Preview Newsletter
AM ACC 4/27/2017
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Bodine Said to Be Considered for EPA No. 2 Slot
Apr 26, 2017 | Inside EPA
Susan Bodine, the former Bush-era EPA waste chief and current chief counsel for the Senate Environment & Public Works Committee (EPW), is said to be under consideration for the still vacant slot as EPA deputy administrator, even though another former committee staffer... -
Law Firm Warns of US EPA Plans to Publish Full Studies
Apr 27, 2017 | Chemical Watch
By Leigh Stringer
US EPA plans to publish full chemical study reports under the new TSCA will be a disaster for data owners, says a prominent Brussels-based lawyer. -
EU Member States Agree To Keep Skin Sensitisers In SVHC Roadmap
Apr 27, 2017 | Chemical Watch
By Clelia Oziel
Skin sensitisers should remain part of Echa's SVHC 2020 roadmap, according to members of the Competent Authorities for REACH and CLP (Caracal) -
It’s OK To Use A Glyphosate-Based Herbicide
Apr 26, 2017 | The Sacramento Bee
By Jen Listello
First, glyphosate does not cause cancer. No regulatory authority in the world considers glyphosate a carcinogen. -
Trump Said to Order Oil Drilling Study of All Federal Waters
Apr 27, 2017 | BNA Daily Environment Report
By Jennifer A. Dlouhy
President Donald Trump will order the Interior Department to review locations for offshore oil and gas exploration and consider selling drilling rights in territory that former President Barack Obama put off limits, according to people briefed... -
Walden Eyes Multiple Options for Reform Legislation
Apr 27, 2017 | E&E News PM
By George Cahlink
House Energy and Commerce Chairman Greg Walden (R-Ore.) today suggested energy reform could move as part of a forthcoming infrastructure package, but also would not rule out advancing broad stand-alone legislation later this year. -
Ohio, Pennsylvania Show Largest NatGas Production Increases in 2016
Apr 27, 2017 | Natural Gas Intelligence
By Jamison Cocklin
The Energy Information Administration (EIA) said this week Ohio and Pennsylvania each increased natural gas production by about 1.2 Bcf/d last year at a time when annual U.S. gas output declined for the first time since 2005. -
Methane Rule Repeal Has Majority Senate Support: Hoeven
Apr 27, 2017 | BNA Daily Environment Report
By Brian Dabbs
Most senators now back legislation repealing a Bureau of Land Management regulation designed to scale back venting and flaring of natural gas from oil and gas operations, Sen. John Hoeven (R-N.D.) said April 26. -
Bakken Shale Play Seen Poised for Recovery as Drillers Add Rigs
Apr 27, 2017 | BNA Daily Environment Report
By Meenal Vamburkar
The Bakken shale play in North Dakota, which has struggled to recover from the oil slump, may be poised for a comeback aided by the completion of a new pipeline. -
US Shale Oil Rebound Shakes OPEC
Apr 27, 2017 | Platts
By Ross McCracken
Even with oil prices hovering around the $50/b mark, the US rig count has increased rapidly while E&P companies continue to record substantial reductions in well drilling costs. The increase in new well oil production per rig demonstrates the extraordinary gains... -
Lawmakers, Industry Pile Up on Safety Agency
Apr 27, 2017 | E&E Daily
By Sam Mintz
Democrats and Republicans might disagree on how much regulation pipeline and hazardous materials companies need, but they're largely united in their criticisms of one of the agencies tasked with developing those standards. -
Four Republicans Sign Letter Urging Trump to Stay in Paris Deal
Apr 27, 2017 | The Hill - E2 Wire
By Devin Henry
Four Republicans joined a House letter to President Trump on Wednesday calling on the United States to stay in the Paris climate deal. -
State Department Memo Boosts Case to Stay in Paris Climate Pact
Apr 27, 2017 | BNA Daily Environment Report
By Jennifer A. Dlouhy and Nick Wadhams
An internal State Department memo says the Paris climate accord imposes few obligations on the U.S., bolstering the case for Trump administration officials who want to stay in the deal. -
The Trump White House Is At War With Itself About Climate Change
Apr 27, 2017 | The Washington Post
By Chris Mooney and Juliet Eilperin
Key officials will meet at the White House on Thursday to discuss whether President Trump should make good on his campaign promise to “cancel” the Paris climate agreement, or allow the United States to remain a party to the global pact — confronting head-on an issue that has divided the administration and raised concern in the international community. -
State AGs Urge Lawmakers to Oppose NAAQS Reform Legislation
Apr 27, 2017 | Inside EPA
Attorneys general (AGs) from 16 primarily coastal states and territories are urging lawmakers to oppose bills in Congress to ease EPA's national ambient air quality standards (NAAQS) program, warning the measures would worsen air quality... -
Judge Says Exxon Owes $19.95 Million For Texas Refinery Pollution
Apr 26, 2017 | The New York Times
By Reuters
A federal judge ruled on Wednesday that ExxonMobil Corp should pay a $19.95 million penalty for pollution from its Baytown, Texas, refining and chemical plant complex between 2005 and 2013.
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Bodine Said to Be Considered for EPA No. 2 Slot
Apr 26, 2017 | Inside EPA
Susan Bodine, the former Bush-era EPA waste chief and current chief counsel for the Senate Environment & Public Works Committee (EPW), is said to be under consideration for the still vacant slot as EPA deputy administrator, even though another former committee staffer was believed to have won the slot.
Bodine returned to EPW in January to serve as its top lawyer under Chairman John Barrasso (R-WY), having previously serving in the same position for former chairman Jim Inhofe (R-OK).
According to a source who is following nominations at EPA, Bodine's name has been recently floated for the deputy administrator slot, as well as for the general counsel position. She will “clearly have an influential role” in the Trump EPA, says the source, who is starting to hear her name discussed more often.
The source first heard Bodine's name for deputy administrator last week.
If President Donald Trump taps Bodine for the deputy administrator slot, she would overtake Andrew Wheeler, another former Inhofe staffer who was thought to have been selected for the role.
