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PM ACC 1/2/2019
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(ACC Mentioned) What to Watch in 2019
Jan 2, 2019 | PoliticoPro
By Kelsey Tamborrino
QUICK FIX — There's no end in sight as the Interior Department and EPA are midway through another week without federal funding. The ongoing partial government shutdown and preceding fight over... -
(ACC Mentioned) Hill Leaders Heading to the White House -- Shutdown Enters 12th Day -- House Dems Release Rules Package -- Romney vs. Trump
Jan 2, 2019 | Politico
By Nolan D. McCaskill
SHUTDOWN STATE OF PLAY -- The partial government shutdown is stretching into its 12th day, and there’s no end in sight. House Democrats plan to pass legislation Thursday to reopen the quarter of the federal government that... -
'Goals for 2018: 1. Get a New Job!'
Jan 2, 2019 | E&E Greenwire
By Kevin Bogardus
It took a week, but EPA has now joined its federal brethren in the partial government shutdown. -
Ewire: EPA Begins New Year in Shutdown Mode
Jan 2, 2019 | Inside EPA
Happy New Year! EPA remains shut down following a lapse in fiscal year 2019 funding and the expiration of a week's worth of reserve funds, and there is no clear path for President Donald Trump and Congress to resolve their impasse on the president's demand for funding for his signature border wall. -
With Zinke Out, Former Lobbyist Becomes Acting Interior Secretary
Jan 2, 2019 | BNA Daily Environment Report
By Jennifer A Dlouhy
As Ryan Zinke left his post heading the Interior Department on Wednesday, the agency’s No. 2 official, David Bernhardt, joined President Donald Trump at a meeting of cabinet officials. -
EPA Denies Petition for Expanded TSCA Asbestos Reporting
Jan 2, 2019 | Chemical Watch
The US EPA has denied an NGO petition to require increased reporting of asbestos under the TSCA chemical data reporting (CDR) rule. Filed under section 21 of TSCA in September, the petition had sought for the EPA... -
EU Notifies WTO of Draft Cosmetic Products Labelling Decision
Jan 2, 2019 | Chemical Watch
The European Commission has notified the WTO of a draft Decision to establish a glossary of common ingredient names for use in the labelling of cosmetic products. -
Fracking’s Secret Problem—Oil Wells Aren’t Producing as Much as Forecast
Jan 2, 2019 | Wall Street Journal
By Bradley Olson, Rebecca Elliott and Christopher M. Matthews
Thousands of shale wells drilled in the last five years are pumping less oil and gas than their owners forecast to investors, raising questions about the strength and profitability of the fracking boom that turned the U.S. into... -
Green New Deal Part 2: Oil & Gas Industry Cautiously Watching Developments
Jan 2, 2019 | Natural Gas Intelligence
By Charlie Passut
Part two of two. This series looks at the potential impact a Green New Deal could have on the oil and gas industry. This installment examines the oil and gas industry's current posture toward the proposal, as well the reaction from... -
Some Oil & Gas States Urge EPA To Limit Rollback Of Methane Rule
Jan 2, 2019 | Inside EPA
By Lee Logan
Some oil- and gas-heavy states are pushing back on aspects of EPA's proposal to roll back Obama-era methane standards for new oil and gas equipment, particularly on the key issue of how frequently operators must... -
FRA Awards $46.3M for Positive Train Control
Jan 2, 2019 | Transportation Today
By Melina Druga
The Federal Railroad Administration (FRA) awarded $46.3 million in grants last month to assist in the deployment of positive train control (PTC) systems. -
Only Four of the Nation's 41 Rail Systems Met Safety Deadline
Jan 2, 2019 | Digital Journal
By Karen Graham
As of Dec. 31, only four of the nation's railroads had fully implemented positive train control (PTC) systems to prevent train accidents, according to the U.S. Transportation Department. -
House Dems Formalize Climate Committee Plans Without Green New Deal Language
Jan 2, 2019 | The Hill - E2 Wire
By Timothy Cama
House Democrats have formally proposed creating a new committee on climate change, without many of the main factors that progressives wanted in the panel’s structure. -
Proposal for MATS Review Creates 'Big Puzzle'
Jan 2, 2019 | E&E - Greenwire
By Sean Reilly
In unveiling plans to unravel the justification for landmark mercury regulations on power plants, EPA officials last week were quick to underscore that the proposed rule would leave the actual emissions standards intact.
Industry and Association News
LCSA News
Chemical Management News
Energy News
Chemical Security News - There are no clips to report at this time.
Transportation and Infrastructure News
Environment News
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(ACC Mentioned) What to Watch in 2019
Jan 2, 2019 | PoliticoPro
By Kelsey Tamborrino
QUICK FIX
— There's no end in sight as the Interior Department and EPA are midway through another week without federal funding. The ongoing partial government shutdown and preceding fight over border wall funding will be on the agenda as lawmakers are invited to meet with President Donald Trump this afternoon.
— House Democrats led by Nancy Pelosi are expected to vote on two proposals when they take control Thursday to re-open the government, but they're not likely to pass the Senate, where Republicans still hold the majority.
— What you missed over the holidays: EPA's mercury proposal was a welcome sight in the coal industry's stocking, while the 9th Circuit finally gave the Trump administration a win in the long-running kids' climate lawsuit.
SHUTDOWN SLUGS ON: It's been more than a week since the partial government shutdown began, but there have been virtually no high-level talks on how to end it. That may change today, as the president has invited congressional leaders from both parties to the White House. But many agencies are already reaching a breaking point.
On Friday, EPA began shutdown operations as spending expired, following several agencies and departments that have run out of carryover cash. The Bureau of Ocean Energy Management says it will not process new offshore drilling applications but will have employees available for emergency situations or to assist the Bureau of Safety and Environmental Enforcement. BSEE, meanwhile, will keep about 51 percent of its staff on duty for "critical permitting and oversight activities ... to support the sustained exploration and development of energy resources on the Outer Continental Shelf," according to its shutdown plan.
— House Democrats want to quarantine the wall fight when they vote to reopen the government Thursday. The idea is to pass two bills: One would fund the Department of Homeland Security until Feb. 8, maintaining border wall funding at existing levels. A second proposal would fund other closed agencies — including Interior and EPA — for the rest of the fiscal year through Sept. 30. But without a breakthrough at today's White House meeting, Senate Republicans aren't likely to accept that approach.
NEW YEAR, NEW ME! It's Wednesday, and I'm your host, Kelsey Tamborrino. We've got a new approach for ME this year, but don't worry, trivia is sticking around — Cheniere's Khary Cauthen knew James Blaine was the last speaker who was younger than Paul Ryan. For today: Which former president ended the White House New Year's Day reception, which began in 1801 and allowed thousands to line up to meet the president. Send your tips, energy gossip and suggestions to ktamborrino@politico.com. Follow us on Twitter @kelseytam, @Morning_Energyand @POLITICOPro.
LOOKING AHEAD: Assuming the shutdown will eventually come to an end, the divided Congress and Trump administration have lots more in store for the new year. Here's what to expect:
— On the Hill: House Democrats will be picking their investigative targets (watch out, Scott Pruitt and Ryan Zinke) and deciding what to do with their new select committee on climate change. Pelosi closed out December by selecting Florida's Kathy Castor to chair the panel, but some liberal activists are already worried it will not be ambitious enough.
The Rules Committee is set to vote on proposed rules this week that would place 9 Democrats and 6 Republicans on the panel. It would not have subpoena power, but would be required to issue policy recommendations by March 31, 2020.
Meanwhile, the Senate ended last year without confirming a spate of EPA, Interior and Energy Department nominees, who must begin the confirmation process all over again this year. That's on top of Andrew Wheeler's announcednomination to replace Pruitt at EPA full-time and a yet-to-be-announced replacement for Zinke at Interior.
— For EPA, the third year of Trump's first term likely will be the most important for his deregulatory agenda. A huge swath of rule rollbacks proposed in 2018 are expected to be finalized in the coming year, including weaker limits on carbon emissions from coal-fired power plants and a re-write of the Waters of the U.S. rule. That schedule would allow for early legal defenses to be in place before the end of 2020 and would avoid potential Congressional Review Act nullifications in 2021. Other efforts like the science transparency rule or a rejiggered formula for cost-benefit analyses could also debut this year.
— At the Energy Department, the Trump administration may finally have to relent this year on its decision to withhold several energy efficiency standards that were approved at the end of the Obama administration as it struggles to defend those decisions in federal court. And concerns about coal and nuclear plants struggling with competition from natural gas are still alive so there's always the potential that DOE takes a different shot at the issue.
— At Interior: One of Zinke's last actions was to firm up the specifics of the Trump administration's plan to open the Atlantic Coast and potentially portions of the Eastern Gulf of Mexico for offshore oil and gas exploration. Sources told Pro's Zack Colman Interior is expected to announce its five-year offshore leasing plan this month.
