Preview Newsletter
AM ACC 1/25/2018
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US Tax Reform to Boost Capital Investment, Open up M&A Options
Jan 24, 2018 | ICIS
By Joseph Chang
US tax reform is set to have profound implications for the US chemical sector – from profitability to capital investment, to mergers and acquisitions (M&A). -
No One Seems to Want to Run Trump's EPA in California
Jan 25, 2018 | Los Angeles Times
By Evan Halper
Perhaps it is unsurprising that the White House still hasn't filled this job: San Francisco is not an inviting place for the Make America Great Again administration. -
NRDC Sues over EPA's 'New' Chemical Framework as Groups Detail Claims
Jan 24, 2018 | Inside EPA
By Dave Reynolds
Environmentalists have quietly sued to block the Trump administration's framework for reviewing new chemicals under the revised Toxic Substances Control Act (TSCA), clearing the way for a legal test on whether the administration can proceed with its plan... -
Edf Submits Comments on Oregon’s Proposed Rules for Lead Testing in Child Care Centers
Jan 24, 2018 | Environmental Defense Fund
By Lindsay McCormick
EDF recently submitted comments to the Oregon Department of Education’s Early Learning Division regarding the state’s proposed rules for lead testing for water in licensed and regulated child care centers. -
Big Data Requires Focus on Mode of Action, Say Experts
Jan 25, 2018 | Chemical Watch
Toxicological information should be reorganised according to mode of action to take full advantage of "big data" and machine learning, according to an expert report from the 2017 World Congress on Alternatives, held in Seattle. -
Non-Genotoxic Carcinogens Missed by Tests, Says Workshop Report
Jan 25, 2018 | Chemical Watch
Some non-genotoxic carcinogens risk being undetected by current testing regimes, according to discussions at an expert workshop on the "way forward" for carcinogenicity assessment. -
Calif., Greens Roll out BLM Fracking Lawsuits
Jan 24, 2018 | E&E News PM
By Ellen M. Gilmer
Federal fracking standards are back in the courtroom. -
Investigators Begin Assessing Oklahoma Gas Rig Explosion
Jan 24, 2018 | Natural Gas Intelligence
By Jamison Cocklin
Three days after an explosion ripped through a Patterson-UTI Energy Inc. drilling rig in Oklahoma killing five men, an investigation is underway to determine what caused the blast. -
Rick Perry: US 'Blessed' to Provide Fossil Fuels to the World
Jan 24, 2018 | The Hill - E2 Wire
By Miranda Green
Department of Energy Secretary Rick Perry said Wednesday that the U.S. is "blessed" to provide fossil fuel to the rest of the world. -
Dems Want Zinke to Testify on Fla. Exemption
Jan 25, 2018 | E&E Daily
By Rob Hotakainen
Interior Secretary Ryan Zinke faced more fallout on Capitol Hill yesterday from his decision to exempt waters off Florida from a five-year oil and gas leasing plan, with leading Democrats on the House Natural Resources Committee asking for a full oversight hearing on the issue. -
Trump Can Keep America Energy Dominant with Advanced Energy
Jan 25, 2018 | The Hill - Opinion
By Malcolm Woolf
The economy will undoubtedly dominate President Trump’s upcoming State of the Union address to Congress. The president spent the past year touting his “energy dominance” agenda. -
Smaller Operators Push Bakken Output Outward
Jan 24, 2018 | Platts
By Brian Schied
For years, large public companies have produced crude oil in North Dakota largely in an area known as "the core of the core" of the Bakken shale play. -
6 Tech-Driven Factors Will Help Make a Truly Modern Grid
Jan 24, 2018 | Environmental Defense Fund
By Ronny Sandoval
Improving our electricity system – using technology available today – could be the single largest opportunity we have to fight climate change. -
2 More Spills Reported at North Carolina Plant Under Review
Jan 24, 2018 | AP (In U.S. News & World Report
A company has reported two more spills at one of its North Carolina plants that likely contained the chemical GenX. -
Trump’s Infrastructure Push Targets Permit Rules
Jan 25, 2018 | Wall Street Journal
By Ted Mann
U.S. Chamber of Commerce President Thomas Donohue last week was nearing the end of a speech urging Congress to rebuild the nation’s infrastructure when he offered another option: At least make it easier to build things when the money can be found. -
Koch Network Joins Fight Against Gas Tax
Jan 25, 2018 | E&E Daily
By Geof Koss and Nick Sobczyk
Conservative outside groups affiliated with the billionaire Koch brothers' political network are trying to tamp down any talk of raising the federal gas tax ahead of the State of the Union speech, around the time President Trump may offer more details about his much-talked-about infrastructure push. -
Environmentalists Fault EPA 'Volte-Face' on Ozone Designations
Jan 25, 2018 | Inside EPA
Environmentalists are faulting what they say is EPA's “volte-face,” or abrupt reversal, in its previously stated non-binding April 30 deadline for issuing all remaining designations of which areas are either attaining or violating the 2015 ozone standard...
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US Tax Reform to Boost Capital Investment, Open up M&A Options
Jan 24, 2018 | ICIS
By Joseph Chang
US tax reform is set to have profound implications for the US chemical sector – from profitability to capital investment, to mergers and acquisitions (M&A). The new US tax regime brings the corporate tax down from a top rate of 35%, to 21%, and also allows for full expensing of certain capital investments such as machinery and equipment through 2021.
“There is no question the tax reform act will benefit US headquartered chemical companies because the lower tax rate will directly increase after-tax profits. Each company will decide where they will use the extra earnings, whether it is greater dividends, stock repurchases, increases in wages, increased investment in their business or more acquisitions,” said Peter Young, president of investment bank Young & Partners.
In addition to the profitability boost that comes with lower taxes, there are more specific implications.
INVESTMENT BOOST
The ability for companies to expense 100% of certain capital expenditures (CAPEX) such as plant and equipment for the first five years (being phased down in the following five years) should spur quick investment decisions on major chemical projects in the US.
The US is now not only feedstock advantaged with shale gas, but also tax advantaged (or at least less tax disadvantaged). There’s a compelling argument for investing in major projects today – a lower tax rate on profits generated from those assets, and the five-year window of full deductibility of CAPEX.
Capital intensive commodity chemical companies are likely to focus more on internal rate of return (IRR) and after-tax return on assets (ROA) – “a recipe for tolerating lower margins across the next cycle and consequently taking on more projects”, noted Laurence Alexander, analyst at Jefferies. The full expensing of certain CAPEX also carries into M&A. “This also means that if you structure deals as asset sales, some or all of the non-goodwill portion of the purchase price can be deducted in the first year, providing real value to any buyer,” said Alex Khutorsky, partner at investment bank The Valence Group.
This deductibility could be one factor putting upward pressure on M&A multiples, as buyers would be able to pay more, said Khutorsky.
“The 100% expensing of CAPEX will be very stimulative, with benefits in particular for investment and asset purchases,” said Leland Harrs, managing director at investment bank Houlihan Lokey. “The tax reform is supportive of a strong M&A market, but you don’t need M&A to benefit,” he added.
The overall US tax reform also makes US assets more attractive to foreign buyers with “an economic incentive to buy US assets that wasn’t there before,” said Harrs. “It’s a tailwind, but we don’t see a wholesale rush to buy US assets.”
REPATRIATION IMPACT
With attractive terms for repatriation of cash, US chemical companies should have a lot more funds available.
The new “deemed repatriation” tax provision makes all profits of US companies generated (and mostly thus held) overseas “deemed” to have been returned to the US and taxed one time at a 15.5% rate for cash and 8% for reinvested assets.
Companies bringing back cash to the US must pay tax immediately, while those that leave cash and reinvested assets abroad can pay the tax over eight years.
