Preview Newsletter
AM ACC 3/23/2017
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(ACC Mentioned) Industry Focuses on Chemicals Cooperation as Trade Pacts Wane
Mar 23, 2017 | BNA Daily Environment Report
By Pat Rizzuto
Chemical manufacturers should encourage government-to-government regulatory cooperation initiatives as political support wanes for multilateral trade agreements in the U.S. and other countries, chemical industry officials say. -
Less Toxic Spray Insulation May Be Required in California
Mar 23, 2017 | BNA Daily Environment Report
By Carolyn Whetzel
Certain spray foam insulation materials sold in California may need to be made less toxic. -
OECD Moves to Cut Chemical Test Costs, Limit Animal Use
Mar 23, 2017 | BNA Daily Environment Report
By Rick Mitchell
The Organization for Economic Cooperation and Development announced new guidance March 22 to help cut the costs of chemical tests and decrease reliance on using animals in determining a chemical's safety. -
Echa's Rac and Seac Agree on Phthalates Restriction Proposal
Mar 23, 2017 | Chemical Watch
Echa's Risk Assessment and Socio-economic Analysis (Rac and Seac) committees have each agreed on a restriction proposal on the phthalates DEHP, DBP, DIBP and BBP in articles. -
Echa Committees Adopt Fnal Opinions on Authorisation Applications
Mar 23, 2017 | Chemical Watch
Echa's Risk Assessment and Socio-economic Analysis committees (Rac and Seac) have adopted Opinions on three applications for authorisation for the industrial use of: -
Med School Backs Professor on Glyphosate Paper
Mar 23, 2017 | E&E News PM
By Cecelia Smith-Schoenwalder
A New York medical school is denying allegations that one of its professors put his name on a 2000 paper ghostwritten by Monsanto Co. employees. -
(ACC Mentioned) Trump Policies to Shift Petrochemical Dynamics
Mar 23, 2017 | ICIS
By Joseph Chang
The US petrochemical sector is undergoing a tectonic shift on the back of shale gas with the first wave of ethane crackers starting up this year. US President Donald Trump could well shake up the sector even more with his key policies. -
Spicer Disputes Delay of Order to Repeal Obama Regs
Mar 23, 2017 | E&E News PM
By Robin Bravender
White House spokesman Sean Spicer today disputed an assertion that an expected White House order repealing President Obama's climate change policies has been delayed. -
U.S. Oil Exports Increased, Spread Across the Globe in 2016, EIA Says
Mar 22, 2017 | Fuel Fix
By Collin Eaton
U.S. oil exports climbed 12 percent last year even as domestic output dropped, bringing the nation’s overseas shipments to an average of more than half a million barrels a day, the Energy Department said Wednesday. -
U.S. Slips in Global Rankings on Energy Infrastructure: Forum
Mar 23, 2017 | BNA Daily Environment Report
By Marine Strauss
The U.S. slipped in a global ranking of countries’ ability to deliver secure, affordable and sustainable energy while European nations maintained positions at the top of the list, a report by the World Economic Forum showed. -
Exxon Mobil to Decide Soon on $10B Texas Petrochemical Plant
Mar 22, 2017 | Fuel Fix
By Jordan Blum
Exxon Mobil Corp. said it will decide as soon as May whether to move forward with a planned $10 billion petrochemical complex north of Corpus Christi now that it has the desired tax breaks approved. -
California Regulator to Vote on United States' Strictest Methane Rule
Mar 23, 2017 | Reuters
By Tom James
California's air pollution regulator is due to hold a vote on Thursday on methane emission regulations that it says would be the strictest in the United States in controlling the second-most prevalent greenhouse gas in the atmosphere. -
Fracking Ban Advances to Maryland Senate Floor
Mar 22, 2017 | Washington Post
By Josh Hicks
A bill to ban hydraulic fracturing in Maryland cleared a major hurdle Wednesday, days after Gov. Larry Hogan (R) surprised advocates by endorsing the ban. -
New Jersey Senators Tell FERC to Investigate Arsenic Concerns from PennEast Pipeline
Mar 23, 2017 | Natural Gas Intelligence
By Charlie Passut
U.S. Sens. Cory Booker (D-NJ) and Robert Menendez (D-NJ) have asked FERC to investigate concerns raised by several federal agencies over the proposed PennEast natural gas pipeline, including the risk of possible arsenic contamination. -
Sutherland: CSB Chair Says Agency's Watchdog Role is Invaluable
Mar 22, 2017 | Houston Chronicle
By Vanessa Allen Sutherland
The notion that safety is always good for the bottom line is not new - but it is most assuredly a principle that should be taken more seriously. Twelve years after the BP Texas City disaster - one of the deadliest industrial accidents in the history of the United States... -
Chemical Safety
Mar 22, 2017 | Houston Chrnoicle
By Editorial Board
On a sunny spring day in Texas City 12 years ago today, workers at the BP refinery had just finished a company-sponsored lunch in appreciation of a month without any on-the-job injuries. The celebration wouldn't last long. -
House Panel to Challenge Climate Science
Mar 23, 2017 | The Hill - E2 Wire
By Timothy Cama
Republicans on the House Science Committee are planning a hearing next week to challenge mainstream climate science conclusions. -
Trump's Words Could Jeopardize His Environmental Rollbacks, Too
Mar 23, 2017 | BNA Daily Environment Report
By Jennifer A. Dlouhy
President Donald Trump's words may come back to haunt him in court as he moves to roll back regulations that fight climate change, just as they did when he tried to ban travel from six predominantly Muslim countries. -
Proposed EPA Cuts Punctuate Hearing on Clean Air Act Bill
Mar 22, 2017 | E&E Daily
By Sean Reilly
The official focus of a House Energy and Commerce subcommittee hearing yesterday was a revived Republican bill to rewrite key tenets of the Clean Air Act, but Democrats took it as an opportunity to pre-emptively question the potential impact of newly proposed budget cuts on U.S. EPA. -
Carbon Tax Debate Exposed Rift Among Trump’s Aides
Mar 21, 2017 | Politico
By Josh Dawsey, Annie Karni and Andrew Restuccia
When former Secretary of State James Baker and his allies came to the White House last month to pitch a carbon tax, they received a warm reception from Gary Cohn, one of the president's top economic advisers. -
EPA Alumni Group Slams Proposed Agency Budget Cuts
Mar 22, 2017 | PoliticoPro - Whiteboard
By Alex Guillen
A newly formed group of former EPA employees today released a report criticizing the Trump administration’s proposed cuts to the environmental agency in its “skinny budget.”
Industry and Association News
LCSA News- There are no clips to report at this time.
Chemical Management News
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Environment News
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(ACC Mentioned) Industry Focuses on Chemicals Cooperation as Trade Pacts Wane
Mar 23, 2017 | BNA Daily Environment Report
By Pat Rizzuto
Chemical manufacturers should encourage government-to-government regulatory cooperation initiatives as political support wanes for multilateral trade agreements in the U.S. and other countries, chemical industry officials say.
“The biggest trade issues faced by our members are the non-tariff barriers, and regulatory cooperation gets at those non-tariff barriers,” Greg Skelton, senior director for regulatory and technical affairs at the American Chemistry Council, recently told Bloomberg BNA.
A non-tariff trade barrier, for example, could include countries requiring different elements on container labels that don't add health or environmental information, but add to the cost of doing business, he said.
Regulatory cooperation between countries on chemical policy can reduce business costs and boost sales opportunities for all parties, Skelton said.
It's fine to include regulatory cooperation in trade agreements, as both the Trans-Pacific Partnership and Transatlantic Trade and Investment Partnership proposed, he said. But “you don't need trade agreements to get cooperation agreements,” Skelton said.
Regulatory cooperation efforts for significant new use chemical regulations are yielding results, Lynn Vendinello, a division director working in the EPA's chemicals office, said Feb. 24 at the Global Chemical Regulations conference organized by the American Chemistry Council. The U.S. Environmental Protection Agency, Health Canada, and Environment and Climate Change Canada have been working on those efforts.
The three agencies have developed joint “primers"—basic information that can help chemical manufacturers and foreign suppliers understand their obligations, she said. Webinars based on the primers will be held in coming months, she said.
Moving Past Trade Pacts
Roberto Azevedo, director-general of the World Trade Organization, acknowledged a global anti-trade sentiment when he talked to reporters following his reappointment Feb. 28.
President Donald Trump withdrew from the Trans-Pacific Partnership in January. Trump also has said he plans to renegotiate the North American Free Trade Agreement, or NAFTA, and may withdraw from that treaty if he's unable to secure something that benefits American workers.
