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AM ACC 1/18/2019

Industry and Association News

(ACC Mentioned) Industry Launches Alliance to End Plastic Waste
Jan 17, 2019 | Inside EPA

Major plastics, oil and consumer goods companies Jan. 16 launched a new alliance with the goal of ending plastic waste in the environment, particularly in oceans.
(ACC Mentioned) Firm Wants EU-Style Plastics Law on California Ballot
Jan 17, 2019 | Plastics News
By Steve Toloken

Arguing that plastics recycling markets are too weak and plastic waste too prevalent, the head of San Francisco waste management firm Recology Inc. is pledging $1 million to jump start a California ballot referendum asking voters to adopt European Union-style limits around plastics.
(ACC Mentioned) American Manufacturing: The Growing Movement toward Domestic Production
Jan 17, 2019 | Floor Focus Daily
By Jessica Chevalier

Over the last five years, we have seen many domestic flooring manufacturers onshore and foreign manufacturers establish production on U.S. soil.
(ACC Mentioned) NOVA Chemicals Becomes Founding Member of Group Intent on Ending Plastic Waste in Environment
Jan 17, 2019 | Lambton Shield
By Editorial Staff

The idea that plastics are valuable materials that should be used—not thrown away—is one of the central themes of an organization that has NOVA Chemicals as one of its founding members, funded with $1 billion (USD).
Concerns over EPA Shutdown Mount as Rule Dockets, Courts Upended
Jan 17, 2019 | Inside EPA

Concerns over EPA and other agencies almost one-month shutdown are growing as the EPA-administered federal online regulatory docket shuttered -- apparently due to the shutdown -- while federal courts that review EPA and other agency actions appear close to running out of funds.
Democrats Wrestle with Casting Less-Combative Wheeler as 'Extreme'
Jan 17, 2019 | Inside EPA
By Doug Obey

Democrats and other backers of a strong EPA are seeking to paint acting EPA chief Andrew Wheeler as “extreme” even his management style threatens to complicate their pitch, underscored by recent deals with lawmakers that suggest he is more skilled...

TSCA News

Tonko, Shimkus Want Oversight Hearing on Chemical Law Implementation
Jan 18, 2019 | PoliticoPro - Whiteboard
By Anthony Adragna

The top Democrat and Republican on the House Energy and Commerce Environment Subcommittee today voiced support for holding an oversight hearing on implementation of a 2016 chemicals law.

Chemical Management News

(ACC Mentioned) Beacon Hill Roll Call - January 18, 2019
Jan 17, 2019 | Beacon Hill Roll Call
By Bob Katzen

.... Baker did not sign a bill that would ban 11 toxic flame retardants from children’s products, bedding, carpeting, and residential upholstered furniture sold or manufactured in Massachusetts, except for inventory already manufactured prior to January 1, 2019...
Schumer Presses Wheeler on Vehicle Rules, PFAS at Meeting
Jan 17, 2019 | PoliticoPro
By Anthony Adragna

Senate Minority Leader Chuck Schumer pressed acting EPA Administrator Andrew Wheeler in a meeting Thursday to end the agency's proposed rollback of Obama-era fuel economy rules and instead cut a deal with states that want more aggressive standards...
Industry Warms to State Coolant Rules With Federal Action Frozen
Jan 18, 2019 | BNA Daily Environment Report
By Abby Smith

U.S. appliance and chemical companies aren’t standing still while they wait for the Trump administration to decide on a global deal to cut potent greenhouse gas coolants. They’re moving to Plan B: work with states setting limits.

Energy News

(ACC Mentioned) Petrochemical Growth Spurt Expected Despite Rising Desire for Fewer Plastics
Jan 17, 2019 | Canadian Broadcasting Corporation (CBC)
By Dan Healing

Canada's slow-growing petrochemical industry is headed for its biggest surge of expansion spending in five years in 2019, thanks in large part to incentive programs by federal and provincial governments.
Legality of Drilling Permits Issued During Shutdown Challenged
Jan 17, 2019 | BNA Daily Environment Report
By Jennifer A. Dlouhy

The Trump administration’s decision to keep issuing oil drilling permits during the government shutdown is putting those authorizations in legal jeopardy, environmentalists argued in a filing Jan. 17.
Greens Gird for Combat as Energy Leasing Continues
Jan 18, 2019 | E&E Energywire
By Kelsey Brugger

Interior Department officials are preparing for the partial government shutdown to last months.
Record Production of Natural Gas to Continue through 2020, Energy Department Projects
Jan 17, 2019 | Houston Chronicle
By Erin Douglas

The U.S. natural gas market will continue full speed ahead through 2020, delivering low prices and booming exports, the Energy Department predicts in its Short-Term Energy Outlook.

Chemical Security News

(ACC Mentioned) House Passes Bill to Extend Security Program
Jan 17, 2019 | E&E News PM
By Courtney Columbus

The House today passed an amended bill to extend a chemical security program for more than a year.
(ACC Mentioned) Congress Sends Bill Renewing Anti-Terrorism Program to Trump
Jan 17, 2019 | The Hill - E2 Wire
By Jacqueline Thomsen

Congress sent legislation to President Trump on Thursday that would reauthorize a program setting standards on protecting manufacturers and other chemical facilities from terror attacks.
(ACC Mentioned) Lawmakers Agree to CFATS Extension
Jan 18, 2019 | Inside EPA

House and Senate lawmakers have agreed to a one-year extension of the Department of Homeland Security's (DHS) Chemical Facility Anti-Terrorism Standards (CFATS) ahead of a looming Jan. 19 deadline when the program's funding will expire...

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

Environment News

(ACC Mentioned) Carper Implores EPA Acting Administrator to Show Urgency on Climate Change
Jan 17, 2019 | Dover Post

Sen. Tom Carper, D-Delaware, led Democrats on Jan. 16 in questioning Environmental Protection Agency Acting Administrator Andrew Wheeler in the committee’s hearing on his nomination.
House Dem to Offer Measure Backing Paris Climate Deal
Jan 17, 2019 | The Hill - E2 Wire
By Timothy Cama

A House Democrat is working with his colleagues to introduce a nonbinding measure to support the Paris climate agreement.
Climate Change’s Giant Impact on the Economy: 4 Key Issues
Jan 17, 2019 | New York Times
By Neil Irwin

By now, it’s clear that climate change poses environmental risks beyond anything seen in the modern age. But we’re only starting to come to grips with the potential economic effects.
Industry Groups Urge White House to Issue Climate Guidance
Jan 18, 2019 | PoliticoPro
By Zack Colman

Business groups are asking the White House to direct federal agencies to consider climate change in environmental reviews because the lack of any formal guidance is hindering progress on natural gas pipelines and other energy projects.
Young Conservatives Urge Gop to Reclaim Green Legacy
Jan 18, 2019 | E&E Climatewire
By Ines Kagubare

College Republicans across the country are ringing the alarms for GOP legislators to lead on green issues.

Industry and Association News

(ACC Mentioned) Industry Launches Alliance to End Plastic Waste

Jan 17, 2019 | Inside EPA

Major plastics, oil and consumer goods companies Jan. 16 launched a new alliance with the goal of ending plastic waste in the environment, particularly in oceans.
Members of the newly formed Alliance to End Plastic Waste (AEPW) include 30 global companies that make, use, sell, process, collect or recycle plastics, the group says in a Jan. 16 press release. These include oil giants ExxonMobil and Shell, chemical companies BASF, Dow, and OxyChem, as well as consumer goods companies, like Proctor & Gamble.
The organization has committed more than $1 billion, with a goal of investing $1.5 billion over the next five years, to the cause of stopping plastic waste from being released into the environment, the press release says.
The alliance aims to develop solutions for minimizing plastic waste and the reuse of plastics as part of a so-called circular economy. “The Alliance will develop and bring to scale solutions that will minimize and manage plastic waste and promote solutions for used plastics by helping to enable a circular economy,” the release says.
Plastic waste in the environment is a “complex and serious global challenge that calls for swift action and strong leadership,” David Taylor, president and CEO of Procter & Gamble, and chairman of the AEPW, said in the release. “This new alliance is the most comprehensive effort to date to end plastic waste in the environment,” he said.
The effort is aimed at limiting the billions of pounds of plastics currently in the ocean, threatening the health of nearly 300 types of marine animals, according to the Center for Biological Diversity. It says that at existing rates, plastics will outweigh all the fish in the oceans by 2050.
The group in 2012 petitioned EPA to start regulating plastics as a pollutant under the Clean Water Act, a step the agency has not taken.
But recycling of plastics has slowed after China last year adopted its National Sword program, which restricted the amount of food waste and other contamination allowed in exported paper, plastic and other recyclables that it had previously accepted.
Statistics from the Institute of Scrap Recycling Industries indicate that in the first seven months of 2017, 36 percent of U.S. recycled plastic was shipped to China, while during that same time period in 2018, just five percent of recycled plastic was sent.
The global industry effort also comes not long after the American Chemistry Council -- comprised of the chemical industry -- launched an effort last year to reduce and eliminate plastic waste.
Peter Bakker, president and CEO of World Business Council for Sustainable Development, says in the release that while the alliance's effort will be global, it plans to focus on parts of the world with the greatest problems, so these efforts can be scaled-up elsewhere. The World Business Council for Sustainable Development is partnering with the alliance in its efforts.
The release cites one study that has found that more than 90 percent of river-borne plastic in the ocean stems from 10 major rivers, eight of which are in Asia and two in Africa. “Sixty percent of plastic waste in the ocean can be sourced to five countries in Southeast Asia,” it says.
The alliance names four key areas it will make investments in: infrastructure development to manage waste and boost recycling; innovation to advance new technologies easing the recycling and recovery of plastics and creating value post-use; educating and engaging governments, businesses and communities on the issue; and cleaning up existing plastic waste in the environment, the release says.
The alliance also announced a slate of initial projects and collaborations to end plastic waste, including joining with cities to design integrated waste management systems where infrastructure is absent, particularly along rivers that transport large amounts of unmanaged plastic waste from land to the ocean.
In addition, the coalition is funding an effort to develop and promote technologies and business models that prevent ocean plastic waste and improve waste management and recycling; backing development of an open source, science-oriented global information project to support waste management projects globally using reliable metrics and standards to help governments and others speed up actions to end plastic waste releases; collaborating on capacity building with intergovernmental entities such as the United Nations to hold workshops for government and community leaders to identify and pursue locally-relevant solutions; and backing Renew Oceans to help with local investment and engagement on capturing plastic waste before it reaches oceans from ten major rivers, the release says.
https://insideepa.com/daily-feed/industry-launches-alliance-end-plastic-waste

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(ACC Mentioned) Firm Wants EU-Style Plastics Law on California Ballot

Jan 17, 2019 | Plastics News

By Steve Toloken

Arguing that plastics recycling markets are too weak and plastic waste too prevalent, the head of San Francisco waste management firm Recology Inc. is pledging $1 million to jump start a California ballot referendum asking voters to adopt European Union-style limits around plastics.
California voters approved a statewide plastic bag ban in a similar referendum in 2016, but a vote on the much tougher EU approach around single use plastics could break new ground in the U.S.
CEO Michael Sangiacomo made the financial pledge in a late December op-ed in the San Francisco Chronicle, where he said the company, which serves nearly 900,000 homes and more than 100,000 businesses, has tried for years to find economic solutions for plastic waste it collects.
He also said he's increasingly concerned about the impact of plastic in the environment, including marine litter.
"If the plastics industry is unable to step forward with a set of policies and programs that reverses these unfortunate trends, Recology will work to place a comprehensive policy on the next statewide California ballot — building off the EU model," he wrote. "We are not out to destroy the plastics industry, but we must embrace change."
The EU approach, which is part of its plastics strategy, has included bans and concerted efforts to reduce single-use plastics.
In a Jan. 16 interview, Recology's Senior Director of Strategic Affairs Eric Potashner said the op-ed has led to a lot of feedback and discussion both with industry, including the American Chemistry Council, and environmental groups. The company sent a letter to ACC CEO Cal Dooley asking for dialogue.
Potashner said Recology wants to put a vote on the 2020 ballot. From discussions the company has had since the op-ed, he said it's clear that industry groups "recognize there is a problem."
As well, Potashner said the group also talked with environmental organizations about the ballot initiative, although he declined to identify them. "These are environmental organizations with resources."
Putting a question on the ballot is an expensive undertaking, likely costing between $3 million and $5 million, Potashner said. That does not include the cost of the campaign to then argue the case before voters, he said.
The company is watching to see specific plastics related bills California legislators are expected to introduce in coming weeks, and it may also do polling around the policy questions, Potashner said.
He said his company has invested substantial resources on its own trying to find better uses for plastic waste.
For five years, it employed a chemical engineer who had 25 years of experience in plastics manufacturing in what as an ultimately unsuccessful search for products it could make from the waste or solutions. As well, it invested $14 million last year for what it believes are first in North America high-speed optical sorters and automated systems at its facilities to remove contaminants.
"The simple fact is, there is just too much plastic — and too many different types of plastics — being produced; and there exist few, if any, viable end markets for the material," Sangiacomo wrote. "Which makes reuse impossible."
Potashner said some markets, like for PET and HDPE, are stronger than for other types of plastics. He declined to get too specific about what Recology would like to see from the industry, but he said a firm commitment for 30 percent recycled content in products would help drive end markets for recycled material.
And he said Recology would like to "have an honest conversation about should certain materials be in the marketplace."
Potashner said the company has also paid close attention to innovative attempts to find new technology for recycling or reclaiming plastic waste, including chemical recycling, but has not seen anything that can be commercialized.
"Unfortunately, none of these efforts has proven scalable — not with the enormous influx of single-use plastic materials into the marketplace," Sangiacomo wrote.
https://www.plasticsnews.com/article/20190117/NEWS/190119892/firm-wants-eu-style-plastics-law-on-california-ballot

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(ACC Mentioned) American Manufacturing: The Growing Movement toward Domestic Production

Jan 17, 2019 | Floor Focus Daily

By Jessica Chevalier

Over the last five years, we have seen many domestic flooring manufacturers onshore and foreign manufacturers establish production on U.S. soil. This has happened across many product categories, primarily hard surface: the establishment of LVT production facilities began in 2013 and the wave of ceramic production facilities in 2014, with construction of plants to produce rigid LVT underway now.

