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(ACC Mentioned) US Trade Group Starts Ad Campaign on BPA Safety
Feb 26, 2015 | Chemical Watch
The American Chemistry Council (ACC) has started an advertisement campaign to highlight certain US and European regulators' statements about the safety of bisphenol A (BPA) in food contact materials and other products. -
D.C. Circuit Declines To Rehear TSCA Lead Bullets Rule Suit
Feb 26, 2015 | InsideEPA
A three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit has rejected environmentalists' request to rehear the court's decision rejecting their suit seeking to force EPA to issue Toxic Substances Control Act (TSCA) regulation for lead bullets and shot, though the judges give no reason for their rejection. -
US Agency to Release Two Final Toxicological Profiles
Feb 26, 2015 | Chemical Watch
The US Agency for Toxic Substances and Disease Registry (ATSDR) will publish its final toxicological profiles for toxaphene and trichlorobenzenes this October. -
Prenatal Phthalate Exposures De-Masculinise Baby Boys, Say Scientists
Feb 26, 2015 | Chemcial Watch
By Philip Lightowlers
A team of US medical researchers says human male babies respond like young rats to phthalate exposures, while in the womb. Higher levels of several phthalate metabolites in their mother’s urine were found to be correlated with a shorter ano-genital distance (AGD), a measure of de-masculinisation seen in many laboratory animals, they say. -
The Crazy Way Your Couch is Making You Fat—And No, It's Not Just From Sitting On It
Feb 26, 2015 | Redbook Mag
By Samantha Shelton
You already know that sitting on your couch all the live-long day isn't going to do great things for your health. -
DHS Funding Lapse Could Harm Work on Cyberthreats, Official Tells House Panel
Feb 26, 2015 | E&E - Energywire
By Blake Sobczak
A looming shutdown at the Department of Homeland Security threatens "critically important" cybersecurity missions, a senior official told Congress yesterday. -
Chemical Train Derails in Minn. But Poses No Risk to Public -- Officials
Feb 26, 2015 | E&E - Greenwire
A freight train carrying hazardous materials derailed early yesterday in a rural area of Minnesota, but none of the material spilled, officials said. -
(ACC Mentioned) New Report: Shale Will Boost U.S. Chemical Exports
Feb 25, 2015 | Energy In Depth
By Varun Krovi
A new report prepared for the American Chemistry Council (ACC) showcases the positive impact of the U.S. shale revolution on manufacturing and our economy. -
Senate Dems Introduce Natural Gas Exports Bill
Feb 26, 2015 | PoliticoPro - Whiteboard
By Elana Schor
Four Senate Democrats today introduced legislation aimed at slowing down DOE’s review process for proposed liquefied natural gas export facilities, a bill that’s likely to come into play as the GOP advances a bipartisan proposal to set time limits for that same process. -
Greens Petition California to Ban Fracking
Feb 26, 2015 | The Hill - E2 Wire
By Timothy Cama
Dozens of environmental groups filed a legal petition Thursday asking California Gov. Jerry Brown (D) to ban hydraulic fracturing for oil and natural gas in the state. -
EPA's Cross-State Air Rule Faces Tough Scrutiny by Circuit Court
Feb 26, 2015 | Reuters
By Ayesha Rascoe
In a case examining Environmental Protection Agency rules requiring states to limit emissions that lower air quality in other states, federal judges questioned just how good a neighbor the agency can obligate states to be. -
Manufacturers: Even with Costs Halved, Ozone Reg Could Still Be Most Expensive
Feb 26, 2015 | The Hill - Reg Watch
By Lydia Wheeler
Though a new study commissioned by the National Association of Manufacturers cuts the compliance cost of the Environmental Protection Agency’s new ozone standards by half, the trade group said the proposed rule could still be the nation’s most costly. -
Lower Ozone Standard Would Cost $140B a Year -- NAM
Feb 26, 2015 | E&E - Greenwire
By Amanda Peterka
Tightening the national ozone standard to the lower end of a range being considered by U.S. EPA could cost the economy up to $140 billion a year, according to a study released today by a manufacturers group. -
EPA IG Officials Detail Wide-Ranging Plan For Reviews Under Tight Budget
Feb 26, 2015 | InsideEPA
By Anthony Lacey
Top officials in EPA's Office of Inspector General (OIG) say they will push ahead with a wide-ranging agenda of agency program evaluations, criminal investigations, and various other work at a time of tight funding, though EPA Inspector General (IG) Arthur Elkins Jr. warns that further funding limits could restrict OIG's work. -
EPA Weighs Early ESPS Role For FERC In Response To Reliability Concerns
Feb 26, 2015 | InsideEPA
By John Siciliano
EPA is suggesting it might ask the Federal Energy Regulatory Commission (FERC) to help states review the grid reliability impacts of their compliance plans for EPA's proposed climate rule for existing utilities sooner than what FERC officials have suggested, as one of several options to address critics' fears about the rule's potential impacts on reliability. -
Western Regulators, Utilities Call for More Time to Implement EPA's Clean Power Plan
Feb 26, 2015 | E&E - Energywire
By Phil Taylor
U.S. EPA proposed an unreasonable and costly deadline for states to begin reducing global warming emissions, according to utility officials and regulators in Western states who testified here yesterday before the Federal Energy Regulatory Commission. -
We Have Tools to Ensure Grid Reliability Under Carbon Rule -- EPA
Feb 26, 2015 | E&E - Climatewire
By Emily Holden
U.S. EPA Chief Gina McCarthy told lawmakers yesterday that her agency is prepared to deal with potential electric reliability problems under the Clean Power Plan, whether through a "waiver or another process." -
IG Targets Budget, 'Access' Hurdles To Ensure Adequate Oversight Of EPA
Feb 26, 2015 | InsideEPA
By Anthony Lacey
EPA Inspector General (IG) Arthur Elkins Jr. is seeking a hike in proposed fiscal year 2016 funding for his office and aiming to secure a commitment from the agency for full access to staff and documents during investigations, saying both issues could create potential hurdles to adequate IG oversight of EPA unless they are fully resolved.
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(ACC Mentioned) US Trade Group Starts Ad Campaign on BPA Safety
Feb 26, 2015 | Chemical Watch
The American Chemistry Council (ACC) has started an advertisement campaign to highlight certain US and European regulators' statements about the safety of bisphenol A (BPA) in food contact materials and other products.
Last December, the US Food and Drug Administration (FDA) reiterated its position that BPA is safe for the “current approved uses in food containers and packaging”. Its experts completed a four-year review of more than 300 scientific studies and concluded that there was no information in the “evaluated studies to prompt a revision of FDA’s safety assessment of BPA in food packaging, at this time” (CW 10 December 2014).
The European Food Safety Authority also concluded in a final scientific opinion on the safety of the substance in foodstuff that current exposure levels to bisphenol A (BPA) pose no risk to human health (CW 22 January 2015). The National Food Institute of the Technical University of Denmark says Efsa's recommended tolerable daily intake level is too high (CW 26 February 2015) but Efsa's stance has been backed by Germany's Federal Institute of Risk Assessment (CW 23 February 2015).
The ACC “believes that it is important to share clear, authoritative statements about BPA safety with consumers and manufacturers” and to pursue this objective, it has started a communications campaign to highlight recent conclusions from Efsa and the FDA, the group said. Advertisements titled “Listen to the Science: Experts Say BPA is Safe” will appear in mainstream and consumer news and health websites.
