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ACC PM 2/21/2017
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(ACC Mentioned) U.S. Specialty Chemicals Start Q1 2017 on Good Note, ACC Says
Feb 21, 2017 | Chemical Engineering
By Scott Jenkins
The American Chemistry Council (ACC; Washington, D.C.; www.americanchemistry.com) reported that U.S. specialty chemicals market volumes rose 0.2 percent in January. -
(ACC Mentioned) Chemical Activity Barometer Continues Steady Climb; Consumer and Business Confidence Strengthening
Feb 21, 2017 | PR Newswire
By Scott Jenkins
The Chemical Activity Barometer (CAB), a leading economic indicator created by the American Chemistry Council (ACC), posted a strong gain in February of 0.4 percent, following a similar 0.4 percent gain in January. -
Pruitt's Pitch to Staff: Give Me a Chance
Feb 21, 2017 | E&E Greenwire
By Robin Bravender and Kevin Bogardus
Scott Pruitt talked up his listening skills and desire for "civility" as he addressed a skeptical U.S. EPA staff today. -
US EPA Delays Effective Date of CBI Substantiation Under TSCA
Feb 21, 2017 | Chemical Watch
The US EPA has delayed by a day the effective date of its interpretative guidance on confidential business information (CBI) claims under the new TSCA. Published 19 January, the guidance will require upfront substantiation of CBI and is intended to facilitate the agency's reviews of such claims. -
White House Readies 'Review' of Carbon Rule for Pruitt EPA
Feb 21, 2017 | E&E Energywire
By Niina Heikkinen
U.S. EPA's new administrator is expected to begin unraveling landmark climate policies in the opening days of his job while possible revelations loom around his connections to the fossil fuel industry. -
Energy Discussions Live on as EPA Rule Faces Death
Feb 21, 2017 | E&E Interactive
By Rod Kuckro
If there's an enduring upside to U.S. EPA's doomed Clean Power Plan, it's that it spurred some much-needed discussions about energy on the state level, says Brian Murray, director for economic analysis at Duke University's Nicholas Institute for Environmental Policy Solutions. -
Westerners Anticipate Crush of Shut-In Wells Under BLM Rule
Feb 21, 2017 | E&E Energywire
By Pamela King
Keeping an Obama-era rule to curb natural gas releases from energy production on public lands could have far-reaching financial impacts for the communities that rely on a robust oil and gas industry to keep their economies afloat. -
Inside the Buried Memo That Could Decide Pipeline's Fate
Feb 21, 2017 | E&E Energywire
By Ellen M. Gilmer
An overlooked memo from the Interior Department's top lawyer could play a critical role in the fate of the Dakota Access pipeline, and the Trump administration is considering erasing it. -
Pa. Landowners Press for 'What They Were Promised' in the Boom
Feb 21, 2017 | E&E Energywire
By Mike Lee
At the height of the Marcellus Shale natural gas boom, Pennsylvania landowners were getting bonuses of $4,000 an acre or more for the drilling rights to their property. -
Study Finds Thousands of Spills at Fracking Sites
Feb 21, 2017 | E&E Greenwire
About 16 percent of hydraulically fractured wells spill liquids every year, according to a new study. -
Even Trump Can Agree That Polluters and Not Taxpayers Should Pay to Clean Up Our Mines
Feb 21, 2017 | The Hill - Congress Blog
By Mark Squillace
A river turns brilliant orange. Maybe that’s what it takes to get folks’ attention. -
Trump Executive Orders to Target Climate, Water Rules: Report
Feb 21, 2017 | The Hill - E2 Wire
By Devin Henry
The White House is preparing executive orders targeting controversial Obama-era climate and water rules, The Washington Post reported Tuesday. -
Texas Sues EPA Over SO2 Nonattainment Designations
Feb 21, 2017 | Inside EPA
Texas is suing EPA over the agency's Obama-era classification of several areas of the state in “nonattainment” of the agency's 2010 sulfur dioxide (SO2) national ambient air quality standards (NAAQS), seeking to avoid stringent regulation of air pollution sources in the state.
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(ACC Mentioned) U.S. Specialty Chemicals Start Q1 2017 on Good Note, ACC Says
Feb 21, 2017 | Chemical Engineering
By Scott Jenkins
The American Chemistry Council (ACC; Washington, D.C.; www.americanchemistry.com) reported that U.S. specialty chemicals market volumes rose 0.2 percent in January. This follows a downwardly revised 0.3 percent gain in December. Volumes have generally been moving up since May. All changes in the data are reported on a three-month moving average (3MMA) basis. Of the twenty-eight specialty chemical segments monitored by ACC, fifteen expanded in January, ten experienced decline and three were flat. During January, large gains (1.0 percent and over) were noted only in oilfield chemicals, ACC says.
The overall specialty chemicals volume index was up 0.4 percent on a year-over-year (Y/Y) 3MMA basis. The index stood at 105.9 percent of its average 2012 levels. This is equivalent to 7.30 billion pounds (3.31 million metric tons). The down-turn in the oil and gas sector affected headline volumes and weakness spread to other segments. Year-earlier comparisons were negative from 2nd quarter 2015 through 2nd quarter 2016 but are now improving. On a Y/Y basis, there were gains among 16 market and functional specialty chemical segments.
Specialty chemicals are materials manufactured on the basis of the unique performance or function and provide a wide variety of effects on which many other sectors and end-use products rely. They can be individual molecules or mixtures of molecules, known as formulations. The physical and chemical characteristics of the single molecule or mixtures along with the composition of the mixtures influence the performance end product. Individual market sectors that rely on such products include automobile, aerospace, agriculture, cosmetics and food, among others.
Specialty chemicals differ from commodity chemicals. They may only have one or two uses, while commodities may have multiple or different applications for each chemical. Commodity chemicals make up most of the production volume in the global marketplace, while specialty chemicals make up most of the diversity in commerce at any given time, and are relatively high value with greater market growth rates.
http://www.chemengonline.com/u-s-specialty-chemicals-start-q1-2017-on-good-note-acc-says/
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Feb 21, 2017 | PR Newswire
By Scott Jenkins
The Chemical Activity Barometer (CAB), a leading economic indicator created by the American Chemistry Council (ACC), posted a strong gain in February of 0.4 percent, following a similar 0.4 percent gain in January. This follows a steady 0.3 percent gain every month during the third quarter of 2016. All data is measured on a three-month moving average (3MMA). Accounting for adjustments, the CAB is now up was up 5.0 percent over this time last year, marking its strongest year-over-year performance since September 2010. On an unadjusted basis the CAB climbed 0.1 percent in February, following a 0.5 percent gain in January.