While the idea of U.S. manufacturing appeals to patriotism, the drive toward domestic production is based on the fact that it’s good business for the manufacturer, the supply chain, the end-user, and the economies, large and small, that it exists within.

Yet, in the broadest of terms, American manufacturing is a complex subject. Even individuals actively producing in the U.S.-and promoting U.S. production-will also hold that blindly onshoring all flooring production is not feasible or necessarily desirable. And, to be clear, we’re far from that point. Right now, in spite of all the establishment of new factories across the States, over 40% of flooring sold in the U.S. market, by dollar value, is imported. And, considering that a significant amount of imported flooring is at the commodity end of the market, that amounts to a hefty square footage.

At the heart of domestic manufacturing’s appeal is the fact that it’s good business in the following ways:
• Lower shipping costs, which is especially significant as energy costs rise
• Lower inventory costs and availability of inventory
• Shorter service and response times
• Quality control
• Protection against import tariffs
• Support of U.S. workers and economy

These factors are significant in enabling domestic manufacturers to confidently and competently serve their customers, which is, of course, the central goal of every business. Says Don Maier, CEO of Armstrong Flooring, which manufacturers a wide range of hard surface flooring products on U.S. soil, “Manufacturing in North America, where the bulk of our flooring is sold, gives us greater product control, improved lead times and the ability to more rapidly integrate customer feedback into the product design and development cycle. Domestic manufacturing puts us in close proximity to raw materials.” Armstrong Flooring has 12 production facilities across the U.S., manufacturing LVT, resilient sheet, VCT and hardwood.

As one expert we spoke with put it, “When you look at the cost of the supply chain, it will only go in one direction over the next three to five years, which is up. Pulling production closer to distribution and building efficient, world-class facilities close to the market will create a competitive advantage with transportation costs rising. It’s good business. We want to get products to customers faster with higher service rates and reliability.”

ARM’S LENGTH MANUFACTURING
As F. Scott Fitzgerald said, “The test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function,” and nowhere is that concept more applicable than with regard to localism and globalism. Because, of course, there are also good arguments to be made for letting specialists-be they domestic or far-flung-do what they do. In an ideal world, we’d consume what was produced at close range-by the local butcher, baker and candlestick maker. But how should those principles be applied to highly manufactured, technical products? Is local always better? Do we want to rely on our neighbors-our literal neighbors-to make our cell phones? Our cars? Our computers? Does Phil next door seem up to the task of establishing a secure, reliable 4G network for your community? And are you willing to assume that, in some way, his network will be inherently better because it was made by local hands?

To step back a bit, we must acknowledge that the concept of American-made itself can be a bit amorphous. One shade of grey within the domestic manufacturing discussion is ownership. Just because a company is producing on U.S. soil doesn’t mean it’s based here, so while local economies may be supported by a facility rooted domestically, profits may be going elsewhere. Complete Flooring Supply Corporation (CFS), for instance, just announced that it is investing $30 million to build its first U.S. manufacturing facility in Gordon County, Georgia; the company is headquartered in Shanghai and has Chinese ownership. Additionally, there are a host of already-established U.S. plants that are foreign-owned, including Tarkett, Nox, American Wonder and Landmark. In addition, three of the top five domestic ceramic producers are foreign firms: Panaria’s Florida Tile, along with Florim and Fiandre’s StonePeak.

Secondly, manufacturing is a multilayered process, and the production of a final product domestically doesn’t guarantee that all the components and chemistries were manufactured within the country’s bounds as well. To carry a Made in the USA mark, “all or virtually all” of the product must be U.S. made, according to the Federal Trade Commission, which regulates the label. Interestingly, at the Made in America Store, located in Elma, New York-a retail location dedicated to carrying only products of which every component is U.S.-made, including packaging, a standard higher than the Federal Trade Commission’s-owner Mark Andol has struggled to fill his shelves and, notably, not a single item in the store requires a battery or plug, according to the Chicago Tribune.

Carpet and hardwood-especially solid hardwood-production have long been rooted in the U.S. And with laminate in stasis, the current movement toward U.S. production primarily focuses on two flooring categories-ceramic and LVT, including rigid LVT like WPC and SPC. The history of these categories in the U.S. market varies greatly. While ceramic has never had the marketshare in the U.S. it enjoys in other parts of the world, it has long had a strong foothold in the U.S., particularly in bathrooms, kitchens and a range of utilitarian commercial environments. And many manufacturers and importers of the category believe there is share to be taken from other categories here, especially as the market mentality has shifted from soft to hard surface, not to mention the leaps and bounds made with regard to ceramic tile aesthetics, due to digital printing and new formats.

LVT has seen its star rise more rapidly. The category is gobbling up share. Last year, it propelled resilient to be the fastest growing product category with a 16.3% increase. It is also evolving quickly and significantly in terms of its construction and composition.

Responding to high end-user demand, we see manufacturers establishing resilient production in the States. Currently, the top five-Shaw, Armstrong, Mohawk, Mannington and Tarkett-have plants already operating or under construction in Ringgold, Georgia; Lancaster, Pennsylvania; Stillwater, Oklahoma; Dalton, Georgia; Madison, Georgia; Kankakee, Illinois and Florence, Alabama. How that will ultimately shape up is yet to be determined. At this point in time, the demand for LVT is so strong that the domestic production capacity represents less than half of what’s consumed.

The network of LVT’s manufacturing is much different from that of carpet, which has a centralized hub of production, a system that arguably leads to a more sophisticated industry and output than scattered production. Northwest Georgia is the undisputed leader in carpet worldwide. Sure, there are companies in other regions making carpet, but having consolidated expertise creates a more sophisticated market than scattered expertise. A consolidated market means that its primary suppliers are likely close at hand, as we see with the proximity of tufting machinery makers-like Card-Monroe and Tuftco-to the carpet industry. These organizations aren’t just shipping machinery from across the ocean to serve their clients, they’re walking onto the factory floors to discuss the successes and challenges of the machinery as the industry develops new processes and products.

When it comes to Card-Monroe, which produces 98% of its machinery just outside Chattanooga in Hixson, Tennessee, less than 40 miles from Dalton, Zach Monroe, the firm’s vice president of sales and marketing, notes, “It’s easier from a sales and service perspective. We can run parts up the road to them. The carpet industry in north Georgia is supplying product to the largest carpet country in the world, so for us it obviously makes sense to be close to that production.”

The Dixie Group’s Dan Phelan adds, “We were early adopters of LCL and it helped to create the differentiated look that we have today. It would have been challenging for our design team to push that edge with regard to equipment and yarn technology from afar.”

A consolidated market means that material resources are, to some degree, shared-fiber and chemical suppliers, for instance, increasing the industry’s importance with those suppliers. It also means that personnel, through the normal course of employment, transition easily from one organization to another, creating a stronger and more knowledgeable workforce that, while competitive, is also friendly and, to a degree, unified.

As the industry considers the next steps in onshoring production of multilayered flooring, how might it best position itself to establish what could be the next Dalton, Georgia? Where is the expertise? Where are the material resources? And will the U.S. vertically integrate the full process or leave components to overseas sourcing?

Needless to say, the success of the give-and-take economy relies on an even playing field, and that, too, is a subject of endless grey area-and a subject at the forefront of many minds right now due to the proposed tariff’s on Chinese-made products, including flooring.

THE IMPORT PICTURE
In 2017, $9.078 billion dollars of flooring (landed duty value) hit U.S. shores, an 8.5% increase from the year before. This means that imports accounted for 40.1% of the U.S. market, which totaled $22.262 billion last year, according to Market Insights.

The largest increase among the flooring categories was, unsurprisingly, in resilient, with a 27.7% increase over 2016. And, within the resilient category, resilient tile, which includes LVT and its cousin products, led with a 32.6% year-over-year increase.

It is interesting to note that, per the Imports by Flooring Category chart, over the last decade imports (by dollar value) have risen in all categories except laminate, with hardwood and resilient tile experiencing dramatic increases.

And while laminate has lost share generally within the U.S., it also seems pertinent that Lumber Liquidator’s formaldehyde scandal involved Chinese-made laminate, which reached the public via 60 Minutes in March 2015. However, China remains the largest importer of the laminate to the U.S. market.

All that said, it is somewhat surprising to see that, in spite of all the activity within the industry to establish onshore manufacturing, such a significant chunk is still arriving on a ship.

With the inclusion of flooring in the Trump administration’s proposed list of tariffed Chinese imports-a decision on which will be finalized August 18-that landscape could potentially change, though U.S. manufacturing is not yet poised to take over a substantial amount of LVT/WPC production. Regarding the issue, the industry seems to be divided to a degree, with some feeling that the tariffs will create more of an equal opportunity market between domestic-made and Chinese-made products, and others, reliant on imports, uniting in opposition to the action-as a group of vinyl industry representatives, including Shaw, Novalis, CFL, Metroflor, the American Chemistry Council and the Vinyl Institute have done-appealing to the Office of the United States Trade Representative against implementation of the tariffs.

Says Tim Baucom, executive vice president, residential division for Shaw Industries, “The U.S. government is currently considering a 25% tariff on flooring products from China, and in May, Mohawk Industries requested a 25% tariff on ceramic tile, laminate, engineered wood flooring, and vinyl flooring products (including LVT) imported from China. Shaw Industries opposed Mohawk’s request, as we believe such tariffs will harm consumers with higher prices and fewer choices, and we will continue opposing tariffs that do not take into account dynamic market changes, innovation and consumer preferences.”

Allie Finkell, executive vice president of American OEM, adds, “Now that flooring is part of the Trump administration’s tariff list, domestic manufacturers provide peace of mind that prices won’t suddenly change. Whether those tariffs will come to fruition no one knows, but the seed of doubt is pretty scary. Being a domestic supplier alleviates some of that uncertainty. If the anti-dumping duty on engineered wood floors from China receives a substantial increase in the current administrative review, importers of record could really suffer, some catastrophically, since the tariffs are retroactive for all material that has been imported for the 2017 year. That uncertainty is still out there.”

On top of all this, Chinese labor is not as cheap as it used to be. CNBC reported last year in an article called “‘Made in China’ Isn’t So Cheap Anymore, and That Could Spell Headache for Beijing” that worker pay rose 64% between 2011 and early 2017 to an average $3.60 per hour. And last August, Forbes reported that China is either “catching up to parts of Europe in terms of wages, or wages in the newest parts of the European Union are being capped by the global competition for labor, a competition that China wins, hands down. In reality, it’s both.”

THE BENEFITS OF AMERICAN MADE
For both consumers and A&D, American-made without doubt generates a host of warm feelings, and with good historical reason-in 1932, manufacturing employed almost a third of Americans (32%), according to the Bureau of Labor Statistics. By 2015, that number had dropped to 9%.

In spite of that drop-or perhaps because of it-American-made carries significant weight with a certain type of American consumer. Don’t we all have an uncle, for instance, who will only buy American cars? Interestingly, however, with regard to flooring, this commitment is purely conceptual-it’s not easier to install, clean or fix a U.S.-made floor; it’s not inherently more comfortable underfoot or more beautiful. Except in extreme circumstances, existing on an American-made floor doesn’t significantly improve quality of life, though it might put the mind at ease-and, as we all know, mental comfort is as important as physical comfort, if not more so.

Paul Stringer, vice president of sales and marketing for Somerset, reports, “Hardly a week goes by that a potential customer does not call to confirm that Somerset’s products are made in the USA. They usually cite reasons like, ‘I want to buy from a company that I can contact directly,’ ‘I don’t want to support jobs overseas; I want to support jobs in the U.S.,’ or even ‘I don’t trust how products are made overseas.’” Somerset manufactures 100% of what it sells in the U.S. today; a decade ago, it imported around 5% of its volume.

Even so, most of the manufacturers with whom we spoke aren’t sure that U.S. consumers will pay more for domestically made product. Instead, they generally agree that it is one consideration among many. James Lesslie, executive vice president of sales and marketing for Engineered Floors, notes, “All soft floorcovering is pretty much made in the U.S., so U.S.-made is not much of a differentiator there. Effectively, the vast majority of hard surface is imported. Unfortunately, I don’t see that this factor is-as with cars-at the forefront of people’s minds.” Lesslie reports that establishing Engineered Floors’ carpet production in the U.S. market was essentially a no brainer, considering owner Bob Shaw’s roots in the Dalton, Georgia community and his experience in manufacturing in the area. The company, which launched from zero in 2010, now employs 4,000 in northwest Georgia.

The central benefits of U.S. manufacturing listed by the experts with whom we spoke are often virtually invisible to those ultimately choosing product, but they do help determine what products ultimately make it to the showroom floor or architecture folder. It’s the supply chain that makes these critical decisions and servicing them well is a key focus for manufacturers.

“I frequent floorcovering dealer discussion boards, listening to dealers talk among themselves,” says Tom Lape, president of Mohawk Residential. “They hate poor service, and they talk frequently about the reliability of service with imported product. They cringe at waiting for a container from the distributor. The percentage of dealers buying sourced product is considerably higher today than it was ten years ago, but there is no doubt that frustration of dealers is at an all time high as well.”

Lape points out that the risk associated with being unable to fill a customer order increases as customers and lines get larger. “As customers get bigger, they want less disruption on orders, less disruption at the program level,” he explains. “Risking a large vendor going on strike is a big business risk and, without doubt, that risk is inherently greater overseas-even before the trade war.”

Michel Vermette, Lape’s counterpart at Mohawk Commercial, contends that domestic production provides leverage through limiting risk and errors. “There is a higher service level with U.S. manufacturing,” he adds. “You can respond quickly. Your controls are in your backyard, and you can execute quickly. The right hand and the left hand are more coordinated. With importing, there are more variables to be controlled.” When Mohawk ramps up its multilayered flooring production next year, it expects its LVT offering will be 50% imported and 50% domestic.

Finkell agrees that service is the crux of keeping production close to the market, “There are some great overseas manufacturers today, so it’s not as much about quality as it once was, but about service. Every company makes mistakes and ships products that are imperfect. When that happens with us, it’s a whole different ballgame than it is with product shipped from China. Our mistakes are easier to fix and less painful for the supply chain. That’s a big part of why people, in some cases, are willing to pay a little more for locally made. Our lead times are two to four weeks or in stock. By using a domestic supplier, distributors have less money on the water. In addition, we can respond to demand much faster and are a better predictor of trends.” Finkell’s father, Don Finkell, started American OEM in 2015; the company’s product is manufactured in Tennessee, using prison labor.

