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ACC AM Ap 21
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(ACC Mentioned) Are Chemical Stocks Heating Up?
Apr 20, 2015 | Zacks
The recovery momentum for the chemical industry is expected to continue this year, backed by a strengthening U.S. economy, strength in the automotive space, healthy demand in emerging geographies and gradually convalescing construction markets. Notwithstanding a few industry-related headwinds, weakness in Europe and slowdown in China... -
(ACC Mentioned) Statewide View: Senate Bill Limits Ability Of States To Act On Toxic Chemical Problems
Apr 20, 2015 | Duluth News Tribune
By Deanna White
We like to do things our own way in Minnesota. Finns don’t have a holiday? We create St. Urho’s day. People don’t have enough to eat? A Minnesota mailman walks 300 miles to fight hunger. From the lighthearted to the serious, we have our own take on things in Minnesota. But this ability to find creative solutions to problems is under threat by ... -
(ACC Mentioned) Recycling Group Changes Its Name to the Recycling Partnership
Apr 20, 2015 | Plastics News
By Jim Johnson
Curbside Value Partnership is no more. But don’t worry. The organization that promotes curbside recycling is simply changing its name to the Recycling Partnership. CVP has been managing a program called the Recycling Partnership since last summer. The partnership was created to use money from the private sector to help transition ... -
US Trade Union Federation Opposes Udall-Vitter TSCA Bill
Apr 21, 2015 | Chemical Watch
The largest federation of trade unions in the US has detailed “serious flaws and deficiencies” in the Udall-Vitter Senate Toxic Substances Control Act (TSCA) reform bill (CW 10 March 2015) The American Federation of Labor and Congress of Industrial Organizations (AFL–CIO) says they need to be remedied before passage. -
Risk Values for Key Combustion Chemical Need More Work, EPA Science Advisers Say
Apr 21, 2015 | BNA Daily Environment Report
By Pat Rizzuto
Proposed risk values that the Environmental Protection Agency would use as it develops hazardous waste cleanup standards, air standards and possibly other regulations managing risks from polycyclic aromatic hydrocarbons (PAHs) need more work before they can be used, a panel of agency advisors said April 17. -
Epigenetics, Uncertainty Analysis Among Topics EPA to Raise in Series of Workshops
Apr 21, 2015 | BNA Daily Environment Report
By Pat Rizzuto
Epigenetics and uncertainty analysis will be among the risk-related issues the Environmental Protection Agency will probe during four state-of-the-science workshops the agency plans to announce soon, a senior agency scientist said April 17. Samantha Jones, associate director for science in EPA's Integrated Risk Information System program... -
The Little Pipeline Agency That Couldn’t
Apr 20, 2015 | PoliticoPro
By Elana Schor & Andrew Restuccia
On June 10, 1999, a few days after his high school graduation, Liam Wood unexpectedly got an afternoon off work and decided to go fly-fishing on a creek near his hometown of Bellingham, Wash. About 100 miles away, operators missed the signs of a pressure spike in the 16-inch gasoline pipeline that crossed the stream in Whatcom Falls Park. -
(ACC Mentioned) Race to Zero Team Named a Finalist in National Competition
Apr 20, 2015 | University News - Appalachian State University
Appalachian State University’s Race to Zero team was named one of five finalists in the national Race to Zero competition held April 18-20. A total of 33 teams from across the United States and Canada participated in the U.S. Department of Energy (DOE) student design competition held at the National Renewable Energy Lab in Golden... -
Fracking 'Best Practices' Spur Debate Over Use As Model For States' Rules
Apr 20, 2015 | InsideEPA
By Bridget DiCosmo
Energy sector "best management practices" (BMPs) -- agreed-upon standards for conducting hydraulic fracturing -- are spurring debate among observers over whether the BMPs, when coupled with compliance incentives, should serve as models for states in developing fracking rules given the federal government's limited regulatory power. -
2 House Dems Reintroduce Bill To Stop Fracking On Public Land
Apr 21, 2015 | E&E Daily News
By Mike Soraghan
Two Democratic House members want to stop hydraulic fracturing and some other drilling activities on federal land. Reps. Jan Schakowsky of Illinois and Mark Pocan of Wisconsin are holding a press conference tomorrow to introduce a bill to ban fracking on future leases. Food and Water Watch calls the legislation "the strongest federal bill... -
GOP Chairwoman To Sponsor Bill To Lift Oil Export Ban
Apr 20, 2015 | The Hill - E2 Wire
By Timothy Cama
Sen. Lisa Murkowski (R-Alaska) said she will introduce a bill this year to end the 40-year-old ban on exporting crude oil. Murkowski, chairwoman of the Senate Energy and Natural Resources Committee, told energy executives Monday that the ban is severely holding U.S. producers back, Reuters reported. -
Murkowski Says President Can Act To Approve U.S.-Mexico Crude Oil Swap
Apr 21, 2015 | BNA Daily Environment Report
By Nushin Huq
While bills are extremely difficult to pass, President Barack Obama has the ability to act now to approve a U.S.-Mexico crude oil swap, Sen. Lisa Murkowski (R-Alaska), chairman of the Senate and Natural Resources Committee, said. “Mr. President, you use executive orders pretty freely nowadays,” Murkowski said April 20. -
Lift the Ban on Crude Oil Exports
Apr 20, 2015 | The Hill - Congress Blog
By Mark J. Perry
It’s easy to understand why nothing irritates oil and natural gas companies more than government regulations. Regulations are issued by scores of federal agencies, ranging from the Commerce, Energy and Interior departments to the Environmental Protection Agency, and the oil and gas industry is kept busy slicing and dicing the arcana of... -
Lawmakers Seek Ban on Atlantic Offshore Drilling
Apr 20, 2015 | The Hill - E2 Wire
By Timothy Cama
Two Democratic lawmakers from New Jersey said Monday they would sponsor legislation to ban offshore oil and natural gas drilling in the Atlantic Ocean. Sen. Robert Menendez (D-N.J.) and Rep. Frank Pallone Jr. (D-N.J.) timed their announcement for the fifth anniversary of the Deepwater Horizon oil spill at a BP well in the Gulf of Mexico. -
With Smallest Five-Year Offshore Plan, Industry Braces for Shrinkage Among Leases
Apr 21, 2015 | BNA Daily Environment Report
By Ari Natter
The Obama administration's draft five-year offshore oil and gas leasing program, already the smallest in history, is only expected to get smaller by the time it becomes final, representatives of the oil and gas industry and other industry analysts told Bloomberg BNA. By keeping what the industry says is 85 percent of the nation's federal... -
Texas House Passes Measure to Restrict Local Efforts to Control Oil, Gas Activities
Apr 21, 2015 | BNA Daily Environment Report
By Paul Stinson
The Texas House April 20 approved legislation aimed at limiting municipal efforts to regulate oil and gas operations, a move the state sees as clarifying its regulatory authority but that environmental groups criticize as undermining local ordinances and being rife with ambiguities that could prompt legal challenges. -
Administration To Propose Billions For Infrastructure In QER Release Today
Apr 21, 2015 | E&E Daily News
By Nick Juliano and Hannah Northey
Vice President Joe Biden and Energy Secretary Ernest Moniz today will call on Congress to approve billions of dollars in new spending to repair leaky natural gas pipelines, upgrade the rickety electric grid, overhaul the nation's emergency oil stockpile and improve the systems that move crude along railroads and highways. -
Dems Use Gulf Spill Anniversary To Call For More Protections
Apr 21, 2015 | E&E Daily News
By Jennifer Yachnin
Democratic lawmakers seized on the fifth anniversary of the Deepwater Horizon oil spill yesterday to argue that oversight of offshore wells remains too lax and called for new protections, including an outright ban on drilling along the East Coast. Sen. Bill Nelson (D-Fla.) announced in remarks on the Senate floor that he will introduce new... -
Marcellus Natural Gas Operations Report Increased Emissions
Apr 20, 2015 | E&E News PM
By Amanda Peterka
Natural gas operations in the Marcellus Shale region of Pennsylvania reported an increase in air pollution emissions in 2013 compared with 2012, according to information released today by state regulators. Operators reported releasing 57 percent more sulfur dioxide than they did in 2012, 19 percent more volatile organic compounds, 12... -
Congress Might Get Back Into the Energy Business
Apr 20, 2015 | National Journal
By Ben Geman
Lisa Murkowski, the Alaska Republican who chairs the Senate's energy committee, told a roomful of industry officials that she's introducing legislation this year to end the nation's decades-old ban on crude oil exports. Murkowski also said she has begun mapping out the broader, separate energy bill she hopes to shepherd through the panel with ... -
Week Ahead: House Gets To Work On Energy Reform
Apr 20, 2015 | The Hill - E2 Wire
By Timothy Cama
The House Energy and Commerce Committee will kick off efforts this week toward writing Congress's first comprehensive energy legislation in eight years. The panel’s energy and power subcommittee on Thursday will examine draft legislation meant to train a 21st century workforce, committee officials said. -
House Panel to Vote on Whitfield 'Opt Out' Bill
Apr 21, 2015 | E&E Daily News
By Jean Chemnick
A key House Energy and Commerce subpanel tomorrow will mark up draft legislation to give states the final word about whether or not their power sectors are subject to U.S. EPA's Clean Power Plan. Energy and Power Subcommittee Chairman Ed Whitfield (R-Ky.) has yet to formally introduce his measure, but he said ... -
EPA Seems Well-Positioned To Weather Early Legal Challenge
Apr 20, 2015 | E&E News PM
By Emily Holden & Rod Kuckro
ederal judges wasted no time last week showing their skepticism about the first court challenge to U.S. EPA's Clean Power Plan that seeks to block the draft rule before it's finalized. Coal company Murray Energy Corp., along with 15 predominantly Republican-led states and other potentially regulated parties are asking the U.S. Court of Appeals for... -
McConnell, KY. Newspaper Trade Blows Over EPA Power Plan
Apr 20, 2015 | E&E News PM
By Jean Chemnick
The Senate's most powerful opponent of U.S. EPA's Clean Power Plan hit back this morning at a home-state newspaper for its recent editorial warning that today's foes of climate action would one day be viewed as harshly as apologists for slavery. Senate Majority Leader Mitch McConnell (R-Ky.) decried the Lexington Herald-Leader's April... -
Budget Conferees Hold Initial Meeting; Negotiations to Proceed Quietly, Corker Says
Apr 21, 2015 | BNA Daily Environment Report
By Jonathan Nicholson
Conferees meeting to hammer out a fiscal 2016 budget (S. Con. Res. 11) gathered for the first time, even as signs that one controversial issue—defense funding—may be on the way to being settled. The 30-member committee, divided between 17 Republicans and 13 Democrats, gathered April 20 for a mostly ceremonial kickoff meeting ... -
North Dakota's Governor Signs Bill Creating Panel to Examine Federal Laws
Apr 21, 2015 | BNA Daily Environment Report
By Mark Wolski
North Dakota Gov. Jack Dalrymple (R) signed legislation that will create a committee of legislators and industry officials charged with examining federal laws and regulations to determine if they are detrimental to the state's main industries—agriculture, oil and energy. The bill (H.B. 1432) was signed into law April 16. -
Manchin Bows To Political Reality, Says Clinton And Schumer Better For Coal
| E&E Daily News
By Manuel Quiñones
Sen. Joe Manchin (D-W.Va.) thinks the coal industry would do better with former Secretary of State Hillary Clinton as president and Sen. Chuck Schumer of New York as Senate Democratic leader. Manchin over the weekend announced his decision to stay in Washington, D.C., rather than go back home to run for governor in 2016 (E&E Daily, April 20). -
Maryland Proposal Would Limit Emissions From Some Coal-Fired Plants During Summer
Apr 21, 2015 | BNA Daily Environment Report
By Kathy Lundy Springuel
Maryland Gov. Larry Hogan (R) has proposed emergency regulations that would require certain coal-fired power plants to optimize the use of existing pollution control equipment to cut nitrogen oxide emissions during the ozone season, from May 1 to Sept. 30. The regulations, proposed April 17, would target smaller units generally ... -
Republican Hopefuls Differ on Approaches To Acknowledging, Addressing Climate Issues
Apr 21, 2015 | BNA Daily Environment Report
By Anthony Adragna
Republican presidential hopefuls lacked a unified stance on whether or how to tackle climate change as they fielded a range of questions on the topic in recent days. Sen. Marco Rubio (R-Fla.) said April 19 on CBS' Face the Nation that “humans are not responsible for climate change in the way some of these people out there are trying to make us ... -
Climate Change Biggest Threat to Planet, Extends Beyond Presidency, Obama Says
Apr 21, 2015 | BNA Daily Environment Report
By Dean Scott
Pledges by the U.S. and China to cut their greenhouse gas emissions are providing “new hope” of getting a global climate deal to address an issue “that's bigger and longer-lasting than my presidency,” President Barack Obama said in his April 18 radio address. In his weekly address, held ahead of the April 22 celebration of Earth Day, Obama... -
Other Countries Seek Reassurance Obama Can Deliver on His Climate Pledge
Apr 20, 2015 | National Journal
By Clare Foran
As President Obama rushes to cement his climate legacy, other nations are questioning whether his administration can make good on its promise to slash greenhouse-gas emissions ahead of a major climate summit in Paris at the end of this year. "Certainly...countries want to get reassurance that the U.S. can deliver on what we've said that we're... -
EPA Cites Existing Studies In Push For Court To Reject 'Jobs' Review Suit
Apr 20, 2015 | InsideEPA
By David LaRoss
EPA is urging a federal district court to reject the coal sector's suit seeking to force the agency to conduct what industry says is a Clean Air Act-mandated sweeping review of the employment impacts of its air rules, with EPA arguing that it often conducts such studies for policies including its proposed utility climate rules. -
Wyoming Appeals EPA's Disapproval Of Nonattainment New Source Review Plan
Apr 21, 2015 | BNA Daily Environment Report
By Tripp Baltz
Wyoming appealed the Environmental Protection Agency's disapproval of the state's revisions to nonattainment new source review permitting rules (Wyoming v. EPA, 10th Cir., No. 15-9536, 4/16/15). The state filed a petition April 16 in the U.S. Court of Appeals for the 10th Circuit to review the EPA's disapproval of Wyoming's state implementation... -
Shippers Group Presses For Action On STB Nomination
Apr 21, 2015 | E&E Daily News
By Sean Reilly
A coalition of freight rail shippers is urging the Senate Commerce, Science and Transportation Committee to move quickly on the nomination of Daniel Elliott for another term on the Surface Transportation Board (STB). "A vacancy at the STB creates uncertainties and delays for the rail shippers that rely on the board to review rail rate ...
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(ACC Mentioned) Are Chemical Stocks Heating Up?
Apr 20, 2015 | Zacks
The recovery momentum for the chemical industry is expected to continue this year, backed by a strengthening U.S. economy, strength in the automotive space, healthy demand in emerging geographies and gradually convalescing construction markets.
Notwithstanding a few industry-related headwinds, weakness in Europe and slowdown in China, there are a number of reasons to be optimistic about the broader chemical industry for both the short and long haul, which we have highlighted below:
Shale Bounty Driving Chemical Projects
According to the American Chemistry Council (ACC), abundant shale gas production is driving U.S. chemical exports. A string of factors are driving growth in the export markets, including favorable energy costs stemming from the abundance of shale gas and healthy demand from the emerging markets. New methods of extraction such as horizontal drilling and hydraulic fracturing (or fracking) are boosting shale production, bringing down prices of ethane (derived from shale gas) in the process.
Leveraging the abundant natural gas supply, chemical makers are ratcheting up investment on shale gas-linked projects which is expected to beef up capacity and export moving ahead. The shale revolution made the U.S. an attractive investment location and incentivized a number of chemical companies to invest billions of dollars for setting up facilities (crackers) to produce ethylene and propylene in a cost-effective way.
According to an ACC report, domestic chemical investment related to shale gas has reached as high as $138 billion, most of which are from firms outside of the U.S. Already 225 projects -- many backed by Federal government support -- have been announced by chemical makers to take advantage of ample natural gas supplies. Such investments are expected to boost capacity and export over the next several years.
Automotive Kicks into High GearThe automotive sector is one of the major consumers of chemicals and is witnessing significant momentum. Global automotive sales are expected to hit 88.6 million units this year (up 2.4% from 2014), according to IHS Automotive.
The U.S. auto industry also remains on top gear with new car and light truck sales rising to 16.4 million units in 2014 from 15.6 million last year. Sales are expected to further jump to 16.94 million units in 2015 on the back of low gasoline prices and pent-up consumer demand, as per The National Automobile Dealers Association (NADA) estimates.
In particular, U.S. light vehicles (a key end-user market) sales are expected to increase this year, riding on improving employment rate and household income, lower fuel prices, attractive financing options and pent-up demand. Auto industry in Asian countries, especially China, is also expected to thrive over the next several years. Lower oil and gas prices have also been a boon for automakers. As such, chemical makers are expected to gain from higher demand from this important end-market.
Strategic Actions
A number of chemical companies are shifting their focus on attractive, growth markets (driven by megatrends) in an effort to cut their exposure on other businesses that are struggling with weak demand and input costs pressure. In particular, agriculture and health and nutrition have emerged as a lucrative markets as evident from recent trends.
Moreover, cost-cutting measures -- including plant closures and headcount reduction -- and productivity improvement actions by chemical companies are expected to yield industry-wide margin improvements. Cash flows derived through these actions could be directed for growth initiatives. Several chemical makers are also disposing non-core assets as they shift their focus on high margin businesses.
M&A Heating Up
The chemical industry also saw a pick-up in consolidation activities in 2014. Chemical companies remain actively focused on mergers and acquisitions to diversify and shore up growth in a still-challenging economic environment. These companies continue to explore growth opportunities in the fast-growing emerging markets, particularly in the lucrative regions of Asia-Pacific and Latin America.
The chemical industry witnessed high levels of consolidation activities last year with some major deals have taken place including PPG Industries Inc.’s (PPG - Analyst Report) acquisition of Mexican paint company Comex and Albemarle Corp.’s (ALB - Snapshot Report) $6.2 billion buyout of Rockwood Holdings, Inc.