NAFTA renegotiations will raise a host of issues—such as what mechanism should be used to resolve disputes—and may not offer the best vehicle to pursue regulatory cooperation initiatives, Sean Heather, a vice president at the U.S. Chamber of Commerce, said Feb. 24 during the Global Chemical Regulations conference (GlobalChem).
Geraldine Emberger, trade counselor for regulatory affairs with the EU Delegation to the United States, said trade agreements can be catalysts to regulatory cooperation, but are not essential to it.
Regulators must, however, recognize they could mutually benefit by cooperating with counterparts in other countries, Emberger said March 22. She spoke during a meeting on consumer safeguards for transatlantic markets.
The meeting was organized by the Trans Atlantic Consumer Dialogue, a coalition of about 75 U.S. and European consumer groups that develop policy recommendations.
Robert Adler, a commissioner with the U.S. Consumer Product Safety Commission, and Pinuccia Contino, head of product safety and rapid alert systems with the European Commission's Directorate General for Justice and Consumers, told dialogue meeting participants that sharing safety concerns consumers have encountered has helped the U.S. and EU member states protect their consumers.
Contino said she would meet with the U.S. commission after the dialogue to discuss additional ways they could jointly address the safety of products sold online.
Kim Tuminaro, who coordinates the Transatlantic Economic Council at U.S. Department of State, said cooperation efforts on the science needed for future regulatory actions also have been helpful. She cited joint meetings the U.S. and European Union held on nanomaterials.
U.S.-Canada Council
The EPA, Health Canada, and Environment and Climate Change Canada have benefited from their chemicals management work undertaken through the U.S.-Canada Regulatory Cooperation Council, speakers from those agencies said during the GlobalChem conference.
The council was launched in 2011 by then-Prime Minister Stephen Harper and President Barack Obama. Regulatory agencies in both countries are working together through the council to address chemical risk assessments, locomotive emissions, medical devices, new chemicals, pesticides and pharmaceuticals.
Regulatory cooperation agreements could be a good option if consumer advocates are at the table and if the negotiations for the cooperation initiatives are transparent, consumer advocates said throughout the Trans Atlantic dialogue meeting.
The U.S.-Canada Regulatory Cooperation Council's risk assessment effort has undertaken interesting projects, Jennifer Sass, a senior scientist at the Natural Resources Defense Council (NRDC) who participated in the risk assessment work group, told Bloomberg BNA March 22.
The process was initially flawed, however, because nongovernmental organizations weren't involved in selecting the risk assessment issues on which to focus, nor the chemicals for which the group prepared case studies, she said. NRDC and two Canadian nongovernmental organizations were invited to participate only after the regulatory agencies and industry participants already made the main decisions, she said.
Civil society groups must be part of a spectrum of organizations that contribute to trade or regulatory cooperation agreements, Emberger said.
Government positions that are crafted before entering into agreement negotiations should be available to the public at large, she said.
Next Steps
EPA, Health Canada, and Environment and Climate Change Canada will issue reports on their new chemicals work this summer, Vendinello said at GlobalChem.
A strategy, or “framework,” for the two countries to work together on risk assessments will be issued by the end of the year, Tala Henry, director of the Risk Assessment Division in EPA's Office of Pollution Prevention and Toxics, told GlobalChem participants.
A challenge for chemical and other industries is to show regulatory cooperation generates benefits, said the U.S. Chamber's Heather.
Consumer groups working on regulatory cooperation will need to demonstrate the benefits that regulations provide, Monique Goyens, director general of the European Consumer Organization said during the Trans Atlantic Consumer Dialogue meeting.
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=107776767&vname=dennotallissues&fn=107776767&jd=107776767
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Less Toxic Spray Insulation May Be Required in California
Mar 23, 2017 | BNA Daily Environment Report
By Carolyn Whetzel
Certain spray foam insulation materials sold in California may need to be made less toxic.
California's Department of Toxic Substances Control launched a rulemaking to identify spray polyurethane foam systems containing unreacted methylene diphenyl diisocyanates, or MDI, as a priority product under its Safer Consumer Products Program. The comment period begins March 24.
The agency is targeting two-piece spray foam systems with MDI, which when mixed together form a foam used for insulation, roofing or sealing or filling voids or gaps in homes and other buildings.
Unreacted methylen diphenyl diisocyanates have been linked to respiratory toxicity, asthma, dermal irritation and other health effects.
California DTSC has scheduled a May 16 public hearing on the proposed regulation at its headquarters in Sacramento. Written comments are due the same day.
The rulemaking marks the second under the Safer Consumer Products Program. If the rules become final, an estimated 17 manufacturers that make and sell the products would have to conduct a lifecycle alternatives analysis to determine if the products can be made safer. Should the analysis show no safer alternatives are available, the state could issue a range of regulatory actions, including banning the sale of the products.
State officials estimated the rules would costs businesses between $1.06 million and $3.1 million.
Also, the final rules would officially list unreacted methylene diphenyl diisocyanates as a “chemical of concern” under the program.
The agency is in the process of completing rules identifying children's foam-padded sleeping mats treated with Tris (1,3-dichloro-2-propyl) phosphate (TDCPP) and Tris (2,chloreothyl) phosphate (TCEP).
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=107776773&vname=dennotallissues&fn=107776773&jd=107776773
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OECD Moves to Cut Chemical Test Costs, Limit Animal Use
Mar 23, 2017 | BNA Daily Environment Report
By Rick Mitchell
The Organization for Economic Cooperation and Development announced new guidance March 22 to help cut the costs of chemical tests and decrease reliance on using animals in determining a chemical's safety.
The 33-page technical guidance document will advise regulatory authorities, scientists and others who test chemical safety on how they can use “toxicity pathways” in work to develop new approaches to safety testing and assessment of chemicals. That work is part of the process by which regulators identify hazardous chemicals, assess their risks and then regulate the chemicals.
The guidance would help companies adopt screening tools to replace some existing test methods that are expensive and require using many animals.
The guidance provides a framework and examples for developing an alternative approach based on the concept of adverse outcome pathways, known as AOPs. The document defines an AOP as a logical sequence of key events triggered by chemical exposure and occurring at the molecular, cellular, organ, whole organism or population level. The Paris-based OECD has said that adverse outcome pathways can be used to better understand a substance's toxicity mechanisms.
While the guidance is voluntary, the OECD said it wants to incorporate AOPs into work to bring new methods into test guidelines in its Multilateral Acceptance of Data system, whose 41 country participants agree to legally binding rules.
2014 Wiki
When it launched its AOP-Wiki in 2014, the OECD described its combined effort with the U.S. Environmental Protection Agency and European Commission Joint Research Center as a web-based platform for gathering knowledge on toxicity pathways through which chemicals cause adverse effects in humans and wildlife.
AOPs underpin the OECD's project for developing integrated approaches to hazard testing and assessment, which are aimed at encouraging regulatory acceptance of nontest data, allowing reduction of animal testing, and making it possible to assess larger numbers of chemicals based on factors such as similarity in structure, mode of action and metabolic pathways.
Since 2014, the OECD has continued to release new AOPs; the AOP-Wiki currently lists dozens.
In January, the organization launched an Effectopedia collaborative tool for using AOPs in interdisciplinary research.
The organization has said it plans to incorporate adopted AOPs into work to bring new in vitro test methods—which allow avoiding use of animals for chemical safety tests—into test guidelines in its multilateral Mutual Acceptance of Data system, under which participating countries exchange results of toxicity testing conducted using OECD-approved methods and principles.
Advanced Economies
The OECD's 35 member countries, which include the world's advanced economies, have signed the legally binding Mutual Acceptance of Data system multilateral agreement, as have non-OECD members Argentina, Brazil, India, Malaysia, South Africa and Singapore as full adherents.
Mutual Acceptance of Data system testing allows hazard identification, which with exposure information allows regulators to make risk assessments for chemicals, the organization said.
The OECD said it also plans to use the AOPs in its Quantitative Structure-Activity Relationships project for developing new methods and profilers for grouping chemicals.
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=107776768&vname=dennotallissues&fn=107776768&jd=107776768
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Echa's Rac and Seac Agree on Phthalates Restriction Proposal
Mar 23, 2017 | Chemical Watch
Echa's Risk Assessment and Socio-economic Analysis (Rac and Seac) committees have each agreed on a restriction proposal on the phthalates DEHP, DBP, DIBP and BBP in articles.
The Rac's recommendation on the proposal, originally submitted by Echa and Denmark, is to ban phthalates in articles that cause exposure through skin or by inhalation, especially those which could come into contact with children's mouths.
Examples of articles through which this could occur are:
· articles moulded or coated with plastic;
· mattresses and flooring;
· coated fabrics and paper;
· footwear, recreational gear and equipment; and
· office supplies and equipment.
