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AM ACC Clips Report - October 31, 2018

Industry and Association News

(ACC Mentioned) Nova Rolls October, November PE Hikes for US, Canada Markets: Letter
Oct 30, 2018 | Platts
By Phillipe Craig

Nova Chemicals is delaying a previously announced 3-cent/lb price increase on all grades of polyethylene sold in US and Canada, according to a letter to customers obtained Tuesday by S&P Global Platts.
(ACC Mentioned) Volkswagen Chattanooga Recognized for Environmental Excellence
Oct 30, 2018 | WRCB-TV

Volkswagen Chattanooga received the Environmental Excellence award last night at the Tennessee Chamber of Commerce & Industry’s 36th Annual Environment and Energy Awards Conference.
(ACC Mentioned) Why Is Group Trashing Bag Ban?
Oct 31, 2018 | Kennebec Journal & Morning Sentinel
By Claire Prontnicki

I was puzzled to see “Bag ban won’t reduce litter” (Oct. 12), an op-ed from something calling itself “Environmental Resources Planning” (ERP), based in Gaithersburg, Maryland.
Over 250 Companies Sign Pledge to Fight Plastic Pollution
Oct 31, 2018 | BNA Daily Environment Report
By Adam Allington

Some of the world’s largest consumer goods manufacturers and packaging companies, including Colgate-Palmolive, PepsiCo, and Unilever, have pledged to minimize plastic pollution and make their products more environmentally friendly.
Zinke’s Own Agency Watchdog Just Referred Him to the Justice Department
Oct 30, 2018 | The Washington Post
By Juliet Eilperin and Josh Dawsey

The Interior Department’s Office of Inspector General has referred one of its probes into the conduct of Secretary Ryan Zinke to the Justice Department for further investigation, according to two individuals familiar with the matter.

LCSA News

(ACC Mentioned) NGO Questions If Recent Snurs Conform With TSCA Policies
Oct 30, 2018 | Chemical Watch
By Kelly Franklin

The Environmental Defense Fund has raised concerns that many recently issued significant new use rules (Snurs) are not in keeping with TSCA guidance and policies, and the NGO is urging the US EPA to modify its proposed rules to address these deviations.

Chemical Management News

(ACC Mentioned) Democrats Seek Broad Agenda From EPA To Curb Ethylene Oxide Risks
Oct 30, 2018 | Inside EPA
By Maria Hegstad

Democratic lawmakers from Illinois are pressing EPA to take a series of actions to limit risks of exposure to ethylene oxide (EtO), a known carcinogen, in the wake of local concerns that a Chicago-area sterilizing plant has released high levels of the substance in an area with already high cancer risks.
Years After IRIS' TCE Analysis, Acute Action Levels Remain Controversial
Oct 30, 2018 | Inside EPA
By Maria Hegstad

North Carolina regulators are asking their science advisors to review a guide developed with EPA for those working to limit short-term exposures to vapor intrusion at sites contaminated with the common solvent trichloroethylene (TCE), amid ongoing controversy with EPA's 2011 assessment of TCE risks, which formed the basis for this and other such guides.
US FDA Set to Ban Lead Acetate in Hair Dye
Oct 31, 2018 | Chemical Watch
By Nick Hazlewood

The US Food and Drug Administration has published a final rule banning the use of lead acetate as a colour additive in hair dye.
Homes Filled With New Mysterious Pollutant, Study Finds
Oct 31, 2018 | Courthouse News Service
By Nathan Solis

Don’t take a deep breath and don’t touch anything: Researchers have discovered a mysterious chemical is abundant in homes, the natural environment and electronic recycling facilities and which can be passed through skin contact or by breathing, is difficult to track and largely unregulated by the federal government.

Energy News

Carlyle Joins Oil Supertanker Race as Terminal Projects Pile Up
Oct 30, 2018 | BNA Daily Environment Report
By Catherine Ngai

Carlyle Group LP joined an already-crowded field seeking to enable the next wave of U.S. oil exports.
Sino-U.S. Trade War Delays FID for Magnolia LNG to 2019
Oct 30, 2018 | Natural Gas Intelligence
By Charlie Passut

The Australian company interested in building a liquefied natural gas (LNG) export terminal adjacent to the Calcasieu Ship Channel in Lake Charles, LA, said it will delay a final investment decision (FID) until the first half of 2019, citing the ongoing Sino-U.S. trade war.
Peak Shale: Is the US Fracking Industry Already in Decline?
Oct 30, 2018 | DeSmog (Blog)
By Justin Mikulka

In 2016, lower oil prices led to an overall drop in production for shale companies, which use horizontal drilling and fracking to extract oil and gas from shale formations such as the Marcellus and Permian.
Chesapeake Further Tilts Toward Oil With $4B WildHorse Acquisition
Oct 30, 2018 | Natural Gas Intelligence
By Jamison Cocklin

Chesapeake Energy Corp. said Tuesday it plans to acquire East Texas-focused WildHorse Resource Development Corp. to significantly expand its position in the Upper Eagle Ford Shale and Austin Chalk formations in a cash-and-stock deal valued at nearly $4 billion that management said would double oil production growth and further reduce debt.
Time to Weigh Climate Threats From Gas Pipelines — Glick
Oct 31, 2018 | E&E Energywire
By Rod Kuckro

The Federal Energy Regulatory Commission needs to acknowledge the "existential threat" posed by climate change and address it in the context of the natural gas projects it reviews, said Commissioner Richard Glick yesterday.

Chemical Security News

Illinois Sues to Force Plant to Limit Toxic Emissions or Close
Oct 31, 2018 | BNA Daily Environment Report
By Stephen Joyce

An Illinois company that sterilizes medical equipment and other products could be shut down if it can’t limit its emissions of the chemical ethylene oxide, which is toxic to humans.
Oil and Gas Industry Hits Back Over Pipeline Hacking Claims
Oct 31, 2018 | E&E Energywire
By Blake Sobczak

A new oil and gas industry report pushes back on claims that pipelines are particularly likely to fall prey to hackers.

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

Environment News

Cap and Trade Hinges on Tight Governor's Race
Oct 31, 2018 | E&E Climatewire
By Benjamin Storrow

When climate hawks departed Oregon's capital earlier this year without a cap-and-trade bill, they consoled themselves in the knowledge that legislative leaders had penciled in carbon reduction as a priority for 2019.
EAB Wrestles With Test For EPA To Loosen CWA Permits After TMDL Change
Oct 30, 2018 | Inside EPA
By David LaRoss

EPA's Environmental Appeals Board (EAB) is wrestling with the correct test for EPA to justify rolling back Clean Water Act (CWA) permit limits after it loosens the terms of a waterbody cleanup plan, with the agency claiming broad discretion for such changes unless stakeholders can show “new information” that softer permit terms would be improper.
EPA Drops Grades From NEPA Review Process, Drawing Mixed Reaction
Oct 30, 2018 | Inside EPA
By Dawn Reeves

EPA's plan to drop its system of providing letter grades on other agencies' National Environmental Policy Act (NEPA) reviews is drawing mixed reactions, with industry saying it will promote efficiency without curbing transparency while environmentalists warn it will dampen both transparency and public participation.
EAB Raises Bar For Battery Storage As BACT For Gas-Fired Power Plants
Oct 30, 2018 | Inside EPA
By Stuart Parker

A recent EPA Environmental Appeals Board (EAB) ruling raises the bar for environmentalists' effort to establish battery storage as best available control technology (BACT) in Clean Air Act permits for natural gas-fired power plants, an environmentalist says, because it says the technology first needs to be in proven use.

Industry and Association News

(ACC Mentioned) Nova Rolls October, November PE Hikes for US, Canada Markets: Letter

Oct 30, 2018 | Platts

By Phillipe Craig

Nova Chemicals is delaying a previously announced 3-cent/lb price increase on all grades of polyethylene sold in US and Canada, according to a letter to customers obtained Tuesday by S&P Global Platts.
Nova will now seek hikes of 3 cents/lb ($66/mt) on PE in each of the last two months of 2018, after previously announcing increases in October and November, the October 29 letter said. The separate 3-cent/lb hikes will now take effect November 1 and December 1.
While no other producers have been heard officially delaying increases, some US buyers were settling October contracts at a rollover to September prices, sources said, adding that all US producers had given up on the current month.
Nova's delaying of an October increase amid fellow US producers settling flat was not unexpected, with recent market feedback casting doubt on the likelihood of higher contract prices given current market conditions.
US producers were able to push through higher September contract pricing after months of "rolling" proposed increases, with a key driver being higher feedstock ethane and ethylene pricing. Contract PE pricing in the US is typically settled retroactively toward the end of the given month, per market feedback.
Between the end of August and September 18, when both feedstocks reached third-quarter highs, ethane prices rose 48.1% and ethylene prices climbed 36.5%, Platts data showed. Since then, however, prices have come off, by 42% for ethane and 14.1% for ethylene as of Monday's assessments, Platts data showed.
Additionally, recent production and sales data have aligned with market feedback of weak demand and soft sales, both on the domestic and export fronts. US PE stocks fell for a second straight month to end the third quarter 3.4% lower in September, final data from the American Chemistry Council showed.
Total PE inventories in the US stood at more than 4.6 billion lb at the start of October, down some 160 million lb (3.4%) from the beginning of September.
A reduction in US inventories amid lower sales was partially explained by a major US producer taking a month-long planned maintenance at the close of Q3, along with an unplanned outage at different US producer plants, market sources said.
Additionally, lower production in the US has been tied by some market sources to a surge in feedstock ethane and ethylene pricing in September. US producers were heard reducing PE operating rates in September amid shrinking margins and weakening global PE markets, with output dropping off by an estimated 5%-10%, sources said.
Domestic high density PE contract prices were last assessed Wednesday at 66.50-67.50 cents/lb ($1,466-$1,488/mt) for blow molding and injection, while film closed at 69.50-70.50 cents/lb ($1,532-$1,554/mt). Domestic linear low density butene contracts were assessed at 64.50-65.50 ($1,422-$1,444/mt), while low density contracts closed at 78.50-79.50 cents/lb ($1,731-$1,753/mt).
All Platts US PE contract assessments were stable week on week after rising 3 cents/lb from September and are made on a delivered-railcar basis.
https://www.spglobal.com/platts/en/market-insights/latest-news/petrochemicals/103018-nova-rolls-october-november-pe-hikes-for-us-canada-markets-letter

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(ACC Mentioned) Volkswagen Chattanooga Recognized for Environmental Excellence

