Preview Newsletter
ACC AM Feb 26
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(ACC Blog) Fueling Export Growth (Part 2 of 2): Why the Expected Surge In U.S. Chemicals Exports Will Depend On Our Country’s Ability To Deliver On Its Ambitious Trade Agenda
Feb 26, 2015 | American Chemistry Matters
By Greg Skelton
The release yesterday of ACC’s latest exports report, “Fueling Export Growth: U.S. Net Export Trade Forecast for Key Chemistries to 2030,” painted a bright picture for exports of chemicals linked to the shale gas revolution. But what stood out to me even more than the numbers themselves was that our industry’s massive growth... http://blog.americanchemistry.com/ -
(ACC Mentioned) Chemical in BPA-Free Products Linked to Irregular Heartbeats
Feb 25, 2015 | National Geographic
By Brian Clark Howard
Many consumers avoid products that contain bisphenol-A (BPA) because the estrogen-imitating chemical has been linked to an array of health effects in people and animals. But new research published Thursday suggests that an ingredient that has replaced BPA in many items may have a similar effect on the heart. -
(ACC Mentioned) Recycling Of Plastic Wraps, Bags, Film Surges 11%
Feb 26, 2015 | Environmental Leader
The recycling of postconsumer plastic film packaging in the US grew 116 million pounds, or 11 percent, in 2013 to reach a reported 1.14 billion pounds, according to a report released today at the 2015 Plastics Recycling Conference. This marks the highest annual collection of plastic film — a category that includes product wraps, bags and ... -
(ACC Mentioned) Listen to the Science on BPA, ACC Urges Consumers
Feb 25, 2015 | Plastics Today
By Norbert Sparrow
The American Chemistry Council (ACC; Washington, D.C.) is launching a communications and advertising campaign to amplify recent conclusions from FDA and the European Food Safety Authority (EFSA) stating that BPA is safe as currently used in food-contact materials and other consumer products. -
(ACC Mentioned) American Chemistry Council Launches Pro-BPA Campaign
Feb 25, 2015 | Canadian Plastics
Washington, DC-based industry organization The American Chemistry Council (ACC) is launching a communications and advertising campaign to amplify recent conclusions from FDA and the European Food Safety Authority (EFSA) stating that BPA is safe as currently used in food-contact materials and other consumer products. -
(ACC Mentioned) Recycling of Plastic Wraps, Bags, Film Surging in North America
Feb 25, 2015 | Canadian Plastics
Post-consumer plastic recycling is surging in North America, according to two new reports prepared for the American Chemistry Council (ACC). According to the first study, the recycling of post-consumer plastic film packaging increased by 116 million pounds, or 11 per cent, in the U.S. in 2013 to reach a reported 1.14 billion pounds. -
US EPA Administrator Walks Up Computational Toxicology's Benefits
Feb 26, 2015 | Chemical Watch
The US EPA's computational toxicology research is a “significant step forward” that strengthens the agency's ability to get more chemicals assessed in a quick manner, EPA administrator Gina McCarthy told Congress. The agency is seeking an increase of $12.4m in its fiscal year 2016 budget for research in the area. -
Siloxanes Unexpectedly Observed In Antarctic Soil And Marine Life
| Chemical & Engineering News
By Deirdre Lockwood
Cyclic volatile methylsiloxanes give many personal care products, such as cosmetics, skin lotions, and deodorants, a smooth feel and allow them to dry quickly. But scientists have been scrutinizing the compounds for potential toxicity, endocrine disruption, and bioaccumulation in the environment. -
REACH Can Help Bottom Line, Says Senior Echa Official
Feb 26, 2015 | Chemical Watch
By Geraint Roberts
The REACH Regulation can drive expenditure cuts and offer opportunities for companies to grow revenue, says Echa's risk management director, Jack de Bruijn. Speaking at Chemical Watch's supply chain summit in Brussels yesterday, Mr de Bruijn said that in the longer term, the increase in formation on chemicals safe ... -
Colorado Drilling Task Force Recommends Larger Role for Local Governments
Feb 26, 2015 | BNA Daily Environment Report
By Tripp Baltz
An oil and gas task force in Colorado recommended accepting more local input on the siting of large-scale oil and gas projects but stopped short of endorsing local government decision-making power over drilling and hydraulic fracturing. In its final meeting Feb. 24, at least 14 of the task force's 21 members approved nine of 36... -
FERC to Congress: No Progress to Report On Alaska Gas Pipeline as Project Is Ended
Feb 26, 2015 | BNA Daily Environment Report
By Nushin Huq
The Federal Energy Regulatory Commission staff has discontinued work on the Alaska natural gas pipeline after TransCanada Alaska Co. told the commission in August 2014 of its intent to terminate the pre-file review process for the project, FERC told Congress in a semi-annual report filed Feb. 24. -
Veto Signals to Keystone XL Foes Obama May Reject Pipeline Project
Feb 26, 2015 | BNA Daily Environment Report
By Jim Snyder
President Barack Obama's veto of the Keystone XL bill is the latest sign to pipeline opponents that he is prepared to reject a project he said won't create many jobs or reduce U.S. oil prices. Obama rejected the Republican-backed bill because it interfered with a review being led by the State Department... -
NAFTA’s Specter May Haunt Keystone Verdict
Feb 25, 2015 | PoliticoPro
By Elana Schor
President Barack Obama may decide to kill Keystone XL for good, but that could be no easy task — thanks in part to the North American Free Trade Agreement. The 21-year-old free-trade pact allows foreign companies or governments to haul the U.S. in front of an international tribunal to face accusations of putting their investments... -
Canada's Climate Goals Will Be Weighed In Keystone XL Decision, U.S. Official Says
Feb 26, 2015 | BNA Daily Environment Report
By Jim Snyder and Jonathan Allen
U.S. climate negotiators have told their Canadian counterparts that Canada's plan to cut carbon emissions could be one of the factors that President Barack Obama weighs as he considers whether to approve the Keystone XL pipeline, a U.S. official said Feb. 25. -
How ‘Orphan’ Wells Leave States Holding the Cleanup Bag
Feb 26, 2015 | The Wall Street Journal
By Dan Frosch and Russell Gold
After a natural-gas boom in the Powder River Basin here petered out several years ago, few energy companies were interested in the leftover wells pockmarking the prairie. Then Ed Presley came along. The burly, bearded speculator acquired roughly 3,000 idle wells, many for a few dollars. With a salesman’s charm, he vowed to revive the wells ... -
Political ‘Jousting' Over Environment Division At Justice Could End With Level Funding
Feb 26, 2015 | BNA Daily Environment Report
By Rachel Leven
Deliberations on appropriations for the Justice Department's environment division for fiscal year 2016 could turn into a contentious debate over the president's environmental policies, lawmakers on the House and Senate appropriations committees told Bloomberg BNA. -
Ex-Im Reauthorization Bill to Continue Coal Project Financing Provision: Manchin Aide
Feb 26, 2015 | BNA Daily Environment Report
By Ari Natter
Senate legislation being drafted to reauthorize the U.S. Export-Import Bank is expected to include a provision that overrides Obama administration guidance limiting the bank from financing overseas coal-fired power plants, an aide to Sen. Joe Manchin (D-W.Va) said in an e-mail to Bloomberg BNA Feb. 25. -
Sen. King: Climate Impacts on Arctic Are 'Canary in Coal Mine'
Feb 25, 2015 | The Hill - E2 Wire
By Laura Barron-Lopez
Sen. Angus King (I-Maine) on Wednesday urged the Senate panel on energy to weigh the impacts climate change is having on the Arctic. The Senate Energy and Natural Resources Committee plans to hold a hearing on the U.S. chairmanship of the Arctic Council, which the nation will take over later this year. -
Sen. King Says ENR Hearing Should Plumb Climate Change
Feb 26, 2015 | E&E Daily News
By Phil Taylor
The Senate Energy and Natural Resources Committee should consider the impacts of climate change, newly emerging economic opportunities and the United States' claims to the outer continental shelf at its upcoming hearing on the Arctic, Sen. Angus King (I-Maine) said yesterday. -
McAuliffe Signs Virginia Utility Rate Bill Aimed at Clean Power Plan Compliance
Feb 26, 2015 | BNA Daily Environment Report
Virginia Gov. Terry (D) signed legislation that will freeze base rates for investor-owned electric utilities and allow the companies to retain “over-earnings” that normally would be rebated to customers, to help them cover the costs of reducing carbon dioxide emissions. -
EPA Blog Slams Clean Power Plan's 'Special-Interest Critics'
Feb 25, 2015 | E&E News PM
By Hannah Northey
U.S. EPA posted a defense on its website today of a draft rule for slashing carbon emissions from power plants that's been criticized as a threat to grid reliability and affordability. "As with anything EPA does, a handful of special-interest critics are automatically opposed," spokesman Tom Reynolds said in the EPA blog. -
President to Continue Climate Push In Last Two Years of Term, Adviser Says
Feb 26, 2015 | BNA Daily Environment Report
By Andrea Vittorio
President Barack Obama plans to continue his climate policy push during what he has called the “fourth quarter” of his presidency, one of his senior advisers said Feb. 25. “We are looking at the next two years of climate action as an opportunity to go on offense, and we intend to stay there between now and the end of the administration,”... -
GOP Uses Hearing On EPA's FY16 Budget As Push To Aid GHG Rule Suits
Feb 25, 2015 | InsideEPA
By Lee Logan
House Republicans at a hearing on EPA's fiscal year 2016 budget request sought to build a record that could help lawsuits challenging EPA's proposed climate rules for new and existing power plants, even as one GOP House member says the agency's critics likely lack the votes for legislation that would block the regulations. -
GOP Battles With EPA Over Rules
Feb 25, 2015 | The Hill - E2 Wire
By Timothy Cama
House Republicans used a Wednesday hearing on the Environmental Protection Agency’s (EPA) budget to attack various regulations being pursued by the agency. Most of the fights focused around the EPA’s proposals to cut carbon dioxide emissions from power plants, but other regulations also got attention. -
Judges Mull How to Handle Individual Challenges to EPA Cross-State Rule
Feb 26, 2015 | BNA Daily Environment Report
By Patrick Ambrosio
Two federal appeals court judges questioned how the court should handle challenges to individual state emissions budgets under the Environmental Protection Agency's cross-state air pollution rule, given that the rule based those budgets on uniform cost thresholds (EME Homer City Generation LP v. EPA, D.C. Cir., No. 11-1302... -
California-Quebec Carbon Dioxide Emissions Allowances Sell Out; Market Expands to Fuel
Feb 26, 2015 | BNA Daily Environment Report
By Lynn Doan
California and Quebec, which together run North America's biggest carbon market, sold out of greenhouse gas emissions allowances at $12.21 each, about a dime above the minimum price set. Agencies received 1.14 bids for each allowance on sale Feb. 18, the California Air Resources Board... -
Committee Moves EPA Data Transparency, Advisory Board Reform Bills to House Floor
Feb 26, 2015 | BNA Daily Environment Report
By Anthony Adragna
Members of the House Science, Space and Technology Committee quickly advanced two bills aimed at boosting scientific transparency in the Environmental Protection Agency's rulemaking process and reforming the agency's scientific advisory panel. -
McCarthy Defends Viability of Carbon Capture Technologies Before House Energy Panels
Feb 26, 2015 | BNA Daily Environment Report
By Anthony Adragna
Carbon capture and sequestration technologies are available and will provide a path forward for the construction of new coal-fired power plants in the U.S., Environmental Protection Agency Administrator Gina McCarthy said Feb. 25. McCarthy told a joint hearing of two House Energy and Commerce subcommittees that the EPA has never... -
Heitkamp to Reintroduce Bill to Expand Use of Carbon Capture Technologies
Feb 26, 2015 | BNA Daily Environment Report
By Ari Natter
Sen. Heidi Heitkamp (D-N.D.) plans to reintroduce legislation with incentives for developing and using carbon capture technologies, the senator's office said in a statement Feb. 25. “Her bill aims to make sure coal remains an essential part of our national energy mix while also meeting long-term environmental goals by opening up increased... -
Ultrafine Particles Linked to California Heart Disease Deaths, Study Finds
Feb 25, 2015 | LA Times
By Tony Barboza
A new study by California scientists has linked chronic exposure to microscopic air pollutants in vehicle exhaust to deaths from heart disease. The finding bolsters evidence that ultrafine particles, which are not regulated by state or federal environmental agencies, are a key contributor to health problems among people living near traffic. -
Judges' Review Of CSAPR May Set Precedent On EPA Air Trading Policies
Feb 25, 2015 | InsideEPA
By Stuart Parker
Appellate judges reviewing lingering legal challenges to EPA's Cross-State Air Pollution Rule (CSAPR) emissions cap-and-trade program wrestled with a host of issues that could -- depending on how they rule -- set new precedent for how the agency crafts air trading rules, including which states to regulate and the level of pollution caps. -
EPW Leaders, Witnesses Voice Opposition to Devolution
Feb 26, 2015 | E&E Daily News
By Sean Reilly
The leaders of the Senate Environment and Public Works Committee may occupy opposite ends of the political spectrum, but they readily united on one point yesterday: The need to keep the federal government in the business of paying for highways. "No state is an island," EPW Chairman James Inhofe (R-Okla.) said during a hearing... -
Canadian Regulations Impose New Rail Safety Management System Requirements
Feb 26, 2015 | BNA Daily Environment Report
By Peter Menyasz
The Canadian government finalized regulations Feb. 25 requiring all railways to implement safety management systems to help prevent accidents involving the transport of oil and other dangerous goods. The regulations complement proposed railway safety legislation introduced Feb. 20 in the Canadian Parliament...
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Feb 26, 2015 | American Chemistry Matters
By Greg Skelton
The release yesterday of ACC’s latest exports report, “Fueling Export Growth: U.S. Net Export Trade Forecast for Key Chemistries to 2030,” painted a bright picture for exports of chemicals linked to the shale gas revolution. But what stood out to me even more than the numbers themselves was that our industry’s massive growth potential largely depends on establishing a robust 21st century trade policy agenda – and committing fully to its implementation.
Advancing and successfully concluding the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP) are important first steps. It’s well established that the potential impact of these pending agreements would be significant: it would lead to more job growth, boost innovation, improve industry competitiveness, and if done correctly, ensure long-term growth and prosperity.
A vital prerequisite to pursuing a comprehensive trade agenda is securing Trade Promotion Authority (TPA). TPA is a necessary tool to achieve meaningful trade agreements that stimulate economic growth and result in greater consumer choice. It ensures that completed agreements will be subject to an up or down vote in Congress. This is important because, in the absence of TPA, negotiating partners are unlikely to put their best offers on the table, knowing that Congress remove items from the agreement that made those offers possible.
U.S. Chemical Manufacturers Lead Calls for Renewing Trade Promotion Authority
An additional fundamental component of a pro-competitive agenda is ensuring the re-authorization of the Miscellaneous Tariff Bill (MTB). Businesses all across the U.S. depend on MTB as a means put an end to unnecessary tariffs on imported materials for further manufacturing. According to the National Association of Manufacturers’ (NAM) economic impact assessment of the MTB, failure to pass the MTB has resulted in a tax hike on manufacturers of $748 million and in economic losses of $1.857 billion over three years. Any action to reduce barriers to domestic production and increase the competitiveness of U.S. companies must include the re-authorization of MTB.
The U.S. chemical industry is poised for continued growth due to the new economics of shale gas. But in order to make this potential growth a reality, we need a comprehensive, sensible, and bipartisan trade agenda going forward. Furthering this international trade agenda will help unleash the massive growth potential for U.S. chemical exports, enable chemical manufacturers to drive extraordinary job growth in the broader manufacturing sector, eliminate costly barriers to chemicals trade, and resolve 21st-century trade issues limiting manufacturing growth in the U.S. and around the world. - See more at: http://blog.americanchemistry.com/2015/02/fueling-export-growth-part-2-of-2-why-the-expected-surge-in-u-s-chemicals-exports-will-depend-on-our-countrys-ability-to-deliver-on-its-ambitious-trade-agenda/#sthash.YJAQC4kX.dpuf
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(ACC Mentioned) Chemical in BPA-Free Products Linked to Irregular Heartbeats
Feb 25, 2015 | National Geographic
By Brian Clark Howard
Many consumers avoid products that contain bisphenol-A (BPA) because the estrogen-imitating chemical has been linked to an array of health effects in people and animals. But new research published Thursday suggests that an ingredient that has replaced BPA in many items may have a similar effect on the heart.
BPA-free labels have been popping up on many plastic bottles, cash register receipts, food packaging, and other products.Although the label implies a sense of safety, "our research suggests that BPS and potentially other BPA substitutes aren't necessarily free of health problems," said Hong-Sheng Wang, a professor of pharmacology at the University of Cincinnati College of Medicine.
Exposure to BPS, or bisphenol-S, caused irregular heartbeats in female lab rats, according to the study by Wang and colleagues published in the journal Environmental Health Perspectives. The findings were "remarkably similar—if not identical to—what we find in BPA," Wang said.
The scientists discovered that BPS changes how the rats' cells respond to estrogen, a result that has been suggested in previous studies. Specifically, BPS interferes with the way calcium is stored in heart muscle cells, causing leakage as well as extra absorption. That, in turn, alters heartbeats.
