Preview Newsletter
ACC AM 12/8/17
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(ACC Mentioned) In Rare House Panel Appearance, Pruitt Touts EPA's Deregulatory Agenda
Dec 7, 2017 | Inside EPA
By Anthony Lacey & David LaRoss
In a rare appearance before Congress, EPA Administrator Scott Pruitt is defending his efforts to roll back Obama-era policies while vowing to implement environmental statutes such as the revised toxics law, and also rejecting some Democrats' criticisms about a lack of “transparency” from not responding to lawmakers' detailed queries. -
(ACC Mentioned) Scott Pruitt Is The Trump Administration’s Most Effective Weapon
Dec 7, 2017 | ThinkProgress
By Natasha Geiling
After ten months, EPA Administrator Scott Pruitt finally testified on Thursday before the House Committee of Commerce & Energy, the legislative committee tasked with oversight of the EPA. -
Senate Confirms Bodine As EPA Enforcement Chief, Bolstering Pruitt
Dec 7, 2017 | Inside EPA
The Senate has confirmed by voice vote President Donald Trump's nomination of Susan Bodine to head EPA's Office of Enforcement & Compliance Assurance (OECA), where she will help implement agency Administrator Scott Pruitt's “cooperative federalism” agenda that critics fear will lead to weakened federal enforcement. -
(ACC Mentioned) BPA: The EFSA Position
Dec 8, 2017 | News-Medical.net
Bisphenol A, also known as BPA, is one of the chemicals used for the manufacture of resins and plastic compounds. Polycarbonate is a high-quality transparent and rigid plastic that is produced using BPA. Baby bottles, beverage bottles, tableware, and storage containers are some of the examples of polycarbonate products. -
Chemical Makers Applaud Coming Animal Reduction Test Strategy
Dec 8, 2017 | BNA Daily Environment Report
By Pat Rizzuto
Scientists working for chemical and pharmaceutical manufacturers praised a federal multiagency strategy to generate regulatory safety data, while reducing the number of animals killed in laboratory experiments. -
Advocates Sue Safety Board Over Chemical Release Reporting
Dec 8, 2017 | BNA Daily Environment Report
By Sam Pearson
Companies could be required to report chemical releases to a federal regulator if a court sides with public interest groups. -
EPA Guide Would OK Chemicals Without Enough Safety Tests: Advocates
Dec 8, 2017 | BNA Daily Environment Report
By Steven Gibb
The EPA is moving to grant new chemical approvals without enough safety testing in a “reckless and irresponsible” way, according to a former senior agency official in the Obama administration, who is now counsel to an advocacy group. -
Input Sought on EU Endocrine Disruptor Guidance
Dec 8, 2017 | BNA Daily Environment Report
By Stephen Gardner
Pesticides and biocidal producers and other respondents can comment on draft guidance that the European Chemicals Agency and the European Food Safety Authority issued Dec. 7 on identifying endocrine-disrupting substances. -
Member States 'May Legislate' If EU Stalls On Harmonising FCM
Dec 7, 2017 | Chemical Watch
By Tammy Lovell
There is a danger member states will introduce their own food contact material (FCM) legislation, if the European Commission stalls on harmonising regulations, said Alistair Irvine of packaging, paper and print industry consultants Smithers Pira. -
The Panama Canal Is Now a Major Problem for U.S. Shale
Dec 8, 2017 | Bloomberg
By Michael D McDonald and Naureen S Malik
Just as the Panama Canal was unveiling a new, fatter set of locks, U.S. shale drillers were readying their very first exports of liquefied natural gas. -
Canadian Industry Leader Urges U.S. Not To Dump NAFTA Energy Chapter
Dec 8, 2017 | PoliticoPro - Whiteboard
By Doug Palmer
The United States should abandon the idea of eliminating the NAFTA energy chapter and work with Canada and Mexico to improve its provisions, the head of the Canadian Electricity Association said today. -
Trump Administration Rolls Back Obama-Era Oil Train Rules
Dec 7, 2017 | Associated Press (In The Washington Post)
The Trump administration has angered environmental groups and residents of the Columbia River Gorge by rolling back a 2015 rule on oil train safety. -
Factors That Could Curb Revival of the Railroad Industry
Dec 7, 2017 | Zacks (In Nasdaq)
Stocks in the railroad space are witnessing good times on the back of a number of tailwinds like an improved coal and intermodal scenario, financial prosperity and prudent cost management, among others. -
EPA Chief Says Public Climate Debate May Be Launched in January
Dec 7, 2017 | Reuters (In The New York TImes)
By Valerie Volcovici
The U.S. Environmental Protection Agency could launch a public debate about climate change as soon as January, Administrator Scott Pruitt said on Thursday, as the agency unwinds Obama-era initiatives to fight global warming. -
Pruitt Questions EPA Finding That Climate Change Is Health Risk
Dec 8, 2017 | BNA Daily Environment Report
By Eric Roston
The Obama administration rushed an analysis that found climate change is a risk to human health and welfare, Environmental Protection Agency Administrator Scott Pruitt said, offering a justification that he could use to reverse that determination. -
US Fails to Enforce Smog Rules, 14 States Allege in Lawsuit
Dec 7, 2017 | Associated Press (In The New York TImes)
Fourteen states and the District of Columbia announced Thursday that they are suing the Trump administration over what they say is a failure to enforce smog standards. -
Pruitt Says Ozone Decisions ‘Close’ After Missed Deadline
Dec 8, 2017 | BNA Daily Environment Report
By Abby Smith
The EPA is “close to finishing” its determinations of which areas in the U.S. don't meet federal ozone standards, Administrator Scott Pruitt told lawmakers. -
CEQ Says Withdrawn GHG Guide Being Reconsidered, Can Still Be Used
Dec 7, 2017 | Inside EPA
By Dawn Reeves
A top career official with the White House Council on Environmental Quality (CEQ) says its 2016 guide to federal agencies for how to consider greenhouse gases and climate change under the National Environmental Policy Act (NEPA) is being reconsidered and could be reissued, and that agencies can still rely on it even though President Donald Trump has ordered its rescission. -
Pruitt Signals Higher Bar For Granting Objections To Clean Air Act Permits
Dec 7, 2017 | Inside EPA
By Stuart Parker
EPA Administrator Scott Pruitt's rejection of a petition asking him to object to a Clean Air Act Title V “umbrella” permit that combines all of a facility's air permits signals a policy shift raising the bar to win such objections, sources say, because EPA will no longer object to Title V permits due to alleged flaws in underlying permits.
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(ACC Mentioned) In Rare House Panel Appearance, Pruitt Touts EPA's Deregulatory Agenda
Dec 7, 2017 | Inside EPA
By Anthony Lacey & David LaRoss
In a rare appearance before Congress, EPA Administrator Scott Pruitt is defending his efforts to roll back Obama-era policies while vowing to implement environmental statutes such as the revised toxics law, and also rejecting some Democrats' criticisms about a lack of “transparency” from not responding to lawmakers' detailed queries.
Pruitt spoke at a Dec. 7 House Energy & Commerce Committee environment panel hearing, which started in the morning but broke halfway through so Pruitt could attend a White House meeting before the administrator would return to the committee. He pledged to work more closely with the legislators on many issues ranging from climate change to toxics and more, while standing by the administration's deregulatory agenda.
For instance, addressing EPA's new risk assessment for asbestos under the reformed Toxic Substances Control Act (TSCA), Pruitt agreed with Rep. Frank Pallone (D-NJ), ranking member on the full energy committee, that the agency's initial scoping document for the assessment may have been too narrow because it focuses on manufacturing rather than use and disposal, where Pallone said almost all exposures now occur.
The scope of the study is a “valid concern,” Pruitt answered, and later told Pallone that asbestos disposal “is something we have to look into."
Pruitt also told Pallone that “We will provide the information that is requested” on how EPA toxics adviser Nancy Beck helped rewrite rules implementing the reformed TSCA statute.
However, he avoided answering whether Beck, a former American Chemistry Council official, recused herself from working on policies she lobbied on as a member of the industry group.
“Nancy Beck went through ethics review,” Pruitt said.
In response, a visibly frustrated Pallone said, “So you did not recuse her? . . . He refuses to answer the question, he obviously has not recused her.”
Environmental groups have called on EPA's acting General Counsel and Ethics Officer Kevin Minoli to require Beck, the top Trump administration appointee in EPA's toxics office, to recuse herself from the ongoing process of deciding whether and how to finalize draft bans of uses of three chemicals that were proposed by the Obama EPA but appear to have stalled.
In a Nov. 7 letter, they charged that Beck's involvement in the rulemakings poses a conflict of interest because of her past work for a trade group opposed to the bans.
But Pruitt's comments at the hearing did not say that any recusal has occurred.
Climate Change
On climate change, Pruitt agreed with Rep. Joe Barton (R-TX) that the Obama administration's finding that greenhouse gases endanger human health and the environment was procedurally flawed, though he stopped short of agreeing with Barton that EPA should heed conservatives' calls to reconsider it.
“You are correct that the work done by the agency in 2009 was accelerated,” Pruitt said, and continued that the Obama EPA committed a “breach of process” by using data provided by Intergovernmental Panel on Climate Change in its work rather than domestic research. “That process was again, I think, in 2009, short-shrifted.”
But rather than agreeing that a reconsideration is needed, Pruitt reiterated his controversial plan for an adversarial “red team, blue team” exercise on the validity of mainstream climate science. “That is an ongoing thing that we are working on” and hoping to announce formally “by early next year at the latest,” he said.
“I think one of the most important things we can do at the agency is to provide that kind of discussion for the American people, because it hasn't happened at the agency.” Such an exercise will show the country that an “objective, transparent” review is happening, he said.
