Preview Newsletter
ACC AM Mar 20
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(ACC Blog) Listening to the Science on BPA in Australia and New Zealand
Mar 19, 2015 | American Chemistry Matters
By Steven Hentges, Ph.D
Consumers can have confidence in the safety of BPA. In recent months, several leading government bodies around the globe have made clear statements in support of the safety of bisphenol A (BPA) as it is used in consumer products. These are not merely opinions, but are sound conclusions backed up by comprehensive reviews... http://blog.americanchemistry.com/ -
(ACC Mentioned) Fearing Federal Pre-Emption, Lawmakers Move to Strengthen Toxics Law
Mar 19, 2015 | E&E - Greenwire
The chemical industry is fighting proposed changes to Vermont's chemical regulation law, which was enacted last year. The Vermont Senate's Health and Welfare Committee heard testimony from industry representatives yesterday urging lawmakers to scrap language in a state bill that would revise the law. The law requires companies that ... -
(ACC Mentioned) Environmental Defense Fund and Chemical Companies: Fool Me Twice?
Mar 19, 2015 | Environmental Working Group
By Ken Cook
It was abundantly clear at the recent Senate hearing that Democrats on the Environment and Public Works Committee have grave doubts about legislation the chemical industry has written to regulate itself (S.697). Senators openly doubted the ability of the U.S. Environmental Protection Agency to review the safety of toxic industrial... -
(ACC Mentioned) Senators Introduce Competing Bills to Update Chemical Safety Law
Mar 19, 2015 | Michigan Radio
By Rebecca Williams
Lawmakers want to overhaul our nation’s chemical safety law, but there’s a lot of disagreement about how to do that. In the U.S., chemicals are innocent until proven guilty. If officials at the Environmental Protection Agency want to ban a chemical, they need to provide a lot of proof that it’s harmful for us or the environment. As the EPA's Dale... -
Bipartisan Group Asks Obama to Fire Chemical Agency Chief
Mar 19, 2015 | The Hill - E2 Wire
By Timothy Cama
A bipartisan group of House members is calling on President Obama to fire the embattled head of the Chemical Safety Board (CSB). Many of the seven Republicans and seven Democrats have previously called for CSB Chairman Rafael Moure-Eraso to step down, accusing him of being an ineffective leader and breaking multiple laws. -
Electronic Reporting Requirements Proposed by EPA
Mar 20, 2015 | BNA Daily Environment Report
Operators of grain elevators, pulp mills and other industrial facilities would be required to electronically submit air emissions reports to the EPA under a new proposal. The proposed rule (RIN 2060-AP63), scheduled for publication March 20, would require affected facilities to submit electronic versions of summary reports, excess emissions reports... -
TCE Authorisation Applications Make Progress
Mar 19, 2015 | Chemical Watch
By Philip Lightowlers
Draft opinions were recently agreed for most of the uses of trichloroethylene (TCE) included in authorisation applications by Echa's Committees for Risk Assessment (Rac) and Socio-Economic Analysis (Seac). Each committee considered 12 applications which, between them, cover 17uses. The substance has a sunset date of ... -
Faster Progress on Risk Management Rule Necessary, Advocates Tell White House
Mar 20, 2015 | BNA Daily Environment Report
By Robert Iafolla
A federal judge has denied a motion by a New Hampshire utility to intervene in a lawsuit seeking action on a challenge to a state air pollution permit for a coal-fired power plant (Sierra Club v. McCarthy, D.D.C., No. 1:14-cv-02149, opinion and order 3/17/15). Judge Christopher R. Cooper of the U.S. District Court for the District of... -
(ACC Mentioned) Fifty Shades of CHP
Mar 19, 2015 | Cogeneration & On-Site Power Production
By David Sweet
The precipitous drop in energy prices is having repercussions throughout the energy industry, and nowhere is this felt more profoundly than in the energy capital of Houston, Texas. In the US we have 50 states, each of which has a distinct market profile for CHP and distributed power generation. While the Texas economy has diversified in recent ... -
Interior’s Fracking Rules Ready for Launch
Mar 20, 2015 | PoliticoPro
By Elana Schor
The Obama administration is set to unveil the first major nationwide safety restrictions on fracking, touching off a fresh political confrontation between the president and his critics in Congress and the energy industry. The Interior Department’s rules — expected to be released as soon as Friday — are the federal government’s most... -
Fracking Rules Expected to Be Unveiled by Obama Administration Friday
Mar 19, 2015 | The Wall Street Journal
By Amy Harder
The Obama administration on Friday is expected to issue long-awaited regulations setting new standards for hydraulic fracturing in the oil and natural-gas industries, people familiar with the matter said. The drilling technology, commonly known as fracking, has been key to unlocking vast reserves of oil and gas across the U.S., but qualms... -
Absent EPA Policy, Democrats Seek To Boost Agencies' Fracking Oversight
Mar 19, 2015 | InsideEPA
By Bridget DiCosmo
House and Senate Democrats are pushing legislation backed by environmentalists that would boost EPA's and other federal agencies' oversight of hydraulic fracturing to address what advocates say are gaps in regulation of the drilling practice, absent stricter EPA policies to address potential risks of environmental harm from fracking. -
Energy Export Ban Hurts U.S. Credibility, Former Obama Officials Tell Senate Panel
Mar 20, 2015 | BNA Daily Environment Report
By Jim Snyder
Two former Obama administration officials said a four-decade-old ban on oil exports limits U.S. geopolitical influence and makes it harder to get other nations to embrace free trade. The issue of the ban “arose constantly” in negotiations with other countries, including when the U.S. sought support for sanctions on Iran's oil production... -
Senate GOP Lays Out Case for Oil Exports
Mar 19, 2015 | The Hill - E2 Wire
By Timothy Cama
Senate Republicans on Thursday laid out a series of arguments that they said justify lifting the 40-year-old ban on exporting crude oil. At a hearing of the Energy and Natural Resources Committee, Republicans said lifting the ban would decrease gasoline and diesel prices in the United States, add 1 percent to the gross domestic product... -
Lawmakers Signal Support for Lifting Crude Export Ban
Mar 20, 2015 | E&E Daily News
By Daniel Bush
Senators on both sides of the aisle yesterday signaled support for lifting the decades-old ban on crude exports, even as some acknowledged the political hurdles that could make repealing it a tough sell to voters back home. At a Senate Energy and Natural Resources Committee hearing, Republicans argued that reversing the 1970s-era ban ... -
In a World Awash With Crude, Oil Storage Companies Are Kings
Mar 20, 2015 | BNA Daily Environment Report
By Javier Blas
In a world awash with cheap oil and plunging profits, one obscure corner of the energy business is shining brightly: the owners of storage tanks. While not nearly as famous as giant oil producers like Exxon Mobil Corp. and Royal Dutch Shell Plc, storage companies including Vopak NV, Kinder Morgan Inc., Oiltanking GmbH and ... -
Protesters Disrupt FERC Meeting
Mar 19, 2015 | PoliticoPro
By Alex Guillén
More than a dozen protesters disrupted the monthly FERC commissioners’ meeting on Thursday in their latest bid to pressure the energy regulator to shelve liquefied natural gas export projects. Just seconds after the meeting was gaveled in, one woman stood up and began reading a prepared statement. Security guards immediately grabbed... -
McConnell Calls on All U.S. Governors To Consider Ignoring EPA Power Plant Rule
Mar 20, 2015 | BNA Daily Environment Report
By Dean Scott
Senate Majority Leader Mitch McConnell (R-Ky.) March 19 stepped up his campaign to have states essentially ignore Environmental Protection Agency carbon pollution limits for power plants, urging all 50 states to “carefully review the consequences before signing up for this deeply misguided plan.” In a letter to the National Governors Association... -
McConnell Letter To Governors: Reject EPA’s CO2 Plan
Mar 19, 2015 | PoliticoPro
By Erica Martinson
Senate Majority Leader Mitch McConnell wrote all 50 governors today to urge them to reject EPA’s proposed greenhouse gas rule for existing power plants, known as the Clean Power Plan. “Some have recently suggested that failing to comply with the EPA’s requirements would be to disregard the law. But the fact is, it is the EPA that is ... -
McConnell to Wtates: EPA Climate Rule is Illegal
Mar 20, 2015 | The Hill - E2 Wire
By Timothy Cama
Senate Majority Leader Mitch McConnell (R-Ky.) is doubling down on his advice that states ignore the Obama administration’s climate rule for power plants. McConnell sought to reassure governors in a letter Thursday that they would be on firm legal ground and not violating the law if they decline to formulate plans to implement... -
Reducing Carbon Pollution From The Power Sector Without Building Thousands Of Miles Of New Pipelines
Mar 19, 2015 | Environmental Defense Fund
By N. Jonathan Peress
With the Environmental Protection Agency’s proposed Clean Power Plan to reduce carbon pollution from the nation’s power plants nearing finalization, all sides are looking closely at the capacity of our existing infrastructure to deliver emission reductions from the power sector — including the natural gas infrastructure that could help reduce the need... -
Three Conservative Judges to Hear Arguments over EPA's Clean Power Plan
Mar 20, 2015 | BNA Daily Environment Report
By Andrew Childers
The Environmental Protection Agency will face a panel of three conservative judges April 16 when it defends its legal authority to issue its proposed Clean Power Plan, possibly jeopardizing the rule before it's even finalized (In re Murray Energy Corp., D.C. Cir., No. 14-1112, merits panel assigned, 3/18/15; West Virginia v. EPA, D.C. Cir., No. 14-1146... -
Judge Denies Bid by New Hampshire Utility To Intervene in Sierra Club Power Plant Case
Mar 20, 2015 | BNA Daily Environment Report
By John Herzfeld
A federal judge has denied a motion by a New Hampshire utility to intervene in a lawsuit seeking action on a challenge to a state air pollution permit for a coal-fired power plant (Sierra Club v. McCarthy, D.D.C., No. 1:14-cv-02149, opinion and order 3/17/15). Judge Christopher R. Cooper of the U.S. District Court for the District of Columbia... -
Cap-and-Trade, Fence Line Monitor Concerns Stall Justice Council Advice to EPA on Rules
Mar 20, 2015 | BNA Daily Environment Report
By Rachel Leven
The National Environmental Justice Advisory Council couldn't agree March 19 on final advice to the Environmental Protection Agency regarding the agency's refinery and Clean Power Plan proposals. The council did approve during a teleconference letters to be sent to EPA Administrator Gina McCarthy on its stance regarding the farmworker... -
Obama Calls for 40 Percent Emissions Cut In Sustainability Goals for Federal Agencies
Mar 20, 2015 | BNA Daily Environment Report
By Andrea Vittorio
President Barack Obama wants to cut the federal government's greenhouse gas emissions by 40 percent over the next decade from 2008 levels. The president signed an executive order March 19 setting the new 2025 emissions target for federal agencies, which so far have cut their greenhouse gas emissions by 17 percent since 2008. -
Obama Orders 40% Reduction in Carbon Emissions by U.S. Agencies
Mar 19, 2015 | Bloomberg
By Toluse Olorunnipa
President Barack Obama ordered the federal government to reduce greenhouse gas emissions by 40 percent from 2008 levels over the next 10 years by shifting to renewable energy sources such as solar power. The executive order signed by Obama Thursday builds on a 2010 directive from the White House requiring 35 U.S. -
Flatlining
Mar 20, 2015 | The Economist
For years, it seemed like carbon-dioxide emissions rose relentlessly, whatever the world’s level of economic activity and however much countries spent on no- or low-carbon energy. Now, though, that depressing fact may be changing. The International Energy Agency (IEA), made up mostly of energy-consuming rich countries, reckons worldwide ... -
Double Standard on Coal Highlights Need for EPA Reform
Mar 19, 2015 | The Hill - Congress Blog
By Kevin Glass
The final tally for fines for Duke Energy's 2014 coal ash spill in the Dan River will come to over $100 million. This is more than ten times than the final bill to the Tennessee Valley Authority for their 2008 spill, which was the largest in history and twenty-eight thousand times larger and far more dangerous than the Dan River spill. -
Ruling Highlights Appellate Split On Air Controls In Areas Attaining NAAQS
Mar 19, 2015 | InsideEPA
By Stuart Parker
A federal appeals court has ruled that states must apply emissions controls on industry in areas seeking redesignation from “nonattainment” to “attainment” of EPA's national ambient air quality standards (NAAQS) even when the agency finds those areas fully comply with the NAAQS, highlighting an appellate circuit split on the issue. -
Novel Ruling Allows RCRA Claims Against Air Pollution Deposited On Land
Mar 20, 2015 | InsideEPA
By Anthony Lacey
A novel federal district court ruling has found the Resource Conservation & Recovery Act (RCRA) waste law can be used to pursue an “imminent and substantial endangerment” suit against industry air pollution deposited on land, which some legal observers say could trigger more “aggressive” litigation over land deposition of emissions. -
Study: Clean Air Makes Children's Lungs Stronger, Healthier
Mar 20, 2015 | Environmental Defense Fund
By Elena Craft
We’ve known for a long time that breathing polluted air can make you sick. Now there's more evidence that breathing cleaner air can make you better. The New England Journal of Medicine published new research this month detailing improved lung function in children that breathe cleaner air. -
Ozone Season Returns to Houston
Mar 19, 2015 | Environmental Defense Fund
By Adrian Shelley
Spring is coming to Houston, and with it the start of ozone season. You probably haven’t thought about ozone yet this year, and with all the cold weather we’ve had, you could be forgiven. But Houston’s ozone season officially began on March 1, and it may be time to start thinking about this pernicious air pollutant once again. -
(ACC Mentioned) Thune Says Senate May Attach Rail Overhaul Bills to Surface Transportation Funding Bill
Mar 20, 2015 | BNA Daily Environment Report
By Stephanie Beasley
Senate lawmakers may push to include language overhauling the Surface Transportation Board (STB) and the environmental review process for rail projects in a surface transportation reauthorization bill, Senate Commerce, Science and Transportation Committee Chairman John Thune (R-S.D.) said. -
Bill Would Reauthorize Rail Safety Grant Program
Mar 20, 2015 | BNA Daily Environment Report
Reps. Daniel Lipinski (D-Ill.) and Mike Quigley (D-Ill.) have introduced a bill that would allocate millions of dollars for passenger and freight rail safety grants. The grants under the Reassuring Adequate Investment in Lifesaving Systems (RAILS) Act (H.R. 1405), introduced March 17, would specifically reauthorize the Rail Safety Technology Grant Program. -
Surcharge on Use of Older Tank Cars Violates Common Carrier Obligations, Lawsuit Alleges
Mar 20, 2015 | BNA Daily Environment Report
By Rebecca Wilhelm
A freight transportation company violated its common carrier obligations when it imposed a $1,000 surcharge on legacy DOT-111 rail cars that ship crude oil, the American Fuel & Petrochemical Manufacturers alleged in a complaint filed in federal district court March 13 (Am. Fuel & Petrochemical Mfrs. v. BNSF Ry. Co., S.D. Tex., No. 4:15-cv-682... -
Want Improved Crude Oil Safety? Build Better Tank Cars
Mar 19, 2015 | The Huffington Post - Blog
By Edward R. Hamberger
A small number of high-profile crude by rail accidents has recently brought the question "Can railroads safely move crude oil?" to the public forefront. The freight rail industry shares the public's concern regarding the safe movement of crude oil by rail, and it's important to know all that is currently being done to safely move crude oil trains.
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(ACC Blog) Listening to the Science on BPA in Australia and New Zealand
Mar 19, 2015 | American Chemistry Matters
By Steven Hentges, Ph.D
Consumers can have confidence in the safety of BPA.
In recent months, several leading government bodies around the globe have made clear statements in support of the safety of bisphenol A (BPA) as it is used in consumer products. These are not merely opinions, but are sound conclusions backed up by comprehensive reviews of the extensive scientific literature on BPA. Of particular significance are the results of an in-depth research program on BPA conducted by U.S. government scientists at the Food and Drug Administration (FDA) and other agencies.
In a recent update, Food Standards Australia New Zealand (FSANZ) joined the chorus of government bodies highlighting BPA safety, stating that “the overwhelming weight of scientific opinion is that there is no health or safety issue at the levels people are exposed to.”
This statement is significant because FSANZ is a bi-national government agency that develops and administers the Australia New Zealand Food Standards Code, which provides a comprehensive set of safety requirements for foods in these countries.