Construction Springing Back to Life
A rebound across housing and commercial construction -- major chemical end-markets -- has been another supporting factor for the chemical industry recovery. After being hit hard in the recession, the construction industry is currently in the process of gradual healing.The housing sector saw steady recovery in 2014 backed by stabilizing mortgage rates, improving job market and moderating home prices, and the momentum is expected to continue in 2015. While the U.S. housing market witnessed a slowdown of late with a sharp decline in housing starts in Feb 2015 due to harsh winter, a pick-up in housing activity is expected in the spring selling season.
Moreover, renewal of long-stalled construction projects and long awaited access to credit from lending institutions have helped invigorate the commercial construction sector. The US Architecture Billings Index (ABI), an indicator that offers a glimpse into the future of U.S. non-residential construction spending activity, remained above 50 for the most part of last year (a reading above 50 indicates an increase in billings). The index rose to 50.4 in Feb 2015 from 49.9 a month ago. This bodes well for demand for chemicals in the construction markets moving ahead.
Wrapping Up
The chemical industry is finally looking up after staying down for long, making it an attractive investment proposition for 2015. As you can see from the above-stated factors, there are a few good reasons to be optimistic about the industry.
Chemical stocks that are well placed in the current operating backdrop include Air Products and Chemicals Inc. (APD - Analyst Report), The Sherwin-Williams Company (SHW - Analyst Report), The Dow Chemical Company (DOW - Analyst Report), PPG Industries Inc., Celanese Corp. (CE - Analyst Report) and LyondellBasell Industries NV (LYB - Analyst Report).
Check out our latest Chemical Industry Outlook here for more on the current state of affairs in this market from an earnings perspective, and how the trend is looking for this important sector. -
Apr 20, 2015 | Duluth News Tribune
By Deanna White
We like to do things our own way in Minnesota. Finns don’t have a holiday? We create St. Urho’s day. People don’t have enough to eat? A Minnesota mailman walks 300 miles to fight hunger. From the lighthearted to the serious, we have our own take on things in Minnesota.
But this ability to find creative solutions to problems is under threat by a new bill in Washington. The bill, sponsored by U.S. Sens. David Vitter and Mark Udall, would restrict Minnesota’s ability to protect public health and the environment from toxic chemicals.
The current federal law regulating chemicals, the Toxic Substances Control Act, hasn’t been updated in more than 40 years, and the amount of chemicals used in plastics, electronics and other products has increased during that time from 60,000 to more than 84,000. All these chemicals have helped create our modern world. Yet in industry’s enthusiasm to create new products, considerations for public health and the environment largely were forgotten.
And we need protection. The current system has been set up to ensure a chemical is innocent until proven guilty. This means a chemical that hasn’t been adequately tested for human and environmental impacts can be put into millions of products and widely distributed throughout the marketplace. Only when the Environmental Protection Agency can prove harm — which is rare after a chemical has been let loose in the marketplace — can a chemical be banned or further regulated. Even asbestos couldn’t be banned under the Toxic Substances Control Act, despite the EPA’s 10-year effort.
There is wide agreement that the Toxic Substances Control Act is putting our health and the health of our environment at risk. Even the American Chemistry Council, the trade association for the chemical industry, is calling for updates to the act. This is largely due to Minnesota’s and other states’ success in passing state chemical policies, something the American Chemistry Council hates. For years, the council has been crisscrossing the country lobbying against state bills and spending millions in campaign contributions to try to stop state policies.
There have been numerous failed attempts to modernize the Toxic Substances Control Act. As a result of the inaction, states have taken the lead. Over the past several decades, 38 states have enacted more than 250 laws or rules regulating toxic chemicals.
Here in Minnesota, state leadership has resulted in new protections for children, families and our water. We were the first state to protect children’s health by prohibiting toxic Bisphenol A, or BPA, and formaldehyde in children’s products. When rising levels of the antibacterial chemical triclosan were detected in the Mississippi River and Lake Pepin, Minnesota again took the lead by restricting triclosan in body products.
Minnesota’s leadership continues today. Right now the Minnesota Legislature is considering two policies that would further protect the health of children, families and firefighters from toxic chemicals. One of the bills would prohibit toxic flame retardants from upholstered furniture and children’s products, chemicals whose levels have been increasing in Lake Superior.
Yet this progress could be undermined and halted by the Vitter/Udall bill pending in the U.S. Senate. Unlike other attempts at reforming the Toxic Substances Control Act, this bill is gaining traction. While I agree reform is needed and is something Clean Water Action and other Minnesota organizations actively have been working to advance, we need to get it right. The Vitter/Udall bill would limit the ability of states to enact new chemical policies or policies stronger than the federal level. The bill also would prohibit Minnesota from enforcing the Toxic Substances Control Act at the state level, taking away an important role states currently play in policy enforcement.
It is the creativity of Minnesota and other states that has advanced public health and environmental protections in the U.S. Looking at the challenges ahead, we still need this creativity.
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(ACC Mentioned) Recycling Group Changes Its Name to the Recycling Partnership
Apr 20, 2015 | Plastics News
By Jim Johnson
Curbside Value Partnership is no more. But don’t worry. The organization that promotes curbside recycling is simply changing its name to the Recycling Partnership.
CVP has been managing a program called the Recycling Partnership since last summer. The partnership was created to use money from the private sector to help transition municipalities to roll-out containers, from bins, to help promote increased recycling rates.
“The Recycling Partnership launched in July 2014 to build a better America through targeted actions to improve recycling in communities. It became increasingly clear that the educational resources, tools and ideas that CVP develops and shares shouldn't be separated from the best practices being promoted and implemented by the Recycling Partnership,” Executive Director Keefe Harrison said in a statement.
The partnership’s initial work has been in Richmond, Va., Columbia, S.C., and Florence, Ala.
Sponsors of the organization include American Chemistry Council, Society of the Plastics Industry Inc., Association of Postconsumer Plastic Recyclers, Amcor Ltd., Foodservice Packaging Institute, Coca-Cola Co, and Sonoco Products Co.
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US Trade Union Federation Opposes Udall-Vitter TSCA Bill
Apr 21, 2015 | Chemical Watch
The largest federation of trade unions in the US has detailed “serious flaws and deficiencies” in the Udall-Vitter Senate Toxic Substances Control Act (TSCA) reform bill (CW 10 March 2015)
The American Federation of Labor and Congress of Industrial Organizations (AFL–CIO) says they need to be remedied before passage.
The “most significant” flaws in the bill, the federation says, are its preemption provisions which, it argues, would greatly restrict the ability of states to act to protect their citizens from toxic chemicals.
In a letter to Senators James Inhofe (R-Oklahoma), chair of the Environment and Public Works Committee, and Barbara Boxer (D-California), the committee's ranking member, the federation writes that the bill would stop states from co-enforcing standards that are identical to federal rules, “a total departure from the shared state-federal enforcement responsibilities under TSCA and other environmental laws.”
The bill's failure to define “unreasonable risk” in its safety standard would subject to “challenge” the level of protection afforded to the public, the federation says. The standard says that the EPA should ensure no “unreasonable risk of harm to health or the environment will result from exposure to a chemical substance under the conditions of use.”
The AFL-CIO also faults the bill for allowing the EPA to rely on cost-benefit analysis in its risk management decisions. “The EPA may only ban substances if other restrictions are insufficient, imposing a tighter burden on the agency before it may prohibit use,” it writes.
The federation does concede that the bill does contain several provisions that are improvements over the existing TSCA, but adds that it is its view that even with these improvements, "the flaws and deficiencies in the bill are so significant … that the legislation fails to provide an effective regulatory framework for protecting workers and the public from exposure to toxic chemicals.”
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Risk Values for Key Combustion Chemical Need More Work, EPA Science Advisers Say
Apr 21, 2015 | BNA Daily Environment Report
By Pat Rizzuto
Proposed risk values that the Environmental Protection Agency would use as it develops hazardous waste cleanup standards, air standards and possibly other regulations managing risks from polycyclic aromatic hydrocarbons (PAHs) need more work before they can be used, a panel of agency advisors said April 17.
The EPA's Chemical Assessment Advisory Committee met April 15-17 to peer review a draft Integrated Risk Information System (IRIS) assessment the agency prepared for benzo[a]pyrene (CAS No. 50-32-8), which is produced by incomplete combustion and found at many Superfund sites.
In a draft assessment issued in 2013 and updated in 2014, the EPA concluded benzo[a]pyrene is a human carcinogen that also harms development, the immune system and reproduction (193 DEN A-6, 10/6/14).
The committee generally concurred with the health hazards the EPA identified and suggested it explore whether benzo[a]pyrene might cause additional problems, including cardiovascular ones.
The committee, however, questioned a number of the risk values, or dose-response calculations, the agency proposed.
The risk values described lifetime oral or inhalation doses of benzo[a]pyrene that the agency estimated people could experience without harm from effects other than cancer, and they describe the carcinogenic potency of benzo[a]pyrene.
Most-Studied of PAHs Compounds
The agency's eventual conclusions about benzo[a]pyrene are important because it is the most-studied compound of the family of more than 100 PAHs, which are produced when coal, oil, wood, garbage and other materials are burned but the combustion process isn't complete.
People also can be exposed to PAHs by eating barbecued or smoked foods or by applying coal tar-based medications used for skin problems such as eczema. Benzo[a]pyrene is called an index chemical because information about it is used to evaluate risks from other PAHs.
The EPA's air office will use risk values, health effects conclusions and other information in a toxicological review of benzo[a]pyrene to make at least a dozen decisions, an agency toxicologist told the committee April 15.
During the public comment session, consultants also said the agency's conclusions would affect hazardous waste cleanup standards (73 DEN A-11, 4/16/15).
Science to Estimate Skin Cancer Potency Unclear
“The state of the science is not entirely clear,” committee member Alan Stern said.
Stern, who manages the risk assessment section of New Jersey's Department of Environmental Protection, commented on the state of scientific knowledge that the EPA could draw upon to estimate the IRIS program's first attempt to calculate a risk value to predict the skin cancer potency of a chemical.
The risk value, called a dermal slope factor, that the EPA proposed for benzo[a]pyrene was 0.006 microgram per day (µg/d). The factor would mean benzo[a]pyrene is a a potent cause of skin cancer.
Concerns about the dermal slope factor and allegations that it greatly exaggerated benzo[a]pyrene's skin cancer-causing potential prompted more public comment during the committee's meeting than did any other single aspect of the draft IRIS assessment.
The comments came from trade associations, including the American Petroleum Institute, the Asphalt Institute, the Electric Power Research Institute and the Utility Solid Waste Activities Group.
Uncertainties in Calculating Potency Value
Advisory committee members discussed many uncertainties they had about how the agency would calculate a potency value.
Due to those uncertainties, committee members said they couldn't recommend specific methods the agency should use to calculate the dermal slope factor.
“We don't have a consensus on how [the agency should] move forward,” committee member Sean Hays, president of the consulting firm Summit Toxicology, said.
The committee did agree, however, that the agency should provide a logical line of reasoning to explain whatever choices it makes.
“EPA hasn't presented an underlying logical structure to explain its dermal slope factor, and it needs a logically coherent underpinning,” Stern said.
EPA Urged to Keep Developing Dermal Data
“We want EPA to keep developing dermal information,” said Elaine Faustman, who chaired the committee.
“We want risk numbers EPA can use to protect children,” said Faustman, who directs the University of Washington's Center for Child Environmental Health Research.
The committee's report will list scientific questions the agency should consider if it proceeds to develop a dermal slope factor, Faustman said.
The committee also raised concerns about draft risk values the agency had calculated for inhaled benzo[a]pyrene.
William Michael Foster, a pulmonary researcher who recently retired from Duke University, was among the committee members who urged the agency to consider whether occupational studies of PAH-exposed workers could provide a stronger basis to predict the cancer-causing potency of inhaled benzo[a]pyrene.
Inhalation Unit Risk
The inhalation cancer potency rate, called an inhalation unit risk, was 0.000002 microgram per cubic meter of air (µg/m3). The EPA based that estimate on the results of a toxicity study in which male hamsters inhaled BaP.
The committee also urged the agency to see if it could expand the number of studies used to calculate its reference concentration (RfC), a lifetime dose that could be inhaled without harm from problems other than cancer. The agency based its draft RfC of 0.000002 milligram of benzo[a]pyrene per cubic meter of air on a rat study that found fewer pups born to exposed dams.
“Fetal death is relevant,” said committee member Barry McIntyre, a senior toxicologist working at the National Toxicology Program.
The agency's draft assessment mentioned two other studies that might provide more information, or “the database may be so weak that derivation of an RfC is not possible,” he said.
Next Steps
The committee will hold two public teleconferences to complete its report, which then must be reviewed by the agency's full Science Advisory Board before being given as formal recommendations to the agency.
The dates for those teleconferences are Aug. 21 and Sept. 2.
The SAB staff office, which acts as a secretariat for the committee, will post the committee's draft report critiquing the agency's draft benzo[a]pyrene assessment about one month before the August teleconference.
Trade associations will review that draft to identify several aspects, a consultant told Bloomberg BNA April 20. He asked not to be identified because the trade association for which he is tracking the benzo[a]pyrene assessment had not reviewed his comments.
Issues to Be Reviewed
These issues include:
• how strongly, or not, the committee recommends the agency issue a dermal slope factor;
• how many and which issues the committee recommends the agency consider if it does calculate a dermal slope factor for benzo[a]pyrene; and
• what recommendations it makes about the EPA developing overarching guidance on how to develop dermal slope factors.
Faustman said the committee needed more guidance as to how the agency had calculated its benzo[a]pyrene dermal slope factor.
Anne LeHuray, executive director of Pavement Coatings Technology Council, told the committee that until the agency develops overall guidance on the development of these skin cancer potency values, the EPA should not issue one for benzo[a]pyrene specifically.
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Epigenetics, Uncertainty Analysis Among Topics EPA to Raise in Series of Workshops
Apr 21, 2015 | BNA Daily Environment Report
By Pat Rizzuto
Epigenetics and uncertainty analysis will be among the risk-related issues the Environmental Protection Agency will probe during four state-of-the-science workshops the agency plans to announce soon, a senior agency scientist said April 17.
Samantha Jones, associate director for science in EPA's Integrated Risk Information System program, discussed four workshops the agency's National Center for Environmental Assessment (NCEA), which includes the IRIS program, will begin holding this year. She spoke with reporters on the sidelines of a Science Advisory Board meeting.
Each workshop, Jones said, will be devoted to one of the following topics: epigenetics, less-than-lifetime exposures, systematic review and uncertainty analysis.
Three workshops will be scheduled during the remainder of 2015, and the fourth workshop will be held early 2016, Jones said. Preliminary information about the four workshops will be released soon on the center's website, Jones said.
NCEA Assessments
The National Center for Environmental Assessment prepares two widely used types of assessments.
The center's toxicological reviews, prepared under its IRIS program, evaluate the human health hazards of chemicals and doses at which those hazards could manifest. Risk analysts combine the IRIS information with exposure data or exposure assumptions to determine whether the risks of particular scenarios warrant regulations or other forms of risk management.
The center's Integrated Science Assessments provide the scientific foundation for the agency's National Ambient Air Quality Standards for ozone, particulate matter, carbon monoxide, sulfur dioxide, nitrogen dioxide and lead.
Epigenetics, Uncertainty, Exposures
Epigenetics is the study of how a parent's experiences such as famine or exposure to certain chemicals change the functions of genes and how those changes can be passed to the next or future generations. The changes can take place even though the “alphabet” or sequence of parental DNA stays the same. The gene-function changes could make people more susceptible to cancer, diabetes or other health problems.
Uncertainty analyses are used by risk assessors to communicate their knowledge that risk estimates or other information contained in a particular analysis are uncertain. For example, the IRIS program's toxicological reviews typically state whether the agency has low, medium or high confidence in a risk value.
Uncertainty analyses also can be presented more numerically through bar charts or other graphical methods that provide a risk value—for example, an inhalation dose that would be expected to do no harm—and the uncertainty that surrounds that value, meaning how much smaller or larger that safe dose could be.
The EPA's regional offices in particular have requested the IRIS program provide more less-than-lifetime risk values, IRIS Director Vincent Cogliano has previously told Bloomberg BNA. Regions could combine the risk values with exposure estimates that would reflect transitory exposures to pollutants emitted from a factory or found at a hazardous waste site.
Annual Systematic Review Workshops?
Systematic review involves methodical procedures through which analysts select the questions they will seek to answer before they begin an analysis; select search terms, databases and other tools to identify relevant studies; develop criteria for including or excluding studies; assess the quality of selected studies and their potential for bias; and analyze and synthesize the scientific information.
The systematic review workshop may evolve into some form of annual workshop, webinar or other event, because the application of systematic review to environmental health assessment is rapidly evolving, Jones said.
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The Little Pipeline Agency That Couldn’t
Apr 20, 2015 | PoliticoPro
By Elana Schor & Andrew Restuccia
On June 10, 1999, a few days after his high school graduation, Liam Wood unexpectedly got an afternoon off work and decided to go fly-fishing on a creek near his hometown of Bellingham, Wash. About 100 miles away, operators missed the signs of a pressure spike in the 16-inch gasoline pipeline that crossed the stream in Whatcom Falls Park.
The pipe ruptured at a point where, several years before, a backhoe had accidentally struck and weakened the 50-year-old iron. Hundreds of thousands of gallons of gasoline began to spew into the creek near where Liam stood, staining the water pink.
It took an hour for control room computers to register an alert. Police began to evacuate the park, but Liam was already dead. Overcome by fumes, the 18-year-old had fallen unconscious into the water and drowned.
Then two 10-year-old boys playing in the park flicked a lighter they’d been using to set off fireworks, igniting the gasoline. The fireball set dozens of acres ablaze in a towering black cloud that could be seen in Vancouver, more than 50 miles away. The two boys died the next day, succumbing to burns over more than 80 percent of their bodies.
The ensuing public outrage revealed gaping holes in pipeline safety regulations. The pipeline company had failed — but clearly, so had federal authorities who were supposed to be keeping watch. At the time of the Bellingham disaster, pipeline operators were not required to inspect the inside of their pipes or install valves that would automatically shut after a rupture. Government auditors later found that the federal agency in charge of pipeline safety was a dismal failure at implementing more stringent regulations, in part because it deemed the rules “too costly for the pipeline industry compared with the expected benefits.”