While the hearing at press time was set to continue following Pruitt's White House meeting, Rep. Paul Tonko (D-NY), the panel's ranking member, told Pruitt in his opening statement that he will seek more appearances from Pruitt and his subordinates. “I hope this is the first of many regular appearances before our Energy and Commerce Committee.”
Tonko continued, both in his statement and to reporters after the hearing adjourned, that the agency has failed to provide witnesses for committee hearings and to provide technical assistance with crafting legislation, such as the brownfields reauthorization bill that has already passed the House.
“I think the first time that somebody from the EPA testified was a couple of weeks ago . . . It's concerning, because the President has to sign or veto the legislation” but allowed it to be crafted without EPA input, Tonko said.
And he added that Republicans appear to share those concerns, despite public support for Pruitt. “You didn't see that today, because they're trying to be nice to him, but I think they're just as concerned as we are.”
https://insideepa.com/daily-news/rare-house-panel-appearance-pruitt-touts-epas-deregulatory-agenda
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(ACC Mentioned) Scott Pruitt Is The Trump Administration’s Most Effective Weapon
Dec 7, 2017 | ThinkProgress
By Natasha Geiling
This week, Pruitt reminded everyone why he's Trump's most dangerous cabinet member.
Rep. Frank Pallone (D-NJ) wanted answers.
After ten months, EPA Administrator Scott Pruitt finally testified on Thursday before the House Committee of Commerce & Energy, the legislative committee tasked with oversight of the EPA. Pallone, the full committee’s ranking member, wanted to know if Pruitt has required agency staff to recuse themselves from a particular project or line or work when a potential conflict of interest occurred.
Of particular interest to Pallone was a woman named Nancy Beck, who, since coming to the agency to serve as the EPA’s Deputy Assistant Administrator, has worked to rewrite regulations that govern how chemical companies report and track potentially toxic substances. Before coming to the EPA, Beck worked for five years as an executive with the American Chemistry Council, the main trade association for the industry she now oversees. Environmental and public health groups, as well as some experts officials, have suggested that Beck’s prior employment constitutes a serious conflict of interest issue, making it impossible for her to fairly regulate the industry that once provided her paycheck.
But Pruitt wasn’t interested in answering Pallone’s question, and repeatedly refused to give a yes or no answer on whether he had asked Beck to recuse herself from chemical-related work. Instead, Pruitt shifted blame for the issue onto career staff, emphasizing that Beck went through an ethics review by the EPA’s senior ethics counsel, who in turn deemed there to be no conflict-of-interest issue.
Unsatisfied, Pallone pressed Pruitt to respond either yes or no. Interrupting the administrator’s roundabout answer, Pallone asked once again for Pruitt to respond with a single word. But Pruitt would not budge, launching yet again into a more circuitous answer than Pallone wanted. With the two men talking over each other, Rep. John Shimkus (R-IL), intervened, telling Pallone to let the witness answer.
“He obviously has not recused her,” Pallone said. But rather than pressing further, the congressman — bound by a five-minute time limit and obviously interested in asking Pruitt more than a single question — let the line of questioning go, turning instead to a question about asbestos before his time expired.
It was a short exchange — lasting a few minutes, at most — but it briefly exposed the tactic that makes Pruitt one of the Trump administration’s most effective messengers: his ability to side-step the truth just enough to shape the administration’s deregulatory agenda and disregard for ethical norms into an almost palatable package.
It’s rare that Pruitt finds himself in front of a combative audience. He makes a point of granting interviews with largely friendly outlets, and tends to shun local media when outside of Washington. But even in front of a potentially antagonistic body, Pruitt manages to skillfully shape the conversation.
When Pruitt testifies before congressional committees, his answers are long, taking up most of the allotted time allowed by committee rules. He rarely gives an answer without following up that answer with a lengthy treatise on what the particular office, or particular regulation, is empowered to do under law. This manner of answering questions can make for unremarkable hearings. There are rarely any controversial moments that would grab headlines on cable news or send ripples throughout the administration.
But Pruitt’s quiet approach belies a ruthless adherence to the Trump administration’s anti-environmental doctrine — one that has has attempted to rollback 48 environmental rules since January, a third-of which were overseen by Pruitt and the EPA. In a cabinet rife with internal conflict and unqualified figureheads, Scott Pruitt is both a compelling communicator and a committed evangelist of the Trump agenda.
Throughout Thursday’s hearing, for instance, Pruitt’s demeanor never wavered from the kind of earnest, fair-minded approach that he often presents to the public. When Rep. Paul Tonko (D-NY) opened with a jibe about how he was surprised the administrator, being from Oklahoma, hadn’t come to the committee “Sooner,” Pruitt laughed, later telling the representative that it was “very good.”
Unlike Secretary of Energy Rick Perry, Pruitt doesn’t get flustered — rarely, if ever, tripping over his own words. Unlike Secretary of the Interior Ryan Zinke, Pruitt never appears overly aggressive or hostile to questioning. As one of the six Trump administration cabinet members to have gone to law school, he brings a certain ethos of prudence to the role, placing an emphasis on things like process, transparency, and consistency.
The irony, of course, is that under Pruitt’s leadership, the EPA has consistently bucked process and forgone transparency in the pursuit of deregulation. On Thursday, before the Commerce Committee, Pruitt touted the EPA’s adherence to process when repealing or issuing new regulations, citing the millions of public comments that the agency received and responded to regarding its plan to repeal the Obama administration’s Clean Water Rule, which sought to clarify the legal jurisdiction of the federal government under the Clean Water Act.
“Process matters as well,” Pruitt said. “It is this body that has required federal agencies to go through the Administrative Procedures Act to adopt rules that are informed by comment.”
What Pruitt failed to mention, however, is that it is also Congress — through a provision in the spending bill — that is attempting to remove the requirements under the Administrative Procedures Act — like a public comment period, or public hearings — for the repeal of the Clean Water Rule. If Pruitt is truly so interested in process, then it seems odd that he wouldn’t use his first appearance before Congress to bring up the fact that some legislators are actively attempting to undermine the very process that Pruitt lauded — on the very regulation that Pruitt used as an example for the supremacy of that process.
During his testimony, Pruitt also took a number of questions from Democratic representatives about his recent decision to prohibit any scientist that had received an EPA grant from serving on the EPA’s scientific advisory panels, which act as independent bodies aimed at providing scientific counsel to the agency on a variety of regulatory issues. But rather than cite instances of a time when a scientist who served on an advisory board and had received an EPA grant gave bad advice, Pruitt extolled the importance of EPA’s internal science as critical to the agency’s decision-making.
“When we engage in rulemaking at the agency, we build a record,” Pruitt said. “And scientists at the agency, whether it’s in the chemical shop or the air program offices, it is important that we hear from our scientists internal to the agency.”
But again, Pruitt’s answer only tells half of the story. He did not discuss all the times that agency science has been undercut by political appointees, from his own decision not to ban chlorpyrifos — a dangerous kind of insecticide that EPA scientists linked to brain damage in children — to the EPA’s decision to repeal the Clean Power Plan even though its internal studies showed that the regulation would likely save both money and lives in the long run.
Throughout the hearing, Pruitt touted the EPA’s future goals, like cleaning up Superfund sites, or helping districts come into compliance with nationwide air quality standards, or helping communities deal with lead remediation. These are all good things, and important projects for the EPA to take on — it’d be hard to find an environmental or public health group that opposes taking steps to curb air pollution, for instance, or to help communities deal with legacy pollution.
But at the same time that Pruitt promised to focus the agency on these projects, he failed to connect how his deregulatory agenda — the agency’s efforts to undermine regulations about coal ash, for instance, or his decision to delay a rule that would force mining companies to prove they have the financial assets to cleanup their sites — could undermine his stated goals of ensuring clean air and clean water for all Americans.
“You’ve made it clear that you’re committed to Superfund cleanup. But what about preventing creation of new Superfund sites. The EPA’s job is to protect public health so it should be the job to prevent companies or entities from creating Superfund sites. Are you committed to that?” Rep. Jerry McNerney (D-CA) asked Pruitt during the hearing’s afternoon session, attempting to make the connection between the administration’s deregulatory effort and the potential for future pollution.
“Obviously lead, uranium, these issues, we want to do all we can to eliminate those things so we don’t have those kinds of sites across the country,” Pruitt answered.
“Well in your rush to eliminate regulations that’s exactly what you’re doing, is creating opportunities for new Superfund sites to be created,” McNerney said.
“I wouldn’t interpret it that way, Congressman,” Pruitt countered.
And with that, Rep. Jerry McNerney’s time expired.
https://thinkprogress.org/scott-pruitt-trump-administrations-weapon-9a6fb0a514a1/
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Senate Confirms Bodine As EPA Enforcement Chief, Bolstering Pruitt
Dec 7, 2017 | Inside EPA
The Senate has confirmed by voice vote President Donald Trump's nomination of Susan Bodine to head EPA's Office of Enforcement & Compliance Assurance (OECA), where she will help implement agency Administrator Scott Pruitt's “cooperative federalism” agenda that critics fear will lead to weakened federal enforcement.
Some Democrats who have previously raised concerns about a lack of responses to their questions from nominees said that EPA appears recently to be pursuing a “good faith effort” to answer those queries, and as a result the minority is willing to allow some progress on nominees for top EPA positions.
“I said just last week that if a sub-set of the letters that were due back from EPA were completed in short order and were truly responsive, we would make progress on nominations. The agency has done its part and now we are here, with Ms. Bodine set to be confirmed by this body today,” said Sen. Tom Carper (D-DE), ranking member on the Environment & Public Works Committee, ahead of the Dec. 7 voice vote on Bodine.
The fact senators approved Bodine by voice vote as opposed to roll call contrasts with the Senate's 49-47 vote on Nov. 9 to confirm controversial EPA air chief William Wehrum.
Bodine's confirmation means that Pruitt now has two other Senate-confirmed political appointees at the agency and suggests that other nominees that have not raised significant Democratic ire -- including the administration's picks for deputy administrator, Andrew Wheeler, and officials to lead the water and general counsel's offices -- could also win confirmation in the coming weeks.