Oct 30, 2018 | WRCB-TV

Volkswagen Chattanooga received the Environmental Excellence award last night at the Tennessee Chamber of Commerce & Industry’s 36th Annual Environment and Energy Awards Conference.
“Every action counts when it comes to sustainability initiatives, and environmental responsibility has been top-of-mind for this plant since the beginning,” said Antonio Pinto, CEO of Volkswagen Chattanooga. “We are proud of our work and are honored to receive this recognition. We take nothing for granted and continue our commitment to be a responsible company that makes a positive impact in our community.”
“We are proud to recognize Volkswagen and applaud their commitment to environmental stewardship and sustainability,” said Bradley Jackson, president, and CEO, Tennessee Chamber of Commerce & Industry. “The Chattanooga facility has a major economic impact not only in Southeast Tennessee but also for the entire state. Running a world-class manufacturing facility while also making it a priority to be good stewards of the environment is a model for manufacturing in Tennessee.”
The two-day conference brings business and industry leaders from across the state together with representatives of the Tennessee Department of Environment and Conservation (TDEC) and Region IV of the Environmental Protection Agency (EPA) to celebrate environmental and energy improvements in the state.
Volkswagen Group of America’s commitment to Tennessee began with its decision in 2008 to build a plant in Chattanooga along with a promise of environmental stewardship in connection with the operation of the plant. Volkswagen committed to restoring the area wetlands, which were destroyed by the former occupants. As of 2018, the Volkswagen wetlands have grown from 40 to more than 88 acres.
Adjacent to the 88 acres of wetlands is the 33-acre Volkswagen Chattanooga Solar Park. The park contains 33,600 solar modules which produce 13.1-gigawatt hours of electricity annually. The electricity from the solar park meets more than 12 percent of the plant energy requirements during full production and 100 percent during non-production periods.
In 2011, Volkswagen’s Chattanooga manufacturing plant received a platinum certification from the U.S. Green Building Council’s (USGBC) Leadership in Energy and Environmental Design (LEED®) green building certification program. The facility is the first and only automotive manufacturing plant in the world to receive the USGBC’s Platinum certification.
Volkswagen strives to maximize gains in energy conservation while balancing manufacturing operation energy requirements. Electric motors used in manufacturing require high energy costs, however, Volkswagen uses high-efficiency motors saving up to three million kWh annually. In addition, Volkswagen installed T5 light bulbs throughout the facility that save approximately 1.15 million kilowatts a year or enough energy to supply 280 households.
Beyond managing energy consumption, Volkswagen implemented innovative environmentally engineered production processes. The company’s paint shop uses a new technology—waterborne base coat—that incorporates the primer, eliminating a step in the painting process and, more importantly, an entire oven-baking session, which helps cut carbon dioxide emissions by approximately 20 percent.
Volkswagen Chattanooga collects rooftop rainwater and repurposes it into cooling the welding robots. Additionally, the rooftop is painted white to achieve a cooling effect on the interior of the plant.
In 2018, Electrify America, a subsidiary of Volkswagen Group of America, announced a $2 billion/10-year investment to advance the adoption of electric vehicles, with a significant focus on electric vehicle charger infrastructure. Even in its early stage, Electrify America has announced EV charging stations in Memphis, Nashville, Chattanooga, and Knoxville.
About Volkswagen Chattanooga
The Volkswagen Group of America, Chattanooga Operations, LLC (Volkswagen Chattanooga) manufacturing facility began production in April 2011. Volkswagen Chattanooga currently assembles the Volkswagen Passat, a midsize sedan specifically designed for the North American market, and the Volkswagen Atlas, a midsize sports utility vehicle which went on sale in May of 2017. In March 2018, Volkswagen Chattanooga was announced as the future production home of a five-seat SUV, representing an additional $340 million investment. Volkswagen Chattanooga currently employs approximately 3500 team members. Volkswagen Chattanooga is the first car factory worldwide with a LEED Platinum certification. It is also certified to international standards for energy management (ISO 50001), environmental management (ISO 14001) and quality management (ISO 9001).
About the Tennessee Chamber of Commerce and Industry
Founded in 1912, the Tennessee Chamber of Commerce & Industry also serves as the Tennessee Manufacturing Association. Commanding statewide partnerships with businesses and local chambers, the Tennessee Chamber aims to enhance Tennessee’s business climate and support economic prosperity by advocating in the State Capitol to elected leaders and government officials on behalf of the state’s business community. The Chamber is the official state affiliate of the U.S. Chamber of Commerce, the National Association of Manufacturers, and the American Chemistry Council.
http://www.wrcbtv.com/story/39385903/volkswagen-chattanooga-recognized-for-environmental-excellence

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(ACC Mentioned) Why Is Group Trashing Bag Ban?

Oct 31, 2018 | Kennebec Journal & Morning Sentinel

By Claire Prontnicki

I was puzzled to see “Bag ban won’t reduce litter” (Oct. 12), an op-ed from something calling itself “Environmental Resources Planning” (ERP), based in Gaithersburg, Maryland. Why would an out-of-state group concerned with the environment be trashing Waterville’s proposed ban on plastic shopping bags from big stores?
So I did a little research online and found one of ERP’s sponsors to be the American Chemical Council, which represents plastics manufacturers — which make plastic shopping bags.
One of the studies they cite, by APCO Insight, claims to have found that “92% of plastic shopping bags are reused.” But most of these bags (65 percent, according to APCO) are re-used as trash bags, which end up as landfill anyway. And by the way, APCO Insight is a company whose experts help their corporate clients “mitigate reputational risks” — perhaps including the bad reputation of plastic bags?
I don’t know the sources of the rest of the studies cited in the article, but I notice it doesn’t mention the fact that these bags can’t be recycled in your curbside collection, but have to go back to the stores that give them out. It also doesn’t mention that many plastic bags end up in the ocean and that marine animals mistake them for jellyfish and eat them — fatally.
If I had to guess, I’d say the Sustain Mid-Maine Coalition, being local and nonprofit, has better motives than these corporate apologists. And I’d vote yes on Waterville Question 1, the plastic bag ordinance.
https://www.centralmaine.com/2018/10/31/why-is-group-trashing-bag-ban/

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Over 250 Companies Sign Pledge to Fight Plastic Pollution

Oct 31, 2018 | BNA Daily Environment Report

By Adam Allington

Some of the world’s largest consumer goods manufacturers and packaging companies, including Colgate-Palmolive, PepsiCo, and Unilever, have pledged to minimize plastic pollution and make their products more environmentally friendly.
They signed on to the New Plastics Economy Global Commitment, launched under the social media hashtag #LineInTheSand and led by the Ellen MacArthur Foundation in collaboration with U.N. Environment.
“We will continue to review the ambition level of the commitment and, over time, raise it, and we also call for many more businesses and governments around the world to join this effort so that we also continue to scale up in numbers of companies and governments involved,” said Sander Defruyt, director of the New Plastics Economy Initiative at the U.K.-based Ellen MacArthur Foundation.
An open letter, titled “Drawing a Line in the Sand,” called on businesses and governments to work together to tackle plastic waste and pollution at source.
As of Oct. 29, all signers agreed to make 100 percent of their plastic packaging either reusable, recyclable, or compostable by 2025.
Hard Commitments
Some companies signing the agreement are among the largest food and consumer products retailers in the world, such as Danone and Coca-Cola.
Erik Solheim, head of UN Environment, said in a statement that ocean plastic represents one of the “most visible and disturbing examples of a plastic pollution crisis.”
“The New Plastics Economy Global Commitment is the most ambitious set of targets we have seen yet in the fight to beat plastics pollution,” he said.
Each signer formally endorses a plan under which plastics never become waste.
In addition to the recyclablity target, the agreement also calls for eliminating single-use packaging in favor of reusable models and significantly increasing recycling.
NGOs Decry “Vague” Targets
Oceana, a Washington DC-based nongovernmental organization focused on marine conservation, said the pledge amounts to little more than vague promises about recycling, which aren’t enough to solve the plastics crisis.
“I hesitate to even call today’s corporate announcements a step in the right direction,” said Jacqueline Savitz, Oceana’s chief policy officer.
In a press statement, Savitz said the only true way to curb the growing impacts of plastic pollution is to “reduce the amount of single-use plastic at the source—in the factory—before it gets to consumers.”
Other groups, such as Greenpeace, cautiously welcomed the announcement while also claiming that it allows too much flexibility for many of the world’s leading plastic polluters.
“While elements of the EMF Global Commitment are moving in the right direction, the problem is that companies are given the flexibility to continue prioritizing recycling over reduction and reuse,” said Ahmad Ashov, global plastics project leader for Greenpeace Indonesia.
“Corporations are not required to set actual targets to reduce the total amount of single-use plastics they are churning out. They can simply continue with business as usual after signing the commitment,” he said.
Focus on Developing Economies
According to a 2015 report by the environmental campaigner Ocean Conservancy and The McKinsey Center for Business and Environment, just five Asian countries, including Indonesia, China, the Philippines, Vietnam, and Thailand, account for up to 60 percent of the plastic waste leaking into the ocean.
S. C. Johnson & Son, Inc., maker of brands such as Ziploc bags and Windex, announced a partnership with Plastic Bank, a Canadian startup trying to rid the oceans of plastic waste by increasing recycling rates in developing countries.
“My dream is a concept of landfill neutrality. We’re not simply closing the loop in our own products, but moving stuff out of landfill and down-cycling it into more durable products,” said Fisk Johnson, CEO of S.C. Johnson.
Johnson told Bloomberg Environment the company is launching a pilot program to open eight recycling centers in Indonesia over the next year, in partnership with Plastic Bank.
He said 95 percent of the companies plastic products are recyclable or reusable, but that boosting recycling rates even in the United States—currently about 9 percent—remains a challenge.
“People today just aren’t willing to go through the challenge of doing that,” he said. “We are not there today, but the attention this global commitment is bringing to all sectors is really going to help us.”
https://news.bloombergenvironment.com/environment-and-energy/over-250-companies-sign-pledge-to-fight-plastic-pollution

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Zinke’s Own Agency Watchdog Just Referred Him to the Justice Department

Oct 30, 2018 | The Washington Post

By Juliet Eilperin and Josh Dawsey

The Interior Department’s Office of Inspector General has referred one of its probes into the conduct of Secretary Ryan Zinke to the Justice Department for further investigation, according to two individuals familiar with the matter.
Deputy Inspector General Mary L. Kendall, who is serving as acting inspector general, is conducting at least three probes that involve Zinke. These include his involvement in a Montana land deal and the decision not to grant two tribes approval to operate a casino in Connecticut. The individuals, who spoke on the condition of anonymity because they were not authorized to talk publicly, did not specify which inquiry had been referred to the Justice Department.
A spokeswoman for the inspector general’s office declined to comment on the matter Tuesday, saying, " I cannot comment on any investigations.” The Justice Department declined to comment, and Interior did not immediately responded to a request for comment.
A referral to the Justice Department means prosecutors will explore whether a criminal investigation is warranted. While an agency’s inspector general regularly issues reports on the findings of its inquiries, it refers cases to the Justice Department only when it has determined that there could be criminal violations.
A senior White House official, speaking on the condition of anonymity because of the sensitive nature of the matter, said the White House understands that the investigation is looking into whether the secretary “used his office to help himself.”
Since taking office in March 2017, Zinke has come under scrutiny for his travel practices and other aspects of his job performance, though his aides have dismissed such allegations as politically motivated. This month, the inspector general’s office released a report finding that Zinke’s decision to allow his wife to travel with him sparked concerns among the department’s ethics officials. Zinke is one of multiple Cabinet members who may leave after the midterm elections, according to administration officials.
Zinke is looking for a political nominee who could replace Kendall, a career official who has served in an acting capacity since 2009. Two weeks ago, Housing and Urban Development Secretary Ben Carson sent an email to his staff announcing that one of his top aides, Suzanne Israel Tufts, would be taking over as Interior’s acting inspector general. But Zinke’s aides disavowed this idea several days later, describing Carson’s email as “100 percent false.”
Interior’s inspector general has continued to look into Zinke’s conduct even as the debate over a replacement for Kendall has played out in public.
One of the allegations under investigation regards the secretary’s role in a Montana land development deal backed by David J. Lesar, chairman of the oil services firm Halliburton, which Politico first reported in June. The business and retail park, known as 95 Karrow, is slated to include several businesses and would be near multiple parcels of land owned by Zinke and his wife. The deal involves land owned by a foundation now headed by Zinke’s wife, Lola, which the secretary used to run before joining the Trump administration.
While Zinke has stepped down as president of the Great Northern Veterans Peace Park Foundation, records obtained under the Freedom of Information Act show that he has met with Lesar, his son and the lead project developer, Casey Malmquist, since taking office. He also corresponded with Malmquist about the project’s design, the records reveal.
Halliburton’s operations are directly affected by many of Interior’s policies, including rules on how oil and gas drilling must be conducted, and which public lands and federal waters are open to energy exploration and development.
Separately, the inspector general’s office is examining Zinke’s involvement in his department’s refusal to sign off on a proposed casino deal in Connecticut involving the Mashantucket Pequot and Mohegan tribes. Interior career staffers had recommended approving the tribes' application to jointly run the casino, which would have competed with an MGM Resorts International casino across the border, in Massachusetts. But MGM and two Nevada senators lobbied against the permit, and in the end, Zinke did not grant it.
Interior’s inspector general has subpoenaed documents from MGM, according to two individuals briefed on the inquiry who spoke on the condition of anonymity because the probe is still underway.
Asked about the subpoena this month, MGM Resorts International spokeswoman Debra DeShong said in an email, “We are not in a position to comment in light of the ongoing litigation filed by the Mashantucket Pequot Tribe and State of Connecticut.”
Zinke’s critics welcomed the idea of a potential Justice Department investigation and vowed to press for answers.
“If Democrats are given the opportunity to hold a congressional majority next year, Secretary Zinke will be called to testify in February on why his conduct in office merited referral to the Justice Department, whether that referral was related to the recent attempted firing of his inspector general, and his many other failures and scandals,” said Rep. Raúl M. Grijalva (Ariz.), the top Democrat on the House Natural Resources Committee and one of the lawmakers who asked the inspector general to investigate the Montana land deal.
Jennifer Rokala, executive director of the advocacy group Center for Western Priorities, said in a statement that a Justice Department inquiry made sense given Zinke’s push for a new inspector general. “If Interior’s inspector general is unable to hold Secretary Zinke accountable without political interference, it’s time for career prosecutors at the Justice Department to take over,” she said.
Separately Tuesday, Democratic Sens. Richard Blumenthal (Conn.), Elizabeth Warren (Mass.) and Ron Wyden (Ore.) wrote Zinke urging him “to immediately cease any efforts to use the office of the Secretary of the Interior for personal gain and fully reimburse the public for your private use of public resources.” Citing the recent inspector general’s report, they questioned why Zinke invited former donors as official guests last year on a trip to California’s Channel Islands and asked his aides to look into designating his wife as a department volunteer.
https://www.washingtonpost.com/energy-environment/2018/10/30/zinkes-own-agency-watchdog-just-referred-him-justice-department/?utm_term=.9bca34a54e36