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D.C. Circuit Declines To Rehear TSCA Lead Bullets Rule Suit
Feb 26, 2015 | InsideEPA
A three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit has rejected environmentalists' request to rehear the court's decision rejecting their suit seeking to force EPA to issue Toxic Substances Control Act (TSCA) regulation for lead bullets and shot, though the judges give no reason for their rejection.
In a brief order issued Feb. 24, Judges David Tatel, Patricia Millet and Cornelia Pillard without comment deny the Feb. 5 request for panel rehearing filed by the Trumpeter Swan Society and other groups. The rejection leaves advocates with the option only of seeking Supreme Court review of the appellate ruling.
Environmentalists have long urged EPA to issue TSCA rules to regulate lead bullets and shot, which advocates say pollute the environment when hunters misfire, resulting in poisonings to wildlife, including the endangered California condor. Environmental groups are also pushing for limits at the state level or seeking voluntary reductions in use of lead -- a known neurotoxin that has been dropped from many uses due to health fears -- in ammunition.
In a bid to force a court order requiring EPA to develop the rules, advocates sued in the U.S. District Court for the District of Columbia over the agency's 2012 rejection of a petition for rulemaking they filed with EPA. But Judge Emmet Sullivan in a May 2013 decision dismissed the lawsuit, saying the petition was substantially similar to a prior rejected petition, and that EPA is entitled deference in interpreting the laws it administers.
Environmentalists then appealed the case to the D.C. Circuit, which hear oral arguments in the case, Trumpeter Swan Society, et al. v. EPA, et al., and then issued its ruling Dec. 23.
In the 12-page unanimous decision, written by Tatel, the court said TSCA “unambiguously exempts” from the law's definition of a chemical substance items taxed as ammunition, including shells and cartridges, and that environmental petitioners failed to offer the agency any grounds for avoiding the exclusion.
The opinion, written by Judge David Tatel, notes the exemption which is written into section 3(2)(B)(v) of TSCA. “Given that bullets and shot can become 'spent' only if they are first contained in a cartridge or shell and then fired from a weapon, petitioners have identified no way in which EPA could regulate spent bullets and shot without also regulating cartridges and shells -- precisely what section 3(2)(B)(v) prohibits,” the ruling said.
Advocates in their Feb. 5 petition for panel rehearing argued that the D.C. Circuit erred with its definition of “spent” ammunition. “In fact, bullets and shot can indeed become 'spent' without ever being contained in a cartridge or shell,” advocates argued. “For example, 'muzzleloader' rifles and pistols are weapons in common use today that fire bullets and shot (and thus deposit 'spent' bullets and shells in the environment) without the use of cartridges or shells. . . . The mistake is material, as it forms the basis for the Court’s reasoning that the plain language of section 3(2)(B)(v) of the TSCA must be read to apply to bullets and shot,” according to their filing.
But the court's Feb. 24 order means the D.C. Circuit panel will not rehear the case, and barring a Supreme Court appeal attention might shift to efforts in Congress to block TSCA lead rules for ammunition.
Sens. John Thune (R-SD) and Amy Klobuchar (D-MN) have re-introduced a bill to block EPA from using TSCA authority to regulate lead in ammunition and fishing tackle, as Thune fears the potential that environmentalists might succeed if they pursue another suit to try to compel the agency to develop such rules.
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US Agency to Release Two Final Toxicological Profiles
Feb 26, 2015 | Chemical Watch
The US Agency for Toxic Substances and Disease Registry (ATSDR) will publish its final toxicological profiles for toxaphene and trichlorobenzenes this October.
The two substances are among the 275 on a priority list of hazardous substances for which the Superfund Amendments and Reauthorization Act mandated the ATSDR administrator to prepare toxicological profiles (CW 18 January 2013). According to a Federal Register announcement, the profiles will be published "on or around 17 October".
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Prenatal Phthalate Exposures De-Masculinise Baby Boys, Say Scientists
Feb 26, 2015 | Chemcial Watch
By Philip Lightowlers
A team of US medical researchers says human male babies respond like young rats to phthalate exposures, while in the womb. Higher levels of several phthalate metabolites in their mother’s urine were found to be correlated with a shorter ano-genital distance (AGD), a measure of de-masculinisation seen in many laboratory animals, they say.
A sample of 753 mothers, who gave a urine sample during the first third of their pregnancy and gave birth in one of several enrolled hospitals across the US, took part in the study. It was led by professor Shanna Swan from the Icahn School of Medicine in Ithaca, New York.
Three metabolites of diethylhexyl phthalate (DEHP) – MEHP, MEOHP and MEHHP – were measured in the urine, and the levels were compared with the AGD measured in each male or female child. Corrections were made for confounding factors such as the size and age of the child, urine specific gravity and maternal age. A significant inverse relationship was found between AGD in boys and concentrations of each of the three metabolites, but not in girls.
The authors say this is the largest, but not the only study to have come to such a finding. They quote two earlier US and a recent Swedish study which found a relationship between prenatal di-isononyl phthalate (DINP) metabolite exposure and shorter AGD in boys (CW 30 October 2014).
The measure of AGD has been found to be a particularly important indicator of anti-androgen exposure during prenatal development in rodents and increasingly in humans, say the researchers. Animal studies suggest that shorter male AGD at birth is permanent and results in significant lifelong consequences. In rodents, previous scientific studies have shown that it predicts decreased sperm production and fertility as well as testicular tumours. The study notes those which have also suggested important clinical implications of shorter male AGD in humans. These include association with cryptorchidism, hypospadias, reduced fertility, lower testosterone, smaller testicular volume and even prostate cancer.
The association was found, the authors say, even though DEHP metabolite levels in the US have declined over the past ten years. The levels of MEOHP and MEHHP measured in the study, between 2010 and 2012, were 50% lower than those measured by an earlier study in 2000-2002. This is probably due to the increasing replacement of DEHP with DINP in products and processes, say the researchers.
Another recent paper published in the journal Andrologia, written by Spanish medical scientists at the University of Murcia, looked at AGD in young men, hormone levels, sperm counts and fertility. Professor Swan was a co-author. This study found no link between AGD and sperm quality or testosterone levels. But professor Swan regards this as an outlier. She told Chemical Watch that a similar study in New York and other US surveys had indeed found such associations in young men.
Professor Swan said the phthalates cause “incomplete masculinisation”, a process that occurs following testicular testosterone production in early pregnancy. When the amount of testosterone is decreased, this process is less complete.
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The Crazy Way Your Couch is Making You Fat—And No, It's Not Just From Sitting On It
Feb 26, 2015 | Redbook Mag
By Samantha Shelton
You already know that sitting on your couch all the live-long day isn't going to do great things for your health. It's likely to slow your metabolism—meaning you're burning less calories throughout the day—and research shows that three or more hours of TV time may even lead to a shorter lifespan.
But what we bet you didn't know is that the actual makings of the couch could be causing harm, too. New research from the University of New Hampshire found that laboratory rats exposed to synthetic chemicals like polybrominated diphenyl ethers (PBDEs)—the kind typically used in flame-retardant materials like furniture foam, fabrics and other household items—experienced disruptions in their metabolisms and had enlarged livers. Yikes.
