Preview Newsletter
ACC PM Clips Report 11/30/17
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(ACC Mentioned) Prices on the Rise for PP, Nylon and Recycled PET
Nov 30, 2017 | Plastics News
By Frank Esposito
North American polypropylene resin prices ticked up another penny per pound in November, while regional prices for nylon 6 and 6/6 resins and some recycled grades of PET bottle resin have increased in recent months as well. -
(ACC Mentioned) American Chemistry Council Backs Manchin in New Ad
Nov 30, 2017 | Politico Pro - Whiteboard
By Kevin Robillard
The American Chemistry Council is out with a new ad praising Democratic West Virginia Sen. Joe Manchin, who is facing a tough reelection bid in 2018. -
Too Little, Too Late: Why SNURs Alone are Not a Sufficient Alternative to Consent Orders for New Chemicals
Nov 30, 2017 | EDF Health Blog
By Richard Denison
The Environmental Protection Agency (EPA) is in the process of making some major changes to its policies and practices governing new chemical reviews. This post discusses one of the most troubling ones. -
EPA to Issue Final Determination on Whether to Revise Current Size Standards for Small Manufacturers and Processors under TSCA Section 8(a)
Nov 29, 2017 | National Law Review
By Lynn L. Bergeson and Margaret R. Graham
On November 30, 2017, the U.S. Environmental Protection Agency (EPA) is scheduled to publish in the Federal Register a notice of its final determination on whether revision to the current size standards for small manufacturers and processors, which are used in connection with reporting regulations under the Toxic Substances Control Act (TSCA) Section 8(a), is warranted. -
Carpet Manufacturers 'Stepping Up Efforts' on Ingredient Disclosure
Nov 30, 2017 | Chemical Watch
By Tammy Lovell
Leading US carpet manufacturers are stepping up efforts to communicate the components of their products — and their relationship to human and ecological health — according to US trade association the Carpet and Rug Institute. -
US NGO Highlights Drop in Toys Recalled for Excessive Lead
Nov 30, 2017 | Chemical Watch
By Tammy Lovell
No toys were recalled for containing excessive levels of lead over the last year, compared to 11 products the previous year, according to a report by the US Public Interest Research Group. -
Choosing a Safe Mattress for Your Baby's Crib
Nov 30, 2017 | EWG
By Olga Naidenko and Tasha Stoiber
During the first few years of their lives, infants can spend most of their time sleeping or crawling in the crib. Choosing children’s products that are good for air quality in the baby’s room can be a difficult task. To help with that choice, EWG talked with Dr. Brandon E. Boor, an assistant professor of civil engineering at Purdue University. -
Regulatory Agencies Reluctant to Use Mathematical Models of Organisms
Nov 30, 2017 | Chemical Watch
Regulatory agencies remain reluctant to use physiologically based kinetic (PBK) models, according to an expert survey by the European Commission's Joint Research Centre (JRC). -
Survey Shows Strong Support for Unified List of GHS Classified Substances
Nov 30, 2017 | Chemical Watch
There is strong support for work to continue on a list of chemicals with harmonised, non-binding GHS classifications, according to a Chemical Risk Manager survey. -
EU Green Criteria Backs Need for Flame Retardants, Says Trade Group
Nov 30, 2017 | Chemical Watch
By Tammy Lovell
The European Flame Retardant Association (Efra) said it welcomed the EU Green Public Procurement (GPP) criteria for furniture. -
REACH New Substance Registrations Estimate 'May Fall Short'
Nov 30, 2017 | Chemical Watch
By Luke Baxton
Echa has revealed that the number of new substances registered for the 2018 REACH registration deadline is less than expected and may not meet estimated figures. -
New Companies, Hurricanes Play Opposing Roles in NGI’s 3Q2017 NatGas Marketer Survey
Nov 30, 2017 | Natural Gas Intelligence
By David Bradley
A pair of first time entries with international ties spiced up NGI's 3Q2017 Top North American Gas Marketers Ranking, but the negative impacts of Hurricane Harvey helped drag the numbers lower among some of the survey's heaviest hitters. -
High Days and Holidays for US Crude Flows
Nov 30, 2017 | Platts Blog
By John-Laurent Tronche
The floodgates have opened. The game has changed. The possibilities are endless. This is the worst — absolutely. Choose any of those expressions or phrases to explain some aspect of the global oil market — a market featuring US exports, OPEC cuts, an improving world economy, yet declining oil demand long-term. -
Regulators Suspect Construction Damage Caused Keystone Spill
Nov 30, 2017 | E&E Energywire
By Jenny Mandel
Mechanical damage to the Keystone pipeline that occurred when it was built may be responsible for the leak of 5,000 barrels of crude oil into a rural part of South Dakota earlier this month, federal officials say. -
Report Warns of Hacking Risk to Refining Sector
Nov 30, 2017 | E&E Energywire
By Blake Sobczak
The refining industry's rush to adopt digital technology could open doors for hackers, according to a report this week from the Deloitte consultancy. -
EPA Finds 3 Barrel Plants Broke Chemical Laws
Nov 30, 2017 | E&E Greenwire
U.S. EPA announced yesterday that three industrial plants in Wisconsin broke federal laws regulating hazardous chemicals. -
Interior IG Faults Cleanup Project in San Joaquin Valley
Nov 30, 2017 | E&E Greenwire
By Michael Doyle
Interior Department auditors are raising "significant" concerns about the management of a high-profile groundwater cleanup project in California's San Joaquin Valley, a new advisory reveals. -
Md. Plant Dumped Far More Nitrogen Than Allowed — Report
Nov 30, 2017 | E&E Greenwire
One of the largest wastewater plants in Maryland dumped four times more nitrogen and phosphorus into the Chesapeake Bay watershed last year than permitted, according to an environmental group. -
Do Not Economically Re-Regulate Freight Railroads
Nov 30, 2017 | The Progress Index
By Brett Harrell, Paul C. Jablonski, and Christopher Reilly
As the fall grain harvest wraps up and we head toward the holiday season, the importance of efficient, reliable transportation is front and center. And though infrastructure investment has been discussed as a priority of the Trump administration and Congress, it remains a distant possibility. -
Nominee Breaks with Trump: Humans are Main Cause of Climate Change
Nov 30, 2017 | The Hill - E2 Wire
By Avery Anapol
President Trump’s pick to lead the nation’s top atmospheric office said in his confirmation hearing Wednesday that he agrees that humans are the primary cause of climate change, according to The Washington Post. -
'Self-Censorship' as 'Climate Change' is Omitted from Grants
Nov 30, 2017 | E&E Climatewire
Scientists seeking grant funding seem to be self-censoring the phrase "climate change" in their grant summaries.
Industry and Association News
LCSA News
Chemical Management News
Energy News
Chemical Security News
Transportation and Infrastructure News
Environment News
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(ACC Mentioned) Prices on the Rise for PP, Nylon and Recycled PET
Nov 30, 2017 | Plastics News
By Frank Esposito
North American polypropylene resin prices ticked up another penny per pound in November, while regional prices for nylon 6 and 6/6 resins and some recycled grades of PET bottle resin have increased in recent months as well.
The 1-cent PP hike marked the second straight month that market prices had moved up by that amount. Prices had jumped 7 cents per pound in September as the market reacted to temporary shortages caused by Hurricane Harvey.
North American PP sales grew just over 1 percent in the first 10 months of 2017, according to the American Chemistry Council. Domestic sales grew 2.5 percent in that period, but were softened by a 32.5 percent plunge in exports.
Domestic sales of PP into injection molded housewares surged almost 5 percent for that 10-month stretch. PP sales into sheet jumped almost 9 percent.
Nylon prices rise
Higher feedstock costs and strong demand from the automotive market sent nylon 6 prices up an average of 6 cents per pound and nylon 6/6 prices up an average of 8 cents per pound since Sept. 1, according to market sources contacted by Plastics News.
North American nylon 6 and 6/6 prices already had surged a total of 18 cents this year.
For recycled PET, a 3-cent increase for clear pellets was fueled, in part, by higher demand and concerns surrounding an anti-dumping petition filed against U.S. PET imports, according to the PetroChemWire LLC consulting firm in Houston.
Strong demand partially has resulted from end users meeting end-of-year production quotas for bottles and packaging with recycled content, the report added.
http://www.plasticsnews.com/article/20171130/NEWS/171139989/prices-on-the-rise-for-pp-nylon-and-recycled-pet
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(ACC Mentioned) American Chemistry Council Backs Manchin in New Ad
Nov 30, 2017 | Politico Pro - Whiteboard
By Kevin Robillard
The American Chemistry Council is out with a new ad praising Democratic West Virginia Sen. Joe Manchin, who is facing a tough reelection bid in 2018.
"Working for bipartisan solutions, Sen. Joe Manchin is fighting for West Virginia," the narrator says in the ad, citing Manchin's work on the economy, infrastructure, coal and the opioid epidemic. "Call Sen. Manchin and tell him to keep fighting for real results,"
The American Chemistry Council has also aired ads backing Wyoming Sen. John Barrasso, North Dakota Sen. Heidi Heitkamp, Nevada Sen. Dean Heller and Michigan Sen. Debbie Stabenow in recent weeks.
Watch the ad here.
