Preview Newsletter
ACC PM 3/15/2017
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(ACC Mentioned) ATA to Sponsor First Economic Summit July 20
Mar 15, 2017 | The Trucker News Services
The American Trucking Associations will host the first annual ATA Economic Summit July 20 in Arlington, Va., for its motor carrier and private fleet members. -
How Unregulated Household Chemicals Harm Us
Mar 14, 2017 | University of California
By Bettye Miller
Generations of toxic chemicals in everyday use — from ingredients in cosmetics and paint to nonstick cookware and upholstery — have sickened or killed thousands of Americans. Why? -
Eurometaux Urges Extension of Echa's PACT Tool
Mar 15, 2017 | Chemical Watch
By Leigh Stringer
Echa’s public activities coordination tool (PACT) should be used to signal links, overlaps and inconsistencies across EU chemicals legislation, by summarising information on the regulatory status of all substances, says metals trade body Eurometaux. -
Evonik to Buy Preservatives Maker
Mar 15, 2017 | Chemical & Engineering News
By Marc S. Reisch
Evonik Industries has reached a deal to acquire Dr. Straetmans GmbH, a pioneer in the development of alternatives to traditional cosmetic preservatives. -
Power Plants’ Methane Emissions Much Higher Than Thought: Study
Mar 14, 2017 | The Hill - E2 Wire
By Timothy Cama
Methane emissions from natural gas-fired power plants are much higher than federal officials have previously estimated, according to a new study. -
Analysis Says EPA Understates Methane from Power Plants, Refineries
Mar 15, 2017 | Inside EPA
By Doug Obey
EPA's greenhouse gas inventory is significantly underestimating methane emissions from natural gas power plants and petroleum refineries, according to a new study from Purdue University that suggests the categories “contribute significantly” to U.S. emissions and recommends further work -- including enhanced monitoring -- to understand and curb the emissions. -
Judge Gives EPA 3 Years to Finish Tardy Toxics Reviews
Mar 15, 2017 | E&E Greenwire
By Sean Reilly
U.S. EPA will have three years to conduct overdue reviews of the adequacy of emissions standards for 20 different sources, a federal judge ordered this week in a lawsuit brought by environmental groups. -
Supply Glut Reverses Profitable Gas Trade
Mar 15, 2017 | E&E Energywire
A glut of U.S. natural gas is reversing one of last year's most profitable trades. -
Drivers of U.S. Natural Gas Price Volatility
Mar 14, 2017 | Energy Collective (in Real Clear Energy)
By Alex Gilbert
Due to natural gas’ seasonal demand profile, weather and storage play significant roles in setting short-term natural gas prices. -
Chevron Pipe Break Spills 4,800 Gallons in Colo.
Mar 15, 2017 | E&E Greenwire
Chevron Corp. is cleaning up about 4,800 gallons of oil from a broken pipeline in Colorado. -
Trump has Declared War on the EPA: 5 Chilling Examples
Mar 15, 2017 | Environmental Defense Fund
By Jeremy Symons
While running for president, Donald Trump threatened to virtually eliminate the U.S. Environmental Protection Agency, leaving only “little tidbits.” -
Trump Dropping Climate Change Impact from Government Reviews: Report
Mar 14, 2017 | The Hill - E2 Wire
By Olivia Beavers
President Trump plans to drop climate change as a factor in making government decisions, Bloomberg reported Tuesday. -
Trump’s Defense Secretary Calls Climate Change a National Security Risk
Mar 14, 2017 | The Hill - E2 Wire
By Devin Henry
President Trump’s Defense secretary, James Mattis, believes climate change is a national security threat, according to congressional testimony highlighted by ProPublica on Tuesday. -
Trump Officials Ask Energy Companies About Paris Climate Pact
Mar 15, 2017 | The Hill - E2 Wire
By Timothy Cama
Trump administration officials are reaching out to energy companies to gather input on what action they should take regarding the Paris climate agreement. -
17 Republicans Back Resolution Urging Action on Warming
Mar 15, 2017 | E&E Greenwire
By Hannah Hess and Erika Bolstad
The Republican climate resolution that jump-started a conversation on global warming ahead of Pope Francis' 2015 visit to Capitol Hill is back. -
As Cap-and-Trade Fight Looms, Offset Providers Quake
Mar 15, 2017 | E&E Climatewire
By Debra Kahn
Carbon offset developers are worried that shifting political winds in California will leave them out of the state's evolving carbon market. -
Pruitt Faces Ozone Deadline Suit in California
Mar 15, 2017 | Inside EPA
EPA Administrator Scott Pruitt has been put on notice that if he fails to take non-discretionary action to develop plans to reduce ozone in several California communities, then environmental groups will sue him in federal court for missing Clean Air Act deadlines.
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(ACC Mentioned) ATA to Sponsor First Economic Summit July 20
Mar 15, 2017 | The Trucker News Services
The American Trucking Associations will host the first annual ATA Economic Summit July 20 in Arlington, Va., for its motor carrier and private fleet members.
“We know trucking is the backbone of the supply chain,” said ATA Chief Economist Bob Costello, “and with this summit, we want to bring together experts from other adjacent industries to explore the state of the economy and trends that impact trucking and the U.S. economy at large.”
The summit will bring together chief economists from several trade associations for an outlook on their respective industries, spanning from manufacturing to construction to retail.
Attendees will gain a broad perspective on the state of the economy and forecasts in the supply chain ecosystem that they can use to strategize their budgets and future plans.
“Knowledge is power,” said ATA President and CEO Chris Spear, “and this summit will offer the opportunity for fleet executives to gain the insights and knowledge necessary to make informed decisions.”
Among the organizations expected to be represented at the Summit are ACT Research, the American Chemistry Council, the Associated General Contractors, the Beer Institute, the National Automobile Dealers Association, the National Association of Manufacturers, the National Restaurant Association and more to be announced later. Bob Costello will also give an outlook for the motor carrier industry.
The summit will take place at the Westin Arlington Gateway in Arlington.
http://www.thetrucker.com/News/Story/ATAtosponsorfirsteconomicsummitJuly20
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How Unregulated Household Chemicals Harm Us
Mar 14, 2017 | University of California
By Bettye Miller
Generations of toxic chemicals in everyday use — from ingredients in cosmetics and paint to nonstick cookware and upholstery — have sickened or killed thousands of Americans. Why?
Because most of these substances are not regulated by the federal government. And the legal system — which offers the only recourse for deaths or injuries resulting from toxic exposures — often fails to properly use science to identify and assess whether or not products are toxic, Carl F. Cranor, a distinguished professor of philosophy at the University of California, Riverside, explains in his new book, “Tragic Failures: How and Why We are Harmed by Toxic Chemicals,” published this month by Oxford University Press.
The 264-page book is based on a series of lectures the philosopher delivered at UC Riverside when he was awarded the prestigious Romanell-Phi Beta Kappa Professorship in Philosophy for 2014-15. The national award is presented to one philosopher every year by the Phi Beta Kappa Society, the oldest and most widely known academic honor society in the United States. He is the third University of California philosopher to receive this award since its inception in 1989.
Cranor is a longtime advocate of reforming policies for regulating exposure to toxic substances, and has served on several California science advisory panels. He is known globally for his research on the regulation of toxic substances, the ethics of risk, and the philosophy of law and science. His work has changed how scientific testimony is addressed in court cases and was cited in a pivotal federal Appeals Court ruling in 2011.
“Tragic Failures” explains the origins of federal regulation of toxic substances, and why only food, drugs, and pesticides are tested before going to market. It also suggests how we could be better protected from tens of thousands of toxic chemicals, some of which are so pervasive that they inhabit the bodies of virtually every American.