The Chemical Activity Barometer has four primary components, each consisting of a variety of indicators: 1) production; 2) equity prices; 3) product prices; and 4) inventories and other indicators.
In February all of the four core categories for the CAB improved, with the diffusion index strengthening to 71 percent. Production-related indicators were positive, with the housing report indicating slipping starts, but improving permits. This was coupled with an improvement in U.S. exports. Equity prices also improved at a robust pace, reflecting an improvement in consumer and business confidence. Overall the barometer continues to hint at gains in U.S. business activity through the third quarter.
The Chemical Activity Barometer is a leading economic indicator derived from a composite index of chemical industry activity. The chemical industry has been found to consistently lead the U.S. economy's business cycle given its early position in the supply chain, and this barometer can be used to determine turning points and likely trends in the wider economy. Month-to-month movements can be volatile so a three-month moving average of the barometer is provided. This provides a more consistent and illustrative picture of national economic trends.
Applying the CAB back to 1912, it has been shown to provide a lead of two to fourteen months, with an average lead of eight months at cycle peaks as determined by the National Bureau of Economic Research. The median lead was also eight months. At business cycle troughs, the CAB leads by one to seven months, with an average lead of four months. The median lead was three months. The CAB is rebased to the average lead (in months) of an average 100 in the base year (the year 2012 was used) of a reference time series. The latter is the Federal Reserve's Industrial Production Index.
The CAB comprises indicators relating to the production of chlorine and other alkalies, pigments, plastic resins and other selected basic industrial chemicals; chemical company stock data; hours worked in chemicals; publicly sourced, chemical price information; end-use (or customer) industry sales-to-inventories; and several broader leading economic measures (building permits and new orders). Each month, ACC provides a barometer number, which reflects activity data for the current month, as well as a three-month moving average. The CAB was developed by the economics department at the American Chemistry Council.
The next CAB is currently planned for:
21 March 2017
9:00 a.m. Eastern TimeThe CAB is designed and prepared in compliance with ACC's Antitrust Guidelines and FTC Safe Harbor Guidelines; does not use company-specific price information as input data; and data is aggregated such that company-specific and product-specific data cannot be determined.
Note: Every effort has been made in the preparation of this publication to provide the best available information. However, neither the American Chemistry Council, nor any of its employees, agents or other assigns makes any warranty, expressed or implied, or assumes any liability or responsibility for any use, or the results of such use, of any information or data disclosed in this material.
http://www.prnewswire.com/news-releases/chemical-activity-barometer-continues-steady-climb-consumer-and-business-confidence-strengthening-300410175.html
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Pruitt's Pitch to Staff: Give Me a Chance
Feb 21, 2017 | E&E Greenwire
By Robin Bravender and Kevin Bogardus
Scott Pruitt talked up his listening skills and desire for "civility" as he addressed a skeptical U.S. EPA staff today.
In his first speech to the agency since his swearing in as EPA administrator Friday, Pruitt stressed his respect for the agency's career staff. He hinted broadly at big changes that are expected to come to the agency under the Trump administration, although he declined to offer specific plans about efforts to repeal Obama administration environmental rules.
Many career EPA staffers have been wary about Pruitt's arrival after the former Oklahoma attorney general battled the agency's regulations in court and vowed major overhauls at the agency.
But Pruitt today cautioned those listening against jumping to conclusions.
"You don't know me very well," he told staff and press gathered in the Rachel Carson Green Room at EPA headquarters in Washington.
"In fact, you don't know me hardly at all other than what you've read in the newspaper and seen on the news," he said. "I might suggest to you ... I look forward to sharing the rest of the story with you as we spend time together. This is a beginning. It's a beginning for us to spend time and discuss certain principles by which I think this agency should conduct itself."
Pruitt steered clear of specifics about the Trump administration's energy policies in his 11-minute speech. He didn't, for example, delve into plans for withdrawing the Obama administration's Waters of the U.S. rule and Clean Power Plan, which he and President Trump have said they plan to do (Greenwire, Feb. 20).
Instead, Pruitt's greeting today appeared to be an attempt to calm the waters at the agency where many staffers are anxious.
"Civility is something I believe in very much. We ought to be able to get together and wrestle through some very difficult issues and do so in a civil manner," he told employees.
He added, "I seek to be a good listener. Those of you that have been here for quite some time, whether it's in the air area or water or whatever area that you may be in, I look forward to spending time with you, not just to address certain issues but really spend time and dig down deep with respect to how we're going to do business in the future and get to know you personally and get to know how I can be a resource to you as you do your work. ... You can't lead unless you listen."
The new administrator hinted broadly at some of the reforms he'd like to see at EPA. He said the agency has a responsibility to "avoid abuses that occur sometimes" in rulemaking, and he stressed the importance of following the "rule of law" and in partnering with states through federalism. "I seek to ensure that we engender the trust of those at the state level," he said.
Catherine McCabe, who served as EPA's acting boss ahead of Pruitt's confirmation, offered the new administrator gifts, including an EPA lapel pin and an agency baseball cap.
Pruitt, the former co-owner of Oklahoma City's minor league baseball team, said he'd wear the EPA hat with pride to Washington Nationals games.
"I am excited about being in a city that actually has a major league baseball team," he said.
Some EPA employees attended today's event in person. Others tuned in online or listened by phone.
As Pruitt settles into his job, EPA staff and environmentalists will be watching closely to see how he leads the agency.
Agency employees were "hoping not to hear 'Death and Destruction for EPA,'" said John O'Grady, an EPA union leader, ahead of the speech. "Probably what we will hear is a lot of very smooth political talk, but the proof will be in the executive orders that President Trump issues."
The Trump administration is widely expected to issue executive orders directing the rollback of some of President Obama's signature environmental rules, including the Clean Power Plan and WOTUS. Those orders are expected to come as early as this week.
http://www.eenews.net/greenwire/2017/02/21/stories/1060050365
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US EPA Delays Effective Date of CBI Substantiation Under TSCA
Feb 21, 2017 | Chemical Watch
The US EPA has delayed by a day the effective date of its interpretative guidance on confidential business information (CBI) claims under the new TSCA. Published 19 January, the guidance will require upfront substantiation of CBI and is intended to facilitate the agency's reviews of such claims.
