Preview Newsletter
ACC AM 8/8/16
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(ACC Mentioned) Chemical Activity Hits A New High
Aug 6, 2016 | Seeking Alpha
By Calafia Beach Pundit
For almost 100 years, The American Chemistry Council has been publishing their "Chemical Activity Barometer." The index rose 3% in the year ending a few days ago, and reached a new all-time high in the process. -
Mesothelioma Cases Continue To Rise In Iceland Despite Asbestos Ban
Aug 8, 2016 | Mesothelioma.com
By Jillian Duff
mesothelioma cases continue to rise in Iceland despite the country’s 1982 ban on asbestos. Cases of malignant mesothelioma increased from 1965 to 2014, but this was expected. -
Parties Agree to Briefing Schedule in Power Plant Lawsuit
Aug 8, 2016 | BNA Daily Environment Report
By Andrew Childers
Parties in the lawsuit over the Environmental Protection Agency's carbon dioxide standards for new power plants have agreed to a proposed schedule that would see the case briefed by February 2017 (North Dakota v. EPA, D.C. Cir., No. 15-1381, motion filed 8/4/16). -
Petitions on Mercury Rule Startup Provisions Rejected by EPA
Aug 8, 2016 | BNA Daily Environment Report
By Patrick Ambrosio
The Environmental Protection Agency won't alter toxic emissions control requirements for power plants during periods of startup under its Mercury and Air Toxics Standards in response to requests from environmental and industry organizations. -
Colorado Fracking Limit Deadline
Aug 7, 2016 | The New York Times
By Clifford Krauss
Monday is the deadline for environmental activists in Colorado to submit the signatures required to put two proposals on the state’s ballot in November. -
In Colorado, Anti-Fracking Measures Face Key Monday Deadline
Aug 8, 2016 | CNBC
By Jeff Daniels
Two initiatives that would affect oil and natural gas extraction in Colorado could get on the state ballot this fall, and backers have until Monday to submit the required number of signatures. -
Fracking Air Pollution Study Retracted
Aug 5, 2016 | Chemical & Engineering News
By Deirdre Lockwood
Because of calculation errors, researchers have retracted a 2015 study showing that airborne pollutants known as polycyclic aromatic hydrocarbons (PAHs) near fracking sites in Ohio posed elevated cancer risk to area residents and workers. -
(ACC Mentioned) Will the STB Railroad Reciprocal Switching Decision Really Help Shippers?
Aug 7, 2016 | MHLnews
By David Sparkman
The Surface Transportation Board’s proposal to allow railroad reciprocal switching garnered immediate praise from shipper groups, but after shippers have a chance to examine it more closely, they might not be as happy. -
Wealthy Companies Gain At Expense Of All Americans Under STB Rule
Aug 5, 2016 | The Hill - Congress Blog
By Edward R. Hamberger
Now in the final throes of our republic’s quadrennial rite, the presidential nominees are staking out positions over how best to cajole an economy sorely in need of cajoling. -
The Safety of Freight Rail
Aug 8, 2016 | The New York Times
By Michael J. Rush
“Oil Train Hazards Cast Doubt in Northwest” (news article, Aug. 1) doesn’t mention critical facts in the debate over crude-by-rail transportation in the Pacific Northwest. -
Native Americans Bring Oil Pipeline Fight To Washington
Aug 6, 2016 | The Hill - E2 Wire
By Maria Rachal
Members of the Sioux nation journeyed to Washington, D.C. this weekend to protest a proposed $3.8 billion oil pipeline they say would contaminate their drinking water and violate sacred lands. -
Brown Gears Up for Fight Over California Climate Effort
Aug 7, 2016 | The Wall Street Journal
By Alejandro Lazo
Democratic Gov. Jerry Brown has launched a political-action committee to preserve California’s cap-and-trade program—setting up a potential battle over the state’s environmental policy. -
Businesses Say California Needs 2030 Climate Target
Aug 8, 2016 | BNA Daily Environment Report
By Carolyn Whetzel
Several businesses and investment companies are pushing California lawmakers to extend the state's signature climate policy before Aug. 31, the end of the current two-year legislative session. -
Texas, EPA Stress Trust in Resolving Permitting Dispute
Aug 8, 2016 | BNA Daily Environment Report
By Paul Stinson
State and federal officials praised the cooperation between Texas and the Environmental Protection Agency for easing a backlog of greenhouse gas emissions permits. -
EPA Denies Petitions To Revise Utility MACT SSM Provisions
Aug 5, 2016 | Inside EPA
EPA has denied environmentalist and industry groups' petitions to reconsider the startup, shutdown and malfunction (SSM) provisions of the agency's maximum achievable control technology (MACT) air toxics standards for power plants, saying the petitioners variously raised their objections too late or failed to support their claims. -
Louisiana Politicians Go To Court Blaming Big Oil For Coastal Ruin
Aug 6, 2016 | AP (In Fuel Fix)
The oil industry has left a big footprint along the Gulf Coast, where a Delaware-size stretch of Louisiana has disappeared.
Congressional Hearings - There are no relevant hearings to report at this time
Industry and Association News
LCSA News - There are no clips to report at this time.
Chemical Management News
Energy News
Chemical Security News - There are no clips to report at this time.
Transportation News
Environment News
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(ACC Mentioned) Chemical Activity Hits A New High
Aug 6, 2016 | Seeking Alpha
By Calafia Beach Pundit
For almost 100 years, The American Chemistry Council has been publishing their "Chemical Activity Barometer." The index rose 3% in the year ending a few days ago, and reached a new all-time high in the process. As the charts below show, this index has reliably tracked the performance of the overall economy and, in particular, it has been a good leading indicator of industrial production, which has been noticebly weak for the past 18 months. (See more details in my June '16 post on the subject here.)
This close-up look at the performance of the index highlights its strength in the past several months, and the fact that it finally exceeded its 2007 peak, which occurred six months before the economy entered the Great Recession.
The chart above gives you a longer-term perspective on the behavior of the index, which invariably turns down in recessions (often in advance of recessions), and invariably rises during recoveries. It would appear that the recent behavior of the index points to stronger growth than is widely perceived to be the case.
The chart above compares the year over year change in the 3-mo. moving average of the Chemical Activity Index with the equivalent change in the level of Industrial Production. The Chemical index invariably moves in advance of move in Industrial Production. If this relationship holds, the market is going to be surprised at the new-found strength in Industrial Production in the months to come. We've been waiting for evidence that sharply lower energy prices will result in a boost in non-energy sectors of the economy, and this suggests that the evidence should be forthcoming before too long.
To be conservative, the strength in the Chemical Activity Index suggests that at the very least, a recession is not on the near-term horizon, and that the economy should prove to be at least a bit stronger, in the months to come, than the market is expecting.
