Preview Newsletter
ACC PM 5/2/17
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(ACC Mentioned) The Revolving Door Spins at the Military-Industrial Lobby
May 2, 2017 | Washington Examiner
By Timothy P. Carney
''Maryland got the life sciences," former Democratic Rep. Jim Moran said about the government-driven boom in the D.C. suburbs, "and Virginia got the death sciences." -
(ACC Mentioned) New Study Challenges Formaldehyde Cancer Findings
May 2, 2017 | Chem Info
By American Chemistry Council
A newly published reanalysis of raw data from a study widely used by chemical assessment agencies to set hazard assessments for formaldehyde shows no link between formaldehyde exposure and leukemia. -
(ACC Mentioned) The Scariest Trump Appointee You’ve Never Heard Of
May 2, 2017 | Environmental Working Group
By Melanie Benesh
The Trump administration just appointed a chemical industry bigwig to be in charge of chemical safety at the Environmental Protection Agency as head of the Office of Chemical Safety and Pollution Prevention. -
(ACC Mentioned) St. Louis Post-Dispatch: Wash Your Food — EPA Reverses Itself on Dangers of Common Pesticide
May 2, 2017 | Watertown Daily Times
President Donald Trump told Fox Business News on April 13: “We’ve done an amazing job on regulations. We’ve freed it up. We freed up this country so much.” -
(ACC Mentioned) Chemical Industry Split About the Case for More US Plants
May 2, 2017 | Financial Times
By Ed Crooks
The surge in investment into the US petrochemicals industry over the past seven years has been one of the biggest spending booms in a developed country this century. -
Gas Group's Riedl Talks Supply Glut's Effect on Exports, Future of Industry Under Trump
May 2, 2017 | E&E TV
By OnPoint
As the market dynamics and politics surrounding liquefied natural gas exports shift, how is the industry adjusting to a changing outlook? During today's OnPoint, Charles Riedl, executive director of the Center for Liquefied Natural Gas, explains how recent moves by the Trump Department of Energy will position the U.S. LNG industry in the global competition for market share. -
House Denies Vote on Fracking Investment Bill
May 2, 2017 | E&E Greenwire
Florida's largest power company failed to get enough backers for its plan to charge customers for out-of-state hydraulic fracturing investments. -
Omnibus Requires Pentagon to Own Up to Base Contamination
May 2, 2017 | E&E Greenwire
The spending bill for fiscal 2017 expected to pass through Congress this week includes a provision that would require the Defense Department to identify all of the hundreds of military bases where drinking water may have been contaminated by firefighting foam. -
Oil and Gas Industry Leads in Severe Injuries
May 2, 2017 | E&E Energywire
By Mike Soraghan
The upstream oil and gas industry has one of the highest rates of severe injuries in the country, according to an E&E News analysis of workplace injury data. By some measures, it has the highest. -
Critics Say Home Explosion Points to Need for Tougher Rules
May 2, 2017 | E&E Energywire
By Mike Lee
Activists yesterday called on Colorado's oil and gas regulators to be tougher on energy companies and more transparent with the public in the wake of a fatal explosion near a gas well. -
Think Tank Sees Trump Failing to Meet Emissions Pledge
May 2, 2017 | E&E Greenwire
By Hannah Hess
President Trump's executive actions on energy during his first 100 days put the United States on course to fall far short of its carbon-cutting goals under the Paris Agreement, according to a new analysis. -
As Trump Reverses Climate Actions, California Considers a Bold New Step
May 2, 2017 | Washington Post
By Chelsea Harvey
As the Trump administration continues its efforts to roll back Obama-era environmental regulations, many of the nation’s most significant efforts to combat climate change are now happening at the state and local levels — and California is among those leading the way. -
6th Circuit Rejects Utility's Call to Rehear Suit Testing NSR Enforcement
May 2, 2017 | Inside EPA
The U.S. Court of Appeals for the 6th Circuit has rejected a utility's request to rehear its ruling upholding EPA's power to enforce the Clean Air Act new source review (NSR) permitting based on a facility's projected future emissions, an important win for the agency after it warned that undoing the ruling could “eviscerate” NSR enforcement.
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(ACC Mentioned) The Revolving Door Spins at the Military-Industrial Lobby
May 2, 2017 | Washington Examiner
By Timothy P. Carney
''Maryland got the life sciences," former Democratic Rep. Jim Moran said about the government-driven boom in the D.C. suburbs, "and Virginia got the death sciences."
The Virginia congressman was referring to the military-industrial complex occupying Northern Virginia "Of course, NoVa, given the two wars, it's done even better than suburban Maryland."
Moran is now a death lobbyist. He lobbies on defense appropriations for Northrop Grumman, which makes bombers, death drones, and many other weapons technologies.
Moran had long been close with Northrop. In 2013, when the Pentagon wanted to cancel its order of more massive Northrop drones known as Global Hawks, Moran penned a letter to the Pentagon demanding they follow through with their order of three more Global Hawks. Also, the Center for Public Integrity reported:
Moran, who successfully urged Northrop Grumman to move its headquarters from Los Angeles to his district in Falls Church, Va., in 2011, confronted top Air Force officials at a May 9 hearing last year, insisting that their figures showing each aircraft operating at roughly the same $32,000 per hour cost was flawed and that the Global Hawk was cheaper to operate.
Now Northrop pays Moran.
The Center for Responsive Politics has a "Where Are They Now" story up today that leads with Moran's gripes that congressmen are not highly paid enough. But Moran's story shows how lucrative an experience it can be in the long run, when you're doling out taxpayer money to massive corporations for years.
Another military-industrial lobbyist recently in public service is former Illinois Senator Mark Kirk, the chief Republican champion of the Export-Import Bank, which mostly subsidizes Boeing, whose headquarters are in Chicago. CRP notes "Kirk has said that he's considering opening up a lobbying shop, and that he's 'already talked to Boeing.'"
