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Industry and Association News - There are no clips to report at this time.

Chemical Management News

1. Senator Boxer Introduces Counter TSCA Reform Measure

   Mar 13, 2015 | Chemical Watch

   By Dinseh Kumar
   
   
   Two Democratic senators introduced a reform bill in the Senate on Thursday, in an apparent counter to the chemical safety act launched there earlier this week (CW 10 March 2014).
2. Chemical Safety Bills Face Off In Senate

   Mar 13, 2015 | Huffington Post

   By Kate Sheppard
   
   
   A pair of Democratic senators has introduced legislation to reform the nation's chemical safety laws, two days after a bipartisan group of senatorsreleased their own chemical legislation.
3. Former EPA Official Questions IRIS' Outdated Pesticide Risk Assessments

   Mar 13, 2015 | InsideEPA

   By Maria Hegstad
   
   
   A retired EPA pesticides official is pressing the agency to address the more than 100 pesticides included in the agency's Integrated Risk Information System (IRIS) toxicity assessment database for environmental chemicals, arguing that these outdated, 30-year-old assessments undermine the influential database's authority.
4. Senate Plans to Slash State Toxics Programs

   Mar 13, 2015 | Safer Chemicals, Healthy Families

   By Tony Iallonardo
   
   
   Opponents of the Senate’s Vitter-Udall chemical legislation introduced this week point to numerous flaws in the bill.

Chemical Security News

5. Trouble for New Data Breach Bill?

   Mar 13, 2015 | The Hill - Cybersecurity

   By Julian Hattem
   
   
   New draft legislation to protect people after their data may have been stolen is running into some quick opposition on Capitol Hill.
6. Chemical Facilities Are Making Themselves Less Attractive Targets For Terrorists

   Mar 13, 2015 | Chemical and Engineering News

   By Glenn Hess
   
   
   In the past year, more than 700 chemical facilities have been dropped from the government’s antiterrorism program for the sector because they are no longer considered “high risk” targets, new federal data show.
7. Chemical Safety Board Prevails in Deepwater Horizon Case

   Mar 12, 2015 | Fuel Fix

   By Jennifer A. Dlouhy
   
   
   A federal appeals court on Thursday affirmed the authority of government investigators to probe Transocean’s involvement in the 2010 Deepwater Horizon disaster.

Energy and Environment News

8. Union, Shell Reach Tentative Agreement to End Strike

   Mar 13, 2015 | E&E - Energywire

   By Pamela King and Nathanial Gronewold
   
   
   Negotiations between the United Steelworkers (USW) and the refining industry yesterday reached a tentative close, settling a nearly six-week worker strike affecting more than a dozen U.S. refineries.
9. Oil Execs Push White House on Crude Export Ban

   Mar 13, 2015 | The Hill - E2 Wire

   By Timothy Cama
   
   
   Oil drilling executives met with White House and Capitol Hill officials this week to lobby for the United States’ ban on exporting crude oil to be lifted.
10. Inhofe’s Misleading Statements on Carbon Emissions Rule

    Mar 13, 2015 | The Washington Post

    By Michelle Ye Hee Lee
    
    
    “EPA also intends to pursue a legislative proposal for an additional $4 billion in mandatory spending for EPA to enforce its climate change regulations … which 32 states oppose and will result in double-digit electricity price increases in 43 states.”
11. Clean Power Plan Bills Generate Debate Across the Southeast, Midwest

    Mar 13, 2015 | E&E - Energywire

    By Jeffrey Tomich and Kristi E. Swartz
    
    
    As U.S. EPA continues to work on a final version of the Clean Power Plan for release later this summer, conservative lawmakers in more than a dozen states are trying to ensure they get the final say on how their state responds to it, citing concerns about electric rates, reliability and jobs.
12. Industry Urges EPA To Resolve Oil, Gas NSPS Suit Ahead Of Methane Rule

    Mar 13, 2015 | InsideEPA

    By Bridget DiCosmo
    
    
    Oil and gas producers are opposing EPA's bid to keep in abeyance litigation over the agency's 2012 new source performance standards (NSPS) for the sector, arguing that EPA needs to first resolve litigation over the rules before it issues its pending proposal to revise the NSPS and impose first-time methane emissions limits on industry.
13. Reversing Position, EPA Says 'Flexible' Air Permitting Will Not Avoid NSR

    Mar 13, 2015 | InsideEPA

    By Stuart Parker
    
    
    EPA is defending Texas' "flexible" Clean Air Act permit program from critics' renewed legal attack that claims the program allows facilities to avoid triggering potentially stringent new source review (NSR) requirements, a reversal of the agency's position several years ago that said the program could allow some NSR circumvention.
14. EPA Sends Final 'Affirmative Defense' Air Rule To OMB

    Mar 12, 2015 | InsideEPA

    EPA has sent for White House Office of Management & Budget (OMB) review its final rule to scrap provisions in many states' air plans that give industry an “affirmative defense” against liability for Clean Air Act violations, a plan environmentalists support but that critics say ignores states' discretion to offer the defense to industries.
15. Carbon Emissions Stop Growing Globally

    Mar 13, 2015 | The Hill - E2 Wire

    By Timothy Cama
    
    
    The growth in global carbon dioxide emissions stalled in 2014 for the first time in the 40 years, and the International Energy Agency (IEA), which has been tracking it, said the slowdown wasn't connected to an economic downturn.
16. Senate Dems: GOP Needs Climate Change 'Day of Reckoning'

    Mar 13, 2015 | The Hill - Floor Action

    By Jordain Carney
    
    
    Senate Democrats slammed Republicans Friday over their climate change tactics. Senate Minority Leader Harry Reid (D-Nev.) and Sen. Sheldon Whitehouse (D-R.I.) said Republicans have "no plan" to tackle climate change.

Transportation News

17. Canada Steps Ahead of U.S. With Rules for Hauling Crude by Rail

    Mar 13, 2015 | E&E - Energywire

    By Blake Sobczak
    
    
    Canadian regulators have upgraded standards for tank cars hauling crude oil and ethanol, pulling ahead of parallel rules under consideration in the United States.
18. Shipping LNG by Rail? Alaska Railroad Wants to Make it Happen

    Mar 13, 2015 | E&E - Energywire

    By Margaret Kriz Hobson
    
    
    At a time when Alaska state officials are eager to provide low-cost fuel to the energy-hungry Fairbanks region, the Alaska Railroad Corp. is seeking to become the first U.S. company to ship liquefied natural gas by rail.

Industry and Association News - There are no clips to report at this time.

Chemical Management News

1. Senator Boxer Introduces Counter TSCA Reform Measure

   Mar 13, 2015 | Chemical Watch

   By Dinseh Kumar

   Two Democratic senators introduced a reform bill in the Senate on Thursday, in an apparent counter to the chemical safety act launched there earlier this week (CW 10 March 2014).

   Senators Barbara Boxer (California) and Edward Markey (Massachusetts) said they introduced their bill after consulting a "wide range of leading experts and stakeholders, including public health and environmental organisations, business groups, states and groups that advocate on behalf of those who have suffered injuries from toxic chemicals."

   Their proposed legislation – the Alan Reinstein and Trevor Schaefer Toxic Chemical Protection Act – protects children and vulnerable populations from harmful toxins, provides stronger safety standards and quicker safety reviews of chemicals, and ensures exposure from chemical spills and leaks are addressed, they said. The bill also requires the US EPA to act quickly to consider a ban on asbestos, and it maintains states’ rights to protect people from dangerous toxic chemicals.

   On Tuesday, Senators David Vitter (Republican-Louisiana) and Tom Udall (Democrat-New Mexico) introduced the Frank R Lautenberg Chemical Safety for the 21 Century Act, which supporters and detractors agreed was an improvement on the 2013 Chemical Safety Improvement Act (CSIA). The Vitter-Udall measure had 18 sponsors, half of them Democrats.

   Ms Boxer, as the then chairman of the Senate Environment and Public Works Committee, was instrumental in the failure of the CSIA by denying it a committee vote. She voiced strong opposition to several provisions in the bill, especially its language on state preemption. With the Republican takeover of the Senate in last November's election, she is now the ranking member of the committee.

   The Boxer-Markey bill would, among other things:not allow the EPA to preempt state authority;require the EPA to review more chemicals more quickly;ensure that the EPA's chemical assessments are consistent with the recommendations of the National Academy of Sciences;make clear which chemicals the EPA can designate as high priority needing review and as low priority and considered safe without a full review; andpreserve states' authority to restrict the use of chemicals, and enforce federal restrictions under state law.

   Citing the bipartisan support for his bill, Mr Vitter said in a statement that “reforming TSCA is absolutely necessary, and our best bet moving forward is to regulate the safety of chemicals based on the latest science, provide greater regulatory certainty to the chemical manufacturing industry, and strike a balance between state and federal roles in chemical safety management.” The Vitter-Udall bill “does just that and has the momentum to move forward, unlike some outlier proposals,” he added in an oblique reference to Ms Boxer's bill.

   NGOs were quick to back the Boxer-Markey bill. Andy Igrejas, director of Safer Chemicals, Healthy Families, said Ms Boxer's bill would be “a clear win for public health and the environment.” It would require the EPA to take expedited action on the worst substances, like asbestos and the broad class of chemicals that build up in the food chain, he added. It would also establish a more aggressive schedule for reviewing the remaining chemicals.

