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(ACC Mentioned) Chemicals Industry Stays on Course Amid Headwinds
Apr 16, 2015 | Zacks
The chemicals industry -- a roughly $5 trillion global business -- has finally embarked on the road to recovery. The industry fared reasonably well last year amid an exigent global operating backdrop, exacerbated by lumpiness in Europe and a cooling Chinese economy. The December quarter elicited healthy demand trends for chemicals across ... -
(ACC Mentioned) 'The Human Experiment' misses a few crucial steps
Apr 17, 2015 | LA Times
By Martin Tsai
Narrated by Sean Penn, the documentary "The Human Experiment" alleges a correlation between four decades of increased chemical use in the United States and health issues such as cancer, miscarriage, autism and birth defects. The film also contends that the American Chemistry Council lobbies for a $720-billion-a-year industry that has... -
Core TSCA Requirements Would Be Similar Under Udall-Vitter Proposal, Attorney Says
Apr 17, 2015 | BNA Daily Environment Report
By Pat Rizzuto
Many requirements chemical manufacturers face to get new chemicals on the market would be similar under a modernized Toxic Substances Control Act bill to requirements under existing TSCA, an attorney with Keller and Heckman LLP said April 16. The enactment of S. 697 would trigger a major new, but temporary, reporting obligation... -
Chemical Reporting Survey Exposes Gaps In U.S. Safety Rules, Watchdog Group Says
Apr 17, 2015 | BNA Daily Environment Report
By Robert Iafolla
A survey of chemical reporting in six states illustrated significant gaps in the federal regulation of hazardous chemicals, according to a government watchdog group's analysis released April 16. The Center for Effective Government found about 1,700 facilities in those states reported housing significant amounts of nine hazardous... -
‘The Human Experiment’ Movie Review
Apr 16, 2015 | The Washington Post
By Stephanie Merry
We’re all just lab rats, subject to endless clinical trials with every move, drink, bite and breath. That’s the paralyzing message of “The Human Experiment,” a documentary about the effects of an unregulated chemical industry that makes its case with more passion than science. Recently, the regulation of chemicals has become one of those ... -
Why You Should Care About Flame Retardants
Apr 16, 2015 | The Huffington Post - Green Blog
By Eve C. Gartner
Is there anything more primal than the fear of fire? The chemical industry has exploited that fear for decades to boost sales of toxic flame retardants by convincing manufacturers that we need to protect ourselves by putting these chemicals in a wide array of household products from chairs to nursing pillows to the plastic casing around... -
Chemical Board Member Grilled Over Low Morale
Apr 17, 2015 | E&E Daily News
By Kevin Bogardus
A member of the Chemical Safety Board came under repeated questioning from lawmakers yesterday over the agency's low morale and management woes. Manuel Ehrlich, who was confirmed to the board by the Senate in December 2014, was testifying before the House Oversight and Government Reform Subcommittee on Government... -
Colo. Congressman Pulls Back From Direct Role In Anti-Fracking Fight
Apr 17, 2015 | E&E Daily News
By Jennifer Yachnin
Environmental activists in Colorado who fell short of putting a measure curbing hydraulic fracturing before voters last year are already back at work on a similar ballot initiative for the 2016 election. But don't expect Rep. Jared Polis (D-Colo.) to lead that fight. The fourth-term lawmaker told E&E Daily in a recent interview that while he remains... -
Murkowski Links Iran Deal to Crude Exports Ban
Apr 17, 2015 | E&E Daily News
By Daniel Bush
The international negotiations with Iran over its nuclear weapons program have little to do with the U.S. energy sector, but that hasn't stopped Republicans from using the potential agreement to push for an end to the decades-old ban on American crude oil exports. If the sanctions that block Iran from exporting most of its oil are lifted as part... -
Offshore Oil, Gas Rule Readied for Public Comment
Apr 17, 2015 | BNA Daily Environment Report
A proposed federal rule on improvements to blowout preventers and other well control equipment used in offshore oil and gas drilling is scheduled for publication in the April 17 Federal Register. The regulatory changes, written by the Bureau of Safety and Environmental Enforcement, include enhancements to practices as well as equipment. -
More Time for Comment on Arctic Drilling Standards
Apr 17, 2015 | BNA Daily Environment Report
The public will be given an additional 30 days to comment on the Interior Department's proposed standards for oil and gas exploration in federal Arctic waters, the Bureau of Ocean Energy Management said April 16. The extension will allow comments through May 27. The proposed Arctic-specific regulations (RIN 1082-AA00) were jointly issued by BOEM... -
Greens Warn Against More Drilling Ahead of Gulf Spill Anniversary
Apr 16, 2015 | The Hill - E2 Wire
By Devin Henry
Lawmakers and environmental groups are using the upcoming five-year anniversary of the Gulf of Mexico oil spill to warn against more offshore drilling. "We shouldn’t even be talking about potentially opening up our East Coast to drilling when oil companies still haven’t learned the lessons from the BP spill and when safe, clean energy options... -
Advocates Query EPA Shale Gas Water Plan, Renew Call For CWT Standards
Apr 16, 2015 | InsideEPA
By Bridget DiCosmo
Environmentalists are questioning EPA's decision to propose a zero discharge standard to prevent publicly owned treatment works (POTW) from accepting wastewater from shale oil and gas operations, and say the agency should instead focus on tightening an effluent limitation guideline (ELG) for centralized waste treatment facilities (CWTs). -
EPA Foes Doubt Climate Rule Challenge Will Succeed
Apr 16, 2015 | The Hill - E2 Wire
By Timothy Cama
Two of the states challenging the Obama administration’s landmark climate rule for power plants said they are not optimistic that it will succeed. The attorneys general for West Virginia and Louisiana said shortly after Thursday’s oral arguments in front of a Washington federal court that their case has a serious procedural hurdle in that the... -
Senate Likely to Carve Out Own Legislative Path in Fighting EPA Power Plant Rules
Apr 17, 2015 | BNA Daily Environment Report
By Anthony Adragna
Numerous Republican senators have repeatedly vowed to target Environmental Protection Agency carbon dioxide regulations for the nation's fleet of power plants, but more than four months into the Republican-controlled Congress, the legislation through which they will directly target the rules remains unclear and the chamber appears in no rush... -
Senate Adds Climate Change Measure to Budget
Apr 17, 2015 | BNA Daily Environment Report
The Senate adopted a non-binding measure on responses to climate change to its annual budget resolution as it voted April 15 to form a conference committee with the House to sort out differences between the two chambers' resolutions. The climate change measure, proposed by Sen. Michael Bennet (D-Colo.), instructed the senators on the conference... -
Judges Skeptical of Clean Power Plan Authority But Wary of Setting Precedent
Apr 17, 2015 | BNA Daily Environment Report
By Andrew Childers
Federal appellate judges questioned whether the Environmental Protection Agency exceeded its legal authority when it proposed the Clean Power Plan, but they appeared skeptical of taking the unprecedented step of blocking the rule before it's finalized (In re: Murray Energy Corp., D.C. Cir., No. 14-1112, oral arguments 4/16/15... -
Judges Seem Wary of Blocking Climate Change Rule
Apr 16, 2015 | PoliticoPro
By Erica Martinson & Alex Guillen
A panel of federal judges on Thursday appeared wary of blocking the Obama administration from issuing its landmark climate change regulation this summer, but didn’t tip its hand on how it might view future legal challenges. At a hearing at the D.C. Circuit Court of Appeals, a panel of three Republican-appointed judges — Karen LeCraft ... -
Judges Skeptical of Challenge to Proposed E.P.A. Rule on Climate Change
Apr 16, 2015 | The New York Times
By Coral Davenport
A panel of federal judges appeared inclined on Thursday to dismiss the first legal challenge to President Obama’s most far-reaching regulation to slow climate change. But in the arguments before the United States Court of Appeals for the District of Columbia Circuit, lawyers for the nation’s two largest coal companies, more than two dozen states... -
Obama’s Mentor Turns Against Him In Court
Apr 16, 2015 | National Journal
By Clare Foran
Laurence Tribe—an iconic legal scholar and longtime mentor to President Obama—offered up blistering criticism on Thursday of the administration's efforts to tackle climate change. Regulations crafted by the Environmental Protection Agency to limit carbon pollution from power plants violate the Constitution and overstep executive... -
Whitfield Vows All-Out Push Against Clean Power Plan, Quick House Action on His Bill
Apr 17, 2015 | BNA Daily Environment Report
By Anthony Adragna
The Environmental Protection Agency should expect an all-out push from Congress against its proposed carbon pollution limits from the nation's fleet of power plants because the agency is “rewriting the Clean Air Act,” Rep. Ed Whitfield (R-Ky.), chairman of the House Energy and Commerce Subcommittee on Energy and Power, told Bloomberg... -
Ky. Manufacturers Back McConnell On 'Just Say No'
Apr 16, 2015 | E&E News PM
By Jean Chemnick
Kentucky manufacturing companies expressed support today for their state's senior senator's efforts to persuade states not to comply with U.S. EPA's Clean Power Plan. The Kentucky Association of Manufacturers told Senate Majority Leader Mitch McConnell (R) that he's right to warn states that compliance with the power plant rule might... -
Court Sees 'Morass' In Ruling On Proposed ESPS But Tees Up Tough Queries
Apr 16, 2015 | InsideEPA
By Dawn Reeves
A three-judge appellate court panel appears unlikely to accept arguments from state and industry critics that EPA's proposed rule to cut greenhouse gas (GHG) emissions from the existing power sector is so patently unlawful that it merits an exceptional ruling blocking the agency from finalizing it, warning that such a holding would create... -
Former Obama Economic Adviser Calls for Shift in Biofuels Mandate
Apr 17, 2015 | The Wall Street Journal
By Amy Harder
Most of the nation’s biofuels come from ethanol produced from corn in states like Iowa. A new report proposes several reforms to the renewable fuel standard, including some that will require congressional approval. A former White House economic adviser is calling for changes to a 2005 law mandating increased use of alternative ... -
EPA to Publish Final Coal Ash Rule After Technical Corrections, Months-Long Delay
Apr 17, 2015 | BNA Daily Environment Report
By Anthony Adragna
The Environmental Protection Agency will publish its first national coal ash management and disposal standards in the Federal Register April 17 after a delay of nearly four months. According to the agency, the gap between the announcement of the final rule in December and its publication allowed the agency to eliminate potentially confusing... -
Obama's Emission Plan Splits Coal Lobby From Utilities in States
Apr 17, 2015 | BNA Daily Environment Report
By Margaret Newkirk
Electric companies are breaking with longtime allies in the coal industry over state-level legislation that would stymie President Barack Obama's carbon emissions limits. Entergy Corp., PPL Corp. and FirstEnergy Corp. are among those opposing a wave of bills backed by coal companies that would let legislatures block plans to curb greenhouse gas... -
LNG Rail Transport Research Could Lead to New Rules, PHMSA Official Says
Apr 17, 2015 | BNA Daily Environment Report
By Rachel Leven
The Pipeline and Hazardous Materials Safety Administration is seeking research on liquefied natural gas transport by rail that could lead to rulemakings, an agency official said April 16. The agency has set aside $1.4 million for research that either evaluates LNG rail transportation, reviews packaging standards for rail transport, assesses rail... -
McDermott Bill Would Require PHMSA Rule To Implement Strictest Tank Car Standard
Apr 17, 2015 | BNA Daily Environment Report
By Rachel Leven
Rep. Jim McDermott (D-Wash.) has introduced a sweeping bill to address safety issues associated with transporting crude oil by rail, including requiring the use of the most stringent tank car standard proposed in a Transportation Department rulemaking. The Crude-by-Rail Safety Act (H.R. 1804) would require the Pipeline and Hazardous... -
PHMSA Expected to Declare HazMat Use Of Electronic Shipping Documents ‘Feasible'
Apr 17, 2015 | BNA Daily Environment Report
By Rachel Leven
A Transportation Department office is likely to tell Congress it is feasible for the hazardous materials industry to use electronic shipping documents, an official said April 16. The onus will be on the Pipeline and Hazardous Materials Safety Administration to set out requirements for this shift from paper to electronic, such as determining a timeline...
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(ACC Mentioned) Chemicals Industry Stays on Course Amid Headwinds
Apr 16, 2015 | Zacks
The chemicals industry -- a roughly $5 trillion global business -- has finally embarked on the road to recovery. The industry fared reasonably well last year amid an exigent global operating backdrop, exacerbated by lumpiness in Europe and a cooling Chinese economy. The December quarter elicited healthy demand trends for chemicals across major markets and continued recovery in non-residential construction -- an end-market that has long been a weak link.
While some industry-specific challenges, concerns over China’s future growth and sluggishness in Europe remain sources of near-term uncertainties, the chemical industry is expected to continue to recuperate in 2015, invigorated by strength in the automotive market and significant shale-linked capital investment. The upturn is also expected to be supported by healing across housing and commercial construction markets.
U.S. Outlook Rosy, Europe & China Smoggy
The U.S. chemical industry got off to a positive start in 2015. According to the American Chemistry Council (ACC), an industry trade group, U.S. chemical production rose on a monthly basis in both Jan and Feb 2015, indicating that the recovery stays the course amid a few macro headwinds. The gain in February also marked the eleventh straight monthly production increase. Growth was witnessed across all chemical-producing regions for these months.
The outlook for the U.S. chemical industry paints an encouraging picture as the ACC envisions national chemical production to rise 3.7% in 2015 (up from a 2% increase in 2014) and 3.9% in 2016. Growth is expected to be backed by healthy demand from the light vehicles market and a recovery in the housing market.
The ACC expects strong capital spending in the coming years, stemming from new investments in petrochemicals and derivatives. The shale gas boom in the U.S. has been a huge driving factor for chemical investment on plants and equipment in the country over the last few years. According to a recent ACC report, domestic chemical investment related to shale gas has reached as high as $138 billion, over 60% which are from firms outside of the U.S.
The shale revolution, which started in 2010, made the U.S. an attractive investment hotspot and incentivized a number of chemical companies to invest billions of dollars to beef up capacity in the country. Chemical makers including BASF (BASFY - Snapshot Report), Dow Chemical (DOW - Analyst Report), DuPont (DD - Analyst Report), LyondellBasell Industries (LYB - Analyst Report), Eastman Chemical (EMN - Analyst Report), Celanese (CE - Analyst Report) and Westlake Chemical (WLK - Snapshot Report) are ramping up investment on shale gas-linked projects to take advantage of ample natural gas supplies which is expected to boost capacity and export over the next several years.
