Preview Newsletter
ACC AM Mar 23
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Hearing to Examine Impacts of EPA’s Carbon Regulations in Coal-dependent West Virginia
Mar 23, 2015 | U.S. Senate Committee on Environment and Public Works
Location: Burnside Ceremonial Courtroom Raleigh County Judicial Center, 2nd Floor 215 Main Street Beckley, WV 25801 / 9:30 AM -
“How Small Businesses Are Supporting America’s Energy Renaissance”
Mar 23, 2015 | U.S. Senate Committee on Small Business & Entrepreneurship
Location: Lafayette City Hall – Council Chambers, located at 705 W. University Ave., Lafayette, LA. / Time Not Provided -
Surface Transportation Reauthorization: Performance, not Prescription
Mar 24, 2015 | U.S. Senate Committee on Commerce, Science, & Transportation
Location: Senate Russell Office Building, Room 253 / 10:00 AM -
Day 2: H.R. ___, the Improving Coal Combustion Residuals Regulation Act of 2015
Mar 24, 2015 | Energy & Commerce Committee
Location: 2123 Rayburn House Office Building / 2:00 PM -
H.R. __, Improving Coal Combustion Residuals Regulation Act of 2015
Mar 24, 2015 | Energy & Commerce Committee
Location: 2123 Rayburn House Office Building / 5:00 PM -
H.R. ___, Data Security and Breach Notification Act of 2015
Mar 24, 2015 | Energy & Commerce Committee
Location: 2123 Rayburn House Office Building / 5:00 PM -
Budget Hearing - Federal Railroad Administration, Pipeline and Hazardous Materials Safety Administration and Federal Motor Carrier Safety Administration
Mar 24, 2015 | U.S. House of Representatives Committee on Appropriations
Location: 2358-C Rayburn House Office Building / 10:00 AM -
Oversight Hearing on "Effect of the President’s FY 2016 Budget and Legislative Proposals for the Bureau of Land Management and the U.S. Forest Service’s Energy and Minerals Programs on Private Sector Job Creation, Domestic Energy and Minerals Production a
Mar 26, 2015 | The House Committee on Natural Resources
Location: 1324 Longworth House Office Building / 9:00 AM -
Hearing on the Administration's Quadrennial Energy Review (QER)
Mar 26, 2015 | U.S. Senate Committee on Energy & Natural Resources
Location: Dirksen Senate Office Building, Room 366 / 9:30 AM -
(ACC Mentioned) Hall of Fame: After Saving NPE 2009 From the Brink, Carteaux Enjoying Rebound
Mar 22, 2015 | Plastics News
By Bill Bregar
Bill Carteaux said this is a great time to be working for the Society of the Plastics Industry Inc. and representing the third-largest U.S. manufacturing sector. The shale gas boom is lowering costs for energy and some major plastic resins. Processors are beefing up automation. “We can compete with anyone in the world today, because ... -
(ACC Mentioned) Recycling, Startups, 3-D Printing Headline NPE 2015
Mar 20, 2015 | Plastics News
By Gayle S. Putrich
t’s back. And bigger than ever. NPE 2015 set to open March 23 at the Orange County Convention Center in Orlando, Fla., featuring five days of all the latest and greatest the plastics industry has on offer from around the world. The Society of the Plastics Industry Inc., the NPE organizer, is bringing together more than ... -
(ACC Mentioned) AFPN Supplement: Clouds on the Horizon
Mar 23, 2015 | ICIS Chemical Business
By Joe Kamalick
The legislative outlook for the US chemicals sector looks better in 2015 than it has for years, but the horizon is still clouded by multiple pending rules from the US Environmental Protection Agency (EPA). Even before the new year dawned, the industry secured an important legislative goal when the House in December 2014 gave final... -
(ACC Mentioned) His Chemical Romance: Tom Udall Teams Up With the Chemical Industry, With Explosive Results
Mar 23, 2015 | Mother Jones
By Jenna McLaughlin
A lot of environmentalists are mad at Tom Udall. And they're surprised about this. The Democratic senator from New Mexico has a long and distinguished record as an environmentalist, and two weeks ago he introduced legislation to reform the testing and regulation of chemicals. But his former green allies—including environmentalists, lawmakers... -
(ACC Mentioned) Plenty of Cash to Sponsors of Bill from Industry Alleged to Have Written It
Mar 20, 2015 | OpenSecrets.org
By Clark Mindock
A bill that would change chemical regulations may or may not have been written by a leading trade organization affected by the rules — but no matter the original source of the bill’s text, it’s a fact that the sponsors of the legislation have received plenty of campaign contributions from the group and its member companies to make their views... -
OMB Clears Proposed Data-Collection Rule By EPA After More Than Four Years of Review
Mar 23, 2015 | BNA Daily Environment Report
By Pat Rizzuto
Manufacturers of engineered nanoscale chemicals probably will have to provide chemical identity information and other data to the Environmental Protection Agency under a proposed rule the Office of Management and Budget cleared March 19 after more than four years of review. -
EPA Agrees to Revisit Corrosivity Standard To Address World Trade Center Concerns
Mar 23, 2015 | BNA Daily Environment Report
By Anthony Adragna
The Environmental Protection Agency has agreed to consider whether to amend its alkaline corrosivity standard for listing materials as hazardous wastes after an advocacy group said the current standard is inadequate and subjected first responders to health harms at the World Trade Center site following the Sept. 11, 2001, attacks In re Cate ... -
Terminate CSB Chairman, Two Top Aides, Democrats, Republicans Urge White House
Mar 23, 2015 | BNA Daily Environment Report
By Robert Iafolla
In the heaviest political shot against leadership at the Chemical Safety and Hazard Investigation to date, a bipartisan group of lawmakers urged President Barack Obama to fire Chairman Rafael Moure-Eraso and his two top lieutenants in a March 18 letter. “It is vital that you act to immediately remove the toxic leadership that is undermining the... -
Lawmaker Says EPA's Failure to Update Site Causing Confusion on Oil Spill Rule for Farms
Mar 23, 2015 | BNA Daily Environment Report
By Amena H. Saiyid
The Environmental Protection Agency hasn't updated its website to reflect an exemption for farmers from federal oil spill rules—even though Congress made the change last summer, said Rep. Rick Crawford (R-Ark.). The EPA website for the spill prevention control and countermeasures (SPCC) rule at 40 C.F.R. pt. 112 continues to say that farmers... -
New Federal Rules Are Set for Fracking
Mar 20, 2015 | The New York Times
By Coral Davenport
The Obama administration on Friday unveiled the nation’s first major federal regulations on hydraulic fracturing, a technique for oil and gas drilling that has led to a significant increase in American energy production but has also raised concerns about health and safety risks. The Interior Department began drafting the rules, focused on drilling... -
(ACC Mentioned) What Happens to Natural Gas Stocks if Cheap Gas is Here to Stay?
Mar 21, 2015 | The Motley Fool
By Jason Hall
Cheap natural gas is great for the country in many ways. It means lower costs for many of the products we buy; reduced heating and electricity bills; and expanded domestic manufacturing, which provides more good-paying jobs. Conversely, the biggest loser in this game is the companies that produce the gas. -
Interior Releases First Federal Fracking Rule, Requires Chemical Disclosure, Safeguards
Mar 23, 2015 | BNA Daily Environment Report
By Tripp Baltz
The Interior Department released a final hydraulic fracturing rule designed to require the oil and gas industry to engage in “safe, responsible drilling” on federal and tribal lands. The first federal fracking rule—which includes requirements for wellbore integrity, public disclosure of fracking chemicals and wastewater handling and... -
Obama Administration Unveils Controversial Fracking Standards
Mar 20, 2015 | National Journal
By Clare Foran
The Obama administration on Friday released highly anticipated federal regulations on fracking, the controversial drilling technique at the heart of America's energy boom. The rules are intended as a safeguard against water contamination near drill sites where chemicals are injected into shale rock to unleash oil and natural gas. -
GOP Moves to Block Obama’s Fracking Regs
Mar 20, 2015 | The Hill - E2 Wire
By Timothy Cama
Republicans on Friday roundly rejected the Obama administration’s rules for hydraulic fracturing on federal land and pledged to fight them. The GOP warned that the regulations will hamper the nation’s economic recovery that has been bolstered by the boom in natural gas and oil production, much of which depends on fracking. -
BLM's Fracking Rule For Public Lands Could Serve As Model For States
Mar 20, 2015 | InsideEPA
By Bridget DiCosmo
The Interior Department's (DOI) just-issued hydraulic fracturing rule for public lands outlines chemical disclosure, drilling well integrity and other requirements that could serve as a model for states with less-effective oil and gas rules, administration officials say, as it allows variances from the rule for states with more-stringent policies. -
Oil and Gas Industry Groups Sue Interior Over Fracking Rule, Say It's Duplicative
Mar 23, 2015 | BNA Daily Environment Report
By Tripp Baltz
The oil and gas industry wasted no time in taking action against the final rule governing hydraulic fracturing announced by Interior Secretary Sally Jewell March 20, with two trade associations filing suit in federal court within moments of the announcement (Indep. Petroleum Ass'n of Am. v. Jewell, D. Wyo., No. 15-CV-41, 3/20/15). -
Drillers File Lawsuit to Challenge Obama's New Fracking Rules
Mar 20, 2015 | The Hill - E2 Wire
By Timothy Cama
Oil and natural gas drillers wasted little time filing a lawsuit against the Obama administration’s new hydraulic fracturing regulations Friday. The complaint from the Independent Petroleum Association of America (IPAA) and Western Energy Alliance came less than an hour after the Interior Department’s Bureau of Land Management... -
BLM Rule Draws Industry Fire, Tepid Praise From Greens
Mar 20, 2015 | E&E News PM
By Phil Taylor
The Obama administration's sweeping rule tightening oversight of hydraulic fracturing on roughly 750 million acres of federal and American Indian lands took major criticism today from the oil and gas industry and Republicans but garnered tepid support from conservation groups and some Democrats. -
Greens Groan at Interior’s Embrace of FracFocus
Mar 23, 2015 | PoliticoPro
By Elana Schor
The Interior Department’s new fracking rule gives greens some of what they wanted in requiring oil and gas companies to disclose the chemicals they inject underground. But it also relies heavily on an industry-backed disclosure website that environmentalists say needs reform. FracFocus, backed by the industry and created in 2011... -
House Panel to Vote on Oil Export Bill
Mar 20, 2015 | The Hill - E2 Wire
By Timothy Cama
House lawmakers will vote next week on a bill that would lift the 40-year-old ban on crude oil exports. The House Foreign Affairs subcommittee on trade said Friday that will meet March 25 to debate the bill sponsored by Rep. Joe Barton (R-Texas) and vote on it. It will be the first time in recent years that lawmakers have voted on a proposal to ... -
Foreign Affairs Subpanel to Mark Up Crude Export Bill
Mar 23, 2015 | E&E Daily News
By Nick Juliano
A co-sponsor of House legislation to lift the crude export ban will use his subcommittee gavel this week to advance the bill along the legislative conveyor belt. The House Foreign Affairs Subcommittee on Terrorism, Nonproliferation and Trade plans to convene Wednesday afternoon to consider H.R. 702, which would lift the ban on exporting U.S... -
Pennsylvania Won't Extend Comment Period Second Time for Draft Oil, Gas Drilling Rules
Mar 23, 2015 | BNA Daily Environment Report
By Leslie A. Pappas
The public comment period for a heavily debated draft regulation that would set new standards for areas around oil and gas drilling sites won't be extended a second time, officials from Pennsylvania's Department of Environmental Protection (DEP) said March 20. “We cannot extend the comment period beyond 30 days or hold public hearings,”... -
New Mexico Approves Rule to Allow Re-Use Of ‘Produced Water’ From Oil, Gas Drilling
Mar 23, 2015 | BNA Daily Environment Report
By William H. Carlile
In a move calculated to have oil companies use less fresh water, the New Mexico Oil Conservation Commission has approved a new rule allowing oil and gas producers to reuse water that is produced during drilling. The water is called “produced water,” a briny liquid that is the incidental by-product of most oil and gas production... -
Sen. Cruz Introduces Broad Legislation Encompassing Energy Development Wish List
Mar 23, 2015 | BNA Daily Environment Report
By Ari Natter
The renewable fuel standard would be phased out over five years, Alaska's Arctic National Wildlife Refuge would be opened for oil and gas exploration and the permitting process for the export of liquefied natural gas would be expedited, under a broad energy bill introduced by Sen. Ted Cruz (R-Texas). -
Under Performance Standards, EPA Plans To Re-Propose Low-Pressure-Well Definition
Mar 23, 2015 | BNA Daily Environment Report
By Andrew Childers
The Environmental Protection Agency will re-propose the definition of low-pressure wells under its new source performance standards for oil and natural gas wells after the agency missed a relevant comment in the docket. The EPA proposes to make no changes to the definition, first issued in 2012, but the agency is seeking additional... -
White House Slams McConnell on EPA
Mar 20, 2015 | The Hill - E2 Wire
By Timothy Cama
The White House is excoriating Senate Majority Leader Mitch McConnell (R-Ky.) for advising states to ignore the Environmental Protection Agency’s climate rule for power plants. A spokesman for the Obama administration said it’s in bad form for McConnell to wade into how states deal with the rule’s requirements. -
Obama Adviser Blasts McConnell For Denigrating Power Plant Rule
Mar 23, 2015 | BNA Daily Environment Report
By Cheryl Bolen
President Barack Obama's top environmental adviser chastised Senate Majority Leader Mitch McConnell (R-Ky.) for attempts to persuade states not to comply with the administration's Clean Power Plan, which is a proposed rule. On March 19, McConnell stepped up his campaign to have states essentially ignore Environmental Protection Agency... -
Litigation Awaits New EPA Emissions Rules
Mar 23, 2015 | The Wall Street Journal
By Brent Kendall and Amy Harder
The Obama administration’s initiatives to reduce air pollution have fared well in several hard-fought legal battles, but a new round of court challenges could determine whether the White House’s most ambitious efforts will survive. The Supreme Court on Wednesday will hear argument on the Environmental Protection Agency’s first-ever regulations... -
Senate Export-Import Reauthorization Bill Retains Provision for Coal Project Financing
Mar 23, 2015 | BNA Daily Environment Report
By Ari Natter
U.S. Export-Import Bank reauthorization legislation introduced March 19 in the Senate includes new language that overrides Obama administration guidance limiting the bank from financing overseas coal-fired power plants. The bill (S. 819) introduced by Sens. Mark Kirk (R-Ill.) and Heidi Heitkamp (D-N.D.), includes a provision that bars the ... -
Inhofe Raises Concerns About Delay In Publishing EPA's Final Coal Ash Rule
Mar 23, 2015 | BNA Daily Environment Report
By Anthony Adragna
Sen. James Inhofe (R-Okla.), chairman of the Senate Environment and Public Works Committee, is calling foul over the more than three months—and counting—that it has taken for the Environmental Protection Agency to publish its final coal ash rule, though observers told Bloomberg BNA it is unlikely the agency is making significant changes. -
Governors Association to Help Four States Identify Compliance Options for Carbon Rule
Mar 23, 2015 | BNA Daily Environment Report
By Andrew Childers
The National Governors Association will help four states with modeling their power sectors and identifying potential compliance options with the Environmental Protection Agency's proposed carbon dioxide emissions limits for existing power plants. The goal is to help the four states—Michigan, Missouri, Pennsylvania and Utah—develop... -
Clean Air Act and Dirty Coal at the Supreme Court
Mar 23, 2015 | The New York Times - Op-Ed
The name of the law at issue before the Supreme Court on Wednesday is the Clean Air Act. It is not the Coal Industry Protection Act, despite what that industry’s advocates seem to want the justices to believe. Congress passed the legislation in 1970 and substantially strengthened it in 1990 to safeguard human health from air pollution generated... -
Calif. Governor: Cruz 'Unfit' to Be Running For Office
Mar 20, 2015 | The Hill - E2 Wire
By Dave McCabe
Sen. Ted Cruz (R-Texas), who is expected to declare his intention to run for president on Monday, is "absolutely unfit" to run for office because of his views on climate change, California Gov. Jerry Brown (D) said Sunday. Brown was asked on NBC's "Meet The Press" about Cruz's comments on "Late Night With Seth Meyers" that "many of the... -
Bills to Ease Permitting, Scrub Federal Rules Head for Markup in House Judiciary Panel
Mar 23, 2015 | BNA Daily Environment Report
By Dean Scott
The House Judiciary Committee is slated to mark up a bill March 24 to streamline environmental permitting for major energy, manufacturing and infrastructure projects, along with other bills designed to roll back environmental and other federal regulations. The expedited permitting bill, known as the RAPID Act (H.R. 348), was approved in ... -
GSA Asks 120 Top Suppliers to Report Greenhouse Gas Emissions in Pilot Program
Mar 23, 2015 | BNA Daily Environment Report
By Andrea Vittorio
The General Services Administration, which manages billions of dollars in acquisition contracts on behalf of federal agencies, is asking companies in its supply chain to publicly disclose their greenhouse gas emissions and set targets for reducing them as part of a first-of-its-kind pilot program. -
In Bid To Bolster ESPS Lawsuit, Critics Cite McCarthy's Vow To Finalize Rule
Mar 20, 2015 | InsideEPA
By Dawn Reeves
Opponents of EPA's proposed greenhouse gas (GHG) rule for power plants are citing recent promises from EPA Administrator Gina McCarthy that the agency will finalize the rule this summer in a bid to convince a court to hear their case challenging the proposed version of the rule. In March 19 filings, state and industry litigants in the three... -
NRDC Weighs Appeal Of Ruling Upholding State Air District's Fee Policy
Mar 20, 2015 | InsideEPA
By Curt Barry
Natural Resources Defense Council (NRDC) attorneys are weighing whether to seek rehearing or Supreme Court review of an appellate ruling that upheld a California air district's rule allowing revenues from fees on motorists to pay for air quality projects as an alternative to levying Clean Air Act penalties on industrial air pollution sources. -
State Laws Blocking EPA Wood Stove Rule Could Lead to Sanctions, Affect Permitting
Mar 23, 2015 | BNA Daily Environment Report
By Patrick Ambrosio
State legislation barring their environmental agencies from enforcing new federal air pollution standards for residential wood heaters could lead to sanctions on the states and jeopardize states' ability to administer permitting programs, observers told Bloomberg BNA. However, the laws are unlikely to affect compliance because, practically... -
(ACC Mentioned) Reauthorization Bill Would Give Regulator New Powers, More Scrutiny
Mar 20, 2015 | E&E Daily News
By Sean Reilly
The Surface Transportation Board would get expanded power to launch investigations into freight rail industry problems but face timelines for conducting rate reviews, under a bipartisan reauthorization bill introduced yesterday by leaders of the Senate Commerce, Science and Transportation Committee. -
Focus Sharpens on Criminal Enforcement, Pipeline Construction for PHMSA Office
Mar 23, 2015 | BNA Daily Environment Report
By Rachel Leven
The nation's pipeline safety office is increasing its enforcement focus on pipeline construction, a senior agency official said March 20. The Pipeline and Hazardous Materials Safety Administration's pipeline office is concentrating on gas pipelines, Jim Pates, the assistant chief counsel for the pipeline legal division in PHMSA's Office of Chief...
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Hearing to Examine Impacts of EPA’s Carbon Regulations in Coal-dependent West Virginia
Mar 23, 2015 | U.S. Senate Committee on Environment and Public Works
Location: Burnside Ceremonial Courtroom Raleigh County Judicial Center, 2nd Floor 215 Main Street Beckley, WV 25801 / 9:30 AM
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“How Small Businesses Are Supporting America’s Energy Renaissance”
Mar 23, 2015 | U.S. Senate Committee on Small Business & Entrepreneurship
Location: Lafayette City Hall – Council Chambers, located at 705 W. University Ave., Lafayette, LA. / Time Not Provided
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Surface Transportation Reauthorization: Performance, not Prescription
Mar 24, 2015 | U.S. Senate Committee on Commerce, Science, & Transportation
Location: Senate Russell Office Building, Room 253 / 10:00 AM
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Day 2: H.R. ___, the Improving Coal Combustion Residuals Regulation Act of 2015
Mar 24, 2015 | Energy & Commerce Committee
Location: 2123 Rayburn House Office Building / 2:00 PM
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H.R. __, Improving Coal Combustion Residuals Regulation Act of 2015
Mar 24, 2015 | Energy & Commerce Committee
Location: 2123 Rayburn House Office Building / 5:00 PM
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H.R. ___, Data Security and Breach Notification Act of 2015
Mar 24, 2015 | Energy & Commerce Committee
Location: 2123 Rayburn House Office Building / 5:00 PM
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Mar 24, 2015 | U.S. House of Representatives Committee on Appropriations
Location: 2358-C Rayburn House Office Building / 10:00 AM
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Mar 26, 2015 | The House Committee on Natural Resources
Location: 1324 Longworth House Office Building / 9:00 AM
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Hearing on the Administration's Quadrennial Energy Review (QER)
Mar 26, 2015 | U.S. Senate Committee on Energy & Natural Resources
Location: Dirksen Senate Office Building, Room 366 / 9:30 AM
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(ACC Mentioned) Hall of Fame: After Saving NPE 2009 From the Brink, Carteaux Enjoying Rebound
Mar 22, 2015 | Plastics News
By Bill Bregar
Bill Carteaux said this is a great time to be working for the Society of the Plastics Industry Inc. and representing the third-largest U.S. manufacturing sector.
The shale gas boom is lowering costs for energy and some major plastic resins. Processors are beefing up automation.
“We can compete with anyone in the world today, because we’ve increased so much in productivity. That’s why it’s even more enticing for people to reshore now, because the cost-structure’s changed,” he said. “It’s changed from the abilities on the other side of the ocean — now when you’ve got those shipping costs and everything else, and now we can do it more inexpensively here.”
As president and CEO of SPI since 2005, Carteaux has seen the changing face of manufacturing in Washington.
