Preview Newsletter
ACC PM 26/7/17
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(ACC Blog) Approaching Hurricane Season Underscores Importance of Well-Built Homes
Jul 26, 2017 | American Chemistry Matters
By Lee Krinzman
Hurricane season is approaching, and Floridians will soon prepare themselves and their homes for potentially serious storms. -
(ACC Mentioned) EPS Collusion Case May Head to Top Court
Jul 26, 2017 | Plastics Recycling Update
By Jared Paben
A defunct foam polystyrene recycling company has appealed its antitrust case against EPS product manufacturers to the U.S. Supreme Court. Those converters are now urging the court to ignore the appeal. -
(ACC Mentioned) Industry, NGO Disagree on TSCA Approach to Confidential Chemical Identities
Jul 26, 2017 | Chemical Watch
By Kelly Franklin
Chemical industry groups are backing a company-specific approach for assigning a "unique identifier" to confidential chemical identities under the new TSCA, but an NGO is advocating a stricter interpretation of the law. -
Air Force Takes Blame for Contamination
Jul 26, 2017 | E&E Greenwire
The Air Force yesterday admitted it could be potentially at fault for fouling the drinking water of thousands of neighbors of Peterson Air Force Base in Colorado Springs, Colo. -
Roundup Ingredient Found in Ben & Jerry's Ice Cream
Jul 26, 2017 | E&E Greenwire
An increasing number of foods have tested positive for glyphosate, a controversial pesticide chemical, including Ben & Jerry's ice cream, a brand known for its environmental advocacy. -
Gov. Cooper Weighs-In on GenX Dumping; Criminal Investigation Possibility Is Raised
Jul 26, 2017 | State Port Pilot
By Terry Pope
Gov. Roy Cooper has directed the State Bureau of Investigation’s Diversion and Environmental Crimes Unit to assess whether a criminal investigation is warranted against Chemours, the manufacturer responsible for the presence of the chemical GenX in the Cape Fear River. -
The Coming Squeeze for Shale Oil Drillers
Jul 26, 2017 | The Wall Street Journal
By Spencer Jakab
Rising profits for oil-service companies usually means oil producers are making money, too. But when the producers are drilling high-cost oil from shale, rising expenses could squeeze profits and lead them to scale back growth. -
Work on Energy Transfer's Mariner Lines Halted After Spills
Jul 26, 2017 | E&E Energywatch
By Mike Lee
Pennsylvania officials shut down construction on Energy Transfer Partners LP's Mariner East 2 pipeline project across the state yesterday, after environmental groups complained that the company's sloppy construction was contaminating water. -
U.S. Shale Threatens Chemical Element of Saudi Aramco’s IPO
Jul 26, 2017 | The Wall Street Journal
By Nathaniel Taplin
The shale revolution means the U.S. is already much less reliant on Saudi Arabia for its oil needs. Less appreciated is the threat it also poses to Saudi Aramco’s plan to diversify downstream into chemicals and plastics production, likely a central pillar of the energy giant’s pitch to investors ahead of its probable initial public offering next year. -
Are Renewables Set to Displace Natural Gas?
Jul 26, 2017 | The Energy Collective
By Geoffery Styles
A recent story on Bloomberg News, “What If Big Oil’s Bet on Gas Is Wrong?”, challenges the conventional wisdom that demand for natural gas will grow as it displaces coal and facilitates the growth of renewable energy sources like wind and solar power. -
Fully Staffed STB Critical for Freight Rail Across Nation
Jul 26, 2017 | Morning Consult
By Donna Harman and Mark Kowlzan
In Washington, D.C., the saying goes that personnel is policy. A president communicates his priorities, and how he intends to address them, with the choices he makes to take leading positions in his administration. -
Why The Oil Industry Might Prefer Rail To Pipelines In Turbulent Times
Jul 26, 2017 | The Energy Collective
With a capacity of half a million barrels of oil a day, the delayed arrival of the Dakota Access Pipeline will once again make pipelines the dominant way to transport oil out of the upper Midwest into coastal refining regions. -
EPA Formally Proposes WOTUS Withdrawal
Jul 26, 2017 | Politico Pro Whiteboard
By Annie Snider
EPA and the Army Corps of Engineers will formally propose the withdrawal of the Obama administration's controversial water rule Thursday. -
Businesses Spent Millions Lobbying before Cap-And-Trade Vote
Jul 26, 2017 | E&E Climatewire
By Anne C. Mulkern
Several businesses poised to benefit from California's new cap-and-trade law are lobbying powerhouses that have poured millions of dollars into efforts to influence legislation.
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(ACC Blog) Approaching Hurricane Season Underscores Importance of Well-Built Homes
Jul 26, 2017 | American Chemistry Matters
By Lee Krinzman
Hurricane season is approaching, and Floridians will soon prepare themselves and their homes for potentially serious storms.
Everyone knows that preparing for a hurricane includes making sure buildings are as secure as possible, including boarding up the windows and removing loose items that may damage nearby structures. However, building scientists understand the importance of building homes so they are inherently more durable and resilient structures.
Using high-quality, energy-efficient products like spray polyurethane foam (SPF) insulation can not only increase the comfort of a home, but also can help to reduce wind damage during hurricanes. When installed properly, SPF expands and conforms to the surface to which it is applied, forming a seamless layer of insulation or roofing. This unique application method can completely seal a structure, which works to prevent wind uplift.
Visit the Southeast Building Conference to learn more
Residents, builders, architects, and anyone interested in building structures who is located in the southeast should come visit the Southeast Building Conference (SEBC) from July 27-28 where the Spray Foam Coalition (SFC) will be on hand to answer questions and share information on the SPF.
The SFC will host a breakfast forum on Thursday, July 27, in the Sanibel room of the Gaylord Palms Resort & Conference center at 8:30 am. This is a great opportunity to learn about the many qualities and versatile benefits of SPF.
The breakfast forum will feature presentations by Thomas Kline of Johns Manville, Paul Duffy of Icynene, and Rick Duncan of the Spray Polyurethane Foam Alliance. Kline’s presentation will focus on how SPF can help increase energy efficiency, while Duffy will discuss the performance characteristics of SPF conditioned attics in hot, humid climates. Duncan will address how the proper application of SPF can help prevent wind damage during a hurricane. The forum will also feature an SPF industry expert panel to take questions from the audience.
To register for the free SFC breakfast forum, please click here.
SEBC, a two-day show on July 27-28, is the largest building industry trade show in the southeast. According to the event website, “SEBC includes outstanding educational programs featuring three days of hard-hitting seminars, networking opportunities, round table discussions and industry briefings.”
Also be sure to check out SFC’s newly redesigned and revamped website WhySprayFoam.org for information on how to use spray foam for comfort, energy efficiencies and building resiliency.