The new 21 March effective date has been set in accordance with the 20 January presidential memorandum freezing all regulations published in the Federal Register, but not yet effected, for 60 days. This includes "an interpretation of a statutory or regulatory issue."
As laid out under the memo, the EPA may consider further delaying the effective date of the interpretative guidance beyond 21 March "if deemed appropriate."
Legal experts have said that because the agency's interpretation was issued in a guidance, rather than through a formal rulemaking, it could – in theory – be easily rescinded by the new administration.
But some in the NGO community had expressed hope that the agency's view on CBI would not be controversial.
https://chemicalwatch.com/53726/us-epa-delays-effective-date-of-cbi-substantiation-under-tsca
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White House Readies 'Review' of Carbon Rule for Pruitt EPA
Feb 21, 2017 | E&E Energywire
By Niina Heikkinen
U.S. EPA's new administrator is expected to begin unraveling landmark climate policies in the opening days of his job while possible revelations loom around his connections to the fossil fuel industry.
Last week, as Administrator Scott Pruitt was weathering a tumultuous confirmation in the Senate, officials in the White House were reviewing an executive order that would begin the process of repealing the Clean Power Plan. The order also cancels the Climate Action Plan, the aspirational framework established by former President Obama to slash the nation's emissions of greenhouse gases.
"It tells EPA and other agencies to start reviewing their actions that curtail energy production," said a source close to the administration.
The order does not cancel the Clean Power Plan outright but instead marks the first step in weakening the controversial climate rule, according to the source. Rumors circulated last week that President Trump and Pruitt would announce an executive order today, but it's unclear if that will happen. Trump is not scheduled to visit the agency.
Pruitt's first day follows comments he made over the weekend suggesting he questions EPA's authority to regulate greenhouse gases. That seems to contradict statements he made during his confirmation hearing, in which he claimed to generally support the agency's endangerment finding. EPA's conclusion in 2009 that carbon dioxide endangers human health is the legal underpinning for regulating the gas.
Pruitt will be hosting a webcast "all-hands" meeting at noon today.
As the administration is working to fundamentally change the agency's climate focus, Pruitt will also have to address a court order requiring him to release emails to oil, coal and natural gas companies. The Center for Media and Democracy won a court case last week in Oklahoma, compelling Pruitt to respond to nine outstanding open records requests.
"It's disappointing that he didn't choose to release those records, which was in his power," said Nick Surgey, research director at the Center for Media and Democracy. "I think the fear is that it will show what we have seen in the past that Pruitt has very deep ties to the oil and gas industry."
Pruitt has until the end of today to file an appeal of the court's decision, or release the correspondence. Surgey said he anticipates receiving the first tranche of records today. Once that happens, the group plans to make them publicly available online as soon as possible. If Pruitt does not appeal the judge's decision, the records could be available as early as tomorrow.
If Pruitt does appeal, he would have to offer specific exemptions explaining why he would not have to provide the emails. He would also have to hand over the emails to Oklahoma County District Judge Aletia Timmons, at which point the records would be reviewable by the Center for Media and Democracy's legal counsel, according to Surgey.
The court ruling also requires Pruitt to release a second round of emails relating to five other open records requests by Feb. 27.
'Get along' with Pruitt
Even as Pruitt and his team of political appointees settle into the agency, career staff members will be working to prepare background materials and impress their incoming bosses. They may also be trying to move to different departments that don't work as closely with appointed staff, according to a former deputy assistant administrator who worked for EPA for nearly 30 years. The source asked not to be named due to efforts to work with the incoming administrator.
The former official made such a move from the Office of Congressional Affairs, reporting directly to the assistant administrator to the policy unit in the Office of Enforcement and Compliance Assurance, during the early days under President Reagan's controversial EPA head, Anne Gorsuch Burford.
"We heard a lot of scary things about her, and they were pretty much borne out," the source said. "I decided that I wouldn't be happy working with them, I decided it wasn't something that I was going to enjoy."
The source said it's not clear under the current federal hiring freeze whether today's staff could make similar moves within the agency.
"Every transition has people in some state of uncertainty and anxiety. It's a somewhat fraught period even if it's a friendly transition," the source said.
Pruitt, a controversial choice for administrator, inspired weeks of protests from Senate Democrats, environmental groups and former EPA staff. Hundreds of former agency staff members signed a letter to the Senate urging lawmakers to reject Pruitt's nomination.
Becky Fried, a speechwriter for former EPA Administrator Gina McCarthy, said the opposition to Pruitt wasn't just about protecting Obama's legacy.
"It's about protecting the progress we all worked so hard for, to make people's lives better. The fate of EPA seems especially vulnerable, and those of us who worked there under Obama know how powerful a strong EPA can be," said Fried. "We aren't going to be quiet about a serious threat to the integrity of an agency people's health and lives depend on."
But the former deputy assistant administrator warned against current staff taking similar steps during this "hyper-partisan" period.
"There are some people in an organization of 15,000 who may feel like they need to assert their First Amendment rights and say critical things about the incoming administration," the former official said. "There hasn't been a fight over an EPA administrator like that ever before. The priority should be getting along with Scott Pruitt and take his statements about improving the environment at face value."
http://www.eenews.net/climatewire/2017/02/21/stories/1060050334
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Energy Discussions Live on as EPA Rule Faces Death
Feb 21, 2017 | E&E Interactive
By Rod Kuckro
If there's an enduring upside to U.S. EPA's doomed Clean Power Plan, it's that it spurred some much-needed discussions about energy on the state level, says Brian Murray, director for economic analysis at Duke University's Nicholas Institute for Environmental Policy Solutions.
"There really was not much going on in terms of coordination and dialogue between energy and environmental regulators at the state level before all this," he said. But since the CPP was proposed in 2014, he said, there has been an "improved understanding of how the power sector works by environmental regulators."
Murray hosted a private discussion in Washington last week on the outlook for the energy and environment market in the Southeast in 2017 that featured such regulators and other stakeholders.
"It's fair to say that there's a fairly broad consensus that the Clean Power Plan as we know it is unlikely to see the light of day. No one knows exactly how it's going to be undone. There's a lot of different options that the Trump administration could take," Murray said.