“What’s the difference between prescription drugs and those other everyday chemicals? In two words: the law,” he wrote. “In a few more words: the law creates and invites ignorance about toxicants, risking our health and permitting substantial harm.”
Weak legal framework and enforcement
Congressional laws, enacted in 1962 after Thalidomide was found to cause birth defects, require that prescription drugs be tested for safety and effectiveness before they enter the marketplace, he said. However, the Toxic Substances Control Act (TSCA) of 1976 — the major public health law governing chemical products — forbade blanket premarket toxicity testing and review of more than 22,000 chemical products that have subsequently entered the marketplace. It also grandfathered as “safe” 62,000 existing substances, including many that are now known to cause cancer and other illnesses.
“Laws that are supposed to protect citizens from toxicity-caused diseases accomplish this so poorly that we rarely read of the U.S. Environmental Protection Agency, the Occupational Safety and Health administration, or the Consumer Product Safety Commission taking action to better protect us,” he said.
There are several reasons for this. In the 1970s Congress created laws that hamper this effort. Another is that the science needed to justify legal action can be difficult to produce even under the best circumstances, but is exacerbated in the current legal environment.
“A third reason is that the laws create ignorance about potential toxicants, provide substantial incentives for companies to remain ignorant about their own products, and, because of the legal structures, provide many incentives for companies to create doubt about the science or demand ideal science in fiercely opposing any actions that might threaten their products or reduce their profits,” Cranor wrote. Judicial errors barring relevant science in the personal injury law can and have frustrated redress of injustices, he added.
An amendment to the TSCA, the Frank R. Lautenberg Chemical Safety for the 21st Century Act, took effect this year and requires that the EPA make an affirmative finding that new products do not pose unreasonable risks to the public.
Overcoming 40 years of ignorance
“Thus, new chemicals should be much safer from 2017 onward as they receive legitimate premarket reviews,” he said. “However, modifications for addressing substances already in commerce must be implemented against the background of 40 years of considerable ignorance about chemical creations that developed during this time. Providing better safeguards for the public, despite amendments that provide more aggressive reviews of products and legally enforceable time lines to remove toxic risks, will be an enormous task that likely will take a very long time.”
“Tragic Failures” is the second book about toxic substances and the law Cranor has written in the past year. The second edition of “Toxic Torts: Science, law, and the Possibility of Justice” (Cambridge University Press), published in 2016. This edition is updated to reflect 10 years of developments in tort law and science, and expanded coverage of the scientific studies used to understand harms from chemical products.
Cranor was reappointed in January to the Scientific Guidance Panel of the California Environmental Contaminant Biomonitoring Program, and has served on state science advisory panels for Proposition 65, which requires the state to publish an annual list of chemicals known to cause cancer, birth defects or other reproductive health problems; the Electric and Magnetic Fields Program; and nanotechnology. He earned a law degree from Yale University and a Ph.D. in philosophy from UCLA.
https://www.universityofcalifornia.edu/news/how-and-why-unregulated-toxic-chemicals-harm-us
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Eurometaux Urges Extension of Echa's PACT Tool
Mar 15, 2017 | Chemical Watch
By Leigh Stringer
Echa’s public activities coordination tool (PACT) should be used to signal links, overlaps and inconsistencies across EU chemicals legislation, by summarising information on the regulatory status of all substances, says metals trade body Eurometaux.
Alongside member states and NGOs, Eurometaux submitted comments to the European Commission’s consultation on the regulatory fitness of chemicals legislation, excluding REACH.
“What is missing is a virtual mapping and overview of the broader architecture, and vertical and horizontal interlinkages between different chemicals legislations, which [also] shows the practical impacts of changes across them," it says.
It recommends that the PACT should first be expanded to cover all ongoing or planned REACH measures being considered for a substance.
“Extending [PACT] to all substances running under any REACH regulatory programme – such as substance evaluation – will further increase consistency and avoid multiple listing,” Eurometaux says.
The tool lists substances where a risk management option analysis (RMOA) or an informal hazard assessment is either under development or has been completed, since the launch of the SVHC Roadmap in 2013. It lists substances covered by the roadmap and those with PBT/vPvB (persistent, bioaccumulative and toxic/very persistent and very bioaccumulative) or endocrine disruptor properties.
Once all REACH measures are covered, it should then incorporate information on other policies, such as workplace legislation considerations for a substance. This, it says, will prevent overlaps or inconsistent work between authorities.
The German chemicals industry association (VCI) and Cefic put forward a similar proposal in 2014. They asked the Commission to develop a “central EU navigator” that provided information on how individual substances are affected by EU laws. At the beginning of 2016, Echa said it would assess the feasibility of developing such a database, but gave no timeframe for the work.
Some NGOs have raised the same concern in comments to the consultation.
They say harmful substances, such as endocrine disrupting chemicals (EDCs) and PBTs, are inadequately regulated by Europe's complex web of chemicals regulations, due to "significant gaps and inconsistencies" in identifying and prohibiting them.
Advisory body
Eurometaux is also calling for an independent advisory body to be appointed, to support the work of Echa’s committees.
Speaking to Chemical Watch this week, Eurometaux’s environment, health and safety director Violaine Verougstraete said it is needed because Echa’s committees have a “continuously growing portfolio of tasks, requiring a mix of expertise and adaptation to formats and deliverables”.
“This stretch on their capabilities [...] is also impacting availability and resources for further learning and in-depth quality assessments,” she said.
The advisory body, she added, could provide support when, for example, more in depth technical discussions are needed to clarify issues that are relevant for developing an opinion or decision making.
It could also be used as an external reviewer or to develop specific concepts to implement agreed decisions, such as classification of 'matrix containing materials' – alloys, ceramics and glass, for example. In addition, it could work on technical concepts and facilitate coherence and links between different legislation, such as those between REACH and the water framework or the industrial emissions Directives.
In its comments to the Commission, Eurometaux said the advisory body could take a similar role to the Scientific Committee on Health and Environmental Risks (Scher), which provides opinions related to pollutants in the environment.
https://chemicalwatch.com/54411/eurometaux-urges-extension-of-echas-pact-tool
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Evonik to Buy Preservatives Maker
Mar 15, 2017 | Chemical & Engineering News
By Marc S. Reisch
Evonik Industries has reached a deal to acquire Dr. Straetmans GmbH, a pioneer in the development of alternatives to traditional cosmetic preservatives.
The acquisition, to be completed by the end of June, will expand Evonik’s portfolio beyond emulsifiers, conditioners, and active ingredients to include alternatives to traditional preservatives. Those traditional products, which include parabens, methylisothiazolinone, and imidazolidinyl urea, are increasingly being shunned by consumers because of toxicity and skin sensitization concerns.
About 60 people will join Evonik when the deal is completed by the end of June. Afterward, Dr. Straetmans’s Hamburg, Germany, site will become Evonik’s global competence center for preservatives.
Dr. Straetmans’s product line includes organic acids as well as cosmetic ingredients that offer both preservative and functional properties. The company acknowledges that the approach is “complex” because it involves adding larger amounts of surface active ingredients, which can compromise a cosmetic formulation if done incorrectly.
The firm also markets what it calls “noncriticized” traditional preservatives such as phenoxyethanol and benzoic acid in blends with synergists such as caprylyl glycol. The latter ingredient doubles as a skin conditioning agent.
“Our aim is to offer cosmetics manufacturers new solutions enabling them to distinguish themselves from the competition,” says Tammo Boinowitz, head of Evonik’s personal care business. With the addition of Dr. Straetmans’s nontraditional preservatives, Evonik will also be able to offer complete cosmetic formulation systems, Boinowitz says.