More from CRP:
Several other lawmakers who left the Hill in January have joined Kirk in exploring their options on the other side of the revolving door. Former Rep. Charles Boustany (R-La.) is now with Capitol Counsel, former Rep. Ander Crenshaw (R-Fla.) is senior counsel at King and Spalding, former Sen. David Vitter (R-La.) is co-chairman of Mercury (his clients include the American Chemistry Council, the Atlantic Development Group and Cabot Corp.) and former Rep. Jeff Miller (R-Fla.) is "senior legislative advisor" at the same firm where Moran landed, McDermott, Will and Emery.
Then there's former Speaker of the House John Boehner (R-Ohio), who resigned in 2015 and is now a senior strategic advisor at lobbying powerhouse Squire Patton Boggs. He's also on the board of Reynolds American, the nation's second-largest tobacco company and producer of brands like Camel, Newport, Pall Mall and Kent. Boehner was big tobacco's prime recipient of campaign contributions in the 2014 cycle, the last one in which he ran for re-election; he received more than $130,000 from the industry then.
http://www.washingtonexaminer.com/the-revolving-door-spins-at-the-military-industrial-lobby/article/2621846
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(ACC Mentioned) New Study Challenges Formaldehyde Cancer Findings
May 2, 2017 | Chem Info
By American Chemistry Council
A newly published reanalysis of raw data from a study widely used by chemical assessment agencies to set hazard assessments for formaldehyde shows no link between formaldehyde exposure and leukemia. The peer-reviewed paper was just published on-line in the Journal of Critical Reviews in Toxicology.
Kenneth A. Mundt, Ph.D., the lead author of the reanalysis and Health Science Global Practice Network Leader and Director of Applied Epidemiology for Ramboll Environ, has led several studies that analyze the health risks from formaldehyde exposure. "The weight of scientific evidence does not support a causal association between formaldehyde and leukemia," he said.
The original paper, published in January 2010 by Luoping Zhang and 33 co-authors in Cancer Epidemiology, Biomarkers & Prevention, compared the presence of reported chromosomal abnormalities in a small group of Chinese workers occupationally exposed to formaldehyde to the presence of these abnormalities in unexposed workers. The researchers suggested that the observed differences might indicate a mechanism linking formaldehyde exposure to leukemia.
In their paper, Mundt and his co-authors analyzed raw data from the Zhang study, including previously unavailable data on individual workers' exposure to formaldehyde. Those data were recently released by the National Cancer Institute, part of the U.S. National Institutes of Health, which co-funded the original study. They also reviewed several other new publications on the health effects of formaldehyde, including studies showing that formaldehyde cannot reach the bone marrow where leukemia-causing effects are generally recognized to occur. The authors concluded: "Taken as a whole, the epidemiological evidence from the most recent analyses and follow-up of available cohorts provides little if any evidence of a causal association between formaldehyde exposure and AML (acute myelogenous leukemia)."
Since its publication in 2010, the conclusions of the Zhang study have been used by several health assessment organizations to inappropriately conclude that formaldehyde causes leukemia. For example, in its 2012 monograph on formaldehyde, the International Agency for Research on Cancer (IARC) determined "that the epidemiologic evidence shows that occupational exposure to formaldehyde causes leukemia." In addition, the U.S. Environmental Protection Agency relied heavily on the Zhang study in its 2010 draft assessment of formaldehyde health risks under its Integrated Risk Information System (IRIS), a draft assessment that was heavily criticized by a 2011 National Academy of Sciences (NAS) peer review report.
"The findings in this reanalysis are important because they call into question the validity of all these recent formaldehyde assessments," said Kimberly White, Ph.D., Senior Director of the American Chemistry Council Formaldehyde Panel. "The original paper failed to meet its own data quality standards and the scientific standard of reproducibility. Relying on it consequently led to unsubstantiated regulatory decisions and unwarranted outcomes. The EPA and other agencies evaluating chemical risk from exposures must consider the entire weight of evidence on formaldehyde when setting exposure limits."
http://www.chem.info/news/2017/05/new-study-challenges-formaldehyde-cancer-findings
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(ACC Mentioned) The Scariest Trump Appointee You’ve Never Heard Of
May 2, 2017 | Environmental Working Group
By Melanie Benesh
The Trump administration just appointed a chemical industry bigwig to be in charge of chemical safety at the Environmental Protection Agency as head of the Office of Chemical Safety and Pollution Prevention.
You read that right. Nancy Beck is coming to the EPA straight from the American Chemistry Council, the powerful lobby whose members include Dow Chemical, DuPont, Monsanto, ExxonMobil Chemical, Chevron Phillips Chemical and Bayer among others. Now she’ll be making decisions as the head of the EPA department whose stated mission is to “protect you, your family, and the environment from potential risks from pesticides and toxic chemicals.”
Here’s three things to know about Nancy Beck:
She has helped craft the chemical industry’s political agenda for years.
Before being appointed to her new position, Beck worked for the ACC as senior director for regulatory science policy in the Division of Regulatory and Technical Affairs. In that position, she helped draft the industry’s positions on chemical legislation before Congress and key regulations at the EPA and other agencies—including the major chemical reform bill that passed last year. Just last month, she testified before a House committee and advocated for EPA to adopt ACC’s scientific approach to evaluating chemical safety.
In her new position at EPA she’ll oversee the agency’s decisions on chemical safety—decisions that will directly affect your health as well as the financial interests of ACC’s member companies.
A House committee once called her out for “very disturbing” attempts to undermine EPA science.
Before joining the ACC, Beck was one of a handful of White House scientists who reviewed EPA regulations for the Office of Budget and Management —a job she started under the Bush Administration in 2002. During her tenure, that office increasingly scrutinized EPA chemical safety evaluations, resulting in significant delays.
In 2009, a report by the House Science and Technology Committee called her out by name for her efforts to rewrite and at times undermine EPA’s assessments of toxic chemicals. Specifically, the report found a Beck comment on a proposed EPA evaluation of a group of flame retardants to be “very disturbing because it represents a substantive editorial change regarding how to characterize the science.” It went on to say that her proposed changes “appear to enhance uncertainty” and that “the whole point of the exercise was to delay.”
In other words, she used her position in the executive branch to water down EPA’s conclusions about chemical safety and unduly delay finalization of risk assessments. Now she’ll be overseeing how those conclusions get drafted at the agency.
She’s been a vocal critic of EPA’s chemical safety findings, despite her own “fundamentally flawed” approach to chemical safety.