“When I came D.C., the president at the time was talking about becoming a service society. Trying to get a meeting with members of Congress to talk about manufacturing, it just wasn’t on their radar screen. And that’s all changed,” he said. “The manufacturing sector overall, as part of the economy, has done well. Manufacturing helped lead the country out of recession. And people realize that to have a middle class in this country, we need manufacturing.”
SPI faced a huge challenge during the Great Recession. NPE 2009 was in doubt as major exhibitors began pulling out as their sales plunged. Leaders of SPI, the trade show organizer, worried about a ripple effect as other companies looked to withdraw.
Carteaux and the other leaders worked quickly — and used his industry contacts forged during a career in plastics machinery — to come up with an “economic stimulus package” of discounts. The show was saved. But the stimulus plan caused SPI economic pain, and the association restructured and laid off employees.
NPE’s commitment to Orlando
Then came a blockbuster announcement: SPI was moving NPE from McCormick Place in Chicago, the exposition’s longtime home in the heart of the industrial Midwest, to lower-cost Orlando, Fla., for the shows in 2012 and 2015.
At NPE 2015, Carteaux said, SPI is announcing that the trade association has contracted with Orlando for NPEs through 2018 and 2021, and has dates reserved there for the NPE 2024 show. The show runs every three years.
Carteaux revealed that earlier talks fell apart with Chicago government and union leaders that could have alternated NPEs between the two cities.
“In the fall of 2013, we went back to Chicago and said, ‘We’d like to talk to you about starting a rotation of NPE between Chicago and Orlando, in 2021. Because we were already locked in to Orlando for 2018. We had in-depth discussions,” Carteaux said.
They couldn’t come to an agreement, he said.
And this week at NPE 2015 — in Florida — Carteaux enters the Plastics Hall of Fame.
Building upon past experiences
Carteaux, 55, discussed his machinery background, working in Washington D.C. and what should be the biggest NPE ever this week in Florida, during an interview at SPI’s new offices on K Street.
The SPI leader was nominated for the Plastics Hall of Fame by Jay Gardiner, president of Gardiner Plastics Inc. in Port Jefferson Station, N.Y. Gardiner also is president of the Plastics Academy, which administers the hall.
Carteaux’s machinery career began in his hometown of Avilla, Ind., at Autojectors Inc., the vertical-clamp insert molding press maker owned by Group Dekko. Later, he was a top official of Demag Plastics Group, a multinational machinery maker, where he saw the integration of Van Dorn Demag.
But at his high school in Indiana’s farm belt, he wanted to be an auto mechanic.
“My dad was an electrician at International Harvester so I grew up in a blue collar family. He and my grandfather also owned a tavern for 30 years,” Carteaux said.
He was a mechanic for about a year at an Oldsmobile dealership. Then he joined the Air Force for training in aircraft maintenance, and a way to pay for college. But after 30 days, he was honorably discharged, thanks to a detached retina suffered when he got hit in the eye by a football in high school.
Carteaux was able to save some money working at a gas station through high school. He enrolled at Purdue University, the first one in his family to attend college. He got a degree in agricultural systems management. His senior year was all paid for, as he won a coveted job as a resident adviser — using experience as a squad leader in his month in the Air Force.
At Purdue, Carteaux and other ag students organized a trade show at the local armory, complete with a parade of tractors through town. The AG Expo was his first trade show. And making connections is a big part of any show (including NPE of course), and that’s how he got a job after college: at the Indiana Farm Co-Op.
“It seems like everything I’ve done, it’s been built off of something else,” he said.
That was the case when he got a job at Group Dekko, a diversified industrial group of companies founded by Chet Dekko, who Carteaux considers a mentor. There was also a lot of luck. Like countless other plastics veterans, he backed into the industry.
Chance encounter
At his gas station job, he filled up cars and maintained the car wash. A frequent customer was Bill Dice, who came in every Saturday with a Corvette from his personal collection.
“I just struck up a conversation with him. And one day he said, “So, you gonna work here the rest of your life?’” Carteaux recalled.
Carteaux explained he was going to college, for ag engineering.
“Really? When you get out of college, look me up. I’ll have a job for you,” Carteaux recalled Dice telling him.
Riiiiight.
After college, Carteaux was selling equipment to farmers at the co-op when his old boss from the gas station asked him to fill in one Saturday.
“Saturday afternoon rolls around about 2 o’clock and lo and behold who drives in, it’s Bill Dice. And it’s a beautiful spring day. He’s got one of his Corvettes out, and he gets out of his car. He looks at me and he goes, ‘Bill! How are you? What are you doing here?’ I told him that Joe had called and asked me to work.”
Dice asked why Carteaux didn’t look him up. He told Carteaux he was executive vice president at a big company, Group Dekko. He wanted Carteaux for an industrial sales job.
Carteaux put down his oil-stained rag. The following Tuesday morning, he went to Dekko. The company hired him in 1984. It turned out Dice was the right-hand man to Chet Dekko.
“And I had no clue when I talked to this guy at the gas station,” he said.
Starting on his kitchen table, Chet Dekko had built a $400 million, vertically integrated industrial group in wire and cable extrusion, insert molding, PVC compounding and plastic recycling. Carteaux became a sales executive at a division that launched office furniture. He was happy at Dekko, but left for five years to get some “hard-core manufacturing experience” at Guardian Industries Corp., an automotive molder.
Group Dekko lured him back with the job at Autojectors. The company began to make insert molding presses for another internal Group Dekko business, which made plugs for wiring harnesses. It was a $3.5 million business. Chet Dekko wanted to sell to other molders, directly competing with Newbury vertical machines. As general manager, Carteaux helped build Autojectors to sales topping $25 million, he said.
Then Milacron LLC bought Autojectors in 1998. Carteaux stayed for only a few weeks, and left to become vice president of marketing at Van Dorn Demag in Strongsville, Ohio. He moved up the ranks, to president, then co-executive managing director, with Helmar Franz.
Just a month after becoming top executive in 2002, Carteaux announced significant layoffs at Strongsville.
Carteaux said that in the early 2000s, work was moving to China, especially hurting Van Dorn Demag business in the United States. After the record attendance of NPE 2000, the machinery market began to slide.
“By the time I became CEO in 2002, we were less than half the size company that we were when I started there in 1998. Van Dorn went from $212 million to $70-some million,” he said. “It was because the market was cut in half during that couple-of-year period of time. And the part of the business that left was the part that Van Dorn was really strong in — it was shoot and ship. It was low-end technology stuff.”
Excess machines
Carteaux enjoys talking about plastics machinery — a major focus at any NPE. The recession in 2009 slammed press sales, but they were already in a slow decline before the crisis. The last big boom was the late 1990s, when annual U.S. unit sales touched 7,000.
“We never should have been selling 7,000 machines,” he said. “What happened was, people weren’t investing in automation. And so they were buying more machines and throwing people on the projects as opposed to investing in automation. And China could do it for freaking nothing. If we would have automated, we never would have sold 7,000 machines a year, and we would’ve invested in more automation, like Europe was doing.”
The resulting glut of excess machines depressed the market for new presses.
Right now, annual injection press orders are around 4,000. Carteaux said 3,800 to 4,200 is a sustainable level. Realistic.
“We’ve slowly built our way up to that. The extrusion market’s doing better in the first half of the year. Auxiliaries have continued to do well. People are investing very heavily in automation. They’re taking cost out,” he said.
Carteaux likes running SPI. “One of the great things about this job is that every day is different. In 10 years, I can say that almost every day has been different than the one before,” he said.
He’s not a “Washington guy,” but instead, someone who has an industry background and has made tough business decisions.
“It has opened up more doors to me because I’m not a talking head,” he said.
Rebuilding relations
Carteaux also has worked hard to forge links with other trade groups. He said he has rebuilt relations between SPI and the American Chemistry Council, which had been severed for years. And he put together the North American Plastics Alliance (NAPA), and the Plastics Association Leaders (PAL). And a new group has started, the North American Plastics Recycling Alliance (NAPRA).
“Basically what we’re doing is communicating about our joint initiatives and issues, and making sure we’re not duplicate spending on issues across the industry,” he said. “We’re talking. We’re collaborating and working together.”
It hasn’t been easy. In fact, SPI faced some of its biggest challenges in history. The Fantastic Plastics Works exhibit at Walt Disney World, while a success, did not attract full industry funding, so SPI was forced to use its core cash, he said.
Then came the recession and the tough NPE 2009.
“If I didn’t have a business background, I’m not sure I would’ve survived. I had to get really creative on cash flow, and be able to make things happen, to keep us afloat. To get us to where we are today,” Carteaux said.
Saving NPE 2009
Plastics News documented the NPE 2009 controversy at the time. But Carteaux revealed some other details during a three hour interview in his D.C. office. The 2009 show was set for June in Chicago. In early February, he said, “the wheels started going off.”
Japanese injection press maker Nissei Plastic Industrial Co. and Swiss press builder Netstal-Maschinen AG issued news releases announcing they were pulling out of NPE 2009. One of Carteaux’s machinery contacts said the Japanese were thinking about pulling out en masse.
“From our perspective what was happening, it was going to become a self-fulfilling prophecy. Because when people realized that these big guys were pulling out then more guys would pull out,” he said.
And if more major machinery players pulled out, that could hurt attendance, since people want to see working equipment.
Carteaux also learned the European machinery makers were teetering. They would exhibit if the Japanese were there. If not, they probably would pull out, too.
Alarm bells sounded. SPI leaders met to figure out a plan. Gunther Hoyt, a consultant and former executive at screw and barrel maker Xaloy Inc. helped set up appointments in Japan. Carteaux got on a plane to Tokyo.
“I flew over there on a Friday night,” he recalled. “I landed at 5, got to the hotel about 6:20. I took a shower and changed and at 7 o’clock I was at my first dinner. And we had meetings on Sunday, Monday, Tuesday. On Tuesday there was a very clear picture.”
Carteaux talked with Gene Sanders, SPI’s senior vice president of trade shows and conferences. They talked to the executive committee. The Japanese, Carteaux reported, “were supportive, but they just didn’t have the cash. So the question was, how can we give you space, give you money so you can still exhibit, and not have to take any more out of existing cash flow?”
The stimulus package was born.
Carteaux visited machinery companies in the United States and Canada. He flew to Europe. Vendors pitched in to lower costs, including Freeman Co., the general contractor.
“At the end of the day everybody stayed,” he said.
But at a price. The economic stimulus plan cost SPI $3.2 million, according to press reports. Layoffs were the result. Carteaux said SPI streamlined its operations.
“We’re still not back to even close to the level that I took over in 2005. And our members will tell you we’re doing multiple times more work with a lot of fewer people. But that’s because we had people in places they shouldn’t have been. We were doing some things we shouldn’t have been doing. We have really refocused the whole organization,” he said.
And NPE moved to Orlando.
Meanwhile, SPI officials are working to diversify income sources from operations. Carteaux said NPE used to account for 60 percent of total revenue, in SPI’s three-year budget. That’s now down to 35 to 40 percent, he said.
SPI is on solid financial footing. The industry is healthy, as NPE 2015 kicks off.
Carteaux said SPI needs to be able to fight what he called unprecedented challenges facing the industry from the regulatory side — the bans, taxes and deselection issues that grab the headlines.
But SPI has a broader mission.
“Trade associations are repositories of information,” Carteaux said. “It’s our job to take information and put it into knowledge for our industry. I think that’s what we’re doing. And that knowledge could be, this is how you’re getting beat up in regulatory, this is what’s happening on the Hill, or the state level. This is what’s happening on new technology. These are things you need to do.”
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(ACC Mentioned) Recycling, Startups, 3-D Printing Headline NPE 2015
Mar 20, 2015 | Plastics News
By Gayle S. Putrich
It’s back. And bigger than ever.
NPE 2015 set to open March 23 at the Orange County Convention Center in Orlando, Fla., featuring five days of all the latest and greatest the plastics industry has on offer from around the world.
The Society of the Plastics Industry Inc., the NPE organizer, is bringing together more than 2,000 exhibitors showcasing their products and processes to an expected 60,000 visitors in more than 1 million square feet of trade show floor space.
Those bigger numbers, especially in attendance, can partially be attributed to big growth in international participation for the show. SPI predicts about 28 percent of attendees and 43 percent of this year’s exhibitors are coming from outside the U.S., not including companies based in other countries but exhibiting through their U.S. subsidiaries. NPE 2015 expects to have its largest ever contingent from China, and 36 other countries will be represented, including Canada, Italy, Taiwan, Germany, India, Turkey, Switzerland, France and South Korea.
“The great size and international makeup of NPE 2015 reflects the importance and value of plastics and plastics manufacturing in our world,” said Gene Sanders, SPI senior vice president of trade shows and conferences.
New faces are only one of the big surprises at North American plastic’s biggest event. More than 600 exhibiting companies say they will have machinery at their booths and more than 400 plan to be operating equipment, according to Sanders and SPI. And the newest trends in the industry will be represented, as well, both in their own pavilions and a new mini-show.
Zero Waste Zone
Image By: Society of the Plastics Industry Inc. Dresses made from recycled or repurposed plastics will be featured at the Zero Waste Fashion Show at the opening ceremony for NPE 2014. Demonstrating an industry-wide commitment to recycling, sustainability and the many potential lives for plastics products, the new Zero Waste Zone, in the South Hall, will feature more than 45 exhibitors focused on the future in the Recycling and Sustainability Pavilions.
Companies including Coca-Cola, Dart, Dell, Green Toys, Hilex Poly, Pepsi, Seventh Generation and Sony, as well as the American Chemistry Council, will showcase the latest trends and products made from post-consumer recycled plastic. At the Zero Waste Wall, show-goers can make a public commitment to zero-waste efforts by adding their business card to the wall (while being entered to win a motorcycle).
In an on-site recycling demonstration, Rapid Granulator Inc. will process PET products into reusable flake. Live demonstrations will run at 10:30 a.m., 1:30 p.m., and 3:30 p.m. daily.
“The Zero Waste Zone and the surrounding Recycling and Sustainability Pavilions will provide attendees with concentrated access to companies and technologies that have made it their business to address these themes and develop workable solutions,” said Gene Sanders, SPI’s senior vice president of trade shows and conferences.
Kicking things off for the zero-waste effort will be the Pursuing Zero Waste Fashion Show in the morning on March 23 in the West Hall. As part of the NPE 2015 opening ceremonies, Savannah College of Art and Design students are designing and creating garments from recycled, reused, or repurposed plastics.
The party will continue in the Zero Waste Zone’s beer garden (with the “same mission ... zero wasted,” cracks an NPE news release), serving up suds to the environmentally minded from 11 a.m. to 5 p.m. daily. For earlier risers, the beer garden will host coffee service from 9 a.m. to 11 a.m. featuring compostable products, sponsored by BASF. The beer garden will also host special events daily, according to SPI.
A shuttle will run a loop from the West Hall to Zero Waste Zone throughout the show.
Startup Garage
From Amazon and Apple to Disney and Mattel, taking a company literally from the garage to the Fortune 500 has happened too many times for it to be merely myth. So don’t be surprised if the first place you hear about the next billion-dollar idea in plastics at the Startup Garage at this year’s NPE.
More than a dozen fledgling companies will highlight innovations in bioplastics, recycling, 3-D printing, polymerization, resin processing and antimicrobial polymer development in Orlando. Originally intended to be a small, juried special exhibit, NPE’s Startup Garage attracted so much attention from potential exhibitors organizers had to expand it.
“The response to our call for applicants has been met with an enthusiastic response by new companies doing exciting things at the forefront of polymer technology,” said Brad Williams, SPI’s director of trade show sales and marketing, in a news release. “While some of these startups propose new ways to address pressing issues involving renewable resources and waste reduction, others offer enhancements of plastics manufacture and product performance. The quality of the exhibitors so far has led us to extend the call for more.”
With the help of Startup.Directory, the new-venture tracking arm of Washington-based InnovaTech Ventures that offers competitive analysis and market intelligence to bring start-up companies together with venture capital and angel investors, NPE’s Startup Garage will offer prominent exhibition space to innovative plastics companies just getting off the ground.
The featured startups come from every point in the plastics supply chain: Ohio-based Biobent Polymers, will feature its licensable bio-composite polypropylene and polyethylene resins made from up to 40 percent soy meal. Plastic EQ Corp.,based in Montreal, is an Internet marketplace bringing together recycled plastics suppliers and buyers — and handling all the paperwork. And FormLabs Inc., a Somerville, Mass.-based startup, is already innovating in the still-developing 3-D printer market with a high-resolution desktop-sized printer that uses stereolithography to build objects from liquid plastics using lasers rather than the more common fused filament fabrication method.
Designer pavilion
Sure, everyone wants to see the latest technology and toys at a trade show, but it’s the designers who make sure that stuff looks good. And this year, designers have their own pavilion at NPE.
The Industrial Designers Society of America (IDSA) and SPI banded together for NPE 2015 to create the show’s first IDSA Design Pavilion. Located in the South Hall, the Design Pavilion will feature booths from design firms, processors, software developers and other companies providing design services to the plastics industry.
“IDSA’s presence at NPE 2015 will sharpen the focus on the role of design in advancing the practical value of plastics, their consumer appeal and their contribution to sustainability,” SPI’s Sanders said.
The pavilion also will include a display featuring the winners of IDSA’s 2014 International Design Excellence Award (IDEA) competition. SPI will present an award and scholarship to the competition’s outstanding student winner.
“IDSA is delighted to be partnering with SPI on NPE 2015, the premier conference for the plastics industry,” said Daniel Martinage, executive director of IDSA, in a news release. “Connecting designers with professionals in related fields continues to be a priority for IDSA, and our partnership with SPI is an excellent step towards furthering this initiative.”
3-D printing
Easily one of the most talked about newcomers to the plastics industry in recent years is 3-D printing, or additive manufacturing, and it’s making its NPE debut in a big way. For the first time, 3-D printing will be featured on its own at the triennial trade show.
NPE3D will feature more than 15 exhibitors from around the world, including reps from 3M’s Advanced Materials Division; Chinese rapid prototype and tool maker Guangzhou Seal Mould Co. Ltd.; engineering services firm Geometric Ltd. out of Mumbai, India; and Carlsbad, Calif.-based prototype tooling and custom short run specialist Forecast 3D. Minneapolis-based 3-D printing specialist Stratasys Ltd. will demo its new Objet 500 Connex1 multi-material 3-D printer, which can produce parts from three materials in a single run.
Organizers said they had to expand the space for NPE3D significantly late last year after a huge response for the first-time event. More booth space was added to accommodate interested exhibitors and the event is even sporting its own dedicated Twitter hashtag, #NPE3D.
NPE3D will also have a dedicated half-day conference track, focused on emerging trends and technologies, short-run injection molding and low-volume production strategy, as part of SPI’s Business of Plastics Conference. The show-within-a-show even features its own happy hour for NPE3D devotees or anyone just 3-D-curious from 4 p.m. to 5 p.m. on March 24.
After the inaugural NPE3D, held March 23-27, the exhibition will be held every year in a different location, collocating with NPE every third year, according to SPI.
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(ACC Mentioned) AFPN Supplement: Clouds on the Horizon
Mar 23, 2015 | ICIS Chemical Business
By Joe Kamalick
The legislative outlook for the US chemicals sector looks better in 2015 than it has for years, but the horizon is still clouded by multiple pending rules from the US Environmental Protection Agency (EPA).
Even before the new year dawned, the industry secured an important legislative goal when the House in December 2014 gave final congressional approval to legislation extending the federal mandate for chemical facility anti-terrorism precautions for a full four years. President Barack Obama has since signed the measure into law.
Although the legislative climate over the US is improving, there are still significant clouds on the horizon
In addition to the four-year renewal – long sought by the chemicals sector – the legislation, HR-4007, the “Protecting and Securing Chemical Facilities from Terrorist Attacks Act”, also made some minor changes to the Chemical Facility Anti-Terrorism Standards (CFATS), enforced by the Department of Homeland Security (DHS).
First put in place in 2007, the CFATS programme requires some 4,000 US chemical facilities to meet certain DHS security standards to thwart a possible attack by terrorists seeking to cause massive off-site casualties and damage.
However, since 2007 the CFATS programme had been renewed chiefly with annual votes by Congress, a practice that chemical manufacturers complained has created continuing uncertainty about the rules, making it difficult for plant operators to make long-term investments to meet those federal standards.
The Society of Chemical Manufacturers and Affiliates (SOCMA) welcomed passage of HR-4007, saying that: “A multi-year CFATS authorisation will provide much-needed certainty for chemical owners and operators”.
The American Chemistry Council (ACC) also welcomed final congressional approval, saying that HR-4007 is “a long-term solution for regulating security that will help create a stronger foundation for CFATS”.
With CFATS extension secured, the chemicals sector is focused on the single most important piece of industry legislation in four decades, modernisation of the Toxic Substances Control Act (TSCA), the principal federal law governing chemicals in commerce.
Prospects for final congressional work on badly needed reforms for the 39-year-old TSCA are seen as especially improved now that Republicans have a complete majority in Congress.
In the November 2014 election, Republicans won a majority in the 100-seat US Senate and solidified their hold in the 435-member House of Representatives.
ACC president Cal Dooley says that his association’s members now are largely confident that the new political balance in the US Senate will enable completion of a bipartisan TSCA modernisation bill in that chamber perhaps by the end of 2015.
Everyone – producers, environmentalists, regulators – agrees that the law badly needs updating, but finding common ground on legislative language that would pass muster in the Republican House and last year’s Democrat-majority Senate proved hopeless.
With both chambers now in Republican hands, says ACC vice president for communications Anne Kolton, “we believe that TSCA reform may be the one issue that could benefit most dramatically”.
While a bipartisan TSCA reform bill, crafted chiefly by Republican Senator David Vitter of Louisiana, has won support in the House, it had grounded on Senate rocks where California Democrat Senator Barbara Boxer, former chair of the Senate Environment and Public Works Committee (EPW), was adamantly opposed to the bill’s provision to largely pre-empt state rules governing chemicals in commerce.
But in the 114th Congress, long-time Nebraska Republican Senator James Inhofe is again chairman of the EPW Committee.
