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AM ACC Clips Report - August 21, 2018

Industry and Association News

(ACC Mentioned) U.S. Moves Toward New Tariffs on China Despite Fresh Round of Trade Talks
Aug 20, 2018 | The Wall Street Journal
By Bob Davis and Andrew Duehren

Two approaches reflect split in Trump administration on how to deal with Beijing; American companies complain about levies at hearings
(ACC Mentioned) More China Tariffs Loom As USTR Opens Marathon Hearings
Aug 21, 2018 | Law 360
By Alex Lawson

The Office of the U.S. Trade Representative on Monday began a week’s worth of daylong public hearings on its proposal to hit $200 billion of Chinese goods with new duties, the most aggressive salvo yet in its ongoing battle with Beijing over intellectual property and technology acquisition policies.
(ACC Mentioned) White House Chemistry: Trump Staffs Administration With Ex-chemical Industry Employees
Aug 20, 2018 | The Wisconsin Gazette

President Donald Trump has staffed White House agencies with lobbyists, lawyers and former employees from the chemical industry and its allies.
(ACC Mentioned) Economists Fear Trump's Policy Risks
Aug 21, 2018 | Northwest Arkansas Democrat-Gazett

U.S. business economists are concerned about the risks of some of President Donald Trump's economic policies, saying they fear his tariffs and higher budget deficits could eventually slow the economy.
(ACC Mentioned) HDPE, LLDPE Drive First-Half Gains In U.S./Canadian Resin Sales
Aug 21, 2018 | Plastics News
By Frank Esposito

The impact of new North American polyethylene resin capacity began to be felt in sales totals for the first half of 2018, with both high and linear low density PE posting big gains.
EPA’s Wheeler Left to Solve Pruitt’s ‘Rubik’s Cube’ of Lawsuits, Rules
Aug 21, 2018 | BNA Daily Environment Report
By Sam Pearson Reporter

Ex-EPA head Scott Pruitt’s mounting court losses put the spotlight on Acting Administrator Andrew Wheeler to deliver the regulatory rollbacks the Trump team has promised.
Back-To-Back Court Losses Show Limits of Trump’s Deregulations
Aug 21, 2018 | BNA Daily Environment Report
By Ari Natter

President Donald Trump has attempted to block environmental regulations by his predecessor Barack Obama, in part by delaying their implementation. But the strategy is getting rebuffed by judges.

LCSA News

EPA Issues 27 TSCA Significant New Use Rules
Aug 21, 2018 | Chemical Watch
By Kelly Franklin

The US EPA has issued TSCA significant new use rules (Snurs) for 27 substances subject to section 5(e) consent orders.

Chemical Management News

Walmart to Shed Solvents Linked to Deaths, Birth Defects
Aug 21, 2018 | BNA Daily Environment Report
By Pat Rizzuto

Walmart Inc., the world’s largest retailer, will stop selling paint strippers containing a solvent linked to more than a dozen deaths and a second solvent that could harm the development of babies in the womb.
Walmart Becomes Latest Retailer To Ban Chemicals Found In Paint Strippers
Aug 21, 2018 | The Hill - E2 Wire
By Miranda Green

Walmart is joining the growing list of retailers that are banning paint strippers that contain two controversial chemicals tied to cancer.
Watch Out Starbucks, Kellogg’s: Tougher Warning Mandates Coming
Aug 21, 2018 | BNA Daily Environment Report
By Julie Steinberg

Starbuck’s, Kellogg’s, and General Mills are only a few of the many companies that have found their products targeted under California’s chemical warnings law in recent years.
Length of CVS Receipts Target of Jokes, and Now Activists
Aug 21, 2018 | Bloomberg BNA Environment & Energy Report
By Adam Allington

The length of the receipts customers get at CVS Health Corp. have been made fun of on late-night TV, been the source of memes, and even inspired Halloween costumes.
Lawyers Warn Companies On Global Impacts Of California Prop. 65 Rules
Aug 20, 2018 | Inside EPA
By Curt Barry

Industry attorneys are warning companies around the world that they could be impacted by a revised set of California Proposition 65 warning requirements that take effect Aug. 30, including provisions that are expected to shift large cost impacts and liability from retailers to upstream manufacturers and distributors of a host of consumer products.
Lawyers Contest California Rule Exempting Coffee From Prop. 65
Aug 21, 2018 | Inside EPA

Trial lawyers representing a public health group are vigorously challenging California's proposed rule that would allow coffee to be sold in the state without requiring a Proposition 65 cancer warning label, charging the plan contradicts a court ruling and is the result of the coffee industry lobbying Gov. Jerry Brown's (D) administration.
California Considers Safe Use Determination Request For Styrene
Aug 21, 2018 | Chemical Watch

California’s Office of Environmental Health Hazard Assessment has received a request to issue a Proposition 65 Safe Use Determination (SUD) for the use of styrene in certain bathware products.
Senators Ask For Briefing On Lead Paint in Army Housing
Aug 21, 2018 | E&E Daily
By Courtney Columbus

A bipartisan group of senators is expressing concern about the health risks lead-based paint poses to families who live in base housing.

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

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

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

Environment News

Trump’s Power-Plant Proposal May Increase U.S. Carbon Pollution
Aug 21, 2018 | BNA Daily Environment Report
By Jennifer A. Dlouhy

Donald Trump is poised to replace former President Barack Obama’s plan to slash power plant greenhouse gas emissions with a substitute that could actually increase them.
Trump Draft Creates 'Huge Loophole' — Gina McCarthy
Aug 20, 2018 | E&E News PM
By Amanda Reilly

The architects of the Clean Power Plan are taking a pre-emptive strike against the Trump administration's expected move to replace it with a version that gives states broad authority for reducing carbon dioxide emissions at power plants.
Critics See Legal Vulnerabilities In EPA's Looming CPP Replacement Plan
Aug 21, 2018 | Inside EPA
By Dawn Reeves

EPA's upcoming proposal to replace the Obama-era Clean Power Plan (CPP) is expected to be riddled with legal vulnerabilities, critics say, including that it may be viewed as “arbitrary and capricious” because officials likely will not be able to demonstrate actual emissions cuts, and the rule could increase greenhouse gases and conventional pollutants.
Leaked Talking Points On CPP Replacement Stress GHG Cuts, NSR Relief
Aug 21, 2018 | Inside EPA
By Dawn Reeves

A leaked copy of White House talking points to support EPA's proposal to replace the Obama-era Clean Power Plan (CPP) shows that the administration intends to stress that greenhouse gases will continue to fall under the new rule and that the agency is giving permitting relief to plants that make efficiency upgrades to cut GHGs.
University of Michigan Sets Ambitious Goal to Pull Carbon From Air
Aug 21, 2018 | BNA Daily Environment Report
By Bobby Magill

Imagine a company selling flexible concrete made from carbon dioxide sucked directly from the air that could help highways withstand earthquakes and help solve climate change.
EPA Seeks Input On Proposal To Bolster Texas' SO2 Regional Haze Trading
Aug 21, 2018 | Inside EPA
By Stuart Parker

EPA is seeking public input on a proposal aimed at bolstering the rationale for approving Texas' use of an intrastate sulfur dioxide (SO2) emissions trading program to satisfy regional haze reduction mandates, while also asking for comment on alternatives including source-specific emissions limits sought by environmentalists.

Industry and Association News

(ACC Mentioned) U.S. Moves Toward New Tariffs on China Despite Fresh Round of Trade Talks

Aug 20, 2018 | The Wall Street Journal

By Bob Davis and Andrew Duehren

Two approaches reflect split in Trump administration on how to deal with Beijing; American companies complain about levies at hearings
WASHINGTON—The Trump administration is moving closer this week to levying tariffs on nearly half of Chinese imports despite broad opposition from U.S. business and the start of a fresh round of talks between the U.S. and China to settle the trade dispute.
The twin administration initiatives—pursuing tariffs on $200 billion of Chinese goodswhile relaunching talks to scrap tariffs—underscore a split within the U.S. administration, with negotiators in the U.S. Treasury Department offering a carrot, while the office of the U.S. trade representative threatens with a stick, both with the approval of President Trump, according to people familiar with the administration’s internal deliberations.
“Trump is a deal guy,” said one person closely following the talks. Until the Chinese make a concrete offer, the person said, Mr. Trump will continue to encourage the dueling agencies about what action to take.
President Trump, a Republican, continues to take a skeptical, hawkish view toward Beijing, said U.S. officials. At a fundraiser on Friday in the tony Hamptons section of New York’s Long Island, he focused on China, said two participants. The message was: “They better pay attention because we’re not done with those guys yet,” said one of the participants.
onday was the first of six full days of public hearings on the next round of tariffs, where about 360 company and trade association officials are expected to testify on the impacts of the tariffs on their industries. As in past hearings on the China trade dispute, which involves U.S. claims that Chinese firms obtain U.S. intellectual property by theft or coercion, the participants generally requested exemptions from the tariffs because they felt the levies would hurt business prospects.
The U.S. is considering tariffs of either 10% or 25% on thousands of categories of products, including for the first time a substantial number of consumer goods, including furniture, computer parts and luggage.
Should tariffs be imposed on handbags, as proposed, “we would not hit profitability for many more years, we would not be able to hire the 10 additional people we had planned,” said Melissa Mash, the founder of Dagne Dover, an online handbag company.
Jim Day, the vice president of global supply chain at 47 Brand LLC in Brockton, Mass., which makes baseball hats and other sports apparel, said the company would likely have to lay off workers if their products are subject to tariffs.
Witnesses underscored the difficulty of trying to find suppliers outside China for their products. In some cases, executives and industry representatives said that the components or products are only available in China or cautioned against the time and resources necessary for establishing a supply line in a different country, including the U.S.
“There is no leather upholstery business in the U.S. anymore, none,” said David Mathison, a co-founder of Leather Miracles, which is based in Hickory, N.C.
“Shifting to another country, or manufacturing in the U.S., requires time, economies of scale and significant capital investment,” said Bob Margevicius, executive vice president of Specialized Bicycle Components in Morgan Hill, Calif.
Some of the companies backed tariffs. Mike Branson, an executive vice president at Atlanta-based Rheem Manufacturing Co., which makes heating, ventilating and air-conditioning equipment, said he needed additional protection from Chinese competition. “These proposed actions would assist in eliminating China’s unfair acts, policies and practices, and wouldn’t cause disproportionate economic harm to U.S. consumers,” he said.
So far, the administration has levied 25% tariffs on $34 billion in Chinese goods—mainly machinery and electronic components—which was matched dollar for dollar by Beijing. On Thursday, 25% tariffs are set to go in place on another $16 billion of Chinese imports, which Beijing also promises to match.
Prior to those tariffs, the U.S. trade representative also held hearings, as requested by U.S. industry. Josh Kallmer, senior vice president at the Information Technology Industry Council, a trade association of high-technology companies that pushed for the hearings, say they have given companies “an opportunity to get in front of officials and explain” their situation. “But it’s hard to know how much it has affected the administration’s decision making.”
The American Chemistry Council, a chemical industry trade group, said that after the first hearings on the China trade dispute, the trade representative removed all but one of the targeted chemicals from tariffs. But then it added even more chemicals to the second round of tariffs due to go into effect on Thursday, and removed very few after ACC objected. That record “means they aren’t really listening to people,” said Edward Brzytwa, the ACC’s director for international trade.
The trade representative declined to comment on individual cases. A senior administration official said that “all interested persons and parties have equal opportunity to provide comments.”
So far, the U.S. has announced decisions to levy tariffs several weeks after the end of the public hearings. The trade representative might decide to divide the tariffs into tranches, as it did with its first round of China levies. That would provide time for more comments, and also for more negotiations with Beijing.
On Wednesday, Chinese negotiators are due to start talking with a U.S. team led by Treasury Undersecretary David Malpass, at the invitation of the U.S. The negotiations are aimed at finding a way for both sides to address the trade disputes, the officials said, and could lead to more rounds of talks. If all goes well, the two sides would figure out a way to end the trade dispute ahead of planned meetings between Mr. Trump and Chinese leader Xi Jinping at multilateral summits in November, said officials in both nations.
But there are plenty of obstacles ahead, particularly if the U.S. goes ahead with its tariffs plans and China hits back, as it has threatened, with tariffs on another $60 billion of U.S. goods. That would mean $110 billion of U.S. exports to China—85% of the total—would be subject to tariffs. Such an outcome is likely to increase pressure on Mr. Trump to go ahead with even more levies.
https://www.wsj.com/articles/u-s-moves-toward-new-tariffs-on-china-despite-fresh-round-of-trade-talks-1534798515?mod=searchresults&page=1&pos=1

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(ACC Mentioned) More China Tariffs Loom As USTR Opens Marathon Hearings

Aug 21, 2018 | Law 360

By Alex Lawson

Law360 (August 20, 2018, 1:27 PM EDT) -- The Office of the U.S. Trade Representative on Monday began a week’s worth of daylong public hearings on its proposal to hit $200 billion of Chinese goods with new duties, the most aggressive salvo yet in its ongoing battle with Beijing over intellectual property and technology acquisition policies.
USTR will hear from nearly 400 businesses, academics, trade groups and other advocates on the potential costs and benefits of imposing tariffs on $200 billion worth of Chinese goods, which were announced last month in the latest escalation of the U.S. enforcement blitzkrieg against China.