   “Unlike the Vitter-Udall bill, it does not have a downside risk for public health because there aren't any rollbacks in it, and state governments remain free to use their authority to protect their citizens,” Mr Igrejas said.

   “Senators Boxer and Markey start with the Vitter-Udall bill, but take a significantly more ambitious and forward-thinking approach to ensuring that public health is protected, without the rollbacks to existing authority of the EPA and states,” said Daniel Rosenberg, senior attorney at the Natural Resources Defense Council. “Every Senator ought to be reviewing it carefully to understand what more needs to be done to adequately protect the public as they consider TSCA reform legislation.” The Environmental Working Group and Earthjustice also came out in support of the measure.

   Most industry trade groups chose not to comment on the Boxer-Markey bill. However, Ernie Rosenberg, president of American Cleaning Institute said the Vitter-Udall bill has the support of groups in the activist and environmental communities as well as manufacturers. “Working together on this bill is our best path forward.”

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2. Chemical Safety Bills Face Off In Senate

   Mar 13, 2015 | Huffington Post

   By Kate Sheppard

   A pair of Democratic senators has introduced legislation to reform the nation's chemical safety laws, two days after a bipartisan group of senatorsreleased their own chemical legislation.

   Sens. Barbara Boxer (D-Calif.) and Ed Markey (D-Mass.) introduced the Alan Reinstein and Trevor Schaefer Toxic Chemical Protection Act on Thursday. Thesenators said their bill would require the Environmental Protection Agency to evaluate whether chemicals are safe before they are brought to market, would speed up the EPA's process for reviewing chemicals, and would force the agency to review all chemicals already on the market.

   The bill would reform the 1976 Toxic Substances Control Act, which many have complained is outdated and too weak to protect Americans from exposure to chemicals. It comes shortly after another pair of senators, Tom Udall (D-N.M.) and David Vitter (R-La.), introduced their own legislation on the subject. Many environmental and public health groups have criticized the Udall-Vitter bill as not going far enough in reforming the nearly four-decades-old legislation.

   The Boxer-Markey bill would also allow states to continue setting tougher regulations on chemicals than the federal standards. California has historically been a leader in tougher standards, and the Udall-Vitter bill would limit states from doing so in the future, which has been a point of contention for Boxer. The Boxer-Markey bill is named after Alan Reinstein, who died from mesothelioma, and Trevor Schaefer, a brain cancer survivor.

   Boxer has accused the sponsors of the rival legislation of being overly deferential to the interests of the chemical industry in crafting their bill. "Our citizens deserve nothing less than a bill that protects them -- not chemical companies," she said in a statement Thursday.

   The Environmental Working Group, which has argued that the Udall-Vitter bill "will only make things worse," praised the Boxer-Markey effort. The group said the new bill would hold chemicals in the marketplace to the same safety standards required for pesticides and other chemicals used in foods. "Americans rightly expect that chemicals in everyday products they use are safe, especially for children who are most vulnerable to toxic exposures,” EWG President Ken Cook said in a statement. “The Boxer-Markey bill would make sure that the nation’s chemical safety law meets that expectation.”

   Daniel Rosenberg, senior attorney in the Health Program at the Natural Resources Defense Council, called the bill "more ambitious and forward-thinking" than the Udall-Vitter bill. "This bill gives a sense of how much could be achieved with a full-fledged effort to reform our broken toxic chemicals law," said Rosenberg.

   The Udall-Vitter bill has 17 co-sponsors, including Jim Inhofe (R-Okla.), the chairman of the Environment and Public Works Committee, which has jurisdiction over the legislation. A hearing on the bill is schedule for Wednesday. 

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3. Former EPA Official Questions IRIS' Outdated Pesticide Risk Assessments

   Mar 13, 2015 | InsideEPA

   By Maria Hegstad

   A retired EPA pesticides official is pressing the agency to address the more than 100 pesticides included in the agency's Integrated Risk Information System (IRIS) toxicity assessment database for environmental chemicals, arguing that these outdated, 30-year-old assessments undermine the influential database's authority.

   "In my view, it is a big problem for IRIS and [EPA's National Center for Environmental Assessment (NCEA)] and a significant impediment to the reestablishment of IRIS as a credible repository of Agency-generated human health guidance," Penelope Fenner-Crisp, a former EPA pesticides official writes in a Dec. 15 letter to NCEA Director Ken Olden that was recently added to IRIS' electronic docket.

   EPA's IRIS database provides toxicity information agency-wide about chemicals and other factors in the environment that may cause adverse health effects, and many risk management decisions are based on the assessments. The database is publicly available on the internet, and many state agencies and agencies in other countries consult it.

   The IRIS program has long held the goal of updating its existing assessments at least once a decade. However, that goal is rarely met, with the program in recent years completing just a handful of assessments per year. In fiscal year 2014, the agency did not publish any final IRIS assessments. In a 2008 review, the Government Accountability Office declared the program so slow-moving as to be nearly obsolete.

   Fenner-Crisp, who at various public meetings has questioned the use of a separately staffed IRIS program rather than a consensus committee of agency-wide risk assessors, as in the early days of the database, writes, "over the time frame during which the IRIS process was a collaborative one (1987-1995), 462 chemical entries were uploaded onto IRIS. In the nearly 20 years since IRIS was taken over by NCEA, only 95 additional chemical entries have been uploaded onto IRIS."

   Olden, who was brought into EPA to turn around the troubled program two years ago, announced in December at the annual meeting of the Society for Risk Analysis in Denver that he intends to remove some 140 IRIS assessments from the database because they are outdated. And he indicated plans to update about 350 other assessments in the database.

   However, those plans have yet to come to fruition. Fenner-Crisp, who questioned Olden about the status of the outdated pesticides assessments in the IRIS database at the Denver meeting, sent Olden her analysis of the number of outdated IRIS assessments in the database. According to her review, "nearly 200 of the 558 entries on IRIS are currently-registered or recently-canceled pesticides," Fenner-Crisp writes.

   IRIS Analysis

   In her analysis, which Fenner-Crisp has updated, she reviews this group of 193 pesticides and compares the cancer and noncancer toxicity estimates in the IRIS database with the toxicity estimates EPA's Office of Pesticide Programs (OPP) has generated for the same chemicals since the IRIS values were calculated in the 1980s. She notes that many of the values are different and argues this undermines IRIS' credibility.

   "Of the nearly 200 chemicals, almost 90 percent of the IRIS entries for these substances are incorrect, either for the [non-cancer reference dose (RfD)] or the cancer call or both," Fenner-Crisp writes. "This is the 800-pound elephant in the room. This problem needs to be corrected, swiftly and thoroughly, if there is any hope of fully restoring credibility to IRIS."

   Fenner-Crisp writes that anyone -- inside or outside the agency -- who has used the IRIS pesticide values rather than the updated OPP values has been using outdated information "for at least 20 years". And she writes that "[a]t least one EPA program office (Superfund) is trapped into using the wrong numbers for pesticides as a matter of policy," pointing to Superfund's Risk Assessment Guidance for Superfund, where IRIS is described as "superseding" all other information sources.

   An agency source says that IRIS leaders are working to get the outdated assessments removed from IRIS, but bureaucratic delays are slowing action. The main delay, the source says, is that in the process of reviewing and determining which pesticides are outdated and obtaining agreement within the agency to remove the assessments, "somebody discovered that there's another set [of chemicals] that [NCEA] also doesn't have responsibility for." The source was unsure, but thought this other group of chemicals also falls within OPP's authority. The source adds that the intent is to remove both sets of chemicals from IRIS together.

   Fenner-Crisp provides Olden with the history of the outdated pesticide values on the IRIS database. When the IRIS program began in the early 1980s, the agency's water and pesticides offices were seeking to gain consensus on toxicity values for chemicals found in drinking water systems, with drinking water utilities asking for EPA advice on treatment, she explains. She notes that she and two colleagues generated many of these values before the effort grew into a larger Refence Dose Workgroup in 1985. This group continued generating IRIS toxicity values until the separate IRIS program, with sole responsibility for creating the IRIS assessments, was created in 1995, Fenner-Crisp writes.

   "So, what does this say about the credibility of the IRIS entries for pesticides? Most of the IRIS entries uploaded between 1987 and 1989 were derived by Drs. Dourson, Engler and myself, later verified by the RfD Workgroup. That means these values are ~30 years old--way out of date and frozen in time."

   'Significant Change'

   Fenner-Crisp adds that "[a]nother very significant change occurred at the 1995 time point, which is not widely remembered and rarely acknowledged. The NCEA-led Agency consensus activities on pesticides ended. The responsibility for the development of health-based values reverted to the [OPP]. Maintenance and updating of IRIS values by NCEA for pesticides ceased, with minor exceptions. If the substance is used primarily for purposes other than as a pesticide, NCEA has retained the responsibility for updating the assessment. In these instances, OPP is consulted and the outcome of the assessment generally represents a consensus opinion."

   One example of this unusual instance is the long ongoing IRIS assessment of the chemical ethylene oxide, which has both pesticidal and industrial uses. Because of the dual uses of the chemical, IRIS retains the authority to assess it, an agency source said during the last peer review of the draft assessment.