This is the same way that BPA affects rats' hearts, "raising the concern of potential cardiac toxicity of BPS," Wang said.
Little Known about Exposures
The scientists removed the rats' hearts and kept them alive and beating for some time by running a solution through them that contains oxygen, glucose, and other nutrients. Then they added BPS and monitored the effect on cells. This technique is commonly used to measure the impact of various chemicals on the heart.
Wang said the rats were exposed to doses that may be similar to the amounts that people encounter from water bottles, receipts, and other items. However, very little is known about human exposures; much more is known about BPA, which is found in the blood of virtually every person tested.
Because BPS is so similar to BPA, it's not surprising that it may have similar health effects, said Frederick vom Saal, a University of Missouri-Columbia biology professor who studies the chemicals but was not involved in the new study.
Previous research, he said, found that BPS stimulates human breast cancer cells at a slightly higher dose than BPA does. Also, in a recent study with zebrafish, BPS disrupted prenatal brain development.
"So the idea that BPS is safe as an alternative to BPA is clearly not true," vom Saal said.
Rats are commonly used to investigate the potential impact of chemicals on the human heart because people and rodents share similar cardiovascular physiology.
The changes were only found in female rats; male rats showed no increase in irregular heartbeats after exposure to BPS.
Any potential human health impacts from using products containing BPS are unknown. No human studies have been conducted.
The American Chemistry Council, which represents chemical manufacturers, declined to comment on BPS because it represents companies that make BPA, not BPS. Appleton Coated, which uses BPS to manufacture receipts, also did not respond to requests for comment.
Can BPS Be Avoided?
Some hard plastic water bottles and other products labeled BPA free are also labeled BPS free, including popular Nalgene bottles. But in many cases it is difficult for consumers to determine if a product contains BPS.
Roughly half of the BPA-free thermal paper used for cash register receipts may contain BPS, according to a preliminary analysis. Some receipts contain both chemicals.
"I think it would be prudent to test BPS and other chemicals with a similar structure, instead of just assuming that they are safe," Wang said.
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(ACC Mentioned) Recycling Of Plastic Wraps, Bags, Film Surges 11%
Feb 26, 2015 | Environmental Leader
The recycling of postconsumer plastic film packaging in the US grew 116 million pounds, or 11 percent, in 2013 to reach a reported 1.14 billion pounds, according to a report released today at the 2015 Plastics Recycling Conference.
This marks the highest annual collection of plastic film — a category that includes product wraps, bags and commercial stretch film made primarily from polyethylene (PE) — for recycling, since the survey began in 2005.
The 2013 National Postconsumer Plastic Bag & Film Recycling Report also found a 74 percent increase in polyethylene film collected for recycling since 2005. Moore Recycling Associates, which authored the report for the American Chemistry Council’s Plastics Division, attributes the gain to a combination of increased collection and more comprehensive reporting.
The increases detailed in the report show that greater collection is taking place among small- and mid-sized businesses and that consumers are bringing more of their used flexible plastic wraps to at-store collection programs to be recycled.
In recent months, several major brands and retailers have started placing the Sustainable Packaging Coalition’s store drop-off label on their film packages to remind consumers to bring their used polyethylene wraps back to participating grocery and retail stores to be recycled. In addition, the SPC, Flexible Film Recycling Group, and Association of Postconsumer Plastic Recyclers have launched the Wrap Action Recycling Program, or WRAP, which makes it easier for state and municipal governments, brands and retailers to increase awareness of opportunities to recycle used PE wraps at local stores.
Recycled PE film is used to make a range of products, including durable composite lumber for outdoor decks and fencing, home building products, lawn and garden products, crates, pipe, and film for new plastic packaging.
A separate report released today found that just over 1 billion pounds of rigid plastics, excluding bottles (measured separately), was collected to be recycled in the US in 2013, representing triple the amount collected since just 2007 and a slight dip (1 percent) since 2012.
The 2013 National Postconsumer Non-Bottle Rigid Plastic Recycling Report also found a 17 percent annual increase in domestic processing of these postconsumer items, with 67 percent processed in the US and Canada — the highest rate since the annual report was introduced in 2007.
Of the resin categories measured in the survey, high-density polyethylene (HDPE) and polypropylene (PP) showed modest increases in 2013, with HDPE making up 36 percent and PP making up 39 percent of the total one billion pounds.
The primary domestic uses for these post-consumer materials include automotive parts, crates, buckets, pipe, and lawn and garden products.
An important driver of domestic processing is the growth of plastic recovery facilities, or PRFs, which purchase mixed rigid bales (typically less valuable) and separate them into segregated resins.
The 1 percent decrease in rigid plastics recycling is the only dip in the report’s history and is largely attributable to China’s stricter standards for accepting scrap imports, referred to as the “Green Fence,” which began in 2013.
According to Moore Recycling Associates, the Green Fence had a two-fold impact on markets for recycled plastics: China’s tighter controls resulted in more material available for US plastic processors, and US recyclers have had to meet higher quality standards to sell this material domestically and abroad.
Read more: http://www.environmentalleader.com/2015/02/26/recycling-of-plastic-wraps-bags-film-surges-11/#ixzz3Sr1Rlley -
(ACC Mentioned) Listen to the Science on BPA, ACC Urges Consumers
Feb 25, 2015 | Plastics Today
By Norbert Sparrow
The American Chemistry Council (ACC; Washington, D.C.) is launching a communications and advertising campaign to amplify recent conclusions from FDA and the European Food Safety Authority (EFSA) stating that BPA is safe as currently used in food-contact materials and other consumer products. The ACC's Polycarbonate/BPA Global Group has commissioned ads urging consumers to, "Listen to the Science: Experts Say BPA Is Safe." The ads will appear in USA Today, the Wall Street Journal and on a number of consumer, news and health-focused websites.
In their comprehensive re-evaluation of BPA exposure and toxicity, notes the ACC in a news release, EFSA's scientific experts recently concluded that "BPA poses no health risk to consumers of any age group (including unborn children, infants and adolescents) at current exposure levels."
The findings from EFSA are similar to recent statements from FDA. The FDA responded recently to the question, "Is BPA safe?" with one unambiguous word: "Yes." Supporting this clear conclusion is one of the largest studies ever conducted on BPA, which was published by FDA researchers in 2014. One of the lead FDA researchers commented that the results of this comprehensive subchronic toxicity study "both support and extend the conclusion from FDA that BPA is safe as currently used."
BPA is a synthetic estrogen used to produce polycarbonate (PC) polymers and epoxy resins. The chemical has faced controversy due to studies linking BPA to an array of adverse health effects, including cancer, obesity, abnormal brain development and reproductive problems. While the results of these studies, which often extrapolate the amount of BPA that humans may be exposed to over a lifetime, have been questioned, public perception of the potential perils of BPA has not swayed.
"People are not making the right decisions because consumers are being led down a path that is based on emotion rather than sound science," Sam Stewart of Bayer MaterialScience told PlasticsToday in an article devoted to the media war over BPA. With its ad campaign, the ACA is hoping to bring back scientific discourse into what has become a largely emotional debate. Related Articles EU says BPA is safe for humans at current exposure levelsFDA says that BPA is safe for current uses in food packagingHealth Canada: BPA is safe for use in food packaging materialsEuropean agency reaffirms existing BPA standards
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(ACC Mentioned) American Chemistry Council Launches Pro-BPA Campaign
Feb 25, 2015 | Canadian Plastics
Washington, DC-based industry organization The American Chemistry Council (ACC) is launching a communications and advertising campaign to amplify recent conclusions from FDA and the European Food Safety Authority (EFSA) stating that BPA is safe as currently used in food-contact materials and other consumer products.
According to a statement, the ACC “believes that it is important to share clear, authoritative statements about BPA safety with consumers and manufacturers.”
“Since last December, EFSA and FDA, two of the most prominent science-based government bodies in the world, have clearly and unequivocally stated that BPA is safe as used in food contact materials and other consumer products,” ACC said. “The ACC’s Polycarbonate/BPA Global Group has launched a communications and advertising campaign to share these scientific conclusions about the safety of BPA.”
The campaign consists of ads that will appear in USA Today, the Wall Street Journal and on a number of consumer, news and health websites. The ads encourage consumers and manufacturers to: “Listen to the Science: Experts Say BPA is Safe,” amplifying what the scientific experts have stated.
BPA is a chemical used in the production of polycarbonate and epoxy resins. The chemical has faced controversy due to studies linking BPA to an array of adverse health effects, including cancer, obesity, abnormal brain development and reproductive problems.
In 2010, Canada became the first jurisdiction in the world to declare BPA a toxic substance. That finding was later reversed, with Health Canada concluding that the current dietary exposure to BPA through food packaging does not pose a health risk to the general population, including newborns and young children.
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(ACC Mentioned) Recycling of Plastic Wraps, Bags, Film Surging in North America
Feb 25, 2015 | Canadian Plastics
Post-consumer plastic recycling is surging in North America, according to two new reports prepared for the American Chemistry Council (ACC).
According to the first study, the recycling of post-consumer plastic film packaging increased by 116 million pounds, or 11 per cent, in the U.S. in 2013 to reach a reported 1.14 billion pounds. This marks the highest annual collection of plastic film – a category that includes product wraps, bags and commercial stretch film made primarily from polyethylene (PE) – for recycling, since the survey began in 2005.
The 2013 National Postconsumer Plastic Bag & Film Recycling Report also found a 74 per cent increase in polyethylene film collected for recycling since 2005. Moore Recycling Associates Inc., which authored the report for the ACC’s plastics division, attributes the gain to a combination of increased collection and more comprehensive reporting.
The increases detailed in the report show that greater collection is taking place among small- and mid-sized businesses and that consumers are bringing more of their used flexible plastic wraps to at-store collection programs to be recycled.
“We are pleased to see such strong growth in the recycling of polyethylene wraps,” said Steve Russell, vice president of plastics for the ACC. “These increases highlight the critical role that grocers, retailers and other businesses play in collecting this valuable material.”
In recent months, several major brands and retailers have started placing the Sustainable Packaging Coalition’s (SPC) “store drop-off” label on their film packages to remind consumers to bring their used polyethylene wraps back to participating grocery and retail stores to be recycled.
Recycled PE film is used to make a range of products, including durable composite lumber for outdoor decks and fencing, home building products, lawn and garden products, crates, pipe, and film for new plastic packaging.
The report is available at this link.
A second report has found that just over one billion pounds of rigid plastics, excluding bottles (measured separately), was collected to be recycled in the U.S. in 2013, representing triple the amount collected since just 2007 and a slight dip (one per cent) since 2012.
The 2013 National Postconsumer Non-Bottle Rigid Plastic Recycling Report also found a 17 per cent annual increase in domestic processing of these postconsumer items, with 67 per cent processed in the U.S. and Canada – the highest rate since the annual report was introduced in 2007.
Of the resin categories measured in the survey, high-density polyethylene (HDPE) and polypropylene (PP) showed modest increases in 2013, with HDPE making up 36 per cent and PP making up 39 per cent of the total one billion pounds.
The primary domestic uses for these post-consumer materials include automotive parts, crates, buckets, pipe, and lawn and garden products.
An important driver of domestic processing is the growth of plastic recovery facilities, or PRFs, which purchase mixed rigid bales (typically less valuable) and separate them into segregated resins.
The one per cent decrease in rigid plastics recycling is the only dip in the report’s history and is largely attributable to China’s stricter standards for accepting scrap imports, commonly referred to as the “Green Fence,” which began in 2013.
According to Moore Recycling Associates, the Green Fence had a two-fold impact on markets for recycled plastics: China’s tighter controls resulted in more material available for U.S. plastic processors, and U.S. recyclers have had to meet higher quality standards to sell this material domestically and abroad.
“Recyclers addressed the challenges and opportunities presented by the Green Fence, and we believe that the plastic recycling industry emerged stronger as a result,” said Patty Moore, president of Moore Recycling. “Recycled plastic producers have invested in advanced separation infrastructure or taken other steps to create higher quality bales with greater yields.”
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US EPA Administrator Walks Up Computational Toxicology's Benefits
Feb 26, 2015 | Chemical Watch
The US EPA's computational toxicology research is a “significant step forward” that strengthens the agency's ability to get more chemicals assessed in a quick manner, EPA administrator Gina McCarthy told Congress. The agency is seeking an increase of $12.4m in its fiscal year 2016 budget for research in the area.
Computational toxicology also has the potential to “significantly eliminate animal testing, which takes a very long time to reap the benefits we need to ensure that we do these chemical assessments quickly,” she said. Ms McCarthy was testifying on the EPA's budget before the House subcommittees on Energy and Power, and Environment and the Economy.
Some committee members also brought up the need to reform the Toxic Substances Control Act. Environment and the Economy subcommittee Chairman John Shimkus (Republican-Illinois), said he wanted to work with the EPA and Democratic colleagues to move forward on the reform. Full Energy and Commerce Committee Chairman Fred Upon (Republican-Michigan) told Ms McCarthy that “it was clear, last year, that your goals and ours for TSCA reform overlap. Let’s sit down and workout good legislation to improve safety for the public and to ensure a robust interstate market for chemicals and products that contain them.”
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Siloxanes Unexpectedly Observed In Antarctic Soil And Marine Life
| Chemical & Engineering News
By Deirdre Lockwood
Cyclic volatile methylsiloxanes give many personal care products, such as cosmetics, skin lotions, and deodorants, a smooth feel and allow them to dry quickly. But scientists have been scrutinizing the compounds for potential toxicity, endocrine disruption, and bioaccumulation in the environment. Now, for the first time, researchers have found traces of these compounds in soil, plants, phytoplankton, and krill in one of the world’s most isolated regions: Antarctica (Environ. Sci. Technol. 2015, DOI: 10.1021/es503697t).
The Environmental Protection Agency is currently assessing one compound, octamethylcyclotetrasiloxane (D4), for environmental hazards including reproductive toxicity. Because they are volatile, these methylsiloxanes can easily escape to the atmosphere. Previously, scientists hadn’t worried too much about their impact on remote ecosystems because they figured that hydroxyl radicals in the atmosphere would degrade these compounds before significant amounts could deposit there.
But after Marinella Farré and her colleagues at the Spanish Council for Scientific Research found that siloxanes were more abundant in relatively pristine ecosystems in the Pyrenees than they had expected, her team decided to examine whether the contaminants had also reached remote regions of Antarctica.
So in 2009, the researchers took samples of soil and plants from more than 10 locations on the South Shetland Islands, north of the Antarctic Peninsula. They also sampled phytoplankton and krill from 11 locations in the waters around the islands, taking precautions to reduce sample contamination and to account for any methylsiloxanes introduced accidentally by the researchers.
Back in the lab in Spain, the team extracted the collected compounds and analyzed the samples using gas chromatography with tandem mass spectrometry. Almost all the field samples contained cyclic volatile methylsiloxanes—including D4, which manufacturers have phased out of many personal care products, as well as decamethylcyclopentasiloxane (D5) and dodecamethylcyclohexasiloxane (D6), which are still commonly found in the products. The highest concentrations of cyclic volatile methylsiloxanes found in the samples were similar to those found in soils and fish in rural areas in North America and Europe.
The researchers hypothesize that these compounds are scrubbed out of the atmosphere by falling snow, and then make their way into the ecosystem when that snow melts in summer. At sampling sites with lower salinity, where melting ice provided freshwater, phytoplankton had higher total concentrations of cyclic volatile methylsiloxanes than at sites with higher salinity.
The presence of these compounds at significant concentrations in Antarctica is “certainly surprising and runs counter to what we would expect” based on what’s known about the compounds’ sources, atmospheric transport, and deposition behavior, says Frank Wania of the University of Toronto. The work must be independently validated, he cautions, because it is extremely challenging to avoid contamination when measuring these compounds in remote environments.
The potential impact of siloxanes on Antarctic ecosystems is likely to be small, Wania says. However, he adds that the presence of synthetic compounds in such remote ecosystems is always undesirable: “If a compound is found there, it will be everywhere.”
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REACH Can Help Bottom Line, Says Senior Echa Official
Feb 26, 2015 | Chemical Watch
By Geraint Roberts
The REACH Regulation can drive expenditure cuts and offer opportunities for companies to grow revenue, says Echa's risk management director, Jack de Bruijn.
Speaking at Chemical Watch's supply chain summit in Brussels yesterday, Mr de Bruijn said that in the longer term, the increase in formation on chemicals safe use through the supply chain should lead to the avoidance of health hazards or environmental damage. The whole system created by REACH, particularly its provisions on safety data sheets (SDSs) and exposure scenarios, is, he said, designed “to get much more information to chemical users in a better way”. Echa has already produced an “eGuide” to SDSs and exposure scenarios, as well as a practical guide and templates explaining the information in such scenarios. It also plans to produce downstream user tuition videos on extended SDSs, and harmonised exposure scenario phrases.
REACH may also generate efficiency gains to support compliance under other EU legislation in areas such as environmental protection or occupational safety, said Mr de Bruijn. Echa is running a pilot project with a nickel electroplating company using a wide range of chemicals. This has process operations typical of many sites, and is being used to see whether information in ”real life” eSDSs can help it with permit applications under the industrial emissions Directive, and workplace risk assessments under the Directives on chemical agents, and carcinogens and mutagens. Feedback on the project will be given at an agency workshop in Helsinki on 16-17 April.