Seac agreed and its draft Opinion concludes that the proposed restriction is the most appropriate EU-wide measure to address the identified risks in terms of the proportionality of its socio-economic benefits to its costs.
Both committees also agreed on a final proposal for restricting tridecafluorooctyl silanetriol and derivatives (TDFA). These are used alongside organic solvents in consumer waterproofing spray products. The original proposal was submitted by Denmark.
Echa has opened a public consultation on Seac's draft Opinions on restrictions to the four phthalates and TDFA. The deadline for comments is 22 May 2017.
In addition, the Rac adopted five Opinions on harmonised classification and labelling.
The Opinions will be available on the Rac and Seac web pages in the near future, Echa says.
https://chemicalwatch.com/54656/echas-rac-and-seac-agree-on-phthalates-restriction-proposal
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Echa Committees Adopt Fnal Opinions on Authorisation Applications
Mar 23, 2017 | Chemical Watch
Echa's Risk Assessment and Socio-economic Analysis committees (Rac and Seac) have adopted Opinions on three applications for authorisation for the industrial use of:
· arsenic acid and chromium trioxide for the treatment of copper foil used in the manufacture of printed circuit board; and
· chromium trioxide in plating on plastics for automotive applications.
Out of 26 applications under consideration, the committees have agreed on 19 draft Opinions on specific uses of:
· chromium (VI) substances;
· 1,2-dichloroethane (EDC); and
· bis(2-methoxyethyl) ether (diglyme).
The draft Opinions will be sent to the applicants for comments before final adoption. The Opinions will be available on the Rac and Seac web pages in the near future.
https://chemicalwatch.com/54654/echa-committees-adopt-final-opinions-on-authorisation-applications
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Med School Backs Professor on Glyphosate Paper
Mar 23, 2017 | E&E News PM
By Cecelia Smith-Schoenwalder
A New York medical school is denying allegations that one of its professors put his name on a 2000 paper ghostwritten by Monsanto Co. employees.
Published in Regulatory Toxicology and Pharmacology, the paper concludes that glyphosate, a key ingredient in Monsanto's Roundup herbicide, doesn't cause cancer.
Monsanto is being accused of having its employees write that paper — and another published in 2013 — which accusers say U.S. EPA used to decide on the safety of glyphosate (Greenwire, March 15).
Lawsuits in federal court accuse Monsanto of failing to warn Roundup users that glyphosate could cause non-Hodgkin lymphoma.
Officials at New York Medical College said they investigated the ghostwriting allegations after a federal court in California last week released internal documents showing a professor in the school's pathology department, Gary William, helped write the report.
"After learning of the recent allegations, we can find no evidence that the research paper in question deviated from [our] policies, or that it was not written by its principal author," the school said in a statement.
An external research partner investigated the situation and confirmed the paper's authors, the school said.
Monsanto has also denied that company scientists ghostwrote the 2000 report.
http://www.eenews.net/eenewspm/2017/03/22/stories/1060051909
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(ACC Mentioned) Trump Policies to Shift Petrochemical Dynamics
Mar 23, 2017 | ICIS
By Joseph Chang
The US petrochemical sector is undergoing a tectonic shift on the back of shale gas with the first wave of ethane crackers starting up this year. US President Donald Trump could well shake up the sector even more with his key policies.
Trump’s first speech to the joint session of Congress on 1 March revealed little detail to his platform policy issues, but reiterated business friendly changes with broad implications for US manufacturing and petrochemicals.
Most relevant to the US chemical industry are corporate tax reform, including a potential border adjustment tax (BAT); infrastructure spending; and rollbacks of regulations, including on energy development – all of which Trump touched upon.
On taxes, Trump alluded to a potential border tax or BAT without mentioning them by name.
“Currently, when we ship products out of America, many other countries make us pay very high tariffs and taxes. But when foreign companies ship their products into America, we charge them almost nothing,” said Trump.
A border tax would be a simple tax on all imports, essentially a tariff which would raise their cost. A border adjustment tax (BAT) could exempt US exports from taxes, while not allowing imported raw materials or cost of goods sold (COGS) to be deducted as an expense for tax purposes.
The BAT, which is being talked about in Congress, would incentivise companies to build plants in the US to export goods, and heavily penalise the use of imported materials.
This could have massive implications for chemical and polymer supply chains where companies – and not just those in chemicals – would be highly incentivised to source local raw materials and eschew imports.
On trade protectionism, Trump quoted former president Abraham Lincoln, who early after his first election to Congress, warned that “abandonment of the protective policy by the American Government [will] produce want and ruin among our people.”*
Any US border tax would be harmful to the US chemical industry, said a private equity firm senior executive.
“For a chemical industry that is very global and excellent at shipping, a border tax would be bad. It would harm economic growth overall and particularly hurt the chemical industry,” said Thomas Kichler, partner and US head of industrials and energy at CVC Capital Partners at an early March meeting of the CMEACS, the business and investment group of the American Chemical Society.
“The US has been such a great place to do business because of free enterprise. If government has more of an influence on what individual companies do, that will lead to bad decisions,” he added.
Whether or not a protectionist tax regime would pass Congress is one thing, but we should fully expect a border tax or BAT to be on the table.
US CHEMICAL TRADE SURPLUS
The US chemical industry, excluding pharmaceuticals (all following data ex pharma), has a substantial surplus in global trade. This surplus amounted to $28.2bn in 2016, according to statistics compiled by the American Chemistry Council (ACC).
Mexico, the target of much of Trump’s talk on trade protectionism, is the second largest destination for US chemical exports ($19.2bn in US exports) behind Canada, and accounts for more than half of the total US trade surplus in chemicals ($14.6bn) – by far the most of any other country.
That represents a major risk in the event of retaliatory trade measures by Mexico, as well as other countries. Purely from a tax standpoint, a US BAT would be a net positive for the US chemical industry, but a trade war would be very negative.
US CAPACITY WAVE
A trade war would especially be harmful at this juncture when the US is on the verge of bringing on a massive wave of ethylene and derivatives capacity, largely polyethylene (PE), of which much will be targeted for export.
The first US cracker in the wave – a joint venture between Occidental Chemical and Mexichem with 544,000 tonnes/year of ethylene capacity in Ingelside, Texas, started up at the end of February 2017 and is expected to ramp up to full rates by September 2017.
The ethylene will be used to produce vinyl chloride monomer (VCM) at the site, the majority of which will be shipped to Mexichem’s polyvinyl chloride (PVC) plants in Mexico and Colombia.
Seven more crackers in the US are under construction, with Dow Chemical, Exxon-Mobil Chemical and Chevron Phillips Chemical next on tap this year, each with 1.5m tonnes/year of ethylene capacity and varying amounts of downstream PE.
The PE capacity downstream from ExxonMobil’s cracker in Baytown, Texas – 1.3m tonnes/year of linear low density PE (LLDPE) and metallocene LLDPE – is being built almost exclusively for export.
Major destinations for export include Asia Pacific, Latin America, Middle East and Africa, as well as Europe, in that order, noted a source in the company.
Chevron Phillips Chemical, which is building 1.0m tonnes/year of PE capacity – 500,000 tonnes/year of high density PE (HDPE) and 500,000 tonnes/year of metallocene LLDPE in Old Ocean, Texas, near its cracker in Cedar Bayou, Texas – expects to export 30-50% of its PE output initially, with that amount eventually falling in line with its current PE export level of 20%.
LyondellBasell CEO Bob Patel, whose company is building a 500,000 tonne/year HDPE project in LaPorte, Texas, for start-up in mid-2019, sees overall US PE exports rising from the high-teens–20% range today, to 30% or higher after all the new capacity starts up.
“As an industry, free trade is important. For feedstock advantaged regions such as the US, the way to monetise this is to serve global markets. We are watching to see what develops,” said Bob Patel, CEO of LyondellBasell, in an interview with ICIS.
Paul Hodges, chairman of consultancy International eChem, sees the US PE capacity situation as problematic and further complicated by Trump’s trade and energy policies.
“Almost inevitably, [US PE producers] will be forced to fight very hard to gain market share by reducing prices. This will start in export markets, as these offer the only chance of taking the new volume,” said Hodges in International eChem’s late February pH Report.
“But, of course, local suppliers and existing importers will also react – and politicians will likely also react by claiming the exports are being ‘dumped’ at lower prices than those obtaining in the US domestic market. In turn, this will open up a wider debate about the role of President Trump’s support for the energy industry – particularly if he has followed through on his pledge to offer tax incentives to exporters.”
