Preview Newsletter
ACC PM 8/3/16
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(ACC Mentioned) Cracks in the Dam
Aug 3, 2016 | The Intercept
By Jon Schwarz and Lee Fang
BEFORE THE 2010 Supreme Court decision known as Citizens United, all money spent in federal elections urging the election or defeat of a candidate had to originate from identifiable human beings. -
(ACC Mentioned) The Chemical Activity Barometer Continues Growth Over Fourth Consecutive Month
Aug 3, 2016 | Gas World
By Rhea Healy
The Chemical Activity Barometer (CAB), a leading economic indicator created by the American Chemistry Council (ACC), has demonstrated consecutive growth over the past four months in its latest review. -
Calif. Issues First-in-U.S. Compliance Plan
Aug 3, 2016 | E&E Energywire
By Anne C. Mulkern
California's landmark cap-and-trade program for carbon emissions and proposed amendments to extend that system will be used to comply with U.S. EPA's Clean Power Plan, the state said yesterday. -
Clean Power Plan: All Pain, No Gain for West Virginia
Aug 3, 2016 | The Hill - Pundits Blog
By Garrett Ballengee and Michael Reed
August 3 will mark one year since President Obama announced the Clean Power Plan (CPP), the Environmental Protection Agency’s (EPA) strategy to decrease carbon emissions from power plants in order to combat the consequences of climate change. -
EPA Bashes Relevance of Rulings Used by Climate Rule Foes
Aug 3, 2016 | E&E Greenwire
By Amanda Reilly
U.S. EPA is rejecting opponents' claims that two recent court rulings bolster their legal challenges against the Clean Power Plan. -
Enviros Vow to Defend EPA Methane Standards Against Legal Fire
Aug 3, 2016 | E&E Energywire
By Ellen M. Gilmer
As an army of critics line up to challenge the Obama administration's new regulations for oil and gas methane emissions, environmentalists say they're prepared to jump into action in defense of the rule. -
Oil and Gas Industry Calls Methane Effort a 'Rushed Job'
Aug 3, 2016 | E&E Greenwire
By Hannah Hess
Energy trade groups yesterday asked U.S. EPA to pump the brakes on plans to expand methane regulations to existing oil and gas operations, as the agency works to finalize a request for up-to-date information from the industry. -
White House Releases Final Guidance on GHG Emissions For NEPA Reviews
Aug 2, 2016 | Natural Gas Intelligence
By Charlie Passut
Six years after launching an effort to modify how federal agencies conduct National Environmental Policy Act (NEPA) reviews with regard to climate change, the Obama administration unveiled final guidance it said is designed to quantify the impacts of greenhouse gas (GHG) emissions. -
(ACC Blog) What Does the Future Hold for Chemical Security Regulations?
Aug 3, 2016 | American Chemistry Matters
By American Chemistry
It’s hard to believe that ten years have gone by since the Department of Homeland Security adopted the Chemical Facility Anti-Terrorism Standards (CFATS). -
Safety Board Slams Calif. Refinery for 'Preventable' Spills
Aug 3, 2016 | E&E Greenwire
By Colby Bermel
The nation's chemicals watchdog yesterday slammed a California refinery for multiple sulfuric acid releases it called "preventable." -
(ACC Mentioned) DC Circuit Upholds EPA’s CAA Rules Governing Industrial Boilers and Incinerators
Aug 3, 2016 | Lexology
By Pillsbury Winthrop Shaw Pittman LLP
On July 29, 2016, the U.S. Court of Appeals for the DC Circuit released a very long (156 pages) opinionessentially upholding every regulatory decision made by the EPA in three major Clean Air Act (CAA) rulemakings: the “Major Boilers Rule”; the “Area Boilers” rule; and the “Commercial/Industrial Solid Waste Incinerators” (CISWI) rule. -
(ACC Mentioned) EPA, Industries Defend Air Toxics 'Completion' Rule
Jul 29, 2016 | Inside EPA
EPA and groups representing several industrial sectors are defending the agency's rule that declares EPA has met a Clean Air Act (CAA) obligation to regulate 90 percent of sources of seven hazardous air pollutants (HAPs), saying environmentalists suing over the rule are improperly using the suit to challenge years-old air toxics standards. -
5th Circuit's Ruling On Venue For Haze FIP Suit Boosts State ESPS Critics
Aug 3, 2016 | Inside EPA
By Dawn Reeves
The recent ruling from the U.S. Court of Appeals for the 5th Circuit finding that it has jurisdiction to review challenges to EPA's plan to address haze-forming pollutants in Texas and Oklahoma could help critics of the agency's power plant greenhouse gas rule by ensuring similar challenges to states' GHG compliance plans are heard in relevant circuits rather than the D.C. Circuit, which is viewed as less friendly. -
EPA Defends ESPS Reliability Review Against States' Haze Rule Claims
Aug 3, 2016 | Inside EPA
By Abby Smith
EPA is dismissing states' claim that a recent appellate court ruling blocking an agency haze emissions plan boosts their criticism that EPA did not conduct an adequate grid reliability review for its existing power plant greenhouse gas rule, arguing the haze case has “minimal relevance” and that it conducted a sufficient reliability analysis for the power plant rule.
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(ACC Mentioned) Cracks in the Dam
Aug 3, 2016 | The Intercept
By Jon Schwarz and Lee Fang
BEFORE THE 2010 Supreme Court decision known as Citizens United, all money spent in federal elections urging the election or defeat of a candidate had to originate from identifiable human beings.
There were also strict limits on the amount any one human being could contribute to any particular campaign. And there were public disclosure requirements for donations over $200.
Corporations and unions were forbidden from involvement beyond organizing individuals’ contributions, via regular (i.e., non-Super) political action committees.
For example, Microsoft long ago established a PAC. But it could only solicit donations from individuals connected with Microsoft — e.g., executives and stockholders — and these individuals could only contribute to the PAC in amounts limited by law. The PAC doled out the money it collected from these individuals, but it couldn’t use any of the tens of billions of dollars in cash in Microsoft’s corporate treasury to make political contributions or expenditures.
Then Citizens United struck down the prohibition on corporations spending their own money on “independent expenditures.” Corporations had free-speech rights, the court decided, and money was tantamount to speech, so corporations had the right to spend unlimited money espousing their political views. Several months later, a lower court decision clarified that a new kind of political action committee — one that only made “independent expenditures” — could collect and spend unlimited amounts of money to that end.
This was the birth of Super PACs.
The sole, weak legal restrictions that remain revolve around the definition of “independent expenditures.” Technically, they are not to be used for spending that is coordinated directly with campaigns — although that restriction, in 2016, has been blatantly violated.
Karl Sandstrom, a former FEC commissioner, explained the situation this way several years ago: “Prior to Citizens United, all federal election money could be traced back to an individual who expended it or contributed to a political committee. Once you enable artificial entities to contribute, money is no longer traceable back to identifiable individuals.”
One foreseeable effect of this was that the question of whether a campaign contributor was foreign or not went from a yes-or-no question to something altogether hazier, where even experts in campaign finance law can’t say for certain whether the government has grounds to sanction the donor.
This would matter less if the Federal Election Commission, the body charged with overseeing campaign finance law, were a well-resourced, ferocious watchdog, developing rules for such things and enforcing them. But it’sexactly the opposite, with inaction built into its structure by Congress: There are six commissioners, but no more than three can be members of the same party. These days, with the Republican commissioners adamantly opposed to enforcing even existing laws, crucial votes often tie 3-3. The commission has a difficult time just deciding to open inquiries into potential violations; it conducted 36 investigations in 2005, but only four in 2013.
One recent Republican commissioner — Don McGahn, now the chief lawyer for Donald Trump’s presidential campaign — even proposed that the FEC’s investigative staff should be forbidden from using Google without approval from a majority of commissioners. FEC employees have some of the lowest morale in comparable government agencies.