   In her analysis, Fenner-Crisp goes through the 193 pesticide compounds in the IRIS database and compares the toxicity estimates with any newer estimates that OPP has generated. She notes that of the 167 IRIS pesticide entries that are not up to date, "For 27 entries, the [non-cancer toxicity estimates, or RfDs] match, but the cancer calls do not . . . For 19 entries, the RfDs do not match, but the cancer calls do . . . For 121 entries, neither the RfD nor the cancer call match." 

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4. Senate Plans to Slash State Toxics Programs

   Mar 13, 2015 | Safer Chemicals, Healthy Families

   By Tony Iallonardo

   Opponents of the Senate’s Vitter-Udall chemical legislation introduced this week point to numerous flaws in the bill. Perhaps the most contentiously debated part is something called “preemption” which would slow or stop states from acting to control harmful chemicals. Just a few days after introduction of the bill, two state AGs are already speaking out.

   Preemption is chemical lobby priority numero unobecause only the states in recent years have managed to make headway in controlling some of the worst toxic chemicals. It’s why the chemical lobby rushed to endorse the bill.

   According to our friends at SAFER States, more than 150 state policies have been enacted to protect citizens from harmful chemicals. States have made critical progress to:define hazardous chemicals of greatest concern to vulnerable populationsdisclose the use of these chemicals in consumer productsban the worst-of-the-worst; andmove the marketplace and the nation towards safer alternatives.

   State officials speak out

   So it’s not surprising that state attorneys general are coming forward to warn that the bill will limit the ability of states to take action.

   Last week, the California attorney general’s general cousel was the first to weigh in with a detailed critique. Among his concerns is a “regulatory void” that would be created under the bill because it stops state action once EPA begins a slow motion process of up to seven years to control a dangerous chemical. One has to imagine somewhere, a room of chemical lobbyists has got champagne on ice in anticipation of a seven year pass to do what they will.

   States, who also do most of the toxics enforcement in this country, would be barred from passing laws identical to rules at the federal level. Our national director, Andy Igrejas, called that provision “a blatant attempt to reduce enforcement.”

   This week, the Massachusetts attorney general weighed in too, saying the Vitter bill “strays far from a bill that can adequately protect our citizens from the potential risks that may be posed  by certain toxic chemicals in commerce.”  The AG, Maura Healey, went on to say that while she supports federal chemical policy reform, the effort “cannot compromise the ability of states like Massachusetts to use our agencies’ expertise and experience to address the potential public health risks posed by some chemicals.”

   I’m just scratching the surface of the state rollbacks. Our friends at the Environmental Health Strategy Center have put together a detailed chart. To see it click here: FS – S.697 Preemption.

   For more on the weaknesses of the bill, read our recent blog packed with detail.

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Chemical Security News

5. Trouble for New Data Breach Bill?

   Mar 13, 2015 | The Hill - Cybersecurity

   By Julian Hattem

   New draft legislation to protect people after their data may have been stolen is running into some quick opposition on Capitol Hill.

   Mere hours after Reps. Peter Welch (D-Vt.) and Marsha Blackburn (R-Tenn.) unveiled their Data Security and Breach Notification Act on Thursday, a pair of key House Democrats is calling it a non-starter. 

   “Data breaches can create serious harm to consumers and businesses alike, and this bill does not provide solutions,” Reps. Frank Pallone Jr. (D-N.J.) and Jan Schakowsky (D-Ill.) said in a joint statement.

   “We have numerous concerns about the weakening of consumer protections overall, as well as the dilution of protections for customers of telecommunications and cable services.”

   Pallone is the top Democrat on the Energy and Commerce Committee and Schakowsky is the ranking member on its Commerce, Manufacturing and Trade subcommittee, which has jurisdiction over data breach issues.

   The early opposition may not be a total deathblow to the bipartisan bill, but it is certainly an indication that many Democrats are likely to rally against it.

   Lawmakers have repeatedly failed to pass new data breach laws, even as the rash of hacks at major banks, retailers and websites continues to dominate the news. 

   In part, the setbacks have been due to the fact that multiple congressional committees have jurisdiction in the area, which has sparked a series of Capitol Hill turf battles. At the same time, conservative lawmakers have raised fears about the government setting an overly rigid set of digital security standards that could actually weaken companies’ security, while Democrats have feared that any additional flexibility could weaken the consumer protections that already exist.

   The Welch and Blackburn bill would require companies who have been hacked to tell people within 30 days if their identity or financial information may have been stolen.  

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6. Chemical Facilities Are Making Themselves Less Attractive Targets For Terrorists

   Mar 13, 2015 | Chemical and Engineering News

   By Glenn Hess

   In the past year, more than 700 chemical facilities have been dropped from the government’s antiterrorism program for the sector because they are no longer considered “high risk” targets, new federal data show.

   A report from the Department of Homeland Security (DHS) indicates that 3,471 facilities are currently regulated under its Chemical Facility Anti-Terrorism Standards (CFATS) program, down from 4,199 facilities a year ago.
   

   Over the longer term, DHS says that more than 3,000 facilities have “voluntarily removed, reduced, or modified their holdings of chemicals of interest” since the program began in 2007 and are no longer regulated under CFATS.

   Chemical industry officials say the sharp decline in the number of regulated facilities shows that the security initiative is working as intended.

   “CFATS is driving facilities to reduce inherent hazards, relying on the company’s expert judgment to do so, and without transferring risk to some other point in the supply chain,” says William E. Allmond IV, vice president of government and public relations at the Society of Chemical Manufacturers & Affiliates, an industry trade association.

   “Thousands of facilities have changed processes or inventories in ways that, under DHS’s definition of high risk, no longer make them attractive targets to terrorists,” Allmond adds.

   CFATS requires facilities that make, use, or store threshold quantities of certain hazardous chemicals to assess their risks, develop site-security plans for DHS approval, and then put the security measures in place.

   The latest statistics also indicate that DHS has confirmed through on-site inspections that 1,600 of the 3,471 facilities have fully implemented their security plans.

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7. Chemical Safety Board Prevails in Deepwater Horizon Case

   Mar 12, 2015 | Fuel Fix

   By Jennifer A. Dlouhy

    A federal appeals court on Thursday affirmed the authority of government investigators to probe Transocean’s involvement in the 2010 Deepwater Horizon disaster.

   By a vote of 9-6, the New Orleans-based Fifth Circuit Court of Appeals rejected Transocean’s petition for a rehearing of its challenge to government subpoenas tied to the explosion of its drilling rig nearly five years ago.

   The move kept in place a lower court ruling affirming the Chemical Safety and Hazard Investigation Board’s power to investigate the incident, despite warnings from drilling contractors that decades of case law and precedents governing the offshore drilling sector hang in the balance.

   A federal district court ordered Transocean to comply with those subpoenas from the Chemical Safety and Hazard Investigation Board in April 2013.

   Although Transocean has since produced the documents, the drilling contractor continued fighting the ruling in federal court. Last September, a three-judge panel of the Fifth Circuit Court of Appeals upheld the district court’s ruling that the board could investigate.

   Read more: Agency can look at rig owner’s role in oil spill

   The appeals court’s decision Thursday to deny Transocean’s request for a rehearing before all of its judges could end a long-running dispute over the power the independent CSB has to investigate offshore accidents.

   It is unclear whether Transocean will take its legal challenge further with an appeal to the Supreme Court. A Transocean spokeswoman declined to comment.

   The company owned the Deepwater Horizon drilling rig that was working on BP’s failed Macondo well in the Gulf of Mexico when it blew out in April 2010. The resulting explosion killed 11 workers on the rig and unleashed the nation’s worst offshore oil spill.

   The Chemical Safety Board has been probing the blast, asserting that its focus is on the root causes of the explosion of the Deepwater Horizon rig and not the oil spill that followed. The distinction is key because the federal law that created the CSB asserts that the agency is not “authorized to investigate marine oil spills.”

   Transocean argued that Congress expressly limited the CSB’s authority to investigate accidental releases from “stationary” sources and that the Deepwater Horizon should not qualify because it was a floating, seagoing vessel, even if happened to be hovering above the Macondo well at the time of the accident.

   The International Association of Drilling Contractors supported Transocean’s view, arguing in a friend-of-the-court brief that allowing CSB to investigate an incident involving an offshore rig — despite the statutory limitation to inquiries involving “stationary” sources — could upset decades of precedent governing the offshore oil sector.

   Ruling in favor of the CSB “threatens the carefully constructed legal framework developed by this court over the past 55 years to deal with the myriad rigs that operate in the Gulf of Mexico,” the IADC argued. At risk, the IADC said, are drilling contracts and insurance programs that have been designed to comply with existing case law.

   Although a riser pipe connected the Deepwater Horizon to the Macondo well deep below, the IADC noted it otherwise was unconstrained by anchor chains or mooring lines when it was working at the site. Instead, the Deepwater Horizon’s dynamic positioning thrusters continually adjusted to the ocean’s movement to kept the rig suspended above the well.

   But the United States countered that “the Macondo drilling installation, as a whole, was a stationary source,” and the Deepwater Horizon drilling unit “was but one portion of the larger integrated drilling installation.”

   The stabilizing thrusters that kept the Deepwater Horizon in constant motion in a confined area over the Macondo well were used “so that it can perform a stationary activity,’ the Justice Department said, noting that in this case, the rig remained in place for about two months.