Other ingredient suppliers are also focusing on alternative preservatives. Clariant, for instance, developed the synergist sorbitan caprylate to boost the effect of traditional preservatives such as phenoxyethanol and benzyl alcohol. Campo Research, a Japanese natural cosmetic materials provider, has a line of preservatives based on the honeysuckle flower. And Emerald Kalama Chemical is expanding output of the food preservative sodium benzoate in anticipation of increased demand from cosmetic makers.
Cosmetic formulators, fearing that restrictions on traditional preservatives will leave them without the tools they need to safeguard their products, are also seeking alternatives. For instance, the Green Chemistry & Commerce Council recently said it would launch a competition, backed by retailers and some preservative makers, for new cosmetic preservatives with prizes up to $25,000.
http://cen.acs.org/articles/95/web/2017/03/Evonik-buy-preservatives-maker.html
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Power Plants’ Methane Emissions Much Higher Than Thought: Study
Mar 14, 2017 | The Hill - E2 Wire
By Timothy Cama
Methane emissions from natural gas-fired power plants are much higher than federal officials have previously estimated, according to a new study.
Researchers from Purdue University concluded in a study published Tuesday that gas plants emit between two and 120 times the amount of methane that the Environmental Protection Agency (EPA) has most recently estimated.
Methane is the main component of natural gas. It is also a greenhouse gas at least 34 times more potent than carbon dioxide.
“There is much more methane being released into the atmosphere by leaky compressors, valves, and industrial hardware,” Paul Shepson, an atmospheric chemistry professor at Purdue, said in a statement.
“The good news from our study is that while emissions are greater than anticipated, natural gas-burning power plants are still cleaner, relative to burning coal.”
The research was published in the journal Environmental Science & Technology.
Natural gas is generally a far cleaner power source than coal, and it has been replacing coal in recent years as prices have fallen and regulations have grown.
But methane leaks can quickly cause gas to outpace the climate effects of coal, since methane is far more potent.
The Purdue researchers said that about 3 percent of gas can leak during the lifecycle of the fuel before it loses its climate advantage. Their research showed that plants generally stay under that threshold.
In the final years of the Obama administration, the EPA and other agencies started to regulate methane emissions.
The EPA and Interior Department both wrote regulations to reduce methane leaks in oil and natural gas drilling, but did not move on to other industries.
http://thehill.com/policy/energy-environment/323941-power-plants-methane-emissions-much-higher-than-thought-study-says
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Analysis Says EPA Understates Methane from Power Plants, Refineries
Mar 15, 2017 | Inside EPA
By Doug Obey
EPA's greenhouse gas inventory is significantly underestimating methane emissions from natural gas power plants and petroleum refineries, according to a new study from Purdue University that suggests the categories “contribute significantly” to U.S. emissions and recommends further work -- including enhanced monitoring -- to understand and curb the emissions.
The analysis announced March 13 attributes the underestimate in part to the fact that power plants are not required to report non-combustion related emissions under EPA's GHG reporting program (GHGRP), as well as to default emissions factors for refineries that “may be outdated and could cause inaccurate estimation of annual emissions.”
While [methane] emission rates from throughout the natural gas supply chain have been recently reported in the literature, there is less understanding regarding emissions from natural gas-fired power plants . . . and crude oil refineries, both of which use large quantities of natural gas,” says the new Purdue study, published in Environmental Science & Technology.
But whether EPA will take near-term regulatory action based on the study is far from clear, with the agency recently withdrawing an information collection request to the oil and gas industry that could have paved the way for methane controls on existing oil and gas drilling facilities.
Even so, the report could provide longer-term pressure for controls to limit methane, a potent GHG, from the two source categories. EPA has issued carbon dioxide limits for power plants, and it has issued methane standards for new oil and gas drilling equipment. It has not issued any GHG controls for refineries.
The Purdue study, conducted in collaboration with the Environmental Defense Fund (EDF), with funding from the Alfred Sloan Foundation, is based on aircraft measurements at three power plants and three refineries in Utah, Indiana and Illinois.
It concludes that natural gas power plants and oil refineries “may be large sources of [methane] emissions and could contribute significantly . . . to U.S. emissions,” and it includes an estimate that natural gas plants and refineries taken together are responsible for 0.61 Teragrams (TG) of methane emissions annually, plus or minus 0.18 TG.
Methane Estimates
The estimate of methane emissions from the two source categories pales in comparison to EPA estimates that oil and gas operations broadly were responsible for 9.8 TG of methane emissions in 2014, a figure the study references.
But the 0.61 TG estimate for natural gas power plant (NGPP) and refinery emissions also dwarfs EPA estimates that NGPP and refineries were responsible for 0.01 TG and 0.02 TG in methane emissions, respectively, in 2014, according to the agency's GHG inventory.
“Average [methane] emission rates [at the plants studied] . . . were larger than facility-reported estimates by factors of 21-120” for the natural gas plants, and larger by a factor of 11-90 for refineries, according to the study.
The Purdue report finds that the majority of the methane emissions from both power plants and refineries appear to come from non-combustion sources, including fugitive leaks at power plants from compressors, steam turbines, boilers, condensers, and other equipment.
The report also cites “significant discrepancies” between the study's calculated emissions rates and those reported to EPA's 2014 GHGRP, due partly to the fact that the power plants are only required to report combustion-related methane emissions to regulatory agencies.
It notes that refineries are required to report methane emissions to the GHGRP from a number of sources -- including catalytic cracking and reforming units, asphalt blowing operations, and equipment leaks -- but it says that default emissions factors for doing so may be outdated. Also, methane may also come from other process equipment at refineries, including boilers, process heaters, and other sources, according to the report.
“Our results suggest that both [methane] and CO2 emissions may be underestimated for these three refineries by the GHGRP. To determine if these results are representative of the full range of operating conditions will require further observations.”
The report broadly argues that “consideration of improved emissions monitoring and reporting procedures for NGPPs and refineries would significantly improve inventory emissions estimates.”
The researchers also call the estimates “preliminary,” while noting that total methane emissions from NGPPs are likely to increase in the future due to reliance on natural gas generation.
'Still Cleaner'
Purdue's Paul Shepson in a press statement on the new study says that while methane emissions are greater than estimated, gas-fired power plants “are still cleaner, relative to burning coal.”
Shepson said the study shows “there is much more methane being released into the atmosphere by leaking compressors, valves, and industrial hardware,” but the “good news” is “it's a relatively easy thing to fix,” using specialized cameras to find the leaks and patch them.
EDF's Steve Hamburg in the press release says that the concerns over leaking methane diminish the environmental benefits of using natural gas, but added “there is the capacity to cost-effectively reduce methane emissions associated with use and production of natural gas, so there is no excuse for the waste and serious long-term impacts.”
https://insideepa.com/daily-news/analysis-says-epa-understates-methane-power-plants-refineries
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Judge Gives EPA 3 Years to Finish Tardy Toxics Reviews
Mar 15, 2017 | E&E Greenwire
By Sean Reilly
U.S. EPA will have three years to conduct overdue reviews of the adequacy of emissions standards for 20 different sources, a federal judge ordered this week in a lawsuit brought by environmental groups.
The ruling by U.S. District Judge Tanya Chutkan of the District of Columbia allows EPA until March 2020 to wrap up the residual risk and technology reviews for hazardous air pollutants from boat manufacturing, hydrochloric acid production and 18 other categories.
Chutkan's ruling, issued Monday, splits the difference between the amounts of time the two sides had wanted. California Communities Against Toxics and other environmental groups that had sued in 2015 to force action had wanted all of the reviews completed within two years; EPA officials had proposed a schedule ending in late 2021.
The tighter timetable sought by the plaintiffs, Chutkan wrote in citing a ruling in an earlier suit, "may be 'simply too compressed at this stage to afford any reasonable possibility of compliance.'"