However, Michael Dourson, the administration's controversial pick to lead EPA's toxics office, is unlikely to win confirmation anytime soon as Democrats and a handful of Republicans continue to insist he is too close to the chemical industry.
Senate environment committee Chairman John Barrasso (R-WY) recently reiterated his support for GOP efforts to limit debate on executive branch nominees in an effort to end continuing Democratic delays on Dourson.
Bodine, a former Republican EPW staffer and the agency's top waste official during the George W. Bush administration, was never seen as a controversial pick because of her policy positions. Instead, Democrats delayed a floor vote on her nomination due to concerns about a lack of EPA responses to their queries.
In late September, Bodine wrote to senators to answer their questions about her current advisory role at OECA, and Democrats at the time suggested it would clear the path to a vote on her nomination.
Once sworn in, she will lead OECA in pursuing enforcement of environmental laws -- something Pruitt has said he wants states to take more responsibility for in his cooperative federalism push.
But critics have claimed that Pruitt will try to pare back EPA enforcement through the effort, and point to a recent Region 7 letter, obtained by Inside EPA, that suggests the agency is reducing enforcement at the regional level and also stepping back from strict oversight of states' enforcement efforts.
Following the Senate's voice vote, EPW member Sen. James Inhofe (R-OK) issued a statement saying, “Susan has a wealth of knowledge and experience making her the right person to work with Administrator Pruitt to faithfully enforce our environmental laws.”
And Pruitt said in a statement: “I look forward to working with Susan to ensure stakeholders across the country are in compliance with the law and that polluters continue to be held accountable."
https://insideepa.com/daily-news/senate-confirms-bodine-epa-enforcement-chief-bolstering-pruitt
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(ACC Mentioned) BPA: The EFSA Position
Dec 8, 2017 | News-Medical.net
Bisphenol A, also known as BPA, is one of the chemicals used for the manufacture of resins and plastic compounds. Polycarbonate is a high-quality transparent and rigid plastic that is produced using BPA. Baby bottles, beverage bottles, tableware, and storage containers are some of the examples of polycarbonate products.
In addition, BPA is used in manufacturing epoxy resins that are used in the lining and coatings of beverage cans or food products. Hence, the BPA chemical is possibly transferred in small amounts to beverages and foods.
The European Food Safety Authority (EFSA) is an organization whose primary task is to collect scientific data from experts and analyze the substances included in the manufacture of products that come into contact directly with foodstuffs and other beverages.
It is the main organization communicating to the public about the possible risks related to unsafe food. EFSA also provides advice and coordinates with international bodies, EU countries, and other agencies on the subject of food safety.Background of EFSA on BPA
January 2007: The EFSA re-evaluated BPA from a group of expert studies carried out since 2002 and from studies in mice. After evidence was found by scientists about the limits of exposure of BPA in the human body, EFSA fixed the tolerable daily intake (TDI) level at 0.05 mg per kilogram of bodyweight.
The expert group of EFSA proved that the lower dose of BPA in rodents is not robust. BPA exposure in the human body, for both adults and children through foods is much lower than the newly-set TDI.
July 2008: In 2008, EPSA reconfirmed its existing position that products extracted from BPA-based polycarbonates such as water bottles, containers, and epoxy contacted foods are safe for use by all age groups. The BPA intake level (TDI) provides the safety margin to protect consumer health.
There are many authorities including the European Commission’s Joint Research Centre, the US NTP, the Norwegian Scientific Committee for Food Safety, and Health Canada who recently reviewed the reassessment done by EFSA.
They are a panel group focused on the mechanism to remove BPA from the body. They concluded that the human body immediately metabolizes BPA in the human body. The human fetal exposure to BPA is insignificant due to the rapid metabolism of the mother’s body.
Similarly, newborns are also able to eliminate BPA from their body through metabolism of doses less than 1 mg per kilogram of body weight within a day.
June 2009: Until the year 2009, there were no studies of based on criticisms of the position of EFSA on the findings of safe intake of BPA.
May 2010: The EFSA aim is to update their previous stance regarding safety of BPA as well as the new research data, including the study of neurodevelopmental factors and the risk of BPA put forward by other organization bodies.
January 17, 2014: The American Chemistry Council also supported the release of reaffirmations about the safety of BPA exposure by EFSA. EFSA finally announced in 2014 that BPA exposure in the human body from various sources is below the margin of safety intake level of BPA set up by government bodies.Other organizational support of EFSA’s opinion on BPA
There are many government organizations in the world that have studied and evaluated the effects of BPA exposure on the human body. Organizations such as the U.S. Food and Drug Administration (FDA) have updated their position recently that BPA is safe for use at lower levels. Previously, FDA was against using BPA-based products, but after comprehensive reexamination, they concluded BPA is safe. The FDA current position aligns with the position of EFSA.
U.S. government laboratories have supported the position of FDA and EFSA; recently FDA along with the government's Pacific Northwest National Laboratory (GPNNL) and the Centers for Disease Control and Prevention have conducted wide research on the risk of BPA in humans and animals. They have found that due to the metabolism of BPA in the body, there is a lower chance of health issues developing from exposure to any level of BPA in the body.Current position of EFSA on BPA
Recently, EFSA has released new data that BPA may affect the immune system of animals, while there is significant evidence that it affects the human immune system. This result was found after complete re-evaluation of the toxicity and exposure from BPA. EFSA is continuing in its efforts to study and analyze the methodologies to reduce the TDI level against the toxicity of BPA.
https://www.news-medical.net/health/BPA-The-EFSA-position.aspx
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Chemical Makers Applaud Coming Animal Reduction Test Strategy
Dec 8, 2017 | BNA Daily Environment Report
By Pat Rizzuto
Scientists working for chemical and pharmaceutical manufacturers praised a federal multiagency strategy to generate regulatory safety data, while reducing the number of animals killed in laboratory experiments.
The final strategy should be published early next year, according to Warren Casey, director of a National Toxicology Program center that serves as an administrative office for the interagency committee that developed the approach.
Bristol-Myers Squibb Co., Eli Lilly and Co., and Johnson & Johnson Services Inc. scientists were among those evaluating the draft interagency plan.
The road map will help companies, regulators, and developers of toxicity tests move away from laboratory-animal-based safety assessments toward tests that better predict the effects chemicals and drugs might have on people, according to members of the toxicology program's Board of Scientific Counselors, which reviewed the draft strategy Dec. 7.
Implementation Plans
Federal agencies will back up the general strategy with specific implementation plans showing whether and how they would use non-animal test data to make certain decisions, Nicole Kleinstreuer, deputy director of NTP Center for the Evaluation of Alternative Toxicological Methods, said.
For example, Kleinstreuer said, agencies will develop plans describing whether and how they could use non-animal data to inform decisions they typically make using data from one of the animal tests required by regulations—the acute oral toxicity test. The test generates a “lethal dose 50” or “LD50,” meaning it kills half of the animals, typically rats or mice.
LD50 data is used for decisions as diverse as types of warning placards needed on vehicles transporting a chemical; the personal protective equipment workers would need if they could be exposed it; whether the product could be used in a school; and whether the product needed to be contained in child-resistant package, Kleinstreuer said.
“All sorts of practical decisions are based on that one endpoint,” she said.
“You've picked a very actionable topic; the LD50 is a very logical target,” board member James Stevens, a research fellow with Eli Lilly Research Laboratories, said. Asking the agencies to focus on the LD50 data makes sense, because finding non-animal data that could inform those decisions could have an important impact, he said.
Hazard Versus Risk
For example, computer-generated toxicity predictions and automated, high-throughput gene or cellular tests can generate data that can separate chemicals into different groups in terms of their potential toxicity, he said.
Companies already use such tests to triage large numbers of molecules into small groups of chemicals and pharmaceutical ingredients they will study more, Norman Barlow, global head of toxicology for Johnson & Johnson, said.
But companies and regulators will want more exposure and biological information from non-animal tests when those tests will generate safety information for risk assessments of chemicals or potential drug ingredients to which people could be exposed, Barlow and Stevens said.
The public will want to know whether the non-animal tests accurately predict whether a chemical or potential pharmaceutical could harm their health or hurt the environment, board member Jennifer Sass, a senior scientist with the Natural Resources Defense Council, said.
Accomplishing the strategy's diverse goals will take a lot more work and time, board members said, cautioning the interagency committee not to over-promise what non-animal tests can deliver.
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=124667589&vname=dennotallissues&fn=124667589&jd=124667589
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Advocates Sue Safety Board Over Chemical Release Reporting
Dec 8, 2017 | BNA Daily Environment Report
By Sam Pearson
Companies could be required to report chemical releases to a federal regulator if a court sides with public interest groups.
The lawsuit, filed by Houston-area organizations and the Public Employees for Environmental Responsibility, seeks to compel the U.S. Chemical Safety Board to publish a rule that would require companies to report accidental chemical releases within 18 months of an incident.
Companies are already required to report unplanned releases of chemicals to local and state emergency planning committees under the Emergency Planning and Community Right-to-Know Act. But federal law called for companies to do more, the lawsuit contends.
Chemical Safety Board spokeswoman Hillary Cohen told Bloomberg Environment Dec. 7 the board has not yet received the lawsuit. Cohen said in an email the board is focused on completing ongoing investigations but will examine whether it has the ability to complete a reporting rule next year.
Law Saw Role for Board
Under the Clean Air Act Amendments of 1990, the board was directed to “establish by regulation requirements binding on persons for reporting accidental releases into the ambient air subject to the Board's investigatory jurisdiction.”
Once the regulations are finished, companies could either submit the information to the board or to the National Response Center, the law states.
