Preview Newsletter
ACC AM 8/15/2016
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(ACC Blog) Lautenberg Chemical Safety Act (LSCA): Legislative Summit Provides Valuable Forum To Explore New, Better Way To Regulate Chemicals In Commerce
Aug 12, 2016 | American Chemistry Matters
As a part of their mission to strengthen state governments, the National Council of State Legislators hosted their annual Legislative Summit this week in Chicago. Given the recent federal action around TSCA reform, the summit could not have come at a more opportune time. -
(ACC Mentioned) Chemical Sector Seeks Clarity From EPA On TSCA Fee Goal, CBI Reviews
Aug 12, 2016 | Inside EPA
By Bridget DiCosmo
Chemical industry officials are seeking clarity from EPA on its goal for implementing user fees under the reformed Toxic Substances Control Act (TSCA) and other issues including how the fees will be used to fund reviews of confidential business information (CBI) claims for substances that the agency must now review under the law. -
Coalition Recommends Chemicals for EPA’s First List of 10
Aug 12, 2016 | Safer Chemical, Healthy Families
By Beth Kemler
EPA’s first major decision under the 2016 Toxic Substances Control Act (TSCA) reform law is the choice of which chemicals to review first. The law requires that the agency choose at least ten chemicals from its existing Work Plan list within 180 days of enactment. -
FDA: Food Additive Reviews Stronger With Voluntary Notice
Aug 15, 2016 | BNA Daily Environment Report
By Steven Gibb
After blocking partially hydrogenated oils and caffeinated alcoholic beverages, the Food and Drug Administration says its final rule allowing outside groups to evaluate food additive risks will streamline its “Generally Recognized as Safe” reviews. -
Lost Opportunity For Safer Food Additives
Aug 12, 2016 | Environmental Defense Fund
By Tom Neltner
On August 12, the Food and Drug Administration (FDA) issued a final rule defining how companies should voluntarily notify the agency when they conclude that a chemical added to or used to make food is “Generally Recognized as Safe” (GRAS). -
Technology, Efficiency Driving Success In Oilfield
Aug 12, 2016 | Fuel Fix
By David Hunn
The technological shift to high-efficiency oil and gas drilling is the single biggest change in production since oil prices crashed, the chief executive of an industry analytics company said this week. -
Billionaire Kelcy Warren Sees ‘Mind-Boggling’ Growth in Texas
Aug 12, 2016 | Bloomberg Markets
By Tim Loh
Energy Transfer Equity LP Chairman Kelcy Warren called the continued boom in West Texas’s Permian Basin “mind-boggling” and said it creates opportunities for transporting more oil, natural gas and natural gas liquids to markets. -
Performance Versus Prescription In New US Arctic Rules: Fuel For Thought
Aug 15, 2016 | Platts
By Gary Gentile
In its new rules for oil and gas drilling in the Arctic, the US has taken the biggest step yet toward a performance-based system that sets clear standards, but allows industry flexibility in how to meet them. -
Army Not Liable for Fort Detrick Chemicals Injuries
Aug 15, 2016 | BNA Daily Environment Report
By Peter Hayes
A class action against the federal government, alleging toxic chemicals emanating from Maryland's Fort Detrick killed and injured nearby residents, was dismissed by the U.S. District Court for the District of Maryland Aug. 11 (Pieper v. United States, 2016 BL 260760, D. Md., No. CCB-15-2457, 8/11/16). -
(ACC Mentioned) Oil Industry Seeks DOT Help in Railroad Tank Car Fight
Aug 15, 2016 | BNA Daily Environment Report
By Ari Natter
Oil industry trade groups like the American Petroleum Institute are squaring off against the railroad industry in a fight over standards for tank cars that has drawn a request for the Transportation Department to step in with new regulations. -
New Regs For Monday: Fish, Hazardous Materials
Aug 12, 2016 | The Hill - Regulation
By Tim Devaney
Petroleum: The Department of Transportation is moving forward with new hazardous materials regulations. -
California Considers Climate Bill Extension
Aug 15, 2016 | BNA Daily Environment Report
By Carolyn Whetzel
While California lawmakers continue to grapple with setting post-2020 climate targets, the state's renewable energy standard, 50 percent by 2030, is embedded in the law, top state legislative aides said. -
EPA's Tighter Ozone Rule Concerns Western Governors
Aug 15, 2016 | BNA Daily Environment Report
By William H. Carlile
Western U.S. governors have repeated concern regarding final revisions to the Environmental Protection Agency's exceptional events rule (RIN:2060-AS02), which is undergoing White House review.
Congressional Hearings - There are no relevant hearings to report at this time
Industry and Association News - There are no clips to report at this time.
LCSA News
Chemical Management News
Energy News
Chemical Security News
Transportation News
Environment News
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Aug 12, 2016 | American Chemistry Matters
As a part of their mission to strengthen state governments, the National Council of State Legislators hosted their annual Legislative Summit this week in Chicago. Given the recent federal action around TSCA reform, the summit could not have come at a more opportune time. During the event the American Chemistry Council’s (ACC) Vice-President of State Affairs Rudy Underwood joined Jim Jones, Assistant Administrator of EPA’s Office of Chemical Safety and Pollution Prevention, and John Linc Stine, Commissioner of the Minnesota Pollution Control Agency, to discuss the Lautenberg Chemical Safety Act (LCSA). This panel provided an opportunity for Mr. Underwood to discuss the benefits of a strong chemical manufacturing sector and the importance of a centralized national chemical regulatory system for state legislatures, consumers, and the business of chemistry.