— At FERC: Republican Commissioner Kevin McIntyre's lengthy absence has led to a stalemate over some natural gas projects that seems unlikely to end unless his health rebounds or he is replaced this year. Otherwise, Trump would have to wait for the departure of Democratic Commissioner Cheryl LaFleur; her term expires June 30, but she can stick around until the congressional session ends sometime in December if she’s not renominated.AROUND THE AGENCIES
TO THE MATS: EPA handed a major victory to fossil fuel interests last week, unveiling a proposal to revisit the Mercury and Air Toxics Standards, Pro's Alex Guillén and Zack report. The Trump administration says it no longer will give the same weight to "co-benefits" that come from mercury reductions, and the proposal's release will likely become one of the most contentious environmental actions of the Trump administration.
— Democrats and environmentalists jumped on the proposal, arguing it will unfairly tilt the scales toward the coal industry at the expense of public health. "It says EPA's just fine with allowing brain poisons mercury and lead, and toxic carcinogens to fill our skies," said John Walke, clean air director at the Natural Resources Defense Council.
— Others like Bracewell's Jeff Holmstead, who is a former EPA air chief under George W. Bush, said the agency walked a "fine line" in the proposal. "They're just saying that, in this case, where virtually all the benefits are 'co-benefits' of reducing a pollutant that is supposed to be regulated under other Clean Air Act programs, we can't use these co-benefits to justify a regulation that is only supposed to be about hazardous air pollutants," he said.
DUNLAP STEERS CLEAR OF FORMALDEHYDE: David Dunlap, a former Koch Industries chemicals expert who became the No. 2 political in EPA's Office of Research and Development in September, has voluntarily recused himself from the agency's hot-button assessment of the health dangers of formaldehyde, according to ethics paperwork obtained by POLITICO under the Freedom of Information Act. The paper and chemicals giant Georgia-Pacific is a Koch Industries subsidiary and one of the country's largest producers of formaldehyde. It was an "initial member" of the American Chemistry Council's Formaldehyde Panel that has for years argued against EPA assessments that have linked the chemical to cancers.
INTERIOR PROPOSES FOIA CHANGES: Interior quietly proposed changes to how the department handles FOIA requests, according to a proposal in the Federal Register, which would make it so it would not have to honor a request "that requires an unreasonably burdensome search."IN THE COURTS
KIDS' CLIMATE APPEAL MOVES FORWARD: The 9th Circuit Court of Appeals will allow the Trump administration to fight the kids' climate lawsuit in Oregon without first going through a federal district court trial. The Trump administration argues that the climate arguments are so legally suspect that the suit should be tossed immediately. It will likely take months to resolve the matter, and expect the losing side to appeal, likely to SCOTUS.
— For legal eagles, check out Judge Michelle Friedland's four-page dissent. She argues that the case should go to trial, and that the only reason the lower court judge approved this appeal now — after previously dismissing several similar requests — is because she "felt compelled" to do so under pressure from the Supreme Court.
HAPPENING TODAY
*crickets*
https://subscriber.politicopro.com/newsletters/morning-energy/2019/01/what-to-watch-in-2019-465390
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Jan 2, 2019 | Politico
By Nolan D. McCaskill
SHUTDOWN STATE OF PLAY -- The partial government shutdown is stretching into its 12th day, and there’s no end in sight. House Democrats plan to pass legislation Thursday to reopen the quarter of the federal government that lapsed before Christmas. But the White House says that plan is “a non-starter” because it doesn’t secure the border, meaning Democrats and the president remain at an impasse over border wall funding. In the White House’s telling, Democrats have ignored President Donald Trump’s “serious, good faith offer … to open the government” and refused to compromise. Yet the president “remains committed to reaching an agreement that both reopens the government and keeps Americans safe,” White House press secretary Sarah Huckabee Sanders said in a statement late Tuesday.
Trump has invited congressional leaders to the White House today for an afternoon border wall briefing from top Department of Homeland Security officials. “The meeting would mark the first time Trump has sat down with top congressional leaders of both parties since the shutdown started,” Rachael and Bres write. “There have been virtually no discussions until this point, and the meeting would offer both sides a chance to restart talks.” Invitations were extended to House leaders Nancy Pelosi (D-Calif.), Steny Hoyer (D-Md.), Kevin McCarthy (R-Calif.) and Steve Scalise (R-La.) and Senate leaders Mitch McConnell (R-Ky.), John Thune (R-S.D.), Chuck Schumer (D-N.Y.) and Dick Durbin (D-Ill.). More: https://politi.co/2R4bhTv
Related: “In shutdown, national parks transform into Wild West -- heavily populated and barely supervised,” by The Washington Post’s Meghann Cuniff, John Waters and Joel Achenbach: https://wapo.st/2GP70hZ; and “Shutdown Leaves Food, Medicine and Pay in Doubt in Indian Country,” from The New York Times’ Mitch Smith and Julie Turkewitz: https://nyti.ms/2CLH037
SHUTDOWN NEARS BREAKING POINT -- Nine federal departments have received no funding in more than a week, making do with leftover money over the holidays and paying staff with checks that were prepped before the partial government shutdown began on Dec. 22. “But all that’s about to end,” Jennifer Scholtes, Caitlin Emma and Bernie Becker warn. “Many of the departments and agencies hit by the partial shutdown … have reached a breaking point in their ability to go on with minimal disruption. They are running out of carryover cash and time to prep checks for the mid-month pay period.”
With their temporary funds exhausted, 19 Smithsonian museums and the National Zoo will be closed to the public today. And it’s unclear whether federal workers will get their next paycheck on Jan. 11. “The Office of Management and Budget said in recent guidance that no federal employee -- including those still working without pay -- can be compensated for the pay period spanning Dec. 23 to Jan. 5 until the shutdown ends,” they write. “House Democrats plan to vote on two proposals when they take control Thursday.” But neither bill includes $5 billion for a border wall, and Senate Republicans are unlikely to take up legislation that doesn’t have the president’s support. A breakdown of how things get harder for departments: https://politi.co/2SxLTlE
HOUSE DEMS UNVEIL RULES PACKAGE -- Pelosi and incoming Rules Committee Chairman Jim McGovern (D-Mass.) released last night the rules package the House will vote on this week. “By an historic ten million vote margin, the American people went to the polls and asked for a professionally run Congress that would be more transparent, ethical and committed to debating and advancing good ideas no matter where they come from,” Pelosi said in a statement. “Our rules package will deliver that Congress.”
The package includes a requirement that text for major bills be available 72 hours before a floor vote, the creation of a consensus calendar to expedite consideration of bipartisan legislation, a reformed method by which the House can oust the speaker, a return to the so-called Gephardt Rule and a prohibition for members and staff serving on corporate boards. The rules: http://bit.ly/2Vs1XHF
Related read: “In Newly Divided Government, Who Will Control the Political Agenda?” via The New York Times’ Sheryl Gay Stolberg and Julie Hirschfeld Davis: https://nyti.ms/2LK9qgE
WELCOME BACK! Thanks for reading Huddle, the play-by-play guide to all things Capitol Hill, on this Wednesday, Jan. 2.
** A message from Part B Access for Seniors and Physicians Coalition:Hundreds of patient, provider and health care stakeholders agree the Administration’s proposed mandatory experiment on seniors’ health care is potentially dangerous for Medicare patients in need of Part B drugs. This experiment should be replaced with reforms that embrace competition, foster the provider-patient relationship and value innovation. Learn more. **
THE TRUMP-PELOSI RELATIONSHIP -- His allies say he respects her. But her allies say she doesn’t trust him. Yet both sides are hopeful that Trump and Speaker-designate Nancy Pelosi (D-Calif.) can strike some bipartisan deals over the next two years. “Bipartisan victories could boost both leaders,” Rachael writes. “Pelosi could show the nation that Democrats are about more than opposing the White House. Trump could check off unfulfilled campaign promises as he pivots toward reelection. But to maintain any kind of working relationship, Trump and Pelosi will have to defy the entire political gravity of their parties when the new Congress gets underway this week.”
The two have had relatively few interactions. Trump praised Pelosi’s “terrific” leadership skills in a phone call after the 2016 election. But he walked away from a tentative immigration deal in 2017 with Pelosi and Senate Minority Leader Chuck Schumer (D-N.Y.) and hasn’t worked with Democrats on health care or infrastructure. He did, however, side with Pelosi that same year on extending government funding and the debt ceiling. Both sides say the two have maintained a cordial relationship. “I think the president admires people he views as strong, and he does view her as strong,” added Marc Short, Trump’s former legislative affairs director. “She’s a historic figure. You can’t deny that.” More: https://politi.co/2RukVhA
ROMNEY’S REBUKE -- Sen.-elect Mitt Romney (R-Utah) appears to be carving out a lane for himself as the rare Senate Republican who is willing to publicly criticize the president. With the late Sen. John McCain (R-Ariz.) gone and Sens. Jeff Flake (R-Ariz.) and Bob Corker (R-Tenn.) retiring, the incoming Utah senator blasted Trump’s leadership -- or lack thereof -- in a Washington Post op-ed published Tuesday night, calling that area the “province where the incumbent’s shortfall has been most glaring.” Romney said Trump’s presidency “made a deep descent in December” and cast Trump’s conduct during his first two years in the White House as “evidence that [he] has not risen to the mantle of the office.”
He praised the president for appointing conservative judges, slashing regulations and pushing criminal justice reform. “But policies and appointments are only a part of a presidency,” he cautioned. A president, the 2012 GOP presidential nominee added, should unite and inspire a nation, demonstrate honesty and integrity, “elevate the national discourse with comity and mutual respect” and be a leader on the world stage. As a senator, Romney said he will support policies that are good for Utah and the country and oppose those that aren’t.