West Virginia Attorney General Patrick Morrisey, Rep. Evan Jenkins and coal magnate Don Blankenship are all running for the GOP nomination to challenge Manchin.
https://www.politicopro.com/energy/whiteboard
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Nov 30, 2017 | EDF Health Blog
By Richard Denison
The Environmental Protection Agency (EPA) is in the process of making some major changes to its policies and practices governing new chemical reviews. This post discusses one of the most troubling ones.
As I have previously described, last year’s Lautenberg Act made extensive changes to section 5 of the Toxic Substances Control Act (TSCA), which governs the review of new chemicals prior to their manufacture and use. Among these changes is a requirement that EPA must evaluate potential risks, and mitigate potential unreasonable risks, of a new chemical under its “conditions of use,” which the new law defines to include “reasonably foreseen” circumstances of production, processing, distribution, use or disposal, as well as those intended by the company submitting notice of the new chemical to EPA. If EPA identifies potential risk or significant exposure or lacks sufficient information on a new chemical, it must issue an order prohibiting or limiting the conditions of use of the chemical in order to mitigate any unreasonable risk.
After passage of the Lautenberg Act until recently, and in keeping with the new law, if EPA’s review identified risk concerns relating to conditions of use beyond those strictly identified by a company submitting a new chemical notice to EPA, the agency made a “may present an unreasonable risk” finding and pursued development of a consent order with the company sufficient to ameliorate those concerns. (While EPA has authority to issue unilateral orders, it typically negotiates with the company to arrive at a consent order that both parties sign.)
Now EPA is indicating it will instead make a “not likely to present an unreasonable risk” finding for the intended conditions of use, and says it can address any concerns over reasonably foreseen uses without issuing an order by developing only a significant new use rule (SNUR). This “SNUR-only approach” is inconsistent with the law, a matter I won’t discuss further here. However, it also raises a host of policy concerns, some of which I lay out in this post.
The SNUR-only approach EPA is now deploying differs dramatically from and provides far less risk protection than would result from it simply doing what the law requires: using orders, with SNURs as backup.
There are ample reasons why Congress called on EPA to use orders to address concerns and then use SNURs as backup: Orders (including consent orders) and SNURs are not created equal. This post discusses 12 key differences, with respect to:
legal requirements available in a consent order vs. a SNUR;
the scope of risk review under a consent order vs. a SNUR;
the requirements for issuing a consent order vs. promulgating a SNUR; and
the incentives and disincentives companies face under a consent order vs. a SNUR
(Spoiler alert: Deep dive ahead. Let me apologize to and warn readers in advance that this post gets rather into the weeds, as the issues are complicated and the details are important.)
Legal requirements available in a consent order vs. a SNUR
A consent order imposes legally binding conditions on the company that signs it. Where EPA identifies potential risk or a lack of sufficient information, TSCA requires that it impose binding conditions that must regulate the chemical “to the extent necessary to protect against an unreasonable risk of injury to health or the environment.” Even where a SNUR defines a significant new use to be any activity outside of those same conditions, the conditions are not binding and the only requirement on a company is to notify EPA prior to engaging in that significant new use (by filing what is called a Significant New Use Notification, or SNUN). The SNUN then undergoes a review similar to that for a premanufacture notification (PMN). Only if that review leads to a risk finding, an exposure-based finding, or an insufficient information finding can EPA impose binding conditions – which would likely be done through a consent order applicable to the SNUN submitter. (Note also that the provisions in a PMN are not legally binding on the submitter; only if codified in a consent order would they be binding.)
Consent orders are readily enforceable because the party subject to a consent order is known and has consented to abide by the conditions of it. A consent order must also be posted visibly within any workplace where activities subject to the consent order are taking place. In contrast, EPA has very limited means to know if companies are complying with the conditions of a SNUR or should have, but did not, file a SNUN.
Testing requirements cannot be imposed through SNURs, but can be through consent orders. Section 5 of TSCA requires EPA to issue an order whenever “the information available to the Administrator is insufficient to permit a reasoned evaluation of the health and environmental effects of a chemical substance,” without limitation to a company’s intended uses, and section 5 orders provide a critical direct mechanism for EPA to address the data gaps that characterize the great majority of PMNs.
Given that only about 10-15% of PMN submissions include chemical toxicity and/or fate data as part of the submission, EPA is typically making determinations based on insufficient data about the PMN substance, often relying exclusively on analogs. There is no current ability to quantitatively evaluate how predictive an analog is of the PMN substance’s properties; at best EPA can make a qualitative determination. Relying on a SNUR instead of a consent order provides no opportunity either to generate new information or to use that information to reassess EPA’s initial evaluation based on limited information.
Consent orders can be reopened and revised based on new information (including results of required testing). If testing shows a chemical is more toxic than initially thought, EPA can tighten conditions in the order. No such option exists with a SNUR: If companies are engaging in activities that do not trigger notification under a SNUR but later those activities are found to present potential or actual risk, those activities cannot be brought under the original SNUR or addressed by a new SNUR, because they are now ongoing uses. EPA’s only option at that point would be to pursue action under section 6 of TSCA: designate the substance as high-priority and undertake a risk evaluation.
In contrast, a consent order includes both actual restrictions to protect against the unreasonable risk and a “reopener” provision: If testing indicates that EPA underestimated the magnitude of the unreasonable risk, then the terms of the consent order allow EPA to modify it to require new restrictions to protect against the unreasonable risk. In the SNUR-only scenario, because there is no testing requirement, EPA will not even be able to learn whether its initial estimate of the risks was accurate.
Scope of risk review under a consent order vs. a SNUR
Under the reforms made by the Lautenberg Act, Congress required that EPA subject new chemicals to risk reviews and risk determinations that extend to reasonably foreseen as well as intended conditions of use. The law requires an order to be issued following a risk finding, an exposure-based finding, or an insufficient-information finding for either category of conditions of use.
In contrast, a SNUR-only approach at best defers or evades altogether the risk or related finding requirement with respect to reasonably foreseen uses. This is because a risk or related finding is not required to be made in order for EPA to issue a SNUR, only consideration of certain factors delineated in TSCA section 5(a)(2). A SNUN submitted in response to a SNUR undergoes a review similar to that for a PMN. If EPA chooses to similarly limit that review only to the new intended use(s) identified by the submitter of the SNUN, it may yet again not make a risk finding, an exposure-based finding, or an insufficient information finding, and hence again not issue a consent order imposing binding conditions on that company.
To summarize and bring together the points made above: Under the Lautenberg Act, EPA’s review of a new chemical requires a risk review and risk determination, whereas EPA may issue a SNUR without such a review or determination. Similarly, the terms of an order issued under section 5 of TSCA must meet a specific, protective risk standard: EPA must issue an order that regulates the chemical “to the extent necessary to protect against an unreasonable risk of injury to health or the environment, … including an unreasonable risk to a potentially exposed or susceptible subpopulation.” In contrast, the terms of a SNUR, standing alone, do not need to meet any specific risk standard.
Congress gave EPA a mandate under the law to consider both intended and reasonably foreseen uses of a new chemical in deciding whether conditions, to be imposed through an order, are warranted. It did not intend for EPA to pursue a more piecemeal approach under which EPA evaluates only intended uses initially and promulgates a SNUR to address any concerns over reasonably foreseen uses.
In addition, under its SNUR-only approach, it appears EPA is warping the concepts of intended vs. reasonably foreseen uses. When a PMN is submitted and EPA finds potential risks based on the scenarios in the PMN, EPA apparently now typically works with the company to identify additional conditions to include in the PMN to protect against the risks. In its SNUR-only approach, EPA is de facto redefining the intended uses to be inclusive of the additional PMN conditions, and redefining the intended uses without those additional conditions (i.e., what the submitter originally intended and was in the original PMN) as the reasonably foreseen uses. As previously noted, however, the provisions in a PMN are not legally binding on the submitter; only if codified in a consent order would they be binding.
The result is that EPA will typically make a “may present” finding for intended uses only if there is no feasible way for the company to add conditions to its PMN sufficient to protect against the risk. In other words, EPA and the submitter iterate the process – with EPA effectively serving as a free consultant or coach to the PMN submitter. The process effectively keeps moving the goal posts until a “not likely” finding can be made that avoids EPA ever having to make the initial “may present” finding and issue an order, clearly not what Congress intended. And crucially, even these additional conditions added to the PMN are not binding on the PMN submitter in the absence of an order.
EPA appears intent on further warping Congressional intent by asserting as a new operating principle that it is redefining “reasonably foreseen” to mean “probable,” thereby setting a higher evidentiary bar EPA would have to meet than Congress intended in order to include in its review ways in which a new chemical could reasonably be used after it enters commerce.
Relying on a SNUR instead of a consent order may result in EPA only analyzing the specific intended use(s) of the new chemical in isolation and never analyzing the chemical substance comprehensively, whereas section 5 of TSCA contemplates that a new chemical substance will receive a comprehensive analysis based on sufficient information, to the extent practicable. That is, deferring the review of potential risks arising from reasonably foreseen uses to a setting that is removed in time and divorced from the risk review of intended uses provides no assurance that EPA will ever conduct a robust review of potential risk under all of the new chemical’s conditions of use.
In addition, the specific proposed use in the PMN only reflects the knowledge that the PMN submitter has of its market and downstream users at the time of PMN submission, which may be quite limited and not reflect the full range of potential uses and users. If EPA only looks narrowly at the conditions of use in the PMN to make its determination, its review and determination may well not reflect or be representative of the actual conditions of use once the chemical enters commerce. Congress clearly intended for EPA to take a more expansive and prospective approach when reviewing new chemicals under reformed TSCA.