What does that translate to? Simply put, metabolism and liver issues are both major problems that can lead to insulin resistance, which happens to be a big cause of weight gain and obesity.
Before you go tossing your couch on the curb though, keep in mind that the study has only been tested on rats thus far, and more research is being done to investigate. Either way, it's good to be informed—but maybe head out for a walk with the fam tonight instead of bingeing another Netflix show. Just to be safe.
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DHS Funding Lapse Could Harm Work on Cyberthreats, Official Tells House Panel
Feb 26, 2015 | E&E - Energywire
By Blake Sobczak
A looming shutdown at the Department of Homeland Security threatens "critically important" cybersecurity missions, a senior official told Congress yesterday.
Suzanne Spaulding, undersecretary of DHS's National Protection and Programs Directorate, said a little more than half of her department's 3,000 workers would still report to work if Congress doesn't pass a spending bill for the agency by tomorrow evening. But a lapse in funding would keep all other "nonessential" employees at home -- including cyber specialists who help protect the electric grid and key networks from online attacks.
"We have done a campaign across the country, for example, to educate critical infrastructure owners and operators about threats to their industrial control systems in cyberspace," Spaulding told the House Homeland Security Committee.
"When you asked me what keeps me awake at night, those are the kinds of things that do," she added, referring to cyberthreats to the grid, oil and gas pipelines, and other control system environments. "Those [DHS] activities would not be able to continue."
Congressional Republicans have sparred with President Obama over immigration policies enforced by DHS, threatening to let funding expire for the agency if Obama doesn't agree to scale back his executive actions.
Lacking cash, DHS would still expect most employees to work, such as Transportation Security Administration agents at airport security checkpoints. But less-visible departments would shrink during a shutdown, including the NPPD.
Rep. Bonnie Watson Coleman (D-N.J.) called those workforce reductions "pretty scary."
The issue of cyber preparedness surfaced yesterday at the hearing, which was held to review recent executive actions on cybersecurity and information sharing.
Last month, the Obama administration offered a legislative proposal to streamline cyberthreat information sharing between the federal government and the private sector (EnergyWire, Jan. 16).
Yesterday, Obama formally instructed the director of national intelligence to set up a new "integration center" that would channel data from the intelligence community to an existing cyberthreat information hub at DHS (EnergyWire, Feb. 11).
That DHS info-sharing office, dubbed the National Cybersecurity Communications Integration Center, would largely continue to function in a shutdown, Spaulding said.
But she said other parts of an agency closure could cause problems.
Asked by Rep. Sheila Jackson Lee (D-Texas) whether a funding hiatus would put "the security of this nation in a position of jeopardy," Spaulding replied, "I think that is an accurate statement."
"We are under daily, moment-by-moment efforts by adversaries. ... There is no pausing, no slowing down in that range of actors' efforts to penetrate our systems and to do us harm," she said.
Homeland Security Chairman Michael McCaul (R-Texas) said he was eager to avoid a crisis at DHS.
"I don't think we should be playing politics with a national security agency given the high-threat environment we are in today, both from a cybersecurity standpoint and also from al-Qaida and ISIS, as well," he said. "I certainly hope that Congress can resolve this and avoid a shutdown of the department."
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Chemical Train Derails in Minn. But Poses No Risk to Public -- Officials
Feb 26, 2015 | E&E - Greenwire
A freight train carrying hazardous materials derailed early yesterday in a rural area of Minnesota, but none of the material spilled, officials said.
Authorities said 13 cars derailed at about 3:23 a.m on the Canadian National Railway train, which was traveling from Winnipeg, Manitoba, to Superior, Wis. The three cars that contained hazardous materials did not leave the tracks, officials said.
Canadian National spokesman Patrick Waldron said the train was carrying naphthalene, which is used to make mothballs, biphenyl and octene. He said there were few homes near the area of the derailment.
Waldron said the railroad had mobilized hazardous materials crews and cleanup workers to remove the train and investigate what went wrong (Fargo Forum, Feb. 25). -- SP
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(ACC Mentioned) New Report: Shale Will Boost U.S. Chemical Exports
Feb 25, 2015 | Energy In Depth
By Varun Krovi
A new report prepared for the American Chemistry Council (ACC) showcases the positive impact of the U.S. shale revolution on manufacturing and our economy. According to the report’s key findings:Gross exports of shale gas derived chemical products will double from $60 billion in 2014 to $123 billion by 2030Trade surplus for selected chemicals is projected to increase from $19.5 billion in 2014 to $48.3 billion in 2030U.S. chemical companies have begun or are planning 223 shale-related projects to date, representing a cumulative investment of $137 billionShale revolution will provide a long-term competitive advantage for U.S. chemical manufacturers
Indeed, shale development has revitalized U.S. manufacturing – a primary indicator of the strength of a nation’s economy. A report by PricewaterhouseCoopers (PWC) studied the impact of shale development on domestic manufacturing and found:Shale gas development could generate annual cost savings of $22.3 billion in 2030 and $34.1 billion in 2040 for U.S. manufacturersShale gas based manufacturing would create 930,000 jobs by 2030 and 1.41 million by 2040
A report by the University of Michigan came to a similar conclusion:
“More than 200 mostly U.S.-based companies have participated in onshoring during the past four years, a trend in part motivated by the availability of less expensive natural gas. One Fall 2013 survey of $1B-plus company executives stated that over half of those are either already planning for or actively considering moving production back to the U.S. from China – a figure double that from the same survey given the previous year.”
Besides the impact on the manufacturing industry, the University of Michigan report highlights a number of other benefits brought on by shale gas development – including, but not limited to, lower energy costs for businesses; a low-cost source of transportation fuel; lower fertilizer costs for farmers; cutting the trade deficit; and increasing our energy security.
The economic impact of shale development has been revolutionary, according to a report by the National Association of Manufacturers:Shale development is projected to support nearly 3.9 million jobs by 2025Increase disposable income to more than $2,000 per U.S. household by 2015And, contribute upwards of $533 billion to our GDP by 2025.
Catalyzed by this surge in energy production, the United States is now the world’s largest producer of oil and natural gas, triggering reverberations in the global energy markets. It has also proven to be a game-changer for the United States’ economy. With our nation’s estimated100 year supply of natural gas, the U.S. chemical industry can count on an abundant, affordable and secure source of energy for years to come.
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Senate Dems Introduce Natural Gas Exports Bill
Feb 26, 2015 | PoliticoPro - Whiteboard
By Elana Schor
Four Senate Democrats today introduced legislation aimed at slowing down DOE’s review process for proposed liquefied natural gas export facilities, a bill that’s likely to come into play as the GOP advances a bipartisan proposal to set time limits for that same process.
The measure offered by Sens. Ed Markey, Barbara Boxer, Al Franken and Bernie Sanders would require DOE to evaluate whether LNG export plans are in the “public interest,” a framework that encompasses factors like their impact on consumers, energy security, and climate change.
“Instead of rushing to send our American natural gas to the highest bidder, we should first carefully determine whether it is in our best economic and national security interests to do so,” Markey said in a statement on the bill.
