Preview Newsletter
ACC PM 1/17/2017
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(ACC Mentioned) Davos Report Calls for Boosting Plastics Recycling to 70 Percent
Jan 17, 2017 | Plastics News
By Steve Toloken
A new report from the Davos World Economic Forum gathering, launched with the support of some large companies in the plastics industry, is calling for strategies to dramatically increase recycling of plastic packaging — from 14 percent today to 70 percent. -
Pruitt Will Put EPA Back on Track
Jan 17, 2017 | The Hill - Congress Blog
By Rep. Lamar Smith
As the Obama administration comes to a close, so too will we close up a chapter of costly, overly burdensome regulations and begin to enter a new era of transparency based on sound science. -
Former State Environment Chiefs Oppose Pruitt
Jan 17, 2017 | E&E Climatewire
By Camille von Kaenel
Thirteen former heads of state environmental protection agencies have joined activists in battle against Scott Pruitt, President-elect Donald Trump's pick for U.S. EPA administrator, ahead of tomorrow's confirmation hearing. -
Environmental Groups Ramp Up Campaign Against Pruitt
Jan 17, 2017 | E&E Greenwire
By Kevin Bogardus
Progressive activists and environmental groups today escalated their lobbying against Oklahoma Attorney General Scott Pruitt (R), President-elect Donald Trump's pick for U.S. EPA administrator, as he prepares for his confirmation hearing this week. -
Watchdogs Criticize Perry's Texas Jobs Record Ahead of Confirmation
Jan 17, 2017 | E&E Climatewire
By Umair Irfan
The Texas Energy Center was created in 2003 and slated to open in Sugar Land, a suburb of Houston, where it would combine public and private resources to research and develop clean coal, offshore fossil fuels and other energy technologies. -
Zinke on the Issues
Jan 17, 2017 | Politico Pro
By Esther Whieldon, Annie Snider, & Eric Wolff
Montana Rep. Ryan Zinke has fought efforts to sell off federal lands while also calling for expanded fossil fuel development, and in his two years in Congress he has voted to pull back protections for a number of species including the notorious Sage Grouse. -
Zinke Not a Top Target for Democrats
Jan 17, 2017 | E&E Climatewire
By Brittany Patterson
Rep. Ryan Zinke might be feeling left out. -
(ACC Mentioned) EPA Issues Nanomaterials Reporting Rule
Jan 17, 2017 | Occupational Health & Safety
EPA issued a final regulation Jan. 11 requiring one-time reporting and recordkeeping of exposure and health and safety information on chemical substances at the nanoscale level. -
No Small Worry: EPA’s First-Ever Nanoscale Rule Met With Industry Concern
Jan 17, 2017 | Chem Info
By Meagan Parrish
It was several years in the making, but in the final stages of its rule-making process for nanomaterial reporting, the Environmental Protection Agency declined to consider feedback from the industry. -
NATIONAL: For the First Time in 40 Years EPA to Put in Place a Process to Evaluate Chemicals that May Pose Risk
Jan 17, 2017 | The Stanley News and Press
By B. J. Drye
The Environmental Protection Agency (EPA) is moving swiftly to propose how it will prioritize and evaluate chemicals, given that the final processes must be in place within the first year of the new law’s enactment, or before June 22, 2017. -
Opening Doors to Innovation
Jan 17, 2017 | Chemistry World
By Anthony King
Chemical companies are increasingly using specialist investment arms to nurture new ideas. -
Inside Pruitt's Conflicting Approaches to Okla. Energy Cases
Jan 17, 2017 | E&E Climatewire
By Benjamin Storrow
When Oklahoma Gas & Electric, the Sooner State's largest utility, requested a $1 billion rate hike three years ago, the power company found a ready ally in Republican Scott Pruitt, the state attorney general. -
Whistleblowers Say Pruitt Fought Them in Oil Fraud Case
Jan 17, 2017 | E&E Energywire
By Mike Soraghan
Lawyers working for Oklahoma Attorney General Scott Pruitt battled for months against a whistleblower lawsuit seeking to claw back money from ConocoPhillips Co. for "double dipping" from a state cleanup fund. -
Revising Energy Regulations: Some Advice for the New Administration
Jan 17, 2017 | Forbes
By Michael Lynch
A political battle over energy ‘deregulation’ looms, but carries with it the usual cacophony of objections, myths, and ideological outrage. Some clear thinking would lead to a favorable outcome that would satisfy most stakeholders, and this post will address some points of contention. -
BLM Rule Survives Initial Court Challenge
Jan 17, 2017 | E&E Energywire
By Ellen M. Gilmer
The Obama administration's plan to cut methane emissions on public lands will take effect as scheduled today after a federal court last night rebuffed industry and state attempts to block the rule. -
Company Wants to Block Launch of Environmental Review
Jan 17, 2017 | E&E Greenwire
By Ellen M. Gilmer
Backers of the Dakota Access pipeline are urging a federal court to block the Obama administration from kicking off an in-depth environmental review of the stalled oil project. -
Enviros Shut Out of Industry Leasing Lawsuit
Jan 17, 2017 | E&E Energywire
By Ellen M. Gilmer
Environmentalists will not have the chance to fight against an industry lawsuit that pushes for more frequent lease sales. -
GOP Environment Chairman Plans ‘Wholesale Change’ at EPA
Jan 17, 2017 | The Hill - E2 Wire
By Timothy Cama
The top senator overseeing the Environmental Protection Agency (EPA) is planning a “wholesale change” at the agency under President-elect Donald Trump and a Republican Congress. -
Hill Republicans Move Full Speed Ahead with Push to Slash Obama-Era Rules
Jan 17, 2017 | Washington Post
By Mike DeBonis
When Vice President-elect Mike Pence addressed House Republicans in a closed-door meeting earlier this month, he let them know just how quickly his running-mate plans to get to work. -
EPA Tentatively Agrees to NO2, SO2 Review Deadlines
Jan 17, 2017 | E&E Greenwire
By Sean Reilly
U.S. EPA would commit to a series of hard deadlines for reviewing — and, if necessary, updating — its ambient air quality standards for nitrogen dioxide and sulfur dioxide under a proposed consent decree released today for public comment.
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(ACC Mentioned) Davos Report Calls for Boosting Plastics Recycling to 70 Percent
Jan 17, 2017 | Plastics News
By Steve Toloken
A new report from the Davos World Economic Forum gathering, launched with the support of some large companies in the plastics industry, is calling for strategies to dramatically increase recycling of plastic packaging — from 14 percent today to 70 percent.
The Jan. 16 report, “The New Plastics Economy: Catalysing Action” from the World Economic Forum and the Ellen MacArthur Foundation, argues for a major rethink of plastic packaging and bills itself as a “transition strategy for better package design and increased recycling rates.”
The American Chemistry Council, in a statement, said it welcomed that the report recognized benefits of plastics, but ACC argued that issues like resource efficiency and greenhouse gas emissions should be taken more into account when setting policy.
A press release from the WEF says the report is endorsed by over 40 industry leaders, including Amcor Ltd. CEO Ron Delia, Dow Chemical Co. Chairman and CEO Andrew Liveris and Alexander Baumgartner, CEO of Constantia Flexibles.
The report was released a day ahead of the WEF’s annual meeting in Davos-Klosters, Switzerland.
It doesn’t make specific recommendations on how to boost recycling, but raises many topics, including replacing single-use plastic bags with reusable bags, looking at container deposits and using more large returnable rigid packaging in shipping.
The group said that over the next year it would launch two “global innovation challenges” to kick-start the redesign of packaging, and would start to develop a “Global Plastics Protocol” for packaging design.
“This could drive systemic change,” said Dominic Waughray, a member of the World Economic Forum’s executive committee. “The plan puts innovation at the heart of a strategy that could shift the entire system while unlocking a billion dollar business opportunity. Alignment along value chains and between the public and private sector is key to this.”
More specifically, the group breaks down plastic packaging into three segments:
• It said that 50 percent of plastics packaging today could be “profitably recycled” if improvements are made to packaging design and waste management systems.
• A further 20 percent of plastic packaging could be profitably reused, “for example by replacing single-use plastic bags with re-usable alternatives or designing innovative packaging models based on product refills.”
• Finally, it suggests that 30 percent of plastic packaging, such as multi-material wrappers, are particularly problematic for recycling.
'Uncommon materials'
“Without fundamental redesign and innovation, the remaining 30 percent of plastic packaging (by weight) will never be recycled and the equivalent of 10 billion garbage bags per year will be destined to landfill or incineration,” the report said.
The report also singled out what it called three “uncommon materials” in plastic packaging — expanded polystyrene, polystyrene and PVC — and said that while they are often technically recyclable they may not be economically recyclable because of their small volumes.
“PVC, PS, and EPS stand out as uncommon plastic packaging materials to focus on first,” the report said. “Dealing with these three would make a huge impact on this segment. Their low volumes lead to poor outcomes: less than 5 percent of PVC packaging is recycled in Europe, and PS and EPS are rarely sorted from household waste and recycled.”
The focus on particular resins, however, was criticized by the American Chemistry Council.
“Looking ahead, discussions building on this report would benefit from focusing less on specific resins and more on the functionality of the package in its specific use,” said Steve Russell, vice president of ACC’s Plastics Division.
ACC cited another study which said that switching from plastics to alternatives would quadruple environmental costs, to $533 billion a year.
“Life cycle studies consistently find that plastic packaging delivers more food and other products with significantly less environmental impacts than alternatives,” ACC said.
The report argued that while plastics packaging is an “integral part of the global economy and provides it with many benefits,” concerns are growing over both litter, including in oceans and waterways, and the greenhouse gas emissions from increased use of plastics.
“For these reasons, plastics and plastic packaging have gradually morphed from a fringe to a mainstream issue,” the report said.
It’s a more action-oriented follow-up to a January 2016 report from the group that predicted that by 2050, the world could see more plastic than fish in the sea, by weight.
In comments distributed with the Jan. 16 report, the groups said more than 40 industry leaders endorsed the report.
“The New Plastics Economy report calls attention to the vast amount of plastic packaging material that is lost to the economy after only a single use,” said Amcor’s Delia. “Amcor understands the challenge, but we also see a tremendous opportunity to continually develop packaging that is better for the environment throughout its life: production, use and re-use.”
http://www.plasticsnews.com/article/20170117/NEWS/170119916/davos-report-calls-for-boosting-plastics-recycling-to-70-percent
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Pruitt Will Put EPA Back on Track
Jan 17, 2017 | The Hill - Congress Blog
By Rep. Lamar Smith
As the Obama administration comes to a close, so too will we close up a chapter of costly, overly burdensome regulations and begin to enter a new era of transparency based on sound science.
Millions of hard-working Americans rely on affordable energy to make ends meet. However, it’s no secret that the president’s so-called Clean Power Plan, the cornerstone of the Obama administration’s climate change policy, could cost up to $292 billion. The so-called Clean Power Plan would actually have no meaningful impact on our environment and only end up reducing global temperatures by three one-hundredths of a degree Celsius. This burdensome regulation would also only lower sea level rise by the thickness of three sheets of paper.
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As America looks forward to a new age of cutting red tape, Oklahoma Attorney General Scott Pruitt’s appointment as EPA administrator is a welcome response to the Obama administration’s legacy of overregulation. Mr. Pruitt has been a leading proponent for inviting local governments, stakeholders and industry leaders to have a seat at the table to help decide what measures and rules work best for them. While he acknowledges the need for the EPA, he sees the truth that the current administration has devotedly ignored: the EPA was never intended to be an advocate of extreme environmental regulations that serve no purpose and are costly and burdensome.
This past May, Mr. Pruitt testified before the Committee on Science, Space, and Technology, that I chair, on the impact of President Obama’s so-called Clean Power Plan on states. Mr. Pruitt has consistently worked to ensure the air we breathe and the water we drink is clean, and will help in resetting the agenda on environmental improvement as we move forward.
Under Mr. Pruitt’s leadership, Oklahoma has developed leading innovations in wind energy and natural gas production through hydraulic fracturing, the most innovative carbon emission reduction technology we have today. Letting regulations take a backseat to innovation is a sure-fire way to allow industry and technology to grow together.