The SFC was formed in December 2010 under the American Chemistry Council’s Center for Polyurethanes Industry (CPI). The SFC is a dynamic organization of companies that produce and sell polyurethane spray foam insulation systems and the chemicals and equipment necessary for their use.
https://blog.americanchemistry.com/2017/07/approaching-hurricane-season-underscores-importance-of-well-built-homes/
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(ACC Mentioned) EPS Collusion Case May Head to Top Court
Jul 26, 2017 | Plastics Recycling Update
By Jared Paben
A defunct foam polystyrene recycling company has appealed its antitrust case against EPS product manufacturers to the U.S. Supreme Court. Those converters are now urging the court to ignore the appeal.
The years-old case is between Evergreen Partnership Group and PS product makers Pactiv, Solo Cup, Dolco Packaging, Dart Container and Genpak (Genpak has since settled with Evergreen), as well as the American Chemistry Council (ACC).
Founded in 2000 by Michael Forrest, Evergreen closed its processing facility in Georgia in 2008. The recycling company first filed a lawsuit in May 2011 accusing the PS product manufacturers parties of conspiring to work against it, ultimately leading to the company’s failure. It alleged violations of the Sherman Act, U.S. law stemming from 1890 that prohibits conspiring to restrain trade.
Evergreen sought to collect used EPS food service items from school districts, recycle them and provide the pellets to manufacturers for use in a line of “green foam” products, according to an appeals court decision. It would charge a fee to school districts, sell the pellets to converters and take a commission on the sale of products containing its resin.
The recycling company claimed that during a May 2007 conference call of the ACC’s Polystyrene Foodservice Packaging Group, the five converters agreed that none of them would enter into a deal with Evergreen that included the payment of commissions. It also alleged they agreed to promote a competitor, Packaging Development Resources of California (PDR), which Evergreen called a sham business, to block its access to PS end users.
“The crux of Evergreen’s claim is that the defendants conspired to prevent its recycling model involving commission payments from becoming viable by universally rejecting any agreements that involved commissions and blocking its access to other customers through the promotion of PDR,” the appeals court noted.
Evergreen alleged they worked together to prevent Evergreen’s business model from catching on, because it would have meant more pressure on them to participate in costly recycling operations.
The defendants denied the accusations, and in a statement sent to Plastics Recycling Update, the ACC called them “wildly imaginative, but baseless, claims.”
The U.S. District Court for the District of Massachusetts in July 2015 dismissed the case. Evergreen appealed, and in August 2016, the U.S. Appeals Court for the First Circuit upheld the district court’s dismissal.
“Viewing, in combination, all the admissible evidence that the parties submitted, and drawing all reasonable inferences in Evergreen’s favor, we conclude that Evergreen has failed to provide evidence that suffices to raise a reasonable inference of unlawful action,” according to the appeals court decision.
In March 2017, Evergreen appealed to the U.S. Supreme Court, which has yet to decide whether to take the case, according to scotusblog.com. The lower courts concluded that Evergreen failed to present evidence “that tended to exclude the possibility that each polystyrene manufacturer independently chose not to partner with Evergreen.” But, in the petition to the Supreme Court, Evergreen’s attorneys claimed that stringent standard was the incorrect one by which to judge the evidence.
Attorneys for Pactiv, Solo Cup, Dart, Dolco and the ACC on July 17 submitted a brief arguing that the Supreme Court shouldn’t take up the case. In addition to presenting myriad legal arguments, including that the “tended to exclude the possibility” standard is the correct one, they asserted the scheme Evergreen alleged is “implausible.” They claimed the company failed because it couldn’t compete in the marketplace.
https://resource-recycling.com/plastics/2017/07/26/eps-collusion-case-may-head-top-court/
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(ACC Mentioned) Industry, NGO Disagree on TSCA Approach to Confidential Chemical Identities
Jul 26, 2017 | Chemical Watch
By Kelly Franklin
Chemical industry groups are backing a company-specific approach for assigning a "unique identifier" to confidential chemical identities under the new TSCA, but an NGO is advocating a stricter interpretation of the law.
The US EPA consulted earlier this year on how it will apply this identifier to substances with identities protected as confidential. This new provision is intended to allow the public to locate other filings related to that substance without disclosing its identity.
At the time, it proposed two alternative approaches "to meaningfully inform the public without compromising trade secrets".
The first called for the EPA to ensure that any submission related to a confidential chemical, including non-CBI information, contains only the unique identifier and not the substance’s name. But the agency warned that masking information not claimed as CBI "might be viewed as inconsistent with policy", while screening non-confidential submissions against a list of confidential substances "carries considerable risk of error", and "may be such a burden on EPA resources as to be impracticable".
The second option proposed assigning a unique identifier for all information on a protected chemical submitted by the same person or company, but applying another for submissions on that same substance from other entities. Such an approach would allow the public to "link some submissions on the same chemical, but not necessarily all", said the EPA.
Unique identifier
TSCA allows companies to ask that a substance’s identity be kept confidential. If the EPA grants this, the substance is listed in the public portion of the TSCA inventory by an accession number and a generic chemical name that masks the specific substance identity.
Under section 14 of the new TSCA, the EPA must:
· develop a system to assign a unique identifier to each specific chemical identity for which it has approved a confidentiality request;
· apply that identifier consistently to all information relevant to the applicable substance;
· annually publish a list of confidential substances with their unique identifiers, including the expiration date for the claim;
· ensure that any non-confidential information received identifies the substance using the unique identifier; and
· for any expired confidentiality claim, link the chemical identity back to its unique identifier.
But in a May Federal Register notice, the agency said that two requirements – to apply the unique identifier to all non-confidential information related to the substance, while ensuring the identity is protected from disclosure – "do not appear to be completely reconciled in the statute". And it cited several examples where universally applying such an identifier to every information submission could result in CBI, including the chemical identity, being revealed.
Industry backs second alternative
In a May stakeholder hearing and in submitted public comments, a plurality of industry groups lent their support to the EPA’s second option.
Speciality chemicals group Socma said in comments that it offers "the only feasible approach that will protect chemical identity CBI claims adequately".
The American Chemistry Council agreed that it was the most workable solution. The trade group supports the public’s right-to-know "up to the line where to do so would disclose protected CBI", it said, but it believes the statute is clear that "EPA is legally bound to protect CBI from improper (including inadvertent) disclosure and that obligation outweighs the public interest of access to information."
It also cautioned that any system "should not enable competitors or members of the public to go on a fishing expedition for protected CBI and cause a cascade of CBI disclosures in the absence of compelling need."
EDF demurs
The Environmental Defense Fund, however, says the chemical industry’s preferred option "directly violates" section 14(g)(4) of TSCA, and that a court would not uphold the interpretation.
Both of the agency’s proposed approaches "would have the perverse effect of denying the public the right to know even more information than would otherwise be the case".
The NGO argues that the EPA has found "an apparent conflict that does not exist in the law and overstates a problem that it has successfully navigated in the past". The agency, it says, has "no statutory basis" for refusing to apply the unique identifier to all information relevant to a substance.