The business of chemistry is a vital part of the nation’s economy—it’s a nearly $800 billion enterprise, employing 810,000 Americans and supporting an additional 6 million jobs. Additionally, more than 96 percent of all manufactured goods are touched by the business of chemistry, many of which are used daily by consumers.
ACC and our members’ top priority? Ensuring that our products are safe for their intended uses. Our members thoroughly test and analyze the products they produce, including thorough adherence to the Responsible Care® Product Safety Code, the chemical industry’s world-class environmental, health, safety, and security performance initiative that is mandatory for all ACC members. And don’t forget about the six primary federal agencies (EPA, FDA, OSHA, DOT, DHS, CPSC), which operate under more than a dozen federal laws and regulations, working to ensure the safety of chemicals. We work closely with these federal agencies, regulators, and other manufacturers to ensure that products sold in stores are safe for consumers and the environment.
Until recently, the nation’s primary chemical regulation, the Toxic Substances Control Act (TSCA), had not been updated since it enactment in 1976. The failure to update the law resulted in growing concerns that the U.S. Environmental Protection Agency (EPA) was not properly regulating chemicals, leading to a patchwork of state chemical regulations and a continued decline in consumer’s confidence.
With concerns regarding TSCA growing stronger and stronger, a diverse group of elected officials from both parties, industry, environmental and health groups, unions, and animal rights activists worked together to plot a path forward to modernize TSCA. After many years of hard-fought compromise, President Obama signedthe bipartisan Lautenberg Chemical Safety Act (LCSA) into law on June 22, 2016.
The new law builds on industry’s many testing and safety practices and will have meaningful impact on consumer confidence in the safety of chemicals. Under LCSA, EPA will be able to review chemicals in commerce more efficiently by prioritizing chemicals to ensure that the chemicals of greatest concern are subject to thorough risk evaluations, according to EPA’s Jones at the Legislative Summit. Under EPA’s risk evaluations, the Agency will only consider potential harm, uses, and exposures—not potential costs to industry. And vulnerable groups, such as infants, pregnant women, and the elderly, will be taken into consideration when reviewing chemicals for safety.
And that patchwork of state regulations that was difficult for chemical companies to navigate and consumers to understand? A major improvement now that the LCSA has struck a delicate, but clear, balance between state and federal regulations. LCSA creates a strong and uniform approach to the regulation of chemicals that will enable the free flow of interstate commerce, while protecting American families in all states. The new law also recognizes that state governments have an important role to play and that some states have already taken many steps to protect their citizens from the unsafe use of chemicals, as highlighted by Linc Stine during the Legislative Summit. Under the LCSA, EPA evaluations of more chemicals will lead to greater transparency about chemical properties and risks, increased certainty in how chemicals will be regulated, and greater confidence that chemicals are being used safely in the marketplace. State governments will no longer have to worry about investing scarce resources in complex chemical regulatory issues that are better managed by the federal government.
LCSA will have lasting and meaningful benefits for all American manufacturing, for American families, and for our nation’s standing as the world’s leading innovator. At the Summit Underwood stressed that businesses will be able to focus on creating innovative products, growing their business, and creating more good-paying jobs for hard working Americans. Consumers will be confident, knowing the products they buy and use daily are safe for their intended uses because there is one, centralized law regulating chemicals in commerce.
The NCSL Legislative Summit provided a valuable opportunity to discuss this new law, as well as next steps. Chemical product safety is an ever-evolving concern, and passage and enactment of this historic bipartisan law is just the beginning. We are committed to working with the federal government to ensure that LCSA implementation occurs as prescribed by Congress so that the new system protects Americans’ health and our environment, supports economic growth and American manufacturing, and promotes America’s role as the world’s leading innovator.
https://blog.americanchemistry.com/2016/08/lautenberg-chemical-safety-act-lsca-legislative-summit-provides-valuable-forum-to-explore-new-better-way-to-regulate-chemicals-in-commerce/
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(ACC Mentioned) Chemical Sector Seeks Clarity From EPA On TSCA Fee Goal, CBI Reviews
Aug 12, 2016 | Inside EPA
By Bridget DiCosmo
Chemical industry officials are seeking clarity from EPA on its goal for implementing user fees under the reformed Toxic Substances Control Act (TSCA) and other issues including how the fees will be used to fund reviews of confidential business information (CBI) claims for substances that the agency must now review under the law.
At an Aug. 11 meeting organized by EPA in Washington, D.C., representatives of the sector raised their questions for how the agency will establish the fee system that Congress expects EPA to rely on in part to pay for implementation of the overhauled statute. Lawmakers have already suggested that the agency has the funding it needs in place for the first year of the law, and that the fees should help pay for the costs of the law in future years.
