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Industry and Association News

1. (ACC Mentioned) Chemical Makers Will Boost R&D But Slice Capital Spending In 2015

   Apr 13, 2015 | Chemical and Engineering News

   By Marc S. Reisch
   
   
   Some of the chemical industry’s biggest companies plan to increase research investment this year, but they are holding back on capital spending.
2. (ACC Mentioned) US Chemical Council Honors Top Global Health, Safety Initiatives

   Apr 14, 2015 | Hydrocarbon Processing

   The American Chemistry Council (ACC) today recognized chemical industry leaders for high accomplishments in chemical management, including environmental, health, safety and security (EHS&S) performance.

Chemical Management News

3. (ACC Blog) One Product Can Make a BIG difference in California

   Apr 14, 2015 | American Chemistry Matters

   By Justin Koscher
   
   
   Last week, I had the chance to talk to attendees at the Green California Summit about the state’s energy goals and how the state can achieve them. http://blog.americanchemistry.com/2015/04/one-product-can-make-a-big-difference-in-california/#sthash.3pOMpAgn.dpuf
4. EPA: House Bill Could Delay Review of Some Chemicals 'Indefinitely'

   Apr 14, 2015 | The Hill - Regulation

   By Lydia Wheeler
   
   
   The Environmental Protection Agency (EPA) is concerned that a House proposal to reform the nation’s toxic chemical laws could “delay evaluations for some of the most dangerous chemicals indefinitely,” a top official said Tuesday.
5. How American Industry Skips Some Chemical Safety Checks

   Apr 14, 2015 | Environmental Working Group

   By David Andrews
   
   
   American industry often avoids the federal government’s chemical safety checks in an unexpected way, by relying on chemicals “grandfathered” by the 1976 Toxic Substances Control Act, according to a new analysis by the Environmental Working Group.

Chemical Security News - There are no clips to report at this time.

Energy and Environment News

6. 2015 Promises Flood of New LNG After Year of 'Relative Stagnation'

   Apr 14, 2015 | E&E - Energywire

   By Jenny Mandel
   
   
   World natural gas markets continued to evolve last year, with an uptick in sales through spot markets and under short-term contracts and a fall in long-term contracts, according to an industry snapshot that suggests changes will accelerate in the coming years as U.S. LNG enters the market.
7. EPA, Dems Assail Bill Targeting Climate Rule

   Apr 14, 2015 | The Hill - E2 Wire

   By Timothy Cama
   
   
   Democrats and an Obama administration official lambasted House Republicans Tuesday for a bill that they say could delay carbon limits for power plants for years.
8. Whitfield Blasts EPA's Air Chief at Hearing on 'Just Say No' Bill

   Apr 14, 2015 | E&E - Greenwire

   By Jean Chemnick
   
   
   The House sponsor of a bill to declaw U.S. EPA's Clean Power Plan today told the agency's air chief that she should not be surprised that Congress is mulling an assault on the unprecedented rule.
9. Western States Studying Regional Clean Power Plan Options, Despite Reservations

   Apr 14, 2015 | E&E - Climatewire

   By Emily Holden
   
   
   Western states are deep in discussions about how they can coordinate to reduce greenhouse gas emissions under U.S. EPA's Clean Power Plan, despite their individual qualms with the proposal.
10. Electric Cooperative CEOs Meet With McCarthy on Power Plan Concerns

    Apr 14, 2015 | E&E - TV

    As pressure grows for U.S. EPA to change its draft Clean Power Plan proposal, a group of electric cooperative CEOs met with EPA Administrator Gina McCarthy this week to discuss their concerns with the current plan.
11. Texas Makes its Case Against a Tighter Ozone Standard

    Apr 14, 2015 | E&E - Greenwire

    By Amanda Peterka
    
    
    Texas air regulators last week laid out their scientific and economic case against a tighter ozone standard that the Obama administration says is necessary to protect public health.
12. EPA's Critics Seek Broader Scrutiny Of 'Co-Benefits' Used To Justify Rules

    Apr 14, 2015 | InsideEPA

    By Stuart Parker
    
    
    Federal courts should more broadly scrutinize EPA's use of "co-benefit" reductions of pollutants not directly covered by an air rule as a justification for the regulation, says one prominent industry attorney, who argues that an early vehicle for such scrutiny could be the Supreme Court's upcoming ruling on EPA's utility air toxics rule.
13. House Panel Releases $35 Billion Spending Bill for Energy, Water

    Apr 14, 2015 | The Hill - Policy

    By Rebecca Shabad
    
    
    The House Appropriations Committee on Tuesday released a $35.4 billion fiscal 2016 energy and water development spending bill, a funding level that's $633 million below President Obama’s budget request.
14. House Unveils Bill Attacking Obama Energy, Water Priorities

    Apr 14, 2015 | E&E - Greenwire

    By Daniel Bush, Annie Snider and Manuel Quiñones
    
    
    House Republicans today released a spending bill for energy and water programs that would block the Obama administration's controversial water rule for a year while boosting funding for fossil energy programs and a long-stalled effort to reopen the Yucca Mountain nuclear waste repository site.
15. States, Industries At Odds Over Scope Of Final EPA CWA 'Standards' Rule

    Apr 14, 2015 | InsideEPA

    By David LaRoss
    
    
    States and major industry groups are at odds over how broad EPA should make its pending final rule updating Clean Water Act (CWA) requirements for states' water quality standards (WQS), with states seeking increased flexibility in the rule while industry groups are opposing such discretion and urging the agency to scale back the policy.

Transportation News

16. Feinberg: Crude-By-Rail Rules Expected 'In the Coming Weeks'

    Apr 14, 2015 | PoliticoPro

    By Jennifer Scholtes
    
    
    The long-awaited regulations for railcars that transport crude oil are expected to be finished “in the coming weeks,” acting Federal Railroad Administration chief Sarah Feinberg told House lawmakers today.
17. U.S. Develops Oil-Train Disaster Plan –Energy Journal

    Apr 14, 2015 | The Wall Street Journal

    By Christopher Harder
    
    
    The U.S. Federal Emergency Management Agency is mapping out how to deal with an urban oil-train accident as part of an exercise to help firefighters and emergency workers prepare for the kind of crude-by-rail accident that until now has occurred mostly in rural locations, Russell Gold reports.
18. GOP Rep. Criticizes Obama Administration for Transport Vacancies

    Apr 14, 2015 | The Hill - Transportation

    By Keith Laing
    
    
    The chairman of the House committee that handles rail and pipeline issues criticized the Obama administration for having vacancies atop several transportation regulatory agencies.

Industry and Association News

1. (ACC Mentioned) Chemical Makers Will Boost R&D But Slice Capital Spending In 2015

   Apr 13, 2015 | Chemical and Engineering News

   By Marc S. Reisch

   Some of the chemical industry’s biggest companies plan to increase research investment this year, but they are holding back on capital spending.

   The strong U.S. dollar, a weak economy in Europe, and slower growth in China are complicating forward-looking spending plans for many chemical companies this year. Individually, plans vary widely, but as a group, firms are taking a cautious approach to future-oriented spending. In some cases they are looking to university research alliances to get more bang for the buck.

   For an interactive look at Capital Expenditures and Research Costs visithttp://cenm.ag/spending2015.

   For a PDF of the charts in this article click here.

   Eight U.S. and European companies tell C&EN they will, as a group, lift research spending 1.3% in 2015 to a combined $3.6 billion.

   Twenty-two U.S. and European firms say they will decrease spending on new plants and equipment by 4.4% to $22.9 billion.

   The capital spending outlook is colored by BASF, which because of its size has a strong influence on industry statistics. It plans to decrease its 2015 budget by nearly $1.5 billion because it is pulling back on its oil and gas investments. Without BASF, the group plans a 2.4% increase in capital spending this year.

   Although the immediate outlook for future-oriented spending may be cloudy, industry leaders acknowledge its importance to advancing their businesses.

   At a press conference in Germany last month to showcase Evonik Industries’ research engine, Chairman Klaus Engel said his firm will invest about $5 billion in R&D over the next decade. “Innovations open up new business areas and strengthen our leading market and technology positions,” he said.

   To fulfill Engel’s promise, Evonik is trying to speed up the delivery of new products to customers, Ulrich Küsthardt, who became chief innovation officer earlier this year, tells C&EN. “Product life cycles are shorter” than they were a decade ago, he says.

   With an R&D budget this year of about $550 million, Evonik intends to beat the competition in part by further internationalizing the core research it now conducts mostly in Germany. For example, to focus on medical devices, the company recently opened a project house—intended to gather experts from across the company for a two- or three-year project—in Birmingham, Ala.
   

   
   Click on table above to view an interactive version.

   “We will ask ourselves where the best location is to do research, and it won’t always be in Germany,” Küsthardt says. Interestingly, that research won’t focus on basic science. It will instead seek to commercialize new ideas from the many university researchers Evonik supports.

   It wasn’t too many years ago, Küsthardt acknowledges, that working with universities could be difficult because of disputes over intellectual property ownership. But “precontract licenses and more professional practices have smoothed the way with universities,” he says.

   Now Evonik can depend on university researchers to do what they do best and allow the company to do the same. “Academicians are much better at focusing on invention,” Küsthardt says. “They are good research partners and bring interesting ideas. We focus on innovation.”[+]Enlarge CAPITAL NOTIONSPlant and equipment spending will slip after increasing steadily over four years and slide to 6.3% of sales. NOTE: Values are for 21 chemical firms listed in the table below. Excludes Evonik because 10 years of data are not available. SOURCES: C&EN surveys and estimates

   Other chemical firms have a similar take on the interface between innovation and academic research. “Innovation should not be fortuitous. It should create products that should be forseen by the market and have a predictable value,” says Stephen G. Crawford, chief technology officer at Eastman Chemical, which plans to spend about $234 million on R&D this year.

   Crawford acknowledges that Eastman’s scientists could develop new molecular approaches on their own. But “it’s not efficient to build all organic capabilities ourselves,” he says. “So we look at academic research as a complement to our own development ­efforts.”

   For Crawford, research at Eastman involves meeting the needs of customers with a blend of internal resources and external academic alliances. “It’s like a large orchestra,” he says. “Who plays depends on each unique project.”

   When Eastman brings in academic researchers on important projects, one of the relationships it draws on is a collaboration with scientists at North Carolina State University in Raleigh. Three years ago, the firm set up the Eastman Innovation Center on the school’s Centennial Campus.
   

   
   Click on table above to view an interactive version.

   A team of six Eastman scientists works out of the center alongside researchers at the school, says Stewart Witzeman, who is the center’s director. The center anchors a $10 million effort over six years to fund projects on matters ranging from fundamental chemistry to applied materials research.

   Eastman and the school negotiated a schedule of costs and intellectual property arrangements to avoid any arguments over future discoveries. The arrangement recognizes that an academic advance is viable only after Eastman puts a lot of development effort behind it, Witzeman says. A new commercial chemical product can’t be compared with a new pharmaceutical, he points out.