But other than Administrator Scott Pruitt, the White House has yet to nominate any other officials to Senate confirmed slots at EPA, underscoring differences of opinions among Trump advisers over who should fill the deputy spot and what kind of role that person should have.
But the delay in making the nominations has also added to the difficulties Pruitt faces as he seeks to implement an ambitious deregulatory agenda.
Wheeler, who served as staff director for Inhofe at EPW and also worked at EPA in the past, is now head of the energy and natural resources practice at Faegre Baker Daniels Consulting where he is a registered lobbyist for coal company Murray Energy.
He was thought to have won the post last month, over former North Carolina environmental chief Don van der Vaart, but he told Inside EPA March 17, “I have not been offered any job.”
Since then, no nomination has emerged.
Neither Bodine nor Wheeler could be reached for comment.
Between her stints at EPW, Bodine was a partner at Barnes & Thornberg, from 2009 to 2015, and was EPA waste chief for the last three years of the Bush administration. Prior to that she was staff director of the House Transportation & Infrastructure Committee's Water Resources & Environment panel, according to her LinkedIn biography.
https://insideepa.com/daily-feed/bodine-said-be-considered-epa-no-2-slot
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Law Firm Warns of US EPA Plans to Publish Full Studies
Apr 27, 2017 | Chemical Watch
By Leigh Stringer
US EPA plans to publish full chemical study reports under the new TSCA will be a disaster for data owners, says a prominent Brussels-based lawyer.
Under Section 14 of the law, the EPA can publish health and safety studies, including data generated on substances. But Jean-Philippe Montfort, a partner at Mayer Brown, says companies will download and use the published data in regulatory filings elsewhere, such as South Korea and the EU, and consider that they are in legitimate possession of the data because it is publicly available.
This, he told Chemical Watch, "would be a disaster for data owners, because once the studies are published, it would be very difficult for them to ensure the protection of their rights on such data."
Proving that publication of such reports would not allow them to be used for regulatory purposes in the EU, South Korea or China is likely to be difficult, he added. In the EU, he said, where registrants must be in legitimate possession of the full study reports, Echa says it is "not equipped" to assess the IP rights concerning registered data. Therefore the data owner's only option is to take legal action through the courts of a member state, demonstrating that the data published by the EPA is either copyright protected, or that its use under REACH would represent a dishonest commercial practice.
These actions, he warned, "take time, cost money and may simply not make sense financially for the data owners."
Using copyright
Another prominent lawyer in the field, Keller & Heckman partner Herb Estreicher, says that Section 14 offers only very limited opportunity for the data submitter to claim confidentiality.
To avoid data being published, he says, the submitter could indicate on the study that it is protected under copyright and is not authorised for use in other regulatory programmes, such as REACH. It could then try to challenge its use for REACH purposes under copyright law – although this has never been tested in the courts.
Another option, he says, would be for the submitter to include certain commercial details in the test report, such as process details, and claim confidentiality for that portion as Section 14 prevents the EPA from disclosing such information.
The data submitter could then challenge the use of the study under REACH, he told Chemical Watch, because the registrant would not have access to the full study report. However, this too has not yet been tested in court.Global data-sharing?
Mr Montfort says protecting the interests of data owners is an issue chemicals regulators should address pragmatically. "If regulators want companies to generate more data and want that data to be published, they also should find ways of protecting data rights, otherwise the regulators will miss their objectives."
In interviews during Chemical Watch’s Global Business Summit in Amsterdam last month, both lawyers talked about the challenges of establishing a global data-sharing system.
A major barrier, they say, is the lack of acceptance of read-across outside the EU. Mr Estreicher said a lot of the EU dossiers rely on read-across, which is "a concept that has not been widely embraced around the world.
"I’m not sure European dossiers, which are constructed using weight-of-the-evidence and read across, and use sophisticated and appropriate strategies, are going to be acceptable around the world."
This is unfortunate, says Mr Montfort, because there is a willingness from the EU to share the data. "Most companies are not trying to make large sums of money from their data, they just want to make sure it is used so that new data isn't being generated."
The EPA did not respond to Chemical Watch's request for comment on the issues raised by the time of publishing.
In this month's Global Business Briefing, Mr Montfort writes about the challenges to establishing a global data-sharing system. You can also read more about data-sharing under the new TSCA in an article by Mr Estreicher in the March issue.
And speaking at the Chemical Watch/Chemical Risk Manager REACH Expo in Berlin yesterday, fellow Mayer Brown lawyer, Thomas Delille said the REACH implementing Regulation on data sharing has placed significant demands on companies managing existing agreements between registrants.
https://chemicalwatch.com/55462/law-firm-warns-of-us-epa-plans-to-publish-full-studies
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EU Member States Agree To Keep Skin Sensitisers In SVHC Roadmap
Apr 27, 2017 | Chemical Watch
By Clelia Oziel
Skin sensitisers should remain part of Echa's SVHC 2020 roadmap, according to members of the Competent Authorities for REACH and CLP (Caracal). They reached their conclusion after considering a proposal for their exclusion at a meeting in March.
The SVHC Coordination Group for Human Health, an informal working group with participants from member states, the European Commission and Echa, issued a paper that included a proposal for exclusion due to the difficulty of proving 'equivalent level of concern' (ELoC) to other substances classified as SVHCs.
The paper was a response to last year's Commission decision not to add skin sensitiser HDDA to the REACH candidate list, citing lack of evidence.
HDDA is the first skin sensitiser to be proposed as an SVHC. It is also the first case where Echa's paper Identification of substances as SVHCs due to equivalent level of concern to CMRs (Article 57(f)) – sensitisers as an example was used as support in an ELoC assessment of a skin sensitiser.
The SVHC Coordination Group's paper says it is not clear what kind of evidence the Commission would consider to motivate ELoC for skin sensitisers. And, it adds, member states would benefit from clearer guidance on data requirements.
The paper also says that views on how Echa's paper should be interpreted vary between member states, and the section on skin sensitisers may need to be updated following the Caracal discussions.