The meeting was the last of three on TSCA that EPA held this week, starting with an Aug. 9 meeting on crafting a rule for conducting risk evaluations to determine whether a chemical “presents an unreasonable risk of injury to health or the environment” under section 6 of the law, which outlines requirements on chemical reviews and how chemicals should be prioritized to undergo those reviews.
EPA then held an Aug. 10 meeting taking input from stakeholders on how to craft a proposed rule under the new law that will establish a risk-based process for prioritizing chemical risk reviews.
The new law, which took effect June 22, allows EPA to for the first time establish a fee structure under TSCA to defray the costs of reviewing new chemicals and a range of actions on existing chemicals by collecting user fees from chemical manufacturers and processors. EPA can collect up to 25 percent of the costs of implementing several key programs under the chemical safety law, or up to $25 million, whichever number is lower.
EPA has the authority to collect fees when companies submit test data under TSCA section 4, which details EPA's authority to conduct testing and compel industry to generate chemical safety data.
The agency can also collect fees when companies submit a premanufacture notice (PMN) for a new chemicals or a significant new use notice (SNUN) under section 5, which outlines EPA's authority to regulate new chemicals.
In addition, EPA can charge fees when chemical producers manufacture or process a chemical that is the substance of a risk evaluation or request that EPA conduct a review of a chemicals under section 6, which details the agency's authority on regulating existing chemicals.
Industry is required to pay 100 percent of the costs for the risk reviews it requests from EPA, unless the chemical is already on the agency's 2014 TSCA work plan, in which case the company making the request must pay 50 percent. The TSCA work plan was launched as an effort to review chemicals' safety under prior TSCA authority.
EPA plans to issue a proposed rule to establish a fee system by December of this year and finalize the regulation by mid-June 2017.
Industry's Questions
At the Aug. 11 meeting, industry officials raised questions about how EPA plans to implement the fee provision, including how funding will be divvied up among the section 4 test action, PMNs and SNUNs reviewed under section 5 for new chemicals, section 6 existing chemical risk evaluations, and section 14 CBI claims.
Michaels Walls, vice president of regulatory and technical affairs at the American Chemistry Council (ACC), said that the issue of how the fees should be distributed “poses a challenge because the absence of fees for one action, such as section 4, puts more pressure” on companies regulated under the other sections to make up the balance in fees, though the other sections may require more work-intensive actions.
James Coopersenior petrochemical adviser of the American Fuel & Petrochemicals Manufacturers said that section 4 actions might receive lower funding because they generally require less work from EPA, and that “section 5 requires some work, section 6 even more work.”
Cooper also said that his group does not support using fees for CBI claims because it could potentially create disincentives for companies to withhold information as proprietary and stymie innovation.
EPA cannot directly assess fees for reviewing CBI claims but may use funds collected for its actions under section 4, 5, and 6 to defray the costs of a number of activities, including ensuring access to public information by substantiating CBI claims, a new requirement under the reform law.
Dan Newton, of the Society of Chemical Manufacturers and Affiliates, said his group opposes fees for CBI claims because they could pose a disincentive for companies taking advantage of the CBI claims to protect innovative formulas.
Meanwhile, Derek Swick, manager of regulatory and scientific affairs at the American Petroleum Institute (API), said that “fees should be proportional to the amount of work of the EPA action.”
Fee Target
Walls also said during the meeting that EPA should provide more clarification on the benchmark amount it is aiming to collect from industry initially, noting that the cap is set at 25 percent or $25 million, with future allowances to adjust for inflation.
He noted that $14 million would be roughly 25 percent of EPA's enacted fiscal year 2016 budget level for TSCA programs, set at $56 million. Walls said, “We need direction from EPA on whether that's the target,” or if the agency thought additional funding would be needed for implementing sections 4, 5, 6 and 14.
Sen. Tom Udall (D-NM) -- a key figure in crafting the final TSCA reform bill that became law and also a top Democrat on the Senate appropriations panel -- previously said that EPA's existing funding is adequate for the agency to start implementing the TSCA overhaul, and that EPA is unlikely to get a budget boost because of the new law.
At a June 8 press conference, Udall said in response to a reporter question that he believes EPA's enacted FY16 budget level for TSCA programs, “is enough” to support the agency's first year of implementing the new law, including an initial set of 10 chemicals to assess.
Even in future years, the agency might not need a significant hike from its $56 million Congressional appropriations because industry will eventually be required to pay part of the cost of assessing chemicals' safety, said Udall, who is ranking member on the Senate appropriations interior panel that oversees EPA's budget.
Risk Reviews
Industry officials during the Aug. 11 meeting also raised questions about the statutory mandate for EPA to outline the conditions of use in its risk reviews, and how that might play out in terms of the fee structure.
“At some point, we need some clarity about whether the scope of an industry requested review is confined to the conditions of use specific to the company requesting the evaluation,” ACC's Walls said, adding, “that may have consequences for the fee system.”
API's Swick said that if an industry-requested assessment included conditions of uses beyond the scope of those supported by the company making the request, it could be “very difficult to administer.”
At the start of the meeting, Barbara Cunningham, deputy director for management and pollution prevention within EPA's toxics office, outlined a broad list of questions on which the agency is seeking input on from industry stakeholders.