Six months after the blast, the head of the National Transportation Safety Board, the independent agency investigating the Bellingham explosion, strode into a meeting of pipeline executives to unleash a brutal critique of the federal regulators and of the industry he believed shared the blame for obstructing reform.
“There is nowhere today the sense that the Office of Pipeline Safety is in charge,” Jim Hall said then, “or that its regulations, its inspections, its assets, its staffing and its spirit are adequate to the task.”
Bellingham was supposed to change that. But more than 15 years later, Hall says he sees little evidence of meaningful improvements. “Unfortunately,” he told POLITICO, “I think I would give the same speech today.”
The story of what happened in those 15 years — or rather, what didn’t happen — is in large part the story of the Pipeline and Hazardous Materials Safety Administration, an obscure agency that was created to oversee the nation’s sprawling network of oil and gas pipelines.
Oil and gas companies like to assure the public that pipelines are a safer way to ship their products than railroads or trucks. But government data makes clear there is hardly reason to celebrate. Last year, more than 700 pipeline failures killed 19 people, injured 97 and caused more than $300 million in damage. Two of the past five years have been the worst for combined pipeline-related deaths and injuries since 2000.
To understand the failure revealed by these numbers, POLITICO talked to more than 15 former and current federal pipeline officials and advisers, as well as dozens of safety experts, engineers and state regulators. We reviewed more than a decade of government data on fatalities, injuries, property damage, incident locations, inspections, damages and penalties.
The picture that emerges is of an agency that lacks the manpower to inspect the nation’s 2.6 million miles of oil and gas lines, that grants the industry it regulates significant power to influence the rule-making process, and that has stubbornly failed to take a more aggressive regulatory role, even when ordered by Congress to do so.
This is a particularly bad time for a frontline safety agency to take a backseat.
The current boom in fossil fuel production has created intense pressure for massive new pipelines like Keystone XL. Many of the pipes already in the ground are more than half a century old. Tens of thousands of miles of pipeline go completely unregulated by federal officials, who have abandoned the increasingly high-pressure lines to the states.
Meanwhile, fatal incidents continue; a gas explosion in Alabama killed one man in January, and PHMSA reported 10 injuries in the three months it took to report this story.
A senior Capitol Hill aide who has long tracked the agency, speaking on condition of anonymity, lamented PHMSA’s deeply rooted “culture of can’t.”
“PHMSA has always said, ‘We can’t,’” the aide said. “‘We can’t get it through [the White House budget office],’ ‘We can’t get the money,’ ‘We can’t get the resources,’ ‘We can’t submit what we really want,’ ‘We can’t regulate this,’ ‘We can’t get enough inspectors to do this.’ … PHMSA acts like it’s been beaten down for decades. Every time you try to offer a hand up, it almost retreats.”
****
About a year after Bellingham came a natural gas explosion in New Mexico that killed 12 people. Members of Congress were rushing to make up for years of inattention, but the families of those killed in Bellingham didn’t hesitate to criticize proposed laws they felt were “watered down by those who pay homage to the powerful oil and gas lobbyists.”
One of those family members was Bruce Brabec, whose stepson was Liam Wood. Brabec would soon join a private watchdog group as way to deal with his grief. “I didn’t want to just be angry,” said Brabec, whose short-cropped white beard gives him the look of a college professor. “I wanted to be effective. I wanted to help make changes.”
It was 2002 before Congress approved legislation that required companies to create risk-management analyses for pipelines that run through densely populated areas and perform more frequent inspections. That was enough to win the wary support of safety advocates.
The creation of PHMSA, an arm of the Department of Transportation, didn’t come for another two years, the result of a bureaucratic reorganization more than a burning desire to bring pipeline companies to heel. Indeed, the new pipeline safety agency inherited many of its predecessor’s flaws — weaknesses entrenched in part by a style that was “a lot more collaborative than traditional rule making,” as one former safety official described it.
PHMSA’s regulations tend to be “a bit open-ended” as opposed to “a prescriptive one-size-fits-all,” said Eben Wyman, a former Transportation Department official who is now a lobbyist representing the plastic pipe industry.
The post-Bellingham reforms give operators latitude to write their own safety plans overseen by PHMSA, which makes it harder for regulators to catch violations. Safety advocates worry that approach is tantamount to self-regulation. But PHMSA and its defenders say that no two pipes are the same and that regulators couldn’t monitor millions of miles of technically complex line without relying on the companies.
A PHMSA official who declined to speak on the record with POLITICO compared the agency to a traffic cop. PHMSA, the official said, “is not responsible for individuals speeding,” but it does have the “responsibility to enforce the law and pull them over to protect the public.”
But the rules PHMSA enforces get shaped by the pipeline industry — as if lead-footed drivers helped to set highway speed limits.
All rules made by the agency undergo “peer review” by two advisory committees, one for hazardous liquids and one for gas. By law, the 15-member committees — five each from industry, government and the public — have the power to vote on proposed regulations and policy moves. In theory, there is balance, but in practice, industry has an advantage. The committees’ current rosters are missing seven members in total on the government and public sides, making it difficult to stop a move backed by pipeline companies. (PHMSA told POLITICO that it is working on getting the rosters back in balance.)
“With PHMSA, there’s only one wind, and it blows from the industry,” said Paul Blackburn, a consultant who works primarily with environmentalists and landowners.
Advisory committee meetings are largely friendly affairs, a review of thousands of pages of transcripts shows, almost wholly devoid of resistance to industry-driven projects that craft voluntary standards for PHMSA. One high-profile standard that PHMSA and industry plan to tout at a hearing on April 22 covers “safety management systems” that are modeled on practices used for decades in the nuclear and aviation industries. But they are voluntary, like so many of PHMSA’s standards.
“From the get-go, the regulations get watered down,” said Randy Knepper, a top pipeline safety official in New Hampshire. “There’s not a lot of teeth behind them.”
PHMSA’s chief pipeline safety official, Jeffrey Wiese, acknowledged at a 2011 meeting of advisers that the agency has trouble determining “who really speaks for the public,” dismissing “advocacy groups out there with a hard-bent agenda.”
“[T]ruth be told, very little [of the] public is even interested or knows” about pipelines, Wiese said. “It’s the ones who were near a failure, and their view is skewed.”
Stacey Gerard, a 20-year PHMSA veteran who retired as its chief safety officer, said public members of the advisory committees “are not getting paid to do the research and reading” that might empower them to play a more vocal role. “Industry is going to be more dominant in the committee discussions because they’re usually more prepared and better armed.”
The most powerful counterweight to the pipeline industry’s sway over its regulators comes, not surprisingly, from Bellingham. Twelve years ago, former environmental educator Carl Weimer created the nonprofit Pipeline Safety Trust to keep an eye on pipeline companies and their regulators in Washington. The judge who awarded $4 million in criminal penalties to the group likened it to “Bambi taking on Godzilla.”
Bambi has learned how to roar in its own way over the years. Weimer sits on one of PHMSA’s advisory panels and is a frequent witness at congressional pipeline hearings. He recalls sprinting to a Capitol Hill Starbucks in 2006 to sketch out legislative language at the request of the late Sen. Frank Lautenberg (D-N.J.) that ultimately made it into that year’s pipeline safety bill.
But Weimer’s influence has not sparked the kind of formal resistance that might stop a weak regulation. During his eight years on a PHMSA advisory committee, he could not remember any formal opposition materializing to a proposed rule. A PHMSA official countered that “tussling” among advisers does happen but downplayed its importance, telling POLITICO that “we consider their input, but are not bound by their input.”
PHMSA’s longest-serving chief, Cynthia Quarterman, said, in an interview with POLITICO, she was “concerned” about the advisory committee structure when she was appointed in 2009 by President Barack Obama. But Quarterman, a former industry lawyer who led the agency until October, came around to the concept “because, if you could get them to agree across the board that what they’re doing makes sense, it makes a better case going forward.”
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Five years ago this week, the nation was riveted by the underwater blowout of BP’s Deepwater Horizon oil rig. But mere days after that Gulf of Mexico gusher was capped, a pipeline in Marshall, Mich., — 40 years old and pumping 8.4 million gallons of heavy oil every day — broke open.
The ruptured pipe leaked more than 840,000 gallons of oil sands crude into a creek that fed the Kalamazoo River, ultimately spreading for 35 miles. The operator, Canadian oil giant Enbridge, misread alarms in its control room and twice tried to pump more fuel through the broken line. Seventeen hours passed before oil was shut off for good.
At the time, it was the largest onshore oil spill in U.S. history. But Marshall got scant attention in 2010, as the public and policymakers focused on the Gulf of Mexico.
The Zinn family saw the Michigan disaster up close. The family’s land was a few hundred feet from the nearly 7-foot gash in Enbridge’s pipeline. Four decades earlier, the family’s patriarch, Frank Zinn, had fought in vain to stop the 30-inch-diameter pipe from being laid across his property. He had been assured that a major spill was unlikely.
After the spill, officials from Enbridge and the federal government transformed 45 acres of the Zinns’ land into the base of operations for the cleanup. Hundreds of trees were cut down and contaminated soil was piled high for removal. The family abandoned plans to plant a community vineyard. Dredging of the nearby river would drag on for more than two years.
“At a bare minimum,” said Carter Zinn, Frank’s grandson, “if you’re going to put a pipeline on people’s land, then the government has to make sure it’s safe.”
An independent investigation later concluded that “weak federal regulations” were partly to blame for the spill. Tests on Enbridge’s pipeline conducted five years earlier had shown warning signs of a future failure. But the company didn’t act, in part because of vague PHMSA rules for when to report potential defects, NTSB said.
“For the regulator to delegate too much authority to the regulated to assess their own system risks and correct them is tantamount to the fox guarding the henhouse,” Deborah Hersman, then the safety board’s chairman, said of PHMSA.
While Enbridge did not contest PHMSA’s penalty, it has offered a lengthy rebuttal to some of the charges. “Enbridge believes that its pipeline integrity process and management in 2010 were state of the art and in compliance with all applicable regulatory requirements,” the company said in a 2012 filing.
Yet even as Obama vowed to remake the nation’s offshore drilling regulations after the Gulf of Mexico spill, a small band of PHMSA critics lamented that it was hard to trust a pipeline agency whose chief had to step aside from the response to the Marshall spill to avoid a conflict of interest. Cynthia Quarterman had served as outside counsel to Enbridge before she was named to lead PHMSA.
Quarterman rejected the criticism. “To that, I would say, who cares what those folks are going to say?” she said. “You have to focus like a laser on safety.”
But PHMSA tends to turn on the laser beam after the oil is already leaking.
One of the agency’s most powerful tools is a “corrective action order” that could shut down a pipeline until the operator addresses violations. PHMSA has used this tool 117 times since 2002 — mostly after an incident has occurred.
“The only time they’re doing a lot of enforcement is after something hasn’t performed. I think if something occurs, it’s a failure,” said Knepper, the New Hampshire pipeline regulator.
While federal spending on pipeline safety has grown by more than 50 percent since 2010, at $145.5 million for 2015 the agency’s pipeline safety budget is still less than what the Pentagon spent on a single jet engine maintenance contract last year.
To boost its inspection capacity, PHMSA doles out grants to states to monitor pipelines that don’t cross state lines. But even when state and federal rosters are combined, the total number of inspectors is about 460 — roughly one person for every 5,830 miles of pipeline.
The federal pipeline safety budget for 2015 includes $11.9 million for hiring 109 new employees largely for inspections and enforcement, but PHMSA officials expect it will take as many as three years to hire and train the new staffers. And the ones they do hire are unlikely to be as highly trained as the engineers that private companies lure away with six-figure salaries.
Ed Ondak, a regional director for federal pipeline safety in the pre-PHMSA days, is now a consultant and frequent expert witness for pipeline companies. Ondak recalled in an interview that “I find violations within the first five minutes I’m there” on the job. “I say, ‘Aren’t you inspected by PHMSA?’ They don’t find the violations.”
Less than six weeks after the Enbridge spill, in September 2010, tragedy struck again in the Northern California suburb of San Bruno. Pressure built in a natural gas pipeline installed more than half a century earlier, resulting in a massive explosion that killed eight people, injured more than 60 and destroyed 38 homes.
Independent investigators later found that the pipeline’s operator, Pacific Gas and Electric, kept inaccurate records about faulty welds on the pipe and resorted to unorthodox strategies to get around PHMSA’s rules for pressure testing. State regulators failed to hold the company accountable until after the disaster. PHMSA, which had the power to sanction the state regulator, gave it the equivalent of an A rating in 2009.
****
It took more than a year after San Bruno for lawmakers to send Obama a new bipartisan pipeline safety bill that imposed dozens of new mandates on PHMSA. But more than three years later, the agency has yet to finish many of the biggest tasks.
“They only seem to act when confronted by and forced by Congress to act,” Rep. Peter DeFazio, the House Transportation and Infrastructure Committee’s top Democrat, said of PHMSA. “And even then, they don’t act.”
Congress gave PHMSA two years to consider requiring excess flow valves — which shut off the flow of gas in the event of a leak to prevent an explosion — in multifamily residences and other facilities. The safety board has for years recommended expanded use of the valves, which only cost a few hundred dollars. A 2012 Associated Press investigation identified at least 270 gas pipeline accidents since 1968, causing 67 deaths, that the valves could have prevented.
But three years after Congress urged PHMSA to take action, the agency has yet to propose any rule for adding the valves to multifamily buildings, amid resistance from industry. A regulation requiring the valves on new single-family homes was finalized the year before the San Bruno blast.
Congress also gave PHMSA 18 months to write a regulation that would require pipeline operators to notify the National Response Center of an accident within an hour. During the Michigan spill, Enbridge waited more than three hours to alert federal responders. More than three years later, PHMSA’s rules only refer to notification at “the earliest practicable moment.”
Congress also sought to eliminate the so-called grandfather clause, which exempts lines built before federal safety regulations first took effect from current rules for record-keeping and pressure tests. Because the San Bruno pipeline was built before 1970, it didn’t undergo the kind of testing that could have alerted regulators to its potential defects.
Lawmakers gave PHMSA 18 months to close that loophole by requiring that previously untested larger gas lines in sensitive areas undergo strength testing. But the agency has not even proposed a rule.
Rep. Jackie Speier, the California Democrat who represents San Bruno, slammed the agency for an “appalling” failure to move “on this simple, noncontroversial regulatory fix that could save untold lives.”
Speier counted “at least 10 more explosions” on gas pipelines since the 2010 disaster, including one in Manhattan last year that killed eight people. “PHMSA knew what it had to do to fix the problem,” she said in a statement.
“Instead, in defiance of the law, it is endangering people by refusing to act. How many more explosions are enough?”
Brabec, who serves with Weimer on the Pipeline Safety Trust, is so unhappy with PHMSA’s sluggishness that he wrote last year to Democratic power broker, John Podesta, his roommate after college. “You grow weary of the reasons why rule making isn’t happening,” he said. He accepts some of the agency’s explanations, but wonders: “Where’s the part that untrue? Where are they holding themselves back?”
There is frustration even within PHMSA’s ranks. John Gale, director of the agency’s Office of Standards and Rulemaking, told PHMSA advisers in October that “I’m not just professionally disappointed, but I’m personally disappointed that we’re not getting these rules to you.”
Former safety board Chairman Jim Hall, who now consults for San Bruno operator Pacific Gas and Electric, said agency officials are “underfunded and understaffed and do not really have the political culture to be effective at what they’re doing.”
“They’re understaffed to provide adequate oversight of the industry, but I don’t believe they’re understaffed to move a regulatory framework,” he added. “They’ve just lacked the will to do so.”
The risk of inaction is real. Older pipelines, particularly those made out of cast or wrought iron, and steel pipelines without protective coatings are considered at most risk of bursting.
At least 1,984 pipeline incidents from 2002 to early this year — or about one-quarter of all reported incidents — involved failed parts installed before 1970, according to a POLITICO analysis of federal data. Ninety-one incidents since 2002 involved failed parts that were at least 80 years old, including a 2011 blast that killed five people in Allentown, Pa.
Incidents caused by equipment failure, including the welds on aging pipelines that the safety board has warned about for decades, have risen by more than 60 percent since their low point in 2007.
PHMSA has stopped short of comprehensive binding regulations that would mandate the replacement of aging pipelines, issuing only a “call to action” encouraging states to move quickly.
“It’s a failure of government, sad as it is,” Lois Epstein, the Wilderness Society’s Arctic program director, said of the agency’s inability to function. “Especially when you’re talking about a Democratic administration that’s out there saying ‘Government can do what’s needed, government is a force for good.’”
But perhaps the biggest unfinished business before PHMSA is the tens of thousands of miles of pipelines connecting oil and gas extraction sites to transmission and distribution lines that are now going almost completely unregulated.
These “gathering” pipelines, once seen as lower priority because of their smaller size and lower pressure, are growing in size and number, thanks to the U.S. shale drilling boom — and states are starting to move on their own to rein in the pipes’ potential dangers while PHMSA stays stalled.
“PHMSA should at least know what’s out there: how many gathering lines, what the pressure is, how old they are and what the risks are,” said Susan Fleming, director of the physical infrastructure program at the Government Accountability Office.
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Most of Congress’ mandates to PHMSA were still awaiting completion in March 2013 when a ruptured pipeline sent more than 200,000 gallons of heavy crude gushing through the streets of Mayflower, Ark.
The Little Rock suburb’s congressman at the time was Tim Griffin, a staunch Republican and former Karl Rove aide who is skeptical of federal regulations and strongly in favor of pipelines. But after the Pegasus pipe burst, forcing the evacuation of 21 homes, Griffin challenged PHMSA’s secrecy in a way that few others have.
When ExxonMobil, the owner of the 65-year-old pipeline, refused to release the full engineering analysis conducted after the leak, PHMSA deferred to the oil company’s decision.
So Griffin obtained a copy of the massive report and posted it on his congressional website. Weeks later, he released three more reports on the failed pipeline’s condition that ExxonMobil and PHMSA had tried to keep under wraps.
“They politely requested that I not” share the data, Griffin recalled in an interview. “And I did.”