The FSANZ position is fully consistent with a January 2015 conclusion from the European Food Safety Authority (EFSA) that ‘BPA poses no health risk to consumers of any age group (including unborn children, infants and adolescents) at current exposure levels.’ Just before the EFSA conclusion, the U.S. Food and Drug Administration stated, based on its most recent safety assessment, that “BPA is safe at the current levels occurring in food.”
Adding to this growing consensus, scientific experts at the German Federal Institute for Risk Assessment just endorsed the recent EFSA conclusion with a statement entitled “No health risk for consumers from Bisphenol A exposure.”
Just as government bodies around the world are listening to the science, ACC’s Polycarbonate/BPA Global Group encourages consumers to “Listen to the Science” about BPA safety. There has been a lot of confusing noise about BPA safety in the media in recent years, but the science is now loud and clear.
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(ACC Mentioned) Fearing Federal Pre-Emption, Lawmakers Move to Strengthen Toxics Law
Mar 19, 2015 | E&E - Greenwire
The chemical industry is fighting proposed changes to Vermont's chemical regulation law, which was enacted last year.
The Vermont Senate's Health and Welfare Committee heard testimony from industry representatives yesterday urging lawmakers to scrap language in a state bill that would revise the law.
The law requires companies that use chemicals designated as "of high concern to children" to disclose information on the chemicals to the Department of Health, and it created a working group to make recommendations to the state's health commissioner on chemicals to be added to the list.
An amendment approved last week would change the law by allowing the health commissioner to conduct a rulemaking to add chemicals to the list based on "credible, scientific evidence," removing language mandating that "the weight of" that evidence be considered. It also would require the health commissioner to consult with the working group, rather than rely on its recommendations. In addition, the proposal would change the safety threshold from "children will be exposed" to "there is potential for exposure," making it easier to list chemicals.
Allison Crowley DeMag, a lobbyist representing the American Chemistry Council, told lawmakers the changes were unwarranted.
The changes would "undo what was a very collaborative effort last session," DeMag said. State Sen. Ginny Lyons (D) said the changes are needed because Congress may restrict Vermont's authority to regulate toxic chemicals under proposed changes to the Toxic Substances Control Act of 1976 (Neal Goswami, Barre Times Argus, March 19)
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(ACC Mentioned) Environmental Defense Fund and Chemical Companies: Fool Me Twice?
Mar 19, 2015 | Environmental Working Group
By Ken Cook
It was abundantly clear at the recent Senate hearing that Democrats on the Environment and Public Works Committee have grave doubts about legislation the chemical industry has written to regulate itself (S.697).
Senators openly doubted the ability of the U.S. Environmental Protection Agency to review the safety of toxic industrial chemicals in a timely, much less urgent, manner under the bill or to ensure that chemicals ultimately are safe under the untested and dubious safety standard concocted especially for S.697. Indeed, a feat of imagination is required to believe that the industry’s proposed system will crack down on thousands of chemicals already in commerce that have been shown to cause cancer or birth defects or to wreak neurological havoc, among other harms.
At a House hearing last year, Jim Jones, the EPA’s top toxics regulator, estimated 1,000 chemicals are in need of urgent review. At the March 18 hearing he told senators the list might even be longer. With the legislation’s languid stream of just 25 high priority chemicals targeted for review in the first seven years, and its numerous procedural eddies where reviews might slowly spin for years, it could easily take over a century before EPA completes its study of the 1,000 most worrisome chemicals the agency has initially identified. And of course, the bill sets no deadline for taking regulatory action to ban or phase out dangerous chemicals if the agency concludes that is the proper course of action.
Several Democrats on the Senate panel were quick to point out that the ongoing assault on the EPA in the Republican budget makes the $18 million chemical companies will pony up to share the cost of chemical assessments reviews look even more inadequate. Meanwhile, the sweeping preemption of state authority proposed by the bill will ensure that legislators and regulators will be hamstrung from protecting their citizens.
Our colleagues at the Environmental Defense Fund, alone in the environmental movement, think otherwise. They have joined forces with the chemical industry to strongly support the legislation.
It’s worth noting that the last time EDF joined forces with chemical companies, it was played for a fool—and played for well over a decade.
In 1998, EDF and the chemical industry joined forces to launch the HPV [High Production Volume] Challenge Program, a voluntary program for which the chemical industry would supposedly provide basic toxicity testing data on the most widely used chemicals in the nation. A high production volume chemical is defined as one that is produced or imported in amounts greater than 1 million pounds per year.
This program was launched after a 1984 review by the National Academies of Sciences and the National Research Council estimated that only 11 percent of high production volume chemicals had disclosed enough safety data to complete even a partial hazard assessment. Years later the EPA issued a detailed report confirming the lack of data and concluding that a striking 43 percent of “high production volume chemicals” had undergone zero testing data on basic toxicity. That’s right, 43 percent of the chemicals produced or imported in quantities greater than 1 million pounds a year were basically untested.
The HPV Challenge Program was a resounding failure. It turned out to be a win-win-win for chemical manufacturers: they managed to get away with minimal testing information, faced essentially no threat of chemical restriction and staved off reform of the broken Toxic Substances Control Act for nearly 20 years and counting. Dow Chemical Co. has a webpage declaring the HPV program “a tremendous success,” and the American Chemistry Council also champions the HPV program and its accomplishments.
But the EDF wrote a report in 2007 entitled “High Hopes, Low Marks” acknowledging that the HPV program was “still well away from delivering on the promises it made.” The organization has not issued a follow-up report or statement since 2007, other than noting how EDF had “impelled the chemical industry” to participate in the program. The Governmental Accountability Office, the investigative arm of Congress, documented huge problems in the program, including its voluntary nature and the lack of sufficient information to support decisions on risk assessments of chemicals.
Today the program is in shambles and no longer seems to be active, and the public is no better protected from chemicals of concern. The HPV program boils down to decades of voluntary information collection without any action. What could be better in the eyes of the chemical industry?
Fast forward to 2015 and we have just watched EDF – alongside the chemical industry – come out in strong support of what is being billed as a chemical safety bill that “creates strong protections against hidden health threats.” Yet in reality, this legislation, S.697, introduced by Sens. Tom Udall (D-N.M.) and David Vitter (R-La.), is actually worse than current law.
This new industry-supported bill would fail to ensure that chemicals are safe, fail to set meaningful deadlines for safety reviews, fail to set deadlines for bans or restrictions when needed, fail to provide EPA with adequate resources and deny states the ability to protect public health and the environment.
While the industry bill would grant the EPA some new authorities and generate some new safety data, the overall package would not enable the agency to take the necessary actions required to protect public health effectively. This bill was written from the ground up NOT to protect public health but to protect chemical industry profit margins. The American public needs a chemical bill that shifts the burden onto industry for proving that chemicals are safe and that ensures EPA has the necessary authority to take action! My child and your children deserve better—and we must demand it on their behalf.
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(ACC Mentioned) Senators Introduce Competing Bills to Update Chemical Safety Law
Mar 19, 2015 | Michigan Radio
By Rebecca Williams
Lawmakers want to overhaul our nation’s chemical safety law, but there’s a lot of disagreement about how to do that.
In the U.S., chemicals are innocent until proven guilty.
If officials at the Environmental Protection Agency want to ban a chemical, they need to provide a lot of proof that it’s harmful for us or the environment. As the EPA's Dale Kemery once explained to me, "EPA can ban chemicals if it can demonstrate that they present an unreasonable risk. This is a relatively high regulatory standard and requires a substantial amount of high quality exposure and hazard information."
The law we currently have on the books is 39 years old. It’s called the Toxic Substances Control Act or TSCA. It’s been widely criticized as toothless and outdated.
Over the years, some lawmakers have attempted to update it, but nothing’s panned out. Now there are two competing bills in the Senate. "So they're really trying to find a balance between doing something about it and doing something that's achievable right now."
The first bill, the Frank R. Lautenberg Chemical Safety for the 21st Century Act, was introduced by Sen. Tom Udall (D-New Mexico) and Sen. David Vitter (R-Louisiana) last week. A few days later, Sens. Barbara Boxer (D-California) and Edward Markey (D-Massachusetts) introduced a competing bill, the Alan Reinstein and Trevor Schaefer Toxic Chemical Protection Act.
The Senate Environment & Public Works Committee held a hearing on the Udall-Vitter bill yesterday. As The Houston Chronicle describes, one of the points of contention for environmental groups and several states' attorneys general is language in the Udall-Vitter bill that would restrict the ability of states to regulate chemicals:
Much of the debate centered on provisions of the Udall-Vitter bill that would preclude states, in most cases, from being co-enforcers of chemical rules. At one point an entire panel of witnesses - including some who are supporting the bill - agreed it would be stronger without the so-called pre-emption language.
Reporter Sam Pearson has been covering these bills for Greenwire in Washington, D.C.
"The Boxer bill really goes further into what they would want, [but Vitter and Udall are] pretty up front about saying that [their bill] is a compromise, even Senator Udall has said that he doesn't necessarily have everything that he wanted in it but he's trying to find something that will pass," said Pearson.
Granting the EPA more authority
One of the major criticisms of the current chemical law is that the Environmental Protection Agency has not been able to completely ban substances such as asbestos, a known carcinogen. Pearson says that the bills differ in how they address this particular issue.
"Senator Boxer has been saying how her bill would actually specifically list asbestos to be required to be added to the high priority chemical list immediately and then the Udall bill, in theory, would give [the EPA] discretion, whether they want to do that or not. It's possible that [the EPA] would consider that a priority given how much history there is."
There’s been some controversy this week about the American Chemistry Council’s involvement with the Udall-Vitter bill. As the San Franscisco Chronicle reported:
In recent days, a draft of the bill — considered the product of more than two years of negotiation and collaboration between Sen. David Vitter, R-La., Sen. Tom Udall, D-N.M., and both chemical industry and environmental groups — was circulated by Udall’s office ahead of the hearing. The draft bill, obtained by Hearst Newspapers, is in the form of a Microsoft Word document. Rudimentary digital forensics — going to “advanced properties” in Word — shows the “company” of origin to be the American Chemistry Council.
On Monday, ACC spokeswoman and vice president Anne Kolter said, “It doesn’t mean the original document was generated here. Anyone could have put that (digital signature) in there. You could change it.”
Asked if that meant she was denying ACC wrote the document, she said, “I have no idea. ... There’s no way for anyone to tell.”
The ACC is the main lobbyist for the chemical industry and they’re backing the Udall-Vitter bill. Pearson says the ACC wants one set of federal rules.
"[The Council] said that they want to kind of want to even out the regulations more, so they say that preemption is important to them because they want to try to make things more consistent across all the states and not have different rules in every state."
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Bipartisan Group Asks Obama to Fire Chemical Agency Chief
Mar 19, 2015 | The Hill - E2 Wire
By Timothy Cama
A bipartisan group of House members is calling on President Obama to fire the embattled head of the Chemical Safety Board (CSB).
Many of the seven Republicans and seven Democrats have previously called for CSB Chairman Rafael Moure-Eraso to step down, accusing him of being an ineffective leader and breaking multiple laws.
But the letter sent Thursday steps up efforts the House Oversight Committee, of which all of the signatories are members, has taken over the last year against Moure-Eraso.
Through hearings and investigations, the panel has found evidence that it says proves that Moure-Eraso retaliated against whistleblowers, violated record retention laws, lied to the committee and created a generally hostile environment that led the CSB to being named one of the worst places to work in the federal government.
Committee Chairman Jason Chaffetz (R-Utah) said the law allows Obama to remove Moure-Eraso for “inefficiency, neglect of duty or malfeasance in office."
“Based on new evidence obtained by the committee, we believe this standard has clearly been met for these three individuals,” the members wrote.
“After holding several hearings, reviewing thousands of documents, and interviewing multiple current and former CSB employees, it is clear that the CSB is in a state of turmoil. It is vital that you act to immediately remove the toxic leadership that is undermining the agency's critical safety mission.”
The group sent the letter two weeks after the latest hearing featuring Moure-Eraso and a week after two leading Senate Republicans asked Obama to urge the CSB chairman to step down.
In response to Thursday’s letter, Moure-Eraso was defiant, saying the committee’s allegations are unfounded.
“The letter repeats old personnel-related allegations which have never been substantiated,” he said in a statement.
He said he has never retaliated against employees and stopped using personal email shortly after he learned it violated rules, while other board members have continued to use personal email accounts.
Moure-Eraso’s term at CSB expires in June, and Obama has nominated Vanessa Sutherland, an attorney at the Pipeline and Hazardous Materials Administration, to replace him.
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Electronic Reporting Requirements Proposed by EPA
Mar 20, 2015 | BNA Daily Environment Report
Operators of grain elevators, pulp mills and other industrial facilities would be required to electronically submit air emissions reports to the EPA under a new proposal. The proposed rule (RIN 2060-AP63), scheduled for publication March 20, would require affected facilities to submit electronic versions of summary reports, excess emissions reports, performance test reports and performance evaluation reports to the EPA. The proposal would not require facility operators to submit any information that is not already required to be submitted under EPA regulations, the agency said. Shifting from paper to electronic reporting would allow state and local air agencies to electronically access reports submitted to the EPA and would result in annual savings of $300,000. The agency will accept public comments on the proposal until May 19. Comments can be filed at http://www.regulations.gov under Docket No. EPA-HQ-OAR-2009-0174. A copy of the proposed rule is available at https://s3.amazonaws.com/public-inspection.federalregister.gov/2015-05406.pdf.
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TCE Authorisation Applications Make Progress
Mar 19, 2015 | Chemical Watch
By Philip Lightowlers
Draft opinions were recently agreed for most of the uses of trichloroethylene (TCE) included in authorisation applications by Echa's Committees for Risk Assessment (Rac) and Socio-Economic Analysis (Seac).
Each committee considered 12 applications which, between them, cover 17uses. The substance has a sunset date of 21 April 2016, which means any uses not covered by a granted authorisation or an application by that date will no longer be permitted.
Rac agreed 11 uses as draft opinions, but rejected six, whereas Seac agreed 16 draft opinions while rejecting one.
The accepted drafts when agreed by both committees are compiled and sent to the applicants for comment within two months. If no comments are received, they become the final opinions of the committees, otherwise they must be brought back for final adoption.
Echa declined to say which uses have been accepted until they become final.
The applications cover specialised and contained uses. The largest application, for five uses, was from Dow Chemical (CW 28 August 2014). Others include as a degreasing solvent in the manufacture of lead-acid batteries, as a processing aid in betacyclodextrin manufacture and as a process chemical in caprolactam purification (CW 17 November 2014).
Other highlights from the Rac and Seac meetings include: Both committees agreed draft opinions in support of the proposed restriction on ammonium salts for use in cellulose insulation (CW 4 November 2013).Seac also adopted its final opinion, in support of the Echa proposal, to amend the existing restriction for chrysotile, a form of asbestos, and adopted a final opinion rejecting the proposed restriction on cadmium and its compounds in artists' paintsBroad proposed restrictions on the manufacturing, use and placing on the market of flame retardant decaBDE and of perfluorooctanoic acid (PFOA) were also debated by both committees and dossiers are likely to be considered later this year.Methanol passed a conformity check at both committees for restriction of its sale to the public or use in windscreen wiper fluids (CW 22 January 2015). However, the proposed restriction for dimethylformamide, a reprotoxic solvent used in the textile and pharmaceutical industries, did not pass its conformity check and the dossier will be returned to Italy with recommendations (CW 10 February 2014).Rac is also developing hazard reference values for the use of applicants which may be derived no-effect levels (Dnels) or, for carcinogens, dose response relationships for Annex XV substances (CW 30 October 2013). A Dnel for bis(2-methoxyether)ether (diglyme) and a dose response curve for EDC were discussed but not agreed. But two dose-response curves were agreed in principle for: 2,2’-dichloro-4,4’-dianiline (MOCA) and technical MDA. They will be redrafted and posted on Echa's website within a few weeks, said Rac chairman Tim Bowmer.An authorisation applicaion for using lead chromate in the manufacture of pyrotechnical delay devices contained in ammunition for naval protection passed its conformity check. A first draft of the authorisation dossier may come before the committees in June.
Rac also agreed to proposals for the harmonised classification and labelling (CLH) of six substances. Five of these are used in pesticides or biocides, with the exception of the widely used fragrance linalool. The substance has no classification in Annex VI of the CLP regulation. Following a proposal from Sweden, Rac agreed to classify linalool as a category 1B skin sensitiser, based on animal data.