   So far, eight patents have been filed as a result of work Eastman funded. In addition, several new products aided by NC State researchers have been moving through the firm’s development pipeline. Eastman plans to pen similar arrangements with other universities in the coming year, Witzeman says.

   Eastman and Evonik spent 2.3% and 3.2% of sales, respectively, on R&D in 2014, up from 2.1% and 3.1% a year earlier, reflecting an overall upward trend in C&EN’s survey of eight firms. The survey found the group—Arkema, Cytec Industries,DuPont, Eastman, Evonik, H.B. Fuller, W.R. Grace, and Solvay—spent 4.0% of sales on R&D in 2014, up from 3.9% a year earlier.

   Over the past decade, R&D spending for the group—excluding Evonik, for which 10 years of data are not available—was up about 20%. But factor in inflation and spending hasn’t increased at all, suggesting that at least for this group, the innovation engine is just maintaining highway speed.

   For years the mantra of corporate leaders has been that R&D managers can’t blithely spend more each year. Instead, they need to get more done per dollar of investment.

   As Eastman and Evonik executives describe them, academic collaborations are part of the answer. Through such arrangements, chemical firms can both tap university talent and control costs in an uncertain global economy.  Predicting Future-Oriented Spending, Never Easy, Is Getting Harder

   Many people believe that numbers don’t lie. Indeed, they do not. But the devil in getting those numbers in sufficient quality and quantity to tell an accurate story.

   When it comes to assembling the data for its annual R&D and capital spending story, C&EN relies on both official company reports and predictions relayed by executives via e-mail or phone interviews. The goal of the exercise is to get a finger on the pulse of the chemical industry’s spending expectations for the year ahead.

   If companies budget more for research projects and increase spending on new plants and equipment, then the future looks full of opportunity. If they don’t plan increases, then the future looks a bit less promising.

   However, as the chemical industry has grown and matured in the past 25 years, R&D doesn’t seem to hold the importance it once did. In 1988, when this reporter wrote his first future-oriented spending story and surveyed firms for their research spending plans, 15 of them provided a number. For this year’s story, only eight companies stepped up to the challenge.

   In contrast, capital spending estimates have become easier to gather. For this year’s story, 22 firms provided an estimate, compared with 14 in 1988. Unlike R&D spending estimates, capital spending estimates are now often found in company annual reports.

   “There are always issues” in gathering data for a study that intends to forecast research spending, says Martin Grueber, a research leader at Battelle Memorial Institute, a nonprofit industrial R&D organization. Grueber is coauthor of aperiodic R&D and funding forecast sponsored by Battelle and R&D Magazine.

   Corporate attitudes about disclosing R&D spending figures vary by industry, Grueber says. Companies in the automotive industry hardly ever talk about research spending. In contrast, for the big research-oriented pharmaceutical firms, “the company is their R&D pipeline,” and they more willingly talk about their spending outlook, he says.

   Chemical companies, it would seem, are evolving to be more like the automakers.

   When chemical firms spend on plants and equipment they are building market positions that promise profits. R&D spending doesn’t offer the same certainty. And in today’s world, where activist investors dominate the discussion about how chemical firms spend their money and how much of it should be returned to shareholders, firms may consider it best not to showcase their research budgets.

   Back in 1988, Myron T. Foveaux, an economist with the Chemical Manufacturers Association, the major U.S. chemical industry trade organization, was concerned that R&D spending increases appeared to be falling below the average annual rate of 12.7% for the decade between 1977 and 1987. The 1988 increase C&EN predicted was 6%. The average annual rate of increase between 2005 and 2015 is about 2%.

   Foveaux, who worked for the group today known as the American Chemistry Council, noted that “spending for R&D for new products traditionally has been the engine of growth for the chemical industry.”

   But investors today don’t seem to share Foveaux’s view. They want quick returns on R&D investments. “Sometimes you get those returns and sometimes you don’t,” Battelle’s Grueber notes.

   “Many investors don’t have a good grasp of how hard R&D is,” Grueber says. “If you can get away without saying something, it raises fewer questions,” he suggests.

   But while the paucity of information may safeguard plans held close to the vest, it also stymies attempts to gauge how strongly the industry’s heart is beating.

   With fewer firms willing to disclose R&D spending plans, C&EN will find it increasingly difficult to offer a prognosis on the health of the chemical industry’s wealth creation engine in future installments of this survey.[+]Enlarge RESEARCH IN MOTIONR&D spending will remain steady but slip as a percent of sales. NOTE: For seven chemical firms listed in the table above. Excludes Evonik because 10 years of data are not available. SOURCES: C&EN surveys and estimates, White House Office of Management & Budget

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2. (ACC Mentioned) US Chemical Council Honors Top Global Health, Safety Initiatives

   Apr 14, 2015 | Hydrocarbon Processing

   The American Chemistry Council (ACC) today recognized chemical industry leaders for high accomplishments in chemical management, including environmental, health, safety and security (EHS&S) performance.
   The ACC gave the awards at the 2015 Responsible Care Conference & Expo in Miami, with winners qualifying based on exemplary performance. The winners were selected by a committee made up of internal and external experts.
   “Responsible Care is our industry’s commitment to continuous improvement in all aspects of our operations—from employee safety to facility security to protection of the health of the communities in which we operate and the environment as a whole,” said Paul Carrico, chair of ACC’s board committee on Responsible Care and CEO of Axiall. “The companies we are recognizing today represent the best of the best and are leaders to their industry peers.”
   The following awards were presented at the 2015 Responsible Care Conference & Expo:
   The Responsible Care Employee of the Year Award recognized one member for outstanding leadership inResponsible Care this year. This year’s winner was Jeff Wooster, an internationally recognized value chainsustainability expert at Dow. Wooster is responsible for market-focused sustainable packaging initiatives within Dow’s Performance Plastics business and has led education initiatives on limiting food waste, benefits of flexible packaging and recycling waste for energy recovery. He has published numerous technical papers, spoken at national and international sustainability conferences and engages on important topics in social media.
   The Responsible Care Partner Award recognizes the superb performance and safety record of companies involved in the distribution, transportation, storage, use, treatment-disposal and/or sales and marketing of chemicals. This year’s winners were: Miller Transporters, based in Jackson, Mississippi; WTS in Lewiston, New York, and Union Tank Car Company in Chicago, Illinois.
   The Responsible Care New Company of the Year Award recognizes member companies who have joined during the most recent certification cycle and fulfilled their Responsible Care obligations ahead of schedule. That award went to Sentinel Transportation, based in Wilmington, Delaware.
   The Product Safety Award is new this year. The award recognizes those member companies who have excelled at driving continuous improvement in chemical product safety, according to the ACC. This year’s winners were AkzoNobel, based in Amsterdam, Netherlands; Dow, in Midland, Michigan; andLyondellBasell, in Houston.

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Chemical Management News

3. (ACC Blog) One Product Can Make a BIG difference in California

   Apr 14, 2015 | American Chemistry Matters

   By Justin Koscher

   Last week, I had the chance to talk to attendees at the Green California Summit about the state’s energy goals and how the state can achieve them. Obviously, this is a big task. But, Californians – from policy-makers to regulators to citizens concerned about the future – want to do their part.

   A pattern quickly emerged. People want to be a part of reducing the amount of energy wasted in California but that they didn’t think there was anything that one person could do to make an impact.

   Lucky, there are actions many of us can take – no matter where we live – to lower our energy use and costs.

   For example, Californians who have installed spray polyurethane foam (SPF) in their homes have discovered that one small change has big effects.

   They know that SPF can substantially reduce energy needs and costs for both residential and commercial buildings. Many new homes and offices throughout the state can lower their energy use and costs by insulating and air sealing with SPF insulation.

   The facts below show exactly the effects that SPF can have in California – for the state’s homeowners and the state’s energy efficiency goals.

   California specific spray polyurethane foam facts:Electricity prices in California are among the top 10 highest in the nation.Heating and cooling costs account for 45% of the average energy bill for California households.SPF can result in $9,000 savings per year on single-family household heating and cooling costs.For homeowners:  In 2013, an estimated 10% of the 36,000 single-family homes built in California used SPF. The resulting energy savings can add up to $3.3 million each year.For building owners:  SPF used on a one-story building roof in California could save the building owner more than $11,000 per year.For the environment: These energy savings mean homes insulated with SPF could reduce 800,000 metric tons of CO2 emissions.  This is the equivalent of removing 2,700 cars from California’s roads each year.

   Savings vary. Find out why in the seller’s fact sheet on R-values. Higher R-values mean greater insulating power.

   http://blog.americanchemistry.com/2015/04/one-product-can-make-a-big-difference-in-california/#sthash.3pOMpAgn.dpuf
   

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4. EPA: House Bill Could Delay Review of Some Chemicals 'Indefinitely'

   Apr 14, 2015 | The Hill - Regulation

   By Lydia Wheeler

   The Environmental Protection Agency (EPA) is concerned that a House proposal to reform the nation’s toxic chemical laws could “delay evaluations for some of the most dangerous chemicals indefinitely,” a top official said Tuesday.

   Jim Jones, the assistant administrator of EPA’s Office of Chemical Safety and Pollution Prevention, said the draft of the bill introduced by Rep. John Shimkus (R-Ill.) allows industry groups to request chemical risk assessments, immediately starting a six-month clock for EPA to complete a review.

   “We’re concerned with the majority of risk evaluation resources going to completing requests from industry,” Jones said during a hearing of the House Energy and Commerce Subcommittee on Environment and the Economy.

   Though industry would be required to pay for their own assessments, critics of the House bill argue that industry could force EPA to assess chemicals that aren’t of a safety risk, distracting the agency from reviewing more dangerous chemicals.

   Unlike the chemical reform bill Sens. Barbara Boxer (D-Calif.) and Edward Markey (D-Mass.) introduced in the Senate, the House bill does not specify which chemicals EPA is expected to review.

   The bill’s co-sponsor, Rep. Paul Tonko (D-N.Y.), said with a new Congress, lawmakers have a new opportunity to address the shortcomings of the Toxic Substances Control Act (TSCA), which hasn't been updated in decades.

   “The discussion draft makes for a great start in completing our goal of drafting a new law,” he said.

   To date, Jones said the EPA has identified 80 chemicals that need to be reviewed. Assessments have been completed for five of those chemicals, with anoter 20 under review now.

   In response to a question from Shimkus, who serves as subcommittee chair, Jones said the agency would need twice the resources it has now to review 20 chemicals a year. EPA is assessing anywhere from three to eight chemicals a year now, he said.

   Though Jones said EPA has not taken a position on the House bill, the agency is concerned that the language of the TSCA Modernization Act creates an additional barrier for EPA in reviewing chemicals.

   The bill would require the agency to make a finding that exposure to a chemical poses a risk to human health or the environment before it can begin an assessing that chemical, but Jones said the whole point of an assessment is to determine the risk.

   The language of the bill, he said, also has EPA questioning whether it will be required to consider costs when regulating a chemical.

   “It’s not clear if this discussion draft is maintaining existing cost benefit balancing or if it’s attempting to exclude costs completely,” Jones said.