Beck has been described as a “powerful critic” of EPA’s Integrated Risk Information System, or IRIS program, which researches chemical toxicity. IRIS assessments have traditionally played a big role in informing the rules that EPA and state governments adopt to protect people from toxic chemicals. Beck has frequently criticized the program and its conclusions, especially when they suggest the need to reduce pollution.
When Beck was a scientist in the George W. Bush administration's Office of Information and Regulatory Affairs, she helped write a controversial draft guidance that would have revamped and undermined the way EPA and other agencies evaluate chemical safety. That guidance was eventually withdrawn and significantly scaled back after the National Academy of Sciences criticized her proposed approach as “fundamentally flawed.”
In her new post, Beck will be free to ignore IRIS findings and direct her office to make chemical safety decisions based on her preferred kinds of studies and scientific methods. She could also play a role in eliminating the IRIS chemical toxicity assessments altogether—something proposed by the Trump administration in a leaked memo.
http://www.ewg.org/planet-trump/2017/05/scariest-trump-appointee-you-ve-never-heard
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May 2, 2017 | Watertown Daily Times
President Donald Trump told Fox Business News on April 13: “We’ve done an amazing job on regulations. We’ve freed it up. We freed up this country so much.”
[In March], Trump’s Environmental Protection Agency administrator, Scott Pruitt, freed up the country to continue using a pesticide called chlorpyrifos on everything from strawberries and almonds to Brussels sprouts and broccoli.
This despite a warning from the National Institutes of Health that chlorpyrifos can cause “adverse developmental, reproductive, neurological and immune effects” in human beings.
This despite scientific studies indicating that chlorpyrifos can interfere with fetal brain development, leading to higher rates of autism and lower intelligence.
The Trump administration fails to acknowledge that the government has a role in protecting Americans from unseen dangers in their food.
That’s weighed against economic facts:
Chlorpyrifos kills insects that destroy crops, leading to bigger yields and cheaper food.
Protecting industry is likely to be more important than protecting consumers in an EPA run by Pruitt, the former attorney general of Oklahoma with a history of fighting the EPA.
Trump recently sent him some help in the person of Nancy Beck, who was named the EPA’s deputy assistant administrator for chemical safety and pollution prevention.
This is the office that regulates toxic chemicals.
Beck’s previous job: senior director of regulatory science policy for the American Chemical Council. In this job, she challenged scientific studies unfavorable to the chemical industry.
During the George W. Bush administration, she analyzed toxic chemicals for the Office of Management and Budget.
In 2009, the House Science Committee criticized her for “rewriting the ‘science’” on some policy issues.
Even under the Obama administration, the EPA dragged its feet on regulating chlorpyrifos.
The pesticide was outlawed for household use and for use on tomatoes in 2000, but the effort to restrict all agricultural use bogged down until 2015.
A federal appeals case kept it in limbo until March.
Just when the EPA-adopted rule was set to take effect, Pruitt undid it.
Chlorpyrifos, marketed under trade names like Lorsban and Dursban, accounts for at least a third of the $6.2 billion in annual worldwide sales of its manufacturer, Dow AgroSciences.
It just so happens that Dow also donated $1 million to Trump’s inauguration committee.
The company has challenged the scientific conclusions about its effect on children’s brain development found in studies at Mount Sinai School of Medicine, the University of California at Davis and Columbia University.
Dow further claims that chlorpyrifos results in $22.9 billion in added income for U.S. farmers.
When science is in dispute, it’s the job of regulators to decide when risks outweigh rewards.
The EPA took 15 years to decide that yes, they did. It took the Trump EPA about 15 minutes to decide that no, they didn’t.
Wash your kids’ food very carefully.
http://www.watertowndailytimes.com/opinion/st-louis-post-dispatch-wash-your-food---epa-reverses-itself-on-dangers-of-common-pesticide-20170502
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(ACC Mentioned) Chemical Industry Split About the Case for More US Plants
May 2, 2017 | Financial Times
By Ed Crooks
The surge in investment into the US petrochemicals industry over the past seven years has been one of the biggest spending booms in a developed country this century.
A series of giant new plants that will make chemicals used to produce plastics, from companies including Dow Chemical and ExxonMobil, are about to come online.
A second wave of projects is now being proposed, as some chemicals producers become increasingly confident that the cheap gas feedstock that makes their spending possible will last for a long time. But the industry is split, with some companies questioning whether the market is strong enough to justify a fresh investment surge.
A decade ago, the US petrochemicals industry seemed doomed to long-term decline, eclipsed by rivals in the Middle East, which had cheap oil and gas for feedstock, and in Asia, where the market growth was strongest.
The US shale revolution transformed that outlook, unleashing a flood of cheap natural gas liquids such as ethane and propane, which are key chemical feedstocks.
Since 2010 $85bn worth of petrochemicals projects have been completed or started construction, with about a further $100bn proposed, according to the American Chemistry Council. Together, these plants would employ an estimated 60,000 people when in service.
“This is the place to be,” says Kevin Swift, the ACC’s chief economist. “We are the low-cost producer.”
The biggest new opportunity in the US has been for ethylene “crackers”: plants that take ethane and convert it into ethylene, a building block for plastics.
Dow, Exxon, Sasol of South Africa, and CP Chem, the joint venture of Chevron and Phillips 66, have built large crackers along the US Gulf of Mexico coast that will be starting up in 2017 and 2018. US ethylene production is set to rise from 25.8m tonnes last year to 34.2m tonnes next year, an increase of 33 per cent, says S&P Global Platts.
Most of the additional output will go for export, typically after being converted to polyethylene pellets. As emerging economies adopt the habits of developed countries, their demand for plastics is growing 1.5 to 2 times as fast as their gross domestic product.
“These expansions in the US are geared towards exports to Asia,” says Bob Patel, chief executive of LyondellBasell, the US-Dutch petrochemicals group. “What drives demand for plastics is the growing middle class in China and India.”
But with new US chemicals plants coming on stream, some analysts have raised concerns about a glut of production that would drive ethylene prices down. Others, and industry executives, argue that consumption growth is strong enough to absorb the increased supply. The convenience of plastic is compelling, and demand has been robust even during economic downturns.