A new era of leadership will put the EPA back on track. The goal of the Obama administration’s so-called Clean Power Plan hasn’t been to improve the way Americans produce and consume energy. Simply put, it forces certain kinds of power plants and power sources to line up with political motivations. This is technology devaluation, not technology innovation. Increasing the cost of energy with no significant environmental benefit is not an efficient way to support American workers and technological advances.
Further, an analysis of the Paris climate agreement shows that it too would have little impact on global temperatures. The total temperature reduction if all countries implement the agreement is predicted to be about one-twentieth of a degree Celsius by 2030. While the benefits are miniscule, the financial burden of the Paris climate agreement are devastating. The agreement is all pain and no gain.
Due to the Obama administration’s overly burdensome regulations, our work is cut out for us. I have always believed that basic research and development has always been a crucial part of American innovation and one of the best solutions forward. Bill Gates, along with other investors, has announced an energy research initiative to work for breakthrough technology solutions. These solutions will provide us with the opportunity for Americans to continue to be a global leader in energy innovation. As a unified government, we should foster these initiatives and shift the focus away from a costly regulatory regime and towards American ingenuity and technological advances. Under President-elect Donald J. Trump, the United States can re-stake our claim as the world leader in energy innovation.
Rep. Smith is chairman of the Committee on Science, Space, and Technology Committee.
http://thehill.com/blogs/congress-blog/technology/314508-innovation-vs-regulation
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Former State Environment Chiefs Oppose Pruitt
Jan 17, 2017 | E&E Climatewire
By Camille von Kaenel
Thirteen former heads of state environmental protection agencies have joined activists in battle against Scott Pruitt, President-elect Donald Trump's pick for U.S. EPA administrator, ahead of tomorrow's confirmation hearing.
The former state officials, who have served under both Republican and Democratic governors, urged senators on the Environment and Public Works Committee to reject the nomination of the Republican Oklahoma attorney general in a letter yesterday. They worked in California, Connecticut, Hawaii, Maryland, Massachusetts, New York, Oregon, Vermont and Washington.
"His record, particularly as a litigator against many EPA rules, causes us to question whether he: 1) appropriately respects science-based decisionmaking, and 2) understands the important role that EPA must play in the 'cooperative federalism' model that undergirds our nation's environmental laws," they wrote in the letter distributed by the Union of Concerned Scientists.
Activists both defending and opposing Pruitt are gearing up for tomorrow's hearing with last-minute lobbying, ad buys and social media campaigns.
The former environment chiefs called Pruitt's criticism of EPA's greenhouse gas endangerment finding, which underpins many of President Obama's climate regulations, "deeply troubling" and a sign of "an inclination to set science aside when the outcome is at odds with his predetermined political point of view."
They also criticized Pruitt's challenges to EPA on many regional issues, including the Cross-State Air Pollution Rule and minimum mercury standards, which he has suggested should be left to the states.
"Rather than EPA acting as our partner in state-led efforts to ensure clean air and water for our residents, we fear that an EPA under Mr. Pruitt would undermine the rules that help to make sure that our state regulations are successful," they wrote.
That stands in contrast to the views espoused by some environmental chiefs in more conservative states.
Donald van der Vaart, who recently stepped down from his role as secretary of the North Carolina Department of Environmental Quality, wrote in The Daily Caller that "Pruitt knows the federal agency has an appropriate role in environmental protection but also understands that state governments have demonstrated the ability to implement environmental protections without destroying the very thing that makes environmental protection possible: a strong economy."
http://www.eenews.net/climatewire/2017/01/17/stories/1060048474
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Environmental Groups Ramp Up Campaign Against Pruitt
Jan 17, 2017 | E&E Greenwire
By Kevin Bogardus
Progressive activists and environmental groups today escalated their lobbying against Oklahoma Attorney General Scott Pruitt (R), President-elect Donald Trump's pick for U.S. EPA administrator, as he prepares for his confirmation hearing this week.
Protesters organized by 350.org staged a sit-in at the office of Sen. Joe Manchin (D-W.Va.), who has been positive about Pruitt. And the Sierra Club is giving senators "survival kits" in honor of the nominee — complete with bottles of clean water and face masks to guard against air pollution.
And ads, letters and opposition research memos are flying thick and fast as green and industry groups gear up for what will be their first major battle of the incoming Trump administration.
Pruitt is set to appear tomorrow before the Senate Environment and Public Works Committee. During his tenure as Oklahoma's attorney general, he targeted EPA, suing the agency over several of its rules — a record that has won Republicans to his cause but is leaving many Democrats unable to support him.
"He is literally the worst nominee tapped to run the agency in its 46-year history," said Rhea Suh, president of the Natural Resources Defense Council, on a call with reporters today. "Scott Pruitt is unfit to serve as our nation's chief environmental steward."
Several environmental leaders blasted Pruitt today for what they call his siding with polluting companies in Oklahoma as attorney general. Several have signed onto a massive coalition letterin opposition to his nomination.
Earthjustice President Trip Van Noppen said, "He is completely dedicated to doing the bidding of the oil industry."
Pruitt and his allies are in the process of shutting down affiliated political action committees. In addition, he pledged to seek authorization from EPA ethics officials to involve himself in matters involving his home state during his first year as agency chief.
Nevertheless, Pruitt's actions to resolve his conflicts of interest are not enough for environmentalists. The Oklahoma attorney general is expected to receive several questions from Democrats regarding his political and industry ties during tomorrow's hearing.
"His conflicts run much deeper than that. They cannot be fixed. His nomination must be rejected," Van Noppen said.
Despite their fierce opposition, environmental leaders acknowledged they face an uphill climb in blocking Pruitt's confirmation. At least some Republicans would have to join with Democrats in voting down Trump's EPA pick.
"There is a lot of fluidity right now," said Elizabeth Thompson, president of EDF Action, the political arm of the Environmental Defense Fund. Thompson noted that people hadn't really heard of Pruitt before. "We believe with more education, that his nomination will be in jeopardy," she said.
EDF Action has set up a website with a laundry list of Pruitt's lawsuits against EPA, noting that in most of the cases, co-litigators contributed to Pruitt's campaign or associated political groups.
"We all know it's very difficult to prevent confirmation, but we feel as if this is an extreme nomination," said Tom Steyer, president of NextGen Climate.
'The right person'
Republicans, on the other hand, have been overjoyed at Trump's pick to lead EPA. The agency is often a prime GOP target, and Pruitt's lawsuits aimed at tamping down EPA's regulatory authority have rallied supporters across the party.
In addition, Pruitt's nomination has won backing from several business groups and conservative activists. The National Association of Manufacturers began running ads this past weekend in support, while groups like the Club for Growth and FreedomWorks endorsed Pruitt in a letter to senators last week (E&E Daily, Jan. 17).
Further, in an op-ed today for Fox News, Senate Environment and Public Works Chairman John Barrasso (R-Wyo.) took shots at EPA's "regulatory rampage" during the Obama administration and voiced his support for Pruitt as agency chief, saying, "The status quo at the EPA is changing."
Barrasso said Pruitt "is respected by his peers for the work he has done."
"His work in Oklahoma protected the environment and strengthened the economy by standing up for states' rights. Attorneys general from 24 states authored a letter in support of his nomination. They know he can and will rein in Washington," said the senator.
Barrasso also told reporters today that Pruitt is the correct choice to lead EPA. "I think he's the right person to run the EPA," he said. "He has the abilities; he's done things as an attorney general at the state level of recognizing states' rights issues."
The chairman did not give a time for when he plans to hold a committee vote on Pruitt, though he plans to move fast. Barrasso noted that Presidents George W. Bush and Obama had their EPA nominees confirmed relatively early in their administrations.
"I'm going to make sure that people have their questions answered tomorrow, and then Sen. [Tom] Carper [D-Del.] and I will come up with a date for a vote. My goal is to get it done as quickly as possible," Barrasso said.
http://www.eenews.net/greenwire/2017/01/17/stories/1060048505
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Watchdogs Criticize Perry's Texas Jobs Record Ahead of Confirmation
Jan 17, 2017 | E&E Climatewire
By Umair Irfan
The Texas Energy Center was created in 2003 and slated to open in Sugar Land, a suburb of Houston, where it would combine public and private resources to research and develop clean coal, offshore fossil fuels and other energy technologies.
With a fresh $3.6 million cash grant from the newly created Texas Enterprise Fund, the project was supposed to create 2,500 direct and indirect jobs, an important symbol of then-Gov. Rick Perry's (R) work to boost employment.
A ProPublica investigation later found that the Texas Energy Center's offices were empty in 2013.
"There was literally nothing there," said Jim Dunnam, a Waco, Texas, attorney who was the House Democratic leader in the Texas Legislature and investigated the Texas Energy Center grant in 2005. "No employees, no anything."
Questions about this and similar projects under Perry's administration may come up again Thursday as he faces a Senate committee as a step toward confirmation as the next secretary of the Department of Energy.
As of Dec. 31, no damages or clawbacks were recovered from the Texas Energy Center, and the Office of the Governor still counted 2,500 direct and indirect jobs from the center and calculated a 571 percent return on its investment.
But the State Auditor's Office in a 2014 review of the program found that the energy center never even filed an application for the money it received and did not face a requirement to create new jobs.
This is a striking omission in a project under a governor who ran for president twice on his record of creating 1.5 million jobs, particularly in the energy sector. Watchdog groups have challenged Perry's employment bona fides and are concerned now that Texas' longest-serving governor is slated to take over DOE, which has a $30 billion budget and billions of dollars earmarked for energy investment programs.
No application? No problem
Two of Perry's signature programs during his tenure in Texas were the Texas Enterprise Fund and the Emerging Technology Fund.
Perry signed the Texas Enterprise Fund into law in 2003 to give companies from all sectors of the economy cash to move to Texas or expand their operations in the state. Since its inception, the enterprise fund has awarded more than $500 million across more than 100 projects.
"Our primary concern with that fund is that it appeared to be more a public relations ploy than an actual job-seeding fund," said Andrew Wheat, research director of Texans for Public Justice, a watchdog group. The group put out a scathing report in 2010 looking into the Texas Enterprise Fund, saying the fund produced "phantom jobs."
Both critics and advocates said Perry was not ideological when it came to supporting energy with these programs, and his record shows support for wind and solar energy alongside allegiances to coal, oil and natural gas.
HelioVolt Corp., a solar panel manufacturer, received $500,000 from the enterprise fund in 2009, and wind turbine component manufacturer Zarges Aluminum Systems received $200,000 in 2010.
But some companies and projects didn't even have to ask for money.
The Texas Energy Center was one of several projects that received money that they didn't apply for and weren't held to benchmarks.
Wheat and his team found that even among the projects that had definite jobs targets, many tallied employment increases that would have occurred even without government funds or in unrelated parts of the business. Some companies, like Citgo Petroleum Corp., were already in the process of moving to Texas when they received funds without submitting applications, according to Wheat.
Other projects fell short of their jobs goals but didn't face cuts from the fund, he added.
"Often what the enterprise fund would do is renegotiate contracts in a way that was advantageous to the companies receiving the funds and not advantageous to the taxpayer," Wheat said. "It allowed the governor to prance around the state, and when he ran for president, around the country, saying, 'I created 50,000 jobs.' Many of those jobs simply weren't there."
A company official at Citgo confirmed that it received money under the enterprise fund and noted that a subsequent state audit found the company in compliance with the regulations of the program.
"CITGO did receive a grant for relocating its HQs from Tulsa to Houston in 2004 and making additional investments at its Corpus Christi Refinery," the official wrote in an email. "The requirements and obligations of the grant were fully satisfied by CITGO. The State of Texas performed a post audit that confirmed that CITGO complied with the requirements of the grant."
Discussions with Senate lawmakers
Other analysts had a more favorable view of the program.
"I think generally it's been successful," said Charles McConnell, executive director of the energy and environment initiative at Rice University, who also served as assistant secretary of Energy from 2011 until 2013.
