Preview Newsletter
ACC AM 6/19/2018
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(ACC Mentioned) Insight: US Chemical Industry Threatened by Escalating China Trade Dispute
Jun 18, 2018 | ICIS
By Nigel Davis
The talk has become serious and the implications dire. -
(ACC Mentioned) Latest Us, Chinese Tariff Proposals Cover Wide Swath of Petchems, Oil Products
Jun 18, 2018 | ICIS
By Al Greenwood
The latest tariff proposals by the US and China cover a wide swath of petrochemicals and oil products, with the US list alone covering more than 150 different chemicals and derivatives. -
(ACC Mentioned) Even Scott Pruitt’s Friends Have Given up on Him
Jun 18, 2018 | Mother Jones
By Rebecca Leber
Environmental Protection Agency chief Scott Pruitt may still be clinging to his job despite his ever-expanding list of controversies, but his inner circle of allies is shrinking fast. -
(ACC Mentioned) US Should Have Signed the Plastics Charter
Jun 18, 2018 | Plastics News
By Steve Toloken
The United States government should have signed the G7's plastics charter. -
Trump Orders Tariffs on $200b More Chinese Goods
Jun 18, 2018 | PoliticoPro
By Doug Palmer
President Donald Trump on Monday raised the stakes in a growing trade dispute with China, ordering trade officials to draw up a list of $200 billion worth of Chinese goods that would be hit with an additional 10 percent tariff. -
Import Restrictions Disrupt Economic Progress From Trade
Jun 18, 2018 | Real Clear Energy
By R. Dean Foreman
Import restrictions on steel and aluminum imports — tariffs and quotas — are about far more than steel and aluminum. -
EPA Stops Policy of Having Press Aide Review Grants
Jun 18, 2018 | The Hill - E2 Wire
By Timothy Cama
The Environmental Protection Agency (EPA) rescinded a policy last month that had a political appointee in the press office review the agency’s grants before they could be approved. -
Republican Senator Calls for Face-To-Face with Epa’s Pruitt
Jun 19, 2018 | The Hill - E2 Wire
By Alexander Bolton
Republican senators are taking a harder look at Scott Pruitt, President Trump’s embattled head of the Environmental Protection Agency (EPA), after a prominent conservative called for his ouster last week amid new allegations of ethical misconduct. -
Details for Five Problem Chemicals Released By EPA
Jun 18, 2018 | BNA Daily Environment Report
By Pat Rizzuto
Hazards and other details about five problem chemicals were released by the EPA June 18 as it prepares rules to limit exposures to the chemicals. -
NRDC Suit Faces Hurdles But May Dissuade EPA Use Of New Chemicals Plan
Jun 18, 2018 | Inside EPA
By Dave Reynolds
Environmentalists' lawsuit challenging EPA's framework for reviewing new chemicals appears to face legal hurdles because it challenges a policy that is not yet final but it nevertheless appears to have dissuaded the agency from following the novel process it floated last year to speed chemical reviews, industry and environmental attorneys say. -
Monsanto Squares Off With Man Dying of Cancer in Roundup Trial
Jun 18, 2018 | BNA Daily Environment Report
By Joel Rosenblatt
Lee Johnson’s doctors didn’t think he’d live long enough to testify in court that exposure to Monsanto Co.’s Roundup weedkiller caused his deadly cancer. -
Battle Builds Around a New Product-Labeling Bill in Congress
Jun 18, 2018 | BNA Daily Environment Report
By Lauren Coleman-Lochner
A new bill in Congress is raising the hackles of consumer advocates who say it’ll give Americans less information about the ingredients in products they buy. -
EPA Issues LRRP Penalty Guide After Whistleblower Complaint
Jun 18, 2018 | Inside EPA
EPA has issued new enforcement guidance for its rule governing remediation of lead paint in residential structures to ensure that inspectors consider potential lead exposures to pregnant women or children due to their presence during repair work in assessing penalties, after a former agency employee reported inadequate inspections under the rule. -
Canada Restricts Pigment Red 4 in Cosmetics
Jun 19, 2018 | Chemical Watch
Canada has added pigment red 4 to its list of restricted substances in cosmetics, according to recently published amendments to its Cosmetic Ingredient Hotlist. -
China Leaves Liquefied Natural Gas Off Tariff List
Jun 18, 2018 | BNA Daily Environment Report
By Ryan Collins
In punching back against U.S. tariffs, China included almost all energy-related commodities on a list of its retaliatory actions. The exception is liquefied natural gas. -
China Hits Back at Trump, but LNG Stays Untouched
Jun 18, 2018 | Platts
By Abache Abreu
Given the central role that both countries envisage for bilateral LNG trade in their national energy strategies in the years ahead, it was not entirely surprising that Beijing opted to exclude LNG from its threat to impose an additional 25% tariff on $50 billion worth of US goods, including energy and agricultural products. -
China's $83.7B Plans for West Virginia Shale, PetChem Projects in Jeopardy As Trade War Escalates
Jun 18, 2018 | Natural Gas Intelligence
By Jamison Cocklin
As fears over a trade war with the United States loom, executives from China Energy Investment Corp. canceled an appearance they were scheduled to make at an industry conference in Pittsburgh this week, where a key announcement was expected about its multi-billion dollar plans for shale gas-related projects in West Virginia. -
Shale Gas Boom Calls for $280 Billion of Pipes in U.S., Canada
Jun 19, 2018 | BNA Daily Environment Report
By Rachel Adams-Heard
Surging natural gas production in the U.S. and Canada will require nearly $280 billion of new pipelines by 2035 as producers seek to expand markets for the heating fuel. -
Studies Show Groundwater Holding Own Against Drilling Boom
Jun 19, 2018 | AP (In The Washington Post)
By Michael Rubinkam
New research suggests drinking water supplies in Pennsylvania have shown resilience in the face of a drilling boom that has turned swaths of countryside into a major production zone for natural gas. -
The Technology Behind Building a $6B Ethane Cracker
Jun 19, 2018 | Pittsburgh Business Times
By Paul J. Gough
Robots. Drones. The latest in computer simulation and part tracking. It’s all part of Shell Chemicals’ playbook when it comes to the building of its ethane cracker in Potter Township. -
Ongoing Labor Shortage Could Hamper Future Petrochemical Projects in Region
Jun 18, 2018 | The Times
By Jared Stonesifer
The shale gas revolution has resulted in unprecedented opportunity in the petrochemical industry for western Pennsylvania, but an ongoing labor shortage could hamper future projects here. -
(ACC Mentioned) Peter Wright’s 50+ Chemical Facility Conflicts: A Disaster Waiting to Happen
Jun 18, 2018 | Union of Concerned Scientists (Blog)
By Genna Reed
Peter Wright, President Donald Trump’s nominee to lead the EPA’s Office of Land and Emergency Management, will face the Senate Environment and Public Works committee at his nomination hearing this Wednesday. -
Environmentalists, Industry Spar Over EPA's Refinery Air Rule Revisions
Jun 18, 2018 | Inside EPA
By Stuart Parker
Environmentalists and oil industry groups are sparring over EPA's proposed revisions to its Clean Air Act “major source” rules for the refining sector, clashing over the agency's acceptance of air emissions from pressure relief devices (PRDs), its requirements for fenceline monitoring of toxics emissions, and several other issues. -
Energy CEOs, Obama Climate Officials Form CCS Group
Jun 19, 2018 | E&E Daily
By Christa Marshall
Coal, oil and utility CEOs and top climate officials from the Obama administration are forming a new leadership council to push carbon capture legislation and policies.
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(ACC Mentioned) Insight: US Chemical Industry Threatened by Escalating China Trade Dispute
Jun 18, 2018 | ICIS
By Nigel Davis
The talk has become serious and the implications dire.
The US chemical industry has a great deal to lose from escalating trade tensions with China.
The Trump administration on Friday released a second list of proposed tariffs on China that included chemicals, plastics and lubes valued at $2.2bn.
According to the American Chemistry Council (ACC): “The administration has now pit US chemical manufacturing directly against China at the front lines of this conflict”.
The threat level has increased markedly, prompting the trade group to react sharply. “We appreciate, and will vigorously utilise, the opportunity to share our comments and concerns with the Office of the US Trade Representative and others in the coming weeks to prevent this situation from escalating further,” it said.
China is unlikely to give much ground in this threatening dispute as it drives hard to strengthen domestic manufacturing and its domestic economy, with eyes firmly fixed on long term strategic goals.
President Trump is looking to act on election pledges and generate support ahead of mid-term elections in November.
Chemicals sit in the middle of this dispute, not attracting too much external attention as a sector but targeted by both sides for its importance in manufacturing and construction value chains and in forward-looking investment.
“Chemistry touches 96% of all manufactured goods and is the foundation for the entire North American supply chain,” the ACC said.
“What gives chemistry a competitive advantage – lower US feedstock and chemical production facility costs – ultimately helps reduce costs for American businesses and consumers and has turned the US business of chemistry into one of America’s top exporting industries, accounting for 14% of all US exports.”
Of course, that proportion has been likely to rise given massive investment in shale-based chemicals and processing.
But the current dispute threatens investment and ultimately the smooth running of chemical and other supply chains.
The ACC calculates that as much as half the $194bn of planned chemical industry investment in the US is at risk of delay or abandonment. As many as 24,000 jobs in chemicals and downstream industries are under threat from China’s retaliation in the escalating dispute.
China is one of the US chemical industry’s main trading partners. China already imports 11% of US plastics, worth $3.2bn.
The great tranches of new capacity coming on-stream in the US this year and next could face a severe uphill battle to enter China markets should 25% tariffs be imposed. New investment economics is clearly threatened.
China is rapidly becoming self-sufficient in the major petrochemicals and increasingly so in polymers.
Tariffs of 25% on low-to-medium density polyethylenes would be keenly felt and it is not as if China hasn’t sources of polymer other than the US.
In the ACC’s words: “Enabling a retaliatory trade war will only advantage China’s growing industry at the expense of American production”.
China moved swiftly on Friday to counter the US tariff threat. Its Ministry of Finance said it would impose a 25% tariff on $50bn of US imports.
It has threatened its intention to impose 25% tariffs on $34bn of US imports as soon a 6 July.
A number of chemical and related products are included in a list on which a decision would be made separately.
This includes polyethylenes, polyvinyl chloride (PVC), polycarbonate, and polyamide alongside propane, LPG and hydrocarbon gases, naphtha, crude benzene, toluene and xylenes, and crude oil. There are 114 products on this second list.
Financial markets in Europe on Monday paid some heed to the trade threat unlike the market in Japan where chemical stocks were down sharply. The markets in China and Hong Kong were closed on Monday for the Dragon Boat Festival holiday.
https://www.icis.com/resources/news/2018/06/18/10232480/insight-us-chemical-industry-threatened-by-escalating-china-trade-dispute/
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(ACC Mentioned) Latest Us, Chinese Tariff Proposals Cover Wide Swath of Petchems, Oil Products
Jun 18, 2018 | ICIS
By Al Greenwood
The latest tariff proposals by the US and China cover a wide swath of petrochemicals and oil products, with the US list alone covering more than 150 different chemicals and derivatives.
China's proposed tariffs are not as numerous, but it also includes kerosene, diesel and other oil products as well as crude, propane and natural gas.
The American Chemistry Council (ACC) estimates that $5.4bn in US exports of chemicals and plastics would be exposed to China's proposed tariffs. If demand does not decline and tariffs are at 25%, then the Chinese government would collect $1.3bn in duties.