   A lawyer representing Transocean in the case, David Baay with Sutherland Asbill & Brennan, said the ruling creates an opening for the CSB to examine other offshore accidents.

   “The Chemical Safety Board — an agency with no rule making or enforcement authority, and one that struggles to survive from year to year — will now be emboldened to investigate any marine spill on an offshore rig that might possibly have a related, unanticipated hazardous emission,” Baay said. “That means that any offshore incident of significance is likely to face one more federal agency among an already crowded field.”

   There were numerous probes into the 2010 Gulf oil spill, including a presidential commission and the National Academy of Sciences. The Interior Department, which regulates offshore oil and gas development, also collaborated with the Coast Guard on an investigation.

   The Chemical Safety Board is nearing the end of its own inquiry. The agency released the first half of its report into the disaster last June; two more volumes are under internal review and could be published later this year.

   Although Thursday’s ruling delivered a victory to the CSB, the agency itself has been battered by allegations of mismanagement and misuse of private email for government purposes. During a March 4 hearing, lawmakers on the House Oversight and Government Reform Committee bluntly urged Board Chairman Rafael Moure-Eraso to resign before his term ends in June.

   Republican Sens. James Inhofe of Oklahoma and Michael Rounds of South Dakota on Thursday asked President Barack Obama to seek Moure-Eraso’s “immediate resignation.”

   “There is no doubt the CSB serves a critical public safety role,” they said in a letter to the president. But “the CSB can no longer continue to operate credibly under this leadership.”

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Energy and Environment News

8. Union, Shell Reach Tentative Agreement to End Strike

   Mar 13, 2015 | E&E - Energywire

   By Pamela King and Nathanial Gronewold

   Negotiations between the United Steelworkers (USW) and the refining industry yesterday reached a tentative close, settling a nearly six-week worker strike affecting more than a dozen U.S. refineries.

   The union's new four-year contract with Shell Oil Co., which has been bargaining on industry's behalf, calls for immediate review of staffing policies, workload assessments, personnel safety and maintenance practices.

   "We salute the solidarity exhibited by our membership," USW International President Leo Gerard said in a statement. "There was no way we would have won vast improvements in safety and staffing without it."

   Over the course of negotiations, Shell has said that the talks hinged on the issue of using contract workers for routine maintenance work -- not safety or wages (EnergyWire, Feb. 23).

   "The central issue standing in the way of a settlement is not safety or fatigue, nor is it even about healthcare or wages, as the union claims. Those things are important to all of us, and it's important to share that we have engaged in productive negotiations regarding each of these issues," the company wrote in a Feb. 21 update. "The central issue of the USW's national leaders is their continued demand that Shell replace routine maintenance contractors with USW-represented employees."

   Aside from Shell, other affected companies vehemently rejected USW's claims that improving safety at U.S. refineries was the principal aim. The union argues that routine use of temporary contractors for plant maintenance places full-time union-represented employees at risk of injury or fatality. Refining companies insisted that the union's true aim was to grow its ranks by requiring contractors be replaced with full-time workers instead.

   "I am personally troubled by the repeated misrepresentations made by the USW in the media regarding safety," LyondellBasell Industries NV Executive Vice President Kevin Brown said in a letter to employees.

   This month will mark the 10th anniversary of the fatal Texas City refinery explosion, which killed 15 employees and injured more than 100.

   The agreement between Shell and USW also calls for annual raises and maintenance of the current health care plan cost-sharing ratio.

   "Preserving 'retrogression' clauses in our agreements was also an objective established by our policy conference, and we accomplished that, too," said USW International Vice President Gary Beevers. "There was no way we could turn our backs to the accomplishments of prior contract negotiations."

   The deal has been approved by USW's lead negotiators and the National Oil Bargaining Policy Committee. It awaits discussion at local bargaining tables.Strike impact

   Affecting 15 plants nationwide, the strike never came close to raising the sort of alarms that sent federal negotiators intervening in the West Coast port slowdown organized by the longshoremen's union. Companies said about 6,500 workers nationally were ordered to strike by USW.

   Though striking workers made their presence known at downtown demonstrations and picket lines in front of plants, the labor action was relatively unnoticed in Houston as it had little if any impact on pump prices, traffic or the refining industry's production volumes (EnergyWire, March 11).

   Companies affected by the strike said they worked with the union to turn over operations safely. Management and other staff kept operations going. BP PLC said it even put former employees to use to keep its affected refineries operating.

   Refining companies also reported that some workers who had been striking left the picket lines to return to work (EnergyWire, March 4). Reports of harassment and intimidation by striking union workers against some of those crossing the lines prompted LyondellBasell to file a complaint with the National Labor Relations Board against USW.

   Texas is a "right to work" state, meaning legislation leaves union activity legal but also makes it optional, forbidding unions from requiring membership and dues payments as a condition of employment. Also, at least 3,000 people have lost their jobs across Texas as a result of the recent plunge in crude oil prices. These forces may have weakened the union's leverage during negotiations.

   At one point, rumors circulated that some refining companies may move to fire USW-represented employees. Motiva Enterprises LLC CEO Dan Romasko moved swiftly to shoot down this rumor in an open letter, stating flatly, "I can assure you that it is false," and pledging to work toward "a mutually satisfactory agreement."

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9. Oil Execs Push White House on Crude Export Ban

   Mar 13, 2015 | The Hill - E2 Wire

   By Timothy Cama

   Oil drilling executives met with White House and Capitol Hill officials this week to lobby for the United States’ ban on exporting crude oil to be lifted.

   About a dozen executives who are part of the ad hoc group Producers for American Crude Oil Exports (PACE) came to Washington, D.C., this week and met with Brian Deese, a top adviser to President Obama, on Wednesday, Bloomberg Business reported, citing people familiar with the meetings.

   The oil drillers want the Obama administration and Congress to do what it can to ease the oil export ban, enacted in 1975 amid the Arab oil embargo.

   George Baker, PACE’s executive director, confirmed to Bloomberg that members of the group did a fly-in this week, but did not disclose specific meetings.

   “We’ve had a series of very productive meetings with senators from both parties and the administration and look forward to continuing those conversations in the months ahead,” he told Bloomberg.

   The group said 11 of its 16 member companies sent executives, including Marathon Oil Corp. chief Lee Tillman, Chesapeake Energy Corp. chief Doug Lawler and Occidental Petroleum Corp. chief Steve Chazen.

   They spoke with administration and legislative officials on the oil market, recent job cuts in the industry, oil production levels and other issues, PACE told Bloomberg.

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10. Inhofe’s Misleading Statements on Carbon Emissions Rule

    Mar 13, 2015 | The Washington Post

    By Michelle Ye Hee Lee

    “EPA also intends to pursue a legislative proposal for an additional $4 billion in mandatory spending for EPA to enforce its climate change regulations … which 32 states oppose and will result in double-digit electricity price increases in 43 states.”

    –  Sen. Jim Inhofe (R-Okla.), Senate Environment Committee hearing on Environmental Protection Agency budget, March 4, 2015

    Inhofe, chairman of the Senate Environment Committee, is a vocal skeptic of scientific research that climate change is man-made. He also has been critical of the EPA’s Clean Power Plan, which proposes new regulations to limit coal-plant carbon emissions.

    Proponents of the Clean Power Plan, a flagship regulatory proposal of the Obama administration, say it will improve public health and the United States would set an example for other countries to curb carbon emissions. Opponents say the plan will have minimal impact on the environment while driving up costs for consumers. The Fact Checker obviously takes no position on the proposal.

    Inhofe said 32 states oppose the EPA’s proposal and that it will result in double-digit electricity price hikes in 43 states. He repeated the 32-state figure in a subsequent hearing. Is he correct on these two points?The Facts

    The Clean Power Plan was introduced in June 2014 as a part of President Obama’s Climate Action Plan. It proposes to cut carbon emissions from existing power plants 30 percent below 2005 levels by 2030.

    Inhofe’s staff provided a list by the American Coalition for Clean Coal Electricity of states where governors, attorneys general, legislatures, public utility commissions and departments of environmental quality oppose the rule. The list comprises 32 states, but the actual number of “official” opponents in those states is smaller. There are 15 governors who wrote a September 2014 letter to Obama that the EPA is overstepping its authority. Of the 22 attorneys general in this list, 13 have joined a federal lawsuit against the EPA challenging the rule. State lawmakers in 18 states passed laws or non-binding resolutions against the rule. State officials opposing the rule have expressed frustration that they do not have enough flexibility to comply with the proposal, or that it would burden states.

    The 32-state figure does not capture the split in some states, where officials are working on a compliance plan despite broader efforts in their states to challenge the rule. In Kentucky, for example, the attorney general is suing the EPA but the Democratic governor, utilities and environmental groups are are working on a plan to meet EPA requirements while keeping electricity rates low.

    Here’s a breakdown:States with opposition from all five agencies: 4States with opposition from either the governor or attorney general: 20States with opposition from both the governor and attorney general: 11States with no stance from public utility commission or departments of environmental quality, but with opposition from governor, attorney general and/or state legislature: 10

    Much of the opposition against the Clean Power Plan is along party lines, and it is difficult to find prominent sitting Republican state leaders who support it. But rule-making agencies are less likely to vocally oppose it, in part because they are responsible for carrying it out if the legal and political challenges fail.