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Faster Progress on Risk Management Rule Necessary, Advocates Tell White House
Mar 20, 2015 | BNA Daily Environment Report
By Robert Iafolla
A federal judge has denied a motion by a New Hampshire utility to intervene in a lawsuit seeking action on a challenge to a state air pollution permit for a coal-fired power plant (Sierra Club v. McCarthy, D.D.C., No. 1:14-cv-02149, opinion and order 3/17/15).
Judge Christopher R. Cooper of the U.S. District Court for the District of Columbia, in a March 17 opinion and order, ruled against the Public Service Co. of New Hampshire (PSNH) in its attempt to join a dispute between the Sierra Club and the Environmental Protection Agency over the deadline for acting on a permit challenge for the utility's Schiller Station power plant.
PSNH had argued that it needed intervenor status to protect its interests in the content of the permit, but in rejecting the motion the judge found that the lawsuit involved only the timing of the EPA decision on the Sierra Club petition, not the substance. The Sierra Club opposed the utility's motion.
The EPA has notified the court that the parties have reached a tentative agreement in settlement negotiations, the judge noted. The utility filed its motion to intervene Feb. 3, and the parties went to the court in early March to seek more time to complete a settlement.
The Sierra Club sued in December 2014, charging that EPA Administrator Gina McCarthy had failed to meet a 60-day statutory deadline under the Clean Air Act for granting or denying the permit-challenge petition and seeking an order compelling the agency to act (246 DEN A-8, 12/23/14).
The petition, filed in July 2014, asked the EPA to object to an air pollution permit issued by the New Hampshire Department of Environmental Services for the Schiller Station plant, which is located in Portsmouth, N.H., near the Maine border. It sought more stringent numerical emission limits on sulfur dioxide and other permit changes.
In focusing the court's decision on the deadline at the center of the Sierra Club lawsuit, as opposed to the substance of the permit challenge, the judge wrote: “Timing is everything. And in this case, it is the only thing.”
No Substance Seen
Rejecting the utility's arguments that the outcome of the lawsuit may lead to modifications or even revocation of the permit, the decision cited recent cases denying intervenor status “based on a finding that a suit over the timing of an agency determination had no effect on the movant's interest in the substance of the determination.”
The case holdings “that the prospective intervenors lack both standing and a legally protectable interest” under Rule 24(a) of the Federal Rules of Civil Procedure, the judge said, “apply squarely to PSNH's motion here.”
Addressing the chance that the EPA could resolve the case by granting the Sierra Club petition, the judge said that standing can't be granted on the basis of an action that is only possible.
He also suggested that allowing the utility to intervene would draw out settlement negotiations and further delay resolution of the case.
A spokesman for the utility March 19 declined to comment on the decision.
Echoes Legislative Theme
The utility's bid to participate in the settlement talks echoes the theme of House Republican legislative proposals to rein in what industry groups call “sue-and-settle” strategies used by environmental groups to prod delayed regulations.
The Environmental Protection Agency must move on strengthening safety regulations for high-hazard chemical facilities as soon as possible to ensure they ever take effect, a coalition of environmental, labor and public interest groups told the White House March 19.
Nearly 150 advocacy groups asked President Barack Obama to push the EPA to swiftly finalize modifications to its risk management program rule.
“Your administration is running out of time to make a real difference on this critical issue,” the groups said in a letter.
The EPA's project to modify its RMP rule is part of the Obama administration's multi-agency chemical safety working group. The group was created by executive order as a response to the catastrophic ammonium nitrate explosion at a fertilizer facility in West, Texas, in April 2013.
The risk management program rule currently imposes conditions, chiefly the development of a risk management plan, on facilities that house over-threshold amounts of covered high-hazard substances. The EPA received nearly 100,000 comments in response to its request for information on a number of possible changes to the rule (221 DEN B-1, 11/17/14).
One of the primary conflicts that emerged in the comments was possibly requiring chemical facilities to consider or use inherently safer technologies and processes. Environment, labor and public interest groups said it was crucial, while industry groups argued against mandating the use of certain technologies.
With public comments in on potential revisions to the risk management rule, the EPA set a September target date to issue a proposed rule.
Target Could Be Problematic
But September could be too late, given that the end of the Obama administration is on the horizon, the advocacy groups told the White House.
Depending on who wins the 2016 presidential election—particularly if it's an industry-friendly Republican—a strengthened risk management rule could be watered down or nullified even if the EPA issues the rule before Obama leaves office, said Ronald White, director of regulatory policy at the Center for Effective Government, one of the 146 groups to sign the letter.
The rule could get swept up into the “midnight regulations” that can be reviewed by the new administration in 2017 if the EPA waits until near the end of Obama's term to issue it, White told Bloomberg BNA March 19.
“[President Bill] Clinton did it when he took office, and so did [President George W.] Bush and Obama,” White said. “So it's not a Democrat or Republican thing.”
Regulations that have been issued but haven't taken effect can be held for review by the White House Office of Management and Budget for possible modification or withdrawal.
Regulation Could Get Overturned
Even if the EPA issues the risk management rule early enough to avoid midnight-regulation review, it could get overturned by a Congressional Review Act challenge, White said.
The act gives Congress 60 legislative days to repeal a final rule on a simple majority vote in both the House and Senate, subject to a presidential veto. But the act has a complicated method for defining what qualifies as a legislative day, such that the period for review is much longer than 60 calendar days.
White suggested that the EPA would need to issue a final regulation by mid-2016 at the very latest to avoid a Congressional Review Act challenge. To meet that date, White said, the agency must issue its proposal soon.
“The notice of proposed rulemaking certainly needs to move in the next couple of months at the latest for the rule to be done so that it wouldn't be vulnerable to the CRA or midnight-regulation rules,” White said.
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(ACC Mentioned) Fifty Shades of CHP
Mar 19, 2015 | Cogeneration & On-Site Power Production
By David Sweet
The precipitous drop in energy prices is having repercussions throughout the energy industry, and nowhere is this felt more profoundly than in the energy capital of Houston, Texas. In the US we have 50 states, each of which has a distinct market profile for CHP and distributed power generation. While the Texas economy has diversified in recent years, it is still very much an energy town and when prices fall as far and as fast as they have, there is going to be some pain experienced. It is estimated that there could be 130,000 job losses in Texas by this summer as a result of the drop in energy prices. While energy prices seem to be slightly rebounding, natural gas prices remained remarkably low throughout the winter in the US, notwithstanding the record low temperatures and snowfalls that many parts of the country experienced.
The flip side of this price slide is that interest in efficiency measures, such as CHP, is escalating as companies look for solutions to increase productivity and reduce costs. WADE is having a conference this April that will focus on CHP for the industrial sector and the many new opportunities for CHP in areas such as oil and gas, chemicals, processing and others. We will hear from none other than Pat Wood, a Texan who served as Chairman of the Federal Energy Regulatory Commission in Washington and who currently serves as Chairman of the Board of the power company Dynegy. In addition, neighbouring Mexico is undergoing an energy renaissance as it opens up its markets to foreign investment, which is creating a range of opportunities for energy projects and infrastructure.
The US energy boom has created a remarkable industrial expansion in the Gulf Coast area. According to the American Chemistry Council (ACC), the shale-related chemical investment has officially topped $100 billion which will create 55,000 permanent jobs in the chemical sector.
While the Obama administration is giving out mixed messages on energy policy, with the recent veto of a bill that would have allowed the Keystone Pipeline project to move forward and announcement of methane regulations that will impact the natural gas production and delivery sectors, the Executive Order that articulated a goal to increase the use of CHP in the United States by 40 GW by 2020 remains in effect. The Clean Power Plan announced by the EPA will also create new and significant opportunities for CHP, as it can be used as a mechanism for compliance with the new emission targets.
While the US is comprised of 50 unique states and there are 50 shades of the market for decentralised energy throughout the country, we are excited by the strong opportunities that lie in the Gulf region and with industrial customers. We hope that you can join us in Houston.
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Interior’s Fracking Rules Ready for Launch
Mar 20, 2015 | PoliticoPro
By Elana Schor
The Obama administration is set to unveil the first major nationwide safety restrictions on fracking, touching off a fresh political confrontation between the president and his critics in Congress and the energy industry.
The Interior Department’s rules — expected to be released as soon as Friday — are the federal government’s most comprehensive foray to date toward regulating the technology at the heart of the U.S. oil and gas boom, addressing worries such as potential dangers to drinking water. They will also offer oil and gas supporters new room to accuse President Barack Obama of seeking to throttle fossil-fuel production, despite his repeated boasts about the nation’s booming energy supplies.
At the same time, the rules fall short of environmentalists’ biggest demands for oversight of fracking operations — let alone some groups’ calls for an all-out ban.
Interior’s proposal would apply only to land owned by the federal government or Indian tribes, so it wouldn’t end the current patchwork of state laws and local ordinances governing the practice in hot spots like Pennsylvania, south Texas and North Dakota. But the industry and its supporters in Congress still call it an overreach, arguing that greens are massively exaggerating the dangers and that states are adequately regulating the industry already.
“Washington continues to come out with regulations that make it more complex and complicated to develop American energy,” said GOP Sen. John Barrasso, whose home state of Wyoming imposed its own fracking regulations in 2010. He said he is “likely to oppose whatever” Interior’s Bureau of Land Management proposes.
But the liberal Center for American Progress says the regulations are an important step.
“As with any rule, you can’t please everyone and you can’t make it perfect, but the rule will absolutely be a huge leap forward toward safer wells, improved transparency, and better protections for nearby communities,” Matt Lee-Ashley, director of the group’s public lands project, said by email.
The debate touches on some of the most dominant energy issues of Obama’s presidency. Fracking, or hydraulic fracturing — which involves injecting water, sand and chemicals underground to break up oil- and gas-rich shale formations — has helped create boom towns in once-unlikely states while turning the U.S. into a rising energy superpower.
The resulting surge in domestic supplies during the past eight years has helped drive a swoon in oil and gas prices, putting money into consumers’ pockets and strengthening the United States’ hand against rival energy producers like Iran and Russia. But it has also weakened the bottom lines of many oil and gas producers, making them vulnerable to what Dan Naatz, a senior vice president at the Independent Petroleum Association of America, described as a regulatory “death by a thousand cuts.”
Kathleen Sgamma, a vice president at the industry group Western Energy Alliance, agreed that the withering downturn in oil prices “strengthens their hand” at Interior.
“The industry is weaker and won’t be able to fight back,” she said in an interview about the upcoming fracking regulations. “If they’re out on public lands where [drilling activity] is already more marginal, this is blood in the water.”
Greens, meanwhile, will likely have a mixed reaction despite potentially winning some concessions in Interior’s final version of the regulations. Anti-fracking activists denounced an earlier draft from Interior as too weak, saying the president should do more to tamp down oil and gas production amid worries about illnesses, damaged roads, explosive fuel trains and even earthquakes, which some scientists suspect have been triggered by underground disposal of drilling waste.
Amy Mall, a senior policy analyst at the Natural Resources Defense Council, said her group would stay worried about fracking’s effects on pollution and public health “even if this rule were absolutely perfect, the strongest it could be, with rigorous penalties for noncompliance.”
“Because none of those rules are strong enough and enforced enough,” she added, and “because we’re very concerned about how much oil and gas BLM is permitting and the process they’re using.”
Interior is expected to follow up in the next few months with new standards for the burning of fracking-generated methane gas, which can contribute to global warming. And the EPA, which has taken its own steps to limit methane pollution from shale gas wells, is still working on a years-long study of fracking’s health risks. That study could lead to even broader attempts at regulation, including on the private or state-owned lands where the vast majority of fracking occurs.
Interior Secretary Sally Jewell, a conservationist and former oil industry engineer, told reporters this week that the proposal will “protect groundwater resources while also unlocking the energy potential that we have.”
“I think that the public, environmental organizations and industry will recognize that we’ve struck the right balance,” Jewell said.
The rules will have an especially large impact in the West, where drillers on federal and tribal lands will have to abide by new standards for well construction and the management of fracking waste fluids. And they will apply to both oil and gas production, unlike an EPA air rule that took effect this year for gas wells only.
The regulations will include standards for well construction, responding to worries about fracking fluids being able to seep into nearby drinking water supplies, sources said. They will also include rules for the disposal of the liquid fracking waste known as “flowback,” and requirements for companies to disclose the chemicals they use in the fracking process. At the same time, the rules will offer some room for states to remain in charge, as long as BLM certifies that existing state regulations are sufficient to comply with federal standards.
The final rule is expected to hew to the core elements of a draft version released two years ago to jeers in equal measure from environmentalists, who slammed Interior for pulling its punches, and industry groups that called the regulations too onerous.
Instead of tightening the screws, Naatz said, the federal government should ease its regulations. “Our members will say the very same activity you’re seeing on state and private lands could be happening on federal land,” he said.
The Interior proposal has had a long, rocky road to the finish line.
BLM originally said the rule would be final by the end of 2012, but then withdrew its proposal in January 2013 before issuing a new proposal four months later. Environmentalists complained that Interior appeared to be backsliding amid heavy pressure from industry.
Now the rule faces a Republican Congress that already has shown hostility toward federal fracking regulations, exemplified by a bill the House passed in 2013 that would have prevented Interior from overruling states’ fracking rules. The White House threatened to veto that bill, in part because it “would undermine” Interior’s work.
A version of the final Interior regulations that circulated in the fall included a few changes that environmentalists had sought, according to one source tracking the rule. Those included stronger restrictions on the storage of fracking fluid in open-air pits and more comprehensive evaluation of well construction.
Yet the administration appears set to reject green groups’ other top priorities in the rule, such as required disclosure of fracking chemicals before oil and gas extraction starts, as opposed to afterward.
“We don’t expect this rule to ban fracking, but to regulate how it’s done,” Athan Manuel, director of the Sierra Club’s lands protection program, said in an interview.
Further federal fracking regulations are expected from Interior in the coming months as part of a proposal to rein in the disposal of methane, a highly potent greenhouse gas generated by the technique.
And EPA’s long-postponed study of the possible drinking water effects of fracking is set for release within the next few months, an agency official said. Some in the industry see that study, begun in 2010, as a prelude to further regulation.
Congressional Democrats did not wait for Interior to finish its fracking rule before firing off their own efforts to rein in oil and gas development. Environmentalists cheered Thursday’s introduction of five House bills on the topic, including a proposal to close the so-called “Halliburton loophole,” a 2005 amendment that prohibits EPA from regulating most fracking activity under the Safe Drinking Water Act. Sen. Bob Casey (D-Pa.) has also also reintroduced that bill in the Senate.
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Fracking Rules Expected to Be Unveiled by Obama Administration Friday
Mar 19, 2015 | The Wall Street Journal
By Amy Harder
The Obama administration on Friday is expected to issue long-awaited regulations setting new standards for hydraulic fracturing in the oil and natural-gas industries, people familiar with the matter said.
The drilling technology, commonly known as fracking, has been key to unlocking vast reserves of oil and gas across the U.S., but qualms about its environmental impact have made it controversial.
The regulations will set standards for wells and disposal of wastewater, and will require disclosure of chemicals used, Interior Secretary Sally Jewell said Tuesday in a speech in Washington.
“The rule will include measures to protect our nation’s groundwater—requiring operators to construct sound wells, to disclose the chemicals they use, and to safely recover and handle fluids used in the process,” Ms. Jewell said. “Some have already labeled these baseline, proven standards as overly burdensome to industry; I think most Americans would call them common sense.”
The regulations, in the works since 2012, apply only to drilling on federal lands, which account for 11% of the natural gas and 5% of the oil the U.S. consumes, according to Interior Department data. Drilling on private or state-owned lands won’t be subject to the regulations.
Many states already regulate fracking, including those leading the domestic energy boom such as Colorado, North Dakota, Pennsylvania and Texas. Part of the federal government’s goal is to create a national standard for hydraulic fracturing that states and companies can adopt.
“The responsibility for developing this energy safely must now be taken up in state capitals, engineering labs, and board rooms all across the country,” Ms. Jewell said.
Hydraulic fracturing is a drilling technique of injecting water and chemicals deep into shale rock formations to crack open pockets of natural gas and oil. Companies have done it for decades, but the practice has come under scrutiny in recent years as its use skyrocketed and triggered the U.S. oil and gas boom. New York, which has natural-gas deposits, banned fracking last year.
Roughly 90% of new land-based wells in the U.S. are drilled using the technology, the government said.
The government, in a May 2013 draft proposal, said it expected the rules to add industrywide costs of between $12 million and $20 million a year. Some analysts said the rules won’t be overly burdensome. “We expect the direct effect will be minimal on the industry, as the associated cost increases will likely represent [less than] 0.5% of average well costs,” investment bank FBR Capital Markets said in a research note on Wednesday.