Environmentalists played up TV images of Canadian crude spilling across sidewalks and lapping at backyard playsets to help their fight against Keystone, which would carry the same heavy oil through some of the Plains states’ most environmentally sensitive areas.
Few policymakers or advocates other than Griffin paid attention to PHMSA’s agreement with ExxonMobil to shield information regarding the spill. A review of PHMSA’s post-accident violation notice to the oil company, however, illustrates the pitfalls of letting pipeline operators police themselves.
Because the pipeline’s Arkansas leg runs through a “high-consequence area” close to drinking water sources, federal rules required ExxonMobil to test it every five years. The company flushed the pipe with water in 2005 and 2006 to gauge the aging steel’s strength under stress, and found what PHMSA later called “susceptibility to seam failures.”
ExxonMobil wasn’t forced to act right away, though PHMSA did require it to test the doomed line again within five years. The company waited seven years instead, without telling its regulators or requesting an extension to comply with federal rules, according to PHMSA’s post-spill violation notice.
Exxon didn’t act despite what PHMSA called “more than adequate information” to deem the line at risk for a rupture. After the leak, the agency proposed a $2.7 million fine that the company is now challenging. Exxon has long maintained that PHMSA’s analysis of the Mayflower incident is flawed and it disputes the agency’s assertion that the company violated federal regulations.
Fines are meant to be one of PHMSA’s most powerful tools. Congress sharpened that weapon in 2011 by doubling the maximum civil penalties the agency can impose to $200,000 per day for each violation or $2 million for a related series of violations.
But over the past 12 years, a POLITICO review of PHMSA data shows, the agency has levied just $44.2 million in fines against pipeline operators that caused more than $5.5 billion in damage.
PHMSA started fewer civil penalty cases in 2014 than it had in almost a decade and proposed 73 percent fewer fines than a year earlier, even as the number of total pipeline incidents increased, agency records show.
The Federal Energy Regulatory Commission, which supervises interstate oil, gas and electricity transmission, imposes much steeper fines for a range of violations including market manipulation. A decade ago, Congress gave FERC authority to impose civil penalties of $1 million per day for every day that a violation continues, and FERC has proceeded to smack companies with more than $626 million in civil penalties since 2007.
Companies often fight PHMSA’s penalties in proceedings that are closed to the public. In addition to appealing its proposed fine for the Arkansas spill in 2013, ExxonMobil is challenging a fine of about $1 million for a leak that dumped an estimated 63,000 gallons of oil in Montana’s Yellowstone River in 2011. The company had already argued that down from the $1.7 million PHMSA first proposed.
“They fine people $1 million and they go into a closed room and they come out and it’s $250,000,” Weimer of the Pipeline Safety Trust said. “What happened in that room? We don’t know.”
PHMSA countered that its hearings are “informal” and shouldn’t be compared with court proceedings. It says the hearings may include discussions about “confidential business information and critical infrastructure security information” that can’t be disclosed to the public.
Former PHMSA officials and industry representatives say the agency does in fact inspire fear. Any civil penalty — even a low one — can hurt a company’s reputation and prevent it from securing permits for future projects, they say.
After the 2010 Michigan oil spill that destroyed the Zinns’ land, PHMSA hit Enbridge with a $3.7 million fine — the biggest civil penalty in the agency’s history. Enbridge did not challenge that penalty and paid up in 2012, during a quarter when its net profit was more than 70 times the size of the fine.
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The myriad problems facing PHMSA — from aging, untested pipes to its frozen rule-making process — might seem ripe for congressional attention in the agency’s next authorization bill. But new pipeline safety legislation, technically due for passage by this fall, is widely expected to slip to next year and to stop short of any serious remodeling of the agency.
Part of the reason for that, as House Energy and Commerce Chairman Fred Upton explained, is PHMSA’s lack of progress on the mandates lawmakers gave it in 2011.
“Pipeline safety has been and will continue to be a top priority,” the Michigan Republican said in a statement, but “it remains to be seen what needs to be accomplished” in a new authorization bill.
“About half of the new safety procedures and requirements are still stuck in the rule-making process,” Upton added. “My fear is that further delays and regulatory uncertainty will discourage development of much-needed infrastructure.”
Despite PHMSA’s lengthy to-do list, the agency hasn’t had a permanent leader since Quarterman, its former administrator, stepped down in October. Timothy Butters, the former assistant chief of operations for the Fairfax, Va., fire department, has served as acting administrator since then, and Obama has not nominated a permanent administrator.
PHMSA took a first step last year toward requiring testing and oversight of hazardous liquid pipelines that were installed before federal regulation began to kick in around 1970. But the road from the agency’s initial outline to formal rule making will be long and arduous, not least because the oil industry slammed the effort in February as costly, unnecessary and problematic.
The agency is also working on two highly anticipated rules that could reform existing regulations for both major types of pipelines, making good on many unmet mandates. Or not — their specifics, for now, remain largely a mystery.
DeFazio, the Democratic PHMSA critic, plans to press for reforms in the next federal pipeline bill regardless of the hurdles. He suggested that lawmakers “look at a major reorganization of the industry,” similar to what the airlines underwent after the 1998 ValuJet crash.
“You don’t screw around with this stuff politically,” DeFazio added. “This is life or death. Pipelines blow up and people die.”
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(ACC Mentioned) Race to Zero Team Named a Finalist in National Competition
Apr 20, 2015 | University News - Appalachian State University
Appalachian State University’s Race to Zero team was named one of five finalists in the national Race to Zero competition held April 18-20. A total of 33 teams from across the United States and Canada participated in the U.S. Department of Energy (DOE) student design competition held at the National Renewable Energy Lab in Golden, Colorado, April 18-20.
The University of Minnesota won the competition.
“We are incredibly pleased to have been selected as a finalist in this illustrious field,” said Dr. Jeff Tiller from the Department of Technology and Environmental Design. Tiller was the lead faculty advisor for Appalachian’s student team.
The goal of the competition was develop plans for high-efficiency new buildings that are “solar ready” and could be seen soon on the market. The designs followed sustainable building practices to assure durability, comfort and excellent indoor air quality in addition to high levels of energy efficiency.
“Our team and our university has received universal praise from the U.S. Department of Energy, the National Renewable Energy Lab, faculty representing the other universities, jurors representing building science and construction companies across the country, and from industry supporters of the competitions, including DuPont, Oak Ridge National Labs, American Chemistry Council, Plastics Pipe Institute and many others,” Tiller said. “The many hours of work have paid off in a major way. All of our team should be incredibly proud of their success to which each member contributed.”
The Race to Zero is an annual competition, open to students and faculty from any interested collegiate institution. The competition is based on a real-world scenario where a builder needs to update an existing product line (house plan) to a high-performance house design or is developing a new high-performance home product line. Teams are presented a specific design problem and are asked to either redesign an existing floor plan or create a new house design that satisfies the project requirements. The mandatory performance target is the DOE Zero Energy Ready Home specification (https://basc.pnnl.gov/checklists/zero-energy-ready-home).
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Fracking 'Best Practices' Spur Debate Over Use As Model For States' Rules
Apr 20, 2015 | InsideEPA
By Bridget DiCosmo
Energy sector "best management practices" (BMPs) -- agreed-upon standards for conducting hydraulic fracturing -- are spurring debate among observers over whether the BMPs, when coupled with compliance incentives, should serve as models for states in developing fracking rules given the federal government's limited regulatory power.
Thomas Merrill, the Charles Evans Hughes Professor of Law at Columbia Law School, outlined one possible strategy for effective regulation during a recent Environmental Law Institute (ELI) event in Washington D.C.. He suggested that development of a robust BMP regime at the state level could be helped along by creating a backstop of potential strict liability for energy companies that do not comply with the regulations.
Such an approach would "give companies incentives to adhere to BMPs because they'd be given a shield for liability" in the event of water contamination or other environmental harms that advocates and other fracking opponents warn are possible, Merrill told the ELI 2015 Environmental Law and Policy Annual Review.
The strategy is discussed in a recent update of a 2013 paper authored by Merrill and David Schizer, a dean and Lucy G. Moses Professor at Columbia Law School, entitled "The Shale Oil and Gas Revolution: Hydraulic Fracturing, and Water Contamination: A Regulatory Strategy," which Merrill presented at the conference.
The paper targets potential groundwater contamination as the most unique risk associated with fracking but warns against "draconian regulatory measures" that could be an overreaction that would stifle the sector.
Instead, Merrill and Schizer in the paper promote the suggestion of BMP regulation, saying it has the advantages of being well-suited to risks associated with fracking, may provide reassurance to the public, and gives industry some predictability on regulatory costs in advance of investing to develop a well.
"However, best practices regulation has three important drawbacks, so that it must be backstopped by liability," the paper says. To establish a liability regime, Merrill suggested a "beefed-up version" of a doctrine known as the regulatory compliance presumption, a defense that companies could use if they can show compliance with the BMPs.
For specific best practices, Merrill suggested measures that create incentives for energy companies to develop better information, including baseline testing of groundwater to document when contamination may have occurred, and disclosure of fracking chemicals -- something environmentalists have long sought.
The paper suggests such an approach may be helpful in a liability system where plaintiffs must demonstrate by a preponderance of the evidence that contamination on their property was caused by fracking.
However, Bradley Campbell, a former EPA regional administrator and environmental attorney, noted during the April 10 ELI conference that while some of the paper's suggestions were "terrific," including on the baseline water testing and push for more transparency, there are some questions on such a strategy.
When regulatory agencies try to push BMPs, they often end up tied up in litigation over how they identified each practice and what degree of formal rulemaking would be required to promulgate the practices, Campbell said.
He also questioned why compliance with best practices should automatically "be dispositive of liability" potentially leaving homeowners to cover the cost of the cleanup.
Further, "as a pure practical matter, best practices regulation is problematic with fracturing," Campbell said, because the ability to prove whether or not fracking well construction or other regulations were followed after an environmental release has already happened is an "evidentiary nightmare."
Fracking Oversight
While fracking oversight has long been considered the purview of states, environmentalists and landowners have increasingly pushed for greater federal governance of the drilling practice.
But the issue is complicated, at least for EPA, by various statutory exemptions in environmental laws barring the agency from regulating certain components related to fracking.
For example, the Energy Policy Act of 2005 blocked the agency's ability under the Safe Drinking Water Act (SDWA) to directly regulate fracking injections, except where diesel fuels are used, by exempting them from the definition of underground injection for purposes of EPA's SDWA permitting program.
The Bureau of Land Management recently unveiled a rule governing fracking on public lands -- the first federal rule targeting fracking, but Wyoming and industry groups are suing over the regulation. Wyoming's suit charges that the rule violates SDWA because Congress intended EPA to have sole authority over underground injections.
The idea of facilitating best industry practices for fracking and other aspects of shale development was among a host of recommendations issued by the Department of Energy's Secretary of Energy Advisory Board shale gas panel in November 2011, but those were more aimed at regional centers to develop the practices as opposed to states.
Environmental and industry groups created in 2013 the Pittsburgh, PA based Center for Sustainable Shale Development to craft performance standards and certify operations. During the ELI conference, Susan Packard LeGros, president and director of the center, said that having industry voluntary standards that are at least as stringent as what states require would give companies that operate in multiple states greater certainty if those states have different levels of regulations.
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2 House Dems Reintroduce Bill To Stop Fracking On Public Land
Apr 21, 2015 | E&E Daily News
By Mike Soraghan
Two Democratic House members want to stop hydraulic fracturing and some other drilling activities on federal land.
Reps. Jan Schakowsky of Illinois and Mark Pocan of Wisconsin are holding a press conference tomorrow to introduce a bill to ban fracking on future leases. Food and Water Watch calls the legislation "the strongest federal bill against fracking introduced in Congress to date."
The bill is unlikely to pass a Republican-controlled Congress. Even less restrictive bills failed to gain traction in Congress when it was controlled by Democrats.
Schakowsky and Pocan introduced the bill late last year during the lame-duck session. Aides said they are intending to make a more concerted effort this year.
If it were passed, it would prevent fracking, the use of fracking fluid or acidization (another form of well "stimulation") for oil and gas production on new federal leases.
It would not stop all future oil and gas drilling, just the methods involving hydraulic fracturing. But most modern oil and gas operations involve some sort of fracturing or other stimulation.
Tomorrow's press conference is to include representatives of Food and Water Watch, the American Sustainable Business Council, Progressive Democrats of America, and the Center for Biological Diversity.
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GOP Chairwoman To Sponsor Bill To Lift Oil Export Ban
Apr 20, 2015 | The Hill - E2 Wire
By Timothy Cama
Sen. Lisa Murkowski (R-Alaska) said she will introduce a bill this year to end the 40-year-old ban on exporting crude oil.
Murkowski, chairwoman of the Senate Energy and Natural Resources Committee, told energy executives Monday that the ban is severely holding U.S. producers back, Reuters reported.
“It’s time to lift America’s ban on crude oil exports,” Murkowski said at CERAWeek, a conference in Houston.
“We shouldn’t lift sanctions on Iranian oil while we are keeping restrictions on American oil. It just doesn't make sense," she added, according to the news service.
Murkowski has long called for President Obama to relax the ban, saying he can declare that exports to certain countries be allowed. The U.S. currently exports oil to Canada, for example.
She suggested allowing exports to Mexico and NATO allies like Italy, the Netherlands and Poland, according to the Houston Chronicle.
Rep. Joe Barton (R-Texas) has sponsored legislation in the House to lift the ban.
Many Democrats and environmentalists want to keep the ban in place. They fear that lifting it could significantly increase energy prices domestically or induce demand for oil.
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Murkowski Says President Can Act To Approve U.S.-Mexico Crude Oil Swap
Apr 21, 2015 | BNA Daily Environment Report
By Nushin Huq
While bills are extremely difficult to pass, President Barack Obama has the ability to act now to approve a U.S.-Mexico crude oil swap, Sen. Lisa Murkowski (R-Alaska), chairman of the Senate and Natural Resources Committee, said.
“Mr. President, you use executive orders pretty freely nowadays,” Murkowski said April 20. “Here's your opportunity to use it in a way that could be good, positive for the economy.”
Regarding the proposed crude oil swap between the United States and Petroleos Mexicanos, or PEMEX, Murkowski told members of the media during the IHS CERA week conference in Houston that the Commerce Department has the authority to approve exemptions, and that this would be a viable workaround until legislation was passed lifting the crude oil export ban.
Murkowski Hopeful
While Murkowski said she hasn't heard anything specific from the Commerce Department about approving the Mexico-U.S. swap, she remains hopeful. There have been signals from the Obama administration, Murkowski said, that there is a willingness to look at the issues surrounding export.
“We've seen it with the condensate issues,” Murkowski said. “The permission that has been granted in the requests for condensates.”
While the export ban cannot be repealed immediately through legislation, Murkowski said that exemptions can be implemented immediately. There is already an exemption for Canada. A Mexico exemption might be approved. Similar exemptions can be given to other countries as well as a way to go around the ban, Murkowski said.
“Why not one for our friends at NATO?” Murkowski said. “If I were Poland, in a place where 96 percent of its crude oil comes from Russia, I'd be knocking on the door. I'd be calling up the President. Is there any way you guys can help?”
The president might be favorable to extending exemptions if the request came from leaders of other nations rather than from Congress, Murkowski said.
While passing a bill lifting the export ban will be very difficult, Murkowski said she is hopeful.
“To put it into context, within the first couple of weeks of this Congress, the President flat out said, ‘I'm going to veto the keystone pipeline,'” Murkowski said. “He had a whole laundry list of measures [he was going to veto], several of which had not even been introduced.”
Obama has not mentioned lifting of the export ban on that list, Murkowski said.
“I'm reading that as a positive,” she told reporters.
Murkowski Panel Discussion
If 2014 was the year of the study, then 2015 will be the year of the legislation, Murkowski told conference attendees during a panel discussion earlier in the day.
Murkowski compared the crude oil ban to the current negotiations with Iran.
“We're negotiating with Iran, which could result in 1 million barrels of Iranian oil to the global market every day,” Murkowski said, “Our export ban equates to a sanction against ourselves.”
While Murkowski later clarified during media questions and answers that she was not suggesting to bargain the approval of lifting some Iranian sanctions in exchange for a lifting of the export ban, she did think that the ban needs to part of the discussions.
The fear that lifting the ban will affect the price of oil is the main challenge to passing legislation, she said.
Murkowski also talked about the Energy and Natural Resources Committee's work on a broad energy bill. The panel will focus on four broad areas: efficiency, supply, infrastructure and accountability.
“Many of our federal policies are outdated,” Murkowski said. “The federal government continues to fail to approve permits in a timely manner.”
When asked what she meant by accountability, she pointed to Bureau of Land Management regulations.
“With the regulations the BLM has or is proposing, there is concern,” Murkowski said. “The state regulation is already there, the federal regulation is coming. But there is no accountability.”
Murkowski was asked whether there was any interest in changing the Jones Act, which requires that goods transported by water between U.S. ports be carried on U.S.-flag ships. While she has been supportive of the Jones Act, Murkowski said she is not against reviewing it but felt it was too early to discuss changing that law.
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Lift the Ban on Crude Oil Exports
Apr 20, 2015 | The Hill - Congress Blog
By Mark J. Perry
It’s easy to understand why nothing irritates oil and natural gas companies more than government regulations.
Regulations are issued by scores of federal agencies, ranging from the Commerce, Energy and Interior departments to the Environmental Protection Agency, and the oil and gas industry is kept busy slicing and dicing the arcana of government rules controlling everything from energy production and distribution to exports. And this is on top of a labyrinth of state regulations that affect oil and gas companies. The industry spends hundreds of millions of dollars every year complying with all of the rules and regulations, even though many are unnecessary or even absurd.
Take the federal rule for exporting very light petroleum known as condensate that is flowing in large quantities from America’s prolific shale fields in Texas, North Dakota and Pennsylvania. Condensate can be exported, but only if it happens to be produced from a gas well. If the same material comes out of an oil well, it can’t be exported without special permission from the federal government. Domestic oil producers are being denied a premium that has been as high as $14 per barrel this year – the difference between the West Texas price and the more expensive Brent crude -- by not being allowed to export condensate and other types of domestically-produced oil.