   Shimkus said the committee will revise the bill and issue a new draft before the mark-up, which is scheduled for May 14.

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5. How American Industry Skips Some Chemical Safety Checks

   Apr 14, 2015 | Environmental Working Group

   By David Andrews

   American industry often avoids the federal government’s chemical safety checks in an unexpected way, by relying on chemicals “grandfathered” by the 1976 Toxic Substances Control Act, according to a new analysis by the Environmental Working Group.

   As of 2011, approximately 89 percent of the 8,000 chemicals manufactured in or imported to the U.S. in quantities of 25,000 pounds or more were discovered or invented before July 1979, when regulations issued under the 1976 act took hold. The act and regulations grandfathered a total of 62,000 “old” chemicals: manufacturers who use them can largely avoid review and minimize the likelihood of additional safety testing.

   In the early 1970s, when the TSCA act was being drafted, its Congressional authors might have assumed that, something like troop deployments to a war zone, a large number of grandfathered substances would rotate out and “new” chemicals would rotate in. They might also have assumed that the U.S. Environmental Protection Agency would eventually assess the safety of the common chemicals that had staying power on the market, so that eventually, the EPA would know which grandfathered chemicals were unsafe for consumer products.

   That hasn’t happened. 

   The EPA has failed to review the majority of the chemicals that have been in use continually since the late 1970s. The list of chemicals in the 25,000 pounds-plus category has changed by 50 percent over the years, but manufacturers have tended to replace one grandfathered chemical with another.

   The bottom line: American industry’s continued reliance on “old” chemicals means that Americans are being exposed to thousands of substances that have never been put through the rigors of modern scientific assessment.

   How is it sound public policy to use chemicals untested for decades?      

   In some situations, it is understandable that manufacturers would continue to choose older, cheaper substances for their formulations. Many aspects of society have not changed much in the past three decades. Most cars are still powered by gasoline, a grandfathered substances produced at 1 billion pounds-plus annually.  Paper is still predominantly manufactured by processing wood pulp with chemicals with methods that haven’t changed since the 19th century. Other grandfathered, significant-volume chemicals  are basic commodities such as ethanol, propane, ammonia and sodium hydroxide, all integral to a wide variety of industrial uses.  Changing them out in favor of newer substances might not be possible or might require retooling, without improving efficiencies that would justify the additional costs.

   Between 1986 and 2011, half of the chemicals produced or imported in the 25,000-pound-plus list were replaced.  At first glance, this relatively rapid change in the marketplace seemed to indicate that the chemical industry was rapidly innovating and developing new chemicals. But a closer analysis shows that the majority of chemicals replacing “old” substances that fell off the list were also grandfathered. 

   Some background: the federal Toxic Substances Control Act, enacted on October 11, 1976, in the last days of the Ford administration, is the last major piece of legislation to attempt to control potential dangerous toxic chemicals in consumer products.  This law, known in Washington as TSCA, pronounced “Tosca,” like the opera, grandfathered about 62,000 substances that companies disclosed to the EPA up until July 1979, the deadline for qualifying for this special status.[1]

   Science has made great advances since 1979 – the year the top pop hit was My Sharona by The Knack and the biggest box office draw was Kramer vs. Kramer. Today, researchers know a lot more about chemicals that may cause subtle damage to humans and other organisms. The pool of grandfathered substances included a number of chemicals that researchers have discovered to be dangerous to human health. These include the synthetics bisphenol-A and phthalates. Some members of a chemical family known as per- and poly-fluorinated chemicals, often shortened to PFCs, were phased out of production after polluting the globe and being linked to cancer and high cholesterol. They are being replaced in nearly all cases with other members of the PFC family, some of which were grandfathered and others invented after the 1979 cut-off date.

   In theory, TSCA permitted the EPA to take a new look at grandfathered substances. But in practice, the statute hobbled effective action by requiring regulators to go through a cumbersome, expensive, multi-year rule-making process even to require testing of these old chemicals.

   As a result, since 1979, the EPA has managed to require safety testing of only about 200 grandfathered chemicals.  Some EPA reviews have dragged on for more than a decade. 

   The agency began a reassessment of formaldehyde in 1998 and still hasn’t completed it.

   Since TSCA was passed, the agency has used its authority to attempt to ban or restrict only five grandfathered chemicals on account of their danger to human health and the environment: asbestos, polychlorinated biphenyls, chlorofluorocarbons, one member of the dioxin family and hexavalent chromium. The asbestos ban was thrown out by the courts. In the other four cases, EPA achieved some restrictions under TSCA or other environmental laws but no blanket bans.

   By contrast, all “new” chemicals, meaning, those invented and registered with EPA after July 1979, were automatically subjected to increased scrutiny. The EPA process of reviewing these chemicals has remained shrouded in secrecy. The agency touts the program as effective. Is it better than nothing? Most likely, but that’s hard to say. According to a 2010 report by the EPA inspector general, five percent of new chemical applications were withdrawn after the EPA’s review. The agency regulated or restricted another eight percent of the “new” chemicals, suggesting that they presented some health hazards.

   Our analysis of the chemical marketplace

    

   How we conducted this analysis

   Using data compiled by EPA through the Chemical Data Reporting rule and the Inventory Update Reporting rule, EWG graphed the number of chemicals produced or imported in amounts greater than 25,000 pounds per year per factory site.

   The regulations governing reporting have changed over the years, but the overall number of chemicals on the marketplace has remained relatively stable. In 1986, nearly 8,500 chemicals were being produced or imported at the 25,000-pound level. About the same number fit that description today.

   But within the 25,000+ production category, the list has shifted from year to year. Fewer than half of the chemicals on the 1986 list remained on the 2011 list. The 4,000 outgoing chemicals had been replaced by 4,000 others chemicals. But 75 percent of those incoming chemicals were grandfathered by the TSCA law. 

   Innovation does not always require the invention of new chemicals. It can also mean finding new uses for old chemicals, such as making biodegradable plastics from plant-based materials. Our analysis shows that using grandfathered chemicals requires less testing and EPA review than innovative new chemicals.

   Chemical makers’ trade secrets claims undermine independent inquiry

   Chemical companies claim confidentiality for nearly two-thirds of all new chemicals added to the EPA’s TSCA inventory since 1979.

   In 2011, the EPA reported that manufacturers had asserted “confidential business information” claims for 495 chemicals over the preceding year. In other words, in a single year, chemical makers claimed that they could not publish the actual names and structures of 495 new products because they were trade secrets.

   The EPA would not tell the public if these were grandfathered chemicals or  “new,” meaning added to the TSCA inventory after July 1979. More detailed information on these and other so-called “secret chemicals” could slightly change the numbers shown in the chart.

   The implications of chemical secrecy are serious. As EWG said in a 2009 report,“Off The Books:  Industry’s Secret Chemicals,” impartial and independent researchers cannot conduct analyses of substances whose identities, components and other facts are shrouded in secrecy. In an emergency such as a fire, train derailment or truck wreck, first responders may have limited or no quick access to information about the substances to which they and the public are being exposed.

   Now that the Congress is debating a long-overdue overhaul of TSCA, it must keep secrecy claims to a minimum by requiring chemical makers to supply the EPA with hard, relevant, verifiable facts and by giving EPA funding and authority sufficient to investigate and challenge these company claims.

    

   [1] When the EPA implemented the TSCA law, the agency required industry to register chemicals already on the market as of as July 1979.  The comprehensiveinventory of these substances was published in 1979 and updated in 1982.  As of 1982, it consisted of 62,000 chemicals, according to the EPA.

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Energy and Environment News

6. 2015 Promises Flood of New LNG After Year of 'Relative Stagnation'

   Apr 14, 2015 | E&E - Energywire

   By Jenny Mandel

   World natural gas markets continued to evolve last year, with an uptick in sales through spot markets and under short-term contracts and a fall in long-term contracts, according to an industry snapshot that suggests changes will accelerate in the coming years as U.S. LNG enters the market.

   "Traditional procurement models are changing as new players with different business models emerge, new procurement alliances are being formed and new commercial offerings are being structured, all mainly in the pursuit of enhanced flexibility both in terms of destination and pricing," wrote the International Group of Liquefied Natural Gas Importers in a year-end assessment.

   The group noted that 70 million tons, or 29 percent of total LNG trade, took place on a spot or short-term basis in 2014, reflecting slow and steady growth in that market over the past several years.

   The industry snapshot made little mention of the U.S. contribution to that evolution, but observers credit much of the change in business models to U.S. projects still in the pipeline that have used contract flexibility as a means to attract buyers and limit project risk. The fact that U.S. LNG imports have all but dropped away, leaving unexpected volumes available on world markets for short-term trading, also plays a part.

   Describing a year in which oil prices plunged and natural gas prices fell by half between March and October, the group pointed to an industrywide drop-off that "will inevitably slow down or defer development of expensive supply projects."

   The total world trade in LNG rose 1 percent last year to 239 million tons, a figure that the group described as "relative stagnation" compared with high expectations for the sector.

   Just one liquefaction plant came online last year -- in Papua New Guinea -- while one new production "train" added to the existing capacity of an Algerian plant. An Australian project, Queensland Curtis LNG, also came close to shipping its first cargo last year but missed that deadline.

   The coming year should see significant new export volumes crossing the seas, with 25 million to 30 million metric tons per year of capacity expected from four Australian projects, as well as the first cargoes likely from Cheniere Energy Inc.'s project in Sabine Pass, La.

   Looking forward, the group said prospects for world LNG demand remain strong, with new import markets emerging in Southeast Asia. China remains something of a wild card, they said, with potential pipeline deliveries of natural gas looming large among several uncertainties.

   In a footnote to those traditional factors for the global LNG trade, the industry group noted that new rules on shipping emissions that went into effect in January in the Atlantic basin will stimulate development in the far newer small-scale LNG industry.

   Natural gas is just one way that ships can meet air pollution requirements under those rules, but experts say there is much work to be done by regulators, fuel vendors and others before LNG can be routinely used for marine fueling (EnergyWire, March 6).

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7. EPA, Dems Assail Bill Targeting Climate Rule

   Apr 14, 2015 | The Hill - E2 Wire

   By Timothy Cama

   Democrats and an Obama administration official lambasted House Republicans Tuesday for a bill that they say could delay carbon limits for power plants for years.

   The bill’s opponents argued at hearing that the bill is irresponsible and would significantly weaken the Environmental Protection Agency’s (EPA) climate rule.

   “What this bill will actually do is unnecessarily stall and delay implementation of the Clean Power Plan and also it will spur countless and in most cases frivolous and meritless challenges to the plan in order to extend the ultimate compliance plan,” said Rep. Bobby Rush (D-Ill.), top Democrat on the House Energy and Commerce Committee’s subcommittee with authority over the regulations.

   “It will effectively give governors veto power the federal requirements in the Clean Power Plan if they decide that their states don’t want to do this, don’t want to cooperate, don’t want to comply with the plan,” he said.

   Rep. Frank Pallone (D-N.J.) called the bill “misguided and unfortunate.”