An EPA spokesman could not immediately be reached for comment this morning on Chutkan's order. Under the Clean Air Act, the agency is supposed to undertake the follow-up reviews for hazardous air pollutants within eight years of setting the initial standards (Greenwire, March 2, 2016). In practice, EPA regulators are chronically behind.
A 2006 Government Accountability Office report included in the filings found that the agency's timetable was driven more by lawsuits than by a comprehensive implementation strategy. Still pending is a separate lawsuit brought last June by the Sierra Club and other groups alleging that EPA was up to six years late in revising emissions limits from nine other source categories (Greenwire, June 9, 2016).
In the case decided by Chutkan, EPA never disputed that the reviews were past due. In arguing for a more lenient time frame, however, a senior EPA official had last year cited the impact of funding constraints and other resource limitations.
By those measures, the job may not get any easier under the Trump administration, which is expected to propose stiff cuts for EPA in an outline of its proposed fiscal 2018 budget set for release tomorrow.
The Clean Air Act's mandate for regular follow-up reviews covers 189 pollutants to be regulated, according to court filings.
After establishing emissions standards for major sources based on what is known as "maximum achievable control technology," EPA is then supposed to undertake another review within the eight-year window to determine both whether the technology has improved and whether any "residual risk" remains to public health.
http://www.eenews.net/greenwire/2017/03/15/stories/1060051510
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Supply Glut Reverses Profitable Gas Trade
Mar 15, 2017 | E&E Energywire
A glut of U.S. natural gas is reversing one of last year's most profitable trades.
Natural gas futures fell 23 percent over the last two months in an oversupplied market.
Yesterday, futures for April delivery dropped during the trading day by 2.5 percent on the New York Mercantile Exchange.
Brokers and analysts pinpoint several factors that have kept prices in check, including a historically warm February that lowered heating demand, rising production and storage levels that are higher than normal.
Before the recent declines, gas was one of the most lucrative trades of 2016. Gas futures rose 58 percent last year, and share prices of producers such as Chesapeake Energy Corp. and Rice Energy Inc. doubled between March lows and late December.
Many investors were betting that new gas-fired power plants and a historic level of exports would help take care of excess supply. But that hasn't been the case in a market whose main drivers are weather and massive new supplies of shale gas.
"Investors right now across the board just hate natural gas," said Pearce Hammond, an analyst at Simmons & Co. International.
http://www.eenews.net/energywire/2017/03/15/stories/1060051489
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Drivers of U.S. Natural Gas Price Volatility
Mar 14, 2017 | Energy Collective (in Real Clear Energy)
By Alex Gilbert
Highlights:
Due to natural gas’ seasonal demand profile, weather and storage play significant roles in setting short-term natural gas prices.
Combined with commodity cycles, these factors can enable natural gas prices to be exceptionally volatile.
This volatility expresses itself in electricity markets through coal to natural gas displacement and electricity prices.
The nature and severity of natural gas volatility could change in the future as shale production grows, overall demand grows, LNG exports increase, and renewable energy impacts seasonal demand.
Natural Gas Demand Profile Creates Volatility
Price volatility is probably the most important economic characteristic of natural gas. As natural gas becomes the dominant electricity source in the United States, its price volatility will increasingly impact electricity markets.
Like other commodities, natural gas prices are determined by supply and demand. Natural gas is unique among energy sources because it has multiple primary end uses: electricity, heat, feedstock, and even some transportation. Total demand varies seasonally while supply is usually flat; the costs of storage cause volatility and price changes balance this temporal mismatch
Since 2009, the natural gas supply has changed significantly as a result of the shale revolution; new technologies and resource locations have drastically reduced the cost of extracting natural gas. This led to much lower natural gas prices than in the early 2000’s.
However, supply costs are only part of the equation to determine price. Demand matters as well. Unlike other fuels, natural gas demand is highly seasonal and can vary significantly year to year based on winter weather. In order to guarantee enough storage for the subsequent winter, natural gas prices change greatly year to year.
This article explores the cause of natural gas price volatility, describes it impacts on electricity markets, and concludes with a critical observation: several factors could greatly change the nature of natural gas price volatility in the next five years.
Winter Weather is Primary Factor Driving Short-Term Natural Gas Volatility
There are two primary drivers of price volatility that closely interact: variability in weather-driven natural gas demand and variations in available supply due to commodity cycles. Of the two, weather-driven demand can have some of the more dramatic and visible impacts on natural gas prices.
Natural gas is unique among energy sources because it is used in multiple sectors. According to the EIA, natural gas consumption in 2015 was split between:
Electric power (35.1%)
Industrial Use (27.3%)
Commercial (11.7%)
Residential (16.9%)
All other (9.0%)
Critically, most commercial and residential demand is for heating, which occurs almost entirely in winter. Therefore natural gas demand has a highly seasonal demand profile.
Over the last five years, January natural gas consumption averaged 96.0 Bcf/day. This is 31-38 Bcf/day (47-65%) higher than average consumption during non-winter months.
Conversely, natural gas production does not have major seasonal patterns and is relatively flat over the course of the year.
In order to match these seasonal differences between production and storage, natural gas heavily relies upon storage. The U.S. has a total underground natural gas storage capacity of 4,343 Bcf at 385 facilities in the U.S., although it never quite approaches full capacity.
Storing natural gas is relatively expensive, so storage usually occurs on one annual cycle: injection season usually lasts from early Spring to mid-November, while withdrawal season lasts from mid-November to early Spring. Multi-year natural gas storage is rare.
As anyone knows, winter weather can vary considerably, with subsequent effects on natural gas storage.
A warmer winter reduces natural gas demand, leading to higher storage levels and lower natural gas prices (to incentivize demand before the next winter).
A colder winter increases natural gas demand, reducing storage levels and increasing natural gas prices (to reduce demand to ensure sufficient storage for next winter).
During the last five years, we have seen both extremes: the winters of 2011-2012 and 2015-2016 were both exceptionally warm, reducing natural gas demand. Subsequently, natural gas prices declined over the course of both winters and reached decadal lows below $2/MMBtu in spring.
Conversely, the winters of 2013-2014 and 2014-2015 were both very cold. During the 2013-2014 winter, heating demand was so high that it drove natural gas storage down to only 800 Bcf, less than 20% of capacity and a level not seen in at least ten years. Prices quickly rose and, from a range a $3-4/MMBtu in 2013, were above $4/MMBtu for most of 2014.
Commodity Cycle Also Influences Price Volatility
Natural gas prices influence production decisions, meaning that weather indirectly influences production through prices. In 2014, prices above $4/MMBtu set the stage for a massive supply response – these were the highest prices in several years.
Critically, shale technology had advanced significantly since prices were last that high in 2012. Although renewable energy’s technological development is often emphasized, shale technology is still relatively young and the technology being developed.
In the last several years, natural gas producers have been able to drastically increase natural gas production from shale wells by: increasing wells per drill pad, reducing labor costs through automation, and perfecting many other fracking techniques.
Improving production per rig led to dramatic declines in rig counts nationally, partially indicating cheaper production costs.
Shale natural gas now dominates US natural gas production.
It also has a key technical characteristic that makes it well suited to addressing short term price increases: its production peaks more rapidly and declines more quickly than conventional natural gas wells. The majority of a well’s production comes in the first 18-24 months, with 80% or more occurring in the first five years.
When prices rise, natural gas producers can thus lock in prices for most of a well’s production. Over time, the ‘long tails’ of production from older wells form a growing base of natural gas production. Refracking old wells where production has tapered off could potential increase production from older wells at a low cost, but remains in early stages.
The below two charts for shale oil conceptually illustrate well decline rates and net effects of production long tails on overall production.