Truck tonnage in June was a bit weaker than in May, but as the chart below suggests, it remains on an upward trend. Both chemical activity and truck tonnage are good measures of the physical size and growth of the economy, and both suggest the economy continues to make progress.
http://seekingalpha.com/article/3996720-chemical-activity-hits-new-high
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Mesothelioma Cases Continue To Rise In Iceland Despite Asbestos Ban
Aug 8, 2016 | Mesothelioma.com
By Jillian Duff
Reykjavik, Iceland - New research from the University of Iceland, the Administration for Occupational Safety and Health, and the Center for Health Security and Communicable Disease Control shows mesothelioma cases continue to rise in Iceland despite the country’s 1982 ban on asbestos. Cases of malignant mesothelioma increased from 1965 to 2014, but this was expected.
“In line with the previously high per capita volume of asbestos import, many buildings, equipment, and structures contain asbestos, so there is an on-going risk of asbestos exposure during maintenance, renovations, and replacements,” said Kristinn Tomasson, Occupational Medicine Specialist, Administration of Occupational Safety and Health.
“It is thus difficult to predict when the incidence of malignant mesothelioma will decrease in the future,” stated Tomasson. This is also due to the latency period where the decreased use of asbestos may not become apparent until several decades later.
The study also showed that Iceland had a higher rate of mesothelioma than its neighboring countries based on data from the Icelandic Cancer Registry, the National Cause-of-Death Registry, and the National Register. Because the country doesn’t have asbestos mines, the import figures were deemed very accurate.
From the results, 79% of the cases of malignant mesothelioma were men and 72% were of pleural origin. The incidence rate increased from 1965 to 2014 when 21.4 per million cases were among men and 5.6 among women. In 2014, the death rate was 22.2 per million among men and 4.8 among women.
Iceland was actually the first country to ban asbestos followed by Norway and Sweden. In Sweden, a similar study was conducted, but the results showed the ban on asbestos there was actually reducing the occurrence of pleural mesothelioma. It’s considered the first convincing study showing a decreased occurrence of asbestos-related diseases due to a ban.
With the Swedish study, men and women born 1955 to 1979 had a decreased risk of malignant pleural mesothelioma compared to men and women born from 1940 to 1949. This decrease prevented 10 cases annually in men and two in women below the age of 57 years in 2012.
According to the Journal of Occupational Health, "Since Iceland first introduced a ban on all types of asbestos in 1983, more than 50 countries have implemented similar bans. However, the pace of countries adopting bans has slowed in the past decade. Indeed, the governments of several industrializing countries have withdrawn bans while others have prescribed long periods over which to move towards a ban.”
Nine of the ten most populated countries in the world, all of which use or have used substantial amounts of asbestos, still have not adopted bans. As result, coverage of the world population by bans remains low and is biased towards industrialized countries.
The Lautenberg Chemical Safety Act is the best bet for implementing a ban in the U.S. Signed on June 22 of this year, the act gives the Environmental Protection Agency (EPA) more authority to regulate chemicals effectively and reduce asbestos exposure.
http://www.mesothelioma.com/news/2016/08/mesothelioma-cases-continue-to-rise-in-iceland-despite-asbestos-ban.htm#ixzz4GjGJXedA
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Parties Agree to Briefing Schedule in Power Plant Lawsuit
Aug 8, 2016 | BNA Daily Environment Report
By Andrew Childers
Parties in the lawsuit over the Environmental Protection Agency's carbon dioxide standards for new power plants have agreed to a proposed schedule that would see the case briefed by February 2017 (North Dakota v. EPA, D.C. Cir., No. 15-1381, motion filed 8/4/16).
The U.S. Court of Appeals for the District of Columbia Circuit had asked all of the parties to work together on an updated briefing schedule after the lawsuit, which challenges the carbon dioxide new source performance standards for new and modified power plants, was paused to allow the court to consolidate new lawsuits filed challenging the EPA's denial of petitions seeking administrative reconsideration of the rule.
The proposed briefing format submitted jointly by the parties Aug. 4 would see the petitioners, including states, utilities and industry groups, file the opening briefs Oct. 13 with the EPA responding by Dec. 14. Petitioners' reply briefs would be due Jan. 19.
The EPA's carbon dioxide performance standards (RIN:2060-AQ91) require new coal-fired units meet a performance standard of 1,400 pounds of carbon dioxide per megawatt-hour, which would effectively require the use of some form of carbon capture. The Utility Air Regulatory Group, American Electric Power, Ameren Corp., the Energy and Environmental Legal Institute and Wisconsin had all asked the EPA to consider aspects of the performance standards, particularly the carbon capture component, but those petitioners were denied. D.C. Circuit had paused its briefing in the lawsuit over the performance standards to allow additional lawsuits challenging the petition denials to be consolidated as well.
The EPA issued the performance standards in 2015 along with comparable carbon dioxide emissions limits for existing power plants, known as the Clean Power Plan. Though the proposed briefing format for the performance standards for new power plants means the litigation likely won't be argued until the middle of 2017, the Clean Power Plan is proceeding on a much faster schedule. The rule has already been stayed by the U.S. Supreme Court and the full D.C. Circuit will hearing arguments beginning Sept. 27 (West Virgina v. EPA, D.C. Cir., No. 15-1363, letter filed 7/27/16).
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=95190350&vname=dennotallissues&fn=95190350&jd=95190350
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Petitions on Mercury Rule Startup Provisions Rejected by EPA
Aug 8, 2016 | BNA Daily Environment Report
By Patrick Ambrosio
The Environmental Protection Agency won't alter toxic emissions control requirements for power plants during periods of startup under its Mercury and Air Toxics Standards in response to requests from environmental and industry organizations.
The agency, in a notice scheduled for publication in the Federal Register Aug. 8, announced that it rejected petitions for reconsideration filed by the Utility Air Regulatory Group, a utility sector organization, and a coalition of environmental advocacy groups led by the Environmental Integrity Project.
The groups' unsuccessful petitions sought changes to a 2014 rule (RIN:2060-AS07) that established an alternative work practice standard for power plant startup under the MATS regulation. The alternative standard allows coal- and oil-fired power plants to comply with the mercury and air toxics standards by initiating startup using clean fuels and continuing to use the maximum amount of clean fuels during startup, when emissions are generally higher than during normal operation.
The EPA's rationale for denying the petitions was that the issues raised by both the environmental and industry petitioners could have been raised during the rulemaking process, but were not.
The denial of the reconsideration requests could allow for challenges to the alternative work practice standard rulemaking to proceed in federal appeals court. The litigation, filed by both the environmental organizations and the Utility Air Regulatory Group, has been held in abeyance since August 2015 (Util. Air Regulatory Grp. v. EPA, D.C. Cir., No. 15-1013, 8/18/15).