The chemical and refined-products tariffs that were proposed by China and the US made up a second set of duties, and they did not specify a date on which they would go into effect.
The first set from both countries would go into effect on 6 July.
A list of the proposed chemical and oil-product tariffs from China and the US is at the bottom. It includes the codes for each product's harmonised tariff schedule (HTS).
During the year, both the American Fuel & Petrochemical Manufacturers (AFPM) and the American Chemistry Council (ACC) have spoken out against the proposed tariffs.
At the AFPM's International Petrochemical Conference (IPC) in March the group's president deemed a US-China trade war as the No 1 threat to the industry.
The ACC also singled out a trade war during its more recent Annual Meeting, which was held in June.
Following the latest tariff proposals, the ACC said the US chemical industry has now been thrust on to the front lines of a trade war with China.
Market players and executives have been more measured in their response to the proposed tariffs.
For polyethylene terephthalate (PET), the effect should be limited. US imports from China fell sharply since antidumping duties imposed in 2016. Also, China is not among the top sources of imported PET.
For propane, China relies on it as feedstock to produce on-purpose propylene at its propane dehydrogenation (PDH) units.
Market sources said tariffs could disrupt trade flows, but US propane exports will eventually find a destination.
“It could put a damper on propane and butane; however, there are many other markets besides China that have an increasing appetite for both,” said a US-based natural-gas liquids (NGLs) broker.
Chinese tariffs on US acrylonitrile (ACN) exports may cause price inflation in China. However, while trade flows in the region may move around, net flows to global regions will likely remain stable.
According to one producer in the US, trade flows will probably “adjust to fit the new laws but the net flows to the regions will be the same”.
Executives expressed similar sentiments during the most recent earnings conference calls held earlier this year.
Rising demand for products such as polyethylene (PE) will have to be met, regardless of tariffs.
In this scenario, Chinese customers would replace US imports with PE shipments from other countries. The US will then export its PE to customers that saw their resin shipments diverted to China.
With that, trade flows would change, but demand would remain the same.
US polyvinyl chloride (PVC) market players were surprised by the announcements earlier this year that China’s list of potential retaliatory tariffs included polyvinyl chloride (PVC) and feedstock ethylene dichloride (EDC or 1,2-dichloroethane.)
China is the US’s second-largest PVC export market after Canada and the largest buyer of US EDC.
China already has import fees on US PVC, but these are not applied if the resin imported from the US is then made into products that are re-exported. Most US PVC exports to China are treated this way and market participants expect that that arrangement will continue. If that happens, then the proposed tariffs should have little impact on US PVC trade flows.
The fate of US EDC trade with China is harder to discern. It is not clear if the same rules will apply.
Declining shipments in recent months may be an indicator that market participants see that business as threatened by the tariffs.
About 40% of the EDC imported into China in February originated in the US. US EDC exports to China account for about 28% of the nation’s EDC shipments in 2017, according to data from the International Trade Commission (ITC).
US EDC producers have in the past year found new buyers in Brazil and in Europe. In Brazil, Braskem has de-bottlenecked its PVC plant and is buying EDC to increase vinyls production.
In Europe, chlor-alkali plant closures have left a couple of PVC plants in the Mediterranean market without ready access to chlorine. Inexpensive EDC from the US appears to be working for the feedstock.
That has put current estimates of the tariff outcome as likely rearranging trade routes, but not necessarily upsetting the markets.
https://www.icis.com/resources/news/2018/06/18/10232591/latest-us-chinese-tariff-proposals-cover-wide-swath-of-petchems-oil-products/
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(ACC Mentioned) Even Scott Pruitt’s Friends Have Given up on Him
Jun 18, 2018 | Mother Jones
By Rebecca Leber
Environmental Protection Agency chief Scott Pruitt may still be clinging to his job despite his ever-expanding list of controversies, but his inner circle of allies is shrinking fast.
Since April, seven key EPA staffers have resigned, four of whom had once worked for him or were longtime friends he brought to the EPA from Oklahoma. And while not directly affiliated with the EPA, Sen. James Inhofe (R-Okla.), who has been a key ally of Pruitt’s, recently revealed some cracks in his support. On Wednesday, when Fox News personality Laura Ingraham observed that Pruitt was “hurting the president” and it was time for him to go, Inhofe replied, “I’ve seen these things. They upset me as much as they upset you, and I think something needs to happen to change that.” He suggested that one solution “would be for him to leave that job,” and that the deputy EPA administrator Andrew Wheeler “might be a good swap.”
Inhofe’s connection to Pruitt runs deep. His former chief of staff, Ryan Jackson, became Pruitt’s chief of staff and reportedly wanted to quit the agency, according to an E&E report in early April. So far, he has remained in his position, and the House oversight committee plans to interview him as part of its investigation into Pruitt’s conduct. Four of his former EPA colleagues who have since left have also been asked to appear before the committee.
A turning point in staff loyalty may have occurred in April, when news broke that Pruitt had rented a $50-a-night condo co-owned by an energy lobbyist for six months. After that, a series of stories about his questionable behavior appeared, and one by one, his formerly loyal staff began to exit the EPA.
Here they are:
Samantha Dravis: One of Pruitt’s first and closest advisers, she worked for the EPA Office of Policy and was often seen by his side. She knew Pruitt from her days as general counsel to the Republican Attorneys General Association and president of its affiliate dark-money group Rule of Law Defense Fund, both of which Pruitt chaired during his time as Oklahoma attorney general. On April 20, she officially left the EPA for the private sector after taking a three-month leave from the agency between November and January. Unnamed agency officials told CBS and the Washington Post that her decision had nothing to do with the bombardment of news that came days later about Pruitt renting a condo from the lobbyist and approving inappropriate pay raises for two staffers.
Albert “Kell” Kelly: Two weeks after the Federal Deposit Insurance Corporation fined Albert Kelly for his alleged involvement in a loan that hadn’t received FDIC approval, Scott Pruitt hired his old friend “Kell” at the EPA in 2017 to lead the Superfund Task Force. The former banker’s company had issued three mortgages to the Pruitts and provided a loan to finance Pruitt’s stake for co-ownership of a minor league baseball team, according to an investigation by the Intercept. Kelly, seen as a close confidante of his EPA boss, left the agency in early May (on the same day as another official, Pasquale Perrotta). In a statement, Pruitt praised the “tremendous impact” Kelly had on the Superfund program, which Pruitt has singled out as his personal achievement, adding, “Kell Kelly’s service at EPA will be sorely missed.”
Pasquale Perrotta: Pruitt’s head of security, Pasquale Perrotta, quit the agency on the same day as Kelly, accelerating his retirement after serving under four EPA administrators. Perrotta came under fire for signing a memothat helped to enable Pruitt’s expansive spending on first-class flights, which the administrator had justified as necessary because of security concerns. The EPA hired Perrotta’s business partner at his private security firm, Sequoia Security Group, for security sweeps when Pruitt arrived.
Liz Bowman: A four-year veteran of the chemical lobby American Chemistry Council, Bowman arrived at the EPA to run its communications team. During Pruitt’s tenure, the press shop has shut out reporters who cover the EPA from events while turning to conservative media to create an echo chamber amplifying Pruitt’s message. Bowman sent her resignation letter as the chief spokesperson for the agency on April 30 and, in early May, assumed her position to handle communications for Sen. Joni Ernst (R-Iowa). Just after her resignation letter, the Atlantic reported that a communications staffer had been reportedly shopping negative stories about another Cabinet member, the Department of Interior’s Ryan Zinke.
John Konkus: John Konkus was second-in-command in the press shop, and his departure was announced on May 4, making him the fourth staffer to leave that week. Last year, the aide was tasked with cutting contracts from the Obama years, and reportedly combed through grants and contracts looking for the phrase “climate change.” True to his communications roots, on his LinkedIn page, Konkus frames this experience in a positive light: “Completely reformed the $4B/annual grant award and solicitation process at the agency to adhere to the new EPA strategic plan and better reflect the policies of the Trump Administration.” He also sparked a minor controversyfor receiving an ethics waiver to work as a Republican political consultant while at the EPA. A former field office director in Florida for Trump’s presidential campaign, Konkus is headed to another federal agency—this time, the Small Business Administration, where he will be in charge of communications.
Sarah Greenwalt: Another Oklahoma aide from when Pruitt worked as state attorney general, Sarah Greenwalt, a senior counsel, announced her departure in early June. She was one of the two aides who received a 53 percent raise from Pruitt, who used the Safe Drinking Water Act to approve the raises after the White House rejected them. She is leaving to become an attorney for the Oklahoma Workers Compensation Commission.
Millan Hupp: Once an employee of Pruitt’s in Oklahoma, Millan Hupp came to the EPA to do his scheduling. She was one of the five staffers interviewed by the House oversight committee for her involvement in finding Pruitt a used Trump hotel mattress and housing with the energy lobbyist, which Democrats say violates federal law forbidding Pruitt from using EPA staff and resources for private gain. The Atlantic quoted an anonymous staffersaying she left because she was “tired of being thrown under the bus by Pruitt.” Hupp was one of the two staffers to receive a raise unauthorized by the White House from Pruitt. Her sister Sydney Hupp also worked at the agency and left last year. She helped Pruitt’s wife, Marlyn, set up a meeting with Chick-fil-A in an unsuccessful bid to own a franchise. She may not have a franchise, but she was responsible for yet another possible violation of federal law.
https://www.motherjones.com/environment/2018/06/even-scott-pruitts-friends-have-given-up-on-him/
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(ACC Mentioned) US Should Have Signed the Plastics Charter
Jun 18, 2018 | Plastics News
By Steve Toloken
The United States government should have signed the G7's plastics charter.
The document, agreed to by leaders of five of the G7 industrial democracies at their annual summit June 9, is a strong statement of their intention for more sustainable use of plastics.
Long term, I think not signing it will be a missed opportunity for the United States. Given the emerging consensus globally around plastics waste, it doesn't make sense that the Trump administration (and Japan, the other abstainer) would not endorse the charter.
I say that partly because daily, I see developments about industry pushing toward more environmentally friendly uses of plastics.
On June 18, as just one example, Volvo announced that by 2025 it plans to have 25 percent of the plastics used in every newly launched Volvo vehicle made from recycled content, which it said is part of a broader strategy to minimize its environmental footprint.
So it's not as if the charter is going in a direction that business is not already heading. And G7 documents are non-binding, they don't specifically limit government choices.
It's worth noting that all the specific commitments in the charter, like recycling and reusing 55 percent of plastics packaging by 2030, are at least a decade away.
Plenty of time to work on it, and if you don't meet the targets, I don't think any government would suffer political harm. Would voters in some distant election choose to "throw the bums out" over not meeting commitments in this relatively obscure thing called the plastics charter? No.
But ocean plastics and sustainability in general will remain big challenges, that will require everyone to be rowing in the same direction. Plastics News has given a lot of coverage to the charter in the last 10 days, and those (and related) stories have gotten some interesting comments on our website.
As one example, Balaji Singh, the founder and former president of Houston-based consulting firm Chemical Market Resources Inc., endorsed big changes in thinking on single-use plastics.
He noted that plastics have had a lot of positive impacts over the last four decades of consistent industry growth, like improving storage of perishable food.
But, Singh, with a career in plastics stretching several decades, wrote that he believesit's now time for a different way of thinking: "The plastics developments essentially 'jumped the shark' in the last 10 years and the damage they cause is far exceeding the benefits of 'single use' plastics. A time has now come for: (1) reducing the single use plastics and (2) spending time to innovate the processes to reduce the damage done over the last 40 years."