EPA proposes to relegate its consideration of any potential risk beyond that specifically presented by a PMN to a SNUR instead of protecting against those risks in an order. To even begin to achieve a sufficient level of protection, EPA would need to write a SNUR in a way that does not allow any activity that could present additional potential risk beyond the activities specified in the company’s PMN to occur without prior notification. Otherwise, EPA’s proposed approach will not provide a pathway to achieving protection comparable to that provided by an order (coupled with a SNUR) addressing reasonably foreseen conditions of use. This is because EPA will be allowing risks to occur (with no consequence) that extend beyond those it deemed acceptable when it determined that the PMN was not likely to present unreasonable risk. Consider, for example:
A PMN specifies a company will require its workers to use a respirator with an air protection factor (APF) of 1000. Unless the SNUR triggers notification if a company does not require its workers to use a respirator with the same level of protection, a “risk gap” will result.
A PMN specifies a company will produce 50,000 pounds of a chemical annually. If the SNUR does not set a volume trigger or sets a volume trigger that would allow more than 50,000 pounds of the chemical to be produced annually when aggregated across what could be multiple producers that are each in compliance with the SNUR, a “risk gap” will result.
In such cases, the SNUR-only approach would allow risk in excess of that EPA deemed “not likely” in reviewing the PMN. That excess risk – even though it by definition does not meet the “not likely” bar – will never be reviewed, let alone subjected to conditions, because the SNUR notification requirement will not be triggered.
The only way the SNUR-only approach could seek to prevent any “risk gap” would be to have the SNUR notification triggers so tightly aligned with the PMN specifications as to effectively lock in the conditions specified in the PMN, with any deviation whatsoever triggering notification. Otherwise, EPA will have conducted a new chemical review with an outcome insufficient to address the risks of the chemical’s reasonably foreseen uses, in clear violation of the law.
Requirements for issuing a consent order vs. promulgating a SNUR
While orders can simply be issued, SNURs must be promulgated through an involved process of rulemaking. This raises numerous uncertainties:
EPA’s designation of what constitutes a significant new use applies upon proposal of a SNUR. However, even upon proposal, that significant new use can be engaged in until the SNUR is finalized (assuming it is in fact finalized), at which point such activity must cease, either altogether or pending the outcome of EPA’s review of a subsequently-filed SNUN.
If there is a time gap between a PMN submitter’s commencement of manufacture (which puts the new chemical on the Inventory) and EPA’s proposal of a SNUR for that chemical, it runs the risk that a company (including the PMN submitter) could engage in the significant new use activity about which EPA is concerned. The company would then be able to argue that its activity negated EPA’s ability to propose the SNUR because that use would then be ongoing.
While EPA can try to promulgate a SNUR as a direct final rule, if anyone files, or notifies EPA of their intent to file, an adverse comment, EPA must withdraw the rule and propose it for public comment.
Once a SNUR is final, it can be judicially challenged, with any final resolution significantly delayed and subject to significant uncertainty.
While some EPA staff have informally suggested they will seek to finalize a SNUR before making a “not likely” finding that allows the PMN submitter to commence manufacture, EPA has not made any public commitment to this approach nor identified any means to ensure this will happen. Nor has it addressed the scenario of what happens in the event of an adverse comment being filing on a direct final SNUR or a judicial challenge to the final SNUR.
In contrast to the SNUR-only approach, a consent order includes provisions that bind the PMN submitter, and indirectly its downstream users, to the conditions of the order throughout the interval until a SNUR is promulgated.
Seeking to address a new chemical’s risks through rulemakings rather than orders has several additional downsides.
While, under an informal agreement with EPA, OIRA does not currently call in SNURs for regulatory review, that agreement could be changed at any point. OIRA has considerable discretion to determine what constitutes a significant regulatory action and is subject to an OIRA-managed interagency review.
The extent to which Trump’s regulatory executive orders apply to SNURs is highly uncertain. Certain aspects apply to all rules, and the EOs give OIRA considerable discretion in deciding which provisions apply to which rules.
Administrator Pruitt has included SNURs among the potential regulatory actions at EPA that must be logged into his new EPA regulatory database upon initiation, signaling that SNURs may be subject to greater scrutiny under this Administration.
Finally, the anti-regulatory climate that prevails at present will likely mean that all new proposals to promulgate rules will be closely scrutinized.
Incentives and disincentives under a consent order vs. a SNUR
If EPA fails to ensure that a final SNUR is in place before it provides a PMN submitter with a “not likely to present an unreasonable risk” finding, and EPA instead makes that finding in advance of a finalized SNUR and allows the submitter to proceed to commence manufacture, that company might have a strong incentive to oppose, seek to delay or weaken, or even judicially challenge a SNUR applicable to its chemical. This is because that SNUR would apply to the submitter and could constrain its future ability to expand use of its new chemical. And because the company would not be subject to a consent order, it would not already be constrained.
Companies have long complained that SNURs “stigmatize” their chemicals, which would also add incentives for the PMN submitter to resist promulgation of a SNUR. The company would have a number of means by which it could seek to prevent, delay or weaken the SNUR, including:
-preventing its issuance as a direct final rule by notifying EPA of its intent to file adverse comments;
-filing adverse comments;
-seeking to have OIRA subject the SNUR to interagency review;
-using its political influence with EPA management, the White House and Congress; and
-challenging the SNUR in court.
In contrast, a PMN submitter subject to a consent order would have significant incentive to support EPA’s promulgation of an accompanying SNUR, in order to “level the playing field” with its competitors who are not subject to the order.
Only through such a SNUR would its competitors likely be held to most of the same conditions that the submitter is already subject to through the consent order.
The Lautenberg Act contemplates that such SNURs would likely be promulgated, by requiring EPA, within 90 days of issuance of an order, to either initiate development of the SNUR or publish a statement indicating why one is not necessary [see TSCA section 5(f)(4)].
In conclusion, I hope this post makes abundantly clear how different the SNUR-only approach EPA is now proposing differs dramatically from and provides far less risk protection than would result from it simply doing what the law requires: using orders, with SNURs as backup.
http://blogs.edf.org/health/2017/11/30/too-little-too-late-why-snurs-alone-are-not-a-sufficient-alternative-to-consent-orders-for-new-chemicals/
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Nov 29, 2017 | National Law Review
By Lynn L. Bergeson and Margaret R. Graham
On November 30, 2017, the U.S. Environmental Protection Agency (EPA) is scheduled to publish in the Federal Register a notice of its final determination on whether revision to the current size standards for small manufacturers and processors, which are used in connection with reporting regulations under the Toxic Substances Control Act (TSCA) Section 8(a), is warranted.
The notice states that EPA has made its final determination that revision is warranted based upon three factors, listed below.
Its preliminary determination. EPA states in the notice that it preliminarily determined that a revision to the size standards is warranted “because of the magnitude of the increase in the [Producer Price Index (PPI)] since the last revision of the size standards and because the current annual sales standard is comparatively low given current revenue-based size standards developed by [the Small Business Administration (SBA)].” When EPA reviewed the change in the PPI for Chemicals and Allied Products between 1988 and 2015 it found that the PPI has changed by 129 percent, which far exceeds the 20 percent inflation index specified as a level above which EPA may adjust annual sales levels in the current standard if deemed necessary.
A review of the comments on the preliminary determination. EPA states that most commenters agreed with its preliminary determination that an update is warranted and several also provided their opinions on how the standards should be revised. EPA states the actual changes to the standards were out of the scope of this determination, but it will address those issues in the subsequent proposed rulemaking.
Feedback from consultation with the SBA. SBA’s Office of Advocacy substantively agreed with EPA’s preliminary determination (that a revision to the current size standards is warranted), but it had requested EPA to consider additional factors in reaching that conclusion which EPA did not. Specifically, the SBA wanted EPA to consider whether the standard is structured appropriately, and wanted EPA evaluate a broader set of factors related to firm and industry characteristics and percentage of firms impacted by Section 8 rules.
https://www.natlawreview.com/article/epa-to-issue-final-determination-whether-to-revise-current-size-standards-small
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Carpet Manufacturers 'Stepping Up Efforts' on Ingredient Disclosure
Nov 30, 2017 | Chemical Watch
By Tammy Lovell
Leading US carpet manufacturers are stepping up efforts to communicate the components of their products — and their relationship to human and ecological health — according to US trade association the Carpet and Rug Institute.
CRI president Joe Yarbrough told Chemical Watch that they were doing this through Health Product Declarations (HPDs) and certified Environmental Product Declarations (EPDs).
Mr Yarbrough's comments are in response to a recent report by the NGO Healthy Building Network (HBN), which called for the fundamental redesign of the carpet industry to eliminate toxic chemicals so that carpets can be more recyclable.
The HBN report claims that manufacturers consistently fail to fully disclose carpet ingredients and green certifications did not address some of the key substances of concern.
Mr Yarbrough said that carpet manufacturers "work with a variety of certification programmes to evaluate and verify the safety and sustainability factors of products, such as Cradle to Cradle and Declare".
He added that 95% of carpet meets the CRI's Green Label Plus programme. This sets standards and limits for indoor air quality and "ensures that customers are purchasing the very lowest emitting products on the market".Disclosure
In response to the report, Interface, the world's largest manufacturer of commercial carpet tile, said that it is the first in the industry to disclose product ingredients — through EPDs and HPDs — globally on its website.