The lawsuit filed by Air Alliance Houston, Public Employees for Environmental Responsibility, Louisiana Bucket Brigade, United Support and Memorial for Workplace Fatalities, and Neil Carman, the clean air program director of the Sierra Club's Texas chapter, asks the Chemical Safety Board to finish the reporting regulation.
The Sierra Club has received funding from Bloomberg Philanthropies, the charitable organization founded by Michael Bloomberg, the ultimate owner of Bloomberg Environment.
In failing to issue the regulation, the board violated the Administrative Procedure Act, the groups alleged.
The lapse harmed chemical release investigations and emergency response efforts, including at the Arkema SA facility in Crosby, Texas, that saw chemical fires and explosions after Hurricane Harvey hit the area this year, the lawsuit claims.Board Relies on Outside Sources
Currently, the board monitors for chemical safety events on its own.
“A news clipping service is not an adequate safeguard for the health of communities, workers, and first responders,” Public Employees for Environmental Responsibility counsel Adam Carlesco said in a statement Dec. 7. “American communities are forced into a game of Russian roulette, never knowing when an explosive round will go off—or what it contains.”
The EPA inspector general, which has oversight of the Chemical Safety Board, has repeatedly flagged the issue in reports, and the board considered starting the rulemaking in 2009.
In 2016, the Office of Inspector General said the board “believes it receives adequate incident notifications through constant media and internet searches, as well as existing federal sources such as the National Response Center.”
The inspector general added: “Even if it had already adopted a reporting rule, the agency would have essentially no capacity to collect or interpret much of the data it received, or seek enforcement action against any non-reporters.”
But in July, the inspector general removed establishing a chemical reporting regulation from a list of board management challenges. The change occurred because the board provided “corrective actions” and “additional justification,” the document said.
The board issued an advance notice of proposed rulemaking on the issue in 2009 but took no further action.
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=124667592&vname=dennotallissues&fn=124667592&jd=124667592
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EPA Guide Would OK Chemicals Without Enough Safety Tests: Advocates
Dec 8, 2017 | BNA Daily Environment Report
By Steven Gibb
The EPA is moving to grant new chemical approvals without enough safety testing in a “reckless and irresponsible” way, according to a former senior agency official in the Obama administration, who is now counsel to an advocacy group.
But Environmental Protection Agency officials countered the comments of Bob Sussman of Safer Chemicals Healthy Families by saying their decisions on whether to approve chemicals for use do not preclude tougher chemical enforcement.
They requested patience as they “live in the house as they build it” by implementing new 2016 amendments to the nation's chemicals law, said Nancy Beck, EPA deputy assistant administrator in the Office of Chemical Safety and Pollution Prevention.
The agency is seeking to ensure that industry can continue to fill a chemical innovation pipeline and keep it flowing as it addresses legal and policy issues raised by the new amendments, Beck said.
The exchanges between activists and EPA officials emerged at a Dec. 6 public meeting on the agency's draft blueprint for new chemical approval decisions under the 2016 Lautenberg Chemical Safety Act.
Since the passage of the new law, EPA has made determinations on whether to approve 1,148 new chemicals for use. It made decisions on 15 new chemicals in November alone, the agency said. But all of those decisions were made without the guidance document the agency is now soliciting comment on.
Step Forward or Back?
The EPA's implementation of new chemical oversight programs is critical to ensuring both public health and industry innovation.
However, Richard Denison, a senior scientist with the Environmental Defense Fund, said rushing to approve chemicals without safety testing is a step backward towards a “Catch-22” scenario: The agency won't test chemicals if there's no indication of risk, but can't determine there's a risk if there's no testing.
For “reasonably foreseen conditions of [chemical] use, EPA will assess whether they can be addressed using a ‘Significant New Use Rule’,” instead of using Section 5(e) orders to require safety testing, Jeff Morris, director of the Office of Pollution Prevention and Toxics at the EPA, said.
Industry representatives from Dow Chemical, BASF, and Procter & Gamble provided input at the meeting on EPA's evolving “Points to Consider” new chemical decision guidance.
For example, P&G Principal Researcher Michael Hayes requested that the EPA outline the touchpoints where the agency and firms can interact on their new chemical applications. He also encouraged more of a focus on physical-chemical properties.
But Morris’ statement prompted Sussman—who was deputy EPA administrator under President Bill Clinton and senior policy counsel to the EPA administrator under President Barack Obama—to say “EPA is disavowing the cornerstone of new chemical regulation” by relying on unenforceable and voluntary company efforts.
Other activists went further, saying EPA is unlawfully rejecting the congressional scheme for reviewing chemical risks prior to granting approvals.
They urged Beck, a former chemical trade industry official, to recuse herself from her position overseeing new chemicals policies. Beck did not respond to the comment.
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=124667588&vname=dennotallissues&fn=124667588&jd=124667588
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Input Sought on EU Endocrine Disruptor Guidance
Dec 8, 2017 | BNA Daily Environment Report
By Stephen Gardner
Pesticides and biocidal producers and other respondents can comment on draft guidance that the European Chemicals Agency and the European Food Safety Authority issued Dec. 7 on identifying endocrine-disrupting substances.
The guidance is intended to steer the implementation of European Union criteria for regulatory identification of endocrine disruptors, or substances that act on the hormone system and can harm growth and development.
Separate EU laws on plant pesticides and on biocidal products such as rat poisons and wood preservatives impose a general prohibition on endocrine disruptors.
Under the laws, companies that file applications to sell pesticides or biocides in the EU are required to evaluate the active substances in their products for potential endocrine-disrupting properties.
The draft guidance will help applicant companies “gather, evaluate and consider all relevant information” for the endocrine-disruption assessment, the agencies said.
Comments on the draft guidance can be submitted through Jan 31, 2018.
Pesticides Hold Up
The EU criteria for identifying endocrine disruptors in biocides were finalized in September and entered into force Dec. 7.
According to the criteria, a substance used in a biocidal product should be considered an endocrine disruptor if it shows an “adverse effect,” has an “endocrine mode of action,” and if “the adverse effect is a consequence of the endocrine mode of action.” A mode of action is a biochemical cascade in the body that results in unwanted health effects.
Exemptions can be granted for substances if “there is evidence demonstrating that the adverse effects identified are not relevant to humans” such as symptoms that emerge in animals but wouldn't in people.
The European Parliament in October blocked similar criteria for the identification of endocrine disruptors in pesticides after lawmakers objected an to exemption for substances that inhibit growth and reproduction in target insects.
Since the European Parliament veto, the commission had prepared a new proposal for the identification of endocrine disruptors pesticides that drops the exemption, Anca Paduraru, a spokeswoman for the European Commission, the EU's executive arm, told Bloomberg Environment.
To be adopted, the new proposal must be approved by a regulatory committee of EU country representatives. The regulatory committee would discuss, and might vote, on the proposal for pesticides at a Dec. 13 meeting, according to Paduraru.
Although the criteria for pesticides had been held up, once finalized, they “should not differ substantially” from the criteria for identification of endocrine disruptors in biocides, the two agencies said.
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=124667593&vname=dennotallissues&fn=124667593&jd=124667593
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Member States 'May Legislate' If EU Stalls On Harmonising FCM
Dec 7, 2017 | Chemical Watch
By Tammy Lovell
There is a danger member states will introduce their own food contact material (FCM) legislation, if the European Commission stalls on harmonising regulations, said Alistair Irvine of packaging, paper and print industry consultants Smithers Pira.
Speaking at the Plastics and Paper in Contact with Foodstuffs conference in Berlin, Mr Irvine said that progress had been "slow and ground to a halt" on EU plans to identify the path forward for future legislation.
He warned: "The risk is that the member states lose patience if new materials aren’t being regulated" and would therefore introduce their own national measures to protect consumers.
"Clearly the whole idea of the European approach is to try and harmonise the way the member states work and this is in danger of breaking down," he added.
Last year, Germany notified a draft of an ordinance on printing inks to the Commission. Germany also published a draft text amending the commodities Regulation with regards to mineral oil aromatic hydrocarbon (MOAH) contact with food materials.
Germany has suspended work on its draft ordinance on inks following an announcement from the Commission in November 2016, that it plans to harmonise printed FCMs.
This followed a draft report, issued by the European Parliament, on the Regulation of FCMs calling for harmonised regulation.
Mr Irvine said: "Many people want to demonstrate compliance for these products that are currently sitting outside European harmonised regulations and industry would therefore benefit from well-thought through and well-implemented legislation."
He added that it needed to be "properly consulted at all levels in the supply chain to make sure it can be made to work".Cross-industry group
Peter Oldring of coatings manufacturer Sherwin Williams (formally Valspar) said the Commission directorate responsible for food safety, DG Sante, challenged industry to think about new ways of regulating harmonised and non-harmonised FCMs and articles.
Industry has formed a cross-sector group of more than 25 professional associations, including representatives from the food industry.
The group has been active for more than a year and has three set groups focused on risk assessment and management; communication along the supply chain; and gaining support of non-industry sectors.
Mr Oldring said: "We are hoping that the output from this group will be an assistance in the way forward for legislation."
He advised companies having issues in non-harmonised sectors, to develop their own proposals based on scientific evidence and work with the Commission and member states to achieve the "common goal of safety of FCM".
The European Commission recently published a roadmap outlining how it will evaluate EU legislation on FCMs.
https://chemicalwatch.com/62354/member-states-may-legislate-if-eu-stalls-on-harmonising-fcm
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The Panama Canal Is Now a Major Problem for U.S. Shale
Dec 8, 2017 | Bloomberg
By Michael D McDonald and Naureen S Malik
A boom in natural-gas exports creates new challenges
Last-minute schedule changes for LNG tankers headed to Asia
It seemed at the time like a somewhat random, and amazingly fortuitous, coincidence.