“This is significant,” says Bill Allmond, vice president for government and public affairs at SOCMA. It is significant, he adds “because for the last two years Boxer has blocked the bipartisan effort to reform TSCA”.
While Boxer remains on the EPW Committee, she no longer controls what bills the panel will or will not consider, and Inhofe is likely to advance the Vitter TSCA reform measure or at least allow it to come up for consideration before the committee.
Dooley says he is equally certain of House passage of a bipartisan TSCA reform bill and that, once Congress has sent the measure to the White House, “we are confident the president would sign a balanced measure”.
SOCMA’s Allmond also thinks the new Republican Senate could help advance TSCA reform, but it still might not be easy.
“Even under the best circumstances, with a small Republican majority in the Senate,” he says “you still have to work with Democrats to get congressional passage of any significant legislation of interest to the chemicals industry.”
RAIL TRANSPORT ISSUES
In rail transport, Dooley says he also has increased expectations that the Republican Congress will advance legislation to revise the manner in which the Surface Transportation Board (STB) decides freight rail rate disputes between railroad operators and high-volume rail shippers such as chemicals manufacturers.Dooley says that a measure already pending on Capitol Hill could well be passed that would “address some of the financial and regulatory barriers to shippers being able to secure timely and equitable rate resolution processes” at the STB.
In addition, he says he has hopes the 114th Congress will move to influence pending plans by the EPA to toughen the federal standards on atmospheric ozone and proposed rules by EPA to sharply restrict carbon dioxide emissions by existing US electric power plants.
On the pending EPA ozone rule, Dooley says he wishes that the agency would instead focus on implementing the existing ozone standards “before imposing a reduced level that could create uncertainty for industry”.
In December last year EPA formally proposed its new, lower standard for ground-level ozone concentrations, saying that it is considering lowering the maximum allowed level to within a range of 0.065 to 0.070 parts per million (ppm), down from the existing 0.075 ppm mandate that was set in 2008.
The agency also said that it was still willing to consider an even lower standard of 0.060 ppm.
US industry officials have warned repeatedly that such a low standard would be unachievable, noting that in some parts of the country – such as national parks where there is no commerce or industry – natural background ozone concentrations often are above the agency’s new proposed standard.
But the agency seems determined to impose the new, tougher ozone mandate.
So too with the EPA’s plans to sharply reduce CO2 emissions by the nation’s electric power plants; the agency appears unmoved by industry appeals and even the Republican-majority Congress is unlikely to intervene.
Dooley says he does not think that Congress would move to completely reverse EPA plans to sharply reduce CO2 emissions by power plants because such a move would unquestionably draw a presidential veto.
Dooley notes that chemicals manufacturers are concerned about EPA’s move to restrict power plant emissions because his industry is one of the most energy-intense sectors in the country.
He says he is also concerned that EPA’s CO2 power plant restrictions might accelerate fuel-switching – as more and more coal-fired power plants switch to lower-carbon natural gas as a generating fuel – that could elevate the cost of natural gas and natural gas liquids, the primary feedstocks of chemicals production in the US.
For SOCMA’s specialty and batch chemicals producers, there is a lot that they would like to see happen in the 114th US Congress.
PROGRESS NEEDED ON TRADE
“One issue of importance to us, the trade issue, likely will be seen more favourably in a Republican Congress,” Allmond says.He would like to see Congress finally renew trade promotion authority (TPA) for the president, also known as fast-track trade authorisation. That once long-standing authority for the White House expired years ago and its lack has hampered trade negotiations.
Under TPA, when the president negotiates a trade deal with one or more other nations, Congress may only approve or reject the trade agreement as-is without amendments.
Prospects for another key trade matter also might improve in a Republican-controlled Congress, renewal of the miscellaneous tariffs bill (MTB).
Under that measure, US tariffs on hundreds, even thousands of imported substances would be eliminated, reducing costs for domestic chemicals manufacturers who require feedstocks or elements of one sort or another that are not produced domestically but used in production of or as end-product components in US manufactured goods and materials.
The MTB expired in 2012, Allmond notes, and restoring it would make US producers more competitive in the global marketplace.
“It’s not that congressional Democrats are against MTB,” Allmond says, “and in fact many of them support it, but with the two chambers split between the two parties, it has been hard to pass this and other trade measures because of uncertainties about what the other chamber will do.”
With both the Senate and House in Republican hands, says Allmond, that reluctance to act may change.
So too with tax reform, he says. “There have been a number of tax reform proposals on both sides, but as with so many other issues they did not advance” because of the party split between the two chambers.
“I think a Republican Congress will try to take this up again, likely in a comprehensive approach,” Allmond says.
US chemicals producers and a legion of other companies have long complained that US corporate income taxes – nearly 40% when most state-level taxes are included – are far higher than all but a couple of other industrialised nations and undermine US companies’ competitive standing abroad.
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Mar 23, 2015 | Mother Jones
By Jenna McLaughlin
A lot of environmentalists are mad at Tom Udall. And they're surprised about this.
The Democratic senator from New Mexico has a long and distinguished record as an environmentalist, and two weeks ago he introduced legislation to reform the testing and regulation of chemicals. But his former green allies—including environmentalists, lawmakers, professors, and public health officials—oppose the legislation, and accuse Udall of becoming too cozy with the chemical industry, which spends over $60 million a year to lobby Congress. They claim that Udall is sacrificing public health for chemical industry profits and that his bipartisan bill, which is co-sponsored by Sen. David Vitter (R-LA), doesn't protect people from dangerous chemicals, such as asbestos, BPA, and formaldehyde, and, moreover, cripples the regulatory efforts of individual states.
"To be 100-percent candid and direct, [Udall's] bill has been generated by the chemical industry itself," Sen. Barbara Boxer (D-CA) said at a press conference last Wednesday. Indeed, the chemical industry has been outspoken in its support of Udall. "This bill is the best and only opportunity to achieve a pragmatic, bipartisan solution to reform chemical regulation," said American Chemistry Council president Cal Dooley last week in a press release.
Boxer has introduced competing legislation—supported by many environmental groups—that includes provisions that mandate a quicker turnaround time for testing chemicals for safety and grant states more power to regulate chemicals. Her bill is unlikely to win passage; last week, the Republican Senate leadership didn't allow Boxer to present the bill on the floor.
Udall and his allies insist that his bill, with nine Republican and eight Democratic co-sponsors, has a chance for success. Udall aide Jennifer Talhelm tells Mother Jones that negotiations between Udall, Vitter, and the chemical industry were often strained and that on at least two occasions Udall's disagreements with industry reps nearly led to a collapse in the talks and no legislation. Supporters of the Udall-Vitter measure contend that the bill is a vital would give the Environmental Protection Agency the authority to control or eliminate dangerous chemicals. Its detractors argue that the chemical industry still has the upper hand.
Backers of the bill and its critics do tend to agree that the 1976 Toxic Substances Control Act has failed to protect public health. That law has permitted the $800 billion-a-year chemical industry to produce over 80,000 substances whose traces now appear nearly everywhere—such as in household items including plastic baby bottles, food, and rugs. Only five of those chemicals have been tested for safety and regulated. And under the current law, according to John Stephenson, director of natural resources and the environment at the Government Accountability Office, the burden of proof is on the EPA to show a chemical is dangerous, not on the chemical industry to demonstrate that it is safe. And if a chemical is determined to be a health risk, its use can only be restricted in a way that is "least burdensome", which is least expensive, for industry. Even a known carcinogen like asbestos—which is linked to the deaths of 10,000 Americans a year—has not been banned under this law because of an industry lawsuit.
So there is a consensus the 1976 law needs to be revamped and bolstered. But most enviros say the Udall-Vitter bill is not sufficient. The critics have three main complaints:
State Preemption: "States have been important leaders in developing rules to protect their residents from harmful chemicals," says Michael Green, the executive director of the Oakland-based Center for Environmental Health. California's Prop 65 Law has pressured companies to eliminate lead from products such as baby bibs and vinyl lunch boxes, and to stop using arsenic-based wood preservatives in children's playgrounds.
But Udall's legislation would undermine strong state action by mostly removing the authority of states and handing it to the EPA, except for chemicals deemed "low priority." Under this bill, states would not be allowed to develop new restrictions on specific uses of a chemical after the EPA has decided to put the substance on a list of "high priority" chemicals to review. Yet reviewing the chemical could take up to seven years. Thus, the states would essentially be blocked from moving forward with safeguards.
The bill would also strip states of the power to enforce federal standards, a process known as "co-enforcement." Supporters of the Udall bill acknowledge that state preemption has some downsides, but they note that existing state laws passed before January 1, 2015, would not be affected by the legislation.
Safety Standard: Critics say Udall's bill won't keep people safe because the language of the legislation is too vague and weak. Under the new bill, the EPA must consider "unreasonable risks" to human health and the environment when testing and regulating chemicals, but it never explicitly defines what an "unreasonable risk" is. Though the wording seems like a step up from former legislation, which explicitly requires the EPA to consider monetary cost as well as health before even testing a chemical, critics believe this cost-benefit analysis will continue to be a priority, because the bill still requires the EPA to consider cost when it is restricting a chemical proven to be dangerous. A group of 34 professors, environmentalists, and legal experts sent a letter detailing these concerns to Sen. James Inhofe and Sen. Barbara Boxer on Monday. The Environmental Working Group, Greenpeace, Safer Chemicals, Healthy Families, the Center for Environmental Health, the Breast Cancer Fund, and others agree. Rick Hind, the legislative director of Greenpeace called Udall and his co-sponsors "liars" for insisting that the cost-benefit analysis was removed from the bill. "Even if you had Rachel Carson running the EPA, she wouldn’t be able to do anything," he says.
But Udall and those involved in negotiations say these complaints are not based on the facts. The phrase that essentially severely limited EPA's authority as a result of its lawsuit over banning asbestos is removed from the bill. In this 1991 suit, the EPA was required to choose the "least burdensome" restriction in regulating a chemical. In Udall's bill, the EPA must regulate chemicals based on health "without taking into consideration cost or other nonrisk factors." If the chemical is determined unsafe, the EPA must regulate it so that it will not pose a risk to health and the environment.
Timeline: Most environmental groups are concerned that the bill would give regulators too much time to conduct safety investigations of chemicals: up to seven years for each review. Also, the chemical industry only has to foot 25 percent of the cost of testing, with a cap of $18 billion a year. Udall's staff insists that these proposed guidelines come straight from the EPA, which maintains that this timeline and budget are the only feasible ways for them to test and regulate chemicals without fear of missing deadlines.
Last Wednesday, the Senate Committee on Environment and Public Works held a hearing where Udall spoke for his side, and Boxer spoke for the opposition. Udall acknowledged that "there is still room to improve" the bill. But he is not phased by the opposition. "I'm not going to stand by and let our best chance to protect our kids from dangerous chemicals to be torpedoed," Udall tells Mother Jones.
Despite controversy over the bill, it seems likely that it will advance out of committee with a large amount of bipartisan support. While the EPA told The Hill that the administration isn't currently taking a position on the bill, an agency official who spoke at last Wednesday's hearing noted that it fulfilled the Obama administration's goals to reform chemical legislation set out in 2009.
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(ACC Mentioned) Plenty of Cash to Sponsors of Bill from Industry Alleged to Have Written It
Mar 20, 2015 | OpenSecrets.org
By Clark Mindock
A bill that would change chemical regulations may or may not have been written by a leading trade organization affected by the rules — but no matter the original source of the bill’s text, it’s a fact that the sponsors of the legislation have received plenty of campaign contributions from the group and its member companies to make their views known.
The Senate Subcommittee on Environment and Public Works held a hearing Wednesday morning to consider amending the Toxic Substances Control Act, which regulates the production, importing and disposal of specific chemicals. Days earlier, Sen. Barbara Boxer (D-Calif.) criticized the access the American Chemistry Council seemed to have been able to get to the bill’s drafting process.
“Call me old-fashioned, but a bill to protect the public from harmful chemicals should not be written by chemical industry lobbyists,” Boxer told the San Francisco Chronicle .
The bill, if enacted, would be the first time in nearly 50 years that TSCA — which deals with chemicals like asbestos — was updated. That is a process, supporters of the bill contend, that should be informed by the industry most affected by it; but if left solely to industry, opponents respond, the result could seriously undermine the purpose of chemical regulations to protect public health.
The alleged authorship was discovered as the bill circulated Capitol offices in the form of a Microsoft Word document, and someone noticed the “company of origin” listed in the document’s digital properties was the ACC. A spokesperson for Sen. Tom Udall (D-N.M.), one of two sponsors along with Sen. David Vitter (R-La.), has said the ACC’s name was put in that field by mistake.
“That document originated in our office,” said Jennifer Talhelm, Udall’s communications director, according to the San Francisco Chronicle. “It was shared with a number of stakeholders including at least one other senator’s office. One of those stakeholders was the ACC. We believe that somebody at the ACC saved the document, and sent it back to us.”
The American Chemistry Council gave over half-a-million dollars to candidates in 2014, and spent $11.4 million on lobbying. It boasts a long list of industry members, many of which spend a pretty penny themselves to influence the federal government.
Udall was one of the Council’s top recipients in 2014. He received $13,500, putting him in fourth place overall for recipients in Congress – and sixth for all recipients including party committees. The Democrat received twice as much as the ACC gave, on average, to his Democratic colleagues, though Republicans received three times as much as Democrats (Democratic senators, on average, did receive bigger sums than Republicans from the Council in 2014, though fewer lawmakers on the blue side of the aisle received cash). Lobbyists employed by ACC upped the ante for Udall, contributing another $22,560 from their own pockets.
Furthermore, Udall received contributions from big member companies of the Council that are some of the chemical industry‘s top spenders. That includes Dow Chemical ($5,000), EcoLab Inc ($7,000), Honeywell ($30,000), and LyondellBasel ($2,000). Honeywell was Udall’s 11th most generous donor, and its lobbyists shelled out another $12,900 to his campaign and leadership PAC.
ACC made Vitter’s top donor list, contributing $12,000 with an additional $15,300 from its lobbyists.
Vitter also got cash from Ecolab ($6,000), Dow Chemical ($15,000), BASF SE ($8,500), Honeywell ($17,500) and LyondellBasel ($9,500). Dow lobbyists gave another $4,250. Overall, the chemical industry contributed $138,350 to his campaign committee and leadership PAC even though it’s not quite as prominent in his district as others.
The industry as a whole clearly favors GOP lawmakers. In 2014, Republicans were at the receiving end of 76 percent of the cash and spending from the industry. The list of its top ten recipients, however, is bipartisan: five Democrats and five Republicans.
Lobbying by the chemical industry has more than doubled since 2005 to $64.9 million in 2014. At the head of the effort are the Council and three major chemical companies. Combined, they spent nearly $38 million last year. From biggest spender down, they were Dow Chemical, the ACC, DuPont, and BASF SE.
They seem to have good reason to spend that kind of cash.
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OMB Clears Proposed Data-Collection Rule By EPA After More Than Four Years of Review
Mar 23, 2015 | BNA Daily Environment Report
By Pat Rizzuto
Manufacturers of engineered nanoscale chemicals probably will have to provide chemical identity information and other data to the Environmental Protection Agency under a proposed rule the Office of Management and Budget cleared March 19 after more than four years of review.
The Toxic Substances Control Act defines categories of basic information the EPA could collect through the proposed rule (RIN 2070-AJ54), including: chemical identity, categories of use, quantity manufactured or processed, byproduct description, health and environmental effects, number of individuals exposed and methods of disposal, according to an agency website.
Data-collection rules can be tailored by the EPA, however, meaning chemical manufacturers and other interested parties will not know what specific information the agency will seek until it releases the proposed rule.
The proposed rule is likely to be published in the next week or so, starting a 90-day comment period, the agency said in a statement e-mailed to Bloomberg BNA.
Clarity Urged
Attorneys Lynn Bergeson, managing partner of Bergeson & Campbell P.C., and Martha Marrapese, a partner with Keller and Heckman LLP, both told Bloomberg BNA they are glad the EPA finally is being allowed to proceed with this long-awaited proposal.
Marrapese said it would be helpful if the proposed rule clearly describes what scope of nanoscale chemicals are covered by the data-collection rule.
The proposed rule should not, however, attempt to define what constitutes a nanoengineered chemical, said Marrapese, whose law firm is establishing a nanomaterial manufacturers association.
Various governments have not yet agreed on regulatory definitions of a nanoengineered chemical, nor are there agreed-upon methods of measuring these substances, Marrapese said.
Bergeson said she has heard that vague terms such as “novel properties” and “trace amounts” have been suggested for inclusion in the proposal as the data-collection rule was reviewed by various agencies and federal offices.
The use of such unclear terms could pose legal and regulatory challenges for the EPA, said Bergeson, who routinely briefs the NanoBusiness Commercialization Association about regulatory issues affecting its members.
Rules Recommended a Decade Ago
Richard Denison, a senior scientist with the Environmental Defense Fund, told BNA by e-mail: “This may well be a record for OMB delay of even the simplest data-gathering rules EPA has tried to advance under the badly broken TSCA.
“The proposed rule was sent to OMB on November 22, 2010, and was finally cleared yesterday, a 1,578-day review,” Denison said.
The clearance occurred roughly a decade after a federal advisory committee recommended the EPA develop the rule, he added.
Denison referred to a now-defunct advisory committee that in 2005 recommended the EPA pursue data-collection rules, a voluntary data-collection program and other means to oversee the responsible introduction of nanoengineered chemicals into commerce (185 DEN A-3, 9/26/05).
Rulemaking Followed Industry Inaction
“We're still not done,” Denison said. “EPA now has to take public comment, revise the proposal—and go through another round of OMB review—before it can start to actually collect basic information on the production and use of nanomaterials that are already in commerce.”
The EPA developed its proposed data-collection rule after chemical manufacturers failed to provide the agency information through a voluntary Nanoscale Materials Stewardship program (65 DEN A-6, 4/8/09).
The OMB's clearance notice that shows it finally approved the agency's proposal said the White House regulatory affairs office did so pursuant to one or more changes the EPA agreed to make.
Marrapese said the EPA has worked very hard for years to satisfy the OMB's concerns.
During the years that the EPA has reviewed chemical manufacturers' requests—called premanufacture notices—to make new nanoengineered compounds it has analyzed nearly 170 chemicals and approved the entry of most into commerce, Jim Alwood, a manager in the agency's new chemicals program, said March 4 at a chemical regulatory conference.
The agency allowed most of these to enter into commerce with restrictions contained either in the PMN or through consent orders negotiated with the manufacturers, Alwood said.
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EPA Agrees to Revisit Corrosivity Standard To Address World Trade Center Concerns
Mar 23, 2015 | BNA Daily Environment Report
By Anthony Adragna
The Environmental Protection Agency has agreed to consider whether to amend its alkaline corrosivity standard for listing materials as hazardous wastes after an advocacy group said the current standard is inadequate and subjected first responders to health harms at the World Trade Center site following the Sept. 11, 2001, attacks In re Cate Jenkins v. EPA, D.C. Cir., No. 14-1173 , order issued 3/13/15.
In a joint motion filed in the U.S. Court of Appeals for the District of Columbia Circuit March 13, the EPA and Public Employees for Environmental Responsibility agreed that the agency would issue an advance notice of proposed rulemaking, a proposed rule, or a tentative determination to deny the petition by March 31, 2016.
According to PEER, the current EPA corrosivity standard under the Resource Conservation and Recovery Act is 10 times weaker than the safety standards for alkaline corrosives set by the European Union, Canada and the United Nations.
Building demolition and cement manufacturing can cause alkaline corrosive dust to be released at levels that can cause chemical burns, especially to the human respiratory tissue.
“A highly publicized consequence of EPA's failure to set the proper pH level for corrosivity has been the severe, permanent and, in some cases, fatal health effects of exposure to corrosive dust on first responders at the World Trade Center,” the September 2014 complaint said. “Because the corrosivity standards were set too low, first responders and local authorities were not put on notice of the danger posed by the dust, and did not require or supply safety gear like respirators.”
Specifically, PEER asks the EPA to revise the pH level associated with alkaline corrosivity for EPA Hazardous Waste Number D002 from a value of 12.5 to 11.5 (40 C.F.R. § 261.22). Additionally, the group seeks the removal of the condition that only “aqueous” wastes can be regulated under that statute.
Hazardous wastes under RCRA must exhibit at least one of four characteristics: ignitability, corrosivity, toxicity or reactivity.
PEER originally filed an administrative petition seeking the rulemaking in September 2011, on the tenth anniversary of the Sept. 11 attacks. After the EPA failed to respond to the petition, the group filed a lawsuit seeking an agency decision in September 2014.
A condition of the EPA meeting the March 31, 2016, deadline for a decision on the group's petition is that the agency remains fully funded by Congress throughout the process, according to the joint filing.
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Terminate CSB Chairman, Two Top Aides, Democrats, Republicans Urge White House
Mar 23, 2015 | BNA Daily Environment Report
By Robert Iafolla
In the heaviest political shot against leadership at the Chemical Safety and Hazard Investigation to date, a bipartisan group of lawmakers urged President Barack Obama to fire Chairman Rafael Moure-Eraso and his two top lieutenants in a March 18 letter.
“It is vital that you act to immediately remove the toxic leadership that is undermining the agency's critical safety mission,” 14 members of the House Committee on Oversight and Government Reform said.
Seven Republican and seven Democratic members of the panel signed onto the letter, including Committee Chairman Jason Chaffetz (R-Utah) and Ranking Member Elijah Cummings (D-Md.).
The White House has received two previous letters seeking Moure-Eraso's removal, one from members of the Senate Environment and Public Works Committee on March 12 and the other from the House Oversight Committee in July 2014. But the impact of the previous letters may have been limited by the fact that they were Republican-only efforts, while this most recent letter was joined by members of Obama's own party.
The lawmakers also took the unusual step of going beyond Moure-Eraso, a political appointee who is set to step down when his term expires June 24, to target a pair of civil servants for termination. They asked Obama to remove Managing Director Daniel Horowitz and General Counsel Richard Loeb. Barring White House action, Horowitz and Loeb would continue on at the CSB after Moure-Eraso departs.