Longer-term cost savings could also be driven by the increased predictability of regulatory action by authorities and companies – particularly those focused on marketing or using safer chemicals – being better prepared for such activities, said Mr de Bruijn. If registrants keep updating their dossiers with clear information on volumes, uses and exposures, and downstream users ensure that uses and use conditions are communicated upstream, and the risk management advice in the eSDSs is followed, then “the chances of having health or environmental problems will be reduced, and the chances of regulators picking on certain chemicals will be reduced.”
There are fewer opportunities to cut expenditure in the short term, said Mr de Bruijn, because the shift of responsibility for filling the information gaps we have on chemicals comes at a cost. However, he said, the registration of low-volume substances is less burdensome than it was pre-REACH, SMEs get rebates and the data-sharing obligations mean data does not have to be provided by each individual registrant.
Also Mr de Bruijn said “when you talk with companies, they often say they had to go through their chemical portfolios, found that they lacked data on some of them, and decided to optimise the size of their portfolio.”
Turning to ways in which REACH can drive increases in income, Mr de Bruijn said the growing knowledge base derived from REACH implementation provides a basis for easier substitution and innovation. The substance-based search functionality on Echa's website, for example, provides links to the lists of restricted substances, those subject to authorisation and substances facing evaluation by member states. In addition, the exemptions for substances for product and process orientated research and development (Ppord) increase the options for product development. These are used “quite extensively”, he said, to find, for example, substitutes for substances of very high concern (SVHCs), or chemicals to support energy use.
As well as this, increased supply chain communication should allow companies to adapt better to customer demands. This idea is “a bit theoretical” said Mr de Bruijn, “but I think it is happening.” First-movers could gain an advantage by proactively responding to bottom-up market pressures, such as demand from some large retailers for SVHC-free products.
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Colorado Drilling Task Force Recommends Larger Role for Local Governments
Feb 26, 2015 | BNA Daily Environment Report
By Tripp Baltz
An oil and gas task force in Colorado recommended accepting more local input on the siting of large-scale oil and gas projects but stopped short of endorsing local government decision-making power over drilling and hydraulic fracturing.
In its final meeting Feb. 24, at least 14 of the task force's 21 members approved nine of 36 draft recommendations for legislative and regulatory policy changes; a two-thirds vote is required for approval.
The remaining 27 proposals—some of which would enhance local government regulatory authority over drilling—will go into a “minority report” to Gov. John Hickenlooper (D), who convened the task force in July 2014 to resolve state-local conflicts over drilling regulation (150 DEN A-10, 8/5/14).
Hickenlooper said the recommendations were “significant in both breadth and the level of consensus they achieved.”
The report of the task force represents “undeniable progress” in addressing the issues that come with balancing quality of life with “an important and thriving industry,” he said in a Feb. 24 statement.
Polis Disappointed
Hickenlooper established the task force and appointed its members as part of a compromise that resolved a dispute over four measures proposed for the November 2014 ballot: two that were anti-drilling and two that favored industry.
The anti-drilling measures were financially backed by U.S. Rep. Jared Polis (D-Colo.), who ended his support when the resolution was reached. All four measures were withdrawn.
After the task force voted on its recommendations Feb. 24, Polis issued a statement expressing his disappointment with the outcome.
“Unfortunately the oil and gas industry proved they weren't interested in compromise or solving a problem,” he said. “We can and we must make the real changes needed to solve the problem of industrial drilling facilities being placed mere feet away from homes and schools.”
Support Seen From Industry
Representatives of the oil and gas industry—several of whom were energy company executives who served on the task force—issued statements supporting the recommendations.
“Any policy going forward must protect human health and the environment while also continuing this economic, environmental and energy security success story delivered by Colorado natural gas,” Frank J. Macchiarola, executive vice president of government affairs of America's Natural Gas Alliance, said in a statement.
Officers with Anadarko Petroleum Co., Noble Energy, Cirque Resources LP, ConocoPhillips, XTO Energy Inc., and Bill Barrett Corp. served on the task force.
Several members of the task force said they were disappointed the group failed to expand local control in a meaningful way—through land-use powers and other regulatory authority—over drilling and other oil and gas activities in the state.
“We did not get at the heart of what the chief concerns were,” Jon Goldin-Dubois, president of Western Resource Advocates in Boulder, Colo., and a member of the task force, told Bloomberg BNA Feb. 25. “We took some small steps that will be helpful, but they were ultimately too small to make a difference.”
Leading Recommendations
Among the ideas that received two-thirds approval were recommendations to include future oil and gas drilling and production facilities in existing local comprehensive planning processes, to enhance local government liaisons to the permitting process and to increase Colorado Oil and Gas Conservation Commission staff and inspectors.
They also approved recommendations to conduct health studies, create an oil and gas information clearinghouse and reduce oil and gas truck traffic on public roads and streets.
Many of the recommendations can be implemented through regulatory changes without having to wait for the Colorado General Assembly to act, Todd Hartman, spokesman with the Colorado Department of Natural Resources, told Bloomberg BNA Feb. 25.
One of the recommendations called for increased collaboration among counties and cities, energy producers and the COGCC. It would establish a mediation process if the parties disagree on where large-scale drilling projects are to be located. The recommendation was one of seven that received the unanimous support of the task force.
Work Out Conflicts Earlier
The recommendation will allow conflicts to be worked out earlier, Tisha Schuller, president and chief executive officer of the Colorado Oil and Gas Association, said in a Feb. 24 statement. It also enhances the role of local governments by ensuring that their needs are addressed in the state permitting process, she said.
“That's a positive move forward,” Schuller said. “We welcome community engagement and believe the more information that Coloradans have about oil and gas development, the more they will be open to developing our natural resources in a safe and efficient manner.”
However, the recommendation would place local government in only a limited “consultative” role, said Will Toor, director of the transportation program at the Southwest Energy Efficiency Project and a member of the task force.
“I would describe it as a minor step forward,” Toor told Bloomberg BNA Feb. 25. “I don't think it will fundamentally change the authority that local governments have.”
‘Merely Advisory.’
“Merely providing advice to the commission does not provide the clarity or enhancement to local government authority which is needed to allow those local jurisdictions closest to the ground to influence and mitigate the surface and land use impacts associated with oil and gas operations,” Jeffery P. Robbins of Goldman, Robbins & Nicholson in Denver, another member of the task force, told Bloomberg BNA Feb. 25.
Toor and Robbins said they were hopeful that a COGCC rulemaking on the “collaboration-mediation” recommendation will clarify the roles of the commission director on siting of multi-well facilities.
During hearings before the task force, COGCC Director Matt Lepore said several such facilities present challenges of “scale, intensity, and proximity” for residential neighborhoods as oil and gas activity moves into urban and suburban areas (12 DEN A-8, 1/20/15).
The task force heard from numerous citizens around the state who are worried about the effects of oil and gas drilling, including fracking, on public health, safety and the environment. The task force met six times from September to February at locations throughout the state.
Not Able to Say No
“There are some localities where the impacts on surrounding neighborhoods are so great, you have to be able to say no,” Toor said. “Unfortunately, we were unable to get a recommendation that would allow local governments to say no.”
Under current rules administered by the COGCC, the oil and gas industry is turning “residential neighborhoods into heavy industrial areas with multiple wells and dozens of tanks, separators, emission control flares and other dangerous equipment,” said Matt Sura, a member of the task force and a Boulder attorney who represents local communities affected by energy development.
“Thousands of wells are being permitted in Colorado every year,” he said. “A growing number of those wells are being proposed within Colorado towns and cities.”
Sura and others noted that several of the recommendations that would have increased local government authority were supported by a majority of the task force but fell short of the two-thirds vote to be included among the recommendations to Hickenlooper.
Sura said he hopes the governor will take note of the proposals in the “minority report” and act upon “those common-sense measures.”
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FERC to Congress: No Progress to Report On Alaska Gas Pipeline as Project Is Ended
Feb 26, 2015 | BNA Daily Environment Report
By Nushin Huq
The Federal Energy Regulatory Commission staff has discontinued work on the Alaska natural gas pipeline after TransCanada Alaska Co. told the commission in August 2014 of its intent to terminate the pre-file review process for the project, FERC told Congress in a semi-annual report filed Feb. 24.
In its previous report, submitted Aug. 26, 2014, FERC highlighted the request by TransCanada to terminate the docket but asked FERC maintain the administrative record in the subject docket for use in any future project in Alaska by TransCanada and its affiliates (Docket No. PF09-11-000).
The Office of the Federal Coordinator for Alaska Natural Gas Transportation Projects has not been funded for fiscal year 2015 and is using carryover funds from previous appropriations for an orderly shutdown, the report said.
Under the Energy Policy Act of 2005, FERC must submit semi-annual reports to Congress describing the progress made in licensing and constructing an Alaska natural gas pipeline. Since this project has been terminated, there was no progress to report.
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Veto Signals to Keystone XL Foes Obama May Reject Pipeline Project
Feb 26, 2015 | BNA Daily Environment Report
By Jim Snyder
President Barack Obama's veto of the Keystone XL bill is the latest sign to pipeline opponents that he is prepared to reject a project he said won't create many jobs or reduce U.S. oil prices.
Obama rejected the Republican-backed bill because it interfered with a review being led by the State Department, though he hasn't decided whether to approve a permit for the pipeline, White House spokesman Josh Earnest said Feb. 24 (37 DEN A-1, 2/25/15).
Pipeline backers in Congress may seek to attach Keystone to other bills that the president supports. Republicans don't have the votes to override Obama's veto, meaning the final decision will rest with the president.
“We have been very encouraged by the president's increased public skepticism about Keystone over the last few months,” Tiernan Sittenfeld, senior vice president for government affairs at the League of Conservation Voters, an environmental group that opposes Keystone XL, said in an e-mail. “We feel great about where things stand.”
The Republican effort to force the bill over Obama's objections may also backfire, said Paul Bledsoe, a former White House energy aide under Democrat Bill Clinton now at the German Marshall Fund.
‘Drum-Banging.’
“Increased Republican oil drum-banging on Keystone cannot help but tempt the White House to send the far left into paroxysms of joy,” Bledsoe said. “With cheap oil, a resurgent economy, and 21 months until the next election, it's hard to think of a more propitious political moment to deny the pipeline.”
There's another reason for Obama to move quickly on the project: The longer he waits, the more the decision could become an issue in the 2016 election. There's no deadline for a decision, though both sides have called for an end to a review that is now in its sixth year.
“After six years of delay and obstruction, the president is going to have to decide where he stands,” said Sen. John Barrasso (R-Wyo.), a pipeline supporter.
Rhea Suh, president of the Natural Resources Defense Council, praised the veto as she called on Obama “to reject the proposed tar sands pipeline once and for all.”
Obama has challenged the merits of TransCanada Corp.’s proposed $8 billion Canada-to-U.S. crude pipeline, namely assertions that it will lower gasoline prices and create thousands of jobs.
“The president has made it clear in numerous ways and at various times that he does not think much of the KXL project,” said Michael McKenna, a Republican lobbyist and strategist.
Seeking Approval
Greg Rickford, Canada's minister of natural resources, said the government would continue to push the administration to grant a permit for Keystone.
“It is not a question of if this project will be approved; it is a matter of when,” Rickford said in a statement.
The State Department, which is responsible for recommending whether the $8 billion project is in the nation's interest, has identified only general issues it is weighing. These include energy security, the environment, cultural issues and foreign relations with Canada.
Jim Murphy, an attorney with the National Wildlife Federation, an environmental group that opposes the pipeline, said the executive order setting up the review doesn't say if one topic is more important than another.
“There's no set criteria about what national interest determination means,” Murphy said.
Expanding Pipeline
The 1,179-mile Keystone XL project would actually expand an existing Keystone pipeline system that starts in Hardisty, Alberta, and juts east across Saskatchewan and Manitoba before turning south along the eastern edges of North Dakota, South Dakota and Nebraska.
TransCanada proposed the original line to link the oil sands and U.S. refineries in 2006. It was approved with zero fanfare less than two years later on Feb. 28, 2008, under President George W. Bush.
The 25-page State Department record of decision on the first Keystone didn't discuss its impact on the climate. Instead, it said the project would increase the U.S.’s diversity of oil supplies and strengthen ties to a “stable and reliable trading partner” in Canada.
Obama will probably use a different set of criteria. In a 2013 speech on climate change at Georgetown University in Washington, he said he wouldn't approve Keystone XL if the project was found to significantly add to the carbon pollution tied to global warming.
A State Department 11-volume environmental analysis released more than a year ago said it probably wouldn't, because the oil sands would be developed without the pipeline.
Closer Look
More recently, the Environmental Protection Agency called on the State Department to look closer at a scenario in its review that said Keystone would make more of a difference if oil fell below $75 a barrel. At that price, low-cost transport options like pipelines may play a bigger role in the economics of an oil sands project, the agency said.
The EPA letter and the administration's promotion of carbon-dioxide emission rules for power plants and the forging of a bilateral climate deal with China have heartened environmentalists who oppose Keystone XL.
Obama's Comments
Beyond Obama's comments on Keystone's carbon impact, he has also challenged the notion promoted by supporters that Keystone offers big benefits to Americans. It wouldn't lower their gasoline prices or lead to many permanent jobs, Obama said last year on several occasions.
He also said most of the oil would end up overseas, even though the State Department report concluded it was more likely it would be used in the U.S.
That leaves the decision on Keystone XL where it has been since TransCanada first applied to build it in September 2008.
Historically, presidents haven't paid much attention to decisions on pipelines like Keystone, said Murphy of the National Wildlife Federation.
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NAFTA’s Specter May Haunt Keystone Verdict
Feb 25, 2015 | PoliticoPro
By Elana Schor
President Barack Obama may decide to kill Keystone XL for good, but that could be no easy task — thanks in part to the North American Free Trade Agreement.
The 21-year-old free-trade pact allows foreign companies or governments to haul the U.S. in front of an international tribunal to face accusations of putting their investments at risk through regulations or other decisions. The CEO of Keystone developer TransCanada has raised the prospect as a potential last resort if Obama rejects the $8 billion project, although for now the company is focused on getting him to say yes.
Administration officials involved in reviewing the proposed Canada-to-Texas pipeline are aware of the potential for a NAFTA challenge and the importance of minimizing that risk in the event the president rejects Keystone. Others familiar with the trade pact’s origins agree it’s an avenue the company could take if the pipeline fails to survive the clash between industry and environmental groups over the project’s potential impact on the Earth’s climate.
Such a challenge would go before a tribunal of privately chosen arbiters who could award TransCanada damages paid by U.S. taxpayers — it would not have the power to approve Keystone.
“If the pipeline is actually vetoed on so-called environmental grounds, I think there is a very strong case for a NAFTA challenge,” former Canadian Ambassador Derek Burney, a senior negotiator on the landmark North American trade deal and its U.S.-Canada predecessor, said in an interview Wednesday.
Burney and former Canadian Prime Minister Brian Mulroney, whom he served as a top aide, have long described the six-year-long delay in the administration’s Keystone decision as stepping on NAFTA’s goal of unrestricted energy trade between the U.S. and its northern neighbor.
“That provision in the NAFTA agreement was really something that had been required by the U.S., not by Canada, that trade in energy should be unfettered across the border,” recalled Burney, who is on the TransCanada board but said he speaks as an individual on the trade issue.
Pro-Keystone Sen. John Hoeven has said as much, too. When asked last month about the possibility of a Keystone-inspired NAFTA complaint, the North Dakota Republican told Canada’s CTV that “I think certainly Canada is entitled to move forward with any other type of challenge” if the GOP Congress can’t win the project’s approval.
Former U.S. Assistant Commerce Secretary Alan Dunn, another lead negotiator on NAFTA, agreed that TransCanada could have a valid claim under the trade deal if Obama denies Keystone after a politically volatile review that has lasted more than six years.
But Dunn also observed that the company’s claim could prove equally strong in a court challenge under U.S. law, such as the Administrative Procedure Act. “TransCanada already has a pipeline that transits the exact same oil from the same fields across the U.S.,” he said in an interview. “So they could put the U.S. on the spot and say, ‘What’s the difference between the two?’”
TransCanada’s other major heavy-oil pipeline into the U.S., known simply as Keystone, got a border-crossing permit in March 2008 after less than two years of review by the George W. Bush administration. That project carries heavy crude from Alberta to locations in Illinois.
In remarks to reporters in May, TransCanada CEO Russ Girling said the company could eventually consider filing a NAFTA challenge but hoped it wouldn’t be necessary.
“Obviously, down the road that’s something that hopefully we don’t have to take a look at, but obviously something we would have to take a look at if we end up in a situation where the pipeline is delayed indefinitely or denied,” Girling said in his remarks, which were reported by the Globe & Mail. “Our view is that this pipeline looks no different than other pipelines that have been approved [and] continue to be approved in the United States.”
More recently, both the company and the Canadian government have expressed optimism that Keystone will win approval without any need for legal combat. “Our focus remains on getting Keystone XL approved,” TransCanada spokesman Shawn Howard said in a recent email, adding that the NAFTA avenue is “not what we are focusing our efforts on.”
“It is not a question of if this project will be approved; it is a matter of when,” Canadian Natural Resources Minister Greg Rickford said in a statement Tuesday, after Obama vetoed a GOP-backed bill that would forced the approval of the pipeline.