In spite of all the benefits, the idea of investing in local production is a significant financial decision-one that won’t necessarily pay dividends for some time. Michael Freedman made the decision to open FloorFolio’s manufacturing facility in New Jersey in 2015 on principle. “We wanted to bring some manufacturing back to the States, and EnviroQuiet LVT was a product we felt we could do it with because it is a premium product,” he says. Freedman reports that many in the industry questioned whether the medium-sized, privately owned firm could achieve such a thing, and that only served to make him more determined. “We wanted to prove to the industry that we could,” Freedman recalls. “Quite honestly, we felt it was the right thing to do. There was no financial benefit to us at all. Everyone felt I was out of my mind, but I am proud of what we’ve built.”

Neil Poland, president of Mullican, points out that doing the right thing isn’t just good business but peace of mind as well. “Control is the most beneficial aspect of U.S.-based manufacturing from my perspective,” he says. “You know there is no child slavery, no illegal logging, no massive abuse of the environment or employee exposure to highly toxic substances. For all those reasons, you can sleep better at night if you manufacture here. You can do due diligence and site visits in sourcing from Asia, but there is still some risk.” A decade ago, Mullican imported all of its engineered flooring; today, it imports less than 10%.
THE CERAMIC INFLUX
We have seen-in only the last few years-a tide change with regard to ceramic manufacturing. For a long time, Crossville and StonePeak were the only ceramic manufacturers in Tennessee, but Dal-Tile, Landmark (where Atlas Concorde produces), American Wonder, Del Conca and Florim have all now established production in the region, where there is ample raw material supply and, to a degree, established efficiencies. Interestingly, this hasn’t as of yet moved the needle too significantly with regard to ceramic import rates, which are still sitting at around 60%, but experts in the field believe that the U.S. market for tile is expanding, and these U.S.-based manufacturers are poised to capitalize on that expansion.

Long an importer to the U.S., Italy-based Atlas Concorde began U.S. production at a new factory owned by Landmark Ceramics, a sister company, in late 2016. Today, the company has two brands: its imported Atlas Concorde brand and its domestically manufactured Landmark brand, which are about equal in size here. The company’s drive to create U.S. production was based on improving its level of service and lead time, while the price point for best sellers and segmentation motives played a role as well.

Similarly, Michael Kephart, CEO of American Wonder Porcelain-which cut the ribbon on its Lebanon, Tennessee facility in April 2017-reports that his customers value the efficiency, competitive pricing and American-made aspects of domestic manufacturing equally. American Wonder, which has Chinese ownership, notes that for many years the U.S. has been the largest import market for all exporters shipping tile and also a good market price-wise. “While the U.S. market is a relatively small market in context to tile utilization per capita, it is a growth market and has been for the past ten years, specifically on the porcelain side of the business,” says Kephart. “With 70% of the tile consumed in the U.S. imported, why not build more here, as long as you can build under the constraints of manufacturing today, which are high automation, a low-cost natural gas supply and close logistic proximity to raw materials.”

As far as struggles in establishing the factory, Kephart reports that labor has been a challenge, “We don’t have a history in ceramic as other countries do, and I would not say there are a lot of young engineers dying to get into the ceramic tile industry. It’s our job to educate and expose young people to what we can do, the products we can make and the technology they can be part of.”

SUPPORTING COMMUNITIES
There is no doubt about the power a factory has to change a community. We’ve seen it across the historical beds of manufacturing in America-particularly the South and the Rust Belt-bringing prosperity when in operation and economic devastation when they close their doors. Of course, much has changed since the days when human hands were completing every detail of production.

Automation has reduced the number of workers it takes to manufacture products, so does manufacturing still bring substantial benefit to the communities in which it’s embedded today?

Yes, because, a factory is not an island. Mark Clayton, CEO of Phenix, points to Dalton as an example of the sort of prosperity that business can bring a town. He notes, “You have a town that was built to support the industry, and the industry supports the community through infrastructure, utilities, healthcare, churches and activities.” Phenix makes residential carpet in company-owned, U.S.-based manufacturing facilities and sources hard surface flooring. One of its sourced LVT products is assembled in the U.S. via a joint venture. The company sought a U.S. partner in this endeavor to both support American manufacturing and to optimize the service cycle.

Lesslie points out that job creation isn’t limited to the primary facility. “It’s very hard to get our arms around the numbers,” he says, “but we know for every job we create at Engineered Floors, there are ancillary jobs created through suppliers-trucking lines, raw materials. One backings producer built a factory in Chatsworth [Georgia], and we’re one of its largest customers.”

“There are tremendous trickle-down economics,” says Poland. “Trucking, secondary suppliers, local food vendors, local supply vendors. We go through a lot of toilet paper and soft drinks here. There is a tremendous economic impact through taxes and utilities too.”
THE DOMESTIC PRICE DIFFERENTIAL
Consumers often assume that U.S.-made will take a bigger chunk from their bank account, but is that actually the case with flooring?

In some cases, yes, American workers demand a higher wage. That and other factors can push the price tag on U.S.-made a bit higher-but not always and, in other cases, not by as much as many assume.
“In general, there is less than a 10% difference,” says Mullican’s Poland of hardwood’s price differential. “This shows how the dealers, distributors and consumers here are fighting over pennies.”

Often, whether or not domestic product can compete price-wise with imported product depends on the level. At the commodity end, U.S. manufacturers struggle more. In many cases, Americans simply can’t produce low-end products as cheaply as Asian producers can. But in the mid- and higher levels, prices even out.

Of the ceramics business, Crossville’s Noah Chitty, director of technical services, reports, “There are still some very low cost products coming in. They are landing material here for cheaper than we can make them. Energy cost, raw material cost, employee cost and workman’s compensation all contribute to that. In competing with other U.S. manufacturers, it’s about how much you’re paying employees, what you have in the process compared to them and the balance you’re trying to strike.”

The successful creation of these types of jobs hinges on having individuals to fill them. In flooring and the construction trades, the shortage of qualified laborers is well documented, but Baucom reports a shortage in truck drivers as well. “Given these challenges,” says Baucom, “we believe we have an opportunity to shape our future workforce by educating students about the rewarding careers available in manufacturing and the diversity of career paths they can take here to work at Shaw. We work in partnership with our local career academies and technical schools to develop individuals in the various disciplines related to manufacturing, creating a pipeline of candidates who are ready as these jobs come open.”

Ed Duncan, president of Mannington Residential, points to job creation as the most satisfying aspect of domestic manufacturing for Mannington. “As a company, knowing that we are providing jobs is extremely satisfying,” says Duncan. “Jobs help families thrive, which in turn helps communities grow.” Mannington produces nearly all of its flooring products on U.S. soil, including sheet vinyl, laminate, carpet, rubber and commercial LVT. A decade ago, 100% of its LVT line was imported.

Another important aspect to consider is that factory jobs today are often at a higher level than they once were, as the automation necessitates the hiring of mechanics, engineers and technicians, rather than primarily line assembly workers.
RISING FREIGHT COSTS
Floor Focus has covered the subject of rising freight costs frequently over the past year or so. Federal Motor Carrier Safety Administration Hours of Service regulations limit the length of time a truck driver can drive consecutively and dictate the numbers of hours drivers must rest between periods of working. This, and rising fuel costs, have driven the cost of transportation up and ultimately support the act of manufacturing close to the market.

Close-to-market manufacturing also helps keep warehouse capacity issues in balance for the distributors they serve. “There is a volume a distributor must stock if he has to keep three to six weeks of inventory of imported products,” says Stringer of Somerset. “Even today, our distributors have less warehouse space due to the volume of the new WPC/LVT-type products that they are buying overseas. They use so much of their warehouse capacity to handle the imports that they rely more on domestic manufacturers to give them just-in-time delivery.”
https://www.floordaily.net/floorfocus/american-manufacturing-the-growing-movement-toward-domestic-production-augsep-18

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(ACC Mentioned) NOVA Chemicals Becomes Founding Member of Group Intent on Ending Plastic Waste in Environment

Jan 17, 2019 | Lambton Shield

By Editorial Staff

The idea that plastics are valuable materials that should be used—not thrown away—is one of the central themes of an organization that has NOVA Chemicals as one of its founding members, funded with $1 billion (USD).
The organization, Alliance to End Plastic Waste, includes 30 companies and will operate as a standalone, not-for-profit organization. Its members are involved with the production, use, processing, collection and recycling of plastics. Included in the membership are waste management companies.
John Thayer, senior vice president of Polyethylene with NOVA, said the idea for the initiative first emerged at a meeting of the American Chemistry Council.
“Representatives of companies across the value chain were part of the dialogue around what could be done,” he said. “The industry has come to the point where we know we have really good products but they don’t belong in the environment.”
Thayer takes the point a step further.
“Plastics are valuable materials that make our modern lives healthier, easier and safer. We also recognize the need to work toward the creation of a circular plastics economy that reduces waste and encourages reuse, recycling and regeneration.”
Thayer said NOVA also remains committed to the communities where it operates, including Sarnia-Lambton.
An indication of how broad-based the support of the work to be done is that the first chair of the organization will be David Taylor, CEO of Procter & Gamble.
The Alliance will work with governments, institutions, companies, non-government organizations and communities to support investments and programs to help eliminate plastic waste in the environment and drive progress in four key areas:
—Infrastructure development to manage waste and increase recycling;
—Innovation to develop and bring to scale new materials and product designs that minimize waste and new recycling technologies that create value from all post-use plastics;
—Education and engagement of governments at all levels, communities, businesses and even individuals; and
—Clean up of concentrated areas of waste in the environment, particularly the major conduits of waste that carry land-based waste to waterways.
Thayer, who works out of NOVA’s headquarters in Pittsburgh, said the company’s contribution to the effort will be in the millions over at least a five-year commitment.
While similar to Project STOP, an initiative designed to prevent plastic from reaching the ocean, Thayer said the latest initiative is “yet another way we are committed to being a responsible global citizen.”
https://lambtonshield.com/nova-chemicals-becomes-founding-member-group-intent-ending-plastic-waste-environment/

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Concerns over EPA Shutdown Mount as Rule Dockets, Courts Upended

Jan 17, 2019 | Inside EPA

Concerns over EPA and other agencies almost one-month shutdown are growing as the EPA-administered federal online regulatory docket shuttered -- apparently due to the shutdown -- while federal courts that review EPA and other agency actions appear close to running out of funds.
While several courts say they will run out of funds in the coming days, they plan to continue “essential” operations once that happens. But despite their lack of funds, several courts have denied recent EPA requests to delay pending litigation, requiring EPA and Justice Department lawyers to work without pay.
The shutdown is now in its 27th day and shows no sign of ending, with House Democrats pushing bills to reopen EPA and other federal agencies despite a veto threat from President Donald Trump who refuses to reopen the government unless Democrats grant his request for $5.7 billion to fund a U.S.-Mexico border wall and other measures.
And its effects are widespread, given thousands of EPA employees who have not worked -- or worked without pay -- since late December, with some forced to consider seeking outside employment.
This has hampered the agency's ability to act on a host of industry requests, including processing industry permit applications, engine certifications, and shuttering key programs that companies support such as the Energy Star efficiency labeling initiative.
While industry officials have previously raised concerns about the Energy Star website's shuttering, top House Democrats amplified the concern in a Jan. 17 letter to acting EPA Administrator Andrew Wheeler, pressing him to “explain why this website was disabled, in lieu of remaining active, but not updated,” the letter states with reference to Energy Star, seeking “all documents and communications referring or relating to EPA's disabling of the Energy Star website from December 2018 to the present” and answers to other questions by Jan. 31.
The lawmakers also press Wheeler for a list of “any other program websites” impacted by the government shutdown, as well as details on the costs and staff time required by either employees or contractors to disabled the Energy Star site.
Wheeler has acknowledged some delays due to the shutdown, telling senators at his Jan. 16 confirmation hearingthat the shutdown has “slightly” delayed a series of actions, including publication of a proposed mercury rule and issuance of plans to manage perflourinated compounds, authorize summertime ethanol blends and address a toxic paint stripper chemical.
While such effects of the shutdown are confined to EPA, the agency's shuttering is also having broader effects, given its role in administering the government-wide regulations.gov website which is instrumental in tracking federal rules and comment periods for all federal agencies but which went offline Jan. 17 amid conflicting explanations.
For example, companies seeking waivers from Trump administration tariffs on many Chinese goods are unable to submit their requests, a significant lapse given that any refunds on tariffs already paid are retroactive to the date of the petition's submission.
That appears to intensify business concerns given the Commerce Department, which processes the requests, is already shuttered.
'System Issues'
The group Public Citizen in a press release noted the multiple explanations for the outage, referencing an early screenshot on the site attributing the outage to the shutdown followed by another that omits such a statement in favor of a more generic reference to “system issues” and work on going to restore service -- with no timeline for completion.
Public Citizen in its statement called the disabling of the site “a complete breakdown of the regulatory process due to President Donald Trump’s shutdown,” and demanded that the administration immediately extend all open comment periods for however long the government shutdown lasts “to protect the public’s fundamental right to participate in the regulatory process.
“Anything less than a blanket comment period extension for the full duration of the shutdown means the Trump administration is cutting the public out of the regulatory process -- and does not take the importance of public comment seriously.”
The shutdown also appears close to styming judicial activities as several courts are poised to run out of funds in the coming days, though courts plan to continue reviewing cases, deeming such work “essential” under the Anti-Deficiency Act.
According to notices posted on U.S. courts' websites, the judiciary expects to sustain paid operations through Jan. 18, although some courts, such as the U.S. Court for the 1st Circuit, say sufficient funds will be available through Jan. 25.
After the funding dries up, the federal courts will operate under the terms of the Anti-Deficiency Act, which permits “essential work” to continue even during an absence of appropriations, the notices say.
“This mission critical work includes activities to support the exercise of the courts' constitutional powers under Article III, specifically the resolution of cases and related services,” one notice says.
While some courts, such as the federal district court in New Mexico, have suspended or postponed cases governing EPA and other agencies, other courts have not.
The U.S. Court of Appeals for the District of Columbia Circuit, without comment, Jan. 16 denied an unopposed EPA request to delay its filing of a final brief in Idaho Conservation League, et al. v. Andrew Wheeler, et al., a case where environmentalists are seeking to compel the agency to reverse course and establish Superfund financial requirements for the hardrock mining sector.
The order maintains Jan. 18 as the deadline for the parties' final briefs to be filed.
Similarly, a federal judge in the U.S. District Court for the Northern District of California lifted a stay on litigation governing her order requiring the agency to release thousands of emails from Wheeler and other top officials within one year, giving government lawyers just three days to work out a schedule with environmentalists.
In a Jan. 16 order in Sierra Club v. EPA, Judge Elizabeth Laport lifted the Jan. 2 stay she had imposed and directed the parties “to meet and confer, and within three business days of the date of this Order, file the status update and adjusted schedule” she ordered late last year but which she had stayed until after the shutdown ended.
https://insideepa.com/daily-news/concerns-over-epa-shutdown-mount-rule-dockets-courts-upended

