Preview Newsletter
PM ACC 8/23/18
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(ACC Mentioned) U.S., China Enter Day Two of Trade Talks as New Tariffs Kick In
Aug 23, 2018 | Bloomberg
By Shawn Donnan, Justin Sink, and Mark Niquette
Senior U.S. and Chinese officials embarked on a second day of trade talks Thursday with expectations low of any meaningful progress as Beijing and Washington traded their latest round of tit-for-tat tariffs. -
(ACC Mentioned) INSIGHT: US Chemical Exports to Take Bigger Hit in US-China 2nd Round of Tariffs
Aug 23, 2018 | ICIS
By Joseph Chang
The 2nd round of US and China tariffs, each comprising 25% on $16bn in imports and going into effect on 23 August, will hit US commodity chemical exports to China far harder, as the impact on comparable China exports to the US should be negligible. -
(ACC Mentioned) Fresh Tariffs on Chinese Goods ‘Weaken Competitiveness of U.S. Chemicals Industry,’ Cautions ACC
Aug 23, 2018 | Plastics Today
By Norbert Sparrow
The frustration is palpable in the oral testimony of Ed Brzytwa, Director of International Trade of the American Chemistry Council (ACC; Washington, DC), during a public hearing on U.S. List 3 of tariffs targeting Chinese products. -
(ACC Mentioned) First Resin Tariffs Kick in for US-China Trade War
Aug 23, 2018 | Plastics News
By Steve Toloken
The U.S.-China trade war officially came to the plastics materials sector Aug. 23, with the two countries kicking off tariffs in the early morning hours on about $4.2 billion in chemicals and plastics. -
EPA Clarifies Chemical Review Process
Aug 22, 2018 | Chemical Processing
By Lynn L. Bergeson
The release of the Toxic Substances Control Act (TSCA) Section 5(a)(3)(C) determination for a new polymer, P-16-0510, represents a positive step in implementing the New Chemicals Program under the Frank R. Lautenberg Chemical Safety for the 21st Century Act. -
(ACC Mentioned) Court Orders U.S. EPA to Implement Chemical Safety Regulation
Aug 23, 2018 | Chemical & Engineering News
By Jeff Johnson
The U.S Environmental Protection Agency must implement a worker and community chemical safety regulation developed by the Obama administration, even as EPA works to replace that rule, a federal court has decided. -
EPA May Make a Deadly Mistake — No Amount of Asbestos Exposure is Safe
Aug 22, 2018 | The Hill - Environment & Energy Opinion
By Karen Selby
As a registered nurse for The Mesothelioma Center, I have been assisting mesothelioma patients and their caregivers for almost 10 years. I’ve spoken with thousands of people battling this asbestos-related cancer. -
US EPA Round-Up
Aug 23, 2018 | Chemical Watch
The EPA is to hold its final PFAS community engagement event for this year in Leavenworth, Kansas on 5 September. The 23 August Integrated Risk Information System (IRIS) public science meeting on naphthalene has been postponed. -
California Releases Hazard Documents for Two Substances
Aug 23, 2018 | Chemical Watch
California’s Office of Environmental Health Hazard Assessment (Oehha) has released hazard identification documents for two substances being considered for listing under Proposition 65: gentian violet and N-nitrosohexamethyleneimine. -
U.S.-China Trade War Barbs Bleed Over Into Central America’s Natural Gas Revolution
Aug 23, 2018 | Natural Gas Intelligence
By Ronald Buchanan
What had looked like a routine trip to Panama for U.S. Treasury’s David Malpass, undersecretary for International Affairs, has unexpectedly pitched him into the frontline of trade tensions between the United States and China against a backdrop of Lower 48 liquefied natural gas (LNG) exports to Central America. -
Oil Under Pressure as China-U.S. Trade Talks Start
Aug 23, 2018 | Wall Street Journal
By Sarah McFarlane and Benjamin Parkin
Oil prices were mixed on Thursday as investors awaited indication of whether the U.S. and China trade talks taking place this week would yield progress. -
New Pipelines to Boost U.S. Natural Gas Exports to Mexico
Aug 23, 2018 | Houston Chronicle
By Katherine Blunt
U.S. natural gas exports to Mexico by pipeline are expected to jump in the coming months as several long-awaited projects are placed into service to feed growing demand across the border and potentially ease bottlenecks in the Permian Basin in West Texas. -
Petrochemicals Market Report Analyzes Global Industry Trends and Opportunities
Aug 22, 2018 | Plastics Today
By Clare Goldsberry
The top 15 petrochemicals are analyzed in a new report by Coherent Market Insights, a market research and consulting firm based in Seattle, WA. Petrochemicals play an important role in the 21st century lifestyle and are utilized in various end use products across a range of industries. -
The New Gas Market: Shipowners Needing Cleaner Fuel
Aug 23, 2018 | Wall Street Journal
By Paul Garvey
The global shipping industry could become a new market for liquefied natural gas, thanks to a drastic change in maritime law that aims to curb air pollution. -
Dem Lawmakers Urge California Governor to End Fossil Fuel Extraction
Aug 23, 2018 | The Hill - Energy & Environment Policy
By Miranda Green
Two Democratic members of Congress are urging California Gov. Jerry Brown (D) to put a cap on any new fossil fuel projects and set a timeline for a hard stop on oil and gas extraction throughout the state. -
Appeals Court Strikes Down EPA’s Attempt to Delay Chemical Disaster Rule
Aug 23, 2018 | Safety and Health Magazine
A federal appeals court has struck down the Environmental Protection Agency’s latest attempt to delay the Obama-era Chemical Disaster Rule. -
Honeywell, Mack Trucks to Pay $5.5 Million for Environmental Cleanup: EPA
Aug 22, 2018 | Reuters
By Lisa Lambert and Jonathan Oatis
Honeywell International Inc and Mack Trucks Inc will reimburse the U.S. government $5.5 million for cleaning up the Elkton Firehole Site in Maryland, where their predecessor, Triumph Industries Inc, disposed explosives manufacturing waste, the Environmental Protection Agency said on Wednesday. -
New York, Illinois Senators Announce Federal PTC Funding for Several Roads
Aug 23, 2018 | Progressive Railroading
Politicians in New York and Illinois are the latest policymakers to announce the award of federal funding for positive train control (PTC) implementation projects at several freight and passenger railroads. -
The Energy 202: Trump's EPA Just Replaced One of Obama's Biggest Climate Rules. Some Conservatives Say It's Not Enough.
Aug 23, 2018 | The Washington Post
By Dino Grandoni
The Trump administration proposed relaxed rules for carbon emissions from coal-fired power plants that check a number of boxes off the wish list of conservatives. -
EPA Plans Broad Review of 'Secondary' NOx, SOx, PM NAAQS
Aug 23, 2018 | Inside EPA
EPA in a new planning document for its review of “secondary” national ambient air quality standards (NAAQS) for nitrogen oxides (NOx), sulfur oxides (SOx) and particulate matter (PM) is outlining a traditional NAAQS review process that will take a broader approach than prior evaluations of the welfare-based limits.
Industry and Association News
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Environment News
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(ACC Mentioned) U.S., China Enter Day Two of Trade Talks as New Tariffs Kick In
Aug 23, 2018 | Bloomberg
By Shawn Donnan, Justin Sink, and Mark Niquette
Senior U.S. and Chinese officials embarked on a second day of trade talks Thursday with expectations low of any meaningful progress as Beijing and Washington traded their latest round of tit-for-tat tariffs.
The world’s two largest economies on Thursday each imposed tariffs on imports worth some $16 billion, taking the total value of goods hit as a result of President Donald Trump’s trade war with China to $100 billion.
Expectations are low for any meaningful progress in the talks led by U.S. Treasury Undersecretary for International Affairs David Malpass and Vice Commerce Minister Wang Shouwen.
The Trump administration insists it’s engaging with China and will keep raising its concerns, but a senior administration official who spoke with reporters on Thursday played down the possibility of any major announcement coming out of the meetings.
The Chinese delegation has shown no signs of bringing any significant compromises to the table this week and continues to believe that offering increased purchases of American commodities aimed at reducing the U.S. trade deficit with China is the best tactic, said a person familiar with the discussions.
The Chinese don’t seem to have evolved at all in their position, the person said.
Hard Line
Analysts point out that the Trump administration is also showing no signs of softening in its hard line toward Beijing.
Trump on Thursday highlighted new tougher restrictions aimed at Chinese investment in the U.S. at a White House event. Moreover, this week he rekindled his campaign accusations that Beijing is engaging in currency manipulation, long one of the most sensitive friction points between the two countries.
His trade team is also proceeding with additional efforts to raise pressure on Beijing.
U.S. officials are due to meet in Washington on Friday with delegations from the European Union and Japan to discuss joint efforts to confront China at the World Trade Organization over its industrial subsidies and the conduct of its state-owned enterprises.