NAFTA also allows governments to challenge their neighbors’ decisions or regulations, but Canadian officials have long tamped down talk of invoking that option over Keystone, especially after multiple State Department environmental reviews found little ecological risk from the project. “We support the State Department’s science and fact-based report, and believe it will proceed on its merits,” a spokesman for Rickford said recently by email.
So far, the U.S. has yet to lose a NAFTA challenge.
The administration has said it’s continuing to review the merits of whether the pipeline would serve the interests of the United States. Obama has no deadline to make that call, although many supporters and opponents are expecting it to be in the coming weeks or months.
Meanwhile, U.S. environmentalists who are confident Obama has their backs are also aware that a trade-deal tribunal process they have never liked could complicate Keystone’s post-rejection politics. The same groups fighting Keystone are also working against a $250 million NAFTA challenge filed by a U.S. energy company, Lone Pine Resources, against a fracking moratorium in the Canadian province of Quebec.
“We are very strongly opposed to these provisions being in trade bills” in the first place, Natural Resources Defense Council International Program Director Jake Schmidt said in an interview. “A company could challenge any environmental law in the U.S. on the basis of lost profits and not have to go through the normal U.S. court system.”
TransCanada becoming the 18th company to file a NAFTA investor challenge against the U.S. is “definitely a possibility,” Schmidt said.
Investor challenges to government policies under NAFTA and other trade pacts “really are harmful,” another green group official said in an interview, speaking candidly on condition of anonymity. “It’s the signal they send to governments — state, local or national — that are considering putting in place strong climate policies.”
A potential TransCanada NAFTA challenge over Keystone “would certainly highlight everything that’s wrong in the investor-state system,” the green-group official added, “but it’s certainly not a position we want to see the U.S. in on the merits.”
A possible free-trade dispute is just one of many signs that even Obama’s signature on an order approving or rejecting Keystone won’t be the end of the matter. Republicans in Congress are promising to continue pushing for approval of the project even if the president says no — perhaps by trying to attach pro-Keystone language to must-pass spending bills. And if Obama approves the pipeline, greens are vowing to stage civil disobedience to delay construction.
Of course, Keystone supporters have another potential avenue if the dispute drags on long enough: trying again with the next U.S. president.
TransCanada has “a good argument that can be made” under NAFTA to dispute a Keystone rejection, Canadian international trade and energy lawyer Lawrence Herman said in an interview Wednesday. But, he added, the company “may feel they’re better off waiting until the results of next election are known.”
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Canada's Climate Goals Will Be Weighed In Keystone XL Decision, U.S. Official Says
Feb 26, 2015 | BNA Daily Environment Report
By Jim Snyder and Jonathan Allen
U.S. climate negotiators have told their Canadian counterparts that Canada's plan to cut carbon emissions could be one of the factors that President Barack Obama weighs as he considers whether to approve the Keystone XL pipeline, a U.S. official said Feb. 25.
The U.S. hasn't suggested it might approve the $8 billion proposed project in exchange for climate commitments, the official said. Canada is developing a climate proposal as part of United Nations-sponsored talks aimed at cutting carbon emissions that governments were encouraged to submit by next month.
Obama has secured climate concessions from China and India as part of the UN talks. A similar deal with Canada could help offset the anticipated environmental damage from the TransCanada Corp. pipeline, responding to opponents of the project.
White House press secretary Josh Earnest said Feb. 24 that Obama could approve the pipeline even though he vetoed a Republican bill that would have circumvented the admininstration's review process, which has been underway for six years (37 DEN A-1, 2/25/15).
The administration didn't immediately comment Feb. 25 on the discussions with Canada.
Canadian Prime Minister Stephen Harper offered in 2013 to cut greenhouse gas emissions to win approval of the Canada-to-U.S. pipeline, according to a person familiar with the matter.
In December, Harper said it would be “crazy” for his government to unilaterally introduce rules to cut greenhouse gas emissions from the oil and gas industry as oil prices fall.
Canada Open to Deal
Gary Doer, Canada's ambassador to the U.S., said Feb. 25 Canada is open to a deal with the U.S. to reduce carbon dioxide emissions, but he doesn't know of any suggestion that Keystone approval is conditional on such an agreement.
“We can't do it as a quid pro quo on Keystone,” Doer said. “We don't think that Keystone is a climate issue.”
American and Canadian environmental and diplomatic officials have long been in discussions over the commitment Canada will make as part of a UN climate accord to be negotiated in Paris this year, said the U.S. official with knowledge of the ongoing talks, who requested anonymity so he could discuss international diplomacy.
The U.S. official said the issue of Canada's carbon reductions arose but wasn't the dominant theme of a meeting among Secretary of State John Kerry, Canadian Minister of Foreign Affairs John Baird and Mexican Foreign Secretary Jose Antonio Meade in Boston Jan. 30.
Technical Advice Given
Aspects of the discussions were described by three U.S. officials. One official said the meetings between the U.S. and Canada have been confined to technical advice, similar to what the U.S. is providing other nations.
“Ultimately it is up to elected officials to decide what agreements to negotiate and what policies to adopt,” TransCanada spokesman Shawn Howard said Feb. 25 in an e-mail. “Our job is to safely build and operate energy infrastructure, and that is what we are focused on.”
Depending on its nature and scope, Canada's contribution to a global climate goal could become a factor in Obama's decision on the Keystone pipeline, the official said, stressing that it's up to the Canadian government, not bilateral negotiations, to decide that.
Obama has said he wouldn't approve Keystone XL if it would significantly exacerbate the problem of carbon pollution.
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How ‘Orphan’ Wells Leave States Holding the Cleanup Bag
Feb 26, 2015 | The Wall Street Journal
By Dan Frosch and Russell Gold
After a natural-gas boom in the Powder River Basin here petered out several years ago, few energy companies were interested in the leftover wells pockmarking the prairie. Then Ed Presley came along.
The burly, bearded speculator acquired roughly 3,000 idle wells, many for a few dollars. With a salesman’s charm, he vowed to revive the wells with a contraption called the Gazmo.
But Mr. Presley’s plan never produced any gas. He says he couldn’t raise enough money for his company, High Plains Gas Inc., to follow through. Last year, Wyoming seized most of his wells to ensure they didn’t pollute groundwater or soil, declaring them abandoned.
On one ranch near Gillette last month, several of Mr. Presley’s former wells peeked from the snow. Inside the flimsy sheds covering them, jumbles of rusting pipes protruded from the ground, worn company signs dangling nearby.
Wyoming is now stuck cleaning up these deserted wells from a bygone boom, and thousands more owned by Mr. Presley and others, at a cost state regulators estimate will be tens of millions of dollars. State officials say the responsible parties never paid enough in regulatory fees to reclaim the wells.
Wyoming’s troubles with Mr. Presley’s wells are a cautionary tale for states amid the energy rush. Drilling booms historically leave legions of idle wells that become state or federal wards. Yet agencies in some states, and federal regulators, aren’t adequately equipped to clean up so-called orphaned sites at a time when shale drilling is raising the prospects of still more.
Hydraulic fracturing has, for example, brought new drilling in the Marcellus Shale that lies under states like Pennsylvania and West Virginia. The potential for more orphaned wells “is certainly a concern of ours,” says David Belcher, assistant enforcement chief for West Virginia’s oil-and-gas office. “It could be considered a liability for the state.”
Jay Parrish, Pennsylvania’s state geologist from 2001 to 2010, says he is concerned Marcellus drilling could leave that state with a surge in environmentally hazardous wells without enough funds to clean them up.
“We run the risk of doing what we did with the last two iterations of lumber and coal,” he says, “where we allow the industry to walk away from problems and the state is faced with having to fix it later.” Who pays to plug a well?
Abandoned wells can deteriorate underground over time, a process that can go unnoticed without inspection. A 2011 study by the Groundwater Protection Council, a nonprofit made up of state water agencies, found orphaned wells caused about one in five incidences of recorded oil and gas groundwater contamination in Ohio and Texas.
Plugging a well—removing equipment and filling holes with cement—costs $25,000 to $100,000 for conventional sites, by some state regulators’ estimates. Horizontal wells, typical in fracking, will likely cost more to plug, they say.
Mr. Presley’s High Plains wells, which are shallow, will cost about $7,500 each to plug, says Bob King, Wyoming’s orphan-wells project manager.
“It is irresponsible to leave them abandoned without dealing with them,” says Wyoming Gov. Matt Mead of his state’s problems with orphaned wells. “We shouldn’t have to pay for it.”
To avoid having to pay steep costs, most states and the federal government have policies to lay aside funds to clean up orphans, primarily by requiring companies to post bond before prospecting. But bonding often sets aside too little, leaving some agencies struggling to clean up tens of thousands of wells.
There is little nationwide data on orphaned wells or on which states face the greatest funding shortfalls for plugging. Lucas Davis, an associate economics professor at University of California, Berkeley, says current bonding levels are “unreasonably low” and should be raised in anticipation of abandoned wells from fracking.
“Given the sheer number of wells that are being drilled by companies, many of which are small and medium sized, states really need to be worried about situations where no company is around anymore,” he says. “Without increased bonding levels, these cleanups will be financed by the state and federal government.”
Many energy-rich states are already saddled with having to plug thousands of abandoned wells from past booms. Pennsylvania’s bonding ranges from $2,500 per conventional well to a $600,000 blanket bond for multiple unconventional wells. In 2014, the state plugged 48 wells from a list of 8,371 orphans, state records show.
Mr. Parrish, the former Pennsylvania state geologist, says the “bonding is outrageously small” in the state. A spokeswoman for Pennsylvania’s environmental-protection department says the adequacy of that bonding is under review.
Louisiana from 2008 through 2013 plugged an average 95 wells annually but added an average of 170 a year to its orphans list, a 2014 state audit showed. The audit found that, because of antiquated regulations and exemptions, 75% of the state’s wells had no bonding on them.
“Not requiring sufficient financial security amounts may provide an incentive for operators to abandon their wells since forfeiting the financial security may be more economical than paying plugging costs,” the audit said. A Louisiana Department of Natural Resources spokesman says regulators are working to strengthen bonding requirements.
Texas, which grappled with orphan wells in the 1990s, has required operators since 2001 to post a $2 bond for every foot of depth or $250,000 to cover numerous wells. Still, the number of abandoned wells in Texas has grown 25% during the past two years, state figures show. Texas has roughly 9,300 wells it considers orphans. It plans to plug about 290 this fiscal year.
A spokeswoman for the Texas Railroad Commission, which oversees drilling, says there aren’t plans to review bonding requirements and that the state’s program is working, noting that the number of abandoned wells has dropped about 44% over roughly a decade.
In 2011, West Virginia established stronger bonding for horizontal drilling used in fracking: $50,000 per well or a blanket $250,000 per driller, compared with $5,000 to $50,000 for conventional drilling.
But the West Virginia Surface Owners’ Rights Organization, a landowners’ group, says blanket bonding in particular is still far too low and that the rush to drill the Marcellus could lead to a wave of abandoned wells.
Mr. Belcher, the West Virginia oil regulator, says conditions of such wells will ultimately vary but “on an average case, you may have an issue with the funding.” He says the state is now calculating the cost of plugging horizontal wells. The Gazmo
Wells like Mr. Presley’s often end up orphaned after passing from large companies to smaller ones without wherewithal to plug them.
Describing himself as a longtime oil man, Mr. Presley, 68, tells of working drilling jobs in Ohio and West Virginia before heading for the natural-gas rush sweeping the Powder River Basin.
Shortly after arriving in Sheridan, Wyo., in 2001, he says he met Kit Jennings, a Wyoming-state senator at the time who had patent rights to a technology that purportedly drew methane from coal seams more effectively. Christening the technology ‘The Gazmo,’ Mr. Presley told investors he, Mr. Jennings and another partner had a way to rejuvenate idle wells that larger companies had left for dead. Mr. Jennings confirms that account, declining further comment.
In 2004, Mr. Presley filed for Chapter 11 bankruptcy shortly after a lending company wired him $550,000 for what proved to be a nonexistent drilling rig. The lender sued him in federal district court in New Mexico, where the judge ruled he and several others had committed fraud, awarding the lender $550,000.
Mr. Presley says that he wasn’t aware the rig was fictitious at the time and that he knows he must pay the award at some point.
He says he was certain the Gazmo would succeed, helping him settle debts. His original plan, he says, was: “We’ll just go out there and take wells over and get them for nothing to put them into production.”
With natural-gas prices sinking around 2010, he had little trouble finding operators happy to unload coal-bed-methane wells in the Powder River Basin that were now idle. The first company he acquired, High Plains, owned about 1,600 idle wells it obtained that year from Pennaco Energy, Securities and Exchange Commission filings show. Pennaco is a subsidiary of Marathon Oil Corp. , which didn’t respond to inquiries.
Mr. Presley says High Plains owed Wyoming at least $10 million in fees for idle wells, compliance fines and unpaid royalties. When Mr. Presley offered to take on the wells in 2013, High Plains’ owners agreed to give him the company at no cost, he says. A lawyer who represented High Plains at the time declines to comment.
Mr. Presley soon after bought wells from Colorado-based Patriot Energy Resources originally drilled by Devon Energy Corp. , a large Oklahoma City company.
In 2013, Patriot’s parent, Luca Technologies Inc., filed for Chapter 11 bankruptcy. Luca agreed to sell Patriot and its approximately 1,350 wells to Mr. Presley for $10 last March, bankruptcy-court records show. Matt Micheli, then Luca’s general counsel, says Mr. Presley’s offer made sense, given the company’s problems. “We didn’t have any real choice.”
When the deal closed, Mr. Presley became an abandoned-well mogul.
He held a pancake breakfast for landowners, vowing to make High Plans wells on their land productive again. Some attendees who had seen drillers come and go had doubts. “He was a good talker if you believe in fairy tales,” says one, Bill West, a local rancher.
Mr. Presley says that he understood the skepticism but that his interest was different from bigger companies’. “We are not carpetbaggers. We’re locals.” Abandoned wells multiply
Still, he couldn’t raise $6.75 million in additional bonding, which Wyoming’s Oil and Gas Conservation Commission required because the wells had been idle for so long. In November, the commission seized High Plains’ wells.
For Wyoming, Mr. Presley’s sites add to a growing list of abandoned wells. Orphans on state and private land more than doubled last year to nearly 3,900. State officials estimate it could cost from $22 million to more than $40 million to clean them up. State figures show about $9.7 million in bonding for those wells.
Wyoming’s oil-and-gas commission hopes to plug more than 650 abandoned wells in 2015. Last year, the state allocated an additional $3 million to deal with the problem. Wyoming officials say they expect eventually to consider raising the energy-production tax on operators and increasing bonding amounts, to help fund plugging.
“It is important to plug these wells quickly so that there are reduced opportunities for groundwater contamination,” says Tom Drean, the state geologist and a commission member.
The U.S. Bureau of Land Management, meanwhile, faces 651 idle High Plains wells it hasn’t taken possession of yet on federal land in Wyoming. The company owes it over $15 million in bonding, civil fines and penalties on those wells, some from before Mr. Presley took over, BLM officials say. Mr. Presley doesn’t dispute the fees.
The BLM hopes an operator takes over the wells before it deems them fully abandoned, says Duane Spencer, who manages its Buffalo, Wyo., field office. The BLM bonding on file isn’t enough to plug all of them, he says.
With more than 11,000 inactive wells on federal land, the agency hasn’t changed its bonding rates since 1960—from $10,000 a well to a blanket $150,000 for all a driller’s wells nationwide—even for inflation. Steven Wells, chief of the BLM’s fluid-minerals division, says the agency is considering proposing an increase.
At his ranch near Gillette, John Hines, a former Wyoming state Senate president, points out several of the roughly 50 abandoned High Plains wells on his land. An earlier owner left pipes strewed around and cattle get into the well huts. “Each one leaves it to the next one,” he says. “The major companies sell it to companies and individuals that don’t really have the means to reclaim things.”
Mr. Presley says he is sympathetic to landowners’ frustrations.
He hopes to acquire more wells but doesn’t expect to revive High Plains. “High Plains dies on the vine,” he says. “And all those collection efforts and everything, they die on the vine, too.”
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Political ‘Jousting' Over Environment Division At Justice Could End With Level Funding
Feb 26, 2015 | BNA Daily Environment Report
By Rachel Leven
Deliberations on appropriations for the Justice Department's environment division for fiscal year 2016 could turn into a contentious debate over the president's environmental policies, lawmakers on the House and Senate appropriations committees told Bloomberg BNA.
Republicans and Democrats differed, however, on what the final fate of the Environment and Natural Resources Division's FY 2016 funds will be.
While Rep. Chaka Fattah (D-Pa.) said political “jousting” would probably leave the division with relatively close funding levels to what the White House has requested, Rep. John Culberson (R-Texas) and Sen. Richard Shelby (R-Ala.) said it was too soon to tell.
“What the president sent up was dead on arrival,” Shelby told Bloomberg BNA. “We'll look at it, but ultimately we'll make the decision during the appropriations process on what we're going to fund and not fund.”
16 Percent Increase Requested
The environment division would see a roughly 16 percent increase in funding in FY 2016—from $110.1 million to $127.5 million—under the White House's latest budget request.