US exports of petroleum products such as gasoline, diesel, and jet fuel have increased almost five-fold in the last decade and America is now both the world’s largest producer and largest exporter of those products. But there is still an outdated 1975 statute on the books that bans the export of actual oil – crude oil – unless the Commerce Department issues a special permit. Since few permits are issued, this is equivalent to a ban on exporting US crude oil.
When Congress approved the ban 40 years ago in the aftermath of the Arab oil embargo, there was no reason to expect then that the United States would ever have a surplus of domestically produced oil. But a new era of energy abundance has arrived in America in recent years as a result of the shale revolution. Petroleum imports have dropped to less than 27 percent of what we consume, down from more than 60 percent a decade ago – and the United States is more energy secure and self-sufficient than it has been in at least thirty years.
Today the crude oil ban is hampering domestic oil production. Drillers in the Bakken shale in North Dakota and Eagle Ford in South Texas have started scaling back production or have stopped producing oil altogether because in some cases they have no outlet for the oil, and storage tanks are nearing capacity. Thousands of oil workers are in danger of losing their jobs as a result.
It’s time for Congress to overturn the outdated ban on oil exports. Lifting the ban would not only provide access to an international market for shale oil but would also create a wide range of jobs in the oil drilling supply chain and broader economy, according to a new study by the research firm IHS. The study says that nearly a million new jobs could be created by 2018 if the ban on crude oil exports is lifted. Only 10 percent of the jobs would be created in actual oil production, while 30 percent would come from industries that support drilling, such as construction, oil field trucks and information technology. And 60 percent of the new jobs would come from the broader economy.
The current export ban represents an unacceptable repudiation of free trade, one of the bedrock economic principles of US foreign policy. Rescinding the ban would save U.S. consumers more than $200 billion over the next decade by reducing gasoline prices according to IHS, while generating new investment in U.S. oil production, creating jobs and revenue, and generally bolstering the nation’s economy with an energy-driven stimulus. Let’s make it happen.
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Lawmakers Seek Ban on Atlantic Offshore Drilling
Apr 20, 2015 | The Hill - E2 Wire
By Timothy Cama
Two Democratic lawmakers from New Jersey said Monday they would sponsor legislation to ban offshore oil and natural gas drilling in the Atlantic Ocean.
Sen. Robert Menendez (D-N.J.) and Rep. Frank Pallone Jr. (D-N.J.) timed their announcement for the fifth anniversary of the Deepwater Horizon oil spill at a BP well in the Gulf of Mexico.
It comes as the Obama administration is considering auctioning some drilling rights in the Atlantic, somewhere between Virginia and Georgia.
“Imagine the devastation an oil spill in the Atlantic would cause — not just to our home state of New Jersey, but to states up and down the East Coast,” Menendez said in a statement.
“I am looking forward to re-introducing this Senate bill to ban Atlantic offshore drilling in an effort to not only protect the Garden State’s economy, but to guarantee a healthier and happier future for all East Coast citizens,” he said.
“We don’t need the anniversary of the Deepwater Horizon disaster to know that offshore drilling in the Atlantic should be completely off the table,” said Pallone, who is the top Democrat on the House Energy and Commerce Committee.
“However, it does remind us of the detrimental and lasting environmental and economic damage that can be done by an oil spill, and that the technology does not exist to safely drill for oil offshore,” he said.
While leaders in the states that would be closest to the drilling generally support it, the Atlantic states farther north are opposed, and fear that oil from a spill would reach their shores.
Pallone said his bill has 13 co-sponsors; Menendez’s has seven.
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With Smallest Five-Year Offshore Plan, Industry Braces for Shrinkage Among Leases
Apr 21, 2015 | BNA Daily Environment Report
By Ari Natter
The Obama administration's draft five-year offshore oil and gas leasing program, already the smallest in history, is only expected to get smaller by the time it becomes final, representatives of the oil and gas industry and other industry analysts told Bloomberg BNA.
By keeping what the industry says is 85 percent of the nation's federal offshore acreage off limits to oil and gas development, the federal government is effectively leaving 3.5 million barrels per day of oil and natural gas beneath the ocean, as well as forfeiting more than 800,000 jobs, $200 billion in government revenue and $1 trillion in economic activity, according to a study conducted by Quest Offshore Resources, an oil and gas industry consulting firm.
Meanwhile, environmental advocates, mindful of disasters such as the Deepwater Horizon blowout and the Exxon Valdez spill, argue the draft plan places environmentally sensitive areas off the coasts of the Atlantic and Alaska at risk.
The 14 potential lease sales to occur between 2017 and 2022 in the Interior Department's draft plan are likely to be further narrowed down by public comment and multiple stages that allow revision, according to groups such as the American Petroleum Institute. API represents major players in the offshore drilling industry such as Transocean Ltd. and Noble Corp.
“Lease sales that you see proposed in this draft may be narrowed or taken out entirely in the future based on additional science, information and public comment that we receive.”
Interior Secretary Sally Jewell
By comparison, the previous five-year plan from 2012 to 2017 scheduled 15 lease sales, and the five-year plan covering 1982 to 1987 had the most with 41 lease sales, according to the Bureau of Ocean Energy Management, part of the Interior Department.
Generally, the draft plan, made public by BOEM, “is as big as it gets,” API spokesman Brian Straessle said in an interview.
Draft ‘As Big as It Gets.'
“They narrow it down further and further,” he said. “It is the start of a very long process. We were disappointed to see it was so restricted at this early stage.”
The draft, made public at the end of January, typically takes multiple years before it becomes final, including the issuance of a proposed version, environmental impact statement and final version.
“This is a step back from some of the earlier discussed proposals,” Erik Milito, API director of upstream and industry operations, said. “Given that this can only get smaller—that is where our concern lies. It's not a guarantee when all is said and done that we will have the acreage on this proposal.”
The vast majority of the lease sales in the draft proposal—10—would occur in the Gulf of Mexico, with three scheduled to occur off the coast of Alaska, and one in a yet-to-be-determined location in the Mid- or South Atlantic.
“We are in the early stages of what is a multiyear process to develop the plan,” Interior Secretary Sally Jewell said during a conference call with reporters in late January. “Lease sales that you see proposed in this draft may be narrowed or taken out entirely in the future based on additional science, information and public comment that we receive” (18 DEN A-1, 1/28/15).
A 1983 decision by the U.S. Court of Appeals for the District of Columbia Circuit, California v. Watt II, which described the federal leasing process as “pyramidic in structure, proceeding from broad-based planning to an increasingly narrower focus as actual development grows more imminent,” has been interpreted to mean the Interior Department is not allowed to add new lease sales or areas to the draft plan once it is proposed, said Connie Gillette, a BOEM spokeswoman (California v. Watt, 712 F.2d 584, 19 ERC 1281 (1983) ).
IMAGE
“At each step, the secretary may only maintain or narrow the options, e.g., remove areas from leasing consideration or reduce the number of sales, but may not add areas back in or increase the number of sales in an area,” Gillette said in an e-mail to Bloomberg BNA. “So while it is true that lease sales that are in the program could be removed as the process moves along, at this time, we don't know if that will happen. We do know that nothing can be added to the program without starting the process over.”
Atlantic Lease Sale in Question
The proposed Atlantic sale, which is scheduled to occur in 2021, would be the first time federal leasing has been allowed in federal waters off the Atlantic Coast since the early 1980s. But the sale may never ever happen because of fierce opposition from environmentalists, according to analysts such as Charles K. Ebinger, a senior fellow at the Brookings Institution.
While the Atlantic sale may be included in the final five-year leasing plan, “there is a good chance the Atlantic sale won't happen,” Ebinger said in an interview. “When it comes to the realities, you will see a lot of environmental opposition come forward.”
Privately, industry representatives said they are also concerned the proposed Atlantic sale may never occur, even though its inclusion in a five-year drilling plan may encourage the oil and gas industry to go through with an expensive permitting process for seismic testing off the Atlantic Coast.
A 2011 BOEM report estimates the technically recoverable resources off the Atlantic are 3.3 billion barrels of oil and 31 trillion cubic feet of natural gas, although industry argues it is based on old data gleaned from out of date technology.
Organized Environmental Opposition
Meanwhile, environmental groups, such as Boston-based Environment America, are organizing opposition groups to attend public scoping meetings about the five-year plan. In a recent meeting, in Wilmington, N.C., roughly 300 out of 400 people came to register opposition to the proposal to hold a lease sale off the Atlantic Coast, Elizabeth Ouzts, a spokeswoman for the organization, said.
“Our coastline is too precious to risk to another BP catastrophe,” Ouzts said in an interview. “What we've seen in all these communities is people absolutely want to protect their beaches from the risk of another BP catastrophe. These are the voices we are bringing to the table and bringing to the fore to stand up for our beaches.”
The Obama administration canceled a scheduled lease sale off the Atlantic Coast in 2010 in the wake of the BP Plc well blowout and Deepwater Horizon drilling rig explosion in the Gulf of Mexico, which claimed 11 lives and dumped more than 4 million barrels of oil into the Gulf of Mexico, according to the federal government. The April 2010 disaster became the largest offshore oil spill in U.S. history (230 DEN A-15, 12/2/10).
“We are extremely hopeful the Atlantic lease sale stays,” National Ocean Industries Association spokeswoman Nicolette Nye said in an interview. “From our perspective, we would like to see all the planning areas included because we know it is going to be whittled down as it goes along. It has never happened that areas get added into the program in the later stage of the process.”
Arctic Lease Sales in Question
The NOIA represents companies such as oil services company Schlumberger Ltd. and major drillers such as ConocoPhillips Co. and Exxon Mobil Corp.
Analysts such as Ebinger, who also is a member of the National Petroleum Council, believe the realities of Arctic lease sales could be in doubt as well. The draft plan calls for three potential new leases off the Alaska coast, one each in the Chukchi Sea, Beaufort Sea and Cook Inlet.
“Unless we see prices dramatically higher, I think there will be a number of oil companies that don't want to put their dollars into a high-cost area when they feel there are better opportunities in the lower 48,” said Ebinger, who has worked on a yet-to-be-released study on the future of Arctic oil and natural gas development requested by Energy Secretary Ernest Moniz. “For the Arctic to really flow, you need $100-a-barrel oil,” he told Bloomberg BNA.
“Unless we see prices dramatically higher, I think there will be a number of oil companies that don't want to put their dollars into a high-cost area when they feel there are better opportunities in the lower 48.”
Charles K. Ebinger
Senior Fellow, The Brookings Institution
Several scheduled Alaska lease sales that were included in the prior five-year plan were not held after the U.S. Court of Appeals for the District of Columbia Circuit vacated the plan in 2009 on grounds that the Bush administration's environmental review did not meet the requirements of the Outer Continental Shelf Lands Act (Ctr. for Biological Diversity v. Interior, 563 F.3d 466, 68 ERC 1833, 2009 BL 84209 (2009); 73 DEN A-9, 4/20/09)).
Little Congress Can Do
“The secretary, in complying with the court's remand, decided not to include those sales in the revised program,” Gillette, the BOEM spokeswoman, said of the five canceled sales, which were supposed to occur in the Beaufort and Chukchi seas and the North Aleutian Basin.
“I'm not optimistic, but I guess it's the first step,” Sen. Lisa Murkowski (R-Alaska), chairman of the Senate Energy and Natural Resources Committee, told Bloomberg BNA, referring to prospects for the Alaska lease sales occurring.
The Outer Continental Shelf Lands Act of 1953 defined submerged land—in most cases three miles from the coast—as federal property and gave the Interior Department jurisdiction over their mineral exploration and development.
The five-year plan doesn't require congressional approval, although Congress can pass legislation requiring the Interior Department to add more sales, or otherwise alter it—a legislative long shot in the current Congress.
Still, lawmakers such as Rep. Rob Bishop (R-Utah), chairman of the House Natural Resources Committee, have vowed efforts to expand the plan.
“We are going to have to be creative,” Bishop said in an interview. “We will do whatever we possibly can, both as far as direct appropriations approaches, direct legislative approaches—efforts to put pressure on the administration to change some of the rulemaking.”
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Texas House Passes Measure to Restrict Local Efforts to Control Oil, Gas Activities
Apr 21, 2015 | BNA Daily Environment Report
By Paul Stinson
The Texas House April 20 approved legislation aimed at limiting municipal efforts to regulate oil and gas operations, a move the state sees as clarifying its regulatory authority but that environmental groups criticize as undermining local ordinances and being rife with ambiguities that could prompt legal challenges.
The House approved the bill (H.B. 40) in a 125-20 vote. It is one of several bills filed after the city of Denton, Texas, approved a ballot measure in November 2014 to ban hydraulic fracturing within its city limits.
The measure would go into effect immediately if it passes by a two-thirds vote of the membership of each house, meaning the measure would need 21 out of 31 seats in the Texas senate. Otherwise, the measure would go into effect Sept. 1.
Authored by House Energy Resources Committee Chairman Drew Darby (R), the bill “expressly would preempt ordinances and regulations” enacted by a political subdivision of the state that ban, limit or otherwise regulate an oil and gas operation unless the regulation meets one of four tests, according to a state bill analysis.
Specifically, ordinances would be preempted unless the regulation: regulates only aboveground activity, is “commercially reasonable,” isn't otherwise preempted by state or federal law or doesn't effectively prohibit an oil and gas operation conducted by a “reasonably prudent” operator.
“Today's vote on H.B. 40 upholds constitutional property rights and establishes statutory local control over oil and gas surface operations,” Darby said in an April 20 news release.
The Texas House's move comes roughly a month after the Oklahoma Legislature passed a series of bills modifying the authority of municipalities to regulate oil and gas drilling or production (58 DEN A-9, 3/26/15).
Substitute Language Key
The Texas Oil and Gas Association (TXOGA) and the Texas Municipal League agreed to the bill during the first week of April, with the league dropping initial objections to the legislation and pledging to remain “neutral” following the March 30 introduction of a committee substitute version of H.B. 40. The House approved that substitute language on April 17.
Making its case for taking a neutral stance on H.B. 40, the league pointed to four “significant ways” in which the original bill was improved by the committee substitute language, including what it called “a much better definition of ‘commercially reasonable.’ ”
An ordinance is deemed “commercially reasonable” if the “ordinance or other measure has been in effect for at least five years and has allowed the oil and gas operations at issue to continue during that period,” according to the bill.
Other improvements included language to permit cities to regulate aboveground activity that is “related” to oil and gas operations, as opposed to activities that are “incident” to operations, as in the original version of the bill. “The ‘incident to’ language was prohibitively restrictive,” said the League.
Not Perfect
“Make no mistake: the League believes the bill is unnecessary,” the league said in an April 10 legislative update. “It isn't perfect.”
“Some areas of regulation, especially those related to subsurface activity, would be preempted by the substitute. So would outright city-wide bans on oil and drilling or fracking,” said the league, which serves as a government sector lobbying association representing the interests of more than 1,130 cities.
“But here's the essential point: better than 80% of what most cities regulate under current ordinances will be protected under the committee substitute,” the league said.
Lauding the measure in an April 17 statement, TXOGA said the legislation “preserves local control and affirms robust state regulation to protect Texans and environment.”
“I really wonder if city mayors and county commissioners know what is in this bill, and how hard H.B. 40 would make it to act in the best interests of their constituents,” Cyrus Reed, conservation director of the Sierra Club Lone Star Chapter, said in an April 17 release.
“Frankly, the Texas Municipal League made a bad deal under duress. Even noncontroversial, commonsense amendments, such as cities requiring shut-off valves in case of a hurricane, were shot down under the edict from big oil and gas that this bill be passed as is.”
Setting State for Litigation
Describing the bill as “very broadly written” Reed told Bloomberg BNA that policy ambiguities remain, adding that there was little comfort given by the neutral policy stance taken by league.
“Just because the Texas Municipal League signed off on it doesn't mean there aren't a lot of people very concerned about it,” Reed said April 20.
“It declares the state has the preemptive right to regulate and that a city can only pass an ordinance if it meets four tests,” he said.
One of those areas of ambiguity is the test for determining whether an ordinance is “commercially reasonable,” Reed said.
“Even that provision is a little unclear,” said Reed, warning that the bill's ambiguous characteristics could set the stage for future legal battles.
“If you look at actual ordinances like Midland's ordinance [and] Fort Worth's ordinance, which have been around a number of years, a lot of those do regulate subsurface activity,” said Reed. He said it isn't clear whether the five-year grandfather provision protects the whole ordinance or only those ordinances on the surface.
“The bill is pretty broadly written. As such that probably [means] a lot of lawyers would have a field day picking ordinances apart,” said Reed.
“The Texas bills are part of a national trend of ‘Big Oil’ attempting to stamp out local control as more and more Americans are working to stop the worst impacts of dirty drilling,” Luke Metzger, director of Environment Texas, told Bloomberg BNA in an April 20 e-mail.
Metzger said the measure would have the effect of undermining more than 300 cities that “have ordinances on the books regulating various aspects of drilling operations” including more than 20 outright bans.
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Administration To Propose Billions For Infrastructure In QER Release Today
Apr 21, 2015 | E&E Daily News
By Nick Juliano and Hannah Northey
Vice President Joe Biden and Energy Secretary Ernest Moniz today will call on Congress to approve billions of dollars in new spending to repair leaky natural gas pipelines, upgrade the rickety electric grid, overhaul the nation's emergency oil stockpile and improve the systems that move crude along railroads and highways.
The pair will appear in Philadelphia touting today's release of the Quadrennial Energy Review, the Obama administration's overview of the current status of America's energy infrastructure. Coming just months before U.S. EPA finalizes its Clean Power Plan, the QER effectively serves as the Department of Energy's contribution to the administration's overall effort to chart a course to a future of sharply reduced greenhouse gas emissions.
Biden, Moniz and White House science adviser John Holdren will appear this afternoon at the headquarters of PECO, the electric utility that serves Philadelphia, to tout the report and "the importance of investing in our nation's energy infrastructure," according to a fact sheet on the QER.
The QER proposes more than $15 billion in new spending programs or tax credits to support a variety of energy infrastructure, including oil and gas pipelines and the electric grid. Republicans have generally resisted administration calls for steep spending increases, but the pitch outlined in the QER fact sheet seems targeted toward GOP priorities such as the oil and natural gas industry.