In its comments to the consultation, the EDF cited "significant precedent" under TSCA for limited disclosure of CBI. These include when a company submits a bona fide notice for a substance subject to a significant new use rule (Snur), or the assignment of the same accession number to multiple reports on the same protected chemical identity under the chemical data reporting (CDR) rule.
And it said that when companies craft CBI requests they should be mindful of the unique identifier provisions to mitigate any concerns around inadvertent release of confidential information.
But the ACC said that the reporting rule and bona fide examples are "very limited in scope… [and] do not establish a precedent for broader disclosures to the public of information protected from disclosure by statute".
And Socma added that if the EPA adopts a system that could allow a chemical identity to be unwittingly revealed by a competitor or academic’s filing of information on it, the original submitter "is going to claim everything CBI".
Indeed, a "simplistic interpretation" would "likely restore the status quo pre-[Lautenberg Act], with rampant overclaiming of CBI" – which is exactly what NGOs and others were seeking to end through the new law, said Socma.
EPA plans to finalise the unique identifier system by December.
https://chemicalwatch.com/57912/industry-ngo-disagree-on-tsca-approach-to-confidential-chemical-identities
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Air Force Takes Blame for Contamination
Jul 26, 2017 | E&E Greenwire
The Air Force yesterday admitted it could be potentially at fault for fouling the drinking water of thousands of neighbors of Peterson Air Force Base in Colorado Springs, Colo.
Offering no apology, the Air Force announced work on a federal remediation plan would likely begin in the 2020s.
Air Force investigators confirmed that contamination of the area's groundwater stemmed from toxic firefighting foam chemicals that were used at the base.
No Superfund designation for the site has been announced, but a similar process to the program will be used to clean up the complex environmental contamination.
A report released yesterday found that there "is the potential for a complete groundwater pathway for human receptors" (Roeder/Rodger, Colorado Springs Gazette, July 26). — CS
https://www.eenews.net/greenwire/2017/07/26/stories/1060057934
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Roundup Ingredient Found in Ben & Jerry's Ice Cream
Jul 26, 2017 | E&E Greenwire
An increasing number of foods have tested positive for glyphosate, a controversial pesticide chemical, including Ben & Jerry's ice cream, a brand known for its environmental advocacy.
The Organic Consumers Association yesterday said it found glyphosate — the main ingredient in Roundup, one of Monsanto Co.'s signature products — in 10 of 11 samples of Ben & Jerry's ice cream.
Traces of the chemical in the company's ice cream are still well below the ceiling set by U.S. EPA, but some research suggests safe levels for consumption may be much lower than EPA's limits.
Ben & Jerry's has been a leader in the push away from foods containing genetically modified organisms. The company says none of its plant-based ingredients are drawn from genetically engineered crops where glyphosate is used in production, but the company said it is continuing to examine its supply chain.
"We're working to transition away from GMO, as far away as we can get," said Rob Michalak, the company's global director of social mission. "But then these tests come along, and we need to better understand where the glyphosate they're finding is coming from. Maybe it's from something that's not even in our supply chain, and so we're missing it" (Stephanie Strom, New York Times, July 25). — NS
https://www.eenews.net/greenwire/2017/07/26/stories/1060057928
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Gov. Cooper Weighs-In on GenX Dumping; Criminal Investigation Possibility Is Raised
Jul 26, 2017 | State Port Pilot
By Terry Pope
Gov. Roy Cooper has directed the State Bureau of Investigation’s Diversion and Environmental Crimes Unit to assess whether a criminal investigation is warranted against Chemours, the manufacturer responsible for the presence of the chemical GenX in the Cape Fear River.
The governor was in Wilmington on Monday to meet with local, state and federal officials before announcing steps he wants to see taken to protect the drinking water in North Carolina and to rid the Cape Fear River of the toxic industrial chemical GenX.
The SBI will work with its partners at the N.C. Department of Environmental Quality and U.S. Environmental Protection Agency to determine if there is evidence of criminal violations of the permit or the federal consent order in place for Chemours.
The plant manufactures Teflon at its facility on the Cape Fear River near Fayetteville and has been discharging the unregulated GenX chemical into the river for years. The presence of GenX wasn’t discovered by Brunswick County or other local water suppliers until earlier this year.
After Gov. Cooper’s visit, Brunswick County District Attorney Jon David of the 13th Judicial District issued a joint statement with District Attorney Ben David of the 5th Judicial District stating their offices will “work closely with our partners at the state, federal and local levels to determine if there is evidence of criminal violations” surrounding the Chemours controversy.
“Our offices are closely monitoring this situation because the Cape Fear River, the source of the drinking water for our region, flows through four of the five counties which we collectively represent; namely Bladen, Brunswick, New Hanover and Pender,” the district attorneys’ statement read. “Moreover, as elected district attorneys, we have overlapping and concurrent jurisdiction involving any applicable state criminal laws. We will continue to assess all the information as it becomes available.”
Chemours is in the process of applying for a new National Pollutant Discharge Elimination System permit, a federal permit program that controls water pollution and is managed by the N.C. Department of Environmental Quality. Last month, the plant voluntarily agreed to halt all discharge of GenX into the river and to collect the chemical in tanks until it can be incinerated at an off-site location.
Gov. Cooper announced Monday that DEQ will deny Chemours’ permit request to release GenX into the river and instead will issue a new draft permit that prevents all release of GenX. Acknowledging the potential for other possibly harmful compounds, Chemours’ draft permit will include a clause authorizing the state to quickly re-open the permit if needed to regulate and enforce levels of any emerging compounds based on new scientific findings, the governor noted.
Frank Williams, chairman of the Brunswick County Board of Commissioners, was among the bipartisan group of state legislators and leaders from neighboring counties to meet with Gov. Cooper on Monday.
“I am encouraged by the commitment of the governor, the Department of Environmental Quality and the Department of Health and Human Services to assessing, and remedying, issues related to our water supply,” said Williams. “I am particularly appreciative of the governor’s insistence that state employees treat the GenX issue as if their own families are drinking the affected water every day.”
The levels of GenX in the raw water supply have been trending downward since Chemours voluntarily agreed on June 21 to halt all discharge of the chemical into the river. GenX is used to produce Teflon, a substance that helps water-proof products.
Since the chemical was introduced, it has been allowed to enter the Cape Fear River under no regulations or guidance from the EPA, despite it being linked to cancer. The Chemours plant is permitted to withdraw up to 26-million gallons of water per day from the river and discharge its treated wastewater back into the river.
Additional test results from Brunswick County to detect GenX in the water supply were announced Monday. Samples taken on July 6 revealed levels of 85.6 parts per trillion in the Northwest Water Treatment Plant’s raw water source and 87.1 parts per trillion in the finished water source.
N.C. Health and Human Services has established the health goal for exposure to GenX in drinking water at 140 parts per trillion before any harmful effects are likely to occur.