   He said lawmakers “should view this bill for what it really is: an amendment to the Clean Air Act, which would overturn the principle of cooperative federalism that has been in place for more than 40 years.”

   That cooperation is “essential to ensure all Americans are protected from environmental harm, even if the actions of their home state fall short,” he said.

   Rep. Ed Whitfield (R-Ky.) sponsored the bill known as the Ratepayer Protection Act, and Tuesday’s hearing was to examine a draft of the legislation.

   He used the hearing to explain the harms of the EPA rule and argue that his bill is essential to protect states from it. The rule, which will be finalized this summer gives each state a carbon reduction target, with the national goal of cutting the power sector’s carbon 30 percent by 2030.

   The bill would delay implementation of the rule until all court challenges are exhausted.

   “We think you are overstepping your authority,” Whitfield told Janet McCabe, head of the EPA’s air pollution office. “We think you are now legislating. Experts in the Clean Air Act have described this proposed rule as extreme, radical and a power grab.”

   He continued, “this unprecedented rule, which will increase electricity rates, affect reliability, cost billions of dollars, make EPA the energy czar for America, will not have a significant impact on climate change.”

   McCabe said electric reliability and affordability were among the EPA’s priorities with the rule.

   “We’ve devoted significant attention to this issue ourselves and have also made sure that we were working with stakeholders and energy regulators at the federal, state and regional levels to ensure that the important public health and environmental protections Congress has called for are achieved without interfering with the country’s reliable and affordable supply of electricity,” she said.

   McCabe called the bill “premature because EPA has not yet finalized the Clean Power Plan, unnecessary because EPA has the tools and indeed the obligation to address cost and reliability issues in our final rule, and ultimately harmful because the bill, if enacted, would delay or prevent the climate and air quality benefits of the Clean Power Plan.”

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8. Whitfield Blasts EPA's Air Chief at Hearing on 'Just Say No' Bill

   Apr 14, 2015 | E&E - Greenwire

   By Jean Chemnick

   The House sponsor of a bill to declaw U.S. EPA's Clean Power Plan today told the agency's air chief that she should not be surprised that Congress is mulling an assault on the unprecedented rule.

   "We think you're overstepping your authority. We think you're now legislating," Rep. Ed Whitfield (R-Ky.) told acting Assistant Administrator Janet McCabe at the top of a hearing of the Energy and Commerce Subcommittee on Energy and Power, which he chairs.

   Rather than sticking to its congressionally mandated function of limiting pollution, Whitfield said, EPA in its existing power plant carbon draft plots to overhaul the nation's power grid, spurring investment in some technologies and demanding that others be taken offline.

   "Whoever thought the EPA would be tempted to become the energy czar for America?" he said.

   Whitfield has floated draft legislation that would allow states to opt out of the rule, citing cost or reliability concerns to refuse to submit a state implementation plan (SIP). The bill would also provide all states a blanket reprieve from complying until judicial review concludes on the rule -- a process that could take years. EPA would be barred from stepping in with a federal implementation plan in the meantime.

   Whitfield has said he plans to formally introduce his bill soon, and he expects it to move quickly through committee. Sen. Rob Portman (R-Ohio) floated a roughly similar measure as an amendment to the fiscal 2016 budget last month, and his office says he is mulling introducing it as a stand-alone measure, though he is not coordinating with Whitfield (E&ENews PM, March 24).

   Whitfield presented his bill as a moderate alternative to killing the rule outright, arguing that states would find it onerous to write SIPs that would not be needed if the rule is overturned by the courts.

   "When you consider the unique, radical approach that is being utilized with this rule, why would anyone object?" Whitfield queried.

   He noted that several lawsuits have already been filed against the rule, even though it is still in draft form. Two consolidated cases led by West Virginia and Murray Energy Corp. will be heard Thursday by a panel of the U.S. Court of Appeals for the District of Columbia Circuit. More litigation is likely after the rule is finalized this summer.

   McCabe asserted that EPA expects its rule to withstand judicial scrutiny. And she has said that plaintiffs already have recourse to ask the courts for a judicial stay if they can make the case that a rule will cause irreparable harm, and that they are likely to prevail. But she noted that the June 2014 draft is not final and devoted substantial time in her opening comments and responses to lawmaker questions to demonstrate that EPA is listening to stakeholder feedback.

   In her opening remarks, she repeated many of the themes raised by industry representatives -- including many cited by members of the National Rural Electric Cooperative Association during an interview yesterday with EPA Administrator Gina McCarthy and senior counsel Joe Goffman (E&E Daily, April 14).

   "When a final rule comes out, you'll see that we've been very responsive to these concerns," she said.

   Stakeholders have urged EPA to look at "initial compliance expectations and compliance flexibilities to provide states the latitude they need to establish workable glide paths that do not put reliability at risk," McCabe said in opening remarks.

   It's a reference to the draft rule's interim compliance period, which phases in emissions reduction requirements beginning in 2020 that would be very steep for some states. McCabe hinted very broadly -- as other EPA leaders have done before -- that interim targets will be different in the final rule that EPA releases this summer.

   She also cited stakeholder concerns that the rule would lead to stranded assets, because it would require utilities to take power plants offline before they have retired the debt incurred to build or retrofit them. And she referred to proposals by industry stakeholders and others to introduce a reliability safety valve "as a backstop, in case a reliability issue does arise."

   At a later point in the hearing, Rep. Mike Doyle (D-Pa.) asked McCabe about the way the draft rule now treats nuclear power, and whether the final version might be changed to treat it as new zero-carbon capacity. The nuclear industry has said the draft does little to incentivize investment in nuclear, despite its status as a zero-carbon source of baseload power.

   "We're thinking very hard about that," she told Doyle. "We don't want the Clean Power Plan to interfere with the use of that power."

   The Federal Energy Regulatory Commission is weighing making a formal proposal to EPA for how it could structure a reliability safety valve provision for the rule, and McCabe said today that EPA is seeking the commission's input.

   The Edison Electric Institute last week submitted its own proposal to FERC for how the two federal entities could introduce backstop language to address unforeseen reliability issues (EnergyWire, April 10).

   FERC Commissioner Philip Moeller has urged the commission to submit its input to EPA sooner rather than later, noting that EPA is rushing to complete its final rule by this summer. "I think we'll get there," he said on the sidelines of a Public Utilities Fortnightlyevent last week. But a busy winter and spring schedule has pushed that process back, he said.

   While McCabe took a conciliatory tone at the hearing, she and the panel's Democrats said the Whitfield bill would needlessly delay the rule and could undermine the Clean Air Act's overarching purpose of providing a nationwide floor for pollution controls.

   Energy and Commerce Committee ranking member Frank Pallone (D-N.J.) blasted the Whitfield measure as a stealth amendment to the landmark environmental law aimed at undermining federal environmental regulation.

   "Bad states get a free ride to pollute without any consequences, while everybody else foots the bill," said Pallone.

   McCabe put it this way: "Air pollution doesn't respect state boundaries."

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9. Western States Studying Regional Clean Power Plan Options, Despite Reservations

   Apr 14, 2015 | E&E - Climatewire

   By Emily Holden

   Western states are deep in discussions about how they can coordinate to reduce greenhouse gas emissions under U.S. EPA's Clean Power Plan, despite their individual qualms with the proposal.
   

   A group of six states all within electric utility PacifiCorp's service area -- Idaho, Montana, Oregon, Utah, Washington and Wyoming -- have applied for a Department of Energy grant to review different paths to decarbonization.

   Utah, Idaho and Montana have questioned EPA's authority to draft the rule, and Wyoming has signed onto early legal challenges to block the regulation. While they disagree with EPA's proposal, the states are pragmatically exploring options for compliance in case the Clean Power Plan survives court battles.

   "The state of Utah was clear about its position regarding the proposed rule in its Dec. 1 comments to the EPA," said Laura Nelson, executive director of Utah's Governor's Office of Energy Development. "However, as much as we disagree with the proposed rule, we believe it is important for the state to be prepared for a changing regulatory landscape."

   Officials in Utah -- the lead applicant for the grant -- say the states would use $800,000 in DOE funding to explore on a "granular" level how different carbon-cutting options align with state policies, if the states should collaborate formally or informally and how they could trade credits for carbon reductions.

   That work would add to at least half a dozen modeling and research efforts underway in the West -- many of which involve multiple states and stakeholders and explore options for swapping compliance credits.

   In the West, regional coordination could be especially important, because utilities often rely on power sources in other states and access them via long power lines that traverse jurisdictions, said Keegan Moyer, a senior consultant with Utah-based Energy Strategies. That means states will have to divide up the responsibility for emissions and the credit for reducing them.Bottoming up cap and trade

   Last week, at a meeting of the Western Interstate Energy Board (WIEB) in San Diego, state representatives heard from consulting group Cadmus about ongoing research into one way to coordinate those efforts.

   Cadmus is preparing a report, due later this month, about how states could trade compliance credits for different carbon-cutting options: implementing renewable energy and energy efficiency programs and switching from coal to natural gas. Under this "modular" approach, states would not necessarily need to submit compliance plans as a group but could still benefit from each other's lower-cost resources and share in reductions across state borders.

   Western stakeholders also heard a presentation from Western Resource Advocates about allowing electric generators in the region to trade carbon credits.

   Across the country, in the Southeast, Duke University's Nicholas Institute for Environmental Policy Solutions is advocating a similar "common elements" approach, where states would assign carbon goals to electric generators and allow them to trade compliance efforts with generators in other states. One academic deemed the idea "cap and trade from the bottom up" (ClimateWire, March 17).

   "We've heard an interest ... across the Western region in the development of regional coordination or regional compliance in modules that will allow states to share across their borders compliance credits, or some portion of the emissions reductions associated with building blocks," Moyer said.

   Electric utilities could be the ones pushing for that option. PacifiCorp told EPA in comments that it supports a similar concept, but the utility's parent company, Berkshire Hathaway, declined to comment for this story.

   PacifiCorp operates in six states and owns electric generation in three others. The company has said the cheapest way to comply with EPA's carbon rule is to look at options across its entire multi-state system, rather than state by state.

   EPA has encouraged states to write regional plans but has only laid out how states could write formal joint proposals. PacifiCorp says joint compliance proposals would require states to adopt a common emissions reduction target.

   Agreeing on that target would take too long and might be impossible politically, PacifiCorp said. States with easier targets might not be willing to bear the burden for states with more stringent goals.

   Instead, PacifiCorp suggests states could trade credits without entering into a full-blown regional cap-and-trade program.

   PacifiCorp states already work together in a multi-state planning process to allocate system costs, so the logistics could come easier. But onlookers warn that regulatory inertia and politics could get in the way.A mishmash of efficiency standards

   Energy interests in the West are well into exploring options under the Clean Power Plan. Utah's application with DOE cites half a dozen regional coordination efforts, for example.

   WIEB contracted the "modular" approach research by Cadmus, and an advisory committee for the project includes the Western Electricity Coordinating Council and electric and environmental regulators in Arizona, California, Colorado, Montana, South Dakota and Utah, as well as multiple consulting groups and the Washington utility Puget Sound Energy.