    As for price hikes, Inhofe’s staff cited a study commissioned by industry groups that oppose the Clean Power Plan. It found that if every state complied, energy prices would increase between 9 to 18 percent in every state (with double-digit increases in 43 of them), partly because of up-front utility costs from investing in energy efficiency programs. Inhofe’s aides noted that this study, unlike the EPA’s analysis, considers broader impacts beyond the energy sector.

    Clean Power Plan proponents criticize that study, saying it inflates the costof energy efficiency programs by at least 63 percent, and as high as 150 percent. They say it ignores long-term benefits of energy efficiency programs that ultimately could drive actual energy bills down. It may cost more to produce cleaner energy, but consumers would pay less in bills because less energy would be generated, proponents say. (The Fact Checker previously gave Four Pinocchios to a claim by the National Mining Association that electricity prices will “nearly double” due to clean coal technology.)

    The EPA says the benefits ($76 billion) by 2030 will far outweigh the costs of complying with new regulations ($9 billion). The agency estimates electricity bills decrease by 8 percent and Americans would save about $8 on average on their monthly residential bills. (Clean energy advocates say the EPA’s calculations are actually conservative.)

    It’s impossible to make accurate cost projections because the rule is not yet final, and states will decide how to meet their emissions goal. Costs can vary depending on state, regional or local policymakers’ decisions.

    Resources for the Future, an independent environmental research group, found that electricity prices can range from double-digit increases to as modest as one to two percent on average. “Considerable uncertainty surrounds the structure of future regulations for existing power plants under the (Clean Air Act), but it is possible that a market-based and reasonably cost-effective approach will emerge,” its study says.

    Emissions and power plants can cross state boundaries, so states can coordinate with each other to lower costs. “The plan’s considerable flexibility regarding how and where emission reductions can occur is an important feature because it promotes cost-effectiveness. Whether states will fully capitalize on this flexibility is an open question,” a group of environmental economists wrote in an article published by the American Association for the Advancement of Science.The Pinocchio Test

    The Clean Power Plan is a highly politicized issue, and Inhofe’s claim reflects views of many Republican lawmakers and industry groups opposing the plan. There are many competing studies, and whether one is more credible than another largely depends on where one stands on climate change or the Clean Power Plan.

    Inhofe’s count of 32 states is an aggregate count of the various governors, attorneys general, state legislatures, public utility commissions and departments of environmental quality that have expressed opposition. When you break it down by states, the 32-state figure is not as dramatic as it sounds — there are smaller groups of governors and attorneys general who have banded together to challenge the proposal.

    His claim that electricity prices will increase by double digits comes from a study commissioned by industry groups that oppose the Clean Power Plan. But the claim is misleading. It assumes the worst-case scenario, and does not consider how states would adopt emissions regulations individually or as a region. A lot of the costs can be driven down by state, local and regional policymakers, and some of them already are working with the EPA to figure out cost-effective plans. This is a highly technical topic with many caveats yet to be sorted out.Two Pinocchios

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11. Clean Power Plan Bills Generate Debate Across the Southeast, Midwest

    Mar 13, 2015 | E&E - Energywire

    By Jeffrey Tomich and Kristi E. Swartz

    As U.S. EPA continues to work on a final version of the Clean Power Plan for release later this summer, conservative lawmakers in more than a dozen states are trying to ensure they get the final say on how their state responds to it, citing concerns about electric rates, reliability and jobs.

    A measure signed by West Virginia's governor this month would require the Legislature to approve of the state's plan to cut carbon emissions before the plan is submitted to EPA (ClimateWire, March 5). Similar bills requiring legislative approval or review are winding their way through committees in states, especially throughout the Southeast and Midwest.

    For the most part, the bills are referendums on the Obama administration's plan to reduce greenhouse gas emissions from the power sector. And most are based on model legislation put forward in December by the American Legislative Exchange Council.

    E&E's Power Plan Hub keeps you up to date on the latest national and state-level developments on EPA's greenhouse gas regulations for the power sector. Go to E&E's Power Plan Hub.

    In Florida, a House committee hearing yesterday on a similar bill proposed by the co-chairman of ALEC's state chapter went even further, evolving into a partisan debate over the health and environmental risks of climate change.

    The bill, H.B. 849, directs the state's Department of Environmental Protection to submit Florida's compliance plan to the Legislature before sending it to EPA.

    Sponsor Rep. John Wood, a Republican from Winter Haven, told committee members he's concerned about the cost to electric ratepayers and wants to make sure the Legislature is involved in forming the Sunshine State's plan for meeting EPA's targets.

    A Democratic lawmaker quizzed Wood about the bill, specifically whether he had taken into consideration the cost to public health from air pollution.

    "Now if you consider CO2 to be a pollutant, then everybody zip up their mouths and don't exhale for the rest of the meeting because you are polluting the air," Wood answered. "God gave us CO2 to grow plants, to exhale, all of that."Critics bash bills as 'duplicative'

    Clean energy advocates and other critics of the bills are pushing back, calling the measures redundant, expensive and unnecessary.

    Aliya Haq is tracking the Clean Power Plan bills as climate change special projects director for the Natural Resources Defense Council. By her count, such legislation has died or stalled in seven states, including Mississippi. Bills are still pending in about a dozen others.

    Haq and other critics of the proposals say they do nothing to help states that are being given maximum flexibility by EPA to come up with specifically tailored strategies to meet the carbon reduction targets.

    "It's odd because presumably the conservative legislators are trying to lambast the EPA, but really they're really shooting their states in the foot," she said.

    In some states, environmental regulators are actively opposing the bills, noting that compliance plans are being developed with extensive input from a wide range of technical experts: regulators, utilities, grid operators and economists.

    Minnesota's Pollution Control Agency, for instance, initiated a work group of more than 130 people from 64 organizations -- utilities, the state Department of Commerce, the regional grid operator, the Public Utilities Commission, the Chamber of Commerce and others -- to examine issues associated with implementation of a plan to cut carbon emissions, Greta Gauthier, the agency's legislative director, told a state House committee Monday.

    "The bill's insertion of a legislative process on top of that sounds duplicative," she said, warning that the measure bill could be a disincentive for groups because of a risk that the Legislature could easily invalidate their work.

    What's more, bills also increase the cost to states and bring the threat of the EPA imposing a federal implementation plan (FIP) on states that don't develop an approved plan on their own.

    "Whether we all want to get FIP-ped is a question going forward for all of us," said J. Drake Hamilton, science policy director for Fresh Energy, a St. Paul, Minn.-based clean energy advocacy group.

    In the end, the committee passed the bill (H.F. 333), which would give the Minnesota Legislature veto power over the implementation plan developed by the state's environmental regulators.Bill supporters want states to have final say

    Rep. Jim Newberger, who represents the district northwest of the Twin Cities that's home to the Midwest's largest coal-burning power plant, Xcel Energy's 2,400-megawatt Sherburne County generating station, is the bill's lead author.

    He said the bill gives elected officials the final say on the state implementation plan and "prevents a handful of agency workers directing the future of Minnesota."

    Two utilities, the state's electric cooperatives and the Chamber of Commerce all testified in favor of the measure, as did the coal lobby. Whatever plan is sent to EPA, they said, would fundamentally reorder how power plants are dispatched in the state -- a weighty decision that should be left to an elected body.

    "This is energy policy," Marc Ourada, central region vice president for the American Council for Clean Coal Electricity, told committee members. "Energy policy is appropriately set by the Legislature and policymakers and not through a bureaucratic process and a SIP [state implementation plan] forced upon the state by the EPA."

    Bills filed in the Missouri House and Senate wouldn't give the Legislature veto power over an implementation plan. But they would require a detailed cost-benefit analysis be submitted to the governor and leaders of both legislative chambers at least a month before the plan is submitted to EPA.

    Dan Hutton, legislative director for state Sen. Gary Romine, the author of one of the bills (S.B. 142), said the intent is to provide additional data about the cost of implementation.

    Similar reports are required when the Missouri Department of Natural Resources develops a new rule or compliance plan, he said. But they are typically done after submission to EPA.

    "It's a transparency piece," Hutton said.

    Ameren Missouri, the state's largest electric utility, and electric cooperatives testified in support of the bill during a hearing last month, as did the state Chamber of Commerce. But not without concerns.

    Warren Wood, an Ameren Missouri vice president, said the St. Louis-based utility wants to be sure the process doesn't overwhelm the state Department of Natural Resources to the point that it triggers delays and invites EPA to impose a federal plan.

    David Weiskopf, an attorney for NextGen Climate, believes that's exactly what S.B. 142 and other bills like it across the country are meant to do -- create unnecessary red tape to delay implementation of rules to slash greenhouse gas emissions.

    "This bill puts additional strains on public resources that should be put toward implementing a plan," he said.

    There's no cost data yet for the Missouri legislation. But the Minnesota bill would come with a $937,000 price tag for the 2016-17 biennial -- a figure challenged by Republican supporters. Similar legislation in Kansas would cost the state $400,000 to $500,000 to hire consultants, according to a fiscal note.

    The Kansas bills would require a joint investigation by the Kansas Department of Health and Environment and utility regulators to determine the cost of re-dispatching power plants. They would also require approval from a special legislative committee and prohibit participation in an organized carbon emission-trading market without specific statutory authority.Some bills look to kill the rule

    In addition to bills requiring legislative approval or review of Clean Power Plan strategies, lawmakers in states such as Georgia have filed resolutions urging withdrawal of the proposed rule.

