Preview Newsletter
ACC PM 11/1/2016
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(ACC Mentioned) Forget the IMF: Global Chemicals are Your Guide to Future Performance
Nov 1, 2016 | Beyond Brics
By Paul Hodges
The global chemical industry has long been the best real-time indicator of the global economy. This is partly because of its size, as the third-largest industry in the world after agriculture and energy, but also because of its global and application reach. -
(ACC Mentioned) America Recycles Day Events Scheduled
Nov 1, 2016 | News Dispatch
Bring in plastic bags for recycling and get a reusable bag for free at one of four upcoming America Recycles Day events in November. -
Attorneys Say TSCA Reform Sets 'Fixed' Period for New Chemical Reviews
Nov 1, 2016 | Inside EPA
By Bridget DiCosmo
Attorneys say the revised Toxic Substances Control Act (TSCA) appears to set a "fixed" period of time for EPA to review new chemicals and significant new uses (SNUs) under section 5, acknowledging that the agency's interpretation and potential legal challenges to EPA's approach could affect how the language is put into practice. -
Jury Awards $70m in Latest Johnson & Johnson Talc Ruling
Nov 1, 2016 | Chemical Watch
By Kelly Franklin
For a third time, Johnson & Johnson has been found liable for injuries from ovarian cancer linked to the use of its talc-containing products. The company has been ordered to pay $65m in punitive damages as part of a $70.075m verdict. -
Washington Posts Chemical Evaluations for CHCC List
Nov 1, 2016 | Chemical Watch
The Washington Ecology Department has posted chemical evaluations for the 20 substances the state is considering for addition to its Chemicals of High Concern to Children list. -
UK Downstream Sectors Consider Post-Brexit Stance on REACH
Nov 1, 2016 | Chemical Watch
By Geraint Roberts
A snapshot survey of UK trade bodies, representing downstream industrial sectors, shows they have a range of attitudes on whether the UK should continue to implement REACH and other EU chemical legislation post Brexit, or adopt its own national policy. -
Addressing Toxic Substances Through Waste Law is Logical, Say NGOs
Nov 1, 2016 | Chemical Watch
By Luke Buxton
A proposed amendment to the EU's waste framework Directive that would set the objective of reducing the content of hazardous substances in materials and products would actually complement REACH, say NGOs, rather than "sideline" it as Cefic suggests. -
Fact-Checking Opponents of the Clean Power Plan
Nov 1, 2016 | The Hill - Pundits Blog
By Richard L. Revesz, Denise A. Grab, and Jack Lienke
On Sept. 27, mere hours after the conclusion of the first presidential debate, opponents of the Environmental Protection Agency's (EPA) Clean Power Plan presented their case in a lengthy oral argument before the U.S. Court of Appeals for the D.C. Circuit. -
Minn. Compliance Strategy Will Depend on Neighboring States
Nov 1, 2016 | E&E Climatewire
By Danny Cusick
If Minnesota were an electricity island — where in-state generation was sufficient to meet all in-state power demand — it would have little difficulty complying with U.S. EPA's Clean Power Plan, experts say. -
6 Things to Know About the Pipeline Protests
Nov 1, 2016 | E&E Energywire
By Ellen M. Gilmer
Social media has been abuzz with #NoDAPL, "I Stand with Standing Rock" and virtual "check-ins" of solidarity since Dakota Access pipeline protests escalated in North Dakota last week. -
Oil Industry Warns of Late Obama Regulation Push
Nov 1, 2016 | The Hill - E2 Wire
By Devin Henry
The top oil and natural gas lobbying group on Tuesday warned the Obama administration to not over-regulate the industry on its way out of office next year. -
Campaign Targets Emissions Exemption for Low-Producing Wells
Nov 1, 2016 | E&E Greenwire
By Sean Reilly
The Environmental Defense Fund has launched a public outreach campaign urging U.S. EPA to extend the reach of new emissions guidelines to low-producing oil and gas wells. -
BP Seeks Expedited FERC Action in Remanded Cove Point LNG Capacity Case
Nov 1, 2016 | Natural Gas Intelligence
By David Bradley
BP Energy continued a long-running dispute with Dominion Cove Point LNG LP (DCP) Friday when it asked FERC to expedite action on a case recently remanded by the United States Court of Appeals and allow it to "turn back" import expansion storage and regasification capacity as the agency previously allowed another existing import customer. -
Colonial Pipeline Explosion in Alabama Sends Gas, Diesel Prices Higher
Nov 1, 2016 | Wall Street Journal
By Alison Sider
Gasoline and diesel prices are surging after a major fuel artery was severed Monday, cutting off the pipeline that supplies much of the East Coast with gasoline, diesel and jet fuel. -
Explosion in Rural Alabama Reportedly Injures at Least 7
Nov 1, 2016 | Fuel Fix
By Associated Press
At least seven workers were injured Monday when an explosion occurred along the Colonial Pipeline in rural Alabama, not far where it burst last month, authorities said.
Industry and Association News
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(ACC Mentioned) Forget the IMF: Global Chemicals are Your Guide to Future Performance
Nov 1, 2016 | Beyond Brics
By Paul Hodges
The global chemical industry has long been the best real-time indicator of the global economy. This is partly because of its size, as the third-largest industry in the world after agriculture and energy, but also because of its global and application reach. Every country in the world uses relatively large volumes of chemicals, and their applications cover virtually all sectors of the economy, from plastics, energy and agriculture to pharmaceuticals, detergents and textiles.
The first chart confirms the position, showing the latest IMF data for global GDP versus the American Chemistry Council’s (ACC) data for global chemical Capacity Utilisation (CU%) since 1988, in terms of percentage change from the previous year.
The IMF data are for the percentage change in global GDP at constant prices (their “headline number”), using the October 2016 World Economic Outlook
The ACC data show the percentage change in CU% updated to include reported data for August 2016
As can be seen, there is extremely close historical correlation between the two sets of data. But crucially, the ACC data are real-time. They are produced within a few weeks of the end of each month, whereas the IMF data only appear after a time lag of many months.
Equally important is that the IMF’s forecasts have proved to be wildly over-optimistic since the start of the financial crisis, as demographic headwinds have now replaced the tailwinds which created the baby boomer-led supercycle that began in 1983. Had the ACC’s data been used as the base case, unnecessary investment would have been discouraged. Even more importantly, policymakers’ wishful thinking about the ability of monetary policy to restore economic growth would have been challenged much earlier.