Administration Hawks
More provocatively, hawks in the administration including Robert Lighthizer, the U.S. trade representative, are moving forward with plans to impose tariffs on a further $200 billion in imports from China. Those will take effect as soon as next month and would mean roughly half of all U.S. imports from China would be covered by new levies.
In hearings this week in Washington, U.S. companies and industry lobbyist have been offering their mostly negative feedback on the proposed additional duties of as much as 25 percent on more than 6,000 product lines.
The goods to be covered in the next round of tariffs range from chemicals, raw materials and seafood to vacuums, bicycles and furniture. The U.S. could impose the duties after a comment period ends Sept. 6.
While some of the almost 350 officials testifying are asking for tariffs to be added to grills, air conditioners and other products being imported duty-free -- especially firms hit by increased costs from Trump’s separate tariffs on steel and aluminum imports -- most are asking for products to be removed from the list.
Political Game
“This is a political game being played with my company as the game piece,” Ross Bishop, president of BrightLine Bags Inc., testified on Monday. The California-based company makes nylon gear bags for pilots and other customers, and Bishop pleaded with the trade panel to “help me keep my company alive.”
The interests of U.S. businesses in a deal will vary based on their circumstances and how they’ve been affected by China’s trade practices, said Ron Sorini, a trade lobbyist and former chief textile negotiator at the office of the U.S. trade representative.
The Chinese are miscalculating if they think Trump will respond as previous presidents have and doesn’t really want concrete changes in response to allegations of intellectual property theft and a trade deficit, Sorini said.
Ending the tariffs must be a starting point because of the damage they are doing to U.S. companies, which will make it more difficult to negotiate with China, said Ed Brzytwa, director of international trade for the American Chemistry Council.
Chemicals are getting hard especially hit, with the duties taking effect Thursday affecting $2.2 billion in chemicals and plastics, and the next round of proposed duties affecting $16.4 billion, according to the council. More than 1,000 chemical and plastics products or product groups are hit by the retaliatory tariffs, the group said.
“If these negotiations are going to be successful, they can’t be done under the threat of tariffs or the actual tariff implementation,” Brzytwa said.
https://www.bloomberg.com/news/articles/2018-08-23/u-s-china-enter-day-two-of-trade-talks-as-new-tariffs-kick-in
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(ACC Mentioned) INSIGHT: US Chemical Exports to Take Bigger Hit in US-China 2nd Round of Tariffs
Aug 23, 2018 | ICIS
By Joseph Chang
The 2nd round of US and China tariffs, each comprising 25% on $16bn in imports and going into effect on 23 August, will hit US commodity chemical exports to China far harder, as the impact on comparable China exports to the US should be negligible.
However, the overall impact on high volume commodity chemical markets could be less than many anticipate, at least from this latest round. The 1st round of US and China tariffs of 25% on $34bn in imports excluded chemicals.
US commodity chemical products most impacted based on exports to China as a percentage of total production in 2017 are monoethylene glycol (MEG), styrene, EVA copolymers, linear low density polyethylene (LLDPE), high density PE (HDPE), and ethylene dichloride (EDC) based on an analysis of select chemicals trade flows in the ICIS Supply and Demand Database.
PE EXPORTS DIVERTED
For LLDPE, US exports of around 222,000 tonnes to China in 2017 accounted for 10.0% of its total LLDPE exports, and 4.4% of total production. In the first half of 2018, the US exported 155,000 tonnes of LLDPE to China, or 9.9% of total exports.The US is also bringing on massive amounts of LLDPE capacity in 2018 and 2019, primarily targeted for export, so planned exports to China in the future would most assuredly have been higher.
Several regional and Chinese traders were actively trying to offload US-origin HDPE film and injection grades, and LLDPE film grades to southeast Asia – Vietnam in particular - pressuring prices as of 20 August.
And one large PE buyer in Europe said it has already received offers of diverted material, or discreet offers of US material that was initially destined for China.
Latin American PE buyers should get access to cheaper material in the short term as US-to-Latin America is the most well established export channel.
In the long run, the loss of China as an export market for LLDPE and HDPE would be a big one, unless US producers can shift exports in a meaningful way elsewhere.
CEOs of US producers have argued that trade flows will simply shift but not impact the global supply/demand dynamics in the long run, with China importing more PE from elsewhere, and the US exporting more to other regions such as Europe.
However, John Richardson, senior Asia consultant at ICIS, offers a different view.
“We estimate that China will account for 51% of global net HDPE and LLDPE net imports (imports minus exports) across the major deficit regions and countries in 2018-2025,” said Richardson in the ICIS Asian Chemical Connections Blog.
“This means that over the shorter term – this year and 2019 – China will have a similarly dominant role as the world’s biggest importer. It also means that it is mathematically impossible for the US to… comfortably place its big increases in production without exporting to China,” he added.
EXPORTS IN CONTEXT
To understand the potential impact on markets, it’s important to keep the export volumes in context with total production as even if US exports of a particular product to China are a large proportion of total exports, they could represent a very small percentage of overall production.A good example is butadiene (BD). Even as US BD exports to China comprised a whopping 63% of total US exports in 2017, the volume of about 21,000 tonnes was minimal, representing just 1.1% of total US production.
EDC TRADE FLOWS
On a less extreme scale, US EDC exports to China were around 28% of total EDC exports, while the volume of about 371,000 tonnes was 2.4% of total US production.Players in the US EDC market said the impact will likely be minimal – or at least, not significant.
“It’s not ‘no problem’, but it’s not much of a problem,” said a US producer that is active in global EDC markets.
The issue has been closely watched in recent weeks because China is the largest consumer of US EDC exports. China took about 28% of the 1.35m tonnes exported by US producers in 2017.
US EDC players actually expect that US EDC imported to China will be exempt from the tariffs if it is used to make polyvinyl chloride (PVC) which is then exported. That re-export exemption should allow for a significant volume of sales to the region, though less than the market has taken in the past.
Earlier in August, China revised its 2nd round list to exclude EDC’s main downstream product PVC but kept EDC on the list.
One scenario is that buyers in China pay higher prices for EDC as they seek supply from southeast Asia and the Middle East, where prices are likely to move up to match the level of the US price plus tariffs. Meanwhile, US producers will focus on gaining sales in Europe, southeast Asia, India, Egypt, Brazil and markets in the Mediterranean.
MEG IMPACTED
MEG is one of the US markets to be most impacted. In the ICIS analysis, the US exported 144,000 tonnes/year of MEG to China in 2017, which accounted for 21.9% of total US exports, and 7.0% of total production.In the short-term, US-based MEG producers will face challenges to divert cargoes to other locations, while in the mid-to-long term, changes in trade flows will be inevitable to cater to the new facilities coming on board in the US. Potential alternative destinations would be Europe, southeast Asia and India.
Import volumes from the US to China should decline significantly in 2018 instead of growing alongside further strong downstream polyester growth.
In China, unlike the case for EDC, the tariffs on US MEG imports will have a limited impact, as imports from the US are just 2.1% of total imports.
No doubt there will be disruptions in global markets stemming from the 2nd round of US-China tariffs but in the case of commodity chemicals, mostly far less than many expect.
IMPACT ON CHINA EXPORTS MINIMAL
For China’s export markets, the impact of US tariffs on chemical imports from China will be negligible.For the 11 select commodity products China exports to the US that come under tariff, none represent even 1% of total China production and most are closer to 0%.
China’s expandable polystyrene (EPS) and polystyrene (PS) exports to the US in 2017 comprised just 0.3% and 0.2% of total production, respectively. As a percentage of total exports, EPS exports to the US represented 3.6% while PS exports were 7.3% of the total.
Yet we’re talking about less than 10,000 tonnes of EPS and just over 5,000 tonnes of PS – small volumes. For the nine China commodity chemical exports to the US analysed, not one surpassed 10,000 tonnes in volume in 2017. And aside from EPS and PS, the others did not even amount to 0.1% of total China production.
ACC SOUNDS ALARM
In the above analysis we’ve covered certain commodity chemicals and polymers, but the overall impact is much more widespread.In the specialty chemicals arena where suppliers are more limited, the impact could be greater. And then there’s the impact from many other manufacturing goods coming under tariff, which would indirectly affect demand for chemicals and polymers.
The American Chemistry Council (ACC) is sounding alarms at the 2nd round of tariffs, as well as the looming 3rd round, which involves the US planning to impose 25% tariffs on an additional $200bn of Chinese imports, and China imposing up to 25% tariffs on an another $60bn in US imports.
The 2nd round of US tariffs impact $2.2bn of chemicals and plastics from China, while China’s 2nd round list includes $2bn in chemicals and plastics from the US, according to the ACC.
“Companies that rely on imported inputs from China to manufacture goods in the United States will be faced with higher costs. Multinationals will be hit especially hard,” the ACC said in a statement on 22 August.