When cold weather drove prices higher in early 2014, new shale developments enable natural gas production to boom. Between December 2014 and 2015, US natural gas production increased by almost 6 Bcf or 10%.
Thus, while cold weather kept demand high in winter 2014-2015, natural gas prices began to decline over the course of the winter. From more than $4/MMBtu at the start of the winter, prices neared $2/MMBtu within twelve months.
These types of cyclical supply-and-price fluctuations are common in commodity markets where storage costs are high. They happen as a direct result of supply and prices affecting each other:
When prices are high, there is an incentive to bring more supply online
More supply leads to lower prices
Lower prices lead to a decrease in supply
Decreased supply drives prices higher
Repeat
Commodity cycles can happen on both longer and shorter timeframes. Oil provides a good example of a longer term cycle: very high oil prices from the mid-2000’s to mid 2010’s provided a significant incentive to increase global oil production. Resources that were previously uneconomic, such as deepwater drilling or tar sands, were profitable at $100/barrel, leading to large increases in supply.
Power Sector is Primary Short Term Balancing Mechanism
When winter weather causes a shift in the natural gas supply-demand balance, higher prices can cause increased supply. However, even with shale, it can take 9-12 months before higher prices drive material increases in production.
In light of this time lag, the only way to ensure sufficient storage for winter (or prevent storage overflow) is by adjusting short-term natural gas demand.
As noted before, natural gas is unique as it is consumed in multiple sectors. Critically, demand in the residential, commercial, and industrial sectors is relatively price inelastic, especially in winter:
Homes and business will continue to use natural gas to heat their homes in the winter regardless of how cold it is.
Most natural gas consumers purchase from regulated utilities at prescribed rates too, further limiting a demand adjustment to high prices.
Effectively, these three sectors are not price sensitive in the short term at the prevailing prices of the last several years.
Thus, the major area where natural gas demand can adjust upwards or downwards in the short term is in the power sector.
Before the shale revolution, the United States built a significant fleet of natural units. This fleet was relatively unused until shale production started reducing natural gas prices. With the capacity in place, lower prices can lead to increased generation from the existing natural gas fleet relatively easily and quickly.
Wholesale Power Prices Reflect Coal and Natural Gas Competition
As we’ve discussed before, the cost structures of energy sources determine how they impact power markets. Solar, wind, hydro, and nuclear power are all capital intensive with low marginal costs. According, these units are almost always dispatched when they are able.
Coal and natural gas have high marginal costs that vary along with fuel prices, making them primary competitors for marginal electricity generation. As they are the primary marginal fuel sources in both rate-regulated and restructured wholesale power markets, coal or natural gas usually sets the market clearing price.
Therefore, in order to balance short natural gas demand to meet storage needs, natural gas prices change to the degree necessary to change electricity prices to shift gas-coal competition in one direction.
For example, if natural gas demand needs to go down:
Natural gas prices go up
Increasing dispatch costs at natural gas facilities
Raising wholesale electricity prices until…
Coal generation is more competitive and increases, displacing less competitive natural gas units and reducing gas demand.
For a simple example, imagine a relatively inefficient combined cycle is competing with a coal generator. At $4/MMBtu, the natural gas combined cycle would have a dispatch cost of around $40/MWh. Say the coal generator has a dispatch cost of $43/MWh. In order to decrease natural gas demand, natural gas prices would have to increase until the dispatch cost for the coal generator is lower. In this case, natural gas prices would have to increase more than $0.30/MMBtu to drive dispatch costs higher than $43/MWh.
If natural gas demand needs to increase (due to relative short term oversupply), the opposite happens, with natural gas prices going down until natural gas replaces coal through power market competition.
Effectively this short-term coal versus gas competition is a primary driver of prevailing wholesale electricity prices. In the short term, there is very limited competition between natural gas and non-coal power sources (particularly for renewables with their long-term fixed contracts).
Future of Natural Gas Price Volatility Uncertain
As natural gas demand continues to grow in the power sector and elsewhere, natural gas price volatility will become an even more important feature of U.S. energy markets. Understanding future changes in the severity and frequency of natural gas price volatility is thus critical to understand how to craft policy and market design for a shale-dominated world.
Recent developments in US electricity markets resulting from the shift from natural gas to coal, may change the short term nature of price balancing:
A significant number of thermal power plants have converted from coal to using natural gas, with relatively inefficient heat rates
The most inefficient coal plants retired due to economic competition with natural gas and other coal sources or due to environmental retrofit requirements
The remaining coal fleet is likely in a death spiral. As capacity continues to decline, potential NG-coal displacement decreases as does the cost for displacement.
All else equal, this likely means that the range for natural gas prices is likely to be $2-4/MMBtu for the next several years, as compared to about $2.50-5/MMBtu pre-MATS. However, if price sensitive power sector demand is insufficient to balance natural gas markets (due to limited coal left to displace), prices could be periodically more volatile.
More broadly, the US natural gas market is in a state of rapid development and transition. Several major developments will shape the future nature of natural gas price volatility:
Continuing general increases in overall natural gas demand and supply will increase the size of the market; relative storage capacity may or may not keep pace
Climate change induced changes in summer and winter weather severity (likely already evident in recent prices) will change required storage levels, storage drawdown, and may elevate short term volatility
US international trade in natural gas is poised to rise, with Mexican exports already increasing and LNG exports beginning
Rapid development of renewable energy may alter NG versus coal competition by limiting dispatchable demand for many hours of the year, particularly in shoulder seasons
Each of these factors individually could dramatically alter the severity and frequency of natural gas price volatility. For example, all else equal, the decline in coal generation could cause more severe price spikes during extreme weather events due to a lack of cheap, alternative short term demand destruction.
Together, however, the net effect is exceptionally difficult to determine. In particular, climate change induced changes in the weather-driven demand profile of natural gas may reduce overall storage requirements, leading to lower volatility. In February 2017, very warm winter weather led to the first net weekly injection of February, a highly unusual development.
What is clear though, is that natural gas’ growing role in US energy makes its volatility a key factor to understand and manage moving forward.
http://www.theenergycollective.com/aqgilbert/2400311/drivers-u-s-natural-gas-price-volatility
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Chevron Pipe Break Spills 4,800 Gallons in Colo.
Mar 15, 2017 | E&E Greenwire
Chevron Corp. is cleaning up about 4,800 gallons of oil from a broken pipeline in Colorado.
The oil made its way into an intermittent stream on public land in northwestern Colorado. The spill was found March 5 and is under investigation.
Federal officials are reviewing the incident and have not confirmed the amount leaked.
Two ducks, two small birds and a few rodents were found dead at the spill site.
Oil spills in Colorado have dropped in recent years as production has slowed.
http://www.eenews.net/greenwire/2017/03/15/stories/1060051498
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Trump has Declared War on the EPA: 5 Chilling Examples
Mar 15, 2017 | Environmental Defense Fund
By Jeremy Symons
While running for president, Donald Trump threatened to virtually eliminate the U.S. Environmental Protection Agency, leaving only “little tidbits.”
Scott Pruitt, Trump’s EPA administrator, has been tasked with the job of tearing down the agency from within. This is the man who sued the EPA 14 times – with strong financial backing from companies seeking to weaken clean air and clean water standards – when serving as Oklahoma’s Attorney General.
The president has used deception to reassure the general public that critical environmental laws will continue to protect public health, and is now taking our country in a dangerous direction.
Here are five ways he and Pruitt will go about weakening the agency responsible for keeping our air clean, drinking water safe, and toxic chemicals from harming our families.
1. Gut the EPAs budget
Deep budget cuts at the EPA are being proposed under the guise of fixing budget issues.
