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(ACC Mentioned) US Chemical Activity Index Rises for Fourth Month
Apr 21, 2015 | Hydrocarbon Processing
The Chemical Activity Barometer (CAB), a leading economic indicator created by the American Chemistry Council (ACC), was up 0.1% in April, as measured on a three-month moving average (3MMA), the group announced on Tuesday. Reaching an index of 98.1, last seen in January 2008, the CAB remains up 2.6% over a year ago, and ... -
(ACC Mentioned) Leading Economic Indicator Maintains Growth Momentum in April
Apr 21, 2015 | iConnect007
The Chemical Activity Barometer (CAB), a leading economic indicator created by the American Chemistry Council (ACC), was up 0.1 percent in April, as measured on a three-month moving average (3MMA). Reaching an index of 98.1, last seen in January 2008, the CAB remains up 2.6 percent over a year ago, and suggests gains in business activity... -
(ACC Mentioned) Zacks Industry Outlook Highlights: PPG Industries, Albemarle, Air Products and Chemicals, Celanese and LyondellBasell Industries - Press Releases
Apr 21, 2015 | Zacks
Today, Zacks Equity Research discusses the Chemicals (Part 2), including PPG Industries Inc. ( PPG - Free Report ), Albemarle Corp. ( ALB - Free Report ), Air Products and Chemicals Inc. ( APD - Free Report ), Celanese Corp. ( CE - Free Report ) and LyondellBasell Industries NV ( LYB - Free Report ). -
(ACC Mentioned) Free Earth Day Film Screening with Seattle Connections
Apr 21, 2015 | PR Web
A free Earth Day screening of a documentary film that includes several Seattle connections, "Bag It: Is Your Life Too Plastic?," and presentation and about how anyone can make small changes that save money help save the planet will be held at the Brown Paper Tickets Community Resource Room, Wed., April 22. The event will begin with a brown bag ... -
(ACC Mentioned) Udall Effort on Chemical Laws Takes Us Backward
Apr 22, 2015 | Albuquerque News
By Sofia Martinez & Richard Moore
A decade of pressure by parents, doctors, scientists, businesses, and state governments has created momentum to finally fix the broken federal law governing chemicals used in commerce, the Toxic Substances Control Act of 1976, which has allowed thousands of hazardous and untested chemicals to be widely used in everyday consumer products. -
Boxer Pushes for Changes to Bipartisan TSCA Bill Ahead of Expected Markup
Apr 22, 2015 | E&E News PM
By Sam Pearson
Lawmakers need to make changes to a bipartisan chemicals bill ahead of a possible Senate Environment and Public Works Committee markup that could take place as soon as next week, the panel's ranking Democrat said yesterday. Sen. Barbara Boxer (D-Calif.), a staunch opponent of S. 697, the "Frank R. Lautenberg Chemical Safety for the 21st ... -
Workers, Consumers May Face Cancer, Other Health Risks From Solvent, EPA Says
Apr 22, 2015 | BNA Daily Environment Report
By Pat Rizzuto
Workers and consumers exposed to 1,4-dioxane (CAS No. 123-91-1), an industrial and a commercial solvent, face an increased risk of cancer and liver, kidney and other health problems, the Environmental Protection Agency found in an initial assessment released April 21. The EPA will refine its analysis and then decide whether to proceed with ... -
EPA Takes Early Step on Suspected Carcinogen in Some Laundry Detergents
Apr 21, 2015 | E&E News PM
By Sam Pearson
U.S. EPA finished the first step this week toward completing a risk assessment of a solvent that has been on the radar of health officials for decades and that was reduced in some laundry detergents in response to public pressure. The initial review, called a Work Plan Chemical Problem Formulation and Initial Assessment, is EPA's... -
Industry-Supported, Bipartisan Bill Boosts FDA Oversight of Personal Care Products
Apr 22, 2015 | E&E Daily News
By Sam Pearson
A bill introduced by a top Democrat and a key moderate Republican would grant the Food and Drug Administration new tools to review the safety of personal care products, a persistent concern of chemical advocacy groups. S. 1014, the "Personal Care Products Safety Act," by Sens. Dianne Feinstein (D-Calif.) and Susan Collins (R-Maine)... -
Behind the Label: the Blueprint for Safer Chemicals in the Marketplace
Apr 21, 2015 | Environmental Defense Fund
By JPratt
Boma Brown-West is a manager on EDF’s Supply Chain Team within the Corporate Partnerships Program. If you’re in the business of using chemicals to make consumer products – things like shampoo or baby lotions, spray cleaners or laundry soap – the last few years have likely been anything but dull. State legislatures have been passing... -
Journal Publishes Papers on Certified Reference Materials
Apr 21, 2015 | Chemical Watch
The journal Analytical and Bioanalytical Chemistry has published a collection of papers on a number of the current challenges concerning reference materials for chemical analysis. The collection consists of 31 manuscripts dealing with a range of certified reference materials (CRMs) topics, from their development and production, to advances... -
(ACC Mentioned) Court Says Plaintiffs Need Not Prove Drilling Injury Prior to Discovery Phase
Apr 22, 2015 | BNA Daily Environment Report
By Tripp Baltz