As per an ACC report, gross exports for chemical products are expected to surge from $60 billion in 2014 to $123 billion by 2030. Accelerated growth in U.S. chemical exports are expected to lead to continued generation of trade surplus. The ACC expects the U.S. chemical industry to rake in trade surplus of $77 billion by 2019, supported by significant shale gas-driven chemical investments. The trade group also sees domestic chemical sales to cross the $1 trillion milestone by 2019.
Major chemical makers are also increasingly switching their focus on lucrative markets to cut their exposure on businesses that are grappling with weak demand and input cost pressures. Agriculture and health and nutrition have emerged as attractive markets. Moreover, strategic measures including cost management and acquisitions/divestments remain the prime focus of chemical companies to stay afloat in a still difficult macro environment.
Outlook for Europe, however, still remains cloudy. According to the European Chemical Industry Council (CEFIC), chemical output rose a mere 0.3% year over year in Europe in 2014, stymied by a decline in export and lower pricing. Chemical prices fell 1.8% in the European Union last year.
CEFIC expects European chemical output to rise 1% this year. Sluggishness in some of the region’s major economies continues to deter recovery of the chemical industry in that region. The European chemical industry also remains hobbled by high energy costs and declining R&D investments.
Moreover, the slowdown in China -- further manifested by slowing economic growth in first-quarter 2015 -- may weigh on demand for chemicals in this key market. The country remains battered by its tepid property market and weak infrastructure investment growth, which is contributing to its decelerating economic growth.
Lower oil prices have also ignited concerns about U.S. petrochemical makers given the potential that it may dwindle the feedstock cost advantage that is so far enjoyed by these companies.
Zacks Industry Rank
Within the Zacks Industry classification, the chemical industry falls under the broader Basic Materials sector (one of 16 Zacks sectors) which had a 2.7% share of total earnings for the S&P 500 in 2014. We rank all of the more than 260 industries in the 16 Zacks sectors based on the earnings outlook for the constituent companies in each industry.
The way to look at the complete list of 260+ industries is that the outlook for the top one-third of the list (Zacks Industry Rank of #88 and lower) is positive, the middle 1/3rd or industries with Zacks Industry Rank between #89 and #176 is neutral while the outlook for the bottom one-third (Zacks Industry Rank #177 and higher) is negative. (To learn more visit: About Zacks Industry Rank.)
We have three chemicals related industries: Chemical Diversified, Chemical Plastics and Chemical Specialty, all of which lie in the middle third with Zacks Industry Ranks of #160, #168 and #171, respectively.
Looking at the exact location of these industries, one could say that the general outlook for the chemical industry as a whole is ‘Neutral.’
Sector Level Earnings Trends
Looking at the overall results of the Basic Materials sector, earnings for the sector participants in the S&P 500 index went up 3% in fourth-quarter 2014, a deceleration from the 17.6% rise in the third. Total revenues for these companies were down 2% in the fourth quarter versus a 2.6% rise a quarter ago.
The earnings picture for first-quarter 2015 looks weak with a projected decline of 12.6%. Revenues are also forecast to fall 6.1% in the quarter.
For 2015, earnings are expected to show a modest 0.8% increase, accelerating to a 19.9% rise next year. Revenues are forecast to fall 2.1% this year and rise 6% in 2016.
For more details about the earnings of this sector and others, please read our ‘Earnings Trends’ report.
The Way Forward
While Europe and China are expected to continue to be deterrents, an improving U.S. economy should support chemical demand in 2015. Strong momentum in the automotive space and recovery in housing and commercial construction markets should also keep the industry on the path to recovery. -
(ACC Mentioned) 'The Human Experiment' misses a few crucial steps
Apr 17, 2015 | LA Times
By Martin Tsai
Narrated by Sean Penn, the documentary "The Human Experiment" alleges a correlation between four decades of increased chemical use in the United States and health issues such as cancer, miscarriage, autism and birth defects.
The film also contends that the American Chemistry Council lobbies for a $720-billion-a-year industry that has politicians in its pocket and sabotages attempts at passing regulatory legislation. Movie reviews
"The Human Experiment" is that rare advocacy documentary that actually lines up legitimate medical and academic experts, who opine authoritatively in their respective specialties. Still, co-directors Dana Nachman and Don Hardy haven't attributed all of their facts and figures, hence the proverbial grain of salt.
The film's parade of activists also raises flags. Hannah Cary asserts that China is among the countries clamping down with better protections regarding chemical use. That would seem to require suspension of disbelief given reports of and questions about formaldehyde in laminated flooring, hydrogen sulfide-laced drywall, tainted baby formula and air pollution in China.
Nachman and Hardy followed the laborious fertility treatment of one woman, Jenn Canvasser, and her deeply personal account proves powerful. But the filmmakers didn't speak to her again until after the death of her son Micah, inexplicably skipping her pregnancy entirely. It's one element of the film that just doesn't add up.
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Core TSCA Requirements Would Be Similar Under Udall-Vitter Proposal, Attorney Says
Apr 17, 2015 | BNA Daily Environment Report
By Pat Rizzuto
Many requirements chemical manufacturers face to get new chemicals on the market would be similar under a modernized Toxic Substances Control Act bill to requirements under existing TSCA, an attorney with Keller and Heckman LLP said April 16.
The enactment of S. 697 would trigger a major new, but temporary, reporting obligation as companies work with the Environmental Protection Agency to update the TSCA inventory, Tom Berger, a partner in the law firm, said.
Other reporting obligations, however, would largely remain the same, he said.
Berger was among a team of Keller and Heckman attorneys that hosted a webinar April 16 on the Frank R. Lautenberg Chemical Safety for the 21st Century Act (S. 697). Sens. Tom Udall (D-N.M.) and David Vitter (R-La.) introduced the bill March 10 (47 DEN A-19, 3/11/15).
As of April 15, the Udall-Vitter bill had the bipartisan support of 22 senators.
‘Heart of TSCA.’
Berger's presentation focused on what he called “the heart of TSCA.” He discussed Sections 5, 8, 12 and 13 of the law, which respectively address what manufacturers must do to market a new chemical, the types of information they must submit to the EPA and the requirements they must meet to export or import a new or existing chemical.
Like other speakers, Berger focused on S. 697.
Sen. Barbara Boxer (D-Calif.) introduced another TSCA reform bill, the Alan Reinstein and Trevor Schaefer Toxic Chemical Protection Act (S. 725), on March 12. It is supported by four other Democrats and one independent, Sen. Bernard Sanders (I-Vt.) (49 DEN A-2, 3/13/15).
Under the Udall-Vitter bill, chemical manufacturers would continue to be required to submit new chemical notices, called premanufacture notices (PMNs), before making or importing a new compound, Berger said.
The bill also would continue to require the EPA to review such notices within 90 days, as the agency must under TSCA, he said.
As under TSCA, the agency's review could be extended once by its own request or when authorized by the manufacturer, he said.
The Udall-Vitter bill would, however, require the EPA to make a new finding before a new chemical could be manufactured or imported, Berger said.
The EPA would have to make one of three findings:
• the new chemical would be likely to meet the law's safety standard;
• the new chemical would not be likely to meet the safety standard;
• additional information is needed to make a safety determination.
Under the safety standard set by the Udall-Vitter bill, chemicals must not pose an unreasonable risk to human health or the environment under foreseeable conditions of use. The agency could not, under S. 697, consider costs or benefits as it makes the safety determination.
If the EPA concluded the new chemical would be unlikely to meet the safety standard, the agency would have to restrict the chemical's use in such a way that it would be likely to meet the safety standard, or to prohibit the chemical altogether, Berger said.
OSHA Consultation; Some Exemptions Retained
Under TSCA, the EPA manages risks through various means, including requiring exposed workers to wear personal protective equipment. The agency can issue such restrictions under TSCA without consulting with the Occupational Safety and Health Administration.
Under S. 697, the EPA would be required to consult with OSHA, Berger said.
“What that means remains to be seen,” Berger said. However, “a requirement that EPA consult with another agency would seem to be favorable to industry.”
The Udall-Vitter bill would retain certain exemptions for chemical manufacturers regarding low-risk chemicals, Berger said.
One such exemption, for example, allows manufacturers of some new polymers and companies making or importing small volumes of a new chemical not to file a new chemical notice.
The EPA would, however, have to issue regulations for such exemptions, Berger said. The impact a rulemaking would have on the exemptions is not clear, he added.
It is essential, however, that the exemptions be maintained, he said.
The Udall-Vitter bill would require the EPA to reset its inventory of chemicals in commerce, now called the TSCA inventory.
That will require a single large investment of time by companies, Berger said.
Most of the other reporting obligations imposed by TSCA would remain largely or completely unchanged under S. 697, he said.
Exports, Imports
Chemical exports could be subject to greater scrutiny under S. 697 than they are under the current TSCA, Berger said.
Under TSCA Section 12(a), a manufacturer of a new chemical substance does not have to file a PMN if the new chemical is manufactured solely for export and if, as it moves through commerce to be shipped, the chemical is clearly labeled and managed solely for export.
Under S. 697 the EPA could require chemicals intended for export be tested to ensure they meet the bill's safety standard, he said.
The requirements chemical manufacturers face when importing chemicals would largely be the same under S. 697 as they are now, Berger said.
The certification requirements for importers would differ, however.
TSCA requires companies to certify that they are not importing a chemical that would violate TSCA.
Under S. 697, companies would have to certify “after reasonable inquiry and to the best of my knowledge and belief” that the chemical would comply with the new law.
That new requirement could lessen penalties a company would face under TSCA if it—despite good-faith efforts to ensure the chemical complied with TSCA—imported a chemical that was not on the inventory of chemicals made or sold in the U.S., he said.
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Chemical Reporting Survey Exposes Gaps In U.S. Safety Rules, Watchdog Group Says
Apr 17, 2015 | BNA Daily Environment Report
By Robert Iafolla
A survey of chemical reporting in six states illustrated significant gaps in the federal regulation of hazardous chemicals, according to a government watchdog group's analysis released April 16.
The Center for Effective Government found about 1,700 facilities in those states reported housing significant amounts of nine hazardous chemicals that aren't covered by the Environmental Protection Agency's rule for preventing chemical disasters.
The gaps that the watchdog group found in chemical regulations echo those highlighted by the deadly disaster at a fertilizer facility in West, Texas, on April 17, 2013 (76 DEN A-16, 4/19/13).
About 30 tons of ammonium nitrate at West Fertilizer exploded in a fire, killing 15 people, hurting more than 200 and leveling parts of the town. But the company didn't develop or file a risk management plan for the ammonium nitrate because it's not one of the 140 chemicals subject to the EPA's risk management program rule.
The Center for Effective Government's analysis on chemical regulations comes as the EPA is considering revisions to the risk management program rule, including potentially expanding the number of chemicals that it covers.
“If the EPA doesn't have a proposal to substantively plug the gaps for dangerous chemicals, it would be a huge missed opportunity,” Sean Moulton, the group's director of open government policy, told Bloomberg BNA April 13.
The EPA has said it plans to issue proposed revisions in 2015 and a final version in 2016, although environmental, labor and public health groups have warned the Obama administration that it needs to act fast to ensure the revisions take effect(54 DEN A-15, 3/20/15).
Tier II Reports Support Analysis
The watchdog group's analysis was based on an examination of chemical reporting mandated by the Emergency Planning and Community Right-to-Know Act.
That law requires facilities to report to their state an inventory of hazardous substances that they have in substantial quantities. The state passes those reports—known as Tier II reports—on to emergency response and planning authorities at the state and local levels.
The watchdog group examined Tier II reports for the 2012 reporting year from Illinois, Indiana, Iowa, Michigan, Minnesota and Wisconsin.
“Just by looking at nine chemicals, we found this enormous gap,” Moulton said. “I'm not saying these are the nine magical chemicals. These are the nine we found most easily.”
The watchdog group searched the Tier II reports for acetone, calcium hypochlorite, dimethoate, fluosilic acid, methanol, phenol, styrene, toluene and xylenes.
Only about 15 percent of the 1,724 facilities that housed significant quantities of the nine hazardous chemicals reported to both state authorities under the right-to-know program and federal authorities under the risk management program.
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‘The Human Experiment’ Movie Review
Apr 16, 2015 | The Washington Post
By Stephanie Merry
We’re all just lab rats, subject to endless clinical trials with every move, drink, bite and breath. That’s the paralyzing message of “The Human Experiment,” a documentary about the effects of an unregulated chemical industry that makes its case with more passion than science.
Recently, the regulation of chemicals has become one of those rare issues that has bipartisan support. The current law — the Toxic Substances Control Act, or TSCA — is full of loopholes. And, as the movie indicates, chemicals are generally considered innocent until proved guilty. In other words, just because that mascara or can of soup or carpet cleaner is being sold in stores doesn’t mean it won’t hurt you. (Just think what we’ve learned about formaldehyde, DDT and, just last month, Roundup.)
Since the movie was made, in 2013, a bipartisan bill has been drafted to overhaul the toothless TSCA. That’s heartening, even if not all environmental groups are pleased with the bill’s scope. In the meantime, “The Human Experiment” is here to scare the bejesus out of us with the reminder that everything we touch might end up giving us cancer.
Liberal activist Sean Penn produced the movie and narrates with fervor. Of course this issue is scary and people deserve to know the risks, but the movie undermines its own argument.
Case in point: One of the most affecting stories in the film follows a young man and woman who have tried for three years to get pregnant. The camera follows them along to the doctor as the woman gets an embryo implanted, and we see the heartbreaking experience as the pair learns, yet again, that it didn’t take. “What’s wrong with me?” she cries, burying her face. It’s an authentic and agonizing scene.
But did the chemical industry cause her fertility problems? Who knows? Some chemicals, such as the ubiquitous bisphenol A — a compound found in plastic bottles and can linings, among other things — might cause infertility, not to mention myriad other problems. But even the woman’s doctors admit they don’t know why she had trouble getting pregnant.
By presenting her story, directors Don Hardy Jr. and Dana Nachman are making a case for something they can’t prove. They are on more solid footing proving the ill effects of flame-retardant materials. (And for a really tremendous documentary about how those landed on the market, “Toxic Hot Seat” is a must-see with a more subtle approach.) Meanwhile, a detour into a green house-cleaning business does little more than serve as free advertising for the company.