He noted that many ambitious programs will have a few high-profile failures, but in the case of the enterprise fund, the victories outweighed the defeats.
Watchdogs, however, argued that the way the enterprise fund was structured was a deliberate obfuscation by the governor for a pay-to-play patronage system. The Texas Energy Center was located in the district of then-House Majority Leader Tom DeLay (R), who secured almost $2 billion in federal funds to research deepwater oil and gas drilling. Drew Maloney, DeLay's former chief of staff, also lobbied for federal funds for the energy center.
"The critiques have often been that the programs operated without clear goals that enable their outcomes to be measured," said Tom Smith, Texas director of Public Citizen, a watchdog group. "[Perry's] policies in Texas were frequently criticized for being donor-driven or benefiting his cronies."
Smith said he's been discussing this with some of the Democrats on the Senate Energy and Natural Resources Committee ahead of Perry's confirmation hearing.
In 2005, Perry signed into law the creation of the Emerging Technology Fund, an early stage investment vehicle to support research and commercialization of new technologies in Texas. At its peak, the fund managed almost $500 million across 120 companies and educational institutions.
The Dallas Morning News reported in 2010 that more than $16 million from the fund went to companies with managers who were large campaign donors to Perry.
Michael Webber, deputy director of the Energy Institute at the University of Texas, Austin, helped launch a research consortium on water conservation that received $4 million from the Emerging Technology Fund in 2015.
"We don't feel like we're cronies of Perry," Webber said.
However, he acknowledged that some of the other grant recipients under the fund were questionable. "There's this cloud hanging over ETF," Webber said. "There's a lot of cool stuff that came out of ETF, but there were a lot of eyebrows raised about others, like, 'How did they get funding?'"
Perry's successor, Republican Gov. Greg Abbott, closed the Emerging Technology Fund in 2015.
This record has led critics to question Perry's suitability to run DOE.
"If anybody's experience indicates what kinds of jobs they shouldn't get, it would be Rick Perry at the Department of Energy," said Matt Angle, director of the Lone Star Project, a Democratic research political action committee. "In the Emerging Technology Fund, corruption was so rampant it was shut down."
'Fewer levers ... of power at DOE'
Some of the criticisms of Perry's programs in Texas echo the complaints against DOE clean energy initiatives, like the loan guarantee program, which supported deployment of large-scale energy projects.
The loan guarantee program was part of the transformation of the agency under the Obama administration, from a focus solely on science and nuclear weapons to an economic development department, with billions of dollars under management.
The agency received more than $35 billion under the Recovery Act to support new energy technologies from fundamental research to startup companies, quickly making energy innovation with the backdrop of fighting climate change one of the highest-profile missions of DOE.
In 2015, the United States joined 21 other countries and the European Union in Mission Innovation, a commitment to double clean-tech research and development funding by 2020.
Under Obama, the energy sector has been a major source of new jobs. "Last year in the United States, we had over 2 million private-sector jobs created," outgoing Energy Secretary Ernest Moniz told reporters last week. "Fourteen percent of those were energy jobs."
But many of the federal grants, loans and loan guarantees behind some of these jobs were also criticized for crony capitalism, establishing poor metrics and having limited accountability.
Much of the money appropriated under the Recovery Act has run out, but there are still billions of dollars of authority left in the loan guarantee program. Meanwhile, Mission Innovation is already behind schedule, and some analysts say the program is unlikely to meet its target under a Trump administration (Climatewire, Jan. 9).
President-elect Donald Trump did say that he wanted a massive infrastructure investment push out of the gate, including in the energy sector, building new transmission lines and natural gas export terminals (Climatewire, Nov. 23, 2016).
Where Perry will steer DOE with this backdrop is anyone's guess, but analysts say one likely change at the agency is the technology it pursues through its investment programs.
"While the [DOE] budget has grown, the Office of Fossil Energy has seen its budget cut by almost 40 percent in that period of time," said Rice University's McConnell.
He noted that the world's energy demand is poised to double and that the bulk of the gap will be filled with fossil fuels. As such, it is imperative for the department to point its resources toward shrinking the environmental footprint of these fuels through innovation, a strategy that Perry had pursued as governor.
"We've been over-investing in the minor and under-investing in the major," McConnell said. "If one truly wishes to move the needle on environmental performance, you must embrace the idea that investing in innovative fossil technology is essential."
However, Perry will have fewer tools at his disposal at the James V. Forrestal Building than he did at the governor's mansion in Austin to spur development in the energy industry.
"The mechanisms or the powers that the governor of Texas is going to have or influence is very different than what the Department of Energy can do," said William Yeatman, a senior fellow at the Competitive Enterprise Institute. "There are fewer levers of policymaking power at DOE than as governor of Texas."
http://www.eenews.net/climatewire/2017/01/17/stories/1060048457
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Jan 17, 2017 | Politico Pro
By Esther Whieldon, Annie Snider, & Eric Wolff
Montana Rep. Ryan Zinke has fought efforts to sell off federal lands while also calling for expanded fossil fuel development, and in his two years in Congress he has voted to pull back protections for a number of species including the notorious Sage Grouse.
Zinke may need to call on his experience on the House Natural Resource Committee and leadership skills honed as a Navy SEAL if he is confirmed as President-elect Donald Trump's pick to run the Interior Department, which is made up of nine massive bureaus that manage one-fifth of the nation's land, including national parks, wildlife refuges, tribal lands and areas ripe for mining minerals and erecting wind turbines, solar farms, and oil and gas pipelines.
Here's a look at some of the challenges Zinke will face if he is confirmed as Interior secretary.
Fossil fuel development
Trump has promised to unleash fossil fuel development in the U.S. and Zinke will face pressure from Day One to carry that out by ending the Interior's freeze on new coal leases and smoothing the path for more oil and gas development on federal lands and offshore.
While Zinke can undo the Interior's coal-leasing moratorium with the swipe of a pen, it may take years to facilitate additional offshore oil and gas development.
Obama in December invoked his largely untested authority under the Outer Continental Shelf Lands Act to prohibit future offshore oil and gas leases in large portions of the Arctic and Atlantic oceans. The law does not include language that would allow Trump to automatically undo the action so it remains to be seen whether Obama's ban will survive the legal battle that is sure to ensue once Trump takes office.
Also unclear is whether Zinke will wait until the court fight over the ban concludes to begin crafting a new five-year plan for offshore drilling, which itself is a multiyear process and the agency's primary vehicle for planning future auctions.
Hailing from a landlocked state, Zinke's record on offshore drilling in particular is thin, but he strongly supports expanded energy development overall. According to his campaign website, Zinke "is constantly working to rein in regulations on our natural resources" and supports giving "tribal and local governments more of a say in how we manage our coal, oil, and natural gas."
Water
Drought, climate change and booming populations are making water supply shortages a growing problem in the American West. From endangered species to water supply, the Interior Department regularly finds itself in the middle of these contentious challenges — and sometimes on multiple sides of them.
As a Montanan, Zinke will have a steep learning curve on many Western water issues. He’d be inheriting them at a particularly critical moment on the Colorado River, which supplies water to nearly 40 million people across the West and is now in its 16th year of drought. The states of Arizona, Nevada and California are teetering on the edge of a shortage declaration that could come as soon as 2018, triggering the first mandatory supply cuts since the reservoir behind Hoover Dam was filled in the 1930s.
At the urging of the Obama administration, the three lower basin states are working on a deal aimed at bolstering reservoir levels and staving off those cuts, but despite overall buy-in, the agreement has yet to be finalized, meaning it will be up to the Trump administration to carry it over the finish line.
But Zinke could face an even bigger challenge in the other important piece of the Colorado River equation — a new deal with Mexico over how to share water supply cuts. The Obama administration spent months negotiating a new deal, but without a signed agreement in hand, the issue could get pulled into much larger politics between the two countries amid President-elect Trump’s plans for a massive border wall and interventions in private business deals that could send jobs to Mexico.
Public lands
As Interior secretary, Zinke will be responsible for overseeing over 507 million acresof federal land. Zinke is an active hunter, and he believes the federal government should retain ownership of its federal lands. That position puts him at odds with the GOP platform and many Republicans in Congress, such as Sen. Mike Lee (R-Utah) and House Natural Resources Chairman Rob Bishop (R-Utah). Then again, it also puts him in good standing with Donald Trump Jr., the president-elect's son, also an avid hunter.
But while he believes the federal government should keep ownership of its property, he also has voted to give states more say in how it's managed, a more nuanced position that concerns green groups. Zinke voted for the Self-Sufficient Community Lands Act last year, a bill that would allow chunks of federal land to be managed by a committee appointed by the state's governor.
Yet to be tested is Zinke's general belief in multi-use land planning, a key issue for sportsman and recreational activity groups who want access to hunt and fish in areas that are used for energy development or mineral extraction.
Wildlife protections
Zinke’s record on public lands issues may hearten hook and bullet groups, but his history on endangered species protections raises alarm bells for many wildlife advocates, especially when key House lawmakers are champing at the bit to overhaul the landmark Endangered Species Act.
As a congressman, Zinke voted against federal protections for wolves and lynx, priorities for ranchers in the West, and supported overriding species protections for fish in California in order to ship more water to central and southern California farms and communities. He also opposed an Obama administration plan to protect the greater sage grouse without formally listing it under the Endangered Species Act, which would entail even stricter restrictions on energy development and land use.
At a 2015 hearing, Zinke asked why "would Washington, the bureaucracy, given there are no sage grouse here ... decide what is best for Montana or the western states, that have a deep, traditional concern for wildlife management?"
Conservationists argue that conserving habitat before a situation becomes dire is the only thing that can break the politics around species protections, and those who have backed Zinke are optimistic that he will be open to a more proactive approach.
“He’s at the table, he’ll actually engage on these issues,” said Collin O’Mara, president of the National Wildlife Federation.
Indian affairs
As Interior secretary, Zinke may find himself in the thick of numerous disputes over tribal land and how that land can be developed. As a member of Congress, he waded into water issues, making himself instrumental in working out a $400 million water settlement between the Blackfeet and local users that was approved by Congress last year.
In another signal of how he might prioritize his work with tribes, last year he helped get a provision into the House version of the now-deceased energy bill that would help the Crow in Montana ship coal out through a West Coast terminal, though this contravened the desires of the Lummi Nation in Washington.
https://www.politicopro.com/energy/story/2017/01/zinke-on-the-issues-144235
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Zinke Not a Top Target for Democrats
Jan 17, 2017 | E&E Climatewire
By Brittany Patterson
Rep. Ryan Zinke might be feeling left out.
Environmentalists are so opposed to Scott Pruitt, the Republican Oklahoma attorney general vying to become EPA administrator, that they created the hashtag #pollutingPruitt to troll him on Twitter. Hostility to Rex Tillerson, the Exxon Mobil Corp. CEO and State Department hopeful, begat #rejectRex.
President-elect Donald Trump's pick for secretary of the Interior doesn't even have a hashtag, and it's one indication of Democratic priorities when it comes to challenging Trump's nominees over climate change.
When Zinke, the 55-year-old Republican congressman from Montana, testifies in front of the Senate Energy and Natural Resources Committee today, he is expected to face questions about his beliefs on global warming, public lands policy and fossil fuel development. Compared to some of Trump's more controversial picks, fewer fireworks are expected at the Interior nominee's hearing.
Environmental groups and Senate Democrats have poured resources into their battle against Pruitt, who has been tapped to lead U.S. EPA. Pruitt has questioned the existance of climate change, and he has filed several high-profile lawsuits challenging EPA rules.
Democratic lawmakers have requested answers to more than 50 questions about Pruitt's record and ties to fossil fuel interests, and Sen. Tom Carper (D-Del.), the top Democrat on the Senate Environment and Public Works Committee, has proposed holding a separate hearing on Pruitt (E&E Daily, Jan. 13).
Even Energy secretary nominee Rick Perry (R-Texas) seems to rank higher than Zinke on Democrats' list of adversaries. Perry's confirmation is hearing is set for Thursday.