For big oil companies, investing in chemicals is particularly appealing because the market is growing faster than for petrol or diesel, and is more resilient to governments’ policies to cut greenhouse gas emissions. The world may shift towards wind and solar power and electric vehicles, but plastics made from oil and gas will be difficult to replace.
Ben van Beurden, chief executive of Royal Dutch Shell, has identified chemicals as one of the Anglo-Dutch company’s priorities for growth.
Using low-cost feedstocks, such as those available in the US, can make chemicals operations highly profitable, he said. “Our chemicals business is [our] best-performing business,” he added. “It is way too small in relation to the rest of the portfolio. That’s why we said we want to double that business, for starters, by the early part of the next decade.”
Last year Shell gave the go-ahead to a large new cracker in Pennsylvania, to take advantage of the cheap local ethane from the prolific Marcellus and Utica shales. In March, Total of France announced that it was leading a consortium looking at a new $1.7bn cracker in Port Arthur, Texas.
Last month Exxon said that along with its joint venture partner Sabic, the Saudi Arabian chemicals and materials group, it had picked a site near Corpus Christi in Texas for its new ethylene cracker, which would be the world’s largest. Exxon is aiming to make a final investment decision on that by the end of next year.
But while these companies press forward, others are hanging back. In the first wave of investment LyondellBasell added capacity at existing plants but did not build a new cracker, and Mr Patel suggests he is likely to stick with that cautious stance.
The economics of new ethylene plants do not look as compelling now compared to between 2010 and 2014, when there was a pronounced divergence between the prices of US gas and global crude oil.
US plants use ethane, which is broadly linked to gas prices, whereas their equivalents in Asia and Europe mostly use naphtha, which is coupled to oil. Since the oil slump of 2014, the spread between crude and gas prices has narrowed significantly.
“Even in this lower oil price environment, the US has advantage in our business,” says Mr Patel. “It’s just not so compelling that it would warrant another wave of investment. The pace will be much more modest.”
In a presentation last month, Mr Patel told investors that plant maintenance, debt interest payments and dividends were LyondellBasell’s priorities for uses of cash.
Andrew Liveris, chief executive of Dow, which will become the world’s largest listed chemical company if the $150bn merger with DuPont goes ahead as planned, is in a similar situation.
On a call with analysts last month, Mr Liveris said he would soon give details of investments to “provide a springboard to drive the next chapter of Dow’s growth trajectory”, but suggested those would include only “incremental” increases in capacity.
Jonas Oxgaard, analyst at Bernstein, says shareholders are reluctant to see Dow take a big gamble on future markets in what has always been a cyclical industry.
“Investors want their money back,” he says. “Even if an investment makes sense on a 20-year horizon, that doesn’t mean it will make sense on a five-year horizon for shareholders.”
Dow Chemical boss hints he may be around a while yet
After 12 years as chief executive of Dow Chemical, Andrew Liveris has become by far the best-known face in the US petrochemicals industry.
He has, for example, been a prominent supporter of Donald Trump, agreeing to lead the American Manufacturing Council, an advisory body to the US president.
Mr Liveris’ time in the spotlight appeared last year to be set to draw to a close this summer, but now seems likely to be extended for at least a while longer.
In 2014, Third Point, Daniel Loeb’s activist fund, revealed a stake in Dow and began pressing for a break-up of the company, saying its shares had badly underperformed for a decade.
Third Point criticised Mr Liveris and his management team. Among other things, Mr Liveris was accused of failing to meet earnings growth targets.
Mr Loeb seemed to have succeeded with his campaign when Dow in 2015 agreed a merger with DuPont that would be followed by the break-up of the combined company into three separate businesses. Last year Dow announced that Mr Liveris would be leaving no later than June 2017.
But that plan assumed that the DuPont deal would have closed by the original target date of the end of 2016. As the timetable for the merger has slipped, with completion now expected in August, Mr Liveris has become vague about his intentions.
Talking to analysts on a Dow earnings call last week, he suggested the commitment to leave in June no longer stood. “The board of the company decides what happens here,” he said.
https://www.ft.com/content/28649ac0-2f23-11e7-9555-23ef563ecf9a
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Gas Group's Riedl Talks Supply Glut's Effect on Exports, Future of Industry Under Trump
May 2, 2017 | E&E TV
By OnPoint
As the market dynamics and politics surrounding liquefied natural gas exports shift, how is the industry adjusting to a changing outlook? During today's OnPoint, Charles Riedl, executive director of the Center for Liquefied Natural Gas, explains how recent moves by the Trump Department of Energy will position the U.S. LNG industry in the global competition for market share.
Transcript
Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. With me today is Charles Riedl, executive director of the Center for Liquefied Natural Gas. Charlie, thank you for joining me.
Charles Riedl: Thanks, Monica. I appreciate the invitation.
Monica Trauzzi: So Charlie, the game is changing for liquefied natural gas, as market dynamics and politics take some dramatic shifts. We've already seen some significant moves by the Trump administration on LNG. Overall, what do you believe the outlook is for your industry over the next four years?
Charles Riedl: Well, I think the outlook overall for the next four years is a positive one. If we were to sort of take a step back and look at where we've come from in the last couple of years, really it's been a very rapidly growing industry, and it's also important to understand where we're at currently — right? We've got one operational project on the Lower 48, doing commercial exports of natural gas.
And so, what I think is going to happen in the next four years, really, is a number of these projects coming online, starting to see new LNG exports ramp up here in the United States, and taking that gas out to other countries that are interested in using U.S. gas. So, I think that overall, from an industry standpoint, we are excited about where we're headed in the near term the next four years, if we really think about these projects. That's the near term for us.
Monica Trauzzi: The Obama DOE was largely supportive of moving forward with these projects. How do you think the Trump DOE will be the same or different?
Charles Riedl: Well, I think it's obviously going to be different. Anytime we talk about an administration change, there's going to be a different set of ideas implemented here. What I think is really a positive sign is what we saw happen this week with the announcement of the Golden Pass Terminal getting their non-free-trade agreement approval.