The questions include: What factors, such as level of difficulty, type of submission, or number of submissions, should be considered in determining how to weight the fees assessed among section 4, 5 and 6; how to distribute payment among multiple manufacturers; how to identify the whole universe of companies from whom to assess fees; and what is the appropriate balance between distributing fees among manufacturers, importers and processors.
Cunningham said the agency will be scheduling a subsequent meeting ahead of issuing a proposed rule in December to provide further clarification for industry, particularly on the funding levels EPA believes will be necessary.
Walls said during the meeting that he believes the agency's TSCA inventory reset rule under section 8, planned under the new law, could present an opportunity for the agency to identify the full scope of manufacturers and processors subject to TSCA, along with EPA's chemical data reporting program.
“Going forward, it won't be as burdensome to identify” the universe of companies because of the data EPA will collect from those two policy actions, Walls said.
http://insideepa.com/daily-news/chemical-sector-seeks-clarity-epa-tsca-fee-goal-cbi-reviews
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Coalition Recommends Chemicals for EPA’s First List of 10
Aug 12, 2016 | Safer Chemical, Healthy Families
By Beth Kemler
EPA’s first major decision under the 2016 Toxic Substances Control Act (TSCA) reform law is the choice of which chemicals to review first. The law requires that the agency choose at least ten chemicals from its existing Work Plan list within 180 days of enactment. Once the chemicals are designated, the law’s deadlines apply, requiring the evaluations to be completed and any needed restrictions imposed within five years. After a review of the Work Plan list, Safer Chemicals Healthy Families and our partners from a cross section of industrial unions, environmental organizations and public health organizations made recommendations for the first ten chemicals for EPA’s review.
See our coalition letter to EPA (PDF).
http://saferchemicals.org/2016/08/12/coalition-recommends-chemicals-for-epas-first-list-of-10/
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FDA: Food Additive Reviews Stronger With Voluntary Notice
Aug 15, 2016 | BNA Daily Environment Report
By Steven Gibb
After blocking partially hydrogenated oils and caffeinated alcoholic beverages, the Food and Drug Administration says its final rule allowing outside groups to evaluate food additive risks will streamline its “Generally Recognized as Safe” reviews.
The agency released its GRAS final rule (RIN:0910-AH15) Aug. 12 for its food additive program, switching reviews from a more formal but slower “petition-based” process to a voluntary “notification” process, which it says establishes “uniform criteria for describing the basis for a conclusion that a substance is GRAS under the conditions of its intended use.”
According to the FDA's review of its notification pilot program, “experience also has shown that streamlining our evaluation of conclusions of GRAS status will enable us to evaluate more, and higher priority, substances.”
But the change has prompted swift reaction from food safety advocates, who say industry should not be allowed to convene their own GRAS panels and then submit the results to the agency.
Trade-Off?
“FDA should not trade effective regulation for efficient regulation,” said Cristina Stella, an attorney with the nonprofit advocacy group the Center for Food Safety. “We're taking a close look at the final rule and evaluating our legal options,” she said.
The agency points to its treatment of partially hydrogenated oils and caffeinated alcoholic beverages as evidence the voluntary GRAS pilot notification program was, and will continue to be, effective.
The agency states that there “is no longer a consensus among qualified experts that PHOs are GRAS for any use in human food,” and that it “informed the companies who were marketing these caffeinated alcoholic beverages that caffeine, as used in the companies’ products, is an unsafe food additive, and therefore the products are adulterated.”
The FDA also states that since 1998, it has processed 638 GRAS notices, compared to the previous decade where the agency issued 25 GRAS affirmation petitions.
Under the former petition-based process the agency would publish an order in the Federal Register listing the substance as GRAS, and issue a corresponding regulation that prescribes the safe conditions of its use. If it determined that it was not GRAS, then the agency would notice that in the Federal Register.
Advocates Preferred Petition Process
Stella says advocates preferred the former process, saying at least “it required more on the part of FDA and industry” to ensure a safe food supply.
And Jessica Almy, deputy director of nutrition policy at the Center for Science in the Public Interest, says the final rule is “deeply disappointing in that they've had 19 years to address this and still haven't gotten to critical conflict of interest ground rules for industry's secret safety determinations.”
Agency spokesperson Lauren Sucher says “FDA can question the basis for an independent GRAS conclusion and take action as appropriate. The FDA has the authority to review and evaluate data on substances added to food in order to ensure safety.”
And the agency also asserts that its scientific criteria for quality data are more rigorous and transparent than under the previous program. “Unless both criteria, i.e., ‘generally available’ as well as ‘generally accepted’, are satisfied, there would be no basis for a conclusion of GRAS status.” It also eliminated the need for complete agreement among risk reviewers in the final rule, compared with the proposed rule. The final rule “uses the term ‘generally recognized' rather than the term ‘consensus,' ” according to the agency.
Calls to the Grocery Manufacturers Association for comment were not returned.
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=95507493&vname=dennotallissues&fn=95507493&jd=95507493
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Lost Opportunity For Safer Food Additives
Aug 12, 2016 | Environmental Defense Fund
By Tom Neltner
On August 12, the Food and Drug Administration (FDA) issued a final rule defining how companies should voluntarily notify the agency when they conclude that a chemical added to or used to make food is “Generally Recognized as Safe” (GRAS).