Zinke, the former Navy SEAL who calls himself a "Teddy Roosevelt" Republican, comes to the table with a handful of policy positions that have garnered praise from sportsmen's groups and cautious optimism from greens. That injects a level of moderation into a Cabinet that critics say is peppered with extreme viewpoints.
Zinke has bucked party leadership on public land, saying repeatedly that he opposes selling off large tracts of federal property. He also supports full restoration of the Land and Water Conservation Fund.
Environmental groups say his record in Congress has been less than stellar. The League of Conservation Voters gives Zinke a 3 percent lifetime score, in part because he's been a strong supporter of Montana coal and has expressed concern over a three-year leasing moratorium for coal mining on federal land.
He has also come out strongly in favor of the Keystone XL pipeline and recently backed a rule change that would allow lawmakers to give federal land to states without offsetting the spending costs (Greenwire, Jan. 5).
"Other than some opposition to giving away public lands back to the states, it's his views on a whole host of issues before the Department of the Interior that are somewhere between unknown and disturbing," said David Goldston, director of government affairs for the Natural Resources Defense Council.
Zinke may also get some deference from committee members because he has served in Congress. Senators may choose to pose more granular, state-specific policy questions to the nominee, as the Interior Department's wide-ranging portfolio touches on Western water policy, endangered species, national parks and policies that affect the 565 federally recognized tribes.
But don't expect Zinke to slide through, said Athan Manuel, director of the lands protection program at the Sierra Club.
"Even though he's not as incendiary, maybe, as Mr. Pruitt is, there's still some real serious concerns with him about how good a steward he's going to be, or can be, if he's not going to work to protect our lands from climate change and fossil fuels," he said.
Questions about science
It's unclear how hard senators will press Zinke on climate change. The congressman has expressed belief in it, but he has also said the science is unsettled.
Just by acknowledging that climate change exists, Zinke is breaking with Trump. Alan Rowsome, senior government relations director with the Wilderness Society, said he expects lawmakers to press the nominee on his beliefs.
Under the Obama administration, the Interior Department has become an important player in climate policy. Any rollback, especially budget cuts to the agency's science programs and its use of science to inform public lands policy, would unravel years of climate monitoring and research, Rowsome said.
"Is he going to continue to fund the science and the research and background to continue to make good science-based decisions? Or is that what's going to be thrown aside and the decision is made to spend that money on leasing new areas?" he said.
Zinke may also face questions about allegations that he improperly used travel funds for personal trips while in the Navy (Greenwire, Dec. 21, 2016).
As a candidate for Congress, Zinke took $345,000 in campaign donations from companies that drill for oil and gas on the vast public lands that he would oversee as Interior secretary. Although the action is not a conflict of interest under the definition of the law, watchdog groups say the contributions raise questions about whether the fossil fuel industry could influence Zinke (Climatewire, Jan. 13).
Zinke has visited lawmakers on Capitol Hill over the last few weeks, such as Sens. Lisa Murkowski (R-Alaska), chairwoman of Energy and Natural Resources Committee; Mike Lee (R-Utah); Jim Risch (R-Idaho); and Mazie Hirono (D-Hawaii).
Sen. Lamar Alexander (R-Tenn.) met with Zinke in early January and said the two had a "good meeting" that focused on the recent fires in the Great Smoky Mountains National Park and the importance of protecting national parks.
Sen. Maria Cantwell of Washington, the committee's top Democrat, told E&E News that her meeting with Zinke last week consisted of an exchange of "different ideas and viewpoints" (E&E Daily, Jan. 10).
"We'll see what he says on the record," she added.
http://www.eenews.net/climatewire/2017/01/17/stories/1060048441
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(ACC Mentioned) EPA Issues Nanomaterials Reporting Rule
Jan 17, 2017 | Occupational Health & Safety
EPA issued a final regulation Jan. 11 requiring one-time reporting and recordkeeping of exposure and health and safety information on chemical substances at the nanoscale level. The information is to include the specific chemical identity, production volume, methods of manufacture and processing, exposure and release information, and existing information concerning environmental and health effects, "insofar as known to or reasonably ascertainable by the person making the report," it states.
These are chemical substances that have structures with dimensions at the nanoscale -- approximately 1-100 nanometers (nm); a human hair is approximately 80,000 to 100,000 nanometers wide.
The agency took the action pursuant to its authority under section 8(a) of the Toxic Substances Control Act, known as TSCA, as part of its efforts to ensure a more comprehensive understanding of nanoscale materials in commerce.
EPA said the information collection "is not intended to conclude that nanoscale materials will to cause harm to human health or the environment. Rather, EPA will use the information gathered to determine if any further action under TSCA, including additional information collection, is needed."
EPA proposed and then took comments on the rule. Entities that manufacture or process a reportable chemical substance during the three years prior to the final effective date of the rule must report to EPA within a year of the rule's publication.
Jay West, senior director of chemical products and technology at the American Chemistry Council, said EPA made "positive" changes to its final nanomaterials reporting rule but not all concerns were addressed sufficiently. The council is compiling a list of topics that it believes require additional explanation and will send that the agency, he said.
Likewise, Richard Denison, Ph.D., a lead senior scientist with the Environmental Defense Fund, wrote that the rule does not include some reporting requirements that EDF recommended, including that chemical substances "formed at the nanoscale as part of a film on a surface" are exempted from reporting.
https://ohsonline.com/articles/2017/01/16/epa-issues-nanomaterials-reporting-rule.aspx?admgarea=news
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No Small Worry: EPA’s First-Ever Nanoscale Rule Met With Industry Concern
Jan 17, 2017 | Chem Info
By Meagan Parrish
It was several years in the making, but in the final stages of its rule-making process for nanomaterial reporting, the Environmental Protection Agency declined to consider feedback from the industry.
Now, with the final language published and the rule set to go into effect in May, some in the industry are concerned that the agency is requiring an unnecessary amount of costly reporting that isn’t likely to reveal potential hazards. The heightened regulations could also hamper the pace of innovation underway in the industry.
The Back Story
Nanotechnology has been heralded as a next big frontier in science and technology innovation. In the chemicals industry. Nanomaterials are used in a range of applications — from clothing and agrochemicals to consumer goods and pigments.
“The poster child for nanotechnology is carbon nanotubes,” says James Votaw, a partner with Manatt, Phelps & Phillips, of the form of carbon that is 10,000 smaller than human hair but stronger than steel. “It can be used to make very strong materials and as an additive in plastics to make them electrically conductive or stiffer.”
The EPA has been attempting to define nanomaterials since 2004 and assess the potential for environmental or human health risks associated with their use. In 2008, the EPA launched an effort to collect voluntarily submitted information from key players in the industry, but after a few years, the agency wasn’t happy with amount of responses. The effort to create a mandatory reporting requirement was launched in 2010.
Yet, according to Votaw, after a 2015 proposal of the rule was extensively criticized by the industry for being overly ambiguous and overly inclusive of its coverage, the industry asked the EPA to reopen a dialogue on the rule. The EPA declined.
In the final language released last week, the EPA addressed some of the concerns, but also created new ones.
Expect Delays
According to the rule, any company that manufacturers, processes or imports nanomaterials has to submit reports 135 days before they begin working with the materials.
“Imagine that you want to buy something and then you have to spend months filling out information about it and then you have to wait some more,” Votaw explains.
The one loophole is if you’re in a plant startup phase, you can report within 30 days of forming the intent to manufacture. There’s just one problem. The EPA estimates that it will take about 164 hours to prepare the reports, which shakes out to about 5.5 hours of work each day in that period to submit on time.
This is exactly the kind of issue Votaw says would have been brought up if the EPA had included more time for public feedback.
Worth The Costs?
The new reporting requirement is expected to cost companies about $27.79 million during the first year and $3.09 million in subsequent years.
One worry about how the rule is designed is that it creates a standing requirement for reporting, which could result in unnecessary and duplicate reporting among different companies.
“In the future, manufacturers, processers and importers are still subject to reporting,” Votaw says. “So even if the EPA already has a report about a nanomaterial and it includes reasonable information about how it’s used and what its properties are…if someone else wants to start using that same material, now they have to report the same information to the EPA.”
It’s also unclear that there is a high hazard risk associated with nanomaterials. So far, Votaw says he has yet to hear of research or any instance where the types of nanomaterials being targeted by this EPA regulation have turned out to be harmful.
“There is not any kind of hazard associated with particle size,” Votaw says. ”Just being small is not an indication of hazard.”
Moving Forward
According to the EPA, the agency is attempting to gather information and so far it isn’t imposing any limits on the use of nanomaterials. But Votaw points out the new reporting requirements could also create a stigma around working with nanomaterials that could slow research.
But the EPA could still face legal challenges to parts of the rule, either to the 135-day stipulation or perhaps to how the rule defines nanomaterials:
solids at 25 degrees Celsius at standard atmospheric pressure;
manufactured or processed in a form where any particles, including aggregates and agglomerates, are between 1 and 100 nanometers (nm) in at least one dimension; and
manufactured or processed to exhibit one or more unique and novel property.
“A more reasonable approach might be to say that all the nanoscale materials we’re interested in are the ones that are relevant to human health risks,” Votaw says.
Votaw says the rule could also potentially have wider industry implications.
“There are concerns that it could set up the EPA to take a similar approach to classifying other groups of materials,” Votaw says.
http://www.chem.info/news/2017/01/no-small-worry-epas-first-ever-nanoscale-rule-met-industry-concern
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Jan 17, 2017 | The Stanley News and Press
By B. J. Drye
The Environmental Protection Agency (EPA) is moving swiftly to propose how it will prioritize and evaluate chemicals, given that the final processes must be in place within the first year of the new law’s enactment, or before June 22, 2017.
“After 40 years we can finally address chemicals currently in the marketplace,” said Jim Jones, EPA's Assistant Administrator for the Office of Chemical Safety and Pollution Prevention. “Today’s action will set into motion a process to quickly evaluate chemicals and meet deadlines required under, and essential to, implementing the new law.”
When the Toxic Substances Control Act (TSCA) was enacted in 1976, it grandfathered in thousands of unevaluated chemicals that were in commerce at the time. The old law failed to provide EPA with the tools to evaluate chemicals and to require companies to generate and provide data on chemicals they produced.
EPA is proposing three rules to help administer the new process. They are:
Inventory rule. There are currently over 85,000 chemicals on EPA’s Inventory, many of these are no longer actively produced. The rule will require manufacturers, including importers, to notify EPA and the public on the number of chemicals still being produced.
Prioritization rule. This will establish how EPA will prioritize chemicals for evaluation. EPA will use a risk-based screening process and criteria to identify whether a particular chemical is either high or low priority. A chemical designated as high-priority must undergo evaluation. Chemicals designated as low-priority are not required to undergo evaluation.
Risk Evaluation rule. This will establish how EPA will evaluate the risk of existing chemicals. The agency will identify steps for the risk evaluation process, including publishing the scope of the assessment. Chemical hazards and exposures will be assessed along with characterizing and determining risks. This rule also outlines how the agency intends to seek public comment on chemical evaluations.
These three rules incorporate comments received from a series of public meetings held in August 2016.
If EPA identifies unreasonable risk in the evaluation, it is required to eliminate that risk through regulations. Under TSCA the agency must have at least 20 ongoing risk evaluations by the end of 2019.
Comments on the proposed rules must be received 60 days after date of publication in the Federal Register. At that time, go to the dockets at: https://www.regulations.gov/ and search for: HQ-OPPT-2016-0426 for the inventory rule; HQ-OPPT-2016-0636 for the prioritization rule; and HQ-OPPT-2016-0654 for the risk evaluation rule.
Learn more about today’s proposals: https://www.epa.gov/assessing-and-managing-chemicals-under-tsca/frank-r-lautenberg-chemical-safety-21st-century-act-5
Learn more about the Frank R. Lautenberg Chemical Safety for the 21st Century Act. https://www.epa.gov/assessing-and-managing-chemicals-under-tsca/frank-r-lautenberg-chemical-safety-21st-century-act.
http://www.thesnaponline.com/news/national-for-the-first-time-in-years-epa-to-put/article_633bbcde-dc38-11e6-931f-bbdfe93226aa.html
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Jan 17, 2017 | Chemistry World
By Anthony King
Chemical companies are increasingly using specialist investment arms to nurture new ideas.
