ACC PM 17/07/18

Industry and Association News

1. (ACC Blog) Transparency, Objectivity and Modern Scientific Practices Critical for Regulatory Decisions

   Jul 17, 2018 | American Chemistry Matters

   Utilization of transparent, objective and modern scientific approaches to draw conclusions regarding human health risk is critical to developing sound regulatory decisions.
2. (ACC Mentioned) 4 Chemical Stocks Poised to Outshine Q2 Earnings Estimates

   Jul 17, 2018 | Zacks.com

   The chemical industry is riding on an upturn in the global economy and strength across major end-use markets such as construction and automotive.
3. (ACC Mentioned) Sidley Austin’s Peter Keisler Takes on More Formal Role for AT&T in Antitrust Appellate Battle

   Jul 17, 2018 | Law.com

   By C. Ryan Barber
   
   
   During the six-week trial over AT&T’s planned acquisition of Time Warner, Sidley Austinpartner Peter Keisler was a constant presence in court, looking on as O’Melveny & Myers’ Daniel Petrocelli mounted a successful defense of the $85 billion deal.
4. (ACC Mentioned) Groups File FOIA Request for EPA-Industry Communications Over Agency Decision to Ignore Key Exposures to Asbestos, Other Toxic Chemicals

   Jul 17, 2018 | Environmental Working Group

   Today American Oversight and the Environmental Working Group petitioned the Environmental Protection Agency for release of documents detailing contacts between former EPA chief Scott Pruitt and the chemical industry ahead of the agency’s decision to exclude major sources of exposure when evaluating the health risks of asbestos and three other highly toxic chemicals.
5. EDF Calls on EPA to Withdraw Censored Science Proposal

   Jul 17, 2018 | Environmental Defense Fund

   Experts for Environmental Defense Fund (EDF) called on the Environmental Protection Agency (EPA) today to withdraw the “censored science” proposal – a proposed rule that would bar the agency from considering some of our most important public health studies in making decisions about vital protections for human health and the environment.
6. EPA Proposal to Limit Science Studies Draws Opposition

   Jul 17, 2018 | Bloomberg (In Houston Chronicle)

   By Mohammed Aly Sergie
   
   
   U.S. Senator Chuck Grassley, along with a fellow Republican and two Democratic lawmakers, introduced legislation in the Senate that’s aimed at allowing the government to bring lawsuits against OPEC members for antitrust violations.
7. Witnesses Slam 'Secret Science' Rule at Public Hearing

   Jul 17, 2018 | E&E Greenwire

   By Sean Reilly
   
   
   EPA officials heard repeated calls this morning to scuttle plans to limit the use of scientific research in drafting new regulations, as opponents at a public hearing variously attacked the proposed rule as unworkable, prohibitively expensive and illegal.
8. EPA Defends FOIA Approach After Cummings' Subpoena Request

   Jul 17, 2018 | Inside EPA

   EPA's top ethics official Kevin Minoli is defending the agency's approach to responding to Freedom of Information Act (FOIA) requests after the top Democrat on the House oversight committee sought to subpoena agency documents regarding potential political interference in the process.
9. Ewire: Trump Backers Fear EPA Rollbacks May Not Get Finished

   Jul 17, 2018 | Inside EPA

   Tick. Tick. Tick. That's the sound of the relentless pressure facing supporters of the Trump administration's deregulatory agenda for EPA.

LCSA News - There are no clips to report at this time.

Chemical Management News

10. Illinois Moves Forward with Critical Rules to Address Lead in Water at Child Care Facilities

    Jul 17, 2018 | Environmental Defense Fund

    By Lindsay McCormick
    
    
    Last week, EDF submitted comments to the Illinois Department of Children and Family Services (DCFS) on the state’s proposed rules for lead in water testing at licensed child care facilities.

Energy News

11. (ACC Mentioned) Spotlight on FERC

    Jul 17, 2018 | Politico

    By Kelsey Tamborrino
    
    
    Today’s the day — POLITICO Pro is hosting its second annual Pro summit, featuring one-on-one conversations with newsmakers across the policy landscape, including two sessions on energy.
12. N.Y. Group Takes FERC Climate Issue to Federal Court

    Jul 17, 2018 | E&E Energywire

    By Ellen M. Gilmer
    
    
    A New York group is heading to court over federal regulators' recent decision to limit their consideration of climate change when approving natural gas infrastructure.
13. U.S. Senators Revive Bill to Counter OPEC 'Price Fixing'

    Jul 17, 2018 | Bloomberg (In Houston Chronicle)

    By Mohammed Aly Sergie
    
    
    U.S. Senator Chuck Grassley, along with a fellow Republican and two Democratic lawmakers, introduced legislation in the Senate that’s aimed at allowing the government to bring lawsuits against OPEC members for antitrust violations.
14. Okla. Commission Splits in 'Frack Hit' Case

    Jul 17, 2018 | E&E Energywire

    By Mike Soraghan
    
    
    One of the three Oklahoma elected officials who oversee oil and gas has escalated a fight between small producers and large independents, siding with a smaller company over the issue of "frack hits."
15. Wheeler Visits Gas Company the Agency Once Fought

    Jul 17, 2018 | E&E Energywire

    By Mike Soraghan
    
    
    In his first state visit as the new head of EPA, Andrew Wheeler went to an office of a company that the agency fought with bitterly during the Obama administration.
16. In the LOOP: US Gulf Coast VLCC Exports Ramp Up Amid Wider Price Spreads

    Jul 17, 2018 | Platts

    By Laura Huchzermeyer and Alan Tomczak
    
    
    Wider price spreads between US crudes and Dubai-based crudes have opened arbitrage opportunities to export US crude to Asia, leading to a recent increase in VLCC exports out of the US Gulf Coast, S&P Global Platts data shows.

Chemical Security News

17. Trump-Putin Summit Blasts Open Cybersecurity Divisions

    Jul 17, 2018 | E&E Energywire

    By Blake Sobczak
    
    
    President Trump's decision yesterday to dismiss evidence of Russian cyber-enabled tampering in the 2016 U.S. presidential election has sent shock waves through the U.S. intelligence community, driving lawmakers and cybersecurity experts to question how the White House will respond to future attacks on critical infrastructure.

Transportation and Infrastructure News - There are no clips to report at this time.

Environment News

18. House Republican Will Introduce $23 Carbon Tax Next Week

    Jul 17, 2018 | E&E Climatewire

    By Zack Colman and Nick Sobczyk
    
    
    Rep. Carlos Curbelo (R-Fla.) is preparing to introduce legislation that would pause federal regulations on climate change in exchange for an escalating tax on carbon emissions, according to draft legislation obtained by E&E News.

Industry and Association News

1. (ACC Blog) Transparency, Objectivity and Modern Scientific Practices Critical for Regulatory Decisions

   Jul 17, 2018 | American Chemistry Matters

   Utilization of transparent, objective and modern scientific approaches to draw conclusions regarding human health risk is critical to developing sound regulatory decisions. Throughout the EPA, the application of scientific information to underpin regulatory activities has often been inconsistent and unclear; leading to concerns regarding how the Agency incorporates the best available science, how it evaluates the quality of that science, and how it applies 21st century scientific practices to draw conclusions.

   The ACC Formaldehyde Panel (the Panel) has regularly met with EPA scientists related to the Integrated Risk Information System (IRIS) program, regarding its subjective use of available science to assess chemical hazards. Unfortunately, EPA IRIS has regularly set values that are below natural background levels and not indicative of human health risk associated with real world exposures.

   Perhaps the most telling example can be found in the case of formaldehyde. Formaldehyde has been the subject of scientific study for years and the large body of evidence shows that the levels of formaldehyde most people encounter on a daily basis do not cause adverse health effects. For more than a decade, the Panel has conducted scientific research and engaged directly with EPA’s IRIS program to understand the scientific information being relied on to draw conclusions. This peer reviewed and publicly available science, summarized in over 30 scientific articles, illustrates that formaldehyde does not cause leukemia and that there are clearly defined safe thresholds for formaldehyde exposure.

   Yet, EPA’s proposed 2010 risk value suggests that human breath poses an unacceptable risk of cancer. The Panel has experienced considerable difficulty understanding what data EPA may be relying on and how the Agency has ensured that the highest quality and most relevant science is informing its decisions. The truth is, formaldehyde is a natural part of our world and the illogical findings of IRIS are not. How can human breath cause cancer? Formaldehyde is found in every living system – from plants to animals to humans – produced as part of our normal metabolic process. If a person inhales formaldehyde, the body breaks it down rapidly, just as when it is naturally produced in our bodies.

   In addition to incorporating modern scientific knowledge, the Panel also recognizes the importance of adequate data access and ensuring regulatory decisions are based on high quality and reproducible data. There have been several examples in recent years where publicly-funded research data were not provided in a transparent or timely manner and erroneous evaluations and interpretations persisted. Importantly, in multiple instances once the underlying data were made available, sometimes after multiple years of requests, the data were found to be severely flawed. In several cases, the findings when re-evaluated did not support the original studies’ conclusions.

   Two examples are provided below:Mundt et al.[1], conducted additional and refined analysis on the underlying data from the Zhang et al. (2010) study provided by NCI and relied upon in the IRIS assessment to identify formaldehyde as a leukemogen. Mundt et al.’s analysis observed no association between individual formaldehyde exposure estimates and frequency of aneuploidy, which the original study authors suggested were indicators of myeloid leukemia risk.Checkoway et al.[2] sought to replicate the findings reported by Beane Freemen et al. (2009) and relied upon in the underlying data provided from NCI. The findings from this re-analysis fail to support the original study hypothesis that formaldehyde causes acute myeloid leukemia. Specifically, the results indicated that acute myeloid leukemia was unrelated to “peak” or any other formaldehyde metric including the conventional cumulative exposure.