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Democrats Wrestle with Casting Less-Combative Wheeler as 'Extreme'

Jan 17, 2019 | Inside EPA

By Doug Obey

Democrats and other backers of a strong EPA are seeking to paint acting EPA chief Andrew Wheeler as “extreme” even his management style threatens to complicate their pitch, underscored by recent deals with lawmakers that suggest he is more skilled than his predecessor at minimizing needless blowback to that agenda.
At his Jan. 16 confirmation hearing, Democratic lawmakers sought to lay the groundwork for years of continued scrutiny of EPA's policies even as they all but concede they cannot block Wheeler's confirmation.
Given that, reality, Democrats and their allies acknowledge that they will have to work harder than under scandal-plagued former Administrator Scott Pruitt to call attention to environmental rollbacks as well as the administration's persistent lack of action on climate change and other top priorities.
“This make him potentially more dangerous than Pruitt,” wrote Earthjustice's Marty Hayden in a Jan. 16 blog post. “With Wheeler, the American public will need to listen more closely and read between the lines.”
Such critiques come as Wheeler and his GOP allies are defending Trump EPA deregulatory policies and arguing that Democrats are caricaturing Wheeler only as a former coal lobbyist, and omitting talk of his prior stints at EPA and as staff director of the Senate Environment and Public Works (EPW) Committee.
“I hoped that [Wheeler] would moderate some of Scott Pruitt's most environmentally destructive policies, specifically where industry and the environmental community are in agreement,” said EPW ranking member Tom Carper (D-DE) during Wheeler's nomination hearing. “Regrettably, my hopes have not been realized.”
Carper added that “upon examination, Mr. Wheeler’s environmental policies appear to be almost as extreme as his predecessor’s, despite the promises that Mr. Wheeler made when he first appeared before our committee.”
After the hearing, Carper told reporters that a committee vote on Wheeler could happen Feb. 5, even as he warned against a “rush to judgment” on the nomination in the middle of a government shutdown.
Wheeler has long garnered attention for his work on behalf of industry, most particularly on behalf of coal producer Murray Energy.
But Wheeler's early tenure at the Trump EPA shows he both embraces the administration's deregulatory approach and has taken some early steps to avoid full-scale war with Democrats and environmentalists and side-step gratuitous provocations on Capitol Hill or in the courts.
For example, he crafted new EPA transparency policies under the Freedom of Information Act and reiterated existing policies under the Federal Records Act, steps that helped end environmentalists' litigation and likely staved off subpoenas from House Democrats.
Similarly, he made a series of policy commitments addressing EPA toxics and other policies that helped pave the way for the Senate confirmation of EPA toxics chief Alexandra Dunn.
He made a similar set of commitments in an effort to win confirmation of waste chief nominee Peter Wright. While Wright's nomination died when Sen. Robert Menendez (D-NJ) insisted on a recorded vote late in the 115th Congress, the White House has resubmitted the nomination and he is expected to be confirmed, with Wheeler's commitments remaining.
Fossil Fuel 'Favor'
Wheeler's coal background surfaced at the hearing multiple times, including in Sen. Sheldon Whitehouse's (D-RI) request that the acting chief detail how many meetings he attended or arranged on behalf of his former client, Murray Energy chief Bob Murray, with the White House or federal agencies.
But the bulk of the proceeding focused on Trump officials' reluctance to state that climate change is a priority, as well as various climate, water and other rules that Wheeler is advancing that are far weaker than Obama-era measures.
These include EPA's Affordable Clean Energy (ACE) rule to replace the stayed Clean Power Plan (CPP), a pending proposal to roll back vehicle greenhouse gas and fuel economy standards and a new proposal to scrap an Obama-era finding that it is “appropriate and necessary” to regulate utilities' air toxics.
“Substantively, I continue to believe that you have your thumb, wrist, forearm and elbow on the scales in virtually every determination you can in favor of the fossil fuel industry,” Whitehouse said, contrasting Wheeler's “polite and professional demeanor” with EPA's actual policies.
Democrats also laced their criticism with multiple references to the ongoing shutdown that is delaying basic EPA functions, including facility inspections.
Wheeler's opening remarks anticipated such attacks, citing several successes at EPA during the first two years of the Trump administration, including deleting all or part of 22 sites from the Superfund National Priorities List, which is “the largest number of deletions in one year since fiscal year 2005.”
He also embraced deregulation as lowering compliance costs, noting that EPA in 2018 finalized “13 major deregulatory actions, saving Americans roughly $1.8 billion in regulatory costs.”
But Wheeler's efforts to defend pending EPA power plant and vehicle GHG rollbacks spawned an array of rebuttals from Democrats, who cited EPA's own analysis to paint the new rules as damaging to the climate and question Wheeler's transparency and truthfulness.
“Once ACE is fully implemented we will see 34 percent reductions” in carbon dioxide from 2005 levels, Wheeler said at one point, casting the rule as a helpful response to a recent report showing a spike in power plant CO2 emissions.
Democrats countered that ACE would result in significantly more GHGs than the CPP and cited a new analysis being published in Environmental Research Letters showing it might even result in more emissions than no regulations being imposed on the sector at all.
Wheeler similarly argued that the pending vehicle standards rollback would reduce CO2 emissions, though multiple Democratic attacks prompted him to refocus his defense of the rule as achieving “multiple goals.” That includes “saving lives,” a reference to hotly contested safety benefits the Trump administration is citing from the package.
With respect to utility mercury limits, Wheeler defended the agency's pending proposal to scrap the “appropriate and necessary” finding, arguing that emissions controls already in place that would not be removed under the plan.
“We believe . . . that the technologies that have already been implemented on coal fired power plants will remain in pace. That is the preferred option under the proposal,” he said.
Presidential Candidates
Panel Democrats -- including several possible presidential candidates -- sought to pick apart Wheeler's assurances by casting his concern over climate change as tepid, highlighting a yawning public gap between the GOP and Democrats over climate risks as well as the likelihood that the issue will continue to simmer in advance of the 2020 elections.
“Your opening statement does not mention the [phrase] 'climate change.' . . . How is that possible?” Sen. Bernie Sanders (I-VT) asked during a broader exchange about whether Wheeler embraces dire warnings of the scientific community on climate change.
“I would not call it the greatest crisis. . . . I consider it a huge issue that has to be addressed globally,” Wheeler said.
Whitehouse pointedly questioned whether Wheeler is “truthful and complete” in his explanations of Trump EPA policies like ACE and the vehicle GHG proposal, by entering into the hearing record EPA analysis on the rules that Whitehouse said shows carbon emissions would rise compared to the “baseline you began with” under the Obama administration.
On the power plant rules specifically, Whtehouse cited EPA analysis showing that, relative to the CPP, the ACE rule would allow higher carbon emissions “by tens of millions of tons, every single year,” including 60 million more tons in 2030.
Sen. Cory Booker (D-NJ) similarly said of Wheeler's priories, “You seem to be consistently doing things that undermine the health and safety of this nation,” citing rollbacks of the power plant rules as well as methane regulations for landfills and the oil and gas sector.
In remarks toward the end of the hearing, Carper critiqued Wheeler's explanations on climate change, mercury and other issues as showing a “lack of urgency” on environmental problems. For example, he targeted Wheeler's remarks suggesting that he only met with California Air Resources Board chair Mary Nichols three times on the pending vehicle rule despite the need to bring California on board with any rule changes to avoid years of litigation.
That prompted clarifications from Wheeler that he was referring to one-on-one meetings, and that there had been many conversations between EPA staff and the state on the issue.
On mercury, Carper said that despite Wheeler's assurances, multiple stakeholders fear “the agency is going to do something that gives someone else, not EPA, but somebody else the ability to come in and have standing in court . . . to undo the mercury and air toxics rules.”
Wheeler Biography
Wheeler and Republican senators, meanwhile, sought to push back against the narrative that Wheeler is simply a former coal lobbyist itching to undo EPA rules, citing his prior stints at EPA and his more than a dozen years as an EPW staffer.
“What was your first job out of law school?” asked Sen. Dan Sullivan (R-AK).
Wheeler responded that his “first job was a career employee at EPA working in the toxics program,” noting that this stint lasted four years and resulted in several awards.
“How long were you at this [EPW] committee?” Sullivan asked.
The acting EPA chief responded that he was at EPW for 14 years, with the last six years as staff director and chief counsel.
“We are talking almost 20 years in the public sector, either at the EPA or at the committee overseeing the EPA,” Sullivan concluded, calling Wheeler “highly, highly qualified in the public sector” despite news reports' emphasis on his work as a coal lobbyist.
This allowed Wheeler to note that “the No. 1 issue” he was asked to work on during his four years of representing Murray Energy was an effort to shore up United Mineworkers pension and health care funds.
EPW Chairman John Barrasso (R-WY) called the ACE rule and the plan to scale back fuel economy standards the right decisions, praising Wheeler's record to date.
And Barrasso also sought to counter Carper and other Democrats' criticisms by stating that he believes Wheeler's background as a former EPA staffer shows he “actually cares about the environment, the air we breathe, the water we drink and the planet on which we live.”
https://insideepa.com/weekly-focus/democrats-wrestle-casting-less-combative-wheeler-extreme

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TSCA News

Tonko, Shimkus Want Oversight Hearing on Chemical Law Implementation

Jan 18, 2019 | PoliticoPro - Whiteboard

By Anthony Adragna

The top Democrat and Republican on the House Energy and Commerce Environment Subcommittee today voiced support for holding an oversight hearing on implementation of a 2016 chemicals law.
The support of Reps. Paul Tonko (D-N.Y.) and John Shimkus (R-Ill.) offers the subcommittee, also tasked with handling the controversial issue of climate change policy, an early opportunity for bipartisan action.
“The spirit and letter of those reforms should be implemented to the nth degree,” Tonko said. “I agree with former Chairman Shimkus that we need to do oversight and we need to revisit how it’s being implemented.”
Shimkus, the ranking member, told reporters today the “jury’s out” on whether EPA is properly implementing the update to the Toxic Substances Control Act, which he took the lead role in getting across the finish line.
“When the new administration came, I was really pleased. I think now it’s time to have an oversight hearing to see where they’re at and get some real numbers,” Shimkus said.
Shimkus said he didn’t necessary need for acting EPA Administrator Andrew Wheeler to testify but wanted to ask questions like “how many new chemicals do we have and how many do we have a decision on.”
What's next: Tonko said the hearing is not yet scheduled.
https://subscriber.politicopro.com/energy/whiteboard