The Democratic plan could emerge during an Energy and Natural Resources Committee markup of Sen. John Barrasso’s LNG exports legislation, which is expected next month, as well as during floor debate on that plan to require a DOE decision on LNG export applications within 45 days of their receipt. Barrasso’s bill counts significant Democratic backing, led by Sen. Martin Heinrich, and has yet to incur a veto threat from the Obama administration. -
Greens Petition California to Ban Fracking
Feb 26, 2015 | The Hill - E2 Wire
By Timothy Cama
Dozens of environmental groups filed a legal petition Thursday asking California Gov. Jerry Brown (D) to ban hydraulic fracturing for oil and natural gas in the state.
The groups said their case is bolstered by recent news that oil and gas drillers were allowed by the state to inject wastewater from 140 wells, some of which were fracked, into protected waters.
“Millions of Californians living near oil and gas wells face grave health and safety threats from fracking and all phases of the oil and gas production process,” the groups wrote in their emergency petition.
“The oil industry is polluting our air, contaminating our aquifers, using dangerous chemicals near homes and schools, increasing earthquake risk by injecting vast quantities of wastewater into disposal wells near active faults, and speeding climate change,” they said. “These harms and risks pose an emergency and must be halted immediately.”
Under California lawn, Brown must respond within 30 days to the petition.
Earlier this month, some of the groups organized a rally in Oakland to push the state to back fracking, at which they said 8,000 people protested.
“Gov. Brown can and should act immediately to protect California’s precious water supplies from benzene-laden fracking fluid,” Hollin Kretzmann, an attorney for the Center for Biological Diversity, said in the statement.
Another factor that the groups say bolsters their case is the December decision by New York Gov. Andrew Cuomo (D) to ban fracking in that state.
Multiple cities and counties within California currently prohibit fracking.
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EPA's Cross-State Air Rule Faces Tough Scrutiny by Circuit Court
Feb 26, 2015 | Reuters
By Ayesha Rascoe
In a case examining Environmental Protection Agency rules requiring states to limit emissions that lower air quality in other states, federal judges questioned just how good a neighbor the agency can obligate states to be.
The Supreme Court last year upheld the EPA's Cross-State Air Pollution Rule (CSAPR), ruling it was a workable and equitable interpretation of the Clean Air Act's "good neighbor" provision, which empowers the EPA to address interstate air pollution.
To read the full story on WestlawNext Practitioner Insights, click here: bit.ly/1zKgOKP
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Manufacturers: Even with Costs Halved, Ozone Reg Could Still Be Most Expensive
Feb 26, 2015 | The Hill - Reg Watch
By Lydia Wheeler
Though a new study commissioned by the National Association of Manufacturers cuts the compliance cost of the Environmental Protection Agency’s new ozone standards by half, the trade group said the proposed rule could still be the nation’s most costly.
According the report, released Thursday, a more stringent ozone standard of 65 parts per billion could lead to $1.1 trillion in compliance, down from the $2.2 trillion the NAM estimated for a standard of 60 parts per billion in July, and a $140 billion annual blow to the gross domestic product, down from the former $270 billion estimate.
The EPA’s latest proposal is to drop its 75 parts per billion standard for smog pollution down to a rage of 65 to 70 parts per billion.
The study, conducted by National Economic Research Associates (NERA) Economic Consulting, however, found that a new standard of 65 parts per billion would reduce GDP by 1.7 trillion from 2017 to 2040, resulting in 1.4 million fewer jobs per year and costing the average household $830 annually in the form of lost consumption.
“Manufacturers in the United States are in the midst of a resurgence that’s fueling job growth and economic recovery nationwide, but the proposed tightening of the ozone standard puts our momentum at great risk,” NAM President and CEO Jay Timmons said in a release.
“This data confirms our long-held concern that revisions to the ozone standard represent one of the most significant threats, not just to our manufacturing sector, but to our economy at large.”
The EPA has estimated the costs for states to be $16.6 billion in 2025 nationwide, according to a December report.
The study is an economic impact analysis only, according to Aric Newhouse, the NAM’s senior vice president of policy and government relations. During a conference call Thursday, he said the report does not factor in any benefits of stricter ozone rule, though the EPA has estimated that yearly health benefits nationwide, excluding California, could reach anywhere from $19 billion to $38 billion annually by 2025.
“65 parts per billion would still be the most expensive regulation of all time,” Newhouse said. “Manufacturers would be forced to shut their facilities down and cars, trucks and trains would have to be scrapped.”
Anne Smith, senior vice president and co-chairwoman of Environment Practice at NERA, said the cost estimates are much higher that the EPA’s because the agency said 60 percent of reduction would need to come from unknown controls and used a blanket price tag of $15,000 per ton.
NERA, however, found that to meet the new standard, manufacturers would have to close power plants, turn over vintage equipment and replace older model vehicles — all of which, she said, would cost more than the EPA is willing to admit.
In a statement Thursday, EPA Spokeswoman Enesta Jones said the agency had not yet reviewed NAM's study, but welcomed the review of its proposed rule.
“EPA’s proposal is about setting a health standard and determining that level," she said. "By law, we cannot consider costs in doing so."
To inform the public, EPA does analyze the benefits and costs of implementing the standards, which is required by executive orders and guidance from the White House Office of Management and Budget. In this case, Jones said the health benefits outweight the estimated costs.
Health benefits, according to the agency include preventing 750 to 4,300 premature deaths; 790 to 2,300 cases of acute bronchitis in children; 1,400 to 4,300 asthma-related emergency room visits; 320,000 to 960,000 asthma attacks in children; 65,000 to 180,000 days when people miss work; and 330,000 to 1 million days when children miss school.
Ultimately, Jones said future state action determines the cost of meeting new standards.
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Lower Ozone Standard Would Cost $140B a Year -- NAM
Feb 26, 2015 | E&E - Greenwire
By Amanda Peterka
Tightening the national ozone standard to the lower end of a range being considered by U.S. EPA could cost the economy up to $140 billion a year, according to a study released today by a manufacturers group.
Between 2017 and 2040, the total cost of a new ozone standard could top $1 trillion, the National Association of Manufacturers report found. The study is an update to an analysis the group released last year and is likely to become a talking point in the months ahead for opponents of tightening the standard.
"Manufacturers in the United States are in the midst of a resurgence that's fueling job growth and economic recovery nationwide, but the proposed tightening of the ozone standard puts our momentum at great risk," NAM President and CEO Jay Timmons said in a statement. "This data confirms our long-held concern that revisions to the ozone standard represent one of the most significant threats, not just to our manufacturing sector, but to our economy at large."
A key component of smog, ground-level ozone is formed when nitrogen oxides react with volatile organic compounds in sunlight. It has been linked to adverse health effects such as reduced lung function.
EPA in November proposed to lower the national limit from 75 parts per billion -- the level set in 2008 by the George W. Bush administration -- to between 65 and 70 ppb. The agency said the science showed that the 75 ppb limit was no longer adequate to protect public health (Greenwire, Nov. 26, 2014).
"Proposing, and then finalizing, an air quality standard involves evaluating the latest available science, and we have more than 1,000 new studies since the last review that we've taken into account," EPA said today. "Based on the administrator's evaluation of the latest research, she believes that a standard in the proposed range will provide substantial public health benefits for millions of Americans by reducing both ozone and particle pollution."