The regulations represent one of the first steps by the Obama administration on fracking, which some environmental groups say is unsafe and should be banned. Administration officials say it can be done safely, though industry and congressional Republicans say no federal regulation is needed.
James Inhofe (R., Okla.), chairman of the Senate Environment and Public Works Committee, introduced legislation Thursday that would prohibit the federal regulation of fracking and instead give states the regulatory responsibility. The bill has support from all Senate Republicans but is unlikely to become law.
Thanks in large part to the combination of fracking and horizontal drilling, U.S. oil and natural gas production has surged. Oil production has risen 85% since 2008, to reach 9.4 million barrels of oil a day in February, and natural gas production has risen more than 30% over the same stretch, the U.S. Energy Information Administration said.
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Absent EPA Policy, Democrats Seek To Boost Agencies' Fracking Oversight
Mar 19, 2015 | InsideEPA
By Bridget DiCosmo
House and Senate Democrats are pushing legislation backed by environmentalists that would boost EPA's and other federal agencies' oversight of hydraulic fracturing to address what advocates say are gaps in regulation of the drilling practice, absent stricter EPA policies to address potential risks of environmental harm from fracking.
The bills -- which four House Democrats discussed during a March 19 press call -- would address what the lawmakers say are “loopholes in the Safe Drinking Water Act (SDWA), the Clean Water Act (CWA) and the Clean Air Act” that hinder federal oversight of the oil and gas industry, according to a press release on the call. The four lawmakers are Reps. Jared Polis (CO), Diane DeGette (CO), Matthew Cartwright (PA) and Jan Schakowsky (IL).
For example, Polis has introduced a bill that would require EPA to issue a final rule within 180 days of enactment that would add hydrogen sulfide to the list of hazardous air pollutants regulated under the Clean Air Act, and revise the air law's “major” source categories list to include oil and gas wells as sources of the air toxic.
Separately, Cartwright is introducing a bill that would address language in the CWA stemming from a 2005 energy law that exempted some discharges from runoff associated with construction at oil and gas operations from strict permitting controls -- an exemption critics say leaves water unprotected from fracking. The bill would eliminate the exemption and require the administration to conduct a study of stormwater impacts associated with oil and gs operations, including an analysis of contamination, nearby groundwater supply and vulnerability of aquifers.
“Obtaining a permit is a straight forward process, and this bill would only seek to require oil and gas companies to have a plan to protect streams from runoff and acquire this simple permit,” says a Dear Colleague letter written by Cartwright.
Schakowsky introduced legislation that would require state underground injection control (UIC) programs to conduct baseline groundwater testing of drinking water sources prior to allowing fracking operations to commence. The legislation would require states to submit the results of that testing to EPA -- a requirement that environmentalists say is necessary to obtain documentation of potential contamination from drilling.
And DeGette has introduced legislation to eliminate an exemption also created by the Energy Policy Act of 2005 that bars EPA from regulating fracking under the SDWA UIC permitting program and also create first time chemical disclosure requirements under the drinking water law for fracking operations. Sen. Robert Casey (D-PA) on March 18 reintroduced the Senate companion to the DeGette bill, S. 785.
Fracking Legislation
One environmentalist says that while senators have not yet introduced companions to the other three fracking bills, some members of the upper chambers are “thinking about it.”
The bills, all of which are identical to bills that were previously introduced in the last Congress but failed to gain traction, come as EPA is readying its massive, multi-year study of the effects of fracking on drinking water.
Environmentalists had previously hoped the study would justify stronger EPA oversight of drilling, but some now say they believe the study will be “scaled back” from what they expected, the environmentalist says.
For example, the Natural Resources Defense Council's (NRDC) Briana Mordick wrote in a March 11 blog post that “recently released documents from the EPA reveal that the agency has narrowed the scope of the study and the data available, as a result of industry influence.”
The blog post cites Inside Climate News reports that one member of the advisory board charged with reviewing the scope of the study said the study appears unlikely to provide much more “real data” than was available five years ago. Mordick writes in the post that NRDC hopes the study will be “clear about remaining gaps and uncertainties in the science,” provide further explanation for the agency's delay in providing “prospective” case studies intended to provide a baseline for documenting whether contamination occurred from fracking and will be “free of industry influence.”
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Energy Export Ban Hurts U.S. Credibility, Former Obama Officials Tell Senate Panel
Mar 20, 2015 | BNA Daily Environment Report
By Jim Snyder
Two former Obama administration officials said a four-decade-old ban on oil exports limits U.S. geopolitical influence and makes it harder to get other nations to embrace free trade.
The issue of the ban “arose constantly” in negotiations with other countries, including when the U.S. sought support for sanctions on Iran's oil production to halt its nuclear ambitions, said Carlos Pascual, a former top energy envoy at the State Department.
“It's those kinds of restrictions that in the end affect American credibility, and in the moment when we have to put through an important policy, makes it much more difficult to negotiate,” Pascual said March 19 at a Senate Energy and Natural Resources Committee hearing called to build support for ending the ban in place since the 1970s Arab oil embargo.
Despite a lobbying push by drillers, and steep job losses in the oil fields tied to a plunge in crude prices, there has been no significant effort in Congress to lift the ban. Some oil refiners, who benefit from low prices, oppose ending the ban.
Pascual said in the drive for international support of penalties on Iran, Indian and Turkish officials questioned where they'd get crude to replace the supplies threatened by sanctions.
Murkowski Bill
The U.S. succeeded in showing both governments why it is in their national interest to diversify their sources beyond Iran, but “it was not an easy negotiation,” said Pascual, now senior vice president for energy and international affairs at IHS Inc., a consulting firm, and a former ambassador to Mexico and Ukraine.
Committee Chairman Lisa Murkowski (R-Alaska) is writing legislation to end the ban as a way to encourage continued oil development in the U.S. as prices fall and companies begin to cut back.
While proponents of ending the export restrictions say doing so will lower U.S. gasoline prices by adding to the global oil supplies, the hearing largely focused on the effect the ban has on energy geopolitics.
Ending the ban “is beneficial to the markets for efficiency, for pricing and also in sending a message of support on the importance of free trade” said Elizabeth Rosenberg, a former senior adviser at the Treasury Department under President Barack Obama.
Rosenberg is the director of the energy, economics and security program at the Center for a New American Security, a Washington-based group that examines national security issues.
Jeff Warmann, the chief executive officer of Monroe Energy LLC, the refining arm of Delta Air Lines Inc., said lawmakers should leave the restrictions in place.
The drop in fuel prices as U.S. production has increased has provided a “jolt to the economy,” Warmann said.
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Senate GOP Lays Out Case for Oil Exports
Mar 19, 2015 | The Hill - E2 Wire
By Timothy Cama
Senate Republicans on Thursday laid out a series of arguments that they said justify lifting the 40-year-old ban on exporting crude oil.
At a hearing of the Energy and Natural Resources Committee, Republicans said lifting the ban would decrease gasoline and diesel prices in the United States, add 1 percent to the gross domestic product, create a million jobs and improve the country’s standing internationally.
But senators acknowledged that getting public support might be tough, especially if the public thinks it would increase fuel prices.
“I think it is time to look at this policy and to repeal it for a lot of what I consider to be substantive policy reasons,” said Sen. Lisa Murkowski (R-Alaska).
“But at the end of the day, the people that I work for really don’t give a hoot about what the policy is. What they want to know is, ‘is it gonna cost me more money when I’m filling up?’ ”
The witnesses Republicans brought to the hearing assured them that fuel prices would actually fall.
Carlos Pascual, a fellow at Columbia University’s Center on Global Energy Policy, said gasoline prices are based on the price of Brent crude, an international benchmark.
“If we are able to export light, tight oil from the United States, we add to the global supplies that contribute to that Brent crude benchmark,” he said. “As a result of that, we help drive down the international oil price that is tied to the price of gasoline in the United States and around the world.”
Murkowski’s colleagues focused on different results of lifting the ban.
“CBO’s estimating that our GDP will grow by 2 percent over the next five or six years, it’s awful,” Sen. Bill Cassidy (R-La.) said. “We can increase it by 1 percent just with exports.”
Sen. Steve Daines (R-Mont.) said exports would be beneficial internationally.
“Many of the world’s energy resources are in unstable regions,” he said. “I do believe the world should rely more on American energy, instead of Russia or the Middle East.”
But the panel’s Democrats were not on board.
Sen. Maria Cantwell (D-Wash.) said she was worried that prices would increase domestically.
“Economic effects of oil and gas prices ripple through our economy,” she said. “Lower oil prices act like a tax cut for the vast majority of Americans. No one wants to see the price at the pump go up.”
Cantwell was also concerned about the safety of moving more crude oil and what it would mean for the country’s energy security.
Sen. Joe Manchin (D-W.Va.) said he wasn’t completely opposed to easing the export ban.
But he proposed a limit on exports based on how much the country is producing, in order to protect low domestic prices.
“In West Virginia, it would be hard for me to explain to the people, to grasp the whole world market, if you will, that if we start unfettered export, it would reduce the price of their gas,” he said.
But instituting a “trigger” to stop exports if production falls could work well, Manchin said.
“I just think there’s a win-win here. We’ve just got to find it.”
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Lawmakers Signal Support for Lifting Crude Export Ban
Mar 20, 2015 | E&E Daily News
By Daniel Bush
Senators on both sides of the aisle yesterday signaled support for lifting the decades-old ban on crude exports, even as some acknowledged the political hurdles that could make repealing it a tough sell to voters back home.
At a Senate Energy and Natural Resources Committee hearing, Republicans argued that reversing the 1970s-era ban on domestic crude oil exports would create new jobs, lower gasoline prices and reduce the country's dependence on imported oil.
"It's time to look at this policy and repeal it," said Chairwoman Lisa Murkowski (R-Alaska), who has intensified her push to lift the ban since taking over the panel in January.
Sen. Joe Manchin (D-W.Va.), a moderate who often sides with the GOP on energy issues, showed a willingness to back the change but cautioned that consumers would be skeptical unless they believe that lifting the ban would lower prices at the pump and bolster U.S. energy security.
"There's got to be a way that I can go home to West Virginia and say this is good" for the country, Manchin said. He added, "I think there's a win-win here, but we just have to find it."
Oil producers and industry analysts testified that reversing the ban could lower the price of gas by as much as 7 to 12 cents per gallon, while creating hundreds of thousands of new oil and gas sector jobs.
The change would generate $86 billion in gross domestic product between 2016 and 2030 and $1.3 trillion in tax revenue for the federal government, states and municipalities, according to a study released this week by IHS, a Colorado-based consulting firm.
"Maintaining the crude export ban precedent undermines the very competitive and global nature of American economic interests," IHS Senior Vice President Carlos Pascual said in his written remarks.
Ryan Lance, the chairman and CEO of ConocoPhillips Co. and a vocal supporter of ending the ban, urged lawmakers to act as swiftly as possible. But Lance acknowledged after the hearing that pushing the policy change through Congress is an "uphill climb."
"It's tough to handicap" when lawmakers might be able to pass legislation to lift the ban, Lance told reporters.
The refining industry, which remains largely opposed to the change, has argued that domestic refineries can process the abundance of light crude being produced in North Dakota, Texas and elsewhere across the country, nullifying the need to lift the ban (Greenwire, March 18).
And some Democrats like Sen. Maria Cantwell of Washington, the panel's ranking member, remain skeptical of the proposal. Cantwell said Americans are already spending less on gas thanks to more fuel-efficient vehicles and other technological advances that have lowered overall energy consumption in recent years.
Domestic gas consumption increased each year between 1982 and 2007 but has tapered off since then, resulting in $356 million in savings for consumers over the past six years, Cantwell said.
She also said that ending the export ban would not address lingering concerns over the shipment of crude by rail or the debate over the Jones Act, a century-old law that requires U.S. vessels to transport goods between domestic ports.
Murkowski, who has made lifting the ban a top priority, said lawmakers should "consider our legislative options." But in a sign that a change might not be imminent, she urged patience, adding, "stay tuned."
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In a World Awash With Crude, Oil Storage Companies Are Kings
Mar 20, 2015 | BNA Daily Environment Report
By Javier Blas
In a world awash with cheap oil and plunging profits, one obscure corner of the energy business is shining brightly: the owners of storage tanks.
While not nearly as famous as giant oil producers like Exxon Mobil Corp. and Royal Dutch Shell Plc, storage companies including Vopak NV, Kinder Morgan Inc., Oiltanking GmbH and Magellan Midstream Partners LP are among those benefiting from rising demand for onshore tanks—and higher prices to rent limited space.
“Storage is king,” said Jean Francois Lambert, global head of commodity finance at HSBC Holdings Ltd. in London. “Good tanking at the right location could make money.”
Driven by record production from shale fields, the oil glut is bigger in the U.S. than any other region, and particularly large around the hub of Cushing, the Oklahoma town that calls itself the “pipeline crossroad of the world.” The International Energy Agency anticipates that total U.S. stocks levels, already at a 80-year high of 459 million barrels, may soon test the limits of the country's tank capacity.
In the U.S. and beyond, traders are filling tanks to take advantage of contango—a relatively rare situation where forward prices are higher than current prices, allowing people to buy oil cheap, store the commodity in tanks and sell it later, all the while locking in their income through the use of derivatives.
The price difference between a West Texas Intermediate oil contract for immediate delivery, the benchmark for U.S. prices, and the one-year forward—a measure of the contango—stood at minus $12.59 a barrel on Thursday, close to the highest since crude prices started falling last year.
Tank Farms
Oil traders believe that tank farms at Cushing will fill up as soon as late April, triggering a race to secure the last remaining tanks in the city.
“Demand for our storage services in Cushing has been robust,” said Robb Barnes, senior vice president for commercial crude oil at Magellan, a company with 12 million barrels of tanking capacity in the Oklahoman town. The company said all its tanks were already leased.
Mark Hurley, chief executive officer of Blueknight Energy Partners, a company with 6.6 million barrels of tank capacity at Cushing, told investors increased demand for his tanks meant fees had “been changing fairly rapidly over the last six months. Obviously, on the rise.”
Storage Fees
Storage companies keep the exact level of their fees confidential but oil traders said they charge around 20 cents to 50 cents a barrel a month, depending on the length of the contract.
The dearth of storage capacity is such that traders said short-term lease rates for the most sought after locations, such as Cushing, have gone up to as much as 80 cents a barrel.
In 2008 and 2009, the last time the oil market was as oversupplied as today, the storage companies were slow to increase rates, allowing the traders who used their tanks to take an unusually large slice of the contango profit. This time, the split between tank owners and traders is more even, according to Mike Conway, head of trading at Shell in London.
“It looks like the owners of the storage facilities have extracted a bit more value for themselves,” he said in an interview.
Share Price
Investors are taking notice. In dollar terms, the share price of Vopak, the world's largest independent oil storage company, has risen 4.4 percent since the beginning of the year. Vopak owns onshore tanks capable of storing roughly 210 million barrels of crude oil and petroleum refined products—enough to supply Germany for almost three months.
In the same period, the MSCI World Energy index has dropped more than 7 percent weighed by lower oil prices.
Across the board, oil storage companies have told investors to expect stronger income in 2015 than in 2014.
On top of a dozen of publicly listed oil storage groups, the increase in demand would be a boon for privately owned companies such as Oiltanking, a unit of German-based Marquard & Bahls AG, and VTTI BV—a venture including Vitol Group, the largest independent oil trader.
“You'll find all the locations around the world that can store crude now, like Saldanha Bay or the Caribbean, are going to be full,” Jared Pearl, VTTI's commercial director, said in an interview this week. “It would be crazy if they weren't.”
The higher demand and fees are not the only factor boosting incomes. Some storage companies also take advantage of the contango by buying themselves crude oil for storage.
“We have five percent of our tankage in Cushing that is really for own account,” Greg Armstrong, CEO of Plains American Pipeline LP, told investors last month. “There are areas where we have strategically pulled off opportunities or massive tankage for our own account.”
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Protesters Disrupt FERC Meeting
Mar 19, 2015 | PoliticoPro
By Alex Guillén
More than a dozen protesters disrupted the monthly FERC commissioners’ meeting on Thursday in their latest bid to pressure the energy regulator to shelve liquefied natural gas export projects.
Just seconds after the meeting was gaveled in, one woman stood up and began reading a prepared statement. Security guards immediately grabbed her and hustled her out of the building.
About 15 other protesters, many wearing red shirts reading “FERC doesn’t work,” began shouting “Let them speak” and “Stop construction at Cove Point,” a reference to Dominion’s planned LNG export project in Maryland. They moved from the audience to sit cross-legged on the floor in front of the commissioners’ table.