   Nelson attended the WIEB meeting last week and said Western states seemed open to the concept but are awaiting EPA's final rule.

   "These options may present a tool that is more manageable than what might be required under fully or partially regionalized compliance," she said.

   Kate Swayne Wilson, a consultant with Cadmus who is working on the report, said the research is looking at tracking systems that states could use to trade credits for renewable energy and energy efficiency, as well as changes to emissions from fossil fuel generation through re-dispatch from coal power to natural gas.

   Energy efficiency activities are defined differently around the country, and for states to trade, they would need to agree on common standards for counting and verifying reductions in energy use.

   In particular, Cadmus is looking at adapting WREGIS, the Western Interconnection's major renewable energy credit trading platform, to enable energy efficiency trading, Nelson noted, adding that the idea was "encouraging" to the Western states in attendance.

   "The full marriage of merging their compliance goals at the state level seems a little daunting, but being able to be a little bit more creative and having these smaller areas of collaboration could have real benefits for states," Wilson said.

   In addition to the Cadmus research, Idaho is working separately on an analysis with WIEB and seven states: California, Colorado, Montana, Nevada, Oregon, Utah and Washington. British Columbia is also involved. That analysis will look at ways to deploy additional renewable energy and energy efficiency resources to improve reliability.

   The Center for the New Energy Economy, a project of former Colorado Gov. Bill Ritter (D), is leading a project on Clean Power Plan planning and implementation among Western states and a large contingent of stakeholders and organizers, including the Navajo Nation, the Western Electricity Coordinating Council, the Western States Air Resources Council, the Environmental Council of the States, the Bipartisan Policy Center, Western Resources Advocates and the Western Interstate Energy Board.

   Several states also will receive assistance from the National Governors Association to work on Clean Power Plan modeling (ClimateWire, March 24).

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10. Electric Cooperative CEOs Meet With McCarthy on Power Plan Concerns

    Apr 14, 2015 | E&E - TV

    As pressure grows for U.S. EPA to change its draft Clean Power Plan proposal, a group of electric cooperative CEOs met with EPA Administrator Gina McCarthy this week to discuss their concerns with the current plan. During today's OnPoint, Duane Highley, CEO of Arkansas Electric Cooperative, and Lisa Johnson, CEO and general manager of Seminole Electric Cooperative, discuss the details of their meeting yesterday with McCarthy. Johnson also talks about her upcoming testimony before a House Energy and Commerce subcommittee on the impact of the Clean Power Plan on electric co-ops.Transcript

    Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. With me today are Duane Highley, CEO of Arkansas Electric Cooperative, and Lisa Johnson, CEO and general manager of Seminole Electric Cooperative. Duane, Lisa, thank you both for joining me today.

    Duane Highley: You're welcome.

    Lisa Johnson: Thank you for having us.

    Monica Trauzzi: So you were both part of a group of CEOs that met with EPA Administrator Gina McCarthy on Monday on the Clean Power Plan and its impacts on your states. Duane, what did you hear from the administrator?

    Duane Highley: Well, she's a very good listener so we're really grateful for the chance to meet with her, and she really listened to us express our concerns about the Clean Power Plan and how it would impact cooperatives in particular. So mostly listening, not a lot of comment from her.

    Monica Trauzzi: So any indication on any potential changes we could see to the draft of the Clean Power Plan as we had towards that final rule?

    Duane Highley: Probably the most deliberate thing we heard from her was a possible change in the interim target, the cliff as we're calling it, for compliance in 2020, possibly some softening of that, although she wasn't specific about details.

    Monica Trauzzi: All right, so she did a lot of listening. Lisa, Florida is looking at a 38 percent emission rate reduction. What types of issues did you highlight for the administrator, and did she seem receptive to those concerns?

    Lisa Johnson: I talked mostly about one of our key issues is the fact that we have the potential for significant stranded assets. So speaking to Florida specifically, you mentioned the 38 percent reduction. That translates under the current proposed plan into a 90 percent reduction of coal-fired units in the state. So that in turn translates into 27 of 30 units going down by 2020. That's a significant issue from a number of perspectives, but particularly it leaves our cooperative with an asset that has a 30-year remaining useful life that it can't enjoy, and our members will continue to pay for that debt.

    Monica Trauzzi: And this is a key issue for co-ops nationwide because about 70 percent of electricity produced is from coal. Why haven't you in Florida done more to diversify your portfolios away from coal?

    Lisa Johnson: Well, actually in Florida there's been quite a bit of diversification, and I would say particularly over the last 10 to 12 years, much movement towards natural-gas-fired generation. Specifically Seminole, we actually built and we currently own and operate a natural-gas-fired facility, both a combined-cycle facility and peaking units, and those were both built in the 2000s. So as things have evolved in the state, there's been a natural progress toward natural-gas-fired generation, and to the extent they're available, some renewables.

    Monica Trauzzi: Duane, go ahead.

    Duane Highley: Well, and we shouldn't forget that the cooperatives' move to coal was largely driven by the federal government policies in the 1970s when the Fuel Use Act was passed. And Jimmy Carter in 1978 was encouraging utilities to move to coal as energy independence. Cooperatives did that in a big way, and the federal government even helped us finance those plants. And now that we're putting the air quality controls on them, we just want to recover that remaining stranded investment over the useful life of that plant rather than prematurely shut the plant down and be stuck with the cost for our members to pay.

    Monica Trauzzi: So Arkansas is involved in this week's court challenge to the EPA Clean Power Plan seeking to block the agency from moving forward with a 44 percent emission reduction target that you have in your state. Do you think that enough has been done to reduce emissions by Arkansas, and is this legal challenge just an effort to kind of find some early legal cover because not enough has been done?

    Duane Highley: Well, Arkansas has the cleanest and most efficient coal plant in the country right now with Turk, and that's the only ultra-super-critical plant operating in the United States. Many are being built in China; we'd like to see more in the United States. But this Turk plant isn't even included in our base line for the requirements of the Clean Power Plan, so it leaves us with more than a 44 percent reduction before we even get started, to try and cover that. So as we've been trying to go to clean coal -- and we have some of the cleanest and most efficient natural gas in the country in Arkansas, but yet we need a target that's reasonable for our state compared to our neighboring states.

    Monica Trauzzi: And how do you both see this week's court proceedings transpiring?

    Lisa Johnson: Oh, I think it's too soon to tell. I find it encouraging that the court is actually hearing the case. My sense is that it will go beyond this court most likely, and the time I think is our biggest challenge right now.

    Duane Highley: Yeah, this is the unique pen risk. What that decision is, is the stroke of a pen, and it's hard to predict.

    Monica Trauzzi: And, Lisa, a lot going on this week. You'll also be testifying before a House Energy and Commerce subpanel on the Clean Power Plan on behalf of the Natural Rural Electric Cooperative Association. How will you be framing your remarks before the panel?

    Lisa Johnson: Many of the remarks that I will share with the committee tomorrow follow along the same lines as what we talked about with the administrator today, the concerns about stranded assets, the concerns about reliability, certainly the concerns about cost for our members, and concerns about infrastructure requirements. This is a massive transition that the Clean Power Plan is proposing in terms of our electric industry. That can't happen overnight, and it certainly won't happen in the way it's been proposed without significant cost.

    Monica Trauzzi: We've heard a lot in this city for sure and now growing around the country about this "Just Say No" option for power plan compliance. Are either of you backing the Just Say No option in your states?

    Lisa Johnson: Well, I don't know that I would describe it as the Just Say No option. So for example, tomorrow in the subcommittee, what is before that subcommittee is consideration of Rate Payer Protection Act. That is a draft that's currently being reviewed, and there are really two components to that. One is allowing for the Clean Power Plan to go through its legal challenges before it actually takes effect, which will give those of us who have to comply the appropriate amount of time to deal with those changes that are required. But it also does have an element that says that state by state, if a governor and a state determines that there is significant harm that would come, either from a cost perspective or a reliability perspective, they can actually contact the administrator of EPA and express the need for some changes. So I don't know that I see that particular act as a Just Say No approach; I find it to be more of an ability for the states to take some control over their unique situations.

    Monica Trauzzi: Duane, Just Say No?

    Duane Highley: I think states are waiting to see what the federal implementation plan would look like, and that's not coming forward out of Arkansas right now, to just say no. But we need to know what the government's plan would be if the states don't act.

    Monica Trauzzi: All right, a lot to look out for. All right, thank you both for your time.

    Duane Highley: Thank you.

    Lisa Johnson: Thank you, Monica.

    Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.

    [End of Audio]

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11. Texas Makes its Case Against a Tighter Ozone Standard

    Apr 14, 2015 | E&E - Greenwire

    By Amanda Peterka

    Texas air regulators last week laid out their scientific and economic case against a tighter ozone standard that the Obama administration says is necessary to protect public health.

    The Texas Commission on Environmental Quality held a three-day workshop where experts invited by the agency charged that U.S. EPA is molding uncertain scientific data to support a predetermined policy conclusion to lower the national standard.

    The workshop also concluded that EPA had neglected to study the negative health effects stemming from the alleged big economic impacts of a tighter standard.

    Texas regulators will likely highlight the workshop's conclusions in the coming months as EPA and the White House wrap up work on the proposal. The workshop will also likely provide fodder for potential legal action against EPA's final decision, which is expected by Oct. 1.

    "I think Texas and the United States is going to benefit greatly from the work here," TCEQ Chairman Bryan Shaw said.

    Ground-level ozone is a key component of smoggy air that's formed when nitrogen oxides react with volatile organic compounds in the presence of sunlight.

    In November, EPA proposed to tighten the national standard from 75 parts per billion to between 65 and 70 ppb based on a review of the data on the public health effects of ozone exposure.

    "Proposing, and then finalizing, an air quality standard involves evaluating the latest available science, and we have more than 1,000 new studies since the last review that we've taken into account," EPA said. "Based on the administrator's evaluation of the latest research, [EPA chief Gina McCarthy] believes that a standard in the proposed range will provide substantial public health benefits for millions of Americans by reducing both ozone and particle pollution."

    For months, though, TCEQ has raised concerns that the agency's proposal would not lead to any "measurable" health benefits and has called on EPA to leave the standard at 75 ppb. The Texas agency also recently commissioned a study by NERA Economic Consulting that found the state's GDP would take a hit of $30 billion a year under a 65 ppb standard between 2017 and 2040.

    "There are real costs associated with this," TCEQ Commissioner Toby Baker said. "The irony of ironies is that it'll make it harder to build roads in a town that is gridlocked for several hours every single day, which actually increases the amount of ozone in the air."

    Texas' views are in opposition to the National Association of Clean Air Agencies, which represents most state and local air regulators in the country. In public comments to EPA, NACAA said it welcomed the agency's proposal.

    "The serious threats to public health from exposure to ozone are well documented," the D.C.-based organization wrote.

    Texas pulled out of the group in the mid-2000s because it felt that its views were not being well-represented (Greenwire, Jan. 14).