For example, the administration is calling for $2.5 billion to $3.5 billion over 10 years for a natural gas pipeline maintenance program, and it says DOE should establish a $3 billion to $5 billion grant program for states to improve electric transmission systems to enhance "resilience and reliability." Critics of EPA's impending climate rules and aggressive crackdown on other pollutants frequently warn that the spate of coal plant shutdowns prompted by tougher rules and cheap natural gas threatens the reliability of the grid.
The fact sheet also highlights calls for improvements in infrastructure permitting requirements and improved coordination between the United States, Canada and Mexico -- apparent olive branches to congressional Republicans who have long decried delays associated with environmental reviews and pressed President Obama to approve the Keystone XL pipeline from Alberta.
The QER also proposes $1.5 billion to $2 billion to improve the Strategic Petroleum Reserve to account for changing market conditions. It touts a crosscutting $3.5 billion grid modernization proposal that includes DOE and several other agencies. The strategy also calls on the Department of Transportation to establish a $2 billion program it dubs Actions to Support Shared Energy Transport Systems, or ASSETS, aimed at improving transportation infrastructure used by the industry.
The administration through the QER seeks to leverage existing programs and create new partnerships to modernize the electric grid and harden the system against physical attacks and cyberattacks, climate-driven storms and even rare solar storms and terrorist attacks.
The QER calls for a partnership between the DOE and 17 federal, municipal and investor-owned utilities, including the Tennessee Valley Authority, nuclear giant Exelon Corp. and renewables-rich NextEra Energy Inc.The utilities will meet with the agency on April 30.
The QER also attempts to use the government's existing leverage within state and federal programs to bolster the development of renewables and transmission projects, including the Department of Agriculture's provision of $72 million for solar deployment through transmission and smart grid projects in rural areas.
The administration is also moving to thwart rare, catastrophic events that can trigger cascading blackouts. The QER calls for DOE and the Department of Homeland Security to study the development of an emergency stockpile of mobile high-voltage power grid transformers that could replace units damaged by major storms, space weather or a terrorist attack. Those results will feed into a national strategy for safeguarding the entire bulk power grid, due in 2015.
Moniz is scheduled to testify on the QER before the Senate Energy and Natural Resources Committee on April 28. The hearing was originally scheduled to take place last month but was delayed after the QER failed to materialize (E&E Daily, March 23).
Melanie Kenderdine, DOE's director of energy policy and systems analysis, in previous discussions of the report before its release said the report will focus on challenges that the United States' power lines, railways, pipelines and power plants are facing from a surge of increasingly violent weather, age, competing interests and shifting trends with the discovery of shale gas (Greenwire, April 2).
DOE has held 14 stakeholder outreach meetings across the country, as well as a meeting in Canada and a conference call with officials in Mexico to discuss the QER.
Kenderdine has also said DOE is assembling an "implementation team" for the recommendations that will be led by Karen Wayland, DOE's deputy director for state and local cooperation in the Office of Energy Policy and Systems Analysis. The Obama administration's fiscal 2016 budget request also includes funding that would push the recommendations forward, she said, including funds for state reliability grants and $400 million to modernize the electric grid.
A hefty tab -- and plenty of GOP criticism -- could follow the release.
Moniz in December warned that the United States may need to invest tens of billions of dollars to upgrade its aging matrix of pipelines and wires. "I'm not going to go into detailed numbers, but let's say the sticker shock is tens of billions of dollars that we need in terms of infrastructure development," Moniz told attendees at the Western Governors' Association's winter meeting on the Las Vegas Strip (Greenwire, Dec. 8, 2014).
Last year, Republicans like then-House Oversight and Government Reform Chairman Darrell Issa (R-Calif.), and the Energy Policy Subcommittee chairman at the time, Rep. James Lankford (R-Okla.), who has since moved on to the Senate, warned in a letter that the QER could touch on "nearly every part of the federal government" and could cost millions of dollars (E&E Daily, May 16).
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Dems Use Gulf Spill Anniversary To Call For More Protections
Apr 21, 2015 | E&E Daily News
By Jennifer Yachnin
Democratic lawmakers seized on the fifth anniversary of the Deepwater Horizon oil spill yesterday to argue that oversight of offshore wells remains too lax and called for new protections, including an outright ban on drilling along the East Coast.
Sen. Bill Nelson (D-Fla.) announced in remarks on the Senate floor that he will introduce new legislation to "make sure we prevent and prepare for and we can effectively respond to the next oil spill."
Nelson, the top Democrat on the Senate Commerce, Science and Transportation Committee, vowed the panel will examine what lessons can be learned from the 2010 incident in which oil spewed from BP's Macondo well for three months.
"There's more to be done," said Nelson, a sponsor of the Resources and Ecosystems Sustainability, Tourism Opportunities and Revived Economies of the Gulf Coast States Act passed in 2011 that aimed to distribute civil fines leveled after the incident.
"As we reflect on the tragic events of April 20, 2010, I hope the Senate will be mindful of this tragedy in the Gulf that riveted the attention of the nation, that seemed out of control for three months and of which we will have the very infernal consequences for years to come," Nelson said.
He also used the anniversary of the Deepwater Horizon spill to highlight ongoing leaks from a well owned by the Taylor Energy Co. near the Louisiana coast.
An Associated Press investigation recently found the well, which has been leaking since Hurricane Ivan in 2004, is releasing more oil than previously reported by the company itself or government officials. Nelson has called for the disclosure of technical data on the spill.
In the meantime, a pair of New Jersey Democrats -- Sen. Bob Menendez and Rep. Frank Pallone, the ranking member on the House Energy and Commerce Committee -- announced yesterday that they will reintroduce a ban for offshore drilling in the Atlantic Ocean.
"We don't need the anniversary of the Deepwater Horizon disaster to know that offshore drilling in the Atlantic should be completely off the table," Pallone said in a statement. "However, it does remind us of the detrimental and lasting environmental and economic damage that can be done by an oil spill, and that the technology does not exist to safely drill for oil offshore."
Menendez similarly called on the specter of the Gulf of Mexico spill to argue that a potential incident in the Atlantic would harm not only his home state but much of the East Coast.
"We cannot stand by and allow our coastline and our marine life to be endangered in order to inflate Big Oil's already inflated profits," Menendez said in a statement.
The "Clean Ocean and Safe Tourism Anti-Drilling Act" comes in opposition to the Obama administration's release earlier this year of a five-year plan that outlined oil and gas lease sales in locations including the Atlantic Ocean and Alaska.
Sierra Club New Jersey Chapter Director Jeff Tittel, who attended a news conference on the bill with Pallone yesterday, told E&E Daily in a telephone interview that despite the 2010 incident, the energy industry has retained its political influence in oil-producing states.
"The average person is concerned about another spill and the environmental devastation that could happen. You have sort of a disconnect between that and people in Washington making decisions," Tittel asserted, pointing to "the power of the special interests trumping the public interest."
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Marcellus Natural Gas Operations Report Increased Emissions
Apr 20, 2015 | E&E News PM
By Amanda Peterka
Natural gas operations in the Marcellus Shale region of Pennsylvania reported an increase in air pollution emissions in 2013 compared with 2012, according to information released today by state regulators.
Operators reported releasing 57 percent more sulfur dioxide than they did in 2012, 19 percent more volatile organic compounds, 12 percent more particulate matter and 8 percent more nitrogen oxides, according to the Pennsylvania Department of Environmental Protection data.
The data also showed that between 2012 and 2013, reported emissions of methane decreased by 13 percent, while reported carbon monoxide emissions fell by 10 percent.
The data cover natural gas production and processing operations, and the compressor stations that receive gas from coal gas and conventional well sites.
Pennsylvania's DEP attributed the increases to both a rise in the number of drilling operations in the shale during 2013 and more robust reporting under Pennsylvania's Air Pollution Control Act.
"The increases were not unexpected," acting DEP Secretary John Quigley said in a statement. "The industry is growing, and each year we are expanding the types and number of facilities from which we collect data so that we have a more comprehensive understanding of air quality issues."
In 2013, the DEP expanded reporting to compressor stations that support coalbed methane formations. That year, the number of well sites included in the emissions inventory rose 18.3 percent and the number of midstream facilities increased by 8.2 percent.
According to industry group Energy in Depth, the Marcellus area continues to be prolific, last year producing 4 trillion cubic feet of natural gas, a 30 percent increase over 2013 levels. Joe Massaro, a field director at the group who lives in the Marcellus region, said that the slight increase reported to the state was not alarming and that natural gas operations were individually releasing less pollution on average.
Marcellus Shale Coalition President Dave Spigelmyer said that the data released by the state today reflected the "industry's clear commitment to enhancing air quality and protecting our environment," highlighting the decline in methane emissions.
"The sharp decline in methane emissions, despite increased activity, is particularly encouraging and reinforces the fact that our strong state-based regulations and innovative technologies are delivering meaningful environmental results," Spigelmyer said. "In addition, year-over-year well site and midstream facility emissions averages have fallen as well. And while this is important progress, our industry remains squarely focused on continued improvements each and every day."
Rob Altenburg, director of the PennFuture Energy Center, said that federal new source performance standards that are in the process of being phased in are instead driving the decreases in reported methane emissions. The regulations require operators of new natural gas wellheads to put in place green completions technology to capture emissions.
"It's going down where regulations have come into effect that have forced the reductions, and in areas where we don't have regulations we're seeing emissions climb," said Altenburg, who previously worked in the DEP.
Quigley said in the statement that the region's air quality continues to get better and highlighted achievements in the area of power generation.
"While we are experiencing some increases in emissions from the natural gas sector, overall, our air quality continues to improve due to emissions reductions from other point sources such as electric generating units," Quigley said. "We remain committed to developing and implementing the most effective ways to control and reduce emissions from Pennsylvania's natural gas sites."
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Congress Might Get Back Into the Energy Business
Apr 20, 2015 | National Journal
By Ben Geman
Lisa Murkowski, the Alaska Republican who chairs the Senate's energy committee, told a roomful of industry officials that she's introducing legislation this year to end the nation's decades-old ban on crude oil exports.Murkowski also said she has begun mapping out the broader, separate energy bill she hopes to shepherd through the panel with Democratic buy-in.
Here's the kicker: Murkowski argues that if the recent past is prologue, it might not be hopeless, despite years of gridlock on Capitol Hill and Congress's failure to pass major energy legislation since 2007.
Congress recently experienced a boomlet of bipartisanship on thorny issues, striking deals on review of the potential deal over Iran's nuclear program and the Medicare "doc fix." Could that extend to energy legislation? "I think that we are starting to work together and I think that that is a very good sign," Murkowski told reporters at the IHS CERAWeek conference here.
Unlike legislation to approve the Keystone XL pipeline, Murkowski noted that President Obama has not signaled rejection of an exports bill. "We haven't heard that there's a hard stop here. I am reading that as a positive," she said. Murkowski also is pressing the White House to ease crude export restrictions, such as granting exemptions on a per-country basis.
Murkowski's comments come as oil producers push to ease or dismantle bans imposed in the wake of the 1970s Arab oil embargo.
ConocoPhillips CEO Ryan Lance, who has been among the most aggressive industry officials on crude exports, noted that his company has been working on two fronts—meeting with the administration on steps it could take using executive authority, and supporting legislative efforts.
He said that time is of the essence on legislation. "If we can get something out there this year, I think that's important," Lance said.
"Going into 2016, we know it may be too difficult to legislate given the elections that are going on," he said. "Which is why I think it is important that we press the issue this year."
Still, Murkowski acknowledged that it's a tough climb for export legislation in Congress, let alone getting agreement from the White House. Over the past year, she has been trying to assuage concerns that lifting the export ban could raise domestic gasoline prices.
"We are dealing with a fear factor that we have to acknowledge," she told the industry audience, later noting: "I do think that it is coming around but it is slower than I think we would like."
Murkowski's announcement drew a quick response from Massachusetts Democrat Edward Markey, who linked exports to Monday's anniversary of the BP oil spill.
"On the fifth anniversary of the largest offshore oil spill in America's history, oil companies and their allies in the Republican Party are trying to export America's oil abroad," he said. "We shouldn't have to choose between spilling America's oil here or selling America's oil abroad, because in both cases it is ordinary Americans who pay the steepest price."
Still, it's not just Markey who can use a ripped-from-the-headlines approach to push a view on exports. Murkowski tied the issue to the brewing U.S.-Iran nuclear deal, in which Tehran would agree to major limits on its nuclear program in exchange for sanctions relief.
"We should not lift sanctions on Iranian oil while keeping sanctions on American oil. It makes no sense," she said.
"There is a broader discussion going on right now about sanctions and oil, and I think the discussion about oil exports from the United States needs to now be part of that conversation," she said.
Murkowski also shared the very broad outlines of wider energy legislation, which she hopes to craft in concert with Maria Cantwell, the top Democrat on the Senate energy committee. (Murkowski said it's not clear whether she would try and put exports into the mix of the broader bill.)
"Those of us on the Senate Energy Committee are beginning work on a broad energy bill, and we are breaking with tradition. Instead of dividing our bill into oil, renewables, gas, electricity, pipelines, and so on, we are focusing on four broad titles: efficiency, supply, infrastructure, and reforms to promote accountability," she said. That last pillar, Murkowski suggested, involves looking at whether energy-related regulations are duplicative or overburdensome.
Murkowski is hopeful that the bill will be on the Senate floor this summer.
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Week Ahead: House Gets To Work On Energy Reform
Apr 20, 2015 | The Hill - E2 Wire
By Timothy Cama
The House Energy and Commerce Committee will kick off efforts this week toward writing Congress's first comprehensive energy legislation in eight years.
The panel’s energy and power subcommittee on Thursday will examine draft legislation meant to train a 21st century workforce, committee officials said.
The draft legislation has not been unveiled, nor has the witness list. But in a framework of the reform plan released earlier this year, the committee said it wants to better prepare workers for the demands of the changing energy and manufacturing industries amid the oil and gas boom of recent years.
"This draft will allow the Department of Energy, along with the national laboratories, community colleges, and public-private partnerships, to better coordinate and leverage existing resources to foster an energy and manufacturing workforce for the 21st century,” it said.
The legislation on energy workers is part of a larger package House Republicans are pushing to boost energy production.
Other congressional committees will hold hearings this week to examine funding requests, regulations, and agency personnel.
The House Appropriations Committee is scheduled Wednesday to vote on the funding bill for the Energy Department and water-related programs. A subcommittee approved the bill last week.
The House Transportation and Infrastructure Committee will also get involved in the spending process, when its water resources and environment subcommittee meets Wednesday about the 2016 budget requests from the Army Corps of Engineers and the Tennessee Valley Authority.
The House Science Committee will scrutinize the Obama administration’s proposed regulations for hydraulic fracturing on public lands in a Thursday hearing on the science behind the rules. Lawmakers will hear from various stakeholders on the proposal.
Marking five years since the 2010 Deepwater Horizon oil spill at a BP-owned well, the House Natural Resources Committee will hold a hearing on what has happened since then, entitled “Innovations in Safety Since the 2010 Macondo Incident,” referring to the name of the well site.
On the other side of Capitol Hill, the Senate Environment and Public Works Committee on Wednesday will discuss the nomination of Vanessa Sutherland to be the chairwoman of the Chemical Safety Board.
Sutherland would replace Rafael Moure-Eraso, who resigned after President Obama asked him to leave amid allegations he broke various laws and being under pressure from a bipartisan group of lawmakers.
The American Council on Renewable Energy will host its annual policy forum Thursday. Sens. Dean Heller (R-Nev.), Chuck Grassley (R-Iowa), Chris Coons (D-Del.) and Cory Gardner (R-Colo.) will all give speeches.
The American Association of Port Authorities will host its annual conference Monday through Wednesday, where Environmental Protection Agency chief Gina McCarthy will speak Tuesday the role ports play in sustainability.
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House Panel to Vote on Whitfield 'Opt Out' Bill
Apr 21, 2015 | E&E Daily News
By Jean Chemnick
A key House Energy and Commerce subpanel tomorrow will mark up draft legislation to give states the final word about whether or not their power sectors are subject to U.S. EPA's Clean Power Plan.
Energy and Power Subcommittee Chairman Ed Whitfield (R-Ky.) has yet to formally introduce his measure, but he said he expects the bill to move quickly through the committee process. Also, he has added Rep. Morgan Griffith (R-Va.) as an original co-sponsor.
The measure would bar EPA from implementing a federal plan to regulate power plant carbon in states that do not choose to comply. And it would also grant all states a reprieve from requirements to submit implementation plans for the rule until judicial review of the rule concludes. Also, EPA would be barred from stepping in with a federal plan.
Whitfield argues that the EPA rule would be disastrous for states like his that rely heavily on coal for inexpensive power. At a hearing on the proposal last week, he said his bill was needed to prevent states from being forced to comply with a federal standard that is likely to be overturned.
"The legal infirmities in this rule have already sparked litigation from states and other parties, and additional lawsuits are sure to follow. However, the proposed rule's tight deadlines would force many states to initiate costly and potentially irreversible compliance steps before these legal challenges are concluded," he said in opening remarks.
A state might opt to shutter a coal-fired power plant or initiate other actions to comply with the rule only to see the courts invalidate it years later, he said.
The draft bill, titled the "Ratepayer Protection Act," would allow state governors to opt out of the rule permanently by asserting that it would harm reliability or drive up power costs.
Environmentalists and EPA argue that plaintiffs already have recourse to ask courts to stay a rule if their challenge is likely to be successful and if they can prove that allowing the rule to go forward in the meantime will lead to irreversible harm. They say the rule will not adversely affect either reliability or ratepayers because it will provide ample flexibility to give the grid time to respond and will lead to lower bills overall due to demand-side efficiency measures.
Schedule: The markup is Wednesday, April 22, at 10 a.m. in 2123 Rayburn.
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EPA Seems Well-Positioned To Weather Early Legal Challenge
Apr 20, 2015 | E&E News PM
By Emily Holden & Rod Kuckro
ederal judges wasted no time last week showing their skepticism about the first court challenge to U.S. EPA's Clean Power Plan that seeks to block the draft rule before it's finalized.