The funding increase would address the department's growing workload on issues such as wildlife trafficking and environmental enforcement associated with oil and gas extraction in Indian country, according to the division's congressional budget submission.
Environmental and legal factors, such as drought and recent Supreme Court precedents, will drive up the division's defensive cases, while the ongoing Deepwater Horizon litigation and “new, unusually cumbersome and increasingly complex” Environmental Protection Agency referrals will boost the division's affirmative enforcement workload, the document said.
Coal-Fired Units Addressed
Notably, efforts to bring coal-fired power plants into compliance with the Clean Air Act's New Source Review requirements and other portions of the act will “continue in earnest” this year and next year, the budget submission said.
The division accounts for less than 1 percent of the Justice Department's overall budget in FY 2015 enacted levels, as it would under the 2016 request. The Justice Department's FY 2015 enacted funding level is $26.2 billion and would be $28.7 billion under the FY 2016 request.
Legislators and a former senior Justice Department official generally agreed that the environment issues associated with the division could spark heated debate.
Environmental Laws, Science
The division could get dragged into the overall congressional debate regarding the implementation of environmental laws and the positions on the science of the environment, such as ongoing discussions in Congress on climate change, Robert Weiner, who previously served as associate deputy attorney general for the Justice Department, said.
“Those who think the environmental laws are being enforced generally too strictly, it wouldn't surprise me to see them to focus on the EPA and ENRD [the environment division] in the budget,” Weiner, now a partner at Arnold & Porter LLP, said.
The funding request for the division should make it into the final FY 2016 appropriations bill relatively unscathed, Fattah told Bloomberg BNA. Any cuts that occur to the environment division's funds from the initial White House request are likely to be generic, across-the-board allocation cuts in funding, not unique to the division, Fattah said.
Drawing Congressional Attention
There are other areas of the Justice Department budget that will garner more of Congress's attention, specifically prison reform, where “the cost is running rampant,” Fattah, the ranking member of the House Appropriations Subcommittee on Commerce, Justice, Science and Related Agencies, said.
And while “some of the politics on environmental issues could come into play”—potentially with amendments offered and passed to cut that portion of the department's budget—those amendments wouldn't make it into the final appropriations bill, Fattah said.
Going to Conference
“When we get to conference and we're negotiating with the White House about what bill they'll sign, the number's going to go back to—relatively—the administration's request,” Fattah said.
Culberson and Shelby told Bloomberg BNA separately that it's too soon to say what the fate of the environmental division's funding levels will be. However, Culberson added that “it's going to be a tight budget year for everybody in every program.”
“It's too early yet,” Shelby said. “We haven't made any deliberations on it.”
Culberson is the chairman of the House Appropriations Subcommittee on Commerce, Justice, Science and Related Agencies. Shelby is the chairman of the Senate Appropriations Subcommittee on Commerce, Justice, Science, and Related Agencies.
Trade-Offs Expected
Weiner said it seems unlikely that the White House's requested budget, on the whole, will make it through Congress as is, and that process may affect the division's FY 2016 funds. There will be trade-offs in Congress and potentially between Congress and the president that could result in altered funding levels for the division, he said.
“That doesn't mean that at the end of the day they won't work something out,” Weiner said. “They may end up with something they all can live with”
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Ex-Im Reauthorization Bill to Continue Coal Project Financing Provision: Manchin Aide
Feb 26, 2015 | BNA Daily Environment Report
By Ari Natter
Senate legislation being drafted to reauthorize the U.S. Export-Import Bank is expected to include a provision that overrides Obama administration guidance limiting the bank from financing overseas coal-fired power plants, an aide to Sen. Joe Manchin (D-W.Va) said in an e-mail to Bloomberg BNA Feb. 25.
The bill, expected to be unveiled soon by Manchin and Sen. Mark Kirk (R-Ill.), is likely to include language similar to a version previously introduced by Manchin that would require the bank to abandon guidance issued by the Obama administration in 2013 (240 DEN A-3, 12/13/13).
That guidance, the bank said, would no longer support new coal-fired power plants in developing nations unless there are no economically feasible alternatives or the plants use carbon capture technologies.
Kirk, in an interview with Bloomberg BNA Feb. 25, said the bill would include a provision related to the financing of overseas coal projects but said the specifics of the issue have yet to be worked out and that talks between him, Manchin and Sen. Heidi Heitkamp (D-N.D.) are ongoing.
“We will have to thread that needle,” Kirk said. “We will have made a huge mistake if we let the export development agency of the U.S. collapse because of a coal dispute.”
Omnibus spending legislation (H.R. 83; Pub. L. No. 113-235) approved by Congress in December continued a policy rider backed by Appropriations Committee Chairman Hal Rogers (R-Ky.) that overrides the Obama administration guidance, which was announced by the president as part of his Climate Action Plan.
The issue became a flash point in a broader fight over the reauthorization of the bank's charter last year.
Bank Has Authorized $1.5 Billion for Plants
The bank, which provides financing to expand U.S. trade, has authorized $1.5 billion in financing for coal projects, including $805.6 million in financing in 2011 for Overland Park, Kan.-based Black & Veatch Corp. to construct one of the world's largest power plants, the 4,800 megawatt Kulsie project in South Africa being developed by Eskom Holdings Ltd.
The bank also is considering financing a 3,960-megawatt coal -fired power plant in Tilaiya, India, according to online records.
The bank's charter expires June 30.
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Sen. King: Climate Impacts on Arctic Are 'Canary in Coal Mine'
Feb 25, 2015 | The Hill - E2 Wire
By Laura Barron-Lopez
Sen. Angus King (I-Maine) on Wednesday urged the Senate panel on energy to weigh the impacts climate change is having on the Arctic.
The Senate Energy and Natural Resources Committee plans to hold a hearing on the U.S. chairmanship of the Arctic Council, which the nation will take over later this year.
In a letter to Sen. Lisa Murkowski (R-Alaska), chairwoman of the committee, and ranking member Sen. Maria Cantwell (D-Wash.), King said climate change impacts on the region must be discussed.
"As our climate has changed, no region has been impacted as significantly as the Arctic -- the changing Arctic is a canary in the coal mine for our planet," King said.
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Sen. King Says ENR Hearing Should Plumb Climate Change
Feb 26, 2015 | E&E Daily News
By Phil Taylor
The Senate Energy and Natural Resources Committee should consider the impacts of climate change, newly emerging economic opportunities and the United States' claims to the outer continental shelf at its upcoming hearing on the Arctic, Sen. Angus King (I-Maine) said yesterday.
King sent a letter to committee Chairwoman Lisa Murkowski (R-Alaska) and ranking member Maria Cantwell (D-Wash.) outlining his goals for March 5 hearing as the United States takes up the chairmanship of the Arctic Council, an international forum, for the next two years.
The State Department has said the Arctic Council should focus on climate change adaptation and mitigation when it takes its leadership post this spring.
King said no other region has been as heavily affected by climate change as the U.S. Arctic, which he likened to "a canary in the coal mine for our planet."
Yet those changes are opening new opportunities for maritime commerce and energy development, as well as national security challenges, King said.
"As we assume the leadership of the Arctic Council, it is imperative that the United States develop a robust strategy for responding to changes in the Arctic," he wrote.
King recommended that Murkowski and Cantwell invite U.S. Special Representative for the Arctic Robert Papp Jr., a former Coast Guard commandant, to testify.
King also urged the committee to discuss the U.N. Convention on the Law of the Sea, an international treaty that the United States has not signed and that sets terms for the use of the world's oceans.
The panel should also discuss the need for new Arctic infrastructure, including icebreakers and other facilities to respond to potential oil spills, he said.
"While the committee does not have jurisdiction over every issue that needs to be examined, it still can serve as a pulpit to raise awareness of the changing Arctic," he said.
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McAuliffe Signs Virginia Utility Rate Bill Aimed at Clean Power Plan Compliance
Feb 26, 2015 | BNA Daily Environment Report
Virginia Gov. Terry (D) signed legislation that will freeze base rates for investor-owned electric utilities and allow the companies to retain “over-earnings” that normally would be rebated to customers, to help them cover the costs of reducing carbon dioxide emissions.
The bill (S.B. 1349), signed by the governor Feb. 24, also allows the utilities to seek rate adjustment clauses (RACs) to cover the costs of constructing solar power stations and the costs of early retirement of power plants caused by the Environmental Protection Agency's proposed Clean Power Plan.
The statute applies to Virginia's dominant utilities, Virginia Dominion Power and Appalachian Power, a unit of American Electric Power. Dominion's base electric rates will be frozen for five years and Appalachian's for four years. Dominion announced Feb. 5 that it planned to build solar power stations by 2020 (25 DEN A-12, 2/6/15).
The Virginia Senate approved S.B. 1349 Feb. 6. The House followed suit Feb. 12 (29 DEN A-16, 2/12/15).
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EPA Blog Slams Clean Power Plan's 'Special-Interest Critics'
Feb 25, 2015 | E&E News PM
By Hannah Northey
U.S. EPA posted a defense on its website today of a draft rule for slashing carbon emissions from power plants that's been criticized as a threat to grid reliability and affordability.
"As with anything EPA does, a handful of special-interest critics are automatically opposed," spokesman Tom Reynolds said in the EPA blog.
"They claim the Clean Power Plan will threaten reliability because they benefit from maintaining the status quo. In fact, failing to take steps to modernize our electric grid is the costliest thing we could do."
Reynolds, who managed communications for President Obama's inaugural committee and presidential campaign, said reliability is a "top issue" for EPA.
"As always," he wrote, "we are committed to working with stakeholders to make sure reliability is never threatened."
An industry coalition, the Electric Reliability Coordinating Council (ERCC), warned this month that the EPA proposal could harm grid reliability. ERCC's membership includes Ameren Corp., Arch Coal Inc., Duke Energy Corp. and DTE Energy Co. (Greenwire, Feb. 19).
And yesterday, the Institute for Energy Research, a free-market think tank headed by former Koch Industries Inc. lobbyist Thomas Pyle, released a report that cast the Clean Power Plan as a direct threat to grid reliability, along with tax incentives for wind generation and what the group cast as "anti-nuclear policies" at the state and federal levels. The rule would figure in the closure of 130 gigawatts of mostly coal-fired generation, according to IER.
"With this one regulation, EPA will be able to exercise unprecedented control over the electric grid. In turn, grid reliability will suffer because reliability is neither a priority for EPA nor one of EPA's statutory obligations," wrote Travis Fisher, an IER economist and a former staffer at the Federal Energy Regulatory Commission.
E&E's Power Plan Hub keeps you up to date on the latest national and state-level developments on EPA's greenhouse gas regulations for the power sector. Go to E&E's Power Plan Hub.
Clean energy advocates and "smart grid" companies have been pushing back against those warnings in their own reports, which Reynolds notes in his blog.
Early this month, a coalition of renewable energy, smart grid and energy technology companies with ties to billionaire climate activist Tom Steyer played down warnings from the North American Electric Reliability Corp. that the EPA proposal could threaten electric grid reliability. Steyer co-founded the Advanced Energy Economy Institute, which hired the Brattle Group, an energy-sector consulting firm, to write the report (EnergyWire, Feb. 12).
The Department of Energy, for example, Reynolds noted, found interstate natural gas pipelines could ramp up with few problems to comply with a national carbon policy.
Reynolds also highlighted a report from Boston's Analysis Group that argues states have the tools to craft plans to safeguard the grid while making the emission reductions envisioned by EPA. Any disruption to power supply would be a failure of planning, not a result of the rule, that report says (Greenwire, Feb. 19).
Federal regulators and grid overseers have been attempting to cut through arguments over the EPA proposal to appreciate challenges to grid reliability.
FERC Chairwoman Cheryl LaFleur questioned state regulators, utility executives and other stakeholders at a regional conference in Denver held today about the possibility of the EPA building a "safety valve" or some other reliability mechanism into its final rule.
And EPA Administrator Gina McCarthy told two House Energy and Commerce subcommittees today that the agency is working to ensure the Clean Power Plan is implemented without affecting grid reliability, as was done with the Mercury and Air Toxics Standards (see related story).
"We always are designing our rules in a way that ensures that we won't threaten reliability and affordability of the energy system," McCarthy said. "And clearly the flexibility in this rule ensures that. We'll take a look at the comments that come in, and if we need to make adjustments or work harder with DOE and FERC, we'll do that."
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President to Continue Climate Push In Last Two Years of Term, Adviser Says
Feb 26, 2015 | BNA Daily Environment Report
By Andrea Vittorio
President Barack Obama plans to continue his climate policy push during what he has called the “fourth quarter” of his presidency, one of his senior advisers said Feb. 25.
“We are looking at the next two years of climate action as an opportunity to go on offense, and we intend to stay there between now and the end of the administration,” Brian Deese, who has succeeded John Podesta as one of the president's top advisers, said at the 2015 Climate Leadership Conference. “We are determined, we're energized and, most importantly, we are hopeful about the prospects of making real change.”
Deese, who previously worked in the White House Office of Management and Budget, spoke at the conference during his first full week on the job.
He said the administration plans to keep pushing “as aggressively as we can” to implement remaining items on the president's climate agenda, including actions to limit carbon pollution from the nation's power plants and to address methane emissions from the oil and gas sector.
Deese said Obama also would “continue to urge other world leaders to step up and stand with the U.S.,” as negotiators work on a global deal to fight climate change, set to be signed in Paris in December, and “continue to stand up and not allow, to the degree that he can within his power, backsliding against the crucial components of this initiative.”
Economic Case Made
“We're going to keep pushing because there is a compelling case to do so,” Deese said. “I come at this from an economic policy background, and I think when you look at the economic case, it too is becoming more and more persuasive.”
The president's latest budget proposal, which tried to put a number on the costs of climate change for the first time, said economic damage from rising seas, increasingly extreme weather events and other impacts is putting a growing strain on taxpayer dollars (22 DEN B-3, 2/3/15).
Over the past decade, the federal government has incurred more than $300 billion in direct costs due to extreme weather and fire alone, including $176 billion in disaster relief and $85 billion for federal flood and crop insurance programs.
“The economics dictate that the longer we wait to curb emissions, the more extreme the impacts will be and the more expensive it will become to mitigate these problems,” Deese said.
“The flip side though is that by cutting carbon pollution today, we can reduce the risks to our children and to our economy while actually putting in place the incentives to create jobs, increase investment and expand opportunity in our economy,” he added.
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GOP Uses Hearing On EPA's FY16 Budget As Push To Aid GHG Rule Suits
Feb 25, 2015 | InsideEPA
By Lee Logan
House Republicans at a hearing on EPA's fiscal year 2016 budget request sought to build a record that could help lawsuits challenging EPA's proposed climate rules for new and existing power plants, even as one GOP House member says the agency's critics likely lack the votes for legislation that would block the regulations.
During the Feb. 25 joint hearing of two House Energy & Commerce subcommittees, Rep. David McKinley (R-WV) told EPA Administrator Gina McCarthy that the agency “has the ultimate power to issue any regulation” authorized by statute, and that “Congress doesn't . . . have the votes here to be able to overturn them.”
He added that “just because you can doesn't mean you should,” and that he is concerned “that maybe EPA has gotten a little more aggressive than they should be.”
Although McKinley did not specifically cite EPA's existing source performance standards (ESPS), which covers emissions from existing power plants, or the companion new source performance standards (NSPS) for new plants, his statement tracks with recent remarks from Rep. Ed Whitfield (R-KY) that the GOP has decided to “acquiesce” to EPA's authority to regulate greenhouse gases (GHGs) and will instead push targeted legislation aimed at easing the rules.
Whitfield, chairman of the energy and power subcommittee, told Inside EPA after the hearing that bills to ease the rules could attract Democratic support and that lawmakers hope to act even though EPA has signaled it could address some of critics' concerns.
The comments from the two coal-state lawmakers appear to foreclose on legislative attempts to block the rules entirely, but several lawmakers at the recent hearing questioned McCarthy in an attempt to build a record for already filed or future suits over the rules.
For example, Rep. Morgan Griffith (R-VA) targeted a procedural issue affecting novel suits brought by the coal mining firm Murray Energy and a group of states that target EPA's underlying authority in the Clean Air Act to issue the ESPS. Critics say the suits can move forward in part because the legal question will be applicable no matter how EPA finalizes the rule, and that the administration is fully committed to finishing the regulation.
To bolster that claim, Griffith asked McCarthy if there is any chance the administration would not complete the rulemaking. “Has there ever been a time that EPA has considered not finalizing this rule?” he asked. McCarthy replied that there has not been such a time.
Griffith said that means the agency's lawyers “did not tell the whole truth” in briefs in the litigation, because they argued the suits were premature in part because EPA could decide not to the finish the proposal at all.
McCarthy later added that, “many things can happen. You asked about my confidence level, and I'm confident we can get this done.”
New Source Rule
Other lawmakers also raised legal concerns over the NSPS, particularly whether carbon capture and sequestration (CCS) technology -- which formed the basis for standards for new coal plants -- is “adequately demonstrated” as the Clean Air Act requires.
Rep. Tim Murphy (R-PA) mentioned several CCS projects that EPA relied on for that finding in the proposed rule, charging that the projects “haven't been completed. Some haven't been started. One's been discontinued. One isn't even in this country, and none of them are large scale.”