Future foreign profits would not be taxed in the US beyond what they are already taxed abroad, giving zero incentive to keep excess cash outside the US from a tax standpoint. Any future profit generated outside the US can now be repatriated at any time at no cost.
“The majority of US chemical companies with overseas operations will look seriously at repatriating their overseas cash. There are some provisions that create an incentive to do it now rather than later,” said Young of Young & Partners.
The range of options for companies opens up considerably. A company that would have wanted to make a large acquisition in the US, but was hindered by having a good portion of its cash held overseas, could now fund that deal if it so chooses.
The combination of US companies having lower corporate taxes, and the fact that they no longer have to pay US taxes on foreign profit “allows US companies to be much more competitive in the international M&A market”, noted the Valence Group’s Khutorsky.
https://www.icis.com/resources/news/2018/01/24/10186522/us-tax-reform-to-boost-capital-investment-open-up-m-a-options/
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No One Seems to Want to Run Trump's EPA in California
Jan 25, 2018 | Los Angeles Times
By Evan Halper
Perhaps it is unsurprising that the White House still hasn't filled this job: San Francisco is not an inviting place for the Make America Great Again administration.
But the administration's effort to fill one of its most important environmental jobs — chief of the Environmental Protection Agency's headquarters for California and the rest of the Pacific Southwest — keeps going sideways.
On Tuesday, an oil and gas lobbyist from New Mexico who, according to several people inside the Trump administration, was poised to fill the post told The Times it was all a big mistake. He'd be staying put in New Mexico.
"I am not leaving my current role as Executive Director of the New Mexico Oil and Gas Association for any position at EPA or elsewhere within the federal government," said an email from Ryan Flynn.
That unwavering declaration caught some in the administration off guard. Flynn had already been spotted at EPA offices this week, where staff in the building reported he was fingerprinted, a final step before assuming the role as head of EPA Region 9.
This was at least the second time the Trump administration had an oil industry executive bow out of the running for the Region 9 job in a late stage of vetting. In other cases, candidates had been approached, but took a pass before talks got that far.
The job is proving to be one of the least sought-after leadership roles in the administration. Region 9 is the only one of EPA's 10 regional headquarters that still lacks a chief.
The assignment is to carry out the Trump agenda — industry-friendly and averse to action to combat climate change — in one of the the nation's most environmentally active states. The post is guaranteed to come with daily confrontation with the state's battle-ready leaders, not to mention the hordes of protesters who can make just getting to and from work in San Francisco a professional hazard.
"The saying goes that there are nine EPA regions and then there is Region 9," said Jared Blumenfeld, who ran that office during the Obama administration.
The passion of the scientists, enforcement officers and others who work in California, he said, has made it "nearly impossible for Trump to recruit" someone "to stand in front of the 900 EPA professionals in Region 9 and lead them and the agency over the precipice. It would be a fool's errand," he said.
Yet the Trump administration continues to hunt aggressively for a candidate. Flynn was cut from cloth similar to that of EPA Administrator Scott Pruitt, whose crusade to unravel scores of federal environmental rules and undermine mainstream climate science is fiercely resisted in California.
Flynn is an oil and gas enthusiast who, during his tenure running New Mexico's state environmental agency, cut deals with industry that enraged local environmentalists. The New Mexico Environmental Law Center twice awarded him its "Toxic Turkey" prize.
The Environmental Protection Agency declined to comment on why its pursuit of Flynn went off track. But officials there said that EPA Region 9 will have its leader soon enough.
"EPA is in the process of filling numerous positions," said an email from agency spokesman Jahan Wilcox. "We look forward to announcing a Regional Administrator for Region 9, who will be dedicated to Administrator Pruitt's agenda of protecting the environment and human health."
Before Flynn was in the mix, the administration had been courting Chris Paul, an executive with Gulf Oil. He, too, was well into the appointment process when things fizzled.
The stress the job would bring is not the only reason it has proved a tough sell, in particular to the oil industry officials Pruitt and President Trump seem to favor. There is also the salary cap. The pay maxes out in the range of $180,000 — probably not enough to support an oil-executive lifestyle in the Bay Area.
Or to help fund a refuge elsewhere. The Region 9 head under the administration of George W. Bush charged the government for so many flights out of San Francisco that it caught the attention of federal investigators. They ultimately concluded he was improperly billing taxpayers to get to his house in Orange County.
But the biggest drawback of the job for a Trump appointee is that everyone considered for it probably agrees with the president that California is "out of control."
As Flynn was emailing a reporter that he likes his job in New Mexico just fine, thank you, California's attorney general was launching yet another attack against the administration. This time it was a lawsuit to stop the administration's plan allowing more fracking.
State Senate President Pro Tem Kevin de Leon (D-Los Angeles) warned in an email that whoever ultimately takes the job "is going to be held to account" for "Trump's hostile intrusions" on California's natural resources and shorelines.
It's a standard battle cry these days, but it gives pause to any operative who anticipates staying in the state after Trump is gone. The administration is so toxic in California that affiliating with it can seriously damage one's career there.
"The state has made it quite clear they oppose anything having to do with Trump," said Jeffrey Holmstead, who was an EPA deputy administrator under President George W. Bush. "It makes it more difficult to find people who afterwards still have to make a living working with companies and agencies in California."
For now, activists like Sierra Club legislative director Melinda Pierce are pleased to see Trump having so much difficulty with the appointment.
Out west, she said, "not even fossil-fuel lobbyists want to help Scott Pruitt."
http://www.latimes.com/politics/la-na-pol-trump-epa-california-20180123-story.html
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NRDC Sues over EPA's 'New' Chemical Framework as Groups Detail Claims
Jan 24, 2018 | Inside EPA
By Dave Reynolds
Environmentalists have quietly sued to block the Trump administration's framework for reviewing new chemicals under the revised Toxic Substances Control Act (TSCA), clearing the way for a legal test on whether the administration can proceed with its plan to drop the use of enforcement orders as an interim step in regulating the substances.
The Natural Resources Defense Council (NRDC) Jan. 5 sued EPA in the U.S. Court of Appeals for the 2nd Circuit to block the agency's “New Chemicals Decision-Making Framework.”
The suit makes good on a threat the group and others issued last month warning of such a suit if the agency did not delay implementing the framework until after it had reviewed comments.
While the petition does not detail any legal arguments, NRDC and other groups previewed their arguments in comments filed ahead of a Jan. 20 deadline that claim EPA's process for reviewing the chemicals violates the new law and the Administrative Procedure Act (APA).
In their comments, NRDC and other environmentalists reiterate long-standing charges that the proposed framework is unlawful in large part because it limits the use of section 5(e) enforcement orders that advocates say are needed as an interim step the agency had previously used for regulating and approving the substances.
They say, among other things, that TSCA mandates use of enforceable orders to ensure that premanufacture notices (PMNs) that EPA issues to allow new chemical uses do not pose unreasonable risks or inadvertently allow other uses that may pose risks.
EPA's framework seeks “to radically deconstruct the new chemicals program,” NRDC, Safer Chemicals Healthy Families, the Union of Concerned Scientists, and other groups say in their Jan. 20 comments.
“It seeks to turn the new law on its head and reduce health protections by dramatically curtailing the use of section 5(e) orders, the principal tool under the old and new laws to address the risks of new chemicals of concern."
EPA sought comment through Jan. 20 on its framework for reviewing new chemicals under section 5 of the revised TSCA, even as agency officials indicated they were implementing the approach.
The section requires that the agency make a definitive finding regarding the safety of each new chemical for which it reviews a PMN and to consider the "reasonably foreseeable" uses of the substance.