On non-border related tax reform, any reduction in the corporate tax rate from a current 35%, to around 20% – a level being talked about in Congress – would be a boon for US chemical companies. Yet it is unclear whether this potential reduction would have to be in conjunction with a border tax or BAT.
“Reducing the corporate tax and changing depreciation guidelines would be directionally positive, giving us more cash flow to reinvest in our business,” said Lyondell- Basell’s Patel.
Among the tax aspects being discussed is the ability to deduct capital expenses immediately or over an accelerated timeframe, giving more favourable tax treatment to capital expenditures. This would be particularly beneficial to the capital intensive petrochemical industry.
INFRASTRUCTURE PLANS
Trump also reiterated his commitment to a massive infrastructure plan, asking Congress to “approve legislation that produces a $1 trillion investment in the infrastructure of the United States, financed through both public and private capital, creating millions of new jobs.”
This is incrementally positive for the US chemical sector, and even more that the programme would be “guided by two core principles: buy American, and hire American,” he said.
That would favour US chemical companies or those with chemical plants in the US that would provide the polymers, coatings, adhesives, solvents and other materials used in the construction of critical infrastructure – from roads, bridges, railways and airports, to energy and telecom assets.
REGULATION ROLLBACK
On regulations, Trump reiterated his commitment to rolling them back to help US business. On 24 February, he signed an executive order directing federal agencies to create regulatory reform task forces to review which regulations to keep, change or slash.
“President Trump and his administration continue to demonstrate an understanding of what it will take to drive growth in US manufacturing. Their focus on smart regulations, competitive taxes, fair trade, training and education are hitting the sweet spots to bring back manufacturing jobs for the new century,” said Dow Chemical in a statement.
“The Executive Order the President signed today (24 February) is another significant step, as regulatory reform is essential to driving the investments and innovation that result in job and economic growth,” it added.
“There is real meat on the bones,” said Dow chairman and CEO Andrew Liveris, regarding the administration’s collaboration with business leaders such as the manufacturing company CEOs.
The Trump administration also cleared the way for the construction of two major crude oil pipelines – the Keystone XL pipeline and the Dakota Access pipeline.
Any rollback of regulations that promotes the development of more energy resources would be a benefit to the US chemical sector as well.
“On the regulatory front, the approval of the pipelines is directionally positive, allowing us to harvest resources and bring them to market,” said LyondellBasell’s Patel.
“The policy priorities President Trump outlined tonight (28 February speech to joint session of Congress) will further the manufacturing renaissance made possible by the shale revolution and ensure the robust production of the fuel and petrochemicals that Americans rely on every day,” said Chet Thompson, president of AFPM.
*Lincoln’s actual quote was a bit longer: “Believing that these propositions, and the [conclusions] I draw from them can not be successfully controverted, I, for the present, assume their correctness, and proceed to try to show, that the abandonment of the protective policy by the American Government, must result in the increase of both useless labour, and idleness; and so, in pro[por]tion, must produce want and ruin among our people.
https://www.icis.com/resources/news/2017/03/23/10090290/trump-policies-to-shift-petrochemical-dynamics/
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Spicer Disputes Delay of Order to Repeal Obama Regs
Mar 23, 2017 | E&E News PM
By Robin Bravender
White House spokesman Sean Spicer today disputed an assertion that an expected White House order repealing President Obama's climate change policies has been delayed.
"Why would it be delayed?" Spicer said today when asked by E&E News about the timing of the order. "I don't believe I ever announced that that was scheduled to come out."
The much-anticipated executive order is widely expected to direct U.S. EPA to repeal Obama's Clean Power Plan rule and could include other wide-ranging energy policy directives.
White House spokeswoman Kelly Love told E&E News in early March that the order would be unveiled the following week, but those plans appear to have been delayed, and the timing for such an order is now unclear (Greenwire, March 1).
Spicer declined to comment further on the timing or possible contents of an executive order addressing climate and energy.
"Until they're ready to be announced, I don't comment on the scheduling" or the contents of executive orders, he said. Asked whether the administration feels that it's legally bound to regulate greenhouse gases, he said, "Let's wait and see what the executive order says or doesn't say."
http://www.eenews.net/eenewspm/2017/03/22/stories/1060051908
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U.S. Oil Exports Increased, Spread Across the Globe in 2016, EIA Says
Mar 22, 2017 | Fuel Fix
By Collin Eaton
U.S. oil exports climbed 12 percent last year even as domestic output dropped, bringing the nation’s overseas shipments to an average of more than half a million barrels a day, the Energy Department said Wednesday.
Exporters sent crude shipments to more than two dozen countries in South America, Europe, Africa and Asia after the federal government lifted its longstanding oil export restrictions in December 2015.
In 2015, more than nine out of 10 exported barrels went to Canada. In 2016, that figure fell to six in 10 barrels, the Energy Information Administration said.
This year, U.S. exporters sent 38,200 barrels of oil a day to the Netherlands, the most shipped to any country except Canada, followed by Curacao, China, Italy, the United Kingdom, Korea, Singapore, Colombia and Japan.
http://fuelfix.com/blog/2017/03/22/u-s-oil-exports-increased-spread-across-the-globe-in-2016-eia-says/
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U.S. Slips in Global Rankings on Energy Infrastructure: Forum
Mar 23, 2017 | BNA Daily Environment Report
By Marine Strauss
The U.S. slipped in a global ranking of countries’ ability to deliver secure, affordable and sustainable energy while European nations maintained positions at the top of the list, a report by the World Economic Forum showed.
With “particularly low scores” relating to emissions, the U.S. ranked 52 on the list of 127 countries, four places lower than a year ago, the WEF said in its latest Global Energy Architecture Performance Index Report published on March 22.
The U.S. “lags behind its peers” in the Organization for Economic Cooperation and Development on environmental sustainability, according to the report.
Switzerland led the rankings for a third year, followed by Norway, Sweden, Denmark and France. European Union nations and their neighbors benefit from “advantages gained through a long history of regional coordination between member states” of the EU, as well as European Commission efforts to focus on cross-border trade and increasing competition for lower energy prices, the WEF said.
The report “demonstrates well the unprecedented structural changes in the global energy system,” Maros Sefcovic, vice president for energy policy at the Brussels-based commission, said in a statement.
“Europe, with its clean-energy transition, has embarked on an ambitious path to lead this goal.”
Among other nations, Japan rose six places to 45, three ahead of Russia. China was at 95, while India ranked 87.
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=107776754&vname=dennotallissues&fn=107776754&jd=107776754
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Exxon Mobil to Decide Soon on $10B Texas Petrochemical Plant
Mar 22, 2017 | Fuel Fix
By Jordan Blum
Exxon Mobil Corp. said it will decide as soon as May whether to move forward with a planned $10 billion petrochemical complex north of Corpus Christi now that it has the desired tax breaks approved.
The Gregory-Portland School Board approved the requested tax abatement late Tuesday evening, just one day after the San Patricio County Commissioners also approved the property tax breaks totaling $460 million. The votes were delayed a couple of months because of community opposition, especially from Portland residents who fear their bedroom community transforming into a new industrial corridor.
“In the weeks and months ahead, we will continue to listen to the community. We will continue to learn from those with whom we have the privilege to dialogue with – regardless of whether or not they support the project,” wrote Robert Tully, Exxon’s project executive, in a prepared statement.
The project is a joint venture between Exxon Mobil and the state-owned Saudi Basic Industries Corp., or SABIC, that’s called Gulf Coast Growth Ventures. Tully said the team will wrap up the site selection in the next two or three months and then begin the required permitting processes. They considered three other Texas and Louisiana sites, but always preferred the Corpus Christi region for its proximity to pipelines, railways, highways, employee housing and port access.
The plant, to be just outside the city limits of Portland and Gregory, sparked strong opposition in the communities, which together have about 20,000 residents. The debate, as in many other cities and towns where major developments are proposed, turned on the question of whether the promised jobs and economic growth were worth the plant’s effect on the character and quality of life of the communities.
The plant, the largest proposed in Texas, would create an estimated 11,000 construction jobs and 600 permanent ones, and feature the world’s biggest ethane cracker, which processes a component of natural gas into ethylene, the primary building block of most plastics.
The project, which could be completed as soon as 2021, is designed to capitalize on cheap Texas shale natural gas to make chemicals and plastics for emerging markets like China and India. Exxon Mobil and SABIC pledged to be sensitive to concerns of the community and residents by including, for example, green spaces and a half-mile buffer around the 1,400-acre site for the plant.