Trump’s enforcement push began with an investigation launched in August using Section 301 of the Trade Act of 1974. That probe uncovered a litany of purportedly unfair Chinese trade practices, chiefly the country's raft of rules requiring foreign companies to hand over sensitive technology as a condition of doing business in Beijing.

Along with the technology transfer rules, the Section 301 probe also rapped Beijing for its discriminatory licensing requirements, state-funded acquisition of U.S. companies’ intellectual property to grow its own domestic champions, and state-backed hacking of U.S. firms to obtain sensitive business information.

Among the groups testifying on the first day of the hearings is the American Chemistry Council, which has bristled at the administration’s decision to target key chemicals and plastic compounds used in a litany of industrial goods and processes.

“Tariffs would erode the competitiveness of U.S. manufacturers and incentivize offshoring and trade diversion,” Ed Brzytwa, director for international trade at the ACC, said in his prepared testimony. “If U.S. manufacturers are less competitive, then they’re unlikely to be in a position where they could increase domestic sales or exports to China, or Europe, or anywhere else.”

Thus far, the tariffs imposed by the U.S. have primarily hit industrial goods and components, which has slowed the rate of price hikes for everyday consumers. But that may change with the latest round of tariffs, which could begin to creep into the consumer goods realm.

One set of goods implicated by the newly proposed tariffs are bridal gowns and prom dresses, according to American Bridal & Prom Industry Association President Stephen Lang, who said that the unique contours of his industry makes producers uniquely susceptible to damage from the tariffs.

“Expanding the tariffs will lead to higher prices for U.S.-produced materials — an increase that will be passed on to consumers,” Lang said in his prepared testimony. “The nature of fashion makes it virtually impossible for clothing importers to stockpile significant merchandise ahead of any potential tariffs.”

The American Apparel & Footwear Association voiced similar sentiments, bashing the U.S. decision to target Chinese textiles, travel goods and hats with new duties.

By and large, the multitude of comments already submitted to the government have been opposed to the duties, a point underscored by the U.S. Chamber of Commerce in its submission released Friday.

“USTR’s proposed tariffs on an additional $200 billion of Chinese imports dramatically expands the harm to American consumers, workers, businesses, and the economy,” the Chamber wrote. “The number of written submissions to USTR and in-person testimony opposing the administration’s tariffs speaks volumes about the damage that additional tariffs will do.”
https://www.law360.com/ip/articles/1074946/more-china-tariffs-loom-as-ustr-opens-marathon-hearings

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(ACC Mentioned) White House Chemistry: Trump Staffs Administration With Ex-chemical Industry Employees

Aug 20, 2018 | The Wisconsin Gazette

President Donald Trump has staffed White House agencies with lobbyists, lawyers and former employees from the chemical industry and its allies.
“Trump’s Chemical Romance,” a new Public Citizen report, identified 146 high-ranking Trump administration officials who have ties to the corporate coalition pushing to undo the Obama-era Chemical Disaster Rule.
To delay and weaken the rule, groups representing chemical and petrochemical corporations, along with allies affiliated with coal-fired power plants, paper mills and corporate groups formed the RMP Coalition, named for the U.S. Environmental Protection Agency’s “Risk Management Program,” the formal name for the rule.
The coalition petitioned former EPA administrator Scott Pruitt to delay and weaken the rule, which has a comment period deadline of Aug. 23.
Among the 146 administration members with ties to the RMP Coalition, and the industry sectors its corporate coalition members represent, are 57 appointees with connections to the American Chemistry Council, the chemical industry’s primary corporate coalition.
Also, 92 appointees with ties to the chemical and petrochemical industries, including Dow Chemical Co., Arkema Inc., BP, Chevron Corp. and Koch Industries.
“Corporate insiders with chemical conflicts have contaminated the Trump administration,” said Stephanie Thomas, an organizer with Public Citizen’s Texas Office. “The polluter-friendly regulatory rollback Trump’s EPA is seeking is a disaster for the public and first responders.”
Those 16 conflicted EPA officials include:
• Nancy Beck, the EPA’s deputy assistant administrator for chemical safety and pollution prevention, who for five years was an executive at the American Chemistry Council.
• Acting EPA Administrator Andrew Wheeler, who worked for International Paper Company -- a member of the American Forest and Paper Association, an RMP Coalition member -- and is a former registered lobbyist for fossil fuel corporations Murray Energy and Xcel Energy.
• William Wehrum, the EPA’s assistant administrator for air and radiation, who provided legal services to four of the seven RMP Coalition members: American Forest and Paper Association, American Fuel and Petrochemical Manufacturers, American Petroleum Institute, and Utility Air Regulatory Group.
• Patrick Traylor, the EPA’s deputy assistant administrator for enforcement and compliance assurance, who provided legal services to the American Petroleum Institute (an RMP Coalition member) as well as API member Transocean Offshore Deepwater Drilling.
• Peter Wright, Trump’s nominee to become assistant administrator for the EPA’s Office of Land and Emergency Management, who was a senior lawyer with Dow Chemical Co. for 19 years.
https://www.wisconsingazette.com/news/white-house-chemistry-trump-staffs-administration-with-ex-chemical-industry/article_12b70cc2-a4a1-11e8-87e5-5791dde75137.html

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(ACC Mentioned) Economists Fear Trump's Policy Risks

Aug 21, 2018 | Northwest Arkansas Democrat-Gazett

U.S. business economists are concerned about the risks of some of President Donald Trump's economic policies, saying they fear his tariffs and higher budget deficits could eventually slow the economy.
More than 90 percent of economists surveyed by the National Association for Business Economics in a report being released Monday said they think the Trump administration's current and threatened tariffs will harm the economy.
The administration has imposed tariffs on goods from many of America's main trading partners -- from China and Europe to Mexico and Canada. Trump officials argue that the tariffs, which are taxes on imports, will help the administration gain more favorable terms of trade. But so far, U.S. trading partners have simply retaliated with tariffs of their own.
About two-thirds of the respondents saw negative effects if the U.S. withdraws from the North American Free Trade Agreement with Mexico and Canada.
Seven in 10 of the economists surveyed by the association said they thought Trump's tax cuts were "too stimulative" because of the resulting increase in the national debt, even though two-thirds said the corporate tax cuts generally benefit their companies.
The 251 respondents, surveyed between July 19 and Aug. 2, said they do envision some of Trump's policies as supporting the economy. Eighty percent, for example, told the association that the administration's efforts to ease regulations would boost growth in the short run.
As a whole, though, the responses of the business economists represent a rebuke of the Trump administration's overall approach to the economy. The administration has been hailing a recent pickup in growth as heralding the start of an enduring and more vigorous economic boom.
Trump has also touted low rates of youth unemployment and, recently, falling joblessness among African-American and Hispanic workers.
Job gains overall have been solid, and the economy expanded at a brisk 4.1 percent annual pace in the April-June quarter. The Trump team has also portrayed a bump in retail sales and the confidence expressed in surveys of consumers and small businesses as evidence of more robust growth ahead.
"Our economy, our investors, our workforce are crushing it right now," Larry Kudlow, the top White House economic adviser, said at a Cabinet meeting Thursday. "Any business economist worth his or her salt would look at these trends and tell you we're going for a while."
But the surveyed business economists said they thought the $1.5 trillion in tax cuts over the next decade would produce higher budget deficits that should be reduced. The survey showed that while the economists expect the tax cuts to boost the economy this year, 62 percent forecast that the lower taxes would accelerate growth by an annual average of just 0.1 percent or less through 2027.
"In general, the panel expects the federal deficit, as a percentage of the economy, to grow in the longer term, with eight out of 10 panelists indicating that fiscal policy should help shrink the deficit as a share of the economy," said survey chair Jim Diffley, an economist at IHS Markit Ltd.
Almost two-thirds said the U.S. corporate tax system following the 2017 Tax Cuts and Jobs Act was an improvement over the previous regime in terms of equity and efficiency, while 25 percent viewed it as "somewhat worse" or "far worse" than before.
Changes to personal income taxes fared worse, with only 31 percent considering the new system better in terms of equity and efficiency and about 54 percent judging it "somewhat worse" or "far worse."
Forecasters were more upbeat on the Federal Reserve, with 76 percent saying monetary policy is on the right track, the most in the semiannual survey in more than 11 years, according to the association. Nineteen percent of respondents in the current survey said policy is "too stimulative," while four percent said the central bank's stance is "too restrictive."
"Most panelists believe the Federal Reserve's current inflation target of 2 percent should be maintained. Of the remaining panelists, more favor raising the target than lowering it," said association Vice President Kevin Swift, chief economist for the American Chemistry Council.
Though most respondents said they thought the administration's drive to end many regulations would lift growth in the short run, nearly half said they felt deregulation would have negative consequences over the long term.
In addition, 60 percent said they believed economic policy should do more to address climate change. The Trump administration announced last year that it was withdrawing the United States from an international climate accord that was designed to reduce carbon emissions.
Seventy-four percent said economic policy should do more to alleviate income inequality.
Information for this article was contributed by Josh Boak of The Associated Press and by Jeff Kearns of Bloomberg News.
http://www.nwaonline.com/news/2018/aug/21/economists-fear-trump-s-policy-risks-20/

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(ACC Mentioned) HDPE, LLDPE Drive First-Half Gains In U.S./Canadian Resin Sales