“Higher priced inputs makes it more expensive for companies - both foreign and domestic - to do business in the United States, thus deterring investment and economic growth in this country,” it added.
The result will be supply chain disruptions and reduced US manufacturing competitiveness, the trade group noted.
3RD ROUND OF TARIFFS
And then there’s the 3rd round of US-China tariffs which are on the table.In this next round of planned US tariffs on $200bn in Chinese imports, around $16.3bn in chemicals and plastics from China will be impacted (based on the ACC’s estimate of a total $18.5bn impacted from all 3 rounds), while China’s retaliatory tariffs of 5-25% on another $60bn in US imports will hit an estimated $8.8bn in US exports of chemicals and plastics to China, according to the ACC.
“Many chemical manufacturers will be impacted negatively by the tariffs from both sides (China and the US) and will see a reduction in their competitiveness,” said the ACC.
However, for the overall economies, China stands to lose far more than the US, according to ICIS senior consultant James Ray.
“Global investors believe the steps the US is taking make the US a better investment and China a worse investment as evidenced by the stock markets especially after each new round of tariff announcements,” said Ray.
“There is no doubt that a serious and sustained trade war could disrupt global trade, but a small skirmish that represents a fraction of a percentage of the global GDP, would barely shift the global trade flow. The financial impact of tariffs announced so far will have a very small impact on the consumers of both countries - low single digits of the annual household income,” he added.
The consultant is optimistic on an eventual resolution of the US-China trade dispute as well as the prospects for the US chemical industry even in the face of China tariffs.
“The bottom line is that the sky is not falling. The US and China are just entering the first round of negotiations to level a playing field which has steeply favored China in the past in hopes of strengthening the relationship between the two great countries. Disrupting the status quo is necessary to bring your largest supplier to the negotiating table, and the US has done exactly that,” said Ray.
“With abundant, low cost natural gas and shale oil, the US is a low cost producer and will easily be able to sell its products and still make a profit. US PE producers could absorb the tariff in to China and still be highly profitable. Because of China’s high PE demand, fuelling a seller’s market, much of the tariff will just be added to the price and paid by the China buyers,” he added.
https://www.icis.com/resources/news/2018/08/23/10253430/insight-us-chemical-exports-to-take-bigger-hit-in-us-china-2nd-round-of-tariffs/
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Aug 23, 2018 | Plastics Today
By Norbert Sparrow
The frustration is palpable in the oral testimony of Ed Brzytwa, Director of International Trade of the American Chemistry Council (ACC; Washington, DC), during a public hearing on U.S. List 3 of tariffs targeting Chinese products. “Before I explain the impact of these tariffs and China’s retaliation on our industry and the supply chains that underpin U.S. manufacturing, I would like to note ACC’s disappointment that the administration did not heed our request in July to remove approximately $2.2 billion in Chinese imports of chemicals and plastics from U.S. List 2,” said Brzytwa.
U.S. List 2, which includes tariffs on $2.2 billion in chemicals and plastics imported from China, went into effect today. China retaliated immediately. “At precisely 12:01 AM ET, the Chinese Ministry of Commerce released a statement vowing to ‘make the necessary counterattacks,’ ” NPR reported today. “And then it matched the Trump administration's move with tariffs on $16 billion worth of U.S. imports, ranging from diesel fuel and coal to medical instruments and cars.” PlasticsToday reportedin June on the potential impact on medical devices and industry’s response.
“If tariffs on $2.2 billion in chemicals and plastics imports that appeared on List 2 would weaken the competitiveness of the U.S. chemicals industry, then the $16.4 billion in tariffs on additional products of chemistry in List 3 would have a potentially irreparable impact on our industry’s economic structure and supply chain,” warned Brzytwa. He provided oral testimony at the U.S. Trade Representative Public Hearing on the tariffs on Aug. 20, his second time testifying in less than one month. List 3 tariffs could go into effect as early as October.
Although the ACC shares concerns about China’s unfair trade practices and wanton disregard for intellectual property, the imposition of unilateral trade tariffs are “counterproductive and do little more than invite retaliation that ultimately undermines their stated intent,” said the ACC. In fact, the looming tariffs have already begun to roil the U.S. resin market, as we noted in this week’s resin report, “China’s chilling effect on spot PE prices.”
Supply chains are complex and intricate, relying on interconnected networks and channels that work together as one to bring finished products to market, said Brzytwa at the hearing. “They cannot easily be reconfigured to meet the whims of U.S. trade policy,” he added.
Meanwhile, a Chinese delegation has been meeting with its U.S. counterparts in Washington, DC, this week to seek a solution to the burgeoning trade war. It does not appear to be making much progress. In an interview with Reuters this week, Trump said there is no time frame for ending the trade dispute. NPR reports that late last month Trump further ramped up the rhetoric, saying that he is “ready to go to 500.” By that he means he would consider imposing tariffs on imports of all Chinese goods, according to NPR, noting that the U.S. imported $505 billion worth of Chinese goods last year, per Census Bureau data.
As somebody once said in a very different context, buckle up—it’s going to be a bumpy ride!
https://www.plasticstoday.com/materials/fresh-tariffs-on-chinese-goods-weaken-competitiveness-us-chemicals-industry-cautions-acc/205544201059322?cid=flyout
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(ACC Mentioned) First Resin Tariffs Kick in for US-China Trade War
Aug 23, 2018 | Plastics News
By Steve Toloken
The U.S.-China trade war officially came to the plastics materials sector Aug. 23, with the two countries kicking off tariffs in the early morning hours on about $4.2 billion in chemicals and plastics.
And those numbers could easily rise. The next round of proposed tariffs under consideration by Washington, covering $200 billion in Chinese goods, includes $25 billion in chemicals and plastics.
While it can be tough to keep track of what seems like a daily drumbeat of trade actions — and retaliatory reactions — Aug. 23 marks the first-time that tariffs have kicked in on substantial amounts of plastics resins and materials flowing between the countries.
There were some signs of de-escalating the larger trade conflict, with Washington and Beijing resuming talks this week. Meanwhile, plastics materials lobbying groups continued to press their case.
The American Chemistry Council testified against plans for 25 percent tariffs during a mammoth six-day series of hearings in Washington that began Aug. 20.
Materials companies including Kraton Corp. joined ACC, testifying or submitting written comments.
In general, they argued that the United States' low-cost shale gas give American plastics producers a global competitive advantage, and they worry that a trade war will cut their access to China's growing market.
"These tariffs will close off China's market to U.S. exports just when our industry was ready to supply China's large and growing demand for chemicals," Ed Brzytwa, ACC's director of international trade, told the hearing on its opening day, Aug. 20. "Trade flows between the U.S. and China will contract as tariffs are imposed on each side."
ACC released an analysis Aug. 22 estimating that $8.8 billion in U.S. chemicals and plastics exports to China would be hit if Beijing retaliates on the next round of U.S. tariffs on Chinese goods. That next batch of U.S. tariffs, on $200 billion in Chinese goods, includes tariffs on $16.4 billion in Chinese chemical and plastics exports.
The next round of tariffs could go into effect in late September or early October, ACC said, and would potentially be much more severe than the tariffs that began Aug. 23.
The Aug. 23 tariffs cover $2 billion in U.S. chemical and plastics exports to China and $2.2 billion in Chinese exports to the United States.
The Washington-based association argued that while it supports action to change China's trading practices, it said the sheer increase in the volume of goods covered would have a "potentially irreparable impact" on chemical supply chains.
The tariffs will force price increases on raw materials that will make U.S. firms less competitive globally against firms in countries that don't have those tariffs for inputs from China, ACC said.
"Supply chains are not plug and play. They cannot be easily reconfigured to meet the whims of U.S. trade policy," Brzytwa said. "Forcing companies to reconfigure their supply chains would threaten the viability of their businesses."
The U.S. resin sector has a trade surplus with China, in contrast with other segments of the plastic sector, which heightens its concerns about losing access to China.
More than 500 companies and organizations across all industries plan to testify in person over the six days, both for and against tariffs. More than 2,000 written comments were submitted.
Kraton comments
One of the written comments, from Houston-based Kraton, urged the U.S. government to drop tariffs on Chinese isoprene, a key component of Kraton's styrene-isoprene-styrene thermoplastic elastomer.
It said that the lack of sufficient domestic production of isoprene is not the result of unfair trade practices by China and argued that tariffs will hurt U.S. competitiveness in SIS manufacturing and shift production elsewhere.
"Kraton believes additional tariffs on isoprene will result in U.S. production of SIS being displaced by foreign production," the company said. "Foreign manufacturers of SIS, including those in China, will have lower costs for isoprene and will be able to produce and market their SIS at a price lower than Kraton will be able to match."