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Chemical Management News

(ACC Mentioned) Beacon Hill Roll Call - January 18, 2019

Jan 17, 2019 | Beacon Hill Roll Call

By Bob Katzen

There were no roll calls in the House or Senate last week.
”There Oughta Be A Law”—Friday, January 18, at 5 PM is the official deadline for legislation to be filed for consideration during the 2019-2020 legislative session. The deadline is not etched in stone because even though the vast majority of proposals are filed by January 18, many late-filed bills are admitted to the Legislature following the deadline and throughout the two-year session. In the recent 2017-2018 session, legislators filed more than 6,000 bills.
Massachusetts is one of a handful of states that give citizens the “right of free petition”—the power to propose their own legislation. A citizen’s proposal must be filed in conjunction with his or her representative or senator or any other representative or senator. Sometimes a legislator will support the legislation and sponsor it along with the constituent. Other times, a legislator might disagree with the bill but will file it anyway as a courtesy. In those cases, the bill is listed as being filed “by request”—indicating that he or she is doing so at the request of the constituent and does not necessarily support it. Citizens that are interested in filing legislation should contact their own or any other representative or senator.
You can find the contact information for your local representatives at https://malegislature.gov/Legislators/Members/House and for your local senator at https://malegislature.gov/Legislators/Members/Senate.
If you don’t know who your legislators are, you can look them up by your street address and city or town at https://malegislature.gov/Search/FindMyLegislator.
Perhaps one of the most famous bills filed “by request” goes all the way back to 1969 when a constituent opposed to the Vietnam War asked Newton Democratic Rep. James Shea to file a bill prohibiting Massachusetts citizens from being forced to fight in an “undeclared war.” The bill challenged the constitutionality of sending Bay State men to fight without a Congressional declaration of war. It was approved by the House and Senate and signed by then-Governor Francis Sargent. The new law made national headlines.
To comply with the new law, Massachusetts initially filed a complaint in the US Supreme Court. The high court declined to hear the case, which was later refiled in the US District Court federal court and dismissed—rejecting the state’s argument that President Richard Nixon had usurped the war-making powers of Congress. In a tragic footnote, Rep. Shea committed suicide in the fall of the year the legislation passed.Also Up On Beacon Hill
Cities And Towns Are Reimbursed For Early Voting Expenses—Auditor Suzanne Bump and Secretary of the Commonwealth Bill Galvin announced that Massachusetts cities and towns would be reimbursed $1.14 million for the costs of allowing early voting in the 2018 general election. Early voting begins 10 business days before an election and ends two days before it. According to Sec. Galvin’s office, more than 584,000 voters cast their ballots early in the 2018 election.
“We owe it to the voters of the commonwealth to constantly strive to remove barriers that prevent them from making their voice heard in our democracy,” said Ms. Bump. “By providing convenience and flexibility, early voting has led to important progress on this front.”
“Early voting has proved to be enormously popular among voters in the last two state elections,” Sec. Galvin said. “As we look to expand early voting to increase voter access and convenience in the future, we need to make sure we are providing local election officials with the resources they need in order to hold successful elections.”
Here is the breakdown of the reimbursement the four Upper Cape towns will receive:
Bourne—$12,111.93
Falmouth—$6,228.00
Mashpee—$198.05
Sandwich—$1,718.00Governor Signs Dozens Of Bills
Here are some of the dozens of bills from the 2017-2018 session that Governor Charles D. Baker Jr. signed last week:
Honor Rosa Parks (S 2410)—Requires the MBTA, during the month of February, to have an LED display or decal on each bus to recognize the accomplishments of Rosa Parks to the Civil Rights Movement. By refusing in 1955 to give up her seat to a white man on a Montgomery, Alabama, city bus, Ms. Parks eventually became known as “the first lady of civil rights” and “the mother of the freedom movement.”
“It was an honor and a privilege to both sponsor and advocate for this legislative bill, which will honor an American heroine,” Sen James Timilty (D-Milton) said. “The sole purpose of this legislation is to commemorate the incredible courage and sacrifices exemplified by Ms. Rosa Parks. I am proud that this piece of legislation was enacted by both bodies of the Legislature.”
Ms. Parks was arrested and convicted of disorderly conduct. What followed was a 381-day boycott of the bus system by blacks that was organized by the then 26-year-old Reverend Martin Luther King Jr. The incident led to a Supreme Court ruling that desegregated public transportation in Montgomery. This eventually led to the 1964 Civil Rights Act that desegregated all public accommodations nationwide.
Counterfeit Airbags (H 4051)—Imposes a 2.5-year prison sentence and/or up to $5,000 fine on anyone who imports or sells counterfeit airbags in Massachusetts. Over the past few years, thousands of counterfeit airbags have made their way into the Bay State through purchases and sales on the Internet.
“I filed this bill to protect Massachusetts drivers from being injured and killed when counterfeit airbags fail to deploy properly,” Rep. Jennifer Benson (D-Lunenburg) said.
Credit Reports (H 4806)—Prohibits consumer reporting agencies, like Equifax, Experian and TransUnion, from charging fees for freezing and unfreezing a person’s credit information. Under current law, companies can and have charged up to $5 per freeze or unfreeze.
A freeze makes the report inaccessible until the consumer unfreezes it. Since banks and other lenders require access to the borrower’s credit report before giving a loan, this greatly reduces identity thieves from getting a loan or credit in another individual’s name.
The proposal gained momentum following the 2017 crisis when, from May to July, the personal information including names, Social Security numbers, addresses, driver’s licenses, and credit card numbers of 145 million Americans was stolen from Equifax’s systems. Equifax didn’t reveal the breach until September and consumers lost valuable time to act.
Other provisions of the bill prohibit businesses from obtaining a consumer’s credit report without obtaining written, verbal, or electronic consent from the consumer; require credit monitoring services to be available for 3.5 years for some consumers affected by a breach; and improve notices and consumer information the companies are required to give.
“This is good news and offers consumers new tools to protect themselves from identity theft after a security breach like the recently announced ones at Equifax and Marriott,” said Deirdre Cummings, legislative director for MASSPIRG. “While a good first step, we still have some more work to do to hold companies accountable for failing to properly safeguard our personal information.”
“With more access to credit due to their longer careers and higher incomes, older adults are the most common targets of identity theft nationwide,” Mike Festa, state director of AARP Massachusetts, said. “Individuals age 50-59 filed more than 7,200 complaints of identity theft in Massachusetts alone in 2017, according to the Federal Trade Commission.”
Disability Insurance (H 482)—Prohibits insurance companies from charging higher disability insurance premiums based solely on gender.
Supporters say that filings with the Division of Insurance show that women in Massachusetts pay much more for the same disability insurance benefits than men in the same occupation class. They note that on average, women pay 23.5 percent more than men but the difference has also been as much as 61 percent higher.
“Equal rights groups having been working to end gender discrimination in insurance products since 1976, when the Equal Rights Amendment was adopted,” said Rep. Ruth Balser (D-Newton), the bill’s sponsor. “Over the years, we eliminated unfair treatment by gender in automobile insurance, homeowner’s insurance, health insurance, and annuities. Today we have ended the unfair practice of charging women more than men for the same disability protection. Always proud when Massachusetts leads the way on equal treatment of all people … Today, we have made progress toward our goal of equal rights for women.”
Ban Toxic Flame Retardants (H 5024)—Gov. Baker did not sign a bill that would ban 11 toxic flame retardants from children’s products, bedding, carpeting, and residential upholstered furniture sold or manufactured in Massachusetts, except for inventory already manufactured prior to January 1, 2019. He was unable to propose any amendments to it because the 2017-2018 session ended on January 1 and the Legislature would not be able to act on the amendments.
“I will continue to stand with families and first responders in our state and will be refiling this bill next session,” Sen. Cindy Creem (D-Newton) Senate, co-sponsor of the measure, said.
The bill requires the Department of Environmental Protection to review, at least every three years, chemical flame retardants used in these products and include them on the list of prohibited chemical flame retardants that are documented to pose a health risk. Vehicles, watercraft, and aircraft are exempt from this law as are any previously owned product that contains a retardant. Violators would be fined up to $5,000 for a first offense and up to $50,000 for subsequent offenses.
In his message to the Legislature, Gov. Baker said that he supports the elimination of flame-retardant chemicals from various household and children’s products when those chemicals are unnecessary and toxic, but cannot sign the bill in its current form. “Had this bill been presented to me while the Legislature was still in session, I would have returned it with an amendment to address [my] concerns,” Gov. Baker said. “Unfortunately, because the Legislature has adjourned, I do not have that option.”
“This bill would make Massachusetts the only state in the United States to ban certain flame retardants in car seats and the non-foam parts of adult mattresses, products already subject to federal flammability requirement,” Gov. Baker continued. “In addition, this ban would go into effect in less than five months, cutting the lead time for manufacturers by more than half as compared to the full year provided in the legislation as originally filed. The resulting disruption to what is available to consumers in Massachusetts would likely have a disproportionate impact on families with lower incomes who are less able to afford more expensive alternatives.”
“Gov. Baker has chosen to stand on the side of the trade industries and not with the thousands of firefighters, children, and mothers who are at risk every day of cancer,” said Rep. Marjorie Decker (D-Cambridge), the bill’s House sponsor.
“Today Massachusetts had the opportunity to make our homes safer for children, firefighters, and families by taking the simple step of banning toxic flame retardants from certain home products,” Senate co-sponsor of the bill Sen. Cindy Creem (D-Newton) said. “However, because [the governor] vetoed this important bill, firefighters, and children continue to remain at risk for cancer and other health problems caused by these harmful chemicals.”
Industry opponents of the bill include the Juvenile Products Manufacturers Association, the American Chemistry Council, International Sleep Products Association, the American Home Furnishings Alliance, and Boston Bed Company.
They say that some of the banned chemicals can be used safely and that prohibiting them is not necessary and would drive up costs for consumers who would have to buy more expensive alternative products. They note it would also hurt Massachusetts businesses.
The industry lobbied heavily to defeat the bill. They argued that flame retardants are still an effective tool to combat fire risk. “We understand and support preventing exposure to dangerous chemicals; however [the bill] goes too far and could endanger children’s lives,” wrote Kelly Mariotti, executive director of Juvenile Products Manufacturers Association.Last Week’s Session
Beacon Hill Roll Call tracks the length of time that the House and Senate were in session each week. Many legislators say that legislative sessions are only one aspect of the Legislature’s job and that a lot of important work is done outside of the House and Senate chambers. They note that their jobs also involve committee work, research, constituent work, and other matters that are important to their districts. Critics say that the Legislature does not meet regularly or long enough to debate and vote in public view on the thousands of pieces of legislation that have been filed. They note that the infrequency and brief length of sessions are misguided and lead to irresponsible late-night sessions and a mad rush to act on dozens of bills in the days immediately preceding the end of an annual session.
During the week of January 7 through 11. the House met for a total of 19 minutes, while the Senate met for a total of eight minutes.
Monday, January 7: House 11:03 AM to 11:06 AM; Senate 11:06 AM to 11:10 AM.
Tuesday, January 8: No House session; no Senate session.
Wednesday, January 9: No House session; no Senate session.
Thursday, January 10: House 11:05 AM to 11:21 AM;Senate 11:02 AM to 11:06 AM.
Friday, January 11: No House session; no Senate session.Quotable Quotes
“AG Special Edition”—quotes from Attorney General Maura Healey last week:
“This company profited from running misleading advertisements that harmed Massachusetts taxpayers. This settlement will provide relief to affected consumers and put tax preparers on notice throughout the upcoming tax season to follow our laws.”
—Announcing that Jackson Hewitt Tax Service will pay approximately $187,000, split between consumers and the state, to resolve allegations that it violated Massachusetts consumer protection laws by posting misleading and deceptive advertisements.
* * *
“Consumers looking to protect themselves from HIV transmission should not be excluded from buying insurance. Under this settlement, Mutual of Omaha will provide relief to affected consumers who faced this discrimination. We are pleased to join GLAD today in sending a message to insurance companies that these unlawful practices will not be tolerated.”
—Announcing that Mutual of Omaha Insurance Company has agreed to no longer deny coverage to individuals using HIV prevention medication and will offer affected consumers an opportunity to reapply for insurance.
* * *
“Through this settlement, Neiman Marcus will take several steps to protect consumers and their data. Retailers must safeguard the financial information of their customers.”
—Announcing Massachusetts’ $51,600 share of a $1.5 million multi-state settlement with Neiman Marcus. The company violated consumer protection and data security laws by failing to appropriately respond to the data breach in 2013 that impacted stores across the country.
* * *
“Decisions about birth control are for women and their families to make, not their employers. This law is essential to the equality of women and the economic security of families.”
—Announcing the filing of two briefs asking the courts to stop the Trump Administration from rolling back the Affordable Care Act’s requirement that employers include birth control coverage in their health insurance.
https://www.capenews.net/columns/beacon-hill-roll-call---january/article_232ad039-01a5-558e-9df6-35c5ae44984f.html

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Schumer Presses Wheeler on Vehicle Rules, PFAS at Meeting

Jan 17, 2019 | PoliticoPro

By Anthony Adragna

Senate Minority Leader Chuck Schumer pressed acting EPA Administrator Andrew Wheeler in a meeting Thursday to end the agency's proposed rollback of Obama-era fuel economy rules and instead cut a deal with states that want more aggressive standards, according to a senior Democratic aide familiar with the conversation.
During what the aide described as a “passionate discussion” with the President Donald Trump's nominee to permanently run EPA, Schumer also encouraged Wheeler to establish a drinking water standard for per- and polyfluoroalkyl substances, toxic chemicals that have contaminated drinking water at hundreds of locations around the U.S.
Schumer also brought up the Trump administration’s plans to weaken mercury standards, issues surrounding paint-stripping chemical methylene chloride, and the Kigali amendment to the Montreal Protocol that would phase down use of hydrofluorocarbons that the administration has refused to submit to the Senate for ratification. He also raised New York-specific issues.
Some Republican senators have also raised concerns about EPA's inaction on PFAS and urged the administration to submit the Kigali treaty for ratification. There is also some GOP opposition to weakening the Obama-era MATS rule and calls for EPA to ban methylene chloride.
Wheeler agreed to follow up with Schumer's office on the issues brought up at the meeting, according to the aide. EPA did not immediately respond to request for comment.
During his Wednesday nomination hearing, Wheeler said the agency is ready to ban methylene chloride once the partial government shutdown ends, but he couldn’t promise to deliver a PFAS drinking water standard within two years. He also expressed a desire to establish a national agreement on fuel economy standards and said his proposed mercury rule would not result in the removal any pollution control technology from power plants.
Schumer opposed Wheeler’s selection to be EPA deputy administrator in April 2018. In floor remarks, he said that Wheeler “spent years working to undermine or lobby against the environmental protections he may soon oversee” and called him the “latest in a long line of swamp nominees.”
https://subscriber.politicopro.com/energy/article/2019/01/schumer-presses-wheeler-on-vehicle-rules-pfas-at-meeting-1096902

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Industry Warms to State Coolant Rules With Federal Action Frozen

