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ACC AM 05/04/18

Industry and Association News

(ACC Mentioned) How U.S.-China Trade Spat Could Threaten Manufacturing
Apr 4, 2018 | The New York Times
By Natalie Kitroeff and Ben Casselman

In the escalating economic showdown between the United States and China, President Trump is trying to put American shoppers first.
(ACC Mentioned) Factbox - U.S. Winners and Losers from Trade Tit-for-Tat
Apr 5, 2018 | Reuters (In Yahoo Finance)
By Yashaswini Swamynathan

China on Wednesday hit back at U.S. President Donald Trump's plan to impose tariffs on $50 billion of Chinese imports, proposing additional tariffs of 25 percent on 106 categories of U.S. goods, from soybeans to autos, chemicals and some kinds of aircraft.
(ACC Mentioned) Trump Trade War Threatens U.S. Chemical Investment Renaissance
Apr 4, 2018 | Bloomberg
By Jack Kaskey

A brewing trade war with China threatens to derail the fastest-growing sector of the U.S. manufacturing economy as chemical companies rethink spending almost $100 billion on new factories.
(ACC Mentioned) China's List of Tariffs Takes Aim at US Chemicals and Plastics Sectors
Apr 4, 2018 | CNBC
By Tom DiChristopher

China's list of more than 100 American products under threat of tariffs targets the U.S. chemicals and plastics sectors at a time when parts of the industry are investing heavily in new production.
(ACC Mentioned) The Latest: Iowa Senator: Trade Dispute Unfair to US Farmers
Apr 4, 2018 | AP (In The Washington Post, Newser, Telegraph Herald, Seymour Tribune)

Sen. Charles Grassley, an Iowa Republican, says the United States needs to protect its intellectual property and competitiveness but shouldn’t force farmers and ranchers to bear the brunt of retaliation for the entire country.
(ACC Mentioned) Chinese Petrochemicals Tariffs Expected to Have Little Impact
Apr 5, 2018 | Houston Chronicle
By Katherine Blunt

China's proposed tariffs on certain U.S. petrochemicals are expected to have a limited impact on Gulf Coast exports, but experts warned that an escalation of the trade war between the two countries could potentially stymie the industry’s rapid expansion.
(ACC Mentioned) US Petrochemicals Industry Alarmed at Potential China Tariffs
Apr 4, 2018 | Platts
By Kristen Hays, Chris Ferrell, and Nida Qureshi

China's plan to impose 25% tariffs on 106 US products, in response to President Donald Trump's proposed import taxes on $50 billion in Chinese goods, includes several petrochemical products for which the Asian country is a critical export market, prompting a swift response from the industry's trade group.
(ACC Mentioned) Tariff Announcements Could be Prelude to Negotiations
Apr 4, 2018 | The Maritime Executive

On Wednesday, Beijing announced tariffs on 106 U.S. products worth $50 billion, matching the Trump administration's recently announced duties on 1,300 Chinese imports.
(ACC Mentioned) U.S. Chemical Companies Heavily Targeted by New Chinese Tariffs
Apr 5, 2018 | PoliticoPro - Trade Whiteboard

...could deter future investment in the U.S. “China is one of the U.S. chemical industry’s most important trading partners, importing 11 percent, or $3.2 billion, of all U.S. plastic resins in 2017," the American Chemistry Council said in a statement
(ACC Mentioned) US-China Trade War Hits Plastics Industry
Apr 5, 2018 | Plastics Today
By Stephen Moore

The fomenting trade war being fought between the US and China could disrupt global supply chains if tariffs on resins, processing machinery, tooling and plastic products come into effect. This could happen as early as the beginning of June.
(ACC Mentioned) China, US Add Plastics to Their Trade War
Apr 4, 2018 | Plastics News
By Audrey LaForest and Bill Bregar

Updated: An escalating trade war between the United States and China is hitting the plastics sector with Chinese officials announcing tariffs on 106 U.S. products, including plastics, and the U.S. targeting machinery and molds.
Plastics Makers Plunge as China Tariffs Hit Chemical Industry
Apr 5, 2018 | BNA Daily Environment Report
By Jack Kaskey

U.S. plastics makers including LyondellBasell Industries NV and Westlake Chemical Co. tumbled after China slapped tariffs on a wide swath of resins used in products such as food packaging and pipe.

LCSA News

(ACC Mentioned) EPA Weighs Chemical Policy That May Backfire on Industry: Critics (1)
Apr 5, 2018 | BNA Daily Environment Report
By Pat Rizzuto and Dean Scott

A proposed chemical policy to allow the EPA to narrow its chemical safety reviews could backfire and hurt chemical makers that the Trump administration intends to help, a former agency official told Bloomberg Environment.
EPA May Disregard Chemical Exposures From Risk Reviews (1)
Apr 5, 2018 | BNA Daily Environment Report
By Pat Rizzuto and Dean Scott

The EPA could ignore ways people are exposed to chemicals under a pending policy that would shape agency safety reviews.
EPA Announces Earlier Compliance Date for Formaldehyde Emission Standards for Composite Wood Products
Apr 5, 2018 | National Law Review

On April 4, 2018, the U.S. Environmental Protection Agency (EPA) announced that the compliance date for emission standards, recordkeeping, and labeling (the manufactured-by date or import-by date) under the Formaldehyde Standards in Composite Wood Products Act (Formaldehyde Act) codified as Title VI of the Toxic Substances Control Act (TSCA) has been set for June 1, 2018, instead of December 12, 2018, per order of the U.S. District Court for the Northern District of California (Sierra Club and A Cmty. Voice-Louisiana v. Pruitt, No. 4:17-cv-06293, filed Oct. 31, 2017).

Chemical Management News

(ACC Mentioned) Kids’ Flame Retardant Exposure Drops Following Phaseout
Apr 5, 2018 | BNA Daily Environment Report
By Pat Rizzuto

Children's blood levels of a once widely used furniture flame retardant have dropped since that chemical was phased out of production in 2004, researchers found.
Vermont Advances Bill Reducing Hurdles to Banning Children's Products
Apr 5, 2018 | Chemical Watch
By Kelly Franklin

Vermont's legislature has approved a bill that would give the state's health commissioner increased authority to ban or restrict children's products.
Jury Set to Weigh Banker's Claims Baby Powder Caused Cancer
Apr 5, 2018 | BNA Daily Environment Report
By Jef Feeley

Jurors are set to weigh an investment banker's claims that using Johnson & Johnson's baby powder for more than 30 years caused him to develop a deadly cancer linked to asbestos.
US Judge Dismisses Formaldehyde Hair-Straightener Lawsuit
Apr 5, 2018 | Chemical Watch

A federal district court has dismissed an NGO case, calling on the US Food and Drug Administration to take action on formaldehyde-producing hair straightening products.
Chemicals Rules 'Insufficient' to Meet 2020 Non-Toxic Target
Apr 5, 2018 | Chemical Watch

Sweden’s chemical agency, Kemi, says the UN target for a non-toxic environment by 2020 will not be achieved "by the measures and instruments already in place".

Energy News

(ACC Mentioned) Whitehouse Questions Pruitt's Morocco Trip
Apr 4, 2018 | Inside EPA

Sen. Sheldon Whitehouse (D-RI) is asking new questions about EPA Administrator Scott Pruitt's December trip to Morocco, where he sought to promote liquefied natural gas (LNG), charging that the four-day, $17,000, journey runs counter to the agency's mission and was a way for Pruitt to reward political staffers who accompanied him.
Colorado AG Asks State High Court to Clarify COGCC Role in Oil, Gas Rules
Apr 4, 2018 | Natural Gas Intelligence
By Carolyn Davis

The Colorado attorney general (AG) on Tuesday urged the state Supreme Court to overturn an appeals court ruling that would “dramatically” change oil and natural gas regulatory reviews.
Clean Power Plan Does Not Tread On FERC Jurisdiction, Say Former Commissioners
Apr 4, 2018 | Natural Gas Intelligence
By David Bradley

Contrary to suggestions by the Environmental Protection Agency (EPA), the Clean Power Plan (CPP) does not interfere with the authority of FERC or threaten the affordability and reliability of the nation's electricity supply, according to a trio of former Commissioners.
Obama Methane Standards Sidelined, Yet Again
Apr 4, 2018 | E&E News PM
By Ellen M. Gilmer

Obama-era restrictions on methane emissions from the oil and gas industry are once again sidelined after a federal court today agreed to freeze implementation.

Chemical Security News

Cyberattack Shows Vulnerability of Gas Pipeline Network
Apr 5, 2018 | The New York Times
By Clifford Krauss

A cyberattack on a shared data network forced four of the nation’s natural-gas pipeline operators to temporarily shut down computer communications with their customers over the last week.
Feds Investigating Cyberattacks As More Pipelines Report Being Affected
Apr 4, 2018 | Natural Gas Intelligence
By Charlie Passut

Several agencies within the federal government are investigating a series of cyberattacks directed at a third-party software system used by several U.S. natural gas pipeline companies, as the software provider looks into restoring data that was lost.

Transportation and Infrastructure News

More Burdensome Regulations Are Not What the Freight-Rail Industry Needs
Apr 5, 2018 | National Review
By Edward R. Hamberger

Despite the Trump administration’s deregulation efforts, a small government agency is considering adding more red tape to this critical sector of the economy.

Environment News

Virginia Becomes Latest State to Scrutinize Pruitt's Rule Changes (1)
Apr 5, 2018 | BNA Daily Environment Report
By Sylvia Carignan

Virginia is the latest to join a growing cadre of states attempting to fill the gap between the EPA's deregulatory efforts and local needs for environmental protection.
EPA Poised to Terminate Obama-Era 'NextGen' Enforcement Policy
Apr 5, 2018 | Inside EPA

EPA's Office of Enforcement & Compliance Assurance (OECA) is poised to terminate an Obama-era policy known as Next Generation Enforcement (NextGen) that encouraged creative and innovative approaches to enforcing environmental laws, according to a source familiar with the pending plan.
Texas Companies are the Biggest Offenders for Water Pollution, Study Finds
Apr 5, 2018 | Houston Chronicle
By Fernando Ramirez

The phrase "don't mess with Texas" rings hollow when it doesn't apply to some of the state's worst polluters: major industries.

Industry and Association News

(ACC Mentioned) How U.S.-China Trade Spat Could Threaten Manufacturing

Apr 4, 2018 | The New York Times

By Natalie Kitroeff and Ben Casselman

In the escalating economic showdown between the United States and China, President Trump is trying to put American shoppers first. The administration did not place tariffs on necessities like shoes and clothes, and mostly spared smartphones from the 25 percent levy on Chinese goods announced this week.
But by shielding consumers, Mr. Trump has put American manufacturers — a group he has championed — in the cross hairs of a potential global trade war. If the measures stand, along with China’s retaliatory tariffs, they could snuff out a manufacturing recovery just beginning to gain steam.
“If you want to spare the consumer so you don’t get this massive backlash against your tariffs, then there goes manufacturing, because that’s what’s left,” said Monica de Bolle, an economist at the Peterson Institute for International Economics. “The irony is, you cannot spare manufacturing from anything because manufacturing is globally integrated. The sector sources its parts and components from all over the world.”
That intricate supply chain often runs directly between the two countries, sometimes in both directions. Chinese factories make wing panels and doors for Boeing’s Next Generation 737 planes, which are assembled by union workers in Renton, Wash. General Motors makes its Buick Envision, a sport-utility vehicle, in Shandong Province, and sells it to American consumers. Construction workers in Denver use building materials manufactured in China, made in part from ethane gas produced in Texas.
A central aim of Mr. Trump’s America First agenda is to bring back pieces of the supply chain lying outside the country. The tariffs announced this week are just a bargaining point in a broader negotiation between the United States and China over trade.Continue reading the main storyRELATED COVERAGEChina Strikes Back at the U.S. With Plans for Its Own Tariffs APRIL 4, 2018White House Unveils Tariffs on 1,300 Chinese Products APRIL 3, 2018ECONOMIC SCENETrump’s China Policy Has a Flaw: It Makes China the Winner MARCH 27, 2018ECONOMIC SCENETrade Wars Can Be a Game of Chicken. Sometimes, Literally. MARCH 13, 2018
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“They are trying to force end-product manufacturers here to use more American content by making it more expensive for them to use Chinese content,” said William Reinsch, a trade expert at the Center for Strategic and International Studies.
The United States trade representative, Robert Lighthizer, has said that the administration carefully conceived the tariffs using an algorithm that would “maximize the impact on China and minimize the impact on U.S. consumers.”
The result is a list of more than 1,300 targets, many of them obscure products that may not deliver a direct hit to consumers’ wallets. The victims include industrial robots, chemicals, medical devices and heavy machinery used in everything from processing food to crushing rock.
Such industries have been a vibrant piece of the economy, adding 224,000 jobs in the past year, the strongest growth since the recession ended nearly nine years ago. But underpinning that rebound has been a strong global appetite for American goods — demand that could now be weakened.
“This is a pretty tenuous recovery, and employment is still at much lower levels than it was before the crisis,” said Mark Muro, an economist at the Brookings Institution. “This is not a super dynamic, healthy industry.”
Recent job growth has been concentrated in industries that could be affected by American tariffs on China, Chinese tariffs on the United States, or both.GRAPHICHow Trump’s Protectionism Could Backfire
President Trump’s tariffs against steel and aluminum imports, designed to protect blue-collar workers, could instead undermine their livelihood. OPEN GRAPHIC
Some of the strongest gains in the past year have come from makers of metal products, industrial machinery and transportation equipment. All those industries rely heavily on steel and aluminum, goods that Mr. Trump hit with tariffs earlier this year in a move aimed indirectly at China’s production.
In the latest salvos, the United States took aim at a multitude of technical components — items like circuit breakers, consoles and touch screens. Those tariffs could raise costs for electronics manufacturers, who have been hiring more aggressively lately and whose supply chains run through China.
Beijing, for its part, zeroed in on an array of American products, including plastics, a fast-growing export. Chinese companies imported $3.2 billion worth of plastic resins from the United States in 2017, according to the American Chemistry Council, a trade group. Chinese factories turn those resins into building materials, automobile instrument panels, eyeglasses and thousands of other products, many of which end up back in the United States.Newsletter Sign UpContinue reading the main storySign up for the all-new DealBook newsletter
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The plastics tariffs alone could send ripples deep into Trump country. In recent years, companies have announced billions of dollars of investments seeking to capitalize on the boom in American natural-gas production. Some of those investments were to go into new plants in Pennsylvania, Ohio and other states to turn gas into chemicals and plastics, much of it bound for China.
Companies aren’t likely to abandon those plans overnight, said Calvin M. Dooley, president of the American Chemistry Council. But if the trade barriers persist, projects could be in jeopardy. “That is going to impede our ability to capitalize on that competitive advantage,” Mr. Dooley said.
Even with the flurry of measures and countermeasures between the United States and China, the moves so far have touched only a fraction of their $650 billion in annual trade. But they are beginning to signal how much damage could be caused, and who would suffer most.
In some cases, the tariffs seem intended to deliver a message rather than a fatal blow. The United States said it would impose tariffs on aircraft parts — an important and high-profile American industry, but not one facing much competition from China. Beijing said it would impose tariffs on cars and S.U.V.s, the third-largest American export to the country. But the move may not hit American automakers as hard as it might seem.
China already has a 25 percent tariff on imported cars, so General Motors, Fiat Chrysler and Ford have all agreed to manufacture inside the country as joint ventures with domestic producers, to avoid the extra charge to consumers. Foreign carmakers operating in the United States — Daimler and BMW — do send vehicles to China from factories in the Southeast. A report by analysts at Evercore ISI suggests that those companies, rather than the Detroit automakers, would bear the brunt of the Chinese levies.
Tesla might have the most to lose. The electric-car company had been lobbying hard for permission to produce cars in Shanghai, but hasn’t reached a deal. It sends vehicles to the Chinese market from its plant in Fremont, Calif., and its chief executive, Elon Musk, has expressed frustration even at the existing duties.Elon Musk✔@elonmusk8 MarReplying to @realDonaldTrump
Do you think the US & China should have equal & fair rules for cars? Meaning, same import duties, ownership constraints & other factors.Elon Musk✔@elonmusk
For example, an American car going to China pays 25% import duty, but a Chinese car coming to the US only pays 2.5%, a tenfold difference9:15 PM - Mar 8, 201811.4K3,311 people are talking about thisTwitter Ads info and privacy
Aircraft and their parts are the largest single category of American exports to China, making Boeing a big target. For now, though, Beijing seems to be moving slowly. It said it would impose tariffs on planes between 15,000 and 45,000 kilograms, which includes some older models that Chinese buyers have ordered from Boeing. But it seemed to stop conspicuously short of whacking the company’s newer 737 MAX 8, which weighs 45,070 kilograms empty.
That near miss is meant to convey to Boeing, and Mr. Trump, what China is capable of, said Richard L. Aboulafia, a longtime aviation and aerospace analyst at the Teal Group.
“Their attitude toward a trade war assumes that the other side will lie down and stay horizontal,” Mr. Aboulafia said. “I’m not sure the easy and fun approach to trade wars holds up against return fire.”
https://www.nytimes.com/2018/04/04/business/economy/trade-impact.html