Coal company Murray Energy Corp., along with 15 predominantly Republican-led states and other potentially regulated parties are asking the U.S. Court of Appeals for the District of Columbia Circuit to issue an "extraordinary writ," an unusual move that would set precedent for future challenges of unfinished regulations.
In the opening minutes of oral arguments at the D.C. Circuit, Republican-appointed Judge Thomas Griffith emphatically asked West Virginia Solicitor General Elbert Lin: "Why in the world would we resort to an extraordinary writ -- which we have never used before?"
This week, E&E Publishing will have several reporters at IHS Energy's annual CERAWeek in Houston. EPA chief Gina McCarthy will provide the keynote address Thursday.
Also on Thursday, the American Council on Renewable Energy will hold its policy forum, which includes a 4 p.m. EDT session on how regulations for power plants will bring state politics even more into the renewable energy debate.
Go to E&E's Power Plan Hub to read more and to see the latest news, state summaries and developments.
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McConnell, KY. Newspaper Trade Blows Over EPA Power Plan
Apr 20, 2015 | E&E News PM
By Jean Chemnick
The Senate's most powerful opponent of U.S. EPA's Clean Power Plan hit back this morning at a home-state newspaper for its recent editorial warning that today's foes of climate action would one day be viewed as harshly as apologists for slavery.
Senate Majority Leader Mitch McConnell (R-Ky.) decried the Lexington Herald-Leader's April 13 editorial as "tone-deaf."
"It's no secret that liberal progressives have a hard time moderating their passions or prioritizing outrage," the majority leader wrote in an op-ed published in the paper today. "But drawing a moral equivalence between America's original sin of slavery and the fight for Kentucky coal reveals a profound lack of moral seriousness -- not to mention a troubling indifference to an industry that keeps this commonwealth and this country running."
McConnell indulged in a bit of heightened rhetoric himself, arguing that the paper should have reserved the analogy for a column on Senate Democrats' refusal to pass an anti-human-trafficking bill with anti-abortion language.
"I must have missed the paper's strong condemnation of these Democrats for their callous indifference to a modern form of slavery," he wrote.
McConnell has been the banner carrier for lawmakers opposed to EPA's existing power plant carbon draft, counseling state officials in letters and on the Herald-Leader's own opinion page not to comply with the rule (Greenwire, March 4). His role prompted the newspaper editorial to coin the term "McConnellites," claiming these political opponents of carbon regulation would one day face the question "How could economic interests blind them to the immorality of their position?"
"We can already hear the McConnellites' wounded outcries: 'The real immorality is the burden that new energy costs would put on poor people. The Obama administration is trampling the Constitution to do what Congress won't. And, of course, war on coal, war on coal,'" the paper's editorial board wrote.
McConnell touched on many of those points in his rebuttal today, noting that poorer households spend a greater share of their income on energy costs and thus are more vulnerable to small increases in power prices.
"Those who support it are taking the polar opposite of a 'progressive' stand," he argued.
Never a favorite of environmentalists, McConnell has become a sort of public enemy No. 1 for environmentalists since he weighed in on state implementation of the power plant rule in March (E&E Daily, April 15). The "just say no" strategy has been reviled by greens and by the Obama administration, who say it would prevent states from taking advantage of the least-cost options for limiting their power sector emissions, which require more planning time.
McConnell so far has been unsuccessful in persuading his own state's Democratic administration to ignore the rule. The Herald-Leader's editorial notes that Kentucky Energy and Environment Secretary Len Peters and his staff are readying the basis for a state plan now in hopes the next administration will submit it to EPA.
The agency is preparing to issue a federal implementation plan (FIP) in August. And while opponents of the rule say the courts will severely limit the stringency of the FIP that EPA can ultimately impose, the agency -- and even the power industry itself -- has cautioned that assuming that outcome carries considerable risk.
But McConnell wrote the draft rule is based on "liberal fantasies" that "are in conflict with the law and the Constitution." He has cautioned that EPA will not be able to move forward with the rule without state cooperation.
And he promised again to use his position to defuse the rule before it can penalize Kentucky's coal-based economy.
"No one can predict the verdicts of history, but here's one thing you can be sure of: I will continue to wage this battle against the EPA on behalf of my constituents, and it's a fight I intend to win," he said.
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Budget Conferees Hold Initial Meeting; Negotiations to Proceed Quietly, Corker Says
Apr 21, 2015 | BNA Daily Environment Report
By Jonathan Nicholson
Conferees meeting to hammer out a fiscal 2016 budget (S. Con. Res. 11) gathered for the first time, even as signs that one controversial issue—defense funding—may be on the way to being settled.
The 30-member committee, divided between 17 Republicans and 13 Democrats, gathered April 20 for a mostly ceremonial kickoff meeting at which some members traded barbs on the House and Senate budgets. Republicans touted the House and Senate plans as moving the federal government toward a better fiscal footing, while Democrats said its proposed spending cuts were harsh and still wouldn't meet the objective of meeting balance within 10 years.
The committee may not meet again formally until a final agreement has been reached by Republicans on a plan acceptable to their House and Senate members. House Budget Committee Chairman Tom Price (R-Ga.) and House Majority Leader Kevin McCarthy (R-Calif.) have said they want to wrap up the budget by the end of April, when House lawmakers head home for a one-week break.
“Today's meeting is more of a formality,” said Sen. Bob Corker (R-Tenn.) after he left the meeting. “Everything will be sort of a negotiated quietly and we'll come to a resolution soon.”
A House Appropriations subcommittee voted to approve a $35.4 billion FY 2016 p energy and water appropriations on April 15. The legislation approved by the Subcommittee on Energy and Water Development would appropriate $28.9 billion for the Energy Department, $5.6 billion for the U.S. Army Corps of Engineers and $1.1 billion for the Bureau of Reclamation (73 DEN A-1, 4/16/15).
At the April 20 meeting, Sen. Mike Enzi (R-Wyo.), chairman of the Senate Budget Committee and also chairman of the conference committee, said getting a final budget blueprint together is crucial. “Passing a balanced budget is about restoring the trust of the American people, because the federal government's chronic overspending and exploding debt threatens each and every American,” Enzi said.
“The biggest reason for this broken trust is Washington's failure to do what voters have long demanded: to eliminate wasteful Washington overspending; to make government truly more effective, and more accountable; to improve the programs that protect our most vulnerable citizens and strengthen the health and retirement security of our seniors,” he said.
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North Dakota's Governor Signs Bill Creating Panel to Examine Federal Laws
Apr 21, 2015 | BNA Daily Environment Report
By Mark Wolski
North Dakota Gov. Jack Dalrymple (R) signed legislation that will create a committee of legislators and industry officials charged with examining federal laws and regulations to determine if they are detrimental to the state's main industries—agriculture, oil and energy.
The bill (H.B. 1432) was signed into law April 16.
The committee, which will be chaired by the state's agriculture commissioner, will work with the state's attorney general in determining whether to challenge federal laws and regulations and whether this should be done administratively or through the courts.
Doug Goehring, agriculture commissioner for North Dakota, said the idea behind the panel is that federal government officials don't always understand the implications of their decisions on North Dakota and its industries.
With the committee, he said, stakeholders will look at laws and regulations, discuss them and examine whether they have significant consequences for the farming and energy sectors.
A rule by the Environmental Protection Agency and the U.S. Army Corps of Engineers that seeks to clarify the reach of the Clean Water Act was raised during hearings on the bill as one that may be subject to review.
The governor or his designee, three members of the Legislature, individuals appointed by the lignite energy council, the North Dakota Corn Growers Association, the North Dakota Grain Growers Association, the North Dakota Petroleum Council, the North Dakota Soybean Growers Association and the North Dakota Stockmen's Association also will serve on the committee.
Sponsored by Rep. Mike Brandenburg (R), the bill also establishes a federal environmental law impact review fund.
The fund will start at $1.5 million, although the bill includes a provision that allows for gifts and donations. The money from the fund will be used to finance any challenges brought by the state's attorney general.
Will Deal With Federal ‘Overreach.'
Sen. Terry M. Wanzek (R), speaking on the bill's behalf during Senate debate, said the committee will be a proactive step toward dealing with “federal regulatory overreach.”
He said it will allow farmers, oil producers and coal producers to speak with one voice in trying to respond to federal laws and regulations they see as detrimental to their industries.
Farmers and ranchers trying to protest or object to federal regulations just don't have the clout to get very far, he said.
Goehring said while there were objections to the panel not including a representative from a conservation group, he is convinced that the inclusion of farmers and ranchers will ensure that there is a conservationist at meetings.
H.B. 1432 does not set out a timeline for meetings. Goehring said they would likely be at his discretion.
Since there are already discussions of certain endangered species protections affecting farming, he said he hopes to have the committee meet shortly after the law takes effect July 1.
Gives Leg Up to Certain Industries
Sen. Connie Triplett (D) argued against the bill, saying that the attorney general works for all North Dakotans.
H.B. 1432 appears to give a leg up to several industries in the state, she said, and each has the ability to bring action if it believes the laws or regulations would be detrimental. By having taxpayers fund their actions, she said, the Legislature is picking winners and losers.
Don Morrison, executive director of the Dakota Resource Council, told Bloomberg BNA April 20 that not including someone from the state's environmental community is “normal operating procedure’’ for North Dakota.
H.B. 1432's focus on industry underscores the Legislature's priorities, he said. With the current oil boom and the current Legislature, the focus is on what is good for the oil industry, he said.
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Manchin Bows To Political Reality, Says Clinton And Schumer Better For Coal
| E&E Daily News
By Manuel Quiñones
Sen. Joe Manchin (D-W.Va.) thinks the coal industry would do better with former Secretary of State Hillary Clinton as president and Sen. Chuck Schumer of New York as Senate Democratic leader.
Manchin over the weekend announced his decision to stay in Washington, D.C., rather than go back home to run for governor in 2016 (E&E Daily, April 20). Not only that, but he endorsed Clinton for president and has strongly backed Schumer to replace retiring Nevada Sen. Harry Reid as Democratic leader.
Even though the West Virginia Democrat has been sharply critical of the Obama administration's environmental policies, he appears less concerned about Clinton and Schumer, who have also expressed support for some of those same policies.
Clinton tapped former White House adviser John Podesta, one of the architects of President Obama's climate policies, to lead her campaign. And in December, she praised the president's climate deal with China.
Schumer was one of a handful of senators at last year's climate march in New York City. And this year, he helped lead the Senate Democratic opposition to legislation to approve the Keystone XL pipeline, a bill Manchin co-sponsored.
"We come from two different worlds," Manchin said about Schumer on West Virginia MetroNews radio yesterday. "But we have a good relationship."
Manchin's comments about his New York colleague came after he repeated his opposition to Reid's style on MSNBC. "He had a game plan," Manchin said about Reid. "The game plan just didn't work."
Manchin has long complained about Reid blocking votes on bills and amendments in recent years as a way of protecting vulnerable Democrats.
Even though Schumer is a partisan Democrat who is known for his messaging prowess, Manchin thinks the blunt New Yorker will be more open to with working with moderates and Republicans. "The leadership that he has is going to be involvement," Manchin said.
Similarly, Manchin contends that Clinton's approach to energy and the environment will be different from Obama's. "I absolutely do believe that it will be different," said Manchin. "I believe it will be more pragmatic."
Manchin's view that Schumer and Clinton would be more pragmatic is the same reason at least some environmental groups are vocally skeptical of the pair.
Schumer has regularly voted against measures attacking Obama administration priorities. At the same time, he has not been as vocal on environmental issues as some of his colleagues. Reid, by contrast, has been vociferously anti-coal.
And while Clinton has expressed her support for administration policies battling climate change, she called for spending on technology to help keep coal viable during her previous presidential campaign in 2008.
The Obama White House has also expressed support for an "all of the above" energy strategy and often touts spending on carbon capture and sequestration for coal plants.
But Manchin, who wants the administration to spend more on technology and for U.S. EPA to back off its proposals to limit greenhouse gas emissions from power plants, said, "I can't get this group to move. And we've been fighting the living daylights."
Geoffrey Skelley, an analyst at the University of Virginia Center for Politics, said Manchin was accepting a fait accompli: Schumer will very likely become Democratic leader in the Senate in 2017, and Clinton is the overwhelming front-runner for the Democratic presidential nomination.
"While he may be relatively conservative compared to other Democrats, Manchin is still a Democrat, and he wants the party to win," Skelley said.
"Moreover," he said, "Manchin may hope that the Clinton brand can be a bit restorative for Democrats in West Virginia, where the party has been hemorrhaging support during the Obama era."
While Obama has been deeply unpopular in West Virginia, losing the state badly in both his presidential campaigns, former President Bill Clinton carried the state twice during the 1990s. And both West Virginia and Kentucky, states where coal is key, favored Hillary Clinton over Obama in the 2008 Democratic primaries.
"It's hard to imagine Clinton will return Democrats to the days of yore in Appalachia, but she almost certainly can't do worse than Obama has," Skelley said. "For Democrats in that region, there really may be nowhere to go but up with her at the top of the ticket."
Belinda Biafore, chairwoman of the West Virginia Democratic Party, told MetroNews listeners yesterday, "Clinton has a lot of friends here."
Republicans have not been too vocal yet in criticizing Manchin for backing Clinton and Schumer.
"He's bowed out. He's not the story for '16," West Virginia GOP Chairman Conrad Lucas told MetroNews.
Manchin, citing "conversations" he's had, said an administration under Clinton would support all forms of energy. Pressed about the issue yesterday evening, Manchin didn't say he had received any assurances from the Clinton camp but told E&E Daily he had never seen the Clintons as hostile to coal.
If they change their policy, Manchin told MetroNews, "Then I'll re-evaluate my support. I assure you of that. I don't think that'll happen."
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Maryland Proposal Would Limit Emissions From Some Coal-Fired Plants During Summer
Apr 21, 2015 | BNA Daily Environment Report
By Kathy Lundy Springuel
Maryland Gov. Larry Hogan (R) has proposed emergency regulations that would require certain coal-fired power plants to optimize the use of existing pollution control equipment to cut nitrogen oxide emissions during the ozone season, from May 1 to Sept. 30.
The regulations, proposed April 17, would target smaller units generally used only during peak demand in the summer.
Hogan's proposal didn't include a more stringent element of an earlier plan that would have given the owners of some of those units a June 1, 2020, deadline to install selective catalytic reduction technology, to switch from coal to natural gas or to close them permanently.
Regulations that would have implemented both the immediate optimization and the 2020 requirements were set to take effect earlier this year, but newly elected Hogan pulled them from final publication just hours after being sworn in (15 DEN A-8, 1/23/15)(15 DEN A-8, 1/23/15).
One lawmaker who supported both prongs of the rules proposed by Hogan's predecessor sought to codify them in legislation (H.B. 1042) during the recent General Assembly session, but the measure never left committee following a March 12 hearing (49 DEN A-17, 3/13/15).
Regulations Submitted to Legislative Panel
The current round of proposed emergency regulations was submitted April 17 to the General Assembly's Joint Committee on Administrative, Executive, and Legislative Review, a panel that reviews all state regulations.
Unless the committee objects, in which case it could hold a hearing, the Maryland Department of the Environment said it expects the emergency regulations to appear in the May 1 Maryland Register and take effect the next day.
Environment Secretary Ben Grumbles said in a news release that “we are committed to putting into place immediate controls for cleaner air, and we're also committed to finding the best path forward for longer-term controls and collaborations with upwind states to protect air quality well into the future.”
The news release said MDE would work with stakeholders to consider options for greater health protection by 2020.
Options Available to State
“Those options include moving ahead with the requirements as previously proposed for future years or with a revised proposed regulation that would provide equal or greater public health protection while also providing flexibility to support a healthy economy and protect jobs,” MDE said.
The agency said a proposal is expected by early fall.
Under the Healthy Air Act of 2006, Maryland required coal-fired power plants to make significant cuts in emissions of NOx and other pollutants, but owners were allowed to average emissions across all units.
As a result, more costly controls were installed at key operating units while less efficient technology often was used for units needed only during peak demand.
According to MDE, Maryland power plants have invested $2.6 billion in technology to comply with the 2006 law.
Prompt for Effort to Reduce Peak Emissions
That investment, however, hasn't been enough to bring all Maryland jurisdictions into attainment with the U.S. Environmental Protection Agency's national ambient air quality standard for ozone, thus the efforts to reduce peak nitrogen oxide emissions.
Ground-level ozone is created when nitrogen oxide and volatile organic compounds react in the presence of sunlight and warm temperatures.
Supporters of Hogan's move included NRG, one of the companies whose plants would have been subject to the 2020 deadline under the prior rules.
NRG spokesman David Gaier told Bloomberg BNA in an e-mail that he “commends Hogan for taking this step, which delivers immediate air quality improvements while protecting Maryland jobs.”
“We look forward to the upcoming stakeholder process announced by MDE to consider options providing the flexibility that addresses environmental issues and maintains hundreds of family-supporting jobs provided by our Maryland generating plants,” he said.
Sierra Club Criticizes Proposal
Critics included the Sierra Club, which had played a key role in the 15 months of negotiations that led to the previous rules that were scuttled in January.
“We are deeply troubled by the governor's use of emergency rulemaking authority to cripple crucial health protections that were already finalized and in place before he ever took office,” Josh Tulkin, director of the group's Maryland chapter, said in a news release.
He criticized Hogan for “siding with a polluting energy company headquartered outside of Maryland rather than thousands of his own constituents concerned about their air quality.”
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Republican Hopefuls Differ on Approaches To Acknowledging, Addressing Climate Issues
Apr 21, 2015 | BNA Daily Environment Report
By Anthony Adragna
Republican presidential hopefuls lacked a unified stance on whether or how to tackle climate change as they fielded a range of questions on the topic in recent days.
Sen. Marco Rubio (R-Fla.) said April 19 on CBS' Face the Nation that “humans are not responsible for climate change in the way some of these people out there are trying to make us believe” as he voiced opposition to policy approaches such as a carbon tax or a cap-and-trade system to cut greenhouse gas emissions on the grounds they would be “devastating” to the economy.
His fellow Floridian, former Gov. Jeb Bush, took a different approach at an event April 17 in New Hampshire when he said “the climate is changing, and I'm concerned about that” but noted he was more concerned about other issues, like the economy.