Just as the Panama Canal was unveiling a new, fatter set of locks, U.S. shale drillers were readying their very first exports of liquefied natural gas. While the wide-body tankers that transport LNG would’ve had no chance of squeaking through the original steel locks built a century ago, they could easily traverse the bigger channel and shave 11 days off the trip to primary markets in Asia.
But 17 months in, it’s not quite working out as planned. Only a single LNG tanker has a guaranteed passage each day. The natural-gas industry blames the Panama Canal Authority for holdups, and the canal authority blames the industry for being lackadaisical about transit timetables.
Whoever’s at fault, this much is clear: The pressure is on both sides to resolve their problems. For gas exporters, it’s critical to establish credibility as a reliable new source of fuel for clients in Asia. For the canal authority, the stakes are high too, with Mexico and other countries flirting with creating alternative routes as gas demand booms.
“The canal surely has had some issues getting the new set of locks up and running smoothly,” said Peter Sand, an analyst with the shipping association BIMCO. “It has taken longer than the canal and the industry expected.”
The story starts at the opening in June 2016 of the expansion project. It couldn’t have come at a better time for the LNG market, just as Cheniere Energy Inc. was ramping up operations at the first export terminal ever built in the lower 48 states, at Sabine Pass on the Louisiana-Texas border.Just One?
The Panama Canal Authority promised a dozen daily slots for ships of all stripes to pass through the new lane -- ultimately. So far, the maximum it has been able to handle every 24-hour period is eight; preparations are underway to move that up to 10 or more in 2019.
What rankles LNG companies is that they’ve been awarded just the single reserved slot, with the rest going to container ships that carry consumer goods from sneakers to refrigerators. One position isn’t sufficient now and will be wholly inadequate once all the new export terminals under construction go on line, said Octavio Simoes, president of Sempra LNG & Midstream, at a conference in October. He caused a ruckus when he warned that canal holdups could crimp sales and cost traders serious money.
Jorge Quijano, chief executive officer of the canal authority, fired back, saying there are no plans to boost reservations for LNG tankers -- and suggested there won’t be until they prove themselves worthy.‘A Maybe’
“We can focus on giving them a second slot when they start to behave with a more contract-like pattern with their suppliers and buyers,” Quijano said from his office in Panama City. With container ships, “if they request a transit tomorrow, they’ll be there tomorrow.” LNG tankers, he said, “are a maybe.”
That’s not an accurate representation, according to the natural-gas industry. But canal operators do have to learn to be flexible, because exports from the U.S. will drive more spot trading, said Jason Feer, head of business intelligence at ship-broker Poten & Partners Inc. in Houston.
A decade ago, when the canal authority approved plans for the build-out, the U.S. was developing import terminals. The shale boom changed everything, and now the country is on track to become the world’s third-largest LNG supplier by 2020 -- up from zero at the start of 2016. That’s creating a new model for an industry that was once organized mostly around long-term contracts with set destinations.New Terminals
“Can the canal adapt? Can traders?” Feer said. “I’m not saying it will inhibit the competitiveness of U.S. LNG -- but there may be instances where it’s hard or impossible to do a deal because you can’t get it there soon enough because of the canal.”
At Sempra, one of several terminal developers spending tens of billions on new Gulf Coast facilities, Simoes said he and others are working with the canal to find a solution to what he called growing pains. “My intent is not to be upset or disruptive,” he said, but “the Panama Canal needs to work faster to resolve the issues.”
Those include too few tugboats to escort ships through the enhanced waterway, according to tug captains and crew members. They’re not impressed that the authority has budgeted $87 million this year to purchase six tugs with the option to buy four more to expand the current fleet of 46; their estimate is 90 are needed to safely and efficiently handle more than 10 vessels a day.
LNG tankers also require special attention -- including tugs with fire-fighting capabilities -- because of what they carry.‘Good Problem’
“You need state-of-the-art equipment and they are short,” said Don Marcus, president of the International Organization of Masters, Mates & Pilots, the union representing many tugboats workers in Panama. He said the canal is risking its own competitive future. “They’re not getting the most out of it because of these flaws, some of which could be fixed, but all of which cost money.”
At the moment, the authority isn’t flush. It has to pay off $2.3 billion in debt it took on to finance the expansion, with payments starting next year. But Quijano said the new lane will record $3 billion in revenue in fiscal 2018, $173 million more than in the previous fiscal year.
“The expansion’s capacity is going to be used much faster than anticipated,” he said. Unmet demand “is a good problem to have.”
Next year, he predicted, LNG volumes will grow by 10 percent. Natural-gas carriers have accounted for 8.6 percent of traffic through the new locks, according to authority data. Container ships represent more than half with vessels including cruise ships and private yachts making up the rest.
The authority’s current toll structure charges container ships substantially more. A fully loaded Neopanamax pays around $1.2 million to cross while a typical 170-cubic meter LNG carrier is charged around $460,000.
“There is a preference for the biggest users of the canal,” said Anders Boenaes, head of network for Maersk A/S, the world’s largest container-shipping company. “And I think that may be one of the reasons why there is noise among LNG carriers.”
The LNG industry and the canal authority “are both following a learning curve to manage additional volumes from the U.S.,” said Vincent Demoury, general delegate of the International Group of Liquefied Natural Gas Importers. He said he’s confident solutions will be worked out.
Feer of Poten & Partners said that could happen. “The canal will change their processes, if it makes them more money.”
https://www.bloomberg.com/news/articles/2017-12-08/u-s-shale-has-a-panama-canal-problem-that-s-got-no-easy-fix
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Canadian Industry Leader Urges U.S. Not To Dump NAFTA Energy Chapter
Dec 8, 2017 | PoliticoPro - Whiteboard
By Doug Palmer
The United States should abandon the idea of eliminating the NAFTA energy chapter and work with Canada and Mexico to improve its provisions, the head of the Canadian Electricity Association said today.
"We believe ... the chapter has worked well and that it does not require major fixing or nixing," CEA president and CEO Sergio Marchi said during a discussion on NAFTA energy issues hosted by the Washington International Trade Association. "It provides a consolidated energy space in NAFTA, and offers an effective framework for adding new elements as we modernize this agreement."
That is also Canada's position, a Canadian embassy spokesman said. Mexico has also expressed support for including an energy chapter in the revamped agreement now being negotiated. That's a major change from 25 years ago, when it insisted on being excluded from NAFTA energy commitments.
Marchi, a former Canadian trade minister, said his group has been told the U.S. wants to eliminate the chapter based on the rationale its provisions can be covered by other sections of the agreement.
"We also hear, for example, that without a chapter it makes it a lot easier for USTR to run the show, rather than relying on interdepartmental consultations," Marchi said.
The Office of the U.S. Trade Representative declined to comment on whether the U.S. was proposing to eliminate the chapter.
Marchi said scrapping the chapter wouldn't necessarily undo the energy reforms contained in the pact. But he argued it would make it appear the chapter hasn't worked, when that's not the case.
"We think [eliminating the chapter] would be a mistake," Marchi said, adding that Canada and Mexico could just as easily argue that the U.S. demand for a textiles chapter is unnecessary.
https://www.politicopro.com/energy/whiteboard
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Trump Administration Rolls Back Obama-Era Oil Train Rules
Dec 7, 2017 | Associated Press (In The Washington Post)
PORTLAND, Ore. — The Trump administration has angered environmental groups and residents of the Columbia River Gorge by rolling back a 2015 rule on oil train safety.
The Obama administration rule change required trains carrying highly explosive liquids to have electronically controlled pneumatic brakes installed by 2021 — systems intended to help prevent fiery oil train wrecks like the one that happened in the Oregon last year, Oregon Public Broadcasting reported Thursday.
A Union Pacific train derailed in the small Columbia River town of Mosier in June 2016, spilling 42,000 gallons of crude oil and sparking a massive fire that burned for 14 hours.
The U.S. Department of Transportation under President Donald Trump now says, however, that the rule change would cost three times the benefit it would produce and is rolling it back, the station reported. Electronically controlled pneumatic brakes are supposed to be faster than the current industry standard — air-controlled brakes — because the simultaneously signal to the entire train.
Industry officials reacted positively to the news.
Chet Thompson, of the American Fuel & Petrochemical Manufacturers, said in a statement that the rollback a “rational decision.”
Conservation groups and lawmakers in the Northwest said the rollback was frustrating, but unsurprising.
“We’re definitely frustrated that the Trump administration is weakening standards that are not strong enough to begin with,” said Dan Serres, conservation director with Columbia Riverkeeper. “We saw that with the Mosier derailment, potentially if there was a better braking system in place, we wouldn’t have seen so many cars come off the tracks.”
U.S. Sen. Jeff Merkley, an Oregon Democrat, also slammed the move.
“Oil trains are rolling explosion hazards, and as we’ve seen all too many times_and all too recently in Mosier_it’s not a question of ‘if’ but ‘when’ oil train derailments will occur. Degrading oil train safety requirements is a huge step backward and one that puts our land, homes, and lives at risk,” he said in a statement.
https://www.washingtonpost.com/national/energy-environment/trump-administration-rolls-back-obama-era-oil-train-rules/2017/12/07/e1cdfcb6-db87-11e7-a241-0848315642d0_story.html?utm_term=.892267c27e9a
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Factors That Could Curb Revival of the Railroad Industry
Dec 7, 2017 | Zacks (In Nasdaq)
Stocks in the railroad space are witnessing good times on the back of a number of tailwinds like an improved coal and intermodal scenario, financial prosperity and prudent cost management, among others. Despite the air of optimism, there are certain roadblocks one must be mindful of before investing in the sector. Let's delve into the details.
Declining Automotive Volumes
Weakness in the automotive sector, due to sluggish vehicle production in the United States, has been hurting railroads for quite some time and the third quarter of 2017 was no exception. Results of major railroad operators like Union Pacific Corp. (UNP) and Norfolk Southern Corp. (NSC) were distorted due to softness in this key sector.