The decision is a lost opportunity to close a widely-abused loophole that allows chemicals to be approved for use in food with no notification to or review by FDA. The rule allows the industry to continue making secret decisions about what we eat without the agency’s – or the public’s – knowledge. The agency has the legal authority to significantly narrow the GRAS loophole to prevent companies from deliberately avoiding FDA’s safety review process.
Just two years ago, the senior FDA official overseeing food safety acknowledged that the agency “cannot vouch for the safety of many of these chemicals” as a result of the GRAS loophole.
Six years ago, the Government Accountability Office, the Congressional watchdog, reviewed FDA’s GRAS program and declared, “FDA’s oversight process does not help ensure the safety of all new GRAS determinations.” GAO continued, “FDA is not systematically ensuring the continued safety of current GRAS substances.”
FDA’s final rule does little to address those shortcomings.
The announcement finalizes a proposed rule that the agency first published in 1997. For the next 19 years, the FDA operated under the proposed rule, while public health advocates and others offered extensive comments about the lax regulatory program. But the rule was never finalized, so no legal challenges have followed. In 2014, the Center for Food Safety sued FDA to force the agency to issue a final rule.
The final rule does nothing to fix the fundamental flaws raised by the public. It remains to be seen how the program's many critics will address the issue.
Even when presented with an opportunity to improve the proposed rule, the agency made only minor tweaks. For example, the rule binds FDA to making a final decision on the voluntary notice within 270 days of the filing. In addition, it allows “general recognition” to be based on unpublished exposure or toxicology data as long as the “scientific data, information, or methods, which ordinarily are published.” So there is no requirement to have an actual published study. The only type of data that the agency says cannot be used are “confidential industry files.”
The agency summarily dismissed a detailed legal analysis making clear that the current approval process – one that is little changed in the final rule – violates the law because it lets novel chemicals into the food supply without FDA safety review. FDA cites as authority for the rule several provisions of the Federal Food, Drug and Cosmetic Act including Section 701. This section gives the agency broad authority to promulgate regulations for the efficient enforcement of the Act. Despite this authority, FDA rejected making notice mandatory as GAO suggested because the food additives provision of the law is silent on the issue. If the agency is unaware of what chemicals are being added to food, it cannot efficiently ensure that these additives – and the food that contains them – are safe.
Over the years, it has become increasingly clear to consumers that FDA is unable or unwilling to ensure food is safe. According to a 2016 industry survey, 38% of consumers rate chemicals in food as their most important food safety concern, up from 9% in 2009. Since many of these GRAS chemicals do not need to appear in the label’s ingredient list, consumers have little choice but to rely on food retailers and manufacturers to ensure the agency has reviewed all additives. Until this loophole is finally closed, EDF will continue working with companies to fill the void left by FDA’s action.
http://blogs.edf.org/health/2016/08/12/fda-gras-rule/
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Technology, Efficiency Driving Success In Oilfield
Aug 12, 2016 | Fuel Fix
By David Hunn
The technological shift to high-efficiency oil and gas drilling is the single biggest change in production since oil prices crashed, the chief executive of an industry analytics company said this week.
Allen Gilmer, chairman of DrillingInfo, says the best oil and gas operators are getting as much as 50 percent higher returns compared with the average producer, and two to three times the production of the least-efficient operators.
Before the crash, with oil at $100 a barrel, companies were made or broken by their access to cheap cash, Gilmer said in an interview at this week’s North American Prospect Expo, now called NAPE.
Now with oil priced at about $40, the difference between success and failure isn’t inexpensive loan rates, he said: “It’s really how efficiently you can extract the hydrocarbons.”
Gilmer and his company have compiled data on oil and gas formations, drilling and production over the past nine years. It shows the shale boom and corresponding price collapse changed the way companies operate, he said.
Companies had to cut tens of thousands of workers and reduce other costs. That forced many to find more efficient drilling and recovery processes.
The new technology is even prompting big oil companies like BP and Chevron, which weren’t as active in fracking, to devote new divisions to U.S. shale production. They hope to innovate as quickly as smaller independent producers.
The benefits could be great.
The average Texas well produces nearly 25 percent more than it did last year, Gilmer said, and there are billions of barrels still to capture.
“The size of the prize here in the United States is mind-blowing,” he said.
http://fuelfix.com/blog/2016/08/12/700775/
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Billionaire Kelcy Warren Sees ‘Mind-Boggling’ Growth in Texas
Aug 12, 2016 | Bloomberg Markets
By Tim Loh
Energy Transfer Equity LP Chairman Kelcy Warren called the continued boom in West Texas’s Permian Basin “mind-boggling” and said it creates opportunities for transporting more oil, natural gas and natural gas liquids to markets.
“There’s a lot of competition in the Permian, but we’re getting at least our share of the pie,” Warren, a 60-year-old billionaire, said in a phone interview Friday.
Warren is looking to the future after Energy Transfer walked away in June from a $32.9 billion takeover of Williams Cos. Long considered a visionary in the energy infrastructure space, Warren made deals during the shale boom to piece together a 71,000-mile (114,239-kilometer) oil-and-gas superhighway that spans the country.