“I do not intend to comment on every tweet or fault,” he said. “But I will speak out against significant statements or actions that are divisive, racist, sexist, anti-immigrant, dishonest or destructive to democratic institutions.” Trump said he hopes Romney won’t be a “Flake.” “Would much prefer that Mitt focus on Border Security and so many other things where he can be helpful,” he tweeted this morning. “I won big, and he didn’t. He should be happy for all Republicans. Be a TEAM player & WIN!” The op-ed: https://wapo.st/2AtGCo2
MEET HOYER’S FLOOR DIRECTOR -- When the new Democratic majority takes control of the House on Thursday, Shuwanza Goff will be Majority Leader Steny Hoyer’s (D-Md.) floor director, making her the first African-American woman to hold that post for the majority party’s No. 2 leader. “It’s a little daunting, but it’s also exciting,” Goff told me in an interview. It’s also a long time coming. Goff has worked on the Hill for nearly 10 years, rising from a staff assistant in 2008 to floor aide, floor assistant, deputy floor director and floor director. In a statement to POLITICO, Hoyer praised Goff’s strong relationships with Democrats and Republicans, her deep knowledge of floor procedure and judgment.
“The House will continue to benefit from her intellect, hard work, and dedication,” Hoyer said. Republicans, too, have high praise for her. Matt Bravo worked with Goff for three years as a floor director for Majority Whip Steve Scalise (R-La.). Floor staff have to “get sh-- done,” Bravo said, “and she’s the best.” Goff’s role will include helping Hoyer drive the agenda and coordinating with committees and others on legislation. She also hopes to help improve diversity among Hill staffers. More: https://politi.co/2F6LB1p
HOUSE DAY CARE -- It’s “the only Washington Monument in D.C. that you can climb up,” House Majority Leader Kevin McCarthy (R-Calif.) jokes. The first phase of a day-care facility for House employees that will provide care for up to 120 infants and toddlers opens this week. It includes a playground designed to look like a fun-size National Mall. The next phase will add another 120-plus preschoolers in a year or so, ultimately reducing the House day care’s waiting list from three years to one. McCarthy “used the office to secure space in a government building adjacent to the Capitol -- and more than $12 million in taxpayer funds -- for a 26,000 square foot, state-of-the-art childcare facility,” NPR’s Susan Davis reports.
“If somebody is working for you and wants to continue to serve government, but says, ‘I don’t have day care so I can’t stay here, the wait list is too long, the quality is not there,’ then you are disadvantaging who can actually serve and work in government at the same time,” McCarthy said. “The wait list for the House day care had become so long that staffers were signing up before they were even pregnant,” Davis writes. Cost ranges between $1,100 and $1,700 a month, a fraction of the cost of comparable private day care in the Washington, D.C., area.
NPR identified just two members of Congress who have children enrolled in the day care. “I never made it off the list,” said Rep. Jaime Herrera Beutler (R-Wash.), who is one of only 10 lawmakers who have given birth while serving in Congress. “I had to keep looking like everyone else does. You get on a list, you hope it works, and if it doesn’t work you’ve got to make something happen.” More: https://n.pr/2F1DPFP
TRANSITIONS
Michael Hacker will be a senior adviser to incoming House Majority Whip James Clyburn (D-S.C.). Hacker is currently a partner at HDMK.
Tim Del Monico will be Rep. Raul Ruiz’s (D-Calif.) chief of staff. He was previously Sen. Bob Menendez’s (D-N.J.) legislative director.
Colston Reid will be chief of staff for Rep.-elect Tom Malinowski (D-N.J.). Reid managed Malinowski’s campaign.
Alex Ball will be Rep.-elect Jason Crow’s (D-Colo.) chief of staff. Ball managed Crow’s campaign. Justin Meuse will be Crow’s legislative director. He previously served as legislative assistant for Rep. Jim Himes (D-Conn.). Anne Feldman will be Crow’s communications director. She was previously the national press secretary for End Citizens United.
Conor Sheehey has been promoted to legislative assistant, handling health finance, education, labor, pensions and retirement security and human services policy for Sen. Tim Scott (R-S.C.). He was previously deputy legislative assistant. Lila E. Nieves-Lee will be Scott’s banking legislative assistant. She was previously director of congressional affairs for the office of the U.S. Trade Representative.
Matt Waldrip will be Sen.-elect Mitt Romney’s (R-Utah) chief of staff. Waldrip managed Romney’s Senate campaign. Kelsey Berg will be Romney’s deputy chief of staff. Berg served as the Romney campaign’s political director. Adam Gardiner will be Romney’s state director. Gardiner was previously elected as the Salt Lake County Recorder. Liz Johnson will be Romney’s communications director. Johnson previously served as communications director to former Sen. Kelly Ayotte (R-N.H.) and a spokesperson for Sen. Susan Collins (R-Maine).
Cheryl Johnson will be the new clerk of the House. Johnson currently serves as director of government relations for the Smithsonian Institution. She will replace Karen Haas.
Douglas N. Letter will be the new general counsel of the House. He is currently a senior litigator at the Institute for Constitutional Advocacy and Protection at Georgetown University, where he is also a visiting professor of law. Letter will replace Thomas G. Hungar.
Katie Patru is leaving the House Administration Committee, where she serves as deputy staff director for member services, outreach and communications. She will be a vice president at government affairs firm Van Scoyoc Associates.
Tom Flanagin is leaving Rep. Elise Stefanik’s (R-N.Y.) office, where he serves as deputy chief of staff. Flanagin will be director of product communications at the American Chemistry Council.
Shellie Bressler has left the House Foreign Affairs Committee, where she was a senior professional staffer working on oversight and investigations.
Several military legislative fellows have left the Hill: Sean McClintock, who worked for Sen. Tom Cotton (R-Ark.), is going to be deputy director for the chief of Senate congressional affairs at the U.S. European Command. Evan Karlik, who was in Rep. Joe Courtney’s (D-Conn.) office, is going to the F-35 Joint Program Office. JP Mantone, who was in Sen. Susan Collins’ (R-Maine) office, is going to be an executive officer on the USS Freedom (LCS 1) in San Diego, California.
... Patrick Hourigan, who was in Sen. Tim Kaine’s (D-Va.) office, is going to be in the USN Joint Strike Fighter Fleet Integration Unit. Jon Fay, who was in Rep. Kay Granger’s (R-Texas) office, will be the legislative liaison at the Office of the Assistant Secretary of Defense for Legislative Affairs.
TODAY IN CONGRESS
The Senate meets at 4 p.m. to resume consideration of the legislative vehicle for the continuing resolution. The House is out.
TRIVIA
DEC. 21’S WINNER -- Mark Henson was first to correctly guess that the three Republican congressmen who held onto their seats in the 2018 election in districts Hillary Clinton won in 2016 are Reps. Will Hurd (Texas), John Katko (N.Y.) and Brian Fitzpatrick (Pa.).
TODAY’S QUESTION -- From Mark: Who were the only House Democratic incumbents first elected in the 2006 general election to lose their seats in the 2008 general election? The first person to correctly guess gets a mention in the next edition of Huddle. Send your best guess my way: nmccaskill@politico.com.
GET HUDDLE emailed to your phone each morning.
** A message from Part B Access for Seniors and Physicians Coalition: Hundreds of patient, provider and health care stakeholders agree the Administration has proposed a potentially dangerous experiment on the health of American seniors who depend on Medicare Part B. The mandatory and unprecedented model proposed by the Centers for Medicare & Medicaid Services (CMS) inserts new middlemen between physicians and patients, puts access to physician-administered medicines at risk and poses a serious threat to vulnerable Medicare beneficiaries. It further sets a risky precedent for other health care providers and services by allowing foreign government price controls to dictate reimbursement while putting decision making in the hands of vendors with no clinical or medical expertise. Instead of experimenting with the health of American seniors, the Administration and Congress must work with stakeholders to develop patient-centered reforms that embrace competition, foster the provider-patient relationship and value innovation. Learn more. **
https://www.politico.com/newsletters/huddle/2019/01/02/hill-leaders-heading-to-the-white-house-shutdown-enters-12th-day-house-dems-release-rules-package-romney-vs-trump-369430
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'Goals for 2018: 1. Get a New Job!'
Jan 2, 2019 | E&E Greenwire
By Kevin Bogardus
It took a week, but EPA has now joined its federal brethren in the partial government shutdown.
Last week, EPA stayed open using carryover funds. But as that money ran short, acting Administrator Andrew Wheeler told staff Thursday that the agency would shut down. On Friday afternoon, furlough notices began popping up in employees' email inboxes.
"Dispose of any food at your desk or in the refrigerator," was one instruction on the checklistincluded with the notice for furloughed employees.
Other instructions were to turn off their government computer and change their voicemail message. "I am out of the office for the duration of the government shutdown," was some suggested language.
Some EPA employees were still on holiday break, given that the notification came during the week between Christmas and New Year's Day. They shut down their workstations remotely on computers while on vacation. Others came in the next scheduled workday, which was New Year's Eve, this past Monday, to close up shop.