The plant near Corpus Christi is not Exxon Mobil’s only project. Karen McKee, Exxon Mobil vice president for global basic chemical, said the company expects to complete by year-end a massive ethane cracker and plastics expansion at its Baytown and Mont Belvieu sites, with plans to sell much of the production in foreign markets.
http://fuelfix.com/blog/2017/03/22/exxon-mobil-to-decide-soon-on-10b-texas-petrochemical-plant/
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California Regulator to Vote on United States' Strictest Methane Rule
Mar 23, 2017 | Reuters
By Tom James
California's air pollution regulator is due to hold a vote on Thursday on methane emission regulations that it says would be the strictest in the United States in controlling the second-most prevalent greenhouse gas in the atmosphere.
The new standards, proposed by the California Air Resources Board, would tighten efficiency requirements in the production and transportation of natural gas, and also for some oil-handling equipment, and would mandate prompt repair of discovered leaks, said Dave Clegern, a spokesman for the board.
The regulations are expected to pass Thursday's vote by the board, people familiar with the process told Reuters.
In October 2015, the massive Aliso Canyon natural gas leak forced thousands to evacuate in Los Angeles' Porter Ranch area. It took nearly four months to plug and has been estimated to have had a larger climate impact than the 2010 Deepwater Horizon oil spill.
Methane, the main component of commercially distributed natural gas, is produced at dedicated wells and during the extraction of oil. Pound for pound, it traps significantly more heat in the atmosphere than carbon dioxide, the most prevalent greenhouse gas.
Thursday's vote comes shortly after U.S. President Donald Trump proposed major cuts to the Environmental Protection Agency's budget and as the U.S. Senate prepares to vote on repealing a rule limiting methane venting and leaking on federal and tribal lands.
Clegern said the timing of the vote was unintentional and that it followed years of active work on the measure.
“If the federal government won’t protect the people and the environment from oil and gas pollution, it has to be up to the states,” said Tim O’Connor, a director at the Environmental Defense Fund, which worked with the agency on the rule.
Since methane is relatively cheap, economic incentives for producers to fix leaks are small, said Steve Weissman, a lecturer at the Golden School of Public Policy at the University of California at Berkeley who specializes in energy law and policy.
Sabrina Lockhart, a spokeswoman for the California Natural Gas Producers Association, expressed reservations about the proposal on Wednesday, and said industry concerns have centered on requirements for continued inspections even for facilities with strong maintenance records, and the cost of inspection.
Since methane is relatively cheap, economic incentives for producers to fix leaks are small, said Steve Weissman, a lecturer at the Golden School of Public Policy at the University of California at Berkeley who specializes in energy law and policy.
Sabrina Lockhart, a spokeswoman for the California Natural Gas Producers Association, expressed reservations about the proposal on Wednesday, and said industry concerns have centered on requirements for continued inspections even for facilities with strong maintenance records, and the cost of inspection.
If approved, California’s regulations would be the most stringent in the country. Colorado, Wyoming and Ohio have their own regulations to tackle methane, and fracking powerhouse Pennsylvania is in the process of crafting its own rules.
(Reporting by Tom James in Seattle; Additional reporting by Valerie Volcovici; Editing by Patrick Enright and Bill Rigby)
http://www.reuters.com/article/us-california-methane-idUSKBN16U12P
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Fracking Ban Advances to Maryland Senate Floor
Mar 22, 2017 | Washington Post
By Josh Hicks
A bill to ban hydraulic fracturing in Maryland cleared a major hurdle Wednesday, days after Gov. Larry Hogan (R) surprised advocates by endorsing the ban.
The state Senate’s environmental committee voted 8-3 in favor of the House bill, with one of the panel’s four Republicans joining all seven Democrats. The measure, which has 23 sponsors, now advances to the full Senate, where it would need at least 24 votes to pass.
If Maryland bans fracking, it would be the third state to do so, joining New York and Vermont.
Advocates successfully fought an amendment that would have required a statewide referendum in 2018 to determine how voters feel about the ban on fracking, a natural-gas extraction method formally known as hydraulic fracturing.
Critics said the referendums would provide an opportunity for the oil-and-gas industry to run ads against the ban and drum up support for repealing it.
Environmental and anti-fracking groups applauded Wednesday’s committee vote.
“Mountain Maryland residents and citizens across our state have for years raised alarm over fracking’s potential to contaminate water and air, to cause earthquakes, and to harm public health and safety,” Citizen Shale said in a statement. “With this vote, we can breathe a little easier.”
https://www.washingtonpost.com/local/md-politics/fracking-ban-advances-to-maryland-senate-floor/2017/03/22/d6d98cf2-0f3c-11e7-9d5a-a83e627dc120_story.html?utm_term=.277078ad76c9
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New Jersey Senators Tell FERC to Investigate Arsenic Concerns from PennEast Pipeline
Mar 23, 2017 | Natural Gas Intelligence
By Charlie Passut
U.S. Sens. Cory Booker (D-NJ) and Robert Menendez (D-NJ) have asked FERC to investigate concerns raised by several federal agencies over the proposed PennEast natural gas pipeline, including the risk of possible arsenic contamination.
Meanwhile, a spokesperson for PennEast Pipeline Co. LLC said the company appreciated the senators’ concerns and that a three-month field study conducted by New Jersey’s leading arsenic expert should allay the contamination concerns.
In a letter to Cheryl LaFleur, acting chairman of the Federal Energy Regulatory Commission, the senators said the issue of arsenic contamination, which was raised by the Department of Interior (DOI), was "of particular concern," and that PennEast Pipeline Co. LLC needed to be more forthcoming with information on the proposed pipeline's construction.
"DOI cites 'confusing' and 'contradictory' statements made by the applicant with regard to the risk of arsenic exposure to groundwater at certain locations along the pipeline route," the senators said. They added that comments submitted by a geoscience professor at Princeton University and a research geochemist/hydrologist with the U.S. Geological Survey "raise serious concerns about the potential for groundwater discharge that contains levels of arsenic that will likely exceed the Surface Water Quality Standard for arsenic in stream water."
The senators said the DOI has called for PennEast to further evaluate the potential exposure by conducting a comprehensive well sampling plan.
"While the applicant acknowledges the potential exposure to arsenic, it has not yet put forth a comprehensive plan to monitor exposure and mitigate impacts such that New Jersey residents can be confident that they would not be exposed to harmful levels of arsenic."
Booker and Menendez added that the U.S. Environmental Protection Agency (EPA) has "raised significant concerns regarding incomplete information on the 'direct, indirect and cumulative impacts of the proposed action on the environment and public health.'" They said the EPA has recommended that PennEast outline its plans for mitigating methane leaks along the pipeline, minimizing drilling risks and provide more information on surveys, data collection and analysis.
Meanwhile, the U.S. Fish and Wildlife Service has also called for more information on the potential impacts to federally protected species along the proposed pipeline's route, including the Bog Turtle and the Indiana Bat.
The 120-mile, mostly 36-inch diameter pipeline would transport 1.11 million Dth/d of eastern Marcellus Shale gas to markets in Pennsylvania and New Jersey. About 36 miles of the pipeline would cross New Jersey.
Last January, FERC staff delayed issuing a final environmental impact statement (EIS) for the pipeline from Feb. 17 to April 7, saying that its staff needed more time to consider additional environmental information for the project [CP15-558]. Six months earlier, FERC determined in its initial environmental assessment that the pipeline would have minimal environmental impact.
Environmental groups praised the senators for sending the letter to LaFleur.
"Sens. Booker and Menendez have rightly pointed out that FERC has yet to fully address a host of critical concerns raised by public agencies and independent scientists regarding the risks that PennEast poses to our health, safety and environment," said Tom Gilbert, campaign director of ReThink Energy NJ and the New Jersey Conservation Foundation.
"The question is whether FERC will pay attention, or will they move ahead with a flawed EIS that fails to evaluate potential contamination of our drinking water, increases in harmful emissions, damage to threatened and endangered species, and other significant environmental impacts."
Jim Waltman, executive director of the Stony Brook-Millstone Watershed Association, added that "the very serious concern that this pipeline could release poisonous arsenic into our groundwater has received only lip service from FERC and PennEast."
But PennEast spokesperson Patricia Kornick told NGI’s Shale Daily that the company “appreciates the input from New Jersey’s two U.S. Senators and shares in their concerns as it relates to safe construction with minimal environmental impact. That abundance of caution is one of the reasons PennEast filed, and FERC approved, a comprehensive well-monitoring plan.
“PennEast also hired New Jersey’s leading arsenic expert to conduct a robust three-month scientific field study that concluded the impacts of PennEast construction would not mobilize naturally occurring arsenic at a level that threatens drinking water supplies. No such study has been conducted that would support the scare tactics and misinformation circulated by opposition groups.”