The Society of Chemical Manufacturers and Affiliates, which represents specialty chemical firms, said it was "exceptionally concerned" that tariffs will disrupt complex industry supply chains and U.S. chemical manufacturing would suffer.
"Specialty chemical supply chain modification is exceedingly difficult because specialty chemicals have purity and performance demands that require particularized expertise and infrastructure," said Matthew Moedritzer, manager of legal and government relations for the Arlington, Va.-based group.
If tariffs are enacted, he urged USTR to work with industry to make sure reasonable alternatives to Chinese suppliers are available.
http://www.plasticsnews.com/article/20180823/NEWS/180829945/first-resin-tariffs-kick-in-for-us-china-trade-war
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EPA Clarifies Chemical Review Process
Aug 22, 2018 | Chemical Processing
By Lynn L. Bergeson
The release of the Toxic Substances Control Act (TSCA) Section 5(a)(3)(C) determination for a new polymer, P-16-0510, represents a positive step in implementing the New Chemicals Program under the Frank R. Lautenberg Chemical Safety for the 21st Century Act. The new chemical is intended to be used as a deodorizer in a variety of products, including floor cleaners, cat litter, fabric freshener sprays and other consumer products. This column explains why this is a significant development.
“The agency may wish to articulate its thinking on what is and isn’t “reasonably foreseeable.””
Since the TSCA’s 2016 revision, review of new chemicals under Section 5 has slowed dramatically. The law requires the U.S. Environmental Protection Agency (EPA) make one of three determinations at the conclusion of its review of new chemicals; however, the introduction of new terms and concepts has confounded the process. Among those concepts is what the EPA considers “reasonably foreseen” conditions of use of the new chemical.
Since mid-2016, the EPA’s interpretation has been such that most new chemicals, approximately 90%, have been targeted for regulation. This sharply contrasts to pre-Lautenberg numbers, where approximately 10% of new chemicals were targeted for regulation. In the document summarizing the EPA’s review of the new polymer, the agency states there are no known or reasonably foreseen conditions of use other than those intended by the submitter. This may not appear to be a controversial statement. Based on the EPA’s more recent interpretation of “conditions of use,” the agency seems to have construed what is reasonably foreseeable to be extraordinarily generous. It includes use patterns far beyond what the submitter intends and what is well beyond the EPA’s commitment, to base what is “reasonably foreseen” on information, knowledge, or experience, not on any conceivable condition of use.
The New Polymer
The EPA identifies the new chemical’s potential health hazard endpoints based on the acrylate/acrylamide category. Causes for concern for acrylamide and certain low molecular acrylamide analogs include mutagenicity, developmental toxicity, reproductive effects, neurotoxicity, and a “marginal potential” for oncogenicity. While this may appear alarming, the real question is how toxic the new chemical is, and are exposures expected to exceed a “safe” level? Risk, after all, is a function of hazard and exposure. The EPA considered the low-molecular weight (LMW) components of the polymer (i.e., the “worst case”) in its assessment and identified two analogs of the LMW components. The EPA also took into account the toxicity of acrylamide in its assessment. Based on the analogs, the EPA set a no observable adverse effect level of 250 mg/kg/day, which placed the substance in the low-to-moderate toxicity category.
The agency also identified ecotoxicity concerns. Using its predictive models, the EPA predicted toxicity levels for acute and chronic effects to aquatic species, and set concentrations of concern at levels that put the substance in the “moderate” category for environmental hazard.
The EPA applied exposure modeling to predict exposures to workers, the general population and consumers. Results indicated that predicted exposures were sufficiently below the EPA’s concern level to not present an unreasonable risk to workers, the general population or consumers. The EPA even found that at the “worst case” of 100% of the premanufacture notification (PMN) substance, exposures would be below the EPA’s concern level. The EPA also evaluated surface water concentrations and determined that the estimated maximum acute and chronic concentrations didn’t exceed the concern level.
Discussion
The EPA reviewed the new chemical’s likely and potential exposures to workers, the general population, consumers, and aquatic species, and did not identify any foreseeable conditions of use that would lead it to predict that unreasonable risk was likely. This approach is a welcome departure from previous new chemical decisions, where in nearly all cases, the EPA only made a “not likely” determination if it identified a low hazard for both health and ecological effects. Absent such a finding, the EPA appeared to believe there could be some conditions of use that could contribute exposures exceeding the EPA’s concern levels.
In the case of P-16-0510, the EPA applied the new TSCA as written. It identified a low-to-moderate health concern and a moderate eco concern, and took a reasonable approach grounded on the law to go beyond the mere consideration of potential hazard and to interpret the “reasonably foreseen” conditions of use and assess unreasonable risk as the new TSCA requires. The EPA’s measured approach indicates a maturation of its understanding of what’s needed to meet a not likely determination. The agency may wish to articulate its thinking on what is and isn’t “reasonably foreseeable” and what PMN submitters can do to help the EPA understand not only what is intended, but what might be “reasonably foreseen” for TSCA Section 5 purposes.
https://www.chemicalprocessing.com/articles/2018/epa-clarifies-chemical-review-process/
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(ACC Mentioned) Court Orders U.S. EPA to Implement Chemical Safety Regulation
Aug 23, 2018 | Chemical & Engineering News
By Jeff Johnson
The U.S Environmental Protection Agency must implement a worker and community chemical safety regulation developed by the Obama administration, even as EPA works to replace that rule, a federal court has decided. The U.S. Court of Appeals for the District of Columbia Circuit strongly criticized actions of former EPA Administrator Scott Pruitt, who sought to kill and rewrite the finalized Obama-era risk management program (RMP) regulation for chemical facilities. At the urging of the American Chemistry Council and other industry groups, the Trump EPA attempted to stall implementation of the Obama rule until February 2019 while the agency develops a replacement regulation.
In an opinion issued Aug. 17, the court ruled that a delay beyond three months is not allowed under the Clean Air Act, the law that established RMP. Additionally, the court said EPA’s justification for the delay is based on the needs of the agency and regulated companies but did not consider the impact on safety and protection of human health and the environment. The delay, the opinion continued, was calculated to avoid compliance with the regulation and makes a “mockery” of the statute.
The RMP regulation, released in the last days of the Obama presidency, calls for better coordination among emergency responders and independent, third-party audits of companies after an accident or near-accident at chemical facilities. It also requires consideration of inherently safer manufacturing approaches.
Some 12,500 plants are covered by the RMP regulation because they handle highly hazardous chemicals. EPA found 1,500 accidents occurred at these facilities over a 10-year period. A 2013 deadly incident--which killed 15 people, 13 of whom were emergency responders--led to the Obama administration’s overhaul of RMP regulations.
The regulation, the rewrite, and delay have generated much heat. Twenty-three states filed briefs supporting or challenging EPA’s withdrawal and delay of the RMP regulation, as did labor unions, several industry groups, and community organizations.
EPA in May announced a re-proposal of the regulation, which would roll back several of its provisions. Meanwhile, industry groups and EPA say they are considering an appeal of the court’s ruling.
The decision did not impact EPA’s effort to rewrite the regulation but it marks the second recent legal ruling against the Trump EPA’s attempts to delay final regulations issued by the Obama administration.
https://cen.acs.org/safety/industrial-safety/Court-orders-US-EPA-implement/96/i34
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EPA May Make a Deadly Mistake — No Amount of Asbestos Exposure is Safe
Aug 22, 2018 | The Hill - Environment & Energy Opinion
By Karen Selby
As a registered nurse for The Mesothelioma Center, I have been assisting mesothelioma patients and their caregivers for almost 10 years. I’ve spoken with thousands of people battling this asbestos-related cancer.
I’ve listened to countless stories from patients fighting for their lives because of asbestos. I’ve consoled numerous grieving family members and friends, hearing stories of their loved ones.
I'm currently assisting a woman who is only 27 years old. She has been diagnosed with peritoneal and pleural mesothelioma — the two most common types of the disease. She is a single mother and unable to work.
She lives in a rural area and is unable to travel to get the appropriate care she needs to fight this aggressive cancer.
As you can see, mesothelioma does not only affect older, blue-collar men — it affects all Americans.
With the Environmental Protection Agency’s (EPA) recent policy proposals, the door may now be open to new uses of asbestos.
The EPA’s significant new use rule (SNUR) will focus on possible harm from direct contact with asbestos at the workplace or elsewhere. It would allow companies to manufacture, import and process new asbestos-containing products after the evaluation of health dangers from direct contact exposures.
I worry the agency will not be considering all of the ways this toxic mineral may be harmful in the future.
People should know the dangers of asbestos and what diseases it can cause. They should know ways of exposure including occupational and secondary exposure — asbestos sticking to their clothing and skin and exposing others.
Asbestos-containing materials are virtually harmless if left intact. However, they become deadly when damaged during renovations and demolitions, or as they age over time. Friable asbestos materials such as crumbling pipe insulation can release large amounts of toxic asbestos dust into the air.