All began planning how to deal with a budget crunch as they sit home without pay. It's not clear when the shutdown will end, given the budget impasse over President Trump's border wall (see related story).
One EPA employee told E&E News that they are concerned about how they will cope if the shutdown lingers for much longer, noting that their day care has offered to delay bills until the government reopens.
"We have reached out to family and our savings just in case we need it," said the employee. "If we don't open soon, we will have to ask our creditors to help or delay our payments."
Once the government does reopen, Congress would have to pass legislation offering back pay for federal employees affected by the shutdown. Otherwise, government workers would have to accept that lost time.
"I'll be OK for January," said one EPA employee. "We get beyond that or they pull something with back pay, things go red."
Jeanne Schulze, president of American Federation of Government Employees Local 1003, which represents EPA Region 6 employees in the agency's Dallas office, said workers are looking toward their next paycheck date on Jan. 11.
"EPA employees will definitely feel the pinch if they don't get paid a week from Friday. Everyone is tightening their belt in anticipation," Schulze said.
"A furlough is not a vacation when you are worried about paying bills, buying groceries," she noted, "especially right after the holidays."
Further, Schulze said, "What is also sad is that people and businesses that depend on the government are being hurt too. No one seems to be talking about those working families. The spillover effect of the shutdown on the economy is huge."
The Office of Personnel Management offered advice to federal employees affected by the shutdown in sample letters on how to talk to creditors. One of those letters advised bartering with landlords, saying employees could fix up the home in place of rent.
That advice did not go over well with federal workers.
Mike Mikulka, president of AFGE Local 704, said, "I find it to be absurd. Whoever wrote it obviously is not living in the real world."
Mikulka's union represents Region 5 workers in EPA's Chicago office. He noted, "Many are in a paycheck-to-paycheck mode. The reality is that the cost of living here is high, and reserves are limited."
Others didn't find OPM's advice helpful.
"Honestly, I have a difficult time imagining that these letters will be taken seriously, particularly in areas like where our office is where landlords are often champing at the bit for tenant turnover so that they can charge higher rents," said Bethany Dreyfus, acting president of AFGE Local 1236, which represents EPA Region 9 employees in the San Francisco office.
"Also, it is unclear what impact these letters will have on employees' credit in the future," she said. "Again, federal employees tend to rely heavily on the consistency of our pay, as do our creditors who presume that they can rely on steady payments from those employed by the government."FOIA, inspections and research could slow
Under EPA's shutdown plan, 13,705 employees are called "exempted," meaning they could work on carryover funds but now have been likely furloughed. "Excepted" employees, numbered at 753, will have to report to work in order to protect life and property — but still without pay (Greenwire, Dec. 28, 2018).
How EPA wound down its operations soon became noticeable by Friday. The agency said it would not regularly update its social media feed during the funding lapse.
EPA also serves as the host agency for FOIAonline.gov, a web portal used by federal agencies to process Freedom of Information Act requests. That, too, could be affected. "Continued systems operations cannot be guaranteed," warned a disclaimer on the website.
Other functions look certain to grind to a halt at EPA.
"Very little of what a government attorney does on a normal workday can continue if there is a lapse of appropriations," said Kevin Minoli, who was EPA's top career lawyer until leaving the agency last year. He said that during the last lengthy government shutdown in 2013, the exception was that a lawyer could work on a case where the Department of Justice was not able to get the deadline stayed.
"An attorney could work as many hours as necessary on that one matter — but only that one matter. Work that had to wait until funding was restored included things such as legal support for regulatory actions, responses to Freedom of Information Act requests and client counseling," said Minoli, now a partner at the law firm Alston & Bird LLP.
EPA also has a law enforcement function, which could be hindered by the shutdown. Doug Parker, formerly head of EPA's criminal investigation division, said that work would be slowed.
"Inspections slowed down, certainly, and civil enforcement proceedings during the earlier shutdown," said Parker, now president of E&W Strategies. He noted that it will take some weeks to catch up.
Official travel for EPA employees will also be canceled during the shutdown. That, too, could hurt enforcement by the agency.
"Much of this travel was for scheduled field work, such as inspections, as well as remedial projects under Superfund authorities," Mikulka said.
EPA's scientific research could also be hampered during the shutdown.
Bob Kavlock, who served about 40 years at the agency including as acting head of EPA's research office, said long-running experiments were likely protected during the last shutdown by having employees come in to care for lab animals. But operations like EPA's Integrated Risk Information System, which analyzes chemicals for harmful effects, and other reviews would have come to a stop.
"In some cases, if a field study should have started and didn't, it could potentially set a study back a full year," said Kavlock, who retired from EPA in 2017.
Overall, a shutdown is not great for an agency's work.
"The time toll on shutdowns is more than generally recognized, as the organization has to prepare for the upcoming shutdown, resulting in numerous senior staff and all-hands meetings, with all the hallway chatter that those stir up," Kavlock said.
"Simply put, the lead-up to a shutdown is not a period of optimum productivity, and the restart likewise has similar overhead associated with it," he said.
The shutdown looks certain to hurt morale among agency staff. One EPA employee said they were fed up with the agency's struggles with budget lapses.
"Hope we all have a blessed 2019 and my top goal that is written on my kitchen blackboard says, 'Goals for 2018: 1. Get a new job!'" said the employee.
https://www.eenews.net/greenwire/2019/01/02/stories/1060110769
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Ewire: EPA Begins New Year in Shutdown Mode
Jan 2, 2019 | Inside EPA
Happy New Year! EPA remains shut down following a lapse in fiscal year 2019 funding and the expiration of a week's worth of reserve funds, and there is no clear path for President Donald Trump and Congress to resolve their impasse on the president's demand for funding for his signature border wall.
As Inside EPA's David LaRoss reported late last week, EPA's reserve funds expired at midnight Dec. 28, just days ahead of the start of a new Congress where Democrats will re-take control of the House. Funding for about a quarter of the government lapsed Dec. 21, though acting EPA chief Andrew Wheeler said in an email that 13,705 agency employees, out of the 13,972 staff currently on the rolls, could continue working with the use of “carryover” funds.
The agency is caught up in a broader fight over Trump's demand for $5 billion for a border wall, with Democrats refusing to provide such funding and instead offering a smaller amount for border security measures that do not include a wall.
Politico and others are reporting that Trump invited congressional leaders to an afternoon briefing Jan. 2 to discuss the wall, an event that “would mark the first time Trump has sat down with top congressional leaders of both parties since the shutdown started.” The gathering would “offer both sides a chance to restart the talks.”
Trump earlier said he would be “proud” to shut down the government over border security issues, but has since been trying to blame Democrats for the funding lapse. The White House said a plan by the new Democratic majority in the House for a “clean” funding bill without wall money is a “non starter.”
Even so, the shutdown is landing the government in court, where a federal employee union filed suit Dec. 31 arguing that the shutdown is illegally forcing more than 400,000 staff to work without pay, according to the Washington Post.
While most staff are not working and their pay is delayed indefinitely, some “essential” or “excepted” employees are nevertheless expected to show up to work.
The Post notes that the timing of the shutdown limited the number of staff that can join the lawsuit. But if the shutdown is still in effect when the next pay cycle ends Jan. 5, any “essential” employees -- including a relatively small number of EPA staff -- could join the legal claims.
https://insideepa.com/daily-feed/ewire-epa-begins-new-year-shutdown-mode
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With Zinke Out, Former Lobbyist Becomes Acting Interior Secretary
Jan 2, 2019 | BNA Daily Environment Report
By Jennifer A Dlouhy
As Ryan Zinke left his post heading the Interior Department on Wednesday, the agency’s No. 2 official, David Bernhardt, joined President Donald Trump at a meeting of cabinet officials.
Bernhardt, who has been serving as deputy Interior secretary since his confirmation last July, is taking over as acting Interior secretary, said a person familiar with the matter. But White House officials did not respond to requests for comment or confirmation Wednesday.
Zinke, who announced his resignation under pressure in December, was not present at the meeting, and his Twitter profile description had been changed to “former secretary of the Interior” by midday. Zinke tweeted that it had been “a high honor to serve” Trump and the American people in the role.
“We’ve restored public lands for the benefit and enjoyment of the people, improved public access and shall never be held hostage again for our energy needs,” Zinke said.
It's been a high honor to serve @POTUS & the American People as @Interior Secretary. We've restored public lands “for the benefit & enjoyment of the people,” improved public access & shall never be held hostage again for our energy needs. God bless America & those who defend her.
Bernhardt is set to continue that pro-energy posture as acting secretary, having already played a leading role shaping Interior Department policies to expand drilling, strip wildlife protections and alter the way the government analyzes the environmental consequences of projects. Bernhardt can continue much of that work without interruption while serving as acting Interior secretary -- a position he could fill for years under a federal vacancies law.
Bernhardt’s time as acting secretary is initially limited to 210 days under that law. But that clock gets paused if Trump nominates someone for the secretary job -- and it can stay that way for two years while a nomination is pending before the Senate.
As a natural resources lawyer, most of Bernhardt’s professional life has been tied to Interior -- either working inside the agency or lobbying it from the outside. After a stint at Brownstein Hyatt Farber Schreck LLP, Bernhardt went to work for former President George W. Bush’s Interior Department in 2001, eventually becoming the agency’s top lawyer in 2006.