Because PMNs apply to specific uses, agency officials as recently as last summer also planned to write some voluntary consent orders under section 5(e), under which manufacturers agreed to limits on “new” chemical uses or additional environmental safety and health testing until the agency finalized significant new use rules (SNURs), formal regulations that can require lengthy notice-and-comment rulemakings.
But rather than issuing 5(e) enforcement orders as the agency had previously planned, the proposed framework indicates the agency will instead preclude other uses with a SNUR.
EPA officials had committed to the consent order approach last summer but dropped it, officials said, to ensure more efficient reviews of industry applications -- which the law requires must be completed within 90 days -- and prevent backlogs in agency reviews of applications while still providing equivalent health protections.
Industry officials are backing EPA's approach, and are also suggesting a series of additional steps the agency could take aimed at speeding reviews of new chemicals.
And an industry coalition is separately urging the agency to craft a process for consulting with OSHA under the revised TSCA. The industry letter also argues that OSHA rules adequately protect workers, in most cases, making EPA restrictions unnecessary.
'Bypasses' Requirements
But the coalition of environmental and public health groups, and the Environmental Defense Fund (EDF) in separate comments, argue that EPA, after correctly implementing a new chemical review program in the first year after the revised TSCA, abruptly changed course last summer.
Advocates blame the reversal on the influence and pressure of the chemical sector and the industry's former lobbyist, Nancy Beck, who is now a senior official in EPA's toxics office.
Advocates contend that dropping enforcement orders violates a requirement in section 5 of the revised TSCA for EPA to reach a determination on the safety of a chemical substance rather than simply review the risks of a use identified in a PMN.
And they charge that SNURs are inadequate to mitigate potential risks and using them in lieu of issuing enforceable 5(e) consent orders violates the APA. “EPA’s new approach necessarily bypasses the important new requirement in amended TSCA to determine the sufficiency of information and to require testing under section 5(e) to fill critical information gaps while exposure and release are controlled,” the coalition of environmental and public health groups say.
Similarly, EDF argues that “TSCA does not allow EPA to avoid issuing a § 5(e) order for a new chemical substance based on a SNUR; if a chemical substance may present an unreasonable risk under its reasonably foreseen conditions of use, or if EPA has insufficient information on the substance, or if EPA makes an exposure‐based finding, the plain text of TSCA requires that EPA issue a § 5(e) order.”
EDF adds that, “Giving weight to a SNUR that is not finalized and legally in‐force would be arbitrary and capricious and would undermine the legality of the SNUR."
Environmentalists also argue that the revised TSCA's legislative history supports a “holistic review” of risks from all foreseeable uses of new chemicals. And the groups raise a host of other arguments, including calls for greater EPA transparency on the review process and rejection of industry's push to defer to OSHA.
Congressional Views
To support its position that TSCA requires review of all foreseeable uses rather than simply those in a PMN, the environmentalist coalition cites comments to EPA from Sens. Ed Markey (D-MA), Tom Udall (D-NM) -- a lead sponsor of the new law -- and Jeff Merkley (D-OR) in January 2017 as clearly rejecting the approach EPA is taking in its framework.
“Congress clearly intended for EPA to assess all conditions of use for new chemicals,” the senators wrote. “Doing
otherwise would be antithetical to the goal of providing the assurance that a new chemical proposed for manufacture is not likely to pose an unreasonable risk, whether that risk is presented by the use(s) the first manufacturer intends to commercialize or by a future use commercialized by that or any other manufacturer."
EDF also points to a statement from former Sen. David Vitter (R-LA) as backing its claims that EPA must address potential risks of chemical uses with enforceable 5(e) orders rather than a future SNUR.
“Senator Vitter (another lead negotiator) explained that 'when EPA does not have the information sufficient for the evaluation of a new chemical, or when EPA determines that a new chemical may present an unreasonable risk, the compromise requires EPA regulate the new chemical to the extent necessary to protect against unreasonable risk.'”
“Notably, Senator Vitter used the language of TSCA § 5(e), making it clear that when a chemical may present an unreasonable risk or there is insufficient information, EPA must issue an order under TSCA § 5(e),” EDF says. “Senator Vitter did not refer to EPA relying on its SNUR authority under § 5(a)(2) instead.”
In their recent comments to the agency, the environmentalist coalition also builds on past procedural concerns with the proposed framework, arguing that EPA has failed to keep the public adequately informed on its new chemicals review process, despite requirements for transparency in the revised TSCA.
The groups urge EPA to take a host of steps to improve understanding of the new process, including notifying the public of receipt of PMNs, the status of reviews and determinations reached on substances deemed not likely to present risks. The groups also seek disclosure of expert analysis of hazard and exposure data underlying the reviews, and aggressive weeding out of unjustified claims of confidential business information, among other concerns.
“At the same time as it implements troubling changes in the PMN process that reduce protections against new chemical risks, EPA has moved backward in providing timely and meaningful information about the PMN program,” the groups say. “This has added to the difficulty of tracking the progress of individual new chemicals through the review process, the basis for EPA’s new chemical evaluations, and the actions it takes (or doesn’t take) on particular PMNs.”
https://insideepa.com/daily-news/nrdc-sues-over-epas-new-chemical-framework-groups-detail-claims
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Edf Submits Comments on Oregon’s Proposed Rules for Lead Testing in Child Care Centers
Jan 24, 2018 | Environmental Defense Fund
By Lindsay McCormick
EDF recently submitted comments to the Oregon Department of Education’s Early Learning Division regarding the state’s proposed rules for lead testing for water in licensed and regulated child care centers.
Children are particularly vulnerable to lead exposure: even very low blood lead levels can impair normal brain development, contribute to learning and behavioral problems and lower IQs.
While national attention on lead in drinking water has spurred action to address lead in schools, fewer states have addressed lead in water in child care settings – even though these centers serve children at their most vulnerable ages.
In October 2017, Oregon’s Governor Kate Brown directed the Early Learning Council to begin rulemaking to require that state licensed child care facilities undergo lead testing – reversing an earlier decisionfrom the Council to not mandate testing. Oregon is one of six states that EDF has highlighted in a previous blog focusing on child care lead in water testing requirements.
Oregon’s draft rules would require all licensed and regulated facilities to test for lead once every six years using a state Health Agency-accredited laboratory and take mitigation actions if levels at or above 20 parts per billion (ppb) are detected.
While we commend Oregon for being a leader in this space, our comments encourage Oregon to make a number of changes to strengthen the final rule:
· Incorporate lead service line (LSL) investigation. When present, LSLs are the largest source of lead in water – and can unpredictably release lead particulates into water. If identified, the facility should work with the local water utility to remove the LSL.
· Use a more protective action level. The proposed action level of 20 ppb is not based on science or health. Results from an EDF pilot project suggest that 3.8ppb is an achievable action level.
· Provide for additional lead remediation options. Facilities should take a tiered approach to corrective action, where stricter action is triggered by higher and more frequent lead readings.
· Require follow-up testing after corrective action. Where initial results are above the established action level, a facility should conduct follow-up testing within three months and facilities with high levels should be subject to more frequent testing.
Check out our full comments for all of the details.
http://blogs.edf.org/health/2018/01/24/edf-comments-oregons-proposed-rules-lead-child-care-centers/
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Big Data Requires Focus on Mode of Action, Say Experts
Jan 25, 2018 | Chemical Watch
Toxicological information should be reorganised according to mode of action to take full advantage of "big data" and machine learning, according to an expert report from the 2017 World Congress on Alternatives, held in Seattle.
At the event a roundtable of academics and industrialists discussed "big data in the 3Rs": reduction, refinement and replacement of animal tests. Among its discussion points was the increasing importance of the way data is formatted, accessed and analysed.