However, the paper did say that regulatory work on these substances "should not be abandoned". A need remains, it says, for further evaluation under other risk management measures, such as harmonised classification and labelling (CLH), product-specific and occupational safety and health (Osh) legislation.'Proportionate strategy'
In comments to Chemical Watch, Sweden, which made the initial SVHC proposal for HDDA, said it is currently "not reasonable" to pursue skin sensitisers under the SVHC roadmap.
"What kind of evidence the European Commission considers sufficient for identifying a skin sensitiser as an SVHC is not clear to us, but we note that evidence must be of a kind which is not available for HDDA," a spokesperson for the Swedish Chemicals Agency (Kemi) said.
Ducc, the downstream users of chemicals coordination group, also said it supports the removal of skin sensitisers from the SVHC roadmap, as it does not see any circumstances under which skin sensitisers could be considered as an ELoC to CMRs.
"We encourage Echa and the Commission to develop a proportionate strategy for skin sensitisers and to identify the most appropriate alternative risk management options in relevant cases," said Janice Robinson, Ducc chair.
https://chemicalwatch.com/55459/eu-member-states-agree-to-keep-skin-sensitisers-in-svhc-roadmap
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It’s OK To Use A Glyphosate-Based Herbicide
Apr 26, 2017 | The Sacramento Bee
By Jen Listello
We get it: An editorial about the controversy surrounding glyphosate is great click-bait. And we understand that when you lay out all the facts – the unanimous backing from regulatory authorities, the 40-year history of safe use, the significant benefits to agriculture, etc. – the story loses its intrigue.
With that, my colleagues and I are not surprised by how badly The Bee’s editorial “Maybe just pull those dandelions by hand” (April 10) misrepresents the safety of glyphosate. It follows the increasingly popular and unfortunate trend of sensationalizing the topic. We just hope the following information will help address any concerns.
First, glyphosate does not cause cancer. No regulatory authority in the world considers glyphosate a carcinogen. Any discussion to the contrary stems from one place: a controversial French-based working group called International Agency for Research on Cancer, which, in March 2015, erroneously classified glyphosate as a “probable carcinogen.”
While IARC’s classification has attracted media attention and been used repeatedly as a fearmongering tool by organizations opposed to modern agriculture, regulators around the world continue to support the safe use of glyphosate. In fact, since IARC classified glyphosate, regulatory authorities in the United States, Europe, Canada, Japan, New Zealand, Australia and Korea have reaffirmed that glyphosate does not cause cancer.
Scientists at the California Office of Environmental Health Hazard Assessment also concluded glyphosate does not cause cancer. Still, OEHHA has proposed adding glyphosate to the Prop. 65 list based on IARC’s flawed classification. The proposed listing is another example of the confusion generated by IARC.
Much of the online chatter would lead you to believe the science is still out on glyphosate safety. The reality is that glyphosate is the most extensively tested pesticide on the market. Over the past four decades, glyphosate has undergone comprehensive and routine evaluations by the Environmental Protection Agency and other regulators. The overwhelming conclusion of experts worldwide has been that glyphosate can be used safely.
Feel free to pick those dandelions by hand, but if you choose a glyphosate-based herbicide, you’ll be OK.
http://www.sacbee.com/opinion/op-ed/soapbox/article146941789.html#storylink=cpy
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Trump Said to Order Oil Drilling Study of All Federal Waters
Apr 27, 2017 | BNA Daily Environment Report
By Jennifer A. Dlouhy
President Donald Trump will order the Interior Department to review locations for offshore oil and gas exploration and consider selling drilling rights in territory that former President Barack Obama put off limits, according to people briefed on the order who spoke on the condition of anonymity before it is issued.
That includes U.S. Pacific waters, as well as Arctic and Atlantic acreage left out of the five-year schedule of lease sales issued by Obama in November.
Interior Secretary Ryan Zinke said April 25 nothing is off the table. “We're going to look at everything,” Zinke said when asked about potential oil leases off the Pacific coast. “A new administration should look at the policies and make sure the policies are appropriate.”
Trump will sign a directive April 28 to “move our country even further toward our goal of energy independence,” according to a White House aide who didn't offer further details.
Federal regulators have tacitly written off the possibility of new oil and gas development along the coast amid opposition ignited by a 1969 well failure in the Santa Barbara Channel that fouled beaches and helped give birth to the modern environmental movement. Offshore platforms visible from the state's southern shoreline are still extracting oil from more than 40 longstanding leases. The last drilling lease sale was in 1984.
Although the Obama administration formally asked the public to weigh in on a potential sale in federal Pacific waters as it began assembling the current five-year auction schedule, it ruled that territory out at the first possible opportunity. Given the opposition from elected officials and residents, Trump may eventually do the same.
Senators representing California, Oregon and Washington have locked arms to fight offshore drilling, arguing that any oil spills in the region could jeopardize fishing and tourism along the coast. They want federal legislation to permanently prohibit offshore drilling by their states. California Governor Jerry Brown has been pushing for a similar moratorium.
“New oil drilling along our coasts is unnecessary and dangerous,” said Senator Dianne Feinstein, a Democrat from California. “There's no reason to expose more coastal economies to the risk of disastrous spills so oil companies can drill for hard-to-reach fossil fuels. Rather than signing reckless executive orders, the president should focus on investing in safer, cleaner energy sources.”
“It is very clear that the communities on the Atlantic and Pacific coasts don't want and don't need offshore leasing or drilling,” said Mike LeVine, senior Pacific counsel for the conservation group Oceana. “It is equally clear that President Trump is prioritizing politics and corporate interests ahead of our coastal communities and good stewardship of our ocean resources.”
More Opportunity
The oil industry has been seeking a shot at Atlantic acreage -- a battle it lost when Obama's Interior Department decided to forgo sales there. It's not clear how enticing energy companies would find potential Pacific leases, given the risk proposed drilling wouldn't clear a state review.
Still, the more opportunities to drill, the better, said Erik Milito, a policy director at the American Petroleum Institute, the industry's leading trade group. By endorsing “a long-term energy strategy that allows opportunities to lease over years in various areas,” the Trump administration would be preserving flexibility for U.S. oil and gas development needed to help satisfy worldwide energy demand, he said.