In late September 2016, Evonik invested $1.5 million (£1.2 million) in Vivasure Medical, a medical device company with a new closure device for heart surgery. It did so through its venture capital arm. The equivalent arm at BASF last year invested $4 million in QD Vision, a firm with quantum dot technology that promises better colour for LCDs. The number and total value of such investments is increasing rapidly.
Many chemical giants nurture their own corporate venture capital, or CVC, units, releasing them to prowl for new ideas and opportunities. ‘There’s a realisation that to be competitive you need access to as many good ideas as you can get, no matter how many R&D people you have,’ says David Gann, vice president (innovation) at Imperial College London, UK. It is part of a wider trend, with the corporate share of venture capital investment rising from 7% in 1995 to around 20% today.
BASF Venture Capital was set up in 2001 and has €175 million to invest. So far, it has backed 35 start-ups, mostly with direct investments of €1–6 million. Active since 2012, Evonik has made 13 investments and plans to invest €100 million in total. ‘There is a realisation that the only way to win is through innovation. And more industries are becoming more competitively intense,’ says Corey Phelps, professor of strategy and organisation at McGill University in Montreal, Canada. A wave of CVCs among all industries, led by the technology sector, began building around 2005.
‘There’s a strong belief that venture capital can complement our existing innovation activities,’ says Bernhard Mohr, head of Evonik Venture Capital. It has invested in young firms such as biotech Algal Scientific, thermoplastic composite maker Airborne Oil & Gas, and flame retardant firm FRX Polymers. It seeks those in its mega-trend areas of interest: resource efficiency, health nutrition, and globalisation.
Strategic investments
CVCs are distinguished from their independent VC brethren though their dual objectives – financial and strategic. ‘We seek a deep and long-term relationship with a company: not only a financial interest, but also a strategic interest and desire to work closely with them,’ says Mohr. BASF Venture Capital also makes its decisions primarily based on strategy, says managing director Dirk Nachtigal: ‘We want to bring disruptive new technologies out of the VC sector and into contact with BASF.’ This gives big firms a window into new technologies or business models, but also gives the companies they supports access to corporate expertise and resources.
Robert Bosch Venture Capital (RVBC) says it invests in startups active in strategically relevant future markets. Companies benefit from connections with and introductions to the Bosch Group, via joint development efforts, manufacturing knowhow and support or supplier agreements. Such agreements offer the startup a chance to ‘build up customer references and credibility,’ according to RBVC. DuPont Ventures says it brings manufacturing expertise, commercialisation support and global science and testing. It invested in NexSteppe, for example, a seed company focused on crops for biofuels and biobased products.
Most often, CVCs foster commercial agreements rather than buying companies outright. This could be a licensing agreement, a supply relationship or a distribution agreement. But the dual mandate of a CVC is also a concern to entrepreneurs and co-investors, which invariably become part of these deals.
‘Independent VCs are purely motivated by financial returns. When co-investing with corporates who have a strategic interest, that becomes a potential conflict,’ warns Phelps. ‘Will they trade financial return for strategic? Do they want to learn its technology, learn its business model and compete against it? Suck it dry from a strategic point of view. That raises questions about motivation.’
This is not how the chemical sector describes strategic interests. ‘We have in-house technology experts who can help companies. We know how to structure the intellectual property too,’ says Nachtigal. He gives the example of Nano H2O, which had a joint development agreement that saw BASF develop a new material used in its water treatment membranes. ‘It always has to be a win-win situation,’ says Nachtigal. Phelps says many CVCs admit in private that strategic interest trumps all.
Dumb money?
Some in the chemical sector jumped early into the VC world, such as Exxon Mobil in speciality chemicals. ‘Chemicals were early into the corporate venture capital field, but looking at investments in the last three years they are clearly a laggard across industries,’ says Michael Brigl of BCG Consultants. His firm reviewed the top 30 chemical companies and discovered one-third had CVC units. For the technology sector, two-thirds host CVCs. Pharma, too, is more smitten by CVC, with Eli Lilly launching Lilly Ventures in 2001, for example. Pharma also seems more willing to try newer formulas, such as business accelerators and incubators.
‘There is such a strong focus around the core in chemicals, some probably say we can cover innovation with our internal R&D,’ says Brigl. But another contributing factor is large firms with no separate VC unit can fly below the radar. An example is materials science company 3M. When it started CVC investments, it used its corporate development group, usually responsible for mergers and acquisitions, Phelps explains. The company’s minority stakes then tend not to get reported or tracked.
Catching the wave
CVC activity goes in cycles, says Phelps, and since 2005-6 we are in the fourth wave since the 1960s. CVCs may jump into the investment cycle later than peers, and get out quicker. They get concerned when portfolios suffer write offs, so cut activities, especially if no specialist CVC arm is involved, he says. ‘The history of CVC investment is characterised by relatively short-lived funds,’ he adds. This sort of behavior has left them somewhat disparaged as ‘dumb money’ by independent VCs.
That tendency to invest at a later stage is partly to the nature of the sector, says Brigl. ‘In order to judge whether [an idea] is really disruptive, it needs to work in practice rather than be just at an idea stage.’ Typically Evonik invests in companies that have already entered the market or are about to do so, Mohr agrees.
Yet most CVCs in chemicals co-invest with other venture capitalists. And they have little trouble finding partners. ‘Independent VCs are co-investing to a greater degree with their corporate venture counterparts than they have in the past. That tells you something about the changing view they have of corporates,’ says Phelps.
Phelps’ research led him to interview over 20 corporate VCs; he says getting co-investors on board, so-called syndication, is essential for corporates for a number of reasons. ‘In all our investments, we syndicate with others, either strategic or financial investors,’ says Mohr.
Syndication is common practice in the VC world to spread risk. ‘Another reasons is essentially to join an old boys’ network,’ says Phelps, a network that shares investment opportunities. Deals vouched for by partners tend to be the best deals, whereas those submitted unsolicited are often discounted.
Balancing internal and external
A third reason is that VC investing is politicised inside big companies, since money is going to an outside firm, rather than internal R&D. The question can come up, says Phelps: why are you investing in this stupid startup firm? But if a CVC can point to high level VCs as co-investors, it validates the decision and gives political cover. Finally, says Phelps, some CVCs will privately admit that independent VCs are the ones with the expertise to do the hardest thing in venture financing – pricing the deal.
In terms of internal R&D, BASF spends around €2 billion every year on 3000 research projects. It also has a web of relationships with 15 preferred universities around the world. Those arrangements mean BASF can just start working on research projects with those universities without negotiating new contracts or non-disclosure agreements.
Corporate venture capital spend is small beer in comparison, but it’s growing. BASF Venture Capital is increasing its budget; it has offices in Silicon Valley and Boston, US; Ludwigshafen in Germany; as well as Tokyo, Japan, and Hong Kong. BASF has a technology charter setting out its intentions to screen some 1200 companies each year, of which it will scrutinise perhaps 10% more closely and invest in two or three. ‘We bring companies into contact with our operating division or our research division and try to initiate some cooperation or collaboration,’ explains Nachtigal. ‘We also want a proper return on investment.’
Measuring success
Assessing strategic return is not straightforward. One measure is the number of co-operations initiated, says Nachtigal: ‘We look at the number of joint development agreements we make and sample testing activities each year.’ He views BASF Venture Capital as ideal moderators, knowing how both startups and big organisations work.
Data provider Global Corporate Venturing estimates that the number of active corporate venturing units has grown from 448 in 2011, to 801 in 2015, and around 1200 at the beginning of 2016. The number of deals went from 626 in 2011 to 1360 in 2015, but the value of those deals rose from $18 billion to $78 billion. With in-house R&D efforts increasingly focused on narrow project portfolios, CVCs can take on the role of identifying potentially disruptive advances, and forging alliances to convert those into opportunities rather than competitive threats.
https://www.chemistryworld.com/news/opening-doors-to-innovation/2500268.article
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Inside Pruitt's Conflicting Approaches to Okla. Energy Cases
Jan 17, 2017 | E&E Climatewire
By Benjamin Storrow
When Oklahoma Gas & Electric, the Sooner State's largest utility, requested a $1 billion rate hike three years ago, the power company found a ready ally in Republican Scott Pruitt, the state attorney general.
Public Service Company of Oklahoma, the state's second-largest utility, wasn't so lucky. The attorney general fiercely opposed the company's $130 million requested rate increase.
Both utilities were seeking to upgrade their power plants to comply with U.S. EPA's rules on haze and mercury. And both were asking regulators on the Oklahoma Corporation Commission for approval to recoup the upgrades' costs from customers.
Pruitt was charged with representing consumers in both cases before the commission. The big difference in his stance: where PSO agreed to work with EPA on a transition away from coal, OG&E fought the agency and favored expensive pollution controls designed to keep its coal furnaces humming.
"The buzz saw PSO ran into here was more political," said Jim Roth, a former Democratic commissioner. "They made a commercial decision, but some at the Corporation Commission and the AG's office felt like no one should deal with Obama's EPA."
Now, Pruitt is poised to become the nation's top environmental regulator. President-elect Donald Trump's pick to lead EPA is scheduled for a confirmation hearing tomorrow.
The two rate cases offer a glimpse into how Pruitt has approached the complicated air quality rules he may soon be charged with enforcing.
One utility fought EPA and won Pruitt's support
The cases stemmed from Pruitt's two largely unsuccessful legal challenges to EPA rules governing mercury and haze.
Pruitt sued the agency over its plan to cut haze in Oklahoma in 2011, saying EPA had overstepped its legal authority in rejecting a state plan and implementing its own. A federal appeals court disagreed, and the U.S. Supreme Court denied Pruitt's request to hear the challenge.
The Oklahoma attorney general then joined a series of states and industry interests to challenge the agency's standard on mercury emissions for coal plants. In 2015, the Supreme Court found EPA failed to take into account the cost of its standards but left the regulations themselves intact (Greenwire, June 29, 2015).
Both utilities initially joined Pruitt's haze challenge, but PSO later dropped its lawsuit. In 2014, the power company entered into a settlement agreement with EPA, agreeing to close one coal plant and install pollution controls on another, which would be retired in 10 years. To replace the lost coal capacity, it agreed to buy wind and natural gas power.
OG&E, by contrast, stuck with Pruitt during his haze challenge. And when that proved unsuccessful, the utility unveiled a compliance plan that relied on keeping its coal plants running by installing a series of expensive pollution controls. They included scrubbers to limit sulfur dioxide, low NOx burners to curb nitrogen oxides and activated carbon injections to tackle mercury emissions.
Commission filings show Pruitt took a dramatically different approach in the two cases.
OG&E's request, the largest in the utility's history, was opposed by a coalition of senior citizens, environmental groups and large consumers. But not only did Pruitt favor OG&E's plan, he didn't even call a witness to support his position.
"That's one of the more telling moments in Attorney General Pruitt's tenure. The consumer advocacy position fell silent," said Roth, who represented wind and hospital interests in the case. "In my 10 years at the Corporation Commission, both as a commissioner and practitioner on behalf of clients, I've never seen an AG stay silent on a case of that magnitude."
To recoup the costs from consumers, OG&E had to convince state regulators the plan was the cheapest way to comply with EPA's standards. It failed, at least at first.
A coalition including AARP, the Sierra Club and Oklahoma Energy Results LLC, a group representing independent power producers and large consumers, disagreed with the power company. Retiring the coal units and replacing them with wind and natural gas would be a cheaper way of meeting EPA's standards, they argued. The utility also failed to account for future environmental regulations, which could make burning coal more expensive, they said.
Regulators on the Oklahoma Corporation Commission agreed and in 2015 rejected OG&E's plan.
Fighting on behalf of fuel diversity
E&E News contacted the attorney general's office and OG&E, but neither returned requests for comment.
Critics say the case illustrates Pruitt's cozy relationship with industry interests. The Oklahoma attorney general has accepted nearly $37,000 in campaign contributions from OG&E and its employees, according to the watchdog FollowTheMoney.org.