Warren singled out the Northeast’s prolific Marcellus and Utica gas plays and North Dakota’s Bakken region as also being ripe for further development. Warren’s Energy Transfer Partners is in the process of spending some $13 billion of capital on new projects including an oil pipeline out of the Bakken and a gas line plugged into the Marcellus and Utica.
On the other hand, he said energy infrastructure is probably overbuilt in North Texas’s Barnett Shale as well as in the Haynesville shale centered in Louisiana. South Texas’s Eagle Ford region is “close to being overbuilt,” he said.
Exporting gas is another bright spot, Warren said. Energy Transfer’s developing the Lake Charles liquefied natural gas terminal on the Gulf of Mexico. And it’s expanding its network of pipelines that’ll connect to Mexico, where Warren expects gas demand to continue to grow.
He prefers the pipelines.
“Liquefied-natural gas is sexy. You get to speak with a lot of people that have a very global view of the market for natural gas,” he said. “Building pipelines to Mexico is not sexy. That’s blue collar. That’s who I am. I much prefer the pipeline export route.”
https://www.bloomberg.com/news/articles/2016-08-12/billionaire-kelcy-warren-sees-mind-boggling-growth-in-texas
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Performance Versus Prescription In New US Arctic Rules: Fuel For Thought
Aug 15, 2016 | Platts
By Gary Gentile
In its new rules for oil and gas drilling in the Arctic, the US has taken the biggest step yet toward a performance-based system that sets clear standards, but allows industry flexibility in how to meet them.
That’s a big difference from most US offshore regulation, which is prescriptive in nature, specifying in almost minute detail how operators must comply and leaving little room for deviation.
It’s an important development, both in the evolution of offshore safety since the devastating 2010 Deepwater Horizon disaster, and in how regulators approach an industry that is using more complex technology to tackle increasingly dangerous frontier environments.
While there are many reasons why operators might return to US Arctic waters, the shift to performance-based standards could help.
Prescriptive rules are sometimes derisively referred to as “checklist” regulation, reflecting their reactive nature that relies on inspectors checking the boxes during inspections.
Performance-based rules, sometimes called a “safety case” approach, by contrast, are proactive, requiring operators to identify upfront the specific risks associated with each new well and then propose how to mitigate those risks.
Last year, the National Petroleum Council, in a study on Arctic potential chaired by ExxonMobil CEO Rex Tillerson, strongly advised adopting a more flexible approach to regulation.
It said that prescriptive rules “can act as a serious barrier” to innovation. And it concluded that a more performance-based system “puts the burden on operators to demonstrate that the technologies and operating practices…achieve or surpass the specified regulatory objective.”
A similar conclusion was reached by the National Commission on the BP Deepwater Horizon Oil Spill, which reviewed performance, or “risk-based” models in the United Kingdom and Norway.
“The commission saw and was attracted to and impressed by how the performance-based approach requires industry to think more creatively and allows industry to be more innovative,” Commission member Fran Ulmer said in an interview. “Undoubtedly, the Interior Department got educated by the Deepwater Horizon spill.”
The Interior Department’s Bureau of Safety and Environmental Enforcement (BSEE) has been embracing a hybrid approach, adopting a more performance-based approach where appropriate.
But what works so well in Norway and other places may not always work in the US.
“It’s a matter of scale,” BSEE Director Brian Salerno told Platts. “In many countries that use the safety case, they don’t have the volume of activity—the number of facilities operating offshore.”
Arctic challenges open way for new approaches
The smaller, less developed Arctic region also lends itself to a different regulatory approach.
Earlier this year, BSEE issued its well control rule, which sets standards for, among other things, blowout preventers—those massive sets of valves and shearing blades that are the last line of defense in controlling well blowouts. That rule leaned more toward the prescriptive side of the hybrid approach.
The well control rule applies across the entire US Outer Continental Shelf—which is mainly the Gulf of Mexico—”where you have a multitude of players of different sizes, different capacities to effectively operate,” as well as different financial abilities to afford such innovation, Ulmer said. “Given the breadth of the players, it’s more appropriate to be consistent with a prescriptive approach.
“In the Arctic, you have a smaller number of players with the financial and technical capacity,” to respond to a risk-based approach. “It’s easier to apply performance based rules in the Arctic,” she said.
The other big difference between performance-based and prescriptive rules is the technical expertise required of the regulator.
Performance-based rules require a regulator staffed with sophisticated engineers who can evaluate new technologies to be sure they meet or exceed the safety standards. In this system, much of the heavy lifting is done upfront, before the well is ever spud, whereas the more traditional prescriptive system relies more heavily on inspectors checking for compliance after the fact.
It costs lots of money to attract that sort of talent. Congress has given BSEE the authority to pay salaries that exceed normal government limits. But retaining that talent is always a challenge.
