely

    EPA officials have repeatedly pointed to two-and-a-half years of industry outreach on the proposal as justification for the 60-day comment period they allowed.

    “The truth is they're not going to change a single thing about this rule. It is a legacy issue for the administration,” Paulson said.

     http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=92488126&vname=dennotallissues&fn=92488126&jd=92488126

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Transportation News

16. Are Railroads Up to Speed? Investigators Say No

    Jun 23, 2016 | The Christian Science Monitor

    By Lucy Schouten

    A federal investigation is placing the blame on Union Pacific for a train that derailed June 3 along the Oregon-Washington border, recommending that the industry update an aging braking system – a move that companies have so far resisted. 

    At least 27 accidents involving oil trains have occurred in the last decade, according to an Associated Press analysis. Lawmakers want to tighten the bolts on safety regulations, but have struggled to raise enough awareness about what some say is an urgent need to update the sprawling national rail system.

    "We're talking about upgrading a brake system that is from the Civil War era," Federal Railroad Administrator Sarah Feinberg told the Associated Press. "It's not too much to ask these companies to improve their braking systems in the event of an accident so fewer cars are derailing."

    Railroads have been working to implement Positive Train Control (PTC) and other safety measures for years, but numerous delays prompted lawmakers to agree to several deadline extensions. The updates needed are widespread, and the public appetite for such reform is generally whetted only when such accidents occur, as The Christian Science Monitor previously reported:

    Congress has also passed a bill to help the Department of Transportation update safety technology for railroads nationwide, but as of the December 2015 deadline for installing PTC, the department told Congress only 29 percent of commuter rails had successfully done so. The department estimated that full installation would not be possible until 2020.

    Environmentalists used the most recent derailment to reiterate their view that oil – particularly the highly flammable oil this train was carrying – should not be carried by train, especially along the scenic vistas of the well-used Columbia River.

    A federal report released Thursday suggested Union Pacific had conducted an inspection of the railroad shortly before the accident but failed to find the bolts that had rusted and broken, leading to a derailment and 14-hour oil fire. 

    Rail consultant Steven Ditmeyer said heavy cargo such as oil can place too much pressure on railways as "sheared-off" bolts loosen. The rails can then separate, leading to derailment and accidents. 

    "We need more rail safety, that's for sure," Sen. Chuck Schumer (D) of New York told Bloomberg.

    State officials have called for a halt on all railroad oil transport in Oregon. Congress does have several bills at ready that would require railroad companies to use updated old cars or contribute to an emergency fund if they ship cargo by rail, Bloomberg reported.

    Union Pacific responded by increasing its inspections from every 18 months to every three months. The report did not find any non-compliance with the train's speed or cargo loads.

    http://www.csmonitor.com/USA/2016/0623/Are-railroads-up-to-speed-Investigators-say-no
    

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17. Oil Pipeline Spills Thousands of Gallons Near California Coast

    Jun 23, 2016 | The Hill - E2 Wire

    By Timothy Cama

    An pipeline in southern California spilled up to 29,400 gallons of oil Thursday just a short distance from the Pacific Ocean.

    The leak spurred a hurried emergency response; firefighters were able to stop the oil before it reached the ocean, the Los Angeles Times reports.

    The spill happened on the northern edge of Ventura in the Hall Canyon area, and was originally estimated at up to 210,000 gallons after it was reported at 5:30 a.m. Thursday.

    It flowed into a ravine that leads to the ocean, but it was far enough inland that it would have taken a while to reach the Pacific, the Times said.

    The oil left a black sludge on the ground and over plants in the canyon.

    The line is owned by Crimson Pipeline, which has about 1,000 miles of pipeline in California and more in Louisiana. It was carrying oil for Aera Energy.

    Crimson shut off the pipeline quickly after the breach, but gravity pushed more oil out of the pipe.

    The spill happened just over a year after a pipeline owned by Plains All American spilled about 143,000 gallons of oil onto a beach in Santa Barbara County.

    That oil went into the ocean and reached as far as Los Angeles.

    http://thehill.com/policy/energy-environment/284672-oil-pipeline-spills-thousands-of-gallons-near-california-coast
    

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