When President Barack Obama took office in 2009, Bernhardt returned to his old firm, where he worked on behalf of oil companies and developers with business before his former agency. Bernhardt’s client list included affiliates of Noble Energy Inc., a major Gulf of Mexico oil producer; Equinor ASA, the Norwegian company seeking to build a wind farm off the New York coast; and Halliburton Co., the world’s largest oilfield services provider.
Unlike Zinke, a former Navy SEAL who rode a horse to the Interior Department’s offices on his first day on the job and had a secretarial flag hoisted whenever he was inside the agency’s headquarters, Bernhardt, 49, avoids the spotlight. His supporters and critics alike describe him as a smart, hard-working lawyer who strategically and methodically advances his goals, often finding ways to use the bureaucracy to his advantage.
Opponents call Bernhardt a “walking conflict of interest” and question whether his recusals from matters involving some former clients are sufficient.
Before he was confirmed to be deputy Interior secretary, Bernhardt helped guide the Trump administration’s transition at the department.
One of Bernhardt’s top priorities at Interior has been revamping the way the U.S. protects vulnerable animals under the Endangered Species Act. Conservationists attacked a Trump proposal championed by Bernhardt to allow economic considerations to factor into wildlife protection decisions. Bernhardt has defended the approach, arguing that the government has too often pursued protections without regard for the potential cost to landowners and businesses.
https://www.bloomberg.com/news/articles/2019-01-02/with-zinke-out-former-lobbyist-becomes-acting-interior-head
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EPA Denies Petition for Expanded TSCA Asbestos Reporting
Jan 2, 2019 | Chemical Watch
The US EPA has denied an NGO petition to require increased reporting of asbestos under the TSCA chemical data reporting (CDR) rule.
Filed under section 21 of TSCA in September, the petition had sought for the EPA to amend the CDR rule to eliminate certain exemptions and require additional reporting on asbestos. The petitioning NGOs argued that this was needed to provide more information on current usage in support of its ongoing TSCA risk evaluation.
But the EPA informed the petitioners on 21 December that it was denying the request. In a pre-publication Federal Register notice, the agency said it believes it "is aware of all ongoing uses of asbestos and already has the information that EPA would receive if EPA were to amend the CDR requirements."
Furthermore, it added, it would not be able to finalise the requested amendments in time to inform its risk evaluation, given the roughly 18-month timeframe necessary for a rulemaking process to propose and agree such changes.
With regard to other requests from the petitioners, the agency said:it did not think that lifting or modifying any existing reporting exemptions – including for naturally occurring substances, chemicals in articles, impurities and byproducts or for low volumes – would result in the agency receiving new information that would change its understanding of asbestos’s use; anda section 21 petition is "not a vehicle" that can be used to compel EPA to lift confidential business information (CBI) protection, nor have the groups made a sufficient case to demonstrate that such disclosure is necessary.
The petition was filed by NGOs the Asbestos Disease Awareness Organization (ADAO), the American Public Health Association (APHA), the Center for Environmental Health (CEH), the Environmental Working Group (EWG), the Environmental Health Strategy Center (EHSC) and Safer Chemicals, Healthy Families (SCHF).
The groups have the right to appeal against the agency’s decision in a US district court within 60 days.
https://chemicalwatch.com/72985/epa-denies-petition-for-expanded-tsca-asbestos-reporting
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EU Notifies WTO of Draft Cosmetic Products Labelling Decision
Jan 2, 2019 | Chemical Watch
The European Commission has notified the WTO of a draft Decision to establish a glossary of common ingredient names for use in the labelling of cosmetic products.
This glossary, which will be part of the cosmetics products Regulation, is meant to:ensure uniform labelling; andfacilitate identification of cosmetic ingredients.
The proposed date of adoption is the first quarter of 2019. It will enter into force 20 days from publication in the Official Journal of the EU.
The deadline for comments is 60 days from notification.
Last October, the EU executive notified the WTO of draft amendments to the cosmetic products Regulation to restrict use of climbazole as a preservative.
https://chemicalwatch.com/72979/eu-notifies-wto-of-draft-cosmetic-products-labelling-decision
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Fracking’s Secret Problem—Oil Wells Aren’t Producing as Much as Forecast
Jan 2, 2019 | Wall Street Journal
By Bradley Olson, Rebecca Elliott and Christopher M. Matthews
Thousands of shale wells drilled in the last five years are pumping less oil and gas than their owners forecast to investors, raising questions about the strength and profitability of the fracking boom that turned the U.S. into an oil superpower.
The Wall Street Journal compared the well-productivity estimates that top shale-oil companies gave investors to projections from third parties about how much oil and gas the wells are now on track to pump over their lives, based on public data of how they have performed to date.
Two-thirds of projections made by the fracking companies between 2014 and 2017 in America’s four hottest drilling regions appear to have been overly optimistic, according to the analysis of some 16,000 wells operated by 29 of the biggest producers in oil basins in Texas and North Dakota.
Collectively, the companies that made projections are on track to pump nearly 10% less oil and gas than they forecast for those areas, according to the analysis of data from Rystad Energy AS, an energy consulting firm. That is the equivalent of almost one billion barrels of oil and gas over 30 years, worth more than $30 billion at current prices. Some companies are off track by more than 50% in certain regions.
The shale boom has lifted U.S. output to an all-time high of 11.5 million barrels a day, shaking up the geopolitical balance by putting U.S. production on par with Saudi Arabia and Russia. The Journal’s findings suggest current production levels may be hard to sustain without greater spending because operators will have to drill more wells to meet growth targets. Yet shale drillers, most of whom have yet to consistently make money, are under pressure to cut spending in the face of a 40% crude-oil price decline since October.
Companies whose wells appear to lag behind forecasts, according to the analysis, include Pioneer Natural Resources Co. and Parsley Energy Inc., two of the biggest oil and gas producers in the Permian basin of West Texas and New Mexico. The Journal’s review didn’t include some leading producers, such as Exxon Mobil Corp. , because they didn’t make shale-well projections.
Pioneer, Parsley and several other companies disputed the findings, saying the third-party estimates used by the Journal differ from their forecasts on key points such as the likely lifespan of shale wells.
Some companies, including major North Dakota producer Whiting Petroleum Corp. , acknowledged the forecasts can be unreliable and said they were moving away from providing such estimates.
Another North Dakota driller, Oasis Petroleum Inc., said the projections it provided in investor presentations were estimates made as it tested drilling in vast tracts, including areas it has since abandoned. “It’s not a science,” said Richard Robuck, the company’s treasurer. “It’s more of an art.”
Few U.S. shale companies disclose exactly how they make their forecasts—the systems they use and the assumptions they make to estimate well-by-well production—or whether their projections from years ago hit the mark. The fact that many have missed is an open secret in the industry.
“I certainly expect many of today’s estimates will turn out to have been pretty optimistic,” said Francis O’Sullivan, director of research for the MIT Energy Initiative, which has examined shale forecasting. He said the complex geology of shale basins and assumptions based on a small number of wells could make forecasts unreliable. “There is profound variability in the performance of these wells,” he said.
Schlumberger Ltd. , the oil-field-services giant, reported in a research paper that secondary shale wells completed near older, initial wells in West Texas have been as much as 30% less productive than the initial ones. The problem threatens to upend growth projections for America’s hottest oil field, the company said in October.
Oil engineers and reserves specialists say existing data suggests there is a more accurate way to model well output. Operators, they say, must use more conservative assumptions about how quickly production will decline and how many wells can be drilled in a given area. Operators also should avoid making forecasts without a sufficient sample size of wells, they say.
Flawed forecasting doesn’t mean U.S. oil output is about to drop. Shale wells reach peak production quickly and rapidly decline, so companies are constantly drilling new wells. But if thousands of shale wells produce less over their lifetimes, companies will reap less of a long tail than anticipated, requiring them to spend more to sustain output and making it harder for them to reach profitability.
Shale companies have attracted huge amounts of capital from Wall Street over the past decade. So far, investors have largely lost money. Since 2008, an index of U.S. oil and gas companies has fallen 43%, while the S&P 500 index has more than doubled in that time, including dividends. The 29 companies in the Journal’s analysis have spent $112 billion more in cash than they generated from operations in the last 10 years, according to data from FactSet, a financial-information firm.
All oil companies are required to file estimates of total proven oil reserves with the Securities and Exchange Commission. Those estimates, governed by strict rules, generally only capture future reserves companies plan to tap in a five-year period. As the fracking boom intensified, many exploration and production companies looked for a way to persuade investors to value their prospects outside of that five-year window.
Shale companies began touting a metric known as estimated ultimate recovery, or EUR, in investor presentations. The estimates, often represented graphically by what is known as a type curve, project how much oil and gas wells are likely to produce over several decades, including the rate of decline.
The practice of promoting EURs became widespread after oil prices crashed in 2014 and producers, many in need of capital infusionsfrom Wall Street, talked up their prospects. Wall Street’s valuation of many shale companies, which had been closely tied to the value of their proven oil and gas reserves, began diverging.