“We are working closely with our partners at the State of North Carolina to analyze the health and safety of our water supply, and to determine potential corrective action,” stated Brunswick County manager Ann Hardy. “We are committed to transparency with any issue related to our water supply, and we will continue to release test results as they become available.”
While test results show that levels of GenX are lower than once feared, county officials expressed concern last week by how it was released into the Cape Fear River, the main source for the county’s drinking water supply. County commissioners indicated they felt let down by the state and federal government for allowing GenX to escape notice on discharge permits and any form of regulation since at least 2009.
Commissioner Williams said Monday he was pleased with the reaction of the governor’s office and his call for an SBI investigation into the actions of the Chemours plant.
“This is the type of leadership we have been looking to the state for, and I am glad that Gov. Cooper has heeded our call,” said Williams. “While there is still a lot of work to do, I was encouraged by what I heard this morning. Brunswick County remains committed to working with our local, state and federal partners on behalf of our citizens.”
Brunswick County Public Utilities receives a majority of its raw water from the Cape Fear River via a pipeline in Bladen County. After treatment, the water is distributed to both individual and wholesale customers across the county. The county’s equipment that treats raw water has no mechanism for removing the GenX chemical.
Since testing began last month, no detectable level of GenX has been found in water samples taken from the county’s N.C. 211 Water Treatment Plant near Southport. That plant is used to supplement the county’s water supply.
http://stateportpilot.com/news/article_47ba85d8-7217-11e7-8529-6bf9fd3461b8.html
According to Gov. Cooper on Monday, Chemours disclosed the company has been discharging GenX as a byproduct from another manufacturing process since 1980. The governor has asked Dr. Brenda Fitzgerald, director for the Centers for Disease Control and Prevention, for a public health assessment to review any potential long-term health effects of GenX.
“The CDC has the expertise needed to conduct complex exposure modeling that will give citizens a better understanding of any potential health risks from the last 30 years,” a statement from the governor’s office indicated. “Local, state and federal authorities will need to work together to provide all available data to the CDC.”
Recently, the N.C. Department of Health and Human Services reported overall cancer rates in the four counties served by water drawn from the Cape Fear River are no higher than other parts of the state for the period since GenX has been discharged.
http://stateportpilot.com/news/article_47ba85d8-7217-11e7-8529-6bf9fd3461b8.html
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The Coming Squeeze for Shale Oil Drillers
Jul 26, 2017 | The Wall Street Journal
By Spencer Jakab
Rising profits for oil-service companies usually means oil producers are making money, too. But when the producers are drilling high-cost oil from shale, rising expenses could squeeze profits and lead them to scale back growth.
That is the message from earnings at Schlumberger SLB +1.00% andHalliburton , HAL +1.62% the world’s two largest oil service providers, which reported strong results this week but said the boom in new shale drilling has likely ended.
The number of rigs drilling for oil and gas in the U.S. has more than doubled in the past year. Paradoxically, though, Halliburton executive chairman David Lesar noted that a “tapping of the brakes is happening all over the place in North America” even as he sees stronger margins ahead.
Schlumberger’s executives said last week that its pressure-pumping equipment is in very high demand in the U.S. shale patch, but chief executive Paal Kibsgaard sounded a skeptical note. He said that U.S. land-based producers are “largely driven by the U.S. equity investors who are encouraging, enabling and rewarding short term production growth in spite of marginal project economics.” He also suggested that activity would moderate.
The fact that these comments are being made with U.S. crude prices hovering around $46 a barrel would have been remarkable three years ago. Back then the conventional wisdom held that the break-even price for spending any money on shale formations was somewhere in the $60-$70 a barrel range.
That number has come way down, much to the chagrin of producers in the Organization of the Petroleum Exporting Countries and major non-OPEC power Russia that were scrambling to stabilize prices at a meeting in St. Petersburg. Much of it stems from innovation—squeezing more oil out of each well. But part came at the expense of oil field services companies that saw margins collapse. That trend is reversing.
“The rig count is up. There are less underutilized assets sitting around, and that puts oil field services companies in a stronger position,” says Rob Thummel, portfolio manager at energy-focused investment firm Tortoise Capital Advisors.
In addition to services such as pressure pumping, other important costs for shale producers such as sand are rising. As employment streams back into the business, labor costs may also go up. Unless producers can innovate away the increased costs of services, materials and labor, or OPEC’s discipline forces prices higher, this inflation will eat away at their margins and make them less likely to drill as many new wells.
https://www.wsj.com/articles/the-coming-squeeze-for-shale-oil-drillers-1500994615
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Work on Energy Transfer's Mariner Lines Halted After Spills
Jul 26, 2017 | E&E Energywatch
By Mike Lee
Pennsylvania officials shut down construction on Energy Transfer Partners LP's Mariner East 2 pipeline project across the state yesterday, after environmental groups complained that the company's sloppy construction was contaminating water.
Judge Bernard Labuskes of the Environmental Hearing Board ordered Energy Transfer's Sunoco pipeline subsidiary to stop directional drilling at 55 locations, according to an order issued yesterday. The order will remain in place until a hearing scheduled for Aug. 7.
Sunoco said in a statement it has "expended every effort" to prevent accidents.
The Mariner East 2 is a pair of pipelines, 20 and 16 inches in diameter, that are designed to carry natural gas liquids from the Marcellus Shale field to transportation terminals in Philadelphia.
The Clean Air Council, Delaware Riverkeeper Network and Mountain Watershed Association complained to the Environmental Hearing Board last week that the company had 61 spills between April and June at construction sites across Pennsylvania. The spills damaged private water wells, a wetland, lakes and creeks.
The state Department of Environmental Protection didn't do enough to prevent the problems, despite advance warnings, the groups said.
The DEP has issued four notices of violations and executed a consent order against Sunoco for the construction problems. The consent order, which is separate from the hearing board's order, requires Sunoco to delay any horizontal drilling until DEP is satisfied the work can be done safely. The company will also have to notify public and private water well owners located near its drilling locations and provide water to people whose supplies were damaged, according to a news release.
The agency "is conducting its own independent investigation of this pollution event and reserves the right to assess further enforcement, as appropriate," DEP Secretary Patrick McDonnell said in the news release.
Pipeline companies typically drill horizontally when they have to build a route under a road or a body of water; a mixture of water and clay is used to lubricate the drill bit and carry away cuttings. If the bore strays to the surface or hits an underground cavity, the fluid can escape.
The environmental groups tried to raise the same issues in February but were rebuffed by the hearing board and the state DEP.
Sunoco said it had already voluntarily stopped drilling at some locations and said the hearing will show that it has tried to comply with its construction permits.
"In the meantime, we will continue (non-drilling) construction throughout the state, with safety and protection of Pennsylvania's environment as our first priorities," the company said in an emailed statement.