Product categories under the proposed significant new uses of asbestos rule include:
Adhesives, sealants and roof and non-roof coatings
Reinforced plastics
Roofing felt
Vinyl asbestos floor tile
Pipeline wrap
High-grade electrical paper
Other building materials including insulation, plasters, mastics and textured paints
Although these products are not problematic when they are new and well maintained, they become toxic when they age, become frayed and begin to deteriorate, sending microscopic asbestos fibers airborne. Cutting, sanding or drilling into these materials also pose serious health risks.
Inhaling or ingesting these microscopic fibers is what can lead to serious health conditions later in life such as asbestosis and mesothelioma. No amount of asbestos exposure is considered safe.
At this time, there is no cure for asbestos-related diseases. If a person develops mesothelioma, their life expectancy and quality of life decreases significantly.
The risks of using asbestos outweigh the benefits. There are more than 40,000 diagnoses of asbestos-related illnesses in the U.S. each year. There are likely thousands more unreported.
Most of the people I speak with are not fully aware asbestos is still used in products in the U.S. such as brake pads, automobile clutches, roofing materials, cement piping and corrugated sheeting. These materials can be manufactured with asbestos as long as the mineral accounts for less than 1 percent of the product.
Sadly, many don’t know much about the diseases the toxic mineral can cause until they are diagnosed.
For the vast majority of people, the only way to prevent mesothelioma is to avoid asbestos exposure. Unfortunately, many retired workers, military veterans and others who have a long history of heavy exposure sit and wait in fear that they may develop an asbestos-related disease.
My colleague and fellow patient advocate Dr. Snehal Smart recently spoke with a Navy veteran diagnosed with pleural mesothelioma. He shared how he would be in a cloud of dust with no protective clothing or masks for hours each day while working in the boiler rooms of ships. He had no choice but to inhale the fumes and clouds of dust that contained asbestos while serving his country.
Mesothelioma can take 20 to 50 years before the first symptoms appear. When they do show, most patients are in the later stages of the disease and survive an average of a year after diagnosis.
More products made with asbestos increases the risk of future exposures to this carcinogen.
We need a full ban on asbestos in the U.S. and worldwide. People need to use all avenues to help better educate the public of the dangers of asbestos, raise awareness and continue to fight.
Karen Selby is a patient advocate at The Mesothelioma Center. She is a registered nurse with a background in oncology and thoracic surgery and was the regional director of a tissue bank.
http://thehill.com/opinion/energy-environment/403098-epa-may-make-a-deadly-mistake-no-amount-of-asbestos-exposure-is
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Aug 23, 2018 | Chemical Watch
PFAS community engagement event
The EPA is to hold its final PFAS community engagement event for this year in Leavenworth, Kansas on 5 September.
The purpose is for the agency to inform the public of its actions on per- and polyfluoroalkyl substances and gain direct knowledge from communities, states and local governments of their experiences of the substances.
There are two sessions – public listening and working – both of which are open to the public and press.
Those interested in speaking can opt to do so when registering for the event. It is also possible to submit comments for stakeholders unable to attend.
The Kansas event follows previous ones in North Carolina, New Hampshire, Pennsylvania and Colorado in recent months.
IRIS naphthalene meeting postponed
The 23 August Integrated Risk Information System (IRIS) public science meeting on naphthalene has been postponed.
A new date to discuss the draft IRIS assessment plan for the substance has yet to be set. But the EPA continues to accept comment on the draft risk assessment materials through 5 September.
The IRIS programme is "working to identify suitable public science meeting dates in the near future".
https://chemicalwatch.com/69907/us-epa-round-up
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California Releases Hazard Documents for Two Substances
Aug 23, 2018 | Chemical Watch
California’s Office of Environmental Health Hazard Assessment (Oehha) has released hazard identification documents for two substances being considered for listing under Proposition 65: gentian violet and N-nitrosohexamethyleneimine.
Gentian violet, also known as crystal violet, is an antifungal and dye. N-Nitrosohexamethyleneimine is a chemical intermediate and used as an explosive in ejector seats in military jet fighter planes.
The two substances will be considered at the 1 November meeting of the agency’s Carcinogen Identification Committee (CIC). Reviews by this advisory board – which gives opinions on whether a substance has been clearly shown to cause cancer – precede a chemical's potential addition to Prop 65.
The recently released documents outline the evidence on the carcinogenicity of each of the substances. Oehha solicited data to support these in April, but received no submissions.
Comments on the hazard identification documents will be accepted until 1 October.
https://chemicalwatch.com/69922/california-releases-hazard-documents-for-two-substances
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U.S.-China Trade War Barbs Bleed Over Into Central America’s Natural Gas Revolution
Aug 23, 2018 | Natural Gas Intelligence
By Ronald Buchanan
What had looked like a routine trip to Panama for U.S. Treasury’s David Malpass, undersecretary for International Affairs, has unexpectedly pitched him into the frontline of trade tensions between the United States and China against a backdrop of Lower 48 liquefied natural gas (LNG) exports to Central America.
Malpass was in Panama late last week for the inauguration of AES Corp.’s $1.15 billion 381 MW power plant and LNG reception terminal to bring natural gas to Central America, a region of mainly weak economies that remain heavily dependent on energy imports. The LNG import terminal received its first cargo in June.
Until recently Central America maintained diplomatic and economic relations with Taiwan, rather than mainland China. However, three years ago Costa Rica opted to break the links with Taiwan in favor of Beijing. Panama did likewise a little more than a year ago. What came as a much bigger shock was that El Salvador chose to follow suit within hours of Malpass leaving the region.
And, as in Panama, Energia del Pacifico, (EDP) a joint venture of Salvadoran business people and U.S.-based Invenergy LLC, is planning to create a second wave of Central America's gas revolution with an LNG import terminal and 378 MW combined-cycle plant in El Salvador that is expected to take three years to build. A unit of Royal Dutch Shell plc is to supply the LNG at a cost indexed to Brent, not Henry Hub.
El Salvador President Salvador Sanchez Ceren is hardly a soulmate of Malpass. He was a commander of rebel forces during the civil war in the late years of last century.
Costa Rica, famed throughout Latin America for its democratic institutions and relative prosperity, and Panama, the region's fastest growing economy powered by the Canal and its geopolitical importance, were of a considerable loss to Taiwan.
Honduras, El Salvador, Guatemala and Nicaragua are among the poorest nations of the Americas.
Malpass, like other members of the Trump administration, has been a strong critic of China's trade and economic practices.
In remarks to an event in February at the Center for Strategic & International Studies, Malpass, in addressing an audience of experts on Latin America, sharply criticized the regimes of Cuba and Venezuela. But he also added severe words of warning on China.
"China has grown to be an economic force in the world economy, and for many years the United States welcomed and supported its gradual liberalization," he said. "China’s growth contributed to global economic growth, and the hope was that China would develop into a fair and reciprocal trading partner.
"However, the direction in China has clearly shifted. Market liberalization has stalled and certain policies and activities have even moved back toward a more state-dominated economic model. While China professes to embrace globalization and openness, in practice its markets are relatively closed."
Latin America should be aware of the dangers, Malpass said. China’s industrial policies "can have serious implications for countries tempted by its massive non-market export credits and loose financing terms, especially if their governments and institutions aren’t robust."
Not many governments and institutions are robust in Central America. Only in recent months, Nicaragua's long-time president and former leader of the 1970s revolution in the country has been facing an uprising that has cost hundreds of lives.
During the Malpass visit to Panama, the U.S. Treasury and Energy departments were reported to have signed a memorandum of understanding that aims to encourage more private investment to expand the importation and distribution of U.S. LNG in Latin America.
Malpass said he hoped the agreement would be the first of several with countries in the region to encourage investment to increase access to cheaper, cleaner energy. It is part of a Treasury-led initiative called America Crece, incorporating the Spanish word for growth, aimed at boosting U.S. exports of LNG, developing Latin American energy resources and downstream demand.
http://www.naturalgasintel.com/articles/115533-us-china-trade-war-barbs-bleed-over-into-central-americas-natural-gas-revolution
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Oil Under Pressure as China-U.S. Trade Talks Start
Aug 23, 2018 | Wall Street Journal
By Sarah McFarlane and Benjamin Parkin
Oil prices were mixed on Thursday as investors awaited indication of whether the U.S. and China trade talks taking place this week would yield progress.
Washington is hosting two days of talks aimed at resolving an escalating trade dispute between the U.S. and China, which investors fear could threaten global economic growth, and thereby oil-demand growth.
Light, sweet crude futures were little changed at $67.88 a barrel at the New York Mercantile Exchange, pausing a streak of several days higher. Brent crude, the global oil benchmark, was down 0.1% to $74.73 a barrel on London’s ICE Futures exchange.