The court initially halted the lawsuit to allow for litigation over the main MATS rule to conclude, which it did in June when the U.S. Supreme Court declined to review a lower court's decision to leave the regulation in place while the agency worked to address a legal flaw in the rulemaking process (Michigan v. EPA, U.S., No. 15-1152, cert. denied 6/13/16).
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=95190358&vname=dennotallissues&fn=95190358&jd=95190358
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Colorado Fracking Limit Deadline
Aug 7, 2016 | The New York Times
By Clifford Krauss
Signatures due for ballot measures to limit fracking.Monday is the deadline for environmental activists in Colorado to submit the signatures required to put two proposals on the state’s ballot in November. Both would restrict hydraulic fracturing in oil and gas fields. Hydraulic fracturing, better known as fracking, allows oil companies to fracture shale and other hard rocks with water, chemicals and sand to free oil and gas. Environmentalists contend that the practice can pollute air and local water supplies, but the companies insist it is safe. The more aggressive of the two initiatives would amend the Colorado Constitution to outlaw fracking within 2,500 feet of occupied buildings, water resources and public spaces like parks.
http://www.nytimes.com/2016/08/08/business/colorado-fracking-limit-deadline-valeant-and-disney-earnings-reports.html
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In Colorado, Anti-Fracking Measures Face Key Monday Deadline
Aug 8, 2016 | CNBC
By Jeff Daniels
Two initiatives that would affect oil and natural gas extraction in Colorado could get on the state ballot this fall, and backers have until Monday to submit the required number of signatures.
Opposition has been fierce, with more than $15 million raised to fight the proposed measures, which are seen as a threat to the state's energy industry.
"The energy industry is very concerned," said David Tameron, an energy analyst at Wells Fargo Securities in Denver. "Essentially, it would grind drilling development to a halt in the state."
Ballot Initiative 78 would force mandatory setbacks for oil and gas development in Colorado, including requiring any development or fracking to be located more than 2,500 feet away from both an "occupied structure" or "areas of special concern" such as parks, playgrounds, public open space, lakes or rivers.Big energy money raised in fight
Initiative 75 would give local government the authority to regulate oil-and-gas development, including banning, limiting or imposing moratoriums on such development. It would amend the state's constitution and give local officials more power to enact regulations that impact energy development and related companies.
Two energy companies, Anadarko Petroleum ($5.5 million) and Noble Energy ($5 million), are among those who have given millions to several issue groups opposed to the measures.
"This is bigger than any individual company, as these potential ballot measures would carry massive consequences for Colorado's economy, public education, public services and every consumer," said Anadarko spokesman John Christiansen, in an email to CNBC. Noble Energy didn't respond to a request for comment.
Other major contributors include Synergy Resources, PDC Energy, Bill Barrett Corp., as well as the Denver Metro Chamber of Commerce, according to campaign finance records from the Colorado Secretary of State's Office.
The setback initiative would reduce an estimated 90 percent of the surface areas in the state for future oil and gas development or hydraulic fracturing operations, according to an impact report from the Colorado Oil and Gas Conservation Commission. Also, around 85 percent of Weld County — an area with around 17,000 oil and gas wells at last count — would be unavailable based on their analysis.
Some analysts estimate the amount of money that will be used to fight the measures could double over the next few months if backers get enough signatures to put the measure on the Nov. 8 ballot. Supporters of the two current statewide initiatives need to obtain 98,492 valid signatures by Monday's deadline.
Proponents have raised less than $500,000, and it's unclear if they will get the required number of signatures to qualify for the fall ballot.
"Given catastrophic implications for these companies, certain downside persists, though given limited likelihood that initiatives pass based on rational behavior, we would expect rally relief to ensue," said David Deckelbaum, an industry analyst at Keybanc Capital Markets.
The Sierra Club is one of the groups backing ballot measures 75 and 78. On the group's website, they make the case that the measures "are aimed at protecting our health, safety, property values and environment from the harms of fracking."Pro-fracking group says $217 billion at stake
"These measures are really backdoor fracking bans that would be economically devastating for our state," said a spokesperson for Protect Colorado, an industry-backed issue committee fighting measures 75 and 78.
Protect Colorado, which has received funding from Anadarko and other energy companies, claims the initiatives would cost the state 140,000 jobs and $217 billion in economic activity over the next 15 years.
"We see the worst-case-scenario (Initiative 78 being approved and passed) as a very low probability but because of the rapid transformation of Colorado's electorate and unprecedented nature of November's election, we believe that the low-probability high-impact risk event warrants investor concern until it can be ruled out," said FBR & Co. analyst Benjamin Salisbury in a note Thursday.Fracking fight could go to courts
If the measures do eventually pass, there's no guarantee they would get implemented as the energy industry could take the issue to the courts.
"There's obvious avenues that people would pursue and they would try to get an injunction or try to fight it on the grounds that it's unconstitutional," said Wells Fargo's Tameron.
Anadarko, Noble Energy and Whiting Petroleum have the greatest acreage in Colorado's Denver-Julesburg Basin, according to the FBR analyst. The basin runs from the northeastern part of Colorado and into Wyoming, Nebraska and Kansas.
"This is an issue where the bar for getting something on the ballot in Colorado is low," said the KeyBanc analyst. "Proponents of these initiatives are using Colorado as a proving ground for other states."
This isn't the first time ballot initiatives have been proposed in Colorado to limit oil and gas development or eliminate fracking. There also have been local attempts to prohibit fracking.
Back in 2014, a compromise resulted in four energy-related measures staying off the Colorado ballot. The compromise came after the state's governor worried about the economic fallout to the state of clamping down on oil and has development. Also, there were reports at the time suggesting Democrats were concerned that energy industry efforts to fight the initiatives could help Republicans in the fall elections.
http://www.cnbc.com/2016/08/05/colorado-fracking-fight.html
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Fracking Air Pollution Study Retracted
Aug 5, 2016 | Chemical & Engineering News
By Deirdre Lockwood
Because of calculation errors, researchers have retracted a 2015 study showing that airborne pollutants known as polycyclic aromatic hydrocarbons (PAHs) near fracking sites in Ohio posed elevated cancer risk to area residents and workers. In a new paper, the team reports corrected PAH values that are about 0.4% of those originally reported. In contrast to the original study’s conclusions, the researchers estimate that exposure to these PAH levels does not exceed the Environmental Protection Agency’s acceptable risk levels for cancer (Environ. Sci. Technol. 2016, DOI:10.1021/acs.est.6b02762).
PAHs are found in fossil fuels, so they can be released into the air through natural gas extraction, and they are also produced when the fuels are burned, such as in truck exhaust near fracking sites. Because they are linked with cancer and respiratory illness, Kim A. Anderson of Oregon State University and her collaborators set out in winter 2014 to measure their airborne concentrations in Carroll County, Ohio, an area with high fracking activity. They deployed passive air samplers made of low-density polyethylene strips to absorb PAHs in the air for several weeks on the private properties of 23 volunteers. (Environ. Sci. Technol. 2015, DOI:10.1021/es506095e).