Jan 18, 2019 | BNA Daily Environment Report

By Abby Smith

U.S. appliance and chemical companies aren’t standing still while they wait for the Trump administration to decide on a global deal to cut potent greenhouse gas coolants. They’re moving to Plan B: work with states setting limits.
The companies have worked for more than a year to encourage President Donald Trump to support and send to the Senate for ratification a 2016 global deal to phase down hydrofluorocarbons (HFCs), greenhouse gases typically used as refrigerants that warm the Earth at a rate hundreds of times more than carbon dioxide.
The agreement, known as the Kigali Amendment to the Montreal Protocol, took effect Jan. 1 without the U.S.
U.S. companies—including Carrier Corp., Lennox International Inc., Honeywell International Inc., and the Chemours Co.—want a national HFC phaseout program following the timetables of the Kigali deal.
That scenario would be simpler to implement and support efforts to transition to more climate-friendly chemicals, they say.
‘Nationwide Regime’
But with no end to federal limbo in sight, they are also working more closely with states like California, New York, Maryland, and Connecticut that are moving to lock in HFC reductions with state-level limits.
The companies’ efforts could lead to a default national program, if state rules match up with each other and the Kigali targets.
“The preference is that the federal government would act and have a nationwide regime,” John Hurst, vice president of government affairs and communications at Lennox, told Bloomberg Environment. “The fallback is California has a tight, coherent plan and states replicated that to the letter.”
“The nightmare is, everybody does their own thing and we try to keep up,” he added. “That’s a really bad outcome for the consumer and industry.”
China in the Wings
HFCs served as the predominant replacement for ozone-depleting chemicals, which countries agreed to eliminate under the Montreal Protocol.
The Kigali deal, agreed to by 197 countries in 2016, amends the protocol to add a phasedown of HFCs, which don’t deplete the ozone but are potent greenhouse gases.
More than 60 other parties, including Canada, Japan, and the European Union, have ratified or otherwise approved the Kigali deal, and most developed nations must cut their HFCs by 10 percent in 2019.
In the U.S., industry is continuing to transition to climate-friendly refrigerants, leading the development of HFC alternatives.
For example, Carrier in December announced it would switch its residential and light commercial refrigeration systems starting in 2023 to a new alternative it developed with Chemours that is one-fifth as damaging to the climate than the current chemical it uses, Matthew Pine, Carrier’s president of residential heating, ventilation and air conditioning, said.
‘Only Go So Far’
Without federal restrictions, though, some companies could be allowed to continue producing and using HFCs.
The longer the U.S. waits to enter the Kigali deal, the more those U.S. investments are undercut and could go elsewhere, Durwood Zaelke, head of the Institute for Governance & Sustainable Development, said.
U.S. industry momentum “will only go so far before they lose their competitive edge and rethink their business plan,” he said.
Chinese companies stand to gain, as they make a large portion of the world’s air-conditioning appliances already and are working to develop their own alternatives, Zaelke added.
States Out the Gate
Companies such as Carrier have a seat at the table in California, Pine said.
The company supports California’s approach to cutting HFCs, and its engineers and product marketing representatives have worked with state regulators to ensure they account for aspects like changes to building codes or how long older equipment might run before it is replaced, he said.
In December, California’s air regulators adopted statewide the regulations the Environmental Protection Agency had put in place during the Obama administration to cut HFCs.
A federal appeals court in July 2017 largely struck down the EPA’s rules, and the agency in April paused the rules while it retools the program in line with the court’s ruling. States don’t have to wait until the EPA resolves that to issue regulations.
New York, Maryland, and Connecticut aren’t far behind California. Regulators from those states announced in September that they would also adopt the Obama-era rules.
Maryland hopes to have final rules in place in 2020, Ben Grumbles, the state’s top environment official, said, adding that the state is working with others, including California, to craft a model rule.
A model rule could be useful to states like New Jersey, where environment regulators are exploring options to control use of HFCs in the absence of federal leadership, including state-level regulations, Larry Hajna, a spokesman for the Department for Environmental Protection, said.
Environment regulators will seek input from the state’s Clean Air Council when it meets in April, he added.
Climate Alliance
Environmental advocates expect more states will jump on board soon—including more from the U.S. Climate Alliance, which includes governors from 16 states and Puerto Rico.
Cutting HFCs is “an area where a number of states working together can drive the industry in the right direction nationally,” Jared Snyder, deputy commissioner of New York Department of Environmental Conservation’s Office of Air Resources, Climate Change, and Energy, said.
In addition to state-level rules, Snyder said New York is working with the other alliance states on HFC reductions that would go beyond the Obama-era EPA rules.
“Industry is very focused on ratification, but I think they’re beginning to realize the real question is implementation and a policy framework that confirms and makes more certain the Kigali schedule and the transition planning that they have done,” David Doniger, the Natural Resources Defense Council’s senior strategic director for climate and clean energy, said.
“If that’s what you want, go for the policies that promote that, and don’t put all your eggs in the Kigali basket or any other basket,” he added.
The Trump administration is considering the Kigali deal through an interagency process, officials at the White House and the EPA have previously said. Late last year, industry groups submitted data on how the agreement would affect American consumers at the White House’s request.
Kigali Framework
Industry groups, though, are cautioning against a transition away from HFCs quicker than what the Kigali deal would require.
“The push that we’re seeing by California and some of the states to be more aggressive, or to follow the European Union model, is a huge mistake,” Stephen Yurek, president and CEO of the Air-Conditioning, Heating, and Refrigeration Institute, said.
The European Union set stricter targets in some uses than Kigali, and it led to market disruptions and increased consumer costs, added Yurek, whose group represents major U.S. appliance and chemical companies.
https://news.bloombergenvironment.com/environment-and-energy/industry-warms-to-state-coolant-rules-with-federal-action-frozen

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Energy News

(ACC Mentioned) Petrochemical Growth Spurt Expected Despite Rising Desire for Fewer Plastics

Jan 17, 2019 | Canadian Broadcasting Corporation (CBC)

By Dan Healing

Canada's slow-growing petrochemical industry is headed for its biggest surge of expansion spending in five years in 2019, thanks in large part to incentive programs by federal and provincial governments.
The government support has angered environmental groups who point out that almost 90 per cent of plastics used in this country wind up as litter or in landfills.
But it's welcomed by the industry as a necessary factor if Canada is to keep up with its competitors in the United States.
Capital spending on industrial chemical industry projects in Canada this year is expected to jump by 65 per cent to $1.9 billion, the highest since $2.2 billion in 2014 and third-highest in a decade, according to a year-end members survey by the Chemistry Industry Association of Canada, which represents producers of 75 per cent of the country's chemical products by value.More than 17,000 jobs
Employment is expected to rise by about four per cent, or by 640 jobs to 17,670.
The growth is coming despite rising concern over single-use plastics. Many jurisdictions are banning plastic straws and grocery bags in reaction to scenes, such as the great Pacific Ocean floating garbage island between Hawaii and California and dead and dying sea creatures.
"Yes, we need plastics. What we want is to stop wasting plastics," said Keith Brooks, programs director for Environmental Defence, who says voluntary initiatives by industry aren't good enough.
His organization is calling for a national strategy with performance standards and tougher enforcement to get Canada to zero plastic waste by 2025.
Capital spending in Canada this year will come mainly from construction already underway on two projects to turn petrochemicals produced with natural gas into plastic pellets: Inter Pipeline Ltd.'s $3.5-billion polypropylene project in central Alberta and the $2-billion expansion of Nova Chemicals Corp.'s polyethylene plant at Sarnia, Ont.
The former is to receive $200 million in royalty credits under a 2016 Alberta NDP government program — the latter is backed by $100 million through Ontario's Jobs and Prosperity Fund and $35 million from Ottawa's Strategic Investment Fund.
"On a global basis, as all jurisdictions are trying to attract investment, the governments at various levels — federal, state and provincial — play a role," Nova CEO Todd Karran said in an interview.
He said it's always been so — the company's $1-billion polyethylene expansion at its central Alberta complex, opened in 2016, benefited from a multimillion-dollar provincial royalty credit program created by a Progressive Conservative government to spur new sources of ethane to remedy a shortage of feedstock.$2.1B in royalty credits from Alberta
Last year Alberta announced two programs worth $2.1 billion in royalty credits, grants and loans to encourage investments in petrochemical feedstock and manufacturing facilities. Winning bids are expected to be announced soon.
Meanwhile, a final investment decision is expected soon on a $4-billion polypropylene project by a joint venture of Calgary-based Pembina Pipeline Corp. and a subsidiary of Kuwait Petroleum Corp., eligible for $300 million in royalty credits under the 2016 Alberta program.
"Our made-in-Alberta plan means new projects must do the right thing for the environment, and by upgrading more here at home instead of shipping our raw product south of the border, we reduce emissions and ensure Alberta is among the most responsible and lowest emissions petrochemical producers in the world," provincial Energy Minister Marg McCuaig-Boyd said in a statement.
'Crazy' not to apply for government funding
David Chappell, senior vice-president of petrochemical development for Inter Pipeline, wouldn't say if the company has applied for further government funding, but conceded it would be "crazy" not to consider it.
"Even in a low-carbon future, you're going to see huge demand for petrochemicals and that's good for the future of Alberta and the oil and gas industry," he said.
Canadian petrochemical expansions are dwarfed by the activity south of the border.
A total of 333 new U.S. chemical industry projects using shale gas had been announced as of September, according to the American Chemistry Council. Those projects account for $202 billion US in new capital investment and are expected to create 431,000 direct and indirect jobs by 2025.
In both Canada and the U.S., the main driver of growth is an ample and inexpensive supply of natural gas-based feedstocks like methane, ethane and propane that can be transformed into chemical building blocks such as methanol, ammonia, ethylene and propylene, said Stephen Zinger, senior vice-president, chemicals, at consultancy Wood Mackenzie.Need to work together
Provincial and federal government supports, and Ottawa's recent decision to allow a 100 per cent accelerated capital cost allowance for new investments, are being noticed by investors, said Bob Masterson, CEO of the Chemistry Industry Association of Canada.
"Where for most of the last decade the global chemistry community has just bypassed Canada ... now we're back on the radar. We've got the resource, we've got the people and now we're starting to see the favourable investment conditions at the provincial and federal level," he said.
The Canadian industry is well aware of its environmental reputation.
The CIAC supports a target of 100 per cent of plastics packaging to be either reusable, recyclable or recovered by 2040 (and 100 per cent to be recyclable or recoverable by 2030), although it acknowledges it can't accomplish that without the co-operation of manufacturers, regulators and the general public.
On Wednesday, Nova Chemicals announced it was one of 30 founding members of the international Alliance to End Plastic Waste, which is making a combined initial commitment of $1 billion US to find ways over the next five years to eliminate plastic waste in the environment.
https://www.cbc.ca/news/canada/calgary/petrochemical-growth-spurt-expected-1.4981860

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Legality of Drilling Permits Issued During Shutdown Challenged

Jan 17, 2019 | BNA Daily Environment Report

By Jennifer A. Dlouhy

The Trump administration’s decision to keep issuing oil drilling permits during the government shutdown is putting those authorizations in legal jeopardy, environmentalists argued in a filing Jan. 17.
The Bureau of Land Management has already violated a federal spending law and legal requirements for public consultation by issuing at least 153 drilling permits since the shutdown began on Dec. 22, WildEarth Guardians, the Western Watersheds Project, and the Center for Biological Diversity said in a formal objection lodged with the agency.
“The public is entirely locked out of the process” during the shutdown, they argue, since people can’t discuss drilling permits with regulators, visit bureau offices to view applications, or even file public comments on them.
Separately, about three dozen conservation groups wrote to Acting Interior Secretary David Bernhardt on Jan. 17 arguing that upcoming sales of oil drilling rights in Colorado and New Mexico should be postponed because the bureau lacks necessary resources during the shutdown—including the expertise of furloughed government biologists, soil scientists and archaeologists—to conduct required environmental reviews ahead of those auctions.
The notices amount to a warning shot from environmentalists and a signal that the actions could be challenged in federal court.
‘Legal Vulnerabilities’
The Bureau of Land Management’s continued work on oil and gas activities “is creating legal vulnerabilities,” said Taylor McKinnon, public lands campaigner at the Center for Biological Diversity. “The only thing trashier than our national parks during this shutdown has been the Trump administration’s coddling of the oil industry.”
Representatives of the BLM didn’t immediately respond to an email seeking comment.
The agency halted work on drilling permits and canceled at least one oil lease sale during the 2013 shutdown, but this time, under President Donald Trump, the agency is treating the activity as “exempted.”
The shift comes as the Trump administration takes other steps to blunt the shutdown’s impact on the oil industry, including the Interior Department’s decision to recall furloughed workers to prepare documents necessary for upcoming sales of Gulf of Mexico drilling rights.
“The administration has bent over backwards to ensure that the pain of the shutdown falls only on ordinary Americans and the environment, and not on the oil and gas industry,” House Democrats said in a letter to Bernhardt.
https://news.bloombergenvironment.com/environment-and-energy/legality-of-drilling-permits-issued-during-shutdown-challenged

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Greens Gird for Combat as Energy Leasing Continues

Jan 18, 2019 | E&E Energywire

By Kelsey Brugger

Interior Department officials are preparing for the partial government shutdown to last months.
Last Friday, acting Interior Secretary David Bernhardt hosted a conference call to inform certain sportsmen and conservation groups how the massive department is navigating the shutdown, now in its fourth week. The Theodore Roosevelt Conservation Partnership arranged the call, and dozens of organizations joined in.
Sources said the officials are not expecting the situation to change soon, though officials could not say with certainty. Interior officials are planning in 30-day increments, they said, and have carryover funds to last two to four weeks.
It's not clear how certain funds are moved around. What is clear is that oil and gas permitting has not stalled.
Since the shutdown started on Dec. 22, the Bureau of Land Management has posted public notice of at least 127 new drilling permit applications in several states during the shutdown, according to the WildEarth Guardians. The work is funded by application fees, the agency said.
In addition, Interior appears to be on track to hold February and March oil and gas lease sales on 2.3 million acres in Wyoming, Utah, Nevada, New Mexico, Colorado and Montana. Some sales were rescheduled from December to comply with a court order, and as such, the land offered on the next auction block is the largest in at least a decade, conservationists said.
Yesterday, a bloc of conservationists charged that Interior is breaking the law.
They said agency scientists tasked with performing environmental analysis have been furloughed, and they expressed concern that public input could get lost or go unnoticed as BLM offices are closed.
"The Trump administration is trying to use the government shutdown to do an end run around the laws that protect our air, water and wildlife," said Kelly Fuller, energy and mining campaign director at the Western Watersheds Project.
Fuller added that the Antideficiency Act prohibits unpaid federal work during a government shutdown except to protect life or property.
BLM's contingency plan does not specifically mention the upcoming oil lease sales. However, the plan, dated January 2019, does say employees who are not furloughed will work on "selected energy, minerals, rights of way, grazing, and associated activities."
Interior is using funds from permit application fees, which cost $10,500, according to Interior's website. Asked specifically about the lease sales, an agency spokesperson said there were no updates.
Every quarter, BLM puts hundreds of thousands of acres on the auction block for oil companies to bid on. Under the Trump administration, oil lease sales occur every quarter in 11 Western states. In past administrations, lease sales rotated from one state to another every quarter. The entire process takes about six months, beginning with oil companies submitting expressions of interest for federal land where they hope to drill.
"This administration is already making it harder for BLM staff," said Nada Culver of the Wilderness Society. "They don't have a lot of time for environmental analysis."
She said most furloughed federal employees she talked to are eager to get back to work.
Beyond financial hits to the federal workforce, many immediate impacts are not sexy, sources said, and include missed meetings or lost time planning for conferences.
Should the shutdown continue for several months, one concern is federally conducted control burns that prevent wildfires, which scientists believe are getting worse with climate change. The government burns hundreds of thousands of acres of federal forestland every year.
https://www.eenews.net/energywire/2019/01/18/stories/1060117865

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Record Production of Natural Gas to Continue through 2020, Energy Department Projects