So, I think that we've seen some positive signals, even in the last couple of weeks, out of the White House, and the administration talking about the idea and desire to see more of the approval process for LNG, and also the announcement yesterday, or two days ago, from Secretary Perry, talking about Golden Pass. So, we're definitely, I think, anxious to see more of those types of announcements. I think we're anxious to continue to establish some relationships with the incoming folks at DOE, and we look forward to working with them.
Monica Trauzzi: How does the Golden Pass decision position the U.S. on LNG?
Charles Riedl: Well, so that project is, again, another approval. If you look at where we're currently at, we've got one — like I said, one project that is currently commercially operational. We've got five more that are under construction, and then a handful of additional projects that are currently approved but not under construction.
And so, this year, we'll see one additional project come online — that's Cove Point down in Maryland. That's Dominion's project. And then two more projects come online in '18 and then on down the line, we'll see the remaining two come online. So, we'll have six operational projects, I think, by 2020. And then, we'll see sort of where these other projects go with their final investment decisions.
Monica Trauzzi: And this is all happening during a supply glut?
Charles Riedl: It is. It is. But if we look at the length of these projects — the Golden Pass project's a great example. From the day that that project exports its first cargo of LNG — they have a 20-year contract, so we're not talking about the next two or three years for U.S. LNG exports, we're talking about the next 20-25 years, looking out towards 2040. When you look at those numbers, the demand begins to outpace supply somewhere in the mid-20s.
So, we're talking about the need to continue to build these projects. You think about how long it takes to build a project like this. It's something that is important that we continue to set up the regulatory framework to ensure that the next phase of these projects can quickly and easily come to a decision to build or not build.
Monica Trauzzi: FERC is obviously a major player in the approval process for export projects; for pipeline infrastructure. There's a lack of quorum right now at FERC. There's a backlog resulting from the lack of quorum. How is that affecting your industry, and how concerned are you about how that backlog is going to affect next steps?
Charles Riedl: Quite frankly, we're concerned. We've voiced some concern and support of filling those seats as quickly as possible. It's something that we are hopeful will happen very soon. What I would say is that FERC's continuing to do the legwork or the good work that they've been doing on processing applications. There are currently 14 applications for LNG projects before FERC, either in filing or pre-filing.
So, it is important for us. As you look at that number, that's a large number of potential projects. We're not exactly sure what the ripple effect might be on these projects, if they're delayed further or not. At this point, it's pretty — it's too early to tell if there's going to be an impact.
Monica Trauzzi: Let's go back to talking about the supply glut in the market that's happening right now. How do you course-correct at this moment, as that's happening?
Charles Riedl: Well, I think that to course-correct is really going to be a matter of where the market demand comes from, and that is going to just take some time to work out — right? You've got a confluence of projects coming online that it just so happened that that was sort of the nature. Add to it what we've got with the crude pricing right now.
The market will correct itself, and that's really where, not so much CLNG, but our members are focused on how they want to set up their transactions with their buyers. And that's really going to just take a little bit of time to work out. But I think that you look at where the numbers go. We get to call it 2022. I think we'll start to see the markets start to tighten up, and I think that you'll start to see demand start to outpace supply.
Monica Trauzzi: So, when we consider the Trump administration's views and actions so far on trade, specifically the TPP, what role do you think that's going to play in the growth potential of the industry? And I know that Latin America's looked at as a big potential market. How do the actions play into that?
Charles Riedl: Well, I think that you bring up a good point. The Latin American market, you look at 90-plus cargos that have left Sabine Pass. Something like 19 of those cargos have gone to Mexico. So, the number of cargos that are already heading into Latin America are proving that that's a market of opportunity. We look at the Asian market, and you look at sort of where exports are going.
Something like 30 percent of the exports right now are currently heading into the Asian market. I expect that number to continue to go upward. I think that the opportunity to — and the interest, quite frankly, from the Asian markets is one that has all of my members excited about the potential there.
Monica Trauzzi: And are you concerned about the Trump administration's views on trade?
Charles Riedl: No, not really. I think that really what we think the Trump administration's views and what we've heard out of the White House is exactly what we've been saying all along. It does a couple of things. One, it helps create jobs here in the U.S. It's a revenue stimulus here in the U.S. And then also, it helps secure — for energy security for our allies and other folks who are interested in transitioning to a cleaner fuel source. So, I think it does sort of — it aligns very well with what our key points are.
Monica Trauzzi: And so, you're continuing to seek a legislative solution to the DOE approval process? Why is that, and why don't you think a Trump DOE would be able to address the concerns that you have?
Charles Riedl: Well, I think we do think that a Trump DOE could potentially address the concerns that we have, but I think that, quite frankly, it just makes good, sound policy sense to have a regulatory framework in place for the long term. Again, I talked about the number of projects that are currently pending before FERC. Those projects are all interested in signaling to potential buyers what their expected time frame to reach a decision to build a project might be. And so, by creating a legislative solution and one that would provide clear guidance for the agencies on how the time frame that they need to act, would signal internationally what the U.S. market could potentially look like.
Monica Trauzzi: All right. We are going to end it right there on that note. Thank you for coming on the show.
Charles Riedl: Thanks so much, Monica.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
https://www.eenews.net/tv/videos/2224/transcript
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House Denies Vote on Fracking Investment Bill
May 2, 2017 | E&E Greenwire
Florida's largest power company failed to get enough backers for its plan to charge customers for out-of-state hydraulic fracturing investments.
State Sen. Aaron Bean (R) sponsored legislation that would have allowed companies to recover costs from oil and natural gas exploration projects, like hydraulic fracturing, from out of state.
Florida House Speaker Richard Corcoran (R) said he had "too many reservations" about the proposal, citing its potential environmental and economic consequences.
"The notion that Florida ratepayers would pay for out-of-state energy production was not in the best interests of the people of Florida," Corcoran said in a statement.
The only company that would have qualified to recover costs under the bill, which was set to get approval from the state Senate toward the end of session, was Florida Power & Light Co.