The movie was nicely shot with flashy graphics to explain the data that does exist. But in the end, this film will persuade only those who already believe.
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Why You Should Care About Flame Retardants
Apr 16, 2015 | The Huffington Post - Green Blog
By Eve C. Gartner
Is there anything more primal than the fear of fire?
The chemical industry has exploited that fear for decades to boost sales of toxic flame retardants by convincing manufacturers that we need to protect ourselves by putting these chemicals in a wide array of household products from chairs to nursing pillows to the plastic casing around electronic products (like televisions and laptops that are doused in flame retardants before they're sold to the public).
For many years the tobacco industry aided this effort by opposing protections that would require cigarettes to be self-extinguishing. Why did these two very different industries team up? The tobacco industry didn't want to change the way it made cigarettes--even to make them safer. With flame retardant chemicals added to household items, Big Tobacco could claim that smoking does not increase fire risks.
This investigative series by the Chicago Tribune exposed the deceptive practices and partnership between the chemical industry and Big Tobacco.
The chemical industry's deceptive practices and partnership with Big Tobacco were documented in a landmark investigative series by the Chicago Tribune two years ago. But not enough attention has been paid to the health consequences of loading furniture and other household items with toxic chemicals.
We fear trace amounts of pesticides on our food, while sitting on sofas containing pounds of similarly toxic chemicals. These chemicals migrate out of our sofas and other household products and are released into the air in our homes. As a result, 97 percent of U.S. residents have measurable quantities of toxic flame retardants in their blood.
Low-income communities and communities of color bear a higher burden from these chemicals than others.
But most people simply aren't aware of the health risks posed by these toxic chemicals which have been linked to reproductive impairment, neurological impacts including learning deficits and decreased IQ in children, endocrine disruption, cancer and immune disorders.
Children are at particular risk because, as every parent knows, kids touch everything and are constantly putting their hands in their mouth. This means they ingest a lot of chemicals that migrate from products soaked with flame retardants. It also means that they may be exposed during critical developmental windows of rapid growth and brain development during which they are particularly vulnerable to these toxins; and children's products in particular are likely to contain flame retardant chemicals.
As studies prove one type of organohalogen flame retardant dangerous, a handful of states have banned it or threatened a ban. The chemical industry has responded to these bans by replacing the chemical with a structurally similar flame retardant that is likely just as harmful, leading to what public health experts call "regrettable substitutions." For example, after pentaBDE was banned by many states, it was replaced with chlorinated tris, a chemical that was recently found by the state of California to be a "known carcinogen."
As Deborah Rice, a former U.S. Environmental Protection Agency (EPA) toxicologist who works for the Maine Center for Disease Control and Prevention, told the Chicago Tribune: "By the time the scientific community catches up to one chemical, industry moves on to another and they go back to their playbook of delay and denial."
Yet, because of the failures of the Toxic Substances Control Act (TSCA)--a federal statute that is supposed to assure that chemicals don' t pose unreasonable risks to families and communities--EPA has not regulated organohalogen flame retardants despite the strong scientific evidence about the health risks posed by this chemical class.
In the face of serious human health risks and inaction by EPA, a broad coalition of organizations, including the International Association of Fire Fighters, American Academy of Pediatrics, Consumers Union, Consumer Federation of America, National Hispanic Medical Association, American Medical Women's Association, League of United Latin American Citizens, Learning Disabilities Association of America, Worksafe, Kids in Danger and the Green Science Policy Institute has just submitted a legal petition to the Consumer Product Safety Commission (CPSC). These groups are asking for regulations banning four categories of consumer products--children's products, furniture, mattresses and the casings around electronics--if they contain any organohalogen flame retardants.
Learn more about the risks you face from these toxic flame retardants, and stand with our well-respected partners as we ask the Obama Administration's CPSC to protect us and our children from being poisoned by products that we use every day.
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Chemical Board Member Grilled Over Low Morale
Apr 17, 2015 | E&E Daily News
By Kevin Bogardus
A member of the Chemical Safety Board came under repeated questioning from lawmakers yesterday over the agency's low morale and management woes.
Manuel Ehrlich, who was confirmed to the board by the Senate in December 2014, was testifying before the House Oversight and Government Reform Subcommittee on Government Operations.
The subpanel was hosting a hearing on the worst places to work in the federal government. Workers at CSB have given the agency low marks year after year for employee satisfaction.
Despite those poor scores, Ehrlich said morale is improving at CSB.
"I can tell you it's getting better, and we are going to continue to make it better," Ehrlich said. "I think we're doing something to turn them around. Our work product has not faltered during this period of time."
Rep. Gerry Connolly (D-Va.) asked Ehrlich if he was surprised that the actions of CSB's board were having an impact on agency workers' morale.
"No, it really didn't surprise me, because in talking to the staff members, they want something from their board members. They want to know that they're part of the team," Ehrlich said.
Members of Congress, however, were not convinced all was well at the scandal-plagued agency. Rep. Mark Meadows (R-N.C.), chairman of the subcommittee, pushed Ehrlich to present more evidence that things were turning around at the safety board.
"Under what matrix are they getting better?" Meadows asked him.
"The fact that we are continually finishing reports, the fact that we have got our backlog down," Ehrlich said.
"Backlog and reports are not employee satisfaction, guy," Meadows said.
The chemical safety agency has been struggling lately.
Its chairman, Rafael Moure-Eraso, has resigned and may have committed perjury too, according to U.S. EPA Inspector General Arthur Elkins Jr. (E&ENews PM, April 14). In addition, the House Oversight and Government Reform Committee found that there was a "toxic work environment" at CSB in a report released last year (Greenwire, June 19, 2014).
The chemical board has a vital mission, which is to investigate major chemical accidents and make safety recommendations to workers and industry. For example, CSB is still looking into the 2010 Deepwater Horizon oil spill in the Gulf of Mexico.
But problems with staff morale and leadership have hampered the agency's work. In last year's Federal Employee Viewpoint Survey, CSB was tied for last when it came to worker satisfaction, earning a score of 38 percent (Greenwire, Oct. 24, 2014).
Asked by Del. Stacey Plaskett (D-Virgin Islands) about CSB workers' complaints that agency leaders haven't listened to their concerns, Ehrlich said they're working on changing the workplace culture.
"We have obviously lost a chair. That takes its share of trauma on the organization," Ehrlich said. "Those attitudes have to be changed, and they will change over time, but they won't be changed overnight."
At the hearing, lawmakers also heard from officials at the Department of Homeland Security and the National Archives and Records Administration -- both agencies are known for low employee satisfaction.
To help improve worker morale, Meadows has set up an email address, TellMark@mail.house.gov, to gather federal workers' complaints anonymously. In addition, the congressman will visit federal agencies on site and host meetings with government workers.
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Colo. Congressman Pulls Back From Direct Role In Anti-Fracking Fight
Apr 17, 2015 | E&E Daily News
By Jennifer Yachnin
Environmental activists in Colorado who fell short of putting a measure curbing hydraulic fracturing before voters last year are already back at work on a similar ballot initiative for the 2016 election.
But don't expect Rep. Jared Polis (D-Colo.) to lead that fight.
The fourth-term lawmaker told E&E Daily in a recent interview that while he remains "committed to solving this issue," he has turned his focus to the legislative process rather than the pair of ballot initiatives he personally backed in the 2014 cycle.
But "the issue is urgent," Polis said in a telephone interview, citing constituents who raised concerns about fracking sites near their homes at a recent town hall meeting in his Boulder-based 2nd District.
During the last election cycle, Polis generated controversy in the Centennial State by publicly supporting and helping fund a pair of ballot initiatives that would have amended the state's constitution to restrict -- though not outright ban -- fracking at new oil and gas wells in the state.
But the measures, one of which would have established a 2,000-foot setback for drilling rigs and another that would have created an environmental bill of rights, never made it to the ballot.
In late summer, with the political temperature rising among both supporters and opponents of fracking, Colorado Gov. John Hickenlooper (D) announced a compromise deal under which those proposals would be dropped, along with a pair of industry-backed ballot measures that aimed to punish communities that restricted drilling.
Instead, the governor appointed a mix of industry representatives, environmental activists and local officials to a special task force assigned with recommending how best to protect Coloradans who live near existing or proposed oil and gas drilling sites.
While that group finished its work in February, it drew criticism from many of its own members, who lamented that the panel failed to support creating real authority for local communities to determine where new wells could be located.
Instead, the panel backed measures such as increased monitoring for air quality, a health complaint line for oil-and-gas-related concerns, studies on how to reduce well-related traffic and the creation of a state-run information clearinghouse.
While the panel also supported giving local communities more input into siting new wells, it stopped well short of recommending that local jurisdictions have any sort of veto authority in those decisions.
But Polis praised the 21-member task force, a third of which included energy industry representatives, for the "thought and deliberation" in their work, adding, "I was thrilled that a strong majority of the commission came up with recommendations that would address the issues that my constituents had."
He also pointed to a minority report included in the group's recommendations to Hickenlooper, adding that he remains hopeful the Colorado Oil and Gas Conservation Commission and the governor will pursue some of the ideas that failed to garner the two-thirds support required of the commission.
In the meantime, activists, including the Colorado Community Rights Network, have already said they will pursue new ballot initiatives in 2016 aimed at curbing hydraulic fracturing in the state.
The CCRN proposal, which fell short of gathering the necessary signatures last year, is among the more stringent proposals, effectively giving communities the right to block any type of industrial activity within their boundaries.
Polis said that he is unfamiliar with any of the ballot measures now being floated for the 2016 election but said he supports the idea that "communities should be empowered" to deal with surface issues like siting and zoning for new wells.
Still, Polis emphasized that he remains opposed to any kind of statewide ban on fracking.
"I've always believed this issue can be best resolved through our legislative process," Polis added, pointing to his sponsorship in the last Congress of both the "Bringing Reductions to Energy's Airborne Toxic Health Effects Act" and the "Fracturing Responsibility and Awareness of Chemicals Act."
"But if there is a continued unwillingness to address the issue, there are many who will turn to direct democracy," he said. Political implications hard to read
While Hickenlooper received credit last year for avoiding a potentially nasty fight in his oil-and-gas-producing state by neutralizing the ballot initiatives, the compromise was also viewed as a victory for Democrats, many of whom saw the ballot measures as an unnecessary distraction at a time when the party was fighting tough races, both for the governor's office and a U.S. Senate seat. Some Democrats at the time privately grumbled that by supporting the anti-fracking initiatives, Polis was inadvertently aiding Republicans and industry supporters.
Ultimately, Hickenlooper won his second term while Sen. Mark Udall (D) lost his re-election bid.
In retrospect, Polis acknowledged that the ballot initiatives would have likely boosted turnout in a midyear election among the state's "gas patch" counties, but he added it's not clear such votes could have helped his Senate colleague.
"Certainly there's a lot of voters who care deeply about protecting their homes and their property rights," Polis said. "I don't know where those voters would fall in federal turnout."
Udall lost his re-election bid to Republican Cory Gardner by nearly 50,000 votes.
"The ballot initiative that Polis supported put other Democrats in the state in an awkward position," said University of Denver political science professor Peter Hanson. "They would have raised the issue of how to handle fracking in an election that was already very difficult for Democrats, so other Democrats in the state worried they'd be forced to take a position on it and hurt themselves with one group or another."
But despite Polis' prominent position backing those measures, Centennial State political observers said the lawmaker did not necessarily hurt his standing among fellow Democrats -- particularly if he wants to run statewide at some point.
"I don't think those hard feelings last," Hanson said. "I think politicians tend to be pretty practical when it comes to helping members of their own party win office."
He added that because the compromise occurred more than three months before the November election -- weeks before most voters begin to tune into the potential issues and candidates on the ballot -- many average Coloradoans were likely unaware of the would-have-been initiatives at all.
"The issue had really faded from view prior to election, I don't think there's anyone who thinks the election turned on it," Hanson said. "Whatever difficulties were caused by the initiatives were temporary."
Longtime Polis adviser Rick Ridder, who is president of Denver-based RBI Strategies and Research, argued that the Democratic lawmaker earned respect from his colleagues, both for taking on the oil and gas industry and for recognizing the need for a compromise.
"Jared is clearly in a position where he garnered a lot of respect among the delegation for taking on an issue that was highly meaningful to his constituents, and as one member whom I will not identify said, 'Yeah, if that stuff was happening in my district, I'd be fighting like hell, too,'" said Ridder, who also served as spokesman for the Polis-backed Coloradans for Local Control, one of the groups that sprouted up last year to support the anti-fracking initiatives. "From that perspective, there was very much a sense of they understood why he was doing it."
Dick Wadhams, former chairman of the state GOP and now a Colorado-based Republican consultant, suggested, however, that Polis' decision to strike a deal and step back from the ballot measures could come back to haunt him should the House lawmaker opt to run statewide someday.
"On one hand, he's already got the stain of having essentially said 'I want to kill oil and gas jobs in Colorado,' and then he turned around and basically abandoned the folks who had been banking on his financial support. He kind of created a lose-lose for himself," Wadhams said.
Nonetheless, Wadhams acknowledged that Polis remains an obvious contender in any future statewide races -- such as the 2018 gubernatorial contest or the 2020 election when Sen. Cory Gardner (R) will face his first re-election bid.
"Any member of Congress starts off with a financial and political basis of support to run for a statewide office. And in Polis' case, he brings something to the table most incumbent members of Congress don't, which is he's wealthy," Wadhams said.
Polis is among the richest members of Congress, making his fortune via an online greeting card company and later founding the floral website ProFlowers.com.
"He can self-fund if he wants," Wadhams added. "So he has to be taken seriously if for no other reason than his personal checking account."
While Polis could face a challenge running from the liberal 2nd District base if he were to opt into the Senate race, he would not be the first lawmaker to do so -- Udall won his Senate seat in 2008 after representing the same district.
"I'm not saying it's impossible for Polis to run statewide, but he'll find it's a lot tougher than it was to get elected in the 2nd congressional district," Wadhams said.
Polis, who is in his fourth House term and turns 40 next month, demurs when asked about his own political future.
"I really enjoy the work that I'm doing," he said, pointing to his new assignment on the Natural Resources Committee this session and his seat as ranking member of the Education and the Workforce Subcommittee on Health, Employment, Labor and Pensions.