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LCSA News

(ACC Mentioned) NGO Questions If Recent Snurs Conform With TSCA Policies

Oct 30, 2018 | Chemical Watch

By Kelly Franklin

The Environmental Defense Fund has raised concerns that many recently issued significant new use rules (Snurs) are not in keeping with TSCA guidance and policies, and the NGO is urging the US EPA to modify its proposed rules to address these deviations.
The comments have come in response to several batches of Snurs issued in recent months. They relate to a large number of new substances that were subject to a pre-manufacture notice (PMN) and permitted to come to market with some restrictions; the rules are intended to mirror the requirements contained in each of those substance’s consent order.
Industry groups have raised their own objections to several of these, including on the rulemaking process and differences between the Snurs and the consent orders they are based on.
But in several detailed comment letters, the EDF has flagged up an array of problems – including several examples where it says the rules fail to conform to TSCA policies and guidance.
In each of its comments, it reiterated concerns that the Snurs suggest the EPA has taken a new course regarding when it will require testing, but has not given the public a chance to weigh in on this policy.
The group also said that it feels the agency has failed to adhere to its persistent, bioaccumulative and toxic (PBT) new chemicals testing policy for certain substances subject to the Snurs – including new perfluorinated compounds.
This long-standing policy calls for tiered testing of substances that exhibit particular persistence and bioaccumulative factors, but the EDF says that not all of the substances that meet those criteria have had requirements attached to carry out the specified tests.
It has called on the EPA to apply its policy and make changes to the relevant substances’ consent orders and Snurs, or "fully explain" its decision to deviate from it.Generic names and uses
The EDF also took issue with some of the generic names used to describe chemicals with confidential identities.
Recently issued guidance on them (see box) calls for the names to be as "specific as practicable". But it noted several examples where they "appear to be far from sufficiently specific to comply with either TSCA or EPA’s guidance". These include such identifiers as ‘mixed metal oxide’, ’functionalised polyimide’, and ‘hydroxystyrene resin’, it said.
It has pressed the agency to ensure that generic names are compliant before finalising the Snurs, and questioned why they had not already been addressed earlier in the substance review process.
And the EDF also objected to Snurs containing generic use descriptions that are "unacceptably broad or vague and do not comply with EPA’s own instructions for PMNs".Generic names guidance
Under TSCA, a company may request to maintain as confidential business information (CBI) a substance’s identity. In these cases, it must provide a ‘generic name’ that stands in for a structurally specific name, which the EPA can use to publicly identify the substances.
Earlier this year, the EPA issued updated guidance on how to form these identifiers, in keeping with new requirements in the Lautenberg Act. In it, the EPA said that they should "reveal the chemical identity of a substance to the maximum extent practicable while masking only those structural elements that are confidential".
The American Chemistry Council said in August comments in response to the document that it was "more detailed and more helpful" than the 1985 guidance it replaced.
The trade group also said the EPA’s approach is "sufficiently flexible to take into account circumstances where multiple elements of a specific chemical identity may need to be masked".
But in its comments, the EDF pressed the EPA on how it would review generic names to ensure they comply with section 14 of TSCA and its guidance. The agency "should add procedural steps to this process and provide greater detail about its review," it wrote.
The NGO suggested that an initial review be completed upon receipt of a PMN. And it sought an EPA commitment to reject "illegal" generic names, among other suggestions.
This autumn has seen several overlapping comment periods for rulemakings addressing hundreds of Snurs. The EPA issued the majority through direct final rulemakings, a process that can be used to advance non-controversial measures on an expedited timeline.
But having received adverse comment – from the EDF as well as others – on each of these rulemakings with completed consultations, the EPA will need to address these batches of Snurs through the more traditional proposed rulemaking process.
The agency will address submitted comments as it works to finalise each of the proposed Snurs.
https://chemicalwatch.com/71449/ngo-questions-if-recent-snurs-conform-with-tsca-policies

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Chemical Management News

(ACC Mentioned) Democrats Seek Broad Agenda From EPA To Curb Ethylene Oxide Risks

Oct 30, 2018 | Inside EPA

By Maria Hegstad

Democratic lawmakers from Illinois are pressing EPA to take a series of actions to limit risks of exposure to ethylene oxide (EtO), a known carcinogen, in the wake of local concerns that a Chicago-area sterilizing plant has released high levels of the substance in an area with already high cancer risks.
In a letter to EPA earlier this month, Sens. Dick Durbin (D-IL) and Tammy Duckworth (D-IL), as well as Rep. Bill Foster (D-IL), urge the agency to ensure its pending review of EtO air toxics rules results in measures that protect vulnerable populations; provide a schedule for a pending review of its air toxics rule for sterilization plants; prioritize air monitoring around facilities that use the chemical and alert communities to levels higher than EPA's safety standards; require an inventory of potential exposures for communities adjacent to sites where EtO is used; and ensure EPA staff who work on the issue are free from conflicts of interest.
In addition, the lawmakers indicate they plan to press the agency to tag EtO for the next possible priority review under the revised Toxic Substances Control Act (TSCA), which is slated to begin late next year, while reiterating past calls that the agency use new authority under the law to investigate the presence of a possible cancer cluster in the area around the Sterigenics plant in Willowbrook, IL.
The Democrats' little-noticed letter is the latest in a series of actions regarding EtO, generally, as well as the releases from the Sterigenics plant.
EtO long been suspected of causing breast and lymph cancers. The chemical is commonly used as an intermediate to make other chemical products like detergent, antifreeze and polyester, and to sterilize medical equipment and foods.
EPA's 2016 Integrated Risk Information System (IRIS) assessment for EtO classified the chemical as a known carcinogen, one of only a handful of substances to so be classified.
When coupled with data in EPA's recently released National Air Toxics Assessment (NATA) emissions modeling information, EPA's information suggested cancer risks from exposures to the chemical near the Sterigenics facility.
In response to the NATA data, EPA reiterated its commitment to review its existing National Emissions Standard for Hazardous Air Pollutants (NESHAP) for miscellaneous organic chemical manufacturing facilities, which was already subject to a March 2020 court deadline, and to “take a closer look at its rules for other types of facilities, beginning with its emissions standards for commercial sterilizers,” EPA said in a fact sheet.
But the chemical industry has been pushing back against such concerns.
The American Chemistry Council last month filed a request for correction (RfC) with EPA under the Information Quality Act (IQA) asking the agency to withdraw EtO data in its latest NATA. The group also urged EPA to refrain from using the IRIS assessment’s cancer risk values to calculate EtO risk in its pending NESHAP reviews -- known as risk and technology reviews (RTRs) -- to determine whether current air toxics rules are protective.
“The 2014 NATA does not meet the IQA’s data quality requirements because the [EtO] IRIS Assessment is not the best available science. Therefore, the 2014 NATA risk estimates for [EtO] should be withdrawn and corrected to reflect scientifically-supportable risk values,” ACC's petition says.
Sterigenics Plant
Even as it reviews its rules, EPA has also sought to downplay local concerns. In a Sept. 27 letter to Durbin, Trump EPA air chief Bill Wehrum reminded Durbin, “[i]t is important to note that the air concentrations of [EtO] are not high enough to cause immediate harm to health for people in and around Willowbrook.”
He said that in response to agency outreach, the facility voluntarily installed new control equipment that the company estimated would reduce its EtO emissions by 90 percent.
Nonetheless, he listed a series of steps the agency is taking, including collecting, analyzing, and communicating technical information, including recent stack testing results, risk and exposure modeling, and ambient monitoring to provide updated, comprehensive information to the public.
Wehrum added that last month, after the new equipment was in place, a Sterigenics contractor collected air samples at the stack, under supervision of EPA and Illinois EPA experts to ensure proper testing protocol. “This testing will give the Agency the information it needs to provide the most accurate picture of the potential risks to the community, and actions the Agency may need to take.”
As of Sept. 27, Wehrum said EPA expected to receive the emissions testing results in early October, when it would be reviewed by EPA and Illinois scientists, though preliminary information suggested greatly reduced emissions.
The agency is reiterating much of this information as it pushes back against concerns in the wake of local press reports that federal and state officials have known about the plant's cancer risks for months but did not publicly disclose it as it worked to address the issue behind the scenes.
Among other “decisive” actions, EPA says in an Oct. 30 press release that its officials have “[r]eceived and are reviewing the final, full report from [Sterigenics'] stack tests ... The agency will use information from the stack test reports to estimate current emissions from the Sterigenics facility and to inform additional risk assessment and ambient air monitoring work.” And the agency says it “[i]ntends to conduct and communicate air quality monitoring and additional risk assessment activity around the facility. EPA is also engaging elected officials and community leaders to hold an additional public meeting in late November.”
But Durbin, Duckworth and Foster in their latest letter -- which responds to Wehrum's Sept. 27 letter -- are calling for additional protective actions for their constituents in DuPage County, and others.
For example, they call for EPA to detail its schedule for reviewing its sterilization NESHAP because “we are concerned that EPA is not motivated to work swiftly, and urgently, on updating” it.
“EPA determined at the end of the Obama Administration that [EtO] is a known carcinogen, however, since then, EPA has not sought to strengthen the public health standard regulating the gas,” they add.
The legislators also ask EPA to “[p]rioritze air monitoring at and around facilities that use [EtO] and alert the community when ambient [EtO] concentrations are higher than EPA's new safety standard.”
Their letter also alludes to an ATSDR report, which they say indicates there is “daily variability” with higher emissions from the 24-hour operating Sterigenics plant at certain times of day. They ask for continuous, rather than 12-hour air sampling at the plant, noting that “near-surface concentrations are higher during the nighttime than the daytime due to meteorology.”
The Democrats ask EPA to provide “an inventory of all communities that lie within or are adjacent to facilities that use [EtO to] ensure we understand where the hazards exist.”
Lastly, they urge Wheeler to “[e]nsure that staff who will be engaged in the writing of the updated regulation are free from conflicts of interest and commit to using rigor[ous] peer-reviewed science. As you know, there are a number of staff at EPA who have previously represented the chemical industry and have worked on [EtO] issues, specifically. We request that you direct these staff to sign recusals...”
The letter does not provide names but Nancy Beck, the top political appointee in EPA's toxics office, was a toxicologist with ACC before joining the Trump administration. It is unclear what role she might play in the decision, but she was long regarded as the Trump EPA's chosen scientist since the agency has yet to appoint a research chief.
Wehrum, the Trump EPA air chief, was a partner with the law firm now known as Hunton Andrews Kurth. It is unclear if any of Wehrum's former clients worked with EtO.
But Wehrum has held a series of briefings on the status of various air regulations at his former law firm with former clients late last year, among them officials with American Electric Power, Southern Company, Duke Energy, Dominion Energy and the Utility Air Regulatory Group. The briefing came less than a month after the Senate confirmed Wehrum's position, a move that could be in violation of his pledge to recuse himself from such meetings due to ethics restrictions.
https://insideepa.com/daily-news/democrats-seek-broad-agenda-epa-curb-ethylene-oxide-risks