After analyzing the concentrations of PAHs on the strips, the researchers estimated airborne concentrations of PAHs for three subsets of volunteers, grouped by their property’s proximity to an active well: within 0.1 mile, between 0.1 and 1 mile, and between 1 and 3 miles. The researchers originally reported that a set of 14 PAHs had total concentrations of 330, 240, and 210 ng/m3 for the three groups, respectively. But they later discovered that they had mistakenly used a value of the ideal gas constant with incorrect units in their calculations to determine the air concentrations of PAHs and to adjust them for sampling temperature, Anderson explains. This error invalidated the original results. The corrected values are much lower, at 1.2, 0.94, and 0.97 ng/m3, on the same order of magnitude as PAH values at rural sites far from natural gas production and values measured near natural gas wells during the drilling phase only (Hum. Ecol. Risk Assess. 2012, DOI: 10.1080/10807039.2012.749447).
The researchers then recalculated the excess lifetime cancer risk level for these concentrations at a variety of different exposures, including maximum residential exposure of 350 days per year over 26 years. In contrast with their previous results, which showed that the maximum exposure exceeded the EPA’s maximum acceptable risk level, the corrected risk levels were 0.04 in a million—well within the EPA’s most conservative acceptable risk level of 1 cancer in a million.
Two major conclusions from the original paper hold. “We still see higher PAH concentrations closer to wells than farther away, on average,” Anderson says. And the forensic profile of the PAHs is consistent with a natural gas source rather than a combustion source, such as from vehicle traffic near fracking operations.
“I respect the authors for issuing a retraction after they discovered their own mistake,” comments David O. Carpenter, an environmental health scientist and director of the Institute for Health & the Environment at the University at Albany, SUNY. “This is the responsible thing to do, but not a step that every scientist would take.”
Carpenter notes that the new study shows elevated PAHs near fracking sites—and adds that the compounds can be harmful at any level. “The EPA standards are set at levels that are achievable in our modern (and contaminated) world, and should not be used to imply that any amount is without some danger,” he says. “But it is reassuring that the measured levels do not exceed EPA standards.”
The Independent Petroleum Association of America, a trade organization for the oil and gas industry, published several posts in response to the retraction and the corrected study on the website it sponsors, Energy in Depth (EID). “This is a prime example of a rushed study, designed to scapegoat fracking, that fails to fully vet the data collected—yet garners media coverage anyway,” wrote Seth Whitehead, a researcher for the website. An EID spokesperson told C&EN that the researchers’ own comments about the study design “should have raised some red flags in the media when the original was released.”
Anderson says that her team called each study participant to report the corrected data and notes that her group will also be holding meetings in Ohio later this summer to discuss the experiments with the community.
Because of the same error in ideal gas constant units, Anderson and coauthors also recently retracted another paper on PAHs in the air and water of the Gulf of Mexico after the Deepwater Horizon spill (Environ. Sci. Technol. 2014, DOI: 10.1021/es503827y). In this case, the correction did not change the results as dramatically, because the air temperatures used in their calculations for that study were closer to standard temperature, 25 °C, than those in the Ohio study (Environ. Sci. Technol. 2016, DOI: 10.1021/acs.est.6b02784). “All major conclusions still held,” Anderson says.
https://cen.acs.org/articles/94/web/2016/08/Fracking-air-pollution-study-retracted.html
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(ACC Mentioned) Will the STB Railroad Reciprocal Switching Decision Really Help Shippers?
Aug 7, 2016 | MHLnews
By David Sparkman
The Surface Transportation Board’s proposal to allow railroad reciprocal switching garnered immediate praise from shipper groups, but after shippers have a chance to examine it more closely, they might not be as happy.
The board issued its proposed rulemaking notice on July 27 and public comments are due on October 25. The STB acted in response to a request filed by the National Industrial Transportation League (NITL) in July 2011—exactly six years earlier.
Reciprocal switching is defined as the switching of a railcar between the interchange tracks of one railroad to a customer’s private or assigned siding on another railroad for the purpose of loading or unloading freight. It is needed by shippers with rail spur lines that go directly to their facilities.
Under the proposed rule a shipper requiring reciprocal switching must prove to the STB that the arrangement is in the public interest and needed for competitive rail service. The STB then would make its findings based on evidence presented by the shipper and the railroad. Also proposed are two alternative methods for the STB to set the access price paid by the new competing railroad to the main railroad if they can’t agree.
In announcing the new rule, STB chairman Daniel R. Elliott III declared, “I thank NITL for bringing their reciprocal switching proposal to the board for consideration, and I am pleased that today we are granting that petition in part.” NITL’s executive director Jennifer Hedrick was just as happy. “We applaud the STB’s decision to move forward on changes to competitive switching regulations,” she said.
The immediate response of Cal Dooley, president of the American Chemistry Council, was, “We welcome STB’s decision to move forward on competitive switching, which will help put the marketplace back in the driver's seat and improve the flow of goods throughout our economy.”
Although common practice in Canada for years where no problems have been reported, railroads in the United States have fought tooth and nail to prevent being required to provide this service. One motivation stems from their fear that this could be the first step onto the slippery slope of re-regulation of the industry.
In reaction to the STB action, Edward R. Hamberger, president of the Association of American Railroads (AAR), said, “The freight rail industry's position remains unchanged: forced access is an ill-conceived approach that compromises the efficiency of the entire network by gumming up the system through added interchange movements, more time and increased operational complexity.”
The proposal applies only to Class I railroads but the industry is so strong in its opposition that Congress only managed to pass rail reform legislation last year after a reciprocal switching provision was left out that had been included in an earlier version of the measure.
What should give shippers pause is that the STB’s proposal does little or nothing to change the actual procedures in place today. Instead of proposing a sweeping change that would mandate reciprocal switching across the country, shippers will still be required to file an individual petition with the board and make a case for gaining its approval in each and every situation where they need switching to take place. All the change does is shift the burden of proof.
The current rules allow a shipper to file a similar petition, but to win it needs to show competitive abuse perpetrated by its main railroad. Under the proposed rule the STB says it will order reciprocal switching if a shipper can show that either it would be practicable and in the public interest, or it is necessary to provide competitive rail service.
“Under the first path, the STB would balance the likely benefits of the switching arrangement against any detriments to the involved railroads. Under the second path, a shipper would need to establish that there are no effective competitive transportation alternatives available,” explain attorneys for the law firm of Thompson Hine.
But they point out that under the proposal railroads can counter with evidence that the proposed switching “is not feasible or is unsafe” or that the presence of such switching would “unduly hamper the ability of that carrier to serve its shippers.”
That sounds like a process that would require considerable amount of time, months at minimum and perhaps longer in a world where same-day deliveries are now common in the supply chain.