“We're not going to sit here and say that companies are going to want to go out and drill tomorrow in the Pacific and the Atlantic,” Milito said. But “it is important to keep options open for the long term, so companies can start planning for and determining where the best prospects are and then make those investments the global economy will require over time.“
“We shouldn't be closing any type of windows to potential discoveries and production that likely would be years away,” he added.
Pacific Access
Trump's approach hearkens back to a failed bid by former President George W. Bush to put Pacific waters on the auction block after the 2008 oil price spike. Just before he left office, Bush offered up a draft leasing plan that included two potential sales off the U.S. West Coast. It was eventually scrapped under Obama.
Trump's Interior Department has some options for revising -- or supplementing -- the existing, Obama-era leasing plan, but it must submit those changes to extensive scrutiny and public comment. Because the Obama administration decided against an Arctic lease sale very late in the process of assembling the current schedule, it would be the easiest for the Trump administration to restore now -- unlike any potential auction of Atlantic and Pacific waters that would require years of work.
Trump's Interior Department could face legal challenges if it tries to rewrite much of the plan without subjecting the changes to years of deep scrutiny. Critics could cite underlying laws that give the Interior secretary latitude to easily make changes only as long as they are “not significant.”
While he is moving to expand offshore access, Trump on April 28 also is slated to direct a review of regulations safeguarding offshore oil and gas exploration, including a well-control rule triggered by the 2010 Deepwater Horizon disaster. The industry is also lobbying for changes to mandates for Arctic drilling.
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=110274599&vname=dennotallissues&fn=110274599&jd=110274599
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Walden Eyes Multiple Options for Reform Legislation
Apr 27, 2017 | E&E News PM
By George Cahlink
House Energy and Commerce Chairman Greg Walden (R-Ore.) today suggested energy reform could move as part of a forthcoming infrastructure package, but also would not rule out advancing broad stand-alone legislation later this year.
Walden, speaking at a conference sponsored by law firm BakerHostetler, said his panel had been working on energy legislation "concurrently" to its involvement with higher-profile health care overhaul legislation.
"You just don't hear a lot about it," he said.
Walden said hearings already held during this Congress could pave the way for moving bills through committee this year on issues such as pipeline siting and safety, nuclear waste storage, ozone and electric grid safety.
He also did not rule out reviving some aspects of an energy package that stalled in the closing weeks of the last Congress.
"Hopefully, we'll get beyond that this time," said Walden, who noted that he was not involved with those talks last year because he had yet to take the helm of the committee.
Walden suggested individual bills could move out of committee and then be pieced together with broader legislation. Pipeline and electric grid language, for example, could fit with infrastructure.
Other individual House-passed measures could be pieced together in an energy omnibus bill once they move to the Senate, where a broad package would stand a better chance of gaining floor time, said Walden.
The chairman did not rule out an energy package moving out of his committee by the later half of the year but said he was reluctant to set a firm deadline.
Walden also is especially eager to move legislation related to federal nuclear waste storage. He said he's examining pushing for development of the long-stalled Yucca Mountain repository or an interim facility (see related story).
Walden said finding a permanent disposal site is a priority for his state. It's been decades since the Trojan Nuclear Power Plant in Oregon has been operational, he said, and the land would be ready for reuse if it didn't have to house waste.
https://www.eenews.net/eenewspm/2017/04/26/stories/1060053641
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Ohio, Pennsylvania Show Largest NatGas Production Increases in 2016
Apr 27, 2017 | Natural Gas Intelligence
By Jamison Cocklin
The Energy Information Administration (EIA) said this week Ohio and Pennsylvania each increased natural gas production by about 1.2 Bcf/d last year at a time when annual U.S. gas output declined for the first time since 2005.
While Louisiana, West Virginia and North Dakota posted gains last year as well, the increases were well below 1 Bcf/d. Texas, the nation's leading gas producing state, saw production decline by 2.5 Bcf/d in 2016. U.S. gas production dropped to 77 Bcf/d last year from 79 Bcf/d in 2015.
Pennsylvania and Ohio had the two largest annual gas production increases from 2015 to 2016, reflecting sustained volumes from the Utica and Marcellus shales. The formations, EIA said, have accounted for 85% of U.S. shale gas output growth since 2012. Production from both states has accounted for an increasing share of the nation's total in recent years, going from less than 2% in 2006 to about one-quarter in 2016.
Pennsylvania surpassed Louisiana in 2013 to become the country's second-highest natural gas producing state. Ohio vaulted over West Virginia last year to become the seventh-highest gas producing state. Ohio produced about 1.4 Tcf of natural gas last year, almost entirely from the Utica, while shale drillers in Pennsylvania produced 5.1 Tcf, according to state data.
EIA's Today in Energy note also said Louisiana's 2016 increase, mostly from the Haynesville Shale, was its first since 2011, while West Virginia and North Dakota have had 13 and 8 consecutive years of natural gas production increases, respectively. EIA's Short-Term Energy Outlook projects that Lower 48 gas production will increase in both 2017 and 2018 as gas prices rise and result in more rig activity.
http://www.naturalgasintel.com/articles/110257-ohio-pennsylvania-show-largest-natgas-production-increases-in-2016
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Methane Rule Repeal Has Majority Senate Support: Hoeven
Apr 27, 2017 | BNA Daily Environment Report
By Brian Dabbs
Most senators now back legislation repealing a Bureau of Land Management regulation designed to scale back venting and flaring of natural gas from oil and gas operations, Sen. John Hoeven (R-N.D.) said April 26.
Senate leadership has been trying for weeks to marshal the 51 votes needed to pass the Congressional Review Act repeal bill (S.J. Res. 11). The House passed its version in early February.
“It looks like we have more than or at least the 51 we need,” Hoeven told Bloomberg BNA. “We're hopeful that we can get a vote on it next week or very soon when leadership's willing to schedule it.”
Sen. Lisa Murkowski (R-Alaska), chairman of the Senate panel that oversees the Bureau of Land Management, said she doesn't expect a vote this week.