Security removed those protesters from the room as well, some of them forcibly.
Chairwoman Cheryl LaFleur gaveled out the meeting and the five commissioners left the room until the protesters had been removed. A few other protestors who had remained quiet earlier while filming the altercation from their seats were escorted out quietly several minutes later.
“I think the mood of the commission is positive more in spite of the protests than because of them,” LaFleur told reporters after the meeting. “We recognize that a lot of the things we do are controversial, and people are entitled to differences of opinion on those things, and those differences of opinion are reflected in our docket, as they should be.”
The relatively low-key agency has become a focal point for activists opposed to expanding natural gas infrastructure and hoping to make the commission take a greater role in addressing climate change.
FERC, they argue, has become a simple rubber stamp for a booming natural gas industry.
“It’s kind of overwhelming what’s going on and what FERC is allowing the natural gas industry to do,” activist Steven Norris, who participated in Thursday’s protest, told POLITICO before FERC’s meeting began. “We’re trying to get FERC to start thinking about climate change and the impacts on communities.”
FERC earlier this month took steps to address the growing protests with an order making it clear that the public can observe the agency’s public meetings, but is forbidden from speaking or waving signs.
Protesters have indicated that FERC’s order, which they refer to as a “gag rule,” will not stop them from continuing their activities. An umbrella organization that has taken to targeting FERC, Beyond Extreme Energy, hopes to attract at least 500 people for a protest and planned arrests outside FERC’s headquarters this May.
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McConnell Calls on All U.S. Governors To Consider Ignoring EPA Power Plant Rule
Mar 20, 2015 | BNA Daily Environment Report
By Dean Scott
Senate Majority Leader Mitch McConnell (R-Ky.) March 19 stepped up his campaign to have states essentially ignore Environmental Protection Agency carbon pollution limits for power plants, urging all 50 states to “carefully review the consequences before signing up for this deeply misguided plan.”
In a letter to the National Governors Association, McConnell wrote that he has “serious legal and policy concerns” regarding the EPA's proposal, which is to be finalized this summer and is central to President Barack Obama's climate agenda.
The EPA is proposing carbon dioxide limits that vary state by state but which it projects will net a 30 percent cut in those emissions by 2030 from 2005 levels.
McConnell's letter comes on the heels of his March 3 op-ed in Kentucky's Lexington Herald-Leader, in which he first urged states to “hold back” their plans for complying with the rule so as to allow litigation over its legality to proceed (43 DEN A-1, 3/5/15).
The EPA's proposal “is already on shaky legal grounds, will be extremely burdensome and costly, and will not seriously address the global environmental concerns that are frequently raised to justify it,” the Senate majority leader wrote in his March 19 letter.
“Moreover, declining to go along with the administration's legally dubious plan will give the other two branches of government time to address the proposal and will not put your state at risk in the interim,” all while providing time for the courts to weigh in on the legality of the rulemaking, he wrote.
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McConnell Letter To Governors: Reject EPA’s CO2 Plan
Mar 19, 2015 | PoliticoPro
By Erica Martinson
Senate Majority Leader Mitch McConnell wrote all 50 governors today to urge them to reject EPA’s proposed greenhouse gas rule for existing power plants, known as the Clean Power Plan.
“Some have recently suggested that failing to comply with the EPA’s requirements would be to disregard the law. But the fact is, it is the EPA that is failing to comply with the law here,” McConnell wrote in the letter. EPA, he said, is asking states to do more to cut carbon than the agency is authorized to do on its own.
McConnell quoted liberal Harvard professor and new GOP favorite Laurence Tribe, who called the plan “constitutionally reckless.”
The letter doubles down on McConnell’s “just say no” campaign, which was launched in his recent opinion piece that called for states to decline to work with the agency or submit plans to cut CO2. EPA is due to issue a final rule this summer.
McConnell said the plan would have major costs for little benefit, and suggested governors “carefully review the consequences before signing up for this deeply misguided plan. I believe you will find, as I have, that the EPA’s proposal goes far beyond its legal authority and that the courts are likely to strike it down.”
The proposed rule faces its first major legal challenge on April 16 when a federal appeals court will hear oral arguments over whether EPA has authority to write the regulation.
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McConnell to Wtates: EPA Climate Rule is Illegal
Mar 20, 2015 | The Hill - E2 Wire
By Timothy Cama
Senate Majority Leader Mitch McConnell (R-Ky.) is doubling down on his advice that states ignore the Obama administration’s climate rule for power plants.
McConnell sought to reassure governors in a letter Thursday that they would be on firm legal ground and not violating the law if they decline to formulate plans to implement the Environmental Protection Agency’s (EPA) carbon limits.
“The fact is, it is the EPA that is failing to comply with the law here,” McConnell wrote to the National Governors Association, adding that the EPA is going “far beyond its legal authority.”
The proposed rule would require states to use various measures, like improving the efficiency of power plants and reducing power demand, to meet individual emissions targets that the EPA calculated for each state.
But McConnell said the EPA is “overreaching” because it doesn’t have the authority under the Clean Air Act to force states to take most of those actions.
McConnell received backlash after telling states earlier this month to ignore the regulation, which the EPA plans to make final this summer.
Critics called the advice irresponsible and charged that states that follow it would get implementation plans imposed upon them by the EPA, and those plans could be worse than what the states write.
However, McConnell dismissed the concern in his letter, saying the EPA can’t legally impose most of its rule.
“In other words, the EPA is attempting to compel states to do more themselves than what the agency would be authorized to do on its own,” he wrote.
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Reducing Carbon Pollution From The Power Sector Without Building Thousands Of Miles Of New Pipelines
Mar 19, 2015 | Environmental Defense Fund
By N. Jonathan Peress
With the Environmental Protection Agency’s proposed Clean Power Plan to reduce carbon pollution from the nation’s power plants nearing finalization, all sides are looking closely at the capacity of our existing infrastructure to deliver emission reductions from the power sector — including the natural gas infrastructure that could help reduce the need for aging, carbon-intensive coal-fired generation.
Some opponents of the Clean Power Plan say we need to invest billions of dollars in thousands of miles of new pipelines, while environmentalists, clean energy advocates and others are concerned that investments in new pipelines serves to reinforce fossil fuel dependence.
What policymakers and regulators need to know is this: Right now, 46 percent of the pipeline capacity that already exists isn’t being used, according to a recent study by the U.S. Department of Energy.
Yes, 46 percent.
Figures like this mean everybody needs to rethink the whole infrastructure equation, and how to balance it most effectively.
Eat What’s On Your Plate Before You Ask for More
In remarks before the five Commissioners on the Federal Energy Regulatory Commission (FERC) recently, I described how the extensive natural gas pipeline system that’s already in place in the United States today can help address the use of natural gas anticipated under EPA’s proposed Clean Power Plan.
The discussion was part of a FERC technical conference assessing implications of the Clean Power Plan on electric reliability, energy markets and infrastructure including natural gas pipelines and electric transmission. The plan sets forth state-wide targets for reducing carbon pollution from existing power plants through 2030, based on cost-effective and proven means for reducing emissions from the power sector including increased energy efficiency, renewable energy deployment, and increasing the amount of electricity produced by natural gas-fired power plants. (States also have broad flexibility if they choose to craft individualized plans to meet those targets deploying a wide variety of solutions.)
The Keys to Unlock Existing Pipeline Capacity
At the FERC conference, EDF recommended a series of actions FERC could take in short order to optimize our utilization of the existing infrastructure and avoid building unnecessary natural gas pipelines. These steps are readily achievable because they entail relatively minor refinements to the natural gas wholesale market design that would increase coordination between the gas and electric industries so that the needs of power generators are better served by pipeline operators.
First and foremost, FERC should require pipeline operators to increase the frequency and number of daily opportunities for their customers – power plants – to reserve space on the pipes and schedule deliveries. These are called “nominating cycles,” and FERC’s rules require pipelines to provide at least two per day. In practice, however, a few pipeline operators have largely automated their scheduling systems and allow customers to submit scheduling requests as many as 24 times per day.
This is important because it allows power generators to schedule gas deliveries on short notice in response to real time conditions on the grid and reliability needs. EDF recently submitted comments to FERC with data analyzing pipeline utilization during the polar vortex events of 2014 which demonstrates that pipelines that provide more nominating cycles are used to a far greater extent of their maximum capacity than those which only provide the minimum requirement of two per day.
Adding Flexibility Around the Clock
EDF also urged the Commission to require pipelines to allow power plants to schedule varying flows and quantities over the course of a day. Currently, many pipelines provide very little flexibility in the amount of gas a customer may seek to have delivered, frequently requiring that deliveries be for a fixed quantity of gas divided evenly over 24 hours. In industry parlance, this is referred to as “ratable” flow.
Electricity demand ramps up significantly in the morning, and down at night. Add to that increasing amounts of low-cost, but variable, supplies of wind and solar energy, and it’s easy to see why power plants – which will increasingly provide grid “firming” or “balancing” services to maintain reliability – need more flexibility in natural gas supplies to meet frequently changing demand for electricity.
Unfortunately, operators are stuck with obsolete ratable flow requirements left over from years ago, before flexible gas-fired power plants became a major customer of the pipelines. That means the current gas market is less responsive than it can and should be in order to efficiently serve gas-fired electric generators. It also means we’re not getting as much use as we could be out of our existing pipeline infrastructure.
Keeping Up With the Times
As more renewable resources, distributed generation and demand response capability is added to the grid, it will be ever more critical to optimize a more dynamic pipeline system. With well-designed market reforms, the existing interstate pipeline system can meet the needs created by the innovative new products, services and technologies being added to the electric system it feeds.
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Three Conservative Judges to Hear Arguments over EPA's Clean Power Plan
Mar 20, 2015 | BNA Daily Environment Report
By Andrew Childers
The Environmental Protection Agency will face a panel of three conservative judges April 16 when it defends its legal authority to issue its proposed Clean Power Plan, possibly jeopardizing the rule before it's even finalized (In re Murray Energy Corp., D.C. Cir., No. 14-1112, merits panel assigned, 3/18/15; West Virginia v. EPA, D.C. Cir., No. 14-1146, merits panel assigned, 3/18/15).
The U.S. Court of Appeals for the District of Columbia Circuit announced that Judges Thomas Griffith, Karen LeCraft Henderson and Brett Kavanaugh will hear oral arguments in Murray Energy Co.'s challenge to the EPA's proposed rule as well as in a lawsuit brought by several states challenging an accord in which the agency agreed to regulate carbon dioxide emissions from power plants.
Griffith and Kavanaugh were appointed to the court by President George W. Bush. Henderson was appointed by President George H.W. Bush.
“Before this panel was announced, I thought EPA had a pretty strong case on procedural issues. With this panel, I feel like it's going to be more of a toss-up,” Brian Potts, an attorney at Foley & Lardner LLP, told Bloomberg BNA March 19.
Though the judges hearing the arguments have conservative backgrounds, observers said the unusual nature of Murray Energy's challenge—asking the D.C. Circuit to block a rule before it's even finalized—may be a more significant factor in the case than how they view other regulatory issues.
Rule Not Yet Final
Legal experts said the court is likely to be very wary of opening up proposed rules to legal challenges, which would upend decades of precedent.
“They will understand this is opening the floodgates to enormous litigation the courts don't want to deal with and would change the face of the regulatory state,” Richard Revesz, director of the Institute for Policy Integrity at the New York University School of Law, told Bloomberg BNA March 19.
Murray Energy is challenging the EPA's authority to propose the Clean Power Plan (RIN 2060-AR33), which would set carbon dioxide emissions limits for the power sector in each state.
The company argues that the EPA can't regulate carbon dioxide emissions from power plants under Section 111(d) of the Clean Air Act because power plants are already subject to hazardous air pollutants standards under Section 112.
House, Senate Approved Conflicting Amendments
When the Clean Air Act was amended in 1990, the House and Senate approved conflicting amendments to Section 111(d).
The Senate amendment would bar the EPA from regulating pollutants under Section 111(d) if they already are subject to hazardous air pollutant standards under Section 112.
The House amendment can be read as barring the agency from regulating industrial sources under Section 111(d) if they are subject to standards under Section 112. Both provisions were included in the bill that was signed into law.
The EPA has argued that the language of the conflicting amendments is ambiguous and therefore open to interpretation by the agency. Section 111(d) has been rarely used, and its limits have never been defined by the courts.
The D.C. Circuit may be reluctant to address that question this early in the rulemaking process because the EPA could offer an alternate interpretation of its Clean Air Act authority in the final rule, expected this summer, Revesz said.
“We don't know what the final rule will look like,” he said. “We don't even know for sure what EPA's interpretation of Section 111(d) will look like.”
Potts Sees Court Eager to Rule
Potts, however, said the court could be eager to rule on the validity of the EPA's proposal, provided it can clear the jurisdictional hurdles.
“Kavanaugh and Griffith, my gut tells me they're going to want to make a decision on the legality of the Clean Power Plan,” he said. “If they get there, I don't think that's going to be good for EPA.”
Thomas Lorenzen, an attorney at Dorsey & Whitney LLP, told Bloomberg BNA March 19 that the case could hinge on Griffith.
As a long-serving judge, Henderson will probably be wary of opening proposed rules to early legal challenges, he said. Whether Griffith agrees with that concern or follows the more aggressive tack attorneys predict Kavanaugh might take will determine how the court addresses Murray Energy's challenge, he said.
Judges Cautioned EPA on Broad Interpretations
Griffith and Kavanaugh were the majority judges in the D.C. Circuit's 2012 decision overturning the EPA's cross-state air pollution rule and cautioned the EPA against broad interpretations of its Clean Air Act authority (EME Homer City Generation LP v. EPA, 696 F.3d 7, 75 ERC 1776, 2012 BL 213202, D.C. Cir., 2012)
Though that decision was eventually overturned by the U.S. Supreme Court, Potts said it dealt with a similar Clean Air Act interpretation issue. There the court examined how the EPA interpreted Section 110(a)(2)(D)'s requirement that upwind states that “significantly contribute” to air quality violations in downwind states be required to control their emissions.
In that decision, Kavanaugh and Griffith cautioned the EPA against reading its statutory authority too broadly.
“It seems inconceivable that Congress buried in Section 110(a)(2)(D)(i)(I)—the good neighbor provision—an open-ended authorization for EPA to effectively force every power plant in the upwind States to install every emissions control technology EPA deems ‘cost-effective,' ” they said in that decision.
Supreme Court Case Could Be Factor
The D.C. Circuit's case could be further complicated by an upcoming Supreme Court argument over the EPA's mercury and air toxics standards for power plants. The Supreme Court will hear arguments in that case March 25 (Michigan v. EPA, U.S., No. 14-46, order filed , 3/9/15).
The rule is being challenged by states and utility groups and focuses on whether the phrase “appropriate and necessary” in Section 7412(n)(1)(A) of the Clean Air Act requires the EPA to consider cost when setting toxic emissions limits for power plants.
If the Supreme Court were to overturn the EPA's rule, issued under Section 112 of the Clean Air Act, that would moot Murray Energy's argument against the proposed Clean Power Plan.
“There are a whole host of reasons why the D.C. Circuit may not want to rule right now,” Lorenzen said.
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Judge Denies Bid by New Hampshire Utility To Intervene in Sierra Club Power Plant Case
Mar 20, 2015 | BNA Daily Environment Report
By John Herzfeld
A federal judge has denied a motion by a New Hampshire utility to intervene in a lawsuit seeking action on a challenge to a state air pollution permit for a coal-fired power plant (Sierra Club v. McCarthy, D.D.C., No. 1:14-cv-02149, opinion and order 3/17/15).
Judge Christopher R. Cooper of the U.S. District Court for the District of Columbia, in a March 17 opinion and order, ruled against the Public Service Co. of New Hampshire (PSNH) in its attempt to join a dispute between the Sierra Club and the Environmental Protection Agency over the deadline for acting on a permit challenge for the utility's Schiller Station power plant.
PSNH had argued that it needed intervenor status to protect its interests in the content of the permit, but in rejecting the motion the judge found that the lawsuit involved only the timing of the EPA decision on the Sierra Club petition, not the substance. The Sierra Club opposed the utility's motion.
The EPA has notified the court that the parties have reached a tentative agreement in settlement negotiations, the judge noted. The utility filed its motion to intervene Feb. 3, and the parties went to the court in early March to seek more time to complete a settlement.