Chief science and technology officer, John Bradford, told Chemical Watch that "the industry has followed suit in disclosure, but there is more work to be done to educate the market about specific materials of concern, especially where there is potential for exposure".
Interface has committed to having no negative environmental impact by 2020, part of which includes removing known harmful materials from its products.
"Through a global initiative, all of our designated materials of concern will be removed globally in early 2018, which keeps our loop clean and enables us to scale recycling to greater volumes," Mr Bradford said.
He added that while he agreed with the sentiment of the HBN report, he would like to see it place more emphasis on recycling.
"We believe that recycling is a critical piece of the puzzle and we would love to see the industry implement protocols and guidelines to ensure that it can scale up quickly and safely," he said.
As well as "working to drive recyclability" of its products, he said that Interface supported regulatory efforts to encourage carpet recycling, such as the California bill (AB 1158, Chu) which was signed into law in October. This mandates recycling 24% of post-consumer carpet waste by 2020, a doubling of the state's current carpet recycling rate.
CRI's Mr Yarbrough said that carpet is more complex to recycle than other products, because it is made from many materials that are bound together in different ways, "making it complicated to deconstruct, sort and process".
However he said "industry's resolve in this challenge is strong" and it was committed to "investing in innovation and sustainability, product health and safety and the careful use of natural resources".
The issue of removing hazardous chemicals from waste streams is a hot topic of discussion in Europe.
The European chemicals agency's (Echa) newly appointed head, Bjorn Hansen, said at his inaugural address to the European Parliament's Committee on Environment, Public Health and Food Safety (Envi) last month that the decision to have different regulations for chemicals in recycled materials than for chemicals in primary products is a key challenge for the circular economy.
Meanwhile, environmental NGO Greenpeace, recently warned that without eliminating the use and releases of harmful chemicals from production chains, "the circular dream could well become a toxic recirculation nightmare".
https://chemicalwatch.com/62140/carpet-manufacturers-stepping-up-efforts-on-ingredient-disclosure
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US NGO Highlights Drop in Toys Recalled for Excessive Lead
Nov 30, 2017 | Chemical Watch
By Tammy Lovell
No toys were recalled for containing excessive levels of lead over the last year, compared to 11 products the previous year, according to a report by the US Public Interest Research Group.
Its annual Trouble in Toyland report found that between October 2016 and October 2017, no toys were recalled for violations of the Consumer Product Safety Improvement Act (CPSIA) toxic heavy metal standard.
The standard requires that all accessible components of children's products contain no more than 100 parts per million (ppm) of lead.
Despite the improvement, the report says that "toys containing metals that pose a health risk to children continue to make it onto American store shelves."
US PIRG advocate Dev Gowda told Chemical Watch: "We've noticed that year after year, there have been improvements in toy safety, partly due to the work that consumer advocates and CPSC has been doing, but parents should still be cautious since there may be potentially hazardous toys out there."
Joan Lawrence, senior vice president of safety standards and regulatory affairs at US trade group the Toy Association (TA), attributed the drop in product recalls for lead to "continued vigilance and enforcement to ensure the products in store shelves are compliant".
She told Chemical Watch: "We have had stricter requirements for lead and phthalates in the last several years and we also have requirements for mandatory testing and certification of products before they reach store shelves, so that helps to ensure that what’s on store shelves is indeed safe."
Fidget spinners
But the report does warn that some fidget spinner toys may contain high levels of the heavy metal.
It says US PIRG identified two fidget spinners for sale that contained excessive levels of lead according to the federal standards for lead in children’s products.
However, the CPSC classifies some fidget spinners as general use rather than children’s products.
Karla Crosswhite-Chigbue of CPSC said: "If a product is a toy designed and intended primarily for children 12 and younger, CPSC regulations for lead and phthalates apply. These requirements do not apply to items, including fidget spinners, which are not marketed to children."
She added that the CPSC would be reviewing the Trouble in Toyland report.
On the issue of fidget spinners, Ms Lawrence said that some of the products were aimed at an older market and consumers needed to use discernment in choosing appropriate products for children.
The TA provides toy safety information for consumers on its "Play Safe" website.
https://chemicalwatch.com/62108/us-ngo-highlights-drop-in-toys-recalled-for-excessive-lead
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Choosing a Safe Mattress for Your Baby's Crib
Nov 30, 2017 | EWG
By Olga Naidenko and Tasha Stoiber
During the first few years of their lives, infants can spend most of their time sleeping or crawling in the crib. Choosing children’s products that are good for air quality in the baby’s room can be a difficult task. To help with that choice, EWG talked with Dr. Brandon E. Boor, an assistant professor of civil engineering at Purdue University.
Since 2011, Boor has been researching indoor air quality and sleep microenvironments. Studies published by Boor and colleagues at The University of Texas at Austin in 2014and 2015 found that crib mattresses released nearly 30 different types of volatile organic compounds, or VOCs, and other potentially harmful airborne chemicals such as endocrine-disrupting phthalates and fragrance allergens.
“Our research shows mattresses can be a significant source of chemical contaminants in the nursery and bedroom,” Boor said.
Crib mattresses are typically composed of polyurethane foam, a petroleum-derived synthetic material. They also contain adhesives and other chemical additives. The foam core is usually enveloped with a waterproof cover. These mattress components can release harmful VOCs, some of which can cause respiratory and nervous system damage.
Boor said VOC exposures are especially troubling for babies.
“A baby’s exposure to chemical contaminants in their crib mattresses can be amplified since they sleep for 12 to 14 hours every day and inhale air just inches above the mattress surface, where the concentrations of the VOCs can be about twice as high as standing just a few feet away," he said. "Their body heat also increases VOC emissions.”
Airing out a new mattress can reduce VOCs, but other harmful chemicals could still be present.
“VOC emissions from new mattresses are four times greater than those from used mattresses," said Boor. "VOC emissions tend to decay over time, but airing out will not get rid of less volatile chemicals, such as phthalates and flame retardants, that leach slowly for years and tend to accumulate in house dust.”
Mattress testing also revealed the surprising presence of fragrance ingredients, such as chemicals associated with lemon and lavender scents, that can act as allergens. Researchers don’t know exactly why these chemicals were present in mattresses. Fragrance ingredients can be used by manufacturers to mask other odors, as can happen in a product that can get wet with use.
Mattress dust and microbes are readily released into the air when a baby moves in bed, kicking up the dust. To reduce allergens, Boor recommends vacuuming the mattress once per week.
“Vacuuming a mattress may not sound fun, but research has shown that it is an effective way to reduce the amount of dust mite allergens and microbes that accumulate on the surface,” he said.
Boor's ressearch has moved from crib mattresses to carpets, which can harbor the same chemicals and bacteria.
“We are studying how infants are exposed to dust and microbes stirred up from carpets as they crawl, using a robotic infant," he said. "We are also relating real-time measurements of microbes in the air to the activities and movements of children in a child care setting. I hope my research could help in the future design of safer bedrooms, cribs and play environments for babies.”
EWG recommends that parents look for low-VOC emitting crib mattresses that have been independently verified by a third-party certifier, such as Greenguard or Oeko-Tex Standard 100, and mattresses made without polyurethane foam. For additional tips on air quality in your baby’s room, visit EWG’s Healthy Living: Home Guide and watch EWG’s video on mattresses and crib mattresses.
For more information about Boor’s research and practical tips for creating a healthy bedroom, watch a short CNN video filmed at the Purdue lab.
In part two of our interview, Boor will discuss his work on endocrine disruptors in crib mattresses.
https://www.ewg.org/news-and-analysis/2017/11/choosing-safe-mattress-your-babys-crib#.WiBEXYanG-s
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Regulatory Agencies Reluctant to Use Mathematical Models of Organisms
Nov 30, 2017 | Chemical Watch
Regulatory agencies remain reluctant to use physiologically based kinetic (PBK) models, according to an expert survey by the European Commission's Joint Research Centre (JRC).
Widely used in industry and academia, PBK mathematical models describe how chemicals pass through the body, which is represented as a series of interconnected compartments. The models are becoming increasingly popular, particularly for use with non-animal test results and quantitative structure activity relationship (Qsar) predictions. For example, they are often used to help extrapolate from in vitro results to the in vivo situation.
Of 93 people that filled out an online survey, 27 described using PBK models for submitting dossiers, opinions or risk assessments to regulatory agencies. Together with scientists at the US Environmental Protection Agency's (EPA's) Oak Ridge Institute and Slovakian consultancy Klimeto, the JRC team has summarised the PBK situation and come up with recommendations to boost regulatory acceptance.
A lack of standardised good modelling practice (GMP) guidelines, together with a wide range of computing platforms, may be the "greatest obstacles" for PBK model use in regulatory risk assessment, they write in Regulatory Toxicology and Pharmacology.
Establishing GMP throughout the modelling community could lead to a "standardised checklist" to evaluate the quality of a PBK model, which would help regulators, the authors say.
Challenges of newer PBK models
PBK models are often developed to answer specific scientific questions related to certain chemicals. However, when the purpose is to use a PBK model to support regulatory decision-making, the models require careful vetting of parameter values, model code and structure, they add.
Developing new models can be labour intensive and data hungry. The researchers warn that newer PBK models bring "additional challenges" for risk assessors attempting to review them for regulatory decision making.
When there are no experimental in vivo data to compare model predictions with, regulatory agencies are likely to remain reluctant to use models in their chemical safety assessments, they say.