Industry trade groups, for their part, note that they put a lot of effort into combating marine plastics pollution, one area of major concern of the plastics charter.
The American Chemistry Council's plastics division put out a statement after the summit noting that it's committed to being part of the solutions to marine plastics litter and welcoming the chance to collaborate on various initiatives in the charter.
Of course, the details are where the disagreements will come. For example, should incineration be counted to meet targets for reducing plastics pollution? And how should societies get to the ambitious recycling and reuse targets in the charter?
The U.S. lags international best practices in recycling one of the most visible forms of plastics packaging, PET beverage bottles. Europe recycles 59 percent of its PET bottles, while the U.S. only manages 28 percent.
Maybe that's an indicator of why the U.S. government declined to sign the charter — we're already lagging in some aspects of plastics environmental policy and Washington doesn't want to highlight that.
Or maybe the plastics charter is caught up in bigger disagreements over climate policy, or in President Donald Trump's distrust of multilateral agreements. The G7 summit clearly had more immediate topics, like Kim Jong Un and not blowing up the world trading system!
I asked both the White House and the State Department for an explanation on the plastics charter. The State Department referred me to the White House, which has not replied to messages.
I also asked the Japanese embassy in Washington for comment, but it too has not replied.
Some U.S. ocean policy advocates I talked with said they hope Washington will nonetheless participate in detailed discussions later this year on how to move forward with the charter, even if they've not signed it.
In the end, perhaps not endorsing a non-binding plastics charter won't matter, the key work will continue regardless.
But it's important symbolism, and I think we'll look back in a few years and think the U.S. government, my government, made a mistake in not signing.
http://www.plasticsnews.com/article/20180618/BLOG03/180619913/us-should-have-signed-the-plastics-charter
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Trump Orders Tariffs on $200b More Chinese Goods
Jun 18, 2018 | PoliticoPro
By Doug Palmer
President Donald Trump on Monday raised the stakes in a growing trade dispute with China, ordering trade officials to draw up a list of $200 billion worth of Chinese goods that would be hit with an additional 10 percent tariff.
The move, which drew a strong response from Beijing, follows China's announcement that it would retaliate in kind to Trump's initial decision last week to hit $50 billion worth of Chinese goods with a 25 percent tariff. That stemmed from a U.S. Trade Representative investigation that determined Chinese theft of U.S. intellectual property and forced technology transfers threatened to undermine U.S. competitiveness.
"This latest action by China clearly indicates its determination to keep the United States at a permanent and unfair disadvantage, which is reflected in our massive $376 billion trade imbalance in goods," Trump said in a statement. "This is unacceptable. Further action must be taken to encourage China to change its unfair practices, open its market to United States goods, and accept a more balanced trade relationship with the United States."
The Chinese Commerce Ministry, in a statement translated for POLITICO, blasted the action as an example "of extreme pressure and blackmail" by the Trump administration that flouts international norms for handling trade disputes.
"If the U.S. side becomes irrational and issues a list, China will have to adopt comprehensive measures combining quantity and quality to make a strong countermeasure," the ministry said. "The United States initiated a trade war and violated the laws of the market. It did not meet the current development trend of the world, harmed the interests of the people and enterprises of China and the United States, and harmed the interests of the people of the world."
Trump also promised to keep upping the ante if China retaliates to his latest action. He said he would pursue additional tariffs on another $200 billion worth of goods, for a grand total of $450 billion. That would encompass roughly 90 percent of the $505 billion worth of goods that China exported to the United States in 2017.
In contrast, the United States exported only about $130 billion worth of goods to China last year, so Beijing has far less room to raise tariffs in a way that would immediately affect trade.
Still, U.S. companies had $92.5 billion worth of investments in China as of 2016, many of which could face retaliation by Chinese regulators if Beijing is looking for ways to exert pressure on the United States. Chinese officials have promised to respond accordingly if Trump continues to ratchet up tensions.
U.S. Trade Representative Robert Lighthizer, who spearheaded the investigation leading to Trump's initial tariff threat, put out a statement saying he supports the president's latest move.
"The initial tariffs that the president asked us to put in place were proportionate and responsive to forced technology transfer and intellectual property theft by the Chinese," Lighthizer said. "It is very unfortunate that instead of eliminating these unfair trading practices, China said that it intends to impose unjustified tariffs targeting U.S. workers, farmers, ranchers and businesses. At the president’s direction, USTR is preparing the proposed tariffs to offset China’s action.”
However, he emphasized no additional duties would be imposed until they have gone through a legal vetting process, which includes taking comments and holding a public hearing.
Trump's proposed new duties, as with the initial tariffs, alarmed the U.S. business community.
“As we’ve said before, tariffs — at any amount — will not fix the problem of China’s unfair practices. We urge the administration to change course and to instead work with our allies on a focused, sustained strategy," a spokeswoman for the U.S. Chamber of Commerce said.
Retail groups also weighed in. National Retail Federation President and CEO Matthew Shay called Trump's threat to impose duties on $200 billion worth of additional goods "a reckless escalation."
"This is a global trade war, plain and simple, and the American families will be the ones who suffer most," added Hun Quach, vice president of international trade for the Retail Industry Leaders Association.
U.S. equipment manufacturers said Trump's action was "terrible news" that would effectively wipe out all of the gains the industry has seen from tax reform and regulatory relief.
"While the White House is chasing some imaginary trade deficit, it will have very real consequences for the 1.3 million men and women of our industry. We should be creating more jobs, not wiping them out," said Kip Eideberg, vice President for public affairs and advocacy at the Association of Equipment Manufacturers.
The initial U.S. tariffs are aimed at items such as semiconductors, electronics, plastics and other goods from sectors expected to benefit from China's "Made in 2025" initiative to dominate the world in technology areas such as robotics, driverless cars and advanced medical devices.
China's proposed retaliatory tariffs on the United States target farm goods such as soybeans, as well as chemicals, oils and seafood.
The first tranche of the U.S. duties on goods totaling $34 billion will go into effect July 6, with the remaining $16 billion imposed at a later date. China is following a similar schedule.
Trump's latest tariffs Monday came on the same day the Senate voted to reverse the Commerce Department's recent move to save Chinese telecommunications giant ZTE by lifting a seven-year ban on the company doing business with U.S. firms, which was imposed after ZTE was found violating the terms of 2017 penalty agreement.
Commerce's deal, made at Trump's request after he spoke on the phone with Chinese President Xi Jinping, was strongly opposed by a bipartisan group of senators who see ZTE as a serious national security risk. The company was originally fined $1.2 billion in 2017 for making illegal sales to Iran and North Korea.
The latest Commerce Department penalties require ZTE to pay an additional $1 billion fine, put in place a new management team and allow the United States to select a team of compliance officers.
https://subscriber.politicopro.com/energy/article/2018/06/trump-orders-tariffs-on-200b-more-chinese-goods-632938
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Import Restrictions Disrupt Economic Progress From Trade
Jun 18, 2018 | Real Clear Energy
By R. Dean Foreman
Import restrictions on steel and aluminum imports — tariffs and quotas — are about far more than steel and aluminum. Implementing tariffs on top U.S. allies and trading partners — 25 percent for steel and 10 percent on aluminum — represents a structural break from the path of global progress. It also places the U.S. economy at risk.
There’s no question that global economic well-being impacts American families. Data from 1970 to 2017 show that U.S. economic growth is correlated with that of the world. As other national economies around the world progress, they buy more U.S. exports and Treasury securities, creating a virtuous growth cycle. This both benefits the United States and generates rising world income and human progress, enabling a greater share of spending and investment to be directed to peaceful and productive means.
The new U.S. tariffs on steel and aluminum will not in and of themselves unravel the benefits of global trade, but they certainly won’t help. And they set a worrisome precedent based on highly questionable rationale — namely, the Commerce Department’s climate that tariffs are necessary for national security. In 2017, the U.S. relied on imports to satisfy just 33 percent of its steel demand, with half of the imports coming from Canada, Mexico, Brazil, and South Korea. More than one quarter of steel imports have come from our neighbors and allies Canada and Mexico — a fact that further reinforces the security and economic value of NAFTA.
For industries like natural gas and oil, which rely critically on specialty steel products that are not manufactured in the United States, such delays and increased costs will jeopardize jobs and cost millions of dollars every day. Some nations have negotiated with the Trump administration to implement quotas as an alternative to tariffs — creating a scenario under which supply may not be available from certain trading partners at any cost.
Specifically, the complex quota system resets quarterly for each country and is structured with sub-quotas on individual product groups determined based on historical shares of U.S. imports. When a quota has been reached, ships carrying that product to the United States may be turned around. Alternatively, the product could be destroyed, or it may be placed into storage until the quota is no longer binding. If the quantity of steel that already is in storage is substantial, it could take months, quarters, or possibly even years to import products that are needed for major projects.
Consider, for example, Oil Country Tubular Goods (OCTG). As of mid-June, the quotas for the second quarter of 2018 were 100 percent filled for Brazil, 86 percent filled for South Korea, and 51 percent filled for Argentina. However, Argentina is subject to quotas of zero for about 40 groups of steel, and Brazil similarly has zero quotas for eight groups. A zero quota is essentially a ban on new steel imports for any country that has not been exporting that product to the U.S. over the past five years.
Since these import restrictions have been applied unevenly across countries, they also have created a bureaucratic quagmire. Potential exemptions for specific products imported by individual companies remain mired in a manual review process that is so burdensome as to be ineffectual. In the nearly three months since Commerce issued its decision, the Commerce website has posted over 8,000 exemption requests, none of which has yet been approved and criteria for which remain opaque. Some sources have placed the backlog of requests as high as 19,000.
For nearly two decades, proposals like the Section 232 tariffs and quotas have easily been shot down and recognized for what they are: a rigged lottery. Tariffs are expensive means to save a relatively small number of U.S. jobs in the steel and aluminum sectors at the likely expense of a far greater number of jobs in the manufacturing sector. Energy and manufacturing depend on steel and aluminum inputs that will now be more expensive, which potentially undermines the U.S. energy renaissance that has significantly bolstered job growth, national security, and family budgets.
With the U.S. unemployment rate at its lowest level in nearly 20 years, there is not much slack in the labor force. Between rising import costs, higher domestic production costs, and a multiplier effect associated with frictions through the entire economy, these policies are likely to raise prices for consumers.
It is time — once again — to call out protectionist policies for what they are and change course — before U.S. price inflation undermines household budgets, supply bottlenecks stymie major industry projects, and policy contagion affects global trade in ways that are harmful to economic and human progress.
https://www.realclearenergy.org/articles/2018/06/18/import_restrictions_disrupt_economic_progress_from_trade_110300.html
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EPA Stops Policy of Having Press Aide Review Grants
Jun 18, 2018 | The Hill - E2 Wire
By Timothy Cama
The Environmental Protection Agency (EPA) rescinded a policy last month that had a political appointee in the press office review the agency’s grants before they could be approved.
The EPA replaced the controversial policy with a new system in which relevant regional administrators or assistant administrators — most of whom are also political appointees — will review and approve grants.
“EPA awards about $4 billion in grants annually, and the Trump EPA is committed to being good stewards of the taxpayers' huge investment in our agency by reviewing every grant award and solicitation,” a spokesman said. “Now that all of our regional administrators and most of our program [assistant administrators] are in place, we have shifted the responsibility to these leaders to review and manage the grants that flow through their respective offices.”
The new memo was first reported Monday by E&E News.
The political review process was instituted last year by EPA head Scott Pruitt as an attempt to ensure that grant funds coming from the agency reflected the Trump administration’s policies.