"Right now, EPA is still legally obligated to do something about CO2," he said, suggesting that one likely outcome would be that the agency would limit its support to heat rate improvements inside the fence line of a power plant.
Those in attendance at the Feb. 15 event "drew a distinction between the Clean Power Plan's undoing by the administration" and a strong consensus "that over the long term, carbon will still likely be constrained in some way," Murray said.
"Everything right now is being driven so heavily by two things — steady and continuing economics of natural gas that is pulling more and more generation to it and also keeping prices low, and the other real dynamic in the room is the unexpected uptake in solar that people just didn't see coming," especially the drop in solar costs, Murray said.
In fact, "even without a Clean Power Plan, this increasing pace of technology development in renewables is raising some planning challenges for the states' utility commissions" and utilities, he said.
"The change in administration is not going to lead to a spike in emissions from the [electric utility] sector," Murray said. "I think it's going to change the trajectory at which [emissions] would decline, or maybe it will flatten out instead of decline with less regulatory pressure for the next several years."
While there may be a "disruption" for four to eight years, Murray said, "the long-term game looks still to be towards decarbonization and a significant uptake in renewables."
In case you missed it:
Cap and trade is still gathering momentum in California as the state's preferred policy to reduce greenhouse gas emissions despite anti-poverty groups' best efforts to stymie it (Climatewire, Feb. 17).
EPA signed off on five environmental waivers for California in the waning days of the Obama administration (Climatewire, Feb. 17).
Electric utilities continue to plan to reduce carbon emissions, even as the Clean Power Plan seems doomed under the Trump administration (Climatewire, Feb. 15).
Alabama's new Republican senator, Luther Strange, brings a strong anti-EPA record with him to Congress (Climatewire, Feb. 10).
http://www.eenews.net/interactive/clean_power_plan/column_posts/1060050326
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Westerners Anticipate Crush of Shut-In Wells Under BLM Rule
Feb 21, 2017 | E&E Energywire
By Pamela King
Keeping an Obama-era rule to curb natural gas releases from energy production on public lands could have far-reaching financial impacts for the communities that rely on a robust oil and gas industry to keep their economies afloat.
While some locals have raised concerns over potential lost revenue if Congress successfully overturns the Bureau of Land Management's methane and waste reduction rule, others say the regulation's costs would shut in production from small independent producers, a loss that would ripple through Western budgets (Energywire, Feb. 15).
The fate of the regulation rests in the hands of the Senate, which could vote next week to repeal the rule under the authority of the Congressional Review Act.
"The overall economic impacts are already being felt," said Christopher Guith, senior vice president for policy at the U.S. Chamber of Commerce, regarding the methane rule. "It's a transparent attempt to make production more expensive."
In Colorado's Rio Blanco County, where the federal government owns most of the land, officials say the amount of money it would take to retrofit the county's wells to bring them into compliance far outweighs the revenue BLM expects to collect.
"You take our revenue, you put these burdensome regulations in place, we don't have a lot of room to work," Guith said. "The federal government controls our economies."
Rio Blanco County Commissioner Shawn Bolton estimated that Rio Blanco, where 85 percent of revenue comes from oil and gas in some way, has experienced a nearly 30 percent revenue drop due to market conditions that have suppressed production.
BLM's rule could be another punch to the gut, Bolton said.
In New Mexico, where at least 30 percent of the state's budget is driven by energy development, a business group has estimated that the methane rule would close up 70 percent of the 30,000 wells in the state's northwestern corner.
"That would have a devastating impact," said Carla Sonntag, executive director of the New Mexico Business Coalition.
BLM has cited a Government Accountability Office estimate that 40 percent of natural gas that is burned off or released from federal onshore production sites could be captured with currently available technologies.
One of the options for containing that gas — pipelines that would carry the fuel to market — is difficult to expand because of environmental activism, Guith said. Disputes over the Keystone XL and Dakota Access pipelines have heightened controversy around new oil and gas infrastructure projects.
Guith said he expects some of that opposition will be overridden by the arrival of a new administration and Congress that favor expediting pipelines. But that does not solve the core problem he and others see with the BLM rule — its attempt to regulate methane.
Financial impact
Disputes over the BLM rule's economic impact stem from disagreements over whether the agency should be regulating methane and the potential financial benefits of implementing that control.
In fact sheets on its rule, BLM has cited a 2010 GAO estimate that taxpayers lose as much as $23 million each year from wasted natural gas.
GAO found Interior's efforts to control flaring and venting insufficient.
"Interior's oversight efforts to minimize these losses have several limitations, including that its regulations and guidance do not address some significant sources of lost gas, despite available control technologies to potentially reduce them," GAO wrote.
Industry and congressional Republicans have called into question the $23 million royalty benefit. That loss is closer to $3.68 million, considering currently low natural gas prices, according to an analysis conducted at the request of the Western Energy Alliance, a trade group representing Western oil and gas producers.
The text of BLM's rule cites a more conservative lost royalty sum ranging from $3 million to $10 million per year.
Either way, the royalty benefit comes nowhere near offsetting industry's estimated cost of $1.26 billion to implement the rule, economic research firm John Dunham & Associates Inc. wrote in a memo to the Western Energy Alliance.
BLM has pegged the cost of its rule at up to $279 million per year. That could be an overestimate, the agency wrote.
"In some areas, operators have already undertaken, or plan to undertake, voluntary actions to address gas losses," BLM wrote. "To the extent that operators are already in compliance with the requirements of this final rule, the above estimates overstate the likely impacts of the rule."
BLM calculated an estimated annual net benefit of at least $46 million, after accounting for a minimum $209 million annual benefit of reducing methane emissions. Environmental groups have pushed for oil and gas companies to internalize the costs of emitting the potent greenhouse gas into the atmosphere.
"Economists believe that only when external costs have been fully considered will firms act so as to prevent market failures and move to a socially optimal level of output," the Conservation Economics Institute wrote in an analysis last year.
Because U.S. EPA and states are already addressing methane emissions, BLM's attempt to limit venting and flaring has been seen by industry as an unnecessary layer of regulation.
"Compliance with these overlapping and likely nonaligned regulations will be challenging, especially in our operations located in 'checkerboard' areas where federal and non-federal sections are located side-by-side," BP PLC wrote in comments on the proposed rule. "We urge the Bureau to consider the overlapping nature of these regulations and the challenges they raise regarding cost, efficiency, effectiveness and governance, and to focus on reducing the duplication that will arise from other state, local, tribal and federal regulatory requirements."