Aug 21, 2018 | Plastics News

By Frank Esposito

The impact of new North American polyethylene resin capacity began to be felt in sales totals for the first half of 2018, with both high and linear low density PE posting big gains.
U.S./Canadian sales of HDPE jumped 8.8 percent in that six-month period, according to the American Chemistry Council, with LLDPE sales booming 16.3 percent. Exports played a big role in this growth, with LLDPE exports up an astonishing 60.2 percent and HDPE exports leaping 18.9 percent.
Domestic market growth for those materials also exceeded that of U.S. GDP. HDPE sales into the domestic market were up 6.5 percent in the first half, with domestic LLDPE sales up 4 percent.
Among major HDPE markets, sales into gas pipe were up 23 percent, with water pipe up 16 percent for the half. In end markets for LLDPE, sales of the material into shipping sacks were up 10 percent.
North America has added more than 6 billion pounds of annual PE production capacity since mid-2016 through major expansions from Nova Chemicals Corp., Dow Chemical Co., ExxonMobil Chemical Co. and Chevron Phillips Chemical. In total, North American PE production capacity is expected to add 26 billion pounds between 2017 and 2022.
The discovery of newfound supplies of shale-based natural gas in the region in the last decade have made these expansions possible. Most of this new capacity has been in the form of HDPE and LLDPE.
U.S. PE exports "can ramp up very quickly when world crude oil prices rise as they did in the first half of 2018 compared to the same months in 2017," said Phil Karig, managing director of the Mathelin Bay Associates LLC consulting firm in St. Louis.
"Crude oil prices were up over 30 percent year over year, while U.S. natural gas prices were mostly down during the same time period," he added. "As a result, many foreign PE buyers found U.S. PE prices attractive, while U.S. PE producers had less reason to lower domestic prices, even in the face of new production capacity."
Esteban Sagel, principal of the Chemical & Polymer Market Consultants consulting firm in Houston, said that "looking at PE, the domestic growth rates would be reflective of a strong domestic market, which I believe is the case."
"The economy is improving, employment is up and confidence is high," he added. "Growth in pipe in HDPE is understandable, as we work in a lot of shale-related infrastructure."Harvey hits pricing
In PE pricing, strong demand and the unexpected prolonged effects of Hurricane Harvey into the spring supported higher post-hurricane price increases, according to Mike Burns, PE market analyst with Resin Technology Inc. in Fort Worth, Texas.
"Resin processors who expected Q1 discounts were surprised when prices increased in February and have lasted for the most part into the summer," Burns said.
Burns added that with hurricane-related supply issues resolved and new capacity running at better rates, suppliers will have to rely heavily on a strong export market in the second half of 2018.
"Exports may need to increase as much as 10 percent over the three-year average of 20 percent to maintain a balanced North American supply," he said. "And recent tariffs talks may disrupt the flow of exports until the direction is certain."
An abundant supply of PE "is contributing to U.S. resin export growth in particular," according to Paul Bjacek, market analyst with the Accenture Research in Houston. "This will pull up [LLDPE] shipping sacks as well, as plastics are typically packed in shipping sacks for loading into overseas containers."
First-half sales for other commodity resins represented a mixed bag. PVC sales posted solid gains, while sales of LDPE and polypropylene essentially were flat and sales of solid polystyrene declined.
U.S./Canadian PVC growth of 5.5 percent was powered by export growth of 17 percent. Sales of the material into the domestic market ticked up 0.6 percent. Among major end markets, sales of PVC into extruded windows and doors surged upward by 31 percent in the first half.Construction growth
The PVC market "is, has been and will continue to be driven by various housing market applications such as vinyl siding, windows and drain and waste pipe," Mathelin Bay's Karig said. U.S. housing starts "were strongly up year over year through May, and though they were down in June, there was more than enough momentum to keep U.S. PVC sales strong during the first half of 2018."
PVC export sales "also benefited from low-cost natural gas, making U.S. producers competitive in the world market, as well as from continued growth in the global economy, including housing," he added. "Looking forward, the big question marks are whether tariff spats and elevated oil prices will cause global growth rates to begin to cool."
Construction has been performing relatively better than manufacturing in the first half, Accenture's Bjacek said, with overall construction spending rising 5 percent. This trend should help explain the strong performance of PVC in construction applications, he added.
LDPE sales ticked up 0.9 percent for the half, as a 0.4 percent export loss weakened domestic growth of 1.4 percent. The nonpackaging film end market, including retail bags and trash and can liners, grew 7 percent.
For PP, North American sales dipped 0.5 percent. A 23.8 percent decline in export sales countered a gain of 0.2 percent in the domestic market. Among major end markets, sales of PP into oriented film were up 17 percent and into injection molded caps and closures were up 7 percent.
Karig said that the PP market "was very much a mirror image of the PE market in the first half of 2018 as it has been for most of the last few years."
PP producers "found themselves suffering from elevated feedstock costs and limited feedstock supply," he explained, "while foreign producers stand ready to ship PP to the U.S. whenever U.S. producers attempt to recover their cost increases or try to increase their margins."PS slides
U.S./Canadian solid PS sales had a very difficult first half, with overall sales sliding 5.5 percent. Export growth of 19 percent allowed for a slight improvement on a domestic sales slump of 6.1 percent. Sales of solid PS to resellers and distributors provided a bright spot by growing 10 percent for the half.
The resin statistics also reflect a 4.9 percent first-half increase in consumption of nondurable goods, which "tend to do relatively well throughout economic cycles," according to Bjacek.
However, he added, the weaker performance of PP and PS is likely related to their greater share of demand in durable goods, which rose slightly less — 4.6 percent — during that time. U.S. auto production is a notable area of weakness, Bjacek said, declining by 13 percent in this period and likely contributing to weaker PP sales.
Commenting on overall resin sales in the region, Bjacek said that strong resin sales data is linked primarily to robust economic growth, with U.S. real GDP rising over 4.1 percent in the second quarter. In addition, he added, growth is contributing to stronger world demand, as U.S. GDP accounts for more than one-fifth of world GDP.
But "a key risk," according to Bjacek, is the lack of consistently strong durable goods production. "Consumers buy less durable goods when there is uncertainty," he said. "Any declines there can signal the beginnings of a downturn. Producers should watch durable figures and be actively pursuing stronger growth applications, as well as financially strong customers, to protect themselves in a downturn."
http://www.plasticsnews.com/article/20180820/NEWS/180829985

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EPA’s Wheeler Left to Solve Pruitt’s ‘Rubik’s Cube’ of Lawsuits, Rules

Aug 21, 2018 | BNA Daily Environment Report

By Sam Pearson Reporter

EPA loses three court cases in eight days over regulatory delays
Agency pushing ahead with rollbacks of Obama-era rules on climate, water jurisdiction, and more
Ex-EPA head Scott Pruitt’s mounting court losses put the spotlight on Acting Administrator Andrew Wheeler to deliver the regulatory rollbacks the Trump team has promised.
A U.S. Court of Appeals for the District of Columbia Circuit panel ruled Aug. 17 that the Environmental Protection Agency can’t postpone by 20 months a chemical facility safety rule. That ruling was the third legal loss for the agency in just over a week, as the EPA grapples with how to halt Obama-era regulations while it crafts alternatives.
The poor track record in court shows the lack of care Pruitt gave to the administrative process, Jonathan Adler, a law professor and Director of the Center for Business Law & Regulation at Case Western Reserve University’s School of Law in Cleveland, told Bloomberg Environment Aug. 17.
“The administration’s going to have to pick its battles” by targeting the most important regulations with its best legal work and leaving others untouched, Adler said. Wheeler seems to understand this, but “I don’t think we know yet,” Adler said.
Wheeler, who took over the agency on an acting basis following Pruitt’s departure in July, is pushing ahead with the Trump administration’s deregulatory agenda. His first major action upon taking office was to send long-awaited plans to replace the Obama-era Clean Power Plan climate regulation to the White House for review.
Pruitt came to the EPA with experience as attorney general of Oklahoma, where he sued the agency more than a dozen times. Wheeler, who started his career at the EPA during the George H.W. Bush administration and spent more than a decade working on environment and energy issues on Capitol Hill, is seen as having more experience in how the agency operates.
Three Losses in Eight Days
The latest loss came one day after the U.S. District Court for the District of South Carolina blocked the Environmental Protection Agency’s delay of the 2015 Waters of the U.S. rule, also known as WOTUS, and just a week after the U.S. Court of Appeals for the Ninth Circuit ordered the agency to ban all crop uses of the insecticide chlorpyrifos within 60 days.
The EPA said in a statement to Bloomberg Environment Aug. 17 it is reviewing the chemical security ruling.
The mounting setbacks create confusion for companies who were promised the Trump administration would scrap environmental rules. For example, two different water regulations are now in effect in varying parts of the U.S.: the Obama-era rule is in effect in 26 states, while the rule remains blocked across the rest of the country by two other federal courts.
“This is a Rubik’s Cube of litigation and rulemaking, that is unlikely to be resolved for years to come,” Neal McAliley, an attorney at Carlton Fields in Miami, said in a statement to Bloomberg Environment.
A coalition of industry trade groups, led by the American Farm Bureau Federation, is urging a different court to grant a nationwide injunction against the water jurisdiction rule. The rule, commonly known as WOTUS, is important to industry because it defines which waters are covered by federal permitting requirements and other Clean Water Act Protections.
“Important and consequential national regulations like the WOTUS Rule should not apply differently depending on the happenstance of location,” the groups said in a court filing. “A crazy-quilt regulatory environment is simply untenable.”
The Trump administration previously lost cases over delays to rules on farmworker pesticide training, formaldehyde emissions from wood products, and methane limits for the oil and gas sector.
“This week’s string of losses, on top of numerous previous losses, suggests something is seriously amiss in EPA’s legal and policy apparatus,” Lisa Heinzerling, a law professor at Georgetown University Law Center and former associate administrator of EPA’s Office of Policy during the Obama administration, said in an email to Bloomberg Environment.
“Unless Andrew Wheeler significantly changes the way EPA has been doing business in this administration, he can expect more of the same from the courts,” she said.
—With assistance from Amena Saiyid.
https://news.bloombergenvironment.com/environment-and-energy/epas-wheeler-left-to-solve-pruitts-rubiks-cube-of-lawsuits-rules?context=landing-heroes

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Back-To-Back Court Losses Show Limits of Trump’s Deregulations

Aug 21, 2018 | BNA Daily Environment Report

By Ari Natter

Federal courts rebuff EPA’s decision to delay major rules
Strategy of delaying Obama-era rules rejected by courts
President Donald Trump has attempted to block environmental regulations by his predecessor Barack Obama, in part by delaying their implementation. But the strategy is getting rebuffed by judges.
Two federal court rulings in the past week nixed the administration’s attempts to delay major Environmental Protection Agency rules, and show the legal perils of stalling unwanted regulations. The court losses could jeopardize the Trump administration’s much-touted plans to roll back as many regulations as it can, as quickly as possible.
“We have enough court losses to indicate this is a losing strategy on the Trump administration’s behalf,” said Amit Narang, a regulatory policy advocate for watchdog group Public Citizen. “The courts are saying you are repealing a rule by delaying it for this long of a period. And if you are repealing a rule, you have to go through all the procedural requirements.”
That includes the time- and resources-intensive process of cost-benefit analysis and public comment periods, Narang said.
In one of last week’s determinations, the U.S. Court of Appeals for the District of Columbia ruled on Aug. 17 that the administration didn’t provide an adequate basis for its move to delay an Obama-era chemical safety rule put in place in the wake of a fertilizer-plant explosion that killed 15 people in West, Texas, in 2013. The rule, which requires broader notification about the types of chemicals stored at certain plants, had been opposed by industry. The court ruled it must be implemented immediately.
A day before, the U.S. District Court for the District of South Carolina reinstated an Obama-era rule defining which waterways are covered by Clean Water Act regulations in 26 states, invalidating the Trump administration’s attempt at a two-year nationwide delay. The rule, opposed by home-builders, manufacturers and farmers, allows small waterways like wetlands and streams to be regulated under the Clean Water Act.
Those losses come on top of earlier decisions halting the EPA’s moves to delay Obama-era rules, such as one unilaterally suspending methane emissions regulations. A court termed the delays unauthorized and unreasonable.
“The courts have been pretty consistent in saying that EPA can’t just change the science or manipulate the scientific process to get the desired outcomes of political appointees at the agency and the industries they are closely associated with,” said Yogin Kothari, a senior Washington representative with the the Union of Concerned Scientists. “Decisions that are scientifically indefensible should be, and will continue to be, struck down.”
The losses aren’t just mounting at the EPA, which didn’t respond to a request for comment. Regulatory rollbacks at the departments of Energy, Interior and Housing and Urban Development have all fared poorly in court. Of 11 reported judicial decisions in those areas through June, 10 went in favor of the plaintiffs, Bloomberg Government reported in July.
Federal agencies have wide latitude to rewrite and rescind rules, but they must follow the Administrative Procedure Act, a law that aims to prevent regulatory whiplash. Under that law, agencies must first formally propose revisions, justify them, and give the public a chance to weigh in. Relatively small tweaks, such as a delay, can advance more quickly, but generally still require a formal notice and comment period.
“At this point, court after court has rejected their approach,” said William Buzbee, a law professor at Georgetown University Law Center. “Because they are trying to bypass what the law requires, the courts have been quite prickly, and in case after case they basically say if you want to do this you have to do this right.”
https://news.bloombergenvironment.com/environment-and-energy/back-to-back-court-losses-show-limits-of-trumps-deregulations