The Colorado Supreme Court has ruled that state trial courts may not force plaintiffs alleging natural gas injuries to present initial evidence prior to the discovery phase of a case against the drilling operator (Antero Res. v. Strudley, 2015 BL 111122, Colo., No. 13SC576, 4/20/15). The state's high court issued a ruling April 20 saying Colorado's... -
Fracking: Good Science Vs. Science Fiction | Commentary
Apr 21, 2015 | Roll Call
By Rep. Lamar Smith
The United States is now the world’s largest oil and natural gas producer, having recently overtaken both Saudi Arabia and Russia. Two decades ago, no one would have believed it. The practice of hydraulic fracturing, or fracking, has fueled this energy boom. Fracking has unlocked vast amounts of what used to be considered economically ... -
Obama Proposes $3.5 Billion Gas Pipeline Overhaul
Apr 21, 2015 | PoliticoPro
By Andrew Restuccia & Elana Schor
The Obama administration on Tuesday proposed spending as much as $3.5 billion to replace aging natural gas pipelines nationwide — a move that comes just as POLITICO published a lengthy investigation of the public safety threat posed by pipelines and the numerous problems plaguing the federal agency that regulates them. -
Senate Bill Would Allow Federal Use Of Fuels Made From Coal, Oil Shale
Apr 22, 2015 | BNA Daily Environment Report
By Ari Natter
Senate legislation introduced April 21 would repeal a section of a 2007 energy law that prohibits the Defense Department and other federal agencies from buying transportation fuels produced from unconventional sources, including fuel made from coal-to-liquid processes, oil sands and oil shale, unless the contract specifies that the ... -
Oil, Gas Industry Sees Price of Federal Rules; Interior Urges Access With Safe Development
Apr 22, 2015 | BNA Daily Environment Report
By Nushin Huq
The Bureau of Land Management rulemaking that could raise royalty rates, requirements and civil penalties on oil and gas companies working on federal lands will drive more jobs off public land, an industry group official predicted. “Despite the renaissance on state and private lands, energy production on federal lands has fallen, and yet another... -
BLM Proposal on Oil, Gas Fees Out for Comment
Apr 22, 2015 | BNA Daily Environment Report
The comment period has opened on an advance notice of proposed rulemaking that raises the prospect of increases in financial requirements and civil penalties for oil and natural gas exploration and production on federal onshore lands. The notice from the Bureau of Land Management was published April 21 (80 Fed. Reg. 22,148). It is available at ... -
Advances in Offshore Safety
Apr 21, 2015 | The Hill - Congress Blog
By Charlie Williams
America runs on energy - and compared to many other countries, we use a diverse mix. Wind, solar, nuclear and other forms of energy all help power our daily lives. No fuels play a greater role than oil and natural gas, which account for more than 60 percent of all the energy used in the U.S. today. As with all sources of energy, ensuring... -
New Studies Link Earthquakes With Oil, Gas Drilling
Apr 21, 2015 | The Wall Street Journal
By Miguel Bustilloand Dan Molinski
New scientific findings released Tuesday linked earthquakes to the practice of injecting wastewater from oil and gas operations deep underground, adding to a growing consensus among researchers that energy development is probably causing seismic activity in Oklahoma, Texas and other parts of the U.S. -
State’s Hochstein: Energy Production Won’t Be Foreign Policy Lever
Apr 21, 2015 | PoliticoPro
By Darren Goode
The State Department’s top energy diplomat said Tuesday that the U.S., unlike some countries that own and operate energy companies, doesn’t use energy production as a lever for the country’s foreign policy goals. “We don’t control our own energy production and we don’t use it as weapons or tools or leverages for pursuit of other policies,” State... -
Murkowski, EPA Spar Over New Clean Power Plan Analysis
Apr 21, 2015 | E&E News PM
By Hannah Northey
The Republican chairwoman of the Senate Energy and Natural Resources Committee today criticized U.S. EPA for calling a high-profile reliability review of the agency's Clean Power Plan "premature." A spokesman for Sen. Lisa Murkowski of Alaska noted that the North American Electric Reliability Corp. is required by Congress to ensure the... -
Why States Should Boycott the Federal Clean Power Plan
Apr 21, 2015 | The Wall Street Journal
By Kenneth C. Hill
Senate Majority Leader Mitch McConnell (R., Ky.) set off a firestorm recently when he advised states not to comply with the Environmental Protection Agency’s Clean Power Plan. Yet that advice isn’t as radical as his detractors make it sound. As a state public utilities commissioner who deals with the effects of federal regulations on a regular basis, I ... -
Electric Reliability and the Clean Power Plan: Perspectives of a Former Regulator
Apr 21, 2015 | Environmental Defense Fund
By Cheryl Roberto
There is no great disagreement that the U.S. energy system is transforming. With or without additional environmental regulations, like the U.S. Environmental Protection Agency’s (EPA) proposed Clean Power Plan, this transition is occurring. Our history and experience have demonstrated that we can weather it without threatening our uniform and ... -
House Clears Energy Efficiency Bill
Apr 21, 2015 | The Hill - Floor Action
By Cristina Marcos
The House sent long-