“If a trade war would escalate it would start to affect global growth, and therefore global demand growth, which would lead to lower oil prices, “ said Hans van Cleef, senior energy economist at ABN Amro.
On Thursday, the U.S. implemented tariffs on $16 billion of Chinese goods in addition to a previous $34 billion already targeted.
Bullish inventory data from the U.S. Energy Information Administration showing a larger-than-expected fall in crude stocks on Wednesday was overshadowed by the uncertainty caused by the trade dispute.
Already there has been a sharp fall in Chinese demand for U.S. crude, although it isn’t included in their list of goods to which tariffs will be applied.
“With the loss of demand from China, crude-oil exports have dropped to 1.16 million barrels a day, the lowest level of the year,” said Olivier Jakob, head of consultancy Petromatrix.
A higher U.S. dollar on Thursday capped gains in the oil market. The WSJ Dollar Index, which tracks the greenback against a basket of currencies, rose 0.5% after falling for much of this week.
Will Rhind, chief executive officer of ETF company GraniteShares, said short-term moves in oil and other commodities were “really all about the dollar.”
“There’s an immediate reaction to the dollar, and once the fundamentals are strong enough, then the underlying prices overtake that and replace that knee-jerk reaction,” he said.
Looming oil-related U.S. sanctions on major producer Iran are helping limit the downward price move, analysts said, with a large fall in exports anticipated.
ABN Amro’s Mr. van Cleef estimated the sanctions could remove at least 600,000 to 700,000 barrels a day of Iranian crude from the global market.
Gasoline futures fell 0.5% to $2.0571 a gallon, with diesel contracts rising 0.2% to $2.1715 a gallon.
https://www.wsj.com/articles/oil-under-pressure-as-china-u-s-trade-talks-start-1535020485?mod=searchresults&page=1&pos=3
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New Pipelines to Boost U.S. Natural Gas Exports to Mexico
Aug 23, 2018 | Houston Chronicle
By Katherine Blunt
U.S. natural gas exports to Mexico by pipeline are expected to jump in the coming months as several long-awaited projects are placed into service to feed growing demand across the border and potentially ease bottlenecks in the Permian Basin in West Texas.
The U.S. Energy Department reported that four major pipelines are scheduled to begin commercial operations by the end of the year to supply Mexico's power generation and industrial sectors. The country has emerged as one of the largest customers of U.S. natural gas after overhauling its energy policies five years ago.
The pipelines, which include Enbridge's Nueces-Brownsville project in the Rio Grande Valley and three projects in Mexico, are expected to start up in October and November. They'll help bring gas from West Texas, where there is a pipeline shortage, and elsewhere in the state to central and western Mexico.
Already, exports have ramped up in recent months. Natural gas shipments to Mexico by pipeline exceeded 5 billion cubic feet per day for the first time last month, up from an average of 4.2 billion cubic feet per day in 2017.
U.S. natural gas exports to Mexico surged after 2013 and 2014, when Mexico opened its energy market to foreign investment and intensified its focus on using cleaner-burning fuel sources such as natural gas. It sought to buy gas from the U.S., where the shale boom in West Texas and elsewhere had unleashed a cheap and plentiful supply, and pushed to expand its pipeline network as its own oil and gas production declined.
https://www.chron.com/business/energy/article/New-pipelines-to-boost-U-S-natural-gas-exports-13175486.php
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Petrochemicals Market Report Analyzes Global Industry Trends and Opportunities
Aug 22, 2018 | Plastics Today
By Clare Goldsberry
The top 15 petrochemicals are analyzed in a new report by Coherent Market Insights, a market research and consulting firm based in Seattle, WA. Petrochemicals play an important role in the 21st century lifestyle and are utilized in various end use products across a range of industries.
The most sought-after product is ethylene, which holds a 25% market share in the global petrochemicals market. It is used as a feedstock for the manufacture of polyethylene, polystyrene, ethylene glycol and ethanol. Following ethylene in terms of market share are benzene, propylene, xylene and butadiene. These petrochemicals are in high demand in applications where there is an absence of large-scale alternatives, such as plastics, rubber and textiles, according to the report, Top 15 Petrochemicals Market—Global Industry Insights, Trends, Outlook, and Opportunity Analysis, 2018-2026.
The major competitors to petrochemicals are bio-based chemicals; as environmental consciousness increases, investment in bio-based chemicals is likely to escalate, said the report. In addition, oil price instability will also affect growth.
The top 15 petrochemicals on the basis of type of intermediate chemicals are methanol, ethylene oxide and propylene oxide.
The top 15 on the basis of type of polymer are polyethylene (PE), polypropylene (PP), polystyrene (PS), polyester (PET), polyvinyl chloride (PVC), and acrylonitrile butadiene styrene (ABS).
Xylene is projected to be the fastest growing petrochemical market due to demand for polyester fibers. Chemicals such as methanol, ethylene oxide and propylene oxide are used as reaction intermediates for light olefins, ethylene glycol, and polyurethane plastics, respectively. “All the end user industries are majorly dependent on polymers with polystyrene being the most widely used. PVC is commonly used for pipes, furniture and flooring applications, and polyethylene for plastic bottles to hold both potable and non-potable liquids,” said Coherent.
The packaging industry is the largest end-use market of petrochemicals, and Coherent projects that segment to see an increase in demand as disposable income in the developing world rises and quality assurance for packaged goods also increases. “The packaging industry is directly affected by consumerism,” noted Coherent. Other end-use industries such as automotive, construction, electrical and consumer goods require petrochemicals for product manufacture.
Coherent explains that surging demand in Asia-Pacific is driving market growth, as that region is a major processing hub for petrochemicals, led by India, China and South Korea. This region has also seen an “upturn in consumption” due to increasing populations.
North America is a major processing hub with feedstock coming from shale gas produced in the various U.S. shale regions (Marcellus, Eagle-Ford, Permian, Barnett, Bakken and Niobrara). North America is also one of the largest consumers of petrochemicals.
Europe is a consumer market for petrochemicals with heavy dependency on North American and Asian markets, as a “west to east shift has been observed in the petrochemical market,” said Coherent. “Maturation in Europe has led to shifting of existing petrochemical infrastructure to countries such as India, where labor is cheap,” added the market research firm.
The growth focus is shifting to low-cost feedstock, such as CTO (coal-to-olefin), MTO (methanol to olefin), shale gas, coal bed methane and bio sources to produce ethylene and propylene. China has announced six CTO projects having a total ethylene capacity of 1.62 metric tons a year, said Coherent.
Major players in the petrochemical industry include BASF, ExxonMobil, Dow Chemical, Shell Chemical, SABIC, Sinoec, LyondellBasell, Total, Sumitomo Chemical, Chevron Phillips and DuPont.
https://www.plasticstoday.com/materials/petrochemicals-market-report-analyzes-global-industry-trends-and-opportunities/201401055959318
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The New Gas Market: Shipowners Needing Cleaner Fuel
Aug 23, 2018 | Wall Street Journal
By Paul Garvey
The global shipping industry could become a new market for liquefied natural gas, thanks to a drastic change in maritime law that aims to curb air pollution.
Major cruise liners and the world’s biggest freight companies have ordered 125 new LNG-powered vessels and another 119 are already in operation, according to current figures from maritime consultancy DNV GL. That is partly because new regulations taking effect in 2020 will reduce the maximum amount of sulfur permitted in the oil used by ships from 3.5% to 0.5%.
LNG is gas that is supercooled until it turns into liquid. While LNG use as a shipping fuel is still too small to affect its prices, the projected uptake is supporting the outlook of companies like Royal Dutch Shell RDS.A -0.13% PLC that LNG demand will continue to grow.
The shipping industry currently consumes about 5 million barrels a day of oil, and most of the industry is expected to meet the new obligations by either switching to more expensive low-sulfur fuels or installing ”scrubbers” that clean sulfur out of exhaust fumes.
But the rule changes will make LNG a cost-competitive option for shipping fuel. Analysts say that just converting 5% of the global fleet to run on LNG would create a new market equivalent to the fifth-largest in the world, behind major consumers Japan, China, Korea and India.
Carnival Corp.’s CCL -0.95% AIDAnova is currently under construction at a shipyard in Papenburg, Germany. When the 1,106-foot vessel launches later this year, it will be the first cruise ship fully powered by LNG. Carnival, the world’s largest cruise company, plans to take delivery of 11 new LNG-powered ships between now and 2025.
Cruise passengers will be able to enjoy the difference of journeying under LNG power, Steve Hill, a vice president at Shell, said in an interview earlier this year.
“If your customer proposition is to have people lying on the deck and enjoying the sun, it’s much nicer to not have pollution from fuel oil being spread all over them all day,” he said.
Carnival isn’t alone: Swiss-based MSC Cruises said in June it ordered what will be its fifth LNG-powered vessel. Royal Caribbean also said this year that it has two LNG-powered cruise liners on order.