Under the Clean Air Act and affirmed by the Supreme Court, EPA is required to consider only public health effects when setting a national ambient air quality standard. But industry groups have warned that a new standard would come with high costs for areas that are found to be out of compliance.
According to the NAM report released today, lowering the standard to 65 ppb would result in 1.4 million fewer job equivalents per year through 2040 and cost the average household in the country $830 annually in the form of lost consumption.
The costs are high, NAM said, because more than half of the pollution controls that would be required to meet the standard are "unknown."
"Because controls are not known, the new regulation could result in the closure of plants and the early scrappage of equipment used for manufacturing, construction and agriculture," the study said.
The report's results, though, are less dire than the study NAM released last year, which measured the costs of reducing the standard to 60 ppb, rather than 65 ppb. That study, which has been widely cited by GOP critics of tightening the standard, found that a lower ozone standard would cost up to $270 billion a year and shutter a third of the nation's coal plants (Greenwire, July 31, 2014).
National Economic Research Associates (NERA) Economic Consulting conducted both studies. In a statement, NERA Senior Vice President and Environment Practice Co-Chairwoman Anne Smith said the updated analysis still "reaffirms that attaining a stricter ozone standard would require compliance costs at levels well beyond what EPA has admitted, and beyond what we have ever estimated for any other EPA regulation."
In a regulatory impact analysis released in November, EPA found that a new standard set at 70 ppb would cost the nation $3.9 billion a year by 2025, though that figure excludes California. A 65 ppb standard, on the other hand, would cost $15 billion a year, EPA said.
The estimates are based on both the cost of existing pollution control technologies and the cost of technologies the agency expects will become available in the future. EPA's cost estimates also take into account rulemakings, such as the agency's Mercury and Air Toxics Standards, that will result in emissions of ozone precursors.
EPA also found that the ozone rule would yield significant savings through reductions in health care costs. Benefits, the agency said, would outweigh costs by as much as 3 to 1.
"To be clear, in each case, the benefits of reducing smog-forming emissions outweigh the estimated costs and industry claims consistently ignore health," EPA said today in a statement on the NAM study.
"While we have not reviewed the study, we welcome review of our analysis, and look forward to considering all comments," EPA added.
Public health advocates and environmentalists have criticized NAM for ignoring the health benefits when calculating the costs of a tighter ozone standard. They also argue that the Clean Air Act was meant to spur the development of new emissions controls.
"NAM has manufactured another wildly exaggerated attack on safe air for all Americans, after experts called its previous attack 'insane' and 'unmoored from economic reality.' Today's report is more of the same," said John Walke, director of the clean air program at the Natural Resources Defense Council. "NAM's report continues to rely upon a bogus 'job-equivalent' gimmick since the report cannot support claims of actual job losses."
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EPA IG Officials Detail Wide-Ranging Plan For Reviews Under Tight Budget
Feb 26, 2015 | InsideEPA
By Anthony Lacey
Top officials in EPA's Office of Inspector General (OIG) say they will push ahead with a wide-ranging agenda of agency program evaluations, criminal investigations, and various other work at a time of tight funding, though EPA Inspector General (IG) Arthur Elkins Jr. warns that further funding limits could restrict OIG's work.
“I don't think you'd be surprised that for the federal government as a whole, the budget is having an impact. We are experiencing that just like everybody else. But I think the impact of the budget on an operation like the OIG has an effect that sometimes you can' t really see,” Elkins said in an exclusive Feb. 23 interview with Inside EPA. He cautioned that any funding cuts to the office could force it to delay some key reviews until next year, or even later.
EPA's budget request would fund the IG office at $50.09 million in FY16, which would be a $8.61 million increase over the $41.49 million currently enacted funding level and also higher than the $41.45 million in funding it received in FY14. Obama is also proposing to scale back funding for the IG's hazardous substance Superfund account by $1.48 million, taking that account down to $8.46 million in FY16 compared to the existing $9.93 million funding.
When combined, the total budget authority for OIG in FY16 under the proposal would be $58.56 million -- a $7.13 million increase over the combined $51.43 million budget authority it received in FY15. Total work years for the office would drop slightly by 3.4 work years, from 321.5 in FY15 down to 318.1 in FY16. But Elkins said the IG needs a higher budget, and that he will continue to call on Congress to provide a higher funding increase.
Lawmakers are holding hearings on EPA's budget that will inform the upcoming appropriations process, but in the meantime the OIG is pushing ahead with its various efforts to target fraud, waste, and abuse.
For example, Assistant IG for Program Evaluation Carolyn Copper said the major projects include a pending review of how EPA conducted its assessment of the Bristol Bay watershed in Alaska that informed the agency's novel preemptive veto of the contested Pebble Mine -- an issue that the mine's developers are litigating.
“Another 'hot topic' is hydraulic fracturing. We're looking at how EPA, as well as the states, can use their authorities to address potential impacts to water resources,” she said, with a report coming later this year.
Copper also said that the OIG at the request of EPA Region 2 Administrator Judith Enck has investigated “pretty serious financial management issues” with the U.S. Virgin Island's implementation of environmental programs, and that the OIG is preparing to make “some pretty sweeping recommendations for improvements.”
Assistant IG for Audit Kevin Christensen said his division will work on important issues such as financial reviews, and said he is seeing a greater willingness by EPA staff to cooperate on those projects.
OIG is also pursuing a host of criminal and other investigations, said Assistant IG for Investigations Patrick Sullivan. His division at the end of January had 207 pending cases: 71 were allegations of employee misconduct, 35 are contract fraud, 34 are grants fraud, 17 are program fraud, 5 are computer crimes, 11 are laboratory fraud, 8 are cases of threats against the agency, and 26 pending cases fall in a general category of “other.”
“EPA's criminal investigation division is limited by statute to environmental crimes only. We investigate all the other crimes that take place in EPA,” Sullivan said. Still, he cautioned that the 207 pending investigations that his division continues to process are only allegations and nothing has been proven.
Meanwhile, Deputy IG Charles Sheehan touted what he sees as an improving relationship between OIG and the agency. He said, “A really strong indicator for how well the relationship is working is that the vast majority of our recommendations are accepted by the agency. We don't have a lot of push-back or fuss,” he said, adding that often EPA has implemented recommendations in an OIG report by the time of its release.
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EPA Weighs Early ESPS Role For FERC In Response To Reliability Concerns
Feb 26, 2015 | InsideEPA
By John Siciliano
EPA is suggesting it might ask the Federal Energy Regulatory Commission (FERC) to help states review the grid reliability impacts of their compliance plans for EPA's proposed climate rule for existing utilities sooner than what FERC officials have suggested, as one of several options to address critics' fears about the rule's potential impacts on reliability.
While addressing a Feb. 25 FERC technical conference held in Denver on the regional impacts of the rule, EPA senior air office attorney Joseph Goffman said FERC's role would be to provide “information not just to EPA but to the states as they put their compliance plans together” under the existing source performance standards (ESPS).
The expanded role for FERC would be “critical” to “ensuring reliability” and identifying “the work required to ensure reliability going forward” under the ESPS, he said.
Goffman's remarks on FERC's role, as well as assurances from top officials that EPA is planning to create a reliability “safety valve,” underscore the agency's push to mollify critics who charge that the rule threatens reliable delivery of electricity.