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Years After IRIS' TCE Analysis, Acute Action Levels Remain Controversial

Oct 30, 2018 | Inside EPA

By Maria Hegstad

North Carolina regulators are asking their science advisors to review a guide developed with EPA for those working to limit short-term exposures to vapor intrusion at sites contaminated with the common solvent trichloroethylene (TCE), amid ongoing controversy with EPA's 2011 assessment of TCE risks, which formed the basis for this and other such guides.
“Our charge is to comment on the action levels … given that we've heard advice from [EPA] Region 4 and [state agencies] put together a draft [guide]; whether we are comfortable or wish to protect” more than the existing guide, North Carolina Science Advisory Board (NCSAB) Chairman Jamie Bartram told board members at their most recent meeting, Oct. 22 in Raleigh, NC.
The panel is preparing to review a regulatory guide that North Carolina regulators crafted several years ago, following the release of EPA's 2011 Integrated Risk Information System (IRIS) assessment of TCE's human health risks. EPA's assessment focuses on the risk of fetal cardiac malformations if a pregnant woman is exposed to TCE early in her pregnancy.
The resulting risk estimate is very stringent, leading to strict management guidelines, particularly when women of child-bearing age are on a site with vapor intrusion.
But chemical industry officials have long pressed EPA to reconsider its conclusions which they say are based on a flawed study by Paula Johnson, a professor at the University of Arizona, and has resulted in overly stringent risk and regulatory levels.
The Halogenated Solvents Industry Alliance (HSIA), which represents the makers and users of TCE and other halogenated solvents, has long disputed the Johnson study and EPA's use of it.
The group is funding an effort to replicate the study, after two previous attempts to do did not replicate its results. Most recently, the group has supported the proposed rule, issued by former Administrator Scott Pruitt, which seeks to bar EPA's regulatory use of any study where the underlying raw data is not publicly available -- one of HSIA's many issues with the Johnson study.
“HSIA has consistently maintained that the data presented” in the original study and two errata “do not allow calculations of the incidence of cardiac malformations per litter that is time-matched to concurrent controls (the standard practice for developmental toxicity studies.)” the group writes in comments last August regarding EPA's proposed rule. “The lack of data availability and clarity sufficient to construct key analyses associated with a key study should disqualify the use of that study in important decisions such as [reference concentration and reference dose] calculations used for regulatory purposes.”
Action Levels
In North Carolina's case, EPA Region 4 staff provided the state with the action levels it uses, based on the IRIS' assessment's fetal cardiac malformation endpoint, of 2.1 micrograms per cubic meter of air in residential settings and 8.8 ug/m^3 in occupational settings.
Should remediators find TCE vapor intrusion at levels above these values where women of child-bearing age are present, the state and EPA region determined that they should immediately inform the affected individuals, take immediate steps to reduce the exposures and notify the state within one business day.
But in North Carolina, as elsewhere, “[a]s regulatory agencies implemented response activities referenced to the TCE short-term action levels some stakeholders questioned the reliability of the toxicological science identified as the critical study, the Johnson et al. (2003) study, that served as the basis of the cardiac developmental reference value,” according to a report that the North Carolina Department of Environmental Quality (DEQ) developed for NCSAB in the fall.
“In response to these concerns, DEQ staff in 2016 performed a literature review to identify peer-reviewed science and epidemiological studies that would fill mechanistic and epidemiological data gaps relevant to the cardiac developmental effect. Additionally, the Massachusetts Department of Environmental Protection [MADEP] and a group of U.S. EPA scientists also published comprehensive reviews of the state-of-the science in 2014 and 2016, respectively. These reviews discussed the science presented in the IRIS 2011 document, as well as studies published subsequent to the IRIS review efforts. These reviews have been made available to the SAB...”
North Carolina's review of the TCE literature, begun in 2016, seeks “to address data gaps in the TCE science related to the developmental cardiac effect,” the report explains. It discusses some of the studies reviewed by the MADEP, EPA and ATSDR reviewers, including “A mechanistic study using the common cardiac zebrafish model by Wirbisky et al. (2016) reports cardiac vasculature and musculature network defects, and alterations to more than 70 genes known associated with associated with cardiovascular disease, organ morphology and function, and 14 skeletal and muscular disorders at environmentally relevant TCE concentrations.”
Further, the reviews point to “[e]pidemiological evidence for cardiac defects included a 2014 study of the Texas Birth Defects Registry evaluating birth records from 1996 through 2008 (Brender et al., 2014). They identified a significant correlation of obstructive heart defect incidence in offspring of mothers 35 years or older with maternal residential proximity to industrial releases of chlorinated solvents. . . . DWM’s review also identified two epidemiological studies reviewed by ATSDR (ATSDR, 2014). One reported significantly elevated risk (2.5-fold) of cardiac defects at birth in children of parents exposed to TCE in drinking water during the month before conception and the 1st trimester of pregnancy for a population in Endicott, NY. The other epidemiological study reported significant (3-fold) increased risk of congenital heart defects in children born to women living within 1.3-miles of a TCE-emitting site in Milwaukee, WI.”
North Carolina in its review notes that ATSDR in its “discussion of the implications for TCE-induced cardiac developmental effects ATSDR stated reports of TCE-induced cardiac malformations in rat fetuses is valid and relevant to
humans, and despite the limitations of the Johnson et al study, there was insufficient evidence to dismiss it, particularly considering the epidemiological, animal and mechanistic evidence.”
https://insideepa.com/daily-news/years-after-iris-tce-analysis-acute-action-levels-remain-controversial

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US FDA Set to Ban Lead Acetate in Hair Dye

Oct 31, 2018 | Chemical Watch

By Nick Hazlewood

The US Food and Drug Administration has published a final rule banning the use of lead acetate as a colour additive in hair dye.
The additive, used in products to gradually darken grey hair, was permanently listed as safe for use in hair colouring cosmetics back in 1980.
However, the FDA says that following an NGO petition in April 2017, data has become available that means "there is no longer a reasonable certainty of no harm" from its use.
Tom Neltner, chemicals policy director at the Environmental Defense Fund (EDF), welcomed the FDA's decision as an "important step to protecting people from a continued source of exposure to lead that is a more significant route than the agency originally thought over three decades ago".
In its Federal Register notice, the FDA says it "agrees with the petitioners that there is no evidence available at this time to determine a safe level of exposure to lead or lead compounds intentionally used as a colour additive in hair dyes".
The conclusion, the agency says, is based on:a recognition of the current consensus that there is no safe exposure level for lead;deficiencies identified from a reevaluation of its 1980 skin absorption study, which may have resulted in an underestimate of exposure to lead from its use in hair dye; andthe fact that blood lead levels in the US have dropped significantly since 1980, meaning it can no longer conclude that exposure to lead from lead acetate-containing hair dye has no discernible effect on the steady-state blood lead level.
The FDA says it will "exercise enforcement discretion" for 12 months from the effective date of the final rule to allow industry time to reformulate its products. The agency says the transition period takes into account the fact that bismuth citrate is already being used as an alternative for lead acetate in hair dye products marketed in the US and elsewhere.
To help consumers wanting to avoid these products during the transition period, lead acetate will be listed as an ingredient and a warning label will say: "For external use only. Keep this product out of children's reach."NGO petition
More than a dozen NGOs and public health advocates signed a 2017 petition that resulted in the FDA consulting on the use of lead acetate in hair dyes. The signatories called for the prohibition on the grounds that such use results in "dangerous lead exposure".
They argued that the 1980 listing of lead acetate had allowed levels of lead in hair dye that greatly exceeded those previously set by the Consumer Product Safety Commission (CPSC) for use in household paint.
And as well as direct contact with the scalp, the petition cited a study demonstrating lead contamination elsewhere – for example on surfaces touched after using the dye such as on blow-dryers, combs and taps.
The Federal Register notice allows for a 30 day period from the date of publication for filing objections. After this the rule will become effective, unless there are objections, in which case the FDA will be given time to respond.
https://chemicalwatch.com/71457/us-fda-set-to-ban-lead-acetate-in-hair-dye

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Homes Filled With New Mysterious Pollutant, Study Finds

Oct 31, 2018 | Courthouse News Service

By Nathan Solis

Don’t take a deep breath and don’t touch anything: Researchers have discovered a mysterious chemical is abundant in homes, the natural environment and electronic recycling facilities and which can be passed through skin contact or by breathing, is difficult to track and largely unregulated by the federal government.
The novel chemical compound, tri(2,4-di-t-butylphenyl) phosphate or TDTBPP, can be used as a flame retardant and also makes plastics less brittle.
Many commercial chemicals do not receive regulatory oversight from the U.S. Toxic Substances Control Act unless they’re used for new purposes, according to the authors of the study published Tuesday in Environmental Science & Technology. This makes it difficult for environmental chemists to track compounds like TDTBPP and what impacts it could have.
Researchers from Indiana University only found TDTBPP because they did a general environmental scan, which included studying dust from 20 homes in Ontario, Canada, and outdoor samples from southwestern Lake Michigan. They also studied dust found in an e-waste facility in Ontario, as chemicals similar to TDTBPP are used to produce plastics, wires, printed circuit boards and other electronic equipment.
While they also measured the amount of TDTBPP in the air, water and soil, house dust surprisingly showed high levels of TDTBPP according to the study.
Marta Venier, a scientist at the IU School of Public and Environmental Affairs, said they did not have to look far for the chemical.
“The fact that this potentially toxic chemical is so abundant, but was previously unknown, is another example of the ineffective management of chemicals in the United States,” said Venier.
Now that scientists know it’s there, TDTBPP can be flagged for further study and to determine its impact on people.
Authors of the study included staff from Indiana University, Masaryk University in the Czech Republic, Canada’s Environment and Climate Change and the University of Toronto.
https://www.courthousenews.com/scientists-discover-abundance-of-chemical-pollutant-in-homes/