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(ACC Mentioned) Factbox - U.S. Winners and Losers from Trade Tit-for-Tat

Apr 5, 2018 | Reuters (In Yahoo Finance)

By Yashaswini Swamynathan

China on Wednesday hit back at U.S. President Donald Trump's plan to impose tariffs on $50 billion of Chinese imports, proposing additional tariffs of 25 percent on 106 categories of U.S. goods, from soybeans to autos, chemicals and some kinds of aircraft.
The trade tension brewing between the world's two largest economies hit global markets, with shares of industrial companies with exposure to Chinese markets, such as Boeing Co and Deere & Co, among the hardest hit.
The following are some of the possible winners and losers among U.S. companies and sectors:
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AUTO COMPANIES:
* U.S. automaker General Motors Co urged the two countries to engage in constructive dialogue over trade. The company's stock fell as much as 3 percent before reversing course to close nearly 3 percent higher.
* GM rival Ford Motor Co also lost as much as 3 percent before rebounding to close 1.6 percent higher while electric carmaker Tesla Inc , which depends on China for 17 percent of its revenue, fell as much as 5.8 percent before retracing losses to end up over 7.2 percent. Shares of Fiat Chrysler fell as much as 3.4 percent before recovering to end up nearly 2 percent.
* Ford said it encouraged both governments to work together to resolve issues.
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BOEING & INDUSTRIALS:
* Aircraft maker Boeing Co closed down 1 percent, weighing the most on the Dow Jones Industrial Average as documents from China's Ministry of Commerce and the U.S. manufacturer showed the move would affect some older Boeing narrowbody models. It was not immediately clear how much the tariffs would impact its newer aircraft.
* Boeing said it was assessing the situation while analysts from JP Morgan said the proposals from China looked to have been calibrated carefully to avoid a major impact on the planemaker.
* Fellow Dow component 3M Co lost as much as 2.4 percent before rebounding to end 0.6 percent higher.
* Farming equipment maker Deere lost nearly $10 per share at its lowest. The company urged the two countries to work toward a resolution to "limit uncertainty for farmers and avoid meaningful disruptions to agricultural trade." The stock ended 2.9 percent lower at $148.57.
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TECH MAJORS:
* The S&P 500 technology sector, which has the biggest revenue exposure to China among the benchmark's 11 major sectors, dipped 0.5 percent before rebounding to end 1.3 percent higher.
* Chip stocks were among the worst-hit in the sector with Intel Corp and Nvidia Corp both falling before retracing losses to end narrowly higher. Broadcom Ltd ended the day nearly flat at $236.99. China's position as an assembly hub for electronic devices makes it the biggest consumer of semiconductors.
* Cisco Systems Inc closed slightly higher at $41.20, but said it was "analyzing the impact of these tariffs on Cisco and reviewing plans to minimize the impact on our business, our customers and our partners," company spokeswoman Robyn Blum told Reuters.
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WHISKEY
* Brown-Forman Corp, the maker of Jack Daniel's whiskey, slipped about 1 percent before recovering to close up 1.3 percent to $54.71 after whiskey was singled out as the only spirit on which China planned to impose more tariffs.
* The Distilled Spirits Council, a U.S. industry group, asked the United States and China to reach a resolution without subjecting American whiskey to more tariffs, which it said would harm Chinese consumers, its hospitality sector and U.S. whiskey exporters. The Council also said U.S. whiskey accounted for nearly 70 percent of the total U.S. spirits exported to China, by value, in 2017.
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COMMODITIES & CHEMICALS
* DowDuPont Inc said its agriculture unit could be affected by the escalating conflict, warning of price declines for soybeans, and a negative impact on U.S. farmers. Shares closed up about 0.6 percent at $63.69.
* Grain traders Archer Daniels Midland Co and Bunge Ltd, which trade U.S. soybeans in China, were both off as much as 1.5 percent. Archer Daniels recovered to add 1.8 percent to $43.90, and Bunge gained 2 percent to close at $75.64.
* The American Chemistry Council (ACC) - which counts Exxon, Chevron, Monsanto and others as its members - urged the United States and China to come to an understanding. "Engaging in a trade war with one of our country's most significant trading partners is not the answer," said ACC Chief Executive Officer Cal Dooley.
Exxon closed 0.2 percent lower at $74.87, and Monsanto also fell 0.2 percent to $116.75. Chevron dipped 0.3 percent to $114.48.
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WINNERS
* U.S. meat processor Tyson Foods Inc, meat exporter Hormel Foods Corp rose on the prospect of a drop in prices of soybean - a key feedstock - following higher Chinese tariffs on U.S. exports. Tyson closed up 2.3 percent at $71.54, and Hormel ended the day at $35.87, a gain of 4.8 percent.
https://finance.yahoo.com/news/factbox-u-winners-losers-trade-tit-tat-001342867--finance.html

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(ACC Mentioned) Trump Trade War Threatens U.S. Chemical Investment Renaissance

Apr 4, 2018 | Bloomberg

By Jack Kaskey

A brewing trade war with China threatens to derail the fastest-growing sector of the U.S. manufacturing economy as chemical companies rethink spending almost $100 billion on new factories.
Tariffs on U.S. chemical exports to China, coupled with new duties on steel imports used to build plants, would undercut the economic advantage that’s fueled the industry’s unprecedented expansion. Contrary to President Donald Trump’s pledge to bring manufacturing back home, companies that expand production or build facilities outside the U.S. would reduce capital expenses while avoiding Chinese tariffs.
“Market shifts caused by tariff increases may convince investors to do business elsewhere,” said Cal Dooley, president of the American Chemistry Council trade group. Current plans for new chemical factories, expansions and restarts of facilities in the U.S. were based on the economics of existing tariffs, he said in a statement Wednesday.
China’s proposal to levy 25 percent tariffs on about $50 billion of U.S. imports effectively would remove a large market for dozens of plastics and chemicals targeted by the measure. China imported $3.2 billion of U.S. plastic resins last year, making the country one of the industry’s most important trading partners, Dooley said. Forty percent of the products on China’s tariffs list are chemicals such as polyethylene, PVC, polycarbonates and acrylates.Quickly Escalating
The Wednesday announcement was retaliation against Trump’s proposals for $50 billion in similar tariffs for China imports. That followed a 25 percent duty the U.S. imposed on steel imports -- a move that DowDuPont Inc. already warned would add $300 million to a major chemical project on the U.S. Gulf Coast.
The new tariffs strengthen the case for DowDupont to locate its next big plant in a country like Argentina or Canada, said Jim Fitterling, chief operating officer of the company’s Dow chemicals unit. Dow just completed a $6 billion Texas expansion, and higher steel costs don’t help the case for another U.S. project, he said.
“You eventually get yourself to the point where you are saying, ‘Should I really be building that here or somewhere else?’” Fitterling said in a March 6 interview.Shale Advantage
Chemical production has emerged as the biggest driver of U.S. manufacturing growth in recent years as the shale drilling boom lowered the costs of key raw materials such as ethane, according to the American Chemistry Council, an industry advocate. Cheap natural gas liquids like ethane give the U.S. a competitive edge over producers elsewhere that use oil-derived naphtha as a raw material.
The advantage prompted chemical makers to announce investments of $188 billion for new U.S. production, with more than half of the projects not yet begun, according to a chemistry council tally.
Companies with factories inside China or elsewhere outside the U.S. should be able to avoid China’s new levy, said Christopher Perrella, a chemicals analyst with Bloomberg Intelligence. The low-cost position of U.S. plastics means the exports will find a market somewhere, even if supply chains need to shift, he said.
Even before the latest round of tariffs, Chevron Phillips Chemical Co. was growing wary of rising plant construction costs that threatened plans for another U.S. project. Construction costs are up 40 percent over five years, Doug May, a DowDuPont business president, said March 21.
https://www.bloomberg.com/news/articles/2018-04-04/trump-trade-war-threatens-u-s-chemical-investment-renaissance

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(ACC Mentioned) China's List of Tariffs Takes Aim at US Chemicals and Plastics Sectors

Apr 4, 2018 | CNBC

By Tom DiChristopher

China's list of more than 100 American products under threat of tariffs targets the U.S. chemicals and plastics sectors at a time when parts of the industry are investing heavily in new production.

About 40 percent of the goods on the list are plastics, petrochemicals, petroleum products and specialty chemicals. To be sure, the proposed tariffs amount to a response to President Donald Trump's threat to slap taxes on 1,300 Chinese goods and may never come to fruition.
But analysts say the prospect of a trade war increases uncertainty about demand in a major foreign market for American companies that are planning to invest billions of dollars at home in large-scale chemicals projects."The biggest concern is how does this escalate? And then does it ultimately impact the global economy? If we go into another 2009 environment, it would really pause investments."-Steve Lewandowski, vice president of global olefins, IHS Markit
"Nearly $185 billion in new chemical factories, expansions and restarts of facilities around the country are predicated on current tariff schedules, and market shifts caused by tariff increases may convince investors to do business elsewhere," the American Chemistry Council warned Wednesday.
"We strongly urge the U.S. and China to reach a productive and meaningful agreement before any of the proposed tariff schedules go into effect," the industry group said.
China is the third-biggest export market for U.S. chemicals behind Canada and Mexico, according to an analysis of U.S. Department of Commerce data performed by the council.
Those shipments were worth $10.6 billion in 2016, the latest year included in the council's analysis. For comparison, shipments to Canada drummed up nearly twice that amount that year, while Mexico spent about $19 billion on American chemicals.Still time for negotiating tariffs and to walk back from where we are, says expert  18 Hours Ago | 05:59
Demand in China has helped North American and European chemical companies grow while consumption at home has stagnated, according to a briefing by McKinsey & Co. Rapid economic growth in China means the country has not been able to develop its own feedstocks fast enough to fuel its massive industrial sector.
"China tries to be self sufficient with any product that they can. Some are easier than others," said Alex Lidback, vice president for chemicals at energy research firm Wood Mackenzie. "Depending on the feedstock availability, the technology availability — all those things have an impact on how quickly they can add capacity."
It's difficult to make a blanket statement about the potential impact of tariffs on the roughly 40 products China targeted across the chemicals, energy and plastics universe. But analysts say the effects could be meaningful for some slices of the U.S. chemical industry.
In Lidback's view, one of the targeted items that stands out is polyethylene, one of the most widely used plastics.
U.S. oil majors and chemical companies have announced major investments in the petrochemical plants that produce polyethylene. The building boom is being driven by a surge in U.S. natural gas output, which has yielded a cheap and abundant source of byproducts that go into American polyethylene.China announces new tariffs as trade tensions escalate  22 Hours Ago | 02:37
"It's a concern without a doubt because the U.S. has a good cost position, they're adding capacity and the Chinese market is very short of polyethylene as a whole, so they need the imports to meet their demand growth," Lidback said.
Another U.S. export that caught Lidback's eye is propane. China has been investing in plants that turn propane into propylene, and those facilities have been counting on a steady supply of pure U.S. propane. A big wave is set to come online in 2019 and 2020, Lidback said.
U.S. propane exports have been have been on the rise over the last few years, according to Andy Lipow, president of Lipow Oil Associates. Last year, China was the third-largest buyer of propane, behind Japan and Mexico, accounting for about 13.6 percent of U.S. exports, according to his analysis.
Some of the companies involved in the U.S. propane export business include Enterprise Products, Targa and Phillips 66.
If the tariffs were enforced, one scenario could see a reshuffling of global trade flows, said Steve Lewandowski, vice president of global olefins at IHS Markit. Since there is currently enough capacity of key plastics to meet global demand, China could potentially source the products from elsewhere, and the United States would then step in to supply other markets.
In his view, the impact of tariffs are likely not enough to cancel planned projects. But the effects of a worsening trade war could slow global economic growth and crimp demand for plastics, making some project economics questionable.Gundlach says he learned in elementary school that tariffs caused the Great Depression  14 Hours Ago | 04:09
"These in themselves probably won't upset the apple cart, but it's what happens politically around it," Lewandoski said.
"The biggest concern is how does this escalate? And then does it ultimately impact the global economy? If we go into another 2009 environment, it would really pause investments."
Nick Vafiadis, vice president of plasticts at IHS Markit, notes that China singled out only one of three main types of polyethylene: a low-density category commonly used in packaging, which is fairly well supplied in China.
Still, there is more than a million metric tons of new low-density U.S. polyethylene capacity coming online through next year, most of which is for export, particularly to China, he said. Dow Chemical is ramping up a new facility now, while Formosa and Sasol have plants coming online soon.
Many parts of the U.S. chemicals industry are set up to meet domestic demand, but Chinese tariffs raise questions about the ability of American companies to sell their surplus products on the international market, said Kathy Hall, executive editor of PetroChem Wire.
"If you're stemming the overflow from the get-go, it's a little bit questionable about how that plays out for these news plants," she said, referring to new plastics and petrochemical facilities.
Another question is whether tariffs would affect American firms that have long-term contracts with Chinese partners.
"For companies that are very dependent on China, that have decadelong contract agreements, is that affected by this? I don't know. I wouldn't think so, but I don't know," she said.
https://www.cnbc.com/2018/04/04/chinas-tariffs-take-aim-at-us-chemicals-and-plastics-sectors.html