Finally, the report suggests that the next generation of PBK models could be developed solely using data from in vitro and in silico methods.
The JRC and EPA are co-leading an OECD project to harmonise characterisation, validation and reporting of PBK models.
https://chemicalwatch.com/62129/regulatory-agencies-reluctant-to-use-mathematical-models-of-organisms
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Survey Shows Strong Support for Unified List of GHS Classified Substances
Nov 30, 2017 | Chemical Watch
There is strong support for work to continue on a list of chemicals with harmonised, non-binding GHS classifications, according to a Chemical Risk Manager survey.
The UN Economic Commission for Europe (Unece) GHS subcommittee, which has been working on the list for several years, is due to make a decision on the project's future at its regular meeting, next week.
Of the 47 people responding to the survey, nearly 96% think the project should go ahead.
From a list of key reasons to continue the programme:
45 said it would simplify classification and labelling systems and management across countries;
28 cited improved safety through a better, common understanding of classification and labelling; and
13 saw significant operational cost savings.
One respondent noted: "There are inherent benefits vis-à-vis human resource development in working towards harmonised safety classifications, as it inherently improves safety knowledge and risk management abilities of staff as they move across organisations."
However, one commentator noted: "While a harmonised list might simplify classification and labelling, not all jurisdictions follow the precautionary principle. Differences in regulatory schemes and philosophies would likely result in greater confusion and add to the cost and time of completing such a project."
According to the poll, 68% of respondents thought industry should provide some funding to support it.
Responses
In posts to Chemical Watch’s LinkedIn Group, Hans-Peter Rensch, senior manager regulatory compliance at Datwyler Sealing Technologies, said: "A global harmonised system should use harmonised classifications or it will stay a collection of different national specialities."
Sonia Bautista Ortiz, a consultant at Universitat Autònoma de Barcelona, said she felt global harmonisation would really help companies achieve compliance in any country, and, at the same time, this could also benefit people who live in countries where the restrictions are not so exacting. And this could contribute to avoiding hazardous substances worldwide.
Phil Rowley, regulatory affairs manager at James M Brown, disagreed: "I see no point in this development. For a start, the UN has no legal mandate anywhere; and, as different jurisdictions can, and do, choose which of the GHS building blocks they will use, and can add ones of their own. Any 'harmonised' classification produced by the UN would not be so anywhere else – unless all the jurisdictions choose to implement identical GHS models – which they will never do."
James Lee, senior compliance analyst at Hach, said he supports the initiative as a step towards global harmonisation. And he thinks the project wil go forward. According to his information from US Osha, there still is strong support from the regulated communities worldwide and the UN GHS subcommittee is willing to continue the work.
https://chemicalwatch.com/62134/survey-shows-strong-support-for-unified-list-of-ghs-classified-substances
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EU Green Criteria Backs Need for Flame Retardants, Says Trade Group
Nov 30, 2017 | Chemical Watch
By Tammy Lovell
The European Flame Retardant Association (Efra) said it welcomed the EU Green Public Procurement (GPP) criteria for furniture.
The trade body's president Edie Engels told Chemical Watch that, because the criteria does not introduce new restrictions on flame retardants, the European Commission was "reaffirming the importance of fire safety" and acknowledging the chemicals are "used to save lives and in accordance with fire safety standards".
The voluntary guidelines — published in August — aim to help public authorities purchase products and services with reduced environmental impacts.
Mr Engels said that because flame retardants are classified under the REACH and CLP Regulations based on their individual toxicological properties, restricting their use as a group of chemicals would be "inconsistent and incoherent with the EU regulatory framework".
"That is precisely why in the GPP criteria technical report the Commission is urging procurers that have decided to specifically restrict the use of flame retardants to consider each of them on the merits of its individual REACH registration and CLP classification," he said.
He also said that flame retardant restrictions "should be avoided" in EU GPP criteria because they may conflict with specific countries’ legislation.
The criteria has been welcomed by the European Furniture Industries Confederation (Efic) because it warnsthe use of flame retardants "may have negative effects for the environment, health, durability and quality of products, and may lead to cost increases".
In the US, San Francisco banned the sale of upholstered furniture and children's products made with or containing an added flame retardant chemical in October. More than a dozen US states have banned some categories of the chemicals.
https://chemicalwatch.com/62103/eu-public-procurement-criteria-backs-need-for-flame-retardants-says-trade-group
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REACH New Substance Registrations Estimate 'May Fall Short'
Nov 30, 2017 | Chemical Watch
By Luke Baxton
Echa has revealed that the number of new substances registered for the 2018 REACH registration deadline is less than expected and may not meet estimated figures.
The agency has so far received 12,918 dossiers covering 5,856 total substances for the May deadline, which is just six months away.
While the agency says this is in line with its original estimates, it also acknowledges that only 3,713 of the substances have not been registered in either of the previous 2010 or 2013 deadlines. And, it says, the number of these 'new' substances is less than it expected at this point.
"Currently, companies seem to mainly be registering those substances for which a registration already exists," the agency said in its latest newsletter.
"At this pace, it may be that we will not reach the estimated 25,000 registered substances by the deadline. We need to monitor this carefully, although industry associations have not yet raised this as a concern."
Approximately 15% of registrations are from SMEs, it says.
2018 REACH deadline figures
Total registrations to date: 12,918
Total expected registrations: 60,000
Total substances to date: 5,856
Total expected substances: 25,000
Directors' Contact Group
At a meeting on 27 November, the REACH Directors’ Contact Group (DCG) issued a recommendation, urging companies to improve efforts to communicate their 2018 registration intentions to customers.
The DCG is an informal group of directors from the European Commission, Echa and industry associations. It was set up to respond to concerns arising from companies' REACH registration obligations.
Disseminating this information, they said, will avoid crucial substances not being registered and help ensure supply chains are not disrupted. Companies should also identify the uses their registrations intend to cover and communicate them downstream, the group said.
Industry associations represented in the DCG "are committed" to pass on this recommendation to their members, Echa says.
The directors also agreed to publish a factsheet on access to EU finance. According to Echa, it provides helpful advice to companies that need to find resources to ensure safe handling of their substances, and also to those that choose to take action on substituting their chemicals with more sustainable alternatives.
In an interview with Chemical Watch earlier this month, Echa head Geert Dancet said the high cost of registrations is "the main stumbling block" in the process.
The DCG will next meet on 15 December to review the solutions it established for the 2010 and 2013 REACH registration deadlines.
It will also continue discussions to endorse an approach for easing the financial burden on SMEs, preparing to submit registrations in the one-ten tonnage band.
https://chemicalwatch.com/62114/reach-new-substance-registrations-estimate-may-fall-short
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New Companies, Hurricanes Play Opposing Roles in NGI’s 3Q2017 NatGas Marketer Survey
Nov 30, 2017 | Natural Gas Intelligence
By David Bradley
A pair of first time entries with international ties spiced up NGI's 3Q2017 Top North American Gas Marketers Ranking, but the negative impacts of Hurricane Harvey helped drag the numbers lower among some of the survey's heaviest hitters.
NGI’s quarterly snapshot of leading gas marketers reported combined sales transactions of 106.82 Bcf/d in 3Q2017, a 6.02 Bcf/d decline year/year from the 112.84 Bcf/d transacted during 3Q2016. Following two quarters of 7% increases in 2016, marketers have reported four consecutive quarters of declines.
BP plc reported 20.04 Bcf/d in 3Q2017, extending its perennial grip on the No. 1 position by another quarter despite a 2.46 Bcf/d (11%) decline, compared with 22.50 Bcf/d in 3Q2016. BP remains North America's largest natural gas supplier, and late in the quarter was ramping up its natural gas service to industrial users, local distribution companies and independent producers in Mexico.
In the No. 2 spot, Shell Energy NA reported 10.30 Bcf/d, a 3% decline compared with 10.60 Bcf/d in 3Q2016.
It was better news from No. 3 Tenaska, with 9.70 Bcf/d in 3Q2017, a 4% increase compared with the year-ago period.
Rounding out the fourth and fifth spots, Macquarie Energy reported 9.60 Bcf/d, a 5% decline compared with 3Q2016, and ConocoPhillips reported 8.47 Bcf/d, also a 5% decline.
Nearly all of the companies that reported lower numbers in 3Q2017 compared with 3Q2016, including BP, Shell, Macquarie and ConocoPhillips, have marketing operations headquartered in Houston or its suburbs, which was slammed by Hurricane Harvey in late August. Harvey made landfall Aug. 25 in South Texas as a Category 4 storm, shuttering the energy breadbasket of the United States and, in concert with a broader cooling trend, prompting temporary natural gas demand reductions across the region. In September, Hurricane Irma, also a powerful Category 4 storm, made landfall in Florida, knocking out power to millions and delivering another major hit to natural gas demand.
Anadarko Petroleum Corp.'s average sales volumes in 3Q2017 fell to 626,000 boe/d, down 20% year/year, partly on asset sales, but also on shut-ins related to atrio of Gulf of Mexico hurricanes -- Harvey, Irma and Nate -- which made landfall on the central Gulf Coast in October and temporarily froze output from the deepwater. ExxonMobil Corp. said Harvey reduced its 3Q2017 earnings by an estimated $160 million (4 cents/share). ConocoPhillips reported increased earnings for 3Q2017 but production declined, due in large part to the effects of Harvey. And Devon Energy Corp.'s 3Q2017 production averaged 527,000 boe/d (44% oil), above the midpoint of its guidance after adjusting for impacts related to Harvey. The company reported storm-related curtailments of around 15,000 boe/d (65% oil) for the quarter, mostly attributable to reduced output from Eagle Ford Shale assets in South Texas.