All in all, Citizens United opened three major potential paths for foreign money to flow into the U.S. political process:
THE INTERCEPT HAS discovered that American Pacific International Capital, a company incorporated in California but owned and controlled by Gordon Tang and Huaidan Chen, a married couple who are Chinese nationals, made donations totaling $1.3 million to the Jeb Bush Super PAC Right to Rise USA.
APIC is actually an example of a corporation whose ownership was comparatively easy to uncover. It is a real company that does actual business in the U.S., and Tang and Chen also control a publicly traded Singapore corporation whose filings disclose that APIC belongs to them.
By contrast, the 2016 election has seen a surge of contributions to Super PACs by so-called ghost corporations, which appear to exist solely to make those donations and whose ownership is unknown. Whether any of these corporations are ultimately owned by foreign nationals is likewise unknown.
Don’t expect the FEC to find out where the money came from: It recently deadlocked on a vote simply to open an investigation into several million-dollar donations by corporate entities four years ago to Restore Our Future, a Super PAC supporting Mitt Romney. (The treasurer of Restore Our Future was Charlie Spies, a prominent D.C. lawyer who went on to become treasurer of Right to Rise USA — and who, in 2015, authored a memo creating a legal roadmap for foreign nationals wishing to take advantage ofCitizens United to invest in U.S. politicians.)
ALMOST ALL LARGE publicly traded U.S. companies have some degree of foreign ownership. The most recent Treasury Department survey estimated that about $6 trillion in U.S. stock, or around one-quarter of the total market value of public U.S. corporations, is ultimately owned by foreign nationals.
The money in these corporations’ treasuries therefore belongs in part to foreign nationals. And because their money can’t plausibly be sequestered from U.S. money, any donations by such corporations are technically partially of foreign origin and should theoretically be illegal. To pick one example of many, the publicly traded Florida electricity company NextEra Energy gave $1 million to Right to Rise USA in 2015.
Americans may find this form of foreign influence less alarming than others, since foreign ownership of public U.S. companies is generally (though not always) held by many separate individuals who don’t coordinate with one another and have little influence over the companies’ behavior. But there’s no way to know, given that the FEC has not investigated this subject since the Citizens United decision. One of the Democratic commissioners, Ellen Weintraub, sponsored a recent forum at the FEC about foreign money and has suggested a possible ceiling of 20 percent foreign ownership for any corporation that wants to spend its money on electioneering.
The Move to Amend coalition held a rally at the Supreme Court to “Occupy the Courts” and mark the second anniversary of the Citizens United decision, Jan. 20. 2012.
NONPROFIT CORPORATIONS ARE organized under Section 501(c) of the Internal Revenue Code. They have always been able to accept unlimited donations from individuals or corporations, but before Citizens United, could engage in little federal political activity.
Now, thanks to the combination of Citizens Unitedand a 2007 Supreme Court decision, “social welfare” organizations operating under Section 501(c)(4) of the Internal Revenue Code and trade associations operating under Section 501(c)(6) may — within certain lax, seldom-enforced limits — make independent political expenditures just like Super PACs.
The 501(c)(4) and 501(c)(6) organizations are, in fact, much more attractive than Super PACs to anyone hoping to influence elections anonymously, because, unlike Super PACs, they are not required to publicly disclose their donors. This is why contributions to politically active nonprofits are often referred to as “dark money.”
This additional layer of obfuscation makes it even less likely that money originating with foreign nationals would be noticed. For instance, if APIC had donated to Right to Rise Policy Solutions, a 501(c)(4) that was affiliated with the Right to Rise USA Super PAC, it’s unlikely The Intercept would have ever discovered its involvement in the election or ultimate ownership.
A (c)(4) like Right to Rise Policy Solutions does have to privately disclose its donors to the Internal Revenue Service on its tax return, but the IRS is perhaps even more hobbled than the FEC and would be extremely unlikely to notice or investigate possible foreign national involvement.
Want an example? Consider, for instance, that the American Petroleum Institute is partially financed by the U.S. subsidiary of Aramco, the state-owned Saudi oil company. In the 2010 midterm elections, API was one of the funders behind attack ads that helped the Republican Party take back the House of Representatives from the Democrats and stop most of Obama’s plans in their tracks.
Similarly, the American Chemistry Council, partially funded by U.S. subsidiaries of Saudi, Japanese, and Belgian corporations, also spent hundreds of thousands of dollars that year to elect its favored politicians. The U.S. Chamber of Commerce, the largest undisclosed outside spending group in federal elections, which has already spent over $16 million on congressional elections this year, has acknowledged that it receives foreign money. (API and Aramco declined in 2012 to comment on their midterm activities. The Chamber of Commerce issued a statement stating it has an internal system in place to prevent the foreign money it raises from financing political activity.)
In theory, 501(c)(4)s and 501(c)(6)s have to keep any foreign money segregated and only spend funds from American donors on U.S. elections. In reality, the public has no idea whether or how they do this, since they are not required to disclose it. And since money is fungible, any foreign donations they use for operating expenses leave more domestic contributions to spend on attack ads.
https://theintercept.com/2016/08/03/citizens-united-foreign-money-us-elections/
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(ACC Mentioned) The Chemical Activity Barometer Continues Growth Over Fourth Consecutive Month
Aug 3, 2016 | Gas World
By Rhea Healy
The Chemical Activity Barometer (CAB), a leading economic indicator created by the American Chemistry Council (ACC), has demonstrated consecutive growth over the past four months in its latest review.
Sequentially, it expanded 0.6% in April, 0.8% in May, 0.7% in June and 0.4% in July. Overall, and accounting for adjustments, the CAB remains 2.6% above this time last year – generally an improvement over prior months.
ACC’s Chief Economist Kevin Swift reflected on the upswing in results and stated, “The CAB is signaling higher US business activity into 2017 and that recent unpleasantness in the goods economy may be approaching its end.”
Production-related indicators were positive over this period, with trends in construction-related resins, pigments and related performance chemistry being mixed, and plastic resins used in packaging and other consumer and institutional applications largely on the up.
All data in the CAB is measured on a three-month moving average, and is derived from a composite index of chemical industry activity founded upon four primary components;
Production
Equity prices
Product prices
Inventories and other indicators
http://www.gasworld.com/cab-continues-growth-over-fourth-consecutive-month/2010824.article
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Calif. Issues First-in-U.S. Compliance Plan
Aug 3, 2016 | E&E Energywire
By Anne C. Mulkern
California's landmark cap-and-trade program for carbon emissions and proposed amendments to extend that system will be used to comply with U.S. EPA's Clean Power Plan, the state said yesterday.
The Golden State is the first in the country to publish a draft blueprint for fulfilling the federal agency's mandate, aimed at cutting existing power plant emissions, said Stanley Young, spokesman for the California Air Resources Board.
"We're the first out of the gate, and we're doing it because we want to make sure that we align" with CPP rules "in the later years of the [cap-and-trade] program," Young said. As well, he added, it's "a proof of concept for other states, to demonstrate that this is a program that can be adapted to each state and that can be set up in a way that we can form a regional association."
ARB's draft plan comes as a court weighs the validity of EPA's Clean Power Plan. The Supreme Court in February put EPA's rule on hold, pending an opinion on its legality from the U.S. Court of Appeals for the District of Columbia Circuit and perhaps until the Supreme Court ultimately decides the case. That could take years.
California is developing a compliance plan regardless. After the Supreme Court's action, ARB Chairwoman Mary Nichols said that "California will not slow down our drive for clean air, renewable energy, and the good jobs that come from investing in green technologies."
Young said yesterday that the state "chose to do it as a kind of insurance policy."
ARB staff said they anticipated submitting the proposed plan, if approved by the board, to EPA "once the stay has been lifted."
