Preview Newsletter
ACC PM 16/8/17
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(ACC Mentioned) Trump’s EPA May Be Weakening Chemical Safety Law
Aug 16, 2017 | Scientific American
By Annie Sneed
Asbestos, trichloroethylene, pigment violet 29—these are just three of thousands of chemicals the U.S. Environmental Protection Agency is assessing for risks to human health and ecosystems under the revamped Toxic Substances Control Act (TSCA). -
EPA Rule on Nanotechnology Reporting is Good News
Aug 16, 2017 | National Resources Defense Council
By Jennifer Sass
EPA issued a Working Guidance for its Final Nanotechnology Reporting and Record-keeping Requirements Rule, which become effective this week, on August 14, 2017. This important rule establishes one-time reporting and record-keeping requirements for certain chemical substances when they are manufactured or processed at the nanoscale. -
US Electronics Retailer Best Buy Announces Chemicals Policy
Aug 16, 2017 | Chemical Watch
By Tammy Lovell
US electronics retailer Best Buy has announced a chemical management policy, but has been criticised for lack of transparency about which chemicals it is restricting. -
UPDATE: ‘Erin Brockovich’ Carcinogen in 250 Million Americans’ Drinking Water
Aug 16, 2017 | Environmental Working Group
By Robert Coleman
Based on test results obtained directly from almost 50,000 local water utilities, drinking water supplies for about 250 million Americans are contaminated with chromium-6. -
Ewire: Universities Launch Major New Study on PFCs
Aug 16, 2017 | Inside EPA
With fears of contamination from perflourinated chemicals (PFCs) growing around the country, researchers at the University of Rhode Island (URI) and Harvard University announced that they are launching a new center to study potential exposure pathways, develop better detection tools and other efforts. -
Global Treaty on Mercury Enters into Force
Aug 16, 2017 | Chemical Watch
By Leigh Stringer
A global treaty to reduce mercury emissions, the Minamata Convention, enters into force today. -
Manufacturers Urge Perry to Slow LNG Exports
Aug 16, 2017 | Fuel Fix
By James Osborne
A lobbying group representing U.S. manufactures says the Department of Energy's continued approval of new LNG export terminals could significantly deplete American natural gas supplies within a little more than three decades. -
North America's NatGas Markets Working, with 'Paradigm Shift' Underway, Says BP Exec
Aug 16, 2017 | Natural Gas Intelligence
By Carolyn Davis
The North American natural gas market is more globally interconnected than ever before, as exports steam along both overseas and to Mexico, a top BP plc executive said Wednesday. -
All Eyes on Pending Challenges after Enviros Lose LNG Case
Aug 16, 2017 | E&E Energywire
By Ellen M. Gillmer
A federal court's rejection of a challenge to liquefied natural gas exports does not spell doom for similar lawsuits working their way through the courts, environmental lawyers say. -
Blackstone Bets $7B on Rising Production
Aug 16, 2017 | E&E Energywire
Blackstone Group LP is betting $7 billion on the future growth of U.S. natural gas production. -
Trump Signs Order to Speed Infrastructure Construction
Aug 16, 2017 | AP (in The Washington Post)
By Joan Lowy and Michael Biesecker
President Donald Trump said Tuesday he has signed a new executive order intended to make more efficient the federal permitting process for construction of transportation, water and other infrastructure projects without harming the environment. -
Trump Promises Rapid Regulatory Review on Infrastructure Projects
Aug 16, 2017 | E&E Energywire
By Peter Behr
President Trump renewed his pledge from January to speed federal approval of major infrastructure development, issuing an executive order yesterday that will put a single federal agency in charge of expediting environmental and other regulatory reviews for each priority project. -
Nominees Submit Identical Answers on Climate
Aug 16, 2017 | E&E Climatewire
By Umair Irfan
The nominees for the Department of Energy's undersecretary positions are singing the same tune with their views on climate change.
Industry and Association News - There are no clips to report at this time.
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Chemical Management News
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Transportation and Infrastructure News
Environment News
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(ACC Mentioned) Trump’s EPA May Be Weakening Chemical Safety Law
Aug 16, 2017 | Scientific American
By Annie Sneed
Asbestos, trichloroethylene, pigment violet 29—these are just three of thousands of chemicals the U.S. Environmental Protection Agency is assessing for risks to human health and ecosystems under the revamped Toxic Substances Control Act (TSCA). Congress overhauled the chemical safety law last summer, with wide bipartisan and industry support. Many viewed the legislation as a much-needed update to old, feeble regulations. Now, though, the Trump administration may be undermining the reformed law.
After Congress amended the old chemical safety act, it tasked the EPA with writing what are called the “framework” rules for how the agency will implement the reformed law. Outside experts and environmental groups express deep concern that the EPA’s new framework rules for TSCA, which took effect in July, could seriously subvert the law’s purpose in favor of industry. “These are major rules that will set the conditions for how TSCA is implemented—potentially for the next few decades,” says Noah Sachs, director of the University of Richmond Law School’s Center for Environmental Studies.
The TSCA framework rules establish formal guidelines for how the EPA will assess tens of thousands of existing chemicals. For the most part, they specify how the agency will prioritize and evaluate chemicals for risks. The Obama administration had already proposed a version of the rules. The current administration took over and finalized them—but not without significantly rewriting them first. “The law is much, much less stringent” with the latest rules, says Rena Steinzor, a professor of law at the University of Maryland.
One of the most controversial parts of the framework is how the EPA changed a key term known as the “conditions of use.” It defines which applications of a chemical the EPA will examine in risk evaluations. For a given chemical, usages could range widely—from a consumer product like a kitchen countertop cleaner to various business and industrial applications. “Uses are critical, because they define exposure” to people and the environment, Steinzor says.