In reality, the agency accounts for a mere two-tenths of 1 percent of federal spending. Any claim that major budget issues can be dealt with on the back of such a small sliver of the budget is false.
Instead, the proposed budget cuts are a clear signal to a narrow group of special interests and supporters who share Trump’s disdain for the EPA because environmental regulations don’t serve their agenda.
2. Relax enforcement against illegal pollution
Leaked budget documents show that Trump has already directed the EPA to curtail pollution-monitoring and get states “to assume more active enforcement roles.” But this isn’t about states’ rights; it’s merely a convenient cover for gutting federal enforcement responsibility without any assurance that states will pick up the slack.
In fact, Pruitt took Oklahoma in the opposite direction as attorney general by shutting down the state’s environmental enforcement unit.
Meanwhile, delegating enforcement to states puts everyone at the mercy of neighboring states’ enforcement. Almost every state has communities that are downwind or downstream from polluters across state boundaries.
3. Roll back pollution standards
“The future ain’t what it used to be at the EPA,” Pruitt explained in a fiery speech to the Conservative Political Action Conference in Washington shortly after his contentious and narrow confirmation by the Senate. He went on to pledge he would “roll back the regulatory state.”
President Trump has already issued an executive order seeking to weaken Clean Water Act protections for American rivers and streams. With Pruitt now at his side, he is expected to next take aim at rolling back standards that reduce toxic emissions from cars and power plants.
Trump says he is slashing federal clean air and water standards to ease what he calls “job-crushing regulations.” Of course, increasing pollution does not grow the economy.
4. Use misinformation to justify political agenda
During his confirmation hearing, Pruitt ran away from his anti-environmental record and assured senators that he was “concerned” about pollution contributing to climate change, that mercury “should be regulated” and that ground-level ozone is “a dangerous pollutant.”
Once he had been confirmed as EPA administrator, his tone has changed back to his roots. Pruitt is already a ready partner to Trump when it comes to spreading misinformation and denying climate change.
Political interference in science will come in many forms, but the most dangerous may be an effort to permanently meddle with the EPA’s scientific capacity under the guise of “reforming” the scientific process. Such meddling is a top Trump transition goal, according to Myron Ebell, the head of Trump’s EPA transition team.
Ebell makes no bones about it: The objective, he’s said, is to permanently cripple the agency’s capacity to bounce back under future presidents.
5. Surrender to allow “sue and pollute” lawsuits
We expect Pruitt and U.S. Attorney General Jeff Sessions to take up a new practice of surrendering to “sue and pollute” lawsuits in court. That would abandon the legal defense of EPA rules against suits brought by some polluters who would rather fight in court than invest in cleaner technology.
Pruitt may even take the unprecedented step to refuse to recuse himself from overseeing decisions about lawsuits that he himself brought against the EPA as Oklahoma’s attorney general – conveniently switching sides from plaintiff to defendant.
The question now is how Pruitt and Trump will contend with growing opposition as they walk the tightrope between broad public support for the EPA’s mission while serving the narrow interests of those who want to permanently weaken the agency.
If we remain vigilant and demand accountability from our elected officials, we can make every step they take along that tightrope more strenuous than the last.
https://www.edf.org/blog/2017/03/15/trump-has-declared-war-epa-5-chilling-examples
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Trump Dropping Climate Change Impact from Government Reviews: Report
Mar 14, 2017 | The Hill - E2 Wire
By Olivia Beavers
President Trump plans to drop climate change as a factor in making government decisions, Bloomberg reported Tuesday.
The move, which would reportedly cover environmental reviews of appliance standards, industry regulations and pipeline projects, would largely reverse how the Obama administration addressed climate change.
Former President Obama required government agencies to submit formal environmental reviews that factored the possible economic harm and impact projects would have from climate change.
Trump’s plan would also reconsider the metric the Obama administration used to measure projects’ expected economic costs and damage to the climate, called the "social cost of carbon,” Bloomberg reports. Obama used the metric to justify a set of environmental regulations.
Should Trump sign the order reversing this Obama-era approach, some changes could be implemented immediately while some could take years.
Bloomberg also reports the order would wipe out industry restrictions on methane emissions, a greenhouse gas.
Trump during the presidential race repeatedly promised to bring back coal jobs, and Bloomberg reports that this order would like lead to policy changes that make coal extraction easier.
American Energy Alliance President Tom Pyle praised the possibility that the Obama regulations would be reversed.
"President Obama created such a labyrinth of rules and orders and regulations to cement his agenda across practically every agency," Pyle told Bloomberg.
Pyle, the leader of a fossil fuel-oriented advocacy group, said Obama’s policies restricted companies from fully utilizing non-renewable energy sources.
"It was designed to put into the mission of the agencies climate change first and make the rest of their mission second. This was a constraint deliberately set up by the previous administration to make it difficult to utilize coal, oil and natural gas,” Pyle said.
Environmentalists, on the other hand, argue that Trump’s approach will upend the climate change commitments the U.S. made abroad and hurt the country’s environment.
Paul Getsos, national coordinator of People’s Climate Movement, believes Trump’s order will put “our country, our communities and our people at great risk.”
"It also sends a dangerous message to the world that the United States does not care about climate change or protecting front-line communities,” Getsos told Bloomberg.
http://thehill.com/policy/energy-environment/323945-trump-dropping-climate-change-impact-from-government-reviews-report
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Trump’s Defense Secretary Calls Climate Change a National Security Risk
Mar 14, 2017 | The Hill - E2 Wire
By Devin Henry
President Trump’s Defense secretary, James Mattis, believes climate change is a national security threat, according to congressional testimony highlighted by ProPublica on Tuesday.
According to a report, Mattis told the Senate Armed Services Committee that he believes in climate change and recognizes it as a threat. The statement came in unpublished written testimony associated with Mattis’s confirmation hearing.
“Climate change is impacting stability in areas of the world where our troops are operating today,” Mattis said in answers to written questions submitted to him by Democratic members of the committee.
He said the military needs to consider the impact that climate change-related outcomes — such as open water in the Arctic and drought in contentious areas of the world — have on military operations.
“It is appropriate for the Combatant Commands to incorporate drivers of instability that impact the security environment in their areas into their planning,” he wrote.
The statement puts Mattis’s Defense Department in line with that of the Obama administration. Former President Obama and his top officials often stressed the impact of climate change on international relations and military issues during the course of his presidency.
But it comes as the Trump administration moves to sideline climate change, a key issue facing the United States. The White House is expected to propose budget cuts this week to several federal climate-related programs, and it could pull back in the U.S.'s international climate change work as well.
http://thehill.com/policy/energy-environment/323959-trumps-defense-secretary-calls-climate-change-a-national-security
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Trump Officials Ask Energy Companies About Paris Climate Pact
Mar 15, 2017 | The Hill - E2 Wire
By Timothy Cama
Trump administration officials are reaching out to energy companies to gather input on what action they should take regarding the Paris climate agreement.
Two officials told Reuters about the effort to seek input from energy companies, though they declined to name the companies being contacted. One source said “publicly traded fossil fuel companies” are being contacted, according to Reuters.
Many of the firms are telling the administration that they want the United States to stay in the landmark 2015 pact, but to dial back former President Obama’s commitment to cut greenhouse gas emissions, Reuters reported.
Obama pledged that the United States would cut its emissions 26 percent to 28 percent by 2025. The pact included nonbinding emissions limits contributed by nearly 200 nations.
Trump promised during the presidential campaign that he would “cancel” the agreement, a central piece of his energy platform.
But he has yet to take action on it. Secretary of State Rex Tillerson wants the nation to stay in the pact, and Trump’s elder daughter, Ivanka, and adviser Jared Kushner are reportedly pushing him to stay in it as well.