    TCEQ announced the three-day ozone workshop last month, and its speakers included several industry-affiliated attorneys and researchers. The workshop also featured a panel of scientists to act as a sort of antithesis to EPA's committee of scientific advisers.

    TCEQ billed the event -- which was sponsored with the assistance of the firms Toxicology Excellence for Risk Assessment, Gradient and NERA -- as an independent look at EPA's proposal.

    The Environmental Defense Fund, which supports a tighter ozone standard, expressed disappointment in the Texas agency's meeting. Elena Craft, a senior health scientist with the group, said TCEQ did not extend any invitations to environmental or public health advocates to sit on any of the panels.

    Craft, who attended the workshop in person, said its focus on uncertainty missed a key point: The body of evidence linking ozone pollution to adverse public health effects is increasing. And by law, EPA is supposed to only look at the weight of public health data when setting a new standard.

    "I felt like all the issues around uncertainty essentially were a distraction from the fact that all of the recent evidence has only served to strengthen the idea that ozone is a tremendous health threat and that we need to be protecting the public from it," she said in an interview with Greenwire after the meeting.'Oversampling these children'

    Among the arguments raised by experts at the workshop: Epidemiological studies linking ozone to negative health effects contain many limitations that make it difficult to separate out the effects of ozone from other factors.

    For much of the workshop, the science panel focused on a 2009 study that looked at the correlation between ozone and premature death in several cities. On average, the study linked higher ozone levels with more premature deaths, but panelists pointed to some instances where higher ozone was correlated with fewer deaths.

    "I think it's a huge issue," said Julie Goodman, a toxicologist with Gradient who has been commissioned to do ozone research for industry groups and TCEQ. "Because obviously ozone is not protective in some cities and causing mortality in others. I think it's a sign that there's some other factor associated with ozone."

    Workshop panelists also said studies done in the lab showed trivial effects to lung function, relied on varying exposure times and could not be extrapolated to the real world.

    "EPA is trotting out benefits that we have a lot of problems with in terms of credibility," said Henry Nickel, an Albuquerque-based industry counsel at Hunton & Williams LLP.

    Sonja Sax, a toxicologist at Gradient, also argued that models of children's reactions to ozone exposure were outdated because they were based on the amount of time kids spent outdoors in the 1980s and 1990s.

    Children are spending more time indoors nowadays, she said.

    "In my mind, it is kind of over-sampling these children that ... are spending a lot of time outdoors, engaged in very heavy exercise," she said. "And it's unclear whether it's really a realistic scenario."

    The net effect, she said, is that lowering the ozone standard would have only a marginal impact on health. She and others added that EPA had also not considered "health dis-benefits" that would occur if people lost their jobs due to a lowering of the standard.

    EPA has estimated that the benefits of the ozone proposal would yield significant savings in health care costs and outweigh overall costs by as much as 3 to 1. A new standard set at 70 ppb would cost the nation $3.9 billion a year by 2025, though that figure excludes California, according to EPA. A 65 ppb standard, on the other hand, would cost $15 billion a year.

    Craft of the Environmental Defense Fund, who described herself as being the only "card-carrying enviornmentalist" at the three-day meeting, said that TCEQ's panelists had nitpicked studies and that EPA had looked at the full weight of evidence.

    TCEQ's work, she said, "doesn't nullify the existing body of work that's out there."

    In the case of the mortality studies, Craft added, "while they are probably not the strongest evidence in making the case for adverse health effects, there's nothing that's been presented that would provide an alternative hypothesis for why we are seeing those changes in mortality in multi-city studies."

    The American Lung Association and other public health groups have called on EPA to set a standard at no higher than 60 ppb.What comes next?

    Last week's workshop was partly a strategy session for the Texas Commission on Environmental Quality and industry critics for how to go about opposing the ozone standard as EPA finalizes its proposal and beyond. Several legal panelists offered advice on the best ways to attack the proposal in and out of the courts, most of them revolving around focusing on uncertainties in the science backing the proposal.

    "If you're [the American Petroleum Institute], you'll probably want to focus on uncertainties in contrast to massive health dis-benefits," said Thomas Lorenzen, a partner and Dorsey & Whitney LLP. "If you're EDF, you'll want to take the opposite tact. ... You'll want to focus on supporting EPA's view that those costs are much lower and that the health science is actually fairly solid."

    It's unclear how useful the workshop will actually prove to be. EPA closed its comment period in mid-March; while many of the issues raised last week were also raised in written public comments, EPA is not required to respond directly to the workshop's proceedings.

    And challenging the action through litigation comes with big hurdles, the most significant of which is that courts tend to place great weight in EPA's scientific and technical expertise, according to Lorenzen, who previously defended EPA regulations in the Department of Justice's Environment and Natural Resources Division.

    For example, a federal court upheld EPA's 2008 standard, even though EPA did not follow the advice of its own scientific advisers.

    "In the face of wide array of contradictory evidence, the administrator can still act by picking and choosing which science he or she credits and explaining why he or she does not credit the other science," Lorenzen said.

    Michael Honeycutt, director of TCEQ's toxicology division, applauded the workshop and said it reinforced his doubts about EPA's proposal. Honeycutt last year came under fire by environmentalists for public statements arguing that EPA shouldn't lower the standard because people spend most of their time indoors.

    One of the goals of the workshop "was to see if I'm crazy, because if you just Google my name, there are people who think I'm crazy," Honeycutt said. "But I haven't heard anything the past two or three days that suggested I'm crazy."

    Craft, though, said the workshop was an example of misplaced priorities at TCEQ.

    "The agency has spent millions of dollars funding Gradient's work, their own research on ozone," she said. "This is an agency that doesn't have enough inspectors to go out and inspect huge facilities."

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12. EPA's Critics Seek Broader Scrutiny Of 'Co-Benefits' Used To Justify Rules

    Apr 14, 2015 | InsideEPA

    By Stuart Parker

    Federal courts should more broadly scrutinize EPA's use of "co-benefit" reductions of pollutants not directly covered by an air rule as a justification for the regulation, says one prominent industry attorney, who argues that an early vehicle for such scrutiny could be the Supreme Court's upcoming ruling on EPA's utility air toxics rule.

    EPA relied heavily on the co-benefit of reducing fine particulate (PM2.5) emissions to justify the costs of its rule setting maximum achievable control technology (MACT) to curb toxics from power plants, even though PM2.5 is not classed as a toxic hazardous air pollutant (HAP). Under the Clean Air Act, MACT standards are set to control HAPs and not criteria pollutants such as PM2.5 which are regulated by a national ambient air quality standard (NAAQS).

    Industry and some states in their challenge to the utility MACT at the high court in three related cases, National Mining Association (NMA) v. EPA, et al., Utility Air Regulatory Group (UARG) v. EPA, et al., and State of Michigan,raised this point to question EPA's cost-benefit analysis, which put the implementation costs at over $9 billion.

    EPA estimated the health benefits at $37 billion to $90 billion, but based this sum almost entirely on the benefits of reducing PM2.5. Removing the PM2.5 benefits from the accounting, the monetized benefits from toxics reductions under the utility MACT are only up to $6.2 million, and are therefore dwarfed by the implementation costs -- although EPA notes that it was unable to quantify many of the benefits of reducing toxic emissions.

    The Supreme Court agreed to hear the utility MACT case on the narrow issue of whether EPA violated the air law by not considering costs in the initial decision to regulate power plants with a MACT.

    At March 25 oral arguments, the justices focused primarily on the cost question, but Chief Justice John Roberts also pressed Justice Department Solicitor General Donald Verrilli on the co-benefits issue.

    Roberts questioned Verrilli on the argument raised by the MACT rule's opponents that EPA attempted "sort of an end run around the restrictions that would otherwise . . . give you less control over the regulation," using "bootstrapped" PM2.5 benefits to justify the cost-benefit analysis for the utility MACT.

    Verrilli responded that using "surrogate" pollutants such as PM2.5 to address other targeted pollutants is "a well-recognized methodology that goes back decades, that EPA has used for decades, that the [U.S. Court of Appeals for the District of Columbia Circuit] has upheld for decades," and "is a perfectly appropriate way to -- to deal with getting at metals and -- and other pollutants that would be hard to get at directly."

    Roberts said, however, that "the issue that I think raises the red flag, at least, is that there's such a tiny proportion of benefit from the HAP program and such a disproportionate amount of benefit that would normally be addressed under the criteria program," he said, referring to the PM2.5 ambient air standard.

    Roberts added, "I understand the idea that you can have -- you know, it's a good thing if your regulation also benefits in other ways. But when it's such a disproportion, you begin to wonder whether it's an illegitimate way of avoiding the . . . quite different limitations on EPA that apply in the criteria program."

    Co-Benefit Predictions

    In the wake of the Supreme Court oral arguments, the industry attorney says the co-benefit issue "could easily" form part of the high court's decision when it issues its ruling on the MACT.

    The industry lawyer says Roberts' questions echo a wider dissatisfaction in industry and among the court's conservatives with EPA's use of co-benefits. The court's ruling, expected by June, "could be significant on the co-benefits issue," the source says. The issue "could easily be part of the decision," the source says.

    If the court backs the government and conservatives' doubts on this and other questions do not feature in its opinion, the co-benefits issue could easily appear in one or more likely dissenting opinions, sources say.

    The industry attorney says that "the co-benefits issue has been a controversial one for some time," noting that PM2.5 benefits, specifically, also provide much of the financial justification for a series of other major EPA air rules. Those rules include the Cross-State Air Pollution Rule (CSAPR) emissions trading program, air toxics rules such as those for industrial boilers and NAAQS standards for PM2.5 and other pollutants.

    "I think there is necessarily some double counting here," the source says, because at some point there is no more PM2.5 to regulate. This echoes an industry argument raised in the utility MACT rule challenge. Industry lawyers say that EPA cannot justify non-NAAQS rules by crediting PM2.5 cuts that reduce levels of the pollutant to a point below the NAAQS, because NAAQS levels are supposed to represent what EPA believes to be a safe threshold for a pollutant.

    For example, in an April 3 op-ed article for Forbes, Brian Potts, a partner with law firm Foley and Lardner, notes Roberts' questioning on this, and asserts that 90 percent of the MACT rule's health-related co-benefits "occur at air quality levels that the EPA has already determined are protective of public health."

    Other sources doubt that co-benefits will be key to the Supreme Court's decision. One former Obama administration official says the issue is more "the atmospherics of the case," and likely will not be a factor in the court's decision.

    Another industry attorney concurs that although the co-benefits issues are "very interesting," ultimately the case will be decided on the narrower issue examined by the court of whether the term "appropriate" requires a consideration of costs. Further, the source like several other observers thinks the court will likely back EPA, with Justice Anthony Kennedy the swing vote likely to break in EPA's favor.

    Even Roberts might side with the government on its discretion for when to consider costs, the source says, although there is less consensus among legal observers about this. 

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13. House Panel Releases $35 Billion Spending Bill for Energy, Water

    Apr 14, 2015 | The Hill - Policy

    By Rebecca Shabad

    The House Appropriations Committee on Tuesday released a $35.4 billion fiscal 2016 energy and water development spending bill, a funding level that's $633 million below President Obama’s budget request.