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(ACC Mentioned) The Latest: Iowa Senator: Trade Dispute Unfair to US Farmers

Apr 4, 2018 | AP (In The Washington Post, Newser, Telegraph Herald, Seymour Tribune)

The Latest on U.S.-China trade tensions (all times local):
___
4:00 p.m.
Breaking news about local government in D.C., Md., Va.
Sen. Charles Grassley, an Iowa Republican, says the United States needs to protect its intellectual property and competitiveness but shouldn’t force farmers and ranchers to bear the brunt of retaliation for the entire country.
“It’s not fair, and it doesn’t make economic sense,” Grassley says in a statement. “The administration knew that if it imposed tariffs on Chinese goods, China would retaliate against U.S. agriculture. I warned President Trump as much in a White House meeting in February.”
He said the federal government has a responsibility to “help those Americans and mitigate the damage it caused” to those suffering economic hardship from the tariffs.
___
3:00 p.m.
The American Chemistry Council, a lobbying group, says China’s threatened tariffs would come down hard on U.S. chemical companies.
The group says 40 percent of the products China said it would target Wednesday are chemicals, including PVC and plastics. China imported 11 percent of all U.S. plastic resins last year, or $3.2 billion worth.
The council, which represents Dow, DuPont and other major chemical companies, says its members have planned $185 million in new U.S. factories or expansions based on current tariff levels. It says a trade war with China would jeopardize those plans.
“We strongly urge both the U.S. and Chinese governments to work together to come to a satisfactory and mutually beneficial decision before this situation escalates further,” council President and CEO Cal Dooley says in a statement.
___
2:45 p.m.
U.S. Sen. Roy Blunt, a Missouri Republican, is critical of the Trump administration’s tariffs.
“A trade war always has unanticipated consequences,” he said during a press conference at the state capitol Wednesday. “The last two days are an indication of exactly what I’ve been most concerned about.”
He says the tariffs could affect Missouri’s ability to export food abroad, and the U.S. should instead focus on pursuing trade cases it already has against China with the World Trade Organization.
___
12:45 p.m.
The American Soybean Association, a lobbying group that says it represents 21,000 U.S. soybean producers, says China’s proposed 25-percent tariff on soybeans would be “devastating” to U.S. farmers. China is the largest consumer of U.S. soybeans, buying about one-third of all U.S. soybean production each year, the group says.
Association President John Heisdorffer, an Iowa farmer, is calling on the Trump administration to withdraw its proposed tariffs and meet with soybean farmers to discuss ways to improve competitiveness without resorting to tariffs.
The association says soybean farmers lost an estimated $1.72 billion on Wednesday morning alone as soybean futures tumbled.
“That’s real money lost for farmers, and it is entirely preventable,” Heisdorffer says in a statement.
___
12:10 p.m.
Ford and General Motors are calling for continued dialogue to resolve escalating trade tensions between the U.S. and China.
Both automakers issued statements Wednesday after China proposed steep retaliatory tariffs on imports of U.S.-made vehicles and other goods.
Ford says it encouraged the governments to work together. GM urges the countries to “engage in constructive dialogue and pursue sustainable trade policies.”
GM would be affected by U.S. tariffs because it imports the Buick Envision SUV from China. Ford has plans to import a new version of the Focus compact car from China next year. Both make most of their vehicles in China that are sold there and ship only a small number of vehicles from the U.S. to China.
___
11:45 a.m.
National Economic Council Director Larry Kudlow is suggesting that proposed tariffs on Chinese imports may not ultimately go into effect.
Kudlow is trying to soothe stock market fears over a potential trade war with China. He says the tariffs announced Tuesday are “potentially” a negotiating ploy in an effort to get China to level the playing field for U.S. businesses.
Kudlow tells reporters: “There are carrots and sticks in life,” adding that the U.S. is encouraging China to lower trade barriers.
He adds that China should take Trump “seriously” on tariffs, but that ultimate the president is a “free-trader.”
Kudlow says the Trump administration is focused on growing the U.S. economy, saying: “Sometimes the path to this kind of growth is a little rocky. That’s the way the world works.”
____
11:30 a.m.
Boeing shares are sinking after China proposed steep tariffs on U.S. aircraft as trade tension grows between the United States and China.
China is a key market for Boeing, accounting for nearly one-fourth of the Chicago company’s deliveries of commercial airplanes last year.
Chinese tariffs on U.S.-made planes are not certain, and the proposal only covers planes within a certain weight range. Analysts say the tariffs would hit older versions of the Boeing 737 that are still in production, but not newer MAX models. Larger wide-body aircraft would not be affected.
Still, the threat that Boeing Co. could be caught in trade war crossfire sent the shares down nearly 6 percent in morning trading. They regained some ground by late morning — down $9.65, or 2.9 percent, to $321.17.
___
10:35 a.m.
Analysts at Sanford C. Bernstein are saying that BMW, Mercedes-Benz and Tesla are the biggest potential losers from higher Chinese tariffs on U.S. auto imports.
Bernstein said in a note Wednesday that BMW sends 89,000 vehicles annually from the U.S. to China while Daimler AG’s Mercedes-Benz ships 65,000. Tesla sells about 14,000 but China accounts for around 15 percent of forecast Model S and X sales this year.
If enforced, the measures announced by Beijing earlier would increase tariffs on cars from the United States to 50 percent from the usual 25 percent.
BMW is headquartered in Munich, Germany but claims the title of biggest U.S. car exporter by shipping vehicles including its X5 SUV from its Spartanburg, South Carolina plant. Stuttgart-based Daimler builds Mercedes in Vance, Alabama.
The Bernstein team raised the question of whether the threat of a U.S-China trade war could “nudge the Germans toward localization” — that is, moving production to China.
___
10:00 a.m.
China says it has made a “request for consultations” at the World Trade Organization in response to U.S. tariffs against Chinese products.
The Chinese Ministry of Commerce confirmed the step taken Wednesday at the Geneva-based trade body, which triggers the WTO’s dispute settlement mechanism that will begin with consultations between the two countries.
China said the request centers on a proposed product list subject to the additional tariffs under U.S. Section 301 rules.
___
8:15 a.m.
Commerce Secretary Wilbur Ross is brushing off concern over trade war with China. In an interview with CNBC Wednesday morning, Ross said that tariffs imposed by China amount to 0.3 percent of U.S. GDP and that some action on tariffs has been “coming for a while.”
“What we’re talking about on both sides is a fraction of 1 percent of both economies,” he said.
The larger concern, Ross said, is the protection of U.S. intellectual property.
Still, U.S. stock futures slumped over concerns that the back-and-forth tariff actions will stunt trade and growth. Ross said he would not comment on the stock market’s reaction, but then said he thinks “it’s being out of proportion.”
___
All times below this point are local time for Beijing.
___
7:50 p.m.
President Donald Trump says the U.S. lost a trade war with China “years ago.”
In a tweet Wednesday after China announced a list of U.S. products that might be subject to a 25 percent tariff, Trump said: “We are not in a trade war with China, that war was lost many years ago by the foolish, or incompetent, people who represented the U.S.”
China announced tariffs worth $50 billion on a series of U.S. products including soybeans, whiskey and cars.
Chinese officials said they were obliged to act after the U.S. announced plans for retaliatory tariffs in an escalating dispute over China’s technology program and other trade issues.
___
7:00 p.m.
The chairman of the American Chamber of Commerce in China says Beijing’s potential retaliation in an escalating dispute with Washington is a concern for every U.S. company doing business in China.
William Zarit told The Associated Press in an interview Wednesday that proposed tit-for-tat tariff hikes by both sides would first hit global stock markets.
Zarit said he still hopes Washington and Beijing will not follow through on their threats.
Instead they should work toward a “serious negotiation.”
U.S. business groups mostly agree that something needs to be done about China’s aggressive push in technology. But they worry that China’s measures targeting U.S. exports of aircraft, soybeans and other products could help bring on a tit-for-tat trade war of escalating sanctions between the world’s two biggest economies.
___
6:40 p.m.
A senior Chinese commerce official has defended the official technology policy at the center of an escalating trade dispute with the United States.
Wang Shouwen, a deputy commerce minister, told reporters Wednesday that the long-range industrial strategy known as “Made in China 2025” is open to foreign companies, including American firms, and to private companies, not just state-owned enterprises.
The policy calls for creating Chinese global leaders in electric cars, robots and other fields.
Wang said the plan, which lays out specific targets for domestic brands’ share of the market in some sectors, should be seen as a guide rather than mandatory.
Foreign business groups complain that strategy will limit or outright block access to those industries.
___
6:00 p.m.
A Chinese foreign ministry spokesman has urged the U.S. to come to the table and discuss an escalating trade dispute.
Ministry spokesman Geng Shuang told reporters in Beijing on Wednesday that China’s door to dialogue with Washington remains open “but the U.S. has missed the opportunity time and time again.”
Geng made the comments after Beijing announced plans to raise tariffs on imports from the U.S.
He said talks between the two countries require “mutual respect and equal treatment, instead of being coerced by one party unilaterally and condescendingly.”
Geng added that neither side should be “threatening the other with senseless and unreasonable demands.”
___
5:50 p.m.
European stock markets have fallen sharply after China announced a series of tariffs on U.S. goods, stoking fears that the two countries were on the brink of a full-scale trade war.
Among the region’s major indexes, Germany’s DAX was down 1.2 percent while the FTSE 100 index fell 0.4 percent, in the wake of China’s decision to raise tariffs on $50 billion of U.S. goods including soybeans, aircraft and automobiles. China was responding to Washington’s equivalent duties on Chinese goods.
Joshua Mahony, market analyst at IG, said it’s “no surprise that we are seeing traders flock to safe havens in response, with gold and the yen both sharply higher throughout the morning’s trade.”
Gold, for example, was up 0.8 percent at $1,347.40 an ounce.
___
5:30 p.m.
A senior Chinese finance official has warned that attempts by foreign countries to pressure China on trade will fail, striking a firm note as Beijing announced proposed tariff hikes on American goods in response to planned U.S. duties.
Zhu Guangyao, China’s deputy finance minister, said Wednesday that Beijing hopes both sides can work together in a constructive manner, “instead of acting in a willful way.”
He made the comment at a briefing to discuss China’s plans to impose a 25 percent tariff hike on U.S. soybeans, autos, aircraft and other goods valued at $50 billion.
Zhu said that China never gives in to outside pressure and that “pressure from the outside will only urge and encourage the Chinese people to work even harder” and to innovate and develop.
___
5:15 p.m.
A senior official with China’s Commerce Ministry says Beijing will keep the door to negotiations with the U.S. open, after announcing a plan to impose tariffs on $50 billion worth of U.S. goods in response to proposed U.S. tariffs.
Wang Shouwen, a vice minister of Commerce, said Wednesday at a briefing with reporters that Beijing doesn’t want a trade war but will fight one if forced to.
Wang said Beijing was willing to resolve these disputes with the U.S. through dialogue on the basis of “mutual respect and mutual benefit.”
Wang said: “If anyone wants to fight, we’ll be there with him, if they want to negotiate, the door is open.”
___
4:20 p.m.
China has raised tariffs on $50 billion of U.S. goods including soybeans, aircraft and automobiles in response to Washington’s increased duties on Chinese goods in a technology dispute.
The Commerce Ministry on Wednesday criticized the U.S. move as a violation of global trade rules and said China was acting to protect its “legitimate rights and interests.”
It said a 25 percent tariff would be imposed and the date the charges will take effect would be announced later.
The dispute stems from U.S. complaints that Beijing pressures foreign companies to hand over technology in return for market access.
Companies and investors worry the conflict could dampen worldwide commerce and set back the global economic recovery.
https://www.washingtonpost.com/business/the-latest-china-open-to-talks-with-us-in-tariffs-dispute/2018/04/04/18223f12-37e9-11e8-af3c-2123715f78df_story.html?utm_term=.6deafe3ab028

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(ACC Mentioned) Chinese Petrochemicals Tariffs Expected to Have Little Impact

Apr 5, 2018 | Houston Chronicle

By Katherine Blunt

China's proposed tariffs on certain U.S. petrochemicals are expected to have a limited impact on Gulf Coast exports, but experts warned that an escalation of the trade war between the two countries could potentially stymie the industry’s rapid expansion.MOST POPULARKirbyjon Caldwell's Victory Charter school to close amid...Fight over Houston floodplain rules taps into city’s...Another sign of Permian boom: record electricity demandCity Council adopts stricter development rules for Houston’s...Galveston hosting 'tall ships' for weekend maritime festivalThe MLK tribute that Houston's power brokers couldn't abideArtist seeing red over Houston's 'Green Trees'
The proposed 25 percent tariffs, announced Wednesday, would include low-density polyethylene used in films and shopping bags, as well as PVC, polycarbonates, acrylates and some other chemicals. But they do not cover styrene or ethylene glycol, major U.S. chemicals exports to China used to make plastics, foams and polyester.
Jonas Oxgaard, a chemicals analyst with Sanford C. Bernstein & Co., a New York investment management and research firm, said most of the chemicals on the list are exported to China in small volumes. Only about 6 percent of low-density polyethylene manufactured in the U.S. is shipped to there, and he noted that much of that volume could be absorbed in other export markets.
"India could take every single ton of (polyethylene) that we're currently shipping to China," he said.TRANSLATOR
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The measures, announced in response to the Trump administration’s decision to impose tariffs on Chinese steel and aluminum, comes amid a boom in petrochemicals production along the Gulf Coast. A surge in oil and gas drilling in West Texas has created a steady stream of cheap natural gas liquids to turn into feedstocks for plastics, building materials and consumer goods.
Major Houston-area producers including LyondellBasell, Chevron Phillips Chemical and ExxonMobil Chemical are investing billions of dollars in their local facilities to meet growing demand in Asia and South America. A number of producers are eyeing export opportunities in China because the country recently stopped importing scrap plastic, which it recycled to into bottles, packaging and consumer goods, and cracked down on industrial polluters to address a smog crisis.
In a research note, Wells Fargo analyst Frank Mitsch said the proposed tariffs on chemicals would likely have few near-term effects on U.S. exports. He emphasized the competitiveness of U.S. petrochemicals production, which relies on cheap natural gas liquids instead of the heavier crude feedstocks often used in Asia and elsewhere.RELATEDCalifornia would be on front lines of US-China trade warWill U.S.-China trade tensions derail energy export plans?Chinese petrochemicals tariffs expected to have little impact
He added that Houston-based petrochemicals companies LyondellBasell and Westlake Chemical would likely feel little impact from the proposals. Neither company exports a substantial amount of the affected chemicals to China.
But the American Chemistry Council, the industry trade group, warned that global trade disruptions could potentially slow the development of $185 billion in new U.S. chemicals factories and expansions coming online to produce exports. China, which imported 11 percent of U.S. plastic resins last year, has emerged as a particularly important trading partner, the trade group said.
“We strongly urge the U.S. and China to reach a productive and meaningful agreement before any of the proposed tariff schedules go into effect,” ACC president and CEO Cal Dooley said in a statement.
https://www.houstonchronicle.com/business/article/Chinese-petrochemicals-tariffs-expected-to-have-12806443.php

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(ACC Mentioned) US Petrochemicals Industry Alarmed at Potential China Tariffs

Apr 4, 2018 | Platts

By Kristen Hays, Chris Ferrell, and Nida Qureshi

China's plan to impose 25% tariffs on 106 US products, in response to President Donald Trump's proposed import taxes on $50 billion in Chinese goods, includes several petrochemical products for which the Asian country is a critical export market, prompting a swift response from the industry's trade group.