EPA's CPP compliance periods begin in 2022, with full reductions mandated by 2031. ARB is proposing to comply with CPP via the "state measures" option, which gives states the choice to develop and use their own rules to achieve required cuts to greenhouse gas emissions.
Under ARB's draft blueprint, power plants and other energy generating units (EGUs) that participate in cap and trade in addition to that state requirement would have a federally enforceable mandate to comply because of CPP. California under CPP must meet an emissions target of a 13.2 percent rate reduction from 2020's level by 2030. It looks likely to hit that number.
The only state with an economywide carbon cap, California aims to cut its greenhouse gas pollution to 1990 levels by 2020. It's writing regulations to reach 40 percent below that by 2030. Even in a high-emissions scenario, which could come about through higher-than-expected electricity demand or a drought that limits hydropower production, the state expects to be about 2 million tons below EPA's 2030 target (ClimateWire, Feb. 25).
"The Cap-and-Trade Program establishes a declining limit on major sources of GHG emissions, and it creates a powerful economic incentive for major investment in cleaner, more efficient technologies," ARB said in the draft. Other state rules will provide any assistance. Those include California's energy efficiency standards and a mandated level of renewable power for electricity generation.
"As California continues to seek greenhouse gas reductions from the electric power sector, these complementary state programs will help ensure that the State meets and exceeds CPP targets," the ARB draft said.
California's CPP compliance plan would affect 246 energy generating units at 93 facilities owned by 67 companies, plus three units under construction. The affected units comprise 62 steam generating units, 121 combustion turbines and 63 steam turbines, the plan said.
ARB will hold a meeting on the proposal Sept. 22. The draft will be open to comments from interested parties through Sept. 19.
Creating a 'backstop' rule
Cap and trade in California covers about 400 industrial facilities that emit more than 25,000 tons of carbon dioxide equivalent per year. They must submit allowances for each ton of that pollution. They can buy those at auction or acquire them through trading.
It's unclear whether ARB has the authority to go beyond 2020 with cap and trade currently, because of potentially limiting language in the original climate law, A.B. 32, and because of a lawsuit challenging the legality of cap-and-trade auctions. The suit argues that the program is subject to a law requiring a two-thirds legislative majority to approve taxes.
ARB last month released amendments to the plan that envision a carbon market through 2050 with increasing allowance prices. The amendments would establish decreasing emissions caps for covered entities through 2031 to reach 40 percent below 1990 levels and would include preliminary caps through 2050 "to signal the long-term trajectory of the program to inform investment decisions" (ClimateWire, July 13).
Other proposed amendments would provide for compliance with the CPP. California divided its cap-and-trade program into three-year compliance periods. At the end of each, every facility must surrender all allowances to cover emissions for the full three-year period. The CPP has two-year compliance periods, "so we adjusted to align with it," Young said.
The ARB proposal includes a supplemental "backstop" policy for power plants, in what the draft described as the "extraordinarily unlikely" event that cap and trade and other existing mechanisms fail to get those facilities in line with EPA's reduction requirements.
"Projected affected EGU emissions are well below -- and in many cases over ten million short tons below -- federal targets even under relatively conservative projection scenarios," the ARB draft said.
The backstop is a trading mechanism. If California EGUs exceeded the state's CPP emissions limit in a given year, ARB staff would look at the tons of emissions over the required cap. For the next year, it would lower the emissions cap by the overage amount, and they would have to make up the amount.
"So when you average out the two years, you hit the standard on two years," Young said.
ARB would create a pool of special allowances equal to the emissions overage that it would give at no cost to California EGUs. Affected EGUs could trade backstop allowances among themselves. If one facility was very good at cutting emissions, it could sell its extra allowances to other EGUs having trouble, Young said. Affected EGUs would be required to retire backstop allowances for each ton of carbon emitted during the backstop compliance period, the proposal said.
"Essentially, we would establish a secondary market under the CPP structure," Young said. "I'm sure that it would develop some kind of pricing mechanism in order to make it work."
"We believe it would take, like, an asteroid hitting the Earth before this happened," he joked. "Nonetheless, we have this as a backstop. And we developed it so that this energy sector would be able to hit sector-specific targets, in essence independent of larger programs."
Utilities Pacific Gas and Electric Co. and Southern California Edison Co. said that knowledgeable people were not immediately available to comment on the plan. San Diego Gas & Electric Co. did not immediately respond to requests for comment.
The Environmental Defense Fund praised the Golden State's actions on emissions cuts.
"California has been leading the country in reducing dangerous climate pollution, protecting families from unhealthy air, and growing a stronger clean energy economy," Erica Morehouse, a senior attorney for EDF, said in a statement. "Today's proposed Clean Power Plan blueprint is another step toward a safer and healthier future -- one we reached through bipartisan solutions and Golden State innovation -- and we look forward to reviewing the proposal."
EDF said that California's proposal "demonstrates that states, including our largest states that serve the electricity needs of tens of millions of people and boast vibrant economies, can develop regulatory frameworks to comply with the Clean Power Plan swiftly and in a way that is consistent with existing state policies."
California's progress on state plan development, EDF added, "will not only help the state ensure compliance with the Clean Power Plan but will provide important information" for those across the West "working to develop compatible, durable solutions for securing cost-effective emissions reductions."
http://www.eenews.net/energywire/2016/08/03/stories/1060041128
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Clean Power Plan: All Pain, No Gain for West Virginia
Aug 3, 2016 | The Hill - Pundits Blog
By Garrett Ballengee and Michael Reed
August 3 will mark one year since President Obama announced the Clean Power Plan (CPP), the Environmental Protection Agency’s (EPA) strategy to decrease carbon emissions from power plants in order to combat the consequences of climate change.
While anniversaries are normally cause for celebration, the echoes of joyous celebration will not be heard in the hills and hollows of West Virginia.
If implemented, the CPP will disproportionately impact states where coal is the majority generator of electricity. As the bête noire of the environmental movement, coal is often the main target of regulations and directives from regulatory agencies. In West Virginia, America’s second largest coal-producing state, the effects could be especially acute.
According to research performed by Energy Analysis Ventures, an energy consulting group headquartered in Arlington, VA, West Virginia will see wholesale electricity prices rise by 30 percent by 2030 – the second-largest increase over that time period in the nation.
For the nation’s second-poorest state, an increase of 30 percent in the price of a critical good through an EPA diktat is a tough pill to swallow, indeed.
And what about the impact on jobs? For West Virginia, the repercussions would also be disastrous. Lest one should think this is merely some right-wing drivel, the left-leaning Economic Policy Institute has estimated that roughly 24,000 coal-mining jobs will be “displaced” by 2020 as a result of the CPP.
It is not a stretch to believe that a disproportionate amount of those “displaced” jobs will be in West Virginia — a state that has already seen 7,000 “displaced” coal-mining jobs since 2011.
A fair question to ask is: what benefit will result from all of this very immediate, very real human cost? According to the EPA’s own analysis, not much — if any. According to the EPA’s own climate model, the average global temperature will be lowered by .02C by the year 2100, if all aspects of the CPP are implemented.
You’ll have to forgive West Virginians for feeling insulted. For those unaware, West Virginia isn’t doing terribly well, economically and otherwise: we’re the only state in the country where less than half of able-bodied adults have a job. West Virginia has “led” the nation in this category every year since 1976, when the Bureau of Labor Statistics began compiling the data.
West Virginia also has among the nation’s highest rates of drug overdose, obesity, diabetes, cancer, and working-age adults on disability benefits. In short, the state is an economic tragedy. It should not be hard to understand why people in this beautiful state are dismayed and bewildered that a group of faceless, unelected bureaucrats can — and do — wield such authority over the outcomes of their lives.
Progress and change brought about by natural market forces are a fact of life and few among us will deny that reality. However, there is a world of difference between natural, market-driven evolutions in an industry and artificial “progress” driven by a select group of ideologues in Washington, D.C. To many in West Virginia, “progress” looks like drug addiction driven by joblessness and hopelessness driven by a sense of helplessness in the face of a regulatory onslaught.