   As demonstrated by the formaldehyde example when data are not made available in a timely manner and modern approaches aren’t used, it can lead to conclusions that lack scientific rigor. The public needs to have confidence that EPA, too, will set acceptable levels that are also based on relevant, best available science. The Panel encourages EPA and other agencies to consider the entire weight of evidence for all chemical evaluations, including formaldehyde.

    

   [1] Mundt, K., Gallagher, A., Dell, L., Natelson, E., Boffetta, P., and Gentry, R. Does occupational exposure to formaldehyde cause hematotoxicity and leukemia-specific chromosome changes in cultured myeloid progenitor cells? (2017) Critical Reviews in Toxicology. Aug;47(7):592-602.

   [2] Checkoway, H., Dell, L.D., Boffetta, P., Gallagher, A.E., Crawford, L., Lees, P.S., and Mundt, K.A. (2015). Formaldehyde exposure and mortality risks from acute myeloid leukemia and other Lymphohematopoietic Malignancies in the US National Cancer Institute cohort study of workers in Formaldehyde Industries. Journal of Occupational and Environmental Medicine, 57(7), 785-794.

   https://blog.americanchemistry.com/2018/07/transparency-objectivity-and-modern-scientific-practices-critical-for-regulatory-decisions/
   

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2. (ACC Mentioned) 4 Chemical Stocks Poised to Outshine Q2 Earnings Estimates

   Jul 17, 2018 | Zacks.com

   The chemical industry is riding on an upturn in the global economy and strength across major end-use markets such as construction and automotive. Improving fundamentals in the energy space driven by an upswing in crude oil prices also augur well for the industry.

   The U.S. Chemical Industry bounced back from the havoc wreaked by last year’s hurricanes, and is poised for a smooth run this year. The American Chemistry Council (ACC), a leading industry trade group,envisions national chemical production (excluding pharmaceuticals) to rise 3.4% in 2018. Growth has come from a pickup in U.S. manufacturing, higher demand across light vehicles, housing markets, capital investments and strengthening export markets.

   Chemical makers are seeing strong demand from the construction and automotive sectors. A rebound in crude oil prices has also led to a recovery in demand for chemicals in the energy market and a favorable pricing environment for chemical products as their prices essentially move in tandem with oil prices.

   The Zacks Industry Rank of 63 carried by the Zacks Chemicals Diversified industry
   

   bears testimony to the fact that the chemical industry is in fine shape. The favorable rank places the industry in the top 25% of the 250 plus Zacks industries. Our back testing shows that the top 50% of the Zacks ranked industries outperforms the bottom half by a factor of more than two to one.

   Despite some headwinds, including a spike in raw materials costs as a result of short supply and softness in agricultural commodity prices due to persistent grain glut, chemical companies are likely to continue the Q1 earnings momentum this time around as the fundamental driving factors remain in place.

   Cost-cutting measures and productivity improvement actions by chemical companies should continue to reap industry-wide margin improvements in Q2. Moreover, a number of chemical makers are taking appropriate pricing actions (reflected by hikes in chemical prices), to offset raw material cost inflation, which should also provide margin benefits.

   Moreover, chemical companies remain actively focused on mergers and acquisitions to diversify and drive growth. Synergies from acquisitions should also lend support to earnings in Q2. 

   Expectations for Q2

   Per the Zacks Industry classification, the chemical industry is under the broader Basic Materials

   sector. Earnings growth for the Basic Materials sector in Q1 was second only to the energy sector. Overall earnings for the sector climbed 56.4% while revenues spiked 24.3%.
   

   The earnings picture for Q2 looks promising. Earnings for the sector are projected to surge 53.5% in Q2, while revenues are expected to improve 24.1%, per the latest Earnings Preview.

   How to Pick the Winners?

   Given the large number of players operating in the chemicals space, picking the right stocks is apparently not an easy task, but our proprietary methodology makes it easier to find the best ones. One can trim down the list with the combination of a favorable Zacks Rank — Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — and a positive Zacks Earnings ESP. You can uncover the best stocks to buy or sell before they report with our Earnings ESP Filter.

   Earnings ESP – the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate – is our proprietary methodology for determining stocks that have high chances of delivering earnings surprises in their next announcements. Our research shows that for stocks with this combination, the chance of a positive earnings surprise is as much as 70%.

   Our Choices

   Below we list four chemical stocks that have the right combination of elements to notch up positive surprises this earnings season:

   Celanese Corporation (CE - Free Report)

   Celanese is an integrated global producer of value-added industrial chemicals, and will be releasing Q2 results after the bell on Jul 19. The Zacks Consensus Estimate for the quarter is $2.40. The stock has an Earnings ESP of +3.13% and carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

   Celanese has an expected long-term (three-five years) earnings growth of 8.9%. It delivered positive earnings surprises in each of the last four quarters, with an average beat of around 7%.

   Eastman Chemical Company (EMN - Free Report)

   Eastman Chemical, who reports after the bell on July 26th, is a global advanced material and specialty additives company. The Zacks Consensus Estimate for the quarter currently stands at $2.20. The stock has an Earnings ESP of +0.91% and a Zacks Rank #2.

   Eastman Chemical has an expected long-term earnings growth of 9.4%. It delivered positive earnings surprises in each of the last four quarters, with an average beat of around 17.8%.

   Ingevity Corporation (NGVT - Free Report)

   Ingevityprovides specialty chemicals, carbon materials and technologies. NGVT, is reporting Q2 results after the bell on Jul 25. The Zacks Consensus Estimate for the quarter is 99 cents.

   This Zacks Rank #2 stock has an Earnings ESP of +9.14%. The company topped earnings estimates in each of the trailing four quarters, delivering a positive earnings surprise of 20.2%. It has an expected long-term earnings growth of 12%.

   Albemarle Corporation (ALB - Free Report)

   Albemarleis a global specialty chemicals company, with leading positions in lithium, bromine, refining catalysts and applied surface treatments reports Q2 results after the bell on Aug 7. The Zacks Consensus Estimate for the quarter stands at $1.28.

   The stock has an Earnings ESP of +0.43% and carries a Zacks Rank #3. The company has an expected long-term earnings growth of 13.9%. It also delivered positive earnings surprises in each of the last four quarters, with an average beat of around 5.5%.

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   https://www.zacks.com/stock/news/311882/4-chemical-stocks-poised-to-outshine-q2-earnings-estimates
   

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3. (ACC Mentioned) Sidley Austin’s Peter Keisler Takes on More Formal Role for AT&T in Antitrust Appellate Battle

   Jul 17, 2018 | Law.com

   By C. Ryan Barber

   During the six-week trial over AT&T’s planned acquisition of Time Warner, Sidley Austinpartner Peter Keisler was a constant presence in court, looking on as O’Melveny & Myers’ Daniel Petrocelli mounted a successful defense of the $85 billion deal.

   Now, as the AT&T’s defense against a Justice Department antitrust challenge advances into a Washington appeals court, Keisler is set to assume a more formal role.

   Keisler, a prominent appellate lawyer who briefly served as interim attorney general late in the George W. Bush administration, entered his first appearance for AT&T late Monday afternoon in the U.S. Court of Appeals for the D.C. Circuit, identifying himself as the lead counsel for a Sidley Austin team that includes Jonathan Nuechterlein and C. Frederick Beckner III, co-leaders of the firm’s communications regulatory practice. Also on the Sidley Austin team: Richard Klingler, a partner at the firm who previously served as general counsel on the National Security Council staff during the Bush administration.

   In Keisler, AT&T has a lawyer who was picked under the Bush administration for a seat on the D.C. Circuit, only to see his nomination scuttled by a Senate filibuster.

   Although Keisler was listed in the filing as the lead attorney, an AT&T spokesman said the company expects O’Melveny & Myers to remain involved in the D.C. Circuit. The spokesman declined to identify the lawyer who will lead arguments in the D.C. Circuit, saying it would be premature given that the Justice Department has yet to file its opening brief.

   Keisler declined to comment.

   The Justice Department in a filing July 12 signaled its plan to take the merger challenge to the U.S. Court of Appeals for the D.C. Circuit. That notice came a month after U.S. District Judge Richard Leon handed down a 172-page opinion rejecting arguments that AT&T’s acquisition of Time Warner would substantially lessen competition and hurt consumers.

   Petrocelli, a seasoned trial lawyer who took up AT&T’s case with little to no antitrust experience, has not yet entered an appearance in the D.C. Circuit. Cravath, Swaine & Moore partner Christine Varney, a former head of the Justice Department’s Antitrust Division, is representing Time Warner.

   Since his return to Sidley Austin in 2008, Keisler has established himself as a go-to lawyer for companies clashing with the government. Indeed, during the Obama administration, he frequently partook in some of the highest profile cases challenging government regulations.

   Keisler previously represented AT&T in the challenge to the Federal Communications Commission’s net neutrality rules, which the D.C. Circuit upheld in 2016. Under a Trump-appointed Republican chairman, the FCC later repealed the rules, which required internet services providers to treat all content and traffic equally.

   In 2016, he argued before the D.C. Circuit for an array of trade associations—including the American Chemistry Council Inc. and U.S. Chamber of Commerce—in a challenge to the Obama administration’s Clean Power Plan. For the past two years, the D.C. Circuit has been granting 60-day abeyances in the case as the Trump administration’s U.S. Environmental Protection Agency has worked to revise the plan. In its most recent order, the D.C. Circuit revealed that some judges’ patience with EPA’s regulatory inaction is wearing thin.

   Earlier in 2016, Keisler represented TransCanada in a lawsuit challenging the Obama administration over its decision to prevent the construction of the Keystone XL Pipeline. Keisler dropped the case a year later after the Trump administration greenlighted the pipeline.

   With Keisler on its side, AT&T appears confident in its chances of sealing the Time Warner deal in the D.C. Circuit. On July 13, AT&T CEO Randall Stephenson said on CNBC that the company believes “the likelihood of this thing being reversed and overturned is really remote.”