The Sierra Club sued in December 2014, charging that EPA Administrator Gina McCarthy had failed to meet a 60-day statutory deadline under the Clean Air Act for granting or denying the permit-challenge petition and seeking an order compelling the agency to act (246 DEN A-8, 12/23/14).
The petition, filed in July 2014, asked the EPA to object to an air pollution permit issued by the New Hampshire Department of Environmental Services for the Schiller Station plant, which is located in Portsmouth, N.H., near the Maine border. It sought more stringent numerical emission limits on sulfur dioxide and other permit changes.
In focusing the court's decision on the deadline at the center of the Sierra Club lawsuit, as opposed to the substance of the permit challenge, the judge wrote: “Timing is everything. And in this case, it is the only thing.”
No Substance Seen
Rejecting the utility's arguments that the outcome of the lawsuit may lead to modifications or even revocation of the permit, the decision cited recent cases denying intervenor status “based on a finding that a suit over the timing of an agency determination had no effect on the movant's interest in the substance of the determination.”
The case holdings “that the prospective intervenors lack both standing and a legally protectable interest” under Rule 24(a) of the Federal Rules of Civil Procedure, the judge said, “apply squarely to PSNH's motion here.”
Addressing the chance that the EPA could resolve the case by granting the Sierra Club petition, the judge said that standing can't be granted on the basis of an action that is only possible.
He also suggested that allowing the utility to intervene would draw out settlement negotiations and further delay resolution of the case.
A spokesman for the utility March 19 declined to comment on the decision.
Echoes Legislative Theme
The utility's bid to participate in the settlement talks echoes the theme of House Republican legislative proposals to rein in what industry groups call “sue-and-settle” strategies used by environmental groups to prod delayed regulations.
Passed by the House most recently in 2014, the regulatory reform proposals are again on the agenda in the new Congress (40 DEN A-5, 3/2/15).
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Cap-and-Trade, Fence Line Monitor Concerns Stall Justice Council Advice to EPA on Rules
Mar 20, 2015 | BNA Daily Environment Report
By Rachel Leven
The National Environmental Justice Advisory Council couldn't agree March 19 on final advice to the Environmental Protection Agency regarding the agency's refinery and Clean Power Plan proposals.
The council did approve during a teleconference letters to be sent to EPA Administrator Gina McCarthy on its stance regarding the farmworker protection proposal and chemical safety issues. A senior agency official also announced on the call that the agency will be working with stakeholders starting in April on a five-year environmental justice plan.
“I think there are concerns as to whether fence line monitoring is absolutely needed as it is described here. It almost seems like a battle of the experts,” Stephanie Hall, a council member and a managing counsel for Valero Energy Corp., said. “I think it just raised a lot of controversy within.”
The council will further discuss what advice it should send to McCarthy on the Clean Power Plan, the refinery rule and Title VI (civil rights enforcement) during another public teleconference. Members requested that the call be scheduled prior to the council's in-person meeting in San Diego May 20-21.
The NEJAC is a council of appointed academics, industry members and representatives from community, non-profit and tribal groups that advises the administrator on environmental justice issues.
Fence Line Monitoring
The council decided to take another look at the need for and accuracy of fence line monitoring technology for refineries at the next teleconference before sending its recommendations to McCarthy, issues largely raised by Hall.
The agency's proposed refinery rule (RIN 2060-AQ75) targets hazardous air pollutant emissions from petroleum refineries. Several officials have touted the fence line monitoring provisions as indicative of how the agency is considering community concerns in its rulemakings and programs (49 DEN A-3, 3/13/15).
Edith Pestana, council member and environmental justice program administrator at the Connecticut Department of Environmental Protection, said she is interested in hearing industry conversations, but emphasized that fence line monitoring gives communities “a little bit more security that at least those emissions are being looked at and being addressed.” If fence line monitoring technology isn't accurate enough, Pestana asked, what would be?
Hall brought up the idea of modeling, but said she would be interested in delving into industry comments submitted to the EPA on the fence line monitoring proposed rule. Members asked Hall to share those comments—and Hall agreed—to get a better sense for what is at the heart of the fence line monitoring issue and what the best solution would be.
The letter was drafted by council member Jill Witkowski.
Meanwhile, individuals not on the council who offered public comments urged the council to support more stringent fence line monitoring and other requirements in the refinery rule.
For example, Denny Larson, executive director of the Global Community Monitor, said active—not passive—monitoring is needed by refineries to most accurately document what emissions are leaving their facilities. Jane Williams, executive director of California Communities Against Toxics, called for the council to promote “near-miss reporting requirements” for inclusion in the refinery rule, a step Williams said would allow refinery employees to report anonymously “near-miss” incidents and improve safety.
Cap-and-Trade, Carbon Tax
The council decided to take more time to research and consider the acceptability of cap-and-trade being included in states' power plans as it relates to the Clean Power Plan and the potential for a national carbon tax. Under the plan, the agency would set unique carbon dioxide emission rates for the utility sectors in each state, and the states would then be responsible for developing their own plans to meet those targets (RIN 2060-AR33) (52 DEN A-1, 3/18/15).
A draft letter that was written by council member Nicky Sheats advised McCarthy to explicitly prohibit “allow[ing] states to meet their obligations under the proposed rule through the use of carbon trading, carbon capture and sequestration or new nuclear electricity generation, or by extending the life of nuclear plants that are scheduled to close.”
Sheats maintained that cap-and-trade approaches would put environmental justice communities at risk of exposure to more pollution; however, council member Deidre Sanders said there are benefits to approaches similar to the one implemented in California under Senate Bill 535. The California legislation requires 25 percent of the proceeds from the state's greenhouse gas emissions cap-and-trade program to be allocated to disadvantaged communities (220 DEN A-16, 11/14/14).
“We don't want to give the impression that we would allow carbon trading in exchange for funds from carbon trading,” Sheats responded.
Sanders, environmental justice program manager for Pacific Gas & Electric Co., questioned whether language stipulating that no mechanism or tool used in a state plan under Section 111(d) of the Clean Air Act could worsen pollution for disadvantaged communities would work. Sheats, director of the Center for the Urban Environment at Thomas Edison State College in Trenton, N.J., and other members agreed to discuss these issues further, potentially with EPA representatives, at a later meeting.
“There's a lot of misunderstanding and lack of understanding on carbon taxes and cap-and-trade,” Michael Ellerbrock, a council member and a Virginia Polytechnic Institute and State University professor, said. “The more discussions we can have the better.”
Farmworker, Chemical Safety
Members approved a separate letter drafted by Witkowski, of San Diego Coastkeeper, to the administrator on the farmworker protection proposal. The agency has delayed its final version of the rule that would set new standards to protect agricultural workers from pesticides exposure (RIN 2070-AJ22) (09 DEN A-13, 1/14/15).
The letter urged the agency to prohibit children under 18 from working as pesticide applicators; to improve training and recordkeeping requirements; to ensure workers don't have to ask their bosses to obtain information regarding the pesticides they work with; to improve protections from pesticide drift for families, workers and nearby residents; and to improve safeguards for pesticide handlers.
A letter to Mathy Stanislaus, the assistant EPA administrator for solid waste and emergency response, that called for more stringent regulation of chemical facilities under Section 112(r) of the Clean Air Act was also approved (240 DEN A-5, 12/15/14).
The council also requested in the letter drafted by council member Vernice Miller-Travis that the agency follow up with the council and with environmental justice groups regarding other queries that have been sent to the agency on the Risk Management Plan issue.
Miller-Travis is vice chair for the Maryland State Commission on Environmental Justice and Sustainable Communities.
The council didn't discuss its Title VI draft letter during the teleconference.
EJ 2020 Action Agenda
The EPA will begin its own outreach next month regarding its upcoming five-year environmental justice plan, Charles Lee, EPA deputy associate administrator for environmental justice, told the council.
The “EJ 2020 Action Agenda” will focus on deepening the incorporation of environmental justice practices into agency programs, collaborating with partners to help overburdened or disadvantaged communities and starting to demonstrate progress on outcomes in communities, Lee said.
These will include actions such as incorporating environmental justice concerns into rulemakings and working with federal agencies to leverage federal resources for communities, he said.
The plan will follow and build on Plan EJ 2014, Lee told the council. The agency will begin communicating with stakeholders on its upcoming 2020 agenda in April and will present additional details to the council at a later meeting, Lee said (119 DEN A-16, 6/20/14).
“It's really about translating what we have accomplished and we have learned over the last several years to [help] overburdened or disadvantaged communities.” Lee said.
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Obama Calls for 40 Percent Emissions Cut In Sustainability Goals for Federal Agencies
Mar 20, 2015 | BNA Daily Environment Report
By Andrea Vittorio
President Barack Obama wants to cut the federal government's greenhouse gas emissions by 40 percent over the next decade from 2008 levels.
The president signed an executive order March 19 setting the new 2025 emissions target for federal agencies, which so far have cut their greenhouse gas emissions by 17 percent since 2008. The executive order also set new goals for increasing renewable energy use, boosting building efficiency, cutting fleet emissions and reducing water intensity across the federal government.
Brian Deese, a senior adviser to the president, said the new emissions target is not just a “win for the environment” in the fight against climate change. He said it also makes financial sense for the agencies because they could save up to $18 billion over the next decade in avoided energy costs.
“For federal agencies who are looking at how to cover their energy needs, this is a very pragmatic dollars-and-cents issue,” Deese said on a call with reporters. “And so if they can consume less energy or they can consume renewable energy that is cheaper, more reliable or more sustainable, then they can achieve environmental goals while actually saving money.”
‘Substantial' Footprint
The federal government is the single largest energy consumer in the U.S., with a footprint that includes 360,000 buildings, 650,000 vehicles in its fleet, and $445 billion spent annually on goods and services.
“So not only is our footprint substantial, our influence is as well,” Christy Goldfuss, the new managing director of the White House Council on Environmental Quality, said on the call. “We can serve as a model for businesses and organizations across the economy as they work to cut emissions and increase efficiency, and we can learn from the businesses too.”
The federal government's influence on private sector investment was the subject of a roundtable held the same day.
Enlisting Suppliers
The roundtable brought the president and other administration officials together with major federal suppliers that collectively account for about $45 billion in federal contract spending.
Some of the suppliers, including IBM, Honeywell and Humana, announced new emissions targets of their own. Other suppliers, such as the global infrastructure consultant AECOM, pledged to look at their emissions and set reduction targets for the first time.
Together, the commitments from the federal government and its suppliers would reduce greenhouse gas emissions by 26 million metric tons, the equivalent of taking nearly 5.5 million cars off the road for a year, according to the White House.
To help track their progress, the White House has launched a new scorecard showing whether major federal suppliers publicly report on their emissions and whether they have set reduction targets for themselves.
Renewable Energy Share
The supplier roundtable was held at the Energy Department, where Obama took a tour of the solar panels that were installed on its roof in 2008.
“And those panels are not just for show—they produce power that the government doesn't then have to buy off the grid,” Obama said afterwards, according to a transcript of his remarks. “And more and more businesses and more and more homeowners are following suit not because it's simply good for the environment, but because it's good for their bottom lines.”
Obama's executive order includes a goal to increase the share of electricity that the federal government gets from solar, wind and other renewable sources to 30 percent within the next 10 years. Currently, renewable energy accounts for about 9 percent of its electricity consumption.
‘Leading by Example.'
Energy efficiency, particularly in buildings, and renewable energy—which have been the two main drivers behind agencies' emission reductions so far—will likely continue to account for the bulk of their emissions reductions toward 2025, Deese said.
The new target only covers agencies' emissions from fuels, building energy use and other direct sources, and does not include emissions from employee commuting, landfill waste and other indirect sources.
Deese said the goal is consistent with a commitment the president made in November to cut overall U.S. emissions 26 percent to 28 percent below 2005 levels by 2025. Still, federal agency contribution to total U.S. emissions is modest, representing less than 1 percent in 2013, the most recent year for which data are available, according to the White House (219 DEN A-8, 11/13/14).
It is part of a broader effort by the federal government to “lead by example,” he said, as Obama pursues an aggressive agenda of climate regulations, including the first greenhouse gas emission standards for the nation's power plants.
‘Blind Spot' in Emissions
But there remains one “blind spot” in the nation's efforts to address climate change, according to the Center for American Progress.
The extraction of taxpayer-owned gas, oil, and coal from federal lands and waters by private companies is of the nation's most significant sources of greenhouse gas emissions, but these emissions are not properly accounted for by the federal government, CAP said in a report issued March 19.
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Obama Orders 40% Reduction in Carbon Emissions by U.S. Agencies
Mar 19, 2015 | Bloomberg
By Toluse Olorunnipa
President Barack Obama ordered the federal government to reduce greenhouse gas emissions by 40 percent from 2008 levels over the next 10 years by shifting to renewable energy sources such as solar power.
The executive order signed by Obama Thursday builds on a 2010 directive from the White House requiring 35 U.S. agencies to limit their energy consumption to help combat climate change. Private companies that contract with the federal government have also agreed to pursue emissions reductions in concert with the most recent directive.
As the single largest consumer of energy in the U.S., the federal government can help create a “virtuous cycle,” driving down costs and reducing environmental damage, Obama said. With little support in Congress for his environmental initiatives, Obama has used executive orders to try to limit U.S. gas emissions.
“We thought it was important for us to lead by example,” Obama said Thursday while meeting executives from International Business Machines Corp., Honeywell International Inc., Hewlett-Packard Co. and other companies at the Energy Department. “We’re proving that it is possible to grow our economy robustly while at the same time doing the right thing for our environment and tackling climate change in a serious way.”
The administration has been trying to build momentum for an international accord on cutting greenhouse gas emissions at a summit in Paris at the end of this year. Having won an agreement from China to cap emissions, Obama has been challenging other nations to follow suit. Climate Talks
Obama spoke with the company leaders after touring a set of solar panels on the roof of the Energy Department in Washington.
The companies, including General Electric Co., Hewlett-Packard and Northrop Grumman Corp., pledged to increase the use of renewable energy. IBM setting a goal of reducing carbon emissions 35 percent from 2005 levels by 2020. The White House released a scorecard Thursday tracking the emissions disclosures for companies that supply goods and services to the federal government.
Chris Warren, a spokesman for the Institute for Energy Research in Washington, said Obama’s move “will have no impact on global temperatures.”
“The president is clearly trying to boost his climate credentials to appease the national environmental lobby, regardless of what it means for the average American,” said Warren, whose organization supports limited government regulation of utilities. Renewable Sources
Under Obama’s order, federal agencies will be required to obtain 25 percent of their total energy from renewable sources by 2025. The order targets the 360,000 federal buildings across the U.S., requiring a 2.5 percent annual reduction in energy use for the next decade. The federal government’s fleet of 650,000 vehicles will be required to reduce per-mile carbon emissions by 30 percent.
The goal of reducing emissions by 40 percent already includes the 17 percent reduction achieved since 2008, said Brian Deese, a senior adviser to Obama. Reaching the goal would save taxpayers $18 billion per year and would be equivalent to taking 5.5 million cars off the road, Deese said.
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Mar 20, 2015 | The Economist
FOR years, it seemed like carbon-dioxide emissions rose relentlessly, whatever the world’s level of economic activity and however much countries spent on no- or low-carbon energy. Now, though, that depressing fact may be changing.
The International Energy Agency (IEA), made up mostly of energy-consuming rich countries, reckons worldwide emissions of carbon dioxide in 2014 were the same as in 2013. The only occasions CO2 emissions have actually fallen were in the early 1980s and 2008, both periods of economic contraction, but this is the first time for many years that the world economy has grown (up by 3.3% according to the IMF) and emissions have not risen too. In the European Union, GDP went up by 1.4% last year but CO2 emissions from energy use fell by 6%. Over the past five years GDP among all rich countries has risen by 7% but CO2 emissions from energy have fallen by 4%, offsetting a rise in developing countries.
The IEA’s finding suggests the regulations put in place to rein in pollution are starting to have an impact. In the EU, for instance, the number of household appliances has risen by a quarter in the past ten years, but household electricity use has been flat—testimony (probably) to the many efficiency requirements brought in under European law. The IEA reckons three-quarters of the cars sold around the world in 2014 met some kind of vehicle-emission or other efficiency standard, and that the fuel-efficiency of new cars in the EU last year was 28% higher than it had been in 2000 (the global improvement was less—16%—but still significant). The IEA reckons that, in America, where emissions ticked up slightly in 2014, vehicle-emission standards have prevented more CO2 entering the atmosphere than switching from coal-fired to gas-fired power stations.