The ACC data are equally valuable when it comes to understanding the outlook for individual country economies, as the second chart confirms. It shows developments since 2014 for the Bric countries:
Brazil has been the most consistent, but unfortunately in a negative sense. Its chemical production went negative in mid-June 2014, providing investors and companies with ample warning that major problems lay ahead for the economy. The chart provides some hope that the situation may be improving, but cautious observers may be forgiven for worrying that production has yet to record a positive performance after more than two years.
Russia has provided the most volatile performance, due to oil price movements. The key issue is that lower oil prices support chemical demand, as consumers need to spend less on essentials such as transport and heating and have more discretionary income. Production was down 11 per cent in July 2014, just before the oil price collapse, but then rebounded to a positive 15 per cent by September 2015. Since them, of course, the doubling of oil prices since the New Year has hit output again, leaving it up by around 5 per cent.
India has also been volatile. Production tumbled during the run-up to premier Narendra Modi’s election in 2014, and remained negative into the early part of 2015. Since then, production has been in positive territory, averaging around 4 per cent since March 2015, as tangible evidence of economic reform has begun to appear.
China has provided the most stable performance, with production fluctuating between a low of 4 per cent and a high of 10 per cent over the period. Key support has been provided by the government’s drive to increase China’s self-sufficiency. This has often meant that imports, rather than domestic production, have taken the pain of slowing domestic demand. In some major products, such as PVC, China has actually moved from being the world’s leading importer to become a net exporter.
Chemical industry performance is therefore not just an excellent guide to the outlook for the global economy. It is also a reliable indicator of the economic state of the world’s major economies. The fact that the global CU% has fallen every month this year, and is now at just 78.7 per cent – nearly equal to its post-crisis low of 77.7 per cent in March 2009 – is therefore grounds for concern. It contradicts the buoyancy being seen in a number of major financial markets and suggests that investors may find it is better to travel in hope than to arrive.
Paul Hodges publishes The pH Report, providing investors and companies with insight on the impact of demographic changes on the economy.
http://blogs.ft.com/beyond-brics/2016/11/01/forget-the-imf-global-chemicals-are-your-guide-to-future-performance/
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(ACC Mentioned) America Recycles Day Events Scheduled
Nov 1, 2016 | News Dispatch
Bring in plastic bags for recycling and get a reusable bag for free at one of four upcoming America Recycles Day events in November.
The La Porte County Solid Waste District has once again teamed up with Al’s Supermarkets to promote all forms of recycling available in our county through these in-store events. New this year will be an additional plastic bag swap at the J-MARt BP on Highway 30 in Wanatah! Not only will residents be able to swap those pesky plastic bags – a major source of litter in our communities – for a bag they can reuse time and time again, but they can also learn what they can recycle every day at Al’s stores in Michigan City and La Porte, snag giveaways, play a game and more!
All events at Al’s Supermarkets will be held from 10 a.m. to 6 p.m. Join the Solid Waste District at the specified location on the following dates:
• Monday, Nov. 14 – Al’s Franklin, 3535 Franklin St., Michigan City.
• Tuesday, Nov. 15 – Al’s East, 702 E. Lincolnway, La Porte.
• Wednesday, Nov. 16 – Al’s Karwick, 1002 N. Karwick Road, Michigan City.
The event at J-MARt BP, 10300 Hwy 30 in Wanatah, will be held from 10 a.m. to 2 p.m. Thursday, Nov. 17, inside the gas station.
Thanks to Al’s and Republic Services, the District’s curbside recycling contractor, for donating reusable bags for these events. We’ll hand out one reusable bag for every 50 plastic bags brought in, up to a total of three reusable bags per person.
“Last year we collected 14,198 plastic bags for recycling, and this year we hope to get even more,” said Alicia Ebaugh, District education and public outreach coordinator. “The convenience of plastic bags comes with a price to wildlife and the cleanliness of our streets when not disposed of properly, so we hope these events provide an incentive for change.”
Each year, Americans use 100 billion plastic bags. That figures out to about 313 per person, so a family of four might go through about 1,250 single-use plastic bags per year. The amount collected would have been used by about 45 residents over one year. That might be enough people to fill one apartment building.
We bring plastic bags home from pretty much anywhere we shop for food, clothes and other items, our newspapers are often wrapped in them, and we even buy more to simply throw away! They may be convenient, but when only one county – ours – can go through more than 34 million of them in a year, it’s time to start thinking about ways to reduce the amount of waste we create.
The amount of bags collected for recycling this year was less than last year, but that’s actually a good thing! We’ve been educating on the proper way to recycle plastic bags – at the store – for a year now, and many participants said they’ve been doing just that! Plus, those who have gotten reusable bags are using them, reducing the number of plastic bags they are bringing in even more.
We gave out about 250 reusable bags to residents in exchange for these plastic bags during our events. When you make the switch to reusable bags for shopping, you not only reduce waste, you reduce the amount of litter that ends up in our communities. Let’s keep reducing, reusing and recycling!
America Recycles Day, celebrated on Nov. 15, is the only nationally recognized day and coast-to-coast community-driven awareness campaign dedicated to promoting and celebrating recycling in the United States. In 2015, the District’s plastic bag swap events were among 2,000 America Recycles Day events nationwide, engaging more than 1.5 million estimated participants nationwide. More than 200,000 people have taken the “I Will Recycle” Pledge online and in paper form at ARD events, joining a growing movement of caring citizens committed to increase the recycling rate in America and to learn how to recycle right.
America Recycles Day is made possible through the generous support of the American Chemistry Council, Amcor, the Institute of Scrap Recycling Industries, and the Northrop Grumman Corporation.
http://www.thenewsdispatch.com/features/article_c00c79f5-243f-5529-94da-9f38b5142086.html
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Attorneys Say TSCA Reform Sets 'Fixed' Period for New Chemical Reviews
Nov 1, 2016 | Inside EPA
By Bridget DiCosmo
Attorneys say the revised Toxic Substances Control Act (TSCA) appears to set a "fixed" period of time for EPA to review new chemicals and significant new uses (SNUs) under section 5, acknowledging that the agency's interpretation and potential legal challenges to EPA's approach could affect how the language is put into practice.