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LCSA News

EPA Issues 27 TSCA Significant New Use Rules

Aug 21, 2018 | Chemical Watch

By Kelly Franklin

The US EPA has issued TSCA significant new use rules (Snurs) for 27 substances subject to section 5(e) consent orders.
The chemicals covered include several alkanes intended to be used as flame retardants or plasticisers, among a variety of others.
During review of each substance's pre-manufacture notice (PMN), the EPA negotiated consent orders with the notifying company to mitigate against identified potential unreasonable risk. Requirements imposed vary, but may include obligatory testing or recordkeeping, use of personal protective equipment, or limitations on the types of applications the substance is used in.
Consent orders, however, are only binding to the original PMN submitter. So the EPA is issuing so-called 5(e) Snurs with consistent provisions to hold subsequent users to the same requirements.5(e) Snurs
Prior to TSCA's 2016 reform, it was standard practice to impose a 5(e) Snur following a consent order. But following updates to the law, the use of consent orders rose sharply amid a slowdown in the pace of review.
The latest batch of Snurs corresponds to consent orders that are more than a year old, taking effect in May or June 2017. This was also the case for the 145 Snurs the EPA issued earlier this month.
Consequently, the orders in question largely predate a policy shift at the EPA last year to use a ‘Snur-only’ approach for addressing certain situations, where the intended use of a substance does not pose a concern, but new ones might.
Consumer and environmental advocates have protested that doing so allows a lapse between a substance entering the market and restrictions being imposed on it. The EPA and industry, meanwhile, have countered that it is a more efficient approach than issuing both consent orders and Snurs.
More recently, controversy has arisen over reports that the agency will be reducing its reliance on Snurs. But the EPA has said that its new chemicals review programme is appropriate and it will address potentially concerning uses, as necessary. Rulemaking process
The agency issued the 27 Snurs as a direct final rule. This will take effect from 16 October in the absence of significant adverse comment by 17 September.
It has, however, also issued the Snurs through a proposed rule. For substances that attract considerable comment, the EPA will withdraw the Snurs from the direct final rule and address them through this standard rulemaking process.
https://chemicalwatch.com/69826/epa-issues-27-tsca-significant-new-use-rules

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Chemical Management News

Walmart to Shed Solvents Linked to Deaths, Birth Defects

Aug 21, 2018 | BNA Daily Environment Report

By Pat Rizzuto

Walmart to stop selling paint strippers with either of two solvents
Environmentalists push Ace Hardware, Menard to follow suit
Walmart Inc., the world’s largest retailer, will stop selling paint strippers containing a solvent linked to more than a dozen deaths and a second solvent that could harm the development of babies in the womb.
The phase out applies to paint strippers with either methylene chloride or n-methylpyrroilidone (NMP). Suppliers must stop shipping paint strippers with either solvent by the end of this year, meaning the products should no longer be sold by the end of February 2019, a Walmart spokesman told Bloomberg Environment.
The phase out “goes above and beyond current legal and regulatory compliances,” Walmart said in its Aug. 20 announcement.
Walmart’s phase out applies to its online sales and to its 8,855 stores in the U.S., Canada, Central America, and Mexico.
Walmart’s 1,444 stores in Chile, China, and the U.K. already stopped selling paint strippers with either solvent.
That means, as of early next year, sales of paint strippers with either solvent won’t be sold in most of Walmart’s nearly 12,000 worldwide stores.
Extent of Phase Outs
Walmart’s announcement follows similar actions that Lowe’s, Sherwin-Williams, and the Home Depot Product Authority LLC have taken, although the scope of these phaseouts varies.
Lowe’s, the first retailer to announce it will stop selling paint strippers with either solvent, said its action will apply throughout its stores. The company operates about 2,154 stores in the U.S., Canada, and Mexico, according to Bloomberg Intelligence senior analyst Seema Menon Shah.
Home Depot told Bloomberg Environment that its phase out of both solvents, announced in June, applies to online sales and its stores in the U.S. and Canada.
By the end of this year, Sherwin-Williams will require its suppliers to remove both solvents from any paint strippers it sells in its retail stores throughout Canada, the U.S., and all of South America, Mike Conway, the company’s director of communications told Bloomberg Environment Aug. 20. Sherwin-Williams’ Americas Group operates 4,620 stores in these countries, according to its annual report.
Health Concerns, Campaign
Health concerns behind the retailers actions include deaths that methylene chloride-based paint strippers have caused when used without sufficient ventilation. For example, health departments throughout the U.S. have blamed the solvent for contributing to the deaths of at least 17 bathtub refinishers.
In addition, N-methylpyrrolidone could harm babies’ development when a pregnant woman is exposed to high concentrations, according to the Environmental Protection Agency.
The companies’ actions also follow an online campaign in which Safer Chemicals, Healthy Families asked retailers to stop selling paint and coating strippers with either of the two solvents.
Additional retailers Safer Chemicals is focusing on include Ace Hardware Corp. and Menard Inc., a chain of home improvement centers located primarily in the Midwest.
Safer Chemicals, a coalition of environmental, health, and labor groups, mounted its campaign after the EPA proposed in the last months of the Obama administration to ban consumer uses of stripping products containing both chemicals, but then took no further action under the Trump administration.
In May, former EPA Administrator Scott Pruitt met with families whose loved ones died following their exposure to methylene chloride. He then announced that the EPA would proceed to ban or restrict methylene chloride paint strippers.
The agency, however, has not sent any final rule to White House regulatory reviewers.
https://news.bloombergenvironment.com/environment-and-energy/walmart-to-shed-solvents-linked-to-deaths-birth-defects

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Walmart Becomes Latest Retailer To Ban Chemicals Found In Paint Strippers

Aug 21, 2018 | The Hill - E2 Wire

By Miranda Green

Walmart is joining the growing list of retailers that are banning paint strippers that contain two controversial chemicals tied to cancer.
The chain announced Monday that it will no longer sell products carrying paint strippers that contain methylene chloride and N-Methylpyrrolidone (NMP) starting in February.
The decision follows in the footsteps of retailers Home Depot, Lowe's and Sherman Williams, which all announced a similar move this year.
The chemicals in question, commonly found in paint thinners and metal cleaning products, can affect the central nervous systems of those in contact with them. Long exposure can at times lead to liver cancer. The chemical has been linked to dozens of deaths.
The removal of the products will cover all of Walmart's stores in the U.S., Mexico, Canada and Central America.
"At Walmart, we are committed to providing our customers with access to affordable, effective and more sustainable products. We will continue to work with suppliers, NGOs, academics, government and industry stakeholders as we advance our sustainable chemistry commitments," Zach Freeze, senior director of strategic initiatives for sustainability at Walmart, said in a statement.
Last year, Walmart joined an effort to track chemicals in goods it sells, including household cleaners, baby and pet care, and beauty products.
The Environmental Protection Agency during the final days of the Obama administration proposed a rule to ban paint strippers containing the chemicals, but the Trump administration has yet to follow through with the proposal.
In December, the proposed bans were dropped from the administration’s Unified Agenda of Regulatory and Deregulatory Actions. But in March, the agency signaled that it would follow through with the ban, announcing that it won't reverse the Obama administration's findings.
In May, the EPA under then-head Scott Pruitt announced that it "intends to finalize" a ban on the chemical but no ban has yet been introduced.
http://thehill.com/policy/energy-environment/402644-walmart-becomes-latest-retailer-to-ban-chemicals-found-in-paint

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Watch Out Starbucks, Kellogg’s: Tougher Warning Mandates Coming

Aug 21, 2018 | BNA Daily Environment Report

By Julie Steinberg

California’s new chemical warning requirements expected to cause more food, other product reformulations
Proposition 65-related activity has increased steadily over last decade
Starbuck’s, Kellogg’s, and General Mills are only a few of the many companies that have found their products targeted under California’s chemical warnings law in recent years.
But look out food and beverage makers, even more warnings-law related activity is expected as new, stricter requirements go into effect next week, the author of the Proposition 65 right-to-know statute tells Bloomberg Law.
The most likely reaction to the tougher warnings: more product makers will follow the lead of companies like Coca-Cola and PepsiCo and “quietly” change their chemical formulas to avoid having to put the detailed, attention-getting warnings on their products.
But you likely won’t hear much about the bulk of these changes, according to David Roe, who drafted Prop 65 while working as an attorney for the Environmental Defense Fund in 1986.
Most of the action will continue to take place out of both the courtroom and the public eye through voluntary “quiet compliance.” More Specific Warnings
The 1986 law requires businesses to provide warnings about cancer or birth defects if their products could expose people to one of more than 800 chemicals on a list the state updates annually.
The law allows for enforcement by both government attorneys and private enforcers, provided they file a 60-day notice of intent to sue that goes to the company and California’s attorney general.
The warnings required under the law over the last 30 years have been fairly general. For example, a warning might say, “This product contains a chemical known to the state of California to cause cancer.”
However, under the change in the law that will take effect August 30, product warnings must be both more detailed and more prominent.
The warning must include a triangular yellow warning symbol and name at least one specific chemical that the consumer is being exposed to. It also must include a link to the attorney general’s website, which has additional information about specific chemicals and how a consumer can reduce her exposure.
For example, “This product can expose you to chemicals including arsenic, which is known to the State of California to cause cancer. For more information, go to www.P65Warnings.ca.gov.”
The new warnings are an attempt to give people neutral but useful advice, according to Caroline Cox, a staff scientist at the Center for Environmental Health in Oakland, Calif., a frequent Prop 65 litigator.
Researchers from the University of California, Davis, interviewed more than 1,500 randomly selected Californians and asked them to compare the new warnings with the current general warnings, according to the Office of Attorney General Xavier Becerra. The vast majority (77 percent) of respondents said the new ones would be more helpful.
Warning Blindness
But critics of Prop 65 decry a proliferation of warnings they said have lost meaning for California residents as they have been saturated with cautionary language in airports, gas stations, hotels, amusement parks, and countless other places. They also said the new requirements will only worsen the over-warning problem.
“The warnings are so omnipresent that consumers encounter them at almost every turn,” said defense attorney Amy Aldefer of Cozen O’Connor in Santa Monica, Calif.