    Members of the Appropriations subcommittee with jurisdiction over those areas will mark up the bill on Wednesday. House GOP leaders have scheduled a floor vote on the bill before the House leaves for its next recess in early May.

    The 56-page bill, which is $1.2 billion above the level Congress enacted for 2015, funds Energy Department programs, the Army Corps of Engineers, which maintains and develops the nation’s water systems, and other related agencies.

    For the Energy Department’s nuclear weapons security programs, the bill would provide $12.3 billion. The Army Corps of Engineers would receive $5.6 billion, which is $142 million above the 2015 level and $865 million above Obama’s request.

    Energy programs, by contrast, would receive $10.3 billion, which is $1.3 billion below the president’s request.

    Science research programs would get $5.1 billion, up $29 million from 2015.

    The bill would also fund research and development to advance natural gas, oil, coal and other fossil technologies. Renewable energy programs would get $1.7 billion, down $279 million from 2015 levels.

    The bill would also support the Yucca Mountain nuclear repository and denies an Obama administration proposal for non-Yucca nuclear waste activities.

    Appropriators are also drafting the 2016 spending bill that covers military construction and veterans so that it gets a floor vote by the end of the month.

    Floor votes on the spending bills, however, cannot happen before May 15 unless Republicans in the House and Senate reach a deal on their separate budgets. The leadership’s floor schedule indicates GOP lawmakers are confident they’ll reach an agreement before the end of April.

    If Congress can’t pass all 12 appropriations bills before the end of September and have them signed by President Obama, lawmakers will likely have no choice but to wrap the spending bills into several packages or one major one.

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14. House Unveils Bill Attacking Obama Energy, Water Priorities

    Apr 14, 2015 | E&E - Greenwire

    By Daniel Bush, Annie Snider and Manuel Quiñones

    House Republicans today released a spending bill for energy and water programs that would block the Obama administration's controversial water rule for a year while boosting funding for fossil energy programs and a long-stalled effort to reopen the Yucca Mountain nuclear waste repository site.

    The bill, which would provide fiscal 2016 funding for the Department of Energy, Army Corps of Engineers and other agencies, is scheduled to be marked up tomorrow by the House Energy and Water Development and Related Agencies Appropriations Subcommittee.

    The legislation will likely be on the House floor in the coming weeks and is expected to pass the lower chamber by the beginning of next month, House Majority Leader Kevin McCarthy (R-Calif.) told GOP members last week (E&ENews PM, April 9).

    Overall, the bill would provide $35.4 billion to the covered agencies, a $1.2 billion increase from current spending levels but $633 million below President Obama's budget request for energy and water programs.

    The bill includes $5.6 billion for the Army Corps, a $142 million hike over fiscal 2015 spending levels, and $10.3 billion for energy programs under DOE, a $64 million boost over the amount Congress enacted last year, according to a committee summary.

    Although the bill would increase overall energy spending, it focuses on boosting funding for fossil energy and nuclear while cutting money for renewable energy programs, setting up a showdown between House Republicans and the White House as Obama races to implement his climate and energy agenda before he leaves office in January 2017.

    "This is a responsible bill that prioritizes national security needs and improving our nation's infrastructure within tight budget caps," said Rep. Mike Simpson (R-Idaho), chairman of the energy and water Appropriations subcommittee. "It makes critical investments in the maintenance and safety of our nuclear weapons stockpile, while also funding important infrastructure projects and research that will increase U.S. economic competitiveness and growth."DOE: Renewables, efficiency cut; fossil sees boost

    The House bill would provide $1.7 billion to DOE's Office of Energy Efficiency and Renewable Energy, a $279 million cut from current spending levels and significantly less than the $2.7 billion Obama requested.

    House Republicans have used the appropriations process to signal their opposition to increased renewable energy funding and support for spending on fossil fuel programs.

    The legislation would fund DOE's fossil energy research and development efforts at $605 million, an increase of $34 million from fiscal 2015 levels. The goal is to boost funding for research related to coal, natural gas and oil, including carbon capture and sequestration.

    The bill would boost nuclear research, development and demonstration activities by $23 million to $936 million. The legislation would also provide $5.9 billion for environmental cleanup efforts, a $39 million increase over current spending levels. A majority of the money, $5.1 billion, would go toward cleaning up former nuclear weapons production and research facilities.Bill sets up fight over Yucca

    The cuts to DOE energy programs would help offset a $150 million boost in nuclear waste disposal funding that House Republicans want to spend on reopening the controversial Yucca Mountain site in Nevada.

    The bill also includes $50 million for the Nuclear Regulatory Commission to continue reviewing DOE's application to build a repository under the mountain, about 100 miles northwest of Las Vegas.

    The Obama administration shuttered the project, which is fiercely opposed by Senate Minority Leader Harry Reid (D-Nev.), but GOP lawmakers are continuing to push to have the site reopened.

    Rep. John Shimkus (R-Ill.) led a bipartisan House trip to Yucca Mountain last week to draw attention to the issue (Greenwire, April 10). Simpson has also made reopening the site a top priority.

    But Simpson said yesterday that the effort will ultimately be decided in the Senate, where Reid will continue to fight the project until he retires at the end of next year (E&E Daily, April 14).Army Corps, Reclamation

    The House measure offers the next move in the annual dance over Army Corps funding, in which the White House, regardless of party, lowballs funding levels for the water infrastructure agency and Congress goes about plussing them up.

    This year the House proposes bumping the Army Corps' overall budget up to $5.6 billion -- $142 million higher than the fiscal 2015 enacted levels and $865 million more than the Obama administration requested.

    The measure would raise the corps' all-important construction account to just over $1.6 billion, a more than $450 million increase over the president's request but a $9 million dip from fiscal 2015 enacted levels. And it would give the agency's operations and maintenance account a $149 million bump, up to $3.058 billion.

    Navigation interests would be among the bigger beneficiaries of the extra funding, although the $2.4 billion allocated for such projects and studies in the bill is still less than the $2.755 billion that they were asking for (E&E Daily, March 12).

    The measure would spend $1.178 billion of the Harbor Maintenance Trust Fund for its intended purpose, a $12 million increase over fiscal 2015 levels but well short of the $1.25 billion target set in last year's Water Resources Reform and Development Act. The trust fund is fed by a 0.125 percent ad valorem tax on goods that arrive on U.S. docks, but to the frustration of navigation interests, only about half the fund's revenues have been put to use for their intended purpose in recent years, with the balance being used to offset federal spending elsewhere in the budget.

    The Inland Waterways Trust Fund saw more of its wishes granted in the House bill.

    After shifting a greater share of the most expensive project on the country's system of locks and dams last year to federal taxpayers and winning a 9-cent fuel tax increase to fund the trust fund, industry's pot of money to fund its share of construction project costs is growing. The House bill would put the trust fund's balance to full use, building new lock and dam projects and undertaking major rehabilitations of aging and failing ones.

    For the Bureau of Reclamation and other Interior Department water programs, the measure would appropriate $1.1 billion -- $1 million below the president's request and a $35 million dip from fiscal 2015, which included additional funding to respond to the entrenched drought gripping the western United States.

    The measure would fund major environmental restoration programs -- namely the Central Valley project restoration fund and the California Bay-Delta restoration program -- at roughly the same levels as last year.Policy riders

    With the Obama administration preparing to finalize its "Waters of the U.S." rule -- aimed at clearing up years of confusion over which streams and wetlands fall under the protection of the Clean Water Act -- Republicans are gearing up to attempt to block its implementation through the appropriations process.

    The House measure would prevent the Army Corps, which runs the Clean Water Act permitting program for dredging and filling waters and wetlands that fall under the law, from using funds to implement the new rule. The bill would also turn down the administration's request for a $5 million increase to the corps' regulatory program, which Assistant Secretary of the Army for Civil Works Jo-Ellen Darcy has said would be used to implement the new regulation (E&E Daily, Feb. 3).

    Meanwhile, the appropriations measure carries forward policy language from the fiscal 2015 spending bill that reiterates Clean Water Act permit exemptions for normal farming practices and maintenance of irrigation ditches and other infrastructure.

    The legislation would also bar the Obama administration from changing the definition of fill material under the Clean Water Act. Even though the corps and U.S. EPA have not expressed plans for a change, such a move would limit Appalachian mountaintop-removal mining and hardrock mining activities.

    Appropriations Chairman Hal Rogers (R-Ky.) has for years made sure the riders remain in place, hoping to prevent increased administration scrutiny of mines in and around his district. Environmentalists have for years been pressing for a new definition of "fill."

    The bill also includes a policy rider to allow visitors to campgrounds and hiking trails managed by the Army Corps to carry firearms.

    While loaded guns have been allowed in national parks and wildlife refuges since Congress passed a law dictating it in 2009, they are still prohibited at the nearly 12 million acres of land managed by the corps. Rep. Bob Gibbs (R-Ohio), chairman of the House Transportation and Infrastructure subcommittee with jurisdiction over the corps, has introduced a stand-alone measure to allow firearms at such sites, and a similar provision was included in the Senate's "Bipartisan Sportsman's Act," S. 405 (Greenwire, March 17).

    One regular policy rider is missing from the bill at this point, though -- the annual prohibition on the corps implementing new guidelines for weighing federal investments in water projects. The corps currently uses 30-year-old guidelines, but after Hurricane Katrina, Congress mandated that new ones be written to place a greater weight on environmental considerations when planning major water projects.

    Those new guidelines, called "principles and requirements," were released by the Obama administration in March 2013, but while other federal agencies are preparing to implement them, Congress has repeatedly blocked the corps from moving forward through policy riders.

    In the fiscal 2015 spending bill, appropriators expressed persistent concerns over the issue, so a policy rider carrying forward the prohibition could still surface as the appropriations process moves forward.

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15. States, Industries At Odds Over Scope Of Final EPA CWA 'Standards' Rule

    Apr 14, 2015 | InsideEPA

    By David LaRoss

    States and major industry groups are at odds over how broad EPA should make its pending final rule updating Clean Water Act (CWA) requirements for states' water quality standards (WQS), with states seeking increased flexibility in the rule while industry groups are opposing such discretion and urging the agency to scale back the policy.

    Various organizations have met with EPA and White House Office of Management & Budget (OMB) officials in recent weeks to discuss the rule, which OMB received for review Jan. 8. The regulation, which EPA intends to finalize some time in May, will update obligations for states implementing the CWA including requirements for review of state standards; variances to standards; antidegradation mandates; limits on waterbodies' designated uses; and the conditions under which EPA will promulgate federal standards when it determines a state's rules to be "inadequate."

    "The core requirements of the current WQS regulation have been in place for over 30 years. These requirements have provided a strong foundation for water quality-based controls," says a description of the pending rule on OMB's website. Since issuance of the rule in 1983, "a number of issues have been raised by stakeholders or identified by the EPA in the implementation process that will benefit from clarification and greater specificity. . . . These revisions will allow the EPA, states and authorized tribes to better achieve program goals by providing clearer more streamlined requirements to facilitate enhanced water resource protection," the description says.