FERC Chairman Cheryl LaFleur in recent weeks has said the commission saw its ESPS role as helping states in the rule's implementation phase that would occur after they file compliance plans with EPA, and not before.
But Goffman's comments appear to define a broader -- and earlier -- role for FERC under the rule because of the “critical” nature of grid reliability, and the need for the agency to actively address the issue.
Goffman outlined the commission's role as part of a “first pass” at answering a question posed by LaFleur at the meeting, in which she asked “what FERC can do” to assist a smooth transition as states comply with the ESPS.
Goffman said the issues being raised at the technical conferences that began Feb. 19 will help inform the final rule. He assured stakeholders that the agency's air rules, including the ESPS, have never impacted grid reliability, and EPA has consistently treated “reliability as absolutely critical.”
“We have devoted significant attention to this issue ourselves,” he said. “We have made sure we are meeting with stakeholders and energy regulators at the federal, state, and regional levels to ensure that the important public health and environmental protections Congress has charged us with providing are achieved without interfering with the country's reliable and affordable supply of electricity.”
Goffman's message on reliability was echoed in Washington, where EPA's chief communications officer, Tom Reynolds, in a Feb. 25 blog post also cast reliability as a “top issue” for the agency, saying, “we are committed to working with stakeholders to make sure reliability is never threatened.”
Reynolds acknowledged that “reliability is a top issue for states, utilities, and energy regulators,” but sought to downplay the concern. He reiterated recent remarks from acting air chief Janet McCabe, who told FERC's Feb. 19 meeting that “the agency has consistently treated electric system reliability as absolutely critical. Because of this attention, at no time in the more than 40 years that EPA has been implementing the Clean Air Act has compliance with air pollution standards resulted in reliability problems."
Reynolds also pointed to three recent studies that argue that the ESPS is unlikely to disrupt grid reliability, while adding that the agency would incorporate comments from stakeholders in the final rule to further address the issue.
'Safety Valve'
Goffman also addressed EPA's thinking in developing a reliability “safety valve” mechanism that would account for power plant retirements and other issues that may impact the reliable flow of power. That mechanism was a key concern raised at FERC's Feb. 19 technical conference held in Washington, DC, where environmental and utility groups agreed on the need for a relatively narrow reliability safety valve to address adverse grid impacts, though they could not agree on how to structure such a mechanism.The groups said a narrow reliability measure would be best given the fact that other mechanisms -- such as eased compliance schedules -- are available to respond to reliability concerns.
In response to questions raised by FERC Commissioner Philip Moeller on what EPA foresees as an appropriate safety valve measure, Goffman at the Denver meeting said the agency has not made a decision on the issue but that a proposal defining a variety of safety valve alternatives submitted to EPA by the Independent System Operator (ISO)/Regional Transmission Operator (RTO) Council -- a group representing grid operators that FERC oversees -- is “getting a lot of attention” from EPA.
The agency is also meeting with the regional grid operators to evaluate their recommendations, he said.
Overall, “it is a little bit too early” to say that EPA has decided on one mechanism over another, Goffman said, but “you won't be surprised to hear that, for example, the ISO/RTO Council proposal is getting a lot of attention, because, in the best sense, it seems to me they have laid out an all-of-the-above strategy.”
“I think their comments were useful. They characterize two or three different ways reliability could be an issue and suggest a remedy for each of them,” he said. “I think they suggested a prospective tack when states are putting their compliance plans together and what I call, not their language, a real-time tack when events occur after plans are launched and when developments require further attention.”
Goffman added: “We are looking in both areas. Our understanding is enriched by last week's workshop that reliability is both an event and a process. We are going to be sensitive to both attributes.”
EPA Administrator Gina McCarthy underscored the agency's thinking on the safety valve during a Feb. 25 House Energy and Commerce subcommittee hearing on EPA's fiscal year 2016 budget request. During the hearing, Rep. Bob Latta (R-OH) urged EPA to include in the final ESPS a “waiver or exception if there is a grid reliability risk” from the compliance obligations.
McCarthy said the agency does not believe the rule will impact grid reliability, but that it “will ensure tools are available to use should anything arise. We would be able to work through the issues, whether it's a waiver or another process.”
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Western Regulators, Utilities Call for More Time to Implement EPA's Clean Power Plan
Feb 26, 2015 | E&E - Energywire
By Phil Taylor
U.S. EPA proposed an unreasonable and costly deadline for states to begin reducing global warming emissions, according to utility officials and regulators in Western states who testified here yesterday before the Federal Energy Regulatory Commission.
The daylong meeting at the Renaissance Denver Hotel was the first of FERC's three regional workshops to gather feedback on EPA's Clean Power Plan, which calls for reducing domestic greenhouse gas emissions by 30 percent by 2030.
The draft rule released last summer also requires many states to show significant progress toward meeting those goals beginning in 2020, a timeline some states have criticized as too strict.
Critics on yesterday's panel included Ben Fowke, CEO of Minneapolis-based Xcel Energy Inc., which is Colorado's largest utility, and Mike Hummel, associate general manager and chief power system executive for the Salt River Project, the utility that powers the Phoenix area.
"We know it can be done," Fowke said of EPA's emissions goals. "We also know it takes time and a lot of coordination. And if you don't have the luxury of time, you essentially sacrifice reliability and affordability."
All five of FERC's commissioners attended yesterday's workshop, which also included testimony from Joseph Goffman, associate assistant administrator and senior counsel in EPA's air office. The audience numbered well over 100.
A key item on yesterday's agenda was whether EPA's plan -- which calls for a mix of increasing the efficiency of fossil fuel plants, leveraging lower-emitting natural gas, boosting the use of renewable energy and reducing electricity consumption -- can be implemented without disrupting the electric grid.
Panelists expressed optimism but urged EPA to provide a smoother path to achieving interim reduction goals. They also discussed the need for a so-called safety valve to EPA's plan that would protect the continued operation of a power plant for a period of time if it were deemed essential to keep the lights on.
EPA Administrator Gina McCarthy yesterday told a House committee that she did not believe EPA's emissions rule would threaten reliability. But if it does, EPA has tools to handle those situations, she said.
Keep up to date on the latest national and state-level developments on EPA's greenhouse gas regulations for the power sector. Go toE&E's Power Plan Hub.
"We would be able to work through the issues, whether it's a waiver or another process. The tools are available to us to use," McCarthy said in response to a question about whether waivers would be available to states with potential problems.
FERC Chairwoman Cheryl LaFleur yesterday reflected on McCarthy's comments.
"All of us are dedicated to making sure there aren't reliability concerns," LaFleur told EnergyWire between panels at the Denver workshop. "It's a question of, 'OK, how do we ensure that? What has to be in the final rule?'"
She said the purpose of the regional workshops is to "look under the hood" for tools to ensure reliability.
"Whether you call it a valve or a waiver or whatever noun you use, what kind of mechanism would best work to protect reliability in a way that's consistent with the purposes of the Clean Power Plan?" LaFleur asked. "Every time we talk about it, I think we understand a little better what that might need to look like."
Hummel said EPA's draft rule would require Arizona to cut CO2 emissions in half, but that 90 percent of those reductions would be required by 2020. The state would have to shut down its entire non-tribal coal fleet, he said.
"We essentially don't have a glide path," he said. "We have a cliff."