Any binding timeline could create further complications for the agency's workload as it seeks to implement the reformed toxics law. EPA is already facing a backlog of section 5 reviews under the new law, and the agency has already issued voluntary suspensions for the "200 or so substances" in the process of reviews under section 5 as of the law's effective date of June 22, as Inside EPA has previously reported.
“By our reading, new TSCA arguably applies a fixed review period to the completion by EPA of its review and determination and needed actions on a [new chemical] NC/SNU submitted to the Agency," Bergeson & Campbell senior regulatory and policy advisor Charles Auer, a former EPA toxics official, and Lynn Bergeson, managing partner of the industry firm, say in a an article, "Is the Section 5 Review Period Fixed or Flexible in New TSCA?"
The article, published in the September issue of the American Bar Association's (ABA) newsletter for its environment and energy section, continues: "Whether this reading will apply, however, as was the case in old TSCA, may turn on whether EPA, in light of the revised statutory text, takes this view and, if not, on whether a notifier legally challenges the use of an informal voluntary suspension approach."
The attorneys are examining whether the review period in the reformed TSCA law under section 5 affords EPA the flexibility to use so-called "voluntary suspensions" to extend the statutory time frame it has to review a pre-manufacture notice (PMN) for a new chemical or a SNU under section 5.
Under the TSCA overhaul, which took effect June 22, section 5 now requires EPA to review all new chemicals and make an affirmative finding on each substance's safety before the chemical may be sold. The agency may find that the chemical is not likely to present a significant risk; it may find that there is "insufficient information" to make a safety determination or that it may present an unreasonable risk.
Regulatory options include a consent order with testing mandates, limits on some releases, or other provisions. Another option is a significant new use rule to "require notice to EPA before chemical substances and mixtures are used in new ways that might create concerns."
Under section 5 of the original 1976 TSCA, EPA did not have to issue findings on the safety of new chemicals entering the marketplace, although it had power to do so.
A company could under the prior TSCA begin manufacturing and sales of a new chemical after 90 days barring an EPA finding that the chemical "may present an unreasonable risk," but the agency was not required to make an affirmative finding of safety for a substance to be used in commerce.
Review Period
Under old TSCA, when the agency identified concerns that indicated a possible need for a consent order under section 5(e), which allows for additional regulatory requirements to preclude certain uses, control exposures or other risk-based measures, EPA would typically obtain agreement from the submitting company to "voluntarily suspend" the review period, according to the ABA article. EPA would usually do this around 80-85 days into the 90-day review period, and use such voluntary suspensions as a tool to provide the time needed for the company and the agency to agree on the terms of a negotiated consent order to specify additional controls or testing.
While the previous version of the statute was silent on voluntary suspensions, EPA codified the approach in regulations. However, the term is not only also not included in new TSCA, but the revised statute introduced a new term, "applicable review period," and uses it extensively throughout section 5, including in section 5(e), which maintains that consent orders are to take effect on the expiration of the applicable review period, and that orders may not be issued later than 45 days before the expiration of the applicable review period.
The amended statute defines applicable review period as the time frame starting on the date EPA receives a PMN or SNU under section 5(a) and ending 90 days after that date, or on such date specified in section 5(c), which allows the agency to extend the review period for "additional periods (not to exceed in the aggregate 90 days)" provided the agency can show "good cause." Extensions provided under section 5(c) and EPA's justification for the extension must be published in the Federal Register and constitute final agency action, which means they may be reviewed by the courts.
New Definition
The new definition for applicable review period, Bergeson and Auer write, "presumably reflects congressional intent at a minimum to clarify the concept that had been described as the 'notification period' in old TSCA," because Congress could have chosen to instead retain the old language rather than create new terms. Or, as is our view, Congress's intent was to change the interpretation of this concept regarding the effective operation of the old TSCA Section 5 review period against the calendar," the article says.
However, the authors note, both the old and new iterations of TSCA use the word "prescribed" when discussing potential extensions, on which EPA's interpretation that allows for voluntary suspensions is partially based, and that interpretation was not challenged.
"The practice was subsequently codified, and, of course, is now widely used," the article says. Thus, despite the efforts of congressional drafters to, in our view, change the meaning, the bottom line may be that someone has to make a legal challenge to EPA's interpretation of applicable review period if it includes voluntary suspensions in its implementation approach going forward under the new law."
The authors further say that absent a legal challenge, submitting companies could choose to decline a request for a voluntary suspension, requiring EPA to proceed with issuing a section 5(c) notice to extend the review period, requiring the agency to issue the order or explain the substance of its determination in writing to the company by day 135 of the review period.
http://insideepa.com/daily-news/attorneys-say-tsca-reform-sets-fixed-period-new-chemical-reviews
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Jury Awards $70m in Latest Johnson & Johnson Talc Ruling
Nov 1, 2016 | Chemical Watch
By Kelly Franklin
For a third time, Johnson & Johnson has been found liable for injuries from ovarian cancer linked to the use of its talc-containing products. The company has been ordered to pay $65m in punitive damages as part of a $70.075m verdict.
And for the first time, the jury also held talc supplier Imerys liable. The verdict includes $2.5m in punitive damages against the company.
The jury’s decision was handed down in favour of Deborah Giannecchini, a plaintiff in a large class-action of suits claiming that use of the multinational conglomerate’s talcum powder products for feminine hygiene has contributed to injuries resulting from ovarian cancer.
Johnson & Johnson was ordered to pay $72m and $55m in actual and punitive damages in two cases decided earlier this year.
The company says it is appealing all three decisions.
In a statement issued following the most recent, it said it will “appeal today’s verdict because we are guided by the science, which supports the safety of Johnson’s baby powder.”
The company pointed to two cases that were thrown out by a New Jersey state court judge earlier this year, who ruled that the science did not adequately support that talcum powder causes ovarian cancer.
Johnson & Johnson said the judge’s decision “highlights the lack of credible scientific evidence behind plaintiffs’ allegations”.
A spokesperson for talc supplier Imerys said it is confident in the safety of its products, a view which is “supported by the consensus view of qualified scientific experts and regulatory agencies”.
And the company said its position was reaffirmed by the New Jersey court’s decision, which found – through a review of more than 100 studies and hearing seven days of scientific testimony – that “the theories relied upon by plaintiffs’ experts lacked scientific foundation”.