"China is one of the US chemical industry's most important trading partners, importing 11 percent, or $3.2 billion, of all U.S. plastic resins in 2017," American Chemistry Council CEO Cal Dooley said in a statement after China's tariff plan was disclosed Wednesday. "We are particularly concerned that 40 percent of the products to which China has assigned new tariffs are chemicals, including polyethylene, PVC, polycarbonates, acrylates, and others."

US tariffs on Chinese goods cannot take effect until May, after public comment periods. China did not specify when its tariffs may take effect.

ACC represents major chemical manufacturers, including DowDuPont, ExxonMobil Chemical, Chevron Phillips Chemical, Huntsman and LyondellBasell. Those companies did not respond to requests for comment, leaving ACC to speak for them.

However, many have new plants among the nearly $185 billion in new chemical infrastructure, expansions and facility restarts in the US -- largely concentrated along the US Gulf Coast -- that will make some of the products facing new tariffs.

The US natural gas shale boom unlocked vast deposits of ethane, the cheap feedstock of choice for eight new steam crackers starting up in the US from 2017 to 2019, which will feed ethylene to 14 new polyethylene plants starting up in the same span. A second wave of crackers and derivative plants, including PE, are slated to come online post-2020.

The overall impact of the tariffs would be higher global polyethylene prices, according to S&P Global Platts Analytics. The US and Middle East are the main global suppliers to PE short markets like Asia, so any tariff would raise prices -- the issue would be which region supplies China.

Of 6.36 million mt/year of new polyethylene capacity coming online from 2017-2019, 45% will make linear-low density polyethylene, and 12% will make low density polyethylene. Both grades are used to make film, like shrink wrap, while LDPE also can be used for stronger thicker plastic containers like detergent bottles.

UNCLEAR IF LLDPE INCLUDED

China's list of targeted products specifically includes LDPE. Market sources, including the ACC, were working to determine whether LLDPE also was included, as its chemical makeup is very similar to LDPE and in line with with specifications on China's list. However the trade code specified was only for LDPE resin.

The initial wave of US Gulf Coast polyethylene units in 2017 did not include new LDPE capacity, but several projects slated to start up next year will, according to Platts Analytics and company announcements.

Formosa Plastics USA is building a 625,000 mt/year LDPE plant in Point Comfort, Texas, giving the company its entrance to the market after previously producing high-density polyethylene and LLDPE grades.

Sasol, which opened a joint HDPE plant with Ineos in 2017 along the Houston Ship Channel, is working to bring its Lake Charles, Louisiana, complex online, which will include 450,000 mt/year of LDPE capacity in late 2018 or early 2019, according to market sources.

DowDuPont also is set to bring 350,000 mt/year of new LDPE capacity online at its Freeport, Texas, complex this spring.

Most, if not all, of the new US polyethylene output will be exported, as North America is already oversupplied. Last year, the US and Canada exported 15% of the region's polyethylene output, or 3.47 million mt.

China received 12% of those exports in 2017, the third-largest recipient behind Mexico and Canada, according to US International Trade Commission data.

"Without China, I just don't see where all this goes," a US-based polymer trader said, noting that regions like Latin America and Africa -- while growing markets -- do not have anywhere near China's buying power.

PACKAGERS HAD ALSO HIKED CAPACITY WITH AN EYE TO CHINA US resin packaging companies also added more than enough capacity to package that new resin in 55 lb bags for export, banking on demand from China and other major markets.

"This is highly disconcerting," said Marc Levine, CEO of Plantgistix, one of many packagers that added capacity at warehouses near the Houston Ship Channel.

"If US resin becomes 25% more costly in China, certainly this would have a significant negative impact on US contract packagers, including Plantgistix," he said. "Most of us primarily package plastic resin for export. We handle LDPE and LLDPE, and China by far has been our largest market."

The ACC's Dooley said the new and expanded infrastructure was predicated on current tariff schedules, and market shifts caused by tariff increases may convince investors to do business elsewhere.

"We strongly urge the US and China to reach a productive and meaningful agreement before any of the proposed tariff schedules go into effect," he said.

China's tariff targets also include polyvinyl chloride, which is used heavily in construction to make pipes, window frames and vinyl siding, and ethylene dichloride, which is a precursor to PVC.

PVC, EDC FACE DIFFERENT FORTUNES

The US exported 31% of its PVC capacity in 2017. Of that, 11% went to China, the second-largest recipient behind Canada. Antidumping duties already prevent US PVC from entering China's domestic market, so that product is re-exported into Southeast Asia, a US producer source said.

"That is all re-export business, so there's no effect" from potential tariffs, the source said.

However, EDC would be affected. China is by far the largest recipient of US EDC exports, having taken 27% of 1.3 million mt in 2017, according to US trade data. China received 25% less last year compared with 2016 because producers there are making more EDC domestically, using chlorine output from chlor-alkali plants run at high rates to capture strong caustic soda margins.

Another target on China's list is acrylonitrile, used to make synthetic fibers like nylon as well as synthetic rubber. The US exported 332,251 mt of ACN to China in 2017, 59.4% less than in 2016. China was the sixth-largest market for US ACN last year, behind South Korea, Mexico, Taiwan, Turkey and Peru, according to US trade data.

"This will definitely have an impact on ACN, especially right after implementation," a market source said Wednesday. "I would expect that with time, the export destinations will shift around as someone else supplies China and we move to a different country. The LDPE is big news, too, as we increase US PE production and needed exports to keep the market balanced."
https://www.platts.com/latest-news/petrochemicals/houston/us-petrochemicals-industry-alarmed-at-potential-10340672

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(ACC Mentioned) Tariff Announcements Could be Prelude to Negotiations

Apr 4, 2018 | The Maritime Executive

On Wednesday, Beijing announced tariffs on 106 U.S. products worth $50 billion, matching the Trump administration's recently announced duties on 1,300 Chinese imports. The affected American goods include cars, aircraft and major agricultural commodities like pork and soybeans.
These tariffs have not taken effect yet, and China has not announced an implementation timeline for its latest round. American stock indexes rose sharply on Wednesday, buoyed by indications from both sides that the announcements are a prelude to negotiations and will not be put into action. The White House's new top economic advisor, Larry Kudlow, suggested Wednesday that the tariff announcements are "potentially" a negotiating tactic, and claimed that ultimately President Donald Trump is a "free-trader." However, Trump's record on free trade appears less supportive: the president campaigned against the North American Free Trade Agreement (NAFTA) and the Trans-Pacific Partnership (TPP) free trade agreement in the 2016 election, and he withdrew the U.S. from TPP after taking office.
If the tariffs do take effect, the impact on trade and consumer purchasing power could be significant. In a telling example, freight forwarder Flexport says that its customers alone would have paid out $13 billion in additional taxes and duties if the U.S. tariffs had been in place last year. On the export side, the American Chemistry Council noted that China buys about 10 percent of America's plastic production, and Chinese tariffs could jeopardize plans for more American petchem plants. The American Soybean Association said that a 25 percent Chinese tariff on U.S. soybeans would be "devastating," as China buys about one third of America's soybean harvest every year. The tariffs would give Chinese buyers an incentive to source goods from outside the U.S. and vice versa.
In addition, analysts with Sanford C. Bernstein suggested that if the tariffs are implemented, certain trade volumes could fall as manufacturers relocate their production within the borders of the target market, a practice known as "localization" that reduces trade and port volumes. In particular, Bernstein's analysts noted that two leading German luxury automakers operate car factories in the American South with China-bound exports of about 150,000 units per year. Beijing has proposed a stiff 50 percent tariff on American cars, which would add tens of thousands of dollars to the base price of a U.S.-built BMW X5 or Mercedes GLE delivered to Shanghai. To avoid the penalty, Bernstein said, BMW and Mercedes could decide to make more of their Chinese-market vehicles in China, like competitor Audi.
https://www.maritime-executive.com/article/u-s-china-tariffs-would-threaten-trade-but-may-never-take-effect#gs.4zzCwrE

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(ACC Mentioned) U.S. Chemical Companies Heavily Targeted by New Chinese Tariffs

Apr 5, 2018 | PoliticoPro - Trade Whiteboard

...could deter future investment in the U.S. “China is one of the U.S. chemical industry’s most important trading partners, importing 11 percent, or $3.2 billion, of all U.S. plastic resins in 2017," the American Chemistry Council said in a statement. "We are particularly concerned that 40 percent of the products to which China has assigned new tariffs are chemicals, including low-density polyethylene,...
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Story can be found here:
https://www.politicopro.com/trade/whiteboard/2018/04/us-chemical-companies-heavily-targeted-by-new-chinese-tariffs-951080

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(ACC Mentioned) US-China Trade War Hits Plastics Industry

Apr 5, 2018 | Plastics Today

By Stephen Moore

The fomenting trade war being fought between the US and China could disrupt global supply chains if tariffs on resins, processing machinery, tooling and plastic products come into effect. This could happen as early as the beginning of June.
The US has listed injection molding machinery, extrusion machinery, blow molding machinery, thermoforming and tooling as imports that could be hit with tariffs of 25%. In a tit-for-tat riposte, China listed low-density polyethylene (LDPE), polyolefin elastomers and plastomers (POEs, POPs), polyvinyl chloride (PVC) resin, polyamide (PA) 66 resin, aromatic and semi-aromatic PAs and their copolymers, and epoxy resin among plastic-related products that would be taxed upon import. PET sheet and film, acrylic resin and polycarbonate resin also made it to the list.
In a written statement, American Chemistry Council (ACC) President and CEO Cal Dooley said: “U.S. chemical manufacturers believe the principles of free and fair trade should apply to all members of the WTO, and that includes China. However, engaging in a trade war with one of our country’s most significant trading partners is not the answer. We strongly urge both the U.S. and Chinese governments to work together to come to a satisfactory and mutually beneficial decision before this situation escalates further.
“China is one of the U.S. chemical industry’s most important trading partners, importing 11 percent, or $3.2 billion, of all U.S. plastic resins in 2017. We are particularly concerned that 40 percent of the products to which China has assigned new tariffs are chemicals, including polyethylene, PVC, polycarbonates, acrylates, and others.
“Nearly $185 billion in new chemical factories, expansions and restarts of facilities around the country are predicated on current tariff schedules, and market shifts caused by tariff increases may convince investors to do business elsewhere. We strongly urge the U.S. and China to reach a productive and meaningful agreement before any of the proposed tariff schedules go into effect.”
The US imported almost $109 million worth of injection molding machinery from China in 2016, while extruder imports were much lower at around $12.4 million. Blow molding machinery imports from China were valued at about $4.2 million. For its part, the US exported over 152,000 tonnes of LDPE (including LLDPE) to China in 2016 valued at $215 million. US polycarbonate exports to China, meanwhile, were valued at almost $325 million (129,000 tonnes).
https://www.plasticstoday.com/business/us-china-trade-war-hits-plastics-industry/178847681458537

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(ACC Mentioned) China, US Add Plastics to Their Trade War

Apr 4, 2018 | Plastics News

By Audrey LaForest and Bill Bregar

Updated: An escalating trade war between the United States and China is hitting the plastics sector with Chinese officials announcing tariffs on 106 U.S. products, including plastics, and the U.S. targeting machinery and molds.
Both nations are eyeing a rate of 25 percent. Final numbers and the effective dates of the new tariffs have not been finalized. The list of U.S. plastics products targeted by China include numerous resins and finished products.
Plastics industry officials were scrambling to react to the news in the first hours after the two countries' announcements. By the afternoon of April 4, Plastics Industry Association President and CEO Bill Carteaux urged officials to "reconsider" their actions.
“China is proposing tariffs on plastic materials and plastic products from the U.S., while the U.S. is proposing tariffs on plastics machinery from China," Carteaux said in a news release from the association. "This is despite the fact that both countries would benefit from a freer approach to trade, one that lies in a different direction than the one that both countries seem to be taking. The persistent trade deficit that the U.S. has had with China is troublesome, and springs from real structural issues that should be resolved, but not through tariffs, which only serve to limit our industry’s potential growth."
Carteaux expressed confidence in the plastics industry's ability to withstand anxieties in the global market, but the threats threaten to "disrupt the supply chains of companies large and small if they take effect.
"Before these tariffs take effect, we urge both countries to reconsider taking yet another step in the wrong direction with their economic policies, and urge both nations to come together to find real solutions that benefit all companies and consumers,” he said.
In a statement, American Chemistry Council president and CEO Cal Dooley said that U.S. chemical manufacturers "believe the principles of free and fair trade should apply to all members of the [World Trade Organization], and that includes China."
ACC represents many producers of chemicals and plastic materials, including resins. Dooley added that "however, engaging in a trade war with one of our country’s most significant trading partners is not the answer."
"We strongly urge both the U.S. and Chinese governments to work together to come to a satisfactory and mutually beneficial decision before this situation escalates further," he added.
China is one of the U.S. chemical industry’s most important trading partners, importing 11 percent, or $3.2 billion, of all U.S. plastic resins in 2017, according to ACC. Dooley said ACC officials "are particularly concerned" that 40 percent of the products to which China has assigned new tariffs are chemicals, including polyethylene, PVC, polycarbonates, acrylates, and others.