There are still significant challenges to overcome in compiling toxicological data and interpreting it for risk assessment, writes a team led by Catherine Mahony from Procter and Gamble UK, in the 'highlights' report of the event.
The report, published in the journal Archives of Toxicology, says the data science community needs access to broad and standardised data to advance scientific discovery. This includes using universally adopted naming systems.
And the experts also called for more data sharing, saying: "If everyone were to share their data, it would increase our resources for better chemical assessment and improved product design."
One of the key challenges is that large toxicological data streams tend to cover effects at a molecular and cellular level, whereas risk assessments are based on adverse effects at the organ or organism level, the scientists add.
"Solving this challenge will require considerable research to identify and quantitate the key steps between initial effect and ultimate outcome."
The first step is to switch the focus in toxicology from endpoint to mode of action, they say.
Big data training
Finally, in the report, the authors question whether current toxicologists are actually prepared for big data analysis. There will be a "high demand" for toxicologists that can understand scientific problems, design and perform experiments, as well as work with big data, they say.
They criticise current toxicological training and call for more investment. "The time is now to review our toxicology training programmes and make them fit for what is already at our doorsteps," they conclude.
The report's authors include Nicole Kleinstreuer, deputy director of the US National Toxicology Program's Interagency Center for the Evaluation of Alternative Toxicological Methods (Niceatm), and Bob van de Water from Leiden University in the Netherlands.
'If everyone were to share their data, it would increase our resources for better chemical assessment and improved product design'
https://chemicalwatch.com/63381/big-data-requires-focus-on-mode-of-action-say-experts
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Non-Genotoxic Carcinogens Missed by Tests, Says Workshop Report
Jan 25, 2018 | Chemical Watch
Some non-genotoxic carcinogens risk being undetected by current testing regimes, according to discussions at an expert workshop on the "way forward" for carcinogenicity assessment.
The carcinogens can cause cancer by mechanisms that are not related to direct gene damage. There are currently few specific requests from regulators for non-genotoxic carcinogenicity tests and no OECD-approved screening methods, according to the report from the workshop which took place in Juan-les-Pins, France.
"These substances may remain undetected and the risk they pose to human health may not be managed adequately," it says.
Hosted by the EU Reference Laboratory for Alternatives to Animal Testing (EURL Ecvam) and the European Society of Toxicology in Vitro (Estiv), the workshop focused in particular on the need to develop novel alternative approaches to replace a two-year rodent bioassay. A gold standard for almost 50 years, the test is still routinely requested by regulators in certain cases.
The rodent assay tends to come after a suite of genotoxicity tests. As a result, non-genotoxic chemicals are often only picked up by the rodent bioassay. Meanwhile, an absence of genotoxic properties can lead to the rodent test being waived, with the risk that some non-genotoxic carcinogens remain unidentified, says the report published in the journal Toxicology in Vitro.Iata for non-genotoxic carcinogens
Recent evidence suggests that the early steps in cancer initiation may relate to non-genotoxic carcinogenic mechanisms. Scientists at the event identified a need for an integrated approach to testing and assessment (Iata) for non-genotoxic carcinogenesis. This could have the in vitro cell transformation assay (CTA) at its core, says the report.
There are several issues with the rodent assay, not least the fact that it is resource intensive, with a high animal burden. It is also difficult to predict potential human cancer target organs from the test and it does not take into account windows of susceptibility over a lifetime.
However, the number of available alternatives is limited. Bottlenecks include lack of a complete mechanistic understanding of carcinogenicity, the report says. The animal testing burden for carcinogenicity has not decreased much in recent years, it adds.
New alternative tests for carcinogenic chemicals should focus on toxicity mechanisms, according to the workshop report, penned by a team of scientists led by Raffaella Corvi from the EURL Ecvam. Insights into mechanisms can be gained using omics datas, such as transcriptome profiling, it suggests.
Meanwhile, workshop participants agreed that available carcinogenicity information from different sectors should be integrated. Cross-sectoral harmonisation will help to build confidence in new approach methods, reducing the need for the two-year rodent bioassay, the report concludes.
https://chemicalwatch.com/63382/non-genotoxic-carcinogens-missed-by-tests-says-workshop-report
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Calif., Greens Roll out BLM Fracking Lawsuits
Jan 24, 2018 | E&E News PM
By Ellen M. Gilmer
Federal fracking standards are back in the courtroom.
A coalition of environmentalists, tribal advocates and the state of California today launched two new legal challenges aimed at reviving Obama-era safeguards for hydraulic fracturing on public and tribal lands.
Their lawsuits, filed this afternoon in the U.S. District Court for the Northern District of California, allege that the Trump administration illegally rolled back the Bureau of Land Management's fracking rule last month, violating the Administrative Procedure Act and other laws.
"The Fracking Rule filled a rapidly expanding regulatory gap that resulted from BLM's failure to address the significant public health and environmental consequences stemming from hydraulic fracturing, a practice that has dramatically increased in recent years in the development of oil and gas resources," California's complaint says. "By repealing the Fracking Rule in its entirety, Defendants have tossed aside the public interest in ensuring that fossil fuel development is conducted in an environmentally sound and safe manner in service of what their own data shows is a negligible increase in oil and gas operators' profits."
The new litigation marks the latest stage in what has already been a three-year legal battle over the fracking rule. The regulation faced challenges from Western states, industry groups and American Indian tribes immediately after its rollout in early 2015 and was struck down by a federal court the following year.
The rule — which sets new requirements for well construction, water management and chemical disclosure — was the Obama administration's marquee effort to address impacts from the rapidly increasing use of fracking on oil and gas wells across the country.
But the Trump administration targeted the regulation in the president's 2016 "energy independence" executive order favoring domestic fossil fuel development. BLM officials reviewed the fracking rule and concluded it was unnecessary in light of existing state and federal oversight of oil and gas development. The agency formally rescinded the standards a few days after Christmas (Energywire, Jan. 2).
Supporters of the regulation are taking aim at BLM's rationale. They say the Trump officials failed to give a reasoned basis for the rollback and that their decision leaves public lands vulnerable to environmental harm and reckless development — in violation of the Federal Land Policy and Management Act, Mineral Leasing Act, Indian Mineral Leasing Act and National Environmental Policy Act.
In a press conference today, California Attorney General Xavier Becerra slammed the rescission as reckless. This is California's first time joining litigation over the fracking rule.
The Sierra Club, the Center for Biological Diversity, Diné Citizens Against Ruining Our Environment, Earthworks, Fort Berthold Protectors of Water and Earth Rights, the Southern Utah Wilderness Alliance, the Wilderness Society, and Western Resource Advocates filed their lawsuit separately. Earthjustice, which led the original environmental defense of the rule, is helping to represent them.
"This is another case of the Trump administration putting our public lands and water at risk to pad the bottom line of the oil and gas industry," Earthjustice attorney Mike Freeman said in a statement. "The agency has abdicated its responsibility under federal law to manage these lands for the good of the public, not just for fracking companies. We're filing this case to force BLM to do its job."
BLM and the Interior Department do not comment on pending litigation.
https://www.eenews.net/eenewspm/2018/01/24/stories/1060071849
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Investigators Begin Assessing Oklahoma Gas Rig Explosion
Jan 24, 2018 | Natural Gas Intelligence
By Jamison Cocklin
Three days after an explosion ripped through a Patterson-UTI Energy Inc. drilling rig in Oklahoma killing five men, an investigation is underway to determine what caused the blast.
Emergency management officials were preparing on Tuesday to hand the investigation to the Occupational Safety and Health Administration. The Oklahoma Corporation Commission and other federal and state agencies are expected to assist.