Under the previous STB reciprocal switching procedures exactly one case had been filed by a shipper seeking to secure reciprocal switching, and they gave up and withdrew after the case dragged on for 10 years, according to Paul Delp, president of Lansdale Warehouse Co. and the American Chain of Warehouses Inc.
One problem for shippers in opposing Class I carriers is that whether it involves fighting them in the halls of Congress or the hearing rooms of the STB, “you can never outspend the railroads,” observes Delp, who also serves as co-chairman of the Transportation Advisory Council (formerly the Rail Council) of the International Warehouse Logistics Association.
http://mhlnews.com/transportation-distribution/will-stb-railroad-reciprocal-switching-decision-really-help-shippers
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Wealthy Companies Gain At Expense Of All Americans Under STB Rule
Aug 5, 2016 | The Hill - Congress Blog
By Edward R. Hamberger
Now in the final throes of our republic’s quadrennial rite, the presidential nominees are staking out positions over how best to cajole an economy sorely in need of cajoling.
As the candidates joust over free trade and the nuances of gloomy economic indicators – including a lowly 1.2 percent GDP growth in the second quarter – they are in danger of losing sight of one of the most important economic issues facing the next administration and Congress. Namely, that our government has, over time, shackled the economy with crippling regulations that contribute to anemic growth and help explain the worst recovery in decades.
The U.S. Surface Transportation Board (STB) is seeking to add at least one more regulation to the stranglehold. In a recent proposal from the agency that oversees freight railroad economic regulations, the board is advancing a measure that would “allow a shipper to gain access to another railroad if the shipper makes certain showings.” In other words, railroads could be forced to use their own privately-owned tracks and infrastructure on behalf of their competitors at the behest of shipping customers.
The notice arises from complaints from some wealthy, multi-billion dollar corporations dissatisfied with the prices that they are paying to ship products. Even though they already have the right to challenge the reasonableness of those prices at the STB, under the proposed rule a shipper could ask the government to force a railroad to carry traffic over a portion of its own lines built specifically to serve that shipper’s facility, but on behalf of another railroad who the shipper believes would charge less.
The rule is noteworthy for several reasons. First, it comes directly at the behest of narrow business interest to advance their own bottom lines, outside of what market forces dictate. Second, for the hugely detrimental ripple effects it would have across freight rail networks that would impact all customers, American consumers and passenger rail riders.
As the rail industry has been arguing for several years, the so-called “forced access” proposal is the motherlode of bad ideas.
Railroads purposely concentrate and move traffic along certain routes to maximize operational efficiencies and network fluidity. The railroads’ routing practices, honed over decades, take into account the health and operation of the entire network and benefit all customers, not just a few. This proposal would upend those logistical efficiencies. Undoing efficiencies and benefits recognized by all rail customers for the benefit of a small number of shippers would hurt the overwhelming majority of businesses that rely on rail. Forced access will slow rail traffic, increase shipment delivery time and result in higher costs to shippers and consumers.
William Rennicke, a partner in Oliver Wyman’s Manufacturing, Transportation & Energy Group, puts a finer point on the problem.
Forced access, he says, “not only affects the local point of switching. It affects the downstream service and the downstream handling of the shipments, because you've added huge amounts of uncertainty to the equation and you've introduced complexity, where simplicity and efficiency have been involved before.”
But the long-term impact on the nation’s infrastructure is what also concerns railroads -- and should concern regulators pondering such a move. Railroads have spent billions of dollars – on average about $25 billion annually and more than $600 billion total since 1980 – to build, maintain and optimize their private networks and serve customers.
Forcing them to use their own property on behalf of competitors would undermine the current incentive that railroads have to invest in those networks and facilities, and as a result it would threaten both freight rail service writ large and the passenger rails that rely upon the infrastructure.
White House administrations of both parties have acknowledged that a productive and efficient freight rail system is critical to the U.S. economy and America’s international competitive position. Yet that is exactly what the STB is putting at risk should it accede to the demands of a handful of multi-billion dollar companies seeking a better deal at the expense of all Americans.
Hamberger is president and CEO of the Association of American Railroads.
http://thehill.com/blogs/congress-blog/economy-budget/290560-wealthy-companies-gain-at-expense-of-all-americans-under
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Aug 8, 2016 | The New York Times
By Michael J. Rush
To the Editor:
“Oil Train Hazards Cast Doubt in Northwest” (news article, Aug. 1) doesn’t mention critical facts in the debate over crude-by-rail transportation in the Pacific Northwest.
A recent derailment in the Pacific Northwest has overshadowed the fact that freight rail transportation on the whole is remarkably safe, with 99.999 percent of all hazardous material shipments traveling by rail reaching their destinations without incident.
This is partly because railroads have invested an average of $25 billion annually in recent years to upgrade rail infrastructure across the country.
Freight railroads also help train emergency responders throughout the country to keep communities safe during the rare instances when an accident does occur. The effectiveness of this training was displayed in Mosier, Ore., as first responders successfully limited the impacts from the accident to the immediate vicinity.
Safety is the top priority of the freight rail industry, and railroads are constantly striving to improve on their already strong record of moving hazardous but essential materials safely across the country.
http://www.nytimes.com/2016/08/08/opinion/the-safety-of-freight-rail.html
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Native Americans Bring Oil Pipeline Fight To Washington
Aug 6, 2016 | The Hill - E2 Wire
By Maria Rachal
Members of the Sioux nation journeyed to Washington, D.C. this weekend to protest a proposed $3.8 billion oil pipeline they say would contaminate their drinking water and violate sacred lands.
The Dakota Access Pipeline is set to pass beneath the Missouri River less than a mile from North Dakota’s Standing Rock Reservation, where tribal members rely on the river as the sole water supply.
Every day, the planned pipeline will transport 450,000 barrels of North Dakota oil 1,172 miles across North and South Dakota, Iowa, and Illinois, according to Energy Transfer Partners, the Dallas-based company behind the project
Young people from the reservation ran a nearly 2,000-mile relay to Washington, D.C. to deliver a petition with over 160,000 signatures to the United States Army Corps of Engineers (USACE). The agency approved nearly all final permits for the pipeline’s construction at the end of July.
Advocates gathered in front of the Supreme Court of the United States on Friday morning, and Standing Rock members met privately with officials from the Army Corps of Engineers in the afternoon. The group continued the protest in front of the White House on Saturday afternoon, even through pouring rain.
The tribe is asking that all pipeline construction be stopped. They worry that oil leaks will inevitably contaminate their water, based on the 300 oil leaks they say occurred from 2012 to 2013 alone in North Dakota.
Tribal members also argue that the agency has violated the National Historic Preservation Act, along with environmental regulations and Native American treaties, by allowing the pipeline’s construction. The Standing Rock Sioux have filed a federal injunction against the organization to prevent the pipeline from going forward.