Kornick added that many of the concerns raised in the senators’ letter “echo those of various cooperating agencies, and fortunately, are incorporated within FERC’s comprehensive review of the project. PennEast appreciates the vote of confidence from two different government regulators under [Democratic] administrations that found, after almost three years of review, PennEast can be built with minimal impacts on the environment.”
PennEast is a joint venture owned by AGL Resources Inc. unit Red Oak Enterprise Holdings Inc. (20%); New Jersey Resources' NJR Pipeline Co. (20%); South Jersey Industries' SJI Midstream LLC (20%); UGI Energy Services LLC's UGI PennEast LLC (20%); PSEG Power LLC (10%); and Spectra Energy Partners LP (10%). The partnership is managed by UGI Energy Services.
Last week, Spectra announced that it had agreed to purchase PSEG's 10% stake in the project. The deal is subject to the approval of the PennEast board and other conditions. If approved, the deal would close in 2Q2017.
http://www.naturalgasintel.com/articles/109857-new-jersey-senators-tell-ferc-to-investigate-arsenic-concerns-from-penneast-pipeline
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Sutherland: CSB Chair Says Agency's Watchdog Role is Invaluable
Mar 22, 2017 | Houston Chronicle
By Vanessa Allen Sutherland
The notion that safety is always good for the bottom line is not new - but it is most assuredly a principle that should be taken more seriously. Twelve years after the BP Texas City disaster - one of the deadliest industrial accidents in the history of the United States - there still is much to learn.
Investigating such accidents is the responsibility of the U.S. Chemical Safety Board (CSB) - the independent, nonregulatory federal agency that I head. I am devastated to know that President Trump's 2018 budget proposal seeks to eliminate the CSB. We have a truly unique mission as we are the only agency that acts as a watchdog for both industry and government agencies. Without the CSB, lessons will not be learned from future high-consequence fires and explosions.
Every refinery and chemical plant should be aware of the CSB's work and support its continued existence. The CSB's learnings from high quality accident investigations will not only keep communities and workers safe but also improve companies' bottom lines. In Texas, 24 chemical accidents have been investigated by the board. As the state with the highest number of CSB investigations, we hope that leaders in government across Texas will support the agency's ongoing work. Simply put, prevention is good business.
Industrial accidents do not occur in a vacuum; they reverberate throughout industry and affect ordinary Americans. The costs are enormous, from injuries and fatalities to long-term economic consequences.
The February 2015 explosion at an ExxonMobil plant in Torrance, Calif., which is currently being investigated by the CSB - was the costliest disruption at a California refinery in the past 16 years, and contributed to pushing California's gas prices past $3 per gallon. A study by the RAND Corp. found that motorists paid at least $2.4 billion in higher pump prices in the six months following the explosion.
The 2005 explosion and fire at BP Texas City cost the lives of 15 workers and billions of dollars in fines and settlements. Likewise, the 2010 Deepwater Horizon oil spill took the lives of 11 workers and has cost the company billions in settlement claims alone and untold environmental damage in the Gulf Coast region.
Exactly 12 years ago today, a series of explosions ravaged the isomerization unit of the BP Texas City Refinery. Our investigation resulted in a new standard of care for corporate boards of directors and CEOs throughout the world, calling for same level of scrutiny for process safety management as financial management. Boards of directors of oil and chemical companies should examine every detail of their process safety programs to prevent future death and destruction, and the CSB challenges the industry to ask what reports, safety videos and educational tools they are using in their facilities.
The absence of an accident is not a measurement of safety. True prevention requires a shift from focusing on past success, to driving meaningful safety change.
The CSB is dedicated to uncovering the hidden catastrophic risk factors that potentially wreak havoc on business. To put it in a more practical manner, the cost of just one accident can far exceed the $11 million annual budget of the CSB. Ultimately, we play an invaluable, irreplaceable role in the safety and security of Americans.
Sutherland is chairperson and CEO of the U.S. Chemical Safety Board.
http://www.houstonchronicle.com/opinion/outlook/article/Sutherland-Preventing-the-next-chemical-disaster-11021020.php
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Mar 22, 2017 | Houston Chrnoicle
By Editorial Board
On a sunny spring day in Texas City 12 years ago today, workers at the BP refinery had just finished a company-sponsored lunch in appreciation of a month without any on-the-job injuries. The celebration wouldn't last long.
As they walked back to a temporary construction building, a malfunction deep in the bowels of the facility triggered a chain of catastrophic events that would result in one of the worst refinery accidents in U.S. history.
The blast killed 15 workers and injured more than 180 others. Air ambulances spent hours shuttling burn victims to the helicopter pad outside the emergency room at UTMB Galveston in a harrowing scene resembling something out of a war movie.
What happened on that terrible day ultimately was documented in a seminal report prepared by the U.S. Chemical Safety Board, the independent federal agency charged with investigating chemical accidents. The CSB not only probed what caused this disaster, it also recommended that BP conduct its own study and rethink its corporate safety culture. Today there's literally no telling how many lives have been saved by the lessons gleaned from those two reports, which have been incorporated into academic curricula and technical standards observed throughout the industry.
The CSB is to chemical accidents what the National Transportation Safety Board is to airline crashes. Just as the NTSB investigates what causes plane mishaps and tells airlines what lessons they can learn to prevent future disasters, the CSB probes accidents at chemical plants and suggests what the owners and managers of refineries should do to make their workplaces safer. This agency has investigated everything from the fertilizer explosion in West, Texas, to the Deepwater Horizon disaster in the Gulf of Mexico.
So it's downright baffling that President Trump's proposed budget calls for eliminating all funding for the CSB.
"Chemical Breakdown," a Houston Chronicle investigation last year, documented how federal agencies including the CSB are already overwhelmed, lacking the resources to adequately oversee facilities that handle dangerous chemicals. Our nation's regulatory system for the chemical industry has been so poorly funded, its complex and outdated rules go largely unenforced, leaving facilities that handle these hazardous materials to mostly police themselves. So it's no wonder petrochemical industry experts told Chronicle reporters Mark Collette and Matt Dempsey the Trump administration's proposed gutting of the CSB is "remarkably stupid," "really sad" and "standing up for death and destruction."
We're not talking about a bloated federal bureaucracy with a padded payroll. The CSB has only 40 employees and an annual budget of about $12 million. Compare that to the estimated $60 billion cost of BP's Deepwater Horizon oil spill. If this agency's work has prevented a single major industrial accident - and people in the industry have no doubt it has - the return on investment is well worth the comparatively small expenditure of taxpayer dollars. No doubt about it, the CSB is a bargain.
Lawmakers on both sides of the aisle believe President Trump's budget proposals were mostly dead on arrival the moment they landed on Capitol Hill, but major parts of this spending plan will certainly survive. Texas lawmakers, who know the importance of the chemical industry in our state, need to make sure the CSB survives.
Anything less would be an insult to the memories of the 15 workers who died a dozen years ago today in Texas City.
http://www.houstonchronicle.com/opinion/editorials/article/Chemical-safety-11021268.php
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House Panel to Challenge Climate Science
Mar 23, 2017 | The Hill - E2 Wire
By Timothy Cama
Republicans on the House Science Committee are planning a hearing next week to challenge mainstream climate science conclusions.
The committee, chaired by Rep. Lamar Smith (R-Texas), has dubbed its hearing “Climate Science: Assumptions, Policy Implications, and the Scientific Method.”
The hearing comes as the GOP, which controls both chambers of Congress and the White House, works on multiple fronts to unravel former President Obama’s aggressive agenda on fighting climate change.
President Trump is planning to use his power to undo major regulations like the Environmental Protection Agency’s (EPA) Clean Power Plan, while Congress works to undo some rules such as limits on methane emissions from oil and natural gas drilling.
Smith doubts the scientific consensus that greenhouse gases from human activity are the main driver behind a changing climate and has used his committee gavel extensively to fight what he frames as “climate alarmism.”
The witnesses at Wednesday’s hearing will include big names in the climate skeptic community who often provide fodder for GOP lawmakers fighting global warming policies.
They include Judith Curry, who recently retired as a professor at the Georgia Institute of Technology. Her research has focused largely on highlighting what she sees as vast uncertainty in climate forecast models and criticizing scientists and policymakers who downplay the uncertainty.
John Christy, meanwhile, has argued that mainstream climate models predict a far higher climate impact from greenhouse gases than is actually the case, and that policies to reduce emissions would have little effect. He is a professor at the University of Alabama in Huntsville.
Roger Pielke Jr., from the University of Colorado, Boulder, is also scheduled to appear. He accepts most mainstream scientific findings on climate. But his high-profile writing has researched extreme weather and argued that the increasingly high impact of weather phenomena like hurricanes is overestimated, along with general criticisms of the politicization of the issue.