But Ted Meadows, a lawyer with the plaintiffs’ firm Beasley Allen, said the jury’s most recent decision reaffirms that it’s time for Johnson & Johnson “to come clean and put consumer health ahead of profits”.
“Despite repeated verdicts that hold the company accountable, Johnson & Johnson has refused to remove its talcum powder products from shelves, has refused to warn consumers about the risk, and continues to deny its responsibility,” said Mr Meadows. “When is enough going to be enough?”
The American Cancer Society says that the findings of studies exploring the possible link between talcum powder and ovarian cancer have been “mixed”.
Some case-control studies have found a small increase in risk, while two prospective cohort studies have not found an increased risk, according to the ACS. “For any individual woman, if there is an increased risk, the overall increase is likely to very be small,” says the organisation.
While the appeals process continues, the company faces thousands of complaints, in several states, that have yet to be heard.
https://chemicalwatch.com/50667/jury-awards-70m-in-latest-johnson-johnson-talc-ruling
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Washington Posts Chemical Evaluations for CHCC List
Nov 1, 2016 | Chemical Watch
The Washington Ecology Department has posted chemical evaluations for the 20 substances the state is considering for addition to its Chemicals of High Concern to Children list.
Washington will accept comments on the update to the CHCC list, until 5 November.
https://chemicalwatch.com/50677/washington-posts-chemical-evaluations-for-chcc-list
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UK Downstream Sectors Consider Post-Brexit Stance on REACH
Nov 1, 2016 | Chemical Watch
By Geraint Roberts
A snapshot survey of UK trade bodies, representing downstream industrial sectors, shows they have a range of attitudes on whether the UK should continue to implement REACH and other EU chemical legislation post Brexit, or adopt its own national policy.
Trade body responses to government advisory body, the UK Chemicals Stakeholder Forum, presented at its meeting on 1 November, show a strong desire to minimise disruption to current compliance obligations.
Some, including the Chemical Industries Association, also see Brexit as a chance to give the concept of risk greater prominence over hazard in UK law.
To help inform the environment ministry’s consultation efforts, the forum asked its members what should be the overarching objectives of UK chemicals policy, during the negotiations and beyond. It also asked what should be the scope of UK chemicals regulation, if it leaves the Single Market.
Illustrating the complexity of policy analysis facing the government, differences of opinion are acknowledged within the membership of individual trade bodies.
Sticking with REACH
The British Plastics Federation says most of its members want “REACH-aligned UK chemicals legislation” and that regulatory equivalence between the UK and EU is “highly important”.
The sector is heavily reliant on imported raw materials and machinery from the EU. Although it says its position could change, currently “it seems that members wish to keep full access to REACH” - while recognising that this may only be possible through access to the Single Market.
Similarly, the REACH cross-sector group, encompassing engineering, manufacturing and retail trade bodies, says that “despite ongoing concerns around the complexity and burden of REACH, the majority of downstream users of chemicals want [it] to stay” - and “are concerned about the uncertainty and the cost of establishing a UK-specific regime”.
It “strongly supports a negotiating position, where the UK can continue to provide scientific and policy input towards ongoing evolution of REACH and substance selection/characterisation.”
But a “smaller number” of companies, belonging to its member trade bodies, say “a transition to a risk-based approach to chemical management” - one giving greater authority to occupational exposure limits, for example - could “increase the appetite for manufacturing investment”.
Cutting red tape
The responses show that many industry groups are pursuing a two-pronged strategy - on the one hand, seeking business certainty and minimum disruption and, on the other, seeking to cherry pick those EU laws they want to keep and those they want to jettison or amend.
The Engineering Employers Federation says its members “want to see existing and future EU chemicals regulation continue to apply in such a way to avoid UK exports facing any barriers to trade”. But they are aware of the “opportunities that Brexit poses”, and see a post-Brexit legislative review as “an opportunity for reducing red tape, whilst maintaining the same regulatory outcome and environmental and safety standards”.
Similarly, the British Coatings Federation says: “The main negotiation objective should be minimum disruption to business and a good deal for UK manufacturing. Beyond this, there should be less red tape and burdensome regulation.”
If the UK leaves the Single Market, it should bring existing “pragmatic” EU chemicals legislation into UK law, “leaving out unworkable regulation”.
https://chemicalwatch.com/50675/uk-downstream-sectors-consider-post-brexit-stance-on-reach
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Addressing Toxic Substances Through Waste Law is Logical, Say NGOs
Nov 1, 2016 | Chemical Watch
By Luke Buxton
A proposed amendment to the EU's waste framework Directive that would set the objective of reducing the content of hazardous substances in materials and products would actually complement REACH, say NGOs, rather than "sideline" it as Cefic suggests.
Using waste policy to address hazardous substances, said Cefic head Marco Mensink last month, would "require Europe to control global production processes and control all imports of finished products into Europe." Without checking every container entering Europe's ports this is practically impossible, he said. "[The] net result will be that even more goods will be made outside of Europe."
But the European Environmental Bureau (EEB) told Chemical Watch REACH and the waste framework Directive can complement each other. And the amendment would strengthen REACH, it adds.
Both pieces of legislation are set to play a key role in achieving the objectives set out in the European Commission's action plan for a circular economy.
Indeed, the Commission's Communication on this says "the interaction of legislations on waste, products and chemicals must be assessed in the context of a circular economy in order to decide the right course of action at EU level".
The circular economy
The circular economy package aims to:
address the presence of substances of concern;
limit unnecessary burden for recyclers; and
facilitate the traceability and risk management of chemicals in the recycling process.
The work will feed into the future EU strategy for a non-toxic environment, and is due to be adopted next year.
The EEB points out that EU waste policies and legislation to manage hazardous waste existed well before REACH. It says the amendment is needed to contribute to "the improvements achieved by REACH on phasing out the most concerning chemicals". It would also encourage communication about hazardous substances in the supply chain – something that is currently "lacking" in the waste Directive.
"We cannot close material cycles and achieve a non-toxic environment if we don't know which substances are included in recycled materials," said Tatiana Santos, EEB chemicals senior policy officer.