John Konkus, a senior aide in the public affairs office and former Trump campaign official, was tasked with reviewing every grant before it went out, as well as grant solicitations.
The system was widely criticized by Democrats and environmentalists who argued that Konkus wasn’t qualified to review grants and the process would overly politicize grantmaking.
In one of the most widely publicized cases, Konkus ended funding for the Bay Journal, a newspaper covering the Chesapeake Bay. Pruitt later restored the funding.
Documents obtained by E&E showed that Konkus often brought other political appointees from the public affairs office and elsewhere into the review process.
He also frequently flagged for defunding grants that mention climate change or other Obama administration priorities.
In one case, he wanted to end a grant because its paperwork mentioned the Clean Power Plan, the Obama administration’s climate change rule. But after the recipient revised the paperwork to remove that mention, Konkus reversed his decision.
http://thehill.com/policy/energy-environment/392845
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Republican Senator Calls for Face-To-Face with Epa’s Pruitt
Jun 19, 2018 | The Hill - E2 Wire
By Alexander Bolton
Republican senators are taking a harder look at Scott Pruitt, President Trump’s embattled head of the Environmental Protection Agency (EPA), after a prominent conservative called for his ouster last week amid new allegations of ethical misconduct.
Sen. James Inhofe (R-Okla.), a senior member of the Environment and Public Works Committee and longtime Pruitt backer, wants to meet with the EPA chief Tuesday to discuss the latest allegations.
“I’ve made a request to sit down with him on Tuesday,” Inhofe told The Hill.
Inhofe said he thinks that some of the allegations that have been raised against Pruitt are false, but other charges have raised concerns.
“I just want to know what’s going on,” he said. “I want to get to the bottom of it.”
Inhofe on Monday evening said he had yet to nail down the precise timing but expressed confidence it would happen soon.
“I’m going to have it this week,” he said, but declined to provide more detail.
Republican senators say Pruitt’s future will hinge on Inhofe’s continued support.
“If Jim came out against him that would be significant. I think people will want to see what Inhofe says,” said a senior Republican senator who requested anonymity to discuss internal conference discussions.
Inhofe is closely aligned with Pruitt’s policy views and supports his aggressive effort to roll back environmental regulations.
The senior senator from Oklahoma once flew Pruitt around the state in his personal plane when Pruitt was campaigning for office early in his career.
“I flew him in my airplane around the state to primarily the western part of Oklahoma, where my numbers have always been pretty good. They didn’t know who he was. That was a long time ago,” Inhofe recalled in an interview.
But there’s growing concern among GOP lawmakers that Pruitt is becoming a political liability as allegations of questionable ethical decisions pile up.
One Pruitt aide, Millan Hupp, said in testimony to the House Oversight and Government Reform Committee that she helped him look for housing and obtain a used mattress from the Trump International Hotel in Washington.
Pruitt has also come under fire for renting a room from the wife of an energy lobbyist, spending more than $100,000 on first-class flights last year and requesting around-the-clock security protection at a cost of more than $3 million to taxpayers.
Questions have also been raised about Pruitt using his aides to help his wife seek employment in Washington, D.C.
“Every day something new comes out,” Inhofe said. “I want to find out everything from the bed to the wife’s job and all these things … because he happens to be an old, old friend of mine.”
The uproar over Pruitt seemed to die down in recent weeks until conservative talk-show host Laura Ingraham rekindled it last week, tweeting that Pruitt’s “bad judgment” is hurting the president and that he’s “gotta go.”
A second Republican senator said Ingraham’s pointed call for Pruitt’s resignation can’t be ignored.
“I thought it had subsided, but it looks like it’s coming back,” said the lawmaker, who declined to comment publicly on Pruitt’s future. “It’s flared back up.”
Pruitt has survived controversy after controversy because of Trump, who has stuck with his embattled administrator.
But there have been other signs of growing unease on the right.
The National Review argued in a recent editorial that Pruitt has become too tarnished to effectively advocate for deregulation.
Inhofe told reporters in Oklahoma on Friday that Pruitt may have to step down if he continues to be dogged by scandals.
“I’m going to have a personal advice session with him, and see what options are out there. Again, I’ve always been supportive of him. But he can’t continue with something new coming out every day.”
Inhofe told Ingraham in an interview last week that the No. 2-ranking official at the EPA, Andrew Wheeler, who is a former Inhofe aide, is “really qualified.”
“So that might be a good swap,” he said.
GOP senators privately acknowledge that Pruitt is becoming a liability for the party in an election year.
Sen. Joni Ernst (R-Iowa), who is running to become the first woman to serve in the elected Senate Republican leadership since 2010, has called Pruitt “about as swampy as you can get.”
She and Pruitt are at odds over the Renewable Fuel Standard, which is a big help to Iowa’s corn farmers who help produce ethanol.
The EPA under Pruitt has granted hardship waivers to large oil refineries to help them circumvent biofuels requirements.
Sen. Chuck Grassley (R), Iowa’s senior senator, threatened last month to call for Pruitt’s resignation if he didn’t stop handing out exemptions to the ethanol mandate.
But GOP senators say they are reluctant to push for Pruitt’s resignation because he has a close relationship with Trump and they fear getting on the president’s bad side.
They also say it would be very difficult to confirm a replacement who would try to unwind EPA regulations, which many Republican lawmakers oppose, with the same zeal as Pruitt.
A third Republican senator said if Pruitt stepped down, his successor would have to make promises to Democrats, and maybe a few environmentally minded Republicans, to secure the 50 votes need for confirmation.
“We couldn’t get someone in who would be as strong on regulations. That person would have to make a lot of promises to get through,” said the source.
Republicans have a narrow 51-49 seat majority, but with Sen. John McCain(R-Ariz.) at home battling cancer, they effectively control only 50 seats.
http://thehill.com/policy/energy-environment/392903-republican-senator-calls-for-face-to-face-with-epas-pruitt
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Details for Five Problem Chemicals Released By EPA
Jun 18, 2018 | BNA Daily Environment Report
By Pat Rizzuto
Hazards and other details about five problem chemicals were released by the EPA June 18 as it prepares rules to limit exposures to the chemicals.
The preliminary information the agency released about a solvent, fuel additive, rubber chemical, and two flame retardants will eventually form the basis of five regulations.
The EPA must propose those rules by June 22, 2019, according to the Toxic Substances Control Act (TSCA) amendments of 2016. The law also requires the EPA to “reduce exposure to the substance to the extent practicable” to these chemicals.
The TSCA amendments presumed all five chemicals are hazardous, because they met the statute’s criteria for persisting in the environment, building up in the food chain, and—with sufficient exposure—being able to harm human health or the environment.
Companies that have reported making one or more of the five compounds since 2011 include Albemarle Corp.; Akzo Nobel N.V.; Chemtura Corp., now owned by LANXESS; Chevron Corp.; ICL North America, Inc.; Shell Oil Co., and Struktol Company of America, LLC.
Production Volumes Range BroadlyThe specific chemicals are:
decabromodiphenyl ether (DecaBDE; CAS No. 1163-19-5), which is used as a flame retardant in textiles, plastics, wiring insulation, and building and construction materials,hexachlorobutadiene (HCBD; CAS No. 87-68-3), which is a solvent used to make rubber compounds and used as a hydraulic, heat transfer or transformer fluid that keeps machines running,pentachlorothiophenol (PCTP; CAS No. 133-49-3) which is used to make rubber more pliable,phenol, isopropylated, phosphate (3:1; CAS No. 68937-41-7), which is a flame retardant in consumer products and used as a lubricant and hydraulic fluid, and2,4,6-tris(tert-butyl) phenol (CAS No. 732-26-3), an antioxidant that can be used as a fuel, oil, gasoline or lubricant additive.Their production volumes range broadly: Up to 10 million pounds for phenol, isopropylated, phosphate (3:1) was produced in 2015, while no company reported HCBD production in 2012 or 2016, although 2,507 pounds of it were released to land, air, or water in 2016, according to EPA information.
The EPA released its preliminary findings about the chemical hazards and some exposure details as it prepares for a June 25 public teleconference. Scientists who will peer-review the agency’s information will discuss it and hear from the public.
Interested parties have several opportunities to add more information to, critique, or voice other perspectives about the agency’s work, according to a notice EPA published May 25. In addition to the brief comments that the EPA invited for the June 25 teleconference, written comments submitted by July 23 will be considered by the scientists that are peer reviewing the agency’s work.
The agency will consider comments submitted on or before August 17.
https://news.bloombergenvironment.com/environment-and-energy/details-for-five-problem-chemicals-released-by-epa
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NRDC Suit Faces Hurdles But May Dissuade EPA Use Of New Chemicals Plan
Jun 18, 2018 | Inside EPA
By Dave Reynolds
Environmentalists' lawsuit challenging EPA's framework for reviewing new chemicals appears to face legal hurdles because it challenges a policy that is not yet final but it nevertheless appears to have dissuaded the agency from following the novel process it floated last year to speed chemical reviews, industry and environmental attorneys say.
The lawsuit, filed by the Natural Resources Defense Council (NRDC) last January, appears to have had a “disquieting impact” on EPA efforts to speed new chemical reviews through the so-called one-step process outlined in the agency framework, says one industry attorney.
And not only is EPA not using the one-step process detailed in its draft "New Chemicals Decision-Making Framework," the agency appears to be increasing use of its long-standing two-step approach, says one environmental attorney, noting that nearly three-quarters of all recently approved new chemical uses are subject to the two-step process.
NRDC's suit, pending in the U.S. Court of Appeals for the 2nd Circuit, challenges EPA's draft framework, which sought to speed review and approval of new chemicals by dropping the agency's two-step approach to such approvals, and instead adopting a one-step approach.
While the agency had previously sought to use enforcement orders as an interim step in regulating the substances, the new framework allows the agency to proceed directly from premanufacture notices (PMNs) to issuing significant new use rules (SNURs). The agency said this approach is needed to speed approvals and help prevent any future backlog of pending applications -- as occurred after the new Toxic Substances Control Act (TSCA) took effect.
But the NRDC suit charges that the plan violates the revised TSCA, which they say requires the use of enforcement orders under section 5(e) to ensure that PMNs do not pose unreasonable risks or inadvertently allow other uses that may pose risks.
The lawsuit also charges procedural violations, citing EPA officials' statements at a December public meeting that the agency had already begun implementing the new approach before seeking public input.
Industry attorneys have argued the NRDC suit is unlikely to succeed in court because the framework is not yet final.
NRDC's lawsuit is "frivolous," Herb Estreicher of Keller and Heckman LLP, which represents industry clients, told a June 13 webinar, reiterating long-standing industry assertions that the suit is likely to fail on procedural grounds because the draft framework is not a final rule.
He said the question of whether the framework is subject to judicial review is a driving question of the lawsuit and faulted petitioners for only using three pages of their opening brief to address that critical question. “You can't file a lawsuit, at least not successful ones, against draft documents, proposed rules, discussion documents, anything of that nature," Estreicher told the webinar.
"I think EPA will file a motion to dismiss and the court will surely grant that."
Anticipating such challenges, NRDC's opening brief, filed last month, makes the case that the appellate court should consider the merits of the litigation, charging that EPA's policy has the effect of a legislative rule, was issued without following proper rulemaking procedure, and should be vacated.
But Estreicher and others say the lawsuit may already have achieved its intended effect of deterring EPA from following through on use of its new chemical review framework. “The goal is not to get a decision on the merits but to signal to EPA not to issue one-step SNURs and that is what has occurred at EPA,” Estreicher told the webinar. “I think the lawsuit has been successful in modifying or attempting to modify agency behavior."