Some politicians have offered to give billions of dollars to coal communities affected by the nation’s ideologically-driven energy policy, but that is insulting to the proud men and women of West Virginia. To us, it seems like the government breaks our legs and then expects gratitude when it offers us crutches. Men and women all over West Virginia just want a fair chance to work and provide for their families — nothing more and nothing less.
As the anniversary of the CPP draws near, you’ll have to forgive the deafening silence in the Mountain State.
Garrett Ballengee is the executive director and Michael Reed is a research associate at the Cardinal Institute for WV Policy.
http://www.thehill.com/blogs/pundits-blog/energy-environment/289694-clean-power-plan-all-pain-no-gain-for-west-virginia
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EPA Bashes Relevance of Rulings Used by Climate Rule Foes
Aug 3, 2016 | E&E Greenwire
By Amanda Reilly
U.S. EPA is rejecting opponents' claims that two recent court rulings bolster their legal challenges against the Clean Power Plan.
EPA yesterday told the U.S. Court of Appeals for the District of Columbia Circuit that the rulings added little new information to the massive litigation over the Clean Power Plan. The agency's defense comes as the Clean Power Plan, which is aimed at cutting carbon dioxide emissions from power plants, today hits its anniversary of being finalized.
Last week, EPA's opponents in court argued that decisions in the Mingo Logan Coal Co. v. EPA and State of Texas, et al., v. EPA, et al., cases support their concerns that EPA did not adequately consider the costs of the Clean Power Plan and its effect on grid reliability.
In the Mingo Logan case, the D.C. Circuit upheld EPA's retroactive veto of a water permit for a West Virginia mining project.
While EPA won the case, the Competitive Enterprise Institute last week argued to the D.C. Circuit that "the only judge to reach the cost-benefit issue" found that the permit should have been vacated. Consequently, CEI said, the case "strongly supports" its arguments over the costs of the power plant rule.
CEI cited the dissenting opinion by Republican appointee Judge Brett Kavanaugh, who wrote that EPA "must go back to the drawing board" on the water permit because its cost analysis was "one-sided."
The majority opinion, on the other hand, said that Arch Coal Inc. and subsidiary Mingo Logan Coal Co. had forfeited their cost claims because they failed to raise the issue to either EPA or a lower court (Greenwire, July 28).
In a letter to the D.C. Circuit yesterday, EPA told the court that the case is "not a relevant new authority on cost considerations," since the majority decision did not rule on cost claims.
The agency also argued that CEI forfeited its own cost claims in the Clean Power Plan litigation because the group did not contest the cost analysis that EPA "actually relied upon" to shape the Clean Power Plan.
CEI "wrongly intimates that EPA failed to consider both benefits and costs as part of the analysis used to set emission limitations," EPA wrote.
EPA is also disputing states' contention that the D.C. Circuit should take into account the recent decision by the 5th U.S. Circuit Court of Appeals to stay the agency's regional haze plan for Texas and Oklahoma.
The 27 states that are challenging the Clean Power Plan last week said that the 5th Circuit's decision supports their argument that EPA "has no expertise in managing electric generation" and failed to consider the Clean Power Plan's impact on grid reliability.
In the unanimous ruling, a three-judge panel in the 5th Circuit wrote that "deference owed to EPA's assertions about grid reliability are diminished" because the Federal Energy Regulatory Commission — not EPA — is the federal expert on the electric grid (E&ENews PM, July 27).
But EPA yesterday told the D.C. Circuit in a filing that the decision is also irrelevant because it was not a final decision on the merits of the regional haze plan.
The agency also wrote that the 5th Circuit "erred" when it said EPA lacks expertise on grid matters because "Congress specifically directed EPA to consider 'energy requirements' in regulating power plants."
EPA defended its analysis of the Clean Power Plan's impacts on the electric grid.
"EPA consulted with FERC and other stakeholders, extensively evaluated grid reliability and provided a reliability safety net," EPA told the D.C. Circuit.
In a statement marking the anniversary of issuing the Clean Power Plan, EPA said that it was confident the program would hold up in court.
"EPA remains fully confident in its legal merits," the agency said. "The Plan rests on a strong legal and technical foundation and is consistent with Supreme Court decisions, EPA's statutory authority, and air pollution standards that have been put in place to tackle other pollution problems."
http://www.eenews.net/greenwire/2016/08/03/stories/1060041153
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Enviros Vow to Defend EPA Methane Standards Against Legal Fire
Aug 3, 2016 | E&E Energywire
By Ellen M. Gilmer
As an army of critics line up to challenge the Obama administration's new regulations for oil and gas methane emissions, environmentalists say they're prepared to jump into action in defense of the rule.
The mobilization came yesterday after a trickle of lawsuits targeting U.S. EPA's standards for new oil and gas operations turned to a torrent: 21 industry trade groups and a coalition of 14 states and state agencies filed suit at the U.S. Court of Appeals for the District of Columbia Circuit, seeking to unravel the new standards.
"There's an extremely good chance that a number of environmental groups will be intervening to defend the rule," Sierra Club attorney Andres Restrepo told EnergyWire.
Published in the Federal Register on June 3, the New Source Performance Standards require companies to track and repair leaks at new sources. The effort is part of a broader Obama administration plan to slash emissions of methane -- a potent greenhouse gas -- from the oil and gas industry. EPA is also collecting data for standards that would limit emissions from existing sources, and the Department of the Interior in January released a draft rule for cutting the industry's methane emissions on public lands (EnergyWire, Jan. 25).
Critics have called the standards an expensive regulatory overreach. West Virginia Attorney General Patrick Morrisey (R) led the coalition of states yesterday in urging the D.C. Circuit to toss out EPA's standards. According to the complaint, the rule exceeds the agency's authority and was crafted in violation of the Administrative Procedure Act.
"This is yet another example of unlawful federal overreach jeopardizing West Virginia jobs and working families," he said in a statement, adding that the rules ignore efforts industry has already taken to reduce methane emissions. Morrisey has led state opposition to several other Obama administration rules, including the Clean Power Plan.
Joining West Virginia as petitioners are Alabama, Arizona, Kansas, Louisiana, Montana, Ohio, Oklahoma, South Carolina, Wisconsin, Kentucky and Michigan Attorney General Bill Schuette (R), along with two state agencies: the Kentucky Energy and Environment Cabinet and the North Carolina Department of Environmental Quality (E&ENews PM, Aug. 2).
The American Petroleum Institute, the Western Energy Alliance and a slew of trade groups led by the Independent Petroleum Association of America also challenged the methane standards, filing three complaints yesterday seeking review of the new rule. And North Dakota, Texas, the Railroad Commission of Texas and the Texas Commission on Environmental Quality filed separate legal challenges late last month.
Environmental response
Environmental groups, which have been calling for tighter methane restrictions for years, criticized the lawsuits for trying to derail "sensible clean air standards."
"The attempts by several states to use the courts to try and stop sensible clean air standards further demonstrates why national methane pollution standards are so badly needed," Earthworks' policy director, Lauren Pagel, said in a statement. "Methane pollution, and the harmful smog-forming and toxic air pollution that is released by the oil and gas industry threatens public health and the climate. We need a national standard because those in power don't believe their constituents warrant protection. Everyone deserves to breathe clean air."
The barrage of buzzer-beater lawsuits surprised one group, which earlier in the day trumpeted the fact that "only two states" had sued over the methane standards. In an update a couple hours later, the Western Environmental Law Center said, "Looks like we jinxed it," and then slammed the new state lawsuit's assertion that the rule exceeds EPA's power.