Consumer and environmental groups opposed the bill, saying it would increase the state's reliance on natural gas when Floridians are trying to expand renewable energy investments.
https://www.eenews.net/greenwire/2017/05/02/stories/1060053896
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Omnibus Requires Pentagon to Own Up to Base Contamination
May 2, 2017 | E&E Greenwire
The spending bill for fiscal 2017 expected to pass through Congress this week includes a provision that would require the Defense Department to identify all of the hundreds of military bases where drinking water may have been contaminated by firefighting foam.
The legislation would order the Pentagon to give Congress a list of affected sites within 120 days and also to establish plans for communicating with nearby communities about the pollution.
Chemicals called PFOS and PFOA, which are in a firefighting foam that has been used to fight jet fuel fires on military bases for decades, could be contaminating water supplies at hundreds of bases across the country, a problem that has been costly for DOD both financially and politically (Greenwire, Jan. 31).
The Pentagon has been working on a list for more than a year, but different branches of the military have responded separately.
"I am pleased that the spending deal includes the language I secured to require greater transparency from the Department of Defense on the issue of water contamination in Bucks and Montgomery counties," said Sen. Bob Casey (D-Pa.). "I will continue to work diligently on this issue to ensure Bucks and Montgomery county families can have peace of mind and resolution."
The Pennsylvania congressional delegation has been pushing for action on the issue after contamination was found at bases in Willow Grove and Warminster, affecting roughly 70,000 residents.
https://www.eenews.net/greenwire/2017/05/02/stories/1060053909
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Oil and Gas Industry Leads in Severe Injuries
May 2, 2017 | E&E Energywire
By Mike Soraghan
The upstream oil and gas industry has one of the highest rates of severe injuries in the country, according to an E&E News analysis of workplace injury data. By some measures, it has the highest.
That stands in stark contrast to data often touted by the industry that its overall injury rate is well below the national average. But the data from the Occupational Safety and Health Administration on severe injuries is in line with the industry's high number of worker deaths.
"It's not at all surprising," said former OSHA chief David Michaels. "It's consistent with the very high fatality rate."
The pace of severe injuries decreased sharply in 2016. That's in line with declining oil-field employment and an improving safety record.
The severe injuries — defined as those causing hospitalization or loss of a body part — ranged from major burns suffered in explosions to injured hips from falling in the office lobby.
The most common injury was amputation, most frequently fingers and fingertips. Next was fractures, mostly legs.
The most common cause was getting a finger or other body part caught in equipment. Fires and explosions were the fourth most common cause for severe injuries, after falls and being struck by objects.
Reporting of the data is fairly new. Until 2015, employers were required to report to OSHA only fatalities and "catastrophes" — incidents in which three or more employees were hospitalized.
But starting in 2015, under a rule change promoted by Michaels, employers had to report any incident that resulted in hospitalization or loss of a body part.
Upstream oil and gas had 503 such injuries in the period covered by the OSHA data, through Oct. 31, 2016. It is an undercount, because it doesn't include the 21 states where employers report to a state agency. Those include oil and gas states such as California, New Mexico, Utah and Wyoming.
The number and rate of injuries declined from 2015 to 2016, E&E's review found. The average monthly number of severe injuries declined from 27 in 2015 to 20 in 2016.
The vast majority of those injuries came from the industry designated as "Support Activities for Oil and Gas Operations," generally contractors who drill, build, "frack" and cement wells.
The oil-field services company Halliburton Co. had the highest number of severe injuries, with 22. Its competitor, Schlumberger Ltd., had four.
In raw numbers, the support industry for oil and gas has more severe injuries than any other industry except "General Medical and Surgical Hospitals." But the hospital category has more than 3 million employees, while the oil and gas category has less than 250,000.
Relating the numbers of injuries to the size of the industry, the support activities for oil and gas category has the highest rate of severe injuries among industries with more than 100,000 employees.
An industry group noted that other industries also have high injury rates.
"OSHA's new severe injury data show a wide spectrum of occupations pose a significant level of injury risk," said Seth Whitehead of Energy In Depth, a campaign of the Independent Petroleum Association of America. "The data show postal workers, grocery store workers and even hospital workers face a moderate risk of significant injury."
Whitehead added, "However, no death or injury on the job is ever acceptable."
Oil and gas has long been a statistical anomaly in terms of worker safety. It has a very high fatality rate and a very low injury rate (Energywire, Dec. 23, 2016; Energywire, Dec. 5, 2014). Because of that low injury rate, oil and gas was excluded last year from a list of "high-hazard employers" (Energywire, June 16, 2016).
To Michaels, who has returned to his job as a professor at George Washington University, the severe injury data serves as further proof that injuries are being underreported.
"Many employers don't accurately record their injuries," he said. He thinks severe injuries are more likely to be reported because they're harder to ignore.
"No one says 'keep working' when somebody's lost a body part," he said.
But Michaels has praised industry leaders for "coming to the table" to work on lowering injuries and deaths.
The Labor Department has long known the number of injuries in United States is higher than it reports every year. Michaels has put the undercount at between 30 and 60 percent. It could be higher in the oil and gas industry. Michaels has said "there's a culture" in the oil field of not reporting injuries.
Click here to see OSHA's severe injury data.
https://www.eenews.net/energywire/2017/05/02/stories/1060053892
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Critics Say Home Explosion Points to Need for Tougher Rules
May 2, 2017 | E&E Energywire
By Mike Lee
Activists yesterday called on Colorado's oil and gas regulators to be tougher on energy companies and more transparent with the public in the wake of a fatal explosion near a gas well.
The cause of the April 17 explosion in Firestone, northeast of Denver, hasn't been determined, but Colorado's biggest oil producer shut down 3,000 of its older, vertical oil and gas wells as a precaution (Energywire, April 28).
The Colorado Oil and Gas Conservation Commission began assisting the investigation the day after the explosion, and the company involved began shutting in and testing its wells around the same time. That information wasn't made public until April 27, more than a week later.
"The public had the right to know that there was a potential danger, that nearby oil and gas wells and/or gathering lines could have been a hazard to them," said Cheryl Tadlock, a board member of Adams County Communities for Drilling Accountability Now.
The eight-member commission wasn't scheduled to take any action related to the Firestone explosion, but Executive Director Matt Lepore briefed the members on the investigation, and about 15 people spoke during the public comment period yesterday.