The panel’s Democrats have invited Michael Mann of Penn State University. He is known best for the “hockey stick” graph of 1999 that showed a sharp increase in average temperatures in recent decades.
Mann has often feuded with Curry, Christy and Pielke. For example, Mann once said “climate science would be stronger without Curry,” while Pielke has accused Mann of working “to destroy academic careers of those with views different than his.”
http://thehill.com/policy/energy-environment/325240-house-panel-to-challenge-climate-science
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Trump's Words Could Jeopardize His Environmental Rollbacks, Too
Mar 23, 2017 | BNA Daily Environment Report
By Jennifer A. Dlouhy
President Donald Trump's words may come back to haunt him in court as he moves to roll back regulations that fight climate change, just as they did when he tried to ban travel from six predominantly Muslim countries.
Environmentalists are scrutinizing Trump's tweets and the phrasing of presidential orders, looking for evidence that an action is driven by politics or that a review of regulations is being carried out with a specific outcome in mind. That could be used in a lawsuit to argue that the process is a sham and violates federal law governing rulemaking.
“If there's anything that suggests that it's a politically motivated decision instead of a rationally based decision, that's always something we put before the court,” said Abigail Dillen, vice president of litigation for climate and energy at Earthjustice. “Explosive statements” in a White House order “can and will be used against them,” she said.
As recent rulings on Trump's travel order illustrate, intent matters. A federal judge in Hawaii halted Trump's latest restrictions after concluding past comments by the president and associates showed the policy was designed to disfavor Muslims. While courts shouldn't examine the “secret motives” of government decision makers, the judge wrote, the clear facts in that case “require no such impermissible inquiry.“
Lobbyists Urge Caution
A handful of energy industry lobbyists have counseled the White House to be cautious. They are advising the administration to dial back its planned executive order targeting Obama's plan to slash greenhouse gas emissions from power plants—lest the White House arm critics with legal fodder for later court challenges. With the administration weighing plans to undo other Obama-era environmental protections, a stray tweet or promise at a presidential rally may turn up in court filings to defend the earlier regulations.
Some damage may already be done. Trump famously called climate change a hoax perpetrated by the Chinese in a 2012 tweet. And he vowed to repeal carbon rules for power plants as part of a broader effort to reverse environmental regulation and save jobs.
The administration will turn the Environmental Protection Agency “from a job killer into a job creator,” Trump told a crowd in Kentucky this week, promising to save coal-mining jobs. “We've wiped out many, many unnecessary regulations and that's just the beginning.“
EPA Administrator Scott Pruitt also discounted the role of carbon dioxide as the main driver of climate change earlier this month. Those climate comments could be used by opponents if the EPA decides to reverse its landmark 2009 determination that greenhouse gas emissions endanger the public health and welfare, said Joanne Spalding, a senior managing attorney at the Sierra Club.
Rulemaking Needed
Generally, regulations can't be killed with the stroke of president's pen. Instead the administration must undertake the same rulemaking process used to create regulations to undo them. And that process can't be “arbitrary and capricious”—the bright line standard established in the 71-year-old Administrative Procedure Act that governs federal rulemaking.
In practice, that means agencies must provide a good explanation for rescinding a regulation—by demonstrating the factual, legal and policy justifications. They also must stick to the factors laid out in the legislation. For instance, that means they can't weigh cost when determining how stringent to make ozone standards because the Supreme Court has unanimously found that those considerations weren't in the original statute.
It's permissible for a government official to announce the beginning of “a process that might lead to a change in policy,” said Richard Revesz, director of the Institute for Policy Integrity at New York University.
But, he said, it would be “very problematic” if the administration explicitly compelled officials to, say, lower the government's metric known as the social cost of carbon., which estimates the effects of climate change.
The issue could come up as soon as the Trump administration files papers designed to interrupt a federal court review of the Clean Power Plan. Not only are statements about the administration's intent to undo the rule relevant to that effort, Spalding said, but so are Pruitt's arguments in his prior role as Oklahoma attorney general that the EPA is precluded from regulating power plant carbon emissions.
Courts also have held that federal decisions can be disqualified if they were driven by regulators who have an “unalterably closed mind” on an issue. Regulators are allowed to have opinions, but courts maintain their actions are suspect if there is clear and convincing evidence an official's mind is so strongly made up that all relevant public comments will be disregarded.
To be sure, Trump and Pruitt's climate commentary isn't a silver bullet for opponents seeking to maintain Obama-era environmental laws. Agencies can help insulate themselves from challenges by doing their homework and buttressing the administrative record with plenty of evidence to support a pivot in policy.
‘Gotcha Moments’
None of these statements are “eureka, gotcha moments” by themselves, said Sean Donahue, an attorney who has argued on behalf of the Environmental Defense Fund. “Most important of all is going to be what they do.” The weaker the record, the more likely those statements will come into play.
Citing statements in a legal filing “would be a weak case if the record showed a serious consideration and a balanced weighing of factors and a reasonable interpretation of the statute,” Donahue said.
EPA spokesmen did not respond to requests for comment.
Supporters say the Trump administration will be making good on its campaign promises by rolling back regulations the president sees as throttling domestic energy development. A White House directive to repeal climate rules is not all that different from when former President Barack Obama issued a 21-page climate action plan outlining plans to establish those rules, they say.
Pruitt's Argument
Rhetoric is “not indicative of a pre-ordained outcome,” said Stephen Brown, a lobbyist for Tesoro Corp. One could also divine intent from Obama's statements, he said.
In fact, when Pruitt was representing Oklahoma, he argued just that point.
Oklahoma joined 13 other states to assert that Obama's EPA administrator had already determined conclusively that the agency had the authority to issue its Clean Power Plan. At the time, that regulation hadn't been finalized.
Pruitt and the other state attorneys general cited tweets by then-administrator Gina McCarthy pledging to reduce carbon dioxide emissions, and said that was evidence that the “agency has a ‘closed mind,’ and is engaged in a ‘sham’ rulemaking.”
In the end, that argument didn't win the day. The case was tossed out when a three-judge panel decided there was no legal authority to review the regulation before it was final.
—With assistance from Erik Larson.
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=107776772&vname=dennotallissues&fn=107776772&jd=107776772
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Proposed EPA Cuts Punctuate Hearing on Clean Air Act Bill
Mar 22, 2017 | E&E Daily
By Sean Reilly
The official focus of a House Energy and Commerce subcommittee hearing yesterday was a revived Republican bill to rewrite key tenets of the Clean Air Act, but Democrats took it as an opportunity to pre-emptively question the potential impact of newly proposed budget cuts on U.S. EPA.
The administration's bare-bones spending blueprint for fiscal 2018, released last week and scheduled to be fleshed out later this spring, would slash EPA's budget by 31 percent (E&E Daily, March 16).
And yesterday's hearing on H.R. 806, the "Ozone Standards Implementation Act," offered clear evidence that spending issues are already bubbling up in the broader debate over federal environmental policy.
Democratic Rep. Paul Tonko of New York, the ranking member on the environment subcommittee, led off. "We must assume state and local air quality management grants ... will not be immune from these cuts," he said in his opening statement, pointing his remarks at a witness panel dominated by state and local air regulators.
Rep. Jerry McNerney (D-Calif.) followed later with a question about the effect of the White House's proposed elimination of targeted airshed grants, which steer cleanup money to pollution hot spots.
Reductions to incentive funding of any kind "will be devastating to our efforts," replied Seyed Sadredin, executive director of the San Joaquin Valley Air Pollution Control District, which covers a portion of central California that struggles with some of the nation's worst ozone problems.
And while bill supporters noted that EPA is already routinely late in meeting some of its statutory responsibilities, more budget cuts would mean "it's going to be another 20 years before they can get some of these things done," Rep. Raul Ruiz (D-Calif.) said.
Otherwise, the two-hour hearing largely plowed familiar ground, given that a similar version of the legislation passed the House last year. The measure, sponsored by Rep. Pete Olson (R-Texas), would immediately target EPA's 70 parts per billion ozone standard, adopted in late 2015 and now in the early stages of implementation.
This fall, EPA is scheduled to name the areas around the country in nonattainment with the 70 ppb benchmark, a step that will start the clock for states to come up with compliance plans. Olson's bill would push back the nonattainment designations until 2025.
The measure would also:
· Stretch the Clean Air Act's mandatory timetable for revisiting the standards for ozone and five other "criteria pollutants" from once every five years to once every decade.
· Allow EPA to take "technological feasibility" into account as a secondary factor when confronted with a range of options for tightening a particular air quality standard.
· Require agency officials to conduct studies on both ozone formation and the extent to which foreign sources of air pollution affect compliance with EPA standards in the United States.