"We disagree -- reducing air pollution is precisely the purpose of the Clean Air Act, on which this rule is based," WELC's senior policy adviser, Thomas Singer, said in the email. "Furthermore, technologies to reduce methane pollution are readily available, inexpensive, and create jobs -- the opposite of what the West Virginia Attorney General's office claims in its press release about the court case. We're disappointed allies of the oil and gas industry are again attacking clean air and public health, but we're not surprised."
Restrepo, the Sierra Club lawyer, argued that the rule fits "squarely" within EPA's authority, as the agency has crafted similar performance standards for decades. Plus, he said, emissions from the oil and gas industry urgently affect climate and public health.
"The industry lawsuit is just kind of trying to put the brakes on something that is absolutely critical," he said. "In our judgment, this is an entirely justified set of standards."
Environmental Defense Fund attorney Peter Zalzal agreed, noting in a statement that methane pollution is contributing to "major changes in our climate."
"It's unfortunate that these states and industry groups are using resources to challenge these commonsense protections, when instead America should be cooperating to address threats to our climate and air," he added. "These standards are firmly grounded in the law and science and we look forward to vigorously defending them in court."
http://www.eenews.net/energywire/2016/08/03/stories/1060041123
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Oil and Gas Industry Calls Methane Effort a 'Rushed Job'
Aug 3, 2016 | E&E Greenwire
By Hannah Hess
Energy trade groups yesterday asked U.S. EPA to pump the brakes on plans to expand methane regulations to existing oil and gas operations, as the agency works to finalize a request for up-to-date information from the industry.
The Independent Petroleum Association of America, the American Exploration & Production Council and 47 additional trade associations urged the Obama administration to work with the industry on the early stages of its latest effort to crack down on methane, a greenhouse gas that is about 28 times more potent than carbon dioxide, according to the latest U.N. climate report.
Stressing the need for regulators to get a better understanding of the industry, including the declining nature of oil and natural gas wells and existing efforts to cut emissions, IPAA Executive Vice President Lee Fuller said the proposed information request "has all the signs of a rushed job, not a thorough process to gather the facts and hear meaningful public comment from the people closest to the U.S. oil and natural gas industry."
Fuller added, "This rushed information-gathering effort is a misguided approach, and we strongly encourage EPA to work with the industry and state agencies to thoroughly and accurately collect data — much of which is already publicly available — on oil and natural gas operations."
The energy trade associations outlined their concerns with the agency's proposed information collection request in a 31-page document submitted to EPA.
Yesterday marked the close of a 60-day comment period on the proposed two-part request from EPA (Greenwire, May 12).
The agency plans to distribute part one by Oct. 30. It will require about 22,000 owners and operators of existing oil and gas equipment to submit within 30 days basic information about their facilities.
The second part of the request — intended to be sent to about 3,000 producers and seeking far more detailed information on control technologies, costs and emissions — would be due in 120 days.
McCarthy has said the requests will gather information needed to "reduce emissions comprehensively" from the oil and gas industry.
However, critics argue the information-gathering effort creates additional paperwork for companies and adds unnecessary burdens on companies' technical teams.
Fuller said as they work to prepare and submit "rushed comments under enormous time constraints," many of the same technical teams are also developing their companies' compliance programs for an earlier set of EPA regulations. Those experts will then turn to their companies' greenhouse gas inventory reports, which are due in the first quarter of 2017.
"Instead of creating duplicative work and information, which goes against the intent of the Paperwork Reduction Act, EPA should first collect all of the publicly available data from industry databases — or acquire it free from state agencies — then, EPA can refine its search and request more targeted, specific information from the industry," Fuller wrote, charging EPA with working on a "tight political timeline" to bolster President Obama's climate legacy.
In May, EPA finalized a suite of rules that targets methane emissions from new and heavily modified oil and gas operations (Greenwire, May 12).
Taken together, the rules are a key part of the Obama administration's pledge to lower U.S. methane emissions from the oil and gas industry between 40 and 45 percent by 2025 compared with 2012 levels.
EPA Administrator Gina McCarthy said at the time that the agency was moving as quickly as possible to gather a comprehensive record "that the next administration can rely on."
Opponents of the methane regulations also say EPA will be challenged to understand the impact of its plans on the hundreds of thousands of small producers. Yet under the agency's planned schedule, it would be sending its detailed questionnaires to companies before it collected the information from the first questionnaire.
Others allege EPA lacks the legal authority to issue rules under the Clean Air Act governing methane emissions from the oil and natural gas source category (EnergyWire, Aug. 3).
As a result, the information collection request has no "practical utility" to EPA, as required by the Paperwork Reduction Act and should not be issued, the GPA Midstream Association told EPA in its 60-page comments.
Mark Sutton, president and CEO of the trade organization with nearly 100 corporate members of all sizes engaged in the gathering and processing of natural gas, said members of GPA Midstream "have taken significant steps to reduce methane emissions from their operations."
GPA Midstream also offered suggestions that the association says would clarify, improve and streamline the request, if EPA and the Office of Management and Budget choose to proceed with the information-gathering effort.
Sutton said, "GPA Midstream has a long history of working collaboratively with EPA and will work with them on this particular issue to lessen the regulatory burdens and minimize the costs this will have on the midstream industry."
http://www.eenews.net/greenwire/2016/08/03/stories/1060041154
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White House Releases Final Guidance on GHG Emissions For NEPA Reviews
Aug 2, 2016 | Natural Gas Intelligence
By Charlie Passut
Six years after launching an effort to modify how federal agencies conduct National Environmental Policy Act (NEPA) reviews with regard to climate change, the Obama administration unveiled final guidance it said is designed to quantify the impacts of greenhouse gas (GHG) emissions.
But industry groups said the changes -- part of what analysts and the industry have derided as an "unprecedented" list of regulations in the waning days of the Obama presidency -- were unnecessary and hinted that they could harm applicants seeking FERC approval for projects.
In a 34-page document issued Tuesday by the White House Council on Environmental Quality (CEQ), federal agencies were told to consider the potential effects of a proposed action on climate change by assessing GHG emissions, and to weigh the effects of climate change on a proposed action and its environmental impacts.
CEQ recommended that federal agencies quantify a proposed action's projected direct and indirect GHG emissions, and that they use projected GHG emissions as a proxy for assessing potential climate change effects when preparing a NEPA analysis. CEQ also recommended that whenever agencies do not perform such a quantification, that they include a qualitative analysis in their NEPA documents explaining why it was not reasonably available.
CEQ also called for, among other things, that federal agencies discuss ways to accurately measure direct, indirect and cumulative GHG emissions and climate effects, and to consider reasonable alternatives that could provide short- and long-term benefits to the environment. Federal agencies were also advised to use available information when assessing the potential future state of the affected environment in a NEPA analysis, rather than conduct new research.
"Climate change is a fundamental environmental issue, and its effects fall squarely within NEPA's purview," CEQ said. "Climate change is a particularly complex challenge given its global nature and the inherent interrelationships among its sources, causation, mechanisms of action, and impacts.
"Analyzing a proposed action's GHG emissions and the effects of climate change relevant to a proposed action -- particularly how climate change may change an action's environmental effects -- can provide useful information to decision makers and the public."
The final guidance, which will be published in the Federal Register within days, builds upon draft guidance CEQ issued in December 2014 (see Daily GPI, Dec. 19, 2014). It was unclear when the new rules would take effect.
Last December, the Federal Energy Regulatory Commission issued a draft update to its Guidance Manual for Environmental Report Preparation (see Daily GPI, Dec. 29, 2015). The manual is designed to help applicants seeking project approval under the Natural Gas Act (NGA), by guiding them through supplying FERC with useful information so it can complete project reviews in accordance with NEPA.
Weeks later, the Environmental Protection Agency (EPA) said FERC should also require NGA applicants provide more information on a project's indirect impacts, including potential increases in GHG emissions (see Shale Daily, Jan. 21). But the Natural Gas Supply Association (NGSA) and the Center for Liquefied Natural Gas (CLNG) jointly urged FERC not to expand the environmental reporting requirements, warning that any change in the manual's language could be interpreted as expanding the scope of FERC's project reviews under NEPA (see Daily GPI, Feb. 1).