Termination Request Follows Hearing
The bipartisan call to remove Moure-Eraso and his two top aides follows the Oversight Committee's March 4 hearing examining management issues at the Chemical Safety Board (43 DEN A-21, 3/5/15).
Testimony at the hearing indicated that Moure-Eraso, Loeb and Horowitz “committed malfeasance, neglect of duty, and that their actions are impacting the agency's efficiency,” the lawmakers said in their letter to the White House
“Documents and testimony obtained by the committee show that CSB's problems have been primarily driven by Chairman Rafael Moure-Eraso, Managing Director Daniel Horowitz and General Counsel Richard Loeb,” the lawmakers said. “Throughout the committee's investigation, their names have come up countless times in the context of conversations with current and former employees regarding mismanagement and the toxic work environment at the CSB.”
In their letter, the lawmakers alleged deep management problems that have led to low employee morale, staff attrition and stalled investigations.
Leadership Troika
The lawmakers cited the Environmental Protection Agency Office of Inspector General's findings that Moure-Eraso, Horowitz and Loeb violated federal law by conducting agency business on personal e-mail accounts. They also suggested Horowitz and Loeb have played a role in retaliation against whistle-blowers and other CSB staffers.
Drawing on testimony from CSB member Manuel Erhlich Jr., the lawmakers said Horowitz and Loeb prepared portions of Erhlich's motion that consolidated power in the chairman's office and cancelled three unfinished investigations. Moure-Eraso and Erhlich voted to adopt the motion at a January meeting, over the objections of board member Mark Griffon and despite the impending arrival of board member Richard Engler just days later (26 DEN B-1, 2/9/15).
That governance motion continues to divide the board. Griffon and Engler attempted to nullify the motion March 10, but Moure-Eraso and Erhlich kept it in place by indefinitely suspending consideration of the rescission motion, according to a March 17 record of board action.
Moure-Eraso's Response
Moure-Eraso responded to the letter with a March 19 statement, repeating his intention to stay at the CSB until his term ends.
“I have much important work to do in the next three months, including completion of the Deepwater Horizon Report, the West, Texas report, the Caribbean Petroleum report and other critical initiatives,” Moure-Eraso said. “I plan to work with my board colleagues to see that our important health and safety efforts are completed during the remaining three months of my term.”
Moure-Eraso said he wants to leave the next head of the agency with a “clean slate.” The White House has nominated Vanessa Allen Sutherland, chief counsel at the Pipeline and Hazardous Materials Safety Administration, as the next head of the CSB (42 DEN A-16, 3/4/15).
Moure-Eraso said he has stopped using private e-mail for agency business—something that other board members did as well—and all private e-mail has been transferred to a government server.
In addition, Moure-Eraso disputed some of the lawmaker's claims against him and his top aides, saying the “letter repeats old personnel-related allegations which have never been substantiated,” Moure-Eraso said.
Office of Special Counsel
The Office of Special Counsel, which examines federal employees’ claims of whistle-blower retaliation and other prohibited personnel practices, has investigated the allegations in the letter and hasn't made any adverse findings against the CSB, Moure-Eraso said.
An OSC attorney told Loeb that “virtually the whole” staff of the CSB's legal office had filed complaints with the OSC, according to the transcript of Loeb's March 2013 interview with government auditors obtained by Bloomberg BNA.
A former CSB employee settled a retaliation complaint against the agency in April 2014 based on the OSC's investigation of the employee's complaint, according to written testimony that Special Counsel Carolyn N. Lerner submitted at the House Oversight Committee's June 2014 hearing. The OSC is working to settle the other CSB cases, which remain pending in OSC's investigation and prosecution division, Lerner said.
Personnel Moves
Moure-Eraso claimed that no employees were demoted during his tenure as chairman, disputing the House Oversight Committee letter's claim that a CSB staffer was demoted days after speaking with the committee.
The CSB staffer had managed the agency's relationship with a consulting firm, but Horowitz removed him from this role minutes after the firm presented a critical report on agency leadership, the letter said.
Moure-Eraso and Ehlrich testified at the March 4 hearing that the consulting firm's report was compromised by interference from the staffer, who had managed the agency's relationship with the firm.
In addition, Moure-Eraso demoted former CSB attorney Chris Warner from his general counsel position after a failed attempt to fire him in 2011, according to a June 2014 report of the committee's investigation of the CSB. Moure-Eraso tried to fire Warner for advising the board on how to stop Moure-Eraso from making any personnel decisions without its approval, the report said.
The board sought the advice after Moure-Eraso unilaterally hired Loeb, the report said. Loeb replaced Warner as general counsel.
Moure-Eraso told the House Oversight Committee in June 2014 that Warner wasn't demoted, just transferred.
Ehrlich's Defense
In a further sign of his allegiance to Moure-Eraso, board member Ehrlich defended the embattled chairman in a March 19 statement. Ehrlich called Moure-Eraso a “great professional colleague” with peerless devotion to the CSB's mission, while dismissing the lawmakers’ claims as exaggerated and out of context.
Ehrlich also stood up for Horowitz and Loeb.
“I am particularly disappointed that the committee is now attacking outstanding non-partisan career civil servants,” Ehrlich said. “In my dealings with these individuals, I have found that they represent the best qualities in public employees, and rank among the best professionals I have interacted with in my 50 years in industry.”
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Lawmaker Says EPA's Failure to Update Site Causing Confusion on Oil Spill Rule for Farms
Mar 23, 2015 | BNA Daily Environment Report
By Amena H. Saiyid
The Environmental Protection Agency hasn't updated its website to reflect an exemption for farmers from federal oil spill rules—even though Congress made the change last summer, said Rep. Rick Crawford (R-Ark.).
The EPA website for the spill prevention control and countermeasures (SPCC) rule at 40 C.F.R. pt. 112 continues to say that farmers must comply with the rules as they apply to all other industries that store, transport, use and consume oil products (RIN 2050–AG16 ).
The EPA site says farmers must comply if they have aboveground oil storage capacity of as little as 1,320 gallons.
But according to Crawford, that has not been the case for eight months.
Last June, Congress enacted the Water Resources Reform and Development Act (WRRDA), which specifically exempted farms with aboveground oil storage capacity of up to 6,000 gallons (Pub. L. No. 113-121).
And the new law also required the EPA to publish information on options for farmers with levels higher than the 6,000-gallon threshold, which would explain that the farmers could either self-certify spill prevention plans or have them done by professional engineers.
‘Can You Update Your Website?'
“My question is why hasn't the EPA told the farmers about the changes in their exemption level?” Crawford asked Mathy Stanislaus, EPA assistant administrator for solid waste and emergency response, at a March 18 hearing before the House Transportation and Infrastructure Subcommittee on Water Resources and Environment.
“Now you are giving the impression to farmers that you have to comply with the 1,320 gallons threshold when in fact that is not the case. Can you update your website to let them know that 6,000 gallons is the threshold?” Crawford asked Stanislaus during a hearing on the EPA fiscal year 2016 budgetary priorities.
Stanislaus said he would look into the issue of updating the agency's website. He also said the EPA's regional staff have been reaching out to farmers regarding the changes in oil storage capacity thresholds that would trigger compliance with SPCC rules. “They will reach out some more,” he added.
The oil spill provision in WRRDA requires farmers to self-certify their spill prevention plans if their property contains aboveground oil storage capacity that exceeds 6,000 gallons but is less than 20,000 gallons. Beyond that threshold, the legislation required farmers to get professional engineers to certify spill prevention plans, among other measures.
EPA Working on Rulemaking
The legislation also directed the EPA and the Agriculture Department to jointly write a rule to adjust to a new aboveground storage exemption level for farmers 18 months after conducting a study that would determine whether the 6,000-gallon aggregate aboveground storage exemption level is appropriate or should be lowered to no less than 2,500 gallons. This study would consider an exemption level based on the significant risk of discharge that the exemption level could pose to nearby waters.
Stanislaus told Crawford that the agencies were moving forward with the study and were prepared to do a rulemaking, per the directive of Congress.
EPA's spill prevention regulations apply to owners and operators of facilities, including farms, if these facilities store, transfer, use, or consume oil or oil products, such as diesel fuel, gasoline, lube oil, hydraulic oil, adjuvant oil, crop oil, vegetable oil, or animal fat; store more than 1,320 gallons in aboveground containers or more than 42,000 gallons in completely buried containers; and reasonably could be expected to discharge oil to water bodies or adjoining shorelines, such as lakes, rivers, and streams.
The rules require most facilities to develop, amend, and implement professionally certified spill prevention plans, although farms are exempt from the professional certification requirement under certain circumstances and may self-certify.
Already Enjoying Exemptions
Until the water resources legislation became law, farmers had received several deadline extensions for compliance with the rule since it was promulgated in 2009. EPA granted the last extension in October 2011. In that extension, farmers were given until May 2013 to prepare spill prevention plans. Congress then extended that exemption to October 2013 under H.R. 933, the continuing resolution that funded the federal government through fiscal year 2013 (Pub. L. No. 113-6) (163
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New Federal Rules Are Set for Fracking
Mar 20, 2015 | The New York Times
By Coral Davenport
The Obama administration on Friday unveiled the nation’s first major federal regulations on hydraulic fracturing, a technique for oil and gas drilling that has led to a significant increase in American energy production but has also raised concerns about health and safety risks.
The Interior Department began drafting the rules, focused on drilling safety, in Mr. Obama’s first term after breakthroughs in the technology, also known as fracking, led to a surge in the production of oil and gas.
The fracking boom has put the United States on track to soon become the world’s largest oil and gas producer. But environmentalists fear that the technique, which involves injecting a cocktail of chemicals deep underground to break up the rocks around oil and gas deposits, could contaminate surrounding water supplies and wildlife.
As the practice of fracking has soared, fights over how and whether to regulate it have broken out across the country. The states have jurisdiction over drilling on private and state-owned land, where the vast majority of fracking is done in the United States. The new federal rules, by contrast, will cover about 100,000 oil and gas wells drilled on public lands, according to the Interior Department.
Still, Obama administration officials hope that the federal rules will serve as a de facto standard for state legislatures grappling with their own regulations.
“Current federal well-drilling regulations are more than 30 years old, and they simply have not kept pace with the technical complexities of today’s hydraulic fracturing operations,” said the interior secretary, Sally Jewell.
Ms. Jewell, who oversaw the creation of the rules, noted that while they would create standards only for wells drilled on public lands, “there are a number of states where these may be the only regulations they have.” The onus for creating further rules, she said, “must now be taken up in statehouses and boardrooms across the country.”
The regulations, which are to take effect in 90 days, will allow government workers to inspect and validate the safety and integrity of the concrete barriers that line fracking wells. They will require companies to publicly disclose the chemicals used in the fracturing process within 30 days of completing fracking operations, using an industry-run website called FracFocus.
Environmentalists take issue with the decision to rely on a site created by and for the fracking industry.
The rules will also set safety standards for how companies can store used fracking chemicals around well sites, and will require companies to submit detailed information on well geology to the Bureau of Land Management, a part of the Interior Department.
Oil and gas companies have resisted fracking regulations, fearing that they could raise the cost of fracking and slow or freeze energy development.
The Independent Petroleum Association of America immediately filed a lawsuit challenging the regulations, calling it “a reaction to unsubstantiated concerns” and requesting that the regulations be set aside. “From California to Pennsylvania, the oil and natural gas industry has played a critical role in reviving America’s economy, and hydraulic fracturing has been the key to this revival,” said Barry Russell, the chief executive of the association.Continue reading the main story Continue reading the main story Continue reading the main story
“These new federal mandates will add burdensome new costs on our independent producers,” Mr. Russell said.
Interior Department officials noted that in states that regulate fracking, companies are already complying with similar regulations. It estimated the new regulations would add about $5,500 to the cost of fracking each individual well — which it calculates as less than 1 percent of the total cost of drilling.
The agency also noted that it spent four years developing the rules, in close consultation with oil and gas companies, state authorities and environmental groups. It has reviewed more than 1.5 million public comments.
Environmental groups offered only lukewarm praise of the regulations, which they said included too many concessions to industry groups.
“This is an important step forward in regulating fracking, a process which has concerned communities across the country,” said Madeleine Foote, legislative representative for the League of Conservation Voters.
“Many aspects of this rule, such as stricter requirements for well construction and disposal of flowback water, reflect the urgent need to minimize the risks posed by fracking,” she said. “However, we remain disappointed with some provisions like continued reliance on the industry-run website FracFocus for disclosure of toxic chemicals, and the lack of a ban on fracking in our most treasured spaces.”
The new regulations are expected to be the first in a series of rules governing fracking safety. The Obama administration is expected to issue rules designed to curb the release of methane, a greenhouse gas, from fracking wells.
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(ACC Mentioned) What Happens to Natural Gas Stocks if Cheap Gas is Here to Stay?
Mar 21, 2015 | The Motley Fool
By Jason Hall
Cheap natural gas is great for the country in many ways. It means lower costs for many of the products we buy; reduced heating and electricity bills; and expanded domestic manufacturing, which provides more good-paying jobs. Conversely, the biggest loser in this game is the companies that produce the gas.
Here's just how far the price of natural gas has fallen over the past decade:
Henry Hub Natural Gas Spot Price data by YCharts.
Since peaking in 2005 -- and rising nearly as high in 2009 -- the price of natural gas has fallen as output has increased more than 45%. With reserves of natural gas at record levels, and technology making it easier to extract the commodity from the ground, will prices stay low for the foreseeable future?
And what happens to natural gas stocks if cheap gas is here to stay? This isn't a simple question. Let's take a deeper look at the industry and see what we can uncover.
Diversified industry with few "pure plays"
As a starting point, we need to understand exactly what constitutes a "natural gas stock." The reality is, very few companies are only exposed to the price of gas. For the sake of this exercise, we'll consider a stock "natural gas" if its primary business is producing or storing natural gas, or distributing it from producers to consumers. That means we won't include natural gas utilities, power companies that use gas to make electricity, or producers that focus on oil but produce some natural gas as well.This leaves us with companies including Chesapeake Energy (NYSE: CHK ) , Devon Energy (NYSE: DVN ) , and smaller peers like Ultra Petroleum in the producer space, along with pipeline operators such as Enterprise Products Partners LP and ONEOK and its master limited partnership ONEOK Partners LP.
While Chesapeake and Devon Energy are two of the largest U.S. natural gas producers, vertically integrated major ExxonMobil (NYSE: XOM ) is the largest, and a significant amount of natural gas comes out of the ground along with oil. In short, natural gas is produced by a lot of companies, though only a few focus primarily on this hydrocarbon.
Why natural gas is cheap right now
Natural gas isn't exposed to international price and demand fluctuations in the way oil is. It doesn't matter how much natural gas Qatar or Russia produce, as the cost dynamics of shipping that product abroad has historically prevented it from being internationally competitive. That means it's almost entirely a domestic supply and demand-driven commodity, and lately our supply is getting a big boost.Here's just how much U.S. natural gas production has increased in the past few years:
US Natural Gas Marketed Production data by YCharts.
The main driver behind this growth has been technological advances in extraction, primarily horizontal drilling and hydraulic fracturing, or "fracking." These developments have been game changers in the production of both natural gas and oil -- with much of the former's output produced as a byproduct of oil wells. The chart below shows the major sources of natural gas in the U.S.:
Source: U.S. Energy Information Administration.As you can see (the yellow line), shale gas wells have been the key driver behind natural gas production growth, but it's worth noting (blue line) that more than 5 trillion cubic feet of natural gas is produced annually from oil wells. That's about 16% of total production -- a not-insignificant amount. As a matter of fact, the U.S. Energy Information Administration recently stated that it expects gas production to rise further in coming months, even as prices remain very low. Let's talk about why.
Why is production still growing? When will it slow?
Producers have gotten really good at drilling and completing wells, and in getting more production out of those wells. The EIA expects the current backlog for completion of U.S. onshore gas wells -- which it estimates at between three and six months -- to be the main driver behind increased production in the next few months, even with major reductions in active drilling rigs.How much has the rig count fallen? As of March 13, the U.S onshore oil rig count had fallen almost 41% since March 2014, while natural gas rigs have declined 25% since March 2014. As to when production will slow, the best guess anyone can make is "eventually." Rest assured that producers want gas prices to go up, but the economics and mechanics of production mean it takes a long time for reduced drilling activity to impact actual production. As the EIA mentioned in last week's weekly update, the well-completion backlog will drive production up in the short term.
Why is this? When a producer has already invested millions of dollars into a well, it is going to complete that well and start producing in order to begin recouping at least some of the drilling costs. This is the stage we are in with both oil and natural gas production. It takes months for capital expenditure cuts in production to reach the oilfields.
Where will the growth in demand come from?
Demand for natural gas is seasonal due to its use as a heating and electricity-producing fuel, and that seasonality is partly to blame for the cheap prices today. However, the long-term trend indicates demand for natural gas in the U.S. will continue growing over the next decade. After all, natural gas serves a lot of purposes beyond feeding power plants and heating your home.This includes being a major feedstock for the production of ethylene, the most commonly used organic compound in chemical manufacturing. Ethylene is used to produce literally thousands of products, ranging from packing material to plastics to detergents to fabrics. Cheap American natural gas is been one of the biggest drivers behind investment in expanding domestic chemical manufacturing.
According to the American Chemistry Council, chemical manufacturers will invest more than $125 billion in new projects in the U.S. over the next decade, specifically because of cheap natural gas.
Natural gas's use as a transportation fuel is also growing, as is its viability as an export, as has been demonstrated by Cheniere Energy (NYSEMKT: LNG ) , which is building liquefaction and export terminals in Louisiana and Texas that are set to begin major exports later this year.
Both of these will increase demand, but they are also based on the economics of U.S. natural gas staying relatively cheap compared to alternatives. In the case of exports, domestic natural gas must remain significantly cheaper than other sources in the target import markets, which are largely Europe and Asia. For transportation, natural gas must remain cheaper than gas or diesel to continue to grow as a vehicle fuel.
Back to the basics: Supply and demand
At the end of the day, natural gas prices will probably continue to fluctuate, but this is more a product of the fact that it can take months for production increases or decreases to impact the actual supply and demand balance. Furthermore, new production methods continue to reduce production costs, meaning cheaper gas can still be profitable.To reemphasize, gas prices aren't influenced by global output in the way oil is, so domestic producers can bring production levels more in line with demand, and the market will find an equilibrium for a time before the next big shift in demand drives prices up or down again.
Natural gas stocks are likely to remain quite cyclical, and in a few months people might be asking, "will gas prices ever go down again?" As much as it might seem otherwise, the situation is not necessarily any different today than it was 20 years ago in that regard.
Final thoughts
If you're going to invest in natural gas stocks, you must accept these "boom and bust" cycles, and you need to stay informed about the industry, demand, and how macroeconomics can impact demand. Prices can move quickly. After all, just about one year ago many in the industry were expecting gas prices to climb, with gas reserves at some of the lowest levels in years. Needless to say, record production levels kept that from happening.To paraphrase Warren Buffett, invest in the best companies, focusing on getting a fair price for them, versus shopping for bargain-bin specials that might be poorly operated. The best-run companies can survive the downturns, and often use it to their advantage and come out stronger, while their peers ignore the warnings signs and get caught with too little capital and too much debt when things get tough.
If you're not willing or able to invest the time in researching the producers, the midstream operators are probably a better place to invest, since their business isn't based on gas prices, but the "toll-booth" fees they collect under long-term contracts to move oil and gas products around.
How to invest in the technology fueling the U.S. energy boom
As the price of oil plummets, savvy investors are looking for a way to invest in this new energy dynamic. And there's one high-caliber company in the oil-services sector using advanced technology to profit from the U.S. oil boom. Given the country's ongoing quest to extract more and more oil, I strongly urge you to claim your copy of our brand-new investigative report on this company helping fuel its boom. Simply click here for access. -
Interior Releases First Federal Fracking Rule, Requires Chemical Disclosure, Safeguards
Mar 23, 2015 | BNA Daily Environment Report
By Tripp Baltz
The Interior Department released a final hydraulic fracturing rule designed to require the oil and gas industry to engage in “safe, responsible drilling” on federal and tribal lands.
The first federal fracking rule—which includes requirements for wellbore integrity, public disclosure of fracking chemicals and wastewater handling and disposal—puts into place “commonsense” reforms to help define “the rules of the road for the oil and gas industry” while protecting public health and the environment, Interior Secretary Sally Jewell said March 20.
The oil and gas industry immediately challenged the rule, with the Independent Petroleum Association of America and the Western Energy Alliance filing a federal lawsuit in Wyoming, saying it is “unnecessary” and a “reaction to unsubstantiated concerns” (see related story).
The new rule is “simply another regulatory overreach by the Obama Administration that will hurt America's oil and natural gas producers,” the two groups said in a March 20 statement.
Members of Congress similarly assailed the move and introduced new legislation declaring states have exclusive authority to regulate fracking.
Environmental groups also found a lot to dislike in the final rule, although they noted it was an improvement over the proposed rule released in May 2013 (96 DEN A-2, 5/17/13).
Earthworks issued a statement applauding the rule for including concrete measures to address fracking, including an effective ban on pits to store wastewater, which the group called a “big step.”
But the rule overall falls short of needed protections and “leaves communities, water and the climate at risk,” the group said. Similar comments came from other environmental groups.
Rules ‘Haven't Kept Pace.’
Still, an update to federal rules governing drilling was needed, Jewell said. “Many of the regulations on the books today haven't kept pace with advances in technology,” she said. “It's absolutely critical the public has confidence that robust safety and environmental protections are in place.”
The rule applies only to land owned by the federal government and Native American tribes, Jewell noted. The vast majority of oil and gas drilling operations in the U.S. are found on state-managed and private lands, where state rules will continue to govern, she said.
Fracking involves high-pressure injection of water, sand and chemicals into tight shale formations deep underground to release natural gas and oil trapped there. Opponents of fracking say it can harm air quality and groundwater, while industry and many state and federal regulators maintain it's safe.