'Have Not Moved Ahead'
The first industry attorney and the environmentalist attorney agree that EPA has not approved new chemicals under the process outlined in the framework and that the lawsuit may be a reason why.
The environmentalist attorney says that while advocates' arguments could have dissuaded EPA from acting on the framework, agency attorneys also may have been skeptical of the one-step approach.
“Whatever the reason, they have not moved ahead with the approach that they were very definite about moving ahead with in December,” the environmentalist says.
The source acknowledges the possibility that EPA's bypassing use of the framework could bolster future agency arguments that environmentalists lack standing for their suit because the framework is not a final agency action.
“You would think that if they were serious about the new approach, they would go ahead with it and deal with the lawsuit as best they could,” the source says, adding that officials' past statements that they were moving ahead with the framework put the lawsuit on firm footing.
“We thought that approach was unlawful and contrary to the statute and thought it was a very bad idea,” the source said. “If the end result is that they're not doing the approach, we're relieved.”
The environmentalist attorney adds that while EPA's new chemical review framework calls for dropping use of enforceable orders as an interim step, EPA's use of section 5(e) consent orders is steadily increasing, while far fewer chemicals are being deemed as unlikely to pose a risk.
“We continue to have a pattern where 75 percent of chemicals that complete review are subject to 5(e) orders even though the intent last December was to change that significantly,” the source says.
EPA sought comment on its framework after officials told a December meeting that they were moving forward with implementing the policy, though it is unclear whether EPA will publicly respond to the input it received.
EPA toxics chief Jeff Morris later told a Feb. 28 chemical industry conference in Washington, D.C. that the agency is wrestling with how far terms in the revised law "reasonably foreseeable" uses and “not likely” to pose an unreasonable risk should expand the agency's assessments.
Morris also urged patience, saying that EPA would have to work through implementing its new chemical reviews, suggesting that time, rather than process changes, is what the agency most needs to correct the process.
In comments to EPA, industry attorneys have faulted environmentalists' criticism of EPA's framework, saying it is “ill-conceived” because companies would face enforcement liability in commercializing unapproved uses even in the absence of an enforcement order.
But despite NRDC's litigation prospects, and the relative merits of environmentalists' criticisms, Estreicher says it is an open question whether EPA will move forward with the one-step process that the lawsuit opposes.
He says that if EPA does issue a SNUR allowing use of a new chemical under the one-step process outlined in the framework, environmental groups could challenge that approval.
And the environmentalist and industry attorneys also said that EPA has offered little clarity in recent months on its new chemical review process.
The environmentalist said that EPA is reviewing comments on the framework and considering revisions to the framework, though the agency has not said when any changes might be announced.
The second industry attorney said that companies are also seeking further clarity on how EPA is reviewing new chemicals. The source said that EPA faces a significant workload given other requirements, such as for additional guidance that must be met on the two-year anniversary of the revised TSCA law and are working with limited resources.
“We're trying to get a better handle on what the process is and how EPA will expedite the review process to avoid this growing glut of chemicals” that are awaiting an agency decision.
https://insideepa.com/daily-news/nrdc-suit-faces-hurdles-may-dissuade-epa-use-new-chemicals-plan
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Monsanto Squares Off With Man Dying of Cancer in Roundup Trial
Jun 18, 2018 | BNA Daily Environment Report
By Joel Rosenblatt
Lee Johnson’s doctors didn’t think he’d live long enough to testify in court that exposure to Monsanto Co.’s Roundup weedkiller caused his deadly cancer.
But the 46-year-old is now first in line to go to trial against the agrochemical giant among thousands of people across the U.S. who blame its herbicide for their disease.
As groundskeeper for the school district in Benicia, Calif., about 40 miles east of San Francisco, Johnson mixed and sprayed hundreds of gallons of Roundup. He was diagnosed with cancer in 2014, and in July, after chemotherapy and other treatment, his oncologist gave him six months to live.
Glyphosate, the main ingredient in Roundup, was first approved for use in Monsanto’s weedkiller in 1974. As it grew to become the world’s most popular and widely used herbicide, the question of whether it causes cancer has been hotly debated by environmentalists, regulators, researchers, and lawyers—even as Monsanto insisted for decades that it’s perfectly safe. Now, a jury will decide in a case set to start this week in San Francisco state court.
The outcome won’t be binding on any of the thousands of plaintiffs in St. Louis making similar claims, or for the approximately 300 cases before a federal judge in San Francisco, or even the dozens of lawsuits consolidated in nearby Oakland. But Johnson’s lawyers, who are involved in lawsuits in all those jurisdictions, see his trial as an indicator of how others could go.
The trial is the “canary in the coal mine,” said Tim Litzenburg, a lawyer representing Johnson. “The world is watching and it’s unofficially a bellwether case.“
Assuming RiskJohnson’s trial was “barely on any investors’ radar screens,” Jonas Oxgaard, senior analyst at Sanford C. Bernstein & Co. in New York, said in an email in early June. “It seems like there are always a few lawsuits claiming Monsanto is responsible for everything from cancer to the Black Plague.“
Bayer AG’s $63 billion acquisition of Monsanto closed this month. Oxgaard said Bayer will likely assume Monsanto’s risk from the prolific litigation over glyphosate. As of August, Monsanto had a reserve fund for environmental and litigation liability of $277 million, according to a regulatory filing.
Glyphosate is the most tested herbicide in history, according to Monsanto.
“Every major regulatory agency charged with answering the question has, with the benefit of all the available primary data, concluded that glyphosate is not likely to pose risks of carcinogenicity,” Monsanto argued in a court filing.
Cancers like Johnson’s, a type of non-Hodgkin’s lymphoma, “take many years to form,” Monsanto said in the filing, previewing a possible argument at trial. The short period between Johnson’s first exposure in 2012 and his diagnosis in 2014 “precludes any possible causal connection here,” according to the company.
A pretrial ruling allows Johnson’s lawyers to try to use internal Monsanto correspondence to show that the company has long been aware of the risk its herbicides are carcinogenic.
“A civil jury is the last great equalizer in America,” Litzenburg said. “We’re excited to get 12 people off the street, telling our story to a bunch of regular folks, hearing the other side, and then letting them decide what’s right.“
The case is Johnson v. Monsanto Co., Cal. Super. Ct., No. CGC-16-550128, 6/18/18.
https://news.bloombergenvironment.com/environment-and-energy/monsanto-squares-off-with-man-dying-of-cancer-in-roundup-trial-1
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Battle Builds Around a New Product-Labeling Bill in Congress
Jun 18, 2018 | BNA Daily Environment Report
By Lauren Coleman-Lochner
A new bill in Congress is raising the hackles of consumer advocates who say it’ll give Americans less information about the ingredients in products they buy.
Dubbed the Accurate Labels Act, the bill backed by groups that represent companies such as Kellogg Co. and Dow Chemical Co. seeks to establish federal standards for labeling. While industry representatives who support the measure argue it will simplify ingredient lists, health and environmental groups say it’s a dangerous effort to defang state laws that inform and protect shoppers.
The initiative could be viewed as a compromise between consumer advocates who want “full transparency” of product ingredients and the companies that bear the cost of “an ever-growing list of requirements,” said Bloomberg Intelligence analyst Ken Shea. Still, “a one-size-fits all label would weaken consumer protections in those states in which greater disclosure is sought.”
The struggle is part of a deepening fault line in the U.S. over how to use and define science, especially as some industry giants say too much information could confuse, not help, the average consumer.
Bill’s ContentsConsumers have been clamoring for more details about what’s in their food and household and personal-care products, driving more than half of U.S. states to pass measures to force companies to disclose—or eliminate—some substances of concern found in commonly used goods. Some retailers have even taken the matter into their own hands, moving to require disclosure or removal of some ingredients.
“People want to know what’s in the products they buy,” said Ansje Miller, director of policy and partnerships at the Center for Environmental Health, a nonprofit group that seeks to reduce exposure to toxic chemicals. “Many of these state laws have a long track record of working very well to protect people from dangerous chemicals in thousands of products across the country. If you care about your constituents’ health, you’re not going to sign on to this.”
But bill supporters say the state laws create a patchwork of labeling legislation, leaving consumers unsure of risk levels or even scared of “harms that do not exist,” Rep. Adam Kinzinger (R-Ill.), who co-sponsored the House version, said in a statement. Current labeling “desensitizes the public from heeding serious warnings on health risks, and imposes unnecessary and costly regulatory burdens for producers.”
The federal initiative, which is supported by dozens of trade groups including the National Retail Federation, seeks to simplify and standardize the way retailers label their products, including allowing them to leave “trace” substances off labels and letting companies move ingredient lists online in lieu of the on-package disclosure mandated by some states.
States’ RightsThe bill would amend the Fair Packaging and Labeling Act, a 1967 measure administered by the Federal Trade Commission and the Food and Drug Administration that governs consumer products.
If state or local governments want to enact stricter rules—like California’s Prop 65 that warns consumers if a product contains chemicals known to cause cancer or reproductive harm—they’d have to prove why they’re needed. States would be required to use “science-based criteria” in developing their own disclosure laws and the “best available science and the weight of the evidence” in evaluating whether substances are harmful, the text of the bill says.
If states “want to add labeling requirements or warnings, they can do so,” said Claire Parker, a spokeswoman for the newly-formed industry group Coalition for Accurate Product Labels. “But they need to show their work and demonstrate there is sound science behind it.”
That alarms opponents, who argue the evaluation methods wouldn’t take into account the quality of scientific studies and would allow policy makers to exclude newer research on the harmful effects of some substances.
Bill StatusThe Senate version of the bill introduced by Sen. Jerry Moran (R-Kan.) has no Democratic co-sponsors, while the House version has co-sponsors on both sides of the aisle.
Both measures were introduced earlier this month and haven’t been scheduled yet for committee hearings or put on the House and Senate calendars for a vote.
If the bill were passed, David Levine, chief executive officer of the American Sustainable Business Council, predicts it would trigger a flood of lawsuits challenging the state rules—which would ultimately hurt the consumer, he said.
“With the undermining of regulations on all fronts, we have moved ahead” to pass state laws like California’s new cleaning products disclosure bill, he said. “If we can’t regulate the chemicals out of the marketplace at the moment, let’s let consumers know what’s in it. If you’ve got safer products, then you shouldn’t be afraid of transparency.”
https://news.bloombergenvironment.com/environment-and-energy/battle-builds-around-a-new-product-labeling-bill-in-congress
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EPA Issues LRRP Penalty Guide After Whistleblower Complaint
Jun 18, 2018 | Inside EPA
EPA has issued new enforcement guidance for its rule governing remediation of lead paint in residential structures to ensure that inspectors consider potential lead exposures to pregnant women or children due to their presence during repair work in assessing penalties, after a former agency employee reported inadequate inspections under the rule.
The whistleblower group Public Employees for Environmental Responsibility (PEER), June 14 announced the new guidance for EPA's lead renovation, repair and painting rule (LRRP), which the group said was issued in response to a complaint from a former lead advisor in EPA's Region 4 who alleged shoddy inspection practices, including agency staff throwing away enforcement files.
The group released a March 19 letter from former EPA Acting Deputy Administrator Michael Flynn to Karen Tanenbaum, an attorney in the U.S. Office of Special Counsel's Retaliation and Disclosure Unit that detailed the guidance.