Michael Warhurst, executive director of NGO CHEM Trust, said REACH is not the only tool needed to solve "problems" created by hazardous chemicals in a more circular economy. Improvements need to be made in REACH, he adds, in particular, more rapid action to get "problem chemicals out of new products". Examples include BPA in cardboard pizza boxes and brominated flame retardants in recycled plastic mugs.
https://chemicalwatch.com/50635/addressing-toxic-substances-through-waste-law-is-logical-say-ngos
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Fact-Checking Opponents of the Clean Power Plan
Nov 1, 2016 | The Hill - Pundits Blog
By Richard L. Revesz, Denise A. Grab, and Jack Lienke
On Sept. 27, mere hours after the conclusion of the first presidential debate, opponents of the Environmental Protection Agency's (EPA) Clean Power Plan presented their case in a lengthy oral argument before the U.S. Court of Appeals for the D.C. Circuit.
The Clean Power Plan aims to reduce carbon dioxide emissions from the nation's existing power plants. A coalition of states, utilities, coal companies and other industry groups have sought to block the rule since it was first proposed in June 2014, while a competing group of states, municipalities, power companies, environmental and public health organizations, and clean energy producers have intervened to support the EPA.
Like the statements of a candidate at a political debate, a litigant's claims at oral argument shouldn't always be taken at face value. As we explored in a recent report, over the course of the D.C. Circuit hearing, the Clean Power Plan's opponents made several legal and factual assertions that don't stand up to scrutiny.
We set the record straight here.
Fact check No. 1: The Clean Power Plan's use of generation shifting is not unprecedented.
The Clean Power Plan's emission guidelines are based, in part, on an assumption that regulated entities will decrease their reliance on higher-polluting sources of electricity (like coal plants) and increase their use of lower- or non-polluting sources (like gas plants, wind farms and solar arrays).
At the argument, the challengers contended that this reliance on "generation shifting" as a means of cutting pollution — as opposed to the installation of a pollution-reducing technology at each plant — represents an "enormous and transformative" expansion of the EPA's regulatory authority.
The trouble with this claim is that the EPA has used generation shifting in prior rules aimed at other types of air pollution, including mercury and soot- and smog-forming emissions.
Past rules aimed at pollution from motor vehicles and the lead content of gasoline have similarly focused on regulated sources' collective ability to reduce emissions, rather than setting standards based only on what each source can accomplish independently.
Fact check No. 2: The text of the Clean Air Act does not unambiguously support the challengers' efforts to limit its coverage.
In 1990, Congress mistakenly passed two separate amendments to Section 111(d) of the Clean Air Act, under which the Clean Power Plan was issued. One amendment originated in the House, and another in the Senate, but both wound up in the conference bill that was passed by both chambers and signed by the president.
At the argument, the challengers asserted that the House amendment unambiguously supports their position in the case, which is that the EPA cannot regulate carbon dioxide from power plants under Section 111(d) because it has already regulated mercury from those plants under Section 112.
But, as a number of the D.C. Circuit judges acknowledged, the wording of the House amendment is anything but clear. While it is possible to read the text in the manner suggested by the challengers, there are many other plausible readings that don't support their position.
And when statutory text is ambiguous, courts typically defer to an agency's interpretation — meaning that the EPA's reading of the law should trump the challengers'.
Furthermore, the Senate amendment unambiguously supports the EPA's position, but the challengers erroneously argued that it should be ignored.
Fact check No. 3: The EPA did conduct a thorough cost-benefit analysis of the Clean Power Plan.
In one of the day's most blatantly incorrect assertions, a lawyer for the challengers claimed that the EPA did not do a cost-benefit analysis of the rule.
This is patently false.
The EPA conducted a thorough Regulatory Impact Analysis of the Clean Power Plan, which projected that, by 2030, the rule's annual benefits would exceed its costs by $26 to $45 billion dollars.
The challengers even cite this economic analysis in their briefs.
Fact check No. 4: The Clean Power Plan is not an attempt to enact Congress's failed 2009 cap-and-trade bill through executive action.
Toward the end of the day, the challengers characterized the Clean Power Plan as an attempt by the Obama administration to implement Congress's 2009 cap-and-trade bill (also known as Waxman-Markey) — which passed the House but never received a vote in the Senate — through executive action. They suggested that this legislative background supports their claim that the EPA exceeded its legal authority in issuing the Clean Power Plan.
But this argument is fatally flawed in multiple respects.
First, Waxman-Markey and the Clean Power Plan differ in fundamental ways. Unlike the congressional bill, the Clean Power Plan does not apply to the entire economy, does not cap overall emissions and does not require emissions trading.
Second, the Supreme Court has held that congressional inaction generally deserves "little weight" when interpreting statutes.
And third, even if the D.C. Circuit were to consider Congress's 2009 inaction on Waxman-Markey, it would also need to take into account more recent, unsuccessful efforts by congressional Republicans to strip the EPA of its carbon-regulating powers under the Clean Air Act.
After all, if the failure to pass cap-and-trade can be taken as evidence that the EPA lacks power to issue the Clean Power Plan, Congress's recent inaction on bills attempting to block the plan should constitute even more persuasive proof that the agency has authority to issue it.
Fact check No. 5: The Clean Power Plan is not primarily responsible for coal's decline.
Listening to the challengers' arguments about the Clean Power Plan's effects, one could easily get the impression that, in the absence of the plan, coal-fired power plants would be thriving.
The reality is that, even without the Clean Power Plan, coal plants would be retiring in large numbers because of the low price of natural gas and the declining cost of renewable energy.
A recent analysis by the Energy Information Administration estimated that, without the Clean Power Plan in effect, about 57 gigawatts of coal-fired generation capacity would retire between 2015 and 2020. With the Clean Power Plan, that number climbs only to 62 gigawatts.
Thus, at least in the near term, the Clean Power Plan's impacts on the financial health of the coal industry and coal-fired power plants appear to be marginal.
In sum, the Clean Power Plan's opponents relied on a number of questionable contentions in their argument. Fact-checking can help set the record straight on the challengers' more dubious assertions.
The truth behind the spin is that the Clean Power Plan is consistent with the text of the Clean Air Act and with decades of prior efforts to implement it.