Rule Requirements
Under the rule, which will take effect 90 days after publication in the Federal Register, oil and gas producers will be required to:
• test well integrity and the strength of cement barriers between the wellbore and the water zone through which the wellbore passes;
• disclose publicly the chemicals they used in hydraulic fracturing to the Bureau of Land Management through the website FracFocus within 30 days of completing fracking operations (the requirement includes an exemption for chemicals that are trade secrets);
• store interim wastewater in covered tanks instead of lined pits to mitigate risks to air, water and wildlife; and
• take measures to reduce the risk of cross-well contamination with chemicals and fluids used in the fracturing operation.
The rule also requires companies to submit more detailed information on the geology, depth and location of preexisting wells to afford the BLM an opportunity to better evaluate and manage unique site characteristics.
Covered Tanks, Integrity Tests Required
BLM Director Neil Kornze said the requirements are “commonsense measures” that represent “one-quarter of 1 percent of the cost to drill a well.”
The requirement that oil and gas wastewater be stored in covered tanks is a significant improvement over the earlier proposed rule, Lauren Pagel, policy director for Earthworks, told Bloomberg BNA March 20. Only New Mexico has a ban on using pits to store waste on an interim basis, she said.
Colorado allows the use of pits but with specific requirements and not in certain circumstances, Todd Hartman, spokesman with the state Department of Natural Resources, told Bloomberg BNA March 20.
Another important improvement concerns wellbore integrity tests, Pagel said. The earlier proposed rule had accommodated an industry request to allow testing of wells by type, meaning a producer could say “we tested a well over here, that means all these other similar wells are fine,” she said. The final rule requires testing of all wells, she said.
Use of FracFocus
However, industry got what it wanted in the use of FracFocus, the national online frack chemical registry, which is funded in part by the Ground Water Protection Council, she said.
“Using a partially industry-funded database for a government regulation is not a step in the right direction,” Pagel said.
In releasing the rule, Jewell noted it was designed to “avoid conflict and protect areas that are too special to drill.”
Pagel said environmental groups had been asking for the rule to declare certain public lands as off-limits to drilling, but the final rule was unclear as to how a site will be determined to be “too special.”
BLM has about 35 million acres of land under lease for oil and gas drilling, the bureau said. It oversees about 700 million subsurface acres of federal mineral estate and administers some additional 56 million of acres of Indian mineral estate across the country.
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Obama Administration Unveils Controversial Fracking Standards
Mar 20, 2015 | National Journal
By Clare Foran
The Obama administration on Friday released highly anticipated federal regulations on fracking, the controversial drilling technique at the heart of America's energy boom.
The rules are intended as a safeguard against water contamination near drill sites where chemicals are injected into shale rock to unleash oil and natural gas. They arrive as part of a broader unilateral push by the administration to shore up Obama's environmental legacy while the White House touts the benefits of fracking and fossil fuels.
The standards, crafted by the Interior Department, are sure to face pushback from all sides. Environmental groups say the regulations fall short of what is needed to stave off environmental damage from fracking. The oil and gas industry, meanwhile, views the rule as the latest example of administration action to hinder America's energy boom.
Republican senators wasted no time fighting back. A slate of senators, including Senate Majority Leader Mitch McConnell and Environment and Public Works Committee Chairman Sen. Jim Inhofe introduced a bill Thursday evening that would block the rule, stating instead that states have the sole authority to regulate fracking on federal lands.
Interior Secretary Sally Jewell responded to the GOP attack during a call with reporters on Friday, saying that she expects "that these rules will in fact stick." "We believe that these standards are essential and that it is our charge to oversee them," Jewell said, adding, "We're confident right now that we're doing the right thing for the American people."
The administration won't just be fighting a fracking battle on Capitol Hill. The Independent Petroleum Association of America and Western Energy Alliance, two trade groups for the oil and gas industry, announced Friday afternoon that they had filed a lawsuit against the regulation. The legal challenge was filed in a Wyoming federal district court. It charges that the "administrative record lacks the factual, scientific, or engineering evidence necessary to sustain the agency's action."
Under the regulations, companies will be required to disclose chemicals used for fracking. New standards will take effect for well integrity, aimed at heading off leaks that could compromise the quality of ground and drinking water. The oil and gas industry will also need to draw up plans to safely manage the discharge of water from drill sites.
Ultimately, however, the reach of the rule will be limited. The standards apply only to fracking on public lands, which accounts for just a small portion of drilling activity. America's energy boom has largely taken place on state and private lands out of reach of the administration.
A series of peer-reviewed scientific studies have linked fracking to groundwater contamination. The Environmental Protection Agency's own analysis of the impact of fracking on drinking water is expected to be released as a draft later this year.
Republicans in Congress have vowed to take steps to roll back what they say is the Obama administration's regulatory overreach. Much of the GOP's ire has so far focused on landmark regulations to curb carbon pollution from power plants and a slate of other environmental regulations targeting smog and other pollutants. Regulations aimed at fracking, however, will provide fresh fodder for Republican attack.
Sen. Inhofe slammed the rule on Friday, saying that it "adds unnecessary, duplicative red tape that will in turn make it more costly and arduous for our nation to pursue energy security." Inhofe added that regulation should be left to the states, which is what the legislation he introduced on Thursday proposes to do. "There is no logical reason to add a new layer of top-down bureaucratic regulation that duplicates what is already being done effectively by the states," he said in a statement.
The rule has been years in the making, and its winding path to completion and multiple delays underscore the political difficulty the Obama administration faces as it promotes the domestic energy boom while trying to reduce its environmental harms.
Then-Interior Secretary Ken Salazar first announced that his agency would craft a plan to require disclosure of fracking chemicals in late 2010, but a draft regulation did not surface until mid-2012. However, Interior pulled back the draft plan in early 2013 and floated a second version in May of that year.
By unlocking fossil-fuel reserves trapped in shale rock, fracking has sparked the current windfall in domestic oil and natural gas production. As a result, the United States has surpassed Russia as the largest producer of both oil and natural gas.
Obama credits fracking with spurring the U.S. economy and curbing the nation's reliance on foreign oil, suggesting that natural gas can act as a "bridge fuel" to keep turbines turning while the nation's share of electricity from renewables steadily grows.
At the same time, however, the administration has pulled a series of levers to tighten safety and environmental standards for the drilling technique. Additional regulations to limit the release of methane, a potent greenhouse gas, from drill sites are expected to be unveiled before the president leaves office.
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GOP Moves to Block Obama’s Fracking Regs
Mar 20, 2015 | The Hill - E2 Wire
By Timothy Cama
Republicans on Friday roundly rejected the Obama administration’s rules for hydraulic fracturing on federal land and pledged to fight them.
The GOP warned that the regulations will hamper the nation’s economic recovery that has been bolstered by the boom in natural gas and oil production, much of which depends on fracking.
“America’s energy boom is one of the best things going for our economy, and keeping it going should be one of the federal government’s top priorities,” Speaker John Boehner (R-Ohio) said in a statement.
“Instead, the Obama administration is so eager to appease radical environmentalists that it is regulating a process that is already properly regulated.”
Boehner promised to “do all we can” to stop attempts to impede the energy boom, including the fracking rules.
In 2013, the House voted to prohibit federal officials from regulating fracking on federal land in states that already regulate it.
House Majority Leader Kevin McCarthy (R-Calif.) said leaders will “explore legislative options” to fight the rule.
In the Senate, Environment and Public Works Committee Chairman James Inhofe (R-Okla.) introduced a bill with 26 Republican co-sponsors that would block implementation of the fracking rules.
“The Obama administration’s rule on hydraulic fracturing adds unnecessary, duplicative red tape that will in turn make it more costly and arduous for our nation to pursue energy security,” Inhofe said in a statement.
“There is no logical reason to add a new layer of top-down bureaucratic regulation that duplicates what is already being done effectively by the states,” he added.
The rules announced Friday set standards for well construction, disclosure of chemicals used and disposal of waste fluid.
Democrats and environmentalists were also unhappy with the rules, saying they do not sufficiently restrict fracking.
“Instead of offering clarity and protecting our resources, today’s rule lets industry off the hook,” said Rep. Raúl Grijalva (D-Ariz.), the top Democrat on the House Natural Resources Committee. “Rather than raising the bar, the [Bureau of Land Management] settled for the lowest common denominator.”
A coalition of five environmental groups called the rules “toothless.”
Actor Mark Ruffalo, who sits on the board of Americans Against Fracking, said Obama should have banned the procedure altogether.
“The Obama administration has devised fracking regulations that are nothing more then a giveaway to the oil and gas industry,” he said.
“This fracking rule is merely a continuation of Obama’s harmful all-of-the-above energy policy that emphasizes natural gas development over protection of public health and the environment,” said Kate DeAngelis, a campaign leader at Friends of the Earth.
Speaking with reporters Friday, Interior Secretary Sally Jewell said she assumed some Republicans wouldn’t like the rule.
“While there may be comments coming from elected officials, we expect that these rules will in fact stick,” she said.
Jewell called the political reaction “not surprising” but expressed confidence that the Interior Department is doing what’s right.
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BLM's Fracking Rule For Public Lands Could Serve As Model For States
Mar 20, 2015 | InsideEPA
By Bridget DiCosmo
The Interior Department's (DOI) just-issued hydraulic fracturing rule for public lands outlines chemical disclosure, drilling well integrity and other requirements that could serve as a model for states with less-effective oil and gas rules, administration officials say, as it allows variances from the rule for states with more-stringent policies.
However, the March 20 release of the rule by DOI's Bureau of Land Management (BLM) is drawing broad criticism from Republican lawmakers, industry and environmental groups. Oil and gas officials claim the rule unnecessarily duplicates state regulatory regimes and will slow energy development, and at least two major energy groups have already filed a legal challenge in federal district court to try and block the rules.
Separate from the lawsuit, Senate Republicans have already introduced legislation to try and block implementation of the rule. Sen. James Inhofe (R-OK) on March 19 introduced S. 828, a bill intended to restrict authority for regulating fracking on federal land to the relevant state government, with 26 Republican co-sponsors.
Environmentalists -- who have long urged EPA, BLM and other agencies to impose strict fracking rules -- said that while more regulation of fracking is welcome, the BLM policies fall short of what they want.
The rule updates nearly 30-year-old existing standards for regulating fracking on public lands, setting requirements for disclosure of chemicals used in fracking, relying on the state-run database FracFocus as a vehicle for chemical disclosure. The rule, which BLM first proposed in May 2012 and then later revised in a supplemental proposal, also sets requirements to ensure integrity of drilling wells and for fracking wastewater storage.
During a March 20 press call unveiling the rule, DOI and BLM officials sought to defend the need to establish standards in accordance with changes in technology that have occurred over the past several decades.
Janice Schneider, DOI's Assistant Secretary for Land and Minerals Management, told reporters on the calls that the final rule “fills gaps across all public and tribal lands,” and DOI Secretary Sally Jewell in response to a question about the Republicans' criticisms said, “We believe the standards are essential.”
Jewell said she “expects the rules will stick” despite lawmakers' efforts to overturn the regulation, and that “I don't think anybody can say it's common sense to keep a standard that is 30-years-old in place.”
Changes to the final rule compared to the earlier proposed versions include raising the threshold for information that a fracking well operator must provide to show that a substance used in fracking operations is a “trade secret” and therefore may be withheld and strengthening requirements for storage of wastewater by requiring use of enclosed above ground storage tanks, and only in very limited circumstances lined pits.
The rule would also allow for the administration to grant variances via a formal memorandum of understanding in states where the state program has been shown to be more stringent than the federal rule, though Jewell said that it is “fair to assume that states without their own rules will be looking hard at our regulations.”
Jewell noted that Wyoming and Colorado are two states with stringent fracking programs but added that the BLM rule seems to align closely with what those states have already put in place.
Opponents' Concerns
Two industry groups, the Independent Petroleum Association of America and Western Energy Alliance, have already filed a lawsuit in the U.S. District Court for the District of Wyoming, claiming the rule is a “reaction to unsubstantiated concerns” and will slow down development on public lands.
Similarly, the American Petroleum Institute in a March 20 press release said, “A duplicative layer of new federal regulation is unnecessary, and we urge the BLM to work carefully with the states to minimize costs and delays created by the new rule to ensure that public lands can still be a source of job creation and economic growth.”
And Institute for Energy Research President Thomas Pyle echoed many similar industry press releases in a March 20 statement saying, “This new hydraulic fracturing rule isn’t about protecting the environment, but rather about curtailing domestic energy production, which has been this administration’s goal all along.”
GOP lawmakers' statements on the final rule also criticized it, with Inhofe saying the “rule as a whole fails to acknowledge that states have led the way in safely and effectively regulating hydraulic fracturing.”
Similarly, Senate Energy & Natural Resources Committee Chairman Lisa Murkowksi (R-AK) said, “This administration has already taken unprecedented steps to block development in Alaska. Given its anti-development approach, we should expect this rule to make it even harder to produce oil and gas on federal lands.”
In the House, Energy & Commerce Committee Chairman Fred Upton (R-MI) said, “These extra layers of regulation only hurt our ability to finally make energy independence a reality. Let’s call it like it is: this rule is essentially a de facto ban on energy production on federal lands and will take a fire hose to any spark of potential for jobs and affordable energy.”
Environmentalists' Reaction
Environmental groups, though acknowledging some of the changes made in the final rule strengthen the regulation from the earlier proposals, are refreshing previous criticisms that the rule improperly relies on FracFocus, which they say is a flawed database, adding that BLM's rule will fail to protect sensitive regions.
In a March 20 statement, for example, League of Conservation Voters' Madeleine Foote said, “we remain disappointed with some provisions like continued reliance on the industry-run website FracFocus for disclosure of toxic chemicals, and the lack of a ban on fracking in our most treasured spaces.”
Earthjustice in a March 20 press release said the final BLM rule improves on earlier proposals in moving toward use of tanks rather than pits for wastewater storage and eliminating a provision that would have allowed operators to demonstrate well integrity using a sample well instead of all wells.
But the rule still fails “to ensure that sensitive, valuable and unique lands are kept off limits to drilling and there is a reliance on FracFocus for key fracking chemical disclosure,” Earthjustice said.
Inhofe in his statement on the rule said that while he opposes much of the regulation, he welcomed the reliance on FracFocus, saying he was “glad” to see the administration endorsing the database. In response to a question on the FracFocus concerns, Jewell during the March 20 call said that with the rule, BLM has become “the largest customer” of the database, and that DOI will have a representative on the FracFocus board going forward, which she expects will spur continuing improvements.
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Oil and Gas Industry Groups Sue Interior Over Fracking Rule, Say It's Duplicative
Mar 23, 2015 | BNA Daily Environment Report
By Tripp Baltz
The oil and gas industry wasted no time in taking action against the final rule governing hydraulic fracturing announced by Interior Secretary Sally Jewell March 20, with two trade associations filing suit in federal court within moments of the announcement (Indep. Petroleum Ass'n of Am. v. Jewell, D. Wyo., No. 15-CV-41, 3/20/15).
The lawsuit filed in the U.S. District Court for the District of Wyoming is being brought under the Administrative Procedure Act.
The federal rule, which would govern fracking on millions of acres of federal and tribal lands, “duplicates what states are already doing,” Kathleen Sgamma, vice president of government relations and public affairs for the Western Energy Alliance, one of the plaintiffs in the case, told Bloomberg BNA March 20.
The rule is “a reaction to unsubstantiated concerns,” the Independent Petroleum Association of America, which joined WEA in the lawsuit, said in a March 20 statement.
But the oil and gas industry wasn't the only group unhappy with the final rule, which includes requirements for wellbore integrity, public disclosure of fracking chemicals and wastewater storage in covered tanks. Members of Congress, state officials and environmental groups also criticized it (see related story).
Fracking involves high-pressure injection of water, sand and chemicals into tight shale formations deep underground to release natural gas and oil trapped there. Opponents of fracking say it can harm air quality and groundwater, while industry and many state and federal regulators maintain it's safe.
Lawmakers, Environmentalists Dissatisfied
Several members of Congress are calling the rule “unnecessary” and a “de facto ban” on energy production in the U.S.
Sen. Jim Inhofe (R-Okla.), chairman of the Senate Environment and Public Works Committee, introduced a bill March 19—the night before the Interior Department released the rule—that would declare states have sole authority over hydraulic fracturing.
Sen. Ted Cruz (R-Texas) introduced a similar bill March 18 declaring that regulation of fracking should remain exclusively in state hands. “States have proven they can oversee hydraulic fracturing in a responsible, safe manner, and they should be allowed to continue,” he said (see related story).
Environmental groups also were unhappy with the rule.
Rules Fail to Protect Public Lands
“The bottom line is: these rules fail to protect the nation's public lands—home to our last wild places, and sources of drinking water for millions of people—from the risks of fracking,” Amy Mall, senior fracking policy analyst at the Natural Resources Defense Council, said in a statement. “More than ever, this underscores the urgent need to get better protections in place around the country—at the local, state and federal levels.”
The “rule falls short of what is needed to protect communities and the environment and continues the Obama administration's pattern of prioritizing fossil fuel extraction over clean energy development and people's health,” Earthworks said in a statement.
BLM Director Neil Kornze said the expense to industry for implementing the rule's “commonsense measures” will be “one-quarter of one percent of the cost to drill a well.”
Rule Seen Striking Balance
The Interior Department rule strikes a balance between having “a durable industry in the future” and “protecting public health and safety,” Brian Deese, senior adviser to President Barack Obama, said moments before the rule was released.
About 11 percent of fracking takes place on public and Native American lands overseen by BLM, Deese said. While the federal government has an obligation to set rules of the road for the industry, ultimately “this is an issue that is going to be decided in state capitals and in localities, as well as with the industry,” he said.
That would be a good thing, said Utah Gov. Gary R. Herbert (R), who issued a statement March 20 saying the BLM rule ignores Utah's successful regulatory model in lieu of a “one-size-fits-all” approach.
In recent years Utah has worked closely with BLM to develop a “safe and efficient” approval program for drilling on federal lands in the state. “The results have been remarkable in protecting Utah's environment,” including preventing contamination of water and protecting public health, he said.
“This federally led regulatory approach increases costs and delays for industry and may threaten Utah's proven ability to effectively regulate oil and gas production in Utah,” he said. “This is a case of Washington, D.C., seeking to solve a problem that doesn't exist.”
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Drillers File Lawsuit to Challenge Obama's New Fracking Rules
Mar 20, 2015 | The Hill - E2 Wire
By Timothy Cama
Oil and natural gas drillers wasted little time filing a lawsuit against the Obama administration’s new hydraulic fracturing regulations Friday.
The complaint from the Independent Petroleum Association of America (IPAA) and Western Energy Alliance came less than an hour after the Interior Department’s Bureau of Land Management unveiled the first major regulations on fracking on federal and American Indian land.
The lawsuit accuses federal regulators of promulgating “a reaction to unsubstantiated concerns” that lacks the factual, scientific or engineering evidence necessary to justify them.
“These new mandates on hydraulic fracturing by the federal government ... are the complete opposite of common-sense,” Barry Russell, president of IPAA, said in a statement.
“Hydraulic fracturing has been conducted safely and responsibly in the United States for over sixty years,” he said. “These newly mandated fees will add burdensome new costs on our independent producers, taking investments away from developing new American-made energy, much-needed job creation and economic growth.”
Tim Wigley, president of Western Energy Alliance, said states have shown that they are capable of effectively regulating fracking, including on federal land.
“If anything, BLM should be delegating more to the states in recognition of their exemplary environmental and safety records, not implementing new federal red tape that is not properly justified,” he said.
The rules unveiled Friday set new standards for construction of oil and gas wells that are fracked, requires public disclosure of fracking chemicals and mandates that waste fluid from fracking is properly contained.
The standards were criticized from both sides. Republicans and the oil and gas industry said the rules were unnecessarily burdensome, and Democrats and environmentalists said they did not go far enough to protect the environment.
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BLM Rule Draws Industry Fire, Tepid Praise From Greens
Mar 20, 2015 | E&E News PM
By Phil Taylor
The Obama administration's sweeping rule tightening oversight of hydraulic fracturing on roughly 750 million acres of federal and American Indian lands took major criticism today from the oil and gas industry and Republicans but garnered tepid support from conservation groups and some Democrats.
The response foreshadows a bruising battle over the Bureau of Land Management rule in a Republican-controlled Congress and at least one federal court. Stakeholders are also girding for the Obama administration to roll out additional rules affecting the safety and viability of oil and gas development on the federal estate.
BLM's 395-page rule would require companies to disclose the chemicals they inject during the process of hydraulic fracturing, or "fracking," which cracks open rocks and releases oil and gas. It would also require companies to demonstrate that wells are properly cemented to ensure fracking fluids do not leak into surrounding aquifers and to use above-ground tanks to store fluids that return to the surface.
The BLM rule was tweaked from a draft proposal in May 2013 to placate conservation groups, namely by requiring fluids be stored in tanks rather than lined pits, eliminating the use of "type wells" to demonstrate well integrity and raising the burden for companies to receive an exemption from disclosing chemicals.
But in an overture to industry, BLM's rule maintained the use of FracFocus.org, a privately managed website run with industry money, as the repository for chemical disclosure. BLM will also allow enforcement of state and tribal hydraulic fracturing regulations if they are deemed as protective as BLM's rule.
But there was little BLM could have done to please oil and gas groups that from the outset have argued there is no need for the agency to regulate hydraulic fracturing.
The Western Energy Alliance and Independent Petroleum Association of America this morning filed a lawsuit to block BLM's rule in U.S. District Court in Wyoming. They called the rulemaking arbitrary and capricious in imposing steep costs for oil and gas operators without commensurate environmental benefit.
"States have been successfully regulating fracking for decades, including on federal lands, with no incident that necessitates redundant federal regulation," said Tim Wigley, president of WEA.
BLM's final fracking regulations, first proposed in late 2010 by then-Interior Secretary Ken Salazar, come during a boom in oil and gas production in the United States. But industry is currently reeling from low oil prices and pleading with Congress to lift a ban on exporting crude.