“Nearly $185 billion in new chemical factories, expansions and restarts of facilities around the country are predicated on current tariff schedules, and market shifts caused by tariff increases may convince investors to do business elsewhere," he added. "We strongly urge the U.S. and China to reach a productive and meaningful agreement before any of the proposed tariff schedules go into effect.”
Dwight Morgan, vice president of corporate development at resin distributor M. Holland Co. in Northbrook, Ill., said that his firm “is optimistic about the outlook for our industry, regardless of the near-term politics.”
“Plastic resins are one of the few areas where we have a meaningful merchandise trade surplus,” he added. “We’re hopeful that the end result of these trade tensions will be a free, fair playing field for all industries, and not a trade war.
“At the end of the day, though, we believe that market forces prevail in the global economy, and the U.S. plastics industry is among the most competitive in the world.”
The United States kicked off the trade war on March 1 when it announced tariffs on Chinese steel and aluminum. The U.S. has since announced tariffs on additional products. China now has taken that step twice.
The proposed U.S. tariffs cover a massive list of industrial products, including injection molding machines, extruders, blow molding machines and thermoforming equipment.
Bill Duff, general manager of sales and marketing of Yizumi-HPM Corp. — which sells machines made in China by Guangdong Yizumi Precision Machinery Co. Ltd. — said the parent company did not give any immediate communication.
“But certainly it’s not conducive to promote business,” Duff said. “Entering into a trade war, which is what’s happening, is going to hurt everybody.”
Yizumi-HPM imports machines from Guangdong Yizumi in China, built to its specifications for U.S. customers. The cost of the Trump administration’s tariffs is going to be passed onto the consumer—resulting in higher prices, he said.
“So, that means increased prices on all equipment that we sell: die casting, injection molding, metalworking presses. They’ve all been slated for this 25 percent tariff, so that really [results] into higher prices for our customers,” Duff said.
Tariffs on Chinese industrial goods will have a broad impact across the entire capital machinery sector, plastics and otherwise. Many plastics machinery manufacturers in the United States, Europe and Asia build some machines in China, and nearly all of them buy some Chinese-made components.
The 58-page list of U.S. tariffs on Chinese-made products covers nearly every imaginable type of machine and component, including machine tools, steel and aluminum, molds, machine bases and platens, screws, motors, pumps, dryers, printing equipment, and testing instruments.
Glenn Frohring, president of Absolute Haitian Machinery Corp., said so many companies produce equipment in China that the impact will be large. Absolute Haitian gets its machinery from Haitian International Holdings Ltd. in China.
“In the short term, there’s really no concern, because we’ve got a lot of inventory and we’re able to work with customers on trying to do anything to offset any tariffs. But it of course it has an impact, and I think it impacts just about everybody.”
Haitian, as a giant maker of machinery, “also is in a position to be the most flexible and creative when it comes to selling equipment into the U.S. market,” Frohring said.
At some point, would tariffs cause Absolute Haitian to raise prices? Frohring said no comment, but he added: “25 percent, it’s got to come from somewhere.”
Duff of Yizumi-HPM said it would be better for business if the United States and China can back away from the tariffs.
“Building walls and making barriers to trade is not good for business, period.”US products on China's list
U.S.-made products targeted for tariffs by Chinese officials include:
• Primary shaped polycarbonate.
• Other polyesters.
• Reaction initiators, accelerators not elsewhere specified.
• Polyethylene with a primary shape specific gravity of less than 0.94.
• Acrylonitrile.
• Primary shaped epoxy resin.
• Polyethylene terephthalate plate film foil strips.
• Other self-adhesive plastic plates, sheets, films and other materials.
• Other plastic non-foam plastic sheets.
• Other plastic products.
• Other primary vinyl polymers .
• Other ethylene-alpha-olefin copolymers, specific gravity less than 0.94.
• Other primary shapes of acrylic polymers.
• Other primary shapes of pure PVC.
• Polysiloxane in primary shape.
• Other primary polysulphides, polysulfones and other tariff numbers as set forth in note 3 to chapter 39 are not listed.
• Plastic plates, sheets, films, foils and strips, not elsewhere specified.
• Adhesives based on other rubber or plastics.
• Nylon 6/6 slices.
• Other primary-shaped polyethers.
• Primary shaped, unplasticized cellulose acetate,
• Aromatic nylons and their copolymers.
• Semi-aromatic nylons and their copolymers.
• Other nylons of primary shape.
• Other vinyl polymer plates, sheets, strips.
Other plastics industry representatives were studying the list on April 4 and weighing a reaction.
http://www.plasticsnews.com/article/20180404/NEWS/180409966/china-us-add-plastics-to-their-trade-war

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Plastics Makers Plunge as China Tariffs Hit Chemical Industry

Apr 5, 2018 | BNA Daily Environment Report

By Jack Kaskey

U.S. plastics makers including LyondellBasell Industries NV and Westlake Chemical Co. tumbled after China slapped tariffs on a wide swath of resins used in products such as food packaging and pipe.
LyondellBasell is the world's sixth-biggest producer of polyethylene, one of the plastics on which China plans to impose a 25 percent import tariff. Shares of the company tumbled as much as 7.6 percent, the most in two years. Westlake, a major producer of polyethylene and PVC, another resin on the tariff list, dropped as much as 6.4 percent.
The tariffs on dozens of chemicals and plastics come as U.S. companies such as DowDuPont Inc. have spent billions of dollars to expand production of resins made from low-cost natural gas liquids such as ethane, a byproduct of the shale boom. Cheap gas liquids give the U.S. a competitive advantage over producers elsewhere that use oil-derived naphtha as a raw material.
With much of the new U.S. production destined for export, the tariffs remove a large market, said Christopher Perrella, a chemicals analyst with Bloomberg Intelligence. Still, many companies have factories inside China and many more have plants outside the U.S. that should be able to sell into China. The low-cost position of U.S. plastics means the exports will find a market somewhere, he said. Supply chains will probably need to shift.
“The near-term impact is the uncertainty of all this,” Perrella said.

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LCSA News

(ACC Mentioned) EPA Weighs Chemical Policy That May Backfire on Industry: Critics (1)

Apr 5, 2018 | BNA Daily Environment Report

By Pat Rizzuto and Dean Scott

A proposed chemical policy to allow the EPA to narrow its chemical safety reviews could backfire and hurt chemical makers that the Trump administration intends to help, a former agency official told Bloomberg Environment.
But a supporter of the policy disagreed, saying it would reduce redundant regulations.
The Environmental Protection Agency plans to omit from some chemical safety reviews ways people could be exposed that “fall under the purview of other EPA-administered statutes,” the agency said in a draft document obtained by Bloomberg Environment. The document would implement the pending policy for one of 10 chemicals the EPA is evaluating.
The agency is assessing the potential health and environmental effects of exposures to 10 chemicals: asbestos, pigment violet 29, seven solvents, and a cluster of flame retardants. Updated agency plans to assess the chemicals are to be released on April 20, current and former EPA staff told Bloomberg Environment.
“I hope it's not really under consideration,” Lynn Goldman, who served as assistant administrator of chemical safety and pollution prevention at EPA under President Bill Clinton, told Bloomberg Environment.
Goldman said she had discussed the proposed policy with current agency staff, but she had not seen the language. She recalled times when the staff presented her with a spectrum of policy options, not all of which were serious contenders.
The EPA declined requests to comment on the draft policy to Bloomberg Environment.
‘It Will Backfire’
If the agency pursues this option, “it will backfire” on industry, said Goldman, now dean of George Washington University's School of Public Health.
Chemical manufacturers and industries they serve supported the overhaul of the Toxic Substances Control Act in 2016 because they wanted the marketplace to have confidence in the agency's chemical oversight, Goldman said.
But the public will not trust the EPA's oversight if it chooses to ignore ways that communities breathe in, drink, or are otherwise exposed to chemicals, she said.
That mistrust will translate into new state regulations, state or retailers’ purchasing policies, and other restrictions that spurred industries to support TSCA reform in the first place, Goldman said.
“We'd be back where we started” before a supermajority of Republicans and Democrats agreed to overhaul the 40-year-old statute, she said.
The American Chemistry Council , which represents manufacturers of industrial and consumer product chemicals, declined to comment.
‘Assume Compliance’
But Robert Helminiak, a vice president for the Society of Chemical Manufacturers and Affiliates (SOCMA), said the policy would reduce redundant regulations, which SOCMA strongly supports.
His group represents specialty chemical companies in aerospace, electronics, pharmaceuticals, agriculture, and other markets.
Helminiak told Bloomberg Environment that SOCMA would like to see the agency's policy, but that based on what he's heard, it makes sense.
“When evaluating risk, EPA should assume compliance with all other applicable health, safety, and environmental regulations,” Helminiak said.
“For example, EPA's analysis of a chemical should assume that workers in a chemical facility are complying with applicable Occupational Safety and Health Administration requirements for personal protective equipment and respiratory protection and performing their jobs in compliance with all OSHA regulations, as well as any pertinent EPA regulations,” he said.
“This provides a more accurate estimation of potential risk, particularly to susceptible populations such as workers,” Helminiak said.
‘Nothing is 100 Percent Effective’
Richard Denison, lead senior scientist with the Environmental Defense Fund, disagreed with Helminak's point.
“Industry has always argued that if there are any controls, EPA should assume they are used 100 percent of the time, and they are 100 percent effective,” Denison told Bloomberg Environment.
“Nothing is 100 percent effective,” he said.
The EPA's proposed policy “is industry's wildest dream come true,” said Denison, who discussed the agency's plans in an April 3 blog.
The pending policy would presume existing regulations, which could be based on feasibility, available technology, or other criteria, not only reduce all health and environmental risks to acceptable levels required under TSCA, Denison said.
“EPA would essentially assume exposures it will not consider result in zero risk,” he told Bloomberg Environment.
The EPA's draft policy would omit ways people are exposed and likely underestimate chemical risks, Bob Sussman, an attorney for Safer Chemicals, Healthy Families, told Bloomberg Environment.
“TSCA was intended to be a comprehensive law that looked at risk in its entirety and took into account all the contributors to risk—that's how the 2016 amendments were crafted,” said Sussman, a former EPA deputy administrator and senior policy counsel to the EPA administrator.
To contact the reporters on this story: Pat Rizzuto in Washington at prizzuto@bloombergenvironment.com; Dean Scott in Washington at dscott@bloombergenvironment.com

To contact the editor responsible for this story: Rachael Daigle at rdaigle@bloombergenvironment.com
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EPA May Disregard Chemical Exposures From Risk Reviews (1)

Apr 5, 2018 | BNA Daily Environment Report

By Pat Rizzuto and Dean Scott

The EPA could ignore ways people are exposed to chemicals under a pending policy that would shape agency safety reviews.
The policy—nearing final internal review—is expected to be incorporated into risk analysis plans for 10 chemicals the Environmental Protection Agency plans to release April 20, according to current and former agency staff. The risk analyses are mandated by the 2016 amendments to the Toxic Substances Control Act (TSCA).
The agency is evaluating the potential health and environmental effects of exposures to 10 chemicals: asbestos, pigment violet 29, seven solvents, and a cluster of flame retardants.
The EPA's rationale presumes that people and the environment would be adequately protected from risk if exposed to a chemical that already is regulated under another statute that the agency administers, according to an example of the policy's application obtained by Bloomberg Environment.
For example, “EPA does not plan to include in the risk evaluation” airborne exposures to a chemical regulated under the Clean Air Act or water exposures to a chemical already regulated by the Clean Water Act, the agency said in its description of the proposed policy. Under those laws, the EPA regulates hundreds of air toxics and water contaminants that could affect the uses it ultimately focuses on under TSCA.
The 10 risk analysis plans—called “problem formulations"—the EPA intends to release later this month will expand on the initial plans it released last June, according to current and former agency staff Bloomberg Environment interviewed.
Fundamental Precept
Eliminating those uses during the risk analysis would disregard a fundamental precept of the amended TSCA and increase the potential for the EPA to underestimate people's exposure, Trish Koman, a research manager at the University of Michigan's School of Public Health, told Bloomberg Environment. Koman had not seen or discussed the policy with the agency staff, but is among the many environmental health researchers tracking TSCA's implementation.
“Chemicals come at us in multiple ways,” Koman said.
Understanding whether or not those exposures increase the potential that people, animals, or the environment may be harmed from that exposure requires an evaluation of the full range of exposures, said Koman, who spent 20 years at EPA where she analyzed air pollutant risks.
The TSCA amendments directed the EPA to analyze the many different ways people are exposed, Koman said.
Only after the agency understands whether that full exposure presents an unreasonable risk can the EPA figure whether air, water, chemical, or other regulations would best manage that risk, she said.
The EPA did not immediately respond to an emailed request for comment.
Richard Denison, lead senior scientist with the Environmental Defense Fund, said in an April 3 blogthat the EPA was working to systematically dismantle its ability to conduct broad risk reviews of chemicals and effectively address identified risks under TSCA.
“The Pruitt EPA's attempt to atomize the evaluation of chemical risks has one purpose: to make it far less likely that risks needing to be controlled will be identified,” he said.
Current and former EPA staff interviewed by Bloomberg Environment before and after April 3 said the legal rationale they've seen or discussed is largely consistent with Denison's description.
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EPA Announces Earlier Compliance Date for Formaldehyde Emission Standards for Composite Wood Products

Apr 5, 2018 | National Law Review

On April 4, 2018, the U.S. Environmental Protection Agency (EPA) announced that the compliance date for emission standards, recordkeeping, and labeling (the manufactured-by date or import-by date) under the Formaldehyde Standards in Composite Wood Products Act (Formaldehyde Act) codified as Title VI of the Toxic Substances Control Act (TSCA) has been set for June 1, 2018, instead of December 12, 2018, per order of the U.S. District Court for the Northern District of California (Sierra Club and A Cmty. Voice-Louisiana v. Pruitt, No. 4:17-cv-06293, filed Oct. 31, 2017). 83 Fed. Reg. 14375. The court’s March 13, 2018, order issued pursuant to the stipulation and good cause shown after the February 16, 2018, order that granted plaintiff’s motion for summary judgment set the new compliance date of June 1, 2018, by lifting the stay of the February 16, 2018, order.
The February 16, 2018, order determined that EPA’s final rule delaying the compliance date for the formaldehyde emission standards for composite wood products issued September 25, 2017 ((82 Fed. Reg. 44533) (Delay Rule)) exceeded EPA’s authority under the Formaldehyde Act, vacated the Delay Rule, and set aside the year-long extension to December 12, 2018, of the compliance deadlines set out by EPA in the Delay Rule. The Formaldehyde Act set out emission standards for domestically manufactured and imported composite wood products and directed EPA to promulgate implementing regulations that would ensure compliance with the new emission standards. More information on the February 16, 2018, court order is available in our blog item “California District Court Vacates EPA Final Rule to Delay Compliance with Formaldehyde Emission Standards.”
EPA’s notice states the following regarding the new compliance dates:
By June 1, 2018 (instead of December 12, 2018), and until March 22, 2019, regulated composite wood panels and finished products containing such composite wood panels that are manufactured (in the United States) or imported (into the United States) must be certified as compliant with either TSCA Title VI or the California Air Resources Board (CARB) Airborne Toxic Control Measures (ATCM) Phase II emission standards that are set at identical levels by a third-party certifier (TPC) approved by CARB and recognized by EPA;
Until March 22, 2019, regulated products certified as compliant with the CARB ATCM Phase II emission standards must be labeled as compliant with either TSCA Title VI or the CARB ATCM Phase II emission standards;
After March 22, 2019, CARB-approved TPCs must comply with additional accreditation requirements to remain recognized as an EPA TSCA Title VI TPC and to continue certifying products as TSCA Title VI compliant; and
Regulated products manufactured in or imported into the United States after March 22, 2019, may not rely on the CARB reciprocity of 40 C.F.R. § 770.15(e) and must be certified and labeled as TSCA Title VI compliant by an EPA TSCA Title VI TPC with all of the required accreditations.
The notice states this new compliance date may have applicability/interest to/for entities that manufacture (including import), sell, supply, offer for sale, test, or work with the certification of hardwood plywood, medium-density fiberboard, particleboard, and/or products containing these composite wood materials.
https://www.natlawreview.com/article/epa-announces-earlier-compliance-date-formaldehyde-emission-standards-composite-wood