The Obama administration interpreted “conditions of use” broadly, experts say, but Pres. Trump’s EPA has significantly narrowed the term. For instance, the definition now excludes “legacy” applications—a past use of a chemical that has been discontinued. One example of this is a class of chemicals called polybrominated diphenyl ethers used as flame retardants, which were added to furniture cushions until recently. Experts say the EPA still needs to consider exposure to these legacy uses. “When you’re assessing a chemical, it’s important to look at all the uses to understand the actual risk in the real world,” says Richard Denison, a lead senior scientist at the Environmental Defense Fund. That’s because previous or ongoing exposure to a legacy use of a chemical could complicate a person’s exposure to the chemical’s present-day uses. “You have to recognize that the way someone responds to a new risk is partly based on what else they’ve already been exposed to,” Denison says. Sachs agrees: “Congress’s concern is about aggregate exposure, and that makes sense, because that’s what matters to human health,” he notes. “If this rule stands, it is a weakening of TSCA and not at all what Congress intended.”
Karyn Schmidt, senior director of Chemical Regulation, Regulatory and Technical Affairs at the industry group American Chemistry Council (ACC), disagrees. “It’s clear that the legacy uses are cases where EPA does not think it needs to prioritize its resources,” she says.
The framework rules do specify that EPA may consider background exposure to legacy uses of a chemical on a case-by-case basis, but Denison is skeptical about this approach. The rules “don’t provide any criteria as to how they would make that decision—when something would be considered and when it would not be,” he says.
Critics also claim the EPA is giving itself an alarming amount of discretion to decide in general what qualifies as a “condition of use” and what does not. In essence, Denison says, the agency can decide not to look at something because it does not think it is important. He notes the EPA has not provided criteria for how it would make this decision. “It could do anything it wants,” he says.
Nicholas Ashford, director of the Technology and Law Program at Massachusetts Institute of Technology, voices a similar concern. “A shift has been made under the present administration. They have decided not to go very far in looking at all the uses a chemical might have. They’re basically subverting the purpose of the act, which is protection.”
The EPA and industry leaders dispute that the framework rules undermine the TSCA. “I thought they were clearer, cleaner and more focused,” says Lynn Bergeson, a lawyer whose firm Bergeson & Campbell specializes in chemical issues. She adds the new rules will result in a “better use of EPA resources.” Schmidt says the law will allow the agency to focus on the highest risks, rather than getting bogged down in looking at all the different uses for a substance. “A chemical might be used in hundreds, thousands of commercial applications,” she notes. “Risk evaluations need to be driven by public health…, and also yield results on a timeline.”
The EPA maintains its rules will support TSCA. “The agency will make determinations for chemical substances in ways that are both protective and efficient,” an EPA spokesperson wrote to Scientific American in an e-mail. “This means directing greatest attention to those uses that pose the greatest potential for risk to health and the environment.”
Other experts point to the Trump administration’s pro-industry stance as well as its connections with the chemical business as motivation for rewriting the rules. “Industry wants to control what the use is stated to be,” Steinzor says. They point to Nancy Beck, who previously worked for the ACC and is now deputy assistant administrator for the EPA officethat oversees TSCA. “Our concerns are magnified by the fact that…Nancy Beck, who has a reputation over many years of being very favorable toward industry…, is in charge of implementing TSCA at EPA,” Steinzor wrote in an e-mail to Scientific American. According to Sachs, Beck has “incredibly close ties to the chemical industry,” adding that with EPA personnel “coming from those backgrounds, the discretion they have will be tilted in favor of the chemical industry.”
Steinzor acknowledges that no one knows yet how the agency will actually enforce the law. But skeptics say their apprehensions are amplified by the anti-regulatory attitude of those leading the administration, including the president himself and EPA head Scott Pruitt as well as by the White House’s proposal to dramatically cut the agency’s funding. “My worries go beyond the wording of the framework rules to things like the budget and personnel who head the office,” Sachs says. Environmental groups, however, intend to make sure the EPA fully enforces the TSCA—last week the Environmental Defense Fund, the Natural Resources Defense Council and others filed lawsuits intended to force the EPA to strengthen the framework rules.
https://www.scientificamerican.com/article/trump-rsquo-s-epa-may-be-weakening-chemical-safety-law/
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EPA Rule on Nanotechnology Reporting is Good News
Aug 16, 2017 | National Resources Defense Council
By Jennifer Sass
Some good news from the U.S. Environmental Protection Agency!
EPA issued a Working Guidance for its Final Nanotechnology Reporting and Record-keeping Requirements Rule, which become effective this week, on August 14, 2017. This important rule establishes one-time reporting and record-keeping requirements for certain chemical substances when they are manufactured or processed at the nanoscale.
In early January 2017 EPA issued the Final Rule with many improvements that we had asked for in our public comments to the EPA docket (see my earlier blog for a summary).
EPA closed the loophole in the proposed rule that would have exempted nanoclays, zinc oxide, and nanocellulose from reporting requirements. This means EPA and the public will now have more information to make informed regulatory decisions about these materials.
EPA rejected industry arguments for a volume cut off below which no reporting would have been required. Such a threshold may have exempted many nanomaterials which are, of course, notoriously low volume due to their extremely small size.
EPA rejected industry’s request to exempt naturally occurring nanomaterials from reporting requirements.
EPA closed the loophole that would have exempted chemical substances manufactured as part of a film on a surface.
Maybe most importantly, EPA rejected all industry argument that EPA does not have the authority to issue this rule. EPA asserted its authority under the Toxic Substances Control Act (TSCA) section 8(a).
This rule – particularly with the above improvements – is a win for scientific transparency and public disclosure. However, it is not regulations or restrictions. Therefore, EPA must use the information it collects under this rule to inform policies that will protect human health and the environment from harmful exposures to these small-sized chemicals.
EPA first started working on this rule in 2009, and, although the Rule has moved slowly through the regulatory process, nanotechnology has not. In the last decade (since 2005) EPA has received and reviewed over 160 applications for new nanomaterials, including the carbon nanotubes that look and act much like asbestos (see report by U Mass Lowell, 2014) .