The benefits of methane control are superfluous to the rule's cost-benefit analysis because that power lies outside BLM's purview, some opponents of the rule say.
"That, right there, all by itself should be the singular issue why this rule should go away," said Rio Blanco County Commissioner Bolton. "They just do not have the authority on this."
http://www.eenews.net/energywire/2017/02/21/stories/1060050325
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Inside the Buried Memo That Could Decide Pipeline's Fate
Feb 21, 2017 | E&E Energywire
By Ellen M. Gilmer
An overlooked memo from the Interior Department's top lawyer could play a critical role in the fate of the Dakota Access pipeline, and the Trump administration is considering erasing it.
Obama-era Interior Solicitor Hilary Tompkins late last year issued a formal legal opinion outlining reasons the government should conduct further study before granting final approval for the controversial oil project.
The 35-page memo says the existing environmental assessment for Dakota Access suffers from fatal flaws, including inadequate consideration of tribal treaty rights and uneven treatment of the project's impacts on native and non-native populations.
The Trump administration quietly suspended the opinion two weeks ago as it prepared to approve the pipeline and halt deeper environmental study.
The document, known as an "M-opinion," is dated Dec. 4, 2016 — the same day the Army Corps of Engineers agreed to do more review — but it only recently surfaced in legal filings at a federal court in Washington. It includes powerful ammunition for tribes that have long pushed for additional review of the oil pipeline.
"It's hugely significant," said Earthjustice lawyer Jan Hasselman, representing the Standing Rock Sioux Tribe. "It is potentially determinative of the outcome in the case."
Others have cast doubt on the memo's importance. Army Corps officials dismissed it in a recent legal review, and some court watchers have characterized it as an attempt by the Obama administration to provide cover for its decision to delay pipeline approval.
'That's why we have courts'
What's clear is that the Trump administration wants to take a second look. Interior removed the memo from the solicitor's website last week, along with three other opinions that could affect Dakota Access.
Links to the documents now connect to a letter from acting Secretary Jack Haugrud noting that the opinions have been temporarily withdrawn until political appointees can decide whether they should be reinstated, modified or revoked.
Former agency officials say it is not uncommon for a new solicitor to amend a predecessor's opinion. Agency records show that Tompkins, for example, scrapped or modified three opinions during her 7 ½-year tenure.
But they say it's unusual to see a broad suspension of opinions — especially before the agency's political posts have been filled. Trump's pick for Interior secretary, Rep. Ryan Zinke (R-Mont.), is awaiting Senate confirmation, and the president has not nominated a new solicitor.
Hasselman slammed the Trump administration's attempt to quash the memo.
"It's more of the same we've seen from this administration — taking thoughtful and considered work and tossing it in the garbage," he said. "The Standing Rock Sioux deserve better. That's why we have courts."
A federal judge at the U.S. District Court for the District of Columbia will have the final say over the document's importance as he considers the tribe's latest attempt to block the pipeline.
What's an M-opinion?
As the Interior Department's top lawyer, the solicitor counsels the agency and issues formal legal analyses known as M-opinions.
The documents, often requested by the Interior secretary on complex legal matters, include detailed research and guidance on issues the department and its various subagencies face across the country.
The opinions are binding on the agency's administrative proceedings, meaning the Interior Board of Land Appeals and the Office of Hearings and Appeals follow M-opinions as final legal interpretations.
The Trump administration this month suspended four M-opinions issued by Obama-era solicitor Hilary Tompkins. Links to the opinions redirect to a memofrom acting Secretary Jack Haugrud announcing that they have been temporarily withdrawn to comply with President Trump's January executive actions ordering broad regulatory review and pushing speedy approval of the Dakota Access pipeline.
Only one of the M-opinions deals directly with Dakota Access and its impact on tribes. The others address potentially related issues:
M-37039: This Dec. 21, 2016, opinion explores the Bureau of Land Management's authority to use mitigation measures to address impacts from the agency's land-use authorizations.
M-37041: This Jan. 10 opinion clarifies Interior's interpretation of an "incidental take" under the Migratory Bird Treaty Act.
M-37042: This Jan. 12 opinion addresses the authority of the Fish and Wildlife Service to regulate non-federal oil and gas rights beneath national wildlife refuges.
— Ellen M. Gilmer
A scathing review
The solicitor's legal opinion emerged amid a wave of high-level review of Dakota Access approvals.
The Obama administration announced last September that it would not grant the final easement needed for the pipeline to cross Lake Oahe near the Standing Rock Indian Reservation until it could double-check that its review process for prior Dakota Access authorizations was sufficient.
Then-Interior Secretary Sally Jewell directed Tompkins, a political appointee serving as the agency's top lawyer, to explore tribal and environmental implications from the project. The Army Corps received a draft on Friday, Dec. 2, 2016, and the opinion was finalized that Sunday.
In it, Tompkins presents a trove of legal precedent defining the boundaries of the Sioux's treaty rights and potential impacts from the pipeline. Notably, she writes that portions of Lake Oahe are considered part of the Standing Rock and Cheyenne River Sioux reservations and include hunting and fishing rights that could be affected by the crossing. The tribes also retain water usage rights in the lake, the memo says.
The legal opinion goes on to criticize several elements of the Army Corps' environmental assessment (EA) for the project, noting that the corps rejected a potential Bismarck, N.D.-area route due to its proximity to a central municipality and several conservation easements and other sensitive lands but did not apply the same close analysis to impacts from the Lake Oahe crossing, reasoning that the risk of an oil spill was extremely low.
The EA mentions the close proximity of the Standing Rock reservation to the Lake Oahe crossing but finds "there will be no direct or indirect effects" to the tribe, its lands or treaty rights.
"The EA does not explain why, if existing safeguards are inadequate to mitigate spill risk from a pipeline running ten miles from a city, they nevertheless protect federally reserved tribal waters less than one mile from an Indian reservation," the opinion says.
Tompkins concludes by recommending that the Army Corps engage in a new consultation process with tribes and conduct an environmental impact statement to consider a "broader range" of alternative pipeline routes and additional oil spill risk analysis.
"This should be done through an Environmental Impact Statement that will allow for robust tribal and public engagement," the memo says.