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Chemical Management News

(ACC Mentioned) Kids’ Flame Retardant Exposure Drops Following Phaseout

Apr 5, 2018 | BNA Daily Environment Report

By Pat Rizzuto

Children's blood levels of a once widely used furniture flame retardant have dropped since that chemical was phased out of production in 2004, researchers found.
“This is a good news story for sure—100 percent. We are removing the chemicals from indoor exposures and that's great,” lead investigator Julie Herbstman, an associate professor of Environmental Health Sciences at the Columbia Center for Children's Environmental Health, told Bloomberg Environment April. 3.
An exposure study, to be published April 4, tracked 334 children from birth through age 9. The researchers measured the blood levels of a flame retardant mixture called pentabromodiphenyl ether (pentaBDE) at six specific ages.
The study, to be published in the Journal of Exposure Science & Environmental Epidemiology, focused only on exposures, not health effects. Future research on potential effects of pentaBDE, such as behavioral alterations, is underway, Herbstman said.
Commonly Used for Decades
PentaBDE, part of a larger family of chemicals, was the most common flame retardant used by furniture and carpet manufacturers between 1975 and 2004 to for couches, cushions, carpet padding, and other household furnishings, the study said.
Its widespread use was spurred by a flame retardant standard that California set in 1975 to reduce what was then a leading cause of fire-related deaths in the U.S., according to the study.
Great Lakes Corp., which became Chemtura, which has since been acquired by Lanxess, agreed to voluntarily phase out production of pentaBDE after it developed a substitute. California and the European Union had banned the flame retardant due to its persistence and concerns about potential health effects.
In 2013, California updated its fire safety standard to be met without chemicals.
Intervention Strategies
Columbia's study shows exposure to pentaBDE is going down. Blood concentrations of the most frequently detected component of the pentaBDE mixture, a chemical known as BDE-47, decreased by about 5 percent per year from 1998 to 2013, the study found.
“We can document the policies are working. They've had an impact,” Herbstman said.
The research team also explored lifestyle and other habits of the children's families, such as the measures the household use to reduce dust, which is a major source of pentaBDE exposure.
Studying these habits, combined with the multiple blood concentration measurements, documents what actions families can take to reduce their children's exposures, Herbstman said. That information can help families and public health officials recommend strategies that could reduce children's exposure beyond what ceasing production accomplished, she said.
Continued Exposure
Exposures to pentaBDE are continuing for two reasons, according to Herbstman.
First, the couches and other products that contained the flame retardant are designed to have a long lifespan. Herbstman said. Second, people who purchase new furniture may sell or donate their old furnishings, which contain the flame retardant, to others who cannot afford new products, she said.
Bryan Goodman, a spokesperson for the American Chemistry Council's North American Flame Retardant Alliance, had not seen the study, but was advised of its findings.
“Studies like this one should not make us lose sight of the fact that flame retardants can help save lives,” Goodman told Bloomberg Environment in an email. “Moreover, these chemistries are extremely diverse and must be evaluated on their individual characteristics and health and safety profiles,” he said.
Goodman said that consumers should know that flame retardants are subject to review by the Environmental Protection Agency and other regulators around the word.
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Vermont Advances Bill Reducing Hurdles to Banning Children's Products

Apr 5, 2018 | Chemical Watch

By Kelly Franklin

Vermont's legislature has approved a bill that would give the state's health commissioner increased authority to ban or restrict children's products. The governor's signature is all that stands in the way of the controversial measure from becoming law.
In the spotlight among several provisions in S103 are changes to the state's existing children's products reporting scheme (Act 188). Current law requires manufacturers to report specific brand and product model information to the state for products containing any of 66 chemicals of concern.
But the bill would modify the requirements around imposing bans or restrictions on products found to be of concern to children's health.
S103 would amend the exposure criterion for proposing product restrictions from 'children will be exposed' to 'may be exposed'. And it seeks to strike text requiring there to be a likelihood that the exposure could cause or contribute to an adverse health impact
More specifically, it would amend the exposure criterion for proposing product restrictions from "children will be exposed" to "may be exposed". And it seeks to strike text requiring there to be a likelihood that the exposure could cause or contribute to an adverse health impact.
"The existing law makes the health commissioner jump through unnecessary bureaucratic hoops in order to take action," Paul Burns, executive director of Vermont Public Interest Research Group (VPIRG), told Chemical Watch. The legislators intend to give the commissioner "reasonable authority to act once a credible threat has been identified", he added.
Further changes to Act 188 include:codifying the types of information that must be reported, to include brand name, product model and a universal product code (UPC); andremoving the requirement that weight of scientific evidence be used when adding chemicals to the programme, relying instead on "independent, peer-reviewed scientific research".
The measure also calls for codifying an interagency committee on chemical management, in line with the one formed through an executive order last year. The committee is tasked with making recommendations to the governor around reporting processes and regulatory requirements for substances that pose potential risk to human health and the environment.
The Associated Industries of Vermont urged opposition to S103, warning it would critically undermine the integrity and credibility of Act 188 by 'eliminating key scientific and health criteria, making it easier to arbitrarily require testing and reporting on additional chemicals'
The Associated Industries of Vermont wrote to legislators urging opposition to S103. It warned it would "critically undermine the integrity and credibility" of Act 188 by "eliminating key scientific and health criteria, making it easier to arbitrarily require testing and reporting on additional chemicals and to ban or otherwise restrict products in Vermont without appropriate scientific or health-based justification".
And a statement from the Toy Association said the bill would "eliminate important procedural mechanisms for regulating children's products". Without these it said the ability to sell "safe and fun toys in Vermont" could be compromised.
It remains unclear whether Phil Scott, the Republican governor, will sign the measure into law. Representatives from the Health Department have testified against S103. But it was not included in a recent letter from Mr Scott to state legislators about bills he does not support because they contain new or higher taxes, fees or expenses.
https://chemicalwatch.com/65681/vermont-advances-bill-reducing-hurdles-to-banning-childrens-products

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Jury Set to Weigh Banker's Claims Baby Powder Caused Cancer

Apr 5, 2018 | BNA Daily Environment Report

By Jef Feeley

Jurors are set to weigh an investment banker's claims that using Johnson & Johnson's baby powder for more than 30 years caused him to develop a deadly cancer linked to asbestos.
A New Jersey jury will begin deciding April 4 whether Stephen Lanzo III can legitimately blame J&J's iconic product for his mesothelioma, an often-fatal cancer tied to asbestos exposure. Lanzo, a 46-year-old banker with U.S. Trust Corp., accuses the world's largest health-care company of hiding that its talc-based products have contained asbestos for nearly a half century.
J&J is seeking to fend off Lanzo's claims as it grapples with a wave of cases targeting the company's baby powder and former Shower-to-Shower product for allegedly causing life-threatening illnesses. About 6,600 women have sued the company blaming baby powder for causing their ovarian cancers.
Company officials denied in closing arguments April 3 that its product has ever been tainted with asbestos and pointed to decades of testing that found talc purchased from units of Imerys SA, a French-based supplier, is clear of the carcinogen. Imerys also is a defendant in the case.
Several juries in St. Louis held Johnson & Johnson liable in ovarian cancers, but the first of those verdicts was thrown out on procedural grounds. Hundreds of cancer sufferers have sued the company over the powder and the Shower-to-Shower product, which was sold to Valeant Pharmaceuticals International Inc. in 2012.
Johnson & Johnson won the first case to go trial over mesothelioma claims tied to its baby powder when a California jury ruled in November that the product wasn't responsible for causing a 61-year-old woman's cancer.
Other companies, including Colgate-Palmolive Co. and Proctor & Gamble Co., have also been accused of allowing asbestos to contaminate talc in their cosmetic products. Last year, Colgate settled a mesothelioma suit headed for trial in New Jersey over a woman's claims that the company's Cashmere Bouquet powder caused her cancer.
Lanzo's case is the first to go to trial in state court in New Brunswick, N.J., less than a mile (1.6 kilometers) from J&J's headquarters. He's also the first male lead plaintiff to press claims that he and his family's use of the company's talc exposed him to asbestos from 1972 to 2003.
A Johnson & Johnson research scientist noted in a 1969 confidential memo, introduced as evidence in Lanzo's trial, that tests at that time found asbestos in talc used in the company's baby powder, and said the firm should ready itself for litigation if the information became public.
“J&J knew almost 49 years ago there was asbestos in their talc,’’ Moshe Maimon, one of Lanzo's lawyers, told the seven-woman jury in his closing statement. He added the company has never warned consumers that tests have found asbestos in its baby powder.
Mike Brock, one of the company's lawyers, disagreed. He said legitimate tests have never shown there's ever been measurable amounts of asbestos in its talc products and says Lanzo's mesothelioma came from other exposures.
Lanzo's attorneys have twisted “themselves into pretzels’’ trying to show there's asbestos in the talc and that it caused his disease, Brock argued. He said the New Jersey home Lanzo grew up in had asbestos insulation around pipes and his schools underwent multiple asbestos-abatement projects while he attended them.

The case is Lanzo v. Cyprus Amax Minerals Co., N.J. Super. Ct. Law Div., No. L-007385-16, argued4/3/18.
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US Judge Dismisses Formaldehyde Hair-Straightener Lawsuit

Apr 5, 2018 | Chemical Watch

A federal district court has dismissed an NGO case, calling on the US Food and Drug Administration to take action on formaldehyde-producing hair straightening products.
Environmental Working Group (EWG) and Women’s Voices for the Earth (EWG) originally filed the suit in 2016, urging the court to compel FDA action on their 2011 petition.
This had called on the agency to:investigate and respond to "deceptive labelling" of keratin hair straighteners;require manufacturers to label their products to disclose they contain formaldehyde or formaldehyde-releasing chemicals; andreview whether to ban the use of the substances.
The agency issued a formal response to the petition last year. This granted it, in part, by agreeing to review "next steps" in determining the appropriateness of a ban. But it denied the request to begin a rulemaking before it had completed its analysis and determined if such a course would be the best use of its limited resources.
Subsequently, the plaintiffs amended their complaint and requested the court require the FDA to grant the petition and initiate a rulemaking process.
But in a ruling last month, judge Trevor McFadden ruled that the plaintiffs failed to meet the constitutional requirement that they exhibit an injury to support their standing in the case. He therefore dismissed it.
The FDA declined to comment.
https://chemicalwatch.com/65683/us-judge-dismisses-formaldehyde-hair-straightener-lawsuit

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Chemicals Rules 'Insufficient' to Meet 2020 Non-Toxic Target

Apr 5, 2018 | Chemical Watch

Sweden’s chemical agency, Kemi, says the UN target for a non-toxic environment by 2020 will not be achieved "by the measures and instruments already in place".
As the production and consumption of chemicals increases, so does the presence of hazardous substances, Kemi says, in comments following the publication of the Swedish EPA’s annual review of the government’s environmental objectives.
It adds there is still a lack of knowledge about their effects on human health and the environment.
Legislation and industry processes "need to be developed so that we can achieve the goal of a poison-free environment in the long term and help achieve global sustainability goals," says Kemi's director general Nina Cromnier.
"Collaboration between business, government and research is crucial for replacing hazardous chemicals with better alternatives," she said.
In 2014, Kemi released its own toxic-free environment strategy for the period 2015-20. It outlined the key challenges in curbing harmful substances and called for action at national, European and global level.
In the EU, the European Commission is mandated to develop a non-toxic environment strategy under its 7th Environment Action Programme to meet UN objectives by 2018. In October last year, the Commission published seven sub-studies that will form the basis of the strategy.
The UN's voluntary programme – the Strategic Approach to International Chemicals Management (Saicm) – calls for sound management of chemicals throughout their lifecycle. This is so that by 2020 they are produced and used in ways that minimise significant adverse impacts on human health and the environment.Progress
Last year, Kemi said, much progress had been made in introducing controls in the EU to restrict hazardous substances.
This included greater protection for children with substantially lower EU limit values for lead in toys, as well tougher measures on potential endocrine disruptors.
Ms Cromnier says Kemi clearly sees that "preventive chemical control is a prerequisite for sustainable development". Some of the intermediate targets for dangerous substances are within reach, she says, but work needs to continue beyond 2020, "both in Sweden, within the EU and at international level".
At a recent international meeting on chemicals, delegates discussed whether the UN's Saicm should continue beyond its 2020 mandate or be replaced with an alternative framework. The meeting failed to produce a planned draft text to take forward.
https://chemicalwatch.com/65685/chemicals-rules-insufficient-to-meet-2020-non-toxic-target

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Energy News

(ACC Mentioned) Whitehouse Questions Pruitt's Morocco Trip

Apr 4, 2018 | Inside EPA

Sen. Sheldon Whitehouse (D-RI) is asking new questions about EPA Administrator Scott Pruitt's December trip to Morocco, where he sought to promote liquefied natural gas (LNG), charging that the four-day, $17,000, journey runs counter to the agency's mission and was a way for Pruitt to reward political staffers who accompanied him.
The April 3 letter asks Pruitt to respond to a slew of questions about the trip by April 17 “so that I may better understand whether this trip, and possible future international trips, serve a legitimate purpose related to EPA's mission.”
The letter, which comes amid growing questions about the administrator's ethics, stems from information the Senate Environment & Public Works Committee received regarding Pruitt's calendar, which shows he had only one official event on his calendar for two of the days of the trip that lasted just one hour each.
It also notes that he took at least 10 EPA staffers with him, and had only one briefing -- from his personal political staff -- rather than EPA's office of international affairs. The calendar also shows that two days before the trip, Pruitt met with Kinder Morgan, which is developing LNG export facilities in Mississippi and Georgia.
Also Whitehouse says that other documents received include an outline of proposed future travel to countries with major LNG interests, including a previously unreported plan to travel to China.
Whitehouse questions whether the Morocco trip -- which EPA did not disclose until after Pruitt returned and touted his meetings with Moroccan officials to promote LNG exports -- was in furtherance of EPA's mission “to protect human health and the environment.”
He also questions why the only official briefing ahead of the trip on Nov. 15 did not include any staff from EPA's office of International and Tribal Affairs, which normally handles relationships with foreign countries.
Instead, he says the briefing appears to have been conducted by non-career political staff who do not appear to have expertise on environmental or energy issues facing Morocco.
Attendees at the briefing included Forrest McMurray, a scheduling assistant who previously worked on Pruitt's Oklahoma political campaigns; Lincoln Ferguson, a senior adviser who was Pruitt's press secretary when he was Oklahoma's attorney general (AG); Sarah Greenwalt, another senior advisor who was his general counsel when he was AG; Millan Hupp, another scheduler who worked on his campaign for Oklahoma AG; and Pruitt spokeswoman Liz Bowman who most recently worked at the American Chemistry Council.
“If these were the individual who advised you about your trip before you departed, it would suggest the purpose had little to do with EPA's mission and more to do with interests from your time in Oklahoma,” where Pruitt has close ties to the oil and gas industry, Whitehouse charges.
And he notes that the calendar shows only one full working day in Morocco. “In other words, for a trip the Washington Post estimated cost over $17,000 for you, and that included at least 10 EPA staff, your official business consisted of one full working day, and two days each with one, one-hour meeting.”
The calendar also shows several meetings with LNG interests, including a Dec. 7 meeting with Kinder Morgan, which has subsidiaries developing the LNG export terminals in Mississippi and Georgia, Whitehouse says, and adds that the owner of the townhouse he rented last year for $50 a night is married to a top energy lobbyist at a firm that lobbies on LNG issues.
https://insideepa.com/daily-feed/whitehouse-questions-pruitts-morocco-trip

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Colorado AG Asks State High Court to Clarify COGCC Role in Oil, Gas Rules