Trump is being pressed by people like adviser Stephen Bannon and major conservative groups to pull out of it entirely or submit it to the Senate as a treaty, which would nearly guarantee its rejection.
Major international oil companies like Royal Dutch Shell, BP and Statoil support the agreement. Domestic oil majors Exxon Mobil Corp. and ConocoPhillips Co. also back it, while smaller United States oil companies oppose it.
Oil companies that also produce natural gas could see more business if the Paris accord causes a major switch from coal use to gas for electricity generation.
http://thehill.com/policy/energy-environment/324091-trump-officials-ask-energy-companies-about-paris-climate-pact
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17 Republicans Back Resolution Urging Action on Warming
Mar 15, 2017 | E&E Greenwire
By Hannah Hess and Erika Bolstad
The Republican climate resolution that jump-started a conversation on global warming ahead of Pope Francis' 2015 visit to Capitol Hill is back.
In addition to acknowledging the problem of warming, the 17 climate-savvy House Republicans backing the mainly symbolic legislation say they are prepared to embrace policies that help cut carbon dioxide emissions or adapt to the impacts of climate change.
Republican Reps. Elise Stefanik of New York, Carlos Curbelo of Florida and Ryan Costello of Pennsylvania led the effort.
The list of original co-sponsors includes Reps. Ileana Ros-Lehtinen and Brian Mast of Florida; Don Bacon of Nebraska; Mark Amodei of Nevada; Frank LoBiondo of New Jersey; John Faso, John Katko and Tom Reed of New York; Pat Meehan and Brian Fitzpatrick of Pennsylvania; Mark Sanford of South Carolina; Mia Love of Utah; Barbara Comstock of Virginia; and Dave Reichert of Washington.
From streamlining the permitting process for renewable energy projects on public lands to protecting Energy Department research and grant programs from cuts proposed by the Trump administration, a small menu of policy options emerged during interviews with co-sponsors.
Curbelo said yesterday that he "definitely" expects the group to push back on any proposed cuts to climate-related programs at U.S. EPA and elsewhere, though he cautioned, "I don't want to invest too much in presidential budgets. ... It's Congress that passes the budget."
Trump's interest in working with Congress on a sweeping infrastructure package could provide an opportunity to fund sea walls and other investments in coastal communities, Curbelo said.
"Environmental infrastructure is just as important as roads and bridges and rail," he said.
Costello told E&E News he supports clean energy technologies, such as carbon capture, and "more private investment to enable advanced nuclear technology."
DOE research and grant programs "have proven themselves to be of a high value," Costello said on the subject of budget cuts. While EPA from a rulemaking perspective has done things that "some" find objectionable, he said, he would "really want to look closely" at any proposed funding reductions.
"The real challenge is going to be the transportation sector, and I'm very much open to economically viable solutions that help us reduce CO2," Faso said.
Faso replaced Rep. Chris Gibson (R-N.Y.), who retired at the start of the 115th Congress.
Gibson introduced the same language — which assigns human emissions some responsibility for driving harmful warming and states that "if left unaddressed, the consequences of a changing climate have the potential to adversely impact all Americans, hitting vulnerable populations hardest" — last year with 10 co-sponsors. That number grew to 16.
'We have come a long way'
Gibson predicted before departing from Congress that climate change would be an issue on which the House GOP could make inroads over the next two years, despite hostility from the White House (E&E Daily, Nov. 29, 2016).
Curbelo has emerged as one of the most vocal critics of his party's rejection of climate science, heading up the bipartisan Climate Solutions Caucus with fellow South Florida Rep. Ted Deutch (D) (E&E Daily, March 10).
"We have come a long way, and we also recognize we have a long way to go," Curbelo said yesterday. "But we're moving in the right direction, and we're getting to the point that the people realize that this is a real challenge. They're focusing on the evidence, on the science, on the facts surrounding climate change, and that is what's going to lead our actions on this."
Curbelo said the group's main goal with the first resolution was to get a conversation started among fellow Republicans about the effects of climate change. Now, they are hoping to be more of an "idea factory" to talk about climate solutions they can work on with colleagues on both sides of the aisle.
It's time for Republicans to get with the times and acknowledge how important climate issues are to constituents who face rising seas, he said.
"The polling is very clear," the coastal lawmaker said. "A clear majority of Americans understand that this is a challenge we're facing. When you look at younger voters, the numbers are staggering. I've seen polling where over 80 percent of millennial voters consider this a major priority for them."
But neither the 17 co-sponsors of the resolution nor the 18 GOP members of the Climate Solutions Caucus committed to any specific course of action.
Amodei said there were still lingering scientific questions about "if" climate change is "man-caused" and that he is trying to do "the homework" by being part of the effort.
"If that offends some of the folks on the more conservative side, then it's like, 'Well, hey, I'm sorry, but I'm not going to apologize for attempting to be fact-driven,'" Amodei told E&E News.
The text of the resolution doesn't explicitly make the link between fossil fuel emissions and climate change, noted Union of Concerned Scientists President Ken Kimmell. Still, Kimmell said he was "heartened" to see it introduced.
"There is strength in numbers, and I hope that this sizable group of responsible leaders will have an impact on votes in Congress," Kimmell said.
The World Resources Institute and the political arm of the Environmental Defense Fund similarly welcomed the news.
"While [EPA Administrator] Scott Pruitt and the Trump administration move backward with both rhetoric and action that contradict settled science and public opinion, this resolution recognizes the role humans play in contributing to climate change and the need for congressional leadership on this pressing issue," said EDF Action President Elizabeth Thompson.
Conservatives for Responsible Stewardship celebrated the geographic diversity of the co-sponsors.
Love, for instance, represents a solidly red district in Utah, where 48 percent of people think global warming is caused mostly by human activities, according to a recent polling analysis by Yale University (Greenwire, Feb. 27).
"My constituents' concerns are my concerns, and many of them are worried about the impact a changing climate can have on Utah's ski industry. Others are worried about an increase in fires," Love said, when asked how her views align with those expressed in the polls.
"While this has been a good year for snowfall, we should continue to work to mitigate risk and exercise good stewardship," Love said.
CRS President David Jenkins said the significance of the Republican climate resolution "cannot be overstated." The group hopes it will garner more GOP co-sponsors.
Military link
The resolution in its first paragraph pledges to base policy decisions on "science and quantifiable facts on the ground," but it does not explicitly mention the words "climate change" until it arrives at a section on national security.
In that paragraph, the resolution notes that the Defense Department's Quadrennial Defense Review describes the effects of a changing climate as "threat multipliers" that could contribute to poverty, environmental degradation, political instability and social tensions in countries hit hardest by the effects of global warming.
Bacon, who joined the climate caucus within his first weeks on Capitol Hill, has drawn the link between climate and challenges he addressed while serving in the Air Force.
"As a commander of air bases in both Nebraska and Germany, I managed several important environmental programs to include resettlement of bird populations to reduce hazards to aircraft; incorporation of cleaner fuel technologies to minimize aircraft impacts on the environment; and proper disposal of hazardous chemicals used with our aircraft," he said last month.
DOD's belief that climate change is a national security "threat multiplier" was emphasized this week in testimony by Secretary of Defense James Mattis, the retired Marine general who has long been an advocate for alternative fuels to keep fighting forces nimble in combat situations (E&E News PM, March 14).
A handful of retired high-level military leaders expressed their support for the resolution today in a release from the Center for Climate & Security.