It's the second time this year that Energy Transfer, run by Dallas billionaire Kelcy Warren, has been ordered to stop work on a pipeline because of water contamination. The Ohio EPA and the Federal Energy Regulatory Commission both took legal action after construction on Energy Transfer's Rover natural gas pipeline caused a string of incidents, including a 2 million-gallon spill in a wetland (Energywire, May 31).
https://www.eenews.net/energywire/2017/07/26/stories/1060057894
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U.S. Shale Threatens Chemical Element of Saudi Aramco’s IPO
Jul 26, 2017 | The Wall Street Journal
By Nathaniel Taplin
The shale revolution means the U.S. is already much less reliant on Saudi Arabia for its oil needs. Less appreciated is the threat it also poses to Saudi Aramco’s plan to diversify downstream into chemicals and plastics production, likely a central pillar of the energy giant’s pitch to investors ahead of its probable initial public offering next year.
Having ruptured the oil-and-gas industry’s economics, the U.S.’s shale bounty is now triggering a domestic investment boom as companies that use hydrocarbons as an input take advantage of low prices. Half of all capital investment in U.S. manufacturing in 2016 went to chemical plants, while nearly $200 billion of new projects are being planned or under construction. Net U.S. petrochemical exports could grow nearly 10-fold to $110 billion over the next decade, according to consultancy IHS Markit .
With U.S. producers set to dominate the petrochemicals sector in the Western hemisphere in the next 10 years, Aramco will need to pin its hopes on the Asian market, specifically China. But Asian refining capacity, much of it with new petrochemical plants attached, is rising fast—led by China itself, which is already flooding Asian markets with diesel.
China’s oil-refining capacity has risen sharply in recent years. In 2016, it was nearly 15% higher than the nation’s actual petroleum consumption. Chinese refiners have in turn been exporting their surplus, dragging down regional oil-product prices. The prospect of poor investment returns given this overcapacity is one reason why Aramco has been wavering over a planned $20 billion refining and petrochemical joint venture with Malaysia’s Petronas.
By the time Aramco has ramped up its downstream capacity—it plans to nearly triple petrochemical output by 2030—if may find it has diversified from one oversupplied market—crude—into another—petrochemicals.
The home page of Sadara Chemical Company, Aramco’s massive flagship chemical project in the Persian Gulf, built together withDow Chemical , has “Game Changer!” projected in large font. With the U.S. now poised to emerge as both a crude-oil and petrochemical powerhouse, the game has certainly changed—just not in Aramco’s favor.
https://www.wsj.com/articles/u-s-shale-threatens-chemical-element-of-saudi-aramcos-ipo-1501065701
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Are Renewables Set to Displace Natural Gas?
Jul 26, 2017 | The Energy Collective
By Geoffery Styles
A recent story on Bloomberg News, “What If Big Oil’s Bet on Gas Is Wrong?”, challenges the conventional wisdom that demand for natural gas will grow as it displaces coal and facilitates the growth of renewable energy sources like wind and solar power. Instead, the forecast highlighted in the article envisions gas’s global share of electricity dropping from 23% to 16% by 2040 as renewables shoot past it. So much for gas as the “bridge to the future” if that proves accurate.
Several points in the story leave room for doubt. For starters, this projection from Bloomberg New Energy Finance (BNEF), the renewables-focused analytical arm of Bloomberg, would leave coal with a larger share of power generation than gas in 2040, when it has renewables reaching 50%. That might make sense in the European context on which their forecast seems to be based, but it flies against the US experience of coal losing 18 points of electricity market share since 2007 (from 48.5% to 30.4%), with two-thirds of that drop picked up by gas and one-third by expanding renewables. (See chart below.)
It’s also worth noting that the US Energy Information Administration projected in February that natural gas would continue to gain market share, even in the absence of the EPA’s Clean Power Plan, which is being withdrawn.
Natural gas prices have had a lot to do with the diverging outcomes experienced in Europe and the US, so far. As the shale boom ramped up, average US natural gas spot prices fell from nearly $9 per million BTUs (MMBTU) in 2008 to $3 or less since 2014. Meanwhile, Europe remains tied to long-term pipeline supplies from Russia and LNG imports from North Africa and elsewhere. Wholesale gas price indexes in Europe reached $7-8 per MMBTU earlier this year.
But it’s not clear that the factors that have kept gas expensive in Europe and protected coal, even as nuclear power was being phased out in Germany, will persist. The US now exports more liquefied natural gas (LNG) than it imports. US LNG exports to Europe may not push out much Russian gas, but along with expanding global LNG capacity they are forcing Gazprom, Russia’s main gas producer and exporter, to become more competitive.
Then there’s the issue of flexibility versus intermittency. Wind and solar power power are not flexible; without batteries or other storage they are at the mercy of daily, seasonal or random variation of sunlight and breezes, and in need of back-up from truly flexible sources. Large-scale hydroelectric capacity, which makes up 75% of today’s global renewable generation and is capable of supplying either 24×7 “baseload” electricity or ramping up and down as needed, has provided much of the back-up for wind and solar in Europe, but is unlikely to grow rapidly in the future.
That means the bulk of the growth in renewables that BNEF sees from now to 2040 must come from extrapolating intermittent wind and solar power from their relatively modest combined 4.5% of the global electricity mix in 2015 to a share larger than coal still holds in the US. The costs of wind and solar technologies have fallen rapidly and are expected to continue to drop, while the integration of these sources into regional power grids at scales up to 20-30% has gone better than many expected. However, without cheap electricity storage on an unprecedented scale, their further market penetration seems likely to encounter increasing headwinds as their share increases.
BNEF may be relying on the same aggressive forecast of falling battery prices that underpinned its recent projection that electric vehicles (EVs) will account for more than half of all new cars by 2040. As the Financial Times noted this week, battery improvements depend on chemistry, not semiconductor electronics. Assuming their costs can continue to fall like those for solar cells looks questionable. Nor is cost–partly a function of temporary government incentives–the only aspect of performance that will determine how well EVs compete with steadily improving conventional cars and hybrids.
I also compared the BNEF gas forecast to the International Energy Agency’s most recent World Energy Outlook, incorporating the national commitments in the Paris climate agreement. The IEA projected that renewables would reach 37% of global power generation by 2040, or roughly half the increase BNEF anticipates. The IEA also saw global gas demand growing by 50%, passing coal by 2040. That’s a very different outcome than the one BNEF expects.
Despite my misgivings about its assumptions and conclusions, the BNEF forecast is a useful scenario for investors and energy companies to consider. With oil prices stuck in low gear and future oil demand highly uncertain, thanks to environmental regulation and electric and autonomous vehicle technologies, many large resource companies have increased their focus on natural gas. Some, like Shell and Total, invested to produce more gas than oil, predicated on gas’s expected role as the lowest-emitting fossil fuel in a decarbonizing world. If that bet turned out to be wrong, many billions of dollars of asset value would be at risk.