Joshua Epel, chairman of the Colorado Public Utilities Commission, said the big issue with EPA's rule is the timing.
He said his state could meet an appropriate target within 15 years, for example. He also urged EPA to provide "proper credit" in its final clean power rule for early emission reductions.
But Alan Minier, chairman of Wyoming's Public Utilities Commission, said he's less optimistic than Epel.
"It's going to be very difficult to get the Clean Power Plan implemented on time," Minier said, adding that Wyoming needs revised emissions targets.Regional approach 'makes sense' but is 'very difficult'
The panel and commission members also discussed the idea of setting regional emissions reduction targets, an idea that garnered support as well as skepticism.
LaFleur said the West boasts significant renewable energy resources and has the potential to deploy them at a major commercial scale. But the West is also hampered by its geographic size and its lack of an electric coordinating authority, she said.
She asked panelists whether they felt a regional emissions goal might be appropriate given that some states can reduce emissions more cheaply than others.
Wayne Morter, director of power management for Seattle City Light, said a multi-state or regional approach "makes sense," both for reliability and cost.
Other panelists offered mixed reviews.
Fowke of Xcel Energy said a regional plan "would be great" but that EPA has to change the plan's overall goals.
"When you have states that have such disparate targets, it's going to be very difficult to work together in a coordinated fashion," he said.
Hummel said a regional plan may take significant time, but he was doubtful other states would want to work with Arizona.
"We are kind of the least attractive person at the dance," he said. "Not many people knocking at our door."
Melanie Frye, vice president of reliability planning and performance analysis at the Western Electricity Coordinating Council, said that, on average, the Western Interconnection is fairly close to being able to meet EPA targets. But the situation differs by individual states.
FERC Commissioner Norman Bay noted that a WECC study had found that nine of 11 states in the West would come close to meeting the emissions targets in the absence of new EPA rules.
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We Have Tools to Ensure Grid Reliability Under Carbon Rule -- EPA
Feb 26, 2015 | E&E - Climatewire
By Emily Holden
U.S. EPA Chief Gina McCarthy told lawmakers yesterday that her agency is prepared to deal with potential electric reliability problems under the Clean Power Plan, whether through a "waiver or another process."
While McCarthy maintained that the proposed rule would not affect reliability, she said EPA has the necessary tools to address situations that might arise under the landmark standards to cut carbon emissions from coal-fired power plants.
"We would be able to work through the issues, whether it's a waiver or another process. The tools are available to us to use," McCarthy told Ohio Republican Bob Latta at a House Energy and Commerce subcommittee hearing on EPA's budget. Latta asked McCarthy specifically whether a waiver would be available in states that think they cannot comply without jeopardizing the reliability of the power grid or imposing high costs on customers.
Keep up to date on the latest national and state-level developments on EPA's greenhouse gas regulations for the power sector. Go toE&E's Power Plan Hub.
After the hearing, McCarthy told reporters that she wasn't conveying whether a specific type of reliability "safety valve" might be written into the final rule, which is due this summer.
"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 [the Department of Energy] and [the Federal Energy Regulatory Commission], we'll do that."
Prior safety valves, such as for the Mercury and Air Toxics Standards, allowed power plants to apply for waivers to continue running in spite of environmental regulations in order to ensure grid reliability. But the Clean Power Plan asks states to write plans for cutting emissions, rather than directing individual plants to make changes. So it's unclear how those type of waivers would work under the proposed rule.'Looking under the hood'
FERC has been hearing from utilities, regional grid organizations and state officials from around the country that a number of reliability mechanisms might be needed to handle unforeseen circumstances that could cause power outages (ClimateWire, Feb. 20).
The draft rule would reduce carbon emissions from the power sector 30 percent below 2005 levels over the next 15 years, pushing major changes to the grid, including decreases in coal-fired electricity and increases in natural gas use, renewable energy and customer-side energy efficiency measures. Grid organizations have said those changes are much more feasible if EPA amends or eliminates its interim goals for states, which begin in 2020, and if the agency implements safeguards to slow down or halt state plans if they might cause power outages.
FERC Chairwoman Cheryl LaFleur responded to McCarthy's comments yesterday from a regional conference on the Clean Power Plan in Denver.
"All of us are dedicated to making sure there aren't reliability concerns," LaFleur toldEnergyWire. "It's a question of, 'OK, how do we ensure that? What has to be in the final rule?'" (EnergyWire, Feb. 26).
LaFleur said the purpose of the regional workshops is to "look under the hood" for tools to ensure reliability.
"Whether you call it a 'valve' or a 'waiver' or whatever noun you use, what kind of mechanism would best work to protect reliability in a way that's consistent with the purposes of the Clean Power Plan?" she said. "Every time we talk about it, I think we understand a little better what that might need to look like."Formalizing a backstop
While there's no definite consensus on how a reliability backstop should work, the association of grid organizations, the ISO/RTO Council, argues it should be explicitly laid out in the rule, rather than added on later.
Craig Glazer, vice president for federal government policy at PJM Interconnection, the Mid-Atlantic grid organization, said EPA has statutory authority under the Clean Air Act to include a reliability safety valve in the final rule. But if EPA doesn't spell out that mechanism, it's unclear what other existing tools might be available, he said.
One possibility that has surfaced in testimony at FERC technical conferences is a process for electric utilities to seek permission from the Department of Energy to continue to run plants under a provision in the Federal Power Act. But EPA's rule is written under a different statute, the Clean Air Act.
FERC Commissioner Tony Clark noted in Denver yesterday that the Federal Power Act is not "subservient" to the Clean Air Act or vice versa, and that creates a conflict.
Glazer said the process has only been used once, and DOE took months to grant the waiver. Even then, the company was sued for violating environmental laws, he said. Plus, he said, the DOE process is only meant for real-time emergency situations.
"We don't ever want to get to that point," Glazer said. "That is a tool, but a very insufficient tool."
Meanwhile, EPA seems be more proactively defending against reliability complaints. A blog post from EPA spokesman Tom Reynolds yesterday maintained that reliability is a "top issue" and lashed out at "special interest critics" who have lodged reliability complaints (E&ENews PM, Feb. 25).
Reporter Phil Taylor contributed.
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IG Targets Budget, 'Access' Hurdles To Ensure Adequate Oversight Of EPA
Feb 26, 2015 | InsideEPA
By Anthony Lacey
EPA Inspector General (IG) Arthur Elkins Jr. is seeking a hike in proposed fiscal year 2016 funding for his office and aiming to secure a commitment from the agency for full access to staff and documents during investigations, saying both issues could create potential hurdles to adequate IG oversight of EPA unless they are fully resolved.
In a wide-ranging, exclusive Feb. 23 interview with Inside EPA at agency headquarters, Elkins and several top Office of Inspector General (OIG) officials nevertheless touted the program evaluations, audits and investigations that they have been able to do while facing limited resources. And they say recent signals from EPA Administrator Gina McCarthy and others hint at an improved relationship with the OIG after a period of ambiguity.
Elkins -- who has served as the IG since 2010 -- heads the office that is an independent entity within EPA, consisting of auditors, program analysts, investigators and others that review agency programs, grants, contracts, and other issues with the overall goal of detecting fraud, waste and abuse. The IG each year crafts a plan for its upcoming reviews, but also responds to hotline complaints and requests from Congress for investigations.