   “It’s a very narrow path that would have to be traveled to get this thing reversed in any way,” Stephenson said. “The merger is closed. We own Time Warner.”

   https://www.law.com/nationallawjournal/2018/07/17/sidley-austins-peter-keisler-takes-on-more-formal-role-for-att-in-antitrust-appellate-battle/?slreturn=20180617132657
   

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4. (ACC Mentioned) Groups File FOIA Request for EPA-Industry Communications Over Agency Decision to Ignore Key Exposures to Asbestos, Other Toxic Chemicals

   Jul 17, 2018 | Environmental Working Group

   Today American Oversight and the Environmental Working Group petitioned the Environmental Protection Agency for release of documents detailing contacts between former EPA chief Scott Pruitt and the chemical industry ahead of the agency’s decision to exclude major sources of exposure when evaluating the health risks of asbestos and three other highly toxic chemicals.

   In a Freedom of Information Act request, American Oversight and EWG are “seeking information to determine the extent to which industry and trade groups may have engaged with Mr. Pruitt and the EPA about the recent decisions.” In the petition, the groups pledged to pursue all legal avenues, including litigation, to get the requested documents.

   “Scott Pruitt is gone, but we're still dealing with the aftermath of his assault on public transparency," said Austin Evers, executive director of American Oversight. "Acting Administrator Andrew Wheeler says he supports transparency. He can start by explaining to the public exactly how this decision was made and who had a seat at the table."

   “The EPA abruptly retreated from a posture of moving toward more protection for Americans from these dangerous chemicals to a position that can only be seen as placating the chemical industry,” said Melanie Benesh, a legislative attorney at EWG. "The American people deserve the fullest account of how Pruitt and his aides may have colluded with chemical companies and their lobbyists. When a top public health agency has the power to ban asbestos, and it doesn’t, something is amiss.”

   On June 1, the EPA released so-called problem formulation documents indicating it will dramatically scale back the scope of its safety evaluations for 10 chemicals prioritized for action under the revamped Toxic Substances Control Act, or TSCA.

   Congress’ 2016 overhaul of TSCA gave the EPA much broader authority to ban toxic chemicals or dramatically curtail their uses in commerce to protect the public, especially vulnerable populations like young children. Under the Obama administration, the EPA prioritized 10 chemicals for new safety assessments, including asbestos; 1,4-dioxane, an industrial solvent and common household product contaminant; and methylene chloride and trichloroethylene.

   But under Pruitt, the EPA’s problem formulations failed to consider the key ways Americans are exposed to these chemicals, such as exposures from contaminated air, drinking water, and even consumer and skin care products.

   “Pruitt’s resignation under a mountain of ethical scandals calls into question every decision he made during his disastrous 18-month tenure,” said EWG President Ken Cook. “These documents are vital to understanding just how compromised by special interests he and his deputies were.”

   Through the FOIA, American Oversight and EWG are requesting relevant records from 26 current and former officials at the agency, including Pruitt, Wheeler, Chief of Staff Ryan Jackson and Deputy Assistant Administrator Nancy Beck – the former chemical industry official who now is in charge of chemical policy at the agency. The FOIA requests communications between the EPA and more than 20 companies and trade groups, including DowDuPont and the American Chemistry Council.

   https://www.ewg.org/release/groups-file-foia-request-epa-industry-communications-over-agency-decision-ignore-key#.W04IutUza6J
   

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5. EDF Calls on EPA to Withdraw Censored Science Proposal

   Jul 17, 2018 | Environmental Defense Fund

   Experts for Environmental Defense Fund (EDF) called on the Environmental Protection Agency (EPA) today to withdraw the “censored science” proposal – a proposed rule that would bar the agency from considering some of our most important public health studies in making decisions about vital protections for human health and the environment.

   EPA held an all-day public hearing on its proposal at its Washington, D.C. headquarters today. EDF Senior Health Scientist Jennifer McPartland was among the more than 100 Americans who were expected to testify.

   “EPA’s proposed rule represents a total disregard for the agency’s core mission: protection of human health and the environment,” said McPartland in her testimony. “If finalized the rule will erode critical public health protections, and with them, the scientific integrity and public trust of the agency.”

   You can read McPartland’s full testimony here.

   EPA’s proposed rule closely resembles federal anti-science legislation that has been stalled in Congress for years, and has been widely criticized by leading scientific organizations and public health organizations. The legislation was drafted by House Science Committee Chairman Rep. Lamar Smith and is misleadingly labeled the Honest and Open New EPA Science Treatment (HONEST) Act.

   Before he left office, former EPA Administrator Scott Pruitt began attempting to create a rule based on Rep. Smith’s unsuccessful legislation – without seeking input from the agency’s Scientific Advisory Board or other scientific bodies. EPA agreed to hold a public hearing on the proposal only after EDF and hundreds of others demanded an opportunity to voice their views.

   At the hearing today, McPartland called on acting EPA chief Andrew Wheeler to retract the proposal.

   EDF Legal Fellow Surbhi Sarang also testified about the dangers of the censored science proposal at today’s hearing. You can read her full testimony here.

   http://blogs.edf.org/health/2018/07/17/edf-calls-on-epa-withdraw-censored-science/
   

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6. EPA Proposal to Limit Science Studies Draws Opposition

   Jul 17, 2018 | Bloomberg (In Houston Chronicle)

   By Mohammed Aly Sergie

   Democratic lawmakers joined scores of scientists, health and environmental officials and environmental activists Tuesday in denouncing an industry-backed proposal by the Environmental Protection Agency that could limit dramatically what kind of science the agency considers in making regulations.

   A public hearing at EPA headquarters on the rule, introduced by then-administrator Scott Pruitt before his resignation this month amid ethics scandals, drew opponents and a much smaller number of industry and trade groups backing it.

   If adopted by the EPA and the Trump administration, the rule would allow an EPA administrator to reject study results in making decisions about pollutants and other health risks if the underlying research data is not made public because of patient privacy concerns. That move "enables the public to more meaningfully comment on the science" behind environmental regulation, said Joseph Stanko, a representative of a coalition of industry trade groups and companies affected by what the group says is increasingly stringent air-pollution regulation.

   Opponents said the move would throw out the kind of public-health studies that underlie enforcement of the Clean Air Act and other landmark environmental controls because the studies drew on confidential health data from thousands of individuals.

   "This has nothing to do with transparency," Democratic Rep. Paul Tonko of New York said at the hearing in EPA headquarters. "It's a thinly veiled campaign to limit research ... that supports critical regulatory action."
   

   The "proposal and its false claims about transparency ... guarantees that political interests will always matter more than science" in forming environmental regulations, Tonko said.

   Rep. Suzanne Bonamici, an Oregon Democrat, said the EPA proposal was similar to years of "transparency" legislation for EPA that Congress had repeatedly rejected, and called it "an administrative attempt to circumvent the legislative process."

   New York state officials and representatives of public and private universities also spoke against the proposal.

   Critics that include former EPA administrators and scientists said the policy shift is designed to restrict the agency from citing peer-reviewed public-health studies that use patient medical records that must be kept confidential under patient privacy laws.  

   Such studies include the Harvard School of Public Health's landmark Six Cities study of 1993, which established links between death rates and dirty air in major U.S. cities. That study was used by EPA to justify tighter air-quality rules opposed by industrial polluters.

   While Pruitt introduced the proposal, the EPA is continuing the steps toward its formal adoption under the new acting administrator, former Pruitt EPA deputy Andrew Wheeler.

   In an email, EPA spokesman James Hewitt indicated Tuesday that Wheeler wanted to balance transparency and privacy concerns, something Pruitt also spoke about regarding the proposal.

   "Acting Administrator Wheeler believes the more information you put out to the public the better the regulatory outcome. He also believes the agency should prioritize ways to safeguard sensitive information," Hewitt said.

   The proposal is open for public comment through mid-August before any final EPA and White House review.

   https://www.nytimes.com/aponline/2018/07/17/us/politics/ap-us-epa-science.html
   

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7. Witnesses Slam 'Secret Science' Rule at Public Hearing

   Jul 17, 2018 | E&E Greenwire

   By Sean Reilly

   EPA officials heard repeated calls this morning to scuttle plans to limit the use of scientific research in drafting new regulations, as opponents at a public hearing variously attacked the proposed rule as unworkable, prohibitively expensive and illegal.

   "The cynical approach proposed by EPA can be best be described as 'weaponized transparency,'" David Michaels, who headed the Occupational Safety and Health Administration under President Obama, said near the outset.

   Like the tobacco industry decades ago, Michaels said, the agency wants to tap "a caricature of how science really works" to stymie new public health safeguards.

   It was an argument echoed in some form by most of the first 14 speakers at the hearing, which is scheduled to run as late as 8 p.m. at the agency's headquarters with more than 100 people preregistered to talk.

   "The proposed rule would impede, if not eradicate, the EPA's ability to protect Americans from significant risks to human health and to the environment," Rep. Suzanne Bonamici (D-Ore.) said. Rep. Paul Tonko (D-N.Y.), seated next to her at the speakers' table, dismissed it as "ill-conceived."

   The draft rule, titled "Strengthening Transparency in Regulatory Science," would effectively bar EPA from using specific studies for developing new regulations unless the underlying data "are publicly available in a manner sufficient for independent validation," according to the text.

   In unveiling the draft in April, then-EPA Administrator Scott Pruitt framed it as a good government measure that would shed more daylight on the agency's decisionmaking. Newly elevated acting EPA chief Andrew Wheeler signaled in an interview last week that he intends to pursue it.

   The proposal appears to be a Trump administration priority; the Office of Management and Budget — which generally has up to three months to assess the potential impact of major regulatory proposals — completed its review of the draft science rule in four days.