However, it’s hard to view that as the likeliest scenario. Consider a simple reality check: As renewable electricity generation grows to mainstream scale, it must displace something. Is that likelier to be relatively inflexible coal generation, with its high emissions of both greenhouse gases and local pollutants, or flexible, lower-emitting natural gas power generation that offers integration synergies with renewables? The US experience so far says that baseload facilities–coal and nuclear–are challenged much more by gas and renewables, than gas-fired power is by renewables plus coal.
The bottom line is that the world gets 80% of the energy we use from oil, gas and coal. Today’s renewable energy technology isn’t up to replacing all of these at the same time, without a much heavier lift from batteries than the latter seem capable of absent a real breakthrough. If the energy transition now underway is indeed being driven by emissions and cleaner air, then it’s coal, not gas, that faces the biggest obstacles.
http://www.theenergycollective.com/geoffrey-styles/2409354/renewables-set-displace-natural-gas
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Fully Staffed STB Critical for Freight Rail Across Nation
Jul 26, 2017 | Morning Consult
By Donna Harman and Mark Kowlzan
In Washington, D.C., the saying goes that personnel is policy. A president communicates his priorities, and how he intends to address them, with the choices he makes to take leading positions in his administration.
The president has the authority to appoint 554 positions that require confirmation by the U.S. Senate — however, candidates for less than half of those positions have been announced so far. With key personnel missing, progress on policies vital to economic growth across the nation is also absent. Freight rail reform is a perfect example of why the president needs to move quickly to fill critical positions, and the Senate should act quickly to consider his nominations.
Freight rail is crucial for economic growth across the nation because it is a key transportation link for our states’ pulp, paper, packaging, tissue and wood products industry. This industry employs approximately 900,000 Americans with a combined payroll of over $50 billion and generates more than $5 billion a year in taxes to state and local communities in which it operates. We move an incredible $282 billion worth of goods, and much of it moves by freight rail.
You would think that kind of volume would make the forest products industry an important customer for freight rail companies, and it would — if those companies had to compete for our business. The problem is that they don’t.
From more than 40 Class I railroads in 1980, the freight rail industry has undergone significant consolidation. Nationwide, one-third of forest products facilities have access to one rail carrier. The elimination of rail-to-rail competition in the freight rail industry has come at a heavy cost for businesses that rely on it. Rail-dependent customers with no access to railroad competition have experienced significant rate increases.
From 2004-2014, rail rates for our industry increased by 91 percent. That compares to an increase of just 25.7 percent over that period for shipment by the still-competitive long-haul trucking. Those increases have translated into much higher costs to consumers and businesses trying to compete in domestic markets against foreign imports and access the export market to sustain or create American jobs.
The good news is that captive pricing by freight rail companies can be addressed by the federal Surface Transportation Board, which has regulatory oversight of rail rates and service. The bad news is that the STB has two open board seats, and until they get nominated by the president and confirmed by the Senate, efforts to better protect shippers are stalled.
The rate review process at the STB allows shippers to challenge excessive freight rail costs in markets that lack competition. However, these Stand Alone Cost rate cases can take three-and-a-half years to finish and cost $5 million to pursue — an unfair and unmanageable burden for small businesses that have a reasonable claim. The STB is considering improvements in this process to make it fair and reasonable for shippers of all sizes.
The STB is also in the process of considering another sensible reform that would increase access to competitive rail service by allowing certain rail customers to request that their freight be moved to another major railroad only if another rail line is reasonably accessible.
Some shippers currently have no access to STB rate relief processes at all because of existing federal exemptions. These companies have no real recourse when they encounter poor service or exorbitant rates from a freight rail company and have no other competitive rail option to consider. A new STB rulemaking would remove that exemption for forest products companies and help us negotiate on a level playing field with freight rail companies.
But without a full set of members for the STB, none of these reforms can move forward and shippers across the nation will remain at the mercy of rail carriers that face no competition. Until the president and the Senate act to nominate and confirm new STB board members, many businesses will be subjected to unfair pricing that makes them less competitive than their foreign counterparts, ultimately harming the families and communities they support.
We can do better. If our nation’s policy priority under our new president is a strengthening economy that is growing good jobs across the country, then fully staffing the STB must be a top personnel priority in Washington. The president and the Senate should act now to nominate and confirm objective candidates committed to moving the STB forward instead of preserving the status quo.
https://morningconsult.com/opinions/fully-staffed-stb-critical-freight-rail-across-nation/
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Why The Oil Industry Might Prefer Rail To Pipelines In Turbulent Times
Jul 26, 2017 | The Energy Collective
After three years of planning, nearly $4 billion in capital investment and a year of legal disputes and protests, the Dakota Access Pipeline began transporting crude oil from the Bakken Shale region of North Dakota to the Gulf Coast last month. The move came just two months after President Trump issued the permits for the even-more-contested Keystone XL pipeline, which, if completed, would link the Canadian tar sands to U.S. consumption and export markets.
With a capacity of half a million barrels of oil a day, the delayed arrival of the Dakota Access Pipeline will once again make pipelines the dominant way to transport oil out of the upper Midwest into coastal refining regions. For oil producers and refiners, who will benefit from lower transportation costs, this is a great outcome. For environmentalists and tribal leaders, who argued that the pipeline would generate local and global environmental risks, the pipeline’s arrival is surely a disappointment.
Protesters aren’t the only ones who are unhappy with the new pipeline’s arrival. Joining them is the railroad industry, which stands to lose what was until recently a sizable business transporting crude oil out of the Bakken into refining regions. However, the rail industry has good reason to remain optimistic since it offers something pipelines can’t: flexibility in a perpetually volatile market.
Until the beginning of last year, the majority of crude oil produced in the booming Bakken region was transported by rail to refining centers in the Gulf, East and West coasts. At its recent peak, crude-by-rail carried about 10% of U.S. oil production, up from less than 1% in 2010. Though there is no reliable long-term data on crude-by-rail, it is quite possible that the last time the rail industry transported as much crude oil as it does today—20% of Bakken production and 4% of total U.S. production—was during the Standard Oil era of the early 20th century.
The recent re-emergence of crude-by-rail is a bit surprising. The rail industry charges higher prices than pipeline operators do, and anti-competitive practices by the rail industry during the Standard Oil era are arguably why pipelines got built in the first place. So why did producers and refiners choose a more expensive, less competitive option? One answer is that pipelines take a long time to build, and these days, any new fossil fuel infrastructure faces environmental opposition. Maybe the return of crude-by-rail was simply a stopgap: pipeline investment would (and did) eventually come, and in the meantime trains were better than nothing.
This “easy” answer, however, ignores crude-by-rail’s fundamental benefit: flexibility. Crude-by-rail allows producers and refiners to deliver to, or source from, more than one location. Today, crude oil produced in the Bakken is now being refined in diverse regions—from Pennsylvania to Texas to Washington—thanks to the extensive nature of the existing rail infrastructure. Because of this existing infrastructure, all that is needed to start transporting crude by rail are loading and unloading stations—clearly quicker and cheaper to build than pipelines, and requiring limited long-term commitment from producers and refiners.