“When the industry rebounds, as it eventually will, we’ll be in a much more competitive mode regarding talent,” Salerno said. “We’re always in competition for talent.”
http://blogs.platts.com/2016/08/15/arctic-oil-gas-new-rules-performance-prescription/
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Army Not Liable for Fort Detrick Chemicals Injuries
Aug 15, 2016 | BNA Daily Environment Report
By Peter Hayes
A class action against the federal government, alleging toxic chemicals emanating from Maryland's Fort Detrick killed and injured nearby residents, was dismissed by the U.S. District Court for the District of Maryland Aug. 11 (Pieper v. United States, 2016 BL 260760, D. Md., No. CCB-15-2457, 8/11/16).
The plaintiffs can't proceed with their lawsuit against the government under the Federal Tort Claims Act for negligence in its waste disposal and remediation practices at the site, the court said.
Because the waste management and remediation involved judgment or choice, the discretionary function exception shields the government from FTCA suit, it said.
The class action was brought on behalf of three groups—people who died from toxic exposure, people who alleged personal injuries and people who fear developing diseases from their exposure.
The plaintiffs’ claims arise out of the Army's groundwater remediation and disposal of trichloroethylene, tetrachloroethylene and other substances at Fort Detrick's landfill.
Judge Catherine C. Blake issued the ruling.
Paulson and Nace PLLC, Antonoplos & Associates and Hugo and Associates PLLC represented the plaintiffs.
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=95507482&vname=dennotallissues&fn=95507482&jd=95507482
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(ACC Mentioned) Oil Industry Seeks DOT Help in Railroad Tank Car Fight
Aug 15, 2016 | BNA Daily Environment Report
By Ari Natter
Oil industry trade groups like the American Petroleum Institute are squaring off against the railroad industry in a fight over standards for tank cars that has drawn a request for the Transportation Department to step in with new regulations.
The API and American Fuel and Petrochemical Manufacturers, which represents refiners such as Tesoro Corp., have signed onto an Aug. 12petition , led by the American Chemistry Council, asking the DOT's Pipeline and Hazardous Materials Safety Administration to craft a rule blocking outside groups from requiring compliance with tank car standards that are different from the agency's.
The request comes after the Association of American Railroads, which represents company's such as BNSF, sought to require the use of tank cars that are different than those mandated by the agency in a rulemaking last year governing the shipment of crude-by-rail and other hazardous materials, the groups said.
The AAR, through Interchange Rules regulating shippers, has mandated the use of tank car requirements approved by its standards-setting body that are different from those required by PHMSA, according to the petition.
“This system effectively usurps PHMSA's role as the regulatory authority over hazardous materials tank car specifications and, in so doing, bypasses the due process and notice and comment rulemaking requirements of the” Administrative Procedure Act, the petition said.
Among the standards the AAR has sought to require is thermal protection systems and tank car top fittings that PHMSA has considered, but ultimately did not include, in its final crude-by-rail rule made public in May 2015.
While the changes sought by AAR were ultimately “resolved through negotiations of interim solutions, these were crisis situations for tank car owners and users in which the rail industry possessed nearly all the negotiating leverage,” the groups wrote.
Shippers, not railroads, are required to pay for new cars and upgrades to existing tank cars, they said.
The AAR plans to take a close look at the petition, spokesman Ed Greenberg said in an e-mail to Bloomberg BNA, adding, “for decades the tank car committee has worked closely with shippers and other representatives to make tank car transportation in this country even safer.”
“The Department of Transportation standards reflect the minimum level of safety required by law, but through the tank car committee with its shipper representatives—as well as input from tank car manufacturers and suppliers, in addition to participation from the DOT, NTSB and other stakeholders—the entire focus is on identifying the safest way to transport goods, even if that goes beyond DOT regulations,” Greenberg said.
PHMSA did not respond to a request for comment.
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=95507486&vname=dennotallissues&fn=95507486&jd=95507486
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New Regs For Monday: Fish, Hazardous Materials
Aug 12, 2016 | The Hill - Regulation
By Tim Devaney
Monday’s edition of the Federal Register contains new rules for tank cars carrying hazardous materials and protections for threatened species of fish.
Here’s what happening:
Threatened: The Fish and Wildlife Service (FWS) is delaying potentially new protections for certain species of fish.
The FWS proposed to list the headwater chub and certain round tail chubs as threatened species in October, but is now reopening the comment period as it contemplates “substantial disagreement regarding the ... accuracy of the available data.”
The public now has an additional 30 days to comment.
Petroleum: The Department of Transportation is moving forward with new hazardous materials regulations.
The Transportation Department’s Pipeline and Hazardous Materials Safety Administration announced Friday new mandates and minimum requirements that will apply to tank cars that carry "petroleum, ethanol, and other flammable liquids."
The changes go into effect immediately.
http://thehill.com/regulation/291238-new-regs-for-monday-fish-hazardous-materials
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California Considers Climate Bill Extension
Aug 15, 2016 | BNA Daily Environment Report
By Carolyn Whetzel
While California lawmakers continue to grapple with setting post-2020 climate targets, the state's renewable energy standard, 50 percent by 2030, is embedded in the law, top state legislative aides said.
California's Clean Energy and Pollution Reduction Act of 2015, or S.B. 350, established the building blocks needed for the next 15 years to achieve that target, Kip Lipper, state Senate President Pro Tem Kevin De Leon's (D) chief adviser on energy and environmental policy, said at an Aug. 11 event in Sacramento.