The rule (RIN:1004-AE14) applies to federal and Indian lands. The BLM, which finalized the rule in November 2016, said it would reduce waste and increase royalties.
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=110274592&vname=dennotallissues&fn=110274592&jd=110274592
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Bakken Shale Play Seen Poised for Recovery as Drillers Add Rigs
Apr 27, 2017 | BNA Daily Environment Report
By Meenal Vamburkar
The Bakken shale play in North Dakota, which has struggled to recover from the oil slump, may be poised for a comeback aided by the completion of a new pipeline.
As crude prices hover around $50 a barrel and rig counts tick upward, activity in the region is expected to ramp up this summer, according to a Bloomberg Intelligence report April 26. While the prolonged rout has left fewer producers in the area, drilling is likely to increase if prices stabilize over $60 a barrel, analyst Peter Pulikkan said in the report.
Already, operators in the Bakken are getting back to work, with rig counts increasing more than 30 percent this year, reaching 44 in the region for the first time since early 2016 when crude plummeted to nearly $26 a barrel, according to data from Baker Hughes Inc. Hess Corp., for example, expects to have six rigs drilling in the Bakken by year's end, up from two at the start of the year.
“There are good areas of the Bakken,” said Erika Coombs, an analyst at BTU Analytics LLC. “We've seen increased productivity from the Bakken wells just like we've seen across the country.“
The Bakken, which also stretches into eastern Montana, made North Dakota the second-largest oil-producing state in the country when the oil industry was booming. As it recovers from the slump, the Bakken production is around 1 million barrels a day.
Transport Costs
As the Dakota Access pipeline enters service, producers will benefit from lower transport costs. The line, providing access to East and West Coast markets, will help operators in the region as differentials between Bakken crude and West Texas Intermediate tighten, Coombs said.
“It doesn't bring a lot of people into the money, but it does help,” Combs said in a telephone interview. Higher transport costs have been at “the crux of the situation” in the region.
Although companies are reviving activity in the play, the price of crude remains a limiting factor. The Bakken has fewer areas that are profitable at prices below $45 or $55, unlike the Permian Basin in Texas, which has been the driving force of the U.S. shale rebound.
Coombs said she doesn't expert prices to level off at $60 a barrel, “until probably 2019. We have a lot of crude.“
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=110274589&vname=dennotallissues&fn=110274589&jd=110274589
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US Shale Oil Rebound Shakes OPEC
Apr 27, 2017 | Platts
By Ross McCracken
Even with oil prices hovering around the $50/b mark, the US rig count has increased rapidly while E&P companies continue to record substantial reductions in well drilling costs. The increase in new well oil production per rig demonstrates the extraordinary gains the shale drillers have made.
In April 2014, new well oil production per rig on the Bakken was recorded at 492 barrels and on the Eagle Ford at 463 barrels. In April this year, the figures are 1,067 barrels and 1,448 barrels, respectively. Moreover, US E&P companies remain confident they can continue to eke further efficiencies out of their seemingly ever-evolving factory-mode production processes.
However, not all is well. A large part of reductions in well costs came about as a result of the crunch in drilling activity post-2014, when the oil price fell from its heady three-digit heights. The lack of demand for drilling resulted in over-capacity in the oil services sector, which led to a fall in the prices charged for oil services and also a contraction in the sector’s capacity.
As activity rebounds and the rig count rises, the oil services sector will also start to tighten and, indeed, US oil services costs are now forecast to rise about 20% this year. Even if US drillers can continue to deliver efficiency gains, they will have to battle this countervailing price pressure.
Much depends on the oil services sector’s ability to re-establish its former capacity, but there is little short-term motivation to do so, as service providers will be keen to re-establish the margins they formerly enjoyed. As a result, forecasts that US crude production will return to the record levels of the 1970s in 2018 may well only be realized if oil prices move above $60/b.
This, in turn, would appear to depend on an extension of OPEC’s production cuts into the second half 2017, and probably beyond, a prospect which will test the resolve of the organization’s non-OPEC partners.
The joy of being an OPEC member is to exercise market power through collective action, attempting to maximize the volume versus price equation. The joy of being a non-OPEC member is to hoover up the free rider oil price benefits of OPEC’s restraint. Currently, that pleasure is accruing predominantly to US producers, which get to maximize volume at better prices.
The extraordinary costs reductions achieved in the US have another consequence. They will be exported to Argentina, where momentum and investment levels, led by some major US companies, is growing on the giant Vaca Muerta shale play.
The challenges are big and the political risk relatively high but, in terms of production costs and reaching factory-mode production, Argentina should benefit hugely and comparatively rapidly from decades of US innovation in shale production techniques.
As a result, OPEC and its non-OPEC associates may find — in the not too distant future — that the return to the exercise of market power through production restraint will result in competition from not one but two major shale producing centers with implications as much for LNG markets as oil.
More shale production means a further rise in the investment responsiveness to prices, and a further shortening in the time taken to turn investment into production. This is the crux of the matter.
OPEC previously exercised market power in an environment in which new sources of oil supply were frontier, had long lead times, and high costs — crucially higher costs than their own production. That meant output restraint could deliver higher prices.
That environment has changed. Cost gains made by US producers mean shale is no longer a frontier and, more importantly, it is no longer high cost.
http://blogs.platts.com/2017/04/26/us-shale-oil-rebound-shakes-opec/
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Lawmakers, Industry Pile Up on Safety Agency
Apr 27, 2017 | E&E Daily
By Sam Mintz
Democrats and Republicans might disagree on how much regulation pipeline and hazardous materials companies need, but they're largely united in their criticisms of one of the agencies tasked with developing those standards.
The Pipeline and Hazardous Materials Safety Administration took a beating yesterday as lawmakers held a hearing to discuss safety regulations in those two industries as well as for railroads.
A central problem was that PHMSA has yet to implement many rules directed by a 2011 law passed by Congress — the Pipeline Safety, Regulatory Certainty and Job Creation Act.
The agency said it has completed 27 of 42 mandates but is still working on the remaining 15, which include regulations on pipeline shut-off valves, accident reporting and offshore liquid gathering lines.