“You've said you want to stay true to the rule and the courts. I'm not sure that EPA is actually following the law on this,” he said.
McCarthy replied that “the record EPA produced in the proposed rule went well beyond the facilities you referenced. We feel confident this technology is available. The use of CCS technology, at the levels we're proposing, will be a viable option for coal.”
She also defended the agency's cost estimate for CCS technology, saying “I believe we included our best judgment” and that EPA's technical staffers “align very well” with staff from other federal agencies.
In addition to efforts to support legal challenges to the climate rules, Republicans are also moving forward with targeted legislation aimed at easing the rules' requirements, despite signals from McCarthy and other officials that EPA is likely to soften the ESPS' interim targets that critics have decried as creating a compliance “cliff” in many states.
Rep. John Shimkus (R-IL) urged McCarthy to “really look at” the interim limits to ensure “the end goals can be reached without upsetting the apple cart.”
McCarthy responded that, “we've put out some ideas on this, and we have some great comments in that will allow us to address this effectively.”
The administrator earlier offered a “big hint” that EPA would soften the interim goals, noting some have argued that the stringency of the interim limits “could frustrate” the flexibility EPA sought to offer states.
Despite those public assurances, Whitfield told Inside EPA after the hearing that Republicans will quickly move forward with a bill to address the interim goals in the ESPS, as well as other issues with the NSPS.
“We plan to introduce this legislation very soon,” he said. “It's been our experience that EPA, they say a lot of things and we never know precisely what limits they're going to have on anything. So we'll be proceeding with our legislation, which we think is reasonable, relating to new plants and existing plants. We'll be introducing it in a relatively short amount of time.”
Regarding bills to block the power plant rules entirely, Whitfield said: “We know there will be Democratic support for it. The question will be, is there enough?” He added that attracting Democratic support for bills to undermine EPA rules “always depends on the way these bills are written.”
Early litigation
Regarding the early suits over the ESPS, Griffith also cited “prior court cases where EPA conceded the point that EPA cannot move forward” with regulations of power plants under section 111 of the air act if the plants' mercury emissions are already regulated under section 112.
If McCarthy is confident about EPA's legal strategy on the issue, he said, “your confidence is misplaced and your lawyers are not telling you the truth.”
The issue in the suits is complicated because the House and Senate passed two different versions of section 111(d) that were both signed into law in 1990. The Senate amendment would explicitly allow EPA's rule, while the House version could be read as prohibiting EPA's proposal because its prohibition centers on source categories and not pollutants.
In response to Griffith's characterization of EPA's past positions on the issue, McCarthy said “I don't agree with that interpretation.”
She later added that the legal issue over the ESPS differs from past litigation over the Bush-era Clean Air Mercury Rule. “That was about the same source category and the same pollutant being regulated under two different sections. We do not have that conflict [in this rule.] We do not believe that issue is really going to affect the legal viability of our Clean Power Plan,” she said. West Virginia Attorney General Patrick Morrisey (R), who is leading the coalition of states suing over the proposal, recently sounded optimistic that pending April 16 oral arguments over the suits would allow for a “quick review” of the issue after the rule is finalized this summer.
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GOP Battles With EPA Over Rules
Feb 25, 2015 | The Hill - E2 Wire
By Timothy Cama
House Republicans used a Wednesday hearing on the Environmental Protection Agency’s (EPA) budget to attack various regulations being pursued by the agency.
Most of the fights focused around the EPA’s proposals to cut carbon dioxide emissions from power plants, but other regulations also got attention.“EPA seems intent on locking in a long list of new regulations that will bind future administrations,” Rep. Fred Upton (R-Mich.), chairman of the Energy and Commerce Committee, said at the hearing of two subcommittees of the panel.
“If this plan puts reliable base load energy from sources such as coal and nuclear in danger, communities may face higher costs and potentially suffer brownouts when most in need,” said Rep. John Shimkus (R-Ill.), chairman of the environment subpanel.
“We have to ask ourselves if this path leads to the energy future Americans expect.”
EPA Administrator Gina McCarthy defended her rulemaking agenda and the agency’s funding request for fiscal 2016, asking for $8.59 billion, a $452 million increase over what it received in the most recent year.
The budget “provides the resources that are vital to protecting human health and the environment while building a solid path forward for sustainable economic growth,” she said.
McCarthy said almost half of the funds would go straight to states.
She highlighted the $1.1 billion for fighting climate change and air pollution.
“These resources will help protect those most vulnerable to climate change impacts and the harmful effects of air pollution through commonsense standards, guidelines and partnership programs,” she said.
Democrats stood by McCarthy’s plans.
"That is the minimum level, in my opinion, that EPA needs to begin address the many environmental challenges we’re facing today,” Rep. Frank Pallone (D-N.J.), the top Democrat on the panel, said of the EPA’s request.
Rep. Bobby Rush (D-Ill.) drew attention to the EPA’s power plant rules as a significant step to fight climate change.
“If it was appropriate, I’d get up and ask for a standing ovation, but I don’t think that would be appropriate at this point in time,” he told McCarthy. “But you understand how we feel about you on this side.”
While Republicans weren’t fond of the budget request, they spent most of their time criticizing regulations.
Rep. Ed Whitfield (R-Ky.), chairman of the energy and power subcommittee, questioned whether the EPA has the legal authority for its power plant rules, but McCarthy said she felt “very confident” that the rules align with the Clean Air Act.
Rep. Pete Olson (R-Texas) criticized the EPA’s propose to cut down on ground-level ozone pollution.
Houston, he said, has made “great strides” in reducing ozone, “but the proposal EPA has released will land like of brings … on most of the country.”
Rep. Tim Murphy (R-Pa.) challenged the legality of the EPA’s proposed carbon rules for newly built coal power plants. He said the rules must be based on pollution levels that are attainable, but carbon capture and sequestration projects continue to close down or be canceled.
“My concern is … I’m not sure that EPA’s actually following the law on this,” he said. “So I want to know, are you reviewing anything to withdraw the rule and start over so you can really adhere projects that are viable and can work us towards this goal?”
McCarthy said she is very confident that carbon capture is attainable.
“The record that EPA produced in our proposed rule went well beyond data from those facilities,” she said. “We feel very confident that the use of CCS technology at the levels that we’re proposing it will be a viable option for coal to continue to be part of the future of this and other countries, and that we’re supporting investment in CCS.”
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Judges Mull How to Handle Individual Challenges to EPA Cross-State Rule
Feb 26, 2015 | BNA Daily Environment Report
By Patrick Ambrosio
Two federal appeals court judges questioned how the court should handle challenges to individual state emissions budgets under the Environmental Protection Agency's cross-state air pollution rule, given that the rule based those budgets on uniform cost thresholds (EME Homer City Generation LP v. EPA, D.C. Cir., No. 11-1302, oral arguments held 2/25/15).
Judges Brett Kavanaugh and Judith Rogers of the U.S. Court of Appeals for the District of Columbia Circuit heard oral arguments Feb. 25 on challenges to the cross-state rule, including allegations by industry and labor groups that the EPA rule impermissibly overcontrols power plant emissions from Texas and 17 other states.
The rule sets limits on power plant emissions in 28 states in the East, Midwest and South that contribute to ozone and fine particulate attainment issues in downwind states. The U.S. Supreme Court upheld the structure of the cross-state rule in April 2014, but it remanded the litigation to the D.C. Circuit for consideration of unresolved issues (EPA v. EME Homer City Generation LP, 134 S. Ct. 1584, 78 ERC 1225, 2014 BL 118432 U.S. 2014; 83 DEN A-1, 4/30/14).
In addition to the individual, “as-applied” challenges to state emissions budgets, the court also heard arguments on a state claim that the EPA unlawfully imposed federal implementation plans for 22 states that were previously covered by state plans under the Clean Air Interstate Rule, the predecessor of the cross-state rule.
Judge Thomas Griffith, the third member of the appeals panel considering the litigation, didn't participate in oral arguments due to illness but was said to be listening to the proceedings remotely.
Industry Says Data Not Disputed
Industry and labor groups, including the Utility Air Regulatory Group and Luminant Generation Co., claim that the EPA impermissibly overcontrols Texas, Alabama, Georgia and South Carolina beyond what is necessary for all downwind areas affected by pollution from those states to attain and maintain national ambient air quality standards.
Peter Keisler, an attorney with Sidley Austin LLP who represented the industry and labor petitioners during oral arguments, told the court that the EPA doesn't deny that those states could be regulated less without resulting in any downwind areas attaining or maintaining compliance with air quality standards.
The Supreme Court in EPA v. EME Homer City Generation LP found that the EPA lacks the authority under the Clean Air Act to require states to make reductions that would bring them below the minimum thresholds the agency established for significant contribution to downwind nonattainment and to require reductions beyond what would bring all affected downwind states into compliance.
Emissions Budgets Should Be Higher
The petitioners contend that the emissions budgets for those four states should be higher and are requesting that the D.C. Circuit remand those budgets to the EPA for reconsideration without vacatur.
When asked by Judge Rogers if the petitioners were asking the court to require the EPA to set the emissions budgets for those states at a certain cost threshold, Keisler said the court wouldn't need to be that prescriptive but rather should identify legal principles the agency should follow when reconsidering the emissions budgets.
Keisler said that if the petitioners weren't happy with the emissions budgets the EPA set upon reconsideration, they could always file a petition with the court for review of those decisions.
“I can only imagine the battles that would happen on remand,” Judge Kavanaugh said later in the arguments.
Court Warned of ‘Ripple Effects.'
The EPA argued in its brief that changing the emissions budgets for some states and applying different cost thresholds to different states would undermine the efficiency and cost-effectiveness of the rule.
Jessica O'Donnell, a Justice Department attorney who represented the EPA during oral arguments, warned of “ripple effects” if the court were to require the EPA to go back and set different cost thresholds for some states.
For example, a lower cost threshold in Texas would lower the cost of power generation in that state compared to others, leading to an increase in power generation and associated pollution from power plants in Texas, O'Donnell said.
Judge Rogers said that she searched through the EPA's record looking for a technical document explaining the theory of uniform cost control and didn't find one. Relying only on the EPA's data, there “isn't anything” that caused the judge to doubt the industry and labor petitioners' claims that Texas' emissions budget could be raised without interfering with downwind attainment.
Policy Argument for Uniform Cost Thresholds
Kavanaugh, after hearing further arguments from an attorney representing power companies that are intervening in the litigation on behalf of the EPA, said there is a “compelling policy argument” in favor of setting uniform cost thresholds but said that legally the arguments appeared to be inconsistent with part of the Supreme Court's decision in EPA v. EME Homer City Generation LP.
That ruling provided an avenue for individual, “as-applied” challenges to state emissions budgets if those budgets would require emissions reductions beyond what is necessary for downwind states to attain and maintain air quality standards for ozone and fine particulates.
Keisler of Sidley Austin said during his argument that the EPA during oral arguments before the Supreme Court in EPA v. EME Homer City Generation LP actually asked the court to allow for as-applied challenges in lieu of vacating the entire cross-state rule.
He said it is “quite clear” how the Supreme Court viewed the issue based on its opinion, which he said supports the claims that the EPA overcontrolled certain states.
No Ripple Effects Seen
In response to O'Donnell's argument that remanding the emissions budgets for the four states would cause “ripple effects,” Keisler said there would be no ripple effects because no other states would have to do any more to control their pollution just because Texas is doing less.
O'Donnell of the Justice Department disputed the contention that there is anything in the Supreme Court decision that requires the EPA to use different cost thresholds under the cross-state rule.
Keisler also argued that the emissions budgets for 14 states covered by the cross-state rule should be fully vacated by the court because there is no need for the EPA to impose “good neighbor” obligations on those states. The 14 states are Florida, Iowa, Maryland, Michigan, New Jersey, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, Virginia, West Virginia and Wisconsin.
The EPA's own data projected that downwind receptors linked to those 14 states by 2014 would attain and maintain the 1997 ozone standards, the version of the standards the cross-state rule was based on.
O'Donnell Acknowledges Attainment
O'Donnell acknowledged the 2014 projections resulted in attainment of the 1997 ozone standards but said that 2012 data showed that emissions from those 14 states significantly contributed to attainment issues in downwind areas. The emissions budgets in the cross-state rule are based on 2012, not 2014, according to O'Donnell.
The EPA had authority to include those states in the cross-state rule at the time because the states were significantly contributing to attainment issues in 2012, O'Donnell said.
Concluding that the states shouldn't be regulated due to projections of what emissions may be in the future would be inconsistent with the Clean Air Act and the D.C. Circuit's 2008 ruling that vacated the Clean Air Interstate Rule, according to O'Donnell (North Carolina v. EPA, 531 F.3d 896, 67 ERC 1151, 2008 BL 146717 (D.C. Cir. 2008).
Judge Says Decision ‘Sounds Arbitrary.'
Judge Kavanaugh appeared to disagree with the federal government's argument, saying that it “sounds arbitrary” to impose emissions budgets on a state when data show the state's obligation would be met without any additional emissions reductions.
Judge Rogers questioned how the EPA handles situations where data show that a state is no longer contributing to nonattainment or maintenance issues in a downwind state. O'Donnell said in that situation, a state can submit a revised state implementation plan showing that they've met their “good-neighbor” obligations under the Clean Air Act.
In that case, the state would have to show that they aren't interfering with downwind attainment of any more stringent air quality standards, according to O'Donnell.
Graham McCahan, an attorney with the Environmental Defense Fund who represented public health and environmental groups intervening in the litigation on behalf of the EPA, said none of the six downwind areas significantly affected by emissions from the 14 states is currently in attainment of the 2008 ozone standards of 75 parts per billion.
SIP Issue Argued
The D.C. Circuit also heard arguments from state petitioners that the cross-state rule should be vacated because the EPA didn't have the statutory authority to impose federal implementation plans for 22 of the 28 states covered by the rule.
The EPA exceeded its statutory authority by retroactively disapproving state implementation plans based on the Clean Air Interstate Rule, according to Bill Davis, assistant solicitor general at Office of the Attorney General of Texas.
Davis, arguing for the state petitioners, said that because the D.C. Circuit decided to leave the Clean Air Interstate Rule in place while the EPA worked on a valid replacement following the North Carolina v. EPA decision, the EPA did not have a valid reason to disapprove the SIPs.
The D.C. Circuit left that rule in effect for “all purposes,” said Davis, who described the EPA's move to disapprove the state plans as “remarkable in some respects.”
‘Obvious' Deficiency for State Plans
Judge Kavanaugh said the EPA's decision would have been remarkable without the North Carolina v. EPA ruling and questioned why that ruling didn't create an “obvious” deficiency with the state plans, which were based on a rule that was found by the court to be insufficient under the Clean Air Act.
That statute instructs the EPA to promulgate a federal implementation plan if the agency finds that a plan or plan revision submitted by a state doesn't satisfy minimum criteria or if a state plan is disapproved and the state doesn't correct the deficiency.
Judge Rogers called the state implementation plan issue “an interesting issue” but questioned whether the EPA should be required to “return to ground zero.”
Norman Rave, a Justice Department attorney representing the EPA, said that once the D.C. Circuit declared the Clean Air Interstate Rule to be invalid, “it was obvious” that the state implementation plans submitted in accordance with that rule were also invalid.
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California-Quebec Carbon Dioxide Emissions Allowances Sell Out; Market Expands to Fuel
Feb 26, 2015 | BNA Daily Environment Report
By Lynn Doan
California and Quebec, which together run North America's biggest carbon market, sold out of greenhouse gas emissions allowances at $12.21 each, about a dime above the minimum price set.
Agencies received 1.14 bids for each allowance on sale Feb. 18, the California Air Resources Board said Feb. 25 on its website. Units of companies including BP Plc, Chevron Corp., JPMorgan Chase & Co. and Morgan Stanley qualified to participate.
Polluters buy allowances, each permitting the release of a metric ton of carbon-dioxide equivalent, to cover emissions. The lowest price allowed for them, known as “the floor,” was set at $12.10.
The programs established by California and Quebec are designed to shrink greenhouse gas emissions contributing to warmer temperatures, rising sea levels and worsening fires and droughts. The auction was the first held by the governments since they began imposing pollution limits on fuel suppliers.
Carbon-futures trading reached a record in January on speculation that the suppliers would boost demand in the market.
“The current auction cleared at the smallest premium to the floor price since California's first auction in the fourth quarter of 2012,” Colleen Regan, a Bloomberg New Energy Finance analyst in New York, said by e-mail Feb. 25. The results suggest “a decreasing appetite for allowances in an exceedingly oversupplied market.”
About 73.6 million allowances, each permitting the release of one metric ton of carbon dioxide as soon as this year, were on sale. An additional 10.4 million permits that can be used as early as 2018 also were auctioned.
The 2018 allowances sold for $12.10 each. The governments received 1.02 bids for every one of those up for auction.
Emissions Cap
California has capped greenhouse gas emissions from industrial polluters since 2013 and began imposing limits on transportation fuel suppliers Jan. 1.
Companies must either collect enough allowances to cover their emissions or find a way to curb their pollution. The total allowances available shrink with the cap over time to achieve a roughly 15 percent reduction in gases by 2020.