At the end of 2007, the companies in the Journal’s well analysis that existed at the time had an enterprise value, measured by market capitalization plus debt, of about 1.65 times the value of their proven reserves, according to company disclosures and S&P Global Market Intelligence data. Ten years later, that multiple had risen to more than 2.5 times, even though oil prices were much lower. Last year, the enterprise value of the 29 companies in the Journal’s analysis was $360 billion higher than the value of their proven reserves.
EUR estimates from many companies were grounded on two assumptions: that they could pack wells closer together, squeezing more value from the land they leased, and that they could replicate their best early wells. The results to date suggest those assumptions were often wrong.
The Journal’s analysis involves public data that at times gives an incomplete picture of well performance. North Dakota reports oil and gas production by well, but Texas only does so by land parcel. Third-party data providers must extrapolate to make up for that, meaning their data may not be as precise as well-level data maintained by companies.
The Journal relied primarily on figures from Rystad Energy, but consulted with several other third-party providers, including Oseberg Inc. and BLR Digital LLC, whose data pointed to similar conclusions. Those providers forecast well output over several decades based on early, publicly reported production data, taking into account typical decline rates.
When oil prices plummeted around 75% between 2014 and 2016, to below $30 a barrel, many shale companies used EUR estimates to tryto persuade investors that the sector remained a strong place to put their money.
The production forecasts made by many companies were “dangerous” because they were based on a small population of wells, and the performance of individual wells varies significantly, said Norman MacDonald, a natural-resource specialist at asset manager InvescoLtd.
“Companies were able to high-grade the numbers, show those to Wall Street, and the stock price went up accordingly,” said Mr. MacDonald, a portfolio manager who has urged shale companies to prioritize profits over production growth. “Geology doesn’t line up with Excel spreadsheets too well, unfortunately.”
In September 2015, Pioneer Natural Resources, based in Irving, Texas, told investors that it expected wells in the Eagle Ford shale of South Texas to produce 1.3 million barrels of oil and gas apiece. Those wells now appear to be on a pace to produce about 482,000 barrels, 63% less than forecast, according to the Journal’s analysis.
An average of Pioneer’s 2015 forecasts for wells it had recently fracked in the Midland portion of the Permian basin suggested they would produce about 960,000 barrels of oil and gas each. Those wells are now on track to produce about 720,000 barrels, according to the Journal’s review, 25% below Pioneer’s projections.
Pioneer disputed the conclusions, noting that it assumes its wells will produce for at least 50 years, while Rystad Energy uses 30 years in its forecasts. Pioneer also assumes its well productivity will fall off at a slower rate than the 7% final decline rate Rystad assumes.
“We find it is simply impossible to compare the numbers due to the methodological differences,” a Pioneer spokesman said.
Adjusting for those factors doesn’t fully make up for the disparity in production forecasts. If Pioneer’s wells produce for 50 years and decline at 5% annually, its current production trajectory would still be nearly 12% below the company’s forecast of 849,000 barrels of oil and gas in the Permian, according to the Journal’s analysis. In the Eagle Ford, estimated production would increase only slightly to 498,000 barrels, or 62% less than the company projected.
A spokesman for Pioneer said problems in the Eagle Ford in 2015 were “widely known,” and the data shows the company’s well performance has improved.
While it is difficult to know how long shale wells will remain productive, assuming tens of thousands of them will pump for 50 years without costly interventions to keep them flowing is extremely optimistic, according to specialists on reserves.
The oldest case study to date is in the Barnett shale in and around Fort Worth, Texas, where modern fracking began about 20 years ago. Researchers at the University of Texas and Rice University predicted that many wells in the region, which primarily contains natural gas, won’t even produce for 25 years. About 73% or more of the total output of wells will come in the first decade, with little value coming after 20 years, the researchers said.
The decline rates of as low as 5% that some shale companies have adopted for their wells are optimistic, some academics and industry leaders say. Recent studies by Rystad and analytics firm analytics firm Wood Mackenzie Ltd. found that a range of 12% to 16% was the most common decline rate after about five years.
In 2014, Parsley Energy, an Austin, Texas-based producer, told investors its average well in the Midland section of the Permian basin would produce 690,000 barrels, according to a review of Parsley’s quarterly earnings presentations. By 2015, its estimates averaged 1,050,000 barrels.
Parsley is on track to miss its Midland well forecasts for every year from 2014 to 2017 by an average of 25%, according to the Journal’s analysis.
“Responsible evaluation of the data shows that Parsley’s historical well production has been consistent with expectations set forth in our public materials,” said a Parsley spokesperson.
When calculating its estimates, Parsley includes other valuable hydrocarbons that come out of wells, such as ethane. In its analysis, Rystad doesn’t include those hydrocarbons, known as natural gas liquids, because they aren’t accurately captured in available public data.
Parsley declined to comment on how much of a boost its estimates get from such liquids. In recent years, the average increase in barrels from including the byproducts amounts to 10% to 18% in the Midland basin, according to third-party estimates.
Mark Papa, a fracking pioneer and chief executive of Centennial Resource Development Inc. in Sugar Land, Texas, said his company avoids forecasts because they create an “illusory picture” of a company’s prospects. “A lot of type curves present a well’s potential under perfect conditions,” he said. “But in reality, the majority of the wells don’t turn out that way.”
Some companies said they were aware of flaws with the forecasting method and how it has been used, but that they provided the numbers to meet demands from analysts and short-term investors such as hedge funds. Some said that if they didn’t, their stock would underperform peers that made optimistic claims.
“You have to make projections,” said David Lancaster, chief financial officer of Matador Resources Co., a top Permian driller. He said companies should revise forecasts that appear to be off target, disclose production ranges rather than specific estimates and avoid screening out poorly performing wells.
Matador’s average well in the Permian’s Delaware Basin is on track to outperform forecasts in all three years the company provided them, according to the Journal’s analysis.
Denver-based Whiting Petroleum is de-emphasizing its production estimates at the direction of its chief executive, Bradley Holly. Mr. Holly, who became CEO in November 2017, said the company is now more focused on generating cash, lowering debt and maximizing a well’s returns early in its life.
“Your return will really be made in the first two to three years,” he said.
One reason thousands of early shale wells aren’t meeting expectations is that many companies extrapolated how much they would produce from small clusters of prolific initial wells, according to reserves specialists. Some also excluded their worst-performing wells from the calculations, which is akin to eliminating strikeouts when projecting a baseball player’s batting average.
“There are a number of practices that are almost inevitably going to lead to overestimates,” said Texas A&M University professor John Lee, an expert on calculating oil and gas reserves.
Many reserves specialists have advised companies to provide a potential range of outcomes based on their internal analyses, a common practice in statistics that better accounts for uncertainty.
Academic research has suggested that data from at least 60 wells, producing for six months or more, would be needed for accurate forecasts. Yet some companies and analysts have made predictions based on fewer than 10 wells.
At a July presentation Mr. Lee gave in Houston about techniques that could produce more accurate shale forecasts, one participant stood up and challenged the engineers in attendance.
“Why aren’t we doing this?” the man asked several times, according to Mr. Lee and two other people who attended the meeting.
“Because we own stock,” replied another engineer, sparking laughter.
https://www.wsj.com/articles/frackings-secret-problemoil-wells-arent-producing-as-much-as-forecast-11546450162
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Green New Deal Part 2: Oil & Gas Industry Cautiously Watching Developments
Jan 2, 2019 | Natural Gas Intelligence
By Charlie Passut
Part two of two. This series looks at the potential impact a Green New Deal could have on the oil and gas industry. This installment examines the oil and gas industry's current posture toward the proposal, as well the reaction from lawmakers on both sides of the aisle. In part one, an environmental activist and a conservative economist revealed the merits and drawbacks of the sweeping proposal.
Representatives for the oil and gas industry said they were cautiously watching developments surrounding a plan to have all of the nation's electricity generated by renewables in a decade, but trade associations for the industry continue to hold firm that natural gas has helped significantly reduce greenhouse gas emissions over the last decade, and it will continue to play an important role in the nation's energy mix moving forward.
Meanwhile, Congress is divided mostly along partisan lines over the plan, aka the Green New Deal (GND). While many incoming House Democrats, especially its younger members, support the plan, Senate GOP lawmakers blasted it as "a crazy, expensive mess" that would cost $7 trillion.
Industry Urges Expanded Infrastructure
"Infrastructure has the potential to be one of the most bipartisan issues in the new Congress, and natural gas pipelines are an important part of our nation's critical infrastructure," said Interstate Natural Gas Association of America CEO Don Santa. "Put simply, the GND can't happen without natural gas, so supporting natural gas infrastructure should be a priority for members on both sides of the aisle."
The American Petroleum Institute concurred, adding that "expanding energy infrastructure is critical to ensuring that consumers, workers and the environment can continue to benefit from the record U.S. energy production that has boosted our economy and increased our national security over the past decade.
"The bottom line is that natural gas and oil production in America is among the cleanest in the world. Our industry continues to demonstrate that meeting record demand and protecting the environment are not mutually exclusive, and has done so while building toward a cleaner, safer, better future."
Although the American Gas Association (AGA) didn't have a comment on the GND specifically, it did release a report in September that found "policy-driven electrification could be burdensome to consumers and to the economy, have profound impacts and costs on the electric sector and amounts to a very costly approach for a relatively small reduction in emissions."