The document remained mostly under the radar during the final days of the Obama administration. A former Interior communications official said he didn't recall the agency ever publicizing it, and archived webpages indicate the opinion did not appear on the solicitor's website until this year.
Jewell did not cite Tompkins' opinion in her statement praising the Army Corps' December decision, and a letter from then-Army Corps chief Jo-Ellen Darcy announcing the decision alludes to several recommendations from the legal opinion but does not reference it directly.
Tompkins, who is heading into private practice, said she could not comment on the legal opinion or Dakota Access while the litigation is ongoing. Former staff from her office also declined to discuss the memo.
'This is administrative law 101'
According to the Standing Rock Sioux, the Trump administration brushed aside the solicitor's opinion when it opted to reverse course on the pipeline.
A Feb. 3 analysis from Army Corps officials questions whether many of Tompkins' assertions are "legally supportable" and notes that several concerns she raised were adequately addressed in the EA and safety conditions that were added to the Lake Oahe easement. Steven Stockton, the agency's former director of civil works, defended the analysis as a sufficient explanation of the agency's reliance on the original EA.
"I think it does a good job of laying out the rationale for what the corps believes and believed before was appropriate and adequate," said Stockton, now at the consulting firm Dawson & Associates.
But Hasselman said the agency's dismissal of the solicitor's opinion is indefensible in light of Interior's experience implementing the government's trust obligation to tribes.
"The fact is that the assistant secretary made the final decision informed by this very thorough analysis and recommendation from the government officer with the greatest amount of expertise in issues relating to treaties and Indian rights," he said. "And it was the decision of the Trump administration to summarily reverse that without grappling with these important issues."
The tribe is making an Administrative Procedure Act argument against the reversal, noting that Supreme Court precedent requires agencies to offer clear justification and address previous factual findings when changing a policy.
"The Feb. 3 Review did not address any of the Solicitor's findings or conclusions or the well-supported analysis underlying them," the tribe said in a recent brief. "Such a conclusory statement is indefensible in light of the Solicitor's expertise and role in construing treaties and fulfilling the government's trust responsibility."
The tribe's brief also notes that legal precedent requires courts to apply a higher standard of review to claims that an agency has violated its trust responsibility to tribes.
The memo puts the tribes in a strong legal position, said federal Indian law expert Seth Davis, an assistant law professor at the University of California, Irvine.
"This is administrative law 101: The agency must consider relevant concerns and give a reasonable response to them," he said. "The solicitor's opinion raises relevant concerns. It is a careful legal analysis that explains what the federal government would need to do to respect the tribes' rights.
"There's a strong case to be made that the Army Corps shouldn't have brushed that expert analysis aside," he added, noting the solicitor's expertise in tribal issues.
Both Standing Rock and Cheyenne River have referenced the solicitor's opinion in broad updated complaints submitted to the district court earlier this month, along with allegations that the Trump administration also ignored critiques of the oil spill risk assessment used in the EA.
Enough to stop the pipeline?
Some legal experts caution, however, that the solicitor's opinion might not make a splash in the courtroom.
From an administrative law perspective, the memo could be seen as just one of many pieces of information the Army Corps considered and dealt with in its final decision — a process that could receive deference from the court.
"They would need to present evidence or argument that it is a requirement for the Army Corps to integrate all of these things into their decisionmaking process so much so that deference that's generally provided to an agency that makes decisions within its expertise is overridden," said Bloomberg Intelligence analyst Brandon Barnes.
Barnes said that while the memo gives the tribes more ammunition against the Trump administration's call to scrap the more in-depth environmental review, "it ultimately comes down to the agency making a decision."
"I don't know if that's going to be enough to stop oil flowing through," he said.
That's where Hasselman's point about the solicitor's expertise comes in. This isn't just any agency disagreeing with another, he said, it's the agency that manages tribal issues. Tompkins herself is a member of the Navajo Nation and has spent much of her career specializing in Indian law.
But energy law professor James Coleman, of Southern Methodist University, said the legal opinion has already been partially undermined — by the Obama administration.
Much of Tompkins' memo is a blistering critique of the Army Corps' environmental assessment and finding of no significant impact for the pipeline, noting that tribal treaty rights are entitled to more consideration than "a dismissive note that a project is situated off-reservation, argument that a private corporation complied with environmental laws, or citation to general pipeline safety technology."
She concludes that the Army Corps would be justified in denying the easement and suspending or revoking earlier project permits.
The Obama administration's December move does neither.
A Dec. 4 decision memo from Darcy, the political appointee who headed the Army Corps, announced that the agency would not grant the easement until doing an environmental impact statement.
But the document goes to great lengths to defend the process the agency had followed so far. Darcy notes that "this decision does not alter the Army's position that the Corps' prior reviews and actions have comported with legal requirements."
"The problem is that the Department of Interior letter says that the original environmental assessment was incorrect, and the Army secretary letter says, 'No, actually, we still think that was correct,'" Coleman said. "The tribes would be in a much stronger position if the Army Corps had said, 'OK, we need to withdraw this because it turns out we were wrong about the no significant impact finding."
Barry University law professor Nadia Ahmad, who heads the American Bar Association's environmental justice committee, argued that a more fundamental problem exists in the fact that the tribes even have to raise the solicitor's opinion.
"Why do they have to turn to a memorandum that was eleventh-hour during the Obama administration, and why is the treaty not enough?" she asked. "Why are federal statutes not enough to protect them?"
Still, Coleman said, the legal memo could prove useful in persuading the court that the Army Corps' review process did not comply with the National Environmental Policy Act.
"The odds are always tough arguing against the government, but if you were looking for things that would be helpful, a policy reversal and an interagency fight would be great," he said. "And we've got both here."
The court will consider the Standing Rock Sioux's arguments about the memo next month after Dakota Access and the Army Corps have a chance to respond. A hearing for a separate Cheyenne River Sioux attempt to freeze construction is set for next Tuesday.
http://www.eenews.net/energywire/2017/02/21/stories/1060050316
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Pa. Landowners Press for 'What They Were Promised' in the Boom
Feb 21, 2017 | E&E Energywire
By Mike Lee
At the height of the Marcellus Shale natural gas boom, Pennsylvania landowners were getting bonuses of $4,000 an acre or more for the drilling rights to their property. The newly minted industry promised long-term payments that would far exceed those first checks.