Automotive volumes declined 10% and 5% at Norfolk Southern and Union Pacific, respectively, in the third quarter of 2017. What is worse is that the situation on this front is unlikely to improve dramatically in the fourth quarter.
Union Pacific on its third-quarter conference call said that light vehicle sales for full-year 2017 are projected at 17 million units, reflecting a 3% decline from the 2016 levels. With the automotive sector accounting for a significant chunk of their revenues, softness in automotive volumes in the fourth quarter will hurt them significantly.Weather-Related Disruptions
The recent hurricanes hurt operations of railroads by damaging important rail lines. Freight costs skyrocketed following the natural disasters. With fuel costs on the rise, the bottom line of these companies were hurt in the third quarter due to higher costs as a result of the hurricanes.
For instance, at Union Pacific, operating expenses increased 6% year over year to $3.4 billion in the third quarter, primarily due to Harvey. Furthermore, third-quarter operating ratio (operating expenses as a percentage of revenues) deteriorated 70 basis points to 62.8% at Union Pacific. Operating ratio also deteriorated at the likes of Canadian National Railway (CNI) in the third quarter due to high fuel costs.
Though operations have been normalized to a large extent, re-occurrence of such violent acts of nature have the potential to hurt the bottom lines of railroads significantly by increasing costs. In fact, such acts of nature throw railroad schedules out of gear by rendering multiple miles of track out of service.
NAFTA Uncertainty
Uncertainty surrounding the future of the North American Free Trade Agreement (NAFTA) is a major overhang on railroads. NAFTA refers to the trade pact inked in 1994 between the United States, Canada and Mexico in a bid to secure better terms for domestic workers. NAFTA has basically done away with almost all tariff among the three nations.
However, President Trump has repeatedly stated that he does not find the deal favorable to the United States. The President has called it " the worst trade deal ." Trump has in fact threatened to terminate the deal , if the negotiations, which are currently in progress, fail to yield the desired results. Consequently, any unfavorable development on NAFTA has the potential to hit railroads like Kansas City Southern (KSU) that have significant exposure to Mexico.
Kansas City Southern carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.Other Headwinds
Service disruptions at CSX Corp. (CSX), earlier in the year, battered the company. In fact, it had to attend a hearing of the U.S. Surface Transportation Board in October, due to service issues.
Company CEO Hunter Harrison, while apologizing to customers, attributed the disruptions to some of its employees resisting his attempts to boost earnings at CSX through cost-cutting efforts. The company has already laid off more than 2,000 employees so far this year. The workforce at CSX is expected to be trimmed further by year-end.
Naturally, Harrison's efforts at streamlining operations have met with resistance from employees. Though the company stated on the third-quarter conference call that the issues are a thing a past, the occurrence of such customer-related problems are unwelcome and should be avoided.
Moreover, repealing the Clean Power Plan (CPP), aimed at benefiting the coal industry and therefore railroads, is a time-consuming affair. Furthermore, even if CPP is repealed, as envisaged by President Trump, demand for coal might not pick up due to factors like cheap natural gas, according to many market watchers. In the event of the scenario materializing, railroads won't be benefited much, if at all, even if CPP is done away with.
Furthermore, proposals concerning reciprocal switching (referred to as forced access by the Association of American Railroads, if implemented, could result in significant loss of revenues for railroads. This is because the proposal pertaining to reciprocal switching would require railroads t0 share rail traffic with their competitors, most likely at below-market rates.
Conclusion
The write-up clearly indicates that stocks in the railroad space are not free from headwinds in spite of the optimism surrounding the space. The problems, unless solved quickly, can result in investors, especially the risk-averse ones, shying away from the sector.
Check out our latest Railroad Industry Outlook for more news on the current state of affairs in this market from an earnings perspective, and how the trend looks ahead for this important sector at the moment.
http://www.nasdaq.com/article/factors-that-could-curb-revival-of-the-railroad-industry-cm888699
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EPA Chief Says Public Climate Debate May Be Launched in January
Dec 7, 2017 | Reuters (In The New York TImes)
By Valerie Volcovici
WASHINGTON — The U.S. Environmental Protection Agency could launch a public debate about climate change as soon as January, Administrator Scott Pruitt said on Thursday, as the agency unwinds Obama-era initiatives to fight global warming.
The agency had been working over the past several months to set up a "red team, blue team" debate on the science relating to man-made climate change to give the public a "real-time review of questions and answers around this issue of CO2," Pruitt said.
"We may be able to get there as early as January next year," he told the House Energy and Commerce Committee during his first congressional hearing since taking office.
Pruitt and other senior members of President Donald Trump's administration have repeatedly cast doubt on the scientific consensus that carbon dioxide (CO2) from human consumption of fossil fuels is driving climate change, triggering rising sea levels, droughts, and more frequent, powerful storms.
He has also moved to bar scientists from serving on independent agency advisory boards who have previous won EPA grants, a move critics say favors scientists who work with regulated industries. [L2N1N61SV]Continue reading the main story
"EPA has all the signs of an agency captured by industry," U.S. Representative Paul Tonko of New York, the top Democrat on the House energy panel, said at the hearing.
An EPA official did not immediately respond to a request for comment on the selection of scientists.
The debate would come as the EPA proposes to rescind the Clean Power Plan, former Democratic President Barack Obama's main climate change regulation that was aimed at reducing carbon and other greenhouse gas emissions from power plants.
On Thursday, Pruitt said the agency planned to propose a "replacement" for the Obama-era rule. He previously only committed to considering a replacement.
But Pruitt has been under pressure from conservative climate change skeptics in Congress to go further and upend the scientific finding that CO2 endangers human health, which underpins all carbon regulation.
At the hearing, Pruitt said there was a "breach of process" under the Obama administration when it wrote its 2009 "endangerment finding" on CO2, because it cited the research of the United Nations climate science body.
"They took work from the U.N. IPCC [Intergovernmental Panel on Climate Change] ... and adopted that as the core of the finding," Pruitt said.
He did not say whether he planned to try to undo the finding, which legal experts have said would be legally complex.
Pruitt told Reuters in July the debate could be televised.
(Reporting by Valerie Volcovici; Editing by Richard Valdmanis and Peter Cooney)
https://www.nytimes.com/reuters/2017/12/07/us/07reuters-usa-epa-debate.html?_r=0
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Pruitt Questions EPA Finding That Climate Change Is Health Risk
Dec 8, 2017 | BNA Daily Environment Report
By Eric Roston
The Obama administration rushed an analysis that found climate change is a risk to human health and welfare, Environmental Protection Agency Administrator Scott Pruitt said, offering a justification that he could use to reverse that determination.
The key concern, Pruitt told a congressional panel, was that the EPA in 2009 relied on scientific reports written by the Intergovernmental Panel on Climate Change, the world's authoritative network of climate scientists. Pruitt called it a “unique situation” in which a regulatory procedure relied on outsiders’ scientific work.
“There was a breach of process that occurred in 2009 that many believe was not handled the proper way,” Pruitt told a panel of the House Energy and Commerce Committee Dec. 7. “That process in 2009 was short-shrifted.”
The IPCC, composed of government and university scientists from the U.S. and around the world, has produced five comprehensive reports since 1990 summarizing thousands of peer-reviewed research papers. The most recent synthesis, published in 2014, concluded that “human influence on the climate system is clear,” causing “widespread impacts on human and natural systems.”
Pruitt has questioned that link between emissions from factories, power plants and vehicles and global warming, saying the connection isn't as clear as scientists have made it.
His agency has been preparing to launch its own review of climate science in a forum borrowed from military strategy, in which a “red team” challenges conventional thinking and a “blue team” defends it. That will happen next year, he said.
Uprooting the so-called “endangerment finding” that enabled Obama-era climate regulations is no small task. A 2007 Supreme Court ruling essentially required the EPA to regulate carbon dioxide emissions if it found them to be a risk to health and welfare, and the scientific findings, including one issued by the U.S. government last month, have become more clear of the link between greenhouse gases and a changing climate.
While Pruitt has already moved to dismantle President Barack Obama's climate regulations, including the landmark Clean Power Plan, the EPA has so far declined to say if it would also move to repeal the underlying endangerment finding. Doing that would be a drain on agency resources and land it in court. Business groups have signaled they prefer a different course.
President Donald Trump in March issued an executive order directing Pruitt to pull back the Clean Power Plan. The EPA in October formally began the reversal process. Pruitt signaled in his exchange with Texas Republican Joe Barton that he expects his agency to replace the Obama-era measure with a new regulation, one that has yet to be articulated.
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=124667581&vname=dennotallissues&fn=124667581&jd=124667581
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US Fails to Enforce Smog Rules, 14 States Allege in Lawsuit
Dec 7, 2017 | Associated Press (In The New York TImes)
SACRAMENTO, Calif. — Fourteen states and the District of Columbia announced Thursday that they are suing the Trump administration over what they say is a failure to enforce smog standards.
The U.S. Environmental Protection Agency has not designated any areas of the country as having unhealthy air, missing an Oct. 1 deadline, according to the lawsuit. Such areas must take steps to improve their air quality.
Poor air quality particularly affects the health of children, people with asthma and those who work outside, said California Attorney General Xavier Becerra, who led and announced the filing. The lawsuit says smog can cause or aggravate diseases including heart disease, bronchitis and emphysema.
"Lives can be saved if the EPA implements these standards," he said in a statement.
Becerra was joined by the attorneys general in Connecticut, Illinois, Iowa, Maine, Maryland, Massachusetts, New York, Oregon, Pennsylvania, Rhode Island, Vermont and Washington state. Minnesota's Pollution Control Agency also joined the suit.
The EPA said the agency's policy is not to comment on litigation.
The suit is the latest allegation by Democratic officials in California and other states that the Trump administration is illegally delaying environmental actions as it attempts to unwind rules set under former President Barack Obama.Continue reading the main story
Becerra, for instance, noted that he previously sued Trump officials for what he calls an illegal delay of a rule encouraging automakers to create vehicle fleets that meet or exceed federal fuel efficiency standards.