“They’re always going to want to take the easiest way, and the easiest way goes right through treaty lands,” said Jordan Marie Daniel, who works at the Administration for Native Americans and helped organize the D.C. events.
The petition has garnered the support of celebrities, including actor Leonardo DiCaprio, environmentalist and writer Bill McKibben, and actress Shailene Woodley, who participated in part of the run to D.C. as well as Saturday’s rally.
“We all deserve a future, our children deserve a future, even our unborn grandchildren deserve a future,” Bobbi Jean Three Legs, a Standing Rock youth organizer, told Saturday’s crowd, between chants of “Mni Wiconi,” or, “Water is Life.”
“This is more than just indigenous rights, it’s human rights, it’s environmental rights,” Daniel said. “President Obama really puts a lot of indigenous issues at the forefront … so we’re hoping he can have some sway in the decision helping to get this shut down before his term is up.”
The president left Washington early Saturday for a two-week vacation in Martha's Vineyard.
Organizers have planned a similar demonstration in New York City’s Union Square for Sunday afternoon.
http://thehill.com/blogs/blog-briefing-room/290650-native-americans-bring-oil-pipeline-fight-to-washington
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Brown Gears Up for Fight Over California Climate Effort
Aug 7, 2016 | The Wall Street Journal
By Alejandro Lazo
SAN FRANCISCO—Democratic Gov. Jerry Brown has launched a political-action committee to preserve California’s cap-and-trade program—setting up a potential battle over the state’s environmental policy.
Cap and trade aims to reduce carbon emissions by imposing a limit on the amount of CO2 released by industry and then selling a finite number of permits every quarter for businesses to meet those allowances.
California, the first state with a comprehensive cap-and-trade system, launched its program in 2012. After robust permit sales early on, the program has become beset with political and legal challenges, and demand for carbon permits has shrunk.
Mr. Brown last week created a PAC, Californians for a Clean Environment, signaling he may turn to voters for support to extend cap and trade and the state’s emissions-reduction goals through a ballot initiative. The program is particularly important to Mr. Brown, as profits help fund the state’s planned bullet train, among other goals by the state’s Democrats. Nancy McFadden, the governor’s executive secretary, said in a statement that California would expand its climate laws and its cap-and-trade program, “one way or another.”
“There is no state or nation in the Western Hemisphere doing more to curb carbon pollution and our dangerous addiction to oil than California,” Ms. McFadden said. “The governor will continue working with the legislature to get this done this year, next year or on the ballot in 2018.”
The program was created from climate-change legislation signed 10 years ago by then-Gov. Arnold Schwarzenegger, a Republican. While recent polls show the goals of the legislation are popular among state voters, an effort to set new pollution reduction targets for the program beyond 2020 has stalled in the state assembly this summer.
The California Global Warming Solutions Act of 2006 sought to reduce greenhouse gas emissions to 1990 levels by 2020, and the state is on track to meet that goal, according to the California Air Resources Board, which runs the program.
A bill that would require the state to approve levels equivalent to 40% below the 1990 levels by 2030 passed the state Senate but hasn’t passed the assembly. A group of business-friendly Democrats blocked a separate major provision of climate-change legislation backed by the governor last year: a mandated 50% reduction in petroleum use over 15 years.
A spokesman for California’s Air Resources Board said current legislation doesn’t require an extension, but the governor’s office was considering a bill “to show legislative support to demonstrate certainty to the market.”
The California Chamber of Commerce is suing the state, arguing the carbon permit auctions amount to an illegal tax on business. It called this year’s effort to expand the climate change legislation a “job killer,” saying it would “increase costs for California businesses, make them less competitive and discourage economic growth by adopting further greenhouse gas emission reductions for 2030 without regard to the impact on individuals, jobs and the economy.”
http://www.wsj.com/articles/brown-gears-up-for-fight-over-california-climate-effort-1470618980?mg=id-wsj
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Businesses Say California Needs 2030 Climate Target
Aug 8, 2016 | BNA Daily Environment Report
By Carolyn Whetzel
Several businesses and investment companies are pushing California lawmakers to extend the state's signature climate policy before Aug. 31, the end of the current two-year legislative session.
“Action needs to happen this year to ensure our economic growth continues and in order to meet our greenhouse gas reduction goals in California and globally,” Kirsten James, a senior manager at Ceres in San Francisco, told Bloomberg BNA Aug. 5.
Hope for legislation extending the Global Warming Solutions Act of 2006 (A.B. 32) beyond 2020 dimmed this week, after State Senate President Pro Tempore Kevin De León and other Democratic leaders indicated pending legislation to set a 2030 emissions target may not have sufficient support.
Also, the office of Gov. Jerry Brown (D) said Aug. 5 his administration would take the effort to continue the state's climate policies to voters, if needed.
Ceres and executives from Trillium Asset Management, Dignity Health, Genentech Inc., General Mills, Levi Strauss & Co., Macroclimate LLC,, Novozymes, Sierra Nevada Brewing Co., and Xylim Inc. met with state lawmakers Aug. 3, urging their support of S.B. 32.
The bill aims to set a 2030 greenhouse gas emissions target of reductions 40 percent below 1990 levels. Introduced last year, S.B. 32 is opposed by the oil industry and a group of moderate Democrats.
Certainty Needed
Businesses and the investors Ceres is working with need the certainty a 2030 emissions target provides, James said.
Absent a 2030 emissions target, the predictability of California's climate program is eroding, Jonas Kron, a senior vice president at Trillium Asset Management, told Bloomberg BNA.
“What we're hearing from the companies we invest in, is the lack clarity about what happens past 2020, makes business planning more difficult,” Kron said. “As investors we take those statements seriously.”
“I'm really hopeful,” James said.
S.B. 32 author Sen. Fran Pavley (D) has “really listened” and amended the bill to address concerns and win support, James said. For example, S.B. 32 now includes only the 2030 target, not a longer-term 2050 goal, as it initially did, she said. Pavley also has worked with other lawmakers on pending companion measures, A.B. 197 and A.B. 1550, James said.
A.B. 197 would provide some legislative oversight over the California Air Resources Board implementation of climate policies. A.B. 1550 would ensure cap-and-trade auction revenue goes to low-income communities.
Industry Not On Board
The Brown administration has met with the oil industry and others opposed to passage of S.B. 32 but has been unable to gain industry support. De Leon and Assembly Speaker Anthony Rendon (D) also have tried to sway a group of moderate Democrats.
“Consumers and businesses deserve a climate policy developed through collaboration and effective leadership,” Dorothy Rothrock, president of the California Manufacturers & Technology Association, told Bloomberg BNA in an e-mail. “California manufacturers are ready and willing to work with the governor and legislative leadership to make the happen.”
The manufacturing group has questioned the effectiveness of the state's climate policies.