Revesz is dean emeritus and Lawrence King Professor of Law at New York University School of Law and director of the Institute for Policy Integrity. Grab and Lienke are senior attorneys at the Institute for Policy Integrity.
http://www.thehill.com/blogs/pundits-blog/energy-environment/303719-fact-checking-opponents-of-the-clean-power-plan
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Minn. Compliance Strategy Will Depend on Neighboring States
Nov 1, 2016 | E&E Climatewire
By Danny Cusick
If Minnesota were an electricity island — where in-state generation was sufficient to meet all in-state power demand — it would have little difficulty complying with U.S. EPA's Clean Power Plan, experts say.
But under dynamic electricity markets where power flows across state borders, Minnesota's compliance success will depend on actions in at least four other states, as well as national and provincial policies in Canada, which shares key transmission links with the North Star State.
David Young, a principal technical leader for the Electric Power Research Institute, told participants in a state-sponsored webinar yesterday that Minnesota could see a sizeable variation in how much power it imports based on the compliance approaches of North Dakota, South Dakota, Iowa and Wisconsin.
"The Clean Power Plan fundamentally is about state-level policy," Young said. "Each state will have its own approaches and variations to implementation," and those variations will affect Minnesota both directly and indirectly.
For example, if compliance with the Clean Power Plan leads to a substantial reduction in generation from Midwest coal-fired power plants, as many expect, Minnesota will need to look to other resources — both outside and inside its boundaries — to meet its growing power demand.
Such a scenario could require Minnesota to rely more heavily on homegrown natural-gas-fired generation, for example, or to manage its considerable wind resources in ways that enhance power supply without compromising grid reliability, according to an EPRI analysis of the state's power flows.
"For Minnesota and Clean Power Plan compliance, there are two things to keep in mind," Young said. "You've got to meet the [carbon emissions] target, but you've also got to balance the load" so that power flows reliably to key load centers, including the Minneapolis-St. Paul region and the Iron Range of northeastern Minnesota, where industrial plants account for a significant amount of daily load.
"Since Minnesota is a net importer [of electricity], and is likely to stay a net importer, what other states chose to do [with respect to Clean Power Plan compliance] will affect how Minnesota balances that load," Young added.
Minnesota's two largest electric utilities, Xcel Energy Inc. and Minnesota Power, are closely monitoring neighboring states' compliance strategies and working with regulators and grid managers to make sure Clean Power Plan compliance does not interrupt power flows to customers.
Christian Winter, lead transmission planning engineer for Duluth-based Minnesota Power, told participants that his research team has reached a conclusion that "the baseload generation that we have been depending on for years to maintain reliability on our system may not be available ... in the future."
For example, North Dakota's compliance strategy will be particularly important in Minnesota since a significant amount of power flows from large coal plants in North Dakota to consumers in Minnesota, EPRI's analysis shows.
If North Dakota chooses not to participate in carbon emissions trading with other states, it will have to make even deeper cuts to its coal generation, resulting in reduced power exports to Minnesota and other states, experts say.
However, if carbon trading is allowed and revenues from sales of coal-fired power are sufficient to cover the cost of purchasing carbon credits, North Dakota could conceivably continue to operate its baseload coal plants economically, the analysis shows.
http://www.eenews.net/climatewire/2016/11/01/stories/1060045089
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6 Things to Know About the Pipeline Protests
Nov 1, 2016 | E&E Energywire
By Ellen M. Gilmer
Social media has been abuzz with #NoDAPL, "I Stand with Standing Rock" and virtual "check-ins" of solidarity since Dakota Access pipeline protests escalated in North Dakota last week.
Though the conflict garnered national attention in September, news of the latest turbulent confrontation between law enforcement and protesters has launched the issue to the top of many news feeds, engaging a new wave of pipeline critics and supporters.
Much of the recent public dialogue reveals confusion or disagreement over what happened last week and what prompted the conflict. Here's what to know about how it started and what's on the line:
What's going on in North Dakota?
The situation is tense but relatively calm this week at protest camps along the Cannonball and Missouri rivers, about 45 miles south of Bismarck, N.D. That was not the case last week when more than 140 protesters were arrested after a standoff with hundreds of law enforcement officers. The confrontation occurred Thursday when the Morton County Sheriff's Department moved to dismantle protesters' barricade and disperse their encampment along a state highway (EnergyWire, Oct. 28).
Protesters, many of whom had been staying at a larger camp for months, set up tents and barriers on the road earlier last week to try to thwart nearby pipeline construction. They say the Standing Rock Sioux Tribe wasn't adequately consulted about the project, and they worry it could disturb sacred sites and pollute Lake Oahe, a dammed section of the Missouri River.
Has the situation been violent?
During Thursday's confrontation, law enforcement officers at times used pepper spray, rubber bullets and a high-pitched "long-range acoustic device" to disperse or control the crowd. Most officers on the front lines of the standoff held batons, wore riot gear and were backed by armored vehicles. According to the sheriff's department, one protester fired a gun while being arrested, and several threw Molotov cocktails and pieces of debris. The protester who allegedly fired the gun was charged yesterday with attempted murder.
A Dakota Access security contractor was detained by Bureau of Indian Affairs law enforcement Thursday after an altercation with protesters. BIA says the state Bureau of Criminal Investigation — which is under the state attorney general's office — is handling the case, but a spokeswoman for the AG's office refused to answer questions about it. The sheriff's department said Friday that the man had been acting in self-defense and was released. Protesters say he approached them waving a large gun.
Amnesty International representatives and a member of the United Nations Permanent Forum on Indigenous Issues arrived in North Dakota over the weekend to "observe and investigate" the pipeline's impact on tribal rights and law enforcement's treatment of protesters.
Is the pipeline on private or tribal land?
It's complicated. The Dakota Access pipeline route crosses North Dakota, South Dakota, Iowa and Illinois on mostly private land, plus some federally controlled areas like water crossings. The route does not cross the Standing Rock Indian Reservation.
But the private land making up the pipeline corridor just north of the reservation is part of the tribe's ancestral homeland. It was promised to the Sioux people in the 1851 Treaty of Fort Laramie but later taken for private use. Farmers and ranchers have owned and worked the land for generations. The Dakota Access battle has in many ways become a proxy for a broader debate over tribal treaty rights.
Was the tribe consulted?
The federal government is supposed to consult with tribes on any actions it takes that might affect them or their land. Unlike the Keystone XL pipeline, which would have crossed an international border, there is no all-inclusive federal permit for most oil pipelines. But there were several specific federal approvals needed for Dakota Access, including approval under the Army Corps of Engineers' general permitting system for water crossings. Dakota Access LLC applied for and received approvals for several crossings.