The delay and other problems with the PHMSA rulemaking process are disruptive for pipeline builders, industry executives said yesterday.
Donald Santa, CEO of the Interstate Natural Gas Association of America, said that in general, PHMSA's regulatory process takes too long and does not include enough dialogue with stakeholders. That slows down safety improvements and creates uncertainty for companies, Santa said.
"There is apprehension on the part of some of our member companies to make the investment and incur the costs to do, for example, certain types of pipeline testing, when there's the risk that when PHMSA comes back with its rule," they're no longer in compliance, he said.
Rep. Peter DeFazio (D-Ore.), ranking member of the House Transportation and Infrastructure Committee, called PHMSA a "pretty much dysfunctional agency."
He said, "Before we start messing around with the things that are pending, we ought to get them to produce, and then review what their products are."
But while he shared some Republicans' views on PHMSA, DeFazio argued for the importance of regulation. He listed recent incidents, including a million-gallon leak from an Enbridge Inc. oil pipeline and a 2010 pipeline explosion in San Bruno, Calif., that killed eight people.
"Certainly, there are times when regulation becomes absurd ... but other times regulation is absolutely essential and in the public interest," DeFazio said during the Subcommittee on Railroads, Pipelines and Hazardous Materials hearing.
Another problem facing PHMSA is that it, like some other federal agencies, is lacking top personnel, with no administrator nominated yet to replace Obama appointee Marie Therese Dominguez.
Robin Rorick, an executive at the American Petroleum Institute, urged President Trump to appoint leadership at PHMSA, as well as at the Federal Energy Regulatory Commission, a five-member body that is currently down to two commissioners and is without a quorum.
"The absence of a quorum has put a freeze in final permitting and siting approvals preventing natural gas infrastructure projects moving forward toward construction and operation," Rorick said in written testimony.
Separately, full panel Chairman Bill Shuster (R-Pa.) tied yesterday's hearing to Trump's push for a massive infrastructure plan.
"He just dropped the MOAB, mother of all bombs, on Afghanistan. I think this is going to be the MOAB, mother of all bills," he said. "I think it's going to be a big bill; I think it's something we can find common ground across the aisle with our counterparts."
But he also said pipeline and rail "don't require federal dollars" because those industries are already spending billions on their own infrastructure.
https://www.eenews.net/eedaily/2017/04/27/stories/1060053667
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Four Republicans Sign Letter Urging Trump to Stay in Paris Deal
Apr 27, 2017 | The Hill - E2 Wire
By Devin Henry
Four Republicans joined a House letter to President Trump on Wednesday calling on the United States to stay in the Paris climate deal.
The letter, from the House’s bipartisan Climate Solutions Caucus, said the U.S. should stay in the Paris deal because it would give the country the chance to influence future climate change discussions.
Members also seemingly endorsed the greenhouse gas emissions goals former President Obama set for the United States when negotiating the deal in 2015.
The letter says Obama’s proposed 26 percent to 28 percent reduction in greenhouse gas emissions “are achievable, but they will require hard work, and along the way will create massive opportunities for American companies and workers.”
Reps. Ted Deutch (D-Fla.) and Carlos Curbelo (R-Fla.) led the letter. Republican Pennsylvania Reps. Ryan Costello, Brian Fitzpatrick and Patrick Meehan signed the letter, along with 17 Democrats.
“The world’s leading nations must work together to not only reduce greenhouse gas emissions, but also mitigate and prepare for the effects of climate change, which many of our communities are dealing with on a daily basis,” the letter says.
“It is imperative that we maintain our seat at the table in global discussions of how to address the threats posed by climate change.”
The letter comes as the Trump administration debates whether to stay in the Paris deal, attempt to renegotiate the Obama goals or leave the agreement entirely.
The debate has divided Republicans and the Trump White House, with key advisers Gary Cohn, Secretary of State Rex Tillerson and others advising the U.S. stay in the agreement. Environmental Protection Agency Administrator Scott Pruitt is among those calling for an exit from it.
Key aides are reportedly set to discuss the issue at a White House meeting on Thursday.
http://thehill.com/policy/energy-environment/330747-four-republicans-sign-letter-urging-trump-to-stay-in-paris-deal
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State Department Memo Boosts Case to Stay in Paris Climate Pact
Apr 27, 2017 | BNA Daily Environment Report
By Jennifer A. Dlouhy and Nick Wadhams
An internal State Department memo says the Paris climate accord imposes few obligations on the U.S., bolstering the case for Trump administration officials who want to stay in the deal.
The document, marked as a draft, makes no explicit recommendation about whether the U.S. should remain part of the pact. It circulated ahead of a scheduled meeting of top administration officials April 27 to discuss whether President Donald Trump should fulfill his campaign pledge to exit the deal.
While there are some binding provisions in the agreement, those “legal obligations are relatively few and are generally process-oriented,” the three-page memo obtained by Bloomberg News said. Under terms of the agreement, the U.S. couldn't formally exit until 2019. It faces no specific reporting requirements until 2021, the document says.
Trump's decision on the the Paris accord, signed by more than 190 countries, is viewed by foreign leaders, corporate executives and environmental advocates as a test of how far the new president will go to dismantle his predecessor's efforts to address climate change.
The administration is slated to decide what to do about the deal by late May, when world leaders gather for the Group of Seven summit in Italy, White House press secretary Sean Spicer has said. White House staff met to discuss the issue April 25, and Cabinet members and other high-level officials are set to follow suit April 27, according to a person familiar with the plans.
Administration Divided
That person, who spoke on condition of anonymity, also confirmed the veracity of the State Department memo. A White House spokeswoman didn't respond to emailed questions about the document, and a State Department spokesman declined to comment on it.