Clean Air Act standards require that smog-producing ground-level ozone be kept below levels the federal government decides won't affect public health. The lawsuit says the EPA missed its deadline to say which regions are not meeting the most recent standards set by the Obama administration in 2015.
The EPA determined, in setting the ozone standards, that the required reductions would produce billions of dollars' worth of health benefits annually despite the costs of complying.
Failing to designate regions who are not complying deprives state and local regulators of crucial regulatory tools not otherwise available, according to the lawsuit. States were required under the law to recommend which areas they believe are not meeting the standards.
Nationwide, the tighter restrictions were projected to save between 316 and 660 lives each year, prevent nearly 900 hospital visits and keep children from missing 160,000 school days, bringing $4.5 billion in health benefits. That includes up to 218 saved lives and $1.3 billion in savings in California alone from a reduction in health care costs, lost workdays and school absences, according to the lawsuit.
The EPA tried in June to extend its deadline to Oct. 1, 2018, but then withdrew the proposed extension in the face of lawsuits from states and advocacy groups.
Last month, it designated some areas as meeting standards but said it was postponing any decisions on regions that weren't complying, including densely populated and high-risk urban areas, until "a separate future action," the suit says. The agency didn't say when it would act.
Efforts by states and regional air districts to reduce emissions from motor vehicles and other sources will be more difficult as the climate warms, California Air Resources Board Executive Officer Richard Corey said.
He said the EPA has had the information it needs to make the required designations for months without acting. The lawsuit asks a judge to order the EPA to act promptly.
https://www.nytimes.com/aponline/2017/12/07/us/ap-us-smog-lawsuit.html
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Pruitt Says Ozone Decisions ‘Close’ After Missed Deadline
Dec 8, 2017 | BNA Daily Environment Report
By Abby Smith
The EPA is “close to finishing” its determinations of which areas in the U.S. don't meet federal ozone standards, Administrator Scott Pruitt told lawmakers.
“We've designated all but 50 sites across the country approximately, and we've made tremendous progress since the timeframe that you're talking about,” Pruitt said in response to questions from Rep. Jerry McNerney (D-Calif.) at a Dec. 7 hearing before House Energy and Commerce's environment panel.
The Environmental Protection Agency missed its Oct. 1 deadline to issue designations under the more stringent ozone standards set in 2015. And though the EPA on Nov. 6 announced a partial list of the areas where ozone levels met the national limits, states are still waiting to hear which areas have exceeded the standards and must do more to curb pollution.
The agency's inaction recently drew lawsuits from several environmental groups—including the American Lung Association, American Public Health Association, and the Sierra Club—and from 14 states led by California.
Pruitt now says just 50 sites remain to be designated. In response to questions from McNerney, the administrator said the EPA in some cases had not received enough information from states to make the designations. EPA officials “have been in communication with states to get that in and finish that process,” Pruitt said.
Not an ‘Automatic Ratchet’
But Pruitt also said he and agency officials will be looking at the process by which the EPA reviews federal air quality standards, including the ozone limits, every five years.
“The review process should not be interpreted as an automatic ratchet down but a review of whether the levels are protective of human health,” Pruitt said.
That process, Pruitt said, is being reviewed by EPA air chief Bill Wehrum, who the administrator said is leading a task force to look at issues related to air transport, background ozone, and exceptional events, like wildfires. “There are issues we need to calculate and understand as those standards are set,” Pruitt added.
Health Costs Not Recalculated
Pruitt also disputed claims that the agency reversed a years-old approach to calculating air quality benefits in its regulatory analysis.
“We did not reverse it, congressman,” Pruitt told Rep. Raul Ruiz (D-Calif.) about the EPA's policy that fine particulate matter is a “non-threshold” pollutant—meaning there is no level of fine particulate matter the agency considers to be safe.
Ruiz asked Pruitt to explain why the EPA's regulatory impact analysis accompanying its plans to repeal Obama-era carbon controls for power plants altered the calculation of co-benefits.
The EPA's Oct. 10 proposal to repeal the rule, also known as the Clean Power Plan, included lower estimates of the health benefits from the power plant rule—in part by asserting that the health benefits of reducing the pollutant below federal air quality standards should not be part of that calculation.
“EPA assumes there are safe levels of fine particle pollution. That's a concern of mine,” Ruiz said. He asked whether Pruitt relied “on any new peer-reviewed scientific studies to support reversing the EPA's position.”
Pruitt, in response, said the EPA's withdrawal of the power plant rule was focused on “jurisdictional issues” under the Clean Air Act.
“We did not base our withdrawal of the Clean Power Plan on the issues you cited,” he said.
Controlling Methane
On the EPA's methane standards for new oil and gas wells, Pruitt said the agency has not gotten to the “substantive” part of reconsideration of the Obama-era regulation.
“There are compliance dates that are forthcoming that have been extended. That's been the focus,” Pruitt said.
The EPA is taking a second round of comment on its proposal to delay the first ever methane limits for new oil and gas wells by more than two years while it reconsiders portions of the rule. The agency's first attempt to administratively delay the regulation was struck down by the U.S. Court of Appeals for the District of Columbia Circuit in July.
Pruitt, when questioned by Rep. Scott Peters (D-Calif.) on the rule, declined to “prejudge” the outcome of the EPA's reconsideration.
But he noted the market value of companies capturing methane. “Having a rule in place that incentivizes that and ensures we approach it within the statute, I think that's something we should look at,” he said.
The EPA needs to determine, though, whether regulating methane under such a framework is “part of the bundle” under the Clean Air Act language.
When Peters pressed Pruitt on how the EPA would control oil and gas methane emissions, Pruitt said there are “best management practices that can be deployed by companies.”
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=124667582&vname=dennotallissues&fn=124667582&jd=124667582
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CEQ Says Withdrawn GHG Guide Being Reconsidered, Can Still Be Used
Dec 7, 2017 | Inside EPA
By Dawn Reeves
A top career official with the White House Council on Environmental Quality (CEQ) says its 2016 guide to federal agencies for how to consider greenhouse gases and climate change under the National Environmental Policy Act (NEPA) is being reconsidered and could be reissued, and that agencies can still rely on it even though President Donald Trump has ordered its rescission.
The official, Edward “Ted” Boling, who is CEQ's associate director for NEPA and who served as acting CEQ chair earlier in the Trump administration, tells a Dec. 7 American Bar Association call on “NEPA's Past, Present and Future” that Trump's March energy executive order “required CEQ to withdraw the guidance for reconsideration. And so it is just that.”
He says that CEQ is reconsidering the guide and that in the meantime, agencies are free to use the withdrawn document to address climate change in their NEPA reviews.
“We hear frequently at CEQ, 'Well, when are you going to come out with new guidance in this regard?' I think . . . that reconsideration will proceed under current leadership,” he says.
In the meantime, “it's not to say that federal agencies can't look at the prior guidance. Frankly, I was always amazed at the number of times I saw federal agencies quoting the draft guidance when it was in its pendency,” he adds, referring to the years-long process the Obama CEQ underwent to develop the guidance, which was finalized in August 2016.
The guide laid out detailed steps for consideration of the GHG impacts of major agency actions including indirect impacts, along with information for consideration of climate impacts on projects. It also endorsed the use of the Obama metric known as the social cost of carbon to quantify climate damages from GHG emissions.
Boling adds that during the reconsideration process, “federal agencies are on their own to make their own judgments” about the applicability of GHG considerations as well as adaptation, mitigation and emissions monitoring.
Also speaking on the call was Boling's predecessor, Horst Greczmiel, who has retired from government service. He urged attorneys and others to offer CEQ suggestions for how to address climate change and GHGs in ways that are better than what the withdrawn guidance outlined.
Such ideas, particularly ones that can withstand the many ongoing and future NEPA GHG-related court challenges, “would be great to hear, because a lot of the criticism of the guidance” could be addressed with an acronym -- RTFG -- he used frequently when he was at CEQ. That stands for “read the friggin' guidance.”
Greczmiel earlier on the call relayed a tale about a colleague who gave him a beer stein etched with those letters as a gift, since that was often his response to complaints about CEQ's NEPA guidance.
“If there is a simpler way to” address climate under NEPA, it “would be great to offer that to CEQ.” Then we can “take some Quaaludes and chill out,” Greczmiel said, while also lamenting the amount of time it took to finalize the guidance, which was not complete until after he retired at the end of 2015.
Trump Order
Trump's energy executive order called for CEQ to rescind the NEPA GHG guide, though left the council some wiggle room to reconsider the issue.
CEQ “shall rescind its final guidance entitled 'Final Guidance for Federal Departments and Agencies on Consideration of Greenhouse Gas Emissions and the Effect of Climate Change in National Environmental Policy Act Reviews,'” says the order.
But the order also gives a bit of wiggle room, telling the heads of all agencies, including CEQ, that they “shall . . . suspend, revise or rescind, or publish for notice and comment proposed rules suspending, revising or rescinding any such actions,” including the GHG guide.
CEQ published a notice in the April 5 Federal Register that withdraws the guidance “for further consideration” under terms of the executive order.
Meanwhile, on the ABA call, Boling and Greczmiel delivered a presentation that strongly defended NEPA's importance and effectiveness, and noted that many existing streamlining efforts are already in place but do not always get used, prompting Grezcmiel's first reference to RTFG. He said he started using the phrase “because people weren't following the efficiency opportunities” that CEQ offered and were “instead finding ways to fault NEPA” for an “inability to proceed in a timely fashion.”
They provided comprehensive lists of all CEQ NEPA guidance and additional handbooks and memos.