Nanoscale chemicals (nanomaterials) are in products from all commercial sectors ranging from sports equipment to agrochemicals to clothing. Increased concern for potential health and environmental impacts of chemicals, including nanomaterials, in consumer products is driving demand for greater transparency regarding potential risks. To that end, we published the results of our research using the GreenScreen hazard assessment method to show both hazards and data gaps for conventional silver and nanosilver approved by EPA for commercial uses (Sass et al 2016). The ability to conduct hazard assessments like the GreenScreens we published depends on reliable and publicly available information. EPA’s Rule is an important tool to gather relevant data on nanomaterials to inform hazard assessment, regulatory decisions, and industrial product design and development.
https://www.nrdc.org/experts/jennifer-sass/epa-rule-nanotechnology-reporting-good-news
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US Electronics Retailer Best Buy Announces Chemicals Policy
Aug 16, 2017 | Chemical Watch
By Tammy Lovell
US electronics retailer Best Buy has announced a chemical management policy, but has been criticised for lack of transparency about which chemicals it is restricting.
The company recently released a statement, which says it seeks to reduce use, phase out those of concern and "improve the general management of chemicals".
Operations, private-label products, vendors, and the company’s recycling programme are covered by the policy.
Paula Baldwin of Best Buy told Chemical Watch it had been assessing the safe application and handling of chemicals for many years, but had only just declared it publicly.
"We wanted to be sure that we were current, comprehensive and thorough, and leveraged third-party experts to help guide and benchmark our progress," she said.
For corporate, retail, service and distribution operations, the policy advocates transitioning to safer alternatives whenever possible, with a preference for the US EPA's Safer Choice chemicals. Third party experts will be used to identify and evaluate preferred chemicals.
It also requires business-to-business disclosure and restriction of chemicals in its private-label products and in factories. The latter will be provided with training to "improve their chemical management processes".
For private-label and direct import products, the company has developed a restricted substances list (RSL), which Ms Baldwin revealed is primarily concerned with chemicals used in electronics including phthalates, heavy metals and flame retardants.
She said Best Buy will initially focus on phasing out "the RSL list chemicals we are restricting based on regulation or known hazards, as well as the chemicals we require suppliers to report to us." But the company has not announced any timeframes for the phase out or revealed all the chemicals on its RSL.
Chemical disclosure
Last year, Best Buy ranked fourth in NGO Safer Chemicals, Healthy Families' Mind the Store report card, which scores retailers on their progress to eliminate hazardous chemicals - achieving 41 out of a possible 130 points and a C- grade.
When the report card was published last November, Best Buy announced it would reveal its RSL and manufacturing restricted substances list this year.
The company's policy has been praised in a joint blog between Mike Schade of Mind the Store and Kathleen Schüler, co-director of Healthy Legacy, a 37-member health-based coalition in Minnesota. But both add that they are "disappointed that Best Buy has yet to fulfil this pledge to disclose these lists of chemicals publicly in 2017".
"It is challenging for NGOs, investors and consumers to judge the substance of this new chemical management programme without knowing the identity of the chemicals it is setting restrictions on," they added.
They call on Best Buy to follow retailers like Walmart, Target and CVS Health, which have publicly disclosed their RSLs.
"Having a clear definition of safer alternatives and a process for evaluating their hazards is critically important to avoid regrettable substitution," the blog said.
In response, Ms Baldwin said that Best Buy's RSL and MRSL would be communicated to suppliers first, before being disclosed to the public.
"This new formulation is being rolled out across a very complex supply chain. Our vendors have a great deal of knowledge. We expect to learn from them and improve our RSL, and release it publicly when we’ve completed that due diligence," she said.
https://chemicalwatch.com/58212/us-electronics-retailer-best-buy-announces-chemicals-policy
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UPDATE: ‘Erin Brockovich’ Carcinogen in 250 Million Americans’ Drinking Water
Aug 16, 2017 | Environmental Working Group
By Robert Coleman
In 2016, an EWG report found that chromium-6 – a cancer-causing compound made notorious by the film “Erin Brockovich” – contaminated the tap water supplies of 218 million Americans in all 50 states. But our just-released Tap Water Database shows the problem is even worse than that.
Based on test results obtained directly from almost 50,000 local water utilities, drinking water supplies for about 250 million Americans are contaminated with chromium-6. For about 231 million people, drinking water supplies have average levels of chromium-6 exceeding the one-in-a-million cancer risk level determined by California state scientists.
That may still underestimate the number of people exposed because water from most smaller utilities and private wells usually is not tested for chromium-6. Although it’s been almost a decade since the National Toxicology Program found the compound caused cancer in rodents when ingested, there are no federal regulations on chromium-6 in drinking water and no federal requirements for regular monitoring of chromium-6 in tap water.
There are a couple of possible reasons for the new, higher numbers in the Tap Water Database.
· The Environmental Protection Agency classifies utilities that purchase finished water from other public utilities as consecutive systems, which are only required to test for disinfectant byproducts, lead and copper. The database suggests that many consecutive systems are buying finished water tainted with chromium-6 from other utilities. To see if your water supplier is a consecutive system and may be purchasing contaminated finished water, look up your supplier in the Tap Water Database.
· California is the only state that set a public health goal and legal limit* for chromium-6, and requires water utilities to test for the chemical. EWG’s 2016 report was based on data from the EPA’s Unregulated Contaminant Monitoring program. The EPA-mandated testing involves only a small number of water utilities that serve less than 10,000 people.
We urge the federal government to follow California’s lead and set a nationwide legal limit on chromium-6 in drinking water, and require both large and small utilities to test for it. While the legal limit set by California in 2014 was too high to fully protect human health, it represented a step in the right direction. And until regular nationwide testing is required, we can’t know the true extent of contamination in public water utilities.
For now, we invite everyone to use our database to find out if there is chromium-6 in your water. If so, contact your local elected officials to express your outrage and use EWG’s Water Filter Guide to find a water filter that is certified to remove the contaminant.