Authorities were dispatched to the Patterson-UTI rig west of Quinton early Monday when the men went missing following a rig explosion. Patterson was working for Oklahoma City-based Red Mountain Energy LLC and was drilling the vertical leg of a horizontal well permitted for the Mississippian Lime and Hunton formations, as well as the Woodford Shale.
Five men were killed and 17 people were safely evacuated. The men who died were thought to be working on or near the rig floor at the time of the blast, authorities have said. The site was considered stable and safe enough for regulators to begin their work.
The survivors described hearing a “loud boom, they saw fire and they ran,” Pittsburg County Sheriff Chris Morris said. “Everyone was just trying to survive.” One man, presumably the derrickman, who was working on the mast platform high above the rig floor at the time of the incident, had enough time to realize what was happening, and was able to use the escape, or “geronimo line,” to get to the ground and off site, Morris said. He was among the survivors.
In an ironic turn on Tuesday, the Oklahoma Supreme Court ruled that oil and natural gas industry employees and their representatives may file a lawsuit following a death or injury on the job. In a unanimous opinion, the high court affirmed a lower court’s ruling and found that a workers compensation law passed in 2013 exempting oil and gas well operators from lawsuits was a special one crafted to favor the industry unlike others in the state.
The decision stemmed from a lawsuit filed by the family of David Chambers Sr., who died in 2014 from burns he suffered in an accident at a Stephens Production Co. site. Justices sent the case back to the lower court for further proceedings.
U.S. Rep. Markwayne Mullin (R-OK) also joined local authorities for the Tuesday press conference. Mullin sits on the House Energy and Commerce Committee, which he said will take a closer look at the incident.
“We never want to take something like this and not take a deep dive into it so we can debrief at the end of the day and say ‘what was preventable and how can we do it better,’” he said. “That’s the goal here, that’s why the federal agencies are coming in and working with the state. We have a lot of drilling going on in our state, and if there’s something that was preventable, let’s make sure we highlight it, and it doesn’t happen again.”
http://www.naturalgasintel.com/articles/113144-investigators-begin-assessing-oklahoma-gas-rig-explosion
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Rick Perry: US 'Blessed' to Provide Fossil Fuels to the World
Jan 24, 2018 | The Hill - E2 Wire
By Miranda Green
Department of Energy Secretary Rick Perry said Wednesday that the U.S. is "blessed" to provide fossil fuel to the rest of the world.
Speaking at a panel on energy transformation at the World Economic Forum in Davos, Switzerland, Perry said countries like the United States and Saudi Arabia were "blessed" for the their abilities to provide fossil fuel globally and such countries help give the world a "better quality of life or better opportunities."
"We're blessed to be in counties with pretty substantial abilities to deliver to the people of the globe a better quality of life to those fossil fuels," said Perry.
He added, "I think when we have a bit of a surplus and a bit more feast right now than we do famine, I think that’s good for the globe."
The oil production rates in the U.S. are currently at all-time highs. The U.S. Energy Information Administration forecasts that average crude oil production in 2018 will increase by about 1 million barrels per day from 2017 levels. If true, it would be the highest annual average on record.
Last week, Fatih Birol, executive director of the International Energy Agency, said he foresees the United States becoming the "undisputed leader" in oil and gas production for "years to come."
But long-term numbers for oil production appear more bleak. Some outlooks for 2025 show production decreasing, which some fear would stress the energy market. Perry rebuffed those fears, telling the crowd, "we shouldn't buy into these terrible numbers."
"I always try to remind everyone that technology and innovation around the world can really turn all of this on its head. I don’t particularly think that it is going to be a spoiler, the American shale production," he said. "I’m a big believer that the best days are in front of us."
While Perry said he also believed in the future of renewables he said he was still on the fence about how electricity could supplement fossil fuels in products like automobiles, calling the creation of a longer lasting battery "the holy grail."
"I tend to agree with the idea that you are going to displace, in the period of time that we've discussed here, many internal combustion engine automobiles. That’s a bit of a fairy tale. That’s not going to happen," he said.
Perry, who was speaking two days before President Donald Trump is set to address the forum in Davos, said the administration's "America First" initiative is about increasing competition on fossil fuels.
"I think one of the things people are interested in is when the administration talks about 'America First,' what does that mean?" he said. "I can tell you in one word. It’s competition. That the U.S. wants to be competitive. That when your county is looking for a place to purchase [liquid natural gas], that you think about America, first."
http://thehill.com/policy/energy-environment/370585-rick-perry-us-blessed-to-provide-fossil-fuels-to-the-world
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Dems Want Zinke to Testify on Fla. Exemption
Jan 25, 2018 | E&E Daily
By Rob Hotakainen
Interior Secretary Ryan Zinke faced more fallout on Capitol Hill yesterday from his decision to exempt waters off Florida from a five-year oil and gas leasing plan, with leading Democrats on the House Natural Resources Committee asking for a full oversight hearing on the issue.
The Democrats also asked Republican Rep. Rob Bishop of Utah, the committee's chairman, to insist that Zinke appear before the panel to answer questions.
"The American people, and in particular the people of Florida, are rightly confused about the current situation with the five-year program," the Democrats said in a letter to Bishop.
Three Democrats made the request: ranking member Raúl Grijalva of Arizona; Alan Lowenthal of California, ranking member of the Energy and Mineral Resources Subcommittee; and Donald McEachin of Virginia, ranking member on the Oversight and Investigations Subcommittee.
Earlier this month, Zinke proposed to open up more than 90 percent of the outer continental shelf to oil and gas exploration (Greenwire, Jan. 4).
But only days later, after meeting with Florida Republican Gov. Rick Scott, Zinke tweeted that the state would no longer be included in the plan.
The situation became more muddled Friday when a top Interior official told a Natural Resources subcommittee that Florida had not actually been removed from the plan (Greenwire, Jan. 19).
"They are still part of the analysis until the secretary gives us an official decision otherwise," said Walter Cruickshank, acting director of the Bureau of Ocean Energy Management.
In a separate move yesterday, a bipartisan group of Florida lawmakers asked Zinke to formally remove Florida from the five-year plan.
"In light of Bureau of Ocean Energy Management Acting Director Walter Cruickshank's recent statement before the House Natural Resources Committee that the Planning Areas off Florida's coasts are still under consideration for offshore drilling, we write to reiterate our strong opposition to any attempt to open up the eastern Gulf of Mexico to oil and gas drilling," the lawmakers wrote in a letter to the secretary.
"We object to any efforts to open the eastern Gulf of Mexico to drilling, and we urge you to remove this area from the five-year plan immediately."
Florida's senators, Democrat Bill Nelson and Republican Marco Rubio, led the letter, which was signed by 22 members of the state's congressional delegation.
Meanwhile, a group of Senate Democrats wrote a letter to Zinke in support of a petition that environmental groups submitted in November to initiate new regulations aimed at prohibiting the sale or transfer of federal lands without Congress' approval (E&E News PM, Nov. 16, 2017).
"We urge you to respond to this petition and draft the proper regulations clarifying DOI's authorities and process to sell or transfer public lands," wrote Democratic Sens. Tom Udall and Martin Heinrich of New Mexico, Chris Van Hollen of Maryland, Jeff Merkley and Ron Wyden of Oregon, Michael Bennet of Colorado, and Tina Smith of Minnesota.
Reporter Noelle Straub contributed.
https://www.eenews.net/eedaily/2018/01/25/stories/1060071885
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Trump Can Keep America Energy Dominant with Advanced Energy
Jan 25, 2018 | The Hill - Opinion
By Malcolm Woolf
The economy will undoubtedly dominate President Trump’s upcoming State of the Union address to Congress. The president spent the past year touting his “energy dominance” agenda. To date, however, one segment of the energy sector has been noticeably and mistakenly left out — advanced energy.