Pressed on his aspirations, Polis, who was passed over in his bid for the chairmanship of the Democratic Congressional Campaign Committee late last fall, said, "I don't have any plans other than to serve this term, serving the people of Colorado."
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Murkowski Links Iran Deal to Crude Exports Ban
Apr 17, 2015 | E&E Daily News
By Daniel Bush
The international negotiations with Iran over its nuclear weapons program have little to do with the U.S. energy sector, but that hasn't stopped Republicans from using the potential agreement to push for an end to the decades-old ban on American crude oil exports.
If the sanctions that block Iran from exporting most of its oil are lifted as part of a final deal this summer, that country could re-enter the global oil market while U.S. producers remain hamstrung by the 1970s-era ban on crude oil exports, Senate Energy and Natural Resources Chairwoman Lisa Murkowski (R-Alaska) said yesterday.
"Iran [will] be able to make money off selling oil" while American companies sit on the sidelines, Murkowski said at a hearing. "It would be helpful, here in this country, if we were willing to lead from the front on this and lift our own outdated sanctions."
In highlighting the Iran framework agreement released this month, which would restrict the country's development of a nuclear weapon in exchange for the easing of sanctions, Murkowski joined a growing chorus of Republican lawmakers and conservative groups who have turned the international negotiations into a messaging tool to build support for lifting the crude export ban.
Rep. Ted Poe (R-Texas), the chairman of the House Foreign Affairs Subcommittee on Terrorism, Nonproliferation and Trade, who is co-sponsoring a bill to lift the export ban, tied the Iran deal to U.S. crude oil policy at a separate hearing earlier this week, on the same day that the Heritage Foundation's David Kreutzer wrote a column calling out Keystone XL pipeline opponents for not opposing the Iran deal for its potential environmental impacts (Greenwire, April 14).
Iran could begin exporting about 700,000 barrels of oil per day once the sanctions are lifted and eventually ramp its daily production up to 1 million barrels, according to the Energy Information Administration. If current Brent crude oil prices hold steady at about $60 per barrel, Iran could earn roughly $25 billion annually, EIA Administrator Adam Sieminski said at the Senate hearing.
Sieminski said Iran's re-entry into the oil market and any other developments that drive up global supply -- such as ending the U.S. export ban -- would wind up lowering gas prices at home, a conclusion supported by industry and EIA studies on the subject.
"If more crude oil enters the global market, [that] would lower the global oil price, which would tend to lower gasoline prices in the U.S.," Sieminski said.
Though the debate on the Iran deal and the crude export ban dominated large portions of the hearing, Sieminski appeared before the Energy panel to brief lawmakers on EIA's Annual Energy Outlook, the agency's forecast of future oil and natural gas prices and coming changes in the energy sector.
The report predicted that the coal industry's share of power generation would drop from approximately 39 percent today to 34 percent by 2040. Renewable energy is expected to grow from 13 to 18 percent of electric generation over the next 25 years, the report said (E&ENews PM, April 14).
The agency also predicted that the United States would become a net energy exporter sometime between 2020 and 2030, while greenhouse gas emissions will likely remain below 2005 levels through 2040.
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Offshore Oil, Gas Rule Readied for Public Comment
Apr 17, 2015 | BNA Daily Environment Report
A proposed federal rule on improvements to blowout preventers and other well control equipment used in offshore oil and gas drilling is scheduled for publication in the April 17 Federal Register. The regulatory changes, written by the Bureau of Safety and Environmental Enforcement, include enhancements to practices as well as equipment. The proposals will be subject to public comment through June 16. The rule (RIN 1014–AA11) is one of several regulatory initiatives launched after the 2010 blowout of BP Plc's Macondo well beneath the Deepwater Horizon drilling rig. The rule is available at http://bit.ly/1CPo6yt. It builds in part on changes the industry already has begun making (71 DEN A-9, 4/14/15).
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More Time for Comment on Arctic Drilling Standards
Apr 17, 2015 | BNA Daily Environment Report
The public will be given an additional 30 days to comment on the Interior Department's proposed standards for oil and gas exploration in federal Arctic waters, the Bureau of Ocean Energy Management said April 16. The extension will allow comments through May 27. The proposed Arctic-specific regulations (RIN 1082-AA00) were jointly issued by BOEM and the Bureau of Safety and Environmental Enforcement in February (80 Fed. Reg. 9,915; 63 DEN A-1, 4/2/15). The regulations cover drilling, marine transport and emergency response in the Beaufort Sea and the Chukchi Sea. The proposed Arctic standards are available at http://1.usa.gov/1xZjyJf. Comments may be filed via http://www.regulations.gov by using the BSEE–2013–0011 identification number.
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Greens Warn Against More Drilling Ahead of Gulf Spill Anniversary
Apr 16, 2015 | The Hill - E2 Wire
By Devin Henry
Lawmakers and environmental groups are using the upcoming five-year anniversary of the Gulf of Mexico oil spill to warn against more offshore drilling.
"We shouldn’t even be talking about potentially opening up our East Coast to drilling when oil companies still haven’t learned the lessons from the BP spill and when safe, clean energy options like wind and tidal energy could power a new generation of American jobs,” Sen. Ed Markey (D-Mass.) said in a statement.
He held an event with green groups and environmental experts on Capitol Hill Thursday to make their case.
The new push comes after the Obama administration announced plans in January to allow off-shore drilling in three locations near Alaska and along the Atlantic coast stretching from Virginia to Georgia. The plan would also lease out new drilling sites in the Gulf of Mexico.
Republicans have complained that the plan is too restrictive, calling for more drilling in the Atlantic and the Gulf. But green groups have slammed Obama for pushing it.
"We can’t afford to put the Gulf, the Arctic Ocean or the Eastern Seaboard in danger of another BP-style disaster that would threaten our communities and climate," National Resources Defense Council Executive Director Peter Lehner said.
"The government must do all it can to reduce the inherent risks that come with drilling below the ocean surface and rein in the industry — not allow it to expand."
"The science is clear that in order to avoid the worst consequences of climate disruption — consequences already being felt by many coastal communities — we must leave these dirty fuels in the ground,” added Athan Manuel, the director of Lands Protection for the Sierra Club’s Our Wild America campaign in a statement. “The Obama administration should revise its offshore drilling plans to avoid undermining other climate progress.”
The Deepwater Horizon oil rig exploded on April 20, 2010, killing 11 and releasing 3.19 million barrels of crude oil into the Gulf of Mexico.
The incident led Obama to withdraw a plan that would have allowed drilling in the Atlantic Ocean, something environmentalists now warn could lead to a spill of its own.
"As we consider our energy future, we must not allow the lessons of Deepwater Horizon to go unheeded," Center for American Progress Ocean Policy Director Michael Conathan said in a statement.
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Advocates Query EPA Shale Gas Water Plan, Renew Call For CWT Standards
Apr 16, 2015 | InsideEPA
By Bridget DiCosmo
Environmentalists are questioning EPA's decision to propose a zero discharge standard to prevent publicly owned treatment works (POTW) from accepting wastewater from shale oil and gas operations, and say the agency should instead focus on tightening an effluent limitation guideline (ELG) for centralized waste treatment facilities (CWTs).
EPA acknowledged in its March 31 proposed guideline that no POTWs are currently receiving shale wastewater, and one environmentalist says that the rulemaking is therefore "window dressing. . . . If it had come out in 2009, it would have been meaningful," because at that time there was concern POTWs were receiving it.
However, given how many drillers have ceased discharging to POTWs in the Northeast where it first emerged as a potential environmental issue, the rulemaking "does not seem necessary," the source says.
"What we need are effluent standards for [centralized waste treatment] CWT facilities -- those are still in use," the environmentalist adds. The agency announced last year that it is launching a study of centralized waste treatment (CWT) facilities, or industrial plants, that accept oil and natural gas extraction wastewater. EPA has said it will examine whether current regulations provide adequate controls for treating such wastes.
A second advocate says EPA should take the data it gathered on discharges from the sector for the pretreatment proposed rule and use it to address CWT's management of oil and gas wastewater, saying "that's an urgent one to tackle."
And a third environmentalist says it is "not the case" that all POTWs have stopped accepting shale gas wastewater. "From a government enforcement perspective" it may be difficult to enforce the proposed rule given the similarities between conventional and unconventional drilling wastes, the source says. "To the extent that you can tell which is which, it shouldn't be separated, it's troubling that EPA continues to look at it that way."
EPA's shale pretreatment proposal, issued under section 304(m) of the Clean Water Act (CWA) is aimed at filling what EPA says has become a gap in existing effluent limitation guidelines for the oil and gas industry to help ensure that the current practice of not sending wastewater to POTWs continues.
The POTW issue became of particular concern in the Marcellus Shale region, partially due to challenges such as a lack of effluent limits for pollutants unique to the sector and partly due to Pennsylvania's geological constraints that limit the number of underground disposal wells -- EPA's preferred method of disposal of the sector's wastes.
'Regulatory Certainty'
Because the wastewater contains constituents not typical of POTWs, concerns include untreated discharges going to surface water, interference with the POTW's operations, accumulation in biosolids and formation of disinfection byproducts, which are toxic. "EPA has considered that while states, localities, and POTWs are not currently approving these wastewaters for acceptance at POTWs, some POTWs continue to receive requests to accept [existing and new unconventional oil and natural gas (UOG)] extraction wastewater. This proposed rule would provide regulatory certainty and would eliminate the burden on POTWs to analyze such requests," EPA says in a fact sheet.
Current regulations for direct dischargers for onshore oil and gas wastewater set a "zero discharge" standard for discharges of pollutants to surface waters, but there are no existing rules for "indirect" dischargers of the sector's effluent, such as drillers that send their wastewater to POTWs for treatment before it is discharged.
Producers urged EPA that the rulemaking was unnecessary because drillers stopped discharges "several years ago" to POTWs after Pennsylvania Department of Environmental Protection changed its policies in partial response to a high profile series of New York Times articles highlighting the wastewater concerns.
One industry source says, "rather than set aside the issue of creating an ELG, EPA chose to create a zero discharge mandate" with the proposed rule. The source adds that the proposed rule likely does not achieve "much more" than transfer the current zero discharge requirement for direct discharges to POTWs.
The second environmentalist says that while the rule seems like a "good precaution" from EPA, they "don't know that it's entirely true" that all POTWs have stopped accepting drilling discharges from unconventional oil and gas formations, given that a few very small municipalities may have escaped the agency's notice.
Complicating the issue is that wastewater from conventional drilling often contains similar pollutants, making it difficult to tell what sort of facility the discharges may originate from, the source says. EPA will take comment on the proposed rule through June 8.
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EPA Foes Doubt Climate Rule Challenge Will Succeed
Apr 16, 2015 | The Hill - E2 Wire
By Timothy Cama
Two of the states challenging the Obama administration’s landmark climate rule for power plants said they are not optimistic that it will succeed.
The attorneys general for West Virginia and Louisiana said shortly after Thursday’s oral arguments in front of a Washington federal court that their case has a serious procedural hurdle in that the Environmental Protection Agency’s (EPA) proposal is not yet final.
“We recognize that providing relief in this circumstance is not typical. We heard that today in the court,” Patrick Morrisey, West Virginia’s attorney general, told reporters outside the courthouse.
“But we do believe it’s warranted,” he said. “Because the harm to states is extraordinary.”
Elbert Lin, who serves under Morrisey as West Virginia’s solicitor general, argued the case in front of the Court of Appeals for the District of Columbia on behalf of 15 states.
Morrisey is confident that the regulation proposed last June by the EPA is illegal, but it may take more time before a court can decide that.
“We’ve always said that we’re strong on the merits, and we know that what we’re asking for is unusual,” he said. “It’s not typical to ask for an extraordinary writ or to set aside a proposed rule before it’s finalized. We acknowledged that today in court. We’ve acknowledged that for a long period of time.”
Louisiana is another state participating in the lawsuit. Buddy Caldwell, Louisiana’s attorney general, agreed that the case against the rule is strong, but potentially premature.
“The only concern that we have is whether it’s prematurely brought, for an extraordinary remedy,” Caldwell said in the press conference. “But even if the court were to rule that it’s prematurely brought, we still get to bring our actions.”
Although all three judges hearing the case were conservative and appointed by Republican presidents, two of them showed significant doubt that they should overturn the rule before the EPA makes it final.
They pressed Lin to give precedent for such a ruling, and he said there is none.
“There’s always a first. And we think this is the last,” he said in court.
Sean Donahue, an attorney who argued on behalf of three environmental groups supporting the EPA, agreed that the judges are extremely unlikely to stop the rule.
“This is a preemptive strike against an ongoing rulemaking,” he told reporters separately. “Very unusual, and it raises all kinds of practical problems that I think everybody recognized.”
But the EPA rule’s congressional opponents seemed more optimistic.
“EPA’s unprecedented and sweeping regulations threaten to wipe out West Virginia’s vital coal industry, and we need to fight these regulations on every front,” Sen. Shelley Moore Capito (R-W.Va.) said in a statement.
“While I hope that the Court will strike down the administration’s unlawful efforts to wipe out West Virginia coal, I will continue doing everything in my power to protect the lifeblood of our economy,” she said.
Rep. Ed Whitfield (R-Ky.) used the event to promote his Ratepayer Protection Act, which would delay the rule until all court challenges are exhausted, and let states opt out of compliance plans.
“Today's argument highlights the unprecedented attempt by EPA to vastly expand its regulatory authority over state electricity systems without congressional authorization,” he said in a statement.
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Senate Likely to Carve Out Own Legislative Path in Fighting EPA Power Plant Rules
Apr 17, 2015 | BNA Daily Environment Report
By Anthony Adragna
Numerous Republican senators have repeatedly vowed to target Environmental Protection Agency carbon dioxide regulations for the nation's fleet of power plants, but more than four months into the Republican-controlled Congress, the legislation through which they will directly target the rules remains unclear and the chamber appears in no rush to launch its assault.
Sen. Shelley Moore Capito (R-W.Va.) told Bloomberg BNA April 16 that she is working on legislation in response to the EPA's Clean Power Plan but offered no hard time frame for introducing her bill.
“We're still working on that, and we will plan to have something that will have common-sense reaction to the president's Clean Power Plan.” Capito told Bloomberg BNA April 16. “In our state, we're already under serious duress and we need relief, but we're not the only ones. I'd like to block it, and if I can't block it, I'd like to extend the timelines and have measurements that are actually achievable.”