Apr 4, 2018 | Natural Gas Intelligence

By Carolyn Davis

The Colorado attorney general (AG) on Tuesday urged the state Supreme Court to overturn an appeals court ruling that would “dramatically” change oil and natural gas regulatory reviews.
An opening brief filed with the Colorado Supreme Court by AG Cynthia Coffman concerns regulations overseen by the Colorado Oil and Gas Conservation Commission (COGCC).
The American Petroleum Institute and Colorado Petroleum Association are intervenors in the lawsuit, Martinez v. Colorado Oil and Gas Conservation Commission.
The lawsuit is led by hip-hop artist Xiuhtezcatl Martinez and was brought on behalf of teenagers living in Colorado who are fighting the effects of fossil fuels extraction.
The case originally was filed in 2013 and requested the COGCC consider a proposed rule that no new permits for oil and gas drilling be issued “unless the best available science demonstrates, and an independent third-party organization confirms, that drilling can occur in a manner that does not cumulatively, with other actions, impair Colorado’s atmosphere, water, wildlife, and land resources, does not adversely impact human health and does not contribute to climate change.”
When COGCC declined to adopt the rule, the plaintiffs appealed, with support from the Oregon-based group Our Children’s Trust, which has pushed for environmental and health protection in 44 states.
The Colorado Court of Appeals in a 2-1 decision last year said public health and environmental protections clearly must be in place before any new oil and gas drilling is allowed. Colorado in 2007 had altered the mission of the agency so that it would consider public health, safety, environmental and wildlife issues in relation to development of oil and gas natural resources.
The COGCC then voted unanimously to appeal to the Colorado Supreme Court to gain "clarity.” While Gov. John Hickenlooper said at the time the COGCC lacked statutory authority to challenge the court's interpretation, Coffman disagreed, claiming the ruling would change the state’s Oil and Gas Conservation Act.
“For years, the commission has interpreted the Act to require a balance among policy objectives, including both the development of oil and gas resources and protection of the environment,” Coffman said Tuesday in her 68-page brief.
“In this case, the commission was presented with a rulemaking request that sought a dramatic departure from this settled understanding. For example, the request urged the commission to halt oil and gas production across the entire State of Colorado.
“State law creates a balance between development of Colorado’s oil and gas resources, which are tremendously important to our economy and serve as a source of reliable energy, and our other core values, including environmental protection. As Coloradans, we should continue to engage in public debate on issues of statewide significance.”
Colorado administrative agencies have broad discretion to decide whether to pursue a rulemaking based on a request by a member of the public, she noted. The COGCC could have denied the request summarily, as other state agencies have done when presented with similar rulemaking requests.
Instead, the COGCC “engaged in a thorough public comment process, through which it heard from dozens of stakeholders as well as some of the state’s leading environmental experts,” Coffman noted. “Based on the nearly 1,200-page record developed through that process -- and pursuant to the commission’s longstanding interpretation of the Act -- the commission issued an order declining to engage in rulemaking.”
Industry groups on Tuesday filed legal briefs to support Coffman’s appeal. The Mountain States Legal Foundation, which protects property rights, said the appeals court decision “subordinates oil and gas property rights to speculative environmental alarmism.
“An unprecedented decision from the Colorado Court of Appeals threatens to shut down all new oil and gas development in Colorado due to alarmism over so-called climate change.”
Our Children’s Trust attorney Nate Bellinger countered that environment and public safety “is obligatory and not a factor to be balanced.”
The role of the courts “ is to follow the will of the general assembly,” Bellinger said. “And the COGCC is not doing that. We are asking the agency to do what the lawmakers told them to do.”
Environment groups also plan to file briefs. The high court could hear oral arguments this fall.
“State lawmakers changed the law in 2007 because they wanted to put the public health, safety and welfare, and protection of the state’s wildlife resources, first and foremost in the Colorado Oil and Gas Conservation Commission’s considerations,” EarthJustice attorney Joel Minor said. “That’s what the text of the statute says. That’s what the court of appeals decided. That decision was correct.”
http://www.naturalgasintel.com/articles/113923-colorado-ag-asks-state-high-court-to-clarify-cogcc-role-in-oil-gas-rules

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Clean Power Plan Does Not Tread On FERC Jurisdiction, Say Former Commissioners

Apr 4, 2018 | Natural Gas Intelligence

By David Bradley

Contrary to suggestions by the Environmental Protection Agency (EPA), the Clean Power Plan (CPP) does not interfere with the authority of FERC or threaten the affordability and reliability of the nation's electricity supply, according to a trio of former Commissioners.
EPA Administrator Scott Pruitt announced in October that the Trump administration would issue a proposed rule to end the controversial CPP, which established for the first time federal limits on carbon emissions for the nation's power plants. The Obama-era EPA overstepped its legal authority when it issued the CPP, Pruitt said.
But "EPA's suggestion in the proposed repeal that the CPP may tread impermissibly onto the functions and authority of FERC...is unfounded," according to a filing at EPA by former Federal Energy Regulatory Commission Chairmen Norman Bay and Jon Wellinghoff and former Commissioner John Norris.
"The CPP is fully consistent with EPA's traditional regulatory role, is similar in form and function to prior Clean Air Act programs affecting the power sector, and preserves the authority of FERC in the field of energy policy. While EPA and FERC regulate some of the same entities, their statutory aims are distinct, and the CPP respects the differences in authority between the two agencies."
In the proposed repeal, EPA argued that the CPP threatens "to impose massive costs on the power sector and communities." But, according to Bay, Wellinghoff and Norris, the CPP "is consistent with ongoing trends in the power sector, is achievable at reasonable cost, and does not pose threats to reliability."
The Obama administration unveiled the final version of the CPP in August 2015. The plan, which embraces renewables, solar and wind power, but not so much natural gas, calls for states to reduce emissions by 32% below 2005 levels by 2030.
Under the CPP, states must develop and implement plans that ensure power plants in their state -- either as single plants or as a collective group -- achieve goals for reducing carbon dioxide (CO2) emissions between 2022 and 2029, and final CO2 emission performance rates by 2030. The CPP gives states the option of choosing between either an emissions standards plan or a state measures plan to reduce emissions. They would also have the option of trading emissions rate credits with other states.
The Trump administration has estimated that the proposed repeal of CPP would provide up to $33 billion in avoided compliance costs in 2030.
The CPP has been on hold pending legal challenges working their way through the courts. Twenty-seven states -- among them Oklahoma, where Pruitt was then the state's attorney general -- have sued over the CPP, arguing that it is an overreach by EPA. In February 2016, the U.S. Supreme Court temporarily blocked implementation of the rule until all legal challenges have been resolved.
According to a biannual plan released in December, EPA plans to completely repeal the CPP by October and roll back other Obama-era regulations throughout the year, including rules governing new sources of methane emissions and the definition of what constitutes Waters of the United States.
Originally appointed to FERC in 2006 by President George W. Bush, Wellinghoff was named Chairman in 2009 by President Barack Obama. Bay and Norris were both appointed to FERC by Obama.
EPA is accepting public comment on the proposed repeal of the CPP through April 26. EPA's website indicates that more than 19,000 comments have already been filed to the docket.
http://www.naturalgasintel.com/articles/113924-clean-power-plan-does-not-tread-on-ferc-jurisdiction-say-former-commissioners

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Obama Methane Standards Sidelined, Yet Again

Apr 4, 2018 | E&E News PM

By Ellen M. Gilmer

Obama-era restrictions on methane emissions from the oil and gas industry are once again sidelined after a federal court today agreed to freeze implementation.
The U.S. District Court for the District of Wyoming ruled that it "makes little sense" to require the oil and gas industry to comply with key provisions of the Bureau of Land Management's methane venting and flaring rule when the agency is working on a rollback.
The decision effectively reverses a brief revival of the rule that was set in motion in February when a California district court rejected earlier Trump administration efforts to suspend it.
Judge Scott Skavdahl, an Obama appointee to the Wyoming federal court, agreed with Trump officials and industry lawyers that companies should not have to comply while BLM is working on a broader plan to undo most of the regulation. The agency says it expects to finish that rollback by August.
"A stay will provide certainty and stability for the regulated community and the general public while BLM completes its rulemaking process, will allow the BLM to focus its limited resources on completing the revision rulemaking, and would prevent the unrecoverable expenditure of millions of dollars in compliance costs," he wrote.
"The waste, inefficiency, and futility associated with a ping-ponging regulatory regime is self-evident and in no party's interest."
The methane regulation, finalized by the Obama administration in late 2016, aims to cut flaring, venting and leakage of the potent greenhouse gas on public and tribal lands. Industry groups and some states say it's overly burdensome and treads on the regulatory turf of U.S. EPA, states and tribes.
Trump officials have tried and failed to scuttle most of the rule on multiple occasions over the past year. The U.S. District Court for the Northern District of California rejected the latest effort in February, bringing the full Obama rule back into effect (Energywire, Feb. 23).
But industry groups lamented that drillers were unable to comply with key provisions because they trusted Trump officials' earlier efforts to suspend it and didn't make necessary preparations. They also argued that the Interior Department wasn't prepared to enforce the rule and hadn't offered industry any guidance (Energywire, March 29).
They asked the Wyoming court, which has overseen industry challenges to the regulation since 2016, to let them off the hook.
Skavdahl sympathized with their position, writing that it was reasonable for drillers to rely on the Trump administration's suspension of the requirements "unless and until it is held unlawful."
"No reasonable person would rush to comply with a rule that was delayed, suspended, and is soon to be revised, particularly when such compliance requires the expenditure of significant resources," he wrote in a footnote.
Industry groups celebrated the judge's decision as a practical solution.
"He clearly does not think it makes sense to have companies comply with a rule that BLM is substantially changing in just a matter of months," Western Energy Alliance President Kathleen Sgamma said in an email.
"We are happy that he agreed with our arguments and that time and resources will not be wasted on an overreaching rule that the Obama Administration used to try to take air regulatory authority away from EPA and the states, and give it to BLM," said Sgamma.
Environmental lawyers — who pushed for the February revival of the rule — are still reviewing the decision and have not yet signaled their next steps.
https://www.eenews.net/eenewspm/2018/04/04/stories/1060078175

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Chemical Security News

Cyberattack Shows Vulnerability of Gas Pipeline Network

Apr 5, 2018 | The New York Times

By Clifford Krauss

A cyberattack on a shared data network forced four of the nation’s natural-gas pipeline operators to temporarily shut down computer communications with their customers over the last week.
No gas service was interrupted, the companies said, and the interruption of customer transactions was merely a precaution. It was unclear whether any customer data was stolen.
The attack highlighted the potential vulnerability of the nation’s energy system, cyberexperts say. Beyond consumer and business data — energy companies possess much proprietary information about their holdings, trading strategies and exploration and production technologies — the increasing dependence of pipeline infrastructure on digital systems makes them a particularly ripe target. Control valves, pressure monitors and other equipment connected to wireless networks are vital to daily functions of everything from refineries to oil wells.
With nearly 2.5 million miles of oil, gas and chemical pipelines crisscrossing the country, intrusions into control systems could do more than disrupt deliveries, said Andrew R. Lee, a cybersecurity expert at the law firm Jones Walker in New Orleans. The risks include “explosions, spills, or fires, which easily will threaten human life, property and the environment,” he said.
Nothing close to that kind of disaster happened this time. But the pipeline industry leaders Oneok; Energy Transfer Partners; Boardwalk Pipeline Partners; and Eastern Shore Natural Gas, a Chesapeake Utilities subsidiary, all reported communications system interruptions.Continue reading the main storyRELATED COVERAGEA Cyberattack in Saudi Arabia Had a Deadly Goal. Experts Fear Another Try. MARCH 15, 2018Hard Choice for Cities Under Cyberattack: Whether to Pay Ransom MARCH 29, 2018Nations Seek the Elusive Cure for Cyberattacks JAN. 21, 2018Hackers Are Targeting Nuclear Facilities, Homeland Security Dept. and F.B.I. SayJULY 6, 2017
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The attack’s target appears to have been Latitude Technologies, a Texas-based provider of electronic data-sharing between pipeline companies and their gas producer and utility customers. The company handles the critical computer communications of gas storage facilities, as well as sales contracts and shipment scheduling.
Chris Bronk, a cybersecurity expert at the University of Houston, said such attacks on the gas marketing communications hub is a way to gather intelligence on the entire gas industry.
“If I compromise their operations, I can see all the buyers and sellers,” he said. “If I can persistently be in their network I can issue fake transactions.” In that way, Mr. Bronk added, hackers could potentially jumble gas shipments, and even cause electricity production outages.Newsletter Sign UpContinue reading the main storySign up for the all-new DealBook newsletter
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Latitude Technologies, a unit of Energy Services Group, declined to discuss the disruption in detail. In a statement, it said, “We do not believe any customer data was compromised.”
The Department of Homeland Security was investigating the attack, and no suspect has been publicly identified. But the attack came shortly after the department and the F.B.I. issued a report alleging that Russia was taking aim at the electric grid and other critical infrastructure with cyber probes.
The House Committee on Science, Space and Technology released a staff report this month that described Russian efforts to influence American energy markets and energy policy through inflammatory posts on social media. The motivation for such efforts appeared to be the increase in exports of liquefied natural gas from the United States, a challenge to Russian dominance in European markets.
Cybercriminals, frequently suspected of working for foreign governments, have been increasingly active in the energy sector in recent years. Last fall, hackers penetrated safety systems of a petrochemical plant in Saudi Arabia, the latest in a spate of increasingly sophisticated attacks on the kingdom’s energy infrastructure. An attack on Ukraine’s grid in 2015 led to extensive blackouts.
American gas pipeline companies were targeted in 2012, although the damage was believed to have been limited. Employees of several pipeline companies have been targets of spear-phishing attacks — efforts to lure them to click on email attachments containing malicious code.
The Trump administration has announced that it is establishing an office within the Department of Energy to shore up cybersecurity for critical infrastructure like nuclear plants, refineries and pipelines.
https://www.nytimes.com/2018/04/04/business/energy-environment/pipeline-cyberattack.html

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Feds Investigating Cyberattacks As More Pipelines Report Being Affected