The explosion has heightened the tension between the COGCC and residents in the Denver area who are opposed to oil and gas development in their communities. A handful of Colorado towns and counties have tried since 2012 to block drilling, but the state Supreme Court ruled that COGCC has sole authority over most aspects of drilling.
At the same time, the Colorado Court of Appeals ruled in March that COGCC improperly turned down a 2013 rulemaking petition from a group of children and teens who asked the agency to halt permitting until it can demonstrate that oil and gas development is safe to human health and the environment.
COGCC has argued that state law requires it to balance energy development and human health. The appeals court, rejecting a lower court ruling, ruled that the law requires balanced development only after the commission ensures health and safety (Energywire, March 24).
The commission was scheduled to hold a closed-door discussion about appealing the case to the state Supreme Court.
Speakers at yesterday's meeting argued that the court decision and the explosion in Firestone should prompt the COGCC to take more action. The commission needs to do more frequent inspection of older wells, and either the commission or the Legislature need to enact a consistent setback between oil and gas wells and surrounding homes.
"Your rules are blind to what goes on in the field, as the Firestone incident clearly demonstrates," said Phil Doe, environmental director for grass-roots progressive group Be the Change USA.
Currently, the commission requires a 500-foot buffer when a well is drilled near an existing house. But local communities set their own rules on how closely new homes and other buildings can encroach on existing wells.
In Firestone, the local zoning code requires only 150 feet between new homes and older wells. The home that exploded was built in 2015, 178 feet from a vertical well that was drilled in 1993. A pipeline that serves the well extends within 45 feet of the home and runs along the fence line of several other properties.
The explosion leveled the house and killed two people: homeowner Mark Martinez and his brother-in-law, Joey Irwin. Martinez's wife, Erin, was severely injured.
Anadarko Petroleum Corp., which acquired the well from another company, said it closed all of its wells in northeastern Colorado that were drilled in the early 1990s and won't reopen them until it has completed safety tests.
A second company, Great Western Oil & Gas Co., announced Thursday it was closing 61 wells whose pipelines run within 250 feet of surrounding homes, until it can pressure-test the lines (Energywire, May 1).
https://www.eenews.net/energywire/2017/05/02/stories/1060053873
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Think Tank Sees Trump Failing to Meet Emissions Pledge
May 2, 2017 | E&E Greenwire
By Hannah Hess
President Trump's executive actions on energy during his first 100 days put the United States on course to fall far short of its carbon-cutting goals under the Paris Agreement, according to a new analysis.
Using federal projections, Resources for the Future fellow Marc Hafstead found greenhouse gas emissions in 2025 are expected to be 10.2 to 12.6 percent below 2005 levels, failing to hit the Obama administration's pledge of a 26 to 28 percent reduction.
Even if the White House followed through with Obama-era plans for future climate regulations, the United States would fall shy of its target for 2025, Hafstead notes. Hafstead, who advocates a carbon tax, says federal rulemaking plans would have put the United States on track to be 22.6 to 24.9 percent below 2005 levels.
Hafstead relies on data the State Department submitted to the United Nations about emissions projections under current law and estimates of reductions due to future regulations — fuel efficiency standards, appliance efficiency programs, methane standards and U.S. EPA's efforts to reduce hydrofluorocarbons (HFCs), the potent chemicals found in refrigeration and air conditioning — to come up with a "best case" scenario for emissions under Obama policies.
For "best case" under Trump, Hafstead's analysis assumes Republicans are successful in keeping additional regulations at bay and wiping the Clean Power Plan from the books. Hafstead relies on projections by the U.S. Energy Information Administration. He includes emissions reductions from EPA's program geared toward phasing out HFCs, noting it would help U.S. appliance manufacturers export.
"What is the worst-case scenario for emissions trends under Trump?" he writes. "Unfortunately, we simply do not have enough information to make such predictions."
Policies aimed at opening up new federal lands to oil and natural gas producers could lead to increased energy consumption through lower prices, he notes. Hafstead also states the tax reform promised by the White House and Republicans could increase economic growth and lead to an increase in greenhouse gas emissions.
Optimists see public support for climate action, on display at last weekend's climate march, as potentially opening the door for the White House to put forward a new GOP strategy for cutting emissions to meet pledges made in Paris (Greenwire, April 24).
Alternatively, allies of the fossil fuel industry have been clamoring for Trump to revise the U.S. commitment down, lowering emissions reduction goals (E&E Daily, April 26).
Hafstead concludes drama surrounding the Trump administration's decision on whether to follow through with a campaign pledge to pull out of the Paris Agreement is "largely symbolic."
RFF has modeled how various carbon tax proposals would meet the Paris target, an analysis conservatives have used to bolster their arguments for the policy (Greenwire, Feb. 8).
https://www.eenews.net/greenwire/2017/05/02/stories/1060053918
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As Trump Reverses Climate Actions, California Considers a Bold New Step
May 2, 2017 | Washington Post
By Chelsea Harvey
As the Trump administration continues its efforts to roll back Obama-era environmental regulations, many of the nation’s most significant efforts to combat climate change are now happening at the state and local levels — and California is among those leading the way.
Now, a new proposal, announced Monday, would replace California’s current cap and trade carbon pricing program, its flagship effort to reduce the state’s greenhouse gas emissions, with an updated — and, according to supporters, more socially progressive — scheme.
“The state and the federal government were until recently working hand in hand on these issues,” said Danny Cullenward, an energy economist, lawyer and research associate with environmental research organization Near Zero, who helped advise the development of the new proposal. “In an era of the Trump administration, carbon pricing is one of the few tools that the state has to whatever the federal government does.”
California already maintains some of the most ambitious climate goals of any state in the nation — cutting greenhouse gas emissions by 40 percent below their 1990 levels by the year 2030, a pledge that California Gov. Jerry Brown signed into law last year — and it’s now focusing on how to reach those targets in the coming decades.
It’s the same emissions reduction target as that pledged by the European Union in the Paris climate agreement, and it ties with New York for the most ambitious state climate goal in the nation.
That’s where the new program comes in.
In addition to reducing greenhouse gas emissions, the new pricing proposal — which was introduced at a Monday news conference by California state Sens. Bob Wieckowski and Kevin de León — is also designed to return some of the revenue it raises to the public, particularly to low-income and other vulnerable communities.