Instead of recognizing and supporting fast-growing and flexible sources of U.S. energy — natural gas, solar, and wind generation; energy efficiency, demand response, and storage — the administration proposed a bailout for uncompetitive coal and nuclear power plants.
While the tax bill Trump signed kept in place the phaseout of wind and solar tax credits, it failed to give the same treatment to fuel cells, combined heat and power, and storage (among others) after two years of unmet promises.
Most recently, the president imposed a 30 percent tariff on low-cost solar panels that will raise the price for customers, including the growing number of leading companies that are sourcing their electricity from renewable resources, even as it will do little to help domestic manufacturers. Fortunately, the most damaging impacts of these policies were avoided through the work of bipartisan congressional champions of advanced energy and independent regulators.
Now, going into the second year of his term, President Trump should embrace the advanced energy industry as a key contributor to America’s growing energy dominance. Once thought of as futuristic and premium-cost technologies, the advanced energy industry is now a major economic driver throughout the United States. All told, the industry pumps $200 billion into the economy annually, as much as pharmaceutical manufacturing and more than the beer industry.
The industry supports more than 3 million American jobs, as many as retail stores. The industry is strong and growing, whether it’s wind manufacturing in Iowa and Michigan, solar installations in North Carolina and Nevada, energy storage projects in Arizona and Indiana, or energy efficiency upgrades in every state. These projects not only represent millions of jobs, but these technologies are now competitive with traditional energy options, bringing cost-savings to businesses and consumers.
Recent stories highlight the economic and customer benefits of advanced energy throughout the United States. Battery storage projects paired with solar and wind have hit record-low prices, winning competitive bids in Colorado and demonstrating that the technology is ready for prime time today. Sales of plug-in electric vehicles (EVs) have grown at a compound rate above 50 percent annually since 2011, registering a full 1 percent of new vehicle sales in 2017, and more rapid growth is expected. Increasing deployment of advanced energy technologies helped our grid hold up through the recent hurricanes, extreme cold, and even the “bomb cyclone” to keep the lights on for Americans.
In 2018, the Trump administration can further its goal of energy dominance by embracing policies that remove barriers to investment in advanced energy technologies and ensure that all energy technologies get to compete on price and performance.
Advanced energy provides reliable, resilient, and affordable power to Americans every day. From the White House to State Houses around the country, policymakers should look to capitalize on the benefits of the industry, not stand in the way of its growth. As the president addresses the nation, more than 3 million American workers will be watching to see where they fit in to the administration’s energy dominance agenda.
Malcolm Woolf is senior vice president for policy and government affairs for Advanced Energy Economy, a national business organization.
http://thehill.com/opinion/energy-environment/370543-trump-can-keep-america-energy-dominant-with-advanced-energy
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Smaller Operators Push Bakken Output Outward
Jan 24, 2018 | Platts
By Brian Schied
For years, large public companies have produced crude oil in North Dakota largely in an area known as "the core of the core" of the Bakken shale play. Faced with low, stagnant oil prices, the big producers have focused largely on drilling in McKenzie and Dunn counties, Fort Berthold Indian Reservation and other acreage within the southern portion of the Nesson Anticline.
But rising prices, along with the start of the Dakota Access Pipeline and well productivity improvements, have pushed new companies, mainly smaller operators backed by private equity firms, into acreage long ignored by the state's prominent producers.
While NYMEX WTI prices have nearly doubled over the past two years to around $65/b Wednesday, Bakken differentials have also been on the rise, especially over the past year. Bakken at the wellhead has averaged WTI minus $1.43/b so far in January, compared with discounts of close to $5/b back in January 2016, S&P Global Platts data shows.
Better prices have given drillers the opportunity to expand.
"What we would've considered a fringe area a year ago are now considered economic territory in the state of North Dakota," Justin Kringstad, director of the North Dakota Pipeline Authority, said last week during a conference call.
Relatively smaller operators, either unable or unwilling to acquire so-called Tier 1 acreage in the core of the core, are looking at less costly Tier 2 and even Tier 3 areas and considering adding rigs on the outskirts of the Bakken's most prolific plays.
"Their business model is to prove up acreage, drill some great wells, show that the acreage works on a consistent basis and then have some company buy them out," said Jonathan Garrett, director of US upstream research with Wood Mackenzie. "The nature of the beast is not to really ramp up it's just to show that the acreage works consistently."
The move by smaller operators could shift the Bakken away from its recent trend favoring high grading amid relatively low prices, but may lower the state's overall production rate per well, as less prolific wells get drilled.
State officials expect operators to add as many as 10 new rigs in 2018 and the amount of new acreage being considered is growing, according to a new analysis by Kringstad's agency.
"We should expect to see those rigs start to move outward," said Kringstad.
Producers are eyeing roughly 44% more Bakken acreage than they were a year ago, but output in the play will be less prolific than recently seen as operators shift to lower output wells outside of the core drilling area, according to Kringstad's analysis.
Climbing prices are expected to increase both the Bakken's rig and well count as tracts ignored by operators when prices were lower, but the new wells will have an initial production rate roughly 200 b/d below the wells with minimal initial output sought by producers amid lower prices.
Essentially, operators will likely produce from more wells, but the rate of growth could actually slow.
"As prices have risen they're able to move to portions of the play that aren't capable of these high-producing wells, but they can still produce good wells at the right price point and become economic," Kringstad said.
Kringstad estimates that more than 11,800 square miles within the Bakken offer wells with breakeven prices at current levels, compared with about 8,200 square miles a year ago and less than 5,500 square miles in 2016. While North Dakota is now competing with the Permian in Texas and New Mexico for operator interest, counties within North Dakota are also competing with each other for capital. While Kringstad stressed that higher prices do not guarantee expanded drilling, producers are already moving into new areas, according to Graham Walker, a research data analyst at Petrologica.
"There have been a few recent wells in relatively marginal counties like Golden Valley, so we might expect forays further afield in 2018 rather than the kind of activity levels from before the price collapse," Walker said. But increased prices may not translate into a significant producer migration to frontier areas of the Bakken. "As I understand it, there are still enough locations in core areas that moving out is additive, rather than imperative," Walker said.
IP RATES SEEN DROPPING
And while operators are moving to new areas, the wells they are likely to drill are expected to have a lower initial production rate, according to the North Dakota authority's study. For example, in 2016, operators would not produce wells which average below 900 b/d for peak 30-day production. Operators in 2018 are expected to operate wells with initial production rates as low as 500 b/d, according to the analysis.
Smaller companies looking to drill these less prolific wells outside the Bakken's core may initially get initial production rates which mirror those in Tier 1 acreage, according to Pablo Prudencio, an upstream analyst at Wood Mackenzie.
These smaller, private equity-backed firms are likely to use the same enhanced completions with more water and more proppant than larger, publicly-traded companies operating in the core use as well.
"They've been following the trends," he said.
Taylor Cavey, an energy analyst with Platts Analytics, said growth outside the core could be complicated by new drilling techniques and technologies.
"It's hard to know how a well will perform in areas that haven't been produced using high frac volumes and longer laterals," Cavey said. "Assuming that those techniques lead to higher output, it could mitigate the cost to explore in unknown territory. If you are drilling an area that you are unfamiliar with you will likely spend more on geological and seismic surveying to be sure you know what you're getting into before you drill."
Still, Cavey said there was an increasingly likelihood of more development in the Bakken as operators consider existing acreage amid better economics and higher upside.
"They are running out of proven acreage in the Bakken," Cavey said. "Which isn't to say they won't make further discoveries, but it could take some time."
In a note last month, analysts with Morningstar wrote that fears over that it could take decades for drilling opportunities in the Bakken and other shale plays to be exhausted.