Futures for California's 2015 carbon allowances for March delivery rose 2 cents Feb. 24 to settle at $12.65 a metric ton, data compiled by Atlanta-based Intercontinental Exchange Inc. show. The same contract closed at $12.84 on the day of the auction.
By Jan. 9, 23,941 futures contracts had been traded for the month, eclipsing a record set in July 2014, according to ICE. By the end of January, total volume had surpassed 43,000, the exchange said. The bulk of the trading was done for allowances that could be used this year and next.
During the allowance auctions, companies submit confidential bids for the number of allowances they want at a specific price. The highest bidder is awarded permits first, then the second-highest, and so on until all of the permits for sale have been called for. Then all bidders pay the price of the lowest winning offer.
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Committee Moves EPA Data Transparency, Advisory Board Reform Bills to House Floor
Feb 26, 2015 | BNA Daily Environment Report
By Anthony Adragna
Members of the House Science, Space and Technology Committee quickly advanced two bills aimed at boosting scientific transparency in the Environmental Protection Agency's rulemaking process and reforming the agency's scientific advisory panel.
The panel advanced the Secret Science Reform Act (H.R. 1030) by a vote of 16-10 and cleared the EPA Science Advisory Board Reform Act (H.R. 1029) by a vote of 17-12 just one day after their introduction (37 DEN A-19, 2/25/15).
Both votes occurred on party lines. The committee voted down one Democratic amendment to the scientific data transparency bill, while adopting one and voting down two others on the EPA Science Advisory Board reform legislation.
On Feb. 24, Sen. John Barrasso (R-Wyo.) offered a companion bill (S. 544) to the scientific data transparency measure in the Senate, while Sens. John Boozman (R-Ark.) and Joe Manchin (D-W.Va.) offered a companion version (S. 543) of the EPA Science Advisory Board reform bill.
Similar versions of both bills passed the House last year, but were not considered in the Senate. The White House threatened to veto both measures (222 DEN A-15, 11/18/14).
‘Secret Science' Bill
The Secret Science Reform Act would expressly prevent the EPA from finalizing regulations unless the agency releases all scientific information and technical data used in crafting them.
Supporters said this would enable independent verification of data used to justify regulations and support government transparency principles frequently championed by the administration of President Barack Obama.
“Nearly every major air quality regulation from this Administration has been justified by studies with data that even the EPA hasn't seen,” Rep. Lamar Smith (R-Texas), chairman of the committee, said. “This will allow the EPA to focus its limited resources on the highest quality science that all researchers can examine. And this will promote sound science and restore confidence in the EPA decision-making process.”
Democrats on the committee and public health groups warned the legislation would require the EPA to ignore the best available science or publicly release confidential patient information in violation of federal law.
“This is an untenable outcome that would completely undermine the ability of the EPA to perform its responsibilities under the Clean Air Act and myriad other federal laws,” the American Lung Association and American Thoracic Society said in a Feb. 24 letter. “The legislation will not improve EPA's actions; rather it will stifle public health protections.”
Rep. Eddie Bernice Johnson (D-Texas), ranking member of the committee, said the legislation was among the “most partisan” and “most ill-considered” measure ever discussed by the panel.
Advisory Board Reform Bill
The other bill considered by the committee, the EPA Science Advisory Board Reform Act, would enable reviews of EPA risk or hazard assessments, limit non-scientific policy advice, revise the selection of board members, expand public participation opportunities, increase the ability of board members to express dissenting views and expand required disclosures.
Committee members adopted by voice vote an amendment from Rep. Alan Grayson (D-Fla.) clarifying that all registered lobbyists would be prohibited from serving on the board. Previously, the bill said only “federally registered lobbyists” would be banned.
Another amendment from Rep. Eric Swalwell (D-Calif.), which would have limited the requirement for draft risk or hazard assessments to those agency actions with an estimated $100 million economic impact or more, was not adopted.
A final amendment from Rep. Suzanne Bonamici (D-Ore.), which would have allowed time restrictions on public comments and eliminated a requirement requiring responses to significant comments, also fell along party lines.
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McCarthy Defends Viability of Carbon Capture Technologies Before House Energy Panels
Feb 26, 2015 | BNA Daily Environment Report
By Anthony Adragna
Carbon capture and sequestration technologies are available and will provide a path forward for the construction of new coal-fired power plants in the U.S., Environmental Protection Agency Administrator Gina McCarthy said Feb. 25.
McCarthy told a joint hearing of two House Energy and Commerce subcommittees that the EPA has never considered withdrawing its new source performance standards for future power plants, but she also said no final decision has been made about whether to effectively require carbon capture and sequestration technology, as was done in the proposed rule.
McCarthy's defense of carbon capture and sequestration technologies comes amid a series of high-profile setbacks for projects used by the EPA to justify the technology's availability and feasibility. McCarthy, though, said the agency didn't rely on those projects alone to justify its conclusion that CCS technologies are adequately demonstrated and economically feasible.
“We feel very confident that this technology is available,” McCarthy said. “We feel very confident that the use of CCS technology—at the levels we're proposing—will leave a viable option for coal to continue to be a part of the future.”
In its proposed new source performance standards for carbon dioxide emissions from new fossil fuel-fired power plants (RIN 2060-AQ91), the EPA cited a number of CCS projects as the basis for the feasibility and availability of the technology (05 DEN A-4, 1/8/14).
But one of those projects—Southern Co.'s Kemper County Energy Facility in Mississippi—is billions of dollars over-budget and another—the FutureGen 2.0 project in Illinois—lost federal funding in early February after it became clear it would not meet several statutory deadlines (34 DEN A-11, 2/20/15).
In Canada, SaskPower International Inc. installed carbon capture equipment on the Boundary Dam plant, establishing the first commercial-level operation of its kind when it opened last year. Republicans said the fact that only one project in North America was operational showed the technology was not feasible and could not be used to justify the regulations (191 DEN A-11, 10/2/14).
“Some [projects] haven't been completed, some haven't been started, one has been discontinued, one isn't even in this country and none of them are large-scale,” Rep. Tim Murphy (R-Pa.), chairman of the House Energy and Commerce Oversight and Investigations Subcommittee, said. “I'm not sure that EPA is actually following the law on this.”
The EPA also has argued in a supplement to its proposal that engineering studies have shown that carbon capture systems are technologically viable.
Could EPA Back Off CCS?
Several observers of the EPA rulemaking process believe the agency might back off effectively requiring the use of carbon capture and sequestration in its final version of the rule, expected out sometime in mid-summer, despite McCarthy's continued vocal defense of the technology.
“There's no guarantee what they're going to do obviously, but I've thought for a while they were going to back off the CCS requirement,” Brian Potts, a partner at Foley & Lardner LLP, told Bloomberg BNA.
One potential obstacle to abandoning the carbon capture requirement in its final performance standards for new power plants is that rules for new facilities are typically more stringent than those for existing sources, Potts said. Removing the carbon capture component from the standards for new power plants could result in a rule less stringent than the EPA had proposed for existing sources as part of its Clean Power Plan.
Dropping the carbon capture component of the proposed rule could help insulate the final rule from some legal challenges, Jeffrey Holmstead, a partner at Bracewell & Giuliani LLP and former head of the EPA air office, told Bloomberg BNA Feb. 25. The Energy Policy Act of 2005 bars the EPA from setting standards that require carbon capture based “solely” on projects funded by the Energy Department, such as FutureGen and the Kemper project.
Under the Clean Air Act, the EPA may not implement the Clean Power Plan, which would set carbon dioxide limits on existing power plants, until it finalizes standards for new units. Dropping the carbon capture component of the performance standards could remove one potential legal vulnerability, allowing the EPA to focus on the Clean Power Plan, Holmstead said.
“I'm quite confident they're looking seriously at whether they're going forward with CCS and whether they want to take on vulnerability,” Holmstead said.
Skepticism Over Clean Power Plan
In addition to the concern over CCS requirements, several House Republicans voiced concerns about the agency's plan to address carbon emissions from existing power plants through its Clean Power Plan (RIN 2060-AR33) (138 DEN A-1, 7/18/14).
“If this plan puts reliable baseload energy from sources such as coal and nuclear in danger, communities may face higher costs and potentially suffer brown outs when most in need,” Rep. John Shimkus (R-Ill.), chairman of the Environment and the Economy Subcommittee, said. “I believe there is a better way and that we can find solutions to these challenges without placing the burden on the backs of consumers.”
In response, McCarthy said she was “very confident” of the legality of the Clean Power Plan and told lawmakers that the agency would maintain reliability in the nation's energy supply. She also said there was never any consideration of withdrawing the proposed rule.
“We are not encouraging any state to do anything that they do not consider … right and cost-effective and reasonable for them to do,” McCarthy said. “There are just lots of choices. There's maximum flexibility.”
McCarthy made a similar case for the Clean Power Plan before several governors during National Governors Association meeting Feb. 22.
At least one Republican, Rep. David McKinley (R-W.Va.), acknowledged there are not the votes in Congress to overturn the power plant regulations, but he urged the EPA to take greater account of the impacts its regulations would have on the economy in coal-dependent regions and on jobs.
“We know the EPA has the ultimate power to issue these regulations, and you well know that we don't have the votes here to overturn them,” McKinley said. “So whatever you're issuing, it's becoming the law of the land.... We didn't come here to Congress to be bullied by radical, environmentalist policy. The regulatory environment we're facing here is very destructive here.”
RFS Coming ‘Very Soon.'
Both Democrats and Republicans on the subcommittees probed the EPA for information about how it would redress the problem of being chronically late in issuing the renewable fuel standard. However, they received few details from McCarthy other than the agency will issue the standards for 2014, 2015 and 2016 “very soon, in the spring.”
“Continued investments in this sector are going to be essential—we have to play some catch up here,” McCarthy said. “We had problems in 2014 that we all have learned from and we will not repeat those problems again.”
McCarthy did not directly respond when asked by Rep. Joe Pitts (R-Pa.) if the EPA would base its 2014 standard on actual volumes of renewable fuels used, but she acknowledged the need for certainty in the market and said the agency would “clearly” answer that question in its regulation.
Senior House members have been open to reviewing the EPA's ability to set minimum volumes of renewable fuel that must be blended into national supplies, and there is momentum in the Senate for review as well. Sen. Jeff Flake (R-Ariz.) told Bloomberg BNA he would attempt to roll back the renewable fuel standard and its ethanol mandate through the appropriations process (37 DEN A-2, 2/25/15).
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Heitkamp to Reintroduce Bill to Expand Use of Carbon Capture Technologies
Feb 26, 2015 | BNA Daily Environment Report
By Ari Natter
Sen. Heidi Heitkamp (D-N.D.) plans to reintroduce legislation with incentives for developing and using carbon capture technologies, the senator's office said in a statement Feb. 25.
“Her bill aims to make sure coal remains an essential part of our national energy mix while also meeting long-term environmental goals by opening up increased funding options for advanced clean coal technologies,” Heitkamp's office said in a Feb. 25 news release. “Currently, coal is used to produce almost 40 percent of the electricity in the U.S., and nearly 80 percent of the electricity in North Dakota.”
The bill will be “along the same lines” as legislation (S. 2152) Heitkamp introduced in the previous Congress, which would have increased tax credits for carbon capture and storage and would have directed the Energy Department to set aside $2 billion in existing loan guarantees for coal projects, among other incentives for CCS technologies, a spokeswoman for the senator told Bloomberg BNA.
The bill is expected to be formally introduced this week.
As the Environmental Protection Agency moves forward with developing new carbon dioxide emissions limits for new and existing fossil fuel-fired power plants, industry uncertainty has led to a number of CCS projects being shelved or abandoned.
The Energy Department halted plans to provide $1 billion in American Recovery and Reinvestment Act funds for the FutureGen 2.0 carbon capture and sequestration project after it determined the project wouldn't be able to meet a Recovery Act requirement that the money be committed by July 1 and spent by Sept. 30 (25 DEN A-2, 2/6/15).
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Ultrafine Particles Linked to California Heart Disease Deaths, Study Finds
Feb 25, 2015 | LA Times
By Tony Barboza
A new study by California scientists has linked chronic exposure to microscopic air pollutants in vehicle exhaust to deaths from heart disease. The finding bolsters evidence that ultrafine particles, which are not regulated by state or federal environmental agencies, are a key contributor to health problems among people living near traffic.
Fireplace smoke is extremely hazardous to breathe, yet neither the California legislature nor SCAQMD will do anything to reduce wood smoke levels in densely crowded urban areas especially Los Angeles where people are dying from breathing smoke pollution. The air you breathe is your problem--not... tom gillilan at 10:43 PM February 25, 2015 Add a comment See all comments 4
Scientists analyzed health data from 2001 to 2007 on a cohort of more than 100,000 middle-aged women across California who had worked as school teachers or administrators. They used a computer model to estimate the levels of ultrafine particles the women breathed.
The authors said their study, recently published in the journal Environmental Health Perspectives, is the first to examine the effects of long-term exposure to ultrafine particles. The pollutants are about one-thousandth the width of a human hair and are released during combustion by car, truck and airplane engines, kitchen stoves, fireplaces and other sources.
The analysis found a stronger association between ultrafine particles and early deaths from heart disease than for fine particles, which are 25 times larger and regulated by state and federal emissions rules.
The study identified some components of ultrafine particle pollution, including soot-laden exhaust from diesel engines and specks of copper from vehicle brake pads, that were more strongly associated with heart disease deaths than others.
The findings are the latest to raise concerns about health effects from ultrafine particles, which are so small they can pass through the lungs and into the bloodstream, critical organs and brain. Past research has suggested ultrafine particles as a potential cause of health problems associated with living near traffic, where residents breathe more polluted air, but it remains an area of active study.
Major roadways were among the most ubiquitous of hundreds of sources of ultrafine particle pollution examined in the study. Other contributors included oil refineries, off-road construction equipment, cook stoves, seaports and fires.
The analysis by scientists at California’s Office of Environmental Health Hazard Assessment, the Cancer Prevention Institute of California, the City of Hope National Medical Center and UC Davis, found a link between the pollutants and heart disease deaths even after controlling for more than two dozen other risk factors, including smoking, drinking and exercise.
While some heart disease risks are genetic or cannot easily be changed, “air pollution is something we can deal with,” said Bart Ostro, an air quality researcher with OEHHA and UC Davis and lead author of the study. “It’s something we can reduce with the proper standards in place.”
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Judges' Review Of CSAPR May Set Precedent On EPA Air Trading Policies
Feb 25, 2015 | InsideEPA
By Stuart Parker
Appellate judges reviewing lingering legal challenges to EPA's Cross-State Air Pollution Rule (CSAPR) emissions cap-and-trade program wrestled with a host of issues that could -- depending on how they rule -- set new precedent for how the agency crafts air trading rules, including which states to regulate and the level of pollution caps.
The pending U.S. Court of Appeals for the District of Columbia Circuit case, EME Homer City Generation, LP, et al. v. EPA et al., addresses a host of suits over technical provisions of the rule and other issues that the appellate court did not resolve in its initial 2-1 ruling in 2012 that vacated CSAPR as exceeding EPA's Clean Air Act authority. The Supreme Court reversed that decision in April, remanding the case back to the court to resolve.
Observers have suggested that the lingering challenges are unlikely to pose the risk of another total remand of CSAPR, though it was unclear from the Feb. 25 arguments how the court might resolve some of the major issues.
Judge Brett Kavanaugh -- who authored the majority opinion scrapping CSAPR -- was one of the judges who heard arguments, along with Judge Judith Rogers who wrote the dissent in the initial ruling. At arguments, they again appeared to be on competing sides, with Kavanaugh appearing more sympathetic to critics of the trading rule. The third judge, Thomas Griffith, followed the proceedings remotely due to sickness and did not ask any questions.
Power sector groups and some upwind states want the court to vacate CSAPR entirely or scrap certain requirements for states to reduce emissions. Several downwind states and environmentalists are backing EPA's defense of the rule, saying that its pollution cuts will be vital to help states attain stricter federal air standards.
CSAPR regulates nitrogen oxides and sulfur dioxide emissions in 28 states, seeking to satisfy an air law “good neighbor” duty for states to curb interstate pollution that contributes to downwind areas' problems attaining the national ambient air quality standards (NAAQS) of ozone and fine particulate matter (PM2.5).
The Bush EPA first tried to establish a cap-and-trade program with its Clean Air Interstate Rule (CAIR), but the D.C. Circuit found fault with the rule and remanded it to EPA. The Obama EPA then developed CSAPR, imposing federal implementation plans (FIPs) on states to implement the rule. Several states objected, saying the rule was too strict and that they should have been allowed to first write state implementation plans (SIPs) to implement it.
The D.C. Circuit's split ruling in 2012 said EPA should have devised an allocation of states' emissions allowances, or “budgets,” using a strictly proportional approach based on how much each state contributes to its neighbors' air quality problems. Kavanaugh said at the time that EPA was wrong to directly impose FIPs, and wrong to allow any degree of “overcontrol” -- emissions cuts beyond those required to ensure downwind areas attain the NAAQS.
The high court, however, rejected this position in its 6-2 ruling that revived CSAPR, although the justices explicitly allowed “as-applied” legal challenges to be brought by states where they consider EPA's mandates on them to be in error. The high court approved of EPA's use of a uniform cost-effectiveness threshold for emissions controls when determining states' obligations, and allowed for some degree of overcontrol. But the high court also said that overcontrol is not permissible in situations where a downwind area is forced to reduce emissions more than is required to attain or maintain the NAAQS in every downwind location “to which it is linked.”