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Energy News

Carlyle Joins Oil Supertanker Race as Terminal Projects Pile Up

Oct 30, 2018 | BNA Daily Environment Report

By Catherine Ngai

Carlyle Group LP joined an already-crowded field seeking to enable the next wave of U.S. oil exports.
The private equity firm announced plans Oct. 29 for a crude export terminal in Texas, the eighth project of its kind discussed in recent months with the potential to move millions of barrels more of U.S. oil into foreign markets. The new terminal, to be built with the Port of Corpus Christi, will have multiple operators and could be in service by late 2020.
The project to load supertankers—known as very large crude carriers, or VLCCs—is the latest plan that will change the network of trade flows in the U.S. Gulf Coast starting as early as 2020, when some of the terminals are expected to start.
Since the end of the decades-old crude export ban was lifted in late 2015, producers and traders have been moving U.S. barrels to China, India, Europe, and beyond. But the lack of deep-water ports has kept U.S. exporters from getting the cheapest shipping rates for supertankers sailing to Singapore and other distant ports.
“Incremental U.S. production is going to exports,” said Sandy Fielden, director of research for the commodities group at Morningstar Inc. “Refiners don’t need it, so everyone is eyeing foreign markets now.“
U.S. ports can readily load 500,000-barrel Aframax vessels and some can take 1 million-barrel Suezmaxes, but no onshore terminal has a channel deep enough to load a 2 million-barrel VLCC. Some companies, like Enterprise Products Partners LP, have been trying to bridge the gap by partially loading a very large crude carrier, then topping up its tanks offshore from smaller ships.
Pipeline bottlenecks are likely to restrain U.S. production growth next year to 890,000 barrels a day, down from this year’s 1.39 million, according to the Energy Information Administration. Supply will likely accelerate again after pipelines to the coast come into service in late 2019 and 2020, increasing the need for more export terminals.
One concern that could arise if all, or even most, of the terminals are built: Is there enough oil to go around? Industry analysts predicted that exports will double by 2020 given increased export capacity and shale production. Enterprise projected that exports will top 4 million barrels a day by 2021 and nearly 7 million by 2025, while Trafigura predicts that U.S. oil exports will more than double to 4.8 million barrels a day by 2022.
The U.S. has exported as much as 3 million barrels a day, and averaged about 1.9 million this year. This would mean the additional 2 million barrels a day to reach Enterprise’s forecast could be filled by as little as one additional terminal.
“Given the sheer scale of some of the proposed export facilities, the race is on to be first to market since the Gulf Coast needs one or two major release valves,” said Michael Tran, commodity strategist at RBC Capital Markets LLC. “The rest will likely be superfluous.“
https://news.bloombergenvironment.com/environment-and-energy/carlyle-joins-oil-supertanker-race-as-terminal-projects-pile-up

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Sino-U.S. Trade War Delays FID for Magnolia LNG to 2019

Oct 30, 2018 | Natural Gas Intelligence

By Charlie Passut

The Australian company interested in building a liquefied natural gas (LNG) export terminal adjacent to the Calcasieu Ship Channel in Lake Charles, LA, said it will delay a final investment decision (FID) until the first half of 2019, citing the ongoing Sino-U.S. trade war.
LNG Ltd. (LNGL) CEO Gregory Vesey said Monday while the company devoted much of 1Q2018 to signing long-term contracts for the project, trade tensions between China and the Trump administration had impacted those discussions. He said LNGL had originally planned to make a FID by the end of 2018, but conceded "we made that statement prior to the trade tensions that have manifested over the past months, which have caused headwinds for LNG transactions.
"We remain hopeful in our ability to bring a final investment decision for Magnolia LNG to the board of directors in the first part of 2019," Vesey said. The CEO said there were "varying opinions on how and when the trade issues with China will be resolved," and that LNGL's "communications with potential Chinese offtakers remain robust with the intent to complete agreements if trade tensions abate before Magnolia is fully sold out."
Subsidiary Magnolia LNG LLC is proposing to construct and operate up to four liquefaction trains, each with 2 million metric tons/year (mmty) of capacity. The terminal is permitted, with the Federal Energy Regulatory Commission order and trade agreements approval from the U.S. Department of Energy in 2016.
The trade war began last May, when the Trump administration imposed a 25% tariff on steel imported from China, as well as a 10% tariff on imported aluminum. The dispute has been escalating ever since, with both sides taking tit-for-tat measures. The White House announced tariffs on $200 billion worth of Chinese products in September, and China responded in kind with $60 billion worth of taxes on American goods, including a 10% tariff on U.S. LNG.
Analysts have since been divided over whether the trade war will dent the burgeoning U.S. LNG industry or have little effect, since project backers could find customers elsewhere.
"From a seller's perspective, the LNG market continues to improve with experts around the globe realizing the need for new LNG production by late 2022, when Magnolia LNG could begin operations," Vesey said. "Global LNG prices have remained high even in the shoulder season when prices typically decline. This trend indicates a continued increase in demand with additional supply needed even as some projects currently under construction will reach an operational state in the next 12 months."
Meridian LNG Holdings Corp. signed up for 2 mmty of tolling capacity from the terminal in 2015. The initial term of the agreement was 20 years, with an option to extend for an additional five. The agreement has been extended several times since, and Meridian and Magnolia agreed last month to extend the financial closing date of the offtake agreement to Dec. 31.
https://www.naturalgasintel.com/articles/116296-sino-us-trade-war-delays-fid-for-magnolia-lng-to-2019

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Peak Shale: Is the US Fracking Industry Already in Decline?

Oct 30, 2018 | DeSmog (Blog)

By Justin Mikulka

In 2016, lower oil prices led to an overall drop in production for shale companies, which use horizontal drilling and fracking to extract oil and gas from shale formations such as the Marcellus and Permian. This was one of the few relatively positive financial periods for an industry plagued by high costs and low returns (although it still lost money in 2016).
But the industry shouldn't get complacent, warned Robert Clarke of energy industry research and consulting group Wood Mackenzie. Cracks already are starting to emerge in the optimistic forecasts of how much these shale formations can produce, which is a bad sign for turning around the industry's struggling finances.
“It was only the best rigs, with the most experienced crews, drilling the best rock at the lowest service costs,” which were doing well in 2016, said Clarke at the 2018 Energy Information Administration (EIA) annual conference in June. “If you are a producer, it’s very dangerous to think that that is the new norm.”
But producers seemed to think it was the new normal and plowed ahead, going all in on fracking in the Permain Basin, currently seen as the best shale play in the country.
Granted, the results have been impressive from a production standpoint. The EIA expects “Permian regional production to average 3.3 million [barrels per day] in 2018 and 3.9 million [barrels per day] in 2019.” Those numbers may reach 5.4 million barrels a day by 2023, according to oil industry consultants IHS Markit.
While the Permian's oil production has been prolific, it hasn’t translated into profits. “Why Aren’t Permian Oil Producers Profitable?” asked a headline on industry publication Oilprice.com this past May.
As DeSmog's series on the finances of fracking has documented, there is no doubt fracking can lead to production of large volumes of light oil, but it comes at the cost of approximately a quarter trillion dollars more than the industry has made since 2007.World’s Largest Oil Services Company CEO Offers Dire Warning for Frackers
As the world’s largest oil services company, Schlumberger has an intimate knowledge of what it takes to produce oil by fracking across the many shale formations currently being drilled.
Its CEO, Paal Kibsgaard, cautioned industry analysts on a recent phone conference, sounding quite like the warning from Clarke in June.
“The well-established market consensus that the Permian can continue to provide 1.5 million barrels per day of annual production growth for the foreseeable future is starting to be called into question,” Kibsgaard said, according to theFinancial Times.
Kibsgaard's main concern touches on a phenomenon known as “child wells,” a situation I reported for DeSmog in August.
The concept is simple. All shale formations are not created equal, which means to make money, producers need to find “good rock,” or what is also known in the industry as “sweet spots.”
But there are limited sweet spots. And the industry is drilling too many “child wells” in established sweet spots around “parent wells” that are producing, hoping to capitalize on that “good rock.” But, as I explained, the approach isn’t working, and in some cases is even costing the industry more money by damaging the existing wells in those sweet spots.
But that raises a simple question: If the shale industry has an abundant enough supply of good rock to support the rosy predictions of groups like IHS, why are companies instead drilling so many child wells around a few sweet spots instead of moving on to drill other, new sweet spots?
Perhaps the industry doesn't have other sweet spots to move on to and perhaps instead is trying to stave off looming bankruptcy from the tremendous debt loads they are carrying?
Kibsgaard explained his skeptical view of the Permian basin's future production, saying that in the Eagle Ford shale play — where production is well below its peak in 2015 — “up to about 70 percent of all new wells drilled” are child wells. This trend indicates that producers there have run out of new “good rock” and are trying to get every last bit from the known sweet spots.
Meanwhile, in the Permian's Midland Wolf Camp section, child wells are already approaching 50 percent of new wells drilled, said Kibsgaard, and the results appear to follow the same trajectory as the Eagle Ford.
“We are already starting to see a similar reduction in unit well productivity to that already seen in the Eagle Ford suggesting that the Permian growth potential could be lower than earlier expected,” warned Kibsgaard.
This is the message from the CEO of the biggest oilfield services company to investment analysts. Will anyone listen?Some Fracking CEOs Make Similar Warnings
Schlumberger isn’t in the business of drilling for oil, just supporting the companies that do. So putting forth rosy projections for the future to keep investors engaged isn’t required — like it may be for fracking companies deeply in debt and unable to turn a profit at current production levels. Promises of huge profits in the future are really the only likely reason for anyone to invest in fracking companies.
But even some fracking CEOs don’t believe the optimistic forecasts for the Permian. In Bethany McLean’s excellent new book Saudi America: The Truth About Fracking and How It's Changing the World, she speaks to two of the fracking CEOs who have actually had success in the industry — Bill Thomas and Mark Papa.
Bill Thomas, current CEO of EOG (formerly known as Enron Oil and Gas), one of the few fracking companies making money, tells McLean that in the Permian the “really good rock” is smaller than the industry optimists are saying. This helps explain the surge in child wells where the industry is trying to over-drill what good rock there is.
Thomas goes on to explain to McLean: “The Permian has terrified the world oil market but there are overblown expectations of the Permian.” “Terrified” because if the Permian actually manages to produce 5.7 million barrels per day, it would be producing a higher volume of oil than every country except the U.S., Saudia Arabia, and Russia in 2017.
Oil traders and producers don't like to be surprised and having a new oil supply of that magnitude come out of almost nowhere fits that bill. But as Thomas is warning, those fears may not be fully justified.
Mark Papa is the former CEO of EOG and now runs Centennial Resource Development. Papa actually delivered his less-than-sunny message at the 2018 IHS Markit annual oil industry conference known as CERAweek, but apparently it wasn’t what the audience wanted to hear.
“There are good geological spots in shale plays and weaker geological spots, and a lot of the good geological spots have already been drilled,” Papa explained during a panel discussion.
In Saudi America, McLean reports that Papa had said that by 2020, even in the Permian, the best acreage will have been mostly drilled and he predicted a sizable dropoff in production to follow.Time Running out for Frackers in Deep Debt
At current oil prices, most fracking companies are losing money while trying to get every last drop out of the known sweet spots in American shale plays. Under these conditions, the industry is having a hard time accepting that what Papa, Thomas, and Kibsgaard are saying could be true. These companies can't hope to pay back their massive debts if the best days of the major shale plays are either in the past or rapidly approaching.
So, who will be right? For nearly a decade, the fracking industry has been promising that profits are just on the horizon, but they have not materialized — not even in the ideal 2016 scenario described by Wood Mackenzie’s Clarke.
Has the industry run out of good rock? In her book, McLean quotes one industry investor, whose words should strike fear into the hearts of those invested in or holding debt for shale companies.
“Our view is that there’s only five years of drilling inventory left in the core,” one prominent investor told McLean, whose book was just published in September 2018. “If I’m OPEC, I would be laughing at shale. In five years, who cares?”
https://www.desmogblog.com/2018/10/30/peak-shale-us-fracking-industry-permian-decline

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Chesapeake Further Tilts Toward Oil With $4B WildHorse Acquisition