The lack of urgency in the Senate comes even as the House launches its own push to pass legislation delaying the rules. There appears to be limited Senate interest, for example, in offering companion legislation to Rep. Ed Whitfield's (R-Ky.) draft Ratepayer Protection Act, which would offer two ways for states to opt out of complying with the proposed regulations (72 DEN A-6, 4/15/15).
The proposed Clean Power Plan (RIN 2060-AR33), which the EPA expects to finalize this summer, would establish unique carbon dioxide emissions rates for the power sector in each state. The EPA rule would be implemented by states, which would determine how best to achieve the emissions targets using four “building blocks” to achieve reductions.
Senate Expected to Make Push
Observers and aides still expect the Senate to launch its own push to block the EPA rules through standalone legislation, though they didn't speculate on when such a push might occur.
Led by Senate Majority Leader Mitch McConnell (R-Ky.), many senators have vowed to attack the rules through standalone bills, amendments and riders in the appropriations process.
These senators either wouldn't commit to introducing legislation or said they had no immediate plans for how to respond to the proposed carbon dioxide regulations for the nation's fleet of power plants.
Sen. Rob Portman (R-Ohio) told reporters April 15 that he wouldn't introduce a standalone version of an amendment to the Senate budget resolution that would have enabled states to opt out of the EPA's proposed Clean Power Plan if it would increase electricity prices, affect grid reliability or cause economic harm.
Barrasso Working to ‘Free' Americans
A member of the Senate Republican leadership critical of the EPA regulations, Sen. John Barrasso (R-Wyo.), would only say, “We're going to continue to work to free the American people from the very expensive mandates that this administration keeps putting on people all across the country—whether it has to do with air, water, land.” He provided no details on how that would be done.
Sen. Joe Manchin (D-W.Va.) introduced bicameral legislation with Whitfield last year to effectively block the EPA's power plant rules, but an aide said he had no immediate plans for a Senate version of the Whitfield bill and was “still reviewing the legislation.”
An aide to Sen. Heidi Heitkamp (D-N.D.), another moderate Democrat seen as a potential partner in combating the regulations, said the North Dakota Democrat had not spoken with Whitfield about his legislation, and the office of Sen. Joe Donnelly (D-Ind.), another moderate Democrat, did not respond to request for comment.
Whitfield in Touch With Offices
Whitfield told Bloomberg BNA he had been in touch with Senate offices about the Ratepayer Protection Act and believes his bill would attract significant bipartisan support, but he declined to name the potential Senate partners on the legislation (see related story).
Any bill Congress passes to address the rules would almost certainly draw a veto from President Barack Obama, which is why McConnell has called the appropriations process his “best tool” for rolling back the regulations(217 DEN A-12, 11/10/14).
McConnell's office declined to comment on whether he plans to introduce legislation similar to last year's Coal Country Protection Act to effectively block the power plant rules, but said the Kentucky Republican would “do all he can to stop them.”
“Sen. McConnell will continue his fight against this administration's unfair anti-coal jobs regulations on behalf of the Kentuckians he represents in the United States Senate,” Robert Steurer, an aide to McConnell, told Bloomberg BNA in an e-mail.
Electric Reliability Seen in Danger
Critics of the proposed regulation in Congress say it will damage electric reliability in the U.S., increase electricity prices and harm the economies of many states.
Supporters of the proposed rules, the centerpiece of Obama's strategy to tackle climate change, said they will generate public health benefits while allowing the nation to address carbon dioxide emissions from the power sector for the first time.
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Senate Adds Climate Change Measure to Budget
Apr 17, 2015 | BNA Daily Environment Report
The Senate adopted a non-binding measure on responses to climate change to its annual budget resolution as it voted April 15 to form a conference committee with the House to sort out differences between the two chambers' resolutions. The climate change measure, proposed by Sen. Michael Bennet (D-Colo.), instructed the senators on the conference committee to allocate funds for a response to the “economic and national security threats posed by human-induced climate change.” Bennet's measure also instructed committee members to ignore amendments attached earlier to the budget resolution by Senate Majority Leader Mitch McConnell (R-Ky.) and Sen. Roy Blunt (R-Mo.) that reined in the Environmental Protection Agency's authority to regulate greenhouse gases (60 DEN A-2, 3/30/15). Bennet's measure, which was adopted by the Senate on a voice vote, will have little, if any, practical effect; it does not bind the conference committee members to act in any specific way.
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Judges Skeptical of Clean Power Plan Authority But Wary of Setting Precedent
Apr 17, 2015 | BNA Daily Environment Report
By Andrew Childers
Federal appellate judges questioned whether the Environmental Protection Agency exceeded its legal authority when it proposed the Clean Power Plan, but they appeared skeptical of taking the unprecedented step of blocking the rule before it's finalized (In re: Murray Energy Corp., D.C. Cir., No. 14-1112, oral arguments 4/16/15; West Virginia v. EPA, D.C. Cir., No. 14-1146, oral arguments 4/16/15).
Public statements by EPA Administrator Gina McCarthy defending the legal basis for proposing the first-ever carbon dioxide emissions standards for existing power plants may indicate the agency hasn't seriously considered legal arguments against the rule, judges from the U.S. Court of Appeals for the District of Columbia Circuit said during oral arguments April 16.
“That's not going to change with comments” on the proposed rule, Judge Karen LeCraft Henderson said. “The only thing that's going to change is a court telling them, ‘You're wrong on the law.' ”
However, judges feared intervening before the Clean Power Plan is finalized, saying such action could create a flood of new lawsuits challenging federal actions at the proposed rule stage.
The proposed Clean Power Plan (RIN 2060-AR33) would establish unique carbon dioxide emissions rates for the power sector in each state. Those standards would be implemented by the states, which would choose for themselves the best options for compliance.
The Clean Power Plan is the EPA's most expansive reading of its authority under the rarely used Section 111(d) of the Clean Air Act, which has never been interpreted by the courts.
The proposed rule is being challenged by Murray Energy Corp. and various states opposed to the regulation such as West Virginia.
EPA Has ‘Closed Mind.'
Henderson said the EPA appeared to have a “closed mind” to arguments that it can't regulate carbon dioxide emissions from existing power plants under Section 111(d) of the Clean Air Act because they are already subject to hazardous air pollutant limits under Section 112 of the act.
When the Clean Air Act was amended in 1990, the House and Senate approved conflicting amendments to Section 111(d).
The Senate amendment would prevent the EPA from regulating pollutants under Section 111(d) if they already are subject to hazardous air pollutant standards under Section 112. The House amendment can be read as barring the agency from regulating industrial sources under Section 111(d) if they are subject to standards under Section 112, as are power plants.
Both amendments exist in the statutes at large, but only the House amendment was included in the U.S. Code.
Opponents Say EPA Barred From Activity
Opponents of the rule argue that means the EPA can't regulate carbon dioxide emissions from power plants because they are already subject to mercury and air toxics standards, currently being reviewed by the U.S. Supreme Court.
Judge Thomas Griffith also expressed concern with public statements by McCarthy defending the EPA's interpretation of its Section 111(d) authority even as it reviews public comments on the proposed Clean Power Plan (61 DEN A-1, 3/31/15).
That the EPA has announced it plans to finalize the proposed rule this summer may indicate it might not give full weight to public comments opposed to the agency's proposal, Griffith said.
“What is the purpose of notice and comment in the face of statements like that? It's a sham,” he said.
Conflicting Amendments Need Resolution
The judges struggled with how to reconcile the two seemingly conflicting amendments to Section 111(d).
The argument presented “an administrative law 101 course in some sense,” Ethan Shenkman, EPA deputy general counsel, said during an April 16 forum on the argument sponsored by the D.C. Bar.
“I don't think there's anything about this case that makes it exceptional from a jurisdictional perspective,” Shenkman said.
If the court accepts that the two amendments present a conflict—and aren't the result of a scrivener's error as argued by challengers—then the EPA is due an opportunity to interpret that language in keeping with the Supreme Court's decision in Scialabba v. Cuellar de Osorio, Griffith said (Scialabba v. Cuellar de Osorio 2014 BL 158583, 134 S. Ct. 2191 (U.S. 2014)).
No Typographical Error Seen
“That's not a scrivener's error,” Griffith said. “There's no mistake here. There are no typographical errors here. You have two conflicting provisions.”
Geoffrey Barnes, a partner at Squire Patton Boggs LLP representing Murray Energy, had argued that the conflict would best be resolved by Congress and that it would be “completely inappropriate and wrong” to give deference to the EPA interpretation
Amanda Shafer Berman, a Justice Department attorney representing the EPA, argued that those two amendments create an ambiguity in the statute, which the EPA must be given an opportunity to reconcile in its proposed rule.
“If there is a scintilla of a shred of potential ambiguity in the statute, EPA must be given that opportunity,” she said.
Lawsuits Said Premature
The EPA hasn't yet issued the final Clean Power Plan and as such hasn't made any final determinations for how the rule will be structured and how it will read its authority under Section 111(d) of the Clean Air Act, making lawsuits premature, Justice Department attorneys representing the agency argued.
In fact, the EPA in its brief to the court had refined its argument for regulating power plants under Section 111(d).
In a legal memorandum issued with the proposed rule, the EPA had argued that the conflicting amendments created an ambiguity to be resolved. In its brief, the agency had argued that the House amendment alone contained enough ambiguity to justify its proposed rule (59 DEN B-1, 3/27/15).
Laurence Tribe, a Harvard Law School professor representing Peabody Energy Corp., had argued that there is no ambiguity in the statute because the two amendments can be read together harmoniously and that would bar the EPA from regulating carbon dioxide from power plants after it has already regulated their toxic pollutant emissions.
“You follow them both,” he said. “They're not inconsistent.”
Court Fears ‘Morass.'
Though the judges appeared skeptical of the legal reasoning for the EPA proposed rule, they also were wary of setting a precedent that could open all federal regulations to legal challenges at the proposed rule stage.
“You're inviting us into a morass,” Griffith said.
Murray Energy and the states opposed to the rule argued that the extraordinary writ is warranted in this circumstance because the proposed Clean Power Plan is an egregious violation of the provisions of Section 111(d). They argued that the unique legal issues presented by the current litigation are unlikely to arise with enough frequency to overburden the courts.
However, Judge Brett Kavanaugh questioned whether the issues raised in the current lawsuit were so truly unique as to warrant issuing an extraordinary writ to block a proposal, which the D.C. Circuit has never done before. The issues could better be resolved in litigation after the rule is finalized, he said.
“For us to get in the middle of this before that happens seems highly unusual,” Kavanaugh said.
Official Concedes Unusual Nature of Action
West Virginia Attorney General Patrick Morrisey conceded the unusual nature of the lawsuits to block the proposed rule.
“We recognize that providing relief in this circumstance is not typical; we heard that today in court,” he told reporters April 16. “But we do believe it's warranted because the harm to states is extraordinary and, separately, we think it's only a matter of time before EPA's flawed interpretation is struck down by the courts.”
When pressed by Griffith, Tribe was unable to name a precedent for the D.C. Circuit blocking a rule before it's finalized.
“I'm afraid I can't give you a bright line there,” Tribe said.
No Unique Grounds Established
Sean Donahue, an attorney representing environmental groups in the litigation, said the arguments brought by the challengers did not establish unique grounds for the court to take the unprecedented step of blocking a proposed rule.
“Fights about whether an agency is authorized to do something is routine,” he told reporters April 16.
The EPA expects to finalize its rule this summer, and proponents of the regulation suggested there may be no harm to states and industry groups by waiting for that process to be completed.
Additionally, that time would allow the U.S. Supreme Court to issue its ruling in a lawsuit challenging aspects of the EPA's mercury and air toxics standards for power plants, which was argued March 25 (Michigan v. EPA, U.S., No. 14-46, oral arguments 3/25/15; 58 DEN A-1, 3/26/15).
Though the Supreme Court only considered the narrow issues of whether costs should be considered when determining whether it was appropriate to regulate toxic emissions from power plants, a decision striking that rule, issued under Section 112, would moot many of the challenges to the Clean Power Plan.
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Judges Seem Wary of Blocking Climate Change Rule
Apr 16, 2015 | PoliticoPro
By Erica Martinson & Alex Guillen
A panel of federal judges on Thursday appeared wary of blocking the Obama administration from issuing its landmark climate change regulation this summer, but didn’t tip its hand on how it might view future legal challenges.
At a hearing at the D.C. Circuit Court of Appeals, a panel of three Republican-appointed judges — Karen LeCraft Henderson, Thomas Griffith and Brett Kavanaugh — heard more than two hours of arguments on the trio of cases over the EPA’s proposed Clean Power Plan, which opponents have said was the latest attack by the administration on the coal industry.
The rule is at the heart of President Barack Obama’s efforts to cut emissions of the greenhouse gases that are blamed for contributing to climate change, an issue Obama has said would be priority during his remaining time in office.
And while they appeared interested in whether the EPA was overstepping its legal authority, the judges spent relatively little time trying to determine who is right on that legal question, which stems from the agency’s controversial interpretation of the amendments that Congress added to the Clean Air Act.
States, utilities and coal companies that are challenging the proposed rule have asked for an extraordinary court order to stop the EPA from issuing it. They also want a review of a 2012 settlement agreement under which the agency agreed to create the rule, and for the court to decide whether EPA has the statutory authority to regulate power plants under section 111(d) of the CAA.
The judges were the most dismissive of arguments to reopen the 2012 settlement agreement, and for issuing the writ to block EPA from releasing its final version. Stopping the rule before it is finished would mark the first time a court has ever done that, the judges noted warily.
“We like to make history,” Griffith said sardonically to the plaintiffs, drawing giggles from the audience. “Just kidding,” he added.
“We recognize that being the first in something isn’t always easy,” West Virginia Attorney General Patrick Morrisey told reporters afterward. “But the stakes are very high for states like West Virginia and people across the country, and that’s why we think it’s warranted.”
Judges didn’t seem swayed by the contention from Geoffrey Barnes, an attorney representing coal producer Murray Energy, that even the proposed rule is causing “significant, immediate, ongoing harm.”
The final rule will be out in a matter of months, the judges noted.
“You can ask for a stay as soon as the final rule is out there” this summer, Kavanaugh told West Virginia Solicitor General Elbert Lin.
The judges also cast a wary eye on creating a new precedent that could open a floodgate of lawsuits over practically any proposed regulation.
“Do you know of any case in which we have halted a proposed rule?” Griffith asked Lin moments into the oral arguments.