"The next two quarters contain the winter heating season, so we know demand will increase those two months," said NGI’s Patrick Rau, director of strategy and research. "Just how much it increases will of course depend on how cold a winter we get and projections of that have been all over the map so far."
"However, what appears more clear is that production continues to increase, and that should lead to more volumes over the next two quarters, everything else being equal."
U.S. dry gas production in 2Q2017 was up about 0.7 Bcf/d quarter-over-quarter, Rau said, and the 3Q2017 sequential increase should be at least 1.5 Bcf/d.
Moreover, Appalachia producers in particular should continue to increase production to fill the nearly 3.5 Bcf/d of incremental capacity in the near-term, from the completion of Rover,Leach and Rayne Xpress, and Texas Eastern Transmission LP's Adair SW project. "Although operators have indicated it will take maybe a year to a year-and-a-half to fill that capacity, it should still contribute to higher marketing volumes over the next several quarters," Rau said.
So too should more liquefied natural gas (LNG) export capacity from the United States, he added, since being better connected to the rest of the world should increase price volatility, and therefore marketed volumes, here at home. Overall, Rau expects another 1.2 Bcf/d of LNG export capacity from the United States to come online in 2018, followed by a sizable 5.8 Bcf/d increase in 2019.
"And that's just for projects that are currently under construction,” he said. “A few other planned facilities could push our installed export capacity even higher in the 2020-22 timeframe."
Among the highlights of the 3Q2017 survey were the additions of two new companies.
CFE International, which wasn't trading natural gas a year ago, reported 2.40 Bcf/d in 3Q2017, enough for it to claim No. 15 in its first NGI survey. Mexico's Comision Federal de Electricidad (CFE) has said much of its future lies in trading natural gas through marketing affiliates CFE International and CFEnergia.
Swiss trader Vitol reported 2.10 Bcf/d in 3Q2017, more than double the 1.01 Bcf/d it had in 3Q2016. Vitol has been on the advance this year, climbing 37 spots to No. 48 in NGI's June 2017 analysis of 2016 Form 552 buyer and seller filings with FERC.
Other highlights of the 3Q2017 survey include a 5% increase for Direct Energy (4.34 Bcf/d, compared with 4.14 Bcf/d in 3Q2016), a 6% increase for Chevron Corp. (3.46 Bcf/d, compared with 3.26 Bcf/d in 3Q2016) and a 3% increase for Southwestern Energy Co. (2.97 Bcf/d, compared with 2.87 Bcf/d in 3Q2016).
CenterPoint Energy reported 2.96 Bcf/d (up 36%), Castleton Commodities 2.64 Bcf/d (up 19%), and Cabot Oil & Gas Co. 1.75 Bcf/d (up 11%). Canadian Natural Resource Ltd. was up 1% compared with 3Q2016 at 1.66 Bcf/d, and ARM Energy Management was up 11% at 1.24 Bcf/d.
The NGI survey ranks marketers on sales transactions only. The Federal Energy Regulatory Commission’s Form 552 tallies both purchases and sales.
http://www.naturalgasintel.com/articles/112585-new-companies-hurricanes-play-opposing-roles-in-ngis-3q2017-natgas-marketer-survey
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High Days and Holidays for US Crude Flows
Nov 30, 2017 | Platts Blog
By John-Laurent Tronche
The floodgates have opened. The game has changed. The possibilities are endless. This is the worst — absolutely.
Choose any of those expressions or phrases to explain some aspect of the global oil market — a market featuring US exports, OPEC cuts, an improving world economy, yet declining oil demand long-term.
For US oil producers the picture is clear at least, it’s a bright future ahead. US crude prices are at multiyear highs despite North American oil production that shows little sign of slowing down.
That is especially true in the US Gulf Coast, where demand for every barrel, heavy or light, sour or sweet, continues to be robust.
As an example, take prices for the regional medium sour blend LOOP Sour, which reflects the value of crudes most-consumed by the massive US Gulf Coast refining sector. LOOP Sour was trading at the beginning of Q4 at a roughly $2/b premium to the underlying market of cash West Texas Intermediate at Cushing, Oklahoma. Six months earlier, it was closer to cash WTI minus $2/b.
That US crude prices could make such a rebound from early 2016’s bear market is remarkable, but the result of improving drilling economics and a global sour crude shortage brought on by the ongoing production cuts by OPEC members and non-OPEC countries.
As Arab Medium barrels, for example, have become harder to source, US crudes have stepped in to fill the need. Demand for LOOP Sour has increased as competition grows for regional medium sours such as Mars and Poseidon. LOOP Sour delivered ex-cavern averaged 1.03 million barrels per month in Q3 compared with 608,000 barrels per month in Q2 and 990,000 barrels per month in Q1, according to the Louisiana Offshore Oil Port, which manages the cavern and other caverns and tanks with a combined capacity of about 72 million barrels.
US crude exports to average 2 million b/d by 2019
It has been two years since the US reversed its 40-year stance effectively prohibiting exports of domestically produced crude oil; however, that decision made in December 2015 was in reality several years in the making. The first crack in the ban was mid-2013, when the Eagle Ford shale play of South Texas and the Bakken field in North Dakota combined reached 2 million b/d of crude output. The US market was awash in crude, and it was at this time crude by rail dominated headlines and oil made its way across the border to Canada at heavily discounted prices.
About one year later, the US Department of Commerce added another crack, OK-ing the export of lightly treated condensate. Eagle Ford molecules were available to the rest of the world as production there continued to climb.
Finally, the floodgates were opened in December 2015 with the end of crude export restrictions. It took some time for companies to get their bearings, but the market has truly taken off now. US crude exports reached just shy of 2 million b/d in one late September week of this year, more than three times the amount exported one year earlier. That is also well below export capacity in the US Gulf Coast alone, which Platts Analytics currently estimates at 2.927 million b/d but will grow to more than 4 million b/d in Q2 2018.
Just 10 companies took US crudes in the 12 month prior to the end of the ban. Since then, more than 30 countries have taken crudes. Asia is the main consumer, led by China, but US crudes have found willing buyers in India, throughout Latin America and most recently in Northwest Europe, where they have been seen displacing West African grades.
The types of crude leaving US shores are diverse, too. Western Canadian Select and other heavy sours from Canada typically are in the 21 API, 3.6% sulfur range, and can compete in markets served by Mexican and Venezuelan grades. The US has plenty of medium sours: Mars, Alaska North Slope, Southern Green Canyon, LOOP Sour, Poseidon and Thunder Horse range from about 29.5 API to 33 API with sulfur content in the 1%-2.25% range.
Finally, at the light sweet end of the scale is the well-known WTI (41-42 API, 0.33% sulfur) but ever-increasing availability of Eagle Ford crude and condensate (45-55 API, 0.05%-0.15% sulfur) and Bakken (42.25 API, 0.12% sulfur).
Looking ahead, Platts Analytics recently forecast total US crude exports will average 2.5 million b/d by 2020 and 3.7 million b/d in 2025. China’s oil trading arm Unipec has already called out the US as a major source of its crude in the 2020s and beyond.
OPEC and non-OPEC countries have offered no clear insight into their plans for production cuts set to end in spring 2018. But it would appear that regardless of the result — the cuts are maintained, the cuts are deepened, the cuts are abandoned—the US remains poised to continue its emergence as a major player on the world oil supply stage.
The floodgates were opened. The game has changed. The possibilities are endless.
http://blogs.platts.com/2017/11/30/high-days-holidays-us-crude-oil-flows/
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Regulators Suspect Construction Damage Caused Keystone Spill
Nov 30, 2017 | E&E Energywire
By Jenny Mandel
Mechanical damage to the Keystone pipeline that occurred when it was built may be responsible for the leak of 5,000 barrels of crude oil into a rural part of South Dakota earlier this month, federal officials say.
A "corrective action order" issued by the Pipeline and Hazardous Materials Safety Administration on Tuesday says the pipeline failure that led to the spill was a rupture that "has characteristics of mechanical damage from original construction" in 2008.
PHMSA's preliminary analysis suggests that the failure may have been caused by damage to the pipe and a protective coating that covers the metal, associated with a weight sometimes placed on pipes to hold them down "in areas where water could potentially result in buoyancy concerns."
The broken portion of the pipeline will undergo testing to inform the agency's ongoing investigation into what caused the rupture. PHMSA said the pipeline section that failed was manufactured by Berg Steel Pipe Corp.
Cleaning and leak detection tools were in use on the pipeline at the time of the rupture and had already passed the failure site without detecting any problems and are not believed to have contributed to the leak, according to PHMSA.
TransCanada Corp.'s Keystone pipeline runs from Hardisty, Alberta, to Patoka, Ill., and on to the U.S. Gulf Coast. Following the leak on Nov. 16, the pipeline was shut down from Alberta to Illinois. TransCanada got the go-ahead to restart operations at reduced pressure Tuesday after excavating and replacing the ruptured pipeline segment.
Regulators have directed TransCanada to identify other locations where weights like those at the rupture point are in use and to look for damage or cracks at those locations that could have be similar to the failure point. The company has 90 days to complete a "root cause failure analysis" on the incident.