Oil industry officials could not be reached for comment. The Western States Petroleum Association, however, has lobbied for the state to abandoned its low-carbon fuel standard. The Brown administration has refused to do so.
Administrative Effort to Set Target
Meanwhile, the California Air Resources Board has proposed amendments to regulations governing the state's greenhouse gas emissions cap-and-trade program that would administratively establish a 2030 emissions target. The trading program is a key element of the state's plan to achieve its A.B. 32 mandate to cut carbon dioxide emissions to 1990 levels by 2020. Continuation of cap-and-trade also is central to state's strategy to comply with the federal Clean Power Plan.
If adopted next spring, as currently planned, CARB's emissions target would face litigation challenging the agency's authority to set an emissions target beyond 2020. Legislation setting the target could help avoid such challenges, attorneys have said.
Pending litigation challenging the cap-and-trade auction is another cloud hanging over the state's climate programs. A lawsuit filed by the California Chamber of Commerce alleged the auction is an illegal tax.
This Year, Next Year or Ballot
“Let's be clear: We are going to extend our climate goals and cap-and-trade program—one way or another,” Nancy McFadden, Brown's executive secretary said in a Twitter statement Aug. 4. “The governor will continue working with the Legislature to get this done this year, next year or on the ballot in 2018.”
Brown's office filed papers with the secretary of state Aug. 4 to launch a drive for a ballot measure called “Californians for a Clean Environment.”
A recent Public Policy Institute of California poll shows “Californians want to see this happen,” Natural Resources Defense Council attorney Alex Jackson told Bloomberg BNA.
“I don't think the prospect of a ballot measure should excuse the Legislature from doing its job,” Jackson said. “Their constituents want California” to continue its climate policies, he said. “We have not given up the fight for this year, nor will we ever.”
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=95190359&vname=dennotallissues&fn=95190359&jd=95190359
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Texas, EPA Stress Trust in Resolving Permitting Dispute
Aug 8, 2016 | BNA Daily Environment Report
By Paul Stinson
State and federal officials praised the cooperation between Texas and the Environmental Protection Agency for easing a backlog of greenhouse gas emissions permits.
The EPA served as the greenhouse gas permitting authority for Texas until 2014 when the state updated its permitting provisions to include greenhouse gas emissions. Until then, Texas issued permits to industrial facilities for emissions of conventional pollutants while the EPA was in charge of greenhouse emissions. That two-stage process created a backlog of as many as 83 permit applications that needed review and approval, Ron Curry, administrator for the EPA's Region 6, recalled Aug. 4 at the 28th Texas Environmental Superconference during a panel on relations between the EPA and Texas Commission for Environmental Quality (TCEQ).
“We went to the state of Texas and said, ‘Can we work together so that some of these [greenhouse gas] permits can be run in parallel to speed the process?’ ” he said.
“It was challenging enough that it got the attention of [EPA] Administrator [Gina] McCarthy and everyone in Washington,” Curry said. “The administrator very simply said to me, ‘We can't have this backlog.’ ”
Though Texas had disputed the need to update its permitting provisions of its state implementation plan to include greenhouse gases—even suing the EPA over the requirement—Curry said the agency and the state were able to work cooperatively throughout the process.
“One of the things that has been successful in Texas has been [something] that we've worked very hard on is trying to establish relationships of trust, not only between the [TCEQ] commissioner and ourselves, but also that translates into our staff so that we're trying to understand each other's issues [and] at the same time make progress toward solutions,” Curry told Bloomberg BNA after the panel discussion.
Texas Wants ‘Timely Guidance.'
TCEQ Chairman Bryan Shaw told attendees of the positive tenor of working with EPA regional staff, while underscoring the hardships posed by a lack of clarity from Washington.
“I think the key thing is the areas where we've had the greatest success have been those areas where that communication has allowed us to have the dialogue where even if we don't agree 100 percent we're able to understand and appreciate what the concerns are,” he said.
“We do need more timely guidance—again this going to be more of a national issue with regard to NAAQS [national ambient air quality standards] and rulemakings that are coming from federal government. … Often times we have a year or less to be able to look at that guidance or sometimes it's a year or more since that was due that we get the guidance and that makes it difficult,” said Shaw.
The state's top environmental official acknowledged that the EPA recognizes some of the challenges posed by that dynamic, adding that he hoped the federal agency can “utilize some of the relationship-building similar to what we've done with the region and the state” to be able to work at more of a partnership level to develop greater recognition on those issues.
EPA Acknowledges ‘Honest Disagreements.'
“The thing that is important without making too much about it is that you can have honest disagreements if you have a trusting relationship, Curry said after the panel. “That allows you to move on to the next time you're going to have to find a solution to something.”
The EPA official agreed with the characterization of both sides participating in “good faith negotiations” as accurately capturing the dynamic between the regional and Texas authorities.
“That term ‘good faith' is easy to banter around,” said Curry, “but it requires work to build on, and we've made that commitment like I mentioned in my remarks, I think it's been a very important to administrator McCarthy that we have that relationship [with the state] because EPA can't do all of this by itself and we never pretend that we can.”
Improved Communication to Test Wastewater, Air
“The states in this country have been delegated most of the environmental authority from EPA so we have to have relationships with them so that the environmental laws of this country can be implemented in the right way.”
Asked to point toward future areas where improved communication could yield positive results, Curry pointed to the sewer systems of Houston and Corpus Christi and the air quality problems of Dallas.
“Those are all issues in two different media—wastewater and air—that we're working together with TCEQ, sometimes coming from very different positions to try and find solutions for those particular communities so I'm optimistic,” he said.
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=95190341&vname=dennotallissues&fn=95190341&jd=95190341
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EPA Denies Petitions To Revise Utility MACT SSM Provisions
Aug 5, 2016 | Inside EPA
EPA has denied environmentalist and industry groups' petitions to reconsider the startup, shutdown and malfunction (SSM) provisions of the agency's maximum achievable control technology (MACT) air toxics standards for power plants, saying the petitioners variously raised their objections too late or failed to support their claims.
The agency announced its decision in a letter posted online July 29 and a formal notice slated for publication in the Aug. 8 Federal Register, rejecting the requests to reconsider 14 separate issues in the MACT.
The Utility Air Regulatory Group (UARG), which represents power utilities on air issues and filed the industry petition for reconsideration, filed suit against over the MACT's SSM provisions at the same time that it submitted the petition, though that suit has been held in abeyance since 2015, with a motion to govern future proceedings due on Aug. 15.
Both UARG and the environmentalist groups -- including Sierra Club, Environmental Integrity Project and Chesapeake Climate Action Network -- were calling on EPA to reconsider portions of the rule that deal with air toxics emissions during periods when a power plant is starting up, shutting down or malfunctioning.
Rather than imposing a numeric standard on pollution releases during those events, the agency set a “work practice standard” that allows power plants additional time of up to four hours to engage pollution controls. The rule backed comments from industry that measuring emission during SSM events is difficult and unreliable.