In contrast, customers of the new Dakota Access Pipeline can only ship crude oil along a single route. And, because pipelines are so costly to build, these customers have agreed to use it every day for the next 5-10 years.
In this way, crude-by-rail’s flexibility can be more economically efficient than pipelines, at least in the short run. Coastal refiners can use Bakken crude only when it is cheaper than imports, and producers can always ship output to the location with highest demand. Dakota Access Pipeline customers, on the other hand, will be paying to use the pipeline even when prices in the Gulf are lower than prices in markets reachable by rail.
How valuable is this flexibility? I used data on rail and pipeline transportation costs from Genscape, and oil prices in different markets reachable by pipeline and rail from Bloomberg to calculate how often and by how much Bakken producers got a better price for their output due to rail’s flexibility. Between late 2010 and the end of 2016, crude-by-rail’s flexibility provided producers with an added $0.50 a barrel, on average, compared to a hypothetical world where they could only send output to the East Coast—the first major crude-by-rail destination for Bakken crude—or consume it locally. Fifty cents a barrel might seem small relative to average “local” oil prices available to Bakken producers during that time of $78 per barrel, but it’s important to remember that producers had average break-even costs of roughly $61 per barrel at the time, so this option value increased per barrel margins by about 3%.
Rail’s flexibility is also valuable to refiners. Consider a hypothetical East Coast refiner that historically imported crude oil from the North Sea. In the last decade, it has sometimes been cheaper to instead transport crude oil by rail from the Bakken. For these refiners, having the option to use crude-by-rail was worth about $1.90 per barrel over the same time horizon, which is a huge fraction of the typical refining margins of $5-10 per barrel.
At times, the value of this flexibility was even higher. For example, from mid 2011 to mid 2012, pipeline bottlenecks caused large differences in prices across locations in the United States. Being able to ship to whatever location had the highest price was worth about $1.80 a barrel, so during a time when the best “local” oil prices averaged $96 per barrel and break even costs averaged $90 per barrel, option value increased per barrel margins by thirty percent. At the same time, the value of flexibility to refiners was worth more than $5 per barrel. For both producers and refiners, the value of this flexibility eventually dissipated in 2014, when several Midwestern pipeline expansion projects went into service, eliminating the previously large price differences across locations. With these price differences gone, rail’s flexibility was no longer needed.
http://www.theenergycollective.com/epicuchicago/2409435/oil-industry-might-prefer-rail-pipelines-turbulent-times
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EPA Formally Proposes WOTUS Withdrawal
Jul 26, 2017 | Politico Pro Whiteboard
By Annie Snider
EPA and the Army Corps of Engineers will formally propose the withdrawal of the Obama administration's controversial water rule Thursday.
The proposed rule to withdraw the Waters of the U.S. rule, also called the Clean Water Rule, was unveiled in late June, but had yet to be noticed in the Federal Register, the formal step that triggers the beginning of the public comment period. The Trump administration has given the public 30 days to weigh in on the proposed rule, although critics of the effort to repeal the rule have called for more time.
The proposed rule would change little on the ground today since the Obama administration's rule only briefly went into effect before the 6th Circuit Court of Appeals put it on hold nationwide. The repeal is seen as a safety net in case the Supreme Court determines that the 6th Circuit didn't have authority over the case and the hold is dissolved.
The rule would remove the Obama-era rule from the books and cement the regulatory status quo while the Trump administration works on its own rule to define which streams and wetlands are subject to federal protection under the Clean Water Act — an effort it has said it plans to have ready to unveil in December.
WHAT'S NEXT: EPA and the Army Corps will accept public comment on the proposed rule for 30 days. Those public comments will lay the groundwork for expected legal challenges from environmental groups and states that were supportive of the Obama administration's rule.
https://www.politicopro.com/energy/whiteboard
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Businesses Spent Millions Lobbying before Cap-And-Trade Vote
Jul 26, 2017 | E&E Climatewire
By Anne C. Mulkern
Several businesses poised to benefit from California's new cap-and-trade law are lobbying powerhouses that have poured millions of dollars into efforts to influence legislation.
At least seven oil companies and the petroleum trade group Western States Petroleum Association (WSPA) together doled out more than $34 million to persuasion efforts from 2015 through the first quarter of this year. The parent companies of the three biggest investor-owned electric utilities spent a combined $9.1 million. Four agriculture groups bankrolled nearly $1.6 million.
Each of those interests stands to benefit from A.B. 398, which extends cap and trade through 2030. California Gov. Jerry Brown (D) signed the bill yesterday (see related story).
"There are a lot of special interests in the capital, and a lot of them came to play," said Brent Newell, general counsel with the Center on Race, Poverty and the Environment, which pushed for policies to help people who live near sources of pollution, like refineries. "Utilities, agriculture, oil and gas, they all influenced significantly the contours of this bill."
Public disclosure forms outlining lobbying activity from April through July are not yet publicly available, so it's unclear precisely how much the companies spent to influence lawmakers as they raced toward a vote on the bill that passed.
But multiple companies indicated that they were working on the issue for the past two years. In disclosure forms that outline lobbying activities in January through March, several listed "cap and trade" and A.B. 378, a cap-and-trade extension bill that died in an Assembly floor vote. Some said they had worked to influence S.B. 775, another cap-and-trade proposal that never reached a floor vote.
The amount of money spent since 2015 shows the influential arc of the fossil fuel industry, according to others who advocated on climate measures.
"I see it everywhere that I go, the regulation agencies, the governor's office," said Brian Nowicki, California climate policy director with the Center for Biological Diversity. "The oil and businesses interests are there in full force."
WSPA led the companies, and the oil sector, on spending. The trade group spent $20.1 million since 2015 and nearly $1.4 million in the first quarter of this year. The association represents some two dozen oil companies, including BP PLC, Chevron Corp., ConocoPhillips Co. and Exxon Mobil Corp.
Several observers said WSPA won a major plum in the measure that passed, A.B. 398. It contains a provision stating that only the California Air Resources Board (ARB) can regulate carbon emissions at oil and gas facilities, and solely through cap and trade. That means the state's 35 local air districts cannot directly regulate carbon dioxide.
Many familiar with negotiations around the bill say that language was inserted at the behest of WSPA and that Brown consented because he wanted a two-thirds vote approving the legislation. Brown needed allies, not opponents. In the end, eight Republicans voted for it, while three Democrats opposed it.
"This was a response to a direct ask or demand by oil interests," Nowicki said. The Center for Biological Diversity opposed the bill, in part because of the provision. "To that extent, you have to say it was successful."
WSPA would not agree to an interview. In a blog post after the vote, Catherine Reheis-Boyd, WSPA president, said that the measure as written was the best option for meeting the state's 2030 mandate to cut greenhouse gas emissions 40 percent below 1990 levels. Direct regulations from ARB would have been more costly, she said.