The Army Corps reached out to tribes during the general permitting process, but the Standing Rock Sioux mostly sat out. Tribal leaders took issue with the scope of the agency's consultation: The Army Corps was looking specifically at the Lake Oahe/Missouri River crossing and related impacts on the tribe, rather than looking at the broader impacts of the length of the pipeline. Once the scope was finalized, the tribe protested by declining to participate in further consultation efforts. The federal Advisory Council on Historic Preservation has also criticized the scope as overly narrow (EnergyWire, Oct. 6).
State officials who approved the route in North Dakota say the tribe did not participate in their public process either. According to members of the Public Service Commission, the Standing Rock Sioux were notified of three public hearings on the pipeline but did not attend or raise concerns until after the commission concluded its review (EnergyWire, Oct. 18).
The tribe did recently raise concerns to the Army Corps about its general permitting system. The corps updates its "nationwide permit" for utility projects like oil pipelines every five years. With an update due next year, the Standing Rock Sioux urged the agency to rethink how it reviews water crossings for pipeline projects.
What are courts doing?
The Standing Rock Sioux Tribe sued the Army Corps in July over the permitting issue. Another tribe, the Cheyenne River Sioux, joined the case in August, and the Yankton Sioux Tribe filed a similar lawsuit in September. Though a federal district court temporarily halted construction within 20 miles of Lake Oahe, it ultimately rejected the tribes' request for an injunction there, and construction activity is now moving forward, except at the lake itself.
The tribes challenged the decision at a federal appeals court. The appeals court is still reviewing the injunction denial but declined to freeze construction in the meantime. Meanwhile, the district court is still weighing the core issue in the original lawsuit: whether the Army Corps' permitting process is legal (EnergyWire, Sept. 6).
What is the Obama administration doing?
The Obama administration still holds the keys to a final approval needed for Dakota Access to finish construction. The administration announced in September that it would not issue the approval — a real estate easement for Lake Oahe — until it has time to double-check its review process for it. An Army Corps lawyer said in September that the easement decision would be made in a matter of weeks, but more than a month later, the issue remains undecided.
The administration also announced in September that it would kick off a comprehensive consultation process with all 567 federal recognized tribes "to ensure meaningful tribal input" for infrastructure projects. The consultation began last month and is set to continue with a series of meetings this month (EnergyWire, Sept. 26).
http://www.eenews.net/energywire/2016/11/01/stories/1060045082
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Oil Industry Warns of Late Obama Regulation Push
Nov 1, 2016 | The Hill - E2 Wire
By Devin Henry
The top oil and natural gas lobbying group on Tuesday warned the Obama administration to not over-regulate the industry on its way out of office next year.
One week before Election Day, the American Petroleum Institute (API) on Tuesday said it's tracking upcoming federal decisions on methane regulations, a study on the safety of hydraulic fracturing and a new five-year drilling plan, among other issues on President Obama’s plate before he leaves office in January.
Kyle Isakower, API’s vice president of regulatory and economic policy, said the Environmental Protection Agency (EPA) should finalize a report that, in a preliminary version, concluded fracking has no impact on the safety and quality of drinking water. The EPA’s Science Advisory Board has criticized the report’s methodology, but the natural gas industry says it supports their conclusions about fracking’s safety.
Isakower said API is a also pushing the Obama administration to push back an implementation schedule for a rule on ozone emissions, and warned against Bureau of Land Management regulations on methane emissions from drilling sites on federal lands.
Before he leaves office, Obama also has to finalize a new five-year plan on drilling in federal waters around the United States. That decision has become a major issue for the oil industry and anti-drilling groups because it's one of the last major energy issues Obama has to decide on the end of his term.
A proposed plan would block drilling in the Atlantic Ocean and limit it in the Arctic. The oil industry has criticized the decision to prevent Atlantic drilling, and Isakower warned, “making the same mistake now by removing the Arctic from the plan would be very short-sighted.”
“Right now, the United States is leading the world in the production of oil and natural gas,” Isakower said.
“As this administration prepares to release the last of its regulations and as we approach the election, it’s important that the significant progress that we have made, continues.”
http://www.thehill.com/policy/energy-environment/303779-oil-industry-warns-of-late-obama-regulation-push
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Campaign Targets Emissions Exemption for Low-Producing Wells
Nov 1, 2016 | E&E Greenwire
By Sean Reilly
The Environmental Defense Fund has launched a public outreach campaign urging U.S. EPA to extend the reach of new emissions guidelines to low-producing oil and gas wells.
"Tell the EPA: Close this Harmful Pollution Loophole," the New York-based advocacy group said in an email today that gives recipients the chance to write EPA Administrator Gina McCarthy in favor of fully applying the control techniques guidelines to existing wells with an average daily production of 15 barrels of oil equivalent or less.
The guidelines are intended to reduce emissions of volatile organic compounds from existing oil and gas wells. Such compounds react in sunlight with nitrogen oxides to form ozone, the main ingredient in smog.
While EPA had proposed exempting low-producing wells from the "fugitive emissions" provisions of its initial draft of the guidelines unveiled last year, the agency punted a decision in the final version released late last month, citing information received during the public comment period that those wells may nonetheless be significant sources of volatile organic compounds (Greenwire, Oct. 21).
In a suggested sample message for McCarthy included in today's email, EDF echoed that point, saying that "research has shown that these wells can have substantial ozone-forming pollution."
EPA officials are now seeking more input on the exemption question but have not spelled out a deadline for a decision.
Strongly backing the proposed exemption is the Independent Petroleum Association of America, which warns that the cost of new pollution controls could force many small producers out of business.
http://www.eenews.net/greenwire/2016/11/01/stories/1060045121
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BP Seeks Expedited FERC Action in Remanded Cove Point LNG Capacity Case
Nov 1, 2016 | Natural Gas Intelligence
By David Bradley
BP Energy continued a long-running dispute with Dominion Cove Point LNG LP (DCP) Friday when it asked FERC to expedite action on a case recently remanded by the United States Court of Appeals and allow it to "turn back" import expansion storage and regasification capacity as the agency previously allowed another existing import customer.