“How can people reasonably make informed decisions when warnings are everywhere?” asked Aldefer, whose practice includes representing businesses in Prop 65 compliance and litigation.
Some research backs up those concerns. The amount of information people are capable of processing is limited, said Lisa Robinson, a senior research scientist at Harvard University’s T.H. Chan School of Public Health in Boston.
“Even if I accessed and understood the information on each chemical that I might possibly be exposed to each day, it would be very difficult for me to weigh the benefits and harms as part of my decision-making process,” Robinson, one of the authors of an article Consumer Warning Labels Aren’t Working, told Bloomberg Law.
Quiet Compliance
But attorneys who bring private Prop 65 enforcement suits said the warnings aren’t the real measure of the law’s success.
“Prop 65 has an image problem,” Somers said.
Somers and Roe, the statute’s author, both said reformulating products is the real goal of Prop 65, and this “quiet compliance” has been where the vast majority of the law’s successes have occurred.
Such compliance happens when companies proactively opt to reformulate a product once a chemical is added to the state’s list but without a presuit notice being sent, Roe said.
“Nobody ever issues a press release saying, ‘We used to expose you to a chemical that causes cancer, and we just stopped,’” Roe said.
Which is just fine with Roe and other advocates of California’s Prop 65.
After all, Eric Somers of the Lexington Law Group in San Francisco told Bloomberg Law, Prop 65 may be a warnings law, but its real value to consumers is in all the products that have been changed over the years, reducing exposure to toxic chemicals.
Somers represents private organizations and individuals who sue to enforce the law’s requirements including CEH.
An example of such a change occurred when Coca-Cola Co. and PepsiCo. removed 4-methylimidazole, a cancer-causing contaminant in caramel coloring, from soft drink products shortly after it was added to the list in 2011, CEH said.
Still more companies are expected to find alternatives to listed chemicals as the new requirements go into effect, they said.
Upward Trend of Prop 65 Action
If so, that would add to the already steadily increasing level of activity sparked by Prop 65.
The number of presuit notices filed by private individuals and groups under the law has risen more than fourfold over the last decade, according to data from the attorney general’s office.
A total of 635 “60-day” notices of intent to sue product makers under the law were filed in 2008. In 2017, there were 2,711.
This year is nearly on pace with last year, with 1,360 notices sent between January 1 and August 8.
The number of settlements over the last decade also has gone up: From 119 in 2008, to a high of 760 in 2016. Total settlement payouts have ranged from, on the low end, $13.6 million in 2010, to, on the high end, $30.1 million in 2016. But those numbers are hard to compare because many settlements also include product changes.
Chemicals in Coffee
As far as the kinds of chemicals targeted under Prop 65, Alejandro Bras, whose practice includes Proposition 65 defense, said that while more than 800 chemicals are listed, “the bulk of them never see any action,” under the law.
Lead, cadmium, arsenic, acrylamide, and plastic softeners called phthalates make up much of the Proposition 65 activity, Bras, of Morrison & Foerster in San Francisco, told Bloomberg Law.
Acrylamide, which is formed when starchy foods are heated, is “probably the chemical du jour,” Bras said. Hundreds of presuit notices have been filed specific to acrylamide in foods, especially over the last 12 months, he said.
Prop 65 and acrylamide have been the focus of high-profile Prop 65 litigation, including ongoing fights over whether coffee and cereals need to carry a warning because of cancer risks. Starbucks Corp . and Keurig Green Mountain Inc. have both been sued over their coffee, as have many other coffee makers.
Post Foods LLC, General Mills Inc. , and Kellogg USA Inc. are some of the companies sued over their cereals.Attorneys’ Fees
The law includes a potentially heavy hammer against non-compliant companies: civil penalties of up to $2,500 per violation, per day.
Prop 65 settlements also typically include attorneys’ fees when private individuals or groups are the enforcers.
Roe, Sommers, and other Prop 65 advocates said formula changes to prevent toxic exposures, not money, motivate their actions. But defense attorneys point to the fees aspect of the litigation as the main driver behind most of the statute’s enforcement activity.
Product testing and other expenses mean defending right-to-know suits are very expensive for companies, attorney Corrie Plant of Bick Law LLP in Newport Beach, Calif., told Bloomberg Law. Consequently, most Prop 65 suits are “settled without regard to whether or not there is actually an exposure.”
Plant’s practice includes advising clients regarding Prop 65 and other environmental laws.
More than three-quarters (76%) of total money paid through settlements over the last 10 years have gone towards attorneys’ fees, Plant said.
That’s “huge,” she said. “The percentage paid in penalties is minuscule in comparison.”
But Roe and Somers both defend the Prop 65 fees’ awards.
“What the defendants are complaining about is that the plaintiffs get their fees paid by the other side,” Roe said.
The reason for fee provisions in Prop 65 and many other environmental and consumer laws, is that government attorneys don’t have the time or resources to pursue smaller violations, Roe said.
As a result, private enforcement, using paid private attorneys, is needed.
CEH’s Cox also said, “The amount that has been spent on Prop 65 attorneys’ fees could never pay the budget of an agency if instead of Prop 65 we had a state agency that accomplished the same benefits.”
Somers, who represents the Center for Environmental Health, also noted that a judge has to approve all Prop 65 settlements, including the attorneys’ fees.
That’s similar to how fees in class action settlements are checked for fairness.
https://news.bloombergenvironment.com/environment-and-energy/watch-out-starbucks-kelloggs-tougher-warning-mandates-coming

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Length of CVS Receipts Target of Jokes, and Now Activists

Aug 21, 2018 | Bloomberg BNA Environment & Energy Report

By Adam Allington

The length of the receipts customers get at CVS Health Corp. have been made fun of on late-night TV, been the source of memes, and even inspired Halloween costumes.
Now the pharmacy giant is being used as a poster child for an issue that spans the retail sector: toxic chemicals used on cash register paper.
Bisphenol-A (BPA) or bisphenol-S (BPS) are used commonly as developing agents on till paper. When touched, the chemicals can be absorbed through the skin and contribute to a number of health risks including cancer and fetal brain development.
In a sample study from 200 retail stores, more than 9 out of 10 receipts tested positive for BPA or BPS, according to 2018 report from The Ecology Center, an environmental nonprofit based in Ann Arbor, Mich.
So why are activists going after CVS?
“CVS prints these ridiculously long receipts, with lots of coupons, which have also tested positive for bisphenol-S,” said Todd Larsen, a co-director of consumer and corporate engagement with Green America, a Washington D.C.-based environmental nonprofit behind the campaign asking companies to cut exposure to hazardous chemicals.
“These are endocrine-disrupting chemicals with proven impacts,” Larsen told Bloomberg Environment. “As one of the largest providers of health products, they should do better.”
CVS ‘Leadership’ Lauded
In an email to Bloomberg Environment, CVS said it is continuing to educate customers about digital options for receipts and rewards. It said “millions of consumers” enrolled to get digital receipts since 2016, “saving more than three billion inches of paper.”
Despite the concerns over receipt paper, CVS still received a grade of B+, according to an annual retail ranking by Safer Chemicals, Healthy Families. The scores are based on the presence of harmful chemicals in products or supply chains.
“CVS has shown substantial leadership in addressing chemicals, particularly in the area of beauty and personal care products,” said Mike Schade, director of the Mind the Store Campaign for Safer Chemicals, Healthy Families.
“But while they’re certainly not the only retailer to use bisphenols in receipts, we feel this should be low-hanging fruit for them,” he told Bloomberg Environment.
The Food and Drug Administration banned BPA in baby bottles, sippy cups, and formula packaging in 2012. However it’s still allowed in other products including receipts, plastics, and the lining of cans of food.
More recently some retailers—including Best Buy Co. Inc., Trader Joe’s Co., and Apple Inc.—have switched to phenol-free paper. In 2017, Dow Chemical Co. and Papierfabrik August Koehler SE received an EPA green chemistry award for their patent of phenol-free printing paper.
Given the availability of a reasonably cost-competitive substitute, Schade said, CVS, and other retailers, should take the opportunity to get out ahead of future regulatory actions.
Concerns Over Substitute
A simple trip to the grocery store will yield no shortage of boxes plastered with “BPA free” labels.
In response to public concern over BPA, product manufacturers, including paper companies, opted to simply swap out BPA for its chemical cousin, BPS, which was thought to be safer.
But a growing body of scientific evidence shows that BPS may produce the same, or even greater, endocrine disruptive effects than the original chemical.
“Our study shows that making plastic products with BPA alternatives does not necessarily leave them safer,” wrote Nancy Wayne, a reproductive endocrinologist and professor of physiology at UCLA.
Wayne’s 2016 study found that when zebrafish were exposed to BPS at low levels, their physiology at the embryonic stage changed in as quickly as 25 hours.
“Our findings are frightening—consider it the aquatic version of the canary in the coal mine,” Wayne said.
EU Regulatory Push
The European Union is set to phase out BPA-based paper completely by January 2020.
However, the European Chemical Agency concluded that the substitution of BPS is worrisome given that BPS “is suspected to have many of the same adverse health effects as BPA.”
Currently, BPS is on a list of 107 substances to be evaluated under the EU’s Community Rolling Action Plan. The plan has a September target date for parties to submit chemical test data to ECHA for consideration in future regulations.
While U.S. federal action on bisphenols isn’t likely to advance any time soon, Schade said regulatory decisions have a way of spreading from country to country.
“U.S. retailers definitely take note of what’s happening in Europe,” he said. “Over time I expect we’ll see more states step up to pass restrictions.”
https://www.bna.com/length-cvs-receipts-n73014481873/

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Lawyers Warn Companies On Global Impacts Of California Prop. 65 Rules

Aug 20, 2018 | Inside EPA

By Curt Barry

Industry attorneys are warning companies around the world that they could be impacted by a revised set of California Proposition 65 warning requirements that take effect Aug. 30, including provisions that are expected to shift large cost impacts and liability from retailers to upstream manufacturers and distributors of a host of consumer products.
“You should be thinking that Proposition 65 is more than just a law that requires warnings to be given. It is a hook, it is a mechanism by which California intends, and deliberately wants to push its ideas about chemical regulation up the chain of commerce to change the activities and the conduct of people that are manufacturing products worldwide,” said Carol Brophy, an attorney with Steptoe & Johnson LLP, during a recent webinar hosted by Chemical Watch.
Several recent special webinars by the industry lawyers on the changes to the Prop. 65 warning regulations underscore the significance of the revisions, which were hotly debated in 2015-16 during the regulatory amendment process by the Office of Environmental Health Hazard Assessment.
One of the most significant new regulatory provisions is a likely shift in the responsibility to provide warnings from retailers to companies that sell, distribute or manufacture products. And the warnings must be provided prior to the purchase of the products, meaning that companies that sell products on the Internet must include clear warning language on their websites.
“If you have a method, like putting [the warning] inside an instruction book, someone has to read when they put together a product -- that used to be fine. But now if you do that you take the chance that it might not be just fine and you have to go to court to prove to a judge that the method was reasonable,” Brophy said. “It no longer is going to be reasonable under the safe harbor provisions of how you must transmit a warning” under the new rules.
These situations are likely to be “insidious and subtle and may be a whole new adventure in litigation for the private enforcer bar,” she said.
The Internet warning requirements of the new rules “are perhaps the most controversial” in part because they must be given to any purchaser who wants a product shipped to California, according to Brophy.
It is possible that some industry trade groups could challenge the new warning rules in court as being ultra vires, or beyond California's authority, to “force other people in other countries to provide these Internet warnings,” she said. Such a challenge could be bolstered by a June 26 Supreme Court ruling in National Institute of Family & Life Advocates, et al., v. Becerra, et al., which found that a California law requiring abortion center professionals to inform patients that free or low-cost abortions would be available to them elsewhere likely violates the centers’ First Amendment rights on the grounds that the state cannot regulate the content of personal speech, Brophy said.
In addition, she cited a Feb. 26 ruling by a federal district court that sided with national agriculture groups and Monsanto Co. in their lawsuit against California over requiring companies to provide Prop. 65 warnings for glyphosate, which found that such warnings would be "false and misleading" and violate companies' First Amendment rights.
Potential Challenge
A challenge against OEHHA over the new warning requirements could be successful in part because the Prop. 65 statute says warnings shall be given prior to exposure -- “it doesn't say prior to purchase,” Brophy said. In addition, “applying Internet sales warning requirements can be vulnerable to judicial challenges as disproportionately burdening out-of-state sellers and also the manufacturers of products they sell.”
But retailers are being encouraged to require product manufacturers, distributors and vendors to accept full liability under the new Prop. 65 warning rules, she noted.
“One thing that California did that was very clever is, they may not have the authority to regulate this conduct out of state, but they can require the retailers, if they don't want to be sued -- they can make it very convenient for retailers to negotiate by contracts so the retailer does not do business with distributors or manufacturers that do not accept the responsibility of defending Prop. 65 lawsuits as to any products they may sell to the retailer and that the retailer sells in California,” Brophy said.
Other new requirements on the Prop. 65 warnings include: the name of at least one listed chemical that prompted the warning; the Internet address for OEHHA’s new Prop. 65 warnings website, www.P65Warnings.ca.gov, which includes additional information on the health effects of listed chemicals and ways to reduce or eliminate exposure to them; and a triangular yellow warning symbol featuring an exclamation point in the middle.
OEHHA explains that the revised warning regulations also add new “tailored” warnings that provide more specific information for certain kinds of exposures, products and places; provide for warnings in languages other than English in some cases; and clarify the roles and responsibilities of manufacturers and retailers in providing warnings.
Chris Amantea, another lawyer with Steptoe & Johnson, said during the webinar that “it becomes abundantly clear that there are a lot of complications and nuances associated with these new regulations; many of them will probably remain to be decided by the courts at some point in the future.”
Amantea noted that any product inventory manufactured prior to Aug. 30 will be grandfathered as long as the old warning requirements are still provided. In addition, parties to previous court orders on how to provide warning requirements for specific products are deemed to be in compliance with the new rules. However, companies that sell the same products but were not involved in the previous settlements will have to comply with the new rules, he said.
Brophy added that every company potentially affected should have a Prop. 65 compliance strategy and personnel in place. “Those of you in Europe, Asia, Australia, Canada and South America -- you should at least designate a team or one responsible individual in your company to keep abreast of Prop. 65,” she said.
The California Chamber of Commerce, in an Aug. 2 alert blog post, says businesses that fail to comply with the new Prop. 65 warning rules are subject to litigation as well as penalties of up to $2,500 per day, per violation.
https://insideepa.com/daily-news/lawyers-warn-companies-global-impacts-california-prop-65-rules