Lawmakers are considering a bill that would set greenhouse gas reductions to 2030. Even if it doesn't pass this year, existing law will still provide for regulation of greenhouse gases in the future, legislative aides said.
S.B. 350 put into law the governor's directive to boost the renewable portfolio standard from 33 percent to 50 percent and double the energy efficiency of buildings. Other provisions require the California Public Utilities Commission to examine the energy procurement practices through an integrated resource planning process to determine how to balance the type of new energy resources needed.
California has “well-established renewable energy rules,” Lipper said.
Speaking at the Advanced Energy Economy's “Pathway to 2050” conference, Lipper and the chief consultant for the state Assembly Committee on Natural Resources, Lawrence Lingbloom, told businesses and other groups attending the event that implementation of S.B. 350 is moving forward and the state's commitment to clean energy would likely continue well into the future.
California's Democratic leadership, organized labor and businesses believe clean energy is good economic policy, Lipper said.
Groups Press for Extension of Climate Law
The Advanced Energy Economy is a Washington-based group of clean energy businesses and other organizations working to boost the availability of secure, clean and affordable energy. The group brings its members to Sacramento once a year to lobby lawmakers to pass clean energy legislation. During their visits to the state capitol this year, the group's members pressed for passage of S.B. 32, a measure to extend the state's landmark climate law past 2020.
S.B. 32 would establish a target to reduce greenhouse gas emissions to 40 percent below 1990 levels by 2030. With the end of the legislative session less than three weeks off, the fate of the bill remains uncertain.
“If S.B. 32 doesn't get enacted this year, it doesn't mean we're going to stop regulating greenhouse gases,” Lingbloom said. “We want to lock this stuff” into statute, but the renewable energy and other clean energy rules are already addressed in law, he said.
Targets deliver the certainty businesses need for planning, Lingbloom and Lipper said.
“I've made my views well known,” Senate President Pro Tem De Leon told Bloomberg BNA. “I'd like to get it done in this session. I think we need to provide stability and predictability. That's a very important signal that we want to keep our cap and trade market healthy and buoyant.”
The bill is in the hands of Assembly leaders, De Leon said.
Passage of S.B. 32 is expected to reduce some of the uncertainty that has affected California's carbon dioxide trading program. In the May auction, the sale of credits plummeted, in part due to concern that a new target would not be enacted.
“Well, we have two and a half weeks. That's a long time, legislatively speaking,” State Sen. Fran Pavley (D), the author of the bill, told Bloomberg BNA.”
Pavley said the onslaught of support from the business community for S.B. 32 and polls showing voters want California's climate to continue past 2020 may help win lawmakers' support.
“We had solar workers in the halls (of the capitol) with the bright yellow shirts and they're literally in everyone's district now,” she said. Those workers and the businesses are the messengers we need,” Pavley said. “We've shown that 60 percent of all the investment capital in the U.S. came to California because we have targets for emissions reductions.”
California has proven climate policies can reduce emissions, create jobs and grow the economy, she said.
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=95507471&vname=dennotallissues&fn=95507471&jd=95507471
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EPA's Tighter Ozone Rule Concerns Western Governors
Aug 15, 2016 | BNA Daily Environment Report
By William H. Carlile
Western U.S. governors have repeated concern regarding final revisions to the Environmental Protection Agency's exceptional events rule (RIN:2060-AS02), which is undergoing White House review.
The governors argue that the EPA's decision to lower the national ambient air quality standards for ground-level ozone under the Clean Air Act will throw areas in the western U.S. into nonattainment status because of factors outside states' control.
In an Aug. 11 letter to EPA Administrator Gina McCarthy, the Western Governors' Association urged the agency to adjust criteria to account properly for events that contribute to background ozone concentrations. An EPA official did not immediately respond to a Bloomberg BNA request for comment.
According to the governors, the factors include wildfire, winter ozone, high winds and geographic factors such as high elevation. At the same time, the Western governors acknowledge the EPA's statutory responsibility to propose revisions to ozone national ambient air quality standards.
“We recognize the critical importance of maintaining air quality in the West and appreciate the opportunity to work with EPA to achieve this,” the governors said in the letter.
The governors previously expressed concern about this issue in a comment letter sent Feb. 3 to the EPA, as well as in comments submitted to the agency on March 17, 2015. The letter was signed by Western Governors' Association Chairman Gov. Steve Bullock (D) of Montana, and Vice Chairman Gov. Dennis Daugaard (R) of South Dakota.
Inadequate Mechanism
The governors acknowledge, however, that even with their suggested improvements as outlined in the February letter, the exceptional events rule is an inadequate mechanism to account for factors such as lightning, biogenic sources and transported ozone. These sources are inherently difficult to measure and establish in a state's exceptional event demonstration, the governors said. Identifying and quantifying the role of these factors and making a judgment about their relative importance is an onerous, if not impossible, undertaking.
Western governors said the states and, in turn the EPA, would benefit from a more holistic approach under which states could aggregate multiple ozone-contributing factors to prove a single exceptional event exceedance demonstration.
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=95507483&vname=dennotallissues&fn=95507483&jd=95507483
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