There are also pitched policy battles to come as BLM prepares to roll out separate rulemakings to clamp down on the venting and flaring of natural gas from federal leases that cover 36 million acres of federal land in 33 states. BLM is also eying a possible hike to onshore royalty rates.
President Obama's senior adviser, Brian Deese, today stressed that the BLM fracking rule does not extend beyond public lands where roughly 11 percent of the hydraulic fracturing in the country occurs. Regulation for the majority of operations will remain the duty of states.
"Ultimately, this is an issue that is going to be decided in state capitals and in localities, as well as within the industry," Deese said today at a breakfast hosted by The Christian Science Monitor in Washington, D.C.
The BLM rule will be a top talking point next week when the House Natural Resources Committee holds two hearings on the bureau's budget and mineral programs.
"The BLM severely underestimates the added costs and delays that this rule will cause by overlaying upon existing state regulations that have a proven record of safety," said committee Chairman Rob Bishop (R-Utah). "The [rule's] state variance provision -- how a state proves that they already meet or exceed the specified criteria -- demonstrates the duplicity of the rule in the first place and will create an entanglement of bureaucracy previously unseen in our nation's energy history."
Bishop warned the rule would drive more producers from federal lands, where growth in oil production has already failed to keep pace with lands outside of BLM's jurisdiction.
"Energy development on federal lands will be marginalized. Less money will flow into the federal Treasury. More local communities will be denied economic opportunities associated with energy development, including funding for education," Bishop said.
Senate Energy and Natural Resources Chairwoman Lisa Murkowski (R-Alaska) said the administration "has already taken unprecedented steps to block development in Alaska."
"Given its anti-development approach, we should expect this rule to make it even harder to produce oil and gas on federal lands," she said.
Senate Environment and Public Works Chairman James Inhofe (R-Okla.), who yesterday introduced a bill with 26 other GOP senators to block BLM's rule, said he was glad to see BLM endorse FracFocus. But the rule "as a whole fails to acknowledge that states have led the way in safely and effectively regulating hydraulic fracturing," he said. Greens, Dems mixed reactions
Democrats this week rolled out a suite of proposed restrictions on drilling and fracking that they've dubbed the "Frack Pack." The few Democrats who had issued statements on the BLM rule by publication time offered mixed reactions.
Rep. Raúl Grijalva of Arizona, the top Democrat on the House Natural Resources Committee, said BLM's rule "lets industry off the hook."
"Rather than raising the bar, the bureau settled for the lowest common denominator," Grijalva said. "We need to pass the legislation just recently introduced by my House Democratic colleagues that closes loopholes and ensures that frackers abide by the Safe Drinking Water Act, Clean Water Act, Clean Air Act and other bedrock environmental laws. Half measures aren't a realistic response to the situation we face today."
Rep. Diana Degette (D-Colo.) said she would be paying close attention to the "technical elements" of the rule's disclosure provisions, but she praised the underlying rule.
"The public has the right to know basic information about how private industries are operating on public lands, and I am pleased to see the Interior Department take this landmark step to provide information to us all," she said.
Reactions from environmental groups ranged from praise to dismay, though most groups acknowledged major improvements from the May 2013 draft and the status quo.
Mark Brownstein, associate vice president for the Environmental Defense Fund, said EDF welcomes the rule but will be closely monitoring its implementation.
"It is critical that BLM have the resources and the administrative commitment necessary to implement these requirements," he said. "Words on paper mean little if not implemented and enforced."
Brownstein said BLM must also work constructively with states to tap into local "expertise, talent and resources" in safeguarding the federal estate.
Sportsmen for Responsible Energy Development, a coalition led by the National Wildlife Federation, the Theodore Roosevelt Conservation Partnership and Trout Unlimited, praised BLM's rule.
"As with any rule, this one isn't perfect, and nobody got everything they asked for, but it is undeniably a much-needed step forward," said Ed Arnett, senior scientist with TRCP. "We are pleased to see the agency focus on practices, both above and below the ground, that minimize risks to fish and wildlife habitat. Standards for proper well construction and requiring best practices, like tanks for storing recovered fluids instead of pits that are prone to leaking, are common-sense measures that we support."
Earthjustice said the final rules "appear stronger" than the draft in 2013 by requiring the use of above-ground tanks and backtracking from the use of "type" wells in favor of requiring a well integrity test on every well drilled on public lands.
"Still, the BLM rules fail to ensure that sensitive, valuable and unique lands are kept off limits to drilling and there is a reliance on FracFocus for key fracking chemical disclosure," the group said.
Amy Mall, senior fracking policy analyst at the Natural Resources Defense Council, said the BLM rules "put the interests of big oil and gas above people's health, and America's natural heritage.
"The bottom line is these rules fail to protect the nation's public lands -- home to our last wild places, and sources of drinking water for millions of people -- from the risks of fracking," she said.
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Greens Groan at Interior’s Embrace of FracFocus
Mar 23, 2015 | PoliticoPro
By Elana Schor
The Interior Department’s new fracking rule gives greens some of what they wanted in requiring oil and gas companies to disclose the chemicals they inject underground. But it also relies heavily on an industry-backed disclosure website that environmentalists say needs reform.
FracFocus, backed by the industry and created in 2011 by two groups of state-level regulators, provides a forum for oil and gas companies to disclose the identities of chemicals used in the fracking process to address concerns about the potential risk to groundwater.
Chemical data from more than a dozen states are now posted on the website, though green groups have long criticized the privately run FracFocus as more favorable toward the industry than a government-run, public forum would be. They also want to see the data made more easily accessible.
Despite those qualms, the rule released Friday by Interior’s Bureau of Land Management embraces FracFocus as a means for oil and gas companies operating on federal land to disclose the chemicals they use. The regulation requires drillers to disclose the chemicals — using FracFocus — within 30 days after fracking is completed, and adds hoops for companies to jump through before they can invoke trade-secrets exemptions to sidestep that mandate.
The rule’s requirements will affect an estimated 100,000 wells spread across more than 12 million acres of federal and tribal lands, mainly in the West. The rule takes effect in 90 days.
Greens were not thrilled with the disclosure provisions.
“While we are pleased that FracFocus has promised some important improvements, it’s unclear whether the changes they’ll make will really address our concerns, and we think it’s irresponsible for BLM to adopt this site for use until those changes are made,” Natural Resources Defense Council staff attorney Matthew McFeeley said in an interview Friday.
Among other changes, environmentalists want to see the website abide by a 2013 order from President Barack Obama that calls for providing government data in open and “machine-readable” format, which among other things makes it easier for outside groups to create websites and apps that parse and display the data.
Anti-fracking activists also want to see the website integrate changes recommended last year by a task force at the Energy Department, such as a “systems-based” disclosure method that would limit trade-secrets exemptions while meeting the industry’s concerns about sharing proprietary recipes.
McFeeley, from the NRDC, said the bureau is still in negotiations with FracFocus on a memo that would govern how the site integrates new fracking data provided under the Interior regulations.
Matt Lee-Ashley, director of the public lands project at the liberal Center for American Progress, echoed the NRDC’s concerns.
“The disclosure requirements are a big step forward, but the jury is still out on how effective and user-friendly FracFocus will be,” Lee-Ashley said by email. “FracFocus has been improving its functionality and the accessibility of information, but the BLM will need to ensure the Department of Energy’s recommendations for FracFocus are fully implemented.”
Another green organization, the Environmental Working Group, urged regulators last year to replace FracFocus with an “independent” site run by the Environmental Protection Agency, modeled on EPA’s long-standing Toxic Release Inventory. That site has generated a cottage industry of outside organizations that make EPA’s data available in various formats.
Interior Secretary Sally Jewell said Friday that the rule’s embrace of FracFocus would include further enhancements, along with BLM representatives joining the site’s board. “We feel like we have an appropriate seat at the table and they’re listening to input,” she told reporters.
BLM Director Neil Kornze added that FracFocus is “getting even better,” estimating that the creation of a stand-alone system for fracking chemical disclosure would have cost Interior millions of dollars.
One of the groups that runs FracFocus, the Groundwater Protection Council, is “very excited that BLM is going to be coming into FracFocus,” Associate Executive Director Dan Yates said in an interview. “And the states are too.”
The site’s leaders are confident they can meet Interior’s calls for upgrades in a timely fashion, and the memo governing FracFocus’ collaboration with federal regulators is close to completion, Yates said. In addition, he said, the site is on track to make its data machine-readable sometime this spring.
Environmental groups were also dismayed that oil and gas companies will still be able to keep the identity of their chemicals confidential by declaring them trade secrets. The new rule will put BLM in the position to judge the companies’ claims, requiring them to submit affidavits to Interior before getting permission to shield information from FracFocus.
“We were hoping for complete, full disclosure with no allowance for trade secrets,” Athan Manuel of the Sierra Club said in an interview.
In addition to the chemical disclosure provisions, the new rule says liquid wastes generated during the fracking process must be stored in sealed tanks rather than open pits. The rule also adds new certification standards to vet the construction of individual wells, as opposed to allowing the industry to offer “type wells” as stand-ins for a larger group.
But the rule also gives states a chance to remain in control of their fracking operations: States that have stronger fracking standards can seek variances from BLM that would certify them as complying with federal regulations. Industry groups pursuing legal challenges to the rule say that doesn’t give enough certainty to the states, since Interior could revoke its approval.
Sen. Heidi Heitkamp (D-N.D.) said in a statement that the rule ought to allow “states like North Dakota to opt-out, if they are already implementing their own regulations that effectively reflect local geological and environmental issues.”
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House Panel to Vote on Oil Export Bill
Mar 20, 2015 | The Hill - E2 Wire
By Timothy Cama
House lawmakers will vote next week on a bill that would lift the 40-year-old ban on crude oil exports.
The House Foreign Affairs subcommittee on trade said Friday that will meet March 25 to debate the bill sponsored by Rep. Joe Barton (R-Texas) and vote on it.
It will be the first time in recent years that lawmakers have voted on a proposal to lift the ban, enacted in 1975 to protect the country from the Arab oil embargo.
Barton introduced his bill in February and it has 14 co-sponsors.
“Today we are presented with the unique opportunity to undo a piece of legislation that reflects an America of yesterday,” Barton said when introducing it.
“American energy production is at a defining juncture and now is the time to lift the ban on crude oil exports. The rewards are expansive,” he said. “Recent analysis confirms lifting the export ban would spur economic growth and create hundreds of thousands of additional jobs, while at the same time lowering prices at the pump.”
Many Republicans support lifting the ban, including Sen. Lisa Murkowski (Alaska), who held a hearing on the matter earlier this week.
But Democrats and some Republicans fear that opening the United States oil market to the world would create new demand, increasing prices that would eventually hit consumers and businesses.
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Foreign Affairs Subpanel to Mark Up Crude Export Bill
Mar 23, 2015 | E&E Daily News
By Nick Juliano
A co-sponsor of House legislation to lift the crude export ban will use his subcommittee gavel this week to advance the bill along the legislative conveyor belt.
The House Foreign Affairs Subcommittee on Terrorism, Nonproliferation and Trade plans to convene Wednesday afternoon to consider H.R. 702, which would lift the ban on exporting U.S. crude that has been in place since the 1970s. Subcommittee Chairman Ted Poe is a co-sponsor of the bill, which was introduced last month by his fellow Texas Republican Rep. Joe Barton.
The subcommittee held a hearing on the export ban last year (E&ENews PM, April 2, 2014). None of the subcommittee members overlaps with the Energy and Commerce Committee, which also has jurisdiction over the legislation and considered the topic at a subcommittee hearing this month but does not have any markup scheduled.
Poe and other supporters of lifting the ban say exporting crude would help ease the glut of light oil produced from shale formations in the United States, where refiners have been better equipped to handle heavy oil that is typically imported.
Oil prices have fallen sharply since last summer, causing oil companies to cancel some drilling plans and lay off workers. U.S. producers tend to fetch about $10 less per barrel than companies that sell on international markets, creating additional pressure especially in shale plays where a higher break-even oil price is required for drilling to be profitable; lifting the export ban would help lift the domestic price.
Some opponents of the export ban have raised concerns about a possible increase in gasoline prices if the domestic benchmark price rises, but several studies, including from the U.S. Energy Information Administration, have found that gas prices would be likely to fall if the export ban is lifted. That's because gasoline and other refined fuels already can be exported, meaning their price is tied to the international benchmark price, which would be expected to fall if U.S. exports increased overall supply on the global market.
Opponents also warn that members of the Organization of the Petroleum Exporting Countries could curtail their production in response to U.S. exports to quash any effect on global prices.
Oil refiners are also urging Congress and the Obama administration not to act too quickly to lift the export ban. Opponents say refineries would be forced to lay off workers and possibly shut down, but some in the sector are open to the possibility of lifting the export ban in concert with other policy changes. One option that has been floated is reforming the Jones Act, which requires U.S.-flagged vessels be used to ship goods between domestic ports.
The Senate Energy and Natural Resources Committee last week held a hearing on whether to lift the export ban, a cause that ENR Chairwoman Lisa Murkowski (R-Alaska) was instrumental in drawing attention to last year. Murkowski has not yet introduced a bill to lift the ban, arguing that the administration has all the authority it needs to authorize crude exports under existing law, but she appears to be moving in that direction (EnergyWire, March 20).
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Pennsylvania Won't Extend Comment Period Second Time for Draft Oil, Gas Drilling Rules
Mar 23, 2015 | BNA Daily Environment Report
By Leslie A. Pappas
The public comment period for a heavily debated draft regulation that would set new standards for areas around oil and gas drilling sites won't be extended a second time, officials from Pennsylvania's Department of Environmental Protection (DEP) said March 20.
“We cannot extend the comment period beyond 30 days or hold public hearings,” Scott Perry, deputy secretary of the Office of Oil and Gas Management, said during a public meeting of the Oil and Gas Technical Advisory Board (TAB).
The proposed standards generated more than 24,000 comments from about 1,200 to 1,500 individuals and organizations when the first draft of the rulemaking was published in 2013. The 60-day comment period that began in December 2013 on the first proposed draft of the rulemaking was extended by 30 days, and extra hearings were held, according to Kurt Klapkowski, director of planning and program management at the DEP's Bureau of Oil and Gas Management.
The board is tasked with finalizing a draft rulemaking that covers surface activities around oil and gas wells and submitting it to the Independent Regulatory Review Commission by March 2016. “If we do not bring a revised rule [to the commission] by then, we have to start all over,” Perry said.
The proposed Chapter 78, Subchapter C regulations are intended to improve water resources, protect public safety, address landowner concerns and add consideration of public resources around well sites, the DEP said.
“This is a really big deal,” Joe Minott, executive director of the Clean Air Council for Pennsylvania, told Bloomberg BNA in a phone interview March 20. The proposed standards address a range of issues that the government hasn't addressed before, such as protecting schools and playgrounds that are close to drilling sites or requiring that drillers survey the land before drilling to make sure old wells in the area have been properly capped, Minott said.
Administration Looking ‘More Holistically.'
“It's definitely a step in the right direction” and shows that the administration is looking “more holistically” and at the impact that the extraction, drilling, processing and transportation of natural gas can have on communities, Minott said. “Finally, somebody is going to be listening to us.”
Some industry representatives, however, expressed the opposite view.
The Marcellus Shale Coalition “submitted extensive and detailed comments, the vast majority of which appeared to have been ignored,” Jim Welty, the coalition's vice president for government affairs, told DEP officials at the TAB meeting.
Welty said the industry is being asked to comply, for example, with more stringent standards for tanks than those of the chemical industry, with waste reporting requirements “significantly more stringent” than those covering hazardous waste and is “being subjected to an extremely broad and arbitrary definition of ‘critical communities' that is unsupported by science, when every other industry is only to consider threatened and endangered species, which are designations that are clearly defined and understood.”
The draft rulemaking, which was published on the DEP's website March 9, will undergo a 30-day comment period beginning April 4. TAB will meet again April 23, Aug. 25, and Oct. 27 to finalize the draft rules.
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New Mexico Approves Rule to Allow Re-Use Of ‘Produced Water’ From Oil, Gas Drilling
Mar 23, 2015 | BNA Daily Environment Report
By William H. Carlile
In a move calculated to have oil companies use less fresh water, the New Mexico Oil Conservation Commission has approved a new rule allowing oil and gas producers to reuse water that is produced during drilling.
The water is called “produced water,” a briny liquid that is the incidental by-product of most oil and gas production, Gabriel Wade, assistant general counsel in the Oil Conservation Division of New Mexico's Energy, Minerals and Natural Resources Department, told Bloomberg BNA March 19.
In the past, the water was typically discarded, but new economies and new technologies have made recycling of the by-product more cost-effective and less environmentally harmful, he said.
“Producers are very interested in taking what used to be a waste product and doing treatment as necessary to reuse it for their various projects. That includes drilling and production for oil and gas,’’ Wade told Bloomberg BNA March 19.
The new practice offers several advantages, he said, including reducing the need for freshwater consumption from municipal and agricultural users and reducing environmental impacts resulting from the transportation of fresh water to production sites.
Environmentalists Take Critical View
One environmental group is taking a more critical view, however. Peter Dronkers, with the nonprofit Earthworks, said the rule could simply amount to a way for companies to store contaminated water more cheaply than putting it in tanks, as required under the previous rule.
“The economics are quite simple: If it is cheaper to buy fresh water, they'll do that,” he said. “If it is cheaper to treat and reuse produced water, they'll do that. What matters to the operators is the bottom line.”
He added, “The goal here should be no fresh water withdrawals at all, which should be saved for farmers.”
The new rule (Title 19, Chapter 15, Part 34 of the New Mexico Administrative Code) was approved March 12 after a commission a public hearing was held on the proposed rule. It is effective March 31, department spokeswoman Beth Wojahn told Bloomberg BNA March 20.
Rule Covers Storage, Use of Recycled Water
This new rule provides requirements for the storage and use of recycled water in oil and gas production which could lead to producers using 100 percent recycled water on projects.
The rule also provides for “recycling facilities” and “recycling containments” and establishes requirements that protect fresh water, public health and the environment.
Secretary David Martin, head of New Mexico's EMNRD, said in a prepared statement, “These common-sense guidelines will reduce freshwater consumption by the industry, which makes sense both environmentally and economically.”
He added, “We're proud to have worked with many partners on this new rule which we believe will save New Mexico's freshwater while still providing resources for oil and gas production in our state.”
According to the department, several oil producers in New Mexico have taken the initiative to recycle produced water in their operations, but this new rule gives those operators a stable regulatory environment to use recycled water.
The oil commission regulates activity in what is referred to as the “Oil Patch” located in southeastern New Mexico.
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Sen. Cruz Introduces Broad Legislation Encompassing Energy Development Wish List
Mar 23, 2015 | BNA Daily Environment Report
By Ari Natter
The renewable fuel standard would be phased out over five years, Alaska's Arctic National Wildlife Refuge would be opened for oil and gas exploration and the permitting process for the export of liquefied natural gas would be expedited, under a broad energy bill introduced by Sen. Ted Cruz (R-Texas).
The American Energy Renaissance Act (S. 791) also would approve the Keystone XL pipeline, repeal the ban on the export of most domestic crude oil, stop the federal government from regulating hydraulic fracturing and stop the Environmental Protection Agency from regulating greenhouse gas emissions and other EPA regulations that would adversely affect coal and electricity plants, according to a bill summary.
“This legislation is a win-win,” Cruz said in a statement. “The only thing the federal government needs to do is get out of the way and let Americans do what they do best: dream, innovate and prosper.”
Other highlights of the bill, introduced March 18, include expanding both domestic offshore energy development and energy development on federal lands, streamlining the energy-related permitting process and limiting required environmental review of coal export facilities, according to the summary.
In addition, the renewable fuel standard would be phased out starting in 2016, when the volumetric requirements proposed by the EPA would be reduced by 20 percent. The blending requirements would be reduced by an additional 20 percent a year until phased out in 2020, according to the legislative text of the bill.
“Today America faces a pivotal question,” Cruz said. “Will we lead the world into a new generation of American prosperity led by the great American energy renaissance we're experiencing, or will we instead shut off our borders, erect walls, and allow our friends and allies to be dependent on tyrants like Vladimir Putin or Nicolás Maduro?”
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Under Performance Standards, EPA Plans To Re-Propose Low-Pressure-Well Definition
Mar 23, 2015 | BNA Daily Environment Report
By Andrew Childers
The Environmental Protection Agency will re-propose the definition of low-pressure wells under its new source performance standards for oil and natural gas wells after the agency missed a relevant comment in the docket.
The EPA proposes to make no changes to the definition, first issued in 2012, but the agency is seeking additional comment after it discovered a comment from the Independent Petroleum Association of America that wasn't included in the docket in 2014 when the agency revisited that term, according to a proposed rule (RIN 2060-AS49) to be published in the Federal Register March 23.
In addition, the EPA is proposing to delete language from the performance standards requiring storage vessels that are installed in parallel to comply with the air pollution standards after industry groups said the agency's wording could require regulations of tanks the agency hadn't intended to include in its proposal.
The EPA first issued its definition of low-pressure wells when it issued new source performance standard for hydraulically fractured oil and natural gas wells in 2012 (RIN 2060-AP76). That rule required most wells to employ green completions to control emissions, but it exempted low-pressure wells because they lack the pressure necessary to employ reduced emissions completion equipment, commonly known as green completions. The equipment separates gas and liquid hydrocarbons from the flowback that comes from a well as it is being prepared for gas production.
The Independent Petroleum Association of America and other groups petitioned the EPA to revise that definition, arguing it would require green completions at marginally cost-effective wells.
The EPA chose to retain that definition when it reconsidered the rule in 2014 (RIN 2060-AR75). However, the EPA subsequently realized that comments from the Independent Petroleum Association of America that recommended an alternate definition of low-pressure wells and were submitted before the comment deadline hadn't been included in the docket for the reconsideration rule.
The EPA is now seeking additional comment on its definition of low-pressure wells in order to address the issues raised by industry groups.
Storage Vessels Language Deleted
The proposed rule also would delete language from the performance standards that would require storage vessels that are “connected in parallel” or “installed in parallel” to comply with the air pollution standards.