   Speaking in support of the proposal this morning was a representative of the American Petroleum Institute and Anne LeHuray, executive director of the Pavement Coatings Technology Council, a trade group for companies involved in pavement maintenance. She urged EPA to go further.

   The proposed rule lacks "any meaningful remedies when the agency relies on science that has been shown to be unreproducible," LeHuray said. Without offering specifics, LeHuray added that the council "has witnessed firsthand the distortions and bad public policy that result."

   But critics view the proposed rule as a smokescreen intended to stop EPA from using research that could justify the need for tighter regulations.

   "The data underlying many scientific studies are not publicly available and cannot be made publicly available," said Jennifer McPartland, a senior scientist with the Environmental Defense Fund, in urging EPA to withdraw the proposal.

   Not only does research involving human subjects rely on medical information that cannot be made public for legal and other reasons, McPartland said, but advances in data science are making it harder to protect the privacy of study subjects.

   The EPA plan "serves the interests of polluters, not the public," she said.

   The draft rule has its genesis in legislation championed by House Science, Space and Technology Chairman Lamar Smith (R-Texas). While various versions of Smith's bill have cleared the House, they have then stalled in the Senate.

   In 2015, a Congressional Budget Office analysis of what was then called the "Secret Science Reform Act" pegged the initial cost of ensuring "the transparency of information and data" at $250 million per year.

   Last year, based on the Trump administration's assurances that EPA would ignore any studies that don't pre-emptively meet the bill's requirements, the budget office cut the projected price tag to about $5 million from 2018 through 2020 (E&E Daily, April 4, 2017).

   Michaels, an epidemiologist who now teaches at George Washington University, today said that approach would give an advantage to industry-funded research because it would be structured to meet the bill's terms.

   He also questioned whether federal law would allow EPA to selectively reject research findings under the conditions laid out in the proposed rule.

   Not only do statutes like the Clean Air Act require use of the best available science, he said, but the Administrative Procedure Act does not allow EPA to refuse comments submitted to the agency, Michaels said.

   The same principle applies to studies, he added. "Rejecting submitted studies because the underlying data are not available is prohibited under the APA."

   https://www.eenews.net/greenwire/2018/07/17/stories/1060089381
   

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8. EPA Defends FOIA Approach After Cummings' Subpoena Request

   Jul 17, 2018 | Inside EPA

   EPA's top ethics official Kevin Minoli is defending the agency's approach to responding to Freedom of Information Act (FOIA) requests after the top Democrat on the House oversight committee sought to subpoena agency documents regarding potential political interference in the process.

   Minoli, a deputy general counsel, in a July 15 letter to Rep. Elijah Cummings (D-MD), the oversight panel's ranking member, offers to brief him or committee staff on the FOIA issue and in particular about the agency's FOIA Expert Assistance Team (FEAT), created in 2013.

   Minoli does not directly address Cummings' concerns about political interference in responding to FOIA requests but does note how in early 2017, just after the Trump administration took office, the administrator's chief of staff Ryan Jackson asked FEAT to assist the administrator's office (AO) in improving its FOIA program.

   The letter responds to Cummings' allegations in his July 13 letter asking committee Chairman Trey Gowdy (R-SC) to subpoena EPA for “documents it has failed to produce” under “a process in which political appointees review FOIA requests and hand select requests to be processed by a different team if they are complex or 'politically charged.'”

   But the response has not quelled Cummings' concerns. In a statement to Inside EPA, he says, “This letter has some nice talking points, but it does not provide any of the documents I requested and does not answer any of the problematic questions I raised. Chairman Gowdy should issue the subpoena I asked for and compel the agency to comply so that we can get the documents we need to do our job.”

   Cummings is asking Gowdy to demand documents and communications related to reviews of FOIA requests conducted by Trump administration political appointees, including White House employees.

   An EPA spokesman notes Cummings is alleging that “procedures under the Trump EPA regarding FOIA are new but were actually set up in 2013 under the Obama EPA. Under the Trump administration, EPA has moved the national FOIA office from the Office of Environmental Information to the Office of General Counsel to provide the expertise to complement the work of the FEAT. This move will streamline the FOIA process from intake to producing responsive documents.”

   Minoli writes in the letter that the AO saw a 415 percent increase in FOIA requests under former Administrator Scott Pruitt in 2017 compared to requests filed in 2016 under Obama-era Administrator Gina McCarthy. That increase “overwhelmed the small staff that was designed to respond to such requests.”

   The agency then developed an “AO Centralization Pilot Project” that was designed to see if FEAT could “deploy” to an office to improve the FOIA response. “The expectation was that by centralizing and prioritizing the responsibility for FOIA requests, the office would produce more timely responses with fewer errors that necessitated less resources,” the letter says.

   FEAT members, along with representatives from the AO Immediate Office, the public affairs office, the policy office and the office of congressional affairs “began to implement the AO FOIA Centralization Pilot Project” at the end of April 2018, he writes. “Currently, the FEAT is coordinating the centralized FOIA efforts for the 1,453 FOIA requests pending with” the AO.

   Minoli explains that the FEAT -- which hired three new employees -- painstakingly categorized more than 1,400 requests and assigned each a project lead. This allows FOIA requests, when released to one requester, to be released to all. It also allowed all of the requesters to be notified of their place in the FOIA queue.

   Minoli acknowledges that the agency's FOIA program “is far from perfect,” and that the number of unanswered requests that are past due under the statutory deadline for responding has increased. “As a result, EPA now faces over 70 lawsuits under FOIA -- a 500 percent increase over the pre-2017 high.

   “Ultimately, the head of an agency sets the tone and the commitment of EPA's senior leaders will be essential for the program to improve,” he adds, an indirect reference to a promised change in tone from acting Administrator Andrew Wheeler. But he notes the centralization pilot project “has laid the foundation from which EPA's FOIA program could be a model of what a FOIA program should be, not an example of what a FOIA program should not be.”

   https://insideepa.com/daily-feed/epa-defends-foia-approach-after-cummings-subpoena-request
   

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9. Ewire: Trump Backers Fear EPA Rollbacks May Not Get Finished

   Jul 17, 2018 | Inside EPA

   Tick. Tick. Tick. That's the sound of the relentless pressure facing supporters of the Trump administration's deregulatory agenda for EPA.

   As planned measures to roll back Obama-era climate and other rules continue to stall, they run the risk that the policies they hope for won't be completed in President Donald Trump's first term -- or at all.

   Some of those fears are surfacing publicly as Andrew Wheeler takes over as acting EPA chief following Scott Pruitt's resignation amid a swirl of ethics scandals. The concerns focus on the big rules -- replacing the Clean Power Plan utility greenhouse gas standards, finalizing a narrower Clean Water Act jurisdiction rule, weakening Obama-era vehicle greenhouse gas limits.

   “We are now looking at not getting these rules repealed and replaced by end of first Trump’s first term,” Myron Ebell, the former Trump EPA transition chief with the Competitive Enterprise Institute, told the Washington Examiner. “If they don't get it done in the first term and there isn't a second Trump term, they can be repealed again and put back the way they were under Obama.”

   Bracewell attorney Jeff Holmstead, an EPA air chief under the George W. Bush administration, added that, “on the regulatory front, they haven't accomplished nearly as much as they could have by this point.” He said that Pruitt was “not very sophisticated about the realities of the regulatory process and the realities of doing things that are legally defensible and durable.”

   However, the Examiner also quoted Harvard University's Joe Goffman, a former top EPA lawyer under the Obama administration, saying the deregulatory efforts have more than process problems.

   “A lot of the things Pruitt proposed and Andrew will presumably continue are defective not because Pruitt failed to do his homework, but because the proposals themselves are very hard to justify,” he said.

   For his part, Wheeler told the paper that he won't let the constant time pressures force him to cut corners on crafting regulations. “I understand what we do needs to be lasting and we need to make sure we get it right. So I am going to be very cognizant in our rule-makings that we follow the law and that our regulations can stand up to legal challenges,” he said.

   And he told Bloomberg in a separate interview that he has low expectations for how much he can achieve. ““I don’t expect in the short time I’m at the agency that I’ll solve all these problems, but I want to get us on a glide path,” he said.

   https://insideepa.com/daily-feed/ewire-trump-backers-fear-epa-rollbacks-may-not-get-finished
   

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Chemical Management News

10. Illinois Moves Forward with Critical Rules to Address Lead in Water at Child Care Facilities

    Jul 17, 2018 | Environmental Defense Fund

    By Lindsay McCormick

    Last week, EDF submitted comments to the Illinois Department of Children and Family Services (DCFS) on the state’s proposed rules for lead in water testing at licensed child care facilities. Our comments focused on what we learned from our pilot in 11 child care facilities, including 4 in the Chicago area.

    Even at very low levels, lead can impair brain development, contributing to learning and behavioral problems as well as lower IQs. While national attention on lead in drinking water has spurred action in schools, few states have addressed lead in water in child care settings – even though these facilities serve children at younger, more vulnerable ages.

    Illinois is one of seven states that EDF has highlighted in a previous blog for requiring lead in water testing in child care facilities. In January 2017, Illinois General Assembly enacted SB550, establishing a new set of requirements to address lead in drinking water in the state. Under the legislation, Illinois was required to adopt rules prescribing the procedures and standards to assess lead in water in licensed day care homes, day care centers, and group day care homes (herein after “child care facilities”).

    Illinois’ proposed rules would require all licensed child care facilities to test for lead using an Illinois Environmental Protection Agency (IEPA)-certified laboratory and develop a mitigation and implementation plan if any lead is detected (although there is some ambiguity as to the exact action level).  If lead is detected, resampling would be required after six months and every year thereafter until at least two consecutive tests indicate no lead.