Last year's bill, H.R. 4775, cleared the House in June, but then died in the Senate following an Obama administration veto threat and opposition from Democrats.
If signed into law, the package would represent the first major rewrite of the Clean Air Act since 1990.
Rep. John Shimkus (R-Ill.), the subcommittee's chairman, predicted that a markup will occur "somewhat soon."Continued debate
With air quality in the United States generally continuing to improve, the debate over the legislation boiled down to how quickly and forcefully federal regulators should press for further improvements.
Shimkus, who recounted having experienced breathing trouble during a Los Angeles-area college baseball game in the mid-1980s, endorsed the act's benefits.
"We just want to make it more workable for today's era," he said.
The hearing underscored recurrent tensions between EPA officials who set the standards and state regulators who shoulder the day-to-day responsibility of assuring compliance.
EPA is pursuing implementation of the 70 ppb ozone standard, for example, while tens of millions of people live in areas still in nonattainment with the previous 75 ppb standard set in 2008. Yet another wrinkle is that EPA released the formal implementation guidance for the 2008 benchmark only two years ago. One rationale for freezing work on the 2015 standard is to allow states to play catch-up.
"A standard without an implementation strategy is like giving someone a destination without a map," said Marc Cone, air quality director at Maine's Department of Environmental Protection. "You can probably get there, but it's going to take some time and effort."
Also backing H.R. 806 was Sean Alteri, who heads Kentucky's air quality division and is currently president of the Association of Air Pollution Control Agencies, whose 20 member states are located mainly in the South and West.
To the bill's critics, however, any step away from using public health as the sole yardstick for setting air quality standards is cause for alarm. Scientific research continues to show that some pollutants may be harmful at lower levels than previously thought.
There is mounting evidence, for example, that ozone pollution at today's allowable limits "is damaging to human lungs and contributes to disease," said Dr. Homer Boushey, a California pulmonologist who testified on behalf of the American Thoracic Society.
The bill "represents an extreme attack on the most fundamental safeguards and rights in the Clean Air Act," dozens of environmental and public health groups said in a letter to lawmakers released before yesterday's hearing.
But the measure is welcomed by industries that have to deal with tighter emissions limits and permitting requirements that typically follow from stricter air quality standards.
"Proposals for protecting states and businesses from duplicative and costly new regulations are steps in the right direction," Howard Feldman, the American Petroleum Institute's senior director of regulatory and scientific affairs, said in a news release.
While EPA was unable to send a witness to the hearing, Shimkus said he expects the agency to provide written comments on the bill.
http://www.eenews.net/eedaily/2017/03/23/stories/1060051937
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Carbon Tax Debate Exposed Rift Among Trump’s Aides
Mar 21, 2017 | Politico
By Josh Dawsey, Annie Karni and Andrew Restuccia
When former Secretary of State James Baker and his allies came to the White House last month to pitch a carbon tax, they received a warm reception from Gary Cohn, one of the president's top economic advisers.
Six weeks later, the friendly meeting with advocates of the highly controversial policy proposal is still reverberating in the White House, underscoring the increasingly tense relationship between Cohn and Steve Bannon, Trump’s powerful chief strategist, who have staked out vastly different ideological approaches to West Wing matters.
Any tax would raise significant resistance from Republicans, and one Cohn ally says he has not been making active arguments for the tax internally. But the meeting nonetheless set off alarm bells for Bannon and his allies, who regard Cohn with growing suspicion and see climate change as a key point of tension between Trump’s moderate and hard-line conservative advisers. And they say Cohn — a registered Democrat — is a secret supporter of the tax.
"Our objective was twofold: to put this plan on their radar screen and for them not to dismiss it," said Ted Halstead, president of the Climate Leadership Council, who attended the Feb. 8 meeting. "They have not dismissed it, which, given that part of it is a carbon tax, is significant."
When asked on Tuesday whether Cohn, head of the National Economic Council, supported a carbon tax, White House press secretary Sean Spicer said there was a "robust" discussion ongoing about taxes.
"Part of the NEC's responsibility in coordinating economic policy for the president is to listen to a range of viewpoints on various issues. The Trump administration is not considering a carbon tax," Lindsay Walters, a White House spokeswoman, said later Tuesday evening, in response to questions.
It is unlikely such a tax would pass Congress or gain the White House's support, with conservative allies, including the influential Heritage Foundation, fiercely opposed to the idea of a new tax and skeptical about global warming. "I have always been against a carbon tax," said Rep. Chris Collins, a conservative New York lawmaker close to Trump.
But hard-line conservatives in the White House see advancing the notion that Cohn is supportive of the tax as one way to diminish the standing of the former Goldman Sachs executive, a New York power broker who often embraces practicality over politics.
It also is just one example of how tensions have flared inside the White House as different factions try to shape the ideological core of the West Wing and compete for Trump's ear.
After Zeke Emanuel, one of the Affordable Care Act's architects, came to the White House for a meeting with Trump, Speaker Paul Ryan and Health and Human Services Secretary Tom Price on Monday, conservatives and some White House aides were displeased, including Bannon, according to a source familiar with the situation. The strategist skipped the meeting, even though other top White House officials attended.
"Why would he be in here?" one adviser said of Emanuel. "We are trying to pass a new law, not promote theirs."
"That is why the Hill thinks Cohn is not conducive to getting any legislation passed," one White House official said, when asked about the meeting, accusing Cohn of orchestrating the meeting, a claim a White House spokeswoman denied.
Cohn allies say the former Goldman Sachs banker is injecting some realism and a practical sensibility into the White House, and that Trump has frequently talked to Emanuel privately.
Bannon and Stephen Miller, another top White House aide with hard-line views, have been noticeably quiet on the health care law, with Bannon often talking to the conservatives who oppose it and grousing about it privately to associates. "He doesn't like the law, but he understands that if it fails, it could hurt his agenda to do things he wants," one person who spoke to Bannon recently said.
One administration official said different White House aides are giving different pitches and messages to Capitol Hill lawmakers on replacing Obamacare. "What you hear depends on who you talk to and what faction they are from," said one senior GOP aide.
One of the most heated debates in the West Wing has proved to be the Paris climate change agreement. People inside and outside the White House say it's unclear where Trump will come down on the agreement, but that it will be a test of Bannon's and Cohn's influence. Bannon has opposed the deal, separating him from many other advisers, including Trump’s daughter Ivanka and her husband, Jared Kushner, and further heightening his tensions with Cohn.
Cohn is said to be avoiding taking a formal position on the Paris agreement, but several of his aides have been quietly mulling a plan to stay in the deal, while weakening a domestic emissions reduction target put forward by former President Barack Obama and trying to win incentives for fossil fuels. It is, these people said, a practical way to handle the matter.
Halstead said the carbon tax plan that advocates promoted in the White House includes regulatory rollbacks, and dividends for Americans from the proceeds of the tax. Carbon would likely be taxed at $40 per ton or so. Their argument was it would help growth, rebalance trade and reduce regulations, while fighting climate change. It is a plan, he said, that strikes a compromise.
“A carbon tax by itself is unpopular and a political dead end,” said Halstead. “By contrast, our conservative carbon dividends plan is both popular and populist, because the great majority of Americans would come out ahead.''
http://www.politico.com/story/2017/03/trump-carbon-tax-white-house-236327
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EPA Alumni Group Slams Proposed Agency Budget Cuts
Mar 22, 2017 | PoliticoPro - Whiteboard
By Alex Guillen
A newly formed group of former EPA employees today released a report criticizing the Trump administration’s proposed cuts to the environmental agency in its “skinny budget.”
The Environmental Protection Network, which describes itself as a bipartisan group with 75 members, said it understands different administrations have different priorities, but that the proposed 31 percent slashing of EPA's budget does not appear to be "based on any real analysis of changing needs."
Trump's EPA budget proposal "appears to be nothing less than a full-throttle attack on the principle underlying all U.S. environmental laws — that protecting the health and environment of all Americans is a national priority,” the report says.
It criticizes the administration for cutting funding to state environmental agencies while shifting more regulatory and enforcement responsibilities to them, as well as for cutting climate programs, scientific research, regional clean-up programs, environmental justice initiatives and other programs.
“The unavoidable consequences of the cuts would be more pollution that causes illness, death and dangerous changes to the earth’s climate and ecosystems on which Americans and people around the world depend,” the report concludes.
It was written by George Wyeth, a former EPA senior counsel now at the George Washington University Law School, and Nancy Ketcham-Colwill, a former adviser in the Office of General Counsel. Both were among the signers of an EPA alumni letter opposing EPA Administrator Scott Pruitt’s nomination.
https://www.politicopro.com/energy/whiteboard
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