In freight, Siem Industries is building LNG-fueled car carriers for Volkswagen AG . France’s CMA CGM SA has ordered nine new ultra-large LNG-powered container ships and has struck a 10-year LNG supply deal with French oil and gas producer Total. TeekayCorp. , one of the biggest shipowners, and Sovcomflot, Russia’s largest shipping company, also have LNG vessels in order.
LNG does faces challenges in the maritime industry. Credit Suisse oil and gas analyst Saul Kavonic said many shipping companies would meet the emissions rules by fitting their vessels with scrubbers. Carnival, for example, will use scrubbers on 69 of its 103 ships.
“Only a very small percentage of the international shipping fleet will adopt LNG as a fuel over the next five years,” Mr. Kavonic said.
The lack of ”bunkering”—the infrastructure for storing and refueling LNG—is likely the biggest hurdle. LNG requires dedicated facilities to store the fuel at the temperatures needed to maintain its liquid form and load it onto vessels.
LNG fuel tanks also take up almost twice as much space as their oil equivalents, which would impact the design of new vessels. Ships powered by LNG are also more expensive than traditional vessels. Introducing LNG to a fleet requires retraining of engineers and crews.
Shipping companies are also used to working in the highly liquid oil market, where supply is easy to source and deep futures and hedging markets help manage their exposure. In contrast, until recently LNG has been dominated by decadeslong contracts and its futures market is still nascent.
But short-term, more flexible LNG sales are becoming more common. Producers are increasingly willing to trade single LNG cargoes. The percentage of LNG cargoes sold on the spot market has grown from just over 10% in 2010 to almost 25% in 2017, according to Shell.
Tom Strang, who has been leading Carnival’s LNG strategy, said the nature of the LNG market requires longer-term contracting and planning.
Still, LNG producers are eyeing the industry as a promising new source of demand. Shell’s Mr. Hill said the energy giant is betting LNG will grow at a faster pace than oil. Shell is working with Carnival to source LNG and developing bunkering facilities for its cruise ships.
“Historically LNG has struggled to compete with heavy fuel oil which is cheap,” said Mr. Hill. “But in this new world, where the costs of the alternatives are a lot more expensive, LNG will be a lot more competitive. We’re starting to see a lot of interest and a lot of activity.”
https://www.wsj.com/articles/the-new-gas-market-shipowners-needing-cleaner-fuel-1535025601?mod=searchresults&page=1&pos=1
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Dem Lawmakers Urge California Governor to End Fossil Fuel Extraction
Aug 23, 2018 | The Hill - Energy & Environment Policy
By Miranda Green
Two Democratic members of Congress are urging California Gov. Jerry Brown (D) to put a cap on any new fossil fuel projects and set a timeline for a hard stop on oil and gas extraction throughout the state.
In a letter sent to Brown on Wednesday, Reps. Ro Khanna (D-Calif.) and Barbara Lee (D-Calif.) asked him to end all fossil fuel production in the Golden State as part of the governor's commitment to "driving transformational change."
The lawmakers mentioned threats of climate change, increased air pollution and impacts to low income communities in their reasoning for the sweeping request.
"We regularly hear from constituents about the tremendous burdens that fossil fuel production places on our communities, especially low-income communities and communities of color. California is home to some of the country’s most polluted air basins," Khanna and Lee wrote in the letter.
"The pollution from oil and gas field operations and refinery facilities is a major contributor to the array of air quality related health problems that hurt our most overburdened communities."
The lawmakers referenced a 2015 oil spill and a 2012 refinery explosion as examples of threats the fossil fuel production brought to the state.
"Ending the issuance of new permits for fossil fuel development and infrastructure will establish the standard for climate policy worldwide," the lawmakers wrote. "Ending permits for new wells and enacting a health and safety buffer could keep 660 million barrels of oil, equivalent to 425 million metric tons of carbon pollution, in the ground through 2030."
California is home to a number of oil and natural gas drilling sites, including dozens of offshore drilling platforms up and down the state's coastline. But the state's embrace of renewable energy has also in part led to its economic rise as the sixth biggest economy globally.
The letter follows the Trump administration's unveiling Tuesday of a replacement carbon emissions plan that would slash a rule first offered under the Obama administration. The Affordable Clean Energy (ACE) rule instead aims to let states determine how to regulate their coal fired plants, a decision critics fear will increase carbon and soot pollution. Coal is a leading contributor to carbon air pollution globally.
In August the administration announced another proposed rule that would replace Obama-era vehicle emissions standards meant to curb air pollution from vehicles. Trump argued that the standards were set too stringent and economically hurt the auto industry.
http://thehill.com/policy/energy-environment/403124-dem-reps-ask-california-governor-to-end-all-fossil-fuel-extraction
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Appeals Court Strikes Down EPA’s Attempt to Delay Chemical Disaster Rule
Aug 23, 2018 | Safety and Health Magazine
A federal appeals court has struck down the Environmental Protection Agency’s latest attempt to delay the Obama-era Chemical Disaster Rule.
In a decision issued Aug. 17, the U.S. Court of Appeals for the District of Columbia Circuit ruled that EPA’s reasoning for pushing back the effective date to Feb. 19, 2019, “makes a mockery” of the Clean Air Act, and that the postponement has “delayed lifesaving protections.”
The Chemical Disaster Rule amends EPA’s Risk Management Program for chemical facilities with the intention of:
Preventing catastrophic incidents by improving incident prevention program requirements.
Enhancing emergency preparedness to ensure coordination between facilities and local communities.
Improving information access to help the public understand the risks at RMP facilities.
Improving third-party audits at RMP facilities.
Prompting those changes, in part, was a fertilizer facility explosion that killed 15 people in West, TX, in 2013. An Aug. 8 letter from Sens. Cory Booker (D-NJ) and Tom Carper (D-DE) to former EPA administrator Scott Pruitt cites agency data showing more than 1,500 serious incidents occurred at chemical facilities from 2004 to 2013, “resulting in 58 deaths, over 17,000 injuries and billions of dollars in property damage.”
EPA finalized the Chemical Disaster Rule on Jan. 13, 2017, with an initial effective date of March 14 that same year. The Trump administration delayed the effective date for 60 days on Jan. 26. The agency then delayed the rule for another 90 days on March 13, and published a final rule June 14 to push it back to Feb. 19, 2019.
Environmental groups – including lead petitioner Air Alliance Houston – as well as attorneys general from 11 states and other parties filed a lawsuit in response to the delays.
“This decision means that people living near industrial facilities and those who respond to chemical accidents will have the stronger protections they deserve,” Air Alliance Houston Executive Director Bakeyah Nelson said in an Aug. 17 press release.
Unaffected by the ruling is EPA’s proposed rule, issued May 17, to rescind amendments on safer technology and alternatives analyses, third-party audits, incident investigations, information availability, and “several other minor regulatory changes.”
The agency states that the changes will address, among other issues:
Potential security risks associated with new information disclosure requirements introduced in the 2017 amendments.
Concerns about unnecessary regulations and their costs, along with concerns that EPA did not coordinate rulemaking with OSHA.
EPA also stated that it is seeking to modify amendments regarding local emergency coordination, emergency exercises and public meetings, as well as change the compliance dates for those amendments.
https://www.safetyandhealthmagazine.com/articles/print/17388-appeals-court-strikes-down-epas-attempt-to-delay-chemical-disaster-rule
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Honeywell, Mack Trucks to Pay $5.5 Million for Environmental Cleanup: EPA
Aug 22, 2018 | Reuters
By Lisa Lambert and Jonathan Oatis
Honeywell International Inc and Mack Trucks Inc will reimburse the U.S. government $5.5 million for cleaning up the Elkton Firehole Site in Maryland, where their predecessor, Triumph Industries Inc, disposed explosives manufacturing waste, the Environmental Protection Agency said on Wednesday.
In addition, the federal government will pay $6.25 million on behalf of the Army, Navy and Defense Department, which are also alleged former operators of the site, the EPA said.
https://www.reuters.com/article/us-usa-honeywell-intl-environment/honeywell-mack-trucks-to-pay-55-million-for-environmental-cleanup-epa-idUSKCN1L71XS
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New York, Illinois Senators Announce Federal PTC Funding for Several Roads
Aug 23, 2018 | Progressive Railroading
Politicians in New York and Illinois are the latest policymakers to announce the award of federal funding for positive train control (PTC) implementation projects at several freight and passenger railroads.
Yesterday, U.S. Sens. Charles Schumer (D-N.Y.) and Kirsten Gillibrand (D-N.Y.) announced that the U.S. Department of Transportation (USDOT) has awarded a $1.2 million grant to the Middletown & New Jersey Railroad for PTC installation.