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Lawyers Contest California Rule Exempting Coffee From Prop. 65

Aug 21, 2018 | Inside EPA

Trial lawyers representing a public health group are vigorously challenging California's proposed rule that would allow coffee to be sold in the state without requiring a Proposition 65 cancer warning label, charging the plan contradicts a court ruling and is the result of the coffee industry lobbying Gov. Jerry Brown's (D) administration.
The Council for Education & Research on Toxics (CERT), the group that successfully sued Starbucks and other coffee vendors to require warning labels, "will be opposing the proposed rule, which is politically driven, rather than science-based," says an attorney close to the issue. "And yes, the proposed regulation contradicts the court's decision and appears to be a misguided attempt to overrule the judge."
CERT originally sued Starbucks and other coffee sellers in 2010 to require the stores to provide Prop. 65 warnings.
In March, a Los Angeles County Superior Court judge ruled that companies selling coffee in California must provide Prop. 65 warnings because of exposure to acrylamide, a chemical that EPA says is "likely to be carcinogenic to humans," which is produced during the coffee roasting and brewing process.
But on June 15, California's Office of Environmental Health Hazard Assessment, which administers Prop. 65, proposed a regulation clarifying that cancer warnings are not required for coffee under the law because any exposures to acrylamide are too limited to pose cancer risks.
It also cited studies showing that drinking coffee reduces risks of some cancers. The proposed regulation "states that drinking coffee does not pose a significant cancer risk, despite the presence of chemicals created during the roasting and brewing process that are listed under Prop. 65 as known carcinogens," a June 15 OEHHA press release states.
OEHHA on Aug. 16 held a public hearing on its proposed regulation and is accepting written comments until Aug. 30. A CERT attorney presented arguments against the proposal during the hearing, while representatives of the National Coffee Association spoke in support.
The regulation is based on "extensive scientific evidence that drinking coffee has not been shown to increase the risk of cancer and may reduce the risk of some types of cancer," OEHHA says. For example, in a review of more than 1,000 studies, the World Health Organization's International Agency for Research on Cancer (IARC) concluded that there is "inadequate evidence" that drinking coffee causes cancer.
IARC found that coffee "is associated with reduced risk for cancers of the liver and uterus, and does not cause cancers of the breast, pancreas and prostate. IARC also found that coffee drinking exhibits strong antioxidant effects related to reduced cancer risk," OEHHA says.
But the attorney close to the issue says that OEHHA's proposed regulation "contradicts the agency's own risk assessment published in 2005 in which the agency concluded that the No Significant Risk Level for acrylamide was exceeded in all coffee drinkers -- heavy, average and light consumers."
OEHHA's action also contradicts the intent of California voters when they approved Prop. 65 in 1986 "because coffee was mentioned in the pre-election materials as a common household item along with gasoline, which materials stated that coffee would require a cancer warning if it contained carcinogens," the source claims.
And the source alleges that based on information gathered through California Public Records Act requests, it "appears that a lobbyist for the coffee industry prevailed upon the governor or one or more of his high-level appointees to take action to undermine the judge's decision. We are still investigating this."
https://insideepa.com/daily-feed/lawyers-contest-california-rule-exempting-coffee-prop-65

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California Considers Safe Use Determination Request For Styrene

Aug 21, 2018 | Chemical Watch

California’s Office of Environmental Health Hazard Assessment has received a request to issue a Proposition 65 Safe Use Determination (SUD) for the use of styrene in certain bathware products.
Companies may request SUDs so that Oehha can determine whether a specific use would result in an exposure that requires a Prop 65 warning.
The request was made by Tech America Corporation, on behalf of Fiber Care Baths. The company has asked for a determination that exposures to styrene from its bathware products do not present a significant cancer risk that requires a warning.
Comments on it will be accepted until 17 September.
https://chemicalwatch.com/69827/california-considers-safe-use-determination-request-for-styrene

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Senators Ask For Briefing On Lead Paint in Army Housing

Aug 21, 2018 | E&E Daily

By Courtney Columbus

A bipartisan group of senators is expressing concern about the health risks lead-based paint poses to families who live in base housing.
A letter to Army Secretary Mark Esper comes in response to a report published by Reuters last week that detailed instances of children with high blood lead levels living in base housing.
Sens. Tim Kaine (D-Va.), David Perdue (R-Ga.), Mark Warner (D-Va.) and Johnny Isakson (R-Ga.) signed the letter asking the secretary for a briefing on keeping military families safe and for guidance on potential legislation.
"As the [Reuters] report points out, these on-base homes, managed and operated largely through private partnerships, are putting families and children at risk," the senators wrote.
"We ask that you provide our offices with a briefing as soon as possible outlining the immediate and long-term mitigation strategy to keep military families safe, provide medical treatment for those potentially or previously affected, make long-lasting repairs, and finally," they said, "provide legislative proposals or guidance on legislation needed to hold maintenance contractors accountable."
The Reuters report covered Fort Benning in Georgia, Fort Riley in Kansas, Fort Polk in Louisiana, and Fort Hood and Fort Bliss in Texas. The news outlet also found peeling lead-based paint on a porch where kids play at Kentucky's Fort Knox and fallen paint chips containing high levels of lead at a family's home in West Point in New York.
And at Fort Belvoir in Virginia, officials appear to have known about lead-based paint hazards since at least 2015. A Department of Defense inspector general report describes peeling and flaking paint in some on-base housing, including on windowsills.
Records from the Brooke Army Medical Center in Texas show that from 2011 to 2016, more than 1,050 small children had elevated blood lead levels, Reuters reported. The center processes test results from bases across the country.
Consumer use of lead paint in the U.S. has been banned since 1978, but the material is present in many homes built before then.
The paint becomes hazardous if it chips or flakes, making it easy for children — who are particularly susceptible to the harmful effects of lead — to ingest the toxin.
An Army aide, when asked about the lawmakers' letter, said it was not appropriate to comment on correspondence between Congress and the secretary.
https://www.eenews.net/eedaily/2018/08/21/stories/1060094813

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Environment News

Trump’s Power-Plant Proposal May Increase U.S. Carbon Pollution

Aug 21, 2018 | BNA Daily Environment Report

By Jennifer A. Dlouhy

EPA set to propose replacement for Obama-era Clean Power Plan
Measure would impose modest efficiency requirements on plants
Donald Trump is poised to replace former President Barack Obama’s plan to slash power plant greenhouse gas emissions with a substitute that could actually increase them.
The move, combined with a rollback of automobile efficiency mandates proposed earlier this month, represents a significant retreat from the fight against climate change by a president who’s already vowed to pull the U.S. out of the Paris agreement. Transportation and electric generation are the biggest sources of heat-trapping gas emissions in the U.S., accounting for 56 percent of the total in 2016, according to the Environmental Protection Agency.
“The administration is taking aim at the two most significant climate protections that our nation has put in place to address the threat of climate change,” said Tomas Carbonell, director of regulatory policy at the Environmental Defense Fund.
Where Obama envisioned sweeping changes across the nation’s electric grid, Trump’s replacement focuses on boosting efficiency at coal-fired power plants, according to people familiar with the proposal who asked not to be identified describing an internal document. Those efficiency gains could encourage utilities to run their power plants more often, undercutting the environmental benefits.
Release of the new plan, expected within days, comes during a summer dominated by wildfires and hotter-than-normal weather. Northern Europe has withered in a deadly heat wave. California recorded its hottest July on record as its forests burned on an unprecedented scale. At least 116 people in Japan have died this summer, with the country posting its highest-ever temperatures in July. Meanwhile, parts of India are dealing with the worst flooding in a century.
Obama’s Clean Power Plan aimed to cut emissions from U.S. energy production 32 percent by 2030, relative to 2005 levels. It did that by looking beyond individual power plants and encouraging broad changes such as shutting down coal plants that are responsible for 67 percent of power sector emissions, using more cleaner-burning natural gas and boosting renewable electricity.
Obama’s approach—trying to compel broad changes in the nation’s electricity mix rather than regulating just what comes out of the smokestacks at power plants—sparked legal challenges from opponents who said it overstepped the EPA’s authority under federal law. The U.S. Supreme Court put the plan on hold in February 2016.
“It’s a fact that the power market is changing, but EPA doesn’t have any authority to speed that up or to slow that down,” said Jeff Holmstead, a former assistant EPA administrator now at Bracewell LLP. “Its authority under this section of the Clean Air Act is to minimize emissions from individual plants.”
The Trump administration’s proposal takes a narrow view of what technology should be employed at individual facilities. For instance, it would not prescribe big changes, such as forcing individual power plants to employ carbon capture technology or switch to cleaner fuels. Instead, the plan would encourage coal plants to make heat-rate improvements—or efficiency gains—that translate into fewer carbon dioxide emissions per unit of generated electricity.
Such changes—such as adding automation or replacing worn turbine seals—would yield at most a 6 percent gain in efficiency, along with a corresponding fall in greenhouse gas emissions, according to EPA modeling under Obama.
Representatives of the EPA didn’t respond to an email seeking comment.
Plant Efficiency
Analysts and environmental activists say that if the Trump administration requirements allow plants to generate more power with each ton of coal, they would produce cheaper electricity and better compete with natural gas. And coal plant owners would would be inspired run them more. This rebound effect from generating more power (and corresponding emissions) could eclipse any gains from paring the carbon dioxide generated along with each unit of electricity.
“You have a lower operating cost and you can run more,” said John Larsen, director of the Rhodium Group, a research firm. “All the modeling I’ve seen suggests emissions might actually rise if you’re forcing everybody to get more efficient because they are more efficient and cost effective.”
The Trump administration’s drafted proposal also would give states more flexibility to write their own requirements and consider “the remaining useful life” of power plants—a benchmark in federal law.
That approach reflects the bounds of the Clean Air Act, and the fact that there’s no national ambient air standard for carbon dioxide, Holmstead said.
State Flexibility
But critics say that state departures and variances would undercut already modest requirements.
“Without national standards, you get a race to the bottom,” said David Doniger, senior strategic director of the Natural Resources Defense Council’s Climate and Clean Energy Program. “There are some states that would be inclined to give their sources a break just because they don’t care,” and others that might feel pressure from neighboring states to do the same thing.
Once hailed as transformational, the ambitions of Obama’s Clean Power Plan have appeared more modest in hindsight. Even without its requirements in effect, the U.S. is on track to reduce carbon dioxide emissions 28 percent below 2005 levels by 2030, according to a forecast from the government’s Energy Information Administration.
But the plan offered a guarantee that those emissions reductions would be preserved, while creating a long-term framework for achieving further progress, Carbonell said.
And environmentalists say weakening the Obama rule now, while also freezing vehicle emissions standards at 2020 levels, as the administration proposes, could mean lost momentum in an urgent crusade against climate change.
The EPA and National Highway Traffic Safety Administration jointly proposed Aug. 2 to cap fuel economy requirements at a fleet average of 37 miles per gallon starting in 2020. Under the regulation put in place by Obama, the requirements are set to rise gradually to roughly 47 mpg by 2025.
“We have an existential threat if we don’t deal with this,” Doniger said. “If the marketplace alone is reducing power plant carbon pollution, but not enough to meet the climate crisis, then we should be strengthening the Clean Power Plan now, not junking it.”
https://news.bloombergenvironment.com/environment-and-energy/trumpspower-plant-proposal-may-increase-us-carbon-pollution

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Trump Draft Creates 'Huge Loophole' — Gina McCarthy