The Bakken is smaller than the Permian and "relatively mature" after years of development, the analysts wrote.
"Even so, we don't expect meaningful productivity declines in the next 10 years," they wrote.
And, the core acreage will ultimately remain the most prolific, according to Wood Mackenzie's Prudencio.
"The geologic difference between Tier 1 and Tier 2 is going to remain," Prudencio said. "Even if we're now seeing these new enhanced completions in Tier 2, Tier 1 will remain better because of the geology."https://www.platts.com/latest-news/oil/washington/smaller-operators-push-bakken-output-outward-27908502
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6 Tech-Driven Factors Will Help Make a Truly Modern Grid
Jan 24, 2018 | Environmental Defense Fund
By Ronny Sandoval
Improving our electricity system – using technology available today – could be the single largest opportunity we have to fight climate change.
Our grid was built over a century ago by different companies, cities and co-ops. Pieces of it are owned and run by a dizzying web of stakeholders, with different visions of what a “modern grid” looks like.
In our report, “Grid Modernization: The foundation for climate change progress” [PDF], we outline the six key categories that make up a sustainable strategy for modernizing our grid.
All of them are connected, either physically or digitally, or by legislation, regulation or management. If each is executed well, the process will yield the best, most reliable, most affordable and cleanest electricity system.
1. Sensing and monitoring for enhanced system awareness
Technology has already significantly increased the grid’s efficiency, and future advances hold remarkable promise to make it even cleaner, cheaper and more reliable. Advanced sensors throughout our energy system make outages easier to identify and help utilities respond faster to disasters, from wildfires to hurricanes.
2. Intelligent integration of diverse distributed resources
Residential rooftop solar is booming and large, utility-scale solar projects are increasing, too. How new, clean and distributed resources are integrated into the grid will not only determine how efficiently they work, but also how satisfied customers will be with their investments. Solar isn’t the only new resource grid operators are managing. Some software solutions, like demand response services, can provide virtual energy by quickly adjusting demand in response to supply.
3. Maximizing the role of renewable energy
Yesterday’s grid was dirtier, but it sure was simpler. Technologies like wind, solar and energy storage (batteries) are becoming more and more affordable, but they need to be managed differently than coal or gas power plants. This shift will require new infrastructure, policies and even market structures that value the benefits these resources bring to the system.
4. Electrification of transportation systems
Transportation is the largest contributor to our carbon budget. The electrification of America’s automobile fleet could result in significant carbon reductions if the transition is managed correctly. This move includes using more renewable energy to charge cars. But it also includes new charging infrastructure and pricing options for customers that incentivize charging when it is powered by clean resources.
5. Access to actionable energy data
In today’s digital world, customers need secure and simple access to their energy data and the ability to share it with companies that can help them maximize their energy dollars [PDF]. Luckily, there are models out there that show how to open access to this critical information while protecting customer privacy.
6. Efficient transmission and distribution management
The less energy lost on its way to customers, the less energy has to be generated in the first place. And the more we ask of our grid, the better the transmission and distribution system needs to be. Billions of dollars [PDF] are already earmarked for scheduled improvements and maintenance to our aging energy system. These efforts should be planned in conjunction with other critical areas to leverage private and public investments.
We need all 6 pieces working together
Each of these six categories is critical – we need grid managers, utility executives, regulators and other stakeholders to take this broad view of the modern grid to make progress on climate. We already have the technology to make it work.
https://www.edf.org/blog/2018/01/24/6-tech-driven-factors-will-help-make-truly-modern-grid
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2 More Spills Reported at North Carolina Plant Under Review
Jan 24, 2018 | AP (In U.S. News & World Report
A company has reported two more spills at one of its North Carolina plants that likely contained the chemical GenX.
The StarNews of Wilmington reported Chemours has told environmental regulators about two wastewater spills that it thinks contain GenX from its Fayetteville Works plant.
GenX is an unregulated fluorochemical that researchers found along with several related compounds in the Cape Fear River basin and in drinking water. GenX is classified by the federal government as an "emerging contaminant" needing more study. It is used to make Teflon and other coatings.
Chemours told the North Carolina Department of Environmental Quality's Division of Water Resources that none of the wastewater in either spill reached public waterways and was quickly cleaned up.
The spills occurred Dec. 31 and Jan. 14.
https://www.usnews.com/news/best-states/north-carolina/articles/2018-01-24/2-more-spills-reported-at-north-carolina-plant-under-review
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Trump’s Infrastructure Push Targets Permit Rules
Jan 25, 2018 | Wall Street Journal
By Ted Mann
U.S. Chamber of Commerce President Thomas Donohue last week was nearing the end of a speech urging Congress to rebuild the nation’s infrastructure when he offered another option: At least make it easier to build things when the money can be found.
“If we just fix the permitting thing this year, you would create an extraordinary enthusiasm about moving forward,” Mr. Donohue said, at a special forum on infrastructure in which he urged lawmakers to take tough votes, including on raising gasoline taxes, in a midterm election year.
President Donald Trump hasn’t said where he will find $200 billion in budget savings that the White House says it will use as a down payment on an infrastructure package that it hopes will generate more than $1 trillion in spending over 10 years.
But money isn’t going to be the only impetus in the president’s infrastructure push. The administration is hoping to roll back regulations in place for decades to reduce the period between project approval and construction, limiting environmental reviews and litigation in favor of getting big things built.
The effort is likely to face resistance from environmental groups and their Democratic allies in Congress. But the president’s advisers believe they can alter the permitting process in ways that change how the government builds roads, bridges, rails and pipelines for years to come.
“Regardless of what happens with the legislative package, I think one of the most important things this administration can do is take permit delivery times from what is now an average of 4.7 years down to two years,” said Alexander Herrgott, the lead infrastructure aide on the White House’s Council on Environmental Quality, at a conference in Washington this month.
“I truly believe it’s politics-agnostic, and something that will outlive this administration,” he added.
The campaign is part of a broad Trump administration effort to roll back regulations and constraints on business across the federal government. Mr. Trump has said he hopes to cut back the volume of federal regulations to levels of the 1960s. That deregulatory agenda has drawn support from business groups who say it will boost the economy, but it has prompted concern from environmental advocates and consumer groups who warn that the administration risks undoing years of progress in reducing accidents and pollution.
Previous presidents have tried to streamline the federal permitting process as a way to jump-start rebuilding of the nation’s critical infrastructure. That includes President Barack Obama, who signed the FAST Act in 2015, a bipartisan transportation funding package that created a federal permitting improvement council aimed at speeding up the environmental review process. Mr. Obama also issued executive orders, as Mr. Trump as, aimed at improving the efficiency of such reviews.
Mr. Trump and his aides have cited studies suggesting that environmental review can often take a decade, and calling for that period to be reduced to two years. A Government Accountability Office study of the environmental review process in 2014 cited third-party estimates that reviews average 4.6 years. Outside experts say actual review times vary widely based on the scope of a project and other environmental factors.
The Trump team’s goals have alarmed environmental groups and others who say they believe that the administration’s plans are less focused on government efficiency and more on altering the underlying environmental statutes, like the Clean Water Act and Clean Air Act, that dictate what factors must be reviewed before a new highway or pipeline can be approved for construction.
“We’ve been very clear in all of our discussions that their infrastructure package is not an infrastructure package—it is an environmental deregulation package,” said Christy Goldfuss, who was managing director of the Council on Environmental Quality under Mr. Obama and now oversees environmental and energy policy at the liberal think tank the Center for American Progress.
The key to speeding up environmental reviews is better funding and staffing of the agencies that perform the work required by environmental statutes, Ms. Goldfuss said in an interview.