“EPA has issued guidance on the enforcement response and penalty policy (“ERP”) for the Lead RRP Rule and a supporting inspection manual that addresses the need for information on the presence of pregnant women or children,”
“Both the ERP and the inspection manual are widely distributed among [enforcement office] staff, including the Regions, and posted publicly,” the letter says.
While the group did not release the policy, Flynn said in his letter that it “instructs enforcement personnel to use information on the presence of pregnant women or children under 18, if it is available, to select a gravity-based penalty from the penalty matrix.”
Flynn added that the policy “assigns a penalty category in cases where information is known about the occupancy by pregnant women and children."
“Because sometimes it is impossible to obtain information on pregnant women and children, the ERP also addresses how the matrix should be applied in the absence of this information.”
Flynn says that EPA would also issue a national policy statement to all of its regions re-emphasizing the importance of inspectors seeking information on whether pregnant women and children were exposed to lead hazards during renovation, repair or painting, which the letter says has been a long-standing agency policy.
EPA's 2008 LRRP rule covering maintenance work in residences and child care facilities built before 1978 -- when production of lead paint was banned -- addresses the hazard that disturbed lead dust could pose to human health, particularly to children, whose developing nervous systems are most susceptible to the potent neurotoxin.
Before 1978, lead-based paint was commonly used, and lead dust can result when the old paint is disturbed.
The guidance and national policy statement follow an April 2016 PEER complaint to the Office of Special Counsel on behalf of Elizabeth Wilde, the former agency lead advisor to EPA's Southeastern Regional Office in Atlanta.
She alleged poor inspection practices, including that EPA often failed to identify child-occupied units, entered false inspection reports and failed to collect evidence or adequately maintain files, according to a PEER statement.
The complaint also has triggered agency EPA pledges to maintain inspector training and credentialing, as well as enforcement files, the statement says.
“While I am pleased with these improvements, I am struck at EPA’s failure to hold anyone to account for the past deficiencies which put the very people we are trying to help at risk,” Wilde says in the PEER statement. “Without accountability what prevents these new protocols from also being ignored?”
https://insideepa.com/daily-feed/epa-issues-lrrp-penalty-guide-after-whistleblower-complaint
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Canada Restricts Pigment Red 4 in Cosmetics
Jun 19, 2018 | Chemical Watch
Canada has added pigment red 4 to its list of restricted substances in cosmetics, according to recently published amendments to its Cosmetic Ingredient Hotlist.
The list lays out the substances that are inappropriate for use in cosmetics, are restricted, or that require hazard labelling. It was last updated in 2015.
The government's changes follow a proposal made last November. Pigment red 4 is added to its list of restricted substances, with a maximum concentration of 3% permitted. Action on the dye was taken due to "potential health concerns" identified under the nation’s Chemicals Management Plan (CMP).
The list reflects changes relating to the preservative methylisothiazolinone (MI). They include its prohibition in leave-on cosmetic products, and a reduction of the maximum allowed concentration in rinse-off products to 0.0015%, due to the risk of sensitisation. This brings Canada’s regulation in line with Europe’s.
The update also clarifies that a mixture with methylchloroisothiazolinone (MI/MCI), when used in the same product as MI alone, cannot exceed a total combined concentration of 0.0015%.
The government has added information to its entry on the biocide, chloramine T, and expanded a ban on oleandrin to cover the entire nerium oleander plant.
https://chemicalwatch.com/67827/canada-restricts-pigment-red-4-in-cosmetics
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China Leaves Liquefied Natural Gas Off Tariff List
Jun 18, 2018 | BNA Daily Environment Report
By Ryan Collins
In punching back against U.S. tariffs, China included almost all energy-related commodities on a list of its retaliatory actions. The exception is liquefied natural gas.
That’s not surprising, according to a report June 18 by Wood Mackenzie Ltd., a U.K.-based research firm. After an aggressive coal-to-gas switching policy was put in place by China’s government last year to fight the country’s smog issues, U.S. LNG supplied 4 percent of that country’s demand, the report said.
President Donald Trump announced $50 billion in tariffs against China June 15, and China retaliated with a $34 billion list. Oil was included but not LNG. The reason: China’s LNG demand will grow by 10 million tons this year, and 9 millions tons in 2019, the Wood Mackenzie report said. The U.S., meanwhile, is set to generate 30 percent of incremental supply growth in LNG.
“In the event of an escalation, LNG is likely to remain outside the bounds of any additional tariffs,” Nicholas Browne, head of Asia-Pacific gas and LNG at Wood Mackenzie, wrote in a note to clients. “Tariffs on U.S. LNG would increase costs and potentially limit availability of LNG.“
While there are only two export facilities operating in the U.S., at least three more terminals could come online by this time next year. America is on the path to being the world’s largest supplier of the fuel, surpassing Australia and Qatar within five years.
The decision by China comes following a winter in which the country’s natural gas imports from Central Asia, a long-time source of the fuel via pipeline, slipped, worsening a winter shortage and increasing the world’s biggest energy user’s reliance on seaborne supplies.
https://news.bloombergenvironment.com/environment-and-energy/china-leaves-liquefied-natural-gas-off-tariff-list
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China Hits Back at Trump, but LNG Stays Untouched
Jun 18, 2018 | Platts
By Abache Abreu
Given the central role that both countries envisage for bilateral LNG trade in their national energy strategies in the years ahead, it was not entirely surprising that Beijing opted to exclude LNG from its threat to impose an additional 25% tariff on $50 billion worth of US goods, including energy and agricultural products.
LNG is playing an increasingly important role in China’s energy security. China surpassed South Korea as the world’s second largest LNG importer in 2017, its LNG demand is on track to hit 47 million mt in 2018 and could exceed that of Japan by 2030, as Beijing seeks to raise the proportion of gas in the country’s energy mix to 15%, according to S&P Global Platts Analytics.
China’s dependence on US LNG is also on the rise. This is supported by a ramp-up in US Gulf LNG production, declining supplies from Southeast Asian legacy producers and limited spot availability from eastern Australia, where rising domestic gas prices have created political opposition to LNG exports. China has imported around 1.61 million mt so far in 2018, almost as much as it imported in the full year 2017.
Meanwhile, rebalancing fundamentals in Asia Pacific have continued to push up prices, with the Platts JKM averaging nearly $9/MMBtu over January-May 2018, up from $6.5/MMBtu a year earlier. This has made inter-basin trade inflows from the Atlantic and the US Gulf Coast increasingly vital to meet Asia’s spot demand and balance regional fundamentals, especially over the peak winter demand period.
The US-China bilateral LNG trade not only plays a role in short-term fundamentals and supply security. Long-term energy agreements backed by Chinese companies have underpinned US LNG projects such as Cheniere’s Corpus Christi Train 3, Delfin floating LNG and the Alaska LNG project, and helped ensure additional LNG supplies are ready to come online as the LNG market marches towards a supply squeeze in the early-mid 2020s.
The trade war between the US and China escalated on Saturday with China threatening an additional 25% tariff on $50 billion worth of US goods, including energy and agricultural products, in response to President Donald Trump’s decision to place similar tariffs on the same annual value of Chinese product imports.
Among the $50 billion worth of US goods, the additional tariff on a total $34 billion worth of US agricultural products, cars and marine products are due to come into effect on July 6, according to an announcement by the Customs Tariff Commission of the State Council.
Additional duties on the remaining $16 billion of US goods, including crude oil, LPG, gasoline, naphtha, fuel oil and natural gas, will be announced at a later date.
The latest tariff threat between the two biggest economies comes less than a month after Beijing and Washington on May 19 inked an agreement to put the brakes on their trade dispute after China agreed to buy more US goods, key among them being LNG and crude oil.
US tariffs and China’s retaliatory rhetoric have emerged as a big risk for commodity demand and prices in 2018, alongside a slowdown in the Chinese economy and geopolitical uncertainty.
http://blogs.platts.com/2018/06/18/china-hits-back-lng-untouched/
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China's $83.7B Plans for West Virginia Shale, PetChem Projects in Jeopardy As Trade War Escalates
Jun 18, 2018 | Natural Gas Intelligence
By Jamison Cocklin
As fears over a trade war with the United States loom, executives from China Energy Investment Corp. canceled an appearance they were scheduled to make at an industry conference in Pittsburgh this week, where a key announcement was expected about its multi-billion dollar plans for shale gas-related projects in West Virginia.
Brian Anderson, director of West Virginia University’s (WVU) Energy Institute, said as recently as a month ago, China Energy was expected to attend the Northeast U.S. Petrochemical Construction Conference to announce specifics about the “first, or first few projects” the state-owned company planned to develop as part of a memorandum of understanding (MOU) with West Virginia to spend $83.7 billion in the state over the next 20 years.
“What has happened, outside of the business sector, outside of the business decisions that involve net present values and return on investments, is a pending trade war between the U.S. and China that has put this project in jeopardy,” said Anderson, who has worked closely with the company over the years and is working to make the MOU become reality. “And quite frankly, the delegation from China Energy was going to include the CEO, who was going to be here in this room today, and they canceled their trip three weeks ago specifically citing the pending trade wars.”
The Trump administration announced a 25% tariff on $50 billion worth of Chinese goods last week, fulfilling a campaign promise that the president believes will better protect American jobs. China retaliated immediately, announcing a similar package and calling on other countries to act in what could pose broader threats to the global economy.
Tensions have only been building after the European Union, Canada and Mexico each took retaliatory steps against the United States last month after the Trump administration imposed a 25% tariff on steel imports and a 10% tariff on aluminum imports.
Ironically, West Virginia’s MOU with China Energy was signed last November at a meeting with Trump and Chinese President Xi Jinpingn. It outlined plans for China Energy, the world’s largest power company, to spend heavily in the state on electricity generation, underground natural gas liquids storage and chemical manufacturing projects.
The company was formed last year after the Chinese government approved a merger between Shenhua Group Corp., then its largest coal miner, and China Guodian Corp., which was among the country’s largest power companies. The Shenhua Group had long worked with WVU on joint coal-related research. It also has interests in Marcellus Shale wells in Pennsylvania.
“It’s a behemoth company that is very much looking forward in terms of technology and innovation,” Anderson said on Monday during a presentation he gave at the conference. “They have a vision to become a much more western company than a typical state-owned enterprise.”
Details about the proposed projects and where they could be sited have not yet been released. But boths sides have reportedly been working out the details.
Charles Schliebs, managing director of Pittsburgh-based Stone Pier Capital Advisors LP, who is also chairman of this year’s conference, said he was aware that China Energy was expected to attend the event. Until Anderson delivered his comments on Monday, Schliebs told the crowd that he had heard an announcement from China Energy was likely sometime in the third quarter.
http://www.naturalgasintel.com/articles/114759-chinas-837b-plans-for-west-virginia-shale-petchem-projects-in-jeopardy-as-trade-war-escalates
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Shale Gas Boom Calls for $280 Billion of Pipes in U.S., Canada
Jun 19, 2018 | BNA Daily Environment Report
By Rachel Adams-Heard
Surging natural gas production in the U.S. and Canada will require nearly $280 billion of new pipelines by 2035 as producers seek to expand markets for the heating fuel.
Developers will lay down roughly 1,400 miles (2,240 kilometers) of gas pipelines a year over 18 years to keep up with supply, according to a report from consulting firm ICF commissioned by the Interstate Natural Gas Association of America.
Much of the spending will be in the U.S. Northeast, where record output in the Marcellus Shale natural gas field will need to find its way to consumers and a growing number of liquefied natural gas export terminals. In Canada, the Duvernay and Montney shale formations have seen drilling increase, and Royal Dutch Shell Plc is among proponents of an export terminal on the Pacific Coast.