Oct 30, 2018 | Natural Gas Intelligence

By Jamison Cocklin

Chesapeake Energy Corp. said Tuesday it plans to acquire East Texas-focused WildHorse Resource Development Corp. to significantly expand its position in the Upper Eagle Ford Shale and Austin Chalk formations in a cash-and-stock deal valued at nearly $4 billion that management said would double oil production growth and further reduce debt.
As the broader market continued recovering from the losses of recent weeks, Chesapeake shares on Tuesday fell more than 13%. Analysts noted that while the deal could improve cash flow with higher liquids production, it hinges largely on the continued strength of oil prices.
CEO Doug Lawler said during a call to discuss the transaction and the company’s third quarter earnings results that there’s a “compelling investment thesis” in the acquisition that’s “anchored in the significant depth of oil growth opportunities in the portfolio.”
Chesapeake has been shifting to an oilier production mix in recent years to strengthen its balance sheet. Under Lawler, the company has also been assiduously focused on cutting billions of dollars in debt.
"This transaction accelerates Chesapeake's strategic plan and expands the value-creation opportunities for our shareholders by adding a premier asset at an attractive valuation, significantly boosting oil production” margins and cash flow growth, “while improving our leverage metrics,” Lawler said.
Chesapeake’s heaviest focus has been on the Eagle Ford of South Texas, which it views as a growth engine for the current strategy, and where it’s been the most active this year with plans to bring online nearly 150 wells. While the WildHorse assets are located hundreds of miles to the northeast of the core Eagle Ford assets, Chesapeake’s management views them as a third oil growth engine that would also complement its properties in the resurgent Powder River Basin (PRB).
The acquisition would add 420,000 net acres in the Eagle Ford and Austin Chalk to the portfolio, with about 85% of the properties undeveloped. Pro forma, Chesapeake’s Eagle Ford position would be 655,000 net acres.
The deal is expected to double adjusted oil production by 2020 from 2018 estimates. The company projects oil volumes of 125,000-130,000 b/d by 2019 and 160,000-170,000 b/d by 2020. The adjusted oil mix would increase to 30% of total production from 19% today.
Chesapeake also plugged the $200-280 million of projected annual savings it could achieve with the deal through operational and capital efficiencies.
“We believe there are numerous opportunities to build upon WildHorse's impressive performance and further enhance the return profile of the asset,” Lawler said. “Chesapeake is a leading operator in the Eagle Ford. Our capital efficiency in the basin is demonstrated by our ability to consistently drill and complete the longest laterals at the lowest cost per foot. Our proven operational track record and geotechnical expertise provide great confidence that we will deliver material savings across all aspects of the operation.”
WildHorse was founded in 2013 and began trading publicly less than two years ago. It has amassed one of the largest positions in the Upper Eagle Ford. The company produced 46,700 boe/d in 2Q2018, with an 84% liquids cut.
When asked about WildHorse wells and their notable decline profile on the call, Executive Vice President Frank Patterson, who oversees exploration and production, said spacing issues on the acreage must be addressed. He said Chesapeake has already run models to show that the problems can be resolved.
Lawler added that the WildHorse position is “just begging for the Chesapeake weapons to be deployed on it.”
“As we take everything learned from our Eagle Ford in South Texas, as well as the other basins, we'll hit the ground running,” Patterson said. “We will focus on moving toward longer laterals, reducing drilling and completion costs, and optimizing spacing to drive for the greatest value out of this contiguous acreage position. We also see potential in the Austin Chalk on the acreage footprint and look forward to additional appraisal opportunities. This gives us a third oil engine in our portfolio and a second one with direct access to premium markets in the Gulf Coast.”
Chesapeake plans to finance the cash portion of the acquisition, expected to be $275-400 million, with its revolving credit facility. The transaction must be approved by shareholders of both companies and could close in the first half of next year.
At the election of each WildHorse common shareholder, the consideration would consist of 5.989 shares of Chesapeake common stock, or a combination of 5.336 shares and $3.00 cash, in exchange for each WildHorse share. The value of the deal also includes $930 million of WildHorse debt.
The transaction was unanimously approved by each board. If the deal closes, Chesapeake shareholders would own 55% of the combined company and WildHorse shareholders would own the remaining 45%.
WildHorse may designate two people, expected to be CEO Jay Graham and current director David Hayes, to Chesapeake's board.
“We are extremely proud of the company we built,” Graham said. “This combination creates an impressive oil growth platform which provides both immediate value and potential for significant long-term upside to our shareholders. As a highly regarded operator, Chesapeake brings the technical expertise and operational efficiencies needed to maximize the value of this premier asset."
Chesapeake said it ran four rigs in South Texas during the third quarter and plans to add a fifth next year to continue delineating the Upper Eagle Ford and Austin Chalk.
The company also moved to five rigs in the PRB early in the third quarter. It remains focused on the Turner formation, a tight sands oil play, where it turned another 13 wells to sales during the third quarter. Daily Turner production increased 107% from 3Q2017 and management is still considering adding a sixth rig in the basin next year, which would likely start to focus on the Parkman and Niobrara formations.
Production totaled 537,000 boe/d in the third quarter, including 89,000 b/d of oil, compared with 542,000 boe/d in the year-ago period. Year/year volumes were up 5% when adjusted for asset sales. Volumes also increased from the 530,000 boe/d produced in 2Q2018.
Commodity prices were up across the board, which helped lift revenue to $2.4 billion in the third quarter from $1.9 billion in the year-ago period.
Net income was $60 million (7 cents/share) in the third quarter, compared with a year-ago net loss of $41 million (minus 5 cents).
https://www.naturalgasintel.com/articles/116289-chesapeake-4b-wildhorse-deal-to-add-upper-eagle-ford-austin-chalk-assets

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Time to Weigh Climate Threats From Gas Pipelines — Glick

Oct 31, 2018 | E&E Energywire

By Rod Kuckro

The Federal Energy Regulatory Commission needs to acknowledge the "existential threat" posed by climate change and address it in the context of the natural gas projects it reviews, said Commissioner Richard Glick yesterday.
In the 11 months Glick has been on the commission, none of the multiple pending gas pipeline proposals has been rejected for concerns about their contributions to climate change.
In fact, FERC has pulled back on its greenhouse gas analysis, over the objections of Glick and Commissioner Cheryl LaFleur.
"How you put blinders on and not look at GHG emissions' effects associated with pipelines, to me suggests you're not doing your job to determine whether something is in the public interest," Glick said in remarks to reporters after speaking to the Mid-Year Energy Forum of the Energy Bar Association in Washington.
Glick told the EBA that the lack of a Trump administration policy on controlling greenhouse gas emissions "is really irrelevant" as states, corporations and others have bought into the "think globally, act locally" mantra and are taking actions on their own.
FERC has long struggled with how to cope with climate change. Neither the Federal Power Act nor the Natural Gas Act, the two laws that give the commission its authority, mentions climate change. But both laws give the commission the power to consider environmental impacts of energy projects.
Under the NGA, "we're required to examine the public interest implications of proposed pipelines," Glick said, and those interests can extend to greenhouse gas emissions.
Moreover, last year the U.S. Court of Appeals for the District of Columbia Circuit ruled that FERC needed to account for the emissions impact of the Sabal Trail project, a nearly 500-mile pipeline delivering gas across the Southeast to power plants in central Florida, he noted.
Since January, Glick, a Democrat, has issued dissenting statements — often with Democrat LaFleur — in response to the 3-2 approval of pipelines that were a hallmark of the tenure of Kevin McIntyre as FERC chairman.
McIntyre relinquished the chairman's role last week because of health issues, and President Trump named Commissioner Neil Chatterjee as chairman (Energywire, Oct. 24). Chatterjee voted with McIntyre consistently in support of pipeline projects.
But now, as chairman, Chatterjee controls the agenda and the reasoning that can be applied or factors weighed in approving a project.
Earlier this year, while on vacation, Chatterjee posted a picture to Facebook of a seaweed-covered beach in Cancún, Mexico, where he was visiting with his family (Climatewire, July 17).
Chatterjee wrote: "I've been coming to this pristine beach since I was a kid. This was the scene today. Climate change is real. Man has an impact. We must take steps to mitigate emissions asap while being sensitive to communities that get hurt during the transition. Please let's all be rational and work together. I'm ready."
https://www.eenews.net/energywire/2018/10/31/stories/1060104769

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Chemical Security News

Illinois Sues to Force Plant to Limit Toxic Emissions or Close

Oct 31, 2018 | BNA Daily Environment Report

By Stephen Joyce

An Illinois company that sterilizes medical equipment and other products could be shut down if it can’t limit its emissions of the chemical ethylene oxide, which is toxic to humans.
Illinois Attorney General Lisa Madigan (D) and DuPage County State’s Attorney Robert Berlin (R) filed a complaint Oct. 30 asking the DuPage County Circuit Court to ban all emissions of the chemical—essentially shutting down the plant—if it concludes no level of ethylene oxide emissions are safe.
The complaint alleges Sterigenics U.S. LLC continues to pose an unreasonable and substantial risk to public health and the environment by operating a Willowbrook, Ill., facility that uses ethylene oxide in its sterilization process and releases the chemical to the air.
Bill Wehrum, EPA assistant administrator for air, said in a Sept, 27 letter to Madigan’s office that the Willowbrook site was identified this year as potentially having an elevated chronic risk from ethylene oxide as much as 60 times more potent than levels contained in a 2014 National Air Toxics Assessment. The chemical is listed as a hazardous air pollutant under the Clean Air Act, and the EPA listed the chemical as an agent “carcinogenic to humans.”
The complaint recognizes that the company operates within the limits of its permit and Clean Air Act regulations, Sterigenics said in an Oct. 30 statement.
“Any action brought against a business operating well within regulatory limits sets an extremely bad precedent,” Sterigenics said. “We will work with public officials to achieve the appropriate limits to allay the concerns of the community and the regulatory agencies. However, we will vigorously defend ourselves against this lawsuit.”
Legislation Envisioned
The Illinois Environmental Protection Agency in June 2015 renewed a permit for Sterigenics, requiring the company to limit its ethylene oxide emissions. In July, the company voluntarily upgraded its emissions systems in an attempt to better control emissions. Nevertheless, the complaint said emissions at the plant continue to exceed permitted levels and thus violate the Clean Air Act.
About 20,000 people live, work, and attend school within a mile of the facility.
“It’s a step forward,” state Sen. John Curran (R), who is pressing for state Senate hearings on the matter, told Bloomberg Environment.
If he is re-elected in November, Curran plans to introduce two bills in January—one focusing narrowly on use of the chemical at the Sterigenics facility and a second imposing an immediate ban on the ethylene oxide for any reason other than sterilizing medical devices, and then only if a substitute chemical can’t be identified.
The envisioned legislation would ban the use of the chemical no later than 2022, Curran said.
The case is Illinois v. Sterigenics U.S., LLC, Ill. Cir. Ct., No. 2018CH001329, 10/30/18.
https://news.bloombergenvironment.com/environment-and-energy/illinois-sues-to-force-plant-to-limit-toxic-emissions-or-close

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Oil and Gas Industry Hits Back Over Pipeline Hacking Claims