*California set a legal limit in 2014 of 10 ppb, a level too high to fully protect health. After a legal challenge focused on how the costs of implementing the standard were calculated, the state was required to withdraw its limit in 2017 and start work on establishing a new state standard.
http://www.ewg.org/enviroblog/2017/08/update-erin-brockovich-carcinogen-250-million-americans-drinking-water#.WZRxYVUjHIU
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Ewire: Universities Launch Major New Study on PFCs
Aug 16, 2017 | Inside EPA
With fears of contamination from perflourinated chemicals (PFCs) growing around the country, researchers at the University of Rhode Island (URI) and Harvard University announced that they are launching a new center to study potential exposure pathways, develop better detection tools and other efforts.
With an $8 million grant from the National Institute of Environmental Health Sciences, the center will be part of a national network of Superfund Research Program centers.
It will be led by Rainer Lohmann, a professor at URI's Graduate School of Oceanography, who will lead an interdisciplinary group of scientists and outreach specialists from URI, Harvard University and Silent Spring Institute to generate new insights into these pollutants and distribute information to communities.
Lohmann says the new center is intended to bolster the limited regulatory steps that have been taken so far to address the chemicals, which have been widely used in non-stick cookware, fire-fighting foam, waterproof rain gear and other applications.
While EPA in 2016 set health advisory levels for two PFC compounds -- perfluorooctanoic acid (PFOA) and perfluorooctane sulfonate (PFOS) at 70 parts per trillion, Lohmann says it is not enough and he hopes the new center will bolster state and local efforts to address the compounds.
‘So frustratingly little has been done on the regulatory side, I thought a center like this could help,’’ he told the Associated Press.
He added that he wants to give regulators the information they need to help communities dealing with contamination.
As Inside EPA has previously reported, Lohmann's efforts are consistent with those of environmentalists and others, who have been pressing states to adopt enforceable standards in the absence of EPA requirements.
So far, only Vermont has adopted enforceable standards.
But Pennsylvania's Environmental Quality Board Aug. 15 unanimously agreed to a petition by environmentalists to review PFOA contamination in drinking water and make a recommendation on whether an enforceable standard should be set and at what level, according to the Bucks County Intelligencer.
If the review determines that a standard is needed, every water authority in the state would be required to test for the chemical and install filtration systems if it’s found above the safe limit, the paper says.
But it notes that Pennsylvania's Department of Environmental Protection has not undergone such a process or set a safe drinking water limit for any chemical in more than three decades, due to a lack of resources.
State resources are also emerging as an issue in North Carolina, where Gov. Roy Cooper (D) and his administration are seeking more than $2.6 million in emergency funds to address contamination of GenX, a substance developed by DuPont, now known as Chemours, as a PFOA replacement, and to bolster water quality monitoring and other issues in the state.
But Republican state senators are concerned that the administration has not adequately addressed a series of questions they have about releases from a Chemours facility into the Cape Fear River and other issues and are planning a hearing when the legislature reconvenes in the coming weeks, according to the Wilmington Star News.
“We are disappointed in Gov. Cooper’s proposed response to this crisis because it does nothing to actually address the immediate problem of GenX in our drinking water,” Sen. Michael Lee (R) wrote in a recent letter.
Cooper is also pressing EPA to do more on GenX. In a July 17 letter, he urged EPA Administrator Scott Pruitt to quickly complete EPA's health assessment of the substance and set a drinking water standard, revisit a 2009 enforcement order that allowed Chemours to use the chemical and use authority under the new toxics law to evaluate the substance's risks.
https://insideepa.com/daily-feed/ewire-universities-launch-major-new-study-pfcs
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Global Treaty on Mercury Enters into Force
Aug 16, 2017 | Chemical Watch
By Leigh Stringer
A global treaty to reduce mercury emissions, the Minamata Convention, enters into force today.
The 50-party requirement for this to happen was achieved in May, when seven EU member states ratified the convention. This began the 90-day count down for it to take effect.
As of today, 74 countries have committed to the treaty, which requires them to implement measures that control man-made mercury pollution. These include phasing out existing, and banning new, mercury mines, reducing emissions and use. The treaty also sets conditions for interim storage and disposal of mercury waste and regulating artisanal and small-scale gold mining. Mercury is used to separate gold from its ore.
Originally agreed in 2013, the convention is the first legally binding global treaty on chemicals in over a decade. The UN lists mercury as one of the top ten chemicals endangering human health and the environment and says there is no safe level of exposure.
The first Conference of the Parties will take place from 24 to 29 September in Geneva, Switzerland.In an article for the July/August issue of the Global Business Briefing, Dr John Roberts, former chair/co-chair of multiple groups and committees within the Minamata Convention, writes about how the treaty was achieved and its objectives.
https://chemicalwatch.com/58223/global-treaty-on-mercury-enters-into-force
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Manufacturers Urge Perry to Slow LNG Exports
Aug 16, 2017 | Fuel Fix
By James Osborne
A lobbying group representing U.S. manufactures says the Department of Energy's continued approval of new LNG export terminals could significantly deplete American natural gas supplies within a little more than three decades.
In a letter to Energy Secretary Rick Perry Wednesday, the Industrial Energy Consumers Alliance asked he stop approving new LNG export terminals that will send American natural gas to countries without which the United States has a free trade agreement - as it does with Mexico and Canada.
"It is time for the U.S. Department of Energy to put American residential and industrial consumers first by establishing a moratorium on further LNG export approvals to non-free trade agreement countries, and put consumer safeguards in place," ICEA President Paul N. Cicio said.
The Trump administration has described the burgeoning U.S. LNG industry as critical to its plans to grow the domestic energy industry, building on initiaitives taken by former President Barack Obama.
But as gas exports rise, many economists suspect that so too will domestic gas prices - raising energy costs for the nation's industrial and manufacturing industries.
The ICEA is arguing the Obama administration failed to consider the "cumulative impact" of approving terminals to exports to both countries with and without free trade agreements with the United States. And using federal data, the ICEA claims that at current federal projections for gas exports, the United States will use almost 60 percent of its "technically recoverable" gas reserves by 2050 and likely even more if Trump approves more terminals.