AGA spokesman Jake Rubin added that when the details surrounding the GND are released, the trade group "will look at how it treats the direct use of natural gas in homes and businesses for heating, cooking and clothes drying."
Congress Divided
With Democrats just days away from taking control of the House, a partisan divide over the GND appeared to be widening. Rep.-elect Alexandria Ocasio-Cortez (D-NY) has consistently been one of the plan's most ardent supporters.
"We need to act. We need a GND," Ocasio-Cortez said on Twitter on Dec. 21. "Climate change isn't happening in 10 years. It's happening now. We need large, immediate investment now to protect our shores from rising sea levels..."
Eight days after the midterms, Reps. Frank Pallone of New Jersey, Raúl Grijalva of Arizona and Eddie Bernice Johnson of Texas issued a joint statement promising to "hit the ground immediately with a series of hearings early in the next Congress on how best to combat this growing global crisis." They added that the hearings would be held over a two-day period. Pallone will chair the powerful House Energy & Commerce Committee in the next Congress, while Grijalva will chair the House Natural Resources Committee.
But in the Senate, where the GOP will maintain control, lawmakers were taking aim at the GND.
"While the plan is being sold as a solution to climate change and a jobs program, it would cost trillions, and it ignores the rest of the world's contribution to climate change," the RPC said in a policy paper. The group added that "producing 100% of electricity from renewable sources is a practical impossibility in the near future. Scientists doubt it would be achievable by 2050, let alone 2029, the deadline Democrats would set.
"Such a massive overhaul in power generation would require the closure and replacement of about 83% of U.S. electricity generation, including all coal, natural gas, and nuclear plants."
https://www.naturalgasintel.com/articles/116935-green-new-deal-part-2-oil-gas-industry-cautiously-watching-developments
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Some Oil & Gas States Urge EPA To Limit Rollback Of Methane Rule
Jan 2, 2019 | Inside EPA
By Lee Logan
Some oil- and gas-heavy states are pushing back on aspects of EPA's proposal to roll back Obama-era methane standards for new oil and gas equipment, particularly on the key issue of how frequently operators must check for emissions leaks at wells.
Such opposition is not uniform, and it is also not full-throated from conservative states that often support the Trump EPA's deregulatory agenda.
Nevertheless, the states' recent comments suggest that opposition to EPA's plan extends beyond environmentalists and Democratic-led states -- even as some industry groups are pushing the agency for additional regulatory relief.
Under EPA's Sept. 11 proposed changes to its 2016 new source performance standards (NSPS), the agency would relax an existing requirement to check for leaks of the potent greenhouse gas methane every six months, and instead require operators to check annually. For low-production wells, operators would have to conduct monitoring every two years, easing an existing annual requirement.
However, Dec. 17 comments on the plan from the North Dakota Department of Health say that based on the state's experience, “annual monitoring may not be sufficient for many well sites.” Leak detection and repair (LDAR) programs are a “critical part” of the state's rules, the comments add.
The state suggests EPA use a “sliding scale where companies must achieve a certain level of compliance before moving from semi-annual LDAR to less frequent annual testing.” This would “engage the industry and reward companies with top performance.”
Additionally, the Oklahoma Department of Environmental Quality's Dec. 17 comments suggest “retaining the semi-annual monitoring frequency for non-low production well sites which are located in areas designated nonattainment for ozone” -- suggesting the state is sensitive to concerns that EPA's rollback may harm air quality.
While the state agrees with EPA's plan to allow low-production well sites two years to conduct leak monitoring, it opposes industry's call to defer any requirements for these sources indefinitely.
The Sooner State cites a 2015 paper on so-called “super-emitters,” conducted by the University of Texas and Environmental Defense Fund, which shows “only a weak linear correlation between production rate and absolute emissions. That is, low production does not necessarily correlate with low emissions.”
Maryland's Department of the Environment echoes this point in its Dec. 17 comments, saying it does not support reducing the monitoring frequency for well sites. The state “does not believe that just because a well site is low production it is a low methane emitter. In fact, at least one report proves the opposite is true,” it says, citing the same “super-emitter” study.
The state notes that “inspections occurring half as frequently allow leaks twice as long to go unnoticed and unrepaired.”
'Significant Concerns'
Some gas-heavy states with Democratic governors are also pushing back on EPA's planned NSPS changes. For example, Colorado's Department of Public Health & Environment in Dec. 17 comments says it has “significant concerns with EPA's proposal to reduce the monitoring frequencies for well sites and compressor stations.”
The state argues EPA has not concluded that semi-annual inspections are not cost-effective, and cites an agency technical support document showing that “semi-annual optical gas imaging monitoring at all well sites and quarterly OGI monitoring at compressor stations are cost effective work practices to reduce” methane and conventional emissions.
“Colorado's experience demonstrates that a rigorous LDAR program with frequent inspections can be implemented without impeding successful and profitable development of oil and natural gas resources,” the state argues.
The Centennial State's comments are notable because many observers say its oil and gas methane standards are particularly effective, in part because they were drafted with the input of both environmental and industry groups. Also, New Mexico Gov.-elect Michelle Lujan Grisham (D) has said that she plans to replicate Colorado's approach.
Similarly, the Pennsylvania Department of Environmental Protection's (DEP) Dec. 17 comments cite its new general permit for oil and gas facilities, which includes quarterly inspections or the possibility of semi-annual checks for equipment with less than 2 percent of components that leak.
“As EPA has shown, and [Pennsylvania's review] has confirmed, LDAR is a cost-effective method of reducing fugitive emissions. While [the state's] analysis shows cost-effectiveness at a quarterly frequency, [DEP] concedes that costs in Pennsylvania may not be reflective of costs across the nation,” the comments say. “Therefore, rather than recommending a more frequent inspection interval with a possible step-down as in the [the state's permit, DEP] strongly recommends that EPA maintain the monitoring frequency at well sites at semi-annual.”
DEP also notes that EPA's proposed definition of “low-production” wells as those that produce 15 barrels of oil or less per day would capture more than 89 percent of wells in the state and nationally, suggesting that eased standards in this regard could lead to significant emissions. Rather than basing LDAR requirements on production, it argues that such standards “be determined solely based on economic feasibility.”
'Flawed' & 'Unlawful' Plan
Other Democratic-led states offered more vocal criticism. “Maintaining a robust schedule for monitoring and repair of leaks from compressor stations and well sites is critical to New York health and climate,” the New York Department of Environmental Conservation says in Dec. 17 comments. “Less frequent monitoring will result in leaks, potentially significant ones, going undetected for longer periods of time.”
The Empire State adds that EPA justifies its relaxed standards based on a “flawed” calculation of the climate benefits of curbing methane emissions -- which echoes the Trump EPA's prior approach on this issue that significantly reduced Obama-era estimates of the social cost of carbon.
“This unacceptably limited view of how to account for the impact of GHGs places short-term profits ahead of the interests of the public,” the state argues.
Additionally, Dec. 17 comments from the California Air Resources Board argue that the existing NSPS standards are “consistent with the Agency's statutory obligations, are well-supported by the record, and produce substantial benefits at limited cost.”
Also, a coalition of 13 Democratic state attorneys general (AG) charges in Dec. 17 comments that the proposal is “unlawful for multiple reasons.”
Among those reasons, the AGs argue, is that EPA has not shown its proposed standards meet a Clean Air Act requirement to set a “best system of emission reduction,” and that EPA has not provided data to show its 2016 rules are unreasonably costly.
“Instead, EPA relies upon wholly unsupported assertions that the 2016 standard is not as cost-effective as initially expected,” the comments say.
The coalition includes AGs for California, Connecticut, Illinois, Iowa, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Rhode Island, Vermont and Washington. The city of Chicago also joined the filing.
https://insideepa.com/daily-news/some-oil-gas-states-urge-epa-limit-rollback-methane-rule
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FRA Awards $46.3M for Positive Train Control
Jan 2, 2019 | Transportation Today
By Melina Druga
The Federal Railroad Administration (FRA) awarded $46.3 million in grants last month to assist in the deployment of positive train control (PTC) systems.
The grants, which were awarded to 11 projects in 10 states, were provided by the Consolidated Rail Infrastructure and Safety Improvements (CRISI) Program.
Funding for CRISI was authorized under the Fiscal Year 2018 Consolidated Appropriations Act. Of the total provided to the program, $250 million was allotted for PTC system deployment.
The first round of funding was awarded in August. Twenty-eight projects in 15 states were awarded $203.7 million.
“These grants not only help railroads continue to make progress implementing positive train control, but they also show that we’re steadfast in our commitment to make investments in passenger rail and rural communities,” FRA Administrator Ronald L. Batory said.
Thirty-one percent of December’s grants benefit rural areas.
The largest grant award was up to $9.2 million to the Amtrak Southwest Chief on BNSF Railway. Funding will be used for PTC wayside technology on the approximately 179 miles between Dodge City, Kan., and Las Animas, Colo.
The deadline for implementing PTC was Monday.