Mr. Herrgott and others in the administration say they intend to retain protections for the environment, in balance with the needs of local government and private industry to build infrastructure in a timely fashion. They also say that a streamlining would strip out years’ worth of unintentional clutter in the permit process that has lengthened approval times, and in some cases allows opponents of projects to delay construction.
“We are where we are because of the pancake effect,” said James Ray, a top infrastructure adviser to Transportation Secretary Elaine Chao, at the Transportation Research Board conference this month, where he appeared alongside Mr. Herrgott. “No one would write the exact process out that we have today if they were given a clean sheet of paper, and so things layer on top of themselves in ways that sometimes make sense and sometimes don’t.”
Business interests were pleased with an executive order Mr. Trump issued in August, which required federal agencies to coordinate from the earliest stages of a project review, with the goal of making a “single federal decision” on whether a project could move ahead on environmental grounds. The order is intended to compress the timeline of environmental reviews.
The administration is confident that it can get bipartisan support, especially from mayors and governors eager to drive their own local building projects ahead quickly. A senior White House official involved in drafting the infrastructure plan said in August that a delegation of local officials from Florida burst into applause after being briefed on the single federal decision executive order.
In an interview this week, a Los Angeles city official described the struggle to get various federal approvals before moving ahead with critical infrastructure projects, including a subway line extension to serve a Department of Veterans Affairs hospital and an expansion of the Crenshaw light rail line to Los Angeles International Airport. The latter required signoffs from agencies including the Federal Aviation Administration and the Federal Transit Administration.
“If we’re going to expedite, we’ve got to be very careful on a lot of environmental impacts,” the official said, but the process of winning federal approvals was “cumbersome.” Approvals extend project timelines, driving up costs, this person said. “You’re doing more work than you really need to do.”
https://www.wsj.com/articles/trumps-infrastructure-push-targets-permit-rules-1516876202?mod=searchresults&page=1&pos=3
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Koch Network Joins Fight Against Gas Tax
Jan 25, 2018 | E&E Daily
By Geof Koss and Nick Sobczyk
Conservative outside groups affiliated with the billionaire Koch brothers' political network are trying to tamp down any talk of raising the federal gas tax ahead of the State of the Union speech, around the time President Trump may offer more details about his much-talked-about infrastructure push.
Yesterday, the president said while speaking to mayors at the White House that he would soon propose a plan worth up to $1.7 trillion. That includes federal and nonfederal money.
Americans for Prosperity and Freedom Partners this week came out against the recent proposal by the U.S. Chamber of Commerce, which would raise the gas tax by 25 cents a gallon over five years to pay for infrastructure upgrades.
While calling "core infrastructure" maintenance an "important function of government that should be carried out in the most efficient and effective manner possible," the groups wrote to Trump that efforts to upgrade infrastructure should focus on "priorities such as roads and bridges, eliminating wasteful spending, removing regulatory barriers that delay projects and drive up costs, and ensuring there is proper oversight and accountability."
Senate Environment and Public Works Chairman John Barrasso (R-Wyo.) yesterday dismissed any talk of raising the gas tax. "I'm against it," he told E&E News.
Barrasso declined to offer any financing proposals for the infrastructure push but suggested more details may emerge when Trump speaks to Congress on Tuesday.
"I'm waiting to see what the president has to say at the State of the Union," he said.
Sen. Jim Inhofe (R-Okla.), who is also involved with the infrastructure push and has similarly opposed raising the gas tax, said this month it may be unnecessary given the administration's efforts to scale back regulations "and what's happening with the economy."
"We're going to have a lot of revenue coming in, and I'm sure he's depending on some of that revenue reaching very expensive infrastructure legislation," said Inhofe, the former EPW Committee chairman.
However, some Republicans are willing to at least consider the idea.
Sen. Mike Rounds (R-S.D.), a member of the EPW Committee, said this month he remains "open" to a gas tax hike, which he's supported in the past.
"I don't know that anything is off the table," he said after huddling with top administration officials on infrastructure. "I think they're just hoping to say, 'Look, if we can build the consensus on what we need to do and get an agreement on spending the dollars in a way that's good for generations to come, we can find a way to take care of the costs involved.'"
Sen. John Thune (R-S.D.) said the prospects for Trump's plan will largely depend on the thorny question of pay-fors, be they spending cuts or revenue raisers.
"I think that'll be a big issue for a lot of members," Thune told reporters this week. "And the details will matter. So there's a lot of intensity to get an infrastructure bill. I think it's something that should be heavily bipartisan. You know, normally infrastructure bills tend to be bills that get a lot of bipartisan support in both the House and the Senate. So we'll see."
Sen. Tom Carper (D-Del.), the ranking member on the EPW Committee, said yesterday that ultimately policymakers will have to shift from a gas tax to a vehicle-miles-traveled approach. That's an idea that's been long bandied around as vehicle designs shift toward less fuel consumption, but it's one that has also failed to catch on in Congress.
"By 2030, the fleet is going to look a lot different than it does today," Carper told E&E News yesterday. In the interim, he said, the gas tax needs to be adjusted for inflation as a temporary solution, while also noting that as many as 30 states have enacted user fees to fund infrastructure in recent years.
"You can do it and get elected and re-elected," Carper said. He reiterated his call for the Trump administration "to provide some leadership" on the issue.
https://www.eenews.net/eedaily/2018/01/25/stories/1060071891
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Environmentalists Fault EPA 'Volte-Face' on Ozone Designations
Jan 25, 2018 | Inside EPA
Environmentalists are faulting what they say is EPA's “volte-face,” or abrupt reversal, in its previously stated non-binding April 30 deadline for issuing all remaining designations of which areas are either attaining or violating the 2015 ozone standard, saying the agency's subsequent announcement of another delay warrants a federal appeals court imposing a hard deadline for issuing all the designations.
The agency in recent declarations filed with the U.S. Court of Appeals for the District of Columbia Circuit said it intends to complete designations by April 30, with the exception of eight counties around San Antonio, TX, which it intends to designate by Aug. 10.
Environmentalists in a Jan. 24 filing criticize the delay for the Texas areas, saying, “EPA’s new plan renews the illegal argument underlying the Designations Delay. For the San Antonio area, EPA premises its desire for more time solely on vague desires for more information."
Failing a ruling on the merits in their favor now, the groups say, “At the very least, EPA’s constant amendments and recantations of prior statements supports Public Health and Environmental Groups’ alternative request that this Court continue to hold these petitions in abeyance” pending EPA's completion of designations. “Doing so would provide Petitioners some reasonable protection against another EPA volte-face,” they argue.
Environmental groups and states are suing EPA in both the D.C. Circuit and also federal district court in California to force the agency to finish designating all areas of the country as “attainment” or “nonattainment” for the 2015 NAAQS, set at 70 parts per billion. Designations are necessary for states to craft implementation plans to attain the new NAAQS, which is tougher than the prior limit of 75 ppb set by the George W. Bush administration in 2008.
In their D.C. Circuit suit American Lung Association, et al. v. EPA, et al., environmentalists and states are challenging EPA's June 2017 decision to delay all designations by one year, from Oct. 1, 2017 to Oct. 1 this year.
The agency in August rescinded that decision, reinstating the original deadline, which it then missed. The agency then issued designations for most areas in November, but excluded hundreds of designations including all designations of nonattainment that would trigger tougher air pollution control requirements.
EPA says the case is moot and should be dismissed, but environmentalists counter that EPA's statements and actions contradict this. In their new filing, they not only urge a hard deadline for all the designations but also say the case is not moot, and is now “ripe for decision” in their favor.
https://insideepa.com/daily-feed/environmentalists-fault-epa-volte-face-ozone-designations
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