    "I'm tired of the federal government putting regulations on energy companies that are really not attainable ... without a huge amount of money being invested, and that's going to be passed on to the ratepayer," said Sen. Brandon Beach of Alpharetta, an Atlanta suburb, who filed a resolution, S.R. 449, this week.

    Beach said he's frustrated that EPA isn't crediting Georgia for work done so far to cut emissions by 30 percent and building two nuclear reactors. His criticisms mirror those of Georgia Power and state regulators, as well as South Carolina and Tennessee, which also are adding more carbon-free nuclear generation.

    In some states, measures requiring legislative review of state implementation plans have also given rise to a bigger debate over separation of powers. State regulators tasked with submitting plans to EPA are generally appointed by governors, leaving some to question whether lawmakers should be allowed to have the last word on whether a plan is submitted.

    Amanda Garcia, a staff attorney with the Southern Environmental Law Center, said a billin Tennessee based on the ALEC model legislation presents just such an issue.

    "It has the typical problems that you're seeing in the legislation, namely interfering with executive authority to design and implement a plan," Garcia said.

    The same argument was raised in Minnesota, where ideological differences between the state's Democratic governor and the Republican-controlled committee were on display.

    Republicans at Monday's committee meeting cited comments last summer by Gov. Mark Dayton, who challenged state business leaders to figure out a way to wean the state off coal. Democrats, meanwhile, questioned what they saw as efforts to shield the coal industry.

    "Do you believe it's appropriate to inject politics into science?" state Rep. Tim Mahoney (D) asked the bill's sponsor.

    "That's a loaded question," Newberger answered. "In our day and age, it's impossible to separate politics and science."

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12. Industry Urges EPA To Resolve Oil, Gas NSPS Suit Ahead Of Methane Rule

    Mar 13, 2015 | InsideEPA

    By Bridget DiCosmo

    Oil and gas producers are opposing EPA's bid to keep in abeyance litigation over the agency's 2012 new source performance standards (NSPS) for the sector, arguing that EPA needs to first resolve litigation over the rules before it issues its pending proposal to revise the NSPS and impose first-time methane emissions limits on industry.

    In a March 10 filing with the U.S. Court of Appeals for the District of Columbia Circuit, the Western Energy Alliance -- representing many independent oil and gas companies -- says, “The continued abeyance of the NSPS litigation while Respondent EPA promulgates a new methane rule would deny the Alliance due process and the opportunity for timely relief” from various alleged flaws in the existing NSPS.

    “The risk of such prejudice may exist for other petitioners, but it is particularly acute for the Alliance given that, over two years ago, it raised significant concerns about deficiencies in Respondent’s apparent regulation of methane emissions from the oil and natural gas sector,” the group argues. “Now, Respondent appears to be on the cusp of issuing a new methane rule for the oil and natural gas sector without this Court having had the opportunity to address the Alliance’s concerns about that very issue,” according to its filing.

    The group is pushing back on EPA's Feb. 27 motion asking the D.C. Circuit to continue keeping consolidated litigation over the 2012 NSPS, American Petroleum Institute v. EPA, in abeyance until July 17. EPA cited as one reason for the extension its plan to issue this summer a rule to set first-time limits on the greenhouse gas methane from oil and gas operations, which it would achieve through a revision to the NSPS.

    In the motion to continue abeyance, EPA said most of the petitioners in the suit either did not oppose it or took no position on it, but that Western Energy Alliance was still weighing the request.

    But in the recent filing, the group now says that EPA “has not engaged in any discussions with the Alliance or its counsel regarding its anticipated plans for the proposed methane rule. And aside from what little the Alliance can glean from Respondent EPA’s opaque public statements on the matter, the Alliance has no idea what those anticipated plans are. As such, the Alliance cannot concede that a further extension of the abeyance in the NSPS litigation is necessary or that it will not unduly and irreversibly prejudice the Alliance’s interests in timely judicial review.

    Reconsideration Petition

    In addition to filing suit over the 2012 NSPS, the Western Energy Alliance filed an Oct. 15, 2012, petition for administrative reconsideration with EPA seeking changes to the final regulation.

    The group claimed that EPA failed to justify that the final rule included controls that the agency said would reduce methane, such as reduced emission completion controls for hydraulically fractured wells, though EPA had not formally assessed whether an emissions standard for methane was needed. The 2012 standard primarily targeted volatile organic compounds (VOC) but touted reduction of methane as a “co-benefit” of the VOC controls.

    However, the Western Energy Alliance argued that, “The Final Rule places the cart before the horse by purporting to reduce methane emissions before the Agency has even collected the necessary data about those emissions,” the petition said, arguing that a rule based on inadequate data is by definition arbitrary and capricious.

    In the motion opposing an abeyance extension, the group argues that EPA’s failure to close the administrative record on the 2012 NSPS before starting a new, distinct rulemaking “may be tantamount to the denial of relief altogether,” citing Environmental Defense Fund v. Hardin, a 1970 D.C. Circuit case in which the appeals court found that administrative inaction that has the same effect as denial of relief does not preclude judicial review.

    At press time the D.C. Circuit had not ruled on the abeyance extension request. The court is also hearing a separate lawsuit over EPA's related national emissions standards for hazardous air pollutants (NESHAP) also issued in 2012, but has granted an unopposed request to extend abeyance in that litigation through Sept. 16.

    Legal Challenges

    Meanwhile, a handful of energy groups -- including the Western Energy Alliance -- have separately filed suits in the D.C. Circuit over EPA's recent final rule reconsidering provisions of the 2012 NSPS, seeking to preserve their ability to pursue future litigation as the agency gears up to issue another reconsideration proposal.

    American Petroleum Institute, Texas Oil and Gas Association, Gas Processors Association, Independent Petroleum Association of America, state oil and gas groups and the Western Energy Alliance Feb. 27 filed petitions for review in the D.C. Circuit seeking review of the agency's Dec. 31, 2014, reconsideration rule.

    The rule was aimed at addressing a limited set of issues, including those concerning well completions and storage tanks, and an earlier reconsideration rule issued in September 2013 addressed industry concerns related to implementation of storage vessel provisions.

    Now, EPA plans to address concerns over the definition of “low-pressure gas well” in the rule, which identifies wells for which there is greater flexibility on the control requirements, according to the agency's recently released Action Initiation List of rulemakings launched in January. The agency intends to issue a proposed rule within the next 12 months to address concerns raised over the definition, the list says.

    EPA took comment through Aug. 18, 2014 on an alternate definition of low-pressure gas well, responding to concerns that its earlier language was unnecessarily complicated and could pose technical issues for smaller operators. EPA’s final rule defined low-pressure gas well to indicate a well with reservoir pressure and vertical well depth “such that 0.445 times the reservoir pressure (in psia) minus 0.038 times the vertical well depth (in feet) minus 67.578 psia is less than the flow line pressure at the sales meter.”

    Industry groups argued that the definition was based on sparse data and would exclude many wells in formations historically considered to have low pressure. 

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13. Reversing Position, EPA Says 'Flexible' Air Permitting Will Not Avoid NSR

    Mar 13, 2015 | InsideEPA

    By Stuart Parker

    EPA is defending Texas' "flexible" Clean Air Act permit program from critics' renewed legal attack that claims the program allows facilities to avoid triggering potentially stringent new source review (NSR) requirements, a reversal of the agency's position several years ago that said the program could allow some NSR circumvention.

    Environmentalists have long complained about the flexible permit program, which allows industrial facilities to increase emissions from some emissions points so long as their whole plant complies with an overall cap. Advocates say it allows facilities to illegally circumvent NSR permit requirements for "major" industrial sources, avoiding imposition of tough pollution controls that would otherwise be required under the NSR program.

    Major sources in this context are those emitting 100 tons per year (tpy) or 250 tpy or more of pollution, depending on the pollutant. EPA previously agreed with the claims that the flexible permits program could circumvent NSR, and in 2010 issued a rule to disapprove the program, years after Texas introduced it.

    EPA at the time claimed the language of Texas' program was ambiguous as to whether major sources could use the program to skirt NSR, and hence avoid installing expensive pollution controls.

    However, the U.S. Court of Appeals for the 5th Circuit in a 2012 ruling in Texas v. EPA vacated EPA's approval at industry's urging, finding that the program by its terms is limited exclusively to minor sources.

    In response, EPA in July finalized an approval of a revised version of the program, receiving assurances from the Texas Commission on Environmental Quality -- the state agency with delegated federal air law permitting power -- that the flexible permit program cannot be used to avoid major source NSR.

    Environmentalists then filed suit over EPA's approval, and their pending 5th Circuit suit Environmental Integrity Project, et al., v. EPA reiterates their long-running concerns about Texas' program.

    Environmentalists' Concerns

    Although EPA in the prior litigation claimed there was ambiguity in Texas' rules about some sources circumventing NSR, environmentalists now say say there is none. The program clearly applies to both major and minor sources, they say, and contravenes major source NSR requirements on several grounds.

    For example, in a Jan. 9 brief, environmental groups say that the program applies an overall cap on allowable emissions, not actual emissions, and that this could allow actual emissions to rise above the major source NSR threshold.