Oct 31, 2018 | E&E Energywire

By Blake Sobczak

A new oil and gas industry report pushes back on claims that pipelines are particularly likely to fall prey to hackers.
Several U.S. energy officials and lawmakers have questioned whether natural gas pipeline security oversight, currently led by a six-person team at the Transportation Security Administration, is sufficient given gas's growing importance as a fuel source for electric power generation.
The Oil and Natural Gas Subsector Coordinating Council, which represents more than a dozen refining, pipeline and petroleum trade groups, laid out the industry's case for preserving the government's voluntary approach to the issue in an analysis published this morning.
"Various federal agencies have stated or represented that natural gas pipelines are more vulnerable to cyberattacks than other energy infrastructure," the council said in its forward to the report, alluding to recent comments from officials at the Federal Energy Regulatory Commission and Department of Energy. "These statements are not based on evidence and have not been substantiated."
A cybersecurity expert from the American Petroleum Institute said the document was partly a response to "wrongheaded" assumptions underlying a Trump administration effort to prop up coal and nuclear power plants. In a draft policy memo leaked in June, DOE suggested that gas-fired power generators could be more vulnerable to physical or cyber disruptions via the pipelines that feed into them, when compared with "fuel secure" plants that keep coal or nuclear fuel rods on-site.
"All of that together has culminated in us wanting to release this report and be a lot more visible," the expert said, noting that "we've traditionally been pretty silent about what our industry does."
The report said cybersecurity is a "top priority" for oil and gas firms that "recognize that their assets are the targets of a growing number of increasingly sophisticated cyberattacks perpetrated by a variety of attackers including nation-states and organized criminals."
Suspected Chinese military hackers broke into U.S. pipeline networks in 2012, stealing reams of sensitive data, though not interrupting the flow of gas (Energywire, May 23, 2017). More recently this spring, a cyberattack on an energy service provider forced many natural gas companies to resort to backup billing, scheduling and document-sharing techniques (Energywire, April 6).
The report cited "actual examples" of industry responses to looming cyberthreats, including the NotPetya ransomware attack that tore through critical computer networks worldwide in 2017. The downstream natural gas industry used a tip from the electric power sector to start preparing for that ransomware outbreak three hours before the first official U.S. government warning came out, the report said.
The document pointed to other recent efforts to shore up the cybersecurity of gas pipeline networks, including voluntary assessments run through the Department of Homeland Security, use of a DOE cybersecurity maturity model, and a "widely adopted" set of cyber defense benchmarks from the National Institute of Standards and Technology.
"This report makes clear that assertions regarding the inadequacy of natural gas pipeline cybersecurity are not grounded in reality," Don Santa, president and CEO of the Interstate Natural Gas Association of America, said in a statement. "The natural gas industry makes extensive investments in cybersecurity and works directly with the federal government agencies immersed in these issues."
https://www.eenews.net/energywire/2018/10/31/stories/1060104779

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Environment News

Cap and Trade Hinges on Tight Governor's Race

Oct 31, 2018 | E&E Climatewire

By Benjamin Storrow

When climate hawks departed Oregon's capital earlier this year without a cap-and-trade bill, they consoled themselves in the knowledge that legislative leaders had penciled in carbon reduction as a priority for 2019.
Now, the prospects for cap and trade in Salem appear far less certain.
Gov. Kate Brown (D) is locked in a tighter-than-expected contest against Republican state Rep. Knute Buehler, clouding Oregon's efforts to join California's cap-and-trade program and become the second state with an economywide limit on emissions.
Oregon's push to adopt cap and trade has garnered less attention than the referendum on a carbon fee in neighboring Washington state, but it is no less important to climate hawks. Emissions in Oregon increased 12 percent between 1990 and 2015, despite a state law requiring a 10 percent reduction of 1990 levels by 2020.
"If 1631 were to pass and Oregon could pass a cap, one that could link with California, that would create some momentum," said Angus Duncan, the president of the Bonneville Environmental Foundation, referring to the Washington ballot measure. "It's important that more states step up to this."
Buehler's rise hints at the challenge of passing major climate legislation, even in states such as Oregon that reliably vote for Democrats at the presidential level. A series of recent polls have put Brown's lead around 5 points, but analysts say Buehler has made inroads by talking up shortcomings in the state's education system and the rising cost of housing.
In seeking to become Oregon's first Republican governor since 1982, Buehler has sought to distinguish himself from President Trump, who is deeply unpopular in the state. Unlike Trump, he believes human beings contribute to a warming planet, and he likes to tout his vote for a 2016 bill seeking to transition Oregon away from coal-fired electricity generation.
The former surgeon from Bend has even gone further than many Democratic officials, tentatively endorsing the idea of a revenue-neutral carbon tax. But Buehler is against the "Clean Energy Jobs" bill, as the cap-and-trade proposal is officially known. He's labeled the idea a "1.4 billion sales tax on energy."
"I'm against that because it is going to hit hardworking Oregonians struggling to pay the bills right now with a sales tax they can't afford," Buehler said in a debate with Brown earlier this month.
The dueling positions point to the high-wire act Buehler needs to pull off if he is to out Brown next week, said John Horvick, a pollster at DHM Research in Portland.
"He's opposing the cap-and-invest legislation that's likely to come up next session, signaling to his base there are lines he is not willing to cross," Horvick said. "At the same time, he's trying to send a signal to moderates and Democrats that [climate] is not an issue that you should disqualify him on."
Cap and trade has long been a priority of Oregon climate hawks, who have spent years pushing the idea in Salem. They thought they had achieved a breakthrough in 2017 when months of negotiations resulted in the unveiling of the "Clean Energy Jobs" bill (Climatewire, Nov. 29, 2017). Yet the Oregon Legislature, which only meets for a month in off-years, left the capital without voting on the bill.
Democratic leaders, who are one seat shy of a supermajority in the state House and Senate, have promised action on the bill next year (Climatewire, March 1).
A Brown victory would all but ensure the passage of cap and trade. The governor has championed the legislation and dismissed criticism that it would be overly burdensome on working families.
"We are working collaboratively with utilities, with the business community and the ag sector to make sure we reduce carbon emissions in such a way that it doesn't exacerbate already existing economic disparities in our low-income communities and our rural communities," she said in a recent debate with Buehler.
Brown, who served two terms as Oregon's secretary of state, was appointed governor in 2015, when an ethics scandal forced the resignation of her predecessor, John Kitzhaber. She won election to an abbreviated two-year term in 2016 with 51 percent of the vote.
Brown has sought to bolster her reputation as a carbon cutter on the campaign trail, touting passage of a low-carbon fuel standard, incentives for electric vehicles and the 2016 law designed to wean Oregon off coal.
Her allies in the environmental community aren't taking any chances. The Oregon League of Conservation Voters has pumped $140,000 into her campaign since the end of September. The late cash infusion is part of a wider effort by Democratic allies, who have jumped into the race with donations in recent weeks, that's helping to push Brown's fundraising total north of $12 million for the year.
Buehler has raised more than $13 million, helped by $2.5 million from Nike Inc. founder Phil Knight. The big sums make this the most expensive Oregon gubernatorial contest in history.
https://www.eenews.net/climatewire/2018/10/31/stories/1060104763

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EAB Wrestles With Test For EPA To Loosen CWA Permits After TMDL Change

Oct 30, 2018 | Inside EPA

By David LaRoss

EPA's Environmental Appeals Board (EAB) is wrestling with the correct test for EPA to justify rolling back Clean Water Act (CWA) permit limits after it loosens the terms of a waterbody cleanup plan, with the agency claiming broad discretion for such changes unless stakeholders can show “new information” that softer permit terms would be improper.
During Oct. 30 oral argument in the CWA permit challenge In re: City of Ruidoso Downs and Village of Ruidoso Wastewater Treatment Plant, a three-judge EAB panel hearing the case shifted between fact-finding questions on the agency's basis for its contested permit and the broader legal issue of whether “new information” is needed in order to require regulators to go beyond a total maximum daily load's (TMDL) pollution goals in setting discharge limits on an individual facility.
“What's the new information that you're relying on in this case, between the TMDL and the permit?” Judge Mary Kay Lynch asked attorney Steven Sugarman, representing the permit challenger Rio Hondo Ranch & Cattle Co. The company says increased nutrient releases from the New Mexico wastewater plant could damage environmental quality on its land.
Sugarman answered that Rio Hondo is not claiming that new information arose between EPA's 2016 approval of a more lenient TMDL for the nearby Rio Ruidoso and its 2017 permit for the wastewater plant that incorporated the same loosened nutrient limits. Rather, he said, the agency should be required to consider “relevant facts” showing that the TMDL's facility-specific “waste load allocation” (WLA) will not do enough to protect local water quality.
However, EPA attorney Pooja Parikh said in response to an earlier question from Lynch that without any new data to cast doubt on regulators' application of the TMDL, Rio Hondo is effectively challenging the revised cleanup plan -- which is outside EAB's jurisdiction.
“We completely agree that this does not mean blind deference to a waste load allocation in a TMDL -- certainly a permit-writer can deviate from a waste load allocation where there is information to support that. But where, as here, there is no new information that EPA did not already consider in approving the TMDL, it is reasonable -- and certainly not an abuse of discretion -- for the permit-writer to rely on all of the analysis that went into that TMDL issuance," Parikh said.
Rio Hondo is arguing that EPA's permit falls short of the CWA mandate to craft discharge limits that ensure receiving waters will meet with states' water quality standards. The company has said in briefs, and Sugarman reiterated at argument, that since the Rio Ruidoso is already suffering from excess nutrient levels requiring a TMDL to remedy, the agency cannot justify allowing more nutrient discharges into the river.
It says the permit rollback falls under the CWA bar on “backsliding,” which generally forbids loosening existing pollutant limits in discharge permits.
But EPA claims that its revisions to the Ruidoso permit fall under an exception for permits that are based on a TMDL, which allows regulators to make existing limits less restrictive in line with a new WLA, provided that “the cumulative effect of all such revised effluent limitations based on such total maximum daily load or waste load allocation will assure the attainment” of water quality standards.
EAB's Position
The arguments put EAB in the position of deciding whether the agency can rely on a revised TMDL for its finding that more lenient permit terms are enough to “assure” that water quality standards will be satisfied, as well as whether the Ruidoso plant's permit limits are “based on” the TMDL.
Should EAB find in EPA's favor on that test, it would bar any direct challenge to the permit over changes that keep it in line with the TMDL; instead, challengers would have to sue either the state or EPA over the revised cleanup plan. Rio Hondo is currently suing the New Mexico state government over its development of the new TMDL in state court, and has not sought to challenge EPA's approval of the plan.
Much of the judges' questioning at argument dealt with the second half of that inquiry: whether the Ruidoso permit limits on nitrogen and phospohorus were derived from the TMDL. Parikh maintained that they were, noting that after the first cleanup plan was enacted in 2006 regulators set nutrient limits for the wastewater plant that were identical to the TMDL's waste allocations -- first in a 2007 permit, and again when the permit was renewed in 2012.
Parikh said during argument that the correlation shows that the permit limits are based on the cleanup plan for purposes of the CWA's anti-backsliding language. "The best argument we have is that [it is] almost identical to the 2006 TMDL," she said in response to a request from EAB Judge Kathie Stein to give her “best argument” for why the permit terms are derived from the TMDL.
However, Sugarman responded that rather than being “copy and pasted” from the TMDL, the permit terms instead reflect that regulators had a consistent interpretation of the nutrient levels the Rio Rudioso could tolerate before violating state water quality standards.
Those findings “are not waste load allocations, and they are not load allocations,” Sugarman said.
https://insideepa.com/daily-news/eab-wrestles-test-epa-loosen-cwa-permits-after-tmdl-change

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EPA Drops Grades From NEPA Review Process, Drawing Mixed Reaction