PSO and its employees contributed $1,600 to the attorney general's campaigns.
Pruitt became so engulfed in his battle against EPA, his detractors argue, he was willing to saddle consumers with the cost of keeping OG&E's coal plants running.
"While interventions into rate cases are complex and varied, what we do know is this: As attorney general of Oklahoma, Scott Pruitt has repeatedly bent over backward to facilitate the continued burning and extraction of fossil fuels," said Al Armendariz, a former EPA regional administrator in Dallas who now serves as an associate regional director for the Sierra Club's Beyond Coal campaign.
Others disagree. Installing new scrubbers was estimated to be half the price of new natural gas units at the time OG&E analyzed its options, said Thomas Schroedter, an attorney representing Oklahoma Industrial Energy Consumers, a coalition representing large customers in favor of the plan.
Likewise, scrubbers were estimated to be the cheapest compliance option for PSO, Schroedter said.
In both cases, he added, preserving coal units helped maintain the state's fuel supply.
"I believe that these cases are telltale examples of Scott Pruitt's willingness and dedication to promote the public interest based on the information available at the time and also reflect his commitment to protect the interests of those he represents based upon the specific facts of the cases in a balanced and common-sense manner," he told E&E News in an email.
The fuel diversity argument proved a hallmark of Pruitt's position in both cases. Soon after being rejected, OG&E returned to the Corporation Commission with a proposal to spend $500 million on scrubbers at the utility's Sooner coal plant. The investment was needed to comply with the haze standards, the utility contended.
As for Pruitt, his deputies argued the move was needed to ensure fuel diversity, protecting consumers against natural gas price spikes.
This time, Oklahoma regulators agreed. "If additional OG&E coal units were to be retired or converted to natural gas, cost to customers would be higher and OG&E would no longer have sufficient coal-fired generating capability to protect customers from future natural gas and market price spikes and price volatility," commissioners wrote.
$500M to keep a 37-year-old coal plant burning
The Sierra Club and Oklahoma Energy Results have appealed the decision to the state Supreme Court. Their argument: It makes little sense to spend $500 million on a 37-year-old plant that is so inefficient, the regional transmission operator idled it for most of the last year.
Still, Pruitt had hit on a winning argument. PSO, the utility that settled with EPA and agreed to buy more wind and gas, was seeking approval for its $130 million environmental compliance plan.
Pruitt's deputies challenged the company's settlement with EPA, saying the utility was predisposed to closing its coal units.
An administrative law judge, a technocrat tasked with offering a recommendation to regulators, disagreed. Scrubbers were nominally the least costly option for compliance, the judge noted. Yet the cost between installing scrubbers and retiring units was so minimal, it would have little impact on consumers.
In fact, the judge reasoned, the move protected PSO against the possibility of future environmental regulations.
The attorney general's office vociferously disagreed. The judge's opinion was lacking, Pruitt's deputies argued, because it failed to take into account the commission's 2016 OG&E ruling.
In December, the Corporation Committee voted PSO could recoup $14 million from customers to pay for its upgrades, far less than the $130 million it initially sought.
Pruitt's legal challenges to EPA have made him a hero among those who believe the agency has exceeded its legal authority under President Obama. Pruitt has filed 14 lawsuits against the agency during his tenure, challenging everything from EPA's approach to the Freedom of Information Act to its rules on carbon emissions for power plants.
"Mr. Pruitt respects and upholds the Constitution, and understands that many of the nation's challenges regarding clean air and water are best met at the state and local level," the American Energy Alliance, the Competitive Enterprise Institute and 21 other conservative advocacy organizations wrote in a letter to senators Friday. "It is, in fact the states that implement many of the nation's environmental laws, and for good reason."
But Pruitt's record in Oklahoma is worrying to others, who say his approach to the two utilities' rate cases underscores a flaw in his thinking.
There is a misunderstanding that cleaning up pollution is costly, said Daniel Cohan, an associate professor of engineering at Rice University not involved in the cases. Today, the falling cost of wind and solar means utilities can reduce emissions without burdening customers with higher bills, Cohen said.
Pruitt's "making us worse off in terms of health and the environment, and at higher cost," Cohan said. "That is my concern nationally. We weaken pollution standards without benefiting the economy."
http://www.eenews.net/climatewire/2017/01/17/stories/1060048459
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Whistleblowers Say Pruitt Fought Them in Oil Fraud Case
Jan 17, 2017 | E&E Energywire
By Mike Soraghan
Lawyers working for Oklahoma Attorney General Scott Pruitt battled for months against a whistleblower lawsuit seeking to claw back money from ConocoPhillips Co. for "double dipping" from a state cleanup fund.
But in 2013, Pruitt changed his tune. He filed his own suit against the company, alleging the same double dipping, and potentially pushing aside the former state employees who had been pressing the case for nine years. In September, he quietly settled with the company for $3.8 million.
Now that President-elect Donald Trump has named Pruitt to run U.S. EPA, his allies are touting his involvement in such cases as evidence that he will stand up to oil companies. An advocacy group supporting Pruitt's nomination noted a similar case in which Pruitt sued BP PLC, seeking to counter Pruitt's reputation as an ally of oil and gas companies.
"Mr. Pruitt demonstrated that he will take on industry when they overstep," the group, America Rising Squared, stated on its website ConfirmPruitt.com.
But the attorneys for the former state employees who have been pressing the case since 2004 say Pruitt fought them harder than he did the oil company.
"I never saw him do anything to really take on ConocoPhillips," said Thomas Millington, one of the lawyers in the taxpayers' suit. "I did see him actively opposing people who were taking on ConocoPhillips."
ConocoPhillips in 2012 spun off Phillips 66, which is the company that settled with Pruitt.
Pruitt filed the similar double-dipping case against BP in 2012 but has left it dormant ever since. Court records show BP hasn't responded, and nothing has been filed since January 2013.
And Pruitt, who has issued more than 60 press releases about federal overreach and his suits against federal agencies, never issued a news release about the ConocoPhillips or BP cases.
Double-dipping allegations
About 40 states have established funds to pay for the thousands of leaking underground storage tanks below gas stations. Many were installed in the 1950s or earlier. When they corroded, the gasoline and diesel they leaked became a serious threat to underground drinking water supplies all over the country.
Oklahoma's fund gets money from a penny-a-gallon gasoline tax approved by the state Legislature in 1989.
Several states have alleged that Phillips, BP and other oil majors "double dipped" by getting insurance money to clean up the sites, then demanding reimbursement from the state cleanup funds.
In Oklahoma, the fund is administered by the staff of the state Corporation Commission. In 2004, two former commission attorneys, Rachel Lawrence Mor and Charles Wright, filed suit saying that ConocoPhillips had unjustly received $3.6 million in reimbursement for tank cleanups.
Their claim alleged ConocoPhillips was reimbursed for expenses the state fund didn't cover, such as litigation and landscaping.
The legal term for the type of suit is "qui tam." They're more often referred to as "whistleblower," "false claim" or "taxpayer" suits. If they prove fraud, Oklahoma whistleblowers can get half of any money recovered as a reward.
In 2012, the former state employees added a new claim alleging ConocoPhillips had received insurance payments for tank cleanup, then billed the state. They asked for nearly $4 million.
In April 2012, one of Pruitt's assistant attorneys general, Nancy Zerr, filed a motion, representing the Corporation Commission, to dismiss the case. She said the former state employees had missed the statute of limitations and couldn't recover in a whistleblower case since they'd contacted the FBI about it.
"This action should be dismissed, because the plaintiffs lack the capacity to represent the commission in this matter," Zerr wrote.
The motion was denied. In September 2013, Pruitt filed suit, alleging "a bad-faith, deceptive and fraudulent scheme" to drain the cleanup fund. The suit named ConocoPhillips, Phillips 66 and other companies.
Pruitt's office and Phillips fought efforts by Millington's clients to intervene. And Pruitt and Phillips jointly sought an order keeping documents from the case secret.
Pruitt handed the case to attorney Phillip McCallum of the Birmingham, Ala., law firm McCallum, Methvin & Terrell. Pruitt also brought McCallum into the BP case. When the case was settled last year, according to the Oklahoman newspaper in Oklahoma City, the McCallum firm got $942,000.
The whistleblowers lost before an Oklahoma County jury in February 2016 but are appealing to the Oklahoma Supreme Court.
Phillips 66 spokesman Dennis Nuss declined to comment, saying the company doesn't comment on litigation. BP officials did not respond to a request for comment.
Lincoln Ferguson, Pruitt's spokesman in the attorney general's office, cited the BP double-dipping case when asked to provide support for his statement that listed among Pruitt's accomplishments "holding accountable oil and gas companies that were profiting off pollution and defrauding taxpayers." On Friday, Ferguson referred further questions about the cases to the Trump transition team, which did not respond to emails seeking comment.
But the political advocacy group running the "Confirm Pruitt" campaign responded to questions with a general statement that Pruitt acted properly and diligently (Greenwire, Jan. 12).
"Pruitt held these companies accountable and got results, balancing the need for clean air and water against the interests of his constituents and the rule of law," said Jeremy Adler, spokesman for America Rising Squared.
America Rising Squared is a political organization staffed by veterans of past Republican presidential campaigns (Energywire, Jan. 10). It is allowed to keep its donors' names secret.
Its affiliated super political action committee has been largely underwritten by hedge fund manager Paul Singer and other investors.
http://www.eenews.net/energywire/2017/01/17/stories/1060048453
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Revising Energy Regulations: Some Advice for the New Administration
Jan 17, 2017 | Forbes
By Michael Lynch
A political battle over energy ‘deregulation’ looms, but carries with it the usual cacophony of objections, myths, and ideological outrage. Some clear thinking would lead to a favorable outcome that would satisfy most stakeholders, and this post will address some points of contention.
First, “deregulation” is misleading as many think it refers to an absence of regulation, rather than reform of regulation. Anyone who believes that regulations have been removed in, say, the banking sector, should go to the break room of any company and read the posters from everybody from OSHA to EEOC to the Chowder and Marching Society (look it up). Indeed, nothing has changed since Moses brought the Ten Regulations down from Mount Sinai except that they would never fit on two stone tablets.
It has been noted by pundits that Democrats have become focused on the use of government to achieve goals since FDR’s New Deal, while Republicans are fixated on the 19thcentury economic boom which was driven by the private sector. Reality is more nuanced, as always, but it is puzzling that most liberals seem puzzled at the anti-government rhetoric of conservatives. Jon Stewart on The Daily Showfollowed this pattern, but also decried the incredible incompetence of the Veterans’ Administration without noting the irony.
Max Weber, the great sociologist, noted the value of bureaucracy in that it removed the influence of royals and their whims and favoritism from governance. The problem is that bureaucrats have, in their own way, become the new royalty. They not only have significant enforcement power but the Congress has increasingly given them the power to write new regulations. The result is that citizens often face rule by bureaucrats with near-absolute powers: the expensive recourse to the courts can be as punitive as legal sanctions themselves. American philosopher Mel Brooks noted, "It's good to be the king," but left unsaid was that it's not so good for everyone else. Congress has confirmed this by excusing itself from most regulations.
Incrementalism is another source of discontent, reflecting the fact that the regulations faced are created over a long period of time, as situations and perceptions change. No one bothered with carbon monoxide detectors a century ago, but now there is greater awareness of the problem as well as vastly improved technologies that make it cheap to accomplish.
Unfortunately, the result is often a lengthy patchwork of regulations that have accreted over time without any coherence and even sometimes contradictory, even if well-meaning, requirements. The story of the construction site that was ordered to give workers hearing protection then forced to raise the volume on its warning sirens is probably apocryphal, but most will recognize the general problem.
For example, instead of a store plastered with signs saying, “No food and drink” “No Running,” “No Skating,” “No animals” simply put up one proclaiming, “You broke it you bought it.” Personally, I would favor grocery stores having signs on their doors announcing, “Most of the stuff on sale is bad for you if you have too much, and some is bad for you if you don’t have enough.”