    Observers had previously suggested that the administration was aiming to quickly issue the WQS rule ahead of its separate controversial pending rule to define the scope of the CWA.

    But EPA sent its final CWA jurisdiction rule for OMB review April 6 and currently has a target date of sometime in April for issuing that rule, meaning it is slated to come out a month before the WQS policy.

    While the WQS rule is undergoing mandatory OMB pre-publication review, organizations including industrial groups such as the U.S. Chamber of Commerce and state representatives such as the Environmental Council of the States (ECOS) have met with the administration to try and sway the outcome of the regulation.

    According to sources with knowledge of the meetings, states have urged increased flexibility in the final rule, while industry associations have instead called on EPA and OMB to drastically scale back the regulation's scope. They say the rule must be pared back due to concerns that even if states have broad discretion to craft WQS, the agency's proposed additions to the existing rule would still impose high compliance costs for regulated entities.

    A state source who has met with administration officials says they "seemed receptive to those concerns about flexibility, although they didn't tip their hand on exactly how they'll work them into the final rule."

    According to OMB's website, representatives from ECOS, the Association of Clean Water Administrators (ACWA), and states including Colorado, Indiana, Oregon and Virginia met with EPA and OMB officials Feb. 26.

    ACWA's President Martha Clark Mettler then sent an OMB official a March 27 letter saying, "We hope that we successfully relayed our belief that the final rule will address our major concerns and provide states an acceptable range of opportunity to work within the regulations. We also do not believe it is necessary to re-write any of the proposed clarifications."

    Industry's Concerns

    Major industry groups however are renewing their concerns over the potential compliance costs and increased regulation that could result if EPA does not withdraw key provisions of the proposal -- provisions that agriculture and other groups said could trigger a legal challenge in their comments on the proposed rule.

    "The way EPA teed this up is going to make it real easy for there to be big costs down the road. . . . Even though it is a state's responsibility to argue for this flexibility, it has consequences for downstream industry," an industry source says, citing the proposed version of the regulation that EPA floated in September 2013.

    Representatives from the American Farm Bureau, National Mining Association, Peabody Energy, the U.S. Chamber of Commerce, the American Petroleum Institute, Edison Electric Institute, the National Stone, Sand, and Gravel Association, and other organizations met with EPA and OMB March 25 to detail their concerns.

    The industry source says critics of the rule have focused their comments to OMB on the designated-use language in the proposal, which would require regulators to determine a "highest attainable use" when they decide that a waterbody cannot attain its current designated use. Industry says that the "use attainability analysis" (UAA) necessary to make that determination is expensive and would be the responsibility of dischargers rather than regulators.

    For instance, a handout dated March 18 and distributed by Peabody Energy during the March 25 industry groups' meeting with the administration gives as a case study a UAA conducted by a Colorado coal firm beginning in 2012, which the company says has so far cost $526,781 and is not yet complete.

    The industry source says the groups at the meeting argued that EPA's separate pending jurisdiction rule defining which waters are subject to CWA protections could lead to even more mandatory UAAs because it would require regulators to craft designated uses for waterbodies such as ephemeral streams in floodplains.

    "The point we tried to make to OMB is that these rules are inextricably linked together, because if you're not being transparent about what waters you can regulate, and where these use designations apply, then suddenly all these cost analyses go out the window," the industry says of the WQS and jurisdiction rules.

    Antidegradation Policies

    Industry is also asking EPA to withdraw its antidegradation proposal in the WQS update, which addresses how states select "high-quality" or "Tier 2" waters subject to antidegradation policies.

    All states are required to develop such policies, but EPA has set few standards for what they must contain, and allows them to be published in non-binding guidance rather than regulation.

    However, the agency in its 2013 proposal asked for comments on whether it should require such methods to be included in binding state regulation when it finalizes the update, which industry maintains would be unlawful.

    "EPA in this proposed rule is trying to make antidegradation policies reviewable and approvable by EPA, and that is not contemplated anywhere in the statute. . . . EPA likes to give the impression that states are all on board with this, but it represents a massive expansion of federal authority," the industry source says.

    Finally, the source says, critics are asking OMB to cut back EPA's authority to oversee CWA variances. The proposed WQS rule would expand the situations where states are allowed to issue temporary waivers from existing standards, but the variances would be subject to federal review and approval, and states would have to report on any best management practices used to reduce nonpoint sources of pollution at the site of a variance, even though the CWA generally forbids EPA from crafting standards to control nonpoint pollution.

    "We think it discourages, rather than encourages, states to use variances because of these new requirements. EPA is encroaching on things that are really going to have a long tail -- it's going to have negative impacts on states' authority to administer their programs," the source says.

    Representatives from the Pulp & Paperworkers' Resource Council also met with EPA and OMB officials Feb. 11, but spokespeople from the group did not respond to requests for comment. 

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Transportation News

16. Feinberg: Crude-By-Rail Rules Expected 'In the Coming Weeks'

    Apr 14, 2015 | PoliticoPro

    By Jennifer Scholtes

     The long-awaited regulations for railcars that transport crude oil are expected to be finished “in the coming weeks,” acting Federal Railroad Administration chief Sarah Feinberg told House lawmakers today.
    
    The guidance will include rules for new railcars as well as instructions for retrofitting old ones, she told members of the House Transportation Committee’s railroads panel.
    
    Lawmakers gave her flak for the amount of time it has taken the Obama administration to develop those rules and other transportation regulations. (Last year’s omnibus spending package had set a Jan. 15 deadline for the oil train rules.) But Feinberg said regulations will move quickly only  if they are handed down through emergency order or congressional mandate. 
    
    “To be clear, I think we have to function in the regulatory process that exists. And it’s not built for speed. I wish it was,” Feinberg said. “And no one is more frustrated by our regulatory process and how long it takes than I am on occasion. But if we are trying to govern and regulate as quickly as we possibly can, the rulemaking process is not the way to do it.”
    

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17. U.S. Develops Oil-Train Disaster Plan –Energy Journal

    Apr 14, 2015 | The Wall Street Journal

    By Christopher Harder

    The U.S. Federal Emergency Management Agency is mapping out how to deal with an urban oil-train accident as part of an exercise to help firefighters and emergency workers prepare for the kind of crude-by-rail accident that until now has occurred mostly in rural locations, Russell Gold reports. Firefighters at a FEMA workshop in Jersey City, N.J., discussed the difficulties of battling a crude-oil fire, which can be explosive and hard to extinguish, and one problem was limited supplies of the special foam required to smother the flames. “Our job is to design scenarios that push us to the limit, and very often push us to the point of failure so that we can identify where we need to improve,” said FEMA spokesman Rafael Lemaitre.

    The volume of oil transported by rail has grown to almost 374 million barrels last year from 20 million barrels in 2010, according to the U.S. Energy Information Administration. Although low crude prices and safety issues have recently led to small declines in traffic, trains carrying oil from North Dakota and the Rocky Mountains continue to make their way toward refiners on the coast.

    Separately, the U.S. Interior Department proposed new offshore oil and natural-gasdrilling regulations.

    PETROBRAS PLANS TO RELEASE EARNINGS

    Brazilian state-controlled oil giant Petroleo Brasileiro SA  plans to release 2014 audited earnings on April 22. The earnings have been delayed amid a corruption scandalinvolving accusations that Petrobras overpaid for work by contractors and that the excess funds were funneled to former executives and political parties.

    In a Chinese corruption case, the former chief of China’s biggest oil company went on trial on bribery charges. The case of Jiang Jiemin, who ran China National Petroleum Corp., was the first confirmation that his alleged crimes of bribery and abuse of power were connected to Zhou Yongkang, who once ran China’s powerful national-security apparatus.

    Meanwhile,  China National United Oil Corp., the trading unit of China National Petroleum, is on an oil-buying spree. But investors in oil-specific exchange-traded funds are getting out, Reuters reports.

    EAU DE FRACKING

    In an unusual twist to the hydraulic-fracturing industry, Flotek Industries Inc., a Texas producer of fracking fluids used to extract oil and gas from rocks, says its customers have come to associate an orange scent with its line of chemicals and wants the U.S. Patent and Trademark Office to register the smell as a trademark.

    MARKETS

    Oil prices extended their gains Tuesday on expectations that U.S. oil output, which has fueled the global oversupply of crude, may soon start falling.

    Crude oil has halved in value since last summer on the back of surging supply and tepid demand. But prices have been moving largely sideways this year on signs of impending production cuts as companies have responded to the lower prices with large spending reductions.

    The U.S. Energy Information Administration estimated on Monday total crude-oil production from seven key shale regions in the country will likely decline by 57,000 barrels a day in May from April.

    Standard Chartered said there has been some complacency in the market reaction to the collapse in U.S. drilling and the deceleration in U.S. oil output has been greater than the market is currently pricing in.

    Brent crude, the global price benchmark, rose 0.6% to $58.28 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, light, sweet crude futures for delivery in May traded at $52.41 a barrel, up 1% from Monday’s settlement.

    Read our latest market report at wsj.com.

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18. GOP Rep. Criticizes Obama Administration for Transport Vacancies

    Apr 14, 2015 | The Hill - Transportation

    By Keith Laing

    The chairman of the House committee that handles rail and pipeline issues criticized the Obama administration for having vacancies atop several transportation regulatory agencies. 

    “Last year we had both [Federal Railroad Administration] and [Pipeline and Hazardous Materials Safety Administration] Administrators come before us to answer for the administration.  Now, we have two acting administrators,” said Rep. Jeff Denham (R-Calif), who is chairman of the House Railroads, Pipelines and Hazardous Materials Subcommittee. 

    “Mr. [Timothy] Butters and Ms. [Sarah] Feinberg have been good to work with. We appreciate their service and our frustration has nothing to do with either of them personally,” he continued. “But these are very important times and we need certainty in these agencies’ leadership. Yet, the Administration has not formally nominated anyone for these top safety positions.” 

    Critics have lamented the lack of progress from the Obama administration on filling several transportation related vacancies, including positions at the Transportation Security Administration (TSA), Federal Transit Administration (FTA) and the Federal Motor Carrier Safety Administration (FMCSA) that are all currently filed by temporary chiefs. 

    A recent spate of accidents involving commuter, subway and oil trains have raised awareness about the number of vacancies atop the federal government’s transportation watchdogs. 

    The vacant transportation positions all require confirmation from the Senate, which is in control of Republicans now for the first time since 2006.  

    Transportation Secretary Anthony Foxx has told lawmakers that the administration is working on identifying nominees for the vacant regulatory positions, but he has also defended the temporary chiefs who have been in charge in the interim. 

    “There is an awful lot of work underway to move forward on some of these roles, and that is information that I'll have to let the White House move forward with at an appropriate time. But I do believe there's some imminent work on those,” Foxx said during a March Senate hearing. 

    “But also we have good leaders in place, even if they are acting,” he continued. “And the expectation is that there's no drop-off in our ability to focus.” 

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