They also note that the high court did not address a key question of whether EPA had the right to disapprove SIPs crafted to comply with CAIR that aimed to satisfy the air law's good neighbor requirement. The agency eliminated these using an air law SIP “correction” mechanism, clearing the path to impose the FIPs.
Implementation Plans
Attorney Bill Davis, Texas and other states seeking to vacate CSAPR, at the oral arguments in EME Homer City attacked EPA's decision to invalidate SIPs and FIPs that were based on CAIR. The plans were valid when approved by EPA, Davis said, and EPA cannot arbitrarily scrap them because they are based on a rule -- CAIR -- that was remanded by the D.C. Circuit in its 2008 ruling in North Carolina v. EPA.
Rogers noted that EPA's assertion was that the court only left CAIR in place with respect to the trading program using its “equitable powers” to temporarily sustain a rule it had found unlawful, to which Davis responded that the “court left CAIR in effect for all purposes.”
Rogers pressed Davis on what to do where a “statute leaves a gap” on how to proceed in such circumstances.
“We don't believe there is any gap,” Davis replied.
Kavanaugh told Davis that “you are hanging everything on the fact that it [CAIR] wasn't vacated,” to which Davis replied that the manner of EPA's action invalidating SIPs was also unlawful.
EPA used its SIP “error correction” authority to do this, but Davis said this is reserved for errors that are “routine, insignificant and inconsequential,” but “here that is clearly not the case.”
“In our view this error should result in vacatur of the entire rule,” Davis said, because so many SIPs and FIPs supporting CSAPR would fall as a result of the court correcting EPA's mistake that the rule's trading programs could no longer continue to function. Nor did EPA give states the chance to correct any deficiency in their SIPs through a “SIP Call” that would have involved public notice and comment.
Davis also said that EPA failed to give independent meaning to the good neighbor provision's requirement that states reduce their “significant contribution” to pollution that not only results in NAAQS nonattainment, but “interferes with maintenance” of NAAQS in areas that are close to violating the standards.
Department of Justice (DOJ) attorney Norman Rave, representing EPA, said Davis' position was “clearly inconsistent with what this court actually did in North Carolina.”
He rebuffed Rogers' suggestion that EPA considered CAIR to have been kept alive only to preserve the trading program, saying, “it was not the trading program per se,” rather, “it was the health benefits” that the court sought to preserve. “Because CAIR was invalid, the CAIR SIPs were invalid,” he said.
Rave said EPA only invoked the “error correction” mechanism “out of an abundance of caution,” but did not need to rely on it, given the North Carolina ruling. With respect to a SIP Call and notice-and-comment, Rave said, “nothing the states could have said would have changed” the fact that CAIR was invalid.
Rave noted EPA gave independent meaning to the “interfere with maintenance” part of the good neighbor provision, identifying those areas at a high risk of nonattainment, and also significant contributors to their “high risk” status.
Attorney Andrew Frank, representing states and local authorities supporting CSAPR, said EPA's use of the error correction mechanism was “fair, reasonable and lawful,” and that a “SIP Call would have introduced an unnecessary and unreasonable delay” in replacing CSAPR.
Emissions Modeling
Attorney Peter Keisler, representing industry groups seeking a remand of CSAPR, claimed EPA's air modeling for 2014 used in the proposed rule had been ignored, to the detriment of many states that would otherwise not have to participate in the trading program. These groups are seeking the total exclusion of 14 states from the trading program.
While projections used in the final CSAPR rule required these states to participate based on projections of their significant contribution in 2012, the 2014 analysis -- not ultimately used by EPA for regulatory purposes -- showed no significant contribution to NAAQS nonattainment or maintenance problems in 2014. Indeed, the modeling showed that pollution levels in downwind states would actually increase as emissions upwind were cut under CSAPR. “That should have been a stop-the-presses moment” showing serious problems with the rule, Keisler said.
Keisler further said that Texas should be allowed to increase its emissions budget to allow more pollution because EPA's own modeling showed that the state could eliminate its significant contribution to downwind states' problems at a cost-effectiveness threshold of 100 dollars per ton of SO2 -- far less than the 500 dollars per ton used by EPA as a uniform threshold for states including Texas.
EPA in CSAPR used two groupings of states with two different cost-effectiveness thresholds for SO2, limiting the states to trading within, but not between, each bloc. Some states with air pollution problems pressed for higher thresholds, given that they already accept higher costs to reduce pollution, but upwind states argued for lower thresholds.
Keisler said that should a state successfully bring an “as-applied” challenge, including using a lower cost-effectiveness standard, that would be “at war” with EPA's insistence on uniform cost-effectiveness thresholds. Kavanaugh appeared to accept this argument, but pressed Keisler on the solution, to which Keisler replied that a remand with respect to an individual state would suffice. EPA's mistakes with regard to the 14 states, however, were so egregious that only vacatur of their obligations would do, Keisler said.
DOJ attorney Jessica O'Donnell countered that EPA was within its rights not to implement CSAPR based on the 2014 modeling, and not to entertain different cost-effectiveness thresholds for different states. The Supreme Court supported EPA's “reasonable” approach to cost effectiveness, she said. “I don't think anything in the Supreme Court's ruling requires that EPA set an individualized cost-effectiveness threshold for each state,” she added.
O'Donnell further clashed with Kavanaugh over EPA's interpretation of overcontrol, after Keisler had said EPA simply refused to accept the Supreme Court's view that excessive overcontrol is possible and must be avoided. “I think petitioners are putting too much emphasis on that language,” she said.
NAAQS 'Maintenance'
Attorney Graham McCahan, representing environmentalists, said during arguments that downwind areas must formally be designated attainment before they can be excluded from calculations of NAAQS “maintenance” under CSAPR, and that emissions reductions made to achieve this -- including those upwind -- must be “permanent and enforceable,” requiring upwind areas to remain in the program.
Some downwind areas that were projected by 2014 to meet the 1997 ozone NAAQS, expressed as 84 parts per billion (ppb), without CSAPR are now in fact violating the tougher 2008 standard of 75 ppb, now being implemented by EPA and states, McCahan said. Therefore taking the upwind contributor states to these areas out of CSAPR would contradict EPA's purpose of improving public health, he argued.
Rogers and Kavanaugh appeared split over the economic argument in favor of uniform cost-effectiveness thresholds made by Brendan Collins, representing “clean” utilities backing CSAPR that generate much of their power from low-emitting natural gas or renewable sources. Uniform thresholds are essential to allow functioning markets, as power is generated and sold across state lines, Collins said. Utilities in states with lower thresholds and higher emissions budgets will tend to generate more and sell more power, generating more pollution, undermining air quality downwind, Collins argued.
While Rogers seemed receptive to this argument, Kavanaugh said it is “a compelling policy argument,” but at odds with as-applied challenges that would result in state-specific thresholds. Collins said this is untrue, because “the Supreme Court unequivocally upheld the methodology” on cost-effectiveness. Rather, he argued, as-applied challenges could relate to findings of fact on other issues by EPA that states contest. Given the courts' traditional deference to EPA on technical issues, Rogers pondered whether as-applied challenges should then be addressed first to EPA, not the D.C. Circuit. Keisler argued that the high court clearly intended such challenges to be addressed by the courts, and rejected Collins' arguments on the mechanics of trading. “There is no statutory requirement for trading, but there is a requirement to avoid overcontrol,” he said.
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EPW Leaders, Witnesses Voice Opposition to Devolution
Feb 26, 2015 | E&E Daily News
By Sean Reilly
The leaders of the Senate Environment and Public Works Committee may occupy opposite ends of the political spectrum, but they readily united on one point yesterday: The need to keep the federal government in the business of paying for highways.
"No state is an island," EPW Chairman James Inhofe (R-Okla.) said during a hearing on reauthorization of highway programs. The committee's ranking Democrat, Sen. Barbara Boxer of California, offered a quick second, "This is one place where Republicans and Democrats should come together."
Washington, D.C.'s role in transportation matters dates back to the early 19th century with construction of the "National Road" linking Maryland and Illinois. It was enshrined in its current form via the 1956 law that created the Highway Trust Fund to pay for the interstate system.
But as the trust fund again nears a crisis, calls for "devolution" to the states are getting louder from some corners of the right. Last month, The Wall Street Journal editorialized in favor of abolishing the federal gas tax (E&ENews PM, Jan. 16). In a paper issued last week, the Heritage Foundation, a conservative think tank, endorsed legislation that would slash the tax from 18.4 cents per gallon to 3.7 cents per gallon over time, with states free to pick up the slack to pursue their own priorities.
That measure S. 1702, sponsored by Sen. Mike Lee (R-Utah), went down to defeat in the Senate last July by a 28-69 margin. Lee, however, plans to reintroduce it this year.
Dan Holler, communications director for Heritage Action, the foundation's political arm, sees momentum building in its favor.
"There is so much uncertainly at the federal level," Holler told reporters last week.
A stopgap extension of the existing federal highway and transit funding law expires May 31. If Congress doesn't approve a comparable replacement by then, the Department of Transportation could begin rationing reimbursements to states in July, DOT Secretary Anthony Foxx said recently. That is a mounting worry for members of the American Association of State Highway and Transportation Officials (AASHTO), many of whom are in Washington this week for a conference.
The recent cycle of short-term bills "hampers states' ability to even plan for the next construction season," said Bud Wright, AASHTO's executive director, in a news release yesterday announcing a multimedia campaign dubbed "Nation at a Crossroads" to rally support for a longer-term framework.
At a conference lunch, Foxx exhorted the audience "to tell the truth" to lawmakers about projects delayed or shelved because of funding uncertainty. He also urged support for a "big" bill that goes well beyond the status quo.
But flagging fuel gas receipts can no longer support existing spending demands on the trust fund, let alone cover an increase. Neither of the two congressional tax-writing committees -- House Ways and Means or Senate Finance -- has unveiled a strategy to shore up the trust fund for the long haul.
Another stopgap extension is probably coming, a senior Finance Committee staffer acknowledged at a conference panel discussion earlier yesterday.
Sen. Orrin Hatch (R-Utah), the committee's chairman, wants to tackle transportation funding as part of a comprehensive tax code overhaul. But drafting of that overhaul won't be done by May, according to the staffer, who -- like four other congressional aides on the panel -- spoke on condition that he not be identified. In response to an audience question, he declined to predict how soon before the May 31 deadline that Congress will pass a new extension. The current stopgap won final approval last July, less than a day before DOT planned to start delaying reimbursements to states.
"We want there to be minimal discomfort, though," the staffer said.
Two other Senate panels have a role in transportation reauthorization. Transit is the responsibility of the Banking, Housing and Urban Affairs Committee, which has yet to schedule a hearing. Rail and safety programs fall under the purview of the Commerce, Science and Transportation Committee, where a subpanel will hold an oversight hearing Wednesday on the Federal Motor Carrier Safety Administration.
Yesterday's EPW Committee hearing featured witnesses from the business world, as well as from state and local government. All agreed on the importance of maintaining the federal government's presence.
"We called the United States of America for a reason," said Steve Heminger, executive director of Metropolitan Transportation Commission, a regional planning agency for the San Francisco Bay Area, who testified at Boxer's invitation.
For the Utah Department of Transportation, federal money makes up almost a quarter of its budget and pays for maintenance and preservation of the existing highway system, Executive Director Carlos Braceras said.
Without that money, Braceras said, "You would see roads continue to deteriorate, bridges continue to deteriorate. That federal role is critical to the state of Utah."
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Canadian Regulations Impose New Rail Safety Management System Requirements
Feb 26, 2015 | BNA Daily Environment Report
By Peter Menyasz
The Canadian government finalized regulations Feb. 25 requiring all railways to implement safety management systems to help prevent accidents involving the transport of oil and other dangerous goods.
The regulations complement proposed railway safety legislation introduced Feb. 20 in the Canadian Parliament that would impose more stringent liability and insurance requirements on railways shipping oil and other dangerous goods and build on initiatives to improve the safety of Canada's rail system in the wake of the July 2013 Lac-Megantic disaster.
The Railway Safety Management System Regulations, which replace existing regulations from 2001, require railway companies to implement systems that integrate safety considerations into day-to-day operations, Transport Canada said in a regulatory impact statement published with the final regulations in the Feb. 25 issue of the Canada Gazette, Part II.
“The regulations are expected to increase railway safety by enhancing requirements that compel companies to take responsibility for managing the safety of their operations, including improving their abilities to identify hazards, as well as assess and mitigate risks,” the department said.
The regulations address recommendations from a November 2013 report by the federal auditor general, which came four months after a derailment and rail disaster killed 47 people in Lac-Megantic, Quebec.
The regulations require railways to appoint an executive specifically responsible for the safety management system, to establish policies and procedures to permit employees to report safety problems without fear of reprisal, and to use scientific evidence on worker fatigue in creating work schedules.
Transport Canada said significant changes were made to the regulations based on comments received on a draft version published in July 2014 (132 DEN A-19, 7/10/14).
A requirement for each railway to annually audit its safety management system was withdrawn. The regulations now call for full audits every three years, it said.
The department rejected, however, comments raising concerns about extending regulatory requirements to local railway companies and federally regulated national and regional operators.
“Although companies may be travelling short distances, the nature of operations could vary among those companies from carrying grain to carrying passengers or dangerous goods. Therefore, short distances do not necessarily equate to negligible impacts,” it said. “Transport Canada has decided that development of a safety management system to increase safety culture is important for all companies. The safety management system developed will be scalable to the size and nature of operations.”
New Legislation
The regulations are supported by amendments to the Railway Safety Act in Bill C-52, introduced Feb. 20 in the Canadian Parliament, that would empower the federal transport minister to order corrective measures to a railway's safety management system, Transport Canada said Feb. 20 in a background document.
“This new authority would encourage companies to more effectively manage the risks that exist in railway operations,” the department said.
The Railway Safety Act currently permits the minister to order railways to take corrective action to address an immediate threat to safety, but the amendments would allow the minister to order any responsible party to take action or stop any activity in the interests of safe operations, it said. It also would empower inspectors to issue notices and orders to any person creating a threat to the safety or security of railway operations and, in the case of an immediate threat, to order mitigation measures.
Boosting Liability, Insurance
Bill C-52 would substantially increase railways' liability and insurance requirements to carry oil and impose levies on those carrying oil to build a compensation fund for future accidents.
It also would direct the Canadian Transportation Agency to set minimum levels of insurance for railways based on the type and volume of dangerous goods they transport before they could receive a certificate of fitness to operate, according to Transport Canada.
Insurance requirements would range from a maximum of C$1 billion ($800 million) for railways carrying 1.5 million metric tons or more of oil a year or 50,000 metric tons or more of substances considered a toxic inhalation hazard, to as little as C$25 million ($20 million) for railways carrying no crude oil or toxic inhalation hazards and less than 40,000 metric tons a year of other types of dangerous goods, the department said.
The requirements are based on analysis of rail accident cost data and the severity of accidents involving certain types of dangerous goods, the department said. To address concerns that the increased insurance costs could prove difficult for short line railways, intermediate levels of C$100 million ($80 million) and C$250 million ($200 million) would be added 12 months after the legislation takes effect, it said.
The legislation, which would amend both the Canada Transportation Act and the Railway Safety Act, would require railways to inform the Canadian Transportation Agency of any operational changes that could affect their insurance coverage, and would empower the regulatory body to impose administrative monetary penalties of up to C$100,000 ($80,000) per violation for non-compliance with the new requirements.
Canadian National Railway Co. and Canadian Pacific Railway Ltd. did not respond to requests from Bloomberg BNA for comment on the legislative and regulatory changes.
Compensation Fund
The legislation would hold railways involved in crude oil accidents liable for damages to the amount of their minimum insurance coverage without proof of fault or negligence, providing greater certainty of compensation to accident victims, Transport Canada said.
It also would establish a supplementary compensation fund that would be used to address rail accidents involving crude oil, which would be financed through collection of a levy of C$1.65 ($1.32) per metric ton of oil shipped and increased annually based on Canada's national inflation rate. The fund eventually could be used for accidents involving dangerous goods as circumstances and levels of risk evolve, it said.
And the legislation would require railways to continue to cover accidents involving dangerous goods other than crude oil within the existing system, but with enhanced coverage for victims through increased insurance levels, it said.
The legislation also would provide new regulation-making powers to require railway companies to share information on their operational safety with municipal governments, as well as permit the Canadian Transportation Agency to order a railway to reimburse a provincial or municipal government for the cost of responding to an accident for which a railway is proved liable.
The July 6, 2013, Lac-Megantic rail disaster involved a runaway train carrying crude oil that derailed in the tiny Quebec community, exploding and killing 47 people and causing extensive environmental and property damage. Transport Canada and various regulatory and oversight bodies have taken a range of measures to respond to the Transportation Safety Board of Canada's recommendations in response to an extensive investigation of the accident (211 DEN A-5, 10/31/14).
Montreal, Maine & Atlantic Railway Ltd., which was involved in the Lac-Megantic accident, did not have sufficient insurance at the time of the accident to cover the resulting cleanup and other costs, and subsequently filed for bankruptcy.
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