Jan 17, 2019 | Houston Chronicle

By Erin Douglas

The U.S. natural gas market will continue full speed ahead through 2020, delivering low prices and booming exports, the Energy Department predicts in its Short-Term Energy Outlook.
Planned capacity additions for natural gas will continue to replace coal-fired plants coming offline in 2019. Natural gas will continue as the primary source of U.S. electricity, the report states, increasing from 35 percent of domestic electricity generation in 2018 to 37 percent by 2020. Coal-fired electricity is expected to fall to 24 percent of generation by 2020.
The U.S. is expected to continue to be a net exporter of natural gas as production outpaces domestic consumption. The increase in exports will be driven by additional liquefied natural gas capacity additions at the Cameron LNG and Freeport LNG facilities along the Gulf Coast, the report states.
The Energy Department sees record-high natural gas production to continue through 2020, projecting the U.S. will produce 92.2 billion cubic feet per day by 2020, up from an estimated 83.3 billion in 2018. Production will primarily be driven by the Appalachian Basin, the Permian Basin, Eastern New Mexico and the Haynesville Shale Formation. Improved drilling efficiency, cost reductions in drilling and well completions will be factors in supporting production.
Production growth will keep pace with demand and exports, keeping prices relatively unchanged or lower. The U.S. benchmark Henry Hub natural gas spot price will average $2.89 per million British thermal units in 2019 and $2.92 in 2020, about 25 cents lower than the 2018 average, according to the Energy Department's projections.
Total U.S. natural gas consumption is expected to slightly increase through 2020 due to electric and industrial sector demand.
https://www.chron.com/business/energy/article/Record-production-of-natural-gas-to-continue-13541642.php

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Chemical Security News

(ACC Mentioned) House Passes Bill to Extend Security Program

Jan 17, 2019 | E&E News PM

By Courtney Columbus

The House today passed an amended bill to extend a chemical security program for more than a year.
The Chemical Facility Anti-Terrorism Standards program, which regulates more than 3,000 facilities, is on the brink of expiring.
The bill would extend it for 15 months. The Senate approved the legislation yesterday (E&E Daily, Jan. 17).
An earlier version of the bill passed by the House last week would have extended CFATS for two years. But Sen. Ron Johnson (R-Wis.), Senate Homeland Security and Governmental Affairs chairman, said he would not support a bill that provided for a long-term reauthorization without making reforms (E&E Daily, Jan. 9).
Johnson last year introduced a bill that would have extended CFATS for five years and made changes to the program (E&E Daily, Sept. 6, 2018).
"I am concerned this abbreviated authorization period provides less stability for [the Department of Homeland Security] and more uncertainty for the regulated community, but unless we act, the CFATS program will expire at midnight tonight," Rep. Bennie Thompson (D-Miss.), chairman of the Homeland Security Committee, said during floor debate.
"Allowing the program to sunset would make our communities less safe," he said. "After all, this program is designed to prevent the next West, Texas, where a dozen first responders lost their lives after a bad actor caused an explosion at a fertilizer plant, creating a blast that leveled an entire community."
Rep. John Shimkus (R-Ill.), a senior Energy and Commerce Committee member, also spoke in support of the fast-tracked bill during floor debate.
"This program and its operations have not been perfect, but CFATS appears to have vastly improved in the last four years due to committed leadership and a vision for success," he said.
Industry groups, including the American Chemistry Council, praised the House's passage of the 15-month extension.
"ACC and its members have testified many times in support of establishing a strong foundation for CFATS, and we are committed to continuing our work with Congress to provide CFATS with greater regulatory certainty and to make improvements to the program, including leveraging industry programs and ensuring employee screening focuses on high risk facilities and protects personal data," CEO Cal Dooley said in a statement.
Laura Berkey-Ames, director of energy and resources policy for the National Association of Manufacturers, said in a statement: "The continuity of this program without interruption is critical for industry and national security because it ensures manufacturers can confidently make appropriate, economically justifiable, long-term investments to protect high-risk facilities."
https://www.eenews.net/eenewspm/2019/01/17/stories/1060117823

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(ACC Mentioned) Congress Sends Bill Renewing Anti-Terrorism Program to Trump

Jan 17, 2019 | The Hill - E2 Wire

By Jacqueline Thomsen

Congress sent legislation to President Trump on Thursday that would reauthorize a program setting standards on protecting manufacturers and other chemical facilities from terror attacks.
The program is set to sunset on Thursday, meaning Trump will have to sign it into law quickly in order to prevent it from lapsing.
The Senate approved an amended version of the bill to reauthorize the Chemical Facility Anti-Terrorism Standards (CFATS) program for 15 months on Wednesday evening, and the House passed it by voice vote Thursday.
The House had initially passed a bill earlier this month reauthorizing the standards for two years. But Senate Homeland Security Committee Chairman Ron Johnson (R-Wis.) had rejected that version of the bill, saying that he would only accept a short-term extension. Johnson sought broader reforms to the program.
On Wednesday, he agreed to a 15-month reauthorization of the program, after negotiations with the committee’s ranking member Sen. Gary Peters (D-Mich.).
Johnson has authored legislation that would make changes to the Department of Homeland Security program, which applies to facilities that handle certain chemicals.
Industry groups, as well as Homeland Security Secretary Kirstjen Nielsen, had advocated for a clean renewal of the program without any reforms as it approached its authorization deadline, to stop it from lapsing.
Several of those groups issued statements Thursday applauding the bill’s passage and urging Trump to quickly sign the measure.
“The continuity of this program without interruption is critical for industry and national security because it ensures manufacturers can confidently make appropriate, economically justifiable, long-term investments to protect high-risk facilities,” Laura Berkey-Ames, the director of energy and resources policy for the National Association of Manufacturers, said in a statement.
American Chemistry Council President and CEO Cal Dooley said the bill “will give Congress time to work on bolstering CFATS and provide the regulatory certainty needed to support the industry’s ongoing efforts to safeguard chemical facilities and communities.”
And Eric Byer, the president of the National Association of Chemical Distributors, said that continuing CFATS “ensures the chemical industry and regulators work together to keep our nation’s chemical facilities secured against potential terrorist attacks.”
https://thehill.com/policy/cybersecurity/425876-congress-sends-bill-to-extend-anti-terror-program-for-manufacturers-to

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(ACC Mentioned) Lawmakers Agree to CFATS Extension

Jan 18, 2019 | Inside EPA

House and Senate lawmakers have agreed to a one-year extension of the Department of Homeland Security's (DHS) Chemical Facility Anti-Terrorism Standards (CFATS) ahead of a looming Jan. 19 deadline when the program's funding will expire, planning to use the time to debate potential legislative changes.
“We'll take the year and it'll give us time to work out our differences in the Senate,” Rep. Bennie Thompson (D-MS), chairman of the House Homeland Security Committee, told Inside EPA in a Jan. 16 interview. The legislation that both chambers now plan to take up will extend CFATS by one year without any revisions to the program. “We should not let it expire. I know a lot of communities have been made safer because of it,” he said.
Thompson said he is unsure what changes members of the Senate might want to make to DHS' facility safety program, and noted that employers and “industry wants to support the program.”
Industry groups including the American Chemistry Council and the American Petroleum Institute have lobbied lawmakers for a multi-year reauthorization of CFATS because they have invested millions of dollars and instituted thousands of security measures to comply with the program, which requires facilities to craft plans to reduce the risk of terrorist attacks and the adverse consequences of such attacks.
The House on Jan. 8 voted 414-3 to approve legislation, H.R. 251, that would extend CFATS two years and also require companies report their compliance plans and certain chemicals in their facilities to DHS.
“It is critically important that we ensure our nation’s chemical facilities are kept safe from terrorist threats,” Thompson said in a Jan. 8 statement on the approval. “CFATS has made the U.S. demonstrably safer.”
But Sen. Ron Johnson (R-WI), chairman of the upper chamber's homeland security panel, has sparred with Thompson over how to reauthorize the CFATS program after the House approved a two-year extension last week. His position made it unlikely that the Senate would approve the lower chamber's legislation.
But Johnson told Politico Jan. 15 that he will agree to a one-year extension.
He has previously said the program is in need of an overhaul. "It is far from clear that CFATS reduces the risk of a terrorist attack,” he said after the House approved the two-year extension.
In the 115th Congress, Johnson introduced a bill to reauthorize CFATS for five years but also to make several changes to the program, such as easing requirements for facilities that demonstrate compliance with industry best practices. It would also have limited DHS facility audits to no more than once every two years and once every three years for facilities that qualify for a new CFATS Recognition Program under the law.
https://insideepa.com/daily-feed/lawmakers-agree-cfats-extension

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Environment News

(ACC Mentioned) Carper Implores EPA Acting Administrator to Show Urgency on Climate Change

Jan 17, 2019 | Dover Post

Sen. Tom Carper, D-Delaware, led Democrats on Jan. 16 in questioning Environmental Protection Agency Acting Administrator Andrew Wheeler in the committee’s hearing on his nomination.
Carper urged the acting administrator to act with compassion and urgency to address the growing threat of climate change and to support the policies that strengthen protections for the environment and public health while providing certainty for industry and stakeholders.
“I live in Delaware, the lowest lying state in the country, where we feel the urgency to address climate change because we see its vestiges every day. Our state is sinking while the oceans are rising. Not too far away, Ellicott City has withstood two 500-year floods in one year. Across the country, communities are facing wildfires the size of states, while others measure rainfall by the foot instead of the inch. The American people feel the urgency of this growing crisis; they deserve an EPA administrator who will act with compassion and urgency to address climate change...One of the things I just don’t sense here is a sense of urgency to do something about this. I’m looking for some passion here, and I just don’t feel it. That’s deeply troubling,” said Carper.
“I’ve sat in this hearing room for 18 years, and I’ve always looked for ‘win-win’ policies that strengthen protections for our environment and public health without impinging on job creation and economic growth,” said Carper. “Right now, automakers are pleading for certainty and predictability — they want EPA to strive for more rigorous auto emission standards. The utility industry has already met mercury air toxic standards, at a third the expected cost of compliance — they want EPA to keep the MATS rule in place and effective. American companies create the technology and the jobs to help our country phase down harmful hydrofluorocarbons — several Republican senators agree with me that the Senate should ratify the Kigali amendment to the Montreal Protocol. It boggles my mind that EPA is not seizing on these commonsense ‘win-win’ policies, and I urge Acting Administrator Wheeler to appreciate and act upon the opportunities in front of him.”
Carper implored Wheeler to reverse course and commit to policy “win-wins” that protect the environment and public health while providing the industry with certainty:
— Strong fuel economy and greenhouse gas emission standards: Automakers, public health groups and environmental organizations support strong clean car standards, which would provide long-term certainty for domestic industry and help America compete economically on the global stage. But EPA — under Wheeler’s leadership — is leading the way in rolling back the sensible fuel economy standards of the Obama administration, and is also poised to rescind the authority of California to adopt (and for 13 other states, including Delaware, to adopt) its own standards.
— Mercury and Air Toxics Standards rule: There is broad support, from the utility industry to environmental and public health advocacy groups to the Chamber of Commerce, to keep this rule in place and effective. It has been shown to be effective and extremely cost-effective in reducing airborne pollution. Despite this, EPA has proposed action that will put the MATS rule in legal jeopardy and is taking comment on rescinding the MATS completely.
— Support for the submission of the Kigali Amendment to the Montreal Protocol for Ratification: This move is supported by a broad group of stakeholders, including the American Chemistry Council, the Chamber of Commerce, FreedomWorks, Sierra Club and several Republican senators. But EPA political officials are reportedly opposing the submittal of the treaty to the Senate.
— Protecting both consumers and workers from exposure to methylene chloride: Administrator Scott Pruitt in May 2018 announced EPA’s plan to finalize a ban on some uses of methylene chloride, a harmful and often fatal chemical component of paint strippers. The EPA recently sent a ban on that protects consumers to the Office of Management and Budget to be finalized, but exempted workers exposed to the chemical from the ban.
— Combatting PFAS in drinking water: The EPA under Acting Administrator Wheeler has not taken action on Perfluorinated Alkylated substances, or PFAS, dangerous chemicals contaminating drinking water supplies. Today, in response to Carper, Wheeler declined to commit to setting a drinking water standard for PFAS.
View Carper’s concluding remarks at bit.ly/2AR8bYN, and find his opening statement, as prepared for delivery, at bit.ly/2RwvdP0.
https://www.doverpost.com/news/20190117/carper-implores-epa-acting-administrator-to-show-urgency-on-climate-change

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House Dem to Offer Measure Backing Paris Climate Deal

Jan 17, 2019 | The Hill - E2 Wire

By Timothy Cama

A House Democrat is working with his colleagues to introduce a nonbinding measure to support the Paris climate agreement.
Rep. Jared Huffman’s (D-Calif.) resolution, if it gets a vote in the full House, would be a rebuke to President Trump’s 2017 decision to pull out of the climate pact.
Depending on the timing, it could be the first major action House Democrats take to push back against Trump’s environmental policies since they took over the chamber’s majority earlier this month.
Huffman hasn’t gotten any assurances from Democratic leadership on whether the chamber would vote on his resolution, but said he’s hopeful the vote can happen by Earth Day.
“It feels like this is a sweet spot on something we can do early in this Congress that sends an important message, that will be strongly passed out of the House,” Huffman told reporters Thursday.
He said he hasn’t finalized wording yet for the resolution.
“We’re just getting started, but I’m getting an enormous amount of positive feedback from colleagues.”
Huffman said a number of Democrats have agreed to support the resolution — along with at least one Republican — but he declined to name them.
He said the resolution would be a good start to Democrats’ efforts to push back on Trump, but that it should be followed by other legislative actions, too.
“Now, let’s be clear, we’ve got to do a lot more than just a concurrent resolution to stay in the Paris agreement. That’s an important message, but it’s not all we need to do," he said.
But given that Republicans control the Senate and the White House, House Democrats can’t do much more than a nonbinding resolution.
The Paris agreement was written in 2015, with nearly 200 nations signing on. The efforts to come to the agreement were largely driven by then-President Obama.
Under the pact, individual nations came up with their own targets for reducing greenhouse gas emissions, and agreed to revise those targets in coming years. The United States’s pledge was to cut emissions 26 percent to 28 percent by 2025, when compared with 2005 levels. The emissions reduction goals are nonbinding.
Trump promised during the 2016 presidential campaign to pull out of the accord.
He fulfilled the pledge in June 2017, and announced that he would withdraw the United States. But he cannot formally do that until 2020 at the earliest.
Politico first reported Huffman's plans.
https://thehill.com/policy/energy-environment/425888-house-dem-to-introduce-measure-to-back-paris-climate-agreement

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Climate Change’s Giant Impact on the Economy: 4 Key Issues