The spill comes at a difficult time for TransCanada, as it weighs the results of a permitting decision earlier this month in Nebraska that gave the company a green light to build Keystone XL, a controversial expansion of the Keystone line. Nebraska's permit gives the company permission to build along a route that it said was not optimal for the project, and the company has said it is weighing the cost and schedule implications of the proposed change (Energywire, Nov. 21).
One facet of the Keystone XL controversy has revolved around the fragile soils and high water table in some areas the pipeline would pass through. If Keystone is found to have problems related to an engineering solution for high water tables, those issues could extend to the proposed Keystone XL project as well. TransCanada did not respond to questions for this story.
Full remediation expected
While PHMSA is in charge of investigating the recent spill, TransCanada bears cleanup responsibility under oversight from the South Dakota Department of Environment and Natural Resources.
Brian Walsh, environmental scientist manager with the state DENR, said yesterday that the cleanup was going well. Liquid oil has been sucked up with vacuum trucks, he said, and contaminated soil is being removed and characterized. If the samples show only the expected contaminants, they will likely be disposed of in a general-purpose landfill in North Dakota.
The spill site runs north-south along the pipeline path about 1,000 feet, Walsh said, is about 400 feet at its widest part. Walsh said groundwater monitoring stations have been set up around the perimeter of the site and will be in use until state standards for post-spill water quality are met. TransCanada "did sample some drinking water wells that were well outside of the spill area, and of course there were no drinking water impacts, but they wanted to reassure the landowners," he added.
Walsh said the relative simplicity of the spill site, at an easily accessible location without surface bodies of water, made the cleanup easier. He expects the site will be fully remediated over the course of several weeks. "The geology here is going to allow us to get the vast majority if not all of the contaminated soil out," he said. "We will assess the groundwater and address any impacts there."
Warning from S.D.
Last week, members of the South Dakota Public Utilities Commission said they would be monitoring PHMSA's investigation and would consider revoking TransCanada's permit to operate the pipeline if the company had violated its terms.
Commission Chairwoman Kristie Fiegen told E&E News that the comments were meant as a reminder that the PUC has the authority to revoke a permit but said "the facts [of the investigation] don't come in until many months from now, so we're a long ways from any kind of revocation."
Carl Weimer, executive director of the Pipeline Safety Trust, an organization that works for pipeline safety, noted that very little information has been publicly released about the soil type, spill depth or water table level at the site of the leak. "If it is really just a spill into agricultural soil as reported and did not soak or migrate much deeper than the pipeline, than DENR's [remediation estimate of] 'a period of months' may be correct. If they need to do any fancy bio-remediation or purging to get [oil] out of any groundwater then it could be [a] longer period of months," he said.
Beyond the immediate questions of what went wrong in this incident lie bigger questions about why such a new pipeline failed, he added, "and why, with all the promises of safety beyond federal regulations, was the problem not identified before the failure occurred?"
During permitting, TransCanada's spill risk assessment put the chance of a leak of 50 barrels or more at "not more than once every seven to 11 years over the entire length of the pipeline in the United States," with a spill "no more than once every 41 years" in South Dakota, according to a Reuters report.
Data reported publicly by PHMSA show that Keystone spilled 424 barrels of crude in North Dakota in 2011 as a result of a connector failure, at a cleanup cost of $2 million. Another spill in South Dakota in 2016 resulted in 400 barrels released due to "construction, installation or fabrication-related" issues at a cleanup cost of $9 million.
https://www.eenews.net/energywire/2017/11/30/stories/1060067639
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Report Warns of Hacking Risk to Refining Sector
Nov 30, 2017 | E&E Energywire
By Blake Sobczak
The refining industry's rush to adopt digital technology could open doors for hackers, according to a report this week from the Deloitte consultancy.
As downstream oil and gas facilities add connected sensors and automation tools, the risk of a "broader impact" cyberattack costing tens of millions of dollars "becomes increasingly more likely and more consequential," the study claims.
"Cybersecurity will become increasingly important to downstream oil and gas companies, due in part to the sophistication of would-be attackers but mostly due to the sheer complexity and scale of digitizing the business," Deloitte concludes.
Andrew Slaughter, executive director of the Deloitte Center for Energy Solutions and one of the report's authors, said there can be safety and efficiency benefits from adopting "internet of things" technologies and automated controls.
"But the flip side is, if you don't manage it correctly from the start, you open up cyber vulnerabilities," he said.
The report cites a 2014 cyberattack on a German steel mill that caused catastrophic damage to a blast furnace, painting the mysterious case as a cautionary tale for refiners.
"If bad actors were to get into a refinery operating system ... that could be catastrophic in terms of business interruptions, safety and environmental impact," Slaughter said.
The report notes that the hazard, so far, is largely "speculative." The Department of Homeland Security's Industrial Control Systems Cyber Emergency Response Team could point to just two U.S. incidents with "significant impact" to control systems in fiscal 2016, neither of which was made public. Hackers aren't known to have physically damaged any U.S. refining facilities or energy control systems, though such networks have been targeted in the past.
Unlike large electric power utilities, U.S. oil and gas companies don't face binding cybersecurity rules for their control systems. The American Fuel and Petrochemical Manufacturers, a major refining industry trade group, opposes mandatory cybersecurity standards in favor of voluntary guidelines set through the National Institute of Standards and Technology.
"Even though the risk of cyber breaches is ever-present, tremendous steps have been taken to ensure refineries and petrochemical facilities are safe against the increasing amounts of cyber threats facing our facilities," the group noted in a policy paper on the issue.
Deloitte's report did not address the regulatory landscape for refiners, but it did include some tips for energy companies. For instance, the study suggested that downstream oil and gas firms set up a "digital twin" of their control systems, so operators can raise red flags when the duplicate and the real networks fall out of sync.
Still, Slaughter cautioned against relying too much on technological fixes for the cybersecurity dilemma.
"You don't get to a health and safety culture by issuing hard hats and putting barriers around dangerous equipment — much of it is behavior," he said. "It's the same with cybersecurity."
https://www.eenews.net/energywire/2017/11/30/stories/1060067637
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EPA Finds 3 Barrel Plants Broke Chemical Laws
Nov 30, 2017 | E&E Greenwire
U.S. EPA announced yesterday that three industrial plants in Wisconsin broke federal laws regulating hazardous chemicals.
An agency investigation triggered by a Milwaukee Journal Sentinel report found that plants in St. Francis, Oak Creek and Milwaukee failed to obtain licenses for the transport, storage and treatment of hazardous waste.
EPA said officials at the St. Francis and Oak Creek plants initially tried to prevent investigators from entering, despite their warrant.
Once inside, the investigators found barrels of flammable chemicals that were labeled as "nonhazardous" or that workers said contained water.
The three plants are owned by Ohio-based Greif Inc., which has 30 days to respond to the investigation.
"We are not perfect and will always work to address issues in cooperation with regulators," Greif spokeswoman Debbie Crow said in a statement. "Company representatives have met — on a voluntary basis — with federal and state environmental regulators on multiple occasions to discuss perceived issues".
https://www.eenews.net/greenwire/2017/11/30/stories/1060067695
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Interior IG Faults Cleanup Project in San Joaquin Valley
Nov 30, 2017 | E&E Greenwire
By Michael Doyle
Interior Department auditors are raising "significant" concerns about the management of a high-profile groundwater cleanup project in California's San Joaquin Valley, a new advisory reveals.
Interior's Office of Inspector General, which is examining the handling of the multimillion-dollar San Luis Demonstration Treatment Plant, found the potential problems serious enough to merit an early heads-up to federal Bureau of Reclamation officials this week.
"We also identified invalid single audits, conflicts of interest with key personnel, a general absence of project oversight, and questionable use of a cooperative agreement," Deputy Inspector General Mary Kendall wrote.
Operated under a cooperative agreement between Reclamation and the Panoche Drainage District, the San Luis Demonstration Treatment Plant was designed to demonstrate the effectiveness of treating groundwater to remove heavy metals and contaminants.
It's a high-stakes effort for the San Joaquin Valley, where farmers are bedeviled by the accumulation of tainted irrigation drainage.
But in her sharply worded, two-page advisory, Kendall said investigators "question how and why the project grew from a pilot-scale $15 million demonstration and research and development plant to a full-size $37 million plant."
Investigators are also raising doubts about the facility's cost-effectiveness.
"We have been told that the costs to operate and maintain the plant could outweigh the benefits of the treated water produced," Kendall warned.
Unlike a final IG report, the management advisory dated Monday does not include a response from either Panoche or Reclamation. Bureau officials, though, say they are taking the issues seriously.
"We received the OIG management advisory earlier this week, and we are currently reviewing it to develop potential actions to address the concerns outlined," Reclamation spokeswoman Erin Curtis said in a statement yesterday, adding that "we also look forward to receiving the final report from the OIG so that we can address items of concern specifically."
A spokesperson for the Panoche Drainage District could not be reached.
More criticism appears to be coming, as Kendall stated that the IG team plans to "fully address the cost deficiencies, along with several other concerns in two subsequent reports."
The alleged problems have arisen at a politically sensitive time for some Central Valley farmers and their congressional allies who have been wrestling with drainage issues.
Leaders of the 600,000-acre Westlands Water District, located south of Panoche, are trying to secure passage of legislation that would implement an irrigation drainage settlement negotiated with the Obama administration.