    Over the past year, EDF conducted a pilot project on testing and remediating lead in water at 11 child care facilities in four states, including four facilities in Chicago. We recently released a report that summarizes our findings and provides best practices and recommendations for testing and reducing lead in water. We recommend that mandatory testing requirements include:Replacing lead service lines (LSLs) – the lead pipe connecting the main under the street to a building – in child care facilities when found, regardless of testing results.Using an accredited lab for lead in water analysis until further research on portable meters confirms that they can be used reliably.Setting an action level of 5 ppb or below to investigate and remediate interior lead sources.Specifying practical and effective remediation options for lead at the tap – such as fixture replacement, flushing, aerator cleaning with vinegar, and filtration – but allowing facilities flexibility in developing their own remediation plans.Resampling fixtures after remediation steps are employed.

    We applaud Illinois’ leadership in this space, including use of a low action level, but encourage DCFS to make a number of changes when finalizing the rules based on our above recommendations.

    The proposed rules do not address the problem of LSLs.  While replacing LSLs is the best solution, we recommend – at a minimum – that child care facilities should be required to identify whether or not they have an LSL through simple steps such as reviewing historical records and conducting a visual inspection to better understand their facility’s risk of lead exposure (regardless of lead in water testing results) and pursue appropriate mitigation steps. It may be appropriate for communities and/or water utilities to fund LSL replacements at child care facilities – as they are a clear priority location for LSL replacement.

    LSLs can unpredictably release particulate lead into the water, which can complicate testing for lead sources at fixtures.  While LSLs are unlikely to be found at larger facilities, they may be expected at smaller facilities, especially home-based child care. According to a 2016 studyconducted by the American Water Works Association, Illinois has more LSLs than any other state in the U.S. Many of these LSLs are located in Chicago, where the city’s building code mandated their use on lines up to 2” in diameter until 1986 when they were banned by Congress.

    The proposed rule also provides little guidance to child care providers on how to conduct sampling and develop an effective mitigation and implementation plan. We recommend that the final rule specify the types of water samples to be collected; practical and effective remediation options (e.g., fixture replacement, flushing, aerator cleaning with vinegar, and filtration); and criteria for an effective mitigation and implementation plan.

    Check out our full comments here for more details.

    http://blogs.edf.org/health/2018/07/17/illinois-moves-forward-with-critical-rules-to-address-lead-in-water-at-child-care-facilities/
    

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Energy News

11. (ACC Mentioned) Spotlight on FERC

    Jul 17, 2018 | Politico

    By Kelsey Tamborrino

    With help from Emily Holden, Anthony Adragna, Colin Wilhelm and Darius Dixon

    SEE YOU THERE: Today’s the day — POLITICO Pro is hosting its second annual Pro summit, featuring one-on-one conversations with newsmakers across the policy landscape, including two sessions on energy.

    FERC Commissioner Cheryl LaFleur will sit down this afternoon with our own Darius Dixon, before the regulatory body is deadlocked next month following the exit of GOP Commissioner Rob Powelson. LaFleur, a Democrat, has served under presidents from both parties and experienced the agency in almost every configuration — whether it has all five commissioners in place, or just one. There’s no shortage of topics to chew over: the potential impact of an Energy Department coal and nuclear rescue plan, the heated rhetoric against states that stand in the way of pipelines, and whether FERC is “on the wrong side of history” when it comes to climate change. Darius’ interview with LaFleur starts around 2 p.m.

    Also on tap: California Air Resources Board Chairwoman Mary Nichols, Murray Energy CEO Bob Murray and the Council on Foreign Relations’ Amy Myers Jaffe will participate in a panel this morning on America’s “energy future.” Nichols, for one, has been heavily involved in discussions with the Trump administration over car rules that the White House is considering rolling back. Expect questions related to the administration’s efforts to pare back regulations and increase oil, gas and coal production — and an in-depth conversation on what that means for free market forces and renewables.

    See the full agenda here and watch the livestream here.

    WELCOME TO TUESDAY! I'm your host, Kelsey Tamborrino. Citizens’ Climate Lobby’s Brett Cease was first to correctly identify the two presidents who threw out the first pitch at an All-Star game in D.C.: Franklin D. Roosevelt in 1937 and John F. Kennedy in 1962. For today: Which state or states have just one consonant in its spelling? Send your tips, energy gossip and comments to ktamborrino@politico.com, or follow us on Twitter @kelseytam, @Morning_Energy and @POLITICOPro.

    JUST RELEASED: View the latest POLITICO/AARP poll to better understand Arizona voters over 50, a voting bloc poised to shape the midterm election outcome. Get up to speed on priority issues for Hispanic voters age 50+, who will help determine whether Arizona turns blue or stays red.

    HITCHING A RIDE ON THE ‘MINIBUS’: The House Rules Committee late Monday made 70 amendments to the EPA and Interior title of the spending minibus, H.R. 6147 (115). The amendments focus on blocking a host of Obama-era environmental regulations even as the Trump administration is in the process of rolling back many of those. Some of the amendments that caught ME’s eye:

    — Diesel emissions grants: Rep. Gary Palmer’s amendment would eliminate the popular bipartisan Diesel Emissions Reduction Grant program used to retrofit diesel engines like those in school buses,

    — WOTUS: Rep. Don Beyer’s amendment would remove language blocking the Obama administration’s Waters of the U.S. regulation,

    — Obama-era methane rule: Rep. Markwayne Mullin’s amendment would block enforcement of the Obama-era regulation aimed at curbing methane emissions from new oil and gas sources, which the Trump administration is already reconsidering,

    — Social cost of carbon: Another amendment from conservatives would bar the use of the social cost of carbon in rulemakings,

    — Trailer efficiency: Reps. Barry Loudermilk and Morgan Griffith’s amendmentwould bar EPA from applying stricter fuel efficiency and greenhouse gas emissions standards to certain truck trailers,

    — Chesapeake Bay: Rep. Bob Goodlatte’s effort would limit EPA’s ability to go after states that miss Chesapeake Bay cleanup milestones,

    — Ozone: Rep. Glenn Grothman’s amendment would block implementation of EPA’s 2015 tightened ozone standard,

    — Coal ash: A Democratic amendment would block the Trump EPA from visiting an Obama-era coal ash regulation,

    — Endangered Species Act riders: Several measures would bar the administration from issuing or enforcing Endangered Species Act rules relating to species like the lesser prairie chicken and Preble’s meadow jumping mouse,

    — Attorney fees: An amendment from Reps. Jason Smith and Greg Gianfortewould block attorney fees from being awarded in any Clean Air Act, Clean Water Act or Endangered Species Act settlement, and,

    — Inspectors general: Nothing related to former Administrator Scott Pruitt was made in order, but the House will consider an amendment from Rep. Raúl Grijalvathat would increase the budget of the Interior Department’s inspector general by $2.5 million.

    Read the full list of amendments made in order to the measure here.

    ‘SECRET SCIENCE’ OUT IN THE OPEN: EPA’s controversial proposal to consider only research with publicly available data gets a public hearing at agency headquarters today starting at 8 a.m. Nearly 70 health, medical, academic and science groups — including the American Lung Association, American Heart Association, American Medical Association and American Academy of Pediatrics — oppose the plan, which they say could hamstring public health and environment protections.

    EPA’s Science Advisory Board voted unanimously to review the proposal, which Pruitt said was meant to bolster transparency. Paul Billings, national senior vice president of advocacy at the American Lung Association, called the rule a “coordinated effort to ignore the science that is inconvenient to the EPA’s agenda,” and compared it to lobbying efforts by the tobacco industry in the 1990s to exclude studies that showed secondhand smoke could kill.

    What’s at stake? The proposal could move forward quickly enough to allow EPA to roll back certain air quality standards currently under review. According to the Natural Resources Defense Council, the plan could undercut computer models meant to test chemicals under the new Toxic Substances Control Act and could toss out landmark studies that relied on personal health records following extraordinary events, including when Hiroshima and Nagasaki victims were tested over time to find out the effects of radiation on humans.

    The meeting will run until 8 p.m. or an hour after the last of more than 100 registered speakers has commented. Speakers, aside from many environment and public health groups, include the American Petroleum Institute, the U.S. Chamber of Commerce, the American Chemistry Council, FreedomWorks Foundation and climate science critic Steve Milloy. Dan Byers of the Chamber of Commerce's Global Energy Institute is expected to applaud the agency’s efforts and commend EPA for going through the formal public comment and rulemaking process. “It is one thing to be cavalier about transparency principles when their application has little or no import to public policy, but federal rules that impact millions of people and billions of dollars should be held to a higher standard,” he is expected to say. Also registered are Reps. Paul Tonko, Suzanne Bonamici and Dan Lipinski. Comments can be submitted until Aug. 16.

    Related reading: Competitive Enterprise Institute senior fellow Angela Logomasini looks at the science transparency rule in analysis published today. “The rule is actually far more modest and flexible than depicted by its critics, and its goals are in fact achievable,” Logomasini writes. Read it here.

    FOR THE RECORD: The House Rules Committee meets at 3 p.m. this afternoon to formulate a rule on an anti-carbon tax resolution, H. Con. Res. 119 (115), that calls a tax on carbon released from fossil fuels “detrimental to the United States economy.” The Rules panel will tee up a vote later this week on the resolution, which is led by Majority Whip Steve Scalise and would put a range of lawmakers — most notably the Climate Solutions Caucus — on the record on the issue.

    WHERE'S ZINKE? Interior Secretary Ryan Zinke will deliver remarks this morning at the first meeting of the "Made in America" Outdoor Recreation Advisory Committee. The committee is tasked with advising the secretary on "public-private partnerships across all public lands, with the goal of expanding access to and improving infrastructure on public lands and waterways." See the meeting agenda.

    AMERICA’S PLEDGE STILL WORKING ON PLEDGES: Michael Bloomberg and California Gov. Jerry Brown, the co-chairs of climate organization “America’s Pledge,” have unveiled a preview of the report they will release at the Global Climate Action Summit in San Francisco in September, detailing “bottom-up” opportunities for climate action sans federal leadership. The list is familiar: boosting renewables, accelerating coal retirements, retrofitting buildings for energy efficiency, electrifying building energy use, accelerating electric vehicle adoption, phasing out HFCs, preventing methane leaks at the wellhead, reducing methane leaks in cities, reducing emissions from land and starting carbon markets.