"I'm very excited to see the Republican Climate Change Resolution introduced to the Congress," said retired Navy Rear Adm. David Titley, an advisory board member at CCS. "Our nation's long-term security is critically dependent on moving away from fossil-based fuels to lessen the worst risks of climate change. This change will not happen without support and leadership from the Congress, in partnership with the administration. The Republican Climate Change Resolution is a good first step towards a serious bipartisan policy discussion."
http://www.eenews.net/greenwire/2017/03/15/stories/1060051512
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As Cap-and-Trade Fight Looms, Offset Providers Quake
Mar 15, 2017 | E&E Climatewire
By Debra Kahn
Carbon offset developers are worried that shifting political winds in California will leave them out of the state's evolving carbon market.
Forces are gathering that will likely result in some kind of substantive change to the state's landmark, economywide cap-and-trade program. Offsets providers — which fund emissions reductions in sectors not subject to the state's carbon cap — fear they are the likeliest target of activists who believe poor communities located near industrial facilities should benefit more directly from the state's climate policies.
"I think the environmental justice community sees it as a soft target," said Sean Penrith, executive director of the Climate Trust, an offset developer that has 46 projects around the country.
State lawmakers are in a prime position to adjust the cap-and-trade program this year, due to the possibility that the state may lack the authority to continue it past 2020. Gov. Jerry Brown (D) has called for the Legislature to re-approve cap and trade with a two-thirds vote, to insulate it against legal challenges that it violates a state constitutional amendment requiring a supermajority approval of new taxes and fees.
Lawmakers representing poor communities near high-emitting facilities are leading the negotiations. Last year's A.B. 197, by Assembly Member Eduardo Garcia (D), directed the state to "prioritize" direct emissions reductions over market-based ones like cap and trade, which allows companies to buy state-created allowances rather than reducing their own emissions. They can also buy carbon offsets, which are reductions that come from "uncapped" sectors like forests, dairies and refrigerant chemicals.
To environmental justice groups, offsets are a distillation of the issues they see in cap and trade. The biggest emitters are also the biggest users of offsets, depriving residents near the facilities not only of whatever benefits would come from direct emissions reductions, but also of revenue from the purchase of state-issued allowances.
"They're cheaper than other kinds of compliance mechanisms, and they are exporting our potential climate benefits out of state," said Amy Vanderwarker, co-director of the California Environmental Justice Alliance.
2 bills in play
Advocates and opponents of offsets are making the rounds in Sacramento, pitching their cases to lawmakers who are often unfamiliar with the arcana of the state's climate policies. Developers are citing the public health benefits of offsets and of emissions trading in general. They point to a January report on the Northeast's Regional Greenhouse Gas Initiative that found the trading program had helped avoid heart attacks and respiratory illnesses, saving roughly 300 to 830 lives, $5.7 billion in health care costs and 44,000 workdays.
Offset companies also are touting financial benefits to marginalized communities, including the fact that there are 20 projects located in disadvantaged communities within California, amounting to 16 million tons out of the 54 million tons of offsets that have been used thus far.
"It's not a massive theological difference of opinion now that we all understand the facts," said Penrith. "The real challenge is not everybody has the facts."
Legislative negotiations over a post-2020 program are still in the early stages. There have been two bills introduced so far this session to extend cap and trade, one from "moderate" Democrats aligned with industry, and one from Garcia and other lawmakers more aligned with environmental justice groups.
The one that limits offsets most directly is considered to have more support from industrial emitters. A.B. 151, by Assembly Member Autumn Burke (D), would amend the current offset system significantly by creating a new, incentivized hierarchy of projects. Projects in disadvantaged communities would be in the top tier, followed by projects within the state or on tribal lands and ones in territories that have linked emissions markets with California. Projects in the general United States would be in the lowest tier.
Environmental justice groups that oppose offsets regardless of how they are restricted are throwing their weight behind A.B. 378, by Garcia and Assembly Member Cristina Garcia (D).
"We don't have a position on A.B. 151, but our position on offsets has not changed: We don't believe they belong in California's climate change program," Vanderwarker said.
On the other hand, federal lack of support for climate policies could induce California to retain its market-based outreach to other states. There are offset projects in Arkansas, Virginia, Alaska and a host of other states that lean conservative, a supporter pointed out.
"Having the program operative nationally provides a way for other states to see the positive benefits of a climate change program that helps the economy and helps individuals," said Laurie Wayburn, president of Pacific Forest Trust. "It's really something that's very practical."
International offsets under consideration
Offsets have proved moderately attractive to companies that have to submit allowances to the state to cover all of their CO2 emissions. They are priced slightly cheaper than allowances, since their use is limited. Under the state's current rules, businesses are allowed to use offsets, rather than allowances, for up to 8 percent of their emissions.
So far, companies are using offsets for about 3 percent of their total emissions, according to the analysis firm ICIS U.S. Carbon Markets. But some of the largest emitters are relying on them more heavily.
Tesoro Corp. and Chevron Corp. both used the maximum allowed number of offsets in the first years of trading, according to ICIS. Because their emissions burdens are so high, it's worth the administrative cost of going to the trouble to buy the offsets, which generally have been selling for about a dollar cheaper than the state-issued allowances.
Chevron, which had to cover emissions of 20.8 million metric tons of CO2 in 2013 and 2014, used 1.7 million offsets during that period, saving roughly $1.7 million.
"No one wants to see Chevron just maxing out their offset allowance through projects in Arkansas, and that's kind of what's happening," Vanderwarker said.
Offsets are expected to be in higher demand during later years of the program, when the cap ratchets down and prices presumably rise. As well, state regulators have long been weighing whether to accept offsets from other countries, which would send any attendant benefits even farther afield. That proposal may be an indirect casualty of the push to limit offsets.
"I certainly don't think it's going to happen anytime soon," said Bill Magavern, policy director for the Coalition for Clean Air.
http://www.eenews.net/climatewire/2017/03/15/stories/1060051457
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Pruitt Faces Ozone Deadline Suit in California
Mar 15, 2017 | Inside EPA
EPA Administrator Scott Pruitt has been put on notice that if he fails to take non-discretionary action to develop plans to reduce ozone in several California communities, then environmental groups will sue him in federal court for missing Clean Air Act deadlines.
If the issue is litigated, the case could be an early test of the new administrator's vow not to engage in so-called “sue-and-settle” deals.
Two groups, the Center for Biological Diversity and the Center for Environmental Health, filed a March 14 notice of intent to sue EPA if the agency does not take action within 60 days to address missed deadlines to submit ozone plans, including two for the Los Angeles area, and one each for Riverside, Sacramento and Ventura counties.
The notice says EPA must issue a finding of failure to submit a state implementation plan (SIP) for each of these areas to meet the 2008 ozone national ambient air quality standards.
“EPA should remedy its violation of these mandatory duties to better protect the public and native ecosystems from ozone's harmful effects, which include decreased lung function, increased respiratory symptoms, emergency department visits, hospital admissions and even death. The most at risk are children and the elderly.”
It adds that EPA is required to determine whether a SIP submittal is complete and that if a state fails to submit a plan within six months of its deadline, then EPA must issue a finding of failure to submit.
The groups say they would “prefer to resolve this matter without the need for litigation. Therefore, we look forward to EPA coming into compliance within 60 days. If you do not do so, however, we will have to file a complaint,” the notice concludes.
How Pruitt responds to the notice will be seen as a test of his aversion to the practice of “sue-and-settle,” which he has alleged before coming to EPA has been used to result in an abusive fashion to approve regulations outside of the traditional regulatory process.
Sources are warning, however, that he may have to embrace the approach in order to avoid more onerous court-imposed deadlines.
CBD said in a statement announcing the suit, “We refuse to allow Scott Pruitt and the Trump administration to sidestep clean air laws that quite literally save the lives of thousands of Californians every year. The EPA must enforce the Clean Air Act to save lives and protect the environment from the scourge of smog and ozone pollution.”
https://insideepa.com/the-daily-feed
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