Aug 20, 2018 | E&E News PM

By Amanda Reilly

The architects of the Clean Power Plan are taking a pre-emptive strike against the Trump administration's expected move to replace it with a version that gives states broad authority for reducing carbon dioxide emissions at power plants.
The Trump administration is poised to create a "huge loophole" in the Clean Air Act "that is essentially a huge gimme to coal-fired power plants," said Gina McCarthy, who championed the Clean Power Plan while serving as the Obama administration's EPA chief.
Under the Trump administration, EPA is planning to roll out a proposal as soon as tomorrow that gives states three years to come up with plans to reduce carbon pollution from coal-fired power plants, primarily through efficiency improvements (Climatewire, Aug. 20).
In contrast, the Obama administration's Clean Power Plan aimed to address carbon dioxide emissions by regulating plants across the entire electric grid. It called for a combination of efficiency improvements and beyond-the-fence-line strategies such as switching to natural gas and renewable energy.
McCarthy, who is now a professor of public health at Harvard University, today warned in a conference call with reporters that the Trump administration's approach is legally vulnerable.
She said the law requires EPA to set federal targets to reduce carbon dioxide emissions. The Trump administration's approach would "give the states the option to do just a little or absolutely nothing to reduce carbon pollution," she said.
"They are continuing to play to their base, and they are following industry's playbook step by step," she said.
The Trump administration's proposal will almost certainly wind up in the courts, where a key issue will likely be the proper interpretation of the Clean Air Act phrase "best system of emission reduction." Opponents of the Clean Power Plan had argued that the Obama administration's approach was outside of its authority under the law.
The U.S. Court of Appeals for the District of Columbia Circuit heard arguments over the Clean Power Plan in September 2016, including on whether the "best system of emission reduction" encompasses efforts to reduce carbon dioxide emissions outside the fence line, but never reached any legal conclusions. The court instead halted the litigation to give the Trump administration time to review the rule.
"It's going to be interesting to see how patient the D.C. Circuit is with EPA on these issues," McCarthy said. "They clearly have wanted the agency to act more quickly to follow the law and the process and to meet its legal responsibilities. I think this proposal falls short, from what I understand."
Unlike the Obama EPA, the Trump administration is focusing "very narrowly" on a couple of phrases in the Clean Air Act to confine its authority to measures that can be done by individual plants, said Joseph Goffman, a former senior counsel in EPA's Office of Air and Radiation.
"The agency relieved itself of any obligation to really investigate how the power system actually works," Goffman said.
Janet McCabe, who led the air office during the Obama administration, said the Obama EPA recognized that power plants were part of an integrated system tied to the electric grid.
"We felt that the best system of emission reduction absolutely had to take those characteristics of this particular industry into account," she said.
Reporter Ellen M. Gilmer contributed.
https://www.eenews.net/eenewspm/2018/08/20/stories/1060094783

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Critics See Legal Vulnerabilities In EPA's Looming CPP Replacement Plan

Aug 21, 2018 | Inside EPA

By Dawn Reeves

EPA's upcoming proposal to replace the Obama-era Clean Power Plan (CPP) is expected to be riddled with legal vulnerabilities, critics say, including that it may be viewed as “arbitrary and capricious” because officials likely will not be able to demonstrate actual emissions cuts, and the rule could increase greenhouse gases and conventional pollutants.
President Donald Trump is expected to announce the plan Aug. 21 during a planned visit to coal-heavy West Virginia.
The long-awaited proposal, issued under section 111(d) of the Clean Air Act, is expected to drive between a 0.7-1.5 percent cut in GHGs from 2005 levels by 2030.
However, leaked White House talking points note the sector's ongoing emissions reduction trajectory will lead to overall GHG cuts of about 34 percent, which is slightly more than the 32 percent cut the CPP was expected to achieve.
One environmentalist says the “central feature of the rule” is that it will be “mind-blowingly unambitious and weak, almost comically so. . . . This looks like a do-nothing rule that is, at best to put it charitably, for companies to say they are doing something, a fig leaf.”
The proposal also will “infect [development of] more technology and legal disputes” when the focus should be on accelerating GHG cuts, the source says.
The new rule would limit required GHG cuts to efficiency improvements that can be achieved within a coal power plant's fenceline; offer relief from new source review (NSR) requirements that would otherwise mandate installation of conventional pollution controls; defer to states on key issues including defining the best system of emission reduction (BSER) at affected facilities; allow states to rely heavily on the “remaining useful life” of an individual plant to seek a waiver from the rule; and encourage investments in coal plants, allowing them to run longer and pollute more, potentially resulting in pollution increases rather than decreases.
The proposal will be open to public comment for 60 days. EPA has said it plans to finalize the proposal in early 2019, kicking off a near-certain court battle.
Three Obama EPA officials who were key architects of the CPP -- former Administrator Gina McCarthy, former acting air chief Janet McCabe and former senior counsel Joe Goffman -- highlighted many legal problems they believe the proposal will face during an Aug. 20 call with reporters.
In a follow-up interview, Goffman tells Inside EPA that EPA will face significant legal troubles if it cannot demonstrate in the proposal or accompanying regulatory impact analysis (RIA) that the rule will cut emissions.
“If you tell a court, 'We define BSER, but we can't actually show much if any emissions reductions,' that is going to really make the agency have a hard time meeting even the arbitrary and capricious [legal] standard which would govern here,” he says.
“You can really just hear a judge from the bench asking the government, 'How does a system that doesn't actually reduce emissions [meet] the obligation to define the BSER? Did you forget a word? It's a four-word term of art, not a three-word [term].' So yes, I guess they're going to call this the best system of emission.”
Cost-Benefit Analysis
Goffman expects EPA to seek to demonstrate that the rule will cut emissions and the RIA to seek to show that the rule's benefits outweigh the costs but is suspicious.
“I can't wait to see the RIA” and compare it with assumptions the agency used to support the original 2015 CPP, he says. That rule defined BSER as including actions throughout the entire electricity system, and set targets based on three building blocks, with block 1 being efficiency improvement at coal plants.
Crucially, he notes, when the agency conducted the CPP's RIA, it “was not able to show” that block 1 would achieve GHG cuts at each individual plant. He says he will be “eager to see” if the Trump EPA can show in its analysis “each affected plant is achieving reductions. That is a pressing question, because when EPA did it three years ago it was not able to show that under block 1” since more efficient plants may run more often, boosting pollution. “I see that as a riddle.”
Also, while the Trump EPA would be expected to tout benefits as exceeding costs in the RIA, that task is more difficult because of steps it took in its separate proposal to repeal the CPP. There, it dramatically lowered the benefits of the Obama rule by changing how the social cost of carbon (SCC) is calculated, thus making the estimated benefits of GHG cuts far lower.
It also floated a scenario in which it would not count the co-benefits of reducing exposure to particulate matter (PM) below national air quality standards.
The RIA for the CPP replacement proposal is expected to similarly use a low SCC value and to not count PM cuts below regulatory limits as co-benefits.
On the call, McCarthy noted that the upcoming proposal does not deny climate change is happening, does not deny EPA's obligation to address climate pollution and does not deny that coal plants are huge emitters of GHGs and conventional pollutants.
“Yet, they don't even mention climate change until page 300 or so” in the rule, and the measure does “not set federal targets for reducing carbon pollution as the law actually requires,” she said. “Instead, they give states the option to do little or nothing.
“Most galling,” according to McCarthy, is the proposal creates “a huge loophole” and “a huge gimme” by giving coal plants incentives through the NSR relief to increase GHGs and soot- and smog-forming pollutants, which have immediate health effects.
She asked why the Trump administration is moving forward with a “coal at all cost” strategy when there is “no other country in the world looking at coal as its future.”
McCabe warned that a rule focused entirely on inside-the-fence improvements may not provide the flexibility to individual units that the CPP offered, including fuel switching, early reduction incentives and trading. “Heat rate improvements were really only a small part of the Clean Power Plan reduction goals,” she said, while also warning that the accompanying NSR relief could encourage upgrades at old coal plants, leading them to run longer and pollute more.
She added that the NSR relief would give coal plants “a new lease on life” and is another example of the administration trying to artificially prop up coal.
McCarthy called the proposal's NSR exemption “something that could take on a life of its own. . . . This isn't billed as a new source review rule, but it really ought to be.”
What 'Could Have Been'
One industry source agrees that the NSR provisions could be legally vulnerable and is “very curious” to learn EPA's legal justification for including them. “I don't see how you exclude an action being taken . . . from NSR [requirements], especially given previous court decisions” that overturned a George W. Bush administration rule to exempt pollution control prevention projects from NSR -- what appears to be an identical issue here.
However, this source does not believe that the rule's lack of significant GHG cuts will render it legally vulnerable. “You will still have, at the end of the day, an emission rate that they currently don't have.” The stringency does not matter, according to this source, who notes that when the final rule is challenged in court, judges will look at this rule on its own, “not in the context of what it could have been.”
A second industry source also defends the forthcoming rule, noting that it “is premised on the fact that states are in a better position to judge the inventory of measures available to reduce carbon emissions within their power sectors,” which is “consistent with decades of integrated resource planning that takes place at the state level,” as well as federalism under the air law.
This source criticizes the CPP as an “unnecessarily burdensome overreach” and notes, “While we don't exactly know what [the upcoming proposal] addresses, it is clear this administration and its EPA seem likely to address the issue within the framework of the Clean Air Act and give states a significant role in managing the reliability and environmental performance of their power sectors.”
However, McCarthy said the Trump administration in this case is all about states' rights, while its recently proposed rollback of vehicle GHG would revoke states' rights to set their own standards.
She and the other former EPA officials raise a number of additional concerns about the rule, including that the Trump EPA's interpretation of the air law as limiting it to inside-the-fenceline actions means “the agency relieved itself of any obligation to investigate how the power system works” and allowed it to ignore the vast record EPA gathered just three years ago to support the CPP, Goffman said on the press call.
He added that the notion that the legal interpretation and changes to the cost-benefit assumptions “dictated this choice is particularly deceptive, because it's really a set of choices that the agency at its own discretion made in how it performed the legal interpretation and how it performed the cost-benefit analysis that resulted in the agency in this case happily finding itself in a corner from which it could take relatively no action to reduce CO2 or other pollutants.”
McCarthy noted that EPA is “claiming their hands are tied, but the simple fact is they tied them themselves.”
https://insideepa.com/daily-news/critics-see-legal-vulnerabilities-epas-looming-cpp-replacement-plan

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Leaked Talking Points On CPP Replacement Stress GHG Cuts, NSR Relief