Apr 4, 2018 | Natural Gas Intelligence

By Charlie Passut

Several agencies within the federal government are investigating a series of cyberattacks directed at a third-party software system used by several U.S. natural gas pipeline companies, as the software provider looks into restoring data that was lost.
The cyberattacks, which appear to have started last Thursday, were directed at pipelines using the Electronic Data Interchange (EDI), a platform offered by Latitude Technologies Inc., a subsidiary of Norwell, MA-based Energy Services Group LLC. At least four pipeline companies have been affected so far.
Although details are slim, an investigation involving the Department of Homeland Security (DHS), the Department of Energy (DOE) and FERC is underway.
"When we become aware of a potential incident, we work to gather information and offer the company or organization technical assistance and expertise," DHS spokesman Scott McConnell said Wednesday. "However, in order to ensure robust information sharing between private sector partners and DHS, the department does not disclose information shared with us for cybersecurity purposes."
DOE Press Secretary Shaylyn Hynes said late Wednesday that the department "is aware of the situation, and as the Sector Specific Agency for the energy sector, is working closely with our interagency and public partners to support the sector.
"Ensuring we have a safe, reliable, and resilient grid is a national security issue that continues to be one of [DOE] Secretary [Rick] Perry’s highest priorities."
Tamara Young-Allen, spokeswoman for the Federal Energy Regulatory Commission, said "FERC staff is aware of the situation and is coordinating with our federal partners, such as DHS and DOE, to evaluate the circumstances and take appropriate actions."
Precautionary Steps
So far, pipeline subsidiaries of four companies -- Oneok Inc., Boardwalk Pipeline Partners LP, Chesapeake Utilities Corp. and Energy Transfer Partners LP (ETP) -- have been affected by the cyberattacks.
On Tuesday, Oneok announced that it had temporarily disabled its EDI system, citing EDI as the "target of an apparent cyberattack." But the company emphasized that its decision to shut down EDI was "a purely precautionary step," and that Oneok's natural gas pipelines were operating normally.
"Media outlets misinterpreted the company's notification to customers as a reaction to an attack on Oneok's system," the company said. "There were no operational interruptions on Oneok's natural gas pipelines. Affected customers have been advised to use one of the alternative methods of communications available to them for gas scheduling purposes."
Last Friday, three Oneok subsidiaries -- Guardian Pipeline LLC, Midwestern Gas Transmission Co. and Viking Gas Transmission Co. -- posted critical notices stating that "all EDI transmissions are down," and referred customers to Oneok websites for making communications, adding "it is unclear as to the length of time the outage will last." A second notice said "EDI transmission is back up."
Similar notices, marked as non-critical, were posted Wednesday by four subsidiaries of Boardwalk. The subsidiaries -- Texas Gas Transmission LLC (TGT), Gulf South Pipeline Co. LP, Gulf Crossing Pipeline Co. LLC and Boardwalk Storage Co. LLC -- said Boardwalk's EDI system "continues to be unavailable until further notice."
Although the notice said the EDI outage did not affect customers interested in making nominations and confirmations for three of the aforementioned subsidiaries, Boardwalk conceded that TGT customers looking to do the same would be affected.
"The EDI outage does not affect the ability of customers to interact with the Boardwalk Pipelines via the individual pipeline's online customer activities website," Boardwalk said in the notice. "In order to enter/edit nominations and/or confirmations, customers should log in to the pipeline's customer activities website. The length of time that EDI will be unavailable has not been determined."
Boardwalk spokeswoman Molly Ladd Whitaker told NGI that service from all four subsidiaries has not been impacted by the EDI outage. "Customers are conducting business via our customer activities website until EDI service is fully operational," she said Wednesday.
On Monday, Eastern Shore Natural Gas (ESNG), a subsidiary of Chesapeake Utilities, issued a critical notice stating that there had been "an unplanned outage as the result of a cyberattack" of its IWS system, of which Latitude is the system vendor. The outage began last Thursday and ended Monday.
"At this point, Latitude system operations have been restored and the ESNG IWS is available for nomination entry," ESNG said in its notice. The company added that "Eastern Shore operations were not impacted during this event."
'A Very Challenging Situation'
The ESNG notice also included a copy of a message it had received from Latitude management on Monday, which led off with the software developer thanking its customers for their "patience as we have worked through a very challenging situation...
"At this time, we do not believe any customer data was compromised. However, as a precaution, all users will be forced to create a new password when they log into the system."
Latitude added that while historical transaction data -- including contracts, nominations, scheduling and allocations -- posted by last Thursday morning were now available in their customers' system, other files, including historical invoices, were not.
"We are investigating the re-establishment of this data," Latitude said. "You may wish to re-upload missing information to your info postings site. We sincerely apologize for the inconvenience this outage may have created for you, your staffs and your customers, and we remain grateful for your patience as we have worked to remedy it."
Cathy Landry, spokeswoman for the Interstate Natural Gas Association of America, said that while she couldn't comment on any specific company's outage, there was an important distinction to make over what systems have been targeted so far.
"As we understand it, these attacks were on information systems," Landry said. "It looks like electronic bulletin boards and automated nomination systems were impacted. It's important to recognize that this does not appear to be an attack on an operational system, aka a SCADA or control system.
"An attack on a network certainly is inconvenient and can be costly, and something any company -- whether a retailer, a bank, a media company or pipeline -- wants to avoid, but there is no threat as such to public safety or to natural gas deliveries."
ETP issued a critical notice on Monday afternoon that its EDI system had experienced an outage. A second notice issued less than five hours later said the system was back online. Officials with Kinder Morgan Inc. and Tallgrass Energy Partners LP confirmed that they also use EDI, but their systems were not affected.
Last month, the Trump administration accused Russian government operatives of targeting the U.S. energy sector, government agencies and other critical infrastructure sectors with a series of cyberattacks for at least the last two years. The accusation followed an investigation by the Department of Homeland Security and the Federal Bureau of Investigation.
In early March, the House Committee on Science, Space and Technology issued a report that found Russian agents were using social media to try and disrupt energy markets in the U.S.
http://www.naturalgasintel.com/articles/113925-feds-investigating-cyberattacks-as-more-pipelines-report-being-affected

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Transportation and Infrastructure News

More Burdensome Regulations Are Not What the Freight-Rail Industry Needs

Apr 5, 2018 | National Review

By Edward R. Hamberger

Despite the Trump administration’s deregulation efforts, a small government agency is considering adding more red tape to this critical sector of the economy.
As the winds of deregulation blow through D.C., a small federal agency is considering a proposal that would introduce more red tape into an important sector of the American economy.
At issue is a coordinated campaign by major U.S. companies to unravel indisputably successful deregulation and enact backdoor rate regulation on freight railroads. While pretending to support “deregulation,” a cohort of companies and groups flying under the banner of the innocuously named Rail Customer Coalition (RCC) are calling on the government to disregard decades of precedent and congressional direction and ignore the rights of private businesses to use their property to act in ways that ensure their future economic viability.
The proposal currently pending at the Surface Transportation Board would force a railroad to move freight cars over its tracks and then hand them over to competitors. The proponents of the measure also seek a cap on the price of such services by having the government set the fee. This would be a significant departure from the current practice of switching freight cars among railroads through voluntary, privately negotiated agreements. And most alarmingly, it would occur absent any showing of wrongdoing by the railroad.
Because switching operations among railroads require extensive work, widespread forced switching would greatly reduce network fluidity, drive up costs for many U.S. companies that ship over freight rail, and reduce revenues needed for rail-infrastructure investment. If the STB were to adopt some of the more radical elements of the proposal, railroads could even be forced to modify existing infrastructure or build new systems to facilitate switching where it is not currently possible.
The proponents of such a misguided policy are clear about their motivations: They hope that government intervention will lower their own rail-shipping costs. Never mind that the STB has a clear pathway for direct rate regulation, which this would ignore, or the fact that rail rates, adjusted for inflation, were 45 percent lower in 2016 than in 1981.
Indeed, the fight sets a dangerous precedent, particularly when considering the RCC’s overt pandering to the White House. Though proponents of forced access use terms like “free market” and tout the need to “cut red tape,” the group’s “solutions” would actually constitute a drastic increase in regulation, and thus a clear break from the goals of the Trump administration.
Sure, the STB can do more to streamline procedures and legally protect shippers and railroads alike, just as it was directed to do when reauthorized by Congress in 2015. But that reauthorization explicitly refrained from directing the STB to embark on a forced-access regime.
If the proponents of aggressive regulations succeed, the ability of railroads to serve them will suffer greatly. Railroads, which have seen more than $100 billion in industry investment over the past four years alone, require ample, costly upkeep to safely and reliably move goods.
Moreover, this proposal would have broad real-world implications, because the rail industry touches nearly every part of the economy as a means of transporting raw commodities and finished goods. The industry does so by privately bankrolling a 140,000-mile rail network.
If the proponents of aggressive regulations succeed, the ability of railroads to serve them will suffer greatly. Railroads, which have seen more than $100 billion in industry investment over the past four years alone, require ample, costly upkeep to safely and reliably move goods. The RCC’s proposal would undermine the industry’s ability to provide such upkeep in the future.
The fight will intensify soon as the administration and Congress work to fill three vacancies on the STB, which has wisely resisted the call to rule on such a far-reaching regulation until it is fully staffed. Current and future STB members should bear in mind a foundational truth as the process ensues: Only those rent-seeking through sweeping government intervention support a drastic shift in railroad regulation.
Last year, 25 leading free-market organizations urged policymakers to reject the overtures of the RCC. From Brookings to the Heritage Foundation, policy experts across the spectrum oppose a return to an era when government mandates routes and sets prices — because ultimately, that approach is the antithesis of American free-market principles.
https://www.nationalreview.com/2018/04/freight-rail-industry-does-not-need-burdensome-regulations/

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Environment News

Virginia Becomes Latest State to Scrutinize Pruitt's Rule Changes (1)

Apr 5, 2018 | BNA Daily Environment Report

By Sylvia Carignan

Virginia is the latest to join a growing cadre of states attempting to fill the gap between the EPA's deregulatory efforts and local needs for environmental protection.
Gov. Ralph Northam (D) ordered the state's Department of Environmental Quality to review federal environmental regulations and guidance issued under President Donald Trump.
The order may lead to states establishing more stringent standards in the absence of federal regulations, John Bloom, principal at Meyers Nave Riback Silver & Wilson PLC in Oakland, Calif., told Bloomberg Environment.
Virginia isn't the only state looking to fill the gap. A California waiver allows the state to set its own standards for vehicle emissions and fuel efficiency. It's unclear whether Environmental Protection Agency Administrator Scott Pruitt will move to revoke the waiver and bring the state under the federal standards.
Other state attorneys general made a declaration April 3 challenging the EPA's deregulatory actions on vehicle emissions. The states include Connecticut, Maine, Maryland, and Massachusetts.
Waters of the U.S
Virginia's recent comments on a federal rule indicate the state may address the differences between state and federal jurisdiction over water bodies.
During the Trump administration, Virginia has weighed in on multiple federal regulations, including the 2015 Clean Water Rule (RIN:2040-AF30), also known as waters of the U.S. rule. The Obama-era regulation defined the jurisdiction of the country's water quality law.
Changes to the rule could affect heavy industry and mining operations, Bloom noted. Bloom is part of Meyers Nave's environmental law practice group and has tracked the Clean Water Rule's developments.
Revoking the rule would cause “serious confusion” about which waters and wetlands fall under federal jurisdiction, Molly Joseph Ward, former Virginia secretary of natural resources, wrote to the EPA agency Sept. 22.
But, Ward noted, the natural resources agency supports excluding agricultural operations from the rule.
Virginia's Department of Agriculture and Consumer Services said June 16 the original rule put a “significant regulatory burden” on Virginia farmers by expanding federal authority to small, seasonal bodies of water.
Charles R. Green, the department's deputy commissioner, wrote to the EPA June 16, urging the agency to replace the Clean Water Rule “to correct this jurisdictional overreach.”
The EPA is working on a new definition of federal jurisdictions that would replace those in the original 2015 waters of the U.S. rule.
Ozone Regulations
The state also has commented on the EPA's regulations for ozone in ambient air nationwide and ozone moving between jurisdictions along the East Coast. Ozone, at ground level, is a harmful air pollutant and affects human health and ecosystems, according to the EPA.
In Virginia's comments on state plans for ozone standards in ambient air (RIN:2060-AS82), Michael Dowd, director of Virginia DEQ's Air and Renewable Energy Division, wrote that the EPA's proposal to require additional documents would “waste federal and state resources while providing no environmental benefit.”
Northam's executive order requires the Virginia Department of Environmental Quality to review its own permitting, monitoring, and enforcement activities for air, water, and solid waste programs. The review of state-level programs will take priority over Virginia's review of federal regulations.
Virginia-based Smithfield Foods Inc. said it has no concerns about the regulatory review.
“We welcome strong and even handed regulatory oversight,” Diana Souder, spokeswoman for the company, told Bloomberg Environment in an email.
The state has yet to determine how many EPA actions it will review, Ann Regn, spokeswoman for the Virginia DEQ, told Bloomberg Environment.
Northam has ordered the state to continue reviewing federal environmental regulations for the duration of his term.
http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=131211288&vname=dennotallissues&fn=131211288&jd=131211288

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EPA Poised to Terminate Obama-Era 'NextGen' Enforcement Policy

Apr 5, 2018 | Inside EPA

EPA's Office of Enforcement & Compliance Assurance (OECA) is poised to terminate an Obama-era policy known as Next Generation Enforcement (NextGen) that encouraged creative and innovative approaches to enforcing environmental laws, according to a source familiar with the pending plan.
The source says an OECA memo could be issued as soon as April 4 or 5 stating that OECA Assistant Administrator Susan Bodine will pull the policy issued by her predecessor Cynthia Giles.
The memo is also expected to restate how OECA plans to move forward with enforcement but the “effectiveness will be that the NextGen enforcement policy” is dropped, the source says.
The NextGen policy has been considered in jeopardy since before the 2016 presidential election. At the time, sources expected that even a potential Hillary Clinton administration might walk back the framework in favor of its own policies, while then-candidate Donald Trump was seen as all but-guaranteed to scrap it in the broader context of limiting EPA enforcement.
The policy focused on data-driven monitoring and self-enforcement of rules, and aimed to cut costs of enforcement at a time of dwindling federal and state enforcement budgets by shifting focus away from in-person inspections and toward efforts such as electronic self reporting and advanced monitoring.
Giles touted the achievements of the policy in rules and settlements that require cutting-edge leak detection technology at refineries.
However, the same former EPA officials who predicted the end of NextGen under Trump also warned that it would be difficult to eliminate all vestiges of Giles' signature policy, because it is core to the compliance measures in many rules and settlement agreements finalized during the Obama administration.
Rather, they said the agency would be more likely to drop any intent of using similar tools in future rules or enforcement actions -- which could be the goal of the forthcoming OECA memo.
The memo would be the latest change of several Bodine is making to EPA's enforcement offices, including a recent memo requiring that regional enforcement officials give OECA “early notice” of civil cases planned for referral to the Department of Justice. Bodine says the change will accelerate corrective actions, but agency critics fear it is another step to hinder aggressive enforcement efforts.
https://insideepa.com/daily-feed/epa-poised-terminate-obama-era-nextgen-enforcement-policy

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Texas Companies are the Biggest Offenders for Water Pollution, Study Finds

Apr 5, 2018 | Houston Chronicle

By Fernando Ramirez

The phrase "don't mess with Texas" rings hollow when it doesn't apply to some of the state's worst polluters: major industries.
A new study by watchdog advocacy group Environment Texas says Lone Star State companies are the biggest offenders in the nation when it comes to releasing pollution into our waterways.
In 938 instances, Texas companies released pollution that exceeded the levels permitted by federal clean water laws, according to researchers who examined Texas Commission for Environmental Quality data.
"Over a 21-month period from January 2016 to September 2017, major industrial facilities released pollution that exceeded the levels allowed under their Clean Water Act permits more than 8,100 times," explained the study. "Often, these polluters faced no fines or penalties."
Of the 8,100 pollution cases, roughly 12 percent were from major industrial facilities in Texas.
Earlier this year, a separate study by Environmental Working Group found that Texas has the most radiated drinking water in the country.
https://www.chron.com/news/houston-texas/texas/article/Texas-water-pollution-rank-environment-clean-safe-12805691.php

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