For now, the bill is only in its earliest stage, and it may be difficult to predict how it might evolve or gather support in the coming weeks. But the legislation has the support of de León, California Senate’s president pro tempore and its most powerful figure.
“Today marks the first step in that process,” Wieckowski said at Monday’s news conference. “We’ll be amending the bill, and it’ll have its first hearing before the Senate environmental quality committee next week.”
Since 2012, California has been working to reduce its emissions by way of a cap-and-trade carbon pricing scheme, which places a ceiling on allowable carbon emissions — one that grows stricter over time — and requires companies to pay a penalty if they exceed the limit. The system also establishes a market through which companies can buy and sell permits allowing them to emit a certain amount of carbon. It’s designed to encourage companies to save money by cutting down on their own emissions.
But while the current program has proven successful at reducing emissions over the past five years, many experts believe that its current language does not give it the authority to continue past the year 2020. There’s been some debate about this question among lawmakers in the state, but many are concerned that the program will legally need to be renewed or replaced after that point.
Additionally, the revenue it has raised for the state through the sale of emissions allowances has recently begun to slow — suggesting to some experts that a different kind of program might be called for in the future.
“The last five quarterly markets, the state has struggled to sell the permits it wanted to make available,” Cullenward said. “Prices are low, revenue isn’t coming in, and there’s frankly a lot of challenges associated with that market structure.”
The new proposal establishes another cap-and-trade program — which will extend either until 2030 or until the state meets its 40 percent emissions reduction goal, whichever comes first — with some notable updates intended to make it more effective and more socially responsible.
For instance, it would also fund a special program that would return a certain amount of the revenue it raises to the public in the form of rebates. The exact details of this program, and how the money would be distributed, are still in the works — the proposal also establishes an advisory committee to help make those decisions. But the program is likely to particularly benefit low-income communities, Cullenward noted.
“Because poor people use relatively little energy and emit relatively little carbon, it turns out these kinds of processes … tend to produce a progressive impact on people who live in the state,” he said.
And according to Michael Wara, an energy and environmental law expert at Stanford University, who also advised the development of the proposal, moving to extend the state’s cap-and-trade program, rather than allowing it to expire, is an ambitious move in the first place.
“This is really a discussion about what do we do next, and any program that comes next is going to have to be enacted by the legislature,” he told The Washington Post. “The alternative to not extending carbon pricing is really command and control regulation.”
The proposal also requires more legislative effort than the previous cap-and-trade program did when it passed. The original program was established by a simple majority vote — but since then, “the voters approved changes to the rules on how new programs that raise revenue can be passed,” according to Cullenward. The new proposal will likely require a two-thirds majority vote to pass — a requirement that could make the legislation’s passage more challenging, but will also insulate it against legal challenges in the future, he said.
For the time being, there have been few other proposals discussed that would address a replacement for the current program, Cullenward added. Absent another plan, he said, his concern would be that after 2020 “nothing happens” — an even more significant concern for environmentalists at a time when the federal government has begun rolling back numerous environmental and climate regulations established under the Obama administration.
“Given the fact that what is happening today with the climate change deniers as well as climate change liars in Washington, it’s absolutely imperative that we move forward with an extension, with the necessary modifications and reforms that are necessary,” de León said at Monday’s news conference. “The world is watching very closely what we’re doing here in California.”
https://www.washingtonpost.com/news/energy-environment/wp/2017/05/02/as-trump-reverses-climate-actions-california-considers-a-bold-new-step/?utm_term=.636be19f8615
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6th Circuit Rejects Utility's Call to Rehear Suit Testing NSR Enforcement
May 2, 2017 | Inside EPA
The U.S. Court of Appeals for the 6th Circuit has rejected a utility's request to rehear its ruling upholding EPA's power to enforce the Clean Air Act new source review (NSR) permitting based on a facility's projected future emissions, an important win for the agency after it warned that undoing the ruling could “eviscerate” NSR enforcement.
In a one-page order issued May 1, the court says that the 6th Circuit panel of Judges Alice Batchelder, John Rogers and Martha Daughtrey that heard the case “has reviewed the petition for rehearing and concludes that the issues raised in the petition were fully considered upon the original submission and decision of the cases.”
The order notes that Rogers, who dissented from the 2-1 decision, would have granted rehearing “for the reasons stated in his dissent,” in which he argued that EPA's long-running approach of using projected emissions to pursue NSR enforcement cases risks creating a de facto prior approval process for projects.
According to the order, the utility's petition for rehearing was then distributed to the full 6th Circuit to weigh whether any judges wanted en banc rehearing of the decision by the entire court. “No judge has requested a vote on the suggestion for rehearing en banc. Therefore, the petition is denied,” it says.
The court's decision leaves the utility DTE Energy Company with only the option of seeking Supreme Court review of the appellate ruling, otherwise the majority opinion will stand.
The Jan. 10 ruling in DTE v. EPA, et al. backs EPA's authority to enforce NSR permits based on projected emissions increases before a facility seeking air permits begins construction, and not actual emissions levels after construction takes place, affirming what EPA says is a core principle of the NSR program. It also supports the agency's ability to determine whether a regulatory exemption can apply for projects based on electric demand growth, and backs EPA's discretion to determine what may be exempted as “routine maintenance."
NSR applies in areas out of attainment with federal air standards and can require strict air permits to cut pollution, and the Obama administration pursued several such cases against power companies. It initially lost the DTE case in federal district court, prompting the agency's appeal to the 6th Circuit which ruled in its favor.
The Obama Department of Justice (DOJ) earlier in the litigation had warned that the lower court's opinion which rejected that principle could “potentially eviscerate Clean Air Act enforcement in the Sixth Circuit.”
The new administration continued EPA's position in the case and opposed the rehearing request, but the Trump EPA's position on pursuing NSR enforcement cases is unclear at best -- and sources have suggested agency Administrator Scott Pruitt will look to significantly reduce EPA's enforcement activities.
https://insideepa.com/daily-feed/6th-circuit-rejects-utilitys-call-rehear-suit-testing-nsr-enforcement
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