Jan 17, 2019 | New York Times

By Neil Irwin

By now, it’s clear that climate change poses environmental risks beyond anything seen in the modern age. But we’re only starting to come to grips with the potential economic effects.
Using increasingly sophisticated modeling, researchers are calculating how each tenth of a degree of global warming is likely to play out in economic terms. Their projections carry large bands of uncertainty, because of the vagaries of human behavior and the remaining questions about how quickly the planet will respond to the buildup of greenhouse gases.
A government report in November raised the prospect that a warmer planet could mean a big hit to G.D.P. in the coming decades.
And on Thursday, some of the world’s most influential economists called for a tax on carbon emissions in the United States, saying climate change demands “immediate national action.” The last four people to lead the Federal Reserve, 15 former leaders of the White House Council of Economic Advisers, and 27 Nobel laureates signed a letter endorsing a gradually rising carbon tax whose proceeds would be distributed to consumers as “carbon dividends.”
The Trump administration has long rejected prescriptions like a carbon tax. But policy debates aside, many of the central economic questions of the decades ahead are, at their core, going to be climate questions. These are some of the big ones.
How permanent will the costs be?
When we think about the economic damage from a hotter planet, it’s important to remember that not all costs are equivalent, even when the dollar values are similar. There is a big difference between costs that are high but manageable versus those that might come with catastrophic events like food shortages and mass refugee crises.
Consider three possible ways that climate change could exact an economic cost:
·       A once-fertile agricultural area experiences hotter weather and drought, causing its crop yields to decrease.
·       A road destroyed by flooding because of rising seas and more frequent hurricanes must be rebuilt.
·       An electrical utility spends hundreds of millions of dollars to build a more efficient power grid because the old one could not withstand extreme weather.
The farmland’s yield decline is a permanent loss of the economy’s productive capacity — society is that much poorer, for the indefinite future. It’s worse than what happens in a typical economic downturn. Usually when factories sit idle during a recession, there is a reasonable expectation that they will start cranking again once the economy returns to health.
The road rebuilding might be expensive, but at least that money is going to pay people and businesses to do their work. The cost for society over all is that the resources that go to rebuilding the road are not available for something else that might be more valuable. That’s a setback, but it’s not a permanent reduction in economic potential like the less fertile farmland. And in a recession, it might even be a net positive, under the same logic that fiscal stimulus can be beneficial in a downturn.
By contrast, new investment in the power grid could yield long-term benefits in energy efficiency and greater reliability.
There’s some parallel with military spending. In the 1950s and ’60s, during the Cold War, the United States spent more than 10 percent of G.D.P. on national defense (it’s now below 4 percent).
Most of that spending crowded out other forms of economic activity; many houses and cars and washing machines weren’t made because of the resources that instead went to making tanks, bombs and fighter jets. But some of that spending also created long-term benefits for society, like the innovations that led to the internet and to reliable commercial jet aircraft travel.
Certain types of efforts to reduce carbon emissions or adapt to climate impacts are likely to generate similar benefits, says Nicholas Stern, chair of the Grantham Research Institute on Climate Change and the Environment at the London School of Economics.
“You couldn’t provide sea defenses at large scale without very heavy investment, but it’s not investment of the kind that you get from the things that breed technological progress,” Mr. Stern said. “The defensive adaptations don’t carry anything like the dynamism that comes from different ways of doing things.”
There is more fertile ground in areas like transportation and infrastructure, he said. Electric cars, instead of those with internal combustion engines, would mean less air pollution in cities, for example.
How should we value the future compared with the present?
Seeking a baseline to devise environmental regulations, the Obama administration set out to calculate a “social cost of carbon,” the amount of harm each new ton of carbon emissions will cause in decades ahead.
At the core of the project were sophisticated efforts to model how a hotter earth will affect thousands of different places. That’s necessary because a low-lying region that already has many hot days a year is likely to face bigger problems, sooner, than a higher-altitude location that currently has a temperate climate
Michael Greenstone, who is now director of the Becker Friedman Institute at the University of Chicago and of the Energy Policy Institute there, as well as a contributor to The Upshot, was part of those efforts.
“We’ve divided the world into 25,000 regions and married that with very precise geographic predictions on how the local climate will change,” Mr. Greenstone said. “Just having the raw computing power to be able to analyze this at a more disaggregated level is a big part of it.”
But even once you have an estimate of the cost of a hotter climate in future decades, some seemingly small assumptions can drastically alter the social cost of carbon today.
Finance uses something called the discount rate to compare future value with present value. What would the promise of a $1,000 payment 10 years from now be worth to you today? Certainly something less than $1,000 — but how much less would depend on what rate you use.
Likewise, the cost of carbon emissions varies greatly depending on how you value the well-being of people in future decades — many not born yet, and who may benefit from technologies and wealth we cannot imagine — versus our well-being today
The magic of compounding means that the exact rate matters a great deal when looking at things far in the future. It’s essentially the inverse of observing that a $1,000 investment that compounds at 3 percent a year will be worth about $4,400 in 50 years, whereas one that grows 7 percent per year will be worth more than $29,000.
In the Obama administration’s analysis, using a 5 percent discount rate — which would put comparatively little weight on the well-being of future generations — would imply a social cost of $12 (in 2007 dollars) for emitting one metric ton of carbon dioxide. A metric ton is about what would be released as a car burns 113 gallons of gasoline. A 2.5 percent rate would imply a cost of $62, which adds up to hundreds of billions of dollars a year in society-wide costs at recent rates of emissions.
The Obama administration settled on a 3 percent discount rate that put the social cost of carbon at $42 per metric ton. The Trump administration has subsequently revised that estimate to between one dollar and seven dollars.
That sharp decrease was achieved in part by measuring only the future economic costs to the United States, not factoring in the rest of the world. And the Trump administration analyzed a discount rate of up to 7 percent — a rate at which even costs far into the future become trivial.
Mr. Greenstone favors substantially lower discount rates, based on evidence that financial markets also place high value on investments that protect against risk.
Understood this way, spending today to reduce carbon emissions tomorrow is like insurance against some of the most costly effects of a hotter planet — and part of the debate is over how much that insurance is really worth, given that the biggest benefits are far in the future.
How might climate change fuel inequality?
When a government report raises the possibility of a 10 percent hit to G.D.P. as a result of a warming climate, it can be easy to picture everyone’s incomes being reduced by a tenth.
In reality there is likely to be enormous variance in the economic impact, depending on where people live and what kind of jobs they have.
Low-lying, flood-prone areas are at particularly high risk of becoming unlivable — or at least uninsurable. Certain industries in certain places will be dealt a huge blow, or cease to exist; many ski slopes will turn out to be too warm for regular snow, and the map of global agriculture will shift.
Adaptation will probably be easier for the affluent than for the poor. Those who can afford to move to an area with more favorable impacts from a warmer climate presumably will.
So the economic implications of climate change include huge shifts in geography, demographics and technology, with each affecting the other.
“To look at things in terms of G.D.P. doesn’t really capture what this means to people’s lives,” said William Nordhaus, a Yale economist who pioneered the models on which modern climate economics is based and who won a Nobel for that work. “If you just look at an average of all the things we experience, some in the marketplace and some not in the marketplace, it’s insufficient. The impact is going to be highly diverse.”
Can we adapt to a warmer climate?
Despite all these risks, it’s important to remember that humanity tends to be remarkably adaptable. A century ago, most people lived without an automobile, a refrigerator, or the possibility of traveling by airplane. A couple of decades before that, almost no one had indoor plumbing.
Changes in how people live, and the technology they use, could both mitigate the impact of climate change and ensure that the costs are less about a pure economic loss and more about rewiring the way civilization works.
Most capital investments last only a decade or two to begin with; people are constantly rebuilding roads, buildings and other infrastructure. And a warmer climate could, if it plays out slowly enough, merely shift where that reinvestment happens.
But a big risk is that the change happens too quickly. Adaptation that might be manageable over a generation could be impossible — and cause mass suffering or death — if it happens over a few years.
Imagine major staple food crops being wiped out for a few consecutive years by drought or other extreme weather. Or a large coastal city wiped out in a single extreme storm.
“Whether it’s jobs, consumption patterns or residential patterns, if things are changing so fast that we can’t adapt to them, that will be very, very costly,” Mr. Nordhaus said. “We know we can adapt to slow changes. Rapid changes are the ones that would be most damaging and painful.”
It’s clear that climate change and its ripple effects are likely to be a defining challenge of the 21st-century economy. But there are wide ranges of possible results that vary based on countless assumptions. We should also recognize that the economic backdrop of society is always changing. Projecting what that will mean for ordinary people is not simply a matter of dollars.
“I’ve spent the last 20 years trying to communicate it and it’s not easy to process,” Joseph Aldy, who teaches at Harvard’s Kennedy School for Public Policy, said of the connection between climate change and the economy. “It’s really hard to convey something that is long term and gradual until it’s not.”
https://www.nytimes.com/2019/01/17/upshot/how-to-think-about-the-costs-of-climate-change.html

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Industry Groups Urge White House to Issue Climate Guidance

Jan 18, 2019 | PoliticoPro

By Zack Colman

Business groups are asking the White House to direct federal agencies to consider climate change in environmental reviews because the lack of any formal guidance is hindering progress on natural gas pipelines and other energy projects.
At issue is the Council on Environmental Quality’s guidance on greenhouse gas emissions under the National Environmental Policy Act, which requires federal agencies to certify that their activities would not have an adverse effect on ecosystems or public health.
President Donald Trump rescinded the Obama administration’s version two months after taking office, but his administration has not offered a replacement in the nearly two years since. Industry lobbyists say they are optimistic that they will see progress on the guidance now that CEQ chief Mary Neumayr has been confirmed, but the ongoing government shutdown has hindered work on the project.
The Obama guidance, issued in 2016, required agencies to consider "indirect" effects on greenhouse gas emissions, such as the effect of burning natural gas in a power plant in addition to the emissions created when building a pipeline, among other factors that drew objections from industry.
Now, some companies and their advocates in Washington are learning that having no guidance at all is making their lives more difficult. Several pipeline projects — including Keystone XL — have been tied up in court over inadequate reviews.
Groups including the American Petroleum Institute, National Association of Manufacturers and Interstate Natural Gas Association of America have reached out to the White House urging it to release new guidance.
“We have shared with the administration that getting that issued would be very, very important,” said Don Santa, president of INGAA. It “would be an advantage both in terms of litigation challenging pipeline certificates and also as the FERC works through this issue.”
The White House has determined that issuing new guidance on greenhouse gases would address the concerns courts have raised, said Myron Ebell, energy and environment director with the Competitive Enterprise Institute and the former EPA transition team head who remains in contact with the Trump White House.
“They’ve made the decision that we’re not going to win these court cases unless we check that box," Ebell said.
Ebell said he's been told that CEQ staff have completed a draft guidance document and submitted it to Neumayr, whose next step is to send it to the Office of Management and Budget. Before being confirmed by the Senate this month, Neumayr led CEQ as acting chief since joining the council in March 2017 as chief of staff.
The White House did not respond to a request for comment.
The effects of the policy vacuum were felt in August 2017, when the U.S. Court of Appeals for the D.C. Circuit rejected FERC’s approval of the Sabal Trail pipeline that would bring natural gas to Florida. The court said the agency didn’t properly account for the proposed pipeline’s greenhouse gas emissions, which was required by the National Environmental Policy Act.
FERC changed the way it assesses downstream greenhouse gas effects for some projects in a May order. But Democratic Commissioners Richard Glick and Cheryl LaFleur dissented on grounds that the order did not satisfy the requirements of D.C. Court ruling on Sabal Trail. FERC is being sued by seven Democratic attorneys general, led by New York.
Federal courts also cited failure to adequately consider climate change in blocking the Keystone XL pipeline since Trump has been in office.
Christy Goldfuss, who ran the Obama CEQ when the 2016 guidance was issued, warned at the time that Trump's withdrawal risked backfiring.
"Now, we’re back to where you’re going to get completely inconsistent approaches across the federal government. And when people decide not to look at climate change, it will increase litigation risk, which slows down projects as well," Goldfuss, now senior vice president for energy and environment policy at the Center for American Progress, told ThinkProgress when Trump rescinded the guidance in March 2017.
https://subscriber.politicopro.com/energy/article/2019/01/industry-groups-urge-white-house-to-issue-climate-guidance-1095220

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Young Conservatives Urge Gop to Reclaim Green Legacy

Jan 18, 2019 | E&E Climatewire

By Ines Kagubare

College Republicans across the country are ringing the alarms for GOP legislators to lead on green issues.
In a letter, 41 state college Republican chairmen urged their state and U.S. representatives to shape market-based energy and environmental policies.
"The Republican Party has a long history, one that spans from President Roosevelt to President Nixon to President Reagan, of being the champion of our environment," the letter says. "It is time for the Republican party to embrace that legacy once more."
The letter aims to show GOP leadership that caring about the environment shouldn't be a partisan issue, but rather one where Democrats and Republicans can work together to find solutions. It also intends to show that young conservatives are concerned about the environment.
"There are lots of young people on the right who also care about the environment and energy issues, and [they] want their party to make it a priority moving forward," said Bethany Bowra, communications director at the American Conservation Coalition, a millennial-led organization that focuses on educating and empowering conservatives to re-engage on environmental issues. The group organized the College Republican Clean Energy Coalition, which is behind the letter.
Tom Ferrall, chairman of the Ohio College Republican Federation and a signatory, said that young Republicans have many ideas regarding energy and the environment but they often get lost among other conservative priorities, like lowering taxes. He said he wishes the environment would get back on top of the Republican agenda.
Although Ferrall didn't have any specific environmental or climate policy in mind, he said he would support one that favors a free-market-based solution.
"As long as we stick to the free market and use innovations, I think that we will be able to tackle this issue in Ohio and in the country as a whole," Ferrall said.
Both ACC and the clean energy coalition believe that conservatism and the environment can go hand in hand. They also believe that local governments are better suited to deal with environmental issues versus top-down regulation from the federal government.
"There's a way that we can do things that are better for the environment and still have an economic success," Bowra said.
The letter did not specifically mention "climate change." But it's an issue college Republicans intend to address. Bowra said ACC does believe that climate change is happening and that it is caused by human activity — but it would rather focus on the solution rather than the cause.
"As conservatives, we believe innovation, clean energy and free-market policies are the answers to climate-related issues," Bowra said.
ACC plans to officially announce the 41 state college Republican chairmen who signed on to participate in the clean energy coalition on Tuesday. Some of those states are Florida, Texas, Ohio, Rhode Island and Massachusetts.
https://www.eenews.net/climatewire/2019/01/18/stories/1060117851

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