Oct 30, 2018 | Inside EPA

By Dawn Reeves

EPA's plan to drop its system of providing letter grades on other agencies' National Environmental Policy Act (NEPA) reviews is drawing mixed reactions, with industry saying it will promote efficiency without curbing transparency while environmentalists warn it will dampen both transparency and public participation.
One environmentalist says the rating system “has been helpful for the public to know the quality of the draft” environmental impact statement (EIS). “Now, instead of a letter grade that is easy to understand, all the public will have is the technical concerns of EPA (if they can understand them). It will not help public participation or transparency.”
But Fred Wagner, an industry attorney who was chief counsel for the Federal Highway Administration (FHWA)s from 2011 to 2014, says the letter grades “stopped being helpful a long time ago.”
That is because the vast majority of the ratings were “environmental concerns,” which Wager says is the easiest and most logical way to categorize a review, but is a rating that provides little information and is, in the end, unhelpful.
EPA detailed the changes it will be making to its so-called NEPA/309 program -- which refers to EPA's mandate to review agency environmental impact statements (EIS) under section 309 of the Clean Air Act -- in an Oct. 22 memofrom policy chief Brittany Bolen to regional administrators.
“As EPA's NEPA/309 program has evolved, the Agency has increased focus on early engagement efforts with lead agencies as a means to improve proposed actions and associated EISs prior to publication of draft EISs,” she writes. “Increasing lead agency sophistication in the development of EISs, coupled with our efforts to improve the quality of proposed actions and draft EISs, obviates the need for the 1984 rating system.
“Therefore, EPA will discontinue assigning alphanumeric ratings in our NEPA/309 comment letters. Where EPA has concerns with the adequacy of a draft EIS, the agency will continue to provide robust written comments as required” by the air law.
The rating system, developed during the Reagan administration, provided a combined numeric and letter rating to detail the adequacy of, and the agency's short-hand responses to, a draft EIS.
The numeric ratings are: 1 for adequate; 2 for insufficient information; and 3 for inadequate.
The letter ratings are: LO for lack of objections; EC for environmental concerns; EO for environmental objections; and EU for environmentally unsatisfactory.
An EU grade meant a review would be automatically elevated to the White House Council on Environmental Quality (CEQ) for review.
The memo adds that the decision to discontinue the rating system comes after EPA headquarters, regions and other federal agencies conducted a comprehensive review of the process and after the other agencies indicated that EPA's written comments are “more useful than the ratings.”
Bolen writes that the agency believes discontinuing the use of the letter grades “will not lessen environmental protections, but will help to focus attention on resolving issues, eliminating perceptions that ratings are inconsistently applied across the Agency, and minimize any confusion on the part of our partner agencies and the public.”
The memo directs EPA's Office of Federal Activities to revise the 1984 memo to remove the requirement for the agency to assign letter grades; to provide training for NEPA lead reviewers to ensure consistency in implementation' and to communicate those changes.
'Radical Liberal'
The environmentalist opposes the changes, saying that while the ratings are not required by statute, “It was an old and good policy from the administration of that radical liberal, Ronald Reagan.”
The source also points out that the EPA grading requirement was upheld during a 2007 Bush administration reviewof the adequacy of the agency's NEPA requirements, which “concluded with the consensus view that the procedures detailed in the 309 Manual are consistent with NEPA case law and regulations and guidance from [CEQ], and that the procedures continue to be appropriate for our reviews of other federal agencies' NEPA documents.”
But Wagner, the former FHWA counsel, says EPA's grading system was also problematic because the agency often filed its comments “late in the process” and created a problem for agencies to address their concerns when they perhaps had already eliminated some options before the EPA comments were received.
Wagner says that only the EU rating triggers an elevation requirement, “So why do you need a letter grade when the same trigger for raising concerns” to CEQ “exists in their regulations? They or any other agency can do that now. So, reviewing a project and calling it EU might give you notice going up to CEQ but you can do the same without a letter grade,” he says, adding that he can probably “count on one hand” the number of times EPA rated a project EU.
A third reason the grades are problematic is because “a lot of them ended up being rote, very similar to each other and did not provide specific feedback” about an individual project. “So, in my mind, getting rid of constraints in categorizing these grades, getting comments to lead agencies sooner so they can make changes or mitigate, and ensuring comments are very specific to each project, I think, will do nothing but help.”
Wagner adds that the memo appears to suggest that EPA will -- or will try -- to fit its review in the context of every other agency's review, rather than coming in after the fact, a change he says “Makes total sense,” along with “getting rid of the false constraints of grading.”
Also supporting the changes outlined in the memo is the National Association of Manufacturers, which says in a statement, “These good governance reforms are a positive step towards streamlining infrastructure projects that have lagged due to unnecessary red tape and build on a key part of manufacturers’ infrastructure plan. . . . Needless delays to the permitting process have an enormous impact on the infrastructure manufacturers rely on to ship goods to market and to supply affordable and reliable energy.”
Nonetheless, the environmentalist notes that while early engagement is key to getting local buy in for projects, “Communities do not like to be surprised that a pipeline or oil derrick or windmill is going up in the area without their input or knowledge,” pointing to “bad blood” in Nebraska when some conservative landowners first heard about the then-proposed Keystone XL oil sand pipeline “when someone appeared at their door to threaten eminent domain over some of their property.”
But early engagement “is not relevant to grading of draft EISs,” the source adds.
The EPA changes come as CEQ noted in the Oct. 18 unified agenda that it intends to issue a proposed rulemaking to broadly updated its NEPA implementation regulations in February, based on comments it received on an advance notice of proposed rulemaking (ANPR) to streamline NEPA reviews in compliance with President Donald Trump's March 2017 executive order to review “all agency actions that potentially burden the safe, efficient development of domestic energy resources.”
CEQ received about 400 substantive comments on its ANPR by the August deadline, including pushback from Democratic state attorneys general, environmentalists and former EPA officials urging it to drop the planned changes, while industry groups and others urged it to proceed.
Wagner says the Department of the Interior (DOI) may be a guide for what streamlining measures to expect from CEQ, noting that DOI in an August 2017 streamlining memo and other DOI actions has implemented a number of steps that could be replicated.
On Oct. 19, DOI under that new review standard granted conditional approval and a record of decision based on an August EIS to allow oil drilling in federal waters in the Beaufort sea in the Alaskan Arctic Ocean. Conditions include restricted drilling into the hydrocarbon-bearing zone only during times of solid ice conditions; and seasonal restrictions on activities and vessel traffic to reduce disturbance of whaling activities.
https://insideepa.com/daily-news/epa-drops-grades-nepa-review-process-drawing-mixed-reaction

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EAB Raises Bar For Battery Storage As BACT For Gas-Fired Power Plants

Oct 30, 2018 | Inside EPA

By Stuart Parker

A recent EPA Environmental Appeals Board (EAB) ruling raises the bar for environmentalists' effort to establish battery storage as best available control technology (BACT) in Clean Air Act permits for natural gas-fired power plants, an environmentalist says, because it says the technology first needs to be in proven use.
The board's unanimous Oct. 23 decision finds that battery storage is not a technically feasible alternative to what environmentalists say are higher-emitting peak power-boosting “duct burners,” and the broad ruling makes it harder for advocates to push battery storage as BACT in other air permit challenges, the source says. EAB defers to the gas plant's use of duct burners, which the source says lets “polluters” define BACT.
“This is obviously backwards,” the source says of the ruling, but it is unclear whether the environmental groups that filed EAB case will appeal the ruling to the U.S. Court of Appeals for the Ninth Circuit.
EAB in its decision in In re: Palmdale Energy LLC, Palmdale Energy Project says its rejection of battery storage at a California gas-fired utility was a site-specific decision, and that supporters of the technology will be able to push for it qualifying as BACT in future permits for other facilities. However, the ruling sets a high hurdle for environmentalists to prove that the technology is in use at an existing facility.
In the case, Center for Biological Diversity (CBD) and three other environmental groups sought review of the Palmdale plant's prevention of significant deterioration (PSD) air permit, required for new or modified major pollution sources in areas meeting national ambient air quality standards (NAAQS). Major sources in areas failing to meet NAAQS require tougher “nonattainment” new source review (NSR) permits.
EPA Region 9, the permitting authority for the plant, denied environmentalists' effort to establish battery storage as BACT on multiple grounds, including technical feasibility, cost and environmental performance of the technology. CBD and the other groups then appealed that decision to EAB.
EAB ruled only on the grounds of technical feasibility, and did not reach the other issues raised by Region 9 that included the poor cost effectiveness of batteries and their whether they are better for the environment than duct burners. Fundamentally, the board disagreed with environmentalists about the “technology-forcing” nature of BACT, denying that “technology transfer” could overcome the lack of any other instance of a gas plant using batteries in the same way.
Without such an example, EAB would not make the required leap, the environmentalist says. “I think the EAB position, which is wrong, is that they won’t order BACT to be batteries replacing the duct burners at a combined cycle natural gas plant until first someone voluntarily installs that configuration and operates it for multiple years.”
This “BACT is effectively set by polluters rather than regulatory agencies,” the source says, claiming that EPA and EAB have been moving in this direction “for years,” and hence their attitude is not surprising.
The case is the second time EAB has rejected environmentalists' attempt to mandate battery storage as BACT at a gas-fired power plant. In a 2016 decision, the board denied Sierra Club's petition for review of the PSD permit issued by Maricopa County, AZ, to an expansion of the generating power of the Ocotillo Power Plant in Tempe, AZ, operated by Arizona Public Services Company.
The project involved construction of five new gas turbines on the site, and Sierra Club again claimed that battery storage could serve to reduce the gas burned at the plant. But Maricopa County found this would constitute an unlawful “redefinition of the source,” and EAB agreed.
EAB's Ruling
In the Palmdale decision, EAB Judge Aaron Avila on behalf of fellow board Judges Mary Kay Lynch and Kathie Stein says that the Palmdale Energy Project (PEP) could not have used battery storage in the way suggested by environmentalists. He reaches this conclusion without considering “redefinition” of the source, but does argue that use of batteries is not compatible with the proposed mode of operation of the plant.
“First, none of the examples identified by the Conservation Groups use batteries in the fashion the Groups advocate for here -- to replace duct burners on a combined-cycle generating system. Second, at best the battery systems identified by the Conservation Groups show that viable battery systems exist that will supply power for the length of time of Palmdale’s peak demand,” Avila wrote.
“That fact alone, however, does not show that batteries can replace duct burners at the PEP facility because the purposes and functions of the duct burners are not limited to providing energy during peak demand times,” he adds. The facility is designed to be “load following,” and use of the burners may be required to serve “baseload” or “intermediate” operation in addition to meeting peak load, he says.
Central to environmentalists' argument is that regulators are obligated to employ “technology transfer” where technology exists in other applications that has the same physical and chemical characteristics required at the plant at issue. In the Palmdale case, petitioners argued that batteries exist elsewhere with the properties necessary to replace the duct burners.
But EPA Region 9 disputed this view, noting limitations with the capability of batteries. And Avila in his opinion says that environmentalists misconstrue EPA's NSR air permitting guidance manual on this issue, which includes PSD. The permitting authority may arrive at a BACT determination based on technology transfer, but is not obligated to do so, Avila finds,
Further, “the NSR Manual makes clear that a permitting authority is not limited to chemical and physical characteristics in making a technical feasibility determination,” because it also takes into account “unresolvable technical difficulties would preclude the successful deployment of the technique.”
Avila finds, “Given that language in the NSR Manual, and the non-binding nature of the NSR Manual, the Board concludes that the Conservation Groups’ argument regarding the need to identify differences in chemical or physical characteristics fails to establish that the Region’s analysis here is clearly erroneous or otherwise warrants review.”
The ruling further rejects environmentalists' argument that Region 9 must conduct a “wholly new” BACT analysis based on their suggestion that battery storage technology is available. Avila cites a 2006 ruling by EAB in In re: Prairie State Generating Co., which says, “the permit issuer does not have an independent duty to investigate alternatives raised in public comments."
Also, Avila cites the 2007 7th Circuit ruling in Sierra Club v. EPA, which says, “permit issuer is only required to consider the analysis submitted during the public comment period, and it may engage in additional analysis as it sees fit, provided that the permit issuer’s response to comments is sufficient to demonstrate that all significant comments were considered."
Avila therefore allows the permit authority wide discretion in its application of BACT. EPA Region 9 in rejecting the technology as BACT also cited other factors that weigh against imposing battery storage as BACT, including high cost and doubts over whether batteries would truly offer worthwhile pollution cuts relative to duct burners.
Air Modeling
EAB in the decision further affords EPA Region 9 wide discretion in its conduct of air quality impacts modeling with regard to the Air Force's Plant 42 facility, which adjoins the Palmdale plant site.
Environmentalists claim that EPA wrongly excluded emissions from aircraft at the facility because the airspace at the base is closed to the public and therefore not considered “ambient air” subject to NSR modeling requirements, among other arguments.
EPA instead used air data from a roadside monitor in the vicinity to base its projections of pollution on. EAB finds that environmentalists failed to properly raise their objections in public comments on the proposed permit, and that in any event EPA's modeling methods are “conservative” and acceptable.
https://insideepa.com/daily-news/eab-raises-bar-battery-storage-bact-gas-fired-power-plants

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