“This is a pretty healthy environment for infrastructure development going forward,” Kevin Petak, vice president at ICF, said at a press conference webcast from Washington.
Growing LNG exports have put the U.S. on course to challenge Australia and Qatar for dominance in the global seaborne market for the fuel. But soaring investment in North American pipeline capacity comes as the costs for materials used to build those projects have increased “significantly” in recent years, Ingaa said in a statement.
Cost hikes are emphasized by a 25 percent tariff on U.S. imports of foreign steel, which adds “uncertainty” to companies’ future plans, Don Santa, head of the trade group, said at the report launch. That could erode some of the industry’s overall impact on economic growth, he said, which the report sees contributing $1.3 trillion to U.S. and Canadian gross domestic product by 2035.
https://news.bloombergenvironment.com/environment-and-energy/shale-gas-boom-calls-for-280-billion-of-pipes-in-us-canada
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Studies Show Groundwater Holding Own Against Drilling Boom
Jun 19, 2018 | AP (In The Washington Post)
By Michael Rubinkam
New research suggests drinking water supplies in Pennsylvania have shown resilience in the face of a drilling boom that has turned swaths of countryside into a major production zone for natural gas.
Energy companies have drilled more than 11,000 wells since arriving en masse in 2008, making Pennsylvania the nation’s No. 2 gas-producing state after Texas. Residents who live near the gas wells, along with environmental groups and some scientists, have long worried about air and water pollution.
Two new studies that looked at groundwater chemistry did not find much of an impact from horizontal drilling and hydraulic fracturing — or fracking — the techniques that allow energy companies to extract huge volumes of oil and gas from shale rock deep underground. The results suggest that, as a whole, groundwater supplies appear to have held their own against the energy industry’s exploitation of the Marcellus Shale, a rock layer more than a mile underground that holds the nation’s largest reservoir of natural gas.
In a study published Monday, a team from Yale University installed eight water wells and drew samples every few weeks for two years — during which seven natural gas wells were drilled and fracked nearby — to measure changes in methane levels at various stages of natural gas production. Methane is not toxic to humans, but at high concentrations it can lead to asphyxiation or cause an explosion.
Researchers found that methane spiked in some water wells but attributed rising methane levels to natural variability, not drilling and fracking. Their findings were published in the journal Proceedings of the National Academy of Sciences.
Natural variability “is potentially a lot greater than previously understood,” said Yale University hydrologist James Saiers, a study co-author. That’s important, he said, because residential water wells are typically tested only a few times before and after the start of drilling. “Before-and-after sampling might not be sufficient and might lead to misattribution of sources of methane,” Saiers said.
Rob Jackson, a Stanford University scientist who has studied the impact of drilling on groundwater, challenged the researchers’ assertion that elevated methane levels in the water wells had nothing to do with natural gas development, though he agreed the gas found in the water did not come from the Marcellus Shale.
“The simplest explanation is that something associated with drilling and hydraulic fracturing caused shallower gas to migrate into the monitored aquifers,” Jackson, who was not involved in the study, said via email.
Penn State University scientists, meanwhile, obtained an enormous trove of data from the Pennsylvania Department of Environmental Protection — 11,000 groundwater samples collected since 2010 — and, using what they said was a novel data-mining technique, concluded that water quality is either unchanged or even slightly improved for substances like barium, arsenic and iron.
The authors found slightly elevated concentrations of methane near only seven of 1,385 shale wells in the study area.
“It really doesn’t look like the groundwater chemistry has gotten worse, even though we’ve had this huge number of shale gas wells drilled,” said Susan Brantley, a Penn State geoscientist and study co-author.
Their research , which also looked at a small number of water samples taken before 1990, appeared in the journal Environmental Science & Technology.
Allen Robinson, a Carnegie Mellon University engineering professor who wasn’t involved in the study, said the large sample size represented an improvement over earlier studies, but he questioned whether researchers’ focus on just one county — Bradford County, one of the state’s drilling hotspots — might have skewed the results.
“Overall the data demonstrate that there is certainly not a crisis around ground water contamination and unconventional oil and gas activity. That is good news,” he said via email. “However, it does document some contamination. Is ‘rare’ contamination around a few percent of wells acceptable? That is a policy question.”
Environmental regulators have held drillers liable for tainting more than 300 residential water supplies statewide over the years, while homeowner lawsuits have accused gas companies of polluting the water with methane, heavy metals and toxic drilling chemicals. Older research linked faulty gas wells to tainted water.
The latest studies “reflect our industry’s deep commitment to environmental and groundwater protection,” David Spigelmyer, president of the Marcellus Shale Coalition, an industry group, said in a statement.
https://www.washingtonpost.com/national/energy-environment/studies-show-groundwater-holding-own-against-drilling-boom/2018/06/18/b95d5dcc-7334-11e8-bda1-18e53a448a14_story.html?utm_term=.006bb0b83b92
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The Technology Behind Building a $6B Ethane Cracker
Jun 19, 2018 | Pittsburgh Business Times
By Paul J. Gough
Robots. Drones. The latest in computer simulation and part tracking. It’s all part of Shell Chemicals’ playbook when it comes to the building of its ethane cracker in Potter Township.
The multinational corporation pulled back the curtain — for a mostly technical audience at a chemical-industry conference in downtown Pittsburgh — on some of its strategy and execution for the petrochemical plant that is under construction, employing up to 6,000 construction workers over the next several years and 600 permanent jobs.
Shell’s using a lot of technology — including some that hadn’t been developed even a few years ago — as it builds the state-of-the-art ethane cracker, which could be the harbinger of a much greater petrochemical industry in Appalachia.
In separate presentations Monday at the Northeast U.S. Petrochemical Construction Conference, Shell Chemicals Vice President Hilary Mercer and Project Director Anca Rusu talked in wide-ranging detail about how technology is informing every part of the construction of the plant. Shell, for instance, is deeply invested in the Internet of Things, where all kinds of devices in the home, workplace and job site are connected to the cloud.
While Shell made the final investment decision in June 2016, it had been planning and investigating every aspect of the decision — from the markets it would serve, the logistics and the past and future regional workforce needs — for years before that. And it had concluded the engineering for the project before the construction work on the plant itself had begun, allowing Shell to employ a granular and tech-focused approach to construction that it said maximizes efficiency and safety. That's where the drones, robots and virtual reality come in.
That also means using radio-frequency identification tags on everything, down to the last bolt, heading from all over the world to the ethane cracker construction site and combining logistics and vendor databases to get an unprecedented real-time handle on what's happening in construction and, just as important, what will happen.
"Every piece of commodity and equipment is tagged so we know at any point in time where they are," Rusu said. That's no mean feat given the fact that pieces of the ethane cracker are being brought in from overseas through ports mainly in the South and then up the Mississippi and Ohio rivers by barge to Potter Township.
It's taken a lot of effort, Rusu said, but it's also been invaluable.
"We pretty much known where every single widget is," Rusu said.
That's also informed how the construction crews are preparing and working on the site, with Shell making sure that everything is in place and well ahead of each crew's assignments, as long as 90 days ahead of time.
Shell also looked beyond the chemical industry for inspiration to the pharmaceutical, electrical generation, auto manufacturing and aviation industries that employ lean manufacturing techniques.
“In our industry, we need to pay more attention to those approaches, and that’s what we did,” said Rusu, who has been involved with the Potter Township cracker project since 2013.
https://www.bizjournals.com/pittsburgh/news/2018/06/18/the-technology-behind-building-a-6b-ethane-cracker.html
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Ongoing Labor Shortage Could Hamper Future Petrochemical Projects in Region
Jun 18, 2018 | The Times
By Jared Stonesifer
The shale gas revolution has resulted in unprecedented opportunity in the petrochemical industry for western Pennsylvania, but an ongoing labor shortage could hamper future projects here.
PITTSBURGH — The shale gas revolution has resulted in unprecedented opportunity in the petrochemical industry for western Pennsylvania, but an ongoing labor shortage could hamper future projects here.
Tony Salemme, a vice president with a company called Industrial Info Resources, extensively tracks 12 different segments of labor in every corner of the country.
Speaking at a conference Monday, he said there is currently a deficit of nearly 4,000 laborers in the Pittsburgh region this year, and western Pennsylvania remains at “high risk” for a shortage until at least 2021.
The problem isn’t unique to Pittsburgh either.
“We’re seeing shortages in metropolitan areas where we’ve never seen them before,” he said.
The problems facing labor are many and varied, he said. Perhaps most concerning, Salemme said he doesn’t see an immediate solution to the issue.
“This is the greatest opportunity we’ve had in five generations, yet we’re falling down,” he said.
One of the success stories for labor is the ongoing construction of the Shell Chemicals ethane cracker plant in Potter Township.
Anca Rusu, the project director for the cracker plant, said Monday that labor was one of the very first issues she tackled when coming on to the project in 2013.
It’s taken five years of extremely detailed planning to get to where the project is now, she said, which included countless meetings with local, regional and international labor officials.
Communication with labor officials was and still is paramount, she said, as those officials understand Shell’s desire that construction be as “efficient and lean” as possible, Rusu said.
But Rusu said she also had to look to other industries, like aviation and car manufacturers, to glean more insight into their efficiencies and procedures, because minor inefficiencies can cause major setbacks on projects the scale of Shell’s cracker plant.
“We looked at other industries and their conveyor-like way of executing their businesses,” she said.
Despite that, Shell had to do its part to sell itself to local labor. She said Shell from the beginning strived to be the “project of choice” in the region and a project that would be desirable for laborers.
Shell is just the first of what could be several petrochemical projects in the region, but uncertainty remains rampant as prospective laborers want more guarantees that they’ll have work, according to a local labor official.
Ed Hill, the business development manager for the International Brotherhood of Electrical Workers, said his agency spends $150 million annually on training new members. Despite that commitment shown to prospective laborer, unions like IBEW aren’t getting the same level of commitment in return because union work is a job-by-job basis.
“We make the investment,” he said. “But they want to know ten years down the road that they’re going to have work.”
Despite the uncertainty facing most local trades, Rusu said Shell continues “ramping up more and more” with labor on-site in Potter Township. At the height of construction on the cracker plant, about 6,000 workers will be involved.
http://www.timesonline.com/news/20180618/ongoing-labor-shortage-could-hamper-future-petrochemical-projects-in-region
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(ACC Mentioned) Peter Wright’s 50+ Chemical Facility Conflicts: A Disaster Waiting to Happen
Jun 18, 2018 | Union of Concerned Scientists (Blog)
By Genna Reed
Peter Wright, President Donald Trump’s nominee to lead the EPA’s Office of Land and Emergency Management, will face the Senate Environment and Public Works committee at his nomination hearing this Wednesday. Mr. Wright has spent the majority of his career working as an attorney for Dow Chemical Company (now DowDuPont). Would he make a smooth transition from defender of polluters to defender of the public? Under Pruitt’s lead, it seems unlikely that public safety would be at the top of his agenda.
As I wrote back in April, Mr. Wright is on tap to lead the EPA’s chemical hazards arm, including the Superfund program and the Risk Management Program (RMP). The agency is currently “reconsidering” the Chemical Disaster Rule, which would have improved the RMP by helping to make the communities surrounding the 12,500 facilities regulated under the program safer and better informed.
DowDuPont itself, or one of its subsidiaries, owns over 50 RMP facilities. An analysis of EPA data on accidents at those facilities shows that Dow, DuPont, and their subsidiaries averaged 7 chemical disaster incidents per year, for a total of 99 fires, explosions, spills or gas releases from 2004 to 2016. These accidents resulted in the deaths of 6 workers and caused over 200 people to be hospitalized or seek medical treatment for injuries.