The proposed deal would forgive a roughly $375 million debt owed by Westlands for its share of Central Valley Project construction. The deal would set terms on future water contracts and oblige Westlands to retire 100,000 acres. In return, it would relieve the federal government of the obligation to construct irrigation drainage facilities.
Earlier this month, senators rejected a House GOP proposal to add the Westlands drainage legislation authored by Rep. David Valadao (R-Calif.) to the fiscal 2018 National Defense Authorization Act (Greenwire, Nov. 9).
Three smaller districts located north of Westlands — the Panoche, Pacheco and San Luis water districts — seek to wrap up a similar irrigation drainage deal, but officials say it has been stalled pending the outcome of IG and other investigations.
The Panoche Drainage District provides drainage services to the Panoche Water District and 6,000 adjacent acres, and the management of the two districts overlaps.
Earlier this year, California Controller Betty Yee released a scathing report on the 38,000-acre Panoche Water District. The report found that between 2013 and 2015, the district gave employees $86,000 in interest-free loans and allowed them to use district credit cards for more than $37,000 in personal spending (E&E News PM, Jan. 31).
"It should be noted that the district has taken substantial corrective actions and continues to make efforts to enhance its administrative and internal accounting controls," the state audit added.
Curtis, the Reclamation spokeswoman, said the bureau requested the IG audit following release of the state audit.
"At that time, Reclamation placed PDD under an agency review as well," Curtis said.
The new IG advisory focusing on the treatment plant project cautioned that "we audited $772,974 in claimed costs under this cooperative agreement, and currently estimate questioning or disallowing nearly 30 percent of these costs."
https://www.eenews.net/greenwire/2017/11/30/stories/1060067693
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Md. Plant Dumped Far More Nitrogen Than Allowed — Report
Nov 30, 2017 | E&E Greenwire
One of the largest wastewater plants in Maryland dumped four times more nitrogen and phosphorus into the Chesapeake Bay watershed last year than permitted, according to an environmental group.
The Patapsco Wastewater Treatment Plant in Baltimore was one of 21 such facilities in the watershed that went over pollution limits last year, the Environmental Integrity Project said in a new report.
Looking at state and federal records, the group found that in 2016, the Patapsco facility released 3.7 million pounds of nitrogen. The nutrient has long been a problem for the bay, which is plagued by algae blooms that consume the water's oxygen.
Patapsco is set to complete plant upgrades to reduce pollution next year, but the group wants to make sure the city follows through on the improvements.
"If that happens, great, but we have to wait and see if that's true," said Tom Pelton, a spokesman for the Environmental Integrity Project. "We have to keep a close eye on the city, and we hope the Maryland Department of the Environment will keep a close eye on the city, too."
Maryland's government says that it has already vastly improved nitrogen pollution controls at its wastewater plants since 2004, at a price tag of $1.25 billion, and that it plans to press on with more upgrades.
"Our commitment to the Chesapeake Bay is stronger than ever and so is our willingness to work with communities as technical, engineering and financial challenges arise," Maryland Environment Secretary Ben Grumbles said in a statement. "We'll continue to push hard for getting results, meeting deadlines and enforcing compliance".
https://www.eenews.net/greenwire/2017/11/30/stories/1060067669
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Do Not Economically Re-Regulate Freight Railroads
Nov 30, 2017 | The Progress Index
By Brett Harrell, Paul C. Jablonski, and Christopher Reilly
As the fall grain harvest wraps up and we head toward the holiday season, the importance of efficient, reliable transportation is front and center. And though infrastructure investment has been discussed as a priority of the Trump administration and Congress, it remains a distant possibility.
At the very least, policymakers should do no harm — ensuring today’s reliable infrastructure, particularly private infrastructure not financed by taxpayers, is kept strong. To that end, a pending regulatory proposal at the U.S. Surface Transportation Board (STB) that would undermine freight rail operations and investment should be scrapped.
Freight railroads are the backbone of our economy. Companies and communities across the country depend on them to connect ports, farms, factories, mines and consumer goods to markets across the country and the globe. In one year alone, freight railroads generated $274 billion in economic activity across the United States, according to a study by Towson University based on 2014 data.
Freight railroads are also the backbone of U.S. passenger rail. Other than the Northeast Corridor, Amtrak trains and state-supported route trains operate on tracks owned by freight railroads, as do most commuter railroads. Policies directed toward freight railroads consequently affect passenger service as well.
Railroads are able to move products and people so efficiently because of their decades-long commitment to investment. Since 1980, these private companies have spent and invested more than $630 billion on maintaining and upgrading the 140,000 track miles that comprise the nationwide rail network. They spend more each year on this network than most states spend on highways. And they do it with their own private-sector dollars, not taxpayer funds.
Railroads are financially capable of these massive expenditures because of smart public policy that allows the industry leeway to run its private business. A balanced system of economic regulations ushered in through the Staggers Act of 1980 fully protects shippers while allowing rail carriers to earn enough money to afford the capital investments the network requires.
“Forced access,” the pending regulation at the STB, could change all that. The proposal would force railroads to share their privately owned and maintained networks with their direct competitors at below-market rates.
Essentially upending the system of regulations put in place by partial economic deregulation enacted nearly 40 years ago, the rule would be a dramatic step backward to a time when government bureaucrats set rates and controlled routes for the railroads. Similar proposals in the past have been estimated to cost $8 billion in annual rail revenue — a steep reduction that would dramatically undercut the resources railroads have at their disposal to invest in infrastructure and operations.
The negative effects of these past onerous policies, of course, radiated far beyond the railroads themselves. Shippers, consumers and the economy suffered. A significant part of the network was in bankruptcy and stationary trains were literally falling off tracks due to the crumbling infrastructure below them.
Policymakers cannot allow a return to this failed system. To this end, a letter jointly signed by more than 450 local and state elected leaders, economic development officers, chambers of commerce, advocacy groups and rail-supply companies was transmitted this week to the STB and to congressional leadership opposing forced access.
As signatories on that letter, we know how much our communities rely on freight rail. We know that the STB rule would undermine local rail service, and moreover, that today’s balanced regulations are the key to a safe and economically viable rail network. In communities across the country, this rule would upset that balance, undercutting rail investment, placing local jobs in jeopardy, undermining local control over passenger train dispatch and exposing our neighbors to a less safe rail system.
And we are, of course, not alone in our thinking. More than 25 national organizations recently wrote to the same set of congressional leaders rejecting this push for re-regulation, echoing years of nonpartisan analysis opposing unnecessary government intrusion into the sector.
Now is the time for the STB to withdraw this misguided proposal. If they do not, Congress should exercise its oversight authority.
http://www.progress-index.com/news/20171130/do-not-economically-re-regulate-freight-railroads
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Nominee Breaks with Trump: Humans are Main Cause of Climate Change
Nov 30, 2017 | The Hill - E2 Wire
By Avery Anapol
President Trump’s pick to lead the nation’s top atmospheric office said in his confirmation hearing Wednesday that he agrees that humans are the primary cause of climate change, according to The Washington Post.
Barry Myers, CEO of the private weather forecasting company AccuWeather, was nominated last month to lead the National Oceanic and Atmospheric Administration (NOAA).
Sen. Ed Markey (D-Mass.) asked Myers if he agrees with the recent federal report that said humans are the primary driver of climate change, to which Myers responded affirmatively, the Post reported.
“I have no reason to disagree with the reports,” he said.
Myers then said “yes” when Markey asked, “So you agree humans are the main cause of climate change?”
Myers's position is a departure from other Trump administration science appointees. EPA Administrator Scott Pruitt and Energy Secretary Rick Perry have publicly questioned the science behind climate change, including the role of humans.
Another Trump environmental pick, Kathleen Hartnett White, once said that belief in global warming is “paganism” for “secular elites.”Trump said throughout his campaign that global warming is a Chinese “hoax” and has filled his administration with climate change skeptics.
http://thehill.com/homenews/administration/362535-trump-climate-pick-breaks-with-trump-humans-are-the-main-cause-of
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'Self-Censorship' as 'Climate Change' is Omitted from Grants
Nov 30, 2017 | E&E Climatewire
Scientists seeking grant funding seem to be self-censoring the phrase "climate change" in their grant summaries.
A new NPR study shows a sharp drop in the term in the title or summary of grants awarded by the National Science Foundation.
The Trump administration's opposition to climate policies appears to be behind the trend. President Trump and many of his agency chiefs have refuted mainstream climate science. At U.S. EPA, mentions of climate change have been removed from the website.
Federal scientists say they're caught in a bind.
"In the scientific community, we're very cautious people," says Katharine Hayhoe, the director of the Climate Science Center at Texas Tech University. "We tend to be quite averse to notoriety and conflict, so I absolutely have seen self-censorship among my colleagues. [They'll say,] 'Well, maybe I shouldn't say it that way, because whatever funding organization or politician or agency won't appreciate it.'"
The study suggests scientists are still pursuing climate-related projects. The number of grants including the terms "environmental change" and "extreme weather" went up.
"This seems to be born out of an abundance of caution to limit their exposure to any political land mines in what is already an extremely competitive process," said Jonathan Thompson, the senior ecologist at the Harvard Forest.
The NSF has historically been one of the more independent federal research units, but multiple scientists told NPR they felt internal pressure to avoid using "climate change."
Earlier this year, the head of the NSF geosciences directorate, William Easterling, called the term "a polarizing icon, for better for worse — obviously for worse, from a scientist's perspective".
https://www.eenews.net/climatewire/2017/11/30/stories/1060067657
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