Administration officials are divided over the wisdom of keeping the U.S. in the pact, with environmental chief Scott Pruitt and top strategist Steve Bannon pushing for a pullout as White House adviser Jared Kushner and Secretary of State Rex Tillerson advocate sticking with the agreement. Energy Secretary Rick Perry told the Bloomberg New Energy Finance conference April 25 he wouldn't advise Trump “to walk away from the Paris accord” and instead thinks “we probably need to renegotiate it.“
Under President Barack Obama, the U.S. promised to pare greenhouse gas emissions at least 26 percent from 2005 levels by 2025. That U.S. pledge joined an array of widely varying “nationally determined contributions” from other countries.
But none of those commitments is binding, according to the State Department memo, which appears to dispel the most common arguments made by Paris agreement foes, including concerns that staying in the global pact would undermine the Trump administration's efforts to unwind Obama-era regulations.
“The agreement does not dictate any particular domestic measures a party must take to achieve its” goals, the memo says. Countries also have wide latitude to amend their planned reductions.
The U.S. also isn't required to fulfill its pledge to donate as much as $3 billion to a Green Climate Fund designed to help developing countries deal with the effects of a warming planet.
Opponents of the agreement, including Marlo Lewis, a senior fellow at the Competitive Enterprise Institute, and Chris Horner, a senior legal fellow with the Energy and Environment Legal Institute, warn that if the U.S. stays in the deal, it would hand legal ammunition to environmentalists fighting to preserve climate regulations.
Free Rein
With anything short of a complete withdrawal, “domestic and foreign opponents of Trump's energy policies and possibly activist courts can continue to invoke this ‘international commitment,’ and any future U.S. administration will have free rein to pick up where Obama left off,” Lewis and Horner wrote in an April 17 blog post.
Opponents also say that the U.S. would be reneging on a promise, and incur worldwide shame, for staying in the deal while simultaneously flouting its pledge.
Trump can't pull the U.S. out of the worldwide pact immediately, though he could begin a four-year process of doing so. One possible tactic is shifting the decision to the Senate by interpreting the accord as a treaty that requires the support of two-thirds of the chamber's members to be ratified. That's currently an insurmountable political hurdle.
The document warns against that Senate-based strategy, explicitly affirming the Obama administration's view that the accord is an “executive agreement,” not a treaty that requires ratification. Sending it to the Senate now could jeopardize Trump's ability to ink other bilateral and multilateral agreements by suggesting “the existence of new limits on the president's constitutional authority,” the State Department said.
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=110274571&vname=dennotallissues&fn=110274571&jd=110274571
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The Trump White House Is At War With Itself About Climate Change
Apr 27, 2017 | The Washington Post
By Chris Mooney and Juliet Eilperin
Key officials will meet at the White House on Thursday to discuss whether President Trump should make good on his campaign promise to “cancel” the Paris climate agreement, or allow the United States to remain a party to the global pact — confronting head-on an issue that has divided the administration and raised concern in the international community.
The meeting will bring together officials with sharply opposing views about the administration’s position on the historic agreement, signed by nearly 200 countries, which Trump as a candidate promised to cancel.
Secretary of State Rex Tillerson and senior adviser Jared Kushner, who may also participate, support remaining in the agreement.
Other attendees such as Environmental Protection Agency Administrator Scott Pruitt and Energy Secretary Rick Perry are opposed. Pruitt has publicly called on the United States to exit the agreement. Perry has suggested renegotiating the deal, but it is unclear how that can be accomplished.
White House Chief of Staff Reince Priebus will be at the meeting, and chief strategist Stephen K. Bannon may also participate.
Officials plan to discuss multiple scenarios, according to people who have been briefed on the matter but spoke on the condition of anonymity to discuss internal deliberations.
These will include pulling out of the voluntary agreement, or remaining part of the U.N. Framework Convention on Climate Change. Those who advocate staying in suggest that the administration can scale back the amount of foreign climate assistance the United States has pledged to provide under the deal, and push countries such as China and India to commit to deeper emissions reductions. Opponents argue that that strategy is unrealistic.
The Trump administration has been under pressure to define its position on the Paris agreement ahead of upcoming international meetings, including of the eight-nation Arctic Council in Fairbanks, Alaska, and the G-7 in Italy, where international partners will inevitably be asking questions and seeking to adopt statements about it.
White House press secretary Sean Spicer has said that the administration will make up its mind about Paris “by the time of the G7 Summit, late May-ish, if not sooner.”
The much-anticipated meeting had been put off last week after several top Trump officials traveled with the president to Wisconsin.
Business groups are also divided on the agreement. On Wednesday, more than a dozen major firms, including Shell, BP, General Mills, Walmart, PG&E and Unilever sent a letter to Trump urging him not to abandon the accord. By contrast, the National Mining Association’s board of directors voted Tuesday to endorse a withdrawal from the climate agreement.
A number of climate experts have suggested they expect the White House will eventually decide to remain in the agreement. “I think there is a better than 50/50 chance that the Trump administration will stay in the Paris agreement. I think odds are they will stay in,” Al Gore told the TED conference in Vancouver Wednesday.
The internal administration debate about the U.S. position toward Paris was echoed on Capitol Hill on Tuesday when Rep. Kevin Cramer (R-N.D.), who served as Trump’s energy adviser during the campaign, convened a panel to debate the merits of staying in, or departing from, the agreement.
The event showed surprising support for the “stay” position, including from conservatives.
Cramer said at the start of the meeting that he had been a Paris opponent, but had been swayed by Tillerson’s argument that there are things to be gained from the United States maintaining a “seat at the table.”
“The longer I think about it, the more I’ve spoken about it to people, the more convinced I am that there’s a lot of upside to staying in if we do this right,” Cramer said. In particular, he said, he thinks the United States could wield more influence.
Scott Segal, a lawyer with Bracewell LLC, argued that there was no contradiction between Trump’s plans domestically to roll back the Clean Power Plan and staying in the Paris accord.
“While Paris does encourage forward momentum to addressing our national contributions … it does not require a particular regulatory outcome. For example, it does not require the Clean Power Plan,” Segal said.
However, Christopher Horner, a lawyer with the Competitive Enterprise Institute, argued that environmentalists would use the United States’ participation in the deal in lawsuits to force climate actions, and that the ongoing negotiations would provide repeated opportunities for the rest of the world to criticize the United States for its overall carbon output.