But estimates on domestic reserves are notoriously conservative, and executives in the natural gas industry believe that as they continue to hone hydraulic fracturing techniques and explore more shale deposits they will tap way more gas than the current federal estimate of 2,214 trillion cubic feet of gas reserves.
"In fact, if the 1966 estimate of 600 Tcf had remained static, the U.S. would have run out of
natural gas 10 years ago," reads a report on the topic by the Potential Gas Committee, a research group funded by the American Petroleum Institute and other oil and gas interests.http://www.chron.com/business/energy/article/Factories-urge-Perry-to-slow-LNG-exports-11823301.php
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North America's NatGas Markets Working, with 'Paradigm Shift' Underway, Says BP Exec
Aug 16, 2017 | Natural Gas Intelligence
By Carolyn Davis
The North American natural gas market is more globally interconnected than ever before, as exports steam along both overseas and to Mexico, a top BP plc executive said Wednesday.
BP Energy Co.’s Dawn Constantin, senior vice president of marketing and regulatory affairs, was keynote speaker in San Antonio on the final day of the inaugural U.S.-Mexico Natural Gas Forum, presented by LDC Gas Forums.
The unearthing of the vast unconventional gas reserves across the U.S. onshore has created a “deep, fungible market in North America,” in turn creating a “paradigm shift,” that has sent a signal that “this market is more interconnected than ever before,” she told the audience.
And it’s interconnected globally not only among gas markets but among oil and natural gas liquids (NGL) commodities, Constantin said.
“There’s plenty of supply; that’s a common theme,” she said, as well as billions of dollars being invested to move gas, via liquefied natural gas (LNG) exports and otherwise to where they are needed most.
Evolving Continental Relationships
“The pricing relationships that we know of, that we care about with Henry Hub, with basis relationships across Canada, the U.S. and Mexico...all that is going to continue to evolve, which means that managing the business, managing the risks, becomes very, very critical when thinking about changes in the future.”
BP has been North America’s largest gas trader for years, according to NGI’s quarterly survey of Top North American Gas Marketers. During 1Q2017, BP traded 22.53 Bcf/d, more than double the No. 2 marketer in the quarter, Shell Energy North America.
Constantin’s Houston-based marketing team is responsible for planning and executing programs that position BP as a counterparty, while also promoting customer relationships. Her regulatory affairs team advises on evolving policy developments that impact the marketing and trading businesses in Canada, the United States and Mexico.
As traders attempt to predict gas prices, Constantin warned that they shouldn’t try to do it in a bubble.
“If someone puts a Henry Hub forecast in front of you and they haven’t considered the oil equation, the NGL equation or the LNG equation, then it’s not credible,” she said. “Oil prices matter because they influence where producers drill.”
Whether it’s a “$50/bbl world, a $75/bbl world or a $100/bbl world, that influences where we drill in North America. That matters, because when you drill for oil, you get natural gas.”
The other thing that matters is liquids prices for the same reason as oil, she said. If propane, butane and ethane prices are strong, there’s an incentive to drill for rich gas, and in some areas, a lot of dry gas comes with those liquids.Those liquids prices transfer globally, as manufacturers can use naphtha or NGLs in the manufacturing process, and if North America is able to export more liquefied petroleum gases (LPG), that matters.
“Oil prices influence naphtha prices,” Constantin said. “$100 oil means really expensive naphtha,” which is an an opportunity for North America to export more LPG to displace naphtha in crackers.
“When it’s a $100/bbl world, the opportunity to displace naphtha to markets around the world is quite big.” Gas traders may not think NGL prices are paramount to their business, but they are, she said.
For example, if oil/liquids prices are trading at $50/bbl, there’s not as much opportunity for North American supply, and that means it needs to find another home.
“All things considered, it could be bearish for prices because it’s all connected…gas, oil, LNG.” There still are long-term contracts around the world linked to oil prices, but gas balances in North America influence whether LNG is exported or whether a lot of supply has to find a home on the continent.
Gas Trading: It’s Complicated
The unconventional gas revolution has made global trading “more complicated than ever before,” Constantin said. “Shale has moved North American gas supply curve decisively to the right.”
Achieving a balance also more difficult than ever before because the massive gas supply now is being met by ever-more efficient producers.
For example, in the last five years or so, U.S. producers have sharply increased the resource potential at much lower prices. A $3.50/Mcf gas price five years ago could recover 870 Tcf. Better technology and improved efficiencies have changed the equation.
“We now can recover over 1,400 Tcf at the same price,” Constantin said. “We might see the rig counts go up and down...but believe me, the rocks are there and we have the logistics to get [it] out of ground.”
U.S. drilling activity also is “shifting in key plays,” which is an important driver for gas supply, she explained. Associated gas from the “four big oil plays,” the Eagle Ford and Bakken shales, the Niobrara formation and the big daddy Permian Basin has brought on an estimated 20 Bcf/d.
“That’s a big deal in a 75 Bcf/d market,” Constantin said of today’s average U.S. gas supply. And in turn, that means higher or lower oil prices “are really important.”
In the Eagle Ford and Permian alone, there’s an estimated 12-13 Bcf/d -- all within the state of Texas.
“That matters,” she said, “because when you talk about demand, where demand growth is coming,” the state will be a key supplier for Mexico and LNG exports overseas.
Meanwhile, the dry gas play that upended the overall market, the Marcellus/Utica shales, is not oil-driven. Gas production is on cruise control in Appalachia, with little holding it back except infrastructure and price signals.
BP, which publishes an annual global energy outlook, expects North American gas demand to continue growing to 2030. “North America is a big demand sink for natural gas, and it’s growing,” for the industrial and power demand sectors and for overseas exports.
Mexico will be a big target for the future, Constantin said.
A recent forecast by the U.S. Energy Information Administration foresees the United States becoming a net gas exporter in 2018, a shift already underway this year as gas exports exceeded imports in three of the first five months of 2017.
“That’s significant,” Constantin said.