Aug 21, 2018 | Inside EPA

By Dawn Reeves

A leaked copy of White House talking points to support EPA's proposal to replace the Obama-era Clean Power Plan (CPP) shows that the administration intends to stress that greenhouse gases will continue to fall under the new rule and that the agency is giving permitting relief to plants that make efficiency upgrades to cut GHGs.
But the rule's exemptions from strict new source review (NSR) permitting requirements to install state-of-the-art conventional pollution controls could ultimately lead to increases in conventional air pollutants, critics charge. This issue, as well as the small GHG reductions that would stem from the rule, is the subject of early legal critiques from opponents of the Trump EPA's rollback, which is slated for release Aug. 21.
A leaked copy of the draft talking points obtained by Inside EPA notes that the plan's regulatory impact analysis includes three replacement scenarios and one repeal-only scenario, with all four finding power sector carbon dioxide would continue to be reduced from current levels.
Replacing the CPP could provide $400 million in net benefits and cost $500 million less than the CPP, the document says.
It also says that the proposal could reduce CO2 emissions from the power sector in 2030 by 0.7-1.5 percent from projected levels without the CPP. The reduction is the same as taking between 2.7 million and 5.3 million cars off the road.
“The rule could also reduce co-pollutant emissions” of sulfur dioxide and nitrogen oxides “by between 1 percent and 2 percent each, and mercury by between 0.5 percent and 1 percent.”
Additionally, it says the illustrative scenarios show when states have fully implemented the proposal, power sector emissions could be 33 to 34 percent below 2005 levels, which it notes is “comparable to the reductions projected from CPP in 2015, but will be achieved in a legal and reasonable manner.”
The talking points bash the CPP throughout, calling it “an overreach of EPA's authority under the Clean Air Act” that would have cost up to $292 billion and caused “double-digit electricity price increases in 40 states.”
The memo stresses the CPP would have hurt minorities and senior citizens disproportionately, because “most live in low- or middle-income households.” The document also includes an out-of-context bullet point that, “Under President Trump, the unemployment rate for Black and Hispanic Americans is at an all-time low.”
The talking points acknowledge that EPA has a “responsibility” to regulate power sector GHGs but that the administration “will not use that authority to pick winners and losers. . . . Americans deserve better than the CPP.”
However, the document also notes that EPA is reviewing administrative challenges to its landmark finding that GHGs are an endangerment and suggests that the agency could revisit that key determination. “EPA has six pending petitions challenging both the substance and the process of the endangerment finding. We are evaluating the best path forward. In the meantime, we have a responsibility to fill the void and provide regulatory certainty.”
'Key Element'
The NSR relief included in the proposal is described as a “key element” that will “encourage our nation's power plants to invest in the latest, most efficient technologies. These permitting updates would also protect states against increased permitting burdens and wasteful compliance costs so they can focus their state plans on improving environmental outcomes instead of bureaucratic red tape.”
The talking points add that the rule will “not interfere” with states' “reliable energy portfolios,” a term apparently related to Trump's “goal of energy dominance,” which is “good for America and good for the world.”
And they say that power sector CO2 “will continue to fall under this rule, but this will happen legally and with proper respect for the states, unlike CPP.”
The memo includes another section on the mechanics of the rule, explaining that EPA would finalize guidelines to determine the best system of emission reduction (BSER), which it is proposing to define as “heat-rate efficiency improvements based on a range of 'candidate technologies' -- an 'inside-the-fenceline' determination that focuses on how sources can perform better and does not attempt to force an accelerated shift to renewables.”
The document says: “EPA is not setting a presumptive standard of performance. States will be given the flexibility to design a plan that works for” them.
Once the rule is final, states would have three years to submit a plan to establish a standard of performance, using the candidate technologies and to determine the emission reductions at each unit. Once a state plan is submitted, EPA would have 12 months to determine if it can be approved, and if it is not submitted or unapprovable, then EPA would have two years to develop a federal plan.
One source familiar with the draft says the claims that the rule will reduce CO2 and other air pollution “are just wrong . . . and some [claims] are downright laughable: 'Americans deserve better than the CPP' could actually be true, but THIS proposal sure ain't it!”
https://insideepa.com/daily-news/leaked-talking-points-cpp-replacement-stress-ghg-cuts-nsr-relief

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University of Michigan Sets Ambitious Goal to Pull Carbon From Air

Aug 21, 2018 | BNA Daily Environment Report

By Bobby Magill

Goal is to remove 10 percent of human annual carbon dioxide emissions by 2030
Climate scientists call the goal ambitious, but are uncertain how realistic it is
Imagine a company selling flexible concrete made from carbon dioxide sucked directly from the air that could help highways withstand earthquakes and help solve climate change.
That is one of the goals of a University of Michigan project taking a market-based approach to climate change. It is setting out to invent and market products such as concrete and fabrics that are stuffed full of human carbon dioxide emissions accumulating in the atmosphere.
The university announced Aug. 8 that its Global CO2 Initiative’s lofty goal is to remove 10 percent of annual carbon emissions by 2030 to help prevent climate change from spiraling out of control.
Climate scientists say it is an ambitious plan, but its feasibility is uncertain. The technology that might accomplish carbon dioxide removal on a scale that will slow global warming remains unproven and untested.
The Global CO2 Initiative is spending $4.5 million to support the invention of products that will be made of carbon captured directly from the air and help launch companies that will market those products, such as flexible concrete that could help buildings more effectively withstand earthquakes, Volker Sick, a University of Michigan mechanical engineering professor and project lead scientist, told Bloomberg Environment.
Carbon dioxide can be captured by using industrial processes to suck it directly from the ambient air or by other methods, including ways to mineralize and solidify it.
Ambitious Goal
The program’s 2030 goal is ambitious, Katharine Mach, a senior research scientist at Stanford University who is unaffiliated with the project, told Bloomberg Environment. Mach is a lead author of the Intergovernmental Panel on Climate Change’s report that became the scientific foundation for the Paris climate agreement.
“It’s the exact kind of ambition we need on the climate issue, across the full portfolio of solutions,” Mach said.
The university’s target is comparable to an estimate for energy sector emissions cuts that countries pledged to make as part of the Paris climate agreement, Jessica Jewell, a contributing author of the IPCC report and research scholar at the International Institute for Applied Systems Analysis in Norway, told Bloomberg Environment.
But the university goal “is to stimulate research and development so it’s difficult to evaluate how realistic it is,” Jewell said.
Investment will determine how realistic it is, Peter Frumhoff, director of science and policy for the Union of Concerned Scientists, told Bloomberg Environment.
“We’ve waited for so long, we’re now in a place where we need to be looking aggressively, assertively to all manner of approaches to reduce emissions and scale up,” he said.
The goal of the project is to “be the catalyst” for a global carbon removal effort, Sick said.
“We also are realistic enough and honest that this is not something we can do individually,” he said.
Negative Math
Directly removing the carbon dioxide accumulating in the atmosphere from human fossil-fuel use may be an important part of keeping global warming in check. Without carbon dioxide removal, or “negative emissions,” the math that underlies the Paris climate agreement doesn’t add up.
That is because scientists say cutting fossil fuel use and climate pollution to zero won’t likely be enough to keep the Earth from warming more than 2 degrees Celsius (3.6 degrees Fahrenheit), the primary purpose of the Paris pact. Humanity may have to invent a way to to clean the atmosphere of some of the carbon pollution put there since the beginning of the Industrial Revolution.
“Given the carbon dioxide and other greenhouse gases already in the atmosphere today, it is difficult to avoid 2 degrees without health-damaging pollution aerosols or ‘negative emissions,’” Inez Fung, a climate scientists at the University of California-Berkeley, who is unaffiliated with the Global CO2 Initiative, told Bloomberg Environment. Aerosols are particles suspended in the air that can cool the Earth by reflecting sunlight back to space.
But technology is not yet mature enough to suck carbon dioxide out of the atmosphere at large enough scale to lessen the threat of climate change, Fung said.
Creating a Market
The Global CO2 Initiative is setting out to advance that technology by inventing carbon-based products that could be used to launch new companies and create a market for captured carbon, Sick said.
Three companies unaffiliated with the Global CO2 Initiative are already working on commercializing direct-air-capture technology at scale: Climeworks AG, Global Thermostat LLC, and Carbon Engineering Ltd.
“That’s important in the near term to get us to a point where we can do large-scale pure carbon removal,” Matt Lucas, associate director of the Oakland, Calif.-based Center for Carbon Removal, which is unaffiliated with the project, told Bloomberg Environment.
Creating a market for carbon-based products now allows the industry to build “more carbon-capture projects that will reduce the cost of that technology so that so that when I do gigaton-scale carbon removal, it’ll be cheaper and more politically palatable,” he said.
The project will release a free “toolkit” that will establish a common way for companies and researchers to evaluate the climate impacts of the products they produce using carbon dioxide captured directly from the air.
A Divisive Issue
Carbon dioxide removal as a solution to climate change is a divisive issue among climate scientists.
For example, the European Academies Science Advisory Council concluded in February that the Paris pact’s reliance on “hypothetical” technologies makes its negative emissions scenarios “overly optimistic.” Relying on carbon removal technology is a moral hazard because it suggests that cutting carbon emissions is less urgent than it really is, the council said.
But carbon removal plays a critical role in solving climate change, Mach said.
“It can involve everything from increasing carbon stored on the landscape, through to engineered approaches that capture CO2 from the atmosphere and store it underground in geologic formations,” Mach said. “Carbon removal is one way to grapple with hard to decarbonize energy services, such as air travel or long-distance shipping.”
https://news.bloombergenvironment.com/environment-and-energy/university-of-michigan-sets-ambitious-goal-to-pull-carbon-from-air

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EPA Seeks Input On Proposal To Bolster Texas' SO2 Regional Haze Trading

Aug 21, 2018 | Inside EPA

By Stuart Parker

EPA is seeking public input on a proposal aimed at bolstering the rationale for approving Texas' use of an intrastate sulfur dioxide (SO2) emissions trading program to satisfy regional haze reduction mandates, while also asking for comment on alternatives including source-specific emissions limits sought by environmentalists.
The proposal, announced Aug. 17, is already prompting criticism from the Sierra Club and National Parks Conservation Association even though it floats facility-specific air pollution limits. The groups argue that the proposal affirms support for SO2 trading -- an approach environmentalists warn would allow emissions increases, in contrast to the Obama EPA's proposed plan for hard emissions limits to meet regional haze requirements.
The Trump administration abandoned that plan, instead finalizing last October a federal implementation plan (FIP) in which it crafted the SO2 trading program for the state. Environmentalists petitioned the agency to reconsider the FIP, and the new proposal with the various options to revise the FIP is the result of that process.
“Instead of protecting public health and the environment, EPA has proposed a plan that will continue to allow air pollution to darken skies and threaten communities and national parks,” say NPCA and Sierra Club.
One environmentalist says “what you have got is a gross disparity” between the proposed Obama EPA plan and the Trump EPA's trading program, which might allow emissions to rise because emissions allowances for facilities emitting SO2 are too generous. “They are obviously not interested in requiring reductions.”
Texas is unusual in employing an intrastate emissions trading program to address regional haze, although several interstate trading programs have previously served to satisfy haze reduction requirements. While the Texas plan relates to a previous period of states' implementation of the regional haze program, from 2008-2018, states are now preparing their plans for compliance with the 2018-2028 phase, with plans due to EPA by 2021.
The haze program requires states to craft state implementation plans (SIPs) detailing how they will reduce haze-forming emissions from industrial sources, and EPA can impose FIPs on states whose SIPs it rejects.
In the agency's new proposal on the Texas plan, EPA affirms its backing for the SO2 trading program as an alternative to best available retrofit technology (BART), the emissions control standard required under the Clean Air Act for regional haze-generating sources, chiefly power plants. The Trump EPA and the Texas Commission on Environmental Quality, the state's environmental regulator, jointly agreed on the program as an alternative to tougher, source-specific BART controls proposed by the Obama administration.
The agency will hold a public hearing on the proposal Sept. 26 in Austin, TX, and will take written comment through Oct. 26.
Texas FIP
Although EPA established the Texas SO2 trading program through a FIP, the agency has expressed its preference for Texas to submit a regional haze SO2 SIP instead, although the state has yet to do so, EPA says in the new proposal. In an Aug. 17 statement the agency says it “maintains that States are in the best position to provide flexibility and protect the environment while maintaining a strong economic engine."
Environmentalists oppose the trading program as too weak to either meet air law haze reduction mandates or to protect public health. In general, environmental groups have opposed emissions trading as insufficient to ensure that pollution is reduced in specific “Class I” areas -- national parks and wilderness areas.
Environmentalists are litigating the SO2 trading program, which they say is too weak and fails to satisfy air law BART requirements. EPA issued its FIP approving the trading plan under a consent decree agreement in the U.S. District Court for the District of Columbia suit NPCA, et al. v. EPA, et al., a case that remains stayed pending EPA's final response to environmentalists' petition for reconsideration.
NPCA and others in the suit have argued that EPA's FIP is unlawful on procedural grounds, because it is such a radical departure from the Obama EPA's original proposal.
EPA is legally required to issue final regulations that are a “logical outgrowth” of the proposal, but environmentalists say the Obama proposal said nothing about an SO2 trading program, rendering it impossible to comment on such a program and violating the Clean Air Act's notice-and-comment requirement.
The new proposal does present an opportunity for public comment on the adequacy of the SO2 program to meet statutory haze reduction requirements. It also solicits comment on how EPA should handle recent or planned retirements of several coal-fired power plants covered by the trading program.
Although EPA has found that the agency's Cross-State Air Pollution Rule interstate emissions program satisfies air law haze obligations with respect to haze-forming nitrogen oxides, the current Texas proposal does not address this finding.
https://insideepa.com/daily-news/epa-seeks-input-proposal-bolster-texas-so2-regional-haze-trading

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