The advocates argued in their petition that the agency lacks authority to set such a standard and ignored evidence that it is in fact practicable to monitor SSM emissions levels, while UARG said the work practice standard involves burdensome monitoring, reporting and recordkeeping mandates that EPA never formally proposed.
But the agency in its denial letter says both sides' claims are procedurally improper because the groups could have raised their objections in comments on proposed versions of the MACT provisions -- and, in fact did so in some cases. It also says evidence in the record contradicts the groups' substantive arguments.
For instance, addressing the advocates' petition, it says, “Petitioners, in fact, did comment that the EPA did not have the authority to establish a work practice standard for [utility] startup and shutdown periods. However, they raised this issue late in the process . . . EPA responded in full to these comments.”
Under the Clean Air Act, a petition for reconsideration is only proper when “it was impracticable to raise such objection within [the public comment period] or if the grounds for such objection arose after the period for public comment.” The objection must also be “of central relevance to the outcome of the rule,” which EPA says in its response many of the environmentalist and industry claims are not
http://insideepa.com/news-briefs/epa-denies-petitions-revise-utility-mact-ssm-provisions
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Louisiana Politicians Go To Court Blaming Big Oil For Coastal Ruin
Aug 6, 2016 | AP (In Fuel Fix)
ALLIANCE, La. — The oil industry has left a big footprint along the Gulf Coast, where a Delaware-size stretch of Louisiana has disappeared.
But few politicians would blame Big Oil for ecosystem abuse in a state where the industry employs up to 300,000 people and injects $73 billion into the economy.
Until now.
Following the lead of Gov. John Bel Edwards, Louisiana political orthodoxy is being turned upside-down as prominent leaders of both parties join lawsuits seeking billions of dollars for environmental improvement projects.
Down in the pancake-flat bayou, it’s not easy to see what made so much of the coast sink into the Gulf of Mexico.
Even when you climb onto the levee, buzzing with dragonflies, that keeps the old delta farming community of Alliance from being swallowed, all that’s visible is marshland, stretching toward a green horizon.
But land’s end is much closer now, and what remains has been disrupted. Access canals carved by the oil industry run straight as arrows, rusting signs warn of underwater pipelines and abandoned drilling platforms sink into the muck. As the Alliance refinery billows with fumes, the surrounding pastures are slowly sinking.
Louisiana remains the nation’s second-largest crude oil producer and oil refiner after Texas, but the industry has been on the defensive since Edwards, a 49-year-old lawyer and Democrat, ended eight years of Republican leadership last November.
Publicly, he joined a campaign by local governments suing to hold the industry at least partly responsible for Louisiana’s loss of 1,900 square miles of coast since the 1930s. Privately, he pushed for a pre-trial settlement to resolve all their claims.
“Our coast is in crisis,” Edwards wrote in a letter to oil executives after their initial meeting in May, calling for an “amicable solution” to avoid years of litigation.
He was soon seconded by New Orleans Mayor Mitch Landrieu, whose family of Louisiana Democrats long supported Big Oil. Landrieu accused former state leaders of allowing the industry to cripple “in a generation or two what Mother Nature built in 7,000 years,” and said the damage has spread “through the marsh like an infection.
In July, Vermilion Parish, deep in Louisiana’s “Oil Patch,” became the fourth local government to file claims against Exxon, Shell, Chevron and dozens of other corporations. The agency overseeing flood protection for New Orleans also is suing. Republicans have joined in, from GOP-led parishes to Attorney General Jeff Landry.
“It’s absolutely new,” pollster Bernie Pinsonat said. “The oil companies are taking it seriously because you’re talking about billions and billions of dollars.”
This political shift can be traced to Hurricane Katrina, which shocked the nation and exposed the dire state of ecology in the Mississippi River’s delta. Katrina alone tore up about 60 square miles of marsh around New Orleans in 2005.
At issue are oilfields like the one in Alliance, in Plaquemines Parish, where oil companies are accused of routinely abandoning open waste pits, carelessly dumping toxic brine and oilfield waste onto the marsh and interrupting the delta’s ebbs and flows by dredging thousands of miles of canals that weren’t filled back in.
The oil industry blames the Army Corps of Engineers, whose levees deny the delta its natural deposits of silt and sand while channeling the Mississippi River out to sea. It also blames the clear-cutting of coastal forests more than a century ago, shipping channels that have sliced up the delta and even the invasive nutria, an oversized marsh grass-eating rodent.
“It’s just such a vague attempt by the plaintiffs to throw a blanket over an entire industry and hold it singularly responsible for a problem that’s got multiple causes,” said Robert Meadows, a Chevron lawyer.
The legal case requires analyzing thousands of coastal drilling permits and oil leases, putting prices on the unmitigated damage caused by each company, and then dueling over demands for compensation.
Scientists generally agree that between 30 percent and 40 percent of wetlands loss is attributable to drilling and its associated activities, said John Day, a Louisiana State University scientist and expert on the delta’s problems.
“The factual basis is terribly strong: If I were a plaintiffs’ counsel, I’d put on a five-day slide show narrated by geologists and hydrologists and wetlands scientists, and it would be devastating,” said Oliver Houck, an environmental law professor at Tulane University in New Orleans.
Geologist Sherwood Gagliano, who has studied the coastal crisis since the 1960s, contends that extracting millions of barrels of oil and gas from below the surface has caused vast swaths of the coast to sink.
“It’s like an Atlantis oilfield,” Gagliano said. “There are well-heads sticking out of the water. Abandoned production platforms now completely submerged. Oilfields developed on land are now under 5 or 10 feet of water. And that is happening all the way across the coast.”
But F. Rivers LeLong Jr. calls the lawsuits a hypocritical “shakedown cruise” by the same governments that have long profited from drilling.
“They aren’t the good guys any more than the oil companies were,” said LeLong, whose father started the Kenmore Oil Co., which is named as a defendant because it worked the Alliance field before going out of business in 1973. “To act as though they were victims in the process is a fairly laughable characterization.”
What’s gone is gone, but the politicians hope to keep hundreds of other square miles from disappearing. They’re envisioning huge projects to divert sediment flows from the Mississippi River and build up marsh flats, barrier islands, ridges and swamp forests.
It would cost between $50 billion and $100 billion, and Louisiana doesn’t expect to have more than $25 billion to spend.
Suing oil companies “is probably the only new potential source of revenue,” said Mark Davis, who directs Tulane University’s Institute on Water Resources Law and Policy. “Before you tax anybody, you’re going to be required, I think, to show that you’ve tried every other alternative. Is there anybody who owes dollars that have not been collected for this purpose?”
http://fuelfix.com/blog/2016/08/06/louisiana-pols-go-to-court-blaming-big-oil-for-coastal-ruin/
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