Then came the bust, and a twist. Landowners in Bradford County and across Pennsylvania said they didn't get their fair share of the money from production. Instead, they got notices saying they owed the gas-producing companies for the cost of transporting and processing the gas pulled from beneath the ground. In some cases, they were told they owed the companies tens of thousands of dollars.
Bradford County's landowners and elected officials are trying for the third time in four years to persuade the Pennsylvania Legislature to pass a measure to resolve some of the conflicts.
They're up against big-money opposition and a state that's grown more conservative in the last two elections. But they're hopeful they can convince lawmakers with a concerted public relations campaign that features individual landowners telling their stories.
Landowners "only want what they were promised at the kitchen table," said Doug McLinko, a Republican Bradford County commissioner who's helped organize the campaign.
H.B. 557 would require companies to comply with an existing state law that requires oil and gas producers to pay landowners a royalty equal to one-eighth the value of oil and gas produced on a particular property. It was introduced by state Rep. Garth Everett, a Republican whose district is adjacent to Bradford County. Everett sponsored similar bills that failed in 2013 and 2015.
Landowners have said that gas companies frequently get around the one-eighth royalty requirement by deducting post-production costs — transportation, processing and other expenses — from the landowners' share (Energywire, July 13, 2013).
It's a common practice that's led to lawsuits across the country. The West Virginia Supreme Court ruled in November 2016 that gas companies can't deduct post-production costs from royalties, the Associated Press reported, although the court has decided since then to rehear the case. The Texas Supreme Court sided with landowners in a 2015 case, but its decision was narrowly written and applies only in cases where a lease specifically bars post-production costs (Energywire, June 15, 2015).
The Pennsylvania Supreme Court ruled in 2010 that it was permissible to deduct post-production costs, despite the state law. Landowners are continuing to challenge the gas industry in federal court, and the Pennsylvania attorney general's office is looking into some of the cases (Energywire, Jan. 7, 2016).
The gas industry has generally said that the state Legislature can't force producers to change their royalty practice, because each gas lease is a private contract between the landowner and the company.
In a statement, the Marcellus Shale Coalition, which represents Pennsylvania's shale drillers, said the low royalty payments stem from low gas prices.
"Mineral owners are our partners in resource development and share in the success and challenges that the market brings," coalition spokeswoman Erica Clayton Wright said. "That said, a legislative response to this issue will not bring the relief that some are promising, as a lease is a binding contract and any disputes that may arise will always be most effectively resolved by the courts."
State Sen. Gene Yaw, a Republican whose district overlaps Everett's, shares those concerns and has filed separate legislation. Instead of requiring companies to abide by the one-eighth royalty, Yaw's bills would allow landowners to examine gas producers' records and would prevent producers from retaliating against landowners who try to enforce their leases.
"It's something that would give royalty owners a couple different tools to use," Yaw said in an interview in January.
Support for royalty system overhaul
Jackie Root, who heads the Pennsylvania chapter of the National Association of Royalty Owners, said there's growing support for a broader overhaul of the royalty system. As many as 150,000 landowners are affected by improper post-production costs, and the Pennsylvania Legislature came close to passing Everett's bill in late 2016, she said.
The group prepared for the 2017-18 legislative session by producing a five-minute video that outlines landowners' problems.
The 130-acre Animal Care Sanctuary in Bradford County got a notice saying it owed Chesapeake Energy Corp. $29,000 in overpayments, Joan Smith-Reese, one of the people featured in the video, said in an interview with E&E News.
"Some landowners were really floored," Smith-Reese said. "They got these huge bills to pay."
The Bradford County commissioners tried to intervene but couldn't help, she said. Chesapeake later sold the animal sanctuary's lease to another producer.
Democratic state Rep. Greg Vitali said the landowners will have a hard time fighting the gas industry's influence in the state capital. The natural gas industry spent at least $7 million lobbying the Legislature in 2016 and gave $883,000 in campaign contributions mostly to the Republicans who control chambers of the Legislature.
It's hard to say if the gas industry's donations specifically led to the royalty legislation's defeat last year, Vitali said, but it at least creates that perception.
"That's just my sense based on how I've seen this bill moved," he said.
The Marcellus Shale Coalition said Vitali's figures are based on old disclosure filings and that it actually spent less on lobbying. In a statement, the group called Vitali "an anti-natural gas activist" and "a harsh critic of the tens of thousands of hardworking men and women across Pennsylvania's natural gas industry."
Root, with the royalty owners association, said she was more confident about the landowners' chances than in the past two sessions.
"You're talking to the most optimistic person in Pennsylvania," she said. "We have a good case and one that can't be ignored now."
http://www.eenews.net/energywire/2017/02/21/stories/1060050332
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Study Finds Thousands of Spills at Fracking Sites
Feb 21, 2017 | E&E Greenwire
About 16 percent of hydraulically fractured wells spill liquids every year, according to a new study.
In four states, the scientists found 6,600 liquid releases from the wells in a 10-year period.
More than two-thirds of the spills were recorded in North Dakota. The other states studied were New Mexico, Colorado and Pennsylvania.
The study, published in Environmental Science & Technology is one of the most comprehensive fracturing studies to date and looked at spills over the entire life of the well hole. The findings drastically increase spill risk estimates from studies by U.S. EPA.
"The EPA just looked at spills from the hydraulic fracturing process itself, which is just a few days to a few weeks," said lead author Lauren Patterson from Duke University. "We're looking at spills at unconventional wells from the time of the drilling through production, which could be decades."
About half of the spills involved storage and movement of fluids by pipelines.
In another notable finding, wells with spills turned up as repeat offenders, suggesting more rigorous inspection at previous accident sites could make a significant difference.
http://www.eenews.net/greenwire/2017/02/21/stories/1060050340
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Even Trump Can Agree That Polluters and Not Taxpayers Should Pay to Clean Up Our Mines
Feb 21, 2017 | The Hill - Congress Blog
By Mark Squillace
A river turns brilliant orange. Maybe that’s what it takes to get folks’ attention.
Colorado’s Animas River became a national media sensation when a major spill released 3 million gallons of mine waste into its waters, impacting drinking water and irrigation not only in Colorado, but also downstream in New Mexico and Utah.