The IG's reviews can include investigating claims of pay fraud, such as former EPA air official John Beale, who was paid for time taken while claiming fraudulently to be working at the CIA. Other work includes reviewing agency rules and programs to determine whether proper procedures were met, financial reviews, and more.
Elkins told Inside EPA that the entirety of the office's work already faces difficulties in a tight budget environment, and that the proposed FY16 budget for OIG could exacerbate the strains on its workforce.
EPA's budget request would fund the IG office at $50.09 million in FY16, which would be a $8.61 million increase over the $41.49 million currently enacted funding level and also higher than the $41.45 million in funding it received in FY14. Obama is also proposing to scale back funding for the IG's hazardous substance Superfund account by $1.48 million, taking that account down to $8.46 million in FY16 compared to the existing $9.93 million funding.
When combined, the total budget authority for OIG in FY16 under the proposal would be $58.56 million -- a $7.13 million increase over the combined $51.43 million budget authority it received in FY15. Total work years for the office would drop slightly by 3.4 work years, from 321.5 in FY15 down to 318.1 in FY16.
But the proposal includes a $276,000 payroll cut, and EPA in its FY16 documents notes that total payroll years for the OIG's audits, investigations and evaluations would fall from 321.5 in FY15 to 318.1.
Tough Budget
Elkins noted that EPA overall faces an ongoing tough budget, and added, “When you start to cut the budget of an agency, in essence what could happen -- because people are trying to do more with less -- it creates an environment where people start to take short cuts. And in taking short cuts they could find themselves doing things that are either illegal or working against the agency. And that's why you have an OIG in place, we step in to make sure that those areas are addressed so that the agency can be more efficient and stay focused on its tasks.”
He noted that OIGs are labor intensive and almost 90 percent of the EPA IG's budget is for personnel. Although the office has not had to lay off staff, it has in place a hiring freeze and has been unable to back-fill when people leave. OIG currently has 307 employees, though Congress authorized it to have 362 employees.
“So that affects the number of reports that we get out, the number of investigations that we do, and quite frankly affects the workload of each and every individual. There's a certain amount of stress that goes along with that,” Elkins said, and adverse impacts include potentially lengthy delays for a host of OIG work.
He also said the tight budget complicates succession planning. “We can't hire new people because of the budget, but we do have a work force with institutional knowledge that is aging. To do all the work takes people, it takes resources and money. So that is a risk that's out there in terms of our ability to operate,” he said.
The IG's Chief of Staff Aracely Nuñez-Mattocks said that EPA appears to have passed on some of its FY16 budget cuts to the OIG, which it should not do as the office has a separate appropriation to the agency's budget. And she said Congress could ultimately reject even the proposed $7.13 million increase, potentially funding OIG at the same or lower levels than its current budget. “That's why we have to fight for every penny that we can get.”
Elkins has in testimony to Congress and a recent letter to the White House Office of Management & Budget urged increased funding his office, a call that he reiterated during the interview.
“Investing in the OIG is like investing in an insurance policy, it's something you need to make sure people are working in various areas that are helpful, that the agency is being more efficient, and the taxpayer is getting a better return on investment. If you cut us, you have fewer people looking at the agency at the most likely time for fraud, waste and abuse to occur. There's a disconnect there and it doesn't make sense,” he said.
Agency Access
Another hurdle to the OIG being able to fully conduct its work is an ongoing dispute with EPA's Office of Homeland Security (OHS) -- part of McCarthy's office -- on access to agency staff and documents.
OHS staff have long claimed that they are exempt from oversight and review by the IG, due to the sensitive security nature of their work. The IG disagrees, and the fight gained publicity as a result of the IG's investigation into the pay fraud scheme of former EPA air official Beale, who earned pay for extensive time he took off in periods when he lied about working for the CIA. The agency's IG for investigations has cited the Beale incident as one case where the OHS impeded the IG's work by withholding information essential to the investigators' research.
The dispute includes a memorandum of understanding (MOU) between the Federal Bureau of Investigations (FBI) and OHS, crafted, without the IG's input, which says OHS has sole power to investigate national security issues at EPA.
The MOU “calls for mutual assistance to each other and states that the OHS will be the FBI's single point of contact in EPA for any matter related to intelligence, counter-intelligence, counter-terrorism and national security involving employees, contractors, records, assets. The reason why that's problematic is it doesn't acknowledge the role of the IG to investigate misconduct,” said Assistant IG for Investigations Patrick Sullivan during the interview.
“We're not limited by national security, we still have jurisdiction as well as the FBI,” Sullivan said. “Nobody is suggesting we're usurping the authority of the FBI. Quite the contrary. But the MOU is problematic for us because our equities were never mentioned. It just made OHS the point of contact and purports to give OHS investigate authority -- clearly they do not have that because they are an entity created by the administrator's office.”
“If you don't have an independent source to review misconduct and leave to agency to do its own work, that creates a potential problem. Cutting the IG out takes away the only objective tool you have for oversight,” Elkins added.
Congress has held several hearings on barriers to IG's access at various agencies, including EPA. At a Feb. 3 House Oversight & Government Reform Committee hearing, Elkins said there is now an agreement in principle with the agency that “there is no category of activity at the EPA to which OIG does not have unfettered access.”
During the Feb. 23 interview, Elkins said, “I think the rhetoric is getting better from the standpoint of the agency making more affirmative statements that they do want to work with us and try to find some ways to move forward. We are still working on the mechanics of that,” though the MOU remains a “bone of contention.”
Alan Larsen, assistant IG for congressional and public affairs and counsel to the IG, said in the interview that “our home run is to rescind that thing” as the FBI has told EPA that the IG should have the access it seeks. He said a meeting is pending between the OIG, FBI and OHS on the issue and he hopes for scrapping of the MOU.
Legislative Revisions
Lawmakers at the recent House oversight hearing suggested that a bill amending the IG Act of 1978, which provides the offices with their authority, might be necessary to enforce compliance with existing mandates that agencies provide IGs with “all” material relevant to their investigations. During the interview, Larson said that the OIG does not believe there is any doubt that the office should have access to all necessarily material.
Nevertheless, he said there are ongoing discussions among federal IGs about whether there is a need to potentially revise the IG Act to create some enforcement mechanisms to achieve that access.
“The IG Act gives emphatic access to all documents and information. The problem is what happens when an agency doesn't do what it's required to do? The IG act doesn't have any self-enforcing mechanisms to deal with that,” Larson noted, adding that the question of how to revise the law is “still up for discussion.”
Elkins concluded by saying that he has seen an improvement in the relationship between the OIG and EPA in recent months, citing for example a Jan. 2 memo McCarthy sent to all agency employees on working with the OIG.
In the memo, the administrator wrote that the IG's “important work” on targeting fraud, waste and abuse “enables us all to be more effective in achieving the agency's mission.” She urged agency staff to report fraud, waste and abuse to the OIG if they see it, and vowed to protect the “valuable role” of EPA employees in helping with the OIG's oversight of the agency.
Elkins said of the memo that “[w]e haven't had that in the last few years, and the lack of such a message created some ambiguity and issues with access, with employees refusing to cooperate. Now we have a clear message from the administrator on expectations and how to move forward in the future.”
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