    Plant-wide emissions caps are based on maximum possible emissions from emission sources, not historical actual emissions which are typically much lower, environmentalists argue. EPA in a federally-approved program applying similar overall emissions caps, called plant-wide applicability limits, requires that caps be set using historic actual emissions, to avoid the possibility of exceeding NSR limits.

    Also, environmentalists argue in their brief, the Texas flexible permit program does not allow the necessary public notice and comment opportunities for plant modifications.

    Environmentalists argue that Texas' definition of "modification" is problematic, as it does not deem a modification to have occurred for the purposes of NSR unless the flexible permit emissions cap is exceeded -- regardless of whether the federal NSR cap is exceeded. An environmental source previously told Inside EPA that definitional differences between EPA and Texas over what constitutes a "source" and what is a "facility" confuse this issue.

    In their brief, environmental groups say that because of these issues, "the flexible permit program straightforwardly eliminates certain key regulatory requirements of the federal Clean Air Act" and EPA must therefore disapprove it.

    The groups insist that "Major sources, including large oil refineries and petrochemical plants, have had and continue to hold flexible permits," including Exxon Mobil's huge Baytown refinery.

    DOJ's Brief

    The Department of Justice (DOJ) in a March 2 brief, however, says that "EPA reasonably approved the Flexible Permit Program as a minor New Source Review revision" to the Texas state implementation plan (SIP) for air law implementation. To support its position that the permit program is permissible, DOJ in the brief cites the 5th Circuit's previous finding that the "Flexible Permit Program does not allow Major NSR evasion because it affirmatively requires compliance with Major NSR."

    "In the Final Rule, the EPA repeatedly articulated, for the benefit of the public and future permittees, that the Program is a minor NSR program and cannot be used to evade Major NSR requirements," DOJ says.

    DOJ further explains that, "facilities covered by a flexible permit can include major sources and sources undergoing major modifications. Because facilities covered by a flexible permit have the potential to undertake activities subject to Major NSR requirements, the Program requires the owner or operator to continue to comply with Major NSR regulatory provisions when taking actions subject to Major NSR requirements."

    Further, the public participation provisions of Texas' SIP are consistent with federal requirements, DOJ says, despite environmentalists' claims to the contrary. 

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14. EPA Sends Final 'Affirmative Defense' Air Rule To OMB

    Mar 12, 2015 | InsideEPA

    EPA has sent for White House Office of Management & Budget (OMB) review its final rule to scrap provisions in many states' air plans that give industry an “affirmative defense” against liability for Clean Air Act violations, a plan environmentalists support but that critics say ignores states' discretion to offer the defense to industries.

    According to OMB's website, EPA sent the final version of the rulemaking for pre-publication review March 11 ahead of a May 22, 2015, settlement agreement deadline for issuing it. OMB review typically takes 90 days but can take more or less time. EPA says it projects publishing the final rule in the Federal Register by June.

    The rule will mark EPA's response to a petition filed by the Sierra Club in June 2011 that asked the agency to force changes to many state implementation plans (SIPs) that included the affirmative defense, which allows industry under certain circumstances to avoid liability for exceeding some Clean Air Act limits.

    Sierra Club has repeatedly said that it is unlawful for EPA to allow states to use the defense in SIPs -- blueprints for complying with federal air programs -- following the U.S. Court of Appeals for the District of Columbia Circuit's unanimous April 18 ruling in Natural Resources Defense Council (NDRC) v. EPA that said the affirmative defense exceeds EPA's air law authority and the agency cannot include it in its rules.

    EPA has interpreted the ruling in NRDC to mean that it must also force states to remove the affirmative defense from federally-approved SIPs. In September, EPA issued a proposed version of its affirmative defense rule, in which it took comment on a “SIP Call” that would force removal of the defense from many states' SIPs.

    Environmentalists have offered support for the proposed rule. “Sierra Club supports this action because the Sierra Club stands with our allies and members across the country fighting environmental injustices and corporate abuses of power, and this rule will go a long way in helping protect those that need it most,” said Sarah Hodgdon, Sierra Club's director of conservation, at an Oct. 7 EPA hearing on the rule.

    The affirmative defense proposal supplements an earlier proposed rule in which the agency said it would scrap provisions from 36 SIPs that exempted pollution spikes during startup, shutdown and malfunction (SSM) from air limit violations. The D.C. Circuit in a 2008 ruling vacated the SSM defense as unlawful under the air law, prompting the original EPA SIP rulemaking in 2013. The agency then developed the affirmative defense policy as a more limited defense in situations where facility malfunctions lead to emissions spikes.

    But the D.C. Circuit in its April ruling vacated that defense as also violating the air law, prompting EPA to issue the supplemental proposal that would scrap affirmative defenses from 17 SIPs. The final rule that EPA will issue once it clears OMB review will address both SSM and the affirmative defense.

    But major industry groups and several states are opposing the plan, saying in their written comments on the proposal that it ignores states' discretion to write the defenses into their SIPs.

    For example, several states -- including Arizona and Georgia -- in comments said that the affirmative defenses states offer can comply with the Clean Air Act and therefore should be allowed in SIPs.

    Arizona argued that it “carefully” reviews each claim for an emissions limit violation defense, and says it would face a resource burden if it had to revise its SIP to eliminate the affirmative defense.

    Luminant Generation Company also echoed other industry group's criticisms of the rule, saying in comments that EPA's plan is based on restrictions on the agency's ability to allow the defense, not SIP provisions, “which may properly vary with the State's discretion so long as air quality standards are maintained.”

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15. Carbon Emissions Stop Growing Globally

    Mar 13, 2015 | The Hill - E2 Wire

    By Timothy Cama

    The growth in global carbon dioxide emissions stalled in 2014 for the first time in the 40 years, and the International Energy Agency (IEA), which has been tracking it, said the slowdown wasn't connected to an economic downturn.

    The IEA said the news shows promise that economic progress does not necessarily have to be tied to increasing greenhouse gas emissions, as it has been for decades.

    “This gives me even more hope that humankind will be able to work together to combat climate change, the most important threat facing us today,” Fatih Birol, IEA’s chief economist, said in a statement from the organization.

    Global emissions were 32.3 billion metric tons, or the annual emissions of about 6.8 billion American cars, the same volume as 2013. Meanwhile, the world’s economy grew by about 3 percent.

    The IEA attributed the carbon stall to shifts that China and major developed economies in the Organization for Economic Cooperation and Development (OECD) undertook last year.

    Specifically, China made a conscious push toward more renewable energy, while OECD countries focuses on various efforts toward sustainable growth, like renewables and energy efficiency.

    “This is both a very welcome surprise and a significant one,” Birol said in the statement.

    Birol added that the news should serve to encourage United Nations negotiators this December in Paris when they finalize a global agreement to reduce greenhouse gases.

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16. Senate Dems: GOP Needs Climate Change 'Day of Reckoning'

    Mar 13, 2015 | The Hill - Floor Action

    By Jordain Carney

    Senate Democrats slammed Republicans Friday over their climate change tactics. Senate Minority Leader Harry Reid (D-Nev.) and Sen. Sheldon Whitehouse (D-R.I.) said Republicans have "no plan" to tackle climate change.  "Republicans in Congress have no plan to address climate change and cannot even bear to utter the words. Even worse, the majority leader [Mitch McConnell] wants to impose on states his irresponsible plan for congressional action," the Senate Democrats wrote in a USA Today op-ed. "The Republican Party in Congress has become the political arm of the fossil fuel industry."  Reid and Whitehouse were among Senate Democrats who blocked an override of President Obama's veto of the Keystone XL pipeline earlier this month. Republicans have pledged that they will try to attach the pipeline to a larger bill.  The Democratic duo compared denying climate change to tobacco companies that suggested their products wouldn't make people sick.  "There is a massive political and public relations operation being run by the fossil fuel industry to create false doubt and plant phony questions to delay their day of reckoning so they can keep making money," they said. "It's the same game, and in many cases the same people, that Big Tobacco used for years to raise doubt that its products make people sick." Reid and Whitehouse said that Republicans are increasingly out of touch with Americans' views on climate change.  More than 80 percent of Americans believe that climate change is at least partly caused by human activity, according to a poll by Stanford University, The New York Times, and Resources for the Future released earlier this year.  "As the evidence becomes clearer and clearer, and the American people move farther away from the deniers, the Republican Party must have its own day of reckoning, when it will finally again be able to address — or even mention — climate change," the senators said. "That day can't come too soon."

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Transportation News

17. Canada Steps Ahead of U.S. With Rules for Hauling Crude by Rail

    Mar 13, 2015 | E&E - Energywire

    By Blake Sobczak

    Canadian regulators have upgraded standards for tank cars hauling crude oil and ethanol, pulling ahead of parallel rules under consideration in the United States.

    Transport Canada's proposed TC-117 tank car would include thicker steel, full-height head shields and tougher bottom outlet valves compared with older models, according to aregulatory update posted online Wednesday. All of those elements are meant to help maintain the integrity of the cars in the event of a crash.

    Spokeswoman Mélany Gauvin said the proposed requirements are still subject to final approval. But the latest proposal offers the clearest indication yet of how North American regulators plan to address tank car concerns raised by a growing number of oil and ethanol train derailments.

    Two oil trains recently crashed within weeks of each other in the same area of Ontario. Quebec witnessed a devastating crude-by-rail derailment and explosion two years ago that killed 47 people in the town of Lac-Mégantic.