In Mexico, with a plethora of pipeline infrastructure underway and more expected, the country could grow from a 4 Bcf/d export market for U.S. gas to 9 Bcf/d, she said.
Mexico gas output also has been on a steady decline, while demand is rising. “That’s real demand…” If Mexico were to move to 9 Bcf/d of capacity within a few years in a 75 Bcf/d U.S. market, “that’s material.”
She reminded the audience that “commodity markets work and price sends a signal. We’ve got lots of supply...In the end, pricing relationships that we know are going to continue to evolve...both domestically and internationally.”
http://www.naturalgasintel.com/articles/111422-north-americas-natgas-markets-working-with-paradigm-shift-underway-says-bp-exec
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All Eyes on Pending Challenges after Enviros Lose LNG Case
Aug 16, 2017 | E&E Energywire
By Ellen M. Gillmer
A federal court's rejection of a challenge to liquefied natural gas exports does not spell doom for similar lawsuits working their way through the courts, environmental lawyers say.
Yesterday's decision by the U.S. Court of Appeals for the District of Columbia Circuit to toss the Sierra Club's calls for federal regulators to take a closer look at greenhouse gas emissions associated with exports from a terminal in Freeport, Texas, is a definite blow to climate action advocates.
But, they say, it's not fatal to a collection of other cases teed up for oral argument before the same court in October.
"Nothing in today's opinion directly addresses those other cases," Sierra Club attorney Nathan Matthews told E&E News. "Our view is that additional questions need to be resolved in the cases that are currently set for argument in October."
At issue is the Department of Energy's consideration of indirect greenhouse gas emissions when it approves LNG exports from new terminals that have cropped up around the country.
Environmentalists have pushed the government to more closely analyze impacts from the production of the natural gas that feeds the projects, pointing to National Environmental Policy Act obligations to consider direct, indirect and cumulative impacts.
After losing several challenges against the Federal Energy Regulatory Commission, which oversees terminal construction, environmental groups turned their sights on DOE, which handles applications for exports to countries that do not have free-trade agreements with the U.S.
Factual distinctions
Yesterday's Freeport LNG (FLEX) ruling was the first major decision in a line of cases that raise many overlapping claims.
Writing for a three-judge panel, Obama appointee Judge Robert Wilkins agreed with DOE that gas production uncertainties made it too difficult to precisely analyze greenhouse gas emissions that could result from increased exports.
"The Department was not required to 'foresee the unforeseeable,'" Wilkins wrote (Greenwire, Aug. 15). "Its determination that an economic model estimating localized impacts would be far too speculative to be useful is a product of its expertise in energy markets and is entitled to deference."
Three more LNG cases against DOE — challenging exports from Corpus Christi, Texas; Sabine Pass, La.; and Cove Point, Md. — are set for oral argument on Oct. 18 in the D.C. Circuit.
Matthews, the Sierra Club lawyer, maintained that the pending LNG export challenges still have a strong case before the D.C. Circuit, largely because of factual distinctions.
He noted, for example, that Sierra Club's challenge to exports from Maryland's Cove Point LNG terminal includes information about contracts with natural gas suppliers that could sway a court's acceptance of DOE's argument that production impacts are too speculative to analyze.
He declined to comment on whether the group will seek a rehearing in the Freeport case.
Uphill battle?
Others have put tougher odds on the next group of LNG challenges.
The American Petroleum Institute, which has intervened to fend off environmental challenges to exports, celebrated the Freeport decision and its potential impacts on future cases.
In a statement, API's Marty Durbin said the decision was "great news for other planned LNG export projects around the country."
ClearView Energy Partners analyst Christi Tezak said this week's decision does not bode well for the other cases.
"We think that Sierra Club's chances of forcing reconsideration of the NEPA reviews of DOE's license approvals may fail as well, given the court's rationale in today's FLEX ruling," she wrote in a memo.
She noted that the Cove Point case includes very similar arguments about DOE's public interest consideration for LNG exports but that the other two cases rely on a slightly different analysis.
"We will be watching to see whether argument in these cases suggests that the Sierra Club's subsequent appeals resolve the deficiencies enumerated by the court today, or whether, like FERC's reviews, the DOE's license approvals will stand," she said.
University of California, Berkeley, law and public policy lecturer Steven Weissman, who has researched how agencies can account for the climate impacts of natural gas, agreed that the Freeport decision may create a new hurdle.
"The fact that this decision was issued will have a tendency to perhaps shift the burden a little bit more in the other cases: Why should this case be any different from the first Sierra Club case?" he said, describing the judges' possible approach.
He added, however, that specific factual differences in the cases could be enough to set them apart — an outcome he would support.
"There seems to be a consistent willingness on the part of courts and the part of agencies to just assume beneficial outcomes from expanded use of natural gas, and that seems to color the assessment you get out of these agencies and out of the courts," he said.
https://www.eenews.net/energywire/2017/08/16/stories/1060058832
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Blackstone Bets $7B on Rising Production
Aug 16, 2017 | E&E Energywire
Blackstone Group LP is betting $7 billion on the future growth of U.S. natural gas production.
The New York-based private equity firm has made investments totaling roughly $7 billion in oil fields, pipelines and a natural gas terminal.
The latest investment was a $1.57 billion stake in Energy Transfer Partners LP's troubled Rover pipeline project (Energywire, Aug. 3).
David Foley, CEO of Blackstone Energy Partners, said the firm's wager is largely dependent on rising production volumes in West Texas, Appalachia and Louisiana.
"We're betting on which basins are going to be the winners," Foley said.
Blackstone joins several other private equity firms that have embraced natural gas investments following the rise of production techniques such as hydraulic fracturing (Ryan Dezember, Wall Street Journal, Aug. 15). — MJ
https://www.eenews.net/energywire/2017/08/16/stories/1060058806
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Trump Signs Order to Speed Infrastructure Construction
Aug 16, 2017 | AP (in The Washington Post)
By Joan Lowy and Michael Biesecker
President Donald Trump said Tuesday he has signed a new executive order intended to make more efficient the federal permitting process for construction of transportation, water and other infrastructure projects without harming the environment.