Here are just a few accounts of accidents from those DowDuPont facilities:At Dow’s Texas Operations plant in Freeport, TX, there have been a series of reported accidents from 2004 to 2016. One July 2014 fire resulted in $200,000 property damage, and a liquid spill later that month injured two employees. Then, in July 2015, a gas release and liquid spill shut down a major highway for several hours. Neither the city of Freeport nor its residents were informed by Dow Chemical; instead they learned of the release from the local news network. Freeport’s fire chief, who should have been notified by Dow through the community awareness and emergency response line, told reporters, “We can’t be left in the dark while we are trying to protect our community.”In Hahnville, LA, Dow’s St. Charles operations had a chemical leak of ethyl acrylate in July 2009. Parish residents reported respiratory impacts that sent almost 30 people to the hospital with eye and nose irritation. Dow notified the St. Charles Parish Emergency Operations Center (EOC) about the leak, but it was unclear whether the EOC had adequate information from the company about the chemical’s risks. This facility has continued to have issues, including a 2014 liquid spill that injured one worker and a 2015 gas release that injured three plant employees.A particularly infamous DuPont facility accident occurred at its insecticide plant in La Porte, TX in November 2014. Two workers died when exposed to methyl mercaptan as they were attempting to fix what they thought was a routine problem, and two other workers died after responding to the others’ distress call. After an investigation into the disaster, Chemical Safety Board chairperson Vanessa Allen Sutherland said that “this investigation has uncovered weaknesses or failures in DuPont’s safety planning and procedures.” These weaknesses includedinadequate gas detectors, nonfunctional ventilation fans, outdated alarms, no system in place to measure the quantity of toxins leaked beyond property lines, an inadequate process of assembling an internal response team, and nonfunctional emergency vehicles. This plant had been fined in the past for spills and gas releases that had injured workers. In 2015, the Occupational Safety and Health Administrationissued penalties summing $273,000 to DuPont for a variety of violations at this plant, and the company finally announced that it would be closing the plant in 2016.
Note that all three of these facilities are at increased risk of flooding due to hurricanes, like the disaster at the Crosby, TX Arkema plant as a result of Hurricane Harvey last summer. Improvements to the chemical safety rule would have helped facilities plan how to manage for future floods, including implementing plans crucial for mitigating incidents and exposures. As EPA prepares to rescind such improvements, Administrator Scott Pruitt is allowing business as usual at these facilities, which face the increased threat of potential flooding, spills, and releases as a result of natural disasters.
Accidents at chemical facilities that may injure and sometimes kill plant workers and residents of nearby communities are not to be taken lightly. There have been 46 such incidents already this year. The future head of OLEM should be advocating for changes at plants that help to prevent disasters like these from ever happening. The Chemical Disaster Rule would have helped to ensure that adequate measures were in place so that emergency responders have rapid access to chemical risks before entering buildings after reports of a spill or release.
Mr. Wright has spent years defending Dow Chemical Co, a member of the American Chemistry Council, which has lobbied long and hard to avoid more safety precautions for chemical plants to save its member companies the money it would cost to make critical preparedness updates. At his hearing on Wednesday, Senators should ask Wright for one reason to trust that he would be looking after the public interest in his role at OLEM, because advocates in favor of the RMP amendments who spoke at last week’s public comment hearing certainly don’t see a 20-year run at Dow Chemical as supporting evidence. Perhaps Savannah Georgia community organizer Mildred McClain characterized the current situation best when she told the EPA, “If industries were authentic in their pursuit of justice for the communities, they would listen to the voices of the residents…The companies will just keep saying ‘I’m meeting the EPA standard’ while the community members are saying, ‘but we’re sick, we still smell stuff and we still don’t have a concrete plan as to what we’d do if there was a major disaster.”
While we wait to see how Mr. Wright responds to Senate questioning this week, there is still plenty of time to comment on the EPA’s proposed rule which is open until June 29th. You can join us in urging Pruitt to consider worker and community health over industry costs by submitting a comment today. For assistance developing a strong comment, check out this RMP public comment guide.
https://blog.ucsusa.org/genna-reed/peter-wrights-50-chemical-facility-conflicts-a-disaster-waiting-to-happen
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Environmentalists, Industry Spar Over EPA's Refinery Air Rule Revisions
Jun 18, 2018 | Inside EPA
By Stuart Parker
Environmentalists and oil industry groups are sparring over EPA's proposed revisions to its Clean Air Act “major source” rules for the refining sector, clashing over the agency's acceptance of air emissions from pressure relief devices (PRDs), its requirements for fenceline monitoring of toxics emissions, and several other issues.
Several groups filed comments ahead of a May 25 deadline arguing that EPA's April 10 amendments to its national emissions standards for hazardous air pollutants (NESHAP) and related new source performance standards (NSPS) for oil refineries are either too strict or too lenient.
The agency says that the proposal is highly technical and responds to oil industry petitions for reconsideration of a 2015 Obama EPA rule that updated air standards for refineries.
But environmentalists warn the proposal would weaken the rule. A coalition of groups including Air Alliance Houston, Environmental Integrity Project, Sierra Club and others in May 25 comments says, “Although EPA has described some of these issues as technical clarifications, the changes discussed below would significantly weaken the standards, undermine compliance and enforcement, and are not lawful or rational.”
The groups list proposed actions they say EPA should not take, arguing for example that the agency should not: allow certain uncontrolled emissions from maintenance vents, add additional and harmful malfunction exemptions for certain pressure relief devices (PRDs), weaken flare operating requirements in the 2015 rule, or weaken, reduce or delay reporting and monitoring requirements.
“In particular, EPA can have no lawful or rational basis to weaken, reduce, or delay the critical fenceline monitoring provisions designed to assure adequate control of fugitive emissions that cause severe health threats to local communities,” the groups say.
The proposed amendments pertain to maintenance venting requirements and associated recordkeeping and reporting; operating requirements for steam-assisted flares; fenceline monitor placement; delayed coker vent standards; and the types of PRDs subject to the PRD atmospheric release work practice standards, among other issues. Delayed cokers are used in refineries in the production of petroleum coke, a common fuel.
The proposal would ease fenceline monitoring obligations and also expand the range of PRDs exempt from emissions control requirements.
The comments reprise a long-running dispute between environmentalists and EPA over its refinery rules, after the Obama EPA sought to tighten the rules, but ultimately dropped a position that would have prohibited emissions from PRDs. Also, EPA has allowed exemptions for “smoking” flares, and for ill-defined force majeure events, the groups say.
Industry's Comments
Two oil industry groups -- the American Petroleum Institute (API) and American Fuel and Petrochemical Manufacturers (AFPM) -- in their joint May 25 comments broadly support the proposal, yet also find fault with aspects of it they view as unclear or too stringent.
“API and AFPM strongly support many of the important corrections, clarifications and improvements to the Refinery Sector Rulemaking (RSR) included in this proposal. In a few cases, we believe a proposed revision imposes unjustified new requirements or the regulatory language proposed does not achieve the intent presented in the preamble or creates conflicts that need to be addressed,” the groups say.
The groups identify as areas of concern: new requirements for delayed coker units using the “water over” production method, “where there is minimal HAP impact and burdens (including costs) are very high;” the requirement to calibrate flow monitors, “particularly those associated with flares, every two years rather than at manufacturer’s recommended intervals,” which “will result in unnecessary monitor outages and, in some cases, unnecessary flare and process outages and/or reduced flare control;” and the “unnecessarily burdensome recordkeeping and reporting requirements associated” with some controls on volatile organic compounds (VOCs).
Further, “The failure to address pressure relief devices and controlled sources as part of the new exception from adding an additional fenceline monitor will unnecessarily require addition of monitors,” the groups say.
The Small Business Administration's Office of Advocacy in its May 24 comments “reiterates its comments of October 28, 2014, opposing the imposition of fenceline monitoring requirements on small refiners. EPA should consider broader relief from the fenceline monitoring than the limited technical changes proposed.”
New Refinery
Meanwhile, in an unrelated development, Meridian Energy Group June 13 announced that it has won a Clean Air Act permit from North Dakota regulators to build the first new “greenfield” refinery in 40 years, according to a statement by the company.
“This marks the first time that a full-conversion refinery of this size and complexity has been reviewed and approved as a Synthetic Minor Source. Securing this classification reflects Meridian’s innovative design, and dedication to attain the lowest achievable emission rates ever seen in a full-conversion oil refinery,” the company says.
Synthetic minor sources are sources that voluntarily restrict their “potential to emit” air emissions to below thresholds that would trigger compliance with EPA's major source NESHAP and NSPS rules.
https://insideepa.com/daily-news/environmentalists-industry-spar-over-epas-refinery-air-rule-revisions
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Energy CEOs, Obama Climate Officials Form CCS Group
Jun 19, 2018 | E&E Daily
By Christa Marshall
Coal, oil and utility CEOs and top climate officials from the Obama administration are forming a new leadership council to push carbon capture legislation and policies.
The group will be part of the Carbon Capture Coalition, an organization advocating for bills such as the "Utilizing Significant Emissions With Innovative Technologies (USE IT) Act," S. 2602, that passed the Senate Environment and Public Works Committee this month.
It also will back broader state policies and industry actions that could help deploy technologies capturing CO2 from fossil fuels and utilizing or storing the greenhouse gas.
The National Carbon Capture Leadership Council initially will include Bipartisan Policy Center President Jason Grumet, Prairie State Generating Co. CEO Don Gaston, Occidental Petroleum Corp. CEO Vicki Hollub, Utility Workers Union of America President Mike Langford, Cloud Peak Energy Inc. CEO Colin Marshall, Center for Climate and Energy Solutions President Bob Perciasepe, and William and Flora Hewlett Foundation Environment Program Director Jonathan Pershing.
Pershing previously was a top climate adviser to former Energy Secretary Ernest Moniz and President Obama. Perciasepe was a deputy EPA administrator during the Obama administration.
"The formation of the council represents a commitment from top business and [nongovernmental organization] leaders to work together to ensure recent progress moves into higher gear, and leads to further technology advancements, new applications and the construction of a new generation of capture projects in the ground," said Jeff Bobeck, energy policy director at the Center for Climate and Energy Solutions and co-director of the Carbon Capture Coalition.
The leadership council could add members outside the coalition, and its objectives include promoting carbon capture through "personal engagement and outreach to federal and state elected officials," according to a statement.
The council will host an annual meeting, have quarterly calls and decide independently which policies it wants to focus most on, a coalition official said.
The William and Flora Hewlett Foundation, John D. and Catherine T. MacArthur Foundation, Bernard and Anne Spitzer Charitable Trust, and Energy Foundation are funding the group.
The coalition, which includes more than 50 companies and organizations, formed in February to advance carbon capture technology (Greenwire, Feb. 23). It is supporting various bills introduced in Congress that would support carbon capture, utilization and storage projects, including through private activity bonds and master limited partnerships.
The "USE IT Act" would amend the Clean Air Act and other federal laws to expedite permitting for CO2 pipelines and authorize new research (Greenwire, May 22).
Last week, the Nature Conservancy announced it was joining the coalition.
The council follows the creation in April of the Energy Advance Center, a lobbying group that includes Southern Co. and other oil interests aiming to promote CCUS technology.
The center is also supporting the "USE IT Act" but is separate from the coalition and has not publicly announced its full legislative agenda.
https://www.eenews.net/eedaily/2018/06/19/stories/1060085029
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