Clearview Energy Partners LLC did not agree, saying “impacts could vary by federal agency. In particular, the guidance may not pose incremental hurdles to natural gas pipeline projects, particularly when they enable gas to supplant coal-fired generation.”
Clearview also said the guidance will be “immediately operational,” implying that an agency’s final action could be subject to litigation risk if it proceeds without addressing GHGs, even if the NEPA review is already in process.
The November presidential election could decide whether the GHG rule prevails, with Republican Donald Trump likely to potentially eliminate it and Democrat Hillary Clinton likely to support it, Clearview said.
In a statement Tuesday, CLNG Executive Director Charlie Riedl said the guidance "not only fails to serve NEPA's goals and purposes, but it also creates yet another arbitrary hurdle for the industry, which is already forced to navigate an unpredictable and inconsistent regulatory approval process.
"The guidance issued today creates greater regulatory uncertainty that will hold the American LNG industry back at a time when it faces fierce competition from LNG projects in other countries that are rapidly coming online."
Michael Tadeo, spokesman for the American Petroleum Institute, told NGI that the organization was currently reviewing the guidance. "[But] it's important to note that the United States is leading the world in the reduction of carbon emissions, which are at near 20-year lows, while leading the world in the production of oil and natural gas," Tadeo said Tuesday.
Analysts and oil and gas experts agree that the waning days of the Obama administration will be challenging ones for the industry, as an "unprecedented" list of proposed regulations that could impact the industry for years to come slowly advance through the rulemaking process.
Last April, the Independent Petroleum Association of America (IPAA) presented attendees of an energy conference with a list of more than 40 regulations proposed by the federal government (see Daily GPI, April 25). CEQ's incorporation of guidance on the impacts of GHG emissions into NEPA was on the IPAA's list.
http://www.naturalgasintel.com/articles/107269-white-house-releases-final-guidance-on-ghg-emissions-for-nepa-reviews
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(ACC Blog) What Does the Future Hold for Chemical Security Regulations?
Aug 3, 2016 | American Chemistry Matters
By American Chemistry
It’s hard to believe that ten years have gone by since the Department of Homeland Security adopted the Chemical Facility Anti-Terrorism Standards (CFATS). Not all of those years were easy ones and the program has had its fair share of challenges along the way.
As Compliance Division Director David Wulf pointed out to a packed house at the Chemical Sector Security Summit, “like most 9-year-olds we had our growing pains.” He went on to tell the audience that the program has recently made great strides and is now delivering solid results.
Flashback to 2013 when the U.S. Government Accountability Office (GAO) issued a report outlining a series of problems with CFATS. At that time, GAO said that it would take the U.S. Department of Homeland Security (DHS) many years to fix the program and complete its review of chemical facilities.
During his remarks, Wulf said that DHS has righted the ship and eliminated its regulatory backlog ahead of GAO’s prediction. You can see the results for yourself by checking the latest CFATS fact sheet from DHS, which shows that the Department has reviewed plans and completed inspections for thousands of facilities.
Wulf went on to explain that CFATS has “built a true culture of chemical security across industries that are too diverse to list.” He said the program’s newfound success has also caught the eye of other countries and is now being looked to as model to improve chemical security around the world, most notably in Europe.
Much of the credit for this turnaround can be attributed to the strong leadership of Under Secretary Suzanne Spaulding, Assistant Secretary Caitlin Durkovich, Director Wulf and the significant efforts by their team. The real progress began when the group dedicated themselves to work more closely with the regulated community to shore up the foundation of CFATS and to make key improvements to the program, including the implementation of the Personnel Surety Program. And, Wulf indicated that more changes are coming. He said that DHS would be proposing some significant modifications to CFATS before the end of the year.
While the future looks better for CFATS thanks to some recent successes, its future is not entirely certain. After a series of short-term extensions the program is set to expire at the end of 2018, and Congress will need to revisit the value of CFATS and its decision to continue the program. A great way for DHS to help keep the program on track and meet congressional expectations would be to stick with what is working–actively engaging with stakeholders. Together, we can keep moving the program forward and keep enhancing security for workers and communities across the country.
https://blog.americanchemistry.com/2016/08/what-does-the-future-hold-for-chemical-security-regulations/
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Safety Board Slams Calif. Refinery for 'Preventable' Spills
Aug 3, 2016 | E&E Greenwire
By Colby Bermel
The nation's chemicals watchdog yesterday slammed a California refinery for multiple sulfuric acid releases it called "preventable."
In its final report wrapping up a two-year investigation into the 2014 spills at the Martinez, Calif., refinery operated by Tesoro Corp., the Chemical Safety Board criticized the company for a lax safety culture.
"While these incidents may appear to be isolated events, they are indicative of safety culture deficiencies at the Tesoro Martinez Refinery," CSB Chairwoman Vanessa Allen Sutherland said at a news conference.
CSB's report found that Tesoro characterized the first- and second-degree burns suffered by four workers as minor injuries. The agency also faulted the firm for failing to provide employees with necessary protective equipment, along with having site-specific policies less strict than overall corporate policies and industry best practices, among other culpabilities.
The releases from an alkylation unit responsible for separate yet similar incidents just 26 days apart in February and March 2014 resulted in 84,000 pounds of sulfuric acid spilling onto refinery grounds and into a sewer system. The employees had to miss about 150 days of work due to their injuries.
Yesterday's report comes as the agency is advocating for California to adopt more rigorous refinery regulations.
CSB is still investigating a February 2015 refinery explosion at an Exxon Mobil Corp. site in Torrance, Calif., and a November 2015 release at the Delaware City refinery, operated by PBF Energy Inc. It has completed an investigation of the January 2015 Chevron Corp. refinery fire in Richmond, Calif.
Thirteen other injurious sulfuric acid release incidents besides the Tesoro Martinez ones were also identified in the document.
"Our report is a reminder to industry to continually improve safety programs in order to thoroughly address safety culture weaknesses," Sutherland said.
However, some questioned CSB at yesterday's news conference.
When asked what the value of the report was if three refinery incidents have happened since Tesoro Martinez in 2014, Sutherland cited "a lot of progress" in the industry and among state regulators.
"I think the value of all of our CSB reports are the independent, objective expertise that we bring to incidents and the key lessons that we share," she said. "Those have brought applicability across the country in multiple states."
A question was raised on whether Tesoro has actually improved its safety culture. In a statement, company spokesman Brendan Smith said that since the incident, "we identified several areas that we are working to improve, including modifying procedures, practices and equipment specifications."
But Smith's statement also noted "inaccuracies" in the report, though he added they "do not detract from our resolve to learn from these incidents."
When asked about this claim, lead investigator Dan Tillema said, "We fully stand behind the information that's in our report."
http://www.eenews.net/greenwire/2016/08/03/stories/1060041157
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(ACC Mentioned) DC Circuit Upholds EPA’s CAA Rules Governing Industrial Boilers and Incinerators
Aug 3, 2016 | Lexology
By Pillsbury Winthrop Shaw Pittman LLP
On July 29, 2016, the U.S. Court of Appeals for the DC Circuit released a very long (156 pages) opinionessentially upholding every regulatory decision made by the EPA in three major Clean Air Act (CAA) rulemakings: the “Major Boilers Rule”; the “Area Boilers” rule; and the “Commercial/Industrial Solid Waste Incinerators” (CISWI) rule. The consolidated cases are United States Sugar Corporation v. EPA; American Forest & Paper Association, et al. v. EPA; and American Chemistry Council v. EPA. These new rules , according to the Court, “set emissions limits on certain combustion machinery known to release hazardous air pollutants (HAPs),” and each rule was promulgated on March 21, 2011.