And Kavanaugh appeared unconvinced that the proposed rule rose to the level of “extraordinary” that is required to issue an order blocking it.
“It’s not that extraordinary … there are other important rulemakings,” he said, adding that if the rule was as important as the plaintiffs claimed, the court should proceed with even more caution.
Griffith also referred to the climate regulations as a “garden-variety rulemaking,” and said if the court were to judge the merits of a rule that was only a proposal, it would invite more lawsuits.
“Then where are we?” he asked. “You’re inviting us into a morass.”
But Henderson appeared more receptive to the plaintiffs’ argument.
“I think I see it differently from my colleagues,” Henderson said, indicating that the court should consider arguments that although the details of the final CO2 rule may change, EPA’s underlying decision to issue it under Section 111(d) of the Clean Air Act will not.
The judges, however, did not indicate how they viewed EPA’s legal authority to regulate greenhouse gas emissions this way.
“This is where the case is really an unusual case,” Griffith said.
The panel spent some time probing whether the conflicting House and Senate language in the Clean Air Act amendments was essentially a drafting mistake, as the coal companies, utilities and opposing states contended.
“How is this a scrivener’s error?” Griffith asked, noting that the House and Senate had passed different laws, and that the discrepancy was not a simple typo. “You have two conflicting provisions.”
Harvard professor Laurence Tribe, representing coal miner Peabody Energy, argued that the court should not be considering the Senate’s Clean Air Act amendment, which would allow EPA to regulate under section 111(d).
“With due respect, I think he’s flat out wrong there,” DOJ attorney Amanda Berman told Griffith, adding that “in the past, everybody has always agreed” that the statutory language is ambiguous.
The EPA has said the differing language between the House and Senate CAA amendments gave EPA the discretion to decide on which sections of the landmark environmental law it could use as the basis for its regulations.
“Both amendments were signed by the president,” Kavanaugh said at one point.
“They see it as authorization and you see it as prohibition. That’s a challenging statutory question,” Kavanaugh said to the plaintiffs. But the judge didn’t seem to think that getting to the answer of that question was an urgent matter during Thursday’s arguments.
Kavanaugh also brought up the footnote in the Supreme Court’s 2010 ruling in AEP v. Connecticut that said that EPA cannot regulate power plants under CAA Section 111(d) if is also regulating them under section 112, as it does for mercury.
It is a minor point, but could be “problematic” if the judges get that far in reviewing EPA’s carbon rules, Kavanaugh said.
“Either the Supreme Court got it wrong or we’re way over-reading it,” Berman replied, after citing other errors in the high court’s CAA interpretation in the ruling.
Kavanaugh appeared content to move on from that issue.
While the judges seemed reluctant to consider the rule before it is final, Griffith seemed peeved by public comments on the rule’s fate by EPA Administrator Gina McCarthy.
“The administrator hasn’t been very helpful in her statements.” he said, referring to McCarthy’s assertions that the rule will absolutely be issued.
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Judges Skeptical of Challenge to Proposed E.P.A. Rule on Climate Change
Apr 16, 2015 | The New York Times
By Coral Davenport
A panel of federal judges appeared inclined on Thursday to dismiss the first legal challenge to President Obama’s most far-reaching regulation to slow climate change.
But in the arguments before the United States Court of Appeals for the District of Columbia Circuit, lawyers for the nation’s two largest coal companies, more than two dozen states and the Environmental Protection Agency offered a preview of what is expected to be a protracted battle over a regulation Mr. Obama hopes to leave as his signature environmental achievement.
At stake is the environmental agency’s proposed rule, issued under the authority of the Clean Air Act, to curb planet-warming carbon pollution from coal-fired power plants. The rule, which would require all states to draft plans to restructure their electricity sectors and would push them to transition from coal power to cleaner forms of energy, could ultimately shut down hundreds of coal plants.
The plaintiffs in two cases before the court, Murray Energy Corporation v. E.P.A. and West Virginia v. E.P.A., say that as states prepare to meet the requirements, their moves are already wreaking economic havoc. They also say that once finalized, the rule will not stand up to additional legal challenges.
These plaintiffs — 14 states and the coal companies — contend that the agency lacks the authority to issue the regulation. In a highly unusual move, they have petitioned the court to block it from finalizing the proposed rule.
Two of the three judges on the panel, Thomas B. Griffith and Brett M. Kavanaugh, appeared highly skeptical of the coal companies’ efforts to stop the regulation before it was final, noting that there was no legal precedent for such an effort.
“Do you know of any case in which we’ve halted a proposed rule-making?” Judge Griffith asked. “Why in the world would we resort to extraordinary writ, which we’ve never used before?”
He added: “It’s a proposed rule. We could guess what the final rule will be. But we’re not in the business of guessing. We typically wait to see what the final rule will be.”
Elbert Lin, the solicitor general of West Virginia, responded that states and utilities were being hurt as they began to restructure their energy systems in anticipation of the rule. “I don’t think we’ve ever seen a program like this,” he said. “This is about fundamentally reordering the way we use energy, from plant to plug.”
He added, “There are ongoing harms incurred by the states which cannot be adequately addressed.”
Judge Kavanaugh, noting that the E.P.A. has said it intends to revise the rule before releasing a final version, said: “Maybe they’ll still tweak it. For us to get in the middle of it before it happens seems highly unusual.”
Judge Kavanaugh also appeared skeptical of the argument that preparations could harm states in the handful of months before the rule is expected to be finalized this summer. “It could take as much time for us to write this opinion as it will for E.P.A. to release the final rule,” he said.
Among the lawyers arguing on behalf of the coal companies was Laurence H. Tribe, a well-known Harvard scholar of constitutional law who was a mentor to Mr. Obama when he attended law school. Republicans who oppose the rule have cheered Mr. Tribe’s role in the case.
In court on Thursday, Mr. Tribe laid out a broad, sweeping argument against the rule as unconstitutional, echoing spirited arguments that he has been making for months in legal briefs, congressional testimony and an opinion article in The Wall Street Journal.
By requiring states to enact new policies to change their energy economies, Mr. Tribe told the court, “the E.P.A. is coloring outside the lines. They’re trying to make law, not execute law. They are commandeering the states.”
“States are not to be treated as puppets,” he added.
Mr. Tribe also engaged in the narrow legal argument over two ambiguously worded amendments to the 1990 Clean Air Act that is at the heart of the dispute between the E.P.A. and the coal companies.
Under those amendments, legal experts say, it is not clear whether the agency has the authority to use one section of the Clean Air Act to regulate greenhouse gas pollution from power plants when it has already used a different section of the law to regulate other kinds of pollutants from the plants.
When the law was passed, the House version appeared to prohibit such “double regulation,” experts say, but the Senate version appeared to allow it. The final version of the legislation left the matter unclear.
In arguing that it has the authority to regulate different pollutants from the same sources, the E.P.A. points to the Senate language. In arguing that the agency lacks the authority, the coal companies point to the House language.
Mr. Tribe argued that a constitutional reading of the law would not give weight to the language that appears to allow double regulation.
“They’ve tried to create the illusion that there are two different provisions you have to reconcile,” Mr. Tribe said. That reading, he said, “would upturn the entire constitutional system.”
Amanda Berman, representing the E.P.A., told the judges, “I think he’s flat-out wrong.” She cited legal precedent in which, if there is ambiguity in a law, the agency enacting the law is given deference to interpret it.
“E.P.A. should be given the chance to reconcile these amendments,” Ms. Berman said.
The third judge on the panel, Karen L. Henderson, who said she held a different view from her colleagues, appeared less inclined to wait for the final regulation. She noted that the E.P.A. administrator, Gina McCarthy, had frequently said that she intended to finalize the rule much as it stands now.
“I see a closed mind as far as the legal issue,” Judge Henderson said. “They’ve already stated their position on the legality, unless a court says they’re wrong.”
It was less clear where the three judges, who were all appointed by Republican presidents, stood on the merits of the rule itself. If the panel dismisses the case because the regulation is not yet finalized, the petitioners are expected to return to the court once the final version is released.
While those broader questions of constitutionality were not at issue in Thursday’s case, they are almost certain to re-emerge.
Thirteen states and the District of Columbia are backing the Obama administration’s proposal.
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Obama’s Mentor Turns Against Him In Court
Apr 16, 2015 | National Journal
By Clare Foran
Laurence Tribe—an iconic legal scholar and longtime mentor to President Obama—offered up blistering criticism on Thursday of the administration's efforts to tackle climate change.
Regulations crafted by the Environmental Protection Agency to limit carbon pollution from power plants violate the Constitution and overstep executive authority, Tribe argued in the opening act of a major legal challenge at the U.S. Court of Appeals for the D.C. Circuit.
Obama's plan would "upturn the entire constitutional system" and force states to become "puppets of a federal ventriloquist" that would be "brought into the federal army," Tribe told the three-judge panel.
Arguing on behalf of industry and state opponents of the rule, Tribe denounced the rule as a massive overreach, saying, "It is clear that they are trying to make law not execute law." The administration was clearly "coloring outside the lines," he added.
The case, brought by coal company Murray Energy and a coalition of states led by West Virginia, is highly unusual since it takes aim at a regulation that has not yet been finalized. It stands as the first wave in what is expected to be an onslaught of litigation against the rule, which Obama hopes to use as leverage to extract pledges from other nations to slash greenhouse-gas emissions during international climate talks later this year.
Tribe's attack against the regulations has become a defining feature of the debate over its survival. The famed constitutional scholar is considered a mentor to Obama and taught the president during his time at Harvard Law School. But Tribe has turned against his former student in a legal challenge that could determine the fate of the president's climate legacy.
Republicans, including Senate Majority Leader Mitch McConnell, have reveled in Tribe's seeming defection, an outcome they say stands as proof of the problems with Obama's climate agenda. McConnell has relied on legal arguments spelled out by Tribe as he attempts to throw a wrench in Obama's plans by convincing governors across the United States not to comply with the regulations.
At issue in the case heard Thursday is whether EPA was justified in regulating carbon pollution from power plants under the Clean Air Act when the agency has already regulated mercury and other toxic air pollution. Opponents of the rule say it should be challenged even before a final version emerges, because it has already begun to inflict economic harm on the energy industry.
Two of the three judges vehemently pushed back against the idea that the rule should be subject to review before it is final.
"It really is quite unusual," Judge Thomas Griffith said, saying that he was not "certain we would do that which we have never done before," by attempting to judge the rule before it is finished.
Judge Brett Kavanaugh added that he was "having trouble seeing the line," that would merit the unusual challenge.
"It's a bit like the sword of Damocles, which doesn't have to be drawn to have its intended effect," Geoffrey Barnes, a lawyer for Murray Energy, argued.
Tribe chimed in to agree during his arguments, saying that "one needn't wait to see … [when] the guillotine is going to drop or whether it will cut off the head."
Lawyers defending the administration countered, saying that the agency was justified in the actions it has taken.
Congress "wanted to cover more pollutants under more programs," Amanda Berman, a lawyer for the Justice Department argued, asserting that Congress clearly gave the agency authority to regulate carbon pollution under the law in the way that the agency has done.
"If there is even a scintilla of a shred of ambiguity," in the law, Berman argued, EPA must be given the chance to determine whether to regulate and how.
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Whitfield Vows All-Out Push Against Clean Power Plan, Quick House Action on His Bill
Apr 17, 2015 | BNA Daily Environment Report
By Anthony Adragna
The Environmental Protection Agency should expect an all-out push from Congress against its proposed carbon pollution limits from the nation's fleet of power plants because the agency is “rewriting the Clean Air Act,” Rep. Ed Whitfield (R-Ky.), chairman of the House Energy and Commerce Subcommittee on Energy and Power, told Bloomberg BNA in an interview.
First up in that effort will be moving Whitfield's own Ratepayer Protection Act, which the Kentucky Republican said his subcommittee would mark up the week of April 20. Full House consideration would follow “very soon” afterward, and passage would occur before the EPA finalizes its regulation, Whitfield said (see related story).
“I support any effort to prevent EPA from being successful in finalizing and implementing this regulation,” Whitfield said. “We have a responsibility to the taxpayers, as a legislative body, to do everything possible to prevent a regulation that was never anticipated by the people who actually passed the Clean Air Act.”
Legislative Options
No one should be surprised that the House and Senate will attempt to halt or block the regulations through standalone legislation, the appropriations process or a possible “omnibus” bill, Whitfield said. It remains unclear how the regulation will fare in the courts—Whitfield declined to predict how the Supreme Court might ultimately rule on it—further necessitating quick congressional action.
Whitfield's subcommittee held the first hearing on his bill April 14; it would offer states two ways to avoid having to comply with the EPA rules. One provision would allow states to opt out of the rule if it would increase utility rates or jeopardize reliability, and another would allow states to postpone submitting their plans for complying with the emissions reduction goals until after all legal challenges are exhausted (72 DEN A-6, 4/15/15).
At issue is the EPA's proposed Clean Power Plan (RIN 2060-AR33), which the agency expects to finalize in mid-summer. The proposal would establish unique carbon dioxide emissions rates for the power sector in each state. States would be required to meet interim targets between 2020 and 2029, with a final emissions rate to be achieved in 2030, but would have flexibility as to how best to meet their individual targets.
‘Just Say No' Approach Endorsed
Whitfield also said he supported an idea from Senate Majority Leader Mitch McConnell (R-Ky.) that states “just say no” and refuse to comply with the regulation. The EPA would then have to issue a federal implementation plan for non-compliant states, an option that many believe would be more costly.
“Each state is going to have to decide what they want to do if this plan becomes final, because it's going to affect a lot of people—a lot of people who have nothing to do with emitting anything,” Whitfield said.
Whitfield said he would be open to more modest efforts to delay the Clean Power Plan should moderate Democrats develop their own plan to push back against the EPA regulations.
EPA's actions also provide “additional incentive for people wanting to revisit the Clean Air Act,” though Whitfield said major reform to the “Holy Grail” of environmental statutes is unlikely with President Barack Obama in the White House.
The Kentucky congressman held a number of forums on the Clean Air Act in 2012 and said he believes a number of changes are needed to the law, including delaying how frequently certain regulations must be reviewed and revising how the EPA can enter into consent decrees.
Human Activity ‘Absolutely' Contributes
Whitfield said human activity “absolutely” contributes to climate change, but said Republicans in Congress disagree on the urgency of the problem.