The EPA had regulated the linked storage vessels in its 2012 rule as a way to prevent well operators from avoiding regulation by dividing throughput between separate vessels.
However, the EPA said it's proposing deleting that requirement after industry groups raised concerns that the terms “connected in parallel” and “installed in parallel” could require regulation of other storage vessels the agency had not intended to include in its rule. Instead, the EPA is seeking comment on other options for regulating those vessels.
The EPA will accept comment on the proposed rule until April 22. Comment can be made at http://www.regulations.gov and should reference Docket ID No. EPA-HQ-OAR-2010-0505.
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White House Slams McConnell on EPA
Mar 20, 2015 | The Hill - E2 Wire
By Timothy Cama
The White House is excoriating Senate Majority Leader Mitch McConnell (R-Ky.) for advising states to ignore the Environmental Protection Agency’s climate rule for power plants.
A spokesman for the Obama administration said it’s in bad form for McConnell to wade into how states deal with the rule’s requirements.
“Climate change is one of the most pressing challenges that we face, and instead of offering solutions, Sen. McConnell’s alternative is an inappropriate and unfounded attempt to dictate state decisions,” said White House spokesman Frank Benenati.
McConnell has been telling state leaders to ignore the EPA rule which, once finalized, would require states to formulate plans to cut carbon emissions from their power sectors.
On Thursday, he wrote directly to state governors to reassure them that they would not be violating the law by ignoring the rule.
The EPA is breaking the law, he reasoned, so states have nothing to fear.
The Obama administration didn’t take kindly to McConnell’s strategy to dismantle one of its landmark regulatory efforts.
“While Sen. McConnell and the other climate deniers in Congress will do everything they can to block or hinder the administration’s progress on climate change, the administration is committed to moving forward to tackle climate change head on because science, history, and the American people are on our side,” Benenati said.
EPA Administrator Gina McCarthy also hit back against McConnell, saying that her agency would impose compliance plans on states if they do not do it themselves, according to Reuters.
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Obama Adviser Blasts McConnell For Denigrating Power Plant Rule
Mar 23, 2015 | BNA Daily Environment Report
By Cheryl Bolen
President Barack Obama's top environmental adviser chastised Senate Majority Leader Mitch McConnell (R-Ky.) for attempts to persuade states not to comply with the administration's Clean Power Plan, which is a proposed rule.
On March 19, McConnell stepped up his campaign to have states essentially ignore Environmental Protection Agency carbon pollution limits for power plants by 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 set to be finalized this summer (54 DEN A-16, 3/20/15).
In remarks to reporters at a breakfast hosted by the Christian Science Monitor March 20, Brian Deese, senior adviser to Obama for climate and energy policy, said McConnell has exceeded his jurisdiction.“So what you have is a Republican leader in Mitch McConnell who is going way outside the bounds of the position that he was elected to,” Deese said. “I think that we all would be better served if he and others spent less time trying to lecture states about what they should be doing … and more time trying to actually get some constructive things done in Congress.”
Clean Power Plan Outlined
The Clean Power Plan proposed rule (RIN 2060-AR33) would establish unique carbon dioxide emissions rates for the power sector in each state. State regulators would then develop their own plans to comply with the emissions rates. The EPA would issue federal plans for states that choose not to develop their own.
The proposed rule, at its core, is based on providing flexibility to states, Deese said. The EPA is working in a bipartisan, pragmatic way at the state level to help states understand their options and opportunities, he said.
“States should be given the flexibility to decide how they want to craft plans to have cleaner air and cleaner water for their kids,” Deese said.
Would Give States Broad Flexibility
The structure of the law, the Clean Air Act, and the structure of the rule are about setting targets, but then giving states broad flexibility about how they achieve those goals, Deese said.
“And what you have seen outside of Washington is broad interest, in red states and blue states, around how to be pragmatic about creating plans that will actually work for those states,” Deese said. “So that is our focus and will remain our focus going forward.”
The administration is pursuing a “very aggressive agenda” on reducing greenhouse gas emissions, reducing carbon pollution and encouraging a clean energy economy, Deese said.
Most of what the administration is pushing forward are actions that can be done within the executive branch, Deese said.
Recent Administration Efforts
On March 19, the president signed an executive order to reduce greenhouse gas emissions from the federal government by 40 percent, and on March 20, the administration announced a new standard on fracking on federal lands (see related story; 54 DEN A-1, 3/20/15).
“But if you look forward, core to our agenda is the Clean Power Plan, which will reduce carbon pollution from the power sector,” Deese said. “That rule has been proposed—we're going to finalize that rule and then implement it with states.”
There is also a big international opportunity this year to leverage what the U.S. is doing domestically into a viable global agreement, Deese said.
Methane Rulemaking Planned
“And then beyond that, if you look at things like, in the area of methane or in the area of energy efficiency, we have a lot more to do through rulemaking to both tighten down on energy waste and carbon pollution but also provide long-term incentives to encourage investment in this space,” Deese said.
This is an agenda that lands squarely within well-established legal precepts, including the Clean Air Act, the Clean Water Act and other foundational environmental laws, Deese said.
In terms of methane, the administration has announced a goal of reducing methane emissions by 40 percent to 45 percent against a 2005 baseline, Deese said (10 DEN A-1, 1/15/15).
“The way in which we're going to achieve that goal is through a combination of regulatory actions and voluntary actions,” he said.
On the regulatory side, this includes measures such as the EPA proposing rules for new sources of methane, which is something the administration anticipates will come forward in the next couple of months, Deese said.
On the voluntary side, the Agriculture Department is working with the agriculture industry on a viable voluntary agreement to reduce emissions, he said.
Bold Goals Set for Reducing Energy Waste
In terms of efficiency, part of what the president did in his Climate Action Plan was to set bold overall goals for reducing energy waste and increasing energy efficiency, Deese said (123 DEN A-10, 6/26/13).
“The Department of Energy has a cadence of rulemakings to increase standards in buildings, appliances and otherwise,” Deese said. “I think you can expect that cadence to continue over the next two years.”
But this is also an area in which the administration is seeking to partner with the private sector, Deese said.
Leveraging Private Sector
In reducing greenhouse gases, companies such as General Electric Co., Hewlett-Packard Co., International Business Machines Corp. and Northrop Grumman Corp. have not only committed to work as contractors to the federal government but also have set their own reduction goals, Deese said.
“And a lot of that is being driven by the fact that energy efficiency is low-hanging fruit from a corporate perspective,” he said.
This is an area where being smart about how the administration partners with the private sector can leverage its impact substantially, Deese said.
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Litigation Awaits New EPA Emissions Rules
Mar 23, 2015 | The Wall Street Journal
By Brent Kendall and Amy Harder
The Obama administration’s initiatives to reduce air pollution have fared well in several hard-fought legal battles, but a new round of court challenges could determine whether the White House’s most ambitious efforts will survive.
The Supreme Court on Wednesday will hear argument on the Environmental Protection Agency’s first-ever regulations requiring power plants to cut emissions of mercury and other toxic air pollutants. The rules, adopted in 2012 and scheduled to go into effect in April, were more than two decades in the making. The case could set important precedent on when and whether the agency needs to consider the potential regulatory costs to industries.
Then, in April, a U.S. appeals court will consider an early challenge to the EPA’s proposal to slash carbon emissions from coal-fired power plants, even though the agency hasn’t finished the regulations. The coming rules, which the EPA expects to complete this summer, are the center pillar of President Barack Obama’s plan to address climate change. The timing of the lawsuit is unorthodox and it faces an uphill battle, but a dozen states have lined up to try to short-circuit the EPA’s plans.
Together, the lawsuits represent attacks on two of the most consequential policies of Mr. Obama’s environmental agenda.
“The courts absolutely hold the key to President Obama’s environmental legacy,” said Thomas Lorenzen of Dorsey & Whitney LLP, a former Justice Department lawyer who supervised environmental cases.
The Supreme Court case focuses on whether the EPA acted properly when it considered only public-health risks, and not industry compliance costs, in deciding whether to require coal and oil-fired plants to cut most emissions of mercury and other hazardous air pollutants.
Coal and oil-fired power plants are the dominant U.S. emitters of mercury, which can cause serious health problems for children as well as fetuses that can absorb the neurotoxin through their mothers. The regulations require plants to install high-tech scrubber systems to remove the pollutants.
The EPA concluded that costs weren’t a relevant consideration. It conducted an analysis estimating the costs to be $9.6 billion annually while valuing the public-health improvements between $37 billion and $90 billion, mostly through a reduction in premature deaths. The EPA reached those numbers by measuring “co-benefits” of the emission controls, which will filter other pollutants in addition to mercury and related toxics.
A group of 21 states, including ones that rely heavily on coal for electricity, and industry groups challenged EPA’s approach. The states in a court brief argued Congress “did not intend for EPA to act with deliberate indifference to cost when answering the basic regulatory question whether it is appropriate to regulate.” The states said the health benefits of the regulations, when focused specifically on mercury reductions, were just $4 million to $6 million a year.
An EPA spokeswoman said, “We fully believe that EPA acted properly under its Clean Air Act authority in regulating harmful toxic air pollution from power plants.”
If the Supreme Court rules against the EPA, the decision wouldn’t foreclose the agency from regulating mercury, but it would have to write new rules and give industry costs greater consideration.
Carol Browner, a former EPA administrator under President Bill Clinton, said the case could have a broad impact if it forces the EPA to consider the costs of regulating even when the law doesn’t specifically require it. “To the degree that EPA cannot maintain that distinction between the scientific process and the regulatory process, that would be a big change,” said Ms. Browner, who was also a top White House adviser to Mr. Obama.
The mercury regulations also are a factor in a closely watched carbon emissions case in front of a Washington federal appeals court on April 16.
A group of states led by West Virginia, along with Ohio-based Murray Energy Corp., say the Clean Air Act prohibits certain double regulation of existing power plants. Once the EPA regulated the plants for mercury emissions under one section of the law, it couldn’t then rely upon a different, rarely used provision to regulate greenhouse gas emissions, the challengers argue.
The EPA carbon regulations, proposed last June, call for a 30% cut in power-plant carbon emissions by 2030 based on emissions levels in 2005. Though the rules won’t be completed for several more months, the challengers argue the regulations are such a dramatic, labor-intensive overhaul, they should be stopped now.
A Murray Energy spokesman said the company filed suit now because the plan “has caused, and continues to cause, immediate and substantial harm to the U.S. coal industry.”
West Virginia Attorney General Patrick Morrisey said, “Judicial relief is essential now because the mere existence and breadth of the proposal is making states and power plants expend resources and make capital investment decisions now to comply with an illegal rule.”
Legal observers say the EPA’s carbon proposal raises tough legal questions, but it may be too soon for a court to resolve them. “It’s a real uphill battle to get a court to weigh in before an agency actually issues a final rule,” said Jeff Holmstead, a former EPA official under President George W. Bush.
The EPA called the lawsuit premature and said it would address public comments about the legality of its carbon rule when it issues it. “Courts have reaffirmed repeatedly the science, law and reasoning on which our rule making has relied,” the spokeswoman said.
Other lawsuits challenging the carbon rules are expected after the EPA finishes the regulations, and the stakes will be significant. If the administration loses, “then the rug is just completely pulled out from under everything they’ve been doing on climate change,” Mr. Holmstead said.
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Senate Export-Import Reauthorization Bill Retains Provision for Coal Project Financing
Mar 23, 2015 | BNA Daily Environment Report
By Ari Natter
U.S. Export-Import Bank reauthorization legislation introduced March 19 in the Senate includes new language that overrides Obama administration guidance limiting the bank from financing overseas coal-fired power plants.
The bill (S. 819) introduced by Sens. Mark Kirk (R-Ill.) and Heidi Heitkamp (D-N.D.), includes a provision that bars the bank from denying an application for financing based on the energy source, according to the legislative text.
The language effectively overrides Obama administration guidance that said the bank could no longer support new coal-fired power plants in developing nations unless there are no economically feasible alternatives or the plants use carbon capture technologies.
“The bipartisan bill that was brokered would also allow coal technologies to be exported abroad, which would ensure countries around the world producing coal to generate energy as cleanly as possible,” Sen. Joe Manchin (D-W.Va.) a cosponsor of the bill, who has championed the language allowing the bank to finance coal projects in the past, said in a statement.
A separate bill to reauthorize the Ex-Im Bank, introduced March 19 by Sen. Jeanne Shaheen (D-N.H.), doesn't include language overriding the guidance, according to a Shaheen spokesman.
A fight over whether the guidance limiting the bank's financing of coal projects, which was announced in 2013 as part of President Barack Obama's Climate Action plan, became a flash point in the broader fight over the reauthorization of the bank's charter last year (240 DEN A-3, 12/13/13).
$1.5 Billion Authorized for Coal-Fired Units
The bank, which provides financing to expand U.S. trade, has authorized $1.5 billion in financing for coal projects, including $805.6 million in financing in 2011 for Overland Park, Kan.-based Black & Veatch Corp. to construct one of the world's largest power plants, the 4,800 megawatt Kulsie project in South Africa being developed by Eskom Holdings Ltd.
Omnibus spending legislation (H.R. 83; Pub. L. No. 113-235) approved by Congress in December continued a policy rider backed by Appropriations Committee Chairman Hal Rogers (R-Ky.) that overrides the Obama administration guidance.
The bank's charter expires June 30.
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Inhofe Raises Concerns About Delay In Publishing EPA's Final Coal Ash Rule
Mar 23, 2015 | BNA Daily Environment Report
By Anthony Adragna
Sen. James Inhofe (R-Okla.), chairman of the Senate Environment and Public Works Committee, is calling foul over the more than three months—and counting—that it has taken for the Environmental Protection Agency to publish its final coal ash rule, though observers told Bloomberg BNA it is unlikely the agency is making significant changes.
In interviews the week of March 16, observers said the delay in publishing the final rule (RIN 2050-AE81) was unusual but not unprecedented. Some said the fact that the EPA had to issue the rule under a Dec. 19 court-ordered deadline probably forced it to rush crafting certain portions of the text that resulted in inconsistencies and typographical errors.
The EPA told Bloomberg BNA in a statement that it was “working through some technical corrections to the rule” but said it expects the rule to be “published in the near future.”
Inhofe, who has raised concerns about delays in formally publishing EPA rules previously, told Bloomberg BNA the agency has a “history of kicking the can down the road when it comes to publication of complicated, burdensome regulations, and publication of the coal ash rule is no different.” He questioned whether there were political reasons for the delay.
“Three months have passed, and the rule still has not been published, raising questions among states, the regulated community, and American citizens about the reason for the delay, when the rule will become effective, and what it will ultimately require of them,” Inhofe said in a statement. “Lengthy delays in publication often provide a signal to hardworking Americans that the practices of EPA are not dependable, and delays unfortunately can be motivated by political means.”
Originally Released in December
On Dec. 19, the EPA released the first final federal standards for the management of coal ash under Subtitle D of RCRA, subjecting the material to nonhazardous waste regulations. Under the rule, states are “strongly” encouraged to adopt those minimum standards, but enforcement is left to citizen lawsuits.
Among other provisions, the final rule requires the closure of surface impoundments and landfills that fail to meet engineering and structural standards, mandates regular inspections of surface impoundments, requires immediate cleanup and closure of unlined impoundments that are polluting groundwater and limits where new structures can be built.
Congress has not waited for the final rule's publication to begin work on modifying it. A House subcommittee held a legislative hearing on a new bill from Rep. David McKinley (R-W.Va.) on March 18, while two senators confirmed they are also working on legislation to address coal ash management (53 DEN A-7, 3/19/15).
Inhofe, in April 2014, alleged the EPA held off formally publishing its proposed rule to limit greenhouse gases from new power plants for more than two months so that the regulation would not be finalized until after the 2014 mid-term elections. A Bloomberg BNA analysis found the rule took 3.7 times as long as the average regulation to appear in the Federal Register, but that length of time was not unprecedented (105 DEN A-1, 6/2/14).
Foul Play Unlikely
Multiple observers told Bloomberg BNA they could not explain the length of the delay in publishing the final rule,but said it was extremely unlikely the agency was making significant changes to the regulation.
“It is hard to imagine charts and graphs causing that much consternation for the Federal Register staff and it is hard to understand how it could take three months to correct typos,” Richard Stoll, partner at Foley & Lardner LLP, told Bloomberg BNA. “I doubt if EPA is making any substantive changes to the Dec. 19 signed rule and preamble, since that document is out there for the world to see and it would be easy enough to spot the changes once we see the Federal Register publication.”
One consequence of the delay in publication is documents associated with the rulemaking process are not released, making it harder for facilities and companies to evaluate their compliance options, Stoll argued in an American College of Environmental Lawyers blog on the subject. He said the agency should begin releasing rulemaking documents along with the pre-publication versions of the rules, instead of waiting for them to appear in the Federal Register.
Jim Roewer, executive director of the Utility Solid Waste Activities Group, which represents the power generation industry on solid and hazardous waste issues, said he noted multiple inconsistencies in the rule text that the EPA needed to fix and attributed the publication delay to the fact the agency had to hurry to meet a court-imposed deadline.
“This is what happens when EPA is forced to rush their rulemaking,” Roewer told Bloomberg BNA.
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Governors Association to Help Four States Identify Compliance Options for Carbon Rule
Mar 23, 2015 | BNA Daily Environment Report
By Andrew Childers
The National Governors Association will help four states with modeling their power sectors and identifying potential compliance options with the Environmental Protection Agency's proposed carbon dioxide emissions limits for existing power plants.
The goal is to help the four states—Michigan, Missouri, Pennsylvania and Utah—develop strategies that can be used to guide their compliance plans when the EPA finalizes the Clean Power Plan this summer, the National Governors Association announced March 19.
The program represents an early attempt by states to begin to develop and analyze potential measures to reduce carbon dioxide emissions from the power sector in anticipation of the EPA's final rule.
State regulators are exploring their compliance options even as some state officials have questioned the proposed rule's legality. The attorneys general of both Michigan and Utah have submitted comments to the EPA on the proposed rule challenging the agency's authority to propose the carbon dioxide standards (232 DEN A-1, 12/3/14).
States Receive Assistance
The governors' association called its program a “policy academy” and said the academy also will provide technical assistance to state officials from association staff as well as experts from federal agencies, the private sector and research and academic groups.
The academy will help agencies within those states coordinate actions on the compliance plan and share best practices from other states.
The EPA's proposed Clean Power Plan (RIN 2060-AR33) would establish unique carbon dioxide emissions rates for the power sector in each state. The rule would be implemented by state officials, who would determine how best to achieve the emissions targets. It is expected to be finalized this summer as part of a package of regulations limiting carbon dioxide emissions from the power sector (106 DEN A-1, 6/3/14).
Under the Clean Power Plan, states would need to begin submitting compliance plans to the EPA for review one year after the rule is finalized, although extensions are available if needed. Many states have raised concerns with the aggressive timelines set out in the rule and the resources that will be necessary to achieve the proposed emissions rates.
The EPA has said federal grants to support state and local air quality management programs will be available for implementing the Clean Power Plan. President Barack Obama has requested an additional $25 million in funding for fiscal year 2016 to assist states in implementing the Clean Power Plan (51 DEN A-8, 3/17/15).
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Clean Air Act and Dirty Coal at the Supreme Court
Mar 23, 2015 | The New York Times - Op-Ed
The name of the law at issue before the Supreme Court on Wednesday is the Clean Air Act. It is not the Coal Industry Protection Act, despite what that industry’s advocates seem to want the justices to believe.
Congress passed the legislation in 1970 and substantially strengthened it in 1990 to safeguard human health from air pollution generated by power plants, vehicles, incinerators and other sources.
One of the most toxic of these pollutants is mercury, a heavy metal that accumulates in waterways and the fish Americans eat. While mercury is particularly dangerous to the vulnerable, developing brains and nervous systems of young children and fetuses, the Environmental Protection Agency estimates that improved air-quality standards prevent the premature deaths of as many as 11,000 Americans each year from exposure to mercury and other toxic air pollutants.
In 2012, the agency issued a rule ordering coal-fired power plants, which are far and away the single biggest source of these emissions, to adopt technology to reduce them. The coal industry sued the government for the same reason it has countless times over the decades: Cleaning up pollution costs money. Business owners and other industry backers argue that the law requires the E.P.A. to weigh those costs against any potential health benefits of a regulation.
Industry supporters point to a single phrase in the law — that the agency must regulate pollutants only when “appropriate and necessary” — to mean that if a regulation would cost too much in their eyes, it’s not appropriate.
But the agency does consider the financial impact of its regulations later in the process, when it sets the actual emissions standards. At the beginning of the process, when it is deciding whether a substance like mercury endangers human health and thus must be regulated — which the law requires it to do — cost is not a factor.
Plenty of evidence suggests this is how the law was designed to work. In line with its fundamental goal of protecting health, it never says costs to business are to be considered at the outset. And even if “appropriate” could be read in more than one way, courts as a rule defer to reasonable agency interpretations of statutory language.
The coal industry, however, argues that costs must be considered at the outset because, it says, they are central to the question of whether to regulate at all. In this case, reducing mercury emissions is expected to cost almost $10 billion, but the industry says it will provide at most $4 million to $6 million in benefits. That is an absurdly low range based on a single statistic: the estimated increase in lifetime earnings for people whose I.Q.s will presumably be higher if their prenatal mercury exposure is lower.
According to the E.P.A., the benefits of an overall reduction in mercury and other toxic air pollutants that the new standards would achieve should be valued at between $37 billion and $90 billion.
The vast discrepancies in these various estimates show that standard cost-benefit analyses can never precisely account for environmental risks to public health. Given that reality, why should the cost of any uncertainty always fall on the American public, rather than on the industries that create the health risks to begin with?
Coal industry backers, notably the Senate’s majority leader, Mitch McConnell of Kentucky, view every regulation, whether aimed at protecting human lives or the future of the planet, as nothing more than a “war on coal.” But profits and human health are not mutually exclusive. To the contrary, the technology to meet the E.P.A.’s new mercury standards is already in place at most coal-fired power plants nationwide.