“There are many rationalizations, we’re hearing more every day, for President Trump breaking his promise,” Horner said. “I think they are rationalizations, they aren’t reasons.”
One thing is clear: If the Trump administration does stay in the Paris accord, it seems unlikely that it would also be able to stick with the United States’ current pledge under the agreement to cut its emissions 26 to 28 percent below 2005 levels by 2025.
The administration has set about dismantling many key Obama policies that made that pledge possible, and the economic consulting firm Rhodium Group has estimated that the elimination of those policies would mean the United States would cut its emissions by 14 percent by 2025 compared to 21 percent if they stayed in place.
So the Trump administration would have to revise that pledge downward, an act that surely would trigger international opprobrium. The Paris accord is aimed at getting countries to increase their ambition on emissions, not decrease it, over time.
But the U.S. could nevertheless do so under the bottom-up, nonobligatory structure of Paris, said Keith Benes, a former State Department attorney who is now a fellow at the Columbia University Center on Global Energy Policy and who also spoke at Cramer’s event.
“Nothing prevents the U.S. or any other country from communicating a different goal for emissions reductions,” Benes said.
https://www.washingtonpost.com/news/energy-environment/wp/2017/04/26/trump-said-he-would-cancel-paris-climate-deal-now-the-white-house-is-having-second-thoughts/?utm_term=.e81379c2fcaf
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State AGs Urge Lawmakers to Oppose NAAQS Reform Legislation
Apr 27, 2017 | Inside EPA
Attorneys general (AGs) from 16 primarily coastal states and territories are urging lawmakers to oppose bills in Congress to ease EPA's national ambient air quality standards (NAAQS) program, warning the measures would worsen air quality and hurt public health by delaying implementation of the standards, among other provisions.
The bills would create “a significant step backward in combating the dangers of ozone” and other criteria pollutants such as particulate matter, the AGs say in April 26 letters to key House and Senate lawmakers.
“EPA's ozone standards aren't just vital to protecting our environment -- they will literally save lives. Too often, states like New York see our efforts to combat ozone pollution undercut by upwind states,” said New York AG Eric Schneiderman (D) in a statement on the letters.
His concerns reflect historically high levels of ozone in the Northeast that stem from air pollution upwind.
In addition to Schneiderman, the letters were signed by the AGs of California, Connecticut, Delaware, Illinois, Iowa, Maryland, Massachusetts, New Mexico, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington and the District of Columbia.
In their letter to the House Energy & Commerce Committee's Chairman Greg Walden (R-OR) and ranking member Frank Pallone (D-NJ), the AGs say, “This bill would not only delay implementation of more protective ozone air quality standards, but, more broadly, would undermine the mandate in the Clean Air Act” that the NAAQS for ozone and other “criteria” pollutants, “be based on up-to-date scientific evidence and focus solely on protecting public health and welfare."
The bills -- H.R. 806 in the House and S. 263 in the Senate -- would delay submission of state implementation plans for EPA's tougher ozone standard of 70 parts per billion (ppb) from 2020 until 2026, extend the statutory five-year review cycle for all NAAQS to 10 years, and allow EPA to consider technological feasibility of implementation in the setting of NAAQS, among other steps.
Democrats are strongly opposed to the bills, with senators threatening to filibuster them in the upper chamber.
Nonetheless, House Republicans have told Inside EPA that they are confident of at least pushing H.R. 806 through the House, as part of a “rifle shot” approach to reforming specific parts of the air law.
https://insideepa.com/daily-feed/state-ags-urge-lawmakers-oppose-naaqs-reform-legislation
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Judge Says Exxon Owes $19.95 Million For Texas Refinery Pollution
Apr 26, 2017 | The New York Times
By Reuters
A federal judge ruled on Wednesday that ExxonMobil Corp should pay a $19.95 million penalty for pollution from its Baytown, Texas, refining and chemical plant complex between 2005 and 2013.
U.S. District Court Judge David Hittner issued the ruling in a citizen lawsuit brought under the U.S. Clean Air Act by two environmental groups, Environment Texas and the Sierra Club.
Environment Texas welcomed the decision in the long-running suit, which was first filed in 2010.
"We think it might be the largest citizen suit penalty in U.S. history," said Luke Metzger, director of Environment Texas. "It definitely means it pays not to pollute."
Exxon said it would consider its legal options and may appeal the ruling.
"We disagree with the court's decision and the award of any penalty," Exxon spokesman Todd Spitler said in an emailed statement. "As the court expressed in its decision, ExxonMobil's full compliance history and good faith efforts to comply weigh against assessing any penalty."Continue reading the main story
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The suit was filed under a provision of the Clean Air Act that allows citizens to sue when regulators have failed to stop pollution. The two groups had contended the penalty could run as high as $573 million, but had only sought $41 million.
In a 101-page decision, Hittner ruled there had been 16,386 days of violations and 10 million pounds (4.5 million kg) of pollutants had been released in violation of operating permits issued to Exxon for the Baytown complex.
"The court finds given the number of days of violations and the quantitative amount of emissions released as a result, the seriousness factor weighs in favor of the assessment of a penalty," he wrote.
The decision comes about a year after the Fifth U.S. Circuit Court of Appeals determined Hittner had errored in a 2014 ruling assessing Exxon's liability for pollution from the refinery, chemical plant and olefins plant in the Baytown complex in the eastern suburbs of Houston.
The Fifth Circuit Court sent the case back to Hittner to reassess Exxon's liability.
The Baytown complex, which includes the second largest refinery in the United States, is regulated by the Texas Commission on Environmental Quality (TCEQ), which had fined Exxon $1.4 million for pollution. Hittner deducted that amount in determining the penalty.
The penalty will be paid to the federal government. Hittner said Exxon was liable for legal fees incurred by the two environmental groups.
https://www.nytimes.com/reuters/2017/04/26/business/26reuters-refinery-pollution-exxon-penalty.html?mtrref=query.nytimes.com&gwh=EFC04A264F9D93313E328BDAB9E145DA&gwt=pay&_r=0
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