Trump’s order includes revoking an earlier executive order signed by President Barack Obama concerning projects built in flood plains, White House officials said. The Obama order required that such projects built with federal aid take rising sea levels into account. Trump has suggested the predicted risks from sea level rise driven by climate change are overblown.
Describing his action, Trump said projects will still be subjected to environmental safeguards.
“It’s going to be quick, it’s going to be a very streamlined process,” Trump said. “And by the way, if it doesn’t meet environmental safeguards, we’re not going to approve it. Very simple. We’re not going to approve it.”
Building trade groups had urged Trump to revoke the flood plain order, saying it was overly bureaucratic and increased the cost of projects. The Obama order was especially unwieldy because it didn’t standardize across the government how sea level rise was to be taken into account, which left each federal agency to come up with its own standards, said Jimmy Christianson, an attorney with the Associated General Contractors.
A recent draft of an upcoming report from scientists representing 13 federal agencies say sea levels along U.S. coastlines could rise by more than one foot on average by 2050, potentially more in the Northeast and western Gulf of Mexico. A projected increase in the intensity of hurricanes in the North Atlantic will increase the probability of “extreme coastal flooding.”
Environmentalists said Tuesday that ignoring the reality of the Earth’s changing climate is shortsighted.
“What this order will do is ensure that we will waste more taxpayer money because federal agencies will no longer have to consider long-term flood risks to federally funded infrastructure projects,” said Jessica Grannis, who manages the adaptation program at the Georgetown Climate Center.
The president, speaking at a news conference at Trump Tower in New York, said it can cost hundreds of millions of dollars and 17 years to approve an ordinary highway project because of burdensome regulations. Under Trump’s order, agencies must complete environmental reviews of projects within two years on average. Trump signed another executive order on streamlining environmental and public reviews of infrastructure projects his first week in office.
“We used to have the greatest infrastructure anywhere in the world. And today we’re like a third-world country,” Trump said, using a term referring to the economically developing nations of Africa, Asia and Latin America.
Transportation Secretary Elaine Chao has said that regulations, not a lack of funding, are a primary holdup faced by transportation infrastructure projects. But a Treasury Department report released earlier this year found that “a lack of public funding is by far the most common factor hindering completion” of major transportation and water infrastructure projects.
Democrats have said the administration would be better off implementing streamlining provisions already in law than attempting new efforts. Congress passed transportation funding laws in 2012 and 2015 with dozens of streamlining provisions.
A report by the Transportation Department’s inspector general this spring found that although the department had completed work necessary to implement a majority of the 42 streamlining provisions in the 2012 law, they had still not been implemented because regulators had to make changes to comply with the requirements of the 2015 law.
Shannon Eggleston, the American Association of State, Highway and Transportation Officials’ program director for environment, said there is still room to make adjustments to the processes for complying with laws protecting endangered species and air quality that won’t hurt the environment.
https://www.washingtonpost.com/politics/trump-signs-order-to-speed-infrastructure-construction/2017/08/15/dffb4318-81f9-11e7-9e7a-20fa8d7a0db6_story.html?utm_term=.fbfea1b861bd
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Trump Promises Rapid Regulatory Review on Infrastructure Projects
Aug 16, 2017 | E&E Energywire
By Peter Behr
President Trump renewed his pledge from January to speed federal approval of major infrastructure development, issuing an executive order yesterday that will put a single federal agency in charge of expediting environmental and other regulatory reviews for each priority project.
At a press conference at Trump Tower in New York City, Trump held up a 5-foot-long paper flow chart that he said described the current maze of pre-construction federal reviews and approvals. "One agency alone can stall a project for many years," if not decades, Trump said.
"This over-regulated permitting process is a massive self-inflicted wound on our country. Disgraceful," he said.
"If it doesn't meet environmental safeguards, we're not going to approve it. Very simple," he said, but he emphasized that his foot was reaching for the accelerator, not the brake. Agencies will be required to streamline reviews, he said. "We're going to get infrastructure built quickly, inexpensively, relatively speaking, and the permitting process will go very, very quickly. No longer will we tolerate one job-killing delay after another."
The White House said the policy sets a two-year goal for completion of the permitting process and "creating accountability for federal agencies involved in the permitting process."
Transportation Secretary Elaine Chao, who stood next to Trump at the announcement yesterday, said, "The average environmental review takes nearly five years, and infrastructure projects can be subject to at least 65 different requirements and permits." She said the Transportation Department has already identified "more than two dozen policies and rules that will streamline project delivery and environmental permitting."
The commitment was welcomed by Rep. Rob Bishop (R-Utah), chairman of the House Natural Resources Committee. "It's encouraging to have a president who understands that regulatory reform is a precondition for any successful infrastructure policy," Bishop said in a statement. Trump's action helps set the table for a score of legislative actions aimed at narrowing regulatory reviews, Bishop added, ranging from the "Bureau of Reclamation Water Project Streamlining Act" and the "American Soda Ash Competitiveness Act" to an act to expand Alaskan hydropower tnfrastructure.
Trump's move was denounced by leading environment groups just as quickly.
"The Trump administration should recognize that worsening climate impacts, including more frequent and more powerful storms, require a new national commitment to safer buildings, smarter siting and more investment in natural as well as other 'green infrastructure' to reduce emissions and increase resiliency," said Elgie Holstein, senior director of the Environmental Defense Fund.
"From Louisiana to New Jersey, from Miami to Missouri, destructive flooding that was once considered rare is becoming more likely and increasingly routine, and it is foolhardy to steer federally funded construction projects to ignore these trends," he said.
Alex Taurel, deputy legislative director of the League of Conservation Voters, said, "This order will put people throughout the country at risk by allowing developers to ignore potential hazards while muzzling the public's ability to weigh in on potentially harmful projects near their homes. Furthermore, this executive order lets the government off the hook when it comes to constructing projects that should withstand flooding, putting lives at risk for the sake of speed over safety."