In 1990, the CAA was substantially revised by the Congress, placing special emphasis on the need to regulate nearly 200 hazardous air pollutants that the Congress identified in the statute. The Court explains that industrial boilers are used for large scale industrial operations (i. e., manufacturing, mining, refining, etc.), commercial boilers are used by such facilities as shopping centers, laundromats, hotels and apartments, and institutional boilers are used by medical centers, prisons, churches and courthouses. All told, the scope and scale of these rules is very impressive: they will extensively govern the HAP emissions generated by 200,000 boilers at over 100,000 separate facilities. In addition, the third rule, the CISWI Rule, regulates HAP emissions generated by incinerators burning “solid waste” as that term is defined by the Resource Conservation and Recovery Act (RCRA).
The significance of these rules is attested to by the fact that thirty separate challenges were filed in the DC Circuit by a large group of industry petitioners and a smaller group of environmental petitioners. The Court developed separate categories for the many challenges that were made to assist its review under the CAA, in particular, and the tenets of administrative law, in general. There were eight categories developed for the industry petitioners, and thirteen categories of challenges for the environmental petitioners. Somewhat surprisingly, the industry petitioners failed to prevail in any of their challenges, while the environmental petitioners were successful in only a few of their arguments. The Court vacated one of the new HAP standards, and remanded to the agency for further consideration a few other challenges.
Although each side made strong and well-documented arguments, the decision in this case again illustrates the enormous regulatory power the Congress has vested in the EPA by means of the CAA, and how small the chances are that any petitioner has that any challenge will be successful if EPA has abided by the procedural requirements of the Administrative Procedure Act. Moreover, the “Chevron deference” that the courts routinely extend to expert agencies struggling with complex and vexing issues of governance also limits any realistic opportunity to second guess important federal agencies like the EPA.
http://www.lexology.com/library/detail.aspx?g=bc39c27c-69e9-4f21-badb-e590b7d1a6ba
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(ACC Mentioned) EPA, Industries Defend Air Toxics 'Completion' Rule
Jul 29, 2016 | Inside EPA
EPA and groups representing several industrial sectors are defending the agency's rule that declares EPA has met a Clean Air Act (CAA) obligation to regulate 90 percent of sources of seven hazardous air pollutants (HAPs), saying environmentalists suing over the rule are improperly using the suit to challenge years-old air toxics standards.
The pending appellate suit, Sierra Club, et al. v. EPA, et al., challenges the agency's June 3, 2015, finding that it has satisfied the statutory mandate to list for regulation industrial sources that account for 90 percent of the emissions of the seven HAPs -- alkylated lead compounds, polycyclic organic matter, hexachlorobenzene, mercury, polychlorinated biphenyls, 2,3,7,8-tetrachlorodibenzofurans and 2,3,7,8- tetrachlorodibenzo-p-dioxin.
Sierra Club and California Communities Against Toxics (CCAT), in briefing in the suit, have said the finding is flawed and argue EPA has not adequately regulated the seven HAPs. The groups fault EPA for relying on old air toxics rules to show compliance with the mandate, and also criticize the agency for counting cuts in other “surrogate” pollutants towards reduction of the HAPs.
But EPA in a July 29 final brief reiterates its belief that its years of air toxics rulemakings have helped it meet the 90 percent benchmark, and that the advocates' brief “presents little or no direct challenge to these findings.”
The agency says Sierra Club and CCAT are instead trying to challenge the merits of the years-old air toxics rule used to justify the 90 percent finding, even though the CAA's 60-day deadline to sue over those rules has long passed. “The 90 Percent Rule does not provide a vehicle to reexamine the sufficiency of previously-promulgated emission standards,” says EPA's filing with the U.S. Court of Appeals for the District of Columbia Circuit.
In a separate July 29 amicus brief, a coalition of industry groups backs EPA's position and notes that the various air toxics rules criticized by Sierra Club and CCAT in their briefs have been in effect for many years.
“These claims are an untimely collateral attack on the legal sufficiency” of the air toxics rules and therefore are barred from consideration by the D.C. Circuit, says the brief filed by the Coalition for Clean Air Implementation, which includes the American Chemistry Council, American Forest & Paper Association, American Fuel & Petrochemical Manufacturers and the National Association of Clean Water Agencies.
http://insideepa.com/news-briefs/epa-industries-defend-air-toxics-completion-rule
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5th Circuit's Ruling On Venue For Haze FIP Suit Boosts State ESPS Critics
Aug 3, 2016 | Inside EPA
By Dawn Reeves
The recent ruling from the U.S. Court of Appeals for the 5th Circuit finding that it has jurisdiction to review challenges to EPA's plan to address haze-forming pollutants in Texas and Oklahoma could help critics of the agency's power plant greenhouse gas rule by ensuring similar challenges to states' GHG compliance plans are heard in relevant circuits rather than the D.C. Circuit, which is viewed as less friendly.
Mike McKenna, a Republican strategist and long-time EPA critic, tells Inside EPA Aug. 1 that the 5th Circuit's July 15 ruling in State of Texas, et al. v. EPA, et al. shows that “the circuits are going to have a say over EPA's rejection or acceptance” of state plans to comply with the power plant GHG rule, the existing source performance standards (ESPS), assuming the rule is upheld on the merits.
In its ruling, the court rejected EPA arguments that the haze rule compliance plans have “national scope” and therefore belong in the D.C. Circuit.
In addition to rejecting EPA's claims about the proper venue for the suits -- a potentially important issue because some states and industry groups view the 5th Circuit and other regional circuits as more receptive to their arguments than the D.C. Circuit -- the recent ruling stayed both EPA's federal implementation plan (FIP) and EPA's Jan. 5 rule rejecting two state implementation plans (SIPs) for regional haze compliance from Texas and Oklahoma.
States have already cited other portions of the ruling to reiterate their argument that the GHG rule is unlawful because EPA failed to conduct an adequate review of it's grid reliability impacts.
But McKenna says the ruling will also bolster states that oppose the rule, also known as the Clean Power Plan (CPP), and make it more likely that they opt to “stiff” EPA in their plans to comply with the ESPS, which requires a 32 percent GHG cut from the power sector by 2030,.
This is particularly true for states that are challenging the legality of the ESPS in the D.C. Circuit and are located in circuits they consider friendlier to their interests, like Texas and Oklahoma, than the D.C. Circuits, McKenna says.
Other states that could benefit from the ruling include Wyoming, Utah, Colorado and Kansas, all located in the 10th Circuit along with Oklahoma. The Sooner State ended up joining Texas in litigating the haze plan in the 5th Circuit, but it had also filed in its own circuit. Louisiana and Mississippi, along with Texas, are also in the 5th Circuit.
Additionally, West Virginia, South Carolina and North Carolina -- which are also challenging the ESPS -- are in the 4th Circuit; and Alabama, Georgia and Florida in the 11th Circuit.
Other circuits that may be friendlier than the D.C. Circuit to states' arguments include the 8th Circuit, which oversees ESPS challengers Arkansas, Missouri, Nebraska, North Dakota and South Dakota; the 7th Circuit, which oversees state challengers Wisconsin and Indiana; and the 6th Circuit that includes Kentucky, Michigan and Ohio.
Circuits generally considered more friendly to EPA include the 9th Circuit, which houses Montana and the Arizona Corporation Commission, both of which are challenging the rule; and the 3rd Circuit, which oversees New Jersey.
The ruling “injects some additional and some significant uncertainty into the CPP,” McKenna says.
The issue would not likely arise until a second round of litigation over the ESPS -- if it survives pending litigation in the D.C. Circuit and a Supreme Court stay of the rule is lifted.
Clean Air Act Jurisdiction
Section 307(b) of the Clean Air Act directs litigation over all national rules, including standards issued under Clean Air Act section 111 like the ESPS, to the D.C. Circuit.