Some examples will provide insight: Robert Bradley’s 1995 magisterial survey of energy regulation, Oil, Gas and Government though dated, stood at 2 volumes and 2000 pages. Texas Railroad Commission has a 95 page document providing instructions into how to apply for a drilling permit. The Western Energy Alliance notes that 11 different acts regulate petroleum drilling, including the Clean Air Act, the Endangered Species Act, and the National Historical Preservation Act. Perhaps some reader can explain why the need for both a Clean Water Act and the Safe Drinking Water Act.
And of course, there is the OSHA handbook for stairways and ladders, which is 27 pages (of which only about 15 pages represents regulation, the rest, contact info, etc.) and includes such wise advice as “Do not load ladders beyond their maximum intended load nor beyond their manufacturer’s rated capacity” and “Use ladders only for their designed purpose.” (There’s also a ‘quick card’ for use of portable ladders and a factsheet for safe use of stepladders.)
Minutiae is another shortcoming of regulation, largely reflecting the philosophy that people can’t take care of themselves and need the government to do it for them. The last time I had a U.S. government contract, I needed to fill out an online form asserting that, among other things, there were no loose electrical cables that I might trip over, and that my office had multiple exits in case of fire. Clearly, every time there is an accident, someone in government thinks they should write a regulation to protect us, and with little consideration for costs and benefits. It’s one thing to require table saws to have automatic shutoffs, another to protect office workers from tripping on a power cord.
There have been recent experiments in building rational regulation, such as Colorado’s design of fracking oversight, where industry and environmentalists were brought together. It certainly seems as if some effort could reduce the paperwork and labor needed to produce energy (for example), while maintaining safety and environmental standards. Hopefully, the new Administration will proceed in this fashion, rather than declaring victory and trying to abolish swathes of existing regulations, and the Administrations opponents will not automatically oppose every suggestion as tainted by the pro-business nature of the new government, and instead focus on making the regulations simpler and more effective.
http://www.forbes.com/sites/michaellynch/2017/01/17/revising-energy-regulations-some-advice-for-the-new-administration/#5cfe53ad233b
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BLM Rule Survives Initial Court Challenge
Jan 17, 2017 | E&E Energywire
By Ellen M. Gilmer
The Obama administration's plan to cut methane emissions on public lands will take effect as scheduled today after a federal court last night rebuffed industry and state attempts to block the rule.
The U.S. District Court for the District of Wyoming denied requests from two industry groups and three states, which had asked for a preliminary injunction halting implementation of the Bureau of Land Management's new rule to slash methane emissions from oil and gas operations on public and tribal lands.
The rule sets gradual caps on how much methane may be flared and requires companies to use technologies to reduce flaring and inspect for leaks of the climate-warming substance, which is the main component of natural gas.
Wyoming, Montana and North Dakota, plus the Independent Petroleum Association of America and Western Energy Alliance, challenged the rule shortly after its release in November.
Meanwhile, a large coalition of environmental groups and the states of California and New Mexico joined the litigation on BLM's side, defending the waste reduction and air quality benefits of the regulation.
The challengers say the rule is costly, duplicative and beyond BLM's authority because it is essentially an air quality regulation that falls on U.S. EPA's and states' turf. They asked Judge Scott Skavdahl — who froze and ultimately struck down the Obama administration's hydraulic fracturing rule last year — to pause the methane rule while the litigation moves forward (Energywire, Jan. 9).
Skavdahl, an Obama appointee, denied the request yesterday, finding that the challengers had not met the steep requirements for a preliminary injunction.
Judge has concerns
Skavdahl focused heavily on the first two injunction requirements: that petitioners must demonstrate they are likely to succeed on the merits of the case and that they will likely suffer irreparable harm without an injunction.
He expressed serious concerns about the methane rule's overlap with EPA and state regulation of air quality issues, noting that the rule was promulgated not under an environmental statute but under the agency's authority to prevent waste of resources.
He also raised red flags about the agency's use of a "social cost of methane" metric in a rule crafted under the agency's authority over resource conservation.
"Moreover, it appears the asserted cost benefits of the Rule are predominately based upon emission reductions, which is outside of BLM's expertise, and not attributable to the purported waste prevention purpose of the Rule," he wrote in yesterday's decision.
Still, he concluded — somewhat reluctantly — that Interior was entitled to Chevron deference, a legal doctrine under which courts typically yield to an agency's reasonable interpretation of ambiguous statutes.
He contrasted the case to BLM's fracking rule, which he enjoined after concluding that Congress had specifically removed the oil and gas extraction technique from the agency's authority.
"Unlike the situation in [the fracking case], Congress has not directly announced that the precise activity in question not be subject to federal regulation," he wrote. "Absent clear expression of Congressional intent, the Court must proceed to the second step of the Chevron abyss."
Under the second step of a Chevron analysis, he continued, he must accept an agency's reasonable interpretation of law, even if it differs from his own.
"[A]t this point, the Court cannot conclude that the provisions of the Rule which overlap with EPA/state air quality regulations promulgated under [Clean Air Act] authority lack a legitimate, independent waste prevention purpose or are otherwise so inconsistent with the CAA as to exceed BLM's authority and usurp that of the EPA, states, and tribes," the decision said.
Weighing the irreparable harm factor, he said challengers have overstated some economic harms and noted that BLM is phasing in the rule, with several major portions not scheduled to take effect until 2018.
"Additionally, though there are undoubtedly certain and significant compliance costs attached to the Rule, which are unrecoverable from the federal government, the Court is not convinced that these costs are of 'such imminence that there is a clear and present need for equitable relief to prevent irreparable harm,'" he wrote.
He added that he would consider fast-tracking briefing for the case.
Reaction
Environmental groups celebrated the decision as a win for taxpayers and "common-sense" protections.
"BLM's standards require companies to take common-sense steps to curb this waste, like monitoring and fixing leaking equipment, and create a level playing field for energy development," Earthjustice attorney Robin Cooley, who is representing the coalition, said in a statement. "We are pleased that the court is allowing the new standards to take effect."
Peter Zalzal, attorney for coalition member Environmental Defense Fund, said the rule offers benefits across the board.
"The judge's decision today to deny a preliminary injunction means that these common sense protections will take effect as planned, with cross-cutting benefits for rural communities," he said in a statement. "BLM's standards will help prevent the waste of valuable natural gas, and that will increase money that can be used for schools and important infrastructure while simultaneously helping to protect the health of communities living in close proximity to oil and gas development."
Industry advocates, meanwhile, seized on the concerns Skavdahl outlined in his decision.
"While we are still reviewing the opinion, upon a first read, the Court appears highly critical of fundamental portions of the rule and BLM's rationale on waste prevention grounds — at one point calling the agency's justification arrogant," industry attorney Eric Waeckerlin, of Davis Graham & Stubbs, said in an email. "Much of the opinion reaffirms the core air quality nature of this rule, and we must remember that a preliminary injunction remains an extraordinary remedy.
"So while we are disappointed in today's outcome, we remain optimistic that the court will invalidate the rule during the merits portion of the briefing this spring," he said.
Western Energy Alliance President Kathleen Sgamma agreed, expressing similar hopes for a speedy conclusion to the litigation.
"While we're disappointed that we didn't convince the judge to stay the rule at this time, we remain confident that when he considers the full merits of the case he will agree this rule is unlawful federal overreach," she said in a statement.
http://www.eenews.net/energywire/2017/01/17/stories/1060048454
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Company Wants to Block Launch of Environmental Review
Jan 17, 2017 | E&E Greenwire
By Ellen M. Gilmer
Backers of the Dakota Access pipeline are urging a federal court to block the Obama administration from kicking off an in-depth environmental review of the stalled oil project.
Dakota Access LLC, an arm of Energy Transfer Partners LP, last night asked the U.S. District Court for the District of Columbia to issue an order barring the Army Corps of Engineers from publishing a Federal Register notice initiating an environmental impact statement for the oil pipeline until the company's litigation against the agency is resolved.
The EIS notice has already been circulated online and is scheduled to be published in tomorrow's register.
Lawyers for the company argue that federal action on the pipeline now would interfere with the judge's consideration of a claim Dakota Access brought against the agency in November. Specifically, they're seeking a preliminary injunction that would block Federal Register publication until the company's challenge is decided, plus an immediate temporary restraining order that would block publication tomorrow.
"That order ... would preserve this Court's ability to rule on the cross-claim free from the risk that its ruling will be frustrated or thwarted by new governmental actions," company lawyers wrote in a brief filed around midnight.
Judge James Boasberg, an Obama appointee, has scheduled a conference call for 4:30 p.m. EST today to discuss the request.
If granted, such an order would likely delay publication until after President Obama leaves office Friday — possibly making it easier for Trump administration officials to walk back the EIS plan.
The plan came about in early December, when the Obama administration withheld final approval for the oil pipeline and instead pledged to perform an EIS to consider potential impacts and alternative routes. Without the final federal approval — a real estate easement — the Dakota Access route has a missing link across Lake Oahe, a dammed section of the Missouri River.
Most construction on other parts of the pipeline is complete, but the company cannot drill beneath the lake until the easement is issued (Energywire, Dec. 5, 2016). Dakota Access' November cross-claim contends that government officials effectively granted the easement over the summer when they determined that the pipeline would not cause a significant impact in the area — an argument federal and environmental lawyers have disputed (Energywire, Jan 9).
Earthjustice attorney Jan Hasselman, who is representing the Standing Rock Sioux Tribe against the pipeline, criticized the company's attempt to block Federal Register publication as a "desperate, last-ditch effort to avoid the EIS that everybody agrees is necessary."
"There's a subtext that can't be ignored," he told E&E News. "Certainly, part of what's going on here is a hope that a new administration would reverse this well-considered decision by the Army Corps to take a different approach."
Dakota Access lawyers disputed that notion in their brief last night, arguing that delaying Federal Register publication would not harm any of the parties.
"Entering the requested order now would achieve significant benefit without any conceivable harm to others, because the order would simply pause an approval process that Dakota Access initiated for the purpose of allowing Dakota Access to install a pipeline," they wrote in a brief.
Under its current route, the pipeline would pass just a half-mile north of the tribe's reservation in North Dakota, carrying up to 570,000 barrels of oil per day from North Dakota to Illinois. The EIS would consider alternative routes.
"If the new administration tries to reverse that, we'll be back in front of the judge," Hasselman said.
http://www.eenews.net/greenwire/2017/01/17/stories/1060048487
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Enviros Shut Out of Industry Leasing Lawsuit
Jan 17, 2017 | E&E Energywire
By Ellen M. Gilmer
Environmentalists will not have the chance to fight against an industry lawsuit that pushes for more frequent lease sales.
A federal court in New Mexico last week rejected a request from a coalition of environmental groups to intervene in the legal battle between oil and gas drillers and the Interior Department. The groups plan to appeal the decision.
The suit, brought by the industry group Western Energy Alliance in August, accuses Interior's Bureau of Land Management of failing to hold lease sales for public lands four times a year, as specified in federal law. Lawyers for the group say the Obama administration frequently bows to environmental pressure and cancels or delays lease sales (Energywire, Oct. 21, 2016).
The Wilderness Society, the Sierra Club, WildEarth Guardians and several other groups took the government's side, arguing that the Western Energy Alliance was trying to force the government to prioritize industry interests over the public interest, including environmental protection.
But the U.S. District Court for the District of New Mexico denied their request to join the case. Judge William Johnson, a George W. Bush appointee, found that the environmental groups' interests would not be directly harmed by the lawsuit and that their position would be adequately represented by government lawyers.
In his opinion Friday, Johnson wrote that environmental groups had overstated industry's objective in the case.
"Based on both the allegations in the Complaint and the pleadings, Plaintiff is not seeking to strike down BLM's Leasing Reform Policy or force BLM to rush into leasing land parcels without adequate environmental review or remove the environmental review process from the discretion and control of the BLM," he wrote.
Therefore, he concluded, the environmentalists do not need to be a part of the litigation.
Earthjustice attorney Mike Freeman, who is representing the groups, said they plan to challenge the decision.
"We respectfully disagree with the district court's ruling and will be appealing," he said in an email.