    Vice Chairman Carl Pope said the group still plans to debut a quantitative analysis outlining what state and local governments are already doing, what they have committed to and what they are keying up. “We have every reason to believe the rest of the world is watching this very closely,” Pope said, noting that the U.N.’s top climate official, Patricia Espinosa, mentioned the group and summit by name at the Vatican earlier this month. Read it here.

    ESA GETS ITS DAY: Proposed tweaks to the Endangered Species Act will be front and center at a Senate Environment and Public Works hearing this morning. The hearing will feature testimony from Wyoming Gov. Matt Mead, Colorado Parks and Wildlife’s Bob Broscheid and Virginia’s Secretary of Natural Resources Matthew J. Strickler, and will focus on a discussion draft released by Chairman John Barrasso earlier this month aimed at changing the statute. If you go: The hearing kicks off at 9:45 a.m. in 406 Dirksen. Livestream here.

    TAKEN BY STORMWATER: The House on Monday passed by voice vote H.R. 3906 (115), the Innovative Stormwater Infrastructure Act of 2017, which would "establish centers of excellence" for stormwater control infrastructure. The legislation, introduced last year by Democratic Rep. Denny Heck, directs EPA to create a stormwater infrastructure funding task force to make recommendations on the availability of public and private funding for stormwater infrastructure.

    DOE ISSUES FIRST TRIBAL LOAN GUARANTEE: The Energy Department will issue its first solicitation for the Tribal Energy Loan Guarantee Program today. The program provides up to $2 billion in partial loan guarantees to support energy development in Native American and Alaska Native communities. According to DOE, today’s solicitation marks more than $40 billion in energy infrastructure loans and loan guarantees from DOE’s Loan Programs Office in five areas.

    HOUSE PANEL TO HOLD GRID HEARING: House Natural Resources will hold a hearing on July 25 on Puerto Rico’s electric grid recovery and possible improvements to make it more efficient and resilient to future hurricanes. On top of the devastation caused by Hurricane Maria last year, Puerto Rico’s electric utility owes bondholders $9 billion, and most of its leadership departed last week after clashes with Gov. Ricardo Rosselló over executive compensation and political control of the utility, which is quasi-governmental.

    MAKING THE GRADE: The Environment America Research & Policy Center is out today with its state-by-state report card, “Renewables on the Rise,” which details increases in solar, wind, energy efficiency, electric vehicles and battery storage. The report says the U.S. now produces almost six times as much renewable electricity from wind and solar than it did in 2008. It also found that in March of last year, wind and solar produced 10 percent of the United States’ electricity — marking a first. On the state level, the report said California, Arizona, North Carolina, Nevada and Texas saw the greatest total increases from 2008 until 2017 in solar energy generation. See the report here and a state-by-state interactive map here.

    YOU DOWN WITH TIP? A bipartisan group of four senators wrote to Energy Secretary Rick Perry on Monday in support of the Western Area Power Administration’s Transmission Infrastructure Program, which was axed under the Trump administration’s fiscal 2019 budget proposal. “TIP is one of the few federal programs that directly supports new and upgraded electric transmission,” according to the letter, signed by Sens. Catherine Cortez Masto, Martin Heinrich, Dean Heller and Cory Gardner.

    HOUSE PLANS FLOOD INSURANCE VOTE: The House is planning to vote next week to extend the National Flood Insurance Program, ahead of its July 31 expiration, sources familiar with the matter tell Pro Financial Services’ Zachary Warmbrodt. There are already a few options on the table for the program: one from Financial Services Chairman Jeb Hensarling, who has been trying to put together an extension bill that includes reforms, and a new bill introduced by Scalise and Rep. Tom MacArthur that would reauthorize the program through Nov. 30. Read more.

    FOR YOUR RADAR: Republican Sen. Chuck Grassley introduced bipartisan legislation on Monday targeting price fixing by OPEC. The bill would amend the Sherman Act to make oil-producing and exporting cartels illegal, and was co-sponsored by Sens. Amy Klobuchar, Mike Lee and Patrick Leahy. “It’s long past time to put an end to illegal price fixing by OPEC,” Grassley said in a statement. Read the legislation here.

    MAIL CALL! National Rural Electric Cooperative Association CEO Jim Matheson sent a letter to the leadership of the Energy and Commerce Environment Subcommittee on Monday in support of legislation to reform the New Source Review permitting program.

    — More than 100 Democrats signed onto a letter to members of both House and Senate Armed Services committees today to urge them to oppose any provisions to the National Defense Authorization Act that would “have widespread, negative consequences for the conservation of our imperiled wildlife and public lands.” Read the letter here.

    — Iowa’s congressional delegation invited acting EPA Administrator Andrew Wheeler to their state to discuss the Renewable Fuel Standard. Read it here.

    What role will Hispanic voters over 50 play in Arizona this Fall? Read POLITICO Magazine’s new series “The Deciders” which focuses on this powerful voting bloc that could be the determining factor in turning Arizona blue.

    QUICK HITS

    — “Puerto Ricans return to power grid, but fear for long term,” The Associated Press.

    — “Oil boom in Southern New Mexico ignites groundwater feud with Texas,” Water Deeply.

    — "In N.Y., farmers think about what might have been," E&E News.

    — “Same agenda, different style, acting EPA head pledges,” Bloomberg Environment.

    https://www.politico.com/newsletters/morning-energy/2018/07/17/spotlight-on-ferc-280874
    

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12. N.Y. Group Takes FERC Climate Issue to Federal Court

    Jul 17, 2018 | E&E Energywire

    By Ellen M. Gilmer

    A New York group is heading to court over federal regulators' recent decision to limit their consideration of climate change when approving natural gas infrastructure.

    The nonprofit Otsego 2000 filed suit in the U.S. Court of Appeals for the District of Columbia Circuit yesterday to challenge a May order from the Federal Energy Regulatory Commission that rejected the group's concerns about a New York gas project and, more controversially, set tighter limits on when the agency tallies greenhouse gas emissions from proposed projects.

    The specific issue in the new legal dispute: a set of now-complete New York compressor stations and upgrades known as the New Market project. The bigger picture: how FERC grapples with the indirect climate impacts of the infrastructure it approves.

    Though the Dominion Energy Transmission Inc. gas project hadn't attracted widespread attention outside the Empire State during its approval process, it caused a stir in May when FERC's Republican majority denied Otsego 2000's rehearing request for the project and used that order to announce a broad new policy of restricting its analysis of downstream climate impacts for some projects (E&E News PM, May 18).

    FERC's Democratic members, Richard Glick and Cheryl LaFleur, issued scathing dissents that accused the majority of ignoring a 2017 D.C. Circuit case related to the Southeast's Sabal Trail gas pipeline that ordered FERC to tally downstream greenhouse gas emissions.

    Environmentalists were outraged by the policy change and frustrated that FERC announced it in the New Market order, which could be challenged only by parties that already participated in that agency docket. Otsego 2000, a group focused on protecting the Otsego Lake region near Cooperstown, was initially unsure whether it could afford to litigate.

    Yesterday's filing lands the group and landowners John and Maryann Valentine in the D.C. Circuit. The lawsuit seizes on the disagreement among the commissioners about FERC's obligations under the National Environmental Policy Act.

    "The Court's [Sabal Trail] ruling left no ground for the Commission to shirk its obligations under NEPA and yet, that is precisely what the Commission majority has done in these orders — over the vehement dissent of Commissioners LaFleur and Glick," the filing says.

    Carolyn Elefant, a Washington, D.C., attorney who frequently represents landowners in pipeline challenges, is representing the group. She said yesterday that the "straw that broke the camel's back" for her clients was that the New Market order seemed contrary to the D.C. Circuit's Sabal Trail decision from last summer.

    The lawsuit is bolstered by a recent letter from New York Attorney General Barbara Underwood (D), who complained that FERC's policy change via the order was "designed to frustrate judicial review."

    The debate over the scope of FERC's review — whether it must consider the impacts of natural gas production and consumption — has been raging for years. FERC had been inching toward increased analysis of greenhouse gas emissions before the New Market order two months ago (Energywire, June 5).

    The new lawsuit could have big implications for climate law: If it goes in FERC's favor, the case could reinforce tighter limits on when the agency must analyze downstream climate impacts. If it goes in Otsego 2000's favor, FERC could be required to routinely expand its analysis. The suit could also be dismissed on procedural grounds or decided narrowly with limited impacts on subsequent cases.

    https://www.eenews.net/energywire/2018/07/17/stories/1060089313
    

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13. U.S. Senators Revive Bill to Counter OPEC 'Price Fixing'

    Jul 17, 2018 | Bloomberg (In Houston Chronicle)

    By Mohammed Aly Sergie

    U.S. Senator Chuck Grassley, along with a fellow Republican and two Democratic lawmakers, introduced legislation in the Senate that’s aimed at allowing the government to bring lawsuits against OPEC members for antitrust violations.

    Lawmakers in the other chamber of Congress, the House of Representatives, already introduced a version of the “No Oil Producing and Exporting Cartels Act,” or NOPEC, bill in May. Congress has discussed various forms of NOPEC legislation since 2000, but both George W. Bush and Barack Obama threatened to use their veto power to halt it from becoming law. The risk for the Organization of Petroleum Exporting Countries is that U.S. President Donald Trump may break with this precedent.

    “It’s long past time to put an end to illegal price fixing by OPEC,” Grassley said in a statement. We are “committed to reducing our reliance on foreign oil, especially when it’s artificially and illegally priced. Our bill shows the OPEC members we will not tolerate their flagrant antitrust violations.”