Burning coal is a dirty business, but it can be made cleaner. The federal law balances the need for affordable electricity with reduction of significant threats to human health. The Supreme Court has upheld the E.P.A.’s authority to carry out that law’s purpose with broad discretion. There is no reason to upset that deliberate balance, or unreasonably limit the agency’s authority, now.
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Calif. Governor: Cruz 'Unfit' to Be Running For Office
Mar 20, 2015 | The Hill - E2 Wire
By Dave McCabe
Sen. Ted Cruz (R-Texas), who is expected to declare his intention to run for president on Monday, is "absolutely unfit" to run for office because of his views on climate change, California Gov. Jerry Brown (D) said Sunday.
Brown was asked on NBC's "Meet The Press" about Cruz's comments on "Late Night With Seth Meyers" that "many of the alarmists on global warming, they've got a problem, because the science doesn't back them up."
"What he said is absolutely false," Brown said — adding that the vast majority of climate scientists believe that climate change is man-made. He said that climate change had contributed to both California's drought and record snowfalls in parts of the Northeast.
"So, it’s climate disruption of many different kinds," Brown added. "And that man betokens such a level of ignorance and a direct falsification of scientific data. It’s shocking and I think that man has rendered himself absolutely unfit to be running for office."
Brown also said that if he were 10 years younger, he might be running for president himself.
Cruz is reportedly planning to announce he is running for president in 2016 during a Monday appearance at Virginia's Liberty University. He is expected to run by courting the party's conservative base instead of trying to become the first choice of moderate voters.
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Bills to Ease Permitting, Scrub Federal Rules Head for Markup in House Judiciary Panel
Mar 23, 2015 | BNA Daily Environment Report
By Dean Scott
The House Judiciary Committee is slated to mark up a bill March 24 to streamline environmental permitting for major energy, manufacturing and infrastructure projects, along with other bills designed to roll back environmental and other federal regulations.
The expedited permitting bill, known as the RAPID Act (H.R. 348), was approved in 2014 by the Republican-led House but was never voted on in the Senate.
Similar legislation (S. 280) introduced in January by Sens. Rob Portman (R-Ohio) and Claire McCaskill (D-Mo.) is expected to move through the Senate Homeland Security and Governmental Reform Committee in April (47 DEN A-12, 3/11/15).
In addition to debating the Responsibly And Professionally Invigorating Development Act, House Judiciary also will also take up other bills March 24 that seek to reduce regulatory burdens, including the Sunshine for Regulatory Decrees and Settlements Act (H.R. 712). It aims to disrupt legal strategies which are typically used by environmental and public interest groups to force the Environmental Protection Agency to end regulatory delays, which in turn can lead to more stringent standards.
A third bill on the committee's agenda, known as the SCRUB Act (H.R. 1155), would direct the EPA and other agencies to scrap one economically costly rule before proceeding with each new major regulation.
Bills Backed by U.S. Chamber of Commerce
The bills got strong backing by the U.S. Chamber of Commerce and Republicans on the Judiciary panel at a March 2 hearing.
But Democrats, including the Judiciary Committee's ranking member, Rep. John Conyers (Mich.), said the measures would create new roadblocks to vital environment and public safety regulations and give industry too much say in regulatory and permitting processes (41 DEN A-10, 3/3/15).
While the House is expected to ultimately approve the RAPID Act, the outlook for Senate passage is uncertain.
The Portman-McCaskill Senate Federal Permitting Improvement Act has two other Democratic cosponsors in addition to McCaskill—Sen. Joe Manchin (W.Va.) and Sen. Joe Donnelly (D-Ind.). Maine Independent Angus King, who caucuses with Democrats, is also a cosponsor.
Three Republicans—Senate Homeland Security and Governmental Affairs Committee Chairman Ron Johnson (R-Wis.) and Sens. Rand Paul (R-Ky.) and Roy Blunt (R-Mo.)—are also cosponsoring the bill.
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GSA Asks 120 Top Suppliers to Report Greenhouse Gas Emissions in Pilot Program
Mar 23, 2015 | BNA Daily Environment Report
By Andrea Vittorio
The General Services Administration, which manages billions of dollars in acquisition contracts on behalf of federal agencies, is asking companies in its supply chain to publicly disclose their greenhouse gas emissions and set targets for reducing them as part of a first-of-its-kind pilot program.
Starting the week of March 23, the agency will invite about 120 of its largest vendors and contractors to report on their corporatewide emissions using a standardized supply chain questionnaire from CDP, formerly the Carbon Disclosure Project.
The CDP questionnaire also will ask the companies about emissions associated with particular products or services they've sold to GSA and other questions such as whether they've identified risks and opportunities related to climate change.
Participation Won't Affect Contracts
The program will be voluntary, and suppliers' participation won't influence the award of GSA contracts, the agency said.
“GSA's renewed commitment to addressing climate change and other sustainability issues would not be complete without efforts to green the federal supply chain,” Denise Turner Roth, GSA's acting administrator, said in a statement.
The new supply chain program builds on other efforts at GSA to encourage vendors to adopt efficiency practices, require emissions reporting and compare bidders’ emissions for similar services.
For its Domestic Delivery Services package delivery contract, for example, the agency required the contract winners FedEx and UPS to submit regular reports showing the carbon footprint of their shipping for each federal agency using the contract and reporting on efficiency-related measures like fuel consumption and the use of alternative-fuel vehicles.
The new supply chain program's launch was announced the same day the president signed a new executive order calling on federal agencies to cut their greenhouse gas emissions 40 percent over the next decade from 2008 levels (54 DEN A-1, 3/20/15).
About 90 percent of federal agencies' carbon footprint lies in the products and services they purchase, according to GSA.
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In Bid To Bolster ESPS Lawsuit, Critics Cite McCarthy's Vow To Finalize Rule
Mar 20, 2015 | InsideEPA
By Dawn Reeves
Opponents of EPA's proposed greenhouse gas (GHG) rule for power plants are citing recent promises from EPA Administrator Gina McCarthy that the agency will finalize the rule this summer in a bid to convince a court to hear their case challenging the proposed version of the rule.
In March 19 filings, state and industry litigants in the three related cases seeking to prohibit EPA from finalizing its proposed existing source performance standards (ESPS) submitted letters notifying the court of McCarthy's March 11 remarks where she vowed to finalize the rule this summer.
“EPA is going to regulate. Mid-summer is when the [Rule's] going to be finalized,” McCarthy told the Council on Foreign Relations.
But the petitioners tell the court that her statement is in conflict with one of EPA's central defenses in the three cases: that the court lacks jurisdiction to hear suits challenging the proposed version of the rule because the agency may abandon it.
McCarthy's “emphatic statements belie the made-for-litigation fiction -- central to EPA's defense in all of these cases -- that EPA might abandon the [ESPS]. The statements leave no doubt that EPA is not open to, and will not be changing its conclusion that it can and will regulate.”
All three suits -- which are slated for oral argument April 16 -- hinge on whether EPA has underlying authority under section 111(d) of the Clean Air Act to issue the ESPS if the sector is already regulated under section 112, the section EPA used to craft its power sector mercury air toxics rule.
The issue is complicated because House and Senate amendments to section 111(d) were never reconciled in a conference committee before the 1990 Clean Air Act amendments were signed into law.
The Senate amendment would explicitly allow EPA's proposed ESPS by limiting section 111(d)'s "112 exclusion" to pollutants already regulated under that section. The House amendment could be read as prohibiting it because the focus of the exclusion is on source categories, not pollutants.
But each of the suits faces significant procedural hurdles because EPA's rule is not yet final. Two consolidated cases -- In re: Murray Energy Corporation and Murray Energy Corporation v. EPA -- argue as a threshold legal matter that EPA lacks air act authority. The coal mining company, together with its supporters, is also seeking a court writ blocking EPA from finalizing the rule.
In another case, West Virginia, et al. v. EPA, 12 states are challenging the proposed rule based on a legal theory that EPA was barred from entering a now-lapsed settlement agreement with another group of states that the petitioners allege is the basis for the proposed regulation. The court did not consolidate West Virginia with the Murray Energy cases, but will hear both cases on the same day.
EPA has argued that the petitioners lack standing, and the court lacks jurisdiction in part because the rule is not yet final.
But the critics' filings add that McCarthy's remarks “further demonstrate the urgent need for this court to grant relief in these related cases now, rather than waiting until the inevitable challenge in this Court when EPA follows through on its threats this summer.” It says her statement also highlights the ongoing harms states are suffering in expending significant resources to prepare for the rule that seeks to alter the electricity sector. “These extraordinary circumstances warrant judicial action now.”
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NRDC Weighs Appeal Of Ruling Upholding State Air District's Fee Policy
Mar 20, 2015 | InsideEPA
By Curt Barry
Natural Resources Defense Council (NRDC) attorneys are weighing whether to seek rehearing or Supreme Court review of an appellate ruling that upheld a California air district's rule allowing revenues from fees on motorists to pay for air quality projects as an alternative to levying Clean Air Act penalties on industrial air pollution sources.
NRDC may request that the U.S. Court of Appeals for the 9th Circuit undertake an en banc review of the unanimous March 11 decision by a three-member panel of the court in NRDC and Communities for a Better Environment v. EPA, or appeal directly to the Supreme Court, says one NRDC attorney.
"We have not made a decision," the source says, noting that a request for an en banc hearing is due in late April. "We're still working with the clients, but the decision is a blow to those working on clean air in Los Angeles. The EPA is essentially creating flexibility in the nation's most ozone-polluted regions," the source says, reiterating NRDC's concerns that allowing alternatives to the federal air law fees will worsen air quality.
Environmentalists had challenged EPA's approval of a California South Coast Air Quality Management District revision to its state implementation plan for complying with federal air standards. The revision adopted the district's Rule 317 that sought an alternative to a requirement in section 185 of the Clean Air Act that requires fees to be applied on industrial sources of ozone-forming emissions in areas violating the federal ozone air standard.
Rule 317 allows the district to raise equivalent sums to the penalties to pay for air pollution control to those that the section 185 fees would have produced, through fees linked to mobile emissions sources that are major contributors to persistently high ozone levels in the area. NRDC in its 9th Circuit suit had argued that EPA must require the section 185 fees at all times in areas violating the ozone standard, and could not allow alternatives.
The South Coast's status "as having the most unsafe air in the country should actually make them the poster children for enforcing the Clean Air Act with the rigor Congress intended," the attorney says.
'Anti-Backsliding' Measures
The case posed a test for when "anti-backsliding" measures -- which are designed to prevent worsening of air quality when EPA relaxes a national ambient air quality standard (NAAQS) -- should apply when the agency tightens a NAAQS. The agency last updated its ozone standard in 2008, setting it at 75 parts per billion (ppb), stricter than the 1997 limit expressed as 84 ppb, and recently proposed to tighten the limit again to between 65 and 70 ppb.
NRDC said the anti-backsliding measures apply at all times and therefore the South Coast could not use Rule 317 because it would allow industry to avoid the penalties to pay for ozone-reducing air policies.
But the court disagreed, saying EPA reasonably interpreted both the air law and prior court rulings finding that anti-backsliding measures apply even when NAAQS are tightened, in order to allow the South Coast air district's alternative fees on the basis that they are "not less stringent" than the otherwise applicable fees on industry.
As such, EPA's interpretation is due deference under the Chevron legal doctrine, which holds that faced with statutory ambiguity, federal agencies' interpretation of the law is permissible so long as it is reasonable.
The court rejected NRDC's argument that the air law requires that section 185 fees must apply when NAAQS are tightened, siding with EPA, the air district and industry groups, which said that under legal precedent, alternatives to the fees are permissible under the air district's Rule 317.
"Because EPA reasonably interpreted CAA § 172(e) to give it authority to approve programs that are alternative to, but not less stringent than, § 185 fee programs, EPA's approval of Rule 317 as such an alternative program, after reasoned consideration and notice and comment procedure regarding Rule 317's stringency and approach to fee collecting, was proper," says the 9th Circuit's ruling. The circuit court's ruling was also a win for California's San Joaquin Valley air district, which implemented its own vehicle registration fee rule prior to the South Coast air district.
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State Laws Blocking EPA Wood Stove Rule Could Lead to Sanctions, Affect Permitting
Mar 23, 2015 | BNA Daily Environment Report
By Patrick Ambrosio
State legislation barring their environmental agencies from enforcing new federal air pollution standards for residential wood heaters could lead to sanctions on the states and jeopardize states' ability to administer permitting programs, observers told Bloomberg BNA.
However, the laws are unlikely to affect compliance because, practically, manufacturers still must comply with federal regulations, which the Environmental Protection Agency will retain the ability to enforce.
Two states have enacted laws to restrict the ability of their state environmental agencies to enforce EPA regulations on wood-burning appliances, and legislation is pending in two other states.
While state Legislatures have the ability to ban state environmental agencies from enforcing federal regulations, those states could risk “severe consequences,” John Walke, clean air director for the Natural Resources Defense Council, told Bloomberg BNA.
The EPA in February finalized the first changes to its residential wood heater new source performance standards since 1988 (RIN 2060-AP93), setting more stringent emissions standards for wood stoves and establishing new standards for hydronic heaters and other previously unregulated products (24 DEN A-20, 2/5/15).
Bills Pending in Virginia, Wisconsin
The Virginia General Assembly in February passed a measure (H.B. 2246) that would bar Virginia's State Air Pollution Control Board from enforcing any federal regulations of wood heaters adopted after May 1, 2014.
That legislation, which also would bar the air board from adopting regulations on wood heaters that emit fewer than 10 tons per year of fine particulate matter and 15 tons per year of coarse particulates, was sent to Gov. Terry McAuliffe (D) March 10 (39 DEN A-14, 2/27/15).
McAuliffe has until March 29 to act on the wood stove bill, according to the General Assembly's website.
If signed, Virginia would become the third state to have a law barring enforcement of EPA wood stove regulations.
Michigan's law was signed by Gov. Rick Snyder (R) in December 2014 and is set to go into effect March 31.
Missouri Approved Law in June
Missouri's wood stove law, signed in June 2014, restricts the Missouri Department of Natural Resources from regulating residential wood-burning appliances. It also bars state agencies from enforcing any new rules or regulations on existing wood-burning appliances.
Gena Terlizzi, a spokeswoman for the Missouri department, told Bloomberg BNA in an e-mail that under state law, the EPA regulates the operation, manufacture, sale and distribution of new wood-burning devices within Missouri.
The Wisconsin Legislature is considering legislation (S.B. 23, A.B. 25) that would bar state enforcement of any federal new source performance standard that is more stringent than the standards in effect on Dec. 31, 2014, which were the 1988 EPA standards. The Wisconsin State Assembly's Committee on Environment and Forestry held a Feb. 17 hearing on the legislation.
Possible Effects on Funding, Offsets
The laws could have unintended negative consequences on state environmental agencies, observers told Bloomberg BNA.
Bill Becker, executive director of the National Association of Clean Air Agencies, said that if a state includes a wood stove compliance program in a state implementation plan for meeting particulate matter standards but then is restricted by state law from ensuring compliance with federal emissions standards, the EPA could interpret that action as a failure to follow through on an approved plan.
The EPA's proposed implementation rule for the 2012 fine particulate matter standards identifies residential wood smoke as something many nonattainment areas will need to address in their plans to reduce fine particle pollution.
Missouri, the only state with a wood stove law and a nonattainment area for particulate matter, doesn't mention wood stove compliance in its state implementation plan, and the Missouri law includes a provision that bars the inclusion of wood-burning appliances in a state implementation plan without prior approval from the state Legislature.
Could be Factor for Other States
However, this could be a factor for other states with significant particulate pollution from wood burning if those states pursued wood stove legislation.
The Clean Air Act includes two automatic sanctions when states fail to implement approved state implementation plans.
One sanction is a restriction on federal highway funding to those states. That includes funding awarded under the Surface Transportation Program, the Highway Bridge Replacement and Rehabilitation Program and the National Highway System, with an exemption for certain projects that benefit safety, transit and air quality, according to the Federal Highway Administration's website.
The other sanction is a “two-to-one” emissions offset for major sources of pollution, which requires new and modified power plants, manufacturing facilities and other industrial projects to reduce emissions from other sources equal to twice their projected emissions.
Becker said it would be ironic for state Legislatures that seek to promote job creation to take action that would subject their state to the offset sanction, which he described as “something close to a ban on new construction.”
Effects on Permitting Authority Unclear
The NRDC's Walke told Bloomberg BNA a state law barring enforcement of a federal new source performance standard also could jeopardize the state's authority over Clean Air Act permitting for all sources.
When operating permits are delegated to state agencies from the federal government, the state attorney general is required to certify the state has “all necessary authority” to enforce all relevant federal law, Walke said.
The state wood stove laws could set up state environmental agencies to lose their authority to administer operating permit programs for power plants, manufacturers and other industries, he said.
The EPA told Bloomberg BNA it's “not immediately clear” whether a state's inability to enforce the revised wood-burning heater standards would have any effect on state operating permit programs.
EPA Regulations Exempt Some Source Categories
EPA regulations under Title V of the Clean Air Act exempt certain source categories from the obligation to obtain an operating permit. Sources that would be required to obtain an operating permit solely because they manufacture or operate wood heaters subject to the federal emissions standards are one such source category that is exempted from the permitting requirements.
“Therefore, the impact such a state law would have on the state's operating permit program is not clear,” the EPA said.
For the wood-burning appliance industry, state laws are “really not relevant” because the products still must meet federal standards, even if state agencies are barred from enforcing them, Rachel Feinstein, manager of government affairs at the Hearth, Patio and Barbecue Association, told Bloomberg BNA. The association represents manufacturers and distributors of wood and pellet stoves, among other products.
EPA Would Have Enforcement Authority
The EPA told Bloomberg BNA that it will continue to have enforcement authority for the wood heater standards, even if state agencies are prohibited from enforcement.
Feinstein said many manufacturers already are making products that comply with the new EPA standards.
It's easier for manufacturers to comply with a single federal standard, rather than complying with different standards in the states that have laws to bar enforcement of the federal standard, Feinstein said.
“It would be a whole different product to make for these states,” she said.
Becker said state laws barring enforcement of the standards could provide an opening for manufacturers to sell existing stocks of non-compliant stoves. Becker questioned whether manufacturers would risk selling off their stockpiles of non-compliant stoves in states with the wood stove laws, knowing that the state agency is restricted from enforcing the standards.
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(ACC Mentioned) Reauthorization Bill Would Give Regulator New Powers, More Scrutiny
Mar 20, 2015 | E&E Daily News
By Sean Reilly
The Surface Transportation Board would get expanded power to launch investigations into freight rail industry problems but face timelines for conducting rate reviews, under a bipartisan reauthorization bill introduced yesterday by leaders of the Senate Commerce, Science and Transportation Committee.
Almost 20 years after the board's creation, "it's time for Congress to address some inefficiencies in the agency," the committee's chairman, Sen. John Thune (R-S.D.), said in a news release. "Oversight efforts have identified causes of wasteful and unnecessary delays in adjudicating cases that harm rail shippers, freight operators and ultimately consumers who pay higher costs." Co-sponsoring the five-year reauthorization, which is set for markup Wednesday, is the committee's ranking Democrat, Sen. Bill Nelson of Florida.
The board, the descendant of the Interstate Commerce Commission, is primarily charged with adjudicating disputes between railroads and shippers.
S. 808, the newly introduced bill, is "substantially the same" as S. 2777, legislation approved by the committee last September, a Thune spokesman said yesterday in an email. It would also expand the board's leadership from three members to five, require the agency to report to Congress every three months on each "unfinished regulatory proceeding," and expand voluntary arbitration procedures to allow for quicker settlements of disputes between freight railroads and shippers.
As the freight rail industry has become increasingly consolidated among a handful of large carriers, shippers' organizations have voiced frustration with what they describe as a lack of competition and the board's slow pace in handling complaints.
The railroad industry has undergone "dramatic changes" since the board's creation, Cal Dooley, president and CEO of the American Chemistry Council, said in a news release in support of the new measure.
"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 Dooley, a former Democratic congressman from California.
The Association of American Railroads, which represents large freight carriers, had raised objections to "restrictive regulations" in last year's legislation. In a statement yesterday, however, the group thanked the committee for working to address the concerns, adding that the bill "as introduced should not be opposed."
"The balanced economic regulation of the freight rail industry is vital to ensuring that freight railroads can provide the reliable, safe and efficient rail system our customers rely on and expect," the group said.
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Focus Sharpens on Criminal Enforcement, Pipeline Construction for PHMSA Office
Mar 23, 2015 | BNA Daily Environment Report
By Rachel Leven
The nation's pipeline safety office is increasing its enforcement focus on pipeline construction, a senior agency official said March 20.
The Pipeline and Hazardous Materials Safety Administration's pipeline office is concentrating on gas pipelines, Jim Pates, the assistant chief counsel for the pipeline legal division in PHMSA's Office of Chief Counsel, said. This bolstered focus on gas pipeline construction compliance comes during what many are calling a U.S. energy renaissance.
“A lot of companies don't realize that PHMSA has pre-construction and construction authorities,” Sara Peters, a senior associate for King & Spalding LLP said, encouraging companies to be proactive. “It's not just FERC [the Federal Energy Regulatory Commission].”
These comments were made on a King & Spalding webcast, “Energy Transportation: Anticipated Developments in Rail and Pipeline Safety.”
There are additional efforts at PHMSA to work with “sister agencies,” such as the Environmental Protection Agency and the Justice Department, to pursue criminal cases where there are “willful violations,” Pates said.
Pates highlighted the “strategic approach” that the office is taking to address pipeline enforcement issues. Namely, the office is identifying the “highest-risk operators,” where they operate, what their risks are and, if they have been the subject of enforcement before, what actions have or haven't brought the company into compliance, he said.
However, Pates emphasized that nothing works better to ensure pipeline safety than “to inculcate a true safety culture,” (226 DEN A-11, 11/24/14).
“I think many, many companies do that, but some just don't get it,” Pates said.
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