    Canada is seeking to bar the oldest tank cars from hauling crude by May 1, 2017, and has already forced nearly 3,000 of the riskiest type DOT-111 tank cars off the tracks (EnergyWire, Dec. 4, 2014).

    Under the latest proposal, tank cars built since improved voluntary standards took effect in 2011 would have another decade before being scrapped or forced out of flammable liquids service.

    All new tank cars would need to have 9/16th-inch-thick steel shells -- bulkier than current requirements and a sliver of an inch wider than what the oil and rail industries had lobbied for in the United States.

    The U.S. Pipeline and Hazardous Materials Safety Administration, the agency that crafted a "comprehensive" oil-by-rail rule now under review at the White House, could come out with tank car standards that don't match the TC-117.

    But industry observers say the two countries are more likely to disagree over the timeline for phasing out older cars rather than the construction standards for new ones.

    "The U.S. and Canada strive to closely coordinate their regulatory requirements given the importance of our close trading relationship with Canada," noted Brigham McCown, a former PHMSA administrator who is now chairman of the Alliance for Innovation and Infrastructure. "Discussions between the U.S. and Canada are ongoing, but it is my understanding differences between the two on retrofit schedules and timelines remain as this dialogue continues."

    A spokesman for PHMSA did not respond to request for comment yesterday. The regulator has been tight-lipped about the details of the oil-by-rail rulemaking, citing federal policy, although officials at the agency have said they meet regularly with their Canadian counterparts and are working to avoid major cross-border discrepancies.

    For its part, Transport Canada said in its update that it "recognizes the integrated nature of rail transport in North America and has taken note of recommendations ... that a harmonized standard is essential."

    The regulator added that "the U.S. is following its own regulatory processes and will make its own decisions on this standard."U.S. regulators under pressure

    The U.S. is under immense public and political pressure to finish its version of the tank car rule, which has been delayed several times and is now on track to be published in May. Oil train derailments and fires in Illinois, West Virginia, Virginia, North Dakota and Alabama have caught the attention of lawmakers.

    Yesterday, Sen. Heidi Heitkamp (D-N.D.) reiterated her calls for the White House's Office of Management and Budget to wrap up its economic analysis of the final rule.

    "While I understand that this is a complicated rule that we absolutely must get right, it must be finalized as soon as possible to ensure safety for North Dakota's communities," she said in a letter addressed to OMB Director Shaun Donovan that cited a December 2013 explosion near Casselton, N.D., that injured no one but raised worries throughout the state.

    The bulk of recent oil train accidents have involved crude from North Dakota, where pipeline infrastructure has failed to keep up with demand for transportation.

    The ill-fated train that derailed in Lac-Mégantic was hauling Bakken crude.

    The Transportation Safety Board of Canada concluded that the oil in that train was more volatile than other types, behaving like gasoline rather than unrefined crude.

    TSB spokesman Chris Krepski said the independent safety watchdog is reviewing Transport Canada's tank car proposal "as part of [TSB's] reassessment of action taken on the Lac-Mégantic recommendations."

    Ed Hamberger, president and CEO of the Association of American Railroads, said the industry group is "pleased with Transport Canada's sensible approach of expediting the rulemaking process for tank car standards, to help provide greater certainty in the rail car marketplace."

    The Canadian oil industry similarly welcomed the announcement of the new TC-117 standard.

    "As we anticipate that rail will remain an important mode of transportation, I think that our producers just want to ensure that all products are transported safely," said Chelsea Klassen, spokeswoman for the Canadian Association of Petroleum Producers.

    The American Petroleum Institute, which represents U.S. drillers, wasn't as supportive of the Canadian government's proposals.

    "Increasing the weight of railcars means more trains will have to run, and it also adds to wear and tear on the tracks," spokesman Brian Straessle said in an email. "API supports upgrades to the tank car fleet with 8/16 inch-thick steel, but regulators must remember there are limits to what tank car design can achieve."

    API has called on railroads to focus more on preventing derailments through track maintenance and enhancing emergency response capabilities. The oil industry group has also suggested cars built since 2011 should be allowed to remain in service after undergoing safety improvements over the next seven years.

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18. Shipping LNG by Rail? Alaska Railroad Wants to Make it Happen

    Mar 13, 2015 | E&E - Energywire

    By Margaret Kriz Hobson

    At a time when Alaska state officials are eager to provide low-cost fuel to the energy-hungry Fairbanks region, the Alaska Railroad Corp. is seeking to become the first U.S. company to ship liquefied natural gas by rail.

    The Alaska railroad and three other companies -- Union Pacific, BNSF Railway and Florida East Coast Railway Co. -- have applied for Federal Railroad Administration permits to ship LNG on their rail lines.

    Currently, no liquefied gas is transported by rail in the United States.

    The Alaska railroad is proposing to transport LNG from the Cook Inlet's offshore natural gas fields to the Fairbanks region.

    To carry the fuel by train, the company would liquefy the gas in southern Alaska and transfer it into 11,000-gallon intermodal tanks known as ISOs.

    Those containers would be transferred onto flatbed trucks and driven to the railroad staging area. There, railroad workers would load two ISOs onto each 89-foot flat rail car. The company anticipates running a 30-car train to central Alaska every four days.

    "We have the existing infrastructure already, and we have the capacity on the railroad," noted Dale Wade, vice president for marketing and customer service at the railroad.

    "We have extensive experience in moving bulk chemicals, many of which are flammables, as well. So that doesn't scare us at all."

    At an Alaska Resource Development Council meeting last month, Wade said that FRA officials have been encouraging about the company's proposal to haul LNG.

    "Their point to us was, 'We are not here to stand against you,'" he said.

    "At this time, we believe we will be the first railroad in the United States to carry LNG. ... We're optimistic about that," Wade asserted. "We've submitted the [application], and we don't see any reason why it won't go through without delay."

    The Alaska Railroad Corp., an independent corporation owned by the state, is looking to enter the LNG hauling business at a time when the company's shipments of other commodities, specifically bulk petroleum and coal, are declining.

    The company operates 45 passenger cars and 1,381 freight cars on 656 miles of track that connects ports in southern Alaska with Anchorage, Fairbanks and North Pole.Ramping up gas, lowering pollution

    State officials have long struggled to provide lower-cost energy to interior Alaska, where heating fuel and electricity prices are among the highest in the nation.

    Rather than pay for expensive petroleum-based fuels, many local residents turn to wood-burning stoves for heat, worsening the region's severe winter air pollution problems.

    Only about 1,000 Fairbanks residents and businesses currently use natural gas, which is trucked to the region by Fairbanks Natural Gas, a local gas utility owned by Pentex Alaska Natural Gas Co.

    FNG buys the gas from producers in the Cook Inlet and converts it to LNG at the company's Point McKenzie liquefaction plan, which is now at its maximum capacity.

    To expand Fairbanks' supply of natural gas, AIDEA had been focused on tapping the abundant gas reserves on Alaska's North Slope. An estimated 34 trillion cubic feet of gas is stranded at those oil fields (EnergyWire, Sept. 23, 2014).

    In September, AIDEA signed a preliminary agreement to hire an outside company for the project. But the agreement fell apart in January when the project proved to be too expensive.

    Shortly afterward, Alaska Gov. Bill Walker (I) issued an edict directing state agencies to find new solutions for getting cheaper fuel to interior Alaska.

    This time, Alaska is eying Cook Inlet's reserves, which the state estimates at 1.54 trillion cubic feet of recoverable gas.

    In February, AIDEA signed a letter of intent to buy Fairbanks Natural Gas parent company Pentex, a move that Walker said would promote his goal of "bringing energy relief to Interior Alaska." The AIDEA board also asserted that the acquisition would promote expansion of the local gas distribution network in central Alaska.

    That transaction drew immediate criticism from Republican state legislators, who protested that the state is interfering with local business markets.

    The state corporation is currently drafting a financial analysis of the proposed Pentex purchase, which will go to the board in late April.Pipelines in the pipeline

    Meanwhile, AIDEA's Interior Energy Project is also casting a wider net in hopes of attracting proposals for other projects that could provide cheaper heating and electricity to central Alaska.

    The state corporation plans to launch a formal request for information, with the top project contenders due to be considered by the AIDEA board "in an expedited manner," according to a corporation spokesman.

    In the long term, Fairbanks businesses and residents could get access to cheaper fuel by hooking into a large-scale natural gas pipeline that would carry fuel from the North Slope to an export terminal in southern Alaska.

    Currently, Alaska has two pipeline projects on the drawing board. Last year, the state agreed to partner with three major oil companies and TransCanada to study the possibility of constructing a multibillion-dollar pipeline and export project.

    More recently, the governor called for the state to consider building its own large-volume natural gas export project (EnergyWire, Feb. 20).

    However, neither project is likely to begin carrying gas to Fairbanks for at least another 10 years.

    The Alaska Railroad's Wade acknowledged that a gas pipeline could provide fuel at a lower cost than moving LNG containers by rail. But he predicted that the railroad could be ready to ship fuel to Fairbanks within the next two years.

    "This project isn't being offered as a replacement for a pipeline," he said.

    "But we believe that the pipeline project will take longer than the patience of people in Fairbanks who are waiting for that solution. So this would be a wonderful interim solution."

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