    OPEC pumps about a third of the world’s oil, and the biggest of its 15 members is Saudi Arabia, one of America’s closest friends in the Middle East. While the group doesn’t target a specific crude price, it adds or removes supplies in the market and therefore can affect prices. Benchmark Brent crude has gained 26 percent since January 2017 as OPEC cut output.

    U.S. oil imports from OPEC countries have declined by almost half from the 6 million barrels a day in 2008, according to data from the U.S. Energy Information Administration. Yet, at 3.4 million barrels a day in 2017, such imports remained 17 percent higher than in 2015, when they fell to their lowest in almost three decades.

    Trump has been a vocal critic of OPEC for decades, first in his books and then via Twitter. He has also gone further than other presidents in commenting about specific oil prices and production levels.

    Trump’s track record is important because it raises the odds that the White House will sign into law a bill that has broad bipartisan support. In 2007, a similar bill passed in the House of Representatives in a 345-72 vote, and in the Senate by 70-23, only to fail afterward in the face of White House opposition.

    The NOPEC legislation that Grassley, chairman of the Senate Judiciary Committee, and his colleagues introduced would amend the Sherman Antitrust Act of 1890. The other senators sponsoring it are Utah Republican Mike Lee and Democrats Amy Klobuchar of Minnesota and Patrick Leahy of Vermont. All four senators represent largely rural states, where oil prices, as reflected in the cost of gasoline, can have a big impact on local economies.

    https://www.chron.com/business/energy/article/U-S-Senators-Revive-Bill-to-Counter-OPEC-Price-13081049.php
    

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14. Okla. Commission Splits in 'Frack Hit' Case

    Jul 17, 2018 | E&E Energywire

    By Mike Soraghan

    One of the three Oklahoma elected officials who oversee oil and gas has escalated a fight between small producers and large independents, siding with a smaller company over the issue of "frack hits."

    Oklahoma Corporation Commissioner Todd Hiett filed a rare written dissent when his colleagues approved a Newfield Exploration Co. request for an exemption from a rule that wells be 600 feet apart.

    "The commission was presented with an opportunity to best enforce its setback rule, which the majority declined to accept," Hiett wrote in the dissent filed Thursday.

    Almont Energy Inc., one of the companies that unsuccessfully fought Newfield's request, filed a formal appeal yesterday to the state Supreme Court. A Newfield spokeswoman said yesterday that the company was looking into the matter and wouldn't be able to comment before publication (Energywire, Oct. 31, 2017).

    A unique system has evolved in Oklahoma that allows large new horizontal wells and older, smaller vertical wells to produce oil from the same place underground.

    But small producers say that system allows larger companies to siphon off their oil with long lateral wells and damage their wells with high-pressure hydraulic fracturing.

    The larger companies acknowledge that they sometimes damage existing wells. But they say it serves the interest of the state and the people who own the rights to the oil, because both get more money from increased production.

    The three-member Corporation Commission has frequently granted exemptions from the setback rule, allowing horizontal wells to be drilled closer than 600 feet from the older vertical wells. The wells in the Almont case are within 220 to 409 feet of vertical wells.

    Newfield said avoiding those vertical wells would cause 1.39 million barrels of oil to be left in the ground. Using yesterday's prices, that would be worth $95 million. In the world of oil and gas regulation, that's considered to be waste.

    Smaller drillers say the 600-foot setback isn't enough. They say wells have been flooded with sand and water by frack hits from hydraulic fracturing operations more than a mile away.

    Kurt Bollenbach, a part owner of Almont, said about 15 of his company's wells have been badly damaged or destroyed. Keeping the horizontal well bores won't necessarily protect them, he said, but will give them a "fighting chance."

    "If we don't get that fighting chance," Bollenbach said, "our wells are just going to be roasted."

    While Oklahoma's situation appears to be unique, the fight over frack hits shows problems that can result from new drilling in old oil fields and shows that the shale boom has created a growing gap between large and small independent producers.

    https://www.eenews.net/energywire/2018/07/17/stories/1060089311
    

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15. Wheeler Visits Gas Company the Agency Once Fought

    Jul 17, 2018 | E&E Energywire

    By Mike Soraghan

    In his first state visit as the new head of EPA, Andrew Wheeler went to an office of a company that the agency fought with bitterly during the Obama administration.

    Wheeler toured the Canonsburg, Pa., facilities of Range Resources Corp., which kicked off the Marcellus Shale gas boom with a well drilled in 2004.

    But the Fort Worth, Texas-based company also became known for a combative approach to those who complained about environmental problems from shale drilling. It sued a Pennsylvania township for delaying approval of new drilling, subpoenaed activists and bloggers, and sought to apply a nondisclosure agreement with a couple to their children.

    EPA charged Range in December 2010 with contaminating two water wells in a Parker County, Texas, subdivision when it drilled two gas wells nearby. The company fought back hard. It ridiculed the idea that there was contamination but also stressed that methane occurs naturally in area drinking water. In 2012, EPA suddenly bailed out of the case with little explanation.

    Triumphant Range officials emphasized that it was not a negotiated settlement, where each side gives a little. Instead, they said EPA officials at headquarters beat a full retreat when they realized their people on the ground in Dallas had brought the case based on flawed science. EPA has never confirmed that (Energywire, Nov. 25, 2013).

    Another Range case is being used by EPA as a template for a Trump administration plan to let oil and gas producers self-report air pollution violations (Energywire, May 7).

    After touring the Range facility, Wheeler held a roundtable with company employees. At the roundtable, according to an EPA release, Wheeler "heard firsthand from employees about the importance of maintaining a robust energy presence in the region to help keep energy prices low and stimulate the local economy."

    Range officials said they appreciated Wheeler's visit.

    "We look forward to continually working with the regulatory community to safely develop oil and gas," Range Resources Senior Vice President of Operations Dennis Degner said in the EPA release. "Range, along with many of our peers, is implementing best-in-class emissions management technologies and practices on our natural gas well sites."

    https://www.eenews.net/energywire/2018/07/17/stories/1060089307
    

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16. In the LOOP: US Gulf Coast VLCC Exports Ramp Up Amid Wider Price Spreads

    Jul 17, 2018 | Platts

    By Laura Huchzermeyer and Alan Tomczak

    Wider price spreads between US crudes and Dubai-based crudes have opened arbitrage opportunities to export US crude to Asia, leading to a recent increase in VLCC exports out of the US Gulf Coast, S&P Global Platts data shows.

    The second VLCC to partially load in the Houston Ship Channel was seen docked at the Enterprise Products’ Texas City facility on Monday, according to cFlow, Platts’ trade flow software. The Eagle Victoria, with a capacity of more than 2 million barrels, arrived on Saturday. A cargo was fixed to the vessel for mid-July loading by SK Energy for delivery to South Korea for a lump sum of $4.8 million, according to Platts fixtures report.

    A spokesman for Enterprise did not return a request for comment Monday.  The FPMC C MELODY, another VLCC, was recently partially loaded in the Enterprise Products’ Texas City dock on the Houston Ship Channel — marking the first time a VLCC has loaded and sailed from any port in Texas. The vessel was partially loaded at Texas City and then a ship-to-ship transfer completed the loading in deeper water offshore Galveston. The vessel was in the South Atlantic Ocean on Monday and is heading to West Coast India, according to cFlow.

    It is unknown what crude grade was loaded on the VLCCs in Texas City. However, West Texas Intermediate Midland crude in Houston, with an API of around 41 degrees, as well as Eagle Ford crude with an API of 45 is known to have been offered for loading in July at WTI in Houston (MEH) plus 75 cents/b.

    The Texas-loading VLCCs join another two that have loaded at the Louisiana Offshore Oil Port (LOOP) within the past month — bringing the total of four to be loaded at LOOP so far this year.

    The Anne, a VLCC with a capacity of 2.02 million barrels of crude, sailed on July 4 to the Dutch Antilles island of St. Eustatius, where it was in port for two days before sailing again, this time with a destination of the Huizhou Mabianzou Terminal in China.

    Another VLCC, Eagle Vancouver, loaded and then sailed from LOOP on June 20. The vessel has two destinations listed on cFlow Qingdao, China, and Cochin, India.

    Widening WTI-Dubai and LOOP Sour-Dubai spreads could be behind the increased exports out of the US Gulf Coast. A wider spread between WTI-based crudes and more expensive Dubai-based grades makes US crudes more competitive with Middle East regional grades.

    The LOOP Sour-Dubai spread has been mostly widening since the spring. The 10-day moving average was $4.13/b on Friday compared with $3.90/b one month ago and $2.88/b two months ago.

    The WTI MEH-Dubai spread has been more volatile in recent months. It reached a wide point of $5.93/b on June 22 but has narrowed back in in July, with WTI at a 20 cents/b premium to Dubai on Friday. The 10-day moving average was about 33 cents/b on Friday.

    The narrowing of the WTI MEH-Dubai spread may be an indication that there may be fewer VLCC exports of light sweet US crudes to Asia in August.

    China also may curb their buying of US crudes in light of recently imposed tariffs.

    http://blogs.platts.com/2018/07/17/loop-usgc-exports-price-spreads/
    

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Chemical Security News

17. Trump-Putin Summit Blasts Open Cybersecurity Divisions

    Jul 17, 2018 | E&E Energywire

    By Blake Sobczak

    President Trump's decision yesterday to dismiss evidence of Russian cyber-enabled tampering in the 2016 U.S. presidential election has sent shock waves through the U.S. intelligence community, driving lawmakers and cybersecurity experts to question how the White House will respond to future attacks on critical infrastructure.

    "I have great confidence in my intelligence people, but I will tell you that President Putin was extremely strong and powerful in his denial today" of any election interference, Trump said alongside Russian President Vladimir Putin at a press conference in Finland yesterday.