Boling also discussed how CEQ is implementing the NEPA portion of the 2015 transportation funding bill known as the FAST Act. He noted, for example, that the law created a permitting council to improve NEPA reviews, and that CEQ in coordination with the permitting group and the White House Office of Management & Budget issued Jan. 13 guidance that allows certain infrastructure projects to apply to become a covered project and receive easy formalized coordination among reviewing agencies and faster reviews.
The law also created a Federal Permitting Improvement Steering Council being led by deputy director Janet Pfleeger, until Trump nominates an executive director, that is steering 23 such covered projects, with information available on a Permitting Dashboard website.
Boling noted that Pfleeger will be testifying next week to the Senate Energy & Natural Resources Committee on the effort's progress.
He also praised some of the infrastructure-specific requirements in Trump's energy executive order for recognizing earlier efforts to speed NEPA reviews, rather than acting like it is the first to try. He said the administration's streamlining efforts “actually bears some striking” similarities to the policies of the Obama administration. The order is “extraordinary because it builds off the prior administration's work,” including referencing a 2015 “red book” and prior CEQ guidance. The order is “building off that effort, not pretending it is the first time” anyone sought to speed NEPA reviews.
He also sought to downplay complaints that NEPA reviews for infrastructure projects always take too long, noting CEQ has tallied about 500 projects and found that the median time between a notice of intent (NOI) to issue a permit and a record of decision (ROD) is 3.7 years, while noting there are “outliers” and that projects in the 75th percentile take 6.4 years between NOI and ROD while the mean is 4.9 years.
Finally, Boling said CEQ will revisit, update or supplement all of its existing NEPA guidance on all stages of the process, including categorical exclusions, environmental assessments, efficiencies, use of mitigation, collaboration and conflict resolution. CEQ has also committed to comprehensively look at its original 1978 regulations “and update and clarify as necessary.” He said that is “apt to be a fairly lengthy process.”
The original rules were developed “with ample public involvement” and he expects “no less for their revisiting.”
All of this is occurring without a confirmed CEQ chairperson. Nominee Kathleen Hartnett White -- a former Texas environment regulator considered a controversial pick because of her questioning of mainstream climate science and pro-industry views -- has been approved by the Senate Environment & Public Works Committee on a party-line vote but her nomination has yet to go to the Senate floor.
https://insideepa.com/daily-news/ceq-says-withdrawn-ghg-guide-being-reconsidered-can-still-be-used
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Pruitt Signals Higher Bar For Granting Objections To Clean Air Act Permits
Dec 7, 2017 | Inside EPA
By Stuart Parker
EPA Administrator Scott Pruitt's rejection of a petition asking him to object to a Clean Air Act Title V “umbrella” permit that combines all of a facility's air permits signals a policy shift raising the bar to win such objections, sources say, because EPA will no longer object to Title V permits due to alleged flaws in underlying permits.
In an order published in the Dec. 7 Federal Register, EPA denies steel manufacture Nucor's petition objecting to the Title V permit that Arkansas issued under delegated air law authority to rival company Big River Steel's (BRS) Oskeola, AR, plant. Nucor has long been engaged in a fight for rights to air pollution “increment,” or available pollution allowances, saying that BRS' emissions compromise its ability to expand operations in the vicinity of the BRS plant.
Title V permits are known as umbrella permits that collate all underlying federal air permits for a facility, and “applicable requirements” that pertain to a pollution source, but Title V permits do not themselves impose new emissions limits or other terms. They must, however, contain federally “enforceable” terms.
The Obama EPA largely focused its permit objection reviews on whether facilities should have undergone new source review (NSR) or prevention of significant deterioration (PSD) permit reviews, rather than whether underlying permits contained flaws. Pruitt's decision calls this an “expansive” interpretation and says EPA will now narrow this to a 1990s policy that was in place before President Bill Clinton took office.
One environmentalist calls the policy shift a “very big problem” because it narrows the grounds on which citizens can challenge Title V air permits, which are easier to identify than the many underlying permits. Often, public notice and comment is absent on underlying permits, especially for the many “minor source” permits issued by states, the source says. A default policy of not granting petitions objecting to Title V permits when the only basis for the request is a flaw in an underlying permit therefore makes winning such objections more difficult, the source says.
Asking EPA to object to Title V permits is a much cheaper and less risky option than filing litigation over alleged deficiencies in a permit, the environmentalist says. And the courts have mixed record in such cases, creating the risk of failure in seeking a legal recourse rather than an administrative option to block permits.
Policy Change
The BRS decision relies on a policy change that the Trump administration first detailed in its denial of another petition for a Title V permit objection, that of Sierra Club to the permit of the PacifiCorp Hunter power plant in Utah, which EPA denied Oct. 16.
In contrast to the Obama-era policy on permit objections, EPA says it will no longer consider challenges to underlying permits, such as the PSD air permit at issue in the BRS case. PSD permits are required for sources in areas attaining national ambient air quality standards (NAAQS) and are Clean Air Act “Title I” requirements, and establish best available control technology (BACT) to limit emissions. NSR is the PSD equivalent for nonattainment areas.
The environmentalist says that although the BRS and Hunter cases address somewhat different issues, EPA is using the same overarching principle to deny both petitions. “They are trying to merge it all,” the source says.
Of the two cases, Hunter has the most significant implications, because it pertains to disputes over the “potential to emit” (PTE) of industrial pollution sources that commonly arise in Title V permit petitions, the environmentalist says. Sources can limit their PTE to become “synthetic minor” sources, hence avoiding the NSR permit review required of “major” pollution sources that can trigger expensive new pollution control requirements.
EPA has not yet published the Hunter decision in the Register, but when it does so it will open a 60-day window to sue the agency -- a move that the source says environmentalists are “seriously considering.”
The BRS case, in contrast, relates to PSD permit terms issued in tandem with a Title V permit, a relatively rare occurrence and seldom the target of Title V permit petitions, the source says.
In its BRS decision, signed by Pruitt Oct. 31, EPA says, “Petitioner’s claims discussed . . . relate exclusively to title I permitting requirements -- including preconstruction modeling and monitoring requirements, additional impacts analyses, and BACT determinations -- rather than title V permitting requirements.”
Further, “This presents the fundamental issue of whether decisions made in issuing a [Title I] preconstruction permit, like the PSD permit issued to BRS, should be considered by the EPA in reviewing or considering a petition to object to a [Title V] operating permit,” according to the notice. The agency “has previously considered similar preconstruction permitting issues when they were raised in petitions for an EPA objection to a state-issued [Title V] permit. However, the EPA has recently reviewed this past practice,” EPA says.
EPA “concluded in the PacifiCorp-Hunter Order that the [Title V] permitting process is not the appropriate forum to review preconstruction permitting decisions when a preconstruction permit has been duly issued,” the agency says. Therefore, EPA denies a slew of specific objections by Nucor that challenge the PSD permit issued to BRS.
'Expansive Reading'
EPA says its prior “expansive reading” of Title V requirements “leads to an incongruous result that is inefficient and can upset settled expectations -- on the part of a state, an owner/operator, and the public at large -- in circumstances where a source has obtained a legally enforceable preconstruction permit in accordance with the requirements of Title I.”
Further, the agency says it aims not to second-guess states' decisions on PSD or related NSR permits, and posits that its new interpretation is actually a return to a more faithful reading of the Clean Air Act.
The Hunter decision turns on Sierra Club's accusations that the plant's Title V permit lacks necessary PSD permit requirements, including BACT, because the group argues the plant is a “major source.” Utah air regulators found the plant is not a major source, and hence need not undergo BACT review, issuing a “minor source” permit instead.
EPA argues that the state's decision is not subject to second-guessing by the agency. “EPA is now interpreting the regulations to mean that the issuance of a minor NSR permit defines the applicability of preconstruction requirements under section (1) of the definition of 'applicable requirement' for the approved construction activities for the purposes of permitting under title V of the [Clean Air Act],” the agency says in its decision.
EPA also denies Sierra Club's request for the agency to object to plant-wide applicability limits (PALs) for the Hunter plant that the group claims are flawed, again because they are not flaws with the Title V permit per se, but with underlying requirements. PALs are overarching emissions caps covering several emissions sources at a given facility.
The agency emphasizes, however, that for enforcement purposes it retains the ability to object to such underlying permit provisions themselves.
Court's Decisions
The policy shift echoes to some extent the views of some federal courts on Title V permitting, where courts have declined environmentalists' or EPA's challenges on the basis that Title V permits are separate from underlying “applicable requirements” and cannot be faulted because of alleged failings in the underlying permits.
For example, Judge Ed Kinkeade of the U.S. District Court for the Northern District of Texas' Dallas division in an Aug. 21, 2015, ruling in United States v. Luminant Generation Company, LLC and Big Brown Power Company, LLC,rejected an Obama EPA enforcement action against utilities Luminant and Big Brown based in part on alleged Title V violations.
In his opinion, Kinkeade wrote, “Failure to amend a Title V permit or the submission of an incomplete permit application is not actionable in an enforcement suit under the Clean Air Act.” EPA in the suit argued that the utilities evaded NSR for major plant modifications, and they therefore lacked the necessary air permits. Because these permits were missing form the Title V permit, that overarching permit was also deficient, EPA reasoned, but Kinkeade found the NSR issue to be separate from Title V.
Meanwhile, Nucor has been locked in a novel legal fight with BRS over access to air pollution increment in the area surrounding its own nearby facilities, which it claimed might not be able to expand if the increment is awarded to BRS' new facility. Increment is the amount of additional pollution available for industry to allow expansion in a given area without causing a violation of NAAQS.
However, the unusual increment fight is for now sidelined by EPA's denial of Nucor's petition, which ends Nucor's lawsuit brought in the U.S. District Court for the District of Columbia seeking to force an EPA response to the petition. EPA and Nucor on Nov. 2 agreed to dismiss the suit.
https://insideepa.com/daily-news/pruitt-signals-higher-bar-granting-objections-clean-air-act-permits
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