"Cap-and-trade's market-based approach provides regulated facilities, like those of our industry, with more flexibility as they work to meet the new standards," Reheis-Boyd wrote. "The bipartisan support of A.B. 398 ensured an improved cap-and-trade program with tax cuts, cost containment measures, and significant bureaucracy reduction that will contain costs for all Californians."
Reheis-Boyd also praised the measure's language that extends a sales tax exemption for purchases of some equipment used in manufacturing. It was expanded to include machinery used for the generation and distribution of renewable electric energy, such as solar, wind and hydropower.
"Important tax cuts were fought for by legislative leaders in both parties that will ease the burden of businesses working to comply with the law," Reheis-Boyd wrote in the blog.Campaign contributions, too
Asked about the trade group's influence efforts, Reheis-Boyd said in an emailed statement that "expenditures for lobbying activities are a direct reflection of the importance of our industry to the state's economy and the enormous number of policy issues confronting us in California."
"In order to ensure the ability of California's oil and gas producers to continue to provide essential fuels, jobs, technology and revenues for the state, it is necessary to engage robustly in the political process," she added. "Total reported spending also includes engagement in research and analysis of the significant regulatory activities of the California Air Resources Board and other state agencies, which is valuable to all engaged in the regulatory process."
In addition to the efforts by WSPA, here are the leading oil companies and their lobbying expenditures since 2015: Chevron, $8.2 million; Tesoro Corp., $1.5 million; Exxon Mobil, $1.1 million; California Resources Corp. and subsidiaries, $1.1 million; and Royal Dutch Shell PLC, $1 million. Valero Energy Corp. and BP Corp. North America Inc. doled out smaller amounts.
Newell with the Center on Race, Poverty and the Environment said he saw oil lobbyists around legislators' offices, and waiting outside the governor's office, leading up to the unveiling of the A.B. 398 text.
Among them were former Assemblymember Henry Perea (D), who is now senior vice president of policy and strategic affairs for WSPA, and Eloy Garcia, a partner at KP Public Affairs in Sacramento who works as a lobbyist for WSPA, focusing on climate issue, according to Newell. He said he also saw former Sen. Michael Rubio (D), now a Chevron lobbyist.
"The language they proposed directly benefits oil production and oil refining," Newell said. "Who else would insist that that be in there?"
He added that "it's hard for me to say how much of a role their direct lobbying played compared to, say, direct campaign contributions."
E&E News reported earlier this month that a group of 17 California Democrats who helped kill an earlier cap-and-trade extension bill received $1.2 million in campaign contributions from the oil and gas industry and other opponents of the measure (Climatewire, July 5). That defeated bill, A.B. 378, included language that would have allowed ARB to set limits for air emissions at refineries, factories and other locations subject to cap and trade.Utilities also lobbied
The electricity sector also sought to persuade lawmakers before the vote on cap and trade.
San Francisco-area utility Pacific Gas & Electric Co. and its affiliates spent $2.8 million lobbying since 2015. Edison International and affiliates, including the Los Angeles-area utility Southern California Edison (SCE), bankrolled $2.7 million. Sempra Energy, parent company of San Diego Gas & Electric Co. and Southern California Gas Co., spent $3.6 million. The lobbying was focused on several issues, including cap and trade.
That was money spent on "general lobbying," which includes time spent talking to lawmakers, the governor and agencies, like ARB. It does not include lobbying of the California Public Utilities Commission, which is listed separately.
The utilities said their lobbying expenditures are funded from shareholder dollars and that they follow disclosure rules.
"Public policy engagement is an important and appropriate role for companies," Sempra said in a statement. "We track hundreds of proposed laws, rules, regulations and policies annually and engage at the federal, state, and local levels of government to ensure that the perspectives of our company, our shareholders, our customers, and our employees are represented before lawmakers and regulators."
PG&E said that it "engages at the federal, state and local level of government to ensure that the concerns of our customers, shareholders and employees are represented before lawmakers and regulators. ... Like many individuals and businesses, PG&E participates in the political process."
Edison International said that it "has a history of civic engagement, educating policymakers and supporting qualified candidates of both parties at all levels of government. ... We fully embrace the values of disclosure and transparency in corporate political spending."
Utilities throughout the state, including municipal ones, supported A.B. 398 for multiple reasons, according to a joint letter filed with Brown and Legislature leadership.
Those included provisions like a price ceiling for the carbon allowances sold at auction and two price containment points. As well, there is a continued role for offsets, the letter said, where businesses can invest in carbon-reducing projects for part of their compliance. There are also opportunities to link California's system with other programs.
The utilities said it was the most cost-effective way to get to the state's emissions reduction goal.
"Cap-and-Trade establishes a firm GHG target and provides flexibility to foster innovative GHG emissions reductions that minimize costs to California consumers and businesses," the letter said.
Some of the utilities also stand to benefit from the language that extends the manufacturing tax credit, Newell noted, as it was expanded to cover some forms of renewable energy.
The utilities confirmed that boost.
"The manufacturing tax credit extension in the Cap and Trade legislation does provide a very small benefit to Southern California Edison on certain eligible renewable energy projects," SCE said in an emailed statement. "The dollars saved, will be passed on to SCE customers. Independent power producers are also eligible on qualified projects."
SDG&E said that "beginning in 2018, utilities in California would be eligible for the partial sales tax exemption. The partial exemption caps eligible purchases of machinery/equipment at $200 million per year per entity."
PG&E also foresees a benefit.
"Extending the sales tax exemption to utilities and renewable energy companies will result in savings for our customers by reducing our capital spend, as well as the amount we pay for renewable energy," the company said in a statement.
"We estimate the sales tax savings for PG&E at about $8 million annually, which will be passed through to our customers over the life of our electric grid assets," it added.Agricultural groups like the bill
Farm groups also spent on lobbying, and they found plenty to like in A.B. 398.
The California Farm Bureau Federation spent nearly $1.3 million since 2015 through the first half of this year. Unlike the others, it has filed a disclosure for the second quarter of this year as well as the first.
The Agricultural Council of California doled out nearly $152,000 through the first quarter. California Dairies Inc. spent nearly $124,000. The Western Agricultural Processors Association paid about $61,000.
Those four listed cap and trade, or "climate change policy issues," as among those they advocated on in the first quarter of this year. They have worked on several other policies and bills, as well, since 2015.
A coalition of farm and agriculture groups in a letter to Assemblymember Eduardo Garcia (D), the lead sponsor of A.B. 398, said the measure "allows food processors regulated under SB 32 to meet their compliance obligations for reducing GHGs in a cost effective manner."
The agriculture groups said the measure provides a mechanism to establish a price ceiling on allowances. It also has language ranking how the revenues from the program will get spent, the letter said, with a "specific order of projects to prioritize, starting with reducing air pollutants from stationary and mobile sources, sustainable agriculture and short lived climate pollutants."
The bill also sets up a path to creating new offsets in California, including in the agricultural industry. That could help dairies install digesters to burn methane.
https://www.eenews.net/climatewire/2017/07/26/stories/1060057923
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