    Trump went on to laud Putin's "incredible offer" to work with U.S. justice officials on their investigation into 12 Russian intelligence officers accused of meddling in the 2016 election, by hacking Democratic Party officials and sharing the stolen material.

    The U.S. president's comments, which came on the heels of a one-on-one meeting with his Russian counterpart, drew bipartisan rebuke for failing to condemn what many experts consider one of America's most brazen geopolitical adversaries.

    Sen. John McCain (R-Ariz.), chairman of the Senate Armed Services Committee, called the joint press conference in Helsinki, Finland, "one of the most disgraceful performances by an American president in memory."

    Susan Hennessey, a former attorney in the National Security Agency's Office of General Counsel, said on Twitter that Trump's performance should prompt a "scary and overwhelming" conversation. "I don't know who the President of the United States is working for, but it is not the American people," she said.

    Trump's own intelligence director, Dan Coats, appeared to distance himself from the president's remarks yesterday, writing in a statement of Russia's "ongoing, pervasive efforts to undermine our democracy."

    "We will continue to provide unvarnished and objective intelligence in support of our national security," he said.

    On Friday, Coats singled out Russian hacking activity during an appearance at the Hudson Institute in Washington, D.C., warning of the potential for a "crippling cyberattack against our critical infrastructure."

    "In regards to state actions, Russia has been the most aggressive foreign actor. No question," he said. "And they continue their efforts to undermine our democracy."

    Earlier that day, the Justice Department unveiled an indictment of 12 Russian military officers on charges of conspiracy, money laundering and identity theft, claiming Moscow's Main Intelligence Directorate (GRU) backed a "sustained effort" to interfere with the last U.S. presidential election. The officers are alleged to have hacked into the email accounts of prominent Democratic Party officials and published stolen material via intermediaries, among other cyber intrusions.

    Members of the same Russian intelligence organization are believed to have been behind major cyberattacks on Ukraine's power grid in 2015 and 2016, and the "economically devastating" NotPetya ransomware attacks last year, noted John Hultquist, director of intelligence analysis at the cybersecurity firm FireEye Inc. "Ultimately, though much of their activity remains opaque, we believe GRU organizations have been behind many of the most aggressive incidents in recent memory," he said in an emailed statement.Pushing the red lines

    Just last week, Ukraine's security service (SBU) accused Russian intelligence officers of attempting to hack into the industrial control systems of a chlorination facility, the Aul Chlorotransfer Station in the central part of the country. SBU said it was able to thwart the attack, which used a variant of the "VPNFilter" malware that cropped up recently in thousands of small-home and office computer routers across the globe (Energywire, May 24).

    "Russian threat actors believe that they have free rein, certainly in Ukraine," Phil Neray, vice president of industrial cybersecurity at the security firm CyberX, said in an interview. "What we're seeing is Russia pushing the red lines, to see where our red lines actually lie."

    In March, the Department of Homeland Security and the FBI issued an extraordinary joint alertwarning of Russian attempts to hack into U.S. critical infrastructure systems in the energy, water, nuclear and manufacturing sectors, among other industries.

    "So far, it mainly appears to have been for cyber espionage reasons," Neray said. "But there's no reason — once you've established a foothold in an [industrial control system] network — that you can't use that foothold to conduct destructive actions."

    Joe Slowik, adversary hunter at industrial cybersecurity firm Dragos Inc., credited DHS and supporting agencies for sharing information on Russian cyberthreats to U.S. infrastructure.

    He said Trump's comments in Helsinki yesterday highlight the "massive cognitive dissonance right now between what's coming out of the executive branch, and some of the departments and agencies below."

    Slowik pointed out that the Ukrainian government appeared to time its announcement of the attempted attack on the chlorine facility to coincide with Trump's visit with Putin, offering an opening for Trump to condemn meddling in civilian critical infrastructure, from water treatment plants to election systems to electric utilities. Friday's indictment from the Justice Department special counsel's office only added to pressure for Trump to bring up Russia's alleged hacking activity at the meeting yesterday.

    Based on the press conference, the summit was a missed chance for Trump to back up his own government's efforts to deter the worst behavior in cyberspace, in Slowik's telling.

    "I don't know if we're in a position to do that anymore, or if that sort of leadership from on top will happen," he said.

    https://www.eenews.net/energywire/2018/07/17/stories/1060089281
    

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Environment News

18. House Republican Will Introduce $23 Carbon Tax Next Week

    Jul 17, 2018 | E&E Climatewire

    By Zack Colman and Nick Sobczyk

    Rep. Carlos Curbelo (R-Fla.) is preparing to introduce legislation that would pause federal regulations on climate change in exchange for an escalating tax on carbon emissions, according to draft legislation obtained by E&E News.

    The move, which comes as Curbelo defends his congressional seat in South Florida, is a rare effort by a Republican to address global temperature increases by reducing greenhouse gases. It's also causing strife within his party.

    Curbelo is trying to line up co-sponsors before the legislation's public release next week, but GOP opponents are already targeting it as anathema to Republican principles on economic growth. The House Rules Committee is meeting today on whether to allow a vote on a resolution that calls carbon taxes "detrimental" to the economy (Climatewire, July 16).

    In an interview yesterday, Curbelo wouldn't go into detail about the bill, saying only that it involves "regulatory reform" and that it would make investments in infrastructure and adaptation.

    "It really attempts to capture the political energy of the moment," he said. "We know that infrastructure investment is highly popular in our country. It's probably the only issue that [President] Trump and [Democratic nominee Hillary] Clinton agreed on in 2016."

    A copy of the draft bill obtained by E&E News calls for eliminating the federal gas tax and replacing it with a $23-per-ton tax on carbon emissions from oil refineries, gas processing plants and coal mine mouths beginning in 2020. Industrial sectors such as cement, aluminum, steel and glass would also pay the fee for emissions stemming from physical or chemical reactions outside of energy production. Sources said Curbelo's office was shopping that version of the bill last week.

    The tax would escalate 2 percent above inflation annually. If the decline in emissions fails to reach certain levels, the carbon tax would increase by an additional $2 per ton the following year.

    Modeling, which the draft text notes is "still under development," suggests the plan would reduce fossil fuel emissions 24 percent below 2005 levels in 2020, and 30 percent below 2005 levels in 2032. For comparison, former President Obama's target under the Paris climate accord was 26 to 28 percent below 2005 levels by 2025. President Trump has said the United States will withdraw from the climate pact.

    The draft bill attempts to strike a compromise between environmental and Democratic advocates of greenhouse gas reduction policies and a growing number of center-right organizations that promote a carbon tax as a conservative solution to climate change.

    It would halt — but not kill — EPA regulations on greenhouse gas emissions so long as the tax meets its goals to cut carbon emissions. The draft legislation contains check-in points in 2025 and 2029 to consider reinstating regulations if the tax hasn't curbed enough greenhouse gases. The moratorium would sunset after 2033 if emissions goals are met. That provision is meant to address concerns from Democrats and environmental groups, which generally oppose forfeiting EPA's authority to regulate carbon in exchange for a carbon tax.

    Carbon price advocates contend it offers more certainty to industry. Many businesses that don't currently face climate regulations expect that a future administration might craft rules that apply to their sectors. Center-right carbon tax proponents have seen the policy as a way out of that scenario.

    "While we always need to see the details of a specific proposal, what we do know is that a carbon price is the most efficient way to reduce greenhouse gas emissions by letting members of the private sector to decide when, where and how to reduce their own emissions," said Joseph Majkut, climate policy director for the libertarian Niskanen Center.

    The bill is still in draft form, so its contents may change, sources said.

    The legislation sidesteps a key tenet of libertarian and free-market groups that are trying to drum up support for the idea — it's not revenue-neutral. The draft uses revenue to pay for other federal spending priorities, such as shoring up the depleted Highway Trust Fund, state grants for low-income families to offset higher energy costs, research and development programs, and financing coastal restoration projects.

    "This tosses all of those justifications out the window," said Kenny Stein, policy director with the Institute for Energy Research. "I don't know how any of those groups could support this."

    The draft bill does accomplish a goal of center-right groups by eliminating a tax — a so-called tax swap. But critics note this isn't a one-for-one offset, because it would increase revenue for the federal government. It's designed to fix the flagging gas tax, which has failed to keep up with highway repairs as vehicle efficiency has increased, motorists drive fewer miles and more people move to urban settings.

    Seventy percent of the revenues would flow to the Highway Trust Fund, according to the draft.

    "Revenue neutrality has not been demonstrated to be the carrot for politicians like many people thought it would be," Majkut said.

    The draft also says the tax should be "border adjustable," meaning fees could be assessed on imported products from countries without a carbon tax.

    Curbelo, who co-chairs the bipartisan Climate Solutions Caucus, is facing a tough re-election battle in South Florida. He has made climate change and bipartisanship key parts of his message.

    The legislation would face long odds in the GOP-controlled Congress. Stein said that the draft's automatic tax increase "puts the fee on autopilot."

    "I don't see how anybody on the right can justify that," he said.

    The bill doesn't have a Senate companion yet, Curbelo said, but he predicted it would "get people's attention."

    "This bill, we've put months and months into it and have taken it around to a lot of experts and groups and corporations. We have high hopes for it," Curbelo said. "That doesn't mean it gets passed this Congress, but it means we really think it could be a good base for bipartisan cooperation on this issue."

    Greg Bertelsen, senior vice president with the Climate Leadership Council, an organization that includes former Republican administration officials, environmental groups and oil and gas companies, said he "likes the direction" of Curbelo's draft legislation. CLC has pushed a carbon tax that would return revenues to taxpayers in the form of dividends, while nixing greenhouse gas regulations.

    "The council's view has always been that this is going to be a longer-term play and like any major policy issue," Bertelsen said. "It can take more than one Congress to build the level of support and education for overall passage, but it's pretty clear that the public wants both parties to come together."

    https://www.eenews.net/climatewire/2018/07/17/stories/1060089315
    

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