The East is green
The other big contributor to the emissions slowdown is a shift in the pattern of economic activity, especially in China, the world’s largest polluter. As manufacturing and heavy industry decline as a share of GDP (and services increase) demand for coal is dwindling. According to China’s national bureau of statistics, coal consumption fell by almost 3% in 2014—pushing CO2 emissions down slightly.
The flattening of global emissions will not of itself make much difference to the climate. Though the quantity did not increase, people still threw a lot of carbon dioxide into the atmosphere last year. The standard measurement of atmospheric CO2 concentration, taken at the Mauna Loa observatory in Hawaii, has therefore barely flickered in its upward rise. Though it ebbs and flows on an annual cycle which matches the growth and dormancy of the great forests of the northern hemisphere, it passed 400 parts per million this January, the earliest in the year it has exceeded this benchmark. Even if emissions stay flat, the world remains on course towards a temperature rise of around 3°C by 2100, compared with pre-industrial levels. To keep the rise to 2°C (which most climate scientists think is needed) would require emissions to fall.
All the same, the IEA’s finding is remarkable. It happened without either a climate-change treaty or a global carbon price. And, by providing evidence emissions can actually be reined in, it might make the successful negotiation of a new climate treaty in Paris at the end of this year a bit more likely. As Fatih Birol, the IEA’s chief economist says, “these numbers make me hopeful for Paris, full stop. But if nothing comes of those talks, the targets scientists set for us [a 2°C rise] may well be out of reach.”
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Double Standard on Coal Highlights Need for EPA Reform
Mar 19, 2015 | The Hill - Congress Blog
By Kevin Glass
The final tally for fines for Duke Energy's 2014 coal ash spill in the Dan River will come to over $100 million. This is more than ten times than the final bill to the Tennessee Valley Authority for their 2008 spill, which was the largest in history and twenty-eight thousand times larger and far more dangerous than the Dan River spill.
Why the difference? It might be because the Tennessee Valley Authority is owned and operated by the federal government, while Duke Energy is the largest private energy utility in the United States.
Watchdog.org energy reporter Rob Nikolewski investigated the case and found out that the federal government doesn't want to talk about the discrepancies. The Environmental Protection Agency, which levied zero fines against the TVA, merely stated in boilerplate that fines assessed are "based on many factors," without getting into specifics.
The Department of Justice, which organized the settlement with Duke Energy, refuses to return inquiries.
It’s important to point out that these environmental accidents were serious incidents that required federal intervention, regulation, and fines. The Dan River spill was huge – coal ash was found 70 miles from the site and people were warned to stay away. Duke Energy is tasked with cleanup and is being overseen by the Environmental Protection Agency with those efforts.
Granting the massive scale of the Dan River spill, it’s still important for both regulators and companies to have clear guidelines and expectations for how to handle their waste byproducts and the penalties for any accidents that might occur. The federal government has unfortunately been negligent in sending clear signals in this area.
There's a lot that the federal government could do to clear up the executive discretion in some of these cases. The Environmental Protection Agency first laid down regulations for coal ash last year, including rules for storage and disposal. The rules frustrated environmentalists, because the EPA did not classify coal ash as hazardous, but it also did not close the door on stricter regulation in the future.
Republicans have characterized the refusal of the EPA to commit on this as unacceptable and are working on legislation to bring "certainty" to coal ash standards. The proposal would also work to limit the exposure of utility companies to lawsuits and thus minimize the either willful or random discrepancy in disaster settlements. It might mean that Duke Energy wouldn't have to be worried about being unjustly targeted compared to government-owned utility companies.
"Let's make one thing clear: this proposed regulation does not provide certainty... the rule results in potentially conflicting federal and state requirements," Rep. David McKinley (R-W.Va.), one of the sponsors of the new reform legislation, said at an Energy and Commerce Committee hearing on January 22. "On page 18 of the rule, it says 'This rule defers a final determination until additional information is available.’" McKinley's proposed regulation reform would, he and other Republicans say, remove unneeded uncertainty from these coal ash regulations.
Sens. Jim Inhofe (R-Okla.) and Shelley Moore Capito (R-W.Va.) protested the EPA’s rulemaking on coal ash since the regulations were announced late last year, citing an economic cost of over $22 billion and more than 60,000 lost jobs. They say that the states themselves have done a good job regulating coal ash and the EPA’s burdensome requirements aren’t necessary.
The other change that Rep. McKinley’s legislation makes is that it allows states to implement their own alternative rules to the national EPA mandates if they’re able to capably regulate themselves. Not weaker rules; the only way that states would be able to implement local regulatory regimes would be if they are as effective as the ones proposed at the federal level. But it would give the states, and the utility companies being regulated, additional flexibility.The vast discrepancy in the federal government’s environmental enforcement in the TVA spill and the Dan River spill highlights the need for regulatory certainty. For the first time last year, the EPA sought to bring standardized rules to the table – a move hailed by both Republicans and Democrats. Unfortunately, the EPA’s final proposals are seriously lacking in the way they propose to regulate the industry. More certainty is needed, especially in light of how the federal government has mismanaged both regulation and penalties in the past.
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Ruling Highlights Appellate Split On Air Controls In Areas Attaining NAAQS
Mar 19, 2015 | InsideEPA
By Stuart Parker
A federal appeals court has ruled that states must apply emissions controls on industry in areas seeking redesignation from “nonattainment” to “attainment” of EPA's national ambient air quality standards (NAAQS) even when the agency finds those areas fully comply with the NAAQS, highlighting an appellate circuit split on the issue.
The unanimous March 18 ruling by the U.S. Court of Appeals for the 6th Circuit in Sierra Club v. EPA, et al. says EPA erred in approving the redesignation of a multi-state area to attainment with the agency's 1997 NAAQS for fine particulate matter (PM2.5). The court says EPA failed to insist on the area imposing certain Clean Air Act-mandated control technology requirements on industrial sources of emissions that lead to PM2.5 formation.
But the court rejected advocates' argument that states cannot rely on regional emissions trading programs to ensure NAAQS compliance. Sierra Club argued that emissions trading cannot provide “permanent” and “enforceable” emissions cuts, because the emissions of individual facilities can rise under such programs if they buy credits to comply. The court, however, finds that the “permanent” cuts can be regional, not tied to specific plants.
While the decision conforms to a 2001 opinion by the 6th Circuit in Wall v. EPA on ozone NAAQS requirements in areas seeking a new attainment classification, it directly contradicts a ruling on a similar situation regarding ozone NAAQS attainment by the 7th Circuit in its 2004 ruling in the case Sierra Club v. EPA.
The 6th Circuit's new ruling therefore exacerbates a lingering division among appellate courts on when emissions control requirements must be met in areas that are redesignated to attainment with one of EPA's NAAQS and the agency deems in full compliance with the standard. Circuit splits can be the basis for seeking a Supreme Court resolution of the differences, though no group to date has asked the high court to resolve the NAAQS issue.
Sierra Club filed its suit after EPA in 2011 approved the redesignation of Cincinnati-Hamilton -- an area spanning parts of Ohio, Indiana and Kentucky -- to attainment of the PM2.5 NAAQS. As part of that decision, the agency waived the requirement for all three states to include in their state implementation plans (SIPs) for NAAQS attainment certain control measures known as reasonably available control technology (RACT) and reasonably available control measures (RACM). These controls are normally required in NAAQS nonattainment areas.
Ohio, Indiana and Kentucky made separate requests to redesignate their portions of the area, and EPA approved them in two steps: approving the Ohio and Indiana requests in October 2011 and the Kentucky request in December 2011. All three states omitted RACT and RACM provisions, but Sierra Club failed to comment on Kentucky's omission during the public comment period, foreclosing its right to sue over that issue with respect to Kentucky.
The agency did not require the RACT or RACM provisions because it reasoned the area was meeting the NAAQS, which EPA in 1997 set at 15 micrograms per cubic meter.
Court's Ruling
Sierra Club challenged the agency's reasoning, claiming that other air law requirements for redesignation had not been met. With respect to RACT and RACM, the court holds that there is an obligation to include these control requirements independent of the requirement that NAAQS be met.
A “State seeking redesignation 'shall provide for the implementation' of RACM/RACT, even if those measures are not strictly necessary to demonstrate attainment with the PM2.5 NAAQS,” Judge Julia Smith Gibbons says in her opinion on behalf of fellow Judges Robert Dow and Raymond Kethledge.
The court relies heavily on its earlier ruling in Wall requiring air controls for ozone NAAQS areas. In that case, “EPA granted requests from Kentucky and Ohio to redesignate the Cincinnati area to attainment status under the ozone NAAQS, despite the fact that the States’ SIPs had not fully adopted ozone-specific RACT measures as required under a distinct, but similar, part of the statute,” that addresses ozone, the court says.
“We vacated the redesignations, holding that the agency received no Chevron deference because 'the statutory language regarding the implementation of RACT rules is not ambiguous. . . . By this language, it is clear that Congress intended for SIPs submitted in redesignation requests to include provisions to require the implementation of RACT measures',” Gibbons writes in the Sierra Club decision.
Under the Chevron legal doctrine, courts defer to federal agencies' interpretations of statutes where a statute is silent or ambiguous on an issue, and the agency's interpretation is a reasonable, “permissible” construction of the law.
EPA in the current Sierra Club case attempted to distinguish the PM2.5 requirements from the ozone provisions in order to avoid applying the findings of Wall. But the court rejects this argument, finding that the air law language governing ozone and PM2.5 standards in this regard is “functionally identical.”
The court also rejects EPA's reliance on the 7th Circuit's opinion in its Sierra Club case, in which it agreed with EPA's interpretation of the requirement that RACT and RACM be included in the “applicable implementation plan,” finding the term is ambiguous and “could conceivably refer to something other than the pre-attainment SIP.”
The 7th Circuit found that the “applicable” modifier “implies that there may be differences between the contents of the pre-attainment plan and those required for the post-attainment period,” Gibbons writes.
But Wall forecloses this interpretation, and therefore “we must respectfully disagree with the Seventh Circuit that 'applicable implementation plan' is sufficiently vague to trigger Chevron deference,” she finds.
The 6th Circuit's ruling therefore vacates the redesignation of Cincinnati-Hamilton with respect to the Ohio and Indiana portions of it, but leaves the Kentucky portion in attainment.
Potential Implications
It is unclear what the practical implications of the ruling will be for the affected NAAQS nonattainment area, because the purpose of Clean Air Act RACT and RACM controls is to help areas attain the NAAQS -- which the Cincinnati-Hamilton area already does, so any control requirements that could be imposed might be lenient.
Further, the area is attaining the 1997 PM2.5 NAAQS, EPA found, in large part because of regional emissions trading programs, such as EPA's Cross-State Air Pollution Rule (CSAPR) and its predecessor programs.
The 6th Circuit finds EPA's regional approach “eminently reasonable,” saying, “The existence of a regional problem is enough to conclude that EPA’s regional focus on emissions reductions is 'sufficiently rational' and within the statutory ambit to warrant deference to its technical expertise” under the Chevron doctrine.
Also, “since we do not believe EPA must be limited to reductions within the nonattainment area, the agency can reasonably stretch the geographic scope to guarantee 'permanence,'” Gibbons writes.
Sierra Club says cap-and-trade programs do not render emissions cuts “enforceable” against individual plants, because facilities can buy compliance credits rather than install air pollution controls.
But Gibbons, writing for the court in Sierra Club, says there is no “reason to think an interpretation of reductions attributable to regional cap-and-trade schemes as 'enforceable' any less rational than considering such reductions as 'permanent,'” because cuts need not be tied to a single emissions source. Emissions cuts tied to the cap-and-trade program as a whole can be permanent and enforceable, the court finds.
The ruling could have precedential value with respect to environmentalists' challenges to other EPA rules relying on cap-and-trade programs to meet Clean Air Act requirements. For example, environmental groups are challenging EPA's rule allowing states to meet regional haze reduction mandates by citing their compliance with CSAPR. The consolidated suit Utility Air Regulatory Group, et al. v. EPA, et al., which includes industry challenges to the rule, is currently in abeyance in the D.C. Circuit, pending the outcome of broader litigation over CSAPR that the court is reviewing.
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Novel Ruling Allows RCRA Claims Against Air Pollution Deposited On Land
Mar 20, 2015 | InsideEPA
By Anthony Lacey
A novel federal district court ruling has found the Resource Conservation & Recovery Act (RCRA) waste law can be used to pursue an “imminent and substantial endangerment” suit against industry air pollution deposited on land, which some legal observers say could trigger more “aggressive” litigation over land deposition of emissions.
Chemical giant DuPont's emissions of perflourooctanoic acid (C8) that landed on a rural water system's land and contaminated the soil and groundwater constitutes disposal of “solid waste” under RCRA's imminent and substantial endangerment provision, says Judge Algenon Marbley of the U.S. District Court for the Southern District of Ohio's Eastern Division in a March 10 opinion and order.
In the case, The Little Hocking Water Association v. DuPont, the non-profit, user-owned rural water system Little Hocking based in Ohio said, among various other claims, that DuPont's Washington Works Facility down river in West Virginia emitted C8 that deposited on and contaminated the soil and groundwater at Little Hocking's Wellfield, which consists of 45 acres of land.
The decision is a rare win for plaintiffs seeking to use the waste law's endangerment provision -- which allows for prosecution of violations of RCRA for waste disposal that poses a threat to human health or the environment -- to include air emissions that are deposited on land, a legal bid that has failed in other courts.
For example, the U.S. Court of Appeals for the 9th Circuit in a ruling in August in Center for Community Action, et al., v. BNSF Railway, et al., rejected advocates' bid to regulate diesel particulate matter (DPM) from locomotives under RCRA, after concluding that the emissions were not “disposal” of solid waste subject to the law.
The 9th Circuit's unanimous opinion upheld a lower court decision saying that although the definition of waste “disposal” in the federal waste law “does not plainly state whether emissions of solid waste into the air fall within its scope, it does provide sufficient contextual clues for us to conclude that they do not.”
But Marbley in the Little Hocking decision seeks to distinguish the case from the 9th Circuit ruling, saying that the appellate court concluded that RCRA governs only “land disposal” while the federal Clean Air Act governs air pollutants. The 9th Circuit in BNSF Railway held that the legislative histories of both laws confirmed its conclusion that DPM emitted to the air that later falls on the ground or water is not governed by RCRA.
The appellate court noted a regulatory gap Congress left between the air law and waste law over locomotive and indirect source DPM emissions, but said that gap did not justify RCRA regulation of DPM air pollution.
“This Court declines to follow the Ninth Circuit's narrow reading of RCRA's text and legislative history,” writes Marbley. “In contrast, this Court finds that RCRA’s legislative history and purpose supports a finding in this case that the aerial emissions of C8 particulate matter, which fell onto the ground, remained there, and contaminated the groundwater, constitutes disposal of solid waste under RCRA,” the ruling says.
“While the BNSF Court found that Congress left an intentional regulatory gap over locomotive and indirect source emissions of diesel particulate matter, this Court does not find that Congress left an intentional regulatory gap over the type of aerial emissions of solid particulate matter in this case,” Marbley writes.
Broad Interpretation
In BNSF Railway, the DPM “fell onto the land, and then was swept back up into the air, causing harm to those who inhaled it,” whereas in Little Hocking, “solid C8 particles are emitted into the air, fall onto the ground, remain there, and then contaminate the soil and groundwater. This Court finds that this type of soil and groundwater contamination is precisely the type of harm RCRA aims to remediate in its definition of 'disposal:' 'the deposit . . . or placing of any solid . . . . waste into or on any land or water so that such solid waste or hazardous waste . . . may enter the environment . . . or discharged into any waters, including ground waters,'” Marbley says.
He writes that when the court interprets what constitutes land disposal of solid waste under RCRA, it should proceed on a “case-by-case basis, keeping in mind as the guiding principal that 'RCRA is a remedial statute that is to be interpreted broadly,'” citing a 2006 ruling by the 3rd Circuit.
Lawyer Christopher Bell of the firm Greenberg Traurig writes in March 18 National Law Review blog post that the district court's opinion and order “could encourage more aggressive litigation based on allegations of harm associated with the land deposition of particles emitted into the air.”
In a separate March 17 blog post on Law & The Environment, lawyer Seth Jaffe of Foley Hoag calls Marbley's conclusions on RCRA liability for C8 deposition the “most significant” part of the ruling.