The funding was allocated through the department's fiscal-year 2018 PTC grants under the Consolidated Rail Infrastructure and Safety Improvements program, according to a joint press release from the senators.
"This federal investment will accelerate the installation of life-saving positive train control … to prevent dangerous and destructive derailments and crashes," Schumer said.
Meanwhile, the USDOT has awarded more than $33 million for the implementation of PTC systems on three Chicago-area railroads, including Metra.
Metra will receive $22,983,308; Chicago Rail Link LLC, $1,640925; and the Belt Railway Co. of Chicago, $8.6 million, according to a joint press release issued by U.S. Sens. Dick Durbin (D-Ill.) and Tammy Duckworth (D-Ill.).
On Monday, Congress members representing New Mexico announced the award of $30 million in federal funds to implement PTC along the New Mexico Rail Runner's network.
https://www.progressiverailroading.com/ptc/news/New-York-Illinois-senators-announce-federal-PTC-funding-for-several-roads--55433
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Aug 23, 2018 | The Washington Post
By Dino Grandoni
The Trump administration proposed relaxed rules for carbon emissions from coal-fired power plants that check a number of boxes off the wish list of conservatives.
The new rules grant significantly more authority to states to regulate power-plant pollution. They cast a lifeline to coal plants to make upgrades and run for years longer with less regulatory hassle.
But many of the conservatives who helped bring shape to President Trump's Environmental Protection Agency want officials to go even further.
Prominent right-leaning voices and institutions that dismiss the consensus among climate researchers that burning fossil fuels warms the planet renewed calls this week for the EPA to challenge its underlying authority to regulate carbon dioxide and other greenhouse gases in the first place.
Sen. James M. Inhofe (R-Okla.), who once brought a snowball to the Senate floor to prove climate change is false and whose former staffers populate EPA headquarters, said in a statement that “the best course of action remains to completely overturn" the scientific underpinning to the EPA's authority.
Myron Ebell, the former head of Trump’s EPA transition team, agreed.
“We're with Inhofe on this,” said Ebell, who directs energy and environmental policy at the libertarian Competitive Enterprise Institute.
“Once you get started down the road of regulating greenhouse gases,” he added, “there's no end to it.”
In 2009, Obama's EPA came to the scientific conclusion that the uptick in greenhouse gases in the atmosphere is a danger to human health. That so-called endangerment finding gave the agency the authority it needed to issue its Clean Power Plan, which aimed to curb carbon emissions from the nation's coal-fired power plants. Two years earlier, the Supreme Court had ruled that if EPA scientists determined carbon emissions were a threat, the agency had to regulate them.
Trump has repeatedly dismissed man-made climate change as a hoax. But that Supreme Court ruling still stands. So unless the EPA gets rid of the endangerment finding, it is compelled to come up with its own greenhouse gas regulations.
Under both acting EPA administrator Andrew Wheeler and former chief Scott Pruitt, the EPA has decided not to touch the endangerment finding — at least just yet.
“This is a regulation of greenhouse gases,” Bill Wehrum, who heads the EPA's air and radiation office, told reporters Tuesday. “We’re not proposing to rescind the endangerment finding.”
That leads some conservatives to worry that Trump's successor as president will try to do a Clean Power Plan 2.0.
“The endangerment finding creates a danger that this kind of grotesque overregulation could come back,” said Peter Ferrara, a senior fellow at the Heartland Institute who served as President George H.W. Bush's associate deputy attorney general.
“It just takes one more election,” he added. “That's why I want to take out the endangerment finding root and branch.”
But uprooting the finding may prove challenging when the courts have stalled many of the regulatory rollbacks the EPA has pursued.
The U.S. Court of Appeals for the District of Columbia Circuit, often considered the most powerful court in the United States after the Supreme Court, has upheld the endangerment finding. And even under Trump, scientists working for the federal government reaffirmed in an official report last year that it is “extremely likely that human influence has been the dominant cause of the observed warming since the mid-20th century.”
To boot, many of the electric utilities that applauded the Trump administration for relaxing the carbon rules are not champing at the bit to repeal the endangerment finding like think-tank conservatives are.
“We said, ‘Do have a replacement, don’t go after the endangerment finding,’” National Rural Electric Cooperative Association chief executive Jim Matheson told reporters Wednesday. “There was broad consensus on that.”
Republicans can try to strip the EPA's authority to curb carbon emissions in other ways — through either the reversal of the Supreme Court decision or the passage of a new law by Congress.
But to the Competitive Enterprise Institute's Ebell, “it seems like rescinding the endangerment finding is the easiest” of those options.
Ebell, whose think tank petitioned the agency to reconsider the endangerment finding to no avail, is not planning to let up on EPA officials. Especially if Trump wins a second term.
“People come and go,” he said.
https://www.washingtonpost.com/news/powerpost/paloma/the-energy-202/2018/08/23/the-energy-202-trump-s-epa-just-replaced-one-of-obama-s-biggest-climate-rules-some-conservatives-say-it-s-not-enough/5b7d9c471b326b7234392b00/?noredirect=on&utm_term=.ab14fb720ad9
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EPA Plans Broad Review of 'Secondary' NOx, SOx, PM NAAQS
Aug 23, 2018 | Inside EPA
EPA in a new planning document for its review of “secondary” national ambient air quality standards (NAAQS) for nitrogen oxides (NOx), sulfur oxides (SOx) and particulate matter (PM) is outlining a traditional NAAQS review process that will take a broader approach than prior evaluations of the welfare-based limits.
The agency's planning document outlining plans for a forthcoming risk and and exposure assessment (REA) to support the review, announced in the Aug. 22 Federal Register, appears to be following a traditional and time-consuming path to new NAAQS rules for SOx, NOx and PM. The document does not adopt the accelerated NAAQS review process that the Trump administration is pushing which would collapse existing review steps into fewer documents.
Instead, the planning document relies on the original integrated review plan (IRP) established for the NOx-SOx-PM review, which will follow steps the Obama EPA used in NAAQS reviews. These include multiple drafts of the integrated science assessment (ISA), which synthesizes new science available since the last review, an REA to determine risks to public welfare, a policy assessment (PA) summarizing policy options for the administrator, and ultimately proposed and final rules either changing the NAAQS or leaving them unchanged.
The current NOx-SOx review takes a broader approach than the last review by including consideration of PM effects on the environment. Secondary NAAQS differ from primary NAAQS in that primary standards are designed to protect public health, while secondary standards must protect public welfare and the environment.
EPA is subject to a court-ordered deadline to finalize by Jan. 28 a new final primary NAAQS rule for SOx, which uses sulfur dioxide (SO2) as its “indicator.”
The agency has further set itself a target of October 2020 to issue a final primary ozone NAAQS, and December 2020 to issue a final primary NAAQS for PM. The Clean Air Act requires EPA to review NAAQS and issue final rules every five years, but EPA typically has missed these deadlines by a wide margin.
There is no currently court-ordered or self-imposed deadline for EPA to complete reviews of the secondary NOx, SOx or PM NAAQS.
“The current review of the secondary NO2 and SO2 standards differs from the review completed in 2012 in that the current review also includes consideration of the secondary PM standards,” EPA says in the REA planning document. EPA has set an Oct. 22 deadline for public comment on the review plan.
The agency adds that it is “considering secondary standards for these three pollutants together with regard to protection against adverse ecological effects on public welfare and particularly such effects related to atmospheric deposition. Given the contribution of nitrogen compounds to PM, including but not limited to those related to oxides of nitrogen, the current review provides for an expanded and more integrated consideration of [nitrogen] deposition and the current related air quality information.”
EPA reviewed the secondary NAAQS for NOx in 2012, retaining the annual limit of 53 parts per billion (ppb) first set in 1971. The agency reviewed the SOx secondary standard in 2012 and retained the 50 ppb limit over three hours also set in 1971. Current secondary PM limits, set in 2012, stand at 15 micrograms per cubic meter (ug/m3) annually or 35 ug/m3 over 24 hours for fine PM (PM2.5), and 150 ug/m3 over 24 hours for the larger “coarse” PM, or PM10.
The Clean Air Scientific Advisory Committee (CASAC), which provides advice to the agency on NAAQS reviews, will consider the REA planning document at its upcoming Sept. 5 and 6 meeting in Durham, NC, along with an expanded draft of the ISA. The new ISA draft appears to contain greater mention of ammonia, after CASAC at an earlier meeting recommended EPA look more closely at ammonia's effects on the environment.
EPA under the Obama administration considered issuing a novel joint NOx-SOx secondary NAAQS, using a new “indicator” based on acid deposition in water bodies rather than concentrations of the pollutants in ambient air. CASAC has supported the concept. The previous administration stopped short of proposing such a standard, citing a lack of technical knowledge in how to implement the novel concept.
https://insideepa.com/daily-feed/epa-plans-broad-review-secondary-nox-sox-pm-naaqs
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