“I don't know of anyone in Congress that denies that the climate is changing,” Whitfield said. “We just don't think it's an urgent issue when there are health care issues facing mankind, [when] there are many places of the Earth where they don't have any electricity, jobs are needed, the economy needs to be stimulated.”
And despite these urgent challenges, “this guy is running around talking about climate change,” he said.
Obama administration officials should also stop their “diatribe” that severe weather events prove the existence and severity of climate change, Whitfield said.
There is great uncertainty about the link between severe weather and climate change, while “we know one eruption of a major volcano spews more CO2 and debris in the atmosphere than certainly any of these coal plants in the U.S. are doing,” he said.
No Appetite for RFS Reform
Asked if Congress would attempt to reform the renewable fuel standard, Whitfield answered flatly “no.”
“I don't think there's any unanimous agreement on what to do about RFS,” Whitfield said. “We tried the last Congress and we did everything that we possibly could do. … We worked with all the groups, and no one could come up with an agreement.”
Congress lacks the “political will” to fully repeal the standard, Whitfield said. Momentum for action on the RFS would only come if the EPA put out “off-the-wall, extreme” numbers when it proposes renewable fuel blending requirements for petroleum refiners for 2014, 2015 and 2016 later this year, Whitfield said (70 DEN A-6, 4/13/15).
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Ky. Manufacturers Back McConnell On 'Just Say No'
Apr 16, 2015 | E&E News PM
By Jean Chemnick
Kentucky manufacturing companies expressed support today for their state's senior senator's efforts to persuade states not to comply with U.S. EPA's Clean Power Plan.
The Kentucky Association of Manufacturers told Senate Majority Leader Mitch McConnell (R) that he's right to warn states that compliance with the power plant rule might make them more vulnerable to federal enforcement of more onerous emissions restraints.
"We agree that Kentucky has every right to question whether restructuring our state's energy portfolio via submitting a State Implementation Plan (SIP) under the [Clean Power Plan] at this time is in the best interest of the Commonwealth," the group said in a letter to McConnell.
The trade group said the EPA proposal would usurp state power over energy policy. It pointed to Harvard Law School professor Laurence Tribe's argument that EPA's approach contravenes the states' rights doctrine under the 10th Amendment to the Constitution.
Among Kentucky's manufacturers are energy-intensive industries, such as aluminum smelters. The state derives 92 percent of its power from coal-fired generation. Some of the current coal fleet is set to close in coming years for reasons unrelated to the Clean Power Plan, with units that burn inexpensive natural gas ramping up to take their place.
Kentucky Gov. Steve Beshear's (D) administration says it hopes those closures can count toward the state's compliance with the rule. The administration is working on the basis for a state implementation plan to hand off to the next administration when it leaves office this year.
But the manufacturers group said the EPA rule could only hurt Kentucky's access to cheap and reliable power, "dealing a lethal blow to the competitiveness of Kentucky's energy-intensive manufacturing sector."
The group pledged to "encourage Kentucky officials to act deliberately under the program and consider the negative consequences of plan development and submittal before court review of the regulation."
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Court Sees 'Morass' In Ruling On Proposed ESPS But Tees Up Tough Queries
Apr 16, 2015 | InsideEPA
By Dawn Reeves
A three-judge appellate court panel appears unlikely to accept arguments from state and industry critics that EPA's proposed rule to cut greenhouse gas (GHG) emissions from the existing power sector is so patently unlawful that it merits an exceptional ruling blocking the agency from finalizing it, warning that such a holding would create a “morass” of challenges to other proposed regulations.
But during two-plus hours of oral arguments April 16, the judges also teed up a series of substantive issues EPA could have difficulties overcoming when it goes back to court to defend its final existing source performance standards (ESPS) in an almost certain challenge.
At issue is an unusual bid by West Virginia and other states, along with coal industry groups, to win a ruling by the U.S. Court of Appeals for the District of Columbia Circuit blocking EPA from finalizing its ESPS, which the agency is expected to complete this summer.
The petitioners brought three separate cases -- In re: Murray Energy, Murray Energy, et al. v. EPA, et al., and West Virginia, et al. v. EPA, et al. -- to convince the court to find it has jurisdiction to review the proposal.
The underlying issues in all three cases rest on petitioners' claims that EPA is barred by the Clean Air Act from regulating power plant GHG emissions under section 111(d) of the law, as it proposes in the ESPS, because it already regulates power plant mercury emissions under section 112.
But the issue is complicated because House and Senate amendments to section 111(d) were never reconciled in a conference committee before the 1990 air act amendments were signed into law. The Senate amendment would explicitly allow EPA's proposed rule by limiting section 111(d)'s "112 exclusion" to pollutants already regulated under that section.
The House amendment could be read as prohibiting it because the focus of the exclusion is on source categories, not pollutants, though EPA has offered an interpretation that would allow it to proceed even under the House language.
But before the court addresses the merits, the petitioners face a steep procedural bar because the rule is still in the proposal stage. They argued that the court should find it has jurisdiction to review the proposal, and address the merits issue now, because EPA is not going to finalize a rule that departs from its proposal to regulate existing power plants under 111(d).
“On this particular issue, we think their mind is made up,” said West Virginia Solicitor General Elbert Lin.
Harvard law professor Laurence Tribe, representing Peabody Energy, added that the court could also save a vast amount of time and energy, rather than waiting for a final action.
But the judges were skeptical, and appeared to realize they would be opening the door to a host of lawsuits seeking to challenge proposals, rather than final actions, despite claims from petitioners that that would not occur.
Judge Thomas Griffith noted the ESPS is “still a proposed rule . . . We typically wait until we have a final rule.” If the court considers a challenge short of a final rule, that would invite a “morass” of similar challenges, he said.
And Judge Brett Kavanaugh noted that final action provides the courts with a bright jurisdictional line that would become blurred here.
He also questioned petitioners' extraordinary claims, noting that there are “lots of rules” and complicated federal programs that require extensive advance state preparations. “I'm having trouble” making a distinction here, he said. Later, he added that if the court ruled now it would “preclude the whole process that leads to a final” rule.
'Closed Mind'
Despite being outnumbered, Judge Karen Henderson appeared to accept the petitioners' argument that EPA would not change its mind about its section 111 authority, noting that the agency appears to have “a closed mind” about the legal issue that it is unlikely to change in the final regulation. She also said that some of the power companies impacted by the rule are already experiencing extraordinary impacts from the proposal.
But most observers are expecting that the case will be decided on jurisdictional grounds, possibly in a split ruling.
Thomas Lorenzen, a former Department of Justice official now in private practice, told Inside EPA outside the courtroom that he expects the case to be dismissed so that EPA can have a final say in the rulemaking. He said the judges recognize the “mischief” that would result if petitioners were able to challenge proposed rules.
He also noted the judges likely also want to allow EPA to further explain its rationale for how it interpreted the differing House/Senate language on the 111/112 issue to conclude it has authority to issue the ESPS.
But he also warned that the 111/112 issue, when it comes up on the merits, will be difficult for the agency.
During the arguments, opposing counsel offered vastly different takes on how crucial the unmatched text is in the House and Senate versions of the 1990 Clean Air Act.
Tribe argued that the Senate amendment effectively does not even exist because of how the process made its way through Congress at the time, and added that EPA has treated the prohibitions as “on-ramps” to its rule, rather than obstacles.
He argued that instead of EPA trying to figure out how to interpret the section to allow its rule, the agency should comply with both provisions and concede it lacks statutory authority to regulate the power sector under section 111 (d). Tribe said EPA is trying to “make law” rather than interpret it.
Murray Energy lawyer Geoffrey Barnes noted that alternatively, EPA could have chosen to de-list mercury from section 112 and undo its regulations there in order to move forward with its ESPS and be in compliance with the law.
Both argued that the fact that the Supreme Court is due to rule in June on a challenge to the 112 regulation is irrelevant here, because EPA is unlikely to drop the rule entirely even if the high court sends it back for revision.
Chevron Deference
But Amanda Shafer Berman of the Department of Justice, arguing on EPA's behalf, said that if the judges get to the merits, the only question they need to answer is whether EPA gets its “ordinary opportunity” to interpret a statute under long-standing Chevron deference.
If there is “a scintilla of a shred of ambiguity,” then EPA has to be given a chance to interpret, she said, and argued that the fact that there are two different amendments for the same section of a law is the definition of ambiguity.
Berman also called Tribe “flat-out wrong” on his interpretation that the Senate amendment effectively fails to exist because it was not included in the official version of the law, as drafted by a congressional office devoted to resolving statutory text conflicts.
While the Senate amendment is missing from the published text, both versions remain in the final official statutory language.
Berman also noted that the House amendment, on its own, has more ambiguity about what it does and does not allow EPA to do than what opponents have said.
Judge Kavanaugh referenced a footnote in the 2010 Supreme Court case American Electric Power v. Connecticut -- an 8-0 ruling that held EPA could not regulate power plant GHG emissions under common law because the agency is authorized to regulate them under the Clean Air Act, and then suggests 111 as the appropriate section.
The footnote specifically references the 111/112 issue. “There is an exception, EPA may not employ [section 111(d)] if existing stationary sources of the pollutant in question are regulated under the national ambient air quality standards program or the hazardous air pollutant program,” which is also known as 112.
Kavanaugh suggested that footnote might be problematic for EPA if the court was addressing the merits, but Berman noted the footnote is pollutant specific, not source specific. She said the footnote, and the House/Senate language differences, were being “overread.”
But Kavanaugh suggested that Tribe's arguments here were “good.”
However, both he and Judge Griffith noted that if the difference in House/Senate language ends up being considered a conflict, rather than an error, then there is Supreme Court precedent in Scialabba v Cuellar de Osorio, a June 2014 plurality, that holds agencies are entitled to Chevron deference to interpret conflicting statutory terms.
However, if the language differences are determined to be a scribner's error, as Tribe argues, then EPA would not necessarily be entitled to deference.
Regulatory Authority
Environmental Defense Fund's Sean Donahue told the court that any interpretation of the 111/112 differences that limit EPA's regulatory authority would be an abhorrent reading of the statute, since the 1990 amendments were designed to expand the law.
He appeared confident after the arguments, telling reporters that the jurisdictional question is not “difficult” and that he expects “very powerful arguments when the agency does issue its” final ESPS.
Also outside the court room, Clean Air Task Force's Ann Weeks told Inside EPA that the House and Senate were making minor amendments to section 111 for the express purpose of adding section 112 to the air law, so there was never any intent to limit EPA's authority. And Sierra Club's Joanne Spalding pointed out that if EPA had issued its 111 rule before the 112 one, “we wouldn't even be here.”
Spalding said the court could rule in the case within a month or two, a ruling that could come before the high court rules in the 112 case and before EPA finalizes the ESPS.
While the merits issues are complicated, most observers do not expect the court to reach those here, and even EPA opponents were circumspect on that following the arguments.
Power industry attorney Scott Segal told Inside EPA at the courthouse that the lawsuit was always a challenge, but whether the merits are considered now or later, opponents' fundamental claims that EPA lacks 111 authority will remain unchanged when the rule is finalized.
West Virginia's Lin also told the judges that if the opponents are correct here, then EPA finalizing the rule does not make a difference to their claims. And West Virginia Attorney General Patrick Morrisey (R) told reporters outside the courthouse that petitioners made their “best attempt to convince” the judges, while acknowledging a tough road. He also noted that the opposition's position gets stronger as time goes on, and expects to eventually win.
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Former Obama Economic Adviser Calls for Shift in Biofuels Mandate
Apr 17, 2015 | The Wall Street Journal
By Amy Harder
Most of the nation’s biofuels come from ethanol produced from corn in states like Iowa. A new report proposes several reforms to the renewable fuel standard, including some that will require congressional approval.
A former White House economic adviser is calling for changes to a 2005 law mandating increased use of alternative fuels in the nation’s transportation supply, adding a key voice to a growing chorus of people who say the policy is not working.
In a report published Thursday, Harvard University professor Jim Stock, who served on President Barack Obama’s Council of Economic Advisers in 2013 and 2014, proposes several reforms to the biofuels mandate, known as the renewable fuel standard, including some requiring congressional approval.
The report adds to a growing body of politicians and experts who are questioning the law’s effectiveness amid regulatory uncertainty and lower oil prices.
Biofuels, mostly corn-based ethanol, have been blended into the nation’s gasoline supply since Congress passed the law a decade ago to promote the use of alternative fuels. But the government has struggled in putting together regulations and mandates for a more diverse offering of fuels, such as products made from municipal solid waste, plant material and biogas. Low gasoline prices, which are more than a dollar cheaper today than this time last year, are also making alternative fuels less cost-competitive.
Obama administration officials acknowledge that the law has been a struggle to enforce, though they have not said whether they think Congress should change it.
Mr. Stock’s report, which is being published by Columbia University’s Center on Global Energy Policy, whose founder, Jason Bordoff, is a former senior energy and climate adviser in the Obama White House, proposes ways to encourage more development of non-corn biofuels under the mandate.
“The renewable fuel standard has a bad name, and in some ways it’s a deserved bad name because of the very large costs associated with it,” Mr. Stock said in an interview Wednesday. “But I think it’s incredibly important we not lose sight of the big challenge we have in the transportation sector.”
Among his recommendations, Mr. Stock says the Environmental Protection Agency should be required to issue new blending standards every four years instead of annually. This change, which would require congressional action, “would provide investors with more guidance on which to make their decisions,” his report says.
Under the law, which was expanded in 2007, the standards require refineries to blend an increasingly large amount of biofuels into gasoline to reach 36 billion gallons of renewable fuels by 2022. No more than 15 billion gallons of that total can come from corn, which today is within one billion gallons of that limit.
The additional 21 billion gallons by 2022 are supposed to come from advanced biofuels made from non-corn products, but that sector is falling far short of producing what Congress had envisioned. The industry produced 1.9 billion gallons of fuel in 2014, with 1.7 billion gallons coming from biodiesel and 180 million gallons from other alternative fuels—far less than the 3.75 billion gallons the 2007 law had initially required for the year.
The EPA is almost two years behind issuing the requirements for 2014 and at least six months late with the 2015 requirements, partly a recognition that the biofuels market has not performed as the law assumed. Bound by a legal agreement announced last week, the agency is planning to propose the levels for 2014-2016 by June 1.
The Advanced Biofuels Association, a Washington-based trade group representing about 30 companies developing biofuels from non-corn products, last month began a campaign asking Congress to revamp renewable-fuel-standard policies, the first biofuels trade group to take such a position.