The groups are expected to file a notice of appeal today.
http://www.eenews.net/energywire/2017/01/17/stories/1060048446
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GOP Environment Chairman Plans ‘Wholesale Change’ at EPA
Jan 17, 2017 | The Hill - E2 Wire
By Timothy Cama
The top senator overseeing the Environmental Protection Agency (EPA) is planning a “wholesale change” at the agency under President-elect Donald Trump and a Republican Congress.
Sen. John Barrasso (R-Wyo.), the new chairman of the Environment and Public Works Committee, wrote in a Fox News opinion piece Tuesday that he and Trump EPA nominee Scott Pruitt will implement a major policy turnaround at the agency.
Barrasso outlined the EPA’s failures under Obama, including the Gold King Mine disaster in Colorado and the Flint water crisis in Michigan. Barrasso also blamed the agency for instituting expensive regulations.
“Disregard for the consequences of its actions has become the trademark of the EPA for the last eight years. Policy goals and talking points have consistently taken priority over American families. This cannot be the case any longer,” Barrasso wrote.
“I look forward to ushering in wholesale change at the EPA,” he continued. “I will be doing it alongside a committed and capable administrator.”
Barrasso’s panel will meet Wednesday to consider confirming Pruitt, who has been a frequent litigator against Obama's EPA as the attorney general of Oklahoma.
Barrasso applauded Pruitt’s work against Obama’s EPA, saying he “stood up for Oklahomans against the EPA’s extreme regulations on greenhouse gasses, methane emissions, and cross state air pollution,” as well as challenging “unworkable” water rules and fighting Obama’s interpretations of the Clean Air Act and Clean Water Act.
The Wyoming senator praised Trump's commitment to require agencies to lift two regulations for each new regulation they put in place.
“President-elect Trump has vowed that his administration will overturn two federal regulations for every new one it proposes,” Barrasso wrote. “The administrator of EPA will play a vital role in keeping that promise. He must make sure that the agency meets its mission of protecting our environment—ensuring clean water, air, and land—while allowing our economy to grow.”
http://thehill.com/policy/energy-environment/314534-gop-chairman-plans-wholesale-change-at-epa
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Hill Republicans Move Full Speed Ahead with Push to Slash Obama-Era Rules
Jan 17, 2017 | Washington Post
By Mike DeBonis
When Vice President-elect Mike Pence addressed House Republicans in a closed-door meeting earlier this month, he let them know just how quickly his running-mate plans to get to work.
The Jan. 20 parade from the Capitol to the White House would be sped up, Pence said, so a newly inaugurated President Donald J. Trump could sit down sooner in the Oval Office and start rescinding his predecessor’s executive actions. The lawmakers cheered, two people in the room said.
When it comes to unraveling President Obama’s legacy, Trump could not have found a more enthusiastic partner than the GOP Congress.
After just two weeks of work, the House has already passed several sweeping bills that, if enacted, would roll back scores of Obama administration regulations and make it significantly harder for future presidents — including Trump — to write similar rules. One measure would allow Congress to eliminate a host of regulations in one fell swoop, while another would make it harder for agencies to issue rules to begin with.
Next month, the House is expected to take up more targeted measures that would use fast-track procedures to undo several recent rules issued by executive-branch agencies. Those could include new Interior Department regulations aimed at protecting waterways near coal mines and preventing the release of methane, a potent greenhouse gas, from oil and gas wells, as well as a Labor Department rule that expands overtime eligibility.
The effort to eliminate existing regulations and place curbs on future ones has garnered almost unheard-of unanimity among fractious House Republicans and heralds sweeping changes to federal labor, environmental and financial oversight as the GOP takes control of Washington.
Not a single House GOP member opposed a trio of major regulatory reform bills that have already passed this year; two other recent House bills to restrict financial-industry regulation were opposed by only one Republican — Rep. Walter Jones Jr. of North Carolina.
“It brings everybody together,” said Rep. Mark Meadows (R-N.C.), chairman of the conservative House Freedom Caucus, whose members have often bucked party leaders on major votes.
Among the regulations on the Republican chopping block are new Interior Department rules aimed at protecting waterways near coal mines and preventing the release of methane, a potent greenhouse gas, from oil and gas wells, as well as a Labor Department rule that expands overtime eligibility.
Democrats, along with major labor, consumer and environmental groups, are warning of significant and lasting harm to the public from the GOP push. A list of targets from the hardline House Freedom Caucus includes school-lunch nutrition guidelines, renewable fuel standards, and anti-tobacco programs.
The effort could be slowed by Senate Majority Leader Mitch McConnell (R-Ky.), who has expressed general enthusiasm for regulatory reform measures — but he has yet to commit scarce Senate floor time with health care and tax reform looming.
House Republicans, however, are pushing full speed ahead. The Freedom Caucus has drawn up its own list of more than 200 executive orders or regulations, most but not all issued by Obama, it is eager to see Congress or Trump undo.
Republican lawmakers are being encouraged by conservative activist groups — including the Club for Growth, Heritage Action for America and the Koch network — all of which are pressing lawmakers to make good on years of small-government promises while the GOP controls both houses of Congress and the White House.
While conservative activists might have their differences with Trump on matters such as infrastructure spending and entitlement reform, regulations is one area where they appear to be wholly simpatico.
“Regulations have grown into a massive, job-killing industry, and the regulation industry is one business I will put an end to,” Trump said in a September policy address.
House Speaker Paul D. Ryan (R-Wis.) said this month that regulatory rollbacks “will be one of the highest priorities of this new unified Republican government.”
“For too long, unelected bureaucrats have been simply telling people how things are going to be,” he said. “This needs to change, and not just by peeling away this rule or that particular regulation.”
The Koch-affiliated Freedom Partners recently issued a “Roadmap to Repeal” laying out dozens of Obama-era executive actions and agency regulations it says constitutes a “unprecedented onslaught of regulatory costs on the U.S. economy.” The group has assembled a list of dozens of Obama initiatives it wants to see reversed — some can be ended with a stroke of Trump’s pen, others are still in the rulemaking process and can be withdrawn, while still others can be targeted through Congress or the courts.
The well-funded group is poised to reward or punish lawmakers, promising to “educate voters” on whether particular lawmakers follow through.
“If we do not take on regulatory reform now and keep those promises we’ve been talking about for years, then this would be a signature failure for us,” said Rep. Doug Collins (R-Ga.), an author of the Regulations from the Executive in Need of Scrutiny, or REINS, Act, which passed the House on Jan. 5.
That bill would require Congress to approve any agency regulation that would have an economic effect of more than $100 million, would lead to a “major increase in costs or prices” for consumers, industries, government agencies, or geographic regions, or would have “significant adverse effects” on employment, investment, productivity or innovation.
Another House-passed bill, the Midnight Rules Relief Act, would allow Congress to undo dozens of recent Obama administration regulations in one combined action, while a third, the Regulatory Accountability Act, would place major new burdens on agencies seeking to issue regulations — requirements that Democrats say would “grind the rulemaking system to a halt.”
“What you do when you repeal regulations or make it harder to have regulations is you make it better for business, better for the Chamber crowd, better for the manufacturing folk,” Rep. Steve Cohen (D-Tenn.) said Wednesday on the House floor. “The side that loses is that of the consumers and the folks who will be injured or killed because of lack of regulations.”
Each of the anti-regulatory bills passed the House in some form in previous Congresses, but Obama’s veto pen and the threat of a Senate filibuster kept the legislation from advancing. Now opponents are worried that Republicans will succeed in landing at least some of the bills on Trump’s desk.
Robert Weissman, president of Public Citizen and chair of a coalition opposing the bills, said together the GOP legislation would “wipe out our ability to establish and enforce public protections, with catastrophic consequences.”
“That House Republicans are choosing to make this package of bills one of their first orders of business shows that they believe their constituents are corporations and the superrich, not the American people,” he said.
Collins pointed to the recent uptick in the stock market — the S&P 500 index is up roughly 6 percent since Election Day — as proof of enthusiasm about the GOP’s anti-regulatory agenda.
“The mood in country is saying, we’re no longer going to have to be worrying about regulations and rules coming out from folks that we don’t even know,” he said. “These businesses are not going to be spending hundreds, thousands or millions of dollars on regulations but will be actually able to invest that in equipment and people and things.”
The House will soon move to undo several recent regulations using the 1996 Congressional Review Act, which includes fast-track procedures to skirt Senate filibusters. Targets could include the stream-protection and overtime measures, as well as regulations on aircraft greenhouse-gas emissions, appliance efficiency standards, and nondiscrimination compliance rules for federal contractors. If those efforts are successful, future presidents could be prevented from re-regulating in those areas.
The more-sweeping measures passed by the House are likely to be opposed by most Senate Democrats, most of whom have little appetite for an anti-regulatory agenda. But Republicans believe they have a winning issue that will force action in the Senate, especially if Trump presses the issue.
Democratic senators in 10 states Trump won last year — including such increasingly conservative states as Montana, Missouri, Indiana, North Dakota and West Virginia — will be up for re-election in 2018.
“The question becomes, are they going to stand up for this big-government regulatory agenda?” said Andy Koenig, Freedom Partners’ vice president for policy. “It’s going to be very interesting to see how some of the Democrats vote.”
https://www.washingtonpost.com/powerpost/hill-republicans-move-full-speed-ahead-with-push-to-slash-obama-era-rules/2017/01/16/5bd50c16-d35f-11e6-9cb0-54ab630851e8_story.html?utm_term=.1d50d35c6948
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EPA Tentatively Agrees to NO2, SO2 Review Deadlines
Jan 17, 2017 | E&E Greenwire
By Sean Reilly
U.S. EPA would commit to a series of hard deadlines for reviewing — and, if necessary, updating — its ambient air quality standards for nitrogen dioxide and sulfur dioxide under a proposed consent decree released today for public comment.
The tentative settlement, which still needs a judge's signature and must be made final by President-elect Donald Trump's incoming administration, would require EPA officials to move ahead with a proposed rulemaking for the primary nitrogen dioxide (NO2) standards by this July, with a final rule coming by April 2018.
For the review of the primary sulfur dioxide (SO2) thresholds, the agency would commit to issuing the "integrated science assessment" that synthesizes the latest research on the pollutant's health effects by December. After that, EPA would propose any changes to the existing primary standard by May 2018, with a final decision following by January 2019.
The proposed consent decree would end a lawsuit brought last July by environmental and public health groups charging that both reviews were already illegally late (E&E News PM, July 7, 2016).
NO2 and SO2 are stand-ins for broader classes of nitrogen oxides and sulfur oxides, respectively. The former is a lung irritant and the ingredient in smog; the latter is linked to heart and respiratory ailments.
Under the Clean Air Act, both are among the half-dozen "criteria pollutants" whose air quality standards are supposed to be revisited every five years in light of current research on their effects. In practice, EPA rarely, if ever, complies with that timetable; the last review of the NO2 and SO2 standards was completed in 2010, meaning the follow-ups should have been done by 2015.
Both reviews are already underway, but the draft consent decree would have mixed effects on EPA's own previously released schedules for completion. For the NO2 review, EPA had initially expected to issue the notice of final rulemaking in August of this year; the SO2 look-back was supposed to be done in July 2019.
Under the Clean Air Act, the primary standards for criteria pollutants are intended to protect public health with "an adequate margin of safety."
The proposed agreement was lodged earlier this month in U.S. District Court for the Northern District of California and has a 30-day public comment period ending Feb. 16, according to the notice in today's Federal Register. With Trump taking office Friday, it will fall on his administration to decide whether to tamp the settlement into place.
The suit was brought by the Arizona-based Center for Biological Diversity and the California-based Center for Environmental Health.
While lawyers for the two groups and EPA said in a joint court filing Friday that the proposed agreement will "likely" resolve the suit, they also agreed on a briefing schedule running through this summer if legal proceedings continue.
"Whether under a Democratic or Republican administration, the American people deserve healthy air and clear skies," Jonathan Evans, an attorney for the Center for Biological Diversity, said in an email this morning, adding that the Clean Air Act works only when "it is enforced."
http://www.eenews.net/greenwire/2017/01/17/stories/1060048500
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