BP's filing comes more than three years after Dominion filed an application at the Federal Energy Regulatory Commission seeking authorization to proceed with a liquefied natural gas (LNG) export facility in Calvert County, MD, and associated interstate natural gas pipeline facilities (see Daily GPI, April 2, 2013). The export facility was to have a marketed capacity of up to 5.75 million metric tons per annum, the subsidiary of Richmond, VA-based Dominion said at the time. DCP received no requests during a pair of open seasons, according to BP, and instead "...negotiated an early termination of Statoil Natural Gas LLC's Cove Point expansion agreements on a bilateral basis."
Just weeks after Dominion filed its application, BP and Shell NA LNG LLC filed protests, citing concerns that it could degrade services to DCP's existing import customers and that the company was showing unduly preferential treatment to certain customers (see Daily GPI, May 8, 2013). BP urged the Commission to "rectify consequences of unduly preferential conduct" by DCP when it allegedly provided Statoil, an existing import customer, a unique opportunity to turn back its import expansion storage and regasification capacity, while denying BP, a similarly situated customer, the same opportunity.
FERC denied BP's protest, finding that the company and Statoil were not similarly situated, and BP turned to the courts for a review of the Commission's order [CP13-113]. The United States Court of Appeals for The District of Columbia Circuit said in July that BP's petition for review would be remanded to FERC "for further explanation," and issued a formal mandate of that decision last month [BP Energy Company v. FERC, No. 15-1205].
The court rejected arguments that BP lacked standing to challenge the order, rejected FERC's contention "that turn back rights were not a term or condition of service at a facility within the scope of Section 3(e)(4) of the NGA [Natural Gas Act]," and rejected FERC's argument that it "could justify its holding solely because Statoil received service under Section 3 and BP received service under Section 7," BP said.
BP asked FERC to grant relief effective Jan. 1, 2017, to coincide with the proposed effective date for the earliest Statoil turn back. A proportional turn back right would be at least 190,000 Dth/d of BP's LTD-1 and FTS capacity, the company said.
FERC authorized DCP to construct its LNG export facility in Calvert County, MD and related facilities in Virginia, the first East Coast LNG project to receive the green light, in September 2014 (see Daily GPI, Sept. 30, 2014). The U.S. Department of Energy approved DCP's application to export LNG to free-trade and non-free trade agreement countries in 2013 (see Daily GPI, Sept. 12, 2013).
Dominion's plans at Cove Point have also been plagued by complaints by environmental groups (seeDaily GPI,July 15).
http://www.naturalgasintel.com/articles/108291-bp-seeks-expedited-ferc-action-in-remanded-cove-point-lng-capacity-case
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Colonial Pipeline Explosion in Alabama Sends Gas, Diesel Prices Higher
Nov 1, 2016 | Wall Street Journal
By Alison Sider
Gasoline and diesel prices are surging after a major fuel artery was severed Monday, cutting off the pipeline that supplies much of the East Coast with gasoline, diesel and jet fuel.
Colonial Pipeline shut down its main gasoline and diesel pipelines after equipment being used by a work crew in Shelby County, Ala., struck one of the lines, causing a fire that killed one person and injured several others.
The closure is causing many to worry about price spikes and fuel shortages in the southeast and up the Atlantic coast. Colonial’s 5,500-mile pipeline system carries 2.5 million barrels of fuel a day from Houston as far as New York Harbor, supplying 13 states.
Gasoline futures are up 11.92 cents, or 8.4%, to $1.5387 a gallon on the New York Mercantile Exchange. Diesel futures rose 4.5 cents, or 2.99%, to $1.5489 a gallon.
It’s the second major incident on the pipeline in recent months. In September, the company’s primary gasoline shipping route was partially shut after a leak of as much as 8,000 barrels was discovered in Alabama, a few miles from the site of Monday’s incident.
That closure pushed prices higher at the pump and led to shortfalls at some stations that couldn’t get their hands on enough fuel. Analysts say this incident could be more serious because both of Colonial’s main lines are closed.
“Just having one line shut down caused a circus. Imagine having both,” said Patrick DeHaan, senior petroleum analyst at GasBuddy. “It’s much more grave of a situation, and prices are shooting up.”
http://www.wsj.com/articles/gas-diesel-prices-spike-following-alabama-pipeline-fire-1478010889
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Explosion in Rural Alabama Reportedly Injures at Least 7
Nov 1, 2016 | Fuel Fix
By Associated Press
At least seven workers were injured Monday when an explosion occurred along the Colonial Pipeline in rural Alabama, not far where it burst last month, authorities said.
The explosion sent flames soaring over the forest about a mile west of where the pipeline burst in September, Gov. Robert Bentley said in a statement. That rupture led to gasoline shortages across the South.
People within 3 miles of the blast site were being evacuated, the governor said.
“We’ll just hope and pray for the best,” the governor added.
Video from area media shows a huge plume of flame and smoke rising in a wooded area in Shelby County southwest of Birmingham.
The seven injured workers were taken to Birmingham hospitals by helicopter and ambulance, Bentley told WBRC-TV in a live interview Monday evening.
“It appears to have been an accident, and they’re allowing fuel to burn,” Bentley said. “It’s about one mile west of where the repair took place on the Colonial Pipeline just recently.”
Georgia-based Colonial Pipeline said in a brief statement Monday evening that it has shut down its main pipeline.
“Colonial’s top priorities are the health and safety of the work crew on site and protection of the public,” the company said.
The company’s statement did not address how Monday’s explosion might affect the availability of gasoline, and said more information would be released as it becomes available.
Several fire departments were sending crews to assist. Helena police say they’re assisting Shelby County authorities with the blaze.
The explosion happened in a remote area outside the town of Helena, away from residential areas, Helena Mayor Mark told WBRC-TV.
In September, the Colonial Pipeline leaked thousands of gallons of gas southwest of Birmingham near Helena and led to dry fuel pumps in several Southern states — for days, in some cases. There was no immediate indication whether or not Monday’s explosion will lead to similar shortages.
Colonial Pipeline, based in Alpharetta, Georgia, transports more than 100 million gallons of products daily to markets between Houston and New York City, serving more than 50 million people, it says on its website. They include petroleum products such as gasoline, diesel fuel and jet fuel. Authorities have not said which type of fuel was involved in the explosion Monday.
http://fuelfix.com/blog/2016/10/31/explosion-in-rural-alabama-reportedly-injuries-at-least-5/
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