Mr. Stock said he decided to write the report because not enough people were calling to change the law while encouraging more support for biofuels made from non-corn products.
“The political process by itself does not have enough supporters of that constituency,” Mr. Stock said.
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EPA to Publish Final Coal Ash Rule After Technical Corrections, Months-Long Delay
Apr 17, 2015 | BNA Daily Environment Report
By Anthony Adragna
The Environmental Protection Agency will publish its first national coal ash management and disposal standards in the Federal Register April 17 after a delay of nearly four months.
According to the agency, the gap between the announcement of the final rule in December and its publication allowed the agency to eliminate potentially confusing or contradictory language in the regulation. The EPA will release a red-line copy of the regulation showing changes along with the rule's formal release.
“The delay in publication was to allow for corrections to address inadvertent omissions, typos, and errors in the preamble and regulatory text,” the agency told Bloomberg BNA in a statement. “These corrections will help avoid unnecessary confusion.”
Lawsuits challenging the regulation would have to be filed by due July 16, under the 90-day requirement of the Resource Conservation and Recovery Act, and the rule would go into effect Oct. 14.
Announced in December
Unveiled Dec. 19, the final RCRA rule (RIN 2050-AE81) establishes a number of requirements for landfills and impoundments currently receiving the material, including location restrictions, inspections, groundwater monitoring and fugitive dust controls, but it contains no federal EPA enforcement mechanism (245 DEN A-1, 12/22/14).
States will be “strongly” encouraged to adopt the minimum federal standards contained in the final rule, but enforcement is left to citizen lawsuits.
Environmental advocates have called the final rule weak and expressed concern that ash disposal will continue to pose unacceptable risks to human health and the environment. Industry groups and coal ash recyclers have expressed relief that the material was not regulated as a hazardous waste under RCRA, but raised concerns about how the regulation would be enforced and that the EPA could one day revisit its nonhazardous waste classification of the material.
Congress has already begun to push for changes in the regulation. The House Energy and Commerce Committee advanced legislation (H.R. 1734) April 15 allowing states greater flexibility in regulating coal ash and barring the EPA from ever regulating the material as a hazardous waste (73 DEN A-15, 4/16/15).
Though no groups or companies have publicly announced their intent to sue EPA over the standards, multiple sources closely watching the rulemaking previously told Bloomberg BNA litigation was inevitable.
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Obama's Emission Plan Splits Coal Lobby From Utilities in States
Apr 17, 2015 | BNA Daily Environment Report
By Margaret Newkirk
Electric companies are breaking with longtime allies in the coal industry over state-level legislation that would stymie President Barack Obama's carbon emissions limits.
Entergy Corp., PPL Corp. and FirstEnergy Corp. are among those opposing a wave of bills backed by coal companies that would let legislatures block plans to curb greenhouse gas emissions.
The rift between power companies and their suppliers is the result of Republican defiance of global warming rules that included a plea from U.S. Senate Majority Leader Mitch McConnell (R-Ky.) asking governors not to cooperate (43 DEN A-1, 3/5/15).
The utilities are already cutting emissions by shifting to solar and wind power and natural gas. They may face costlier federal requirements if states refuse to act.
Environmental advocates were initially alarmed by the flood of legislation, said Aliya Haq, who is tracking it for the Natural Resources Defense Council in Washington.
“You would see this enthusiastic legislator introducing one of these bills and then it would all just fizzle,” Haq said. “The governors didn't like them. The utilities didn't like them. We're pretty optimistic now that most of these bills will die.”
In Montana, PPL persuaded the bill's own sponsor to withdraw his support.
Political Winds Cited
The bills “were drafted by conservative groups that were working against the carbon rule from a broader political perspective,” said David Hoffman, a lobbyist for the Allentown, Pa.-based company. “We were afraid we might get caught up in the political winds of that and might not be able to work on implementation of the rule in a thoughtful, methodical way.”
Lawmakers in at least 22 states have introduced versions of the bills this year, according to the Natural Resources Defense Council. They're modeled on legislation that emerged in December from the American Legislative Exchange Council, an Arlington, Va.-based nonprofit that crafts bills sought by corporations.
John Eick, who works on energy issues for ALEC, said the measures empower elected officials to ensure that greenhouse gas plans don't undermine electricity reliability or send bills soaring.
Cold Shoulder Given
The effort has met with little success as utilities declined to lend support, avoiding outright confrontation with the Obama administration. Only West Virginia, a coal-mining capital, has passed a version that requires the Republican-led Legislature to approve the state's plan.
The measures failed in Colorado, Iowa, South Dakota and Virginia. Arkansas and North Dakota passed versions allowing legislatures to delay but not stop compliance. In Georgia and Mississippi, the bills turned into nonbinding resolutions calling for the EPA to rescind its proposals.
In Ohio, home of FirstEnergy, environmental officials in Republican Gov. John Kasich's administration testified against the bill.
Stephanie Walton, a FirstEnergy spokeswoman, said in an interview that the company wants Ohio officials to have latitude to develop their own programs.
“States should have as much flexibility as possible to build those state programs and determine what activities should be used for compliance,” she said.
Called Part of Broader Strategy
The bills are part of a strategy to stall implementation of the federal regulations, which opponents are seeking to have voided by courts or overturned if a Republican wins the 2016 presidential election.
Fifteen states, all but one with Republican attorneys general, have sided with a lawsuit saying the EPA is overreaching its authority (62 DEN A-5, 4/1/15).
Count on Coal, a group backed by the National Mining Association; Republican-aligned policy organizations; and mining companies advocated the legislation. The National Mining Association's slogan for states is “Just Say No.”
The reason is “the sweeping, detrimental impacts many estimate the proposal will have on electricity reliability and consumer energy costs,” said Steve Hawkins, a spokesman for Alpha Natural Resources Inc., a coal-mining company based in Bristol, Va., that supported West Virginia's bill.
Worse Outcome Said Possible
Power companies are concerned that if states balk, the EPA will impose plans that cost them more by focusing on cutting emissions rather than reducing power demand or promoting cleaner energy, said Bill Becker, director of the National Association of Clean Air Agencies in Washington.
Columbus, Ohio-based American Electric Power Co., which has “a lot of objections” to the carbon rules, took no public stance on the bills when they surfaced in its territories in West Virginia and Virginia, spokeswoman Melissa McHenry said.
Still, “I think a lot of utilities were maybe quietly letting people know that this doesn't necessarily do what you think it does,” she said.
In Mississippi, similar concerns led lawmakers to approve a resolution condemning the carbon rule, rather than a law giving them power to block its implementation.
For Entergy Mississippi, the legislative-approval bill threatened to limit the state's flexibility, spokesman Joey Lee said. Southern Co.’s Mississippi Power took no position on the bill and supported the anti-EPA resolution, spokesman Bill Snyder said.
Center Agreed to Resolution
The Mississippi Center for Public Policy, a small-government advocacy group that backed the legislative approval measure, eventually agreed to the resolution instead, Forest Thigpen, its president, said.
“The way the EPA rules are written, if the state delays, they would not have time to adjust, and the cost would fall on the power companies,” Thigpen said.
“It throws the whole process into uncertainty,” he said. “Utilities like certainty.”
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LNG Rail Transport Research Could Lead to New Rules, PHMSA Official Says
Apr 17, 2015 | BNA Daily Environment Report
By Rachel Leven
The Pipeline and Hazardous Materials Safety Administration is seeking research on liquefied natural gas transport by rail that could lead to rulemakings, an agency official said April 16.
The agency has set aside $1.4 million for research that either evaluates LNG rail transportation, reviews packaging standards for rail transport, assesses rail transport operations or identifies whether a new rail tank car model is necessary, said Leonard Majors, a PHMSA general engineer. These studies could result in new rulemakings that, for instance, could “seek the removal” of the requirement to obtain approval from the Federal Railroad Administration before moving LNG by rail, Majors said.
“So we need information and we will be coming to the rail industry to obtain that information and get their thoughts on it,” Majors said at a PHMSA research and development forum.
Acting Administrator Timothy Butters said in March that LNG will be the next energy transport challenge for PHMSA. At least three companies have reached out to the FRA about transporting LNG by rail (58 DEN A-6, 3/26/15).
PHMSA will finalize these projects and statements of work by July, Majors said. The agency is expected to approve contracts for the research projects in January 2016.
Crude Oil Properties
PHMSA is also seeking to study crude oil and other issues related to safe energy transport.
For example, the Energy Department and PHMSA have committed to study further crude oil properties, following its release of a crude oil literature review, Rick Elliott, the director of advanced supply and facilities division for the Energy Department, said.
The agencies will finalize the plan on sampling, analysis and experiments and then work together to review crude oil data, assess sampling methods, conduct combustion experiments and modeling and examine crude oil characterization, Elliott said.
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McDermott Bill Would Require PHMSA Rule To Implement Strictest Tank Car Standard
Apr 17, 2015 | BNA Daily Environment Report
By Rachel Leven
Rep. Jim McDermott (D-Wash.) has introduced a sweeping bill to address safety issues associated with transporting crude oil by rail, including requiring the use of the most stringent tank car standard proposed in a Transportation Department rulemaking.
The Crude-by-Rail Safety Act (H.R. 1804) would require the Pipeline and Hazardous Materials Safety Administration to choose its most stringent tank car option, which includes electronically controlled pneumatic brakes, when it finalizes its pending rule on crude by rail transport. It would also require the department to issue a final rule within 90 days.
“We are long overdue for a coordinated response to this threat,” McDermott said in a statement announcing his bill's introduction April 15.
The bill, which is cosponsored by Reps. Doris Matsui (D-Calif.) and Ron Kind (D-Wis.), addresses a recent increase in the frequency of derailments of trains carrying crude oil. This increase of derailments, which have caused environmental and property damage, has coincided with an increase in the practice of transporting of crude oil by rail.
The bill is similar to S. 859, introduced by Sen. Maria Cantwell (D-Wash.), and both would implement a maximum volatility standard for crude oil and would require disclosure of rail movement, specifically of trains carrying certain flammable liquids.
McDermott's bill would prohibit use of “unsafe” DOT-111 tank cars for crude oil immediately and for ethanol within two years. It also would address oil spill response and confidential close-call reporting, as well as increased fines for violations.
The bill would fund at $40 million in fiscal years 2016 and 2017 a “Safe Transportation of Energy Products” initiative on transporting Class 3 flammable liquids by rail, pipeline, highway and waterway. Funded activities could include expedited rulemakings, research, training, inspections and grants to communities.
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PHMSA Expected to Declare HazMat Use Of Electronic Shipping Documents ‘Feasible'
Apr 17, 2015 | BNA Daily Environment Report
By Rachel Leven
A Transportation Department office is likely to tell Congress it is feasible for the hazardous materials industry to use electronic shipping documents, an official said April 16.
The onus will be on the Pipeline and Hazardous Materials Safety Administration to set out requirements for this shift from paper to electronic, such as determining a timeline for the switch. However, the nuts-and-bolts of implementation—developing the method, the devices and the tools to use—will fall to industry, the official said.
“[This] is something, I think, that we have to do. There's no escape,” Magdy El-Sibaie, associate administrator for hazardous materials for PHMSA, said at a research and development forum hosted by the agency. “And certainly PHMSA's role … is to not become an obstacle.”
Use of electronic shipping documents across modes of transport has several benefits, such as ensuring better accuracy, speed and accessibility of information for shippers, carriers and emergency responders, Bob Richard, a former PHMSA official, said at the forum. There are still unknowns regarding this shift, however, such as how to ensure adequate security of information.
PHMSA is required under the Moving Ahead for Progress in the 21st Century Act (Pub. L. No. 112-141) to submit to Congress by Oct. 1 a report regarding the feasibility of using electronic shipping documents for hazardous materials transportation.
The agency has solicited feedback from the hazmat industry, law enforcement and first responders and is running its pilot project—HM-ACCESS—between February and April to make its determination for the October report, Mark Raney, an environmental engineering division staff member for the Transportation Department's Volpe Center, said.
Shift to Rulemaking
If the report does come back with a “feasible” finding, PHMSA would then promulgate a rule codifying this electronic shipping document requirement into the Hazardous Materials Regulations, according to MAP-21.
PHMSA would probably come up with “more performance-based language” than currently is set out in hazmat regulations to “unleash the creative juice and the creative power” of the industry and allow the industry to use electronic shipping, if they choose to do so, El-Sibaie said.
A PHMSA spokesman clarified that the agency isn't sure what a rulemaking would look like exactly, but cited the agency's shift from paper to electronic filing of Hazmat Incident Reports—where industry can use either electronic or paper formats—as an example of how this shift has occurred in the past. However, that doesn't mean this option will be available regarding shipping papers, the spokesman told Bloomberg BNA.
Performance-based language sets end goals for industry—for example, on the level of safety they must achieve—while allowing the industry to determine the most efficient and economic steps to achieve the goals.
The agency would consider certain categories in ensuring high performance, such as instituting accuracy and availability of information requirements, El-Sibaie said.
Broad Industry Support
Hazardous materials industry representatives at the forum expressed broad support for the expected shift to electronic shipping documents.
For example, on paper shipping documents there is no requirement to annotate a paper as the carrier drops off shipments, Richard said.
This means a first responder may think there was more hazardous material on board if there is an accident, even if it the carrier has already dropped off most of its cargo, Richard said. This is remedied by the carrier annotating in its electronic shipping document—whether on a phone or tablet—when it drops off any given cargo, he said.
“You can track a Victoria Secret package anywhere in the world, but try to track a hazmat shipment and good luck,” Richard said.
Security, Training Concerns
However, there are still unknowns to be figured out by industry regarding security and training.
For example, there are significant security concerns—such as how shippers will ensure that only the right people can access this information and only at appropriate times, Cynthia Hilton, executive vice president of the Institute of Makers of Explosives, said.
Some members of the industry have already begun to work through these issues and to use electronic shipping documents, such as the United Parcel Service of America Inc., which operates under a PHMSA special permit for this type of documentation (45 DEN A-16, 3/7/14).
CSX Corp. has also reached out to PHMSA regarding use of electronic shipping documents, El-Sibaie said. In additions, the Association of American Railroads has rolled out its own AskRail mobile application for use by first responders and all Class I railroads—the seven largest North American freight haulers (17 DEN A-15, 1/27/15).
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