If a railroad meets congressionally mandated criteria, it can qualify for an alternative schedule, with an implementation deadline of Dec. 31, 2020.
https://transportationtodaynews.com/news/11542-fra-awards-46-3m-for-positive-train-control/
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Only Four of the Nation's 41 Rail Systems Met Safety Deadline
Jan 2, 2019 | Digital Journal
By Karen Graham
As of Dec. 31, only four of the nation's railroads had fully implemented positive train control (PTC) systems to prevent train accidents, according to the U.S. Transportation Department.
The railroads not meeting the deadline, including Amtrak, had to meet Federal Railroad Administration (FRA) requirements to receive a two-year deadline extension known as an "alternative schedule."
The four railroads that fully met the deadline are the North County Transit District, Metrolink, Port Authority Trans-Hudson Corp., and the Portland & Western Railroad, federal officials said in an update on the USDOT website.
Of the railroads requesting alternative schedules, seven are Class Is, 25 are intercity passenger and commuter railroads, and five are short-line or terminal railroads. Additionally, 12 railroads have received conditional PTC system certification from the FRA.
According to the latest USDOT report, there are now 41,000 route miles in PTC operation, which is 71 percent of the route miles that are subject to the mandate.
USDOT and positive train control
The technology that can prevent collisions and derailment - positive train control - involves installing the equipment on the locomotives and the tracks. The system then communicates information about the train's speed as well as the position of the train and track switches.
In February 2018, USDOT Chairman Robert Sumwalt told Congress the board has identified 150 accidents, which caused 300 deaths, since 1969 that could have been prevented by the technology.
"I've always referred to it as the angel on our shoulder," said John Hiatt, a former railroad engineer who is now an investigator with the Bremseth Law Firm, whose clients include railroad employees. Hiatt, speaking with CNN, said that Congress, railroads and federal regulators all share the blame for the missed deadline.
In September 2008, the US Congress considered a new rail safety law that set a deadline of December 15, 2015, for implementation of PTC technology across most of the US rail network. The Congress passed a bill in October 2015, extending the compliance deadline by three years, to December 31, 2018.
In December 2017, Transportation Secretary Elaine Chao wrote to railroad executives that she was "concerned that many of the Nation's railroads must greatly accelerate their efforts" to meet the deadline.
In her letter, Chao "suggested" the FRA would not be feeling kindly to any more requests for additional extensions, saying the agency's leaders had been directed to "create an increased level of urgency to underscore the imperative of meeting existing timeline expectations for rolling out this critical rail-safety technology."
But, subsequently, the FRA did grant an additional 10 exemptions and is considering requests from the other 27 rail systems that did not meet the deadline, according to the Department of Transportation.
"There really are no consequences," Hiatt, the accident investigator, said of the missed deadline. And apparently, he is correct. Not only that, but the Department of Transportation, the railroad administration and the National
Transportation Safety Board are largely closed due to the partial government shutdown.
http://www.digitaljournal.com/news/politics/only-four-of-the-nation-s-41-rail-systems-met-safety-deadline/article/540059
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House Dems Formalize Climate Committee Plans Without Green New Deal Language
Jan 2, 2019 | The Hill - E2 Wire
By Timothy Cama
House Democrats have formally proposed creating a new committee on climate change, without many of the main factors that progressives wanted in the panel’s structure.
Democratic leaders unveiled the plans for the “Select Committee on the Climate Crisis” late Tuesday as part of a package of rules to govern House proceedings for the next two years.
The proposed rules, which the House will vote to adopt Thursday when Democrats formally take the chamber’s majority, say the select committee is instructed “to investigate, study, make findings, and develop recommendations on policies, strategies, and innovations to achieve substantial and permanent reductions in pollution and other activities that contribute to the climate crisis which will honor our responsibility to be good stewards of the planet for future generations.”
As has been reported in recent weeks, the panel will not have many of the features that Rep.-elect Alexandria Ocasio-Cortez (D-N.Y.), dozens of other Democrats and hundreds of activists have asked for to lead to a “Green New Deal.”
The panel will not have the power to subpoena or depose, nor will it have the authority to vote on legislation and send it directly to the House floor for a vote.
It also is not being explicitly charged with developing Green New Deal legislation, which supports envision as bringing the county to 100 percent renewable electricity and decarbonizing major industries over 10 years, as well as a universal jobs guarantee and other ideas.
Nonetheless, Rep. Kathy Castor (D-Fla.), who likely Speaker Nancy Pelosi(D-Calif.) designated chairwoman of the select committee, said the Green New Deal will inspire the panel’s work.
“There’s some fabulous proposals in the Green New Deal, and I’m excited about all that. You may see some similar language. Clearly, the focuses are going to be the same,” she told The Hill last month. “This will be a committee clearly in the spirit of the Green New Deal."
The climate committee also will not prohibit from its rolls lawmakers who have accepted campaign donations from the fossil fuel industry, another request from Green New Deal supporters.
Progressives have lauded Pelosi and other leaders for the panel, but expressed disappointment that it wouldn’t be as strong as they had hoped.
“This committee, if it turns out that the rumors about it are true, sounds about as useful as a screen door on a submarine,” Corbin Trent, a spokesman for Ocasio-Cortez, told The Hill last week. “As it’s portrayed it’s going to be completely incapable of solving the greatest threat to human kind.”
Ocasio-Cortez took to Twitter Monday and accused leaders of rejecting her climate agenda as “too controversial.”
The climate committee will have 15 members under the rules unveiled Tuesday, nine of whom will be Democrats and six Republicans.
https://thehill.com/policy/energy-environment/423492-house-dems-formalize-climate-committee-plans-without-green-new-deal
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Proposal for MATS Review Creates 'Big Puzzle'
Jan 2, 2019 | E&E - Greenwire
By Sean Reilly
In unveiling plans to unravel the justification for landmark mercury regulations on power plants, EPA officials last week were quick to underscore that the proposed rule would leave the actual emissions standards intact.
At least for now.
As part of its plan, however, the agency also intends to explore the possibility of rescinding those standards, along with scrapping the entire package of 2012 Obama-era regulations, according to the proposal's fine print. In both instances, EPA officials are asking for public comment on whether they could legally pursue those options if they go through with axing the justification that it was "appropriate and necessary" to limit emissions of mercury and other hazardous pollutants from coal- and oil-fired power plants.
Most of the power industry has long since complied with those limits. In its Friday press release outlining the proposed rule to undo the regulatory justification for what are formally known as the Mercury and Air Toxics Standards, EPA said the emissions limits and other requirements "would remain in place." The release makes no mention of the possibility of rolling them back, although an accompanying fact sheet briefly alludes to it.
Most of the agency has since closed because of the spending stalemate between Congress and the Trump administration. While the EPA press office remains open, staffers there are only responding to inquiries related to the shutdown or environmental emergencies, spokeswoman Molly Block said in an email this morning when asked why the agency is seeking feedback on the option of scrapping the emission standards.
But to Ann Carlson, a law professor at UCLA, the answer is "the big puzzle" underlying EPA's proposal.
On the one hand, Carlson said in an email, EPA contends that regulation of mercury and other hazardous air pollutants from power plants is not "appropriate and necessary" because of the Trump administration's revised view that "the direct costs of regulating toxins far exceed the direct benefits" (Greenwire, Dec. 28, 2018).
On the other, EPA officials would leave intact regulations "to reduce the very toxic pollutants they say are inappropriate and unnecessary to regulate," Carlson added. "These two positions seem on their face to contradict each other."
The reason for that contradiction may lie in the tension between the stance of utilities that have already met the standards and the interests of Murray Energy Corp., the Ohio-based coal company, Carlson said. The company's CEO, Bob Murray, is an enthusiastic backer of President Trump. Last year, Murray unsuccessfully petitioned the administration to suspend implementation of MATS. Murray Energy is also a plaintiff in litigation challenging EPA's 2016 "supplemental finding" that upheld the appropriate and necessary justification.
While withdrawing MATS would seem to naturally follow from overturning the underlying justification, "that would upset the utilities that have complied with the rule," Carlson said.
As another part of the newly released proposed rule, EPA is also looking into creation of a MATS "subcategory" that would ease acid gas regulations for a set of niche power plants that burn waste coal for fuel. According to the Anthracite Region Independent Power Producers Association (ARIPPA), a trade group, state regulators in West Virginia and Pennsylvania have given four plants that burn bituminous waste coal until April to comply with MATS. In the proposed rule, EPA requests public feedback on the "potential effects of establishing" a separate acid gas standard for such facilities.
The industry has already sought to accomplish that goal through legislation. Last year, the House approved H.R. 1119, the "Satisfying Energy Needs and Saving the Environment (SENSE) Act," that would have created a separate acid gas standard (Greenwire, March 8, 2018). But the bill languished in the Senate, and its sponsor, Rep. Keith Rothfus (R-Pa.), lost his re-election bid in November.
The current EPA proposal "is slightly more narrow" than the bill because it would apply to a smaller set of plants, Jaret Gibbons, ARIPPA's executive director, said in an interview this morning. Because EPA is unlikely to produce a final version of the draft proposal by April, it's uncertain how the four plants covered by the extension would fare in the meantime, Gibbons said.
But ARIPPA is pleased, he said, that EPA has recognized a difference between bituminous and anthracite waste coal power producers "that provides the possible justification" for treating them differently under the MATS rule.
https://www.eenews.net/greenwire/2019/01/02/stories/1060110767
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