More details about Trump's infrastructure strategy did not emerge yesterday. Although he invited questions about the executive order, he jumped into a press conference fray with reporters to defend his statements about the violence in Charlottesville, Va., on Saturday.
He said his initial decision to blame both sides and not condemn American Nazi and white extremists' actions was based on caution. "I wanted to make sure unlike most politicians that what I said was correct. Not make a quick statement," said Trump, whose signature is the inflammatory rapid-fire tweet. He repeated his position that some people on both sides of the confrontation were bent on violence.
The White House appeared to reflect a reality that a large new federal bankroll for infrastructure projects is not being offered. The policy "will change the paradigm of the Federal government's involvement in infrastructure by encouraging self-help, leveraging the incredible potential for investment from the private sector, making smarter federal investments, and streamlining project delivery," a White House statement said.
The Congressional Budget Office reported earlier this year that federal, state and local government spent $416 billion on highways, utility water and waste water projects, mass transit, and rail in 2014, about a quarter of that from Washington. The amount represented about 2.4 percent of the U.S. gross domestic product, a level that has been relatively stable for three decades, CBO said.
"While protecting the environment, we will build gleaming new roads, bridges, railways, waterways tunnels and highways," Trump said. That list did not include energy projects, which have been backed by tax subsidies and loan guarantees but are typically funded by customers' energy bills.
According to a survey by the C Three Group, energy projects have not been languishing. Investment in U.S. electric transmission projects increased 5.5 percent, twice the expansion rate for the entire U.S. economy. Investments in substations — facing federal regulations to strengthen defenses against cyber and physical attacks — jumped 16.9 percent from 2015 to 2016, the survey said.
Despite the spurt of activity, energy developers have long pushed for faster regulatory review. The industry's projects have prompted some of the most controversial and hard-fought permitting battles since the enactment of the National Environmental Policy Act in 1970, with its requirement for environmental reviews of major federal projects.
In January, just after his inauguration, Trump made his first pledge to speed up the NEPA process (Energywire, Jan. 26).
"NEPA has been for many, many years an impediment to timely completion of projects, for a great many reasons," said Diane Katz, senior research fellow in regulatory policy at the Heritage Foundation. The law gives too much discretion to federal agencies, she said in January.
Alison Cassady, director of domestic energy policy at the Center for American Progress, commented then, "If the unstated purpose of the Trump program is to shortcut the NEPA environmental reviews, it will backfire.
"Doing a poor or roughshod review expedites nothing, because then it will be subject to legal challenge and probably lose," she said.
https://www.eenews.net/energywire/2017/08/16/stories/1060058829
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Nominees Submit Identical Answers on Climate
Aug 16, 2017 | E&E Climatewire
By Umair Irfan
The nominees for the Department of Energy's undersecretary positions are singing the same tune with their views on climate change.
In written responses to questions from members of the Senate Energy and Natural Resources Committee, science undersecretary nominee Paul Dabbar and energy undersecretary nominee Mark Menezes provided identical answers about climate change.
"I believe the climate is changing. Some of it is naturally occurring," they both wrote in separate statements in response to questions from ranking member Maria Cantwell (D-Wash.).
When asked how they would address climate change, both responded, "I believe a strong, vibrant economy is the best way to mitigate any impacts from climate change."
Both nominees cleared the committee by a voice vote, with Sen. Bernie Sanders (I-Vt.) standing opposed.
Dabbar and Menezes gave identical answers to Sanders' climate questions, as well. They both wrote, "I believe that the climate is changing and that we have some impact on it," verbatim several times.
Some observers said it's not unusual that Dabbar and Menezes are reading from the same script.
"I'm sure it's frustrating for Senators to see the cut-and-paste approach to these answers, but it's neither uncommon nor surprising," former DOE chief of staff Jeff Navin said in an email. "But what is interesting is that some of the cabinet level nominees had slightly different positions on some of these questions."
A House Democratic staffer who was not authorized to speak to reporters explained that political appointees at DOE typically handle nominees' responses to questions for the record.
"This is likely just what political appointees in [the] DOE [Office of] Congressional Affairs [and Intergovernmental Affairs] and perhaps elsewhere determined were the bare minimum acceptable answers, and they didn't bother changing the wording of the answers to even make it appear as if these responses were coming directly from the nominees themselves," the staffer said. "It's just more blatantly lame now because these nominees happen to be up for consideration simultaneously."
A former DOE official who declined to be named confirmed that agency staff typically write answers on behalf of nominees.
DOE did not respond to requests for comment.
Dabbar and Menezes did have the chance to distinguish themselves.
Committee Chairwoman Lisa Murkowski (R-Alaska) noted in her questions that there are only two DOE employees in her state. Menezes wrote that he would consider doubling the number and proclaimed his support for oil and gas drilling on indigenous land.
"I support energy development on Native lands, including Alaska Native lands," Menezes wrote. "If confirmed, I will be a strong advocate for energy development on such lands."
Cantwell, meanwhile, asked Dabbar about the scope of his job at the department, and he acknowledged that he wasn't sure.
"I am not familiar with any specific plans for reassignment of duties and without being an Administration official at this time, I do not think it is appropriate for me to speculate on how the functions might be assigned," Dabbar said.
The job responsibilities for the undersecretaries for science and energy are a recurring theme for Dabbar and Menezes because their nominations undo an organizational change at DOE under the previous administration (Climatewire, July 31).
Former DOE officials expressed concern as to why these changes were made and uncertainty as to how responsibilities would be divided for critical functions like basic science research, pilot projects and nuclear waste management.
For his part, Energy Secretary Rick Perry is in Washington state this week. He toured DOE's Pacific Northwest National Laboratory with Cantwell and Rep. Dan Newhouse (R-Wash.) yesterday. A visit to DOE's nuclear waste cleanup program at the Hanford Site is also on the agenda.
https://www.eenews.net/climatewire/2017/08/16/stories/1060058834
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