“Although Judge Marbley struggled mightily to distinguish it, his holding seems difficult to reconcile” with the BNSF Railway decision “in which the 9th Circuit -- that noted bastion of conservative environmental decisions -- ruled that diesel emissions into the air did not constitute disposal of a solid waste. I think that the 9th Circuit got it right, but Judge Marbley’s interpretation is not crazy within the scheme of RCRA and its jurisprudence.” However, Jaffe then adds as a “takeway” from the case, “How many different statutes and causes of action do we need to provide? Don’t like Superfund? Try RCRA. Doesn’t work? How about the Clean Air Act? Statutory remedies aren’t sufficient? Let’s resuscitate public and private nuisance doctrines. Of course, one can always -- like Judge Marbley here -- fall back on the canon that remedial statutes are to be construed broadly.”
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Study: Clean Air Makes Children's Lungs Stronger, Healthier
Mar 20, 2015 | Environmental Defense Fund
By Elena Craft
We’ve known for a long time that breathing polluted air can make you sick. Now there's more evidence that breathing cleaner air can make you better.
The New England Journal of Medicine published new research this month detailing improved lung function in children that breathe cleaner air.
The Southern California study received major attention.
That’s not surprising – as it provides compelling evidence that efforts to improve air quality over the years have been successful in improving children’s health.
The study followed three populations of children, aged 11 to 15, for a period of four years. This age group was chosen because children’s lungs develop rapidly during this stage.
In all, the study examined more than 2,100 children in five distinct California communities.
The report found that the greatest improvements in lung function were seen with declining levels of particulate pollution, also known as soot; and of nitrogen dioxide, a fuel combustion byproduct.
And potentially the best benefit of all: Cleaner air doesn’t just lead to healthier lungs during childhood because the benefits last a lifetime. Children with healthier lungs grow up to be adults who have a lower risk of premature death and other serious health problems. The bottom line?
We need and deserve policies to secure a wide range of protections for cleaner, healthier air. Fighting for stronger health protections against smog and defending the first-ever national standards to reduce mercury pollution and other air toxics from power plants are good places to start.
Please join us in giving future generations the best possible chance, today and tomorrow, for healthy lungs.
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Ozone Season Returns to Houston
Mar 19, 2015 | Environmental Defense Fund
By Adrian Shelley
Spring is coming to Houston, and with it the start of ozone season. You probably haven’t thought about ozone yet this year, and with all the cold weather we’ve had, you could be forgiven. But Houston’s ozone season officially began on March 1, and it may be time to start thinking about this pernicious air pollutant once again.
First we should remember that 2015’s ozone season begins amid a proposal by the Environmental Protection Agency to lower the federal ozone pollution standard. Comments on that proposal were due this week. Air Alliance Houston, with help from students at the University of Houston Law Center, submitted comments calling for a standard as low as 60 parts per billion. The best science of the day indicates that such a low standard is needed to protect public health.
Meanwhile our Governor Greg Abbot, along with Governors from ten other states, ignored public health needs and asked the EPA not to update the ozone standard again, ever. Governor Abbot et. al. claim that the new ozone standard will cost billions of dollars and 1.4 million jobs nationwide. This claim ignores a recent EPA study of the results of the Clean Air Act from 1990 to 2020, which estimates that benefits from implementing the Act exceed costs by a factor of more than 30 to 1.
So there are some hard questions about what the ozone standard will be in the future. But putting those aside for right now, what do you need to know for 2015’s ozone season?
First, you should know that there are fewer and fewer bad ozone days each year in Houston. We experienced 14 violations of the eight-hour ozone standard in Houston in 2014, down from 24 in 2013 and more than 200 in the ‘80’s. Ozone pollution has gotten much better in Houston, but there are still some days when it presents a real public health risk.
Second, you should know that EPA issues daily ozone forecasts at Airnow.gov and that the TCEQ relays these daily forecasts online, via email, and via Twitter.
Finally, you should know that there is a better way than daily forecasts to get information about ozone in Houston: real-time information available via the Houston Clean Air Network.
Ozone forecasts may give you some idea what to expect, but they aren’t very accurate. In 2014, with 15 ozone action days forecasted, only 8 were actual exceedances of the eight-hour ozone standard, with 6 exceedance days occurring outside of predicted action days.
In 2013, with 25 Ozone Action Days, 9 represented actual exceedances, with 15 exceedance days going unpredicted.
This means that Ozone Actions Days correctly predicted actual exceedances about one half of the time in 2014 and only one third of the time in 2013.
The Houston Clean Air Network website and smart phone app takes the guesswork out of the equation, allowing you to check ozone levels in real time when and where you are.
When should you check the Houston Clean Air Network? On days when ozone formation is likely: hot, dry, clear, and sunny days.
An ozone forecast or an email alert from the TCEQ may remind you when these days occur, but ultimately it is up to you to check whether ozone is an issue when and where you are. Most time, you will find that it is not. Sometimes, though, you may find that isolated plumes of ozone in your area mean that limiting outdoor activity might be a good idea. This is especially true if you or someone you love is a member of an unusually sensitive group: children, the elderly, or those with respiratory illnesses such as asthma.
So whether you use forecasts, houstoncleanairnetwork.com, the OzoneMap app, or some combination of them all, it’s time to start thinking about ozone again in Houston. Hopefully there won’t be many ozone days this year, but when they come, you’ll be prepared.
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Mar 20, 2015 | BNA Daily Environment Report
By Stephanie Beasley
Senate lawmakers may push to include language overhauling the Surface Transportation Board (STB) and the environmental review process for rail projects in a surface transportation reauthorization bill, Senate Commerce, Science and Transportation Committee Chairman John Thune (R-S.D.) said.
“If we do a multiyear reauthorization of the surface transportation, the highway bill, there's generally a rail title in that, so that could be a vehicle,” he told Bloomberg BNA. “And I guess we haven't gamed that out exactly where we might try to attach it, but that would certainly be an option.”
Thune along with committee ranking member Bill Nelson (D-Fla.) reintroduced a bill (S. 808) March 19 that would give the STB more power to preempt rate fee issues between railroads and their shippers and establish a faster and less expensive process for handling a rate challenge by a shipper.
The Senate transportation panel is scheduled to hold a markup for the bill on March 25.
Legislation (S. 769 ) introduced by Sens. Roy Blunt (R-Mo.) and Joe Manchin (D-W.Va.) March 18 that would extend to rail project provisions from the Moving Ahead for Progress in the 21st Century Act (MAP-21) allowing concurrent interagency environmental reviews also to be tacked on to a surface transportation reauthorization bill, Thune said.
He said there are a number of rail issues that the Senate would like to address this year, including extending the deadline for railroads to implement anti-collision systems, known as positive train control.
Blunt also has introduced a bill that would give rail industries an additional five years to implement PTC (44 DEN A-13, 3/6/15).
Getting floor time for rail issues could be “a fairly heavy lift,” unless they are attached to must-pass legislation, Thune said.
Industry Praises Rail Bills
The American Chemistry Council urged swift action on the STB overhaul legislation, which it said is necessary to align the board's policies with current freight rail challenges.
“The railroad industry has undergone dramatic changes since the STB was created and Congress last passed major freight rail legislation. We need to update the STB's policies so the Board is better equipped to deal with today's freight rail challenges, including ongoing service problems and growing rate issues,” said ACC President and Chief Executive Officer Cal Dooley in a statement March 19.
The Association of American Railroads also said Blunt's call to streamline the environmental review process for rail projects a “common sense reform.”
“America's freight rail industry strongly supports the long-overdue common sense reforms this legislation implements for streamlining rail projects’ environmental permitting processes, something highway and transit projects experience today,” AAR President and CEO Edward R. Hamberger said. “Railroads have long encountered duplicative and burdensome permitting delays unrelated to environmental quality that have resulted in massive cost increases.”
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Bill Would Reauthorize Rail Safety Grant Program
Mar 20, 2015 | BNA Daily Environment Report
Reps. Daniel Lipinski (D-Ill.) and Mike Quigley (D-Ill.) have introduced a bill that would allocate millions of dollars for passenger and freight rail safety grants. The grants under the Reassuring Adequate Investment in Lifesaving Systems (RAILS) Act (H.R. 1405), introduced March 17, would specifically reauthorize the Rail Safety Technology Grant Program. The bill would approve $200 million per year for five years to be used on an electronic communication system for rail transport of hazardous materials, positive train control systems and rail integrity inspection systems, among other improvements, according to a news release. The grant program was developed in the Rail Safety Improvement Act of 2008 to help railroads install positive train control systems by the end of 2015, a deadline that members of Congress have said could be extended this year. Additional rail improvements are needed to modernize commuter lines and make rail transport overall safer, according to Quigley. The bill is available at https://www.congress.gov/114/bills/hr1405/BILLS-114hr1405ih.pdf.
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Surcharge on Use of Older Tank Cars Violates Common Carrier Obligations, Lawsuit Alleges
Mar 20, 2015 | BNA Daily Environment Report
By Rebecca Wilhelm
A freight transportation company violated its common carrier obligations when it imposed a $1,000 surcharge on legacy DOT-111 rail cars that ship crude oil, the American Fuel & Petrochemical Manufacturers alleged in a complaint filed in federal district court March 13 (Am. Fuel & Petrochemical Mfrs. v. BNSF Ry. Co., S.D. Tex., No. 4:15-cv-682, 3/13/15).
American Fuel, a nonprofit national trade association that represents petroleum refiners and petrochemical manufacturers, filed a civil action against BNSF Railway Co. in the U.S. District Court for the Southern District of Texas. American Fuel contends that BNSF breached its common carrier duties under the Interstate Commerce Commission Termination Act by imposing the surcharge on the older-model DOT-111s.
In May 2014 the Transportation Department issued a safety alert recommending that energy companies and shippers not use the older-model DOT-111s to transport Bakken crude oil and instead use a “higher standard of car.” However, the recommendation didn't forbid the use of legacy DOT-111s, and it remains legal for companies to use the older rail cars to transport crude oil (89 DEN A-8, 5/8/14).
The surcharge conflicts with current standards for rail cars engaged in crude service, American Fuel argued in its complaint. The Pipeline and Hazardous Materials Safety Administration, which is authorized under the Hazardous Materials Transportation Act to set safety standards for rail tank cars that transport crude oil, is expected to issue new standards for rail cars in May.
“Allowing railroads to penalize companies that ship crude oil in federally-authorized rail cars would circumvent PHMSA's statutory and regulatory process for setting rail car standards for hazardous materials shipments,” American Fuel wrote in its complaint.
Surcharge Discourages Use of Older DOT-111s
In October 2014, BNSF, “the largest transporter of crude oil in North America, hauling more than 600,000 barrels per day,” announced that it would impose the flat-rate surcharge on legacy DOT-111 shipments without taking destination or any shipment-specific safety considerations into account, American Fuel argued.
The surcharge took effect Jan. 1. The DOT-111 can carry about 700 barrels of crude oil, so the surcharge amounts to an additional $1.50 for each barrel.
“We believe that our rate structure appropriately supports customers who are working to move to a safer car, which is in the interest of rail shippers, BNSF employees and the communities we serve,” BNSF said in a statement provided to Bloomberg BNA. The company is reviewing the complaint.
American Fuel contends that the surcharge is designed “to discourage the use of certain DOT 111s,” which are expressly permitted under PHMSA standards.
“The certainty provided by PHMSA's exclusive tank car standards … would be undermined were BNSF and other railroads allowed to use financial surcharges and penalties to coerce companies to adopt different standards,” American Fuel wrote.
PHMSA Proposal Under Review
The current standards might change soon. A PHMSA rule proposing enhanced tank car and operational control standards for the transportation of certain flammable liquids, including crude oil, is under review by the White House Office of Management and Budget. The rule, expected to be finalized in May, is likely to require older-model DOT-111 tank cars to be retrofitted or retired (26 DEN A-3, 2/9/15).
“We believe the federal government is the exclusive regulator of hazardous materials packaging, such as the type of rail cars,” Rich Moskowitz, American Fuel's general counsel, told Bloomberg BNA March 19. “We support the modification of [legacy DOT-111 cars] on an aggressive schedule. But the bottom line is, there are a lot of cars in the marketplace, they're needed to transport essential commodities, and you can't just flip a switch and say you can't use them anymore.”
By “imposing a higher rate to force the use of a car that suits their specifications,” BNSF is undermining the rulemaking process. The company “shouldn't be allowed to second-guess the government,” Moskowitz said.
Transportation Secretary Anthony Foxx announced the PHMSA proposal in July 2014 following several high-profile train derailments that raised concerns about the safety of older tank cars transporting crude oil and the volatility of Bakken crude oil (127 DEN A-8, 7/2/14).
“The tank car and the crude oil itself have nothing to do with the railroad's ability to keep the car on the track,” Moskowitz said. “The railroads need to do a much better job of ensuring their track integrity.”
American Fuel is represented by Bruce D. Oakley, Justin A. Savage and Heaven C. Chee of Hogan Lovells US LLP.
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Want Improved Crude Oil Safety? Build Better Tank Cars
Mar 19, 2015 | The Huffington Post - Blog
By Edward R. Hamberger
A small number of high-profile crude by rail accidents has recently brought the question "Can railroads safely move crude oil?" to the public forefront.
The freight rail industry shares the public's concern regarding the safe movement of crude oil by rail, and it's important to know all that is currently being done to safely move crude oil trains. Railroads follow the most stringent safety measures when transporting crude and other hazardous commodities. This is why freight railroads have a stellar record for crude rail safety -- 99.995 percent of all rail crude oil shipments reach their destination without a release caused by a train accident. What's more, 2014 looks to be the safest year in railroad history, with accident rates registering at record lows.
But the reality is even one accident is one accident too many.
Communities, rightly so, are eager to understand the breadth of the safety measures in place and those in the works when it comes to crude oil rail transportation.
What will, undoubtedly, make moving crude by rail safer is tougher tank cars. There's no way around this fact. Regardless of recent upgrades to some tank cars, freight railroads are seeking to replace or upgrade the entire fleet of tank cars tasked with transporting crude oil.
The freight rail industry doesn't own tank cars, but has long advocated for increasing the federal design and construction standards for tank cars that carry oil because they are such a critical safety element. The railroads want the government to direct that cars should have new safety features such as increased shell thickness, jacket protection, thermal protection, full-height head shields, higher-capacity pressure relief valves and more. These can help mitigate the potential for rupture of a tank car and limit the severity of an incident if an accident occurs.
In the next few weeks, the U.S. government is expected to finalize its own regulations on the issue. The rail industry is urging the Obama administration to align with Canada and direct tough, new oil tank car standards.Safely moving crude by rail is a shared responsibility, one the rail industry takes exceedingly serious. The railroads have done top-to-bottom reviews of their operations and voluntarily taken steps to further improve the safety of moving crude oil by rail. Specifically, the rail industry has taken these actions:
Increased track inspections and defect detectors: Railroads are performing more track inspections than required by the federal government on lines where trains travel with at least 20 carloads of crude oil. Comprehensive track geometry vehicles, which measure track alignment and assess track conditions, are conducted on crude oil routes. Specialized track-side "hot box" detectors alongside crude oil routes measure the condition of tank car wheel bearings and help identify potential problems before an incident occurs.
Secure routing, speed restrictions, improved braking: Railroads and federal agencies have jointly developed the Rail Corridor Risk Management System, a sophisticated statistical routing tool designed to help railroads identify safe and secure routes for transporting highly hazardous materials. Major U.S. railroads use this routing tool today for trains carrying crude oil. Meanwhile, railroads adhere to a self-imposed 50-mph speed limit for trains carrying 20 or more carloads of crude oil. Speeds are reduced to 40 mph through federally designated high-threat urban areas. Trains operating on main line tracks carrying at least 20 carloads of crude oil are also equipped with enhanced braking systems.
Improved safety coordination: Freight railroads are providing emergency responders and firefighters with details on the hazardous materials transported through a given community. The idea here is to be highly transparent with local safety officials and to ensure that safety remains top of mind for all who are responsible for the safe transport of hazardous materials. At the same time, the industry provides training and education to first responders across the nation.
Investments to reduce accidents: One of the most effective ways railroads have reduced accidents is through the continuous upgrading, maintenance and modernization of the 140,000-mile rail network. Since 1980, the industry has spent $575 billion on the nation's rail system. In 2015, that number is projected to be $29 billion, or approximately $80 million a day.
The aggregate effect of these actions is that the U.S. rail industry has one of the best safety records of any large industry. Just last week, the head of the Federal Railroad Administration allowed that railroads have gone to great lengths to prevent crude oil accidents. But if crude oil from American oil fields is to be transported with even greater levels of safety, it's time for a major upgrade to the crude tank car fleet.
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