The shocking visual images did not come out of thin air. They came from the notorious Gold King Mine. In September 2016, Gold King and 47 other nearby mine sites, were designated a Superfund site by the Environmental Protection Agency. While the owners of these sites may be forced to pay some of the cleanup costs, it’s the American taxpayer that is ultimately on the hook.
There is a simple solution to help ensure that this doesn’t happen again. The federal government can require mining companies post an adequate financial guarantee to cover cleanup costs of hazardous pollution releases that might occur. This “polluter pays” principle ensures that when mining companies profit from mineral development they cover all of their costs, including the cost of cleaning up their mess.
On Dec. 1, the EPA issued draft rules under the federal Superfund law that will, if approved, require mining companies to take responsibility for the cost of cleaning up a site that they contaminate, including a mandate to post a bond or other financial assurances sufficient to cover cleanup should things go wrong. These draft rules are now open for public comment through March 13.
Unlike other Obama administration rules, the Trump EPA cannot simply walk away from these rules because, after years of foot dragging, the agency is under court order to issue final rules by Dec. 1 of this year.
Importantly, the final EPA rules must not allow “corporate guarantees,” which are no guarantee at all. These are mere company promises that cannot be readily enforced when they’re needed most. Mineral prices are volatile and markets change rapidly. As we have seen so recently with the coal industry, companies that seem like financial juggernauts can quickly fall into bankruptcy, unable to honor their cleanup promises unless adequate security has been set aside in advance.
American taxpayers are already burdened with an estimated $20-$54 billion in clean-up costs for the backlog of hardrock mines sites that require clean-up. So, join me in urging the Trump administration to support, without delay, strong financial assurance rules for the hardrock mining industry.
Environmental protection under the new administration may face a bumpy road, but making polluters pay to clean up their own messes ought not be partisan or controversial. We need to be sure that the money is there to clean up abandoned sites and we need to be sure that mining companies take responsibility for the sites they are developing now and in the future. Following through on strong mine cleanup financial assurance rules will go a long way toward achieving these important goals.
Mark Squillace is Professor of Law at University of Colorado Law School.
http://www.thehill.com/blogs/congress-blog/energy-environment/320387-even-trump-can-agree-that-polluters-and-not-taxpayers
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Trump Executive Orders to Target Climate, Water Rules: Report
Feb 21, 2017 | The Hill - E2 Wire
By Devin Henry
The White House is preparing executive orders targeting controversial Obama-era climate and water rules, The Washington Post reported Tuesday.
Through executive orders, President Trump will reportedly tell the Environmental Protection Agency (EPA) to rewrite a 2015 rule that cracks down on greenhouse gas emissions from existing power plants.
He will also instruct the EPA and the Army Corps of Engineers to redo another 2015 rule that gives the federal government more regulatory power over waterways around the country. Along the way, he will also lift an Interior Department moratorium on federal land coal leasing.
The power plant rule — called the Clean Power Plan — and the water rule are two of the most expansive and controversial environmental rules issued by the Obama administration, and ones that Trump has long promised to undo.
The Clean Power Plan was the centerpiece of Obama’s climate change agenda. The measure envisions a 32 percent reduction in electricity sector carbon emissions by 2030. Environmentalists support the measure but Republicans contend it gives the government too much power and the energy sector says it imperils fossil fuel industries.
Last February, the Supreme Court halted implementation of the rule until lawsuits against it could move forward. A ruling on the measure is due soon from a federal court.
The water rule — formally titled the Clean Water Rule, but commonly known as Waters of the United States — gives the federal government regulatory jurisdiction over small waterways around the county. The measure was also stayed by a federal judge after a host of states sued against it.
Throughout his presidential campaign, Trump promised to undo both rules, as well as end the coal leasing moratorium the Interior Department issued in early 2016. So far, he has signed a congressional resolution undoing a different coal mining regulation, and the Senate could soon send him a resolution blocking methane restrictions on federal natural gas wells.
The Senate on Friday confirmed Scott Pruitt to lead the EPA. As Oklahoma’s attorney general, Pruitt sued against both the Clean Power Plan and the water rule and is expected to support efforts to undo them.
http://thehill.com/policy/energy-environment/320409-trump-executive-orders-to-target-climate-water-rules-report
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Texas Sues EPA Over SO2 Nonattainment Designations
Feb 21, 2017 | Inside EPA
Texas is suing EPA over the agency's Obama-era classification of several areas of the state in “nonattainment” of the agency's 2010 sulfur dioxide (SO2) national ambient air quality standards (NAAQS), seeking to avoid stringent regulation of air pollution sources in the state.
In its suit filed Feb. 13 in the U.S. Court of Appeals for the District of Columbia Circuit, Texas asks the court to review EPA's Dec. 13 rule placing three parts of the state in nonattainment with the agency's standard, set at 75 parts per billion (ppb) over one hour, and designating another as “unclassifiable."
Texas frequently clashed with the Obama EPA over what it says is the agency's overreach into states' affairs, filing numerous lawsuits over various agency rules and air quality plans for the state. With new EPA Administrator Scott Pruitt in office, a former Oklahoma attorney general who also sued EPA to assert states' rights, the relationship between EPA and the Lone Star State may now change, though it is unclear whether the Pruitt EPA will defend the Obama-era SO2 designation rule.
In its initial filing, Texas gives no reason for the suit, but nonattainment status brings with it the requirement to impose often costly pollution control mandates on industry.
Texas has also filed suit in the 5th Circuit, but says it also filed in the D.C. Circuit because EPA in the rule argues it has “nationwide scope or effect,” and hence must be heard in the D.C. Circuit.
However, “Jurisdiction and venue for this petition is proper in the Fifth Circuit Court of Appeals because the Final Rule is a 'locally or regionally applicable' final action of the EPA Administrator,” Texas says in its filing. The 5th Circuit, based in New Orleans, is seen by some observers as more conservative and industry-friendly than the D.C. Circuit.
EPA in rule says “it has concluded that dispersion modeling shows that three . . . areas in Texas (portions of Freestone and Anderson Counties, portions of Rusk and Panola Counties, and portions of Titus County) are not meeting the 1-hour primary SO2 standard and we are, therefore, designating these areas as nonattainment.”
EPA says it lacks sufficient data to classify Milam County, and therefore classifies the county “unclassifiable,” a status that avoids pollution controls required for nonattainment zones, but falls short of the positive assurance provided by an attainment finding.
https://insideepa.com/the-daily-feed
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