Those answers are indicative of the choices Republicans must make to keep their campaigns afloat, political observers have previously told Bloomberg BNA (67 DEN A-1, 4/8/15).
Some, like Bush, are expected to push more moderate positions on issues such as climate change to make themselves more palatable to the broader American electorate, while others, like Rubio, will carve out positions designed to appeal to conservatives.
One source of unity among the candidates came in their opposition to the approach taken by President Barack Obama to address climate change, which the hopefuls warned would cripple economic growth and cost thousands of people their jobs.
Push for Moderate Voters
Bush is expected to compete with several candidates, including potential rivals Sen. Lindsey Graham (R-S.C.) and New Jersey Gov. Chris Christie (R-N.J.), for support of moderate Republican voters during the primary campaign.
All three men acknowledged climate change was real during the weekend of April 18, but they rejected the approaches pursued by the Obama administration to address the problem. None have formally entered the race.
Graham, who told Fox News Sunday April 19 there was a 91 percent chance he'd run for president, called climate change “real” but said he rejected “the cap and trade solution.”
“I would like to clean up the air and water, become more energy [independent], create jobs,” Graham said. “I'm for offshore drilling. I'm for finding oil and gas that we own. I'm for coal, I'm for clean coal, I'm for natural gas but I would like a lower carbon economy over time. Clean up the air and create jobs in the process.”
Christie faced questions on his climate change stance during an informal town hall appearance April 19 in New Hampshire. Told by one audience member he needed a “better answer” on the issue, the New Jersey governor replied, “It's not that I need a better answer, you just want me to have your answer.”
“I believe climate change is real,” Christie said, according to the Wall Street Journal. “The question is how you address it.”
Earlier, Bush garnered unusual praise from environmental groups April 17 when he became the first Republican candidate to call for the U.S. “to work with the rest of the world to negotiate a way to reduce carbon emissions.” Many Republicans have opposed the U.S. working toward an international agreement on climate change this December in Paris.
Rubio Position Unchanged
Unlike some of his potential rivals, Rubio doubled down on a position that the cause of climate change was unknown despite the flurry of criticism he received over it in 2014 (71 DEN A-12, 4/14/15).
“I believe the climate is changing because there's never been a moment where the climate is not changing,” Rubio, who entered the race April 13, said during his Face the Nation appearance. “If we do the things they want us to do, cap-and-trade, you name it, how much will that change the pace of climate change versus how much will that cost to our economy? Scientists can't tell us what impact it would have on reversing these changes, but I can tell you with certainty, it would have a devastating impact on our economy.”
Rubio's assertion of uncertainty about the role of human activity has been dismissed by the scientific community. A 2013 survey of scientific literature published in the journal Environmental Research Letters found that 97.2 percent of climate scientists believe human activity plays a major role in climate change.
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Climate Change Biggest Threat to Planet, Extends Beyond Presidency, Obama Says
Apr 21, 2015 | BNA Daily Environment Report
By Dean Scott
Pledges by the U.S. and China to cut their greenhouse gas emissions are providing “new hope” of getting a global climate deal to address an issue “that's bigger and longer-lasting than my presidency,” President Barack Obama said in his April 18 radio address.
In his weekly address, held ahead of the April 22 celebration of Earth Day, Obama focused entirely on the threats posed by rising global temperatures. “[T]oday, there's no greater threat to our planet than climate change,” the president said.
Obama is scheduled to visit the Florida Everglades on Earth Day to highlight concerns that rising sea level “is putting a national treasure—and an economic engine for the South Florida tourism industry—at risk.”
The president also highlighted continued growth in solar and wind energy, saying that every three weeks, the U.S. brings online as much solar power at it did in all of 2008.
He also touted what he said are signs of renewed U.S. leadership on international climate efforts, pointing to pledges by the U.S. and China to address emissions under a climate accord negotiators hope to finalize at end-of-year talks in Paris.
Obama also noted that U.S. emissions have been on a downward trend during his presidency; the president said in his address that emissions have decreased 10 percent since 2007.
But U.S. emissions more recently have been on the upswing. Energy-related carbon dioxide emissions increased in 2014—by 0.7 percent from the year before—on top of a 2.5 percent increase in 2013, the Energy Information Administration said April 20.
Emissions of all U.S. greenhouse gases increased 2 percent in 2013, according to the Environmental Protection Agency. The EPA doesn't yet have total figures for 2014.
U.S. Emissions Now Growing
If an international climate agreement can be reached at the Nov. 30-Dec. 11 summit in Paris, it would be the first in which developed and developing nations alike agree to address their greenhouse gas emissions.
The U.S. last month submitted its formal pledge to the United Nations under which it would cut its emissions 26 percent to 28 percent by 2025 from 2005 levels (62 DEN A-1, 4/1/15).
China has yet to submit its pledge but has vowed it would agree to “peaking” its rising emissions by 2030 and perhaps sooner, after which they would decline. China also has vowed to increase its use of non-fossil fuels to 20 percent of the nation's energy mix by 2030 (219 DEN A-8, 11/13/14).
Would Double Current U.S. Pace
The president in his address noted that the U.S. pledge would double its current pace of annual emissions reductions to between 2.3 percent and 2.8 percent per year.
“We've committed to doubling the pace at which we cut carbon pollution, and China has committed, for the first time, to limiting their emissions,” Obama said. “And because the world's two largest economies came together, there's new hope that, with American leadership, this year, the world will finally reach an agreement to prevent the worst impacts of climate change before it's too late.”a
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Other Countries Seek Reassurance Obama Can Deliver on His Climate Pledge
Apr 20, 2015 | National Journal
By Clare Foran
As President Obama rushes to cement his climate legacy, other nations are questioning whether his administration can make good on its promise to slash greenhouse-gas emissions ahead of a major climate summit in Paris at the end of this year.
"Certainly...countries want to get reassurance that the U.S. can deliver on what we've said that we're doing," U.S. special envoy for climate change Todd Stern told reporters Monday when asked about challenges to the Environmental Protection Agency's efforts to regulate carbon pollution from power plants. "I wouldn't say it's a big drumbeat, but I have definitely been asked that."
But Stern was quick to say that the efforts to curb greenhouse gases are "based fundamentally on existing legal authority" under the Clean Air Act and that "we have a very solid basis for...having confidence in the power plant rule and other regulatory steps that we've taken." Stern noted that EPA has a strong track record in emerging with the upper hand when faced with attack. "These kinds of EPA regulations have been repeatedly challenged over time and almost always upheld."
Stern added that "countries see what President Obama is doing, and what the administration is doing and have a fair, and I think justified degree of confidence that we can deliver."
Legal challenges and political attacks faced by the regulations, which stand as a major pillar of the U.S. climate pledge, highlight the uncertain fate of Obama's most ambitious action to tackle global warming. ADVERTISEMENT
Senate Majority Leader Mitch McConnell has urged states not to comply with the regulations and signaled that the international community should be wary of any kind of climate commitment made by the U.S. Just last week, the regulations endured their first major legal challenge when a federal appeals court heard oral arguments in litigation that takes aim at the rule.
U.S. negotiators plan to use the president's action as leverage to prod countries, including China, India, and Brazil, to make strong climate commitments of their own as part of a global climate deal.
Stern said that he did not get asked about challenges to the regulations during the Major Economies Forum on Energy and Climate, an event in Washington that wrapped on Monday. Seventeen nations belong to the forum, including Australia, Brazil, Canada, China, and India.
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EPA Cites Existing Studies In Push For Court To Reject 'Jobs' Review Suit
Apr 20, 2015 | InsideEPA
By David LaRoss
EPA is urging a federal district court to reject the coal sector's suit seeking to force the agency to conduct what industry says is a Clean Air Act-mandated sweeping review of the employment impacts of its air rules, with EPA arguing that it often conducts such studies for policies including its proposed utility climate rules.
“Congress did not define the term 'evaluations' as used in [the air law] or provide any guidance to EPA regarding the scope, content, timing, or frequency of such evaluations. In the absence of any statutory guidance from Congress, EPA has discretion in deciding how to perform the duty. . . . This includes the discretion to decide how to conduct the evaluations, what information to include in those evaluations, and when and how often to conduct such evaluations,” says a recent motion filed by the Department of Justice on EPA's behalf in Murray Energy, et al. v. EPA.
Coal mining firm Murray Energy and a host of other coal sector members claim that the agency has violated section 321(a) of the air law by not undertaking broad assessments of its emissions rules such as its power plant air toxics and greenhouse gas (GHG) standards, which industry critics say will hurt the coal sector and cause major job losses.
The law says EPA “shall conduct continuing evaluations of potential loss or shifts of employment which may result from the administration or enforcement of the provision of this chapter and applicable implementation plans, including where appropriate, investigating threatened plant closures or reductions in employment allegedly resulting from such administration or enforcement,” and Murray Energy claims EPA has not done such reviews.
EPA in its April 10 motion for summary judgment counters that even though it has not published stand-alone analyses of its regulations' effects on employment, the language of the air law is so broad that regulatory impact analyses (RIAs) -- which are conducted during development of rules and describe the social costs and benefits of rules -- satisfy its requirements for a jobs study as long as they address the topic specifically and in depth.
And it adds that broad analyses of costs and benefits from the agency's Office of Air & Radiation's policies, such as the utility air toxics rule, are enough to comply with a statutory mandate for retrospective review of employment impacts even though they may not be as frequent or as focused as industry seeks. As a result, the agency argues that it has complied with its duties under the air law and that the case should be rejected.
In a footnote, EPA says, “This case is now ripe for final judgment by this Court: The documents submitted by EPA either constitute performance of the duty in Section 321(a), or they do not.”
Pending Litigation
Murray Energy and its coal sector allies are asking the U.S. District Court for the Northern District of West Virginia to compel a sweeping review of how past EPA air rules have affected employment in the energy and other sectors under section section 321(a) of the air law. That study could provide the firms with potential new evidence of job losses or other costs from current and pending regulations.
Judge John Preston Bailey has already ruled against two EPA motions to dismiss the case entirely. In a 2014 order he held that EPA is required to conduct the study because section 321(a) says the administrator "shall" conduct such a review, rejecting the agency's argument that the reviews constitute a discretionary duty that courts cannot order EPA to perform.
And in a March 27 decision he found that the plaintiffs have standing to sue over the analysis even though it would not lead directly to less-stringent rules or reduced costs, in part because if EPA were to conduct such an evaluation, it could compel changes to air rules that impose costs on the coal sector, thereby potentially affecting jobs impacts.
But while Murray Energy and its co-plaintiffs are claiming that section 321(a) requires retrospective analysis of all air rules, EPA counters in the April 10 motion that the mandate can be satisfied through a sufficiently rigorous RIA -- even though the documents are prepared before implementation of a regulation rather than addressing the historical impacts of past rules as industry is seeking.
EPA touts as especially comprehensive its studies of the potential jobs impacts from two of the rules industry is seeking to block: the agency's maximum achievable control technology rule regulating toxics from power plants, also called the mercury and air toxics standards (MATS), and its proposed GHG rules for the power sector.
“Indeed, some of EPA’s most robust evaluations of potential employment impacts are in the RIAs supporting rules that affect the coal industry. . . . When available data and appropriate methodologies make it feasible, EPA’s RIAs include quantified estimates of employment gains, shifts, and losses in both the regulated sector and other affected sectors. For example, the RIA for the final [MATS], which is one of the regulations cited by Plaintiffs, provides a detailed 'Employment and Economic Impact Analysis,'” the brief says.
The MATS RIA, which EPA has submitted as an exhibit supporting its motion, estimates the net employment effect from the rule as ranging from a loss of 15,000 jobs to a gain of 30,000, “with a central estimate of +8,000” gained.
For the power plant GHG rules, it says, EPA “estimated a loss of 10,900 to 18,000 job-years per year in the coal-mining industry, depending on the year in question and the standards finalized,” but also found that energy-efficiency initiatives would add 57,000 to 78,800 new full- or part-time jobs to the economy by 2020.
Economic Studies
The motion also notes that EPA has performed wide-ranging studies of economic impacts from past rules that include assessing their effects on employment, although the studies are not limited strictly to jobs.
As evidence it cites the 2011 agency white paper “Empirical Evidence Regarding The Effects Of The Clean Air Act On Jobs And Economic Growth” and a series of air policy reviews titled “The Benefits and Costs of the Clean Air Act” that includes both retrospective analysis and estimates of future impacts.
“EPA’s RIAs demonstrate the Agency’s on-going, continuous effort to assess the potential employment impacts of individual regulations, while its official reports, including the White Paper . . . demonstrate the Agency’s continuing broad-scale efforts to assess the employment impacts of the Act and its programs,” the brief says.
EPA concludes its argument with a note that if the court rules that RIAs and broad reviews like the white papers do not satisfy the section 321(a) requirement, then the judge should rule against EPA as a matter of law, because the agency has performed no other studies that could qualify.
“EPA has completed no other evaluations of the potential employment of the Act at this time. The Court thus has before it all of the evidence upon which EPA relies to demonstrate its performance of the duty,” the brief says.
But it also notes that Murray Energy and its allies are challenging only whether the agency has performed section 321(a) jobs reviews, and not whether those reviews are adequate. Industry would have to file a separate suit to claim that EPA should have considered additional factors in a particular study, the agency says.
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Wyoming Appeals EPA's Disapproval Of Nonattainment New Source Review Plan
Apr 21, 2015 | BNA Daily Environment Report
By Tripp Baltz
Wyoming appealed the Environmental Protection Agency's disapproval of the state's revisions to nonattainment new source review permitting rules (Wyoming v. EPA, 10th Cir., No. 15-9536, 4/16/15).
The state filed a petition April 16 in the U.S. Court of Appeals for the 10th Circuit to review the EPA's disapproval of Wyoming's state implementation plan submittal to revise rules for air permits for major sources in nonattainment areas.
The EPA's disapproval under Section 110 of the Clean Air Act was published Feb. 20 in the Federal Register with the agency's decision to approve Wyoming's SIP revisions for sulfur dioxide limits and dates of incorporation by reference (80 Fed. Reg. 9,194).
The EPA said it disapproved Wyoming's submittal because changes to the nonattainment new source review permitting requirements in the state's air regulations weren't consistent with Clean Air Act and EPA regulation.
Specifically, the EPA asserted Wyoming's plan for revision doesn't create “unambiguous and enforceable obligations for sources” because the requirements in the EPA regulation the state incorporated are “prefaced by phrases such as ‘the plan shall provide’ or ‘the plan shall require.’ ”
Also, the EPA asserted that because federal air quality rules require states to adopt procedures that meet certain standards, but do not specify the content of those procedures, Wyoming's incorporation of the federal rules “leaves those procedures unspecified.”
For nonattainment areas, states are required to submit SIP revisions, including a new source review permitting program for the construction and operation of new or modified major stationary sources, the EPA said in the Federal Register notice.
Wyoming's 2011 Revisions
In May 2011, before the formal designation of the Green River Basin Area as a nonattainment area for the eight-hour ozone national ambient air quality standard, Wyoming submitted a new source review permitting program plan revision to the EPA.
The EPA's disapproval of Wyoming's plan was “arbitrary and capricious” because it approved the approach the state took—the incorporation of the EPA regulations by reference—for other states, Wyoming said in a request for an agency stay March 5.
The state and the EPA are negotiating over the request for a consideration and stay of the SIP partial disapproval, Keith Guille, spokesman for the Wyoming Department of Environmental Quality, told Bloomberg BNA April 20.
Wyoming revised its air quality regulations to incorporate the EPA rule on nonattainment new source review permitting plan requirements in 2010 and submitted that change to the EPA as part of its state implementation plan revision, the state said.
The EPA failed to take action on Wyoming's plan, the state said.
“Faced with the risk that a non-governmental entity would sue and settle with the EPA—without ever involving Wyoming—for EPA's failure to fulfill this mandatory duty, Wyoming sued the EPA on Feb. 25, 2014,” the state said in its request for agency stay.
Parties Entered into Consent Decree
The parties later entered into a consent decree in which the EPA agreed to take action on Wyoming's plan by Jan. 30, 2015.
Guille said the state filed the petition with the 10th Circuit to preserve its ability to appeal. “The Clean Air Act requires us to file the petition by this week,” he said. “We are doing so just in case negotiations with EPA were to fall through.”
Guille said EPA's disapproval could affect the state's plan for the Sheridan particulate matter nonattainment area in addition to the Green River Basin Area.
Rich Mylott, a spokesman in the Region 8 office of EPA in Denver, told Bloomberg BNA April 17 the agency is reviewing Wyoming's petition.
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Shippers Group Presses For Action On STB Nomination
Apr 21, 2015 | E&E Daily News
By Sean Reilly
A coalition of freight rail shippers is urging the Senate Commerce, Science and Transportation Committee to move quickly on the nomination of Daniel Elliott for another term on the Surface Transportation Board (STB).
"A vacancy at the STB creates uncertainties and delays for the rail shippers that rely on the board to review rail rate and service disputes," Dave Sauer, president of Consumers United for Rail Equity, wrote in a letter yesterday to Commerce Chairman John Thune (R-S.D.) and ranking member Bill Nelson (D-Fla.).
It is "imperative," Sauer said, that the panel hold a hearing on Elliott's nomination as soon as possible, followed by prompt action by the full Senate. "While the shipping crisis of last fall and winter has eased, the underlying issues remain," he said.
Current members of the group, which bills its mission as promoting competition between freight railroads, include the American Public Power Association, the Edison Electric Institute and steelmaker Nucor Corp., according to its website.
Elliott, a former lawyer with the United Transportation Union, had served on the three-member board from 2009 until the end of December, when a holdover year on his term expired. President Obama nominated him for another term in January. Thune, who is sponsoring S. 808 to expand the number of board members to five, said soon after that Elliott would get "fair consideration" (E&E Daily, Jan. 21).
In an email, committee spokesman Frederick Hill said that staff met with Elliott in February and that the committee "is moving forward toward public action on the confirmation request."
The STB is charged with regulating freight rail rates; Elliott had previously served as the board's chairman. Following his departure, Vice Chairwoman Deb Miller is now acting chairwoman, while the other remaining member, Ann Begeman, is vice chairwoman.
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