The section says that litigation over compliance plans crafted under section 111 would be heard in the circuit court where the state is located, but it adds that such cases could still be routed to the D.C. Circuit if “such action is based on determination of nationwide scope or effect and if in taking such action the Administrator finds and publishes that such action is based on such a determination.”
Sources had cited that provision to argue that an early notion by Arkansas to seek an alternative venue for the initial litigation over the ESPS faces a high hurdle.
But McKenna argues that the recent 5th Circuit ruling makes it more difficult for EPA to argue that suits over agency approvals or disapprovals of state ESPS plans would have “nationwide scope or effect” and thus should be considered in the D.C. Circuit.
However, lawyers representing the 27 states challenging the ESPS did not opt to flag this issue when they notified the D.C. Circuit of the 5th Circuit's haze ruling in a July 27 letter. Instead, they said the ruling bolsters their attacks on EPA for inadequate review of the grid reliability impacts of the GHG rule, because the court faulted EPA's grid review for the haze plan as insufficient.
In the ESPS challenge, West Virginia, et al. v. EPA, et al., the states say the 5th Circuit ruling supports their claims that the ESPS requires clear congressional authorization because EPA has no expertise in managing electric generation and as such cannot prevent reliability impacts.
McKenna says the grid reliability issues are germane but that the ruling's impact on the ability of states to challenge EPA's issuance of a FIP for non-compliant ESPS SIPs in the relevant circuit, rather than the D.C. Circuit, is a much bigger deal.
“I don't want to oversell” the haze ruling,” he says, adding: “I expected [the FIP] to get bounced but I didn't expect it to get bounced quite that thoroughly.”
One of the reasons the court acted so aggressively in staying the FIP is because EPA failed to negotiate with the states after it proposed the FIP, he says. “Someone missed the pages in EPA's playbook . . . where you come back and throw carrots after you use the stick,” he says. He adds that the court's jurisdictional determination that the issue was “wholly contained” within the 5th Circuit, rejecting EPA's national scope arguments, was also aggressive.
While it is not a given that other circuits will side with the 5th Circuit on the jurisdictional issue, McKenna says that every circuit prefers to avoid sending cases to the D.C. Circuit.
“So if you are a state . . . located in a friendly circuit, I could easily imagine you are now thinking about the world slightly differently. You are thinking we may have more negotiating room/leverage than before, because EPA's main stick may be useless in the circuit. If EPA's stick is the FIP and your circuit is friendly, maybe you say, 'See you in court,' and hope your [court] bails [you] out,” McKenna says.
The ruling “subtly alters the balance of power” between states and EPA in complying with the ESPS, which remains stayed by the Supreme Court pending resolution of suits challenging the regulation.
It allows some states to tell EPA to “go away. . . . If you believe the appellate court will tilt toward you, you have the ability to be much less afraid of EPA in that negotiation. It doesn't apply everywhere, but it applies in a lot of places.”
McKenna adds that in the event that the Supreme Court upholds the ESPS -- which he believes the court as currently constituted would do, assuming a favorable ruling on the regulation by the D.C. Circuit -- then litigation over compliance plans will be hugely important.
As such, state critics now “know something they didn't know a month ago. . . . It is subtly but importantly tilting the playing field to states.”
http://insideepa.com/daily-news/5th-circuits-ruling-venue-haze-fip-suit-boosts-state-esps-critics
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EPA Defends ESPS Reliability Review Against States' Haze Rule Claims
Aug 3, 2016 | Inside EPA
By Abby Smith
EPA is dismissing states' claim that a recent appellate court ruling blocking an agency haze emissions plan boosts their criticism that EPA did not conduct an adequate grid reliability review for its existing power plant greenhouse gas rule, arguing the haze case has “minimal relevance” and that it conducted a sufficient reliability analysis for the power plant rule.
The haze case, State of Texas, et al. v. EPA, et al. in the U.S. Court of Appeals for the 5th Circuit, adds “no support” to opponents' argument in litigation over EPA's power plant existing source performance standards (ESPS) that EPA “failed to adequately assess grid reliability impacts in the Rule under review,” the Department of Justice (DOJ) on behalf of EPA writes in an Aug. 2 letter.
“None of the alleged analytical deficiencies identified by the Fifth Circuit are present here: EPA consulted with the [Federal Energy Regulatory Commission (FERC)] and other stakeholders, extensively evaluated grid reliability, and provided a reliability safety valve,” the agency adds.
The letter responds to claims from a 27-state coalition -- led by West Virginia -- challenging the ESPS in the D.C. Circuit that the haze ruling backs their argument that the agency's grid reliability review in the rule was inadequate. The 5th Circuit faulted EPA's grid reliability review for its federal haze plan for Oklahoma and Texas.
The haze ruling “concluded that 'EPA's assertions about grid reliability' were owed 'diminished' deference because 'EPA has no expertise on grid reliability,'” the states' July 27 letter read.
The 5th Circuit on July 15 stayed EPA's rule rejecting Oklahoma and Texas' state implementation plans (SIPs) for the haze program and replacing them with a federal implementation plan (FIP) requiring significant emissions cuts from power plants in Texas. EPA said the SIPs were inadequate to sufficiently cut haze-forming emissions, and imposed its own pollution control plan in the FIP.
The court justified the stay with a forceful argument that EPA is likely to fail on the merits of the litigation in part because the FIP is flawed for its “truncated discussion of grid reliability.”
The ruling calls FERC the “federal expert” on grid reliability, and notes that it was “uninvolved in this regulatory scheme or this rulemaking.” In addition, the 5th Circuit said it is “noteworthy” that the haze rule “provides neither an exemption from compliance when necessary to preserve the power supply nor a more rigorous exploration of the impact of the Final Rule on grid reliability.”
DOJ in its recent letter, however, argues the appellate court “erred” when it stated EPA lacks the expertise to evaluate electric grid impacts of its climate and air rules.
“Congress specifically directed EPA to consider 'energy' requirements in regulating power plants under both the regional-haze and Section 111 standard-of-performance programs” under which the agency promulgated the ESPS, DOJ writes.
It adds: “Thus, Congress designated EPA as the 'expert administrative agency' qualified to make an 'informed assessment of' the 'Nation's energy needs' in the context of pollution control.”
Agency Deference
Beyond defending its expertise in the area and its “extensive” analysis of grid impacts of the ESPS, DOJ argues that EPA should be awarded court deference on this issue under the Supreme Court's Chevron precedent.
“Regardless, the reliability judgments made in the Rule are fully supported by a robust record and therefore satisfy any application of the inherently deferential arbitrary-and-capricious standard,” the DOJ letter says.
And the 5th Circuit ruling backs the notion that EPA should receive deference, the department charges. “As the Fifth Circuit stated, judicial review 'is deferential to EPA's interpretation of the Clean Air Act if the statute is susceptible to multiple reasonable interpretations,'” it writes.
The department also notes several measures EPA took in the final ESPS to address reliability concerns, in an effort to differentiate the GHG rule from its treatment of reliability in the haze rule, which the appellate court criticized as “diminished.”
For example, while FERC was “uninvolved” in the haze FIP, DOJ notes that EPA consulted with FERC when developing the ESPS and moving the rule from proposal to final. FERC will also work alongside EPA and the Energy Department during the rule's planning and compliance periods to address any reliability concerns that may come up, per a memo that accompanied the final ESPS.
In addition, the department highlights the existence of the reliability “safety valve” in the ESPS, which is a direct contrast to 5th Circuit charges in the haze ruling that the haze FIP lacked a reliability-related compliance “exemption.”
EPA also included in the final ESPS a provision that requires states to demonstrate in their state compliance plan submittals that they considered grid reliability impacts, though the rule does not specify a means by which states must perform this review.
http://insideepa.com/daily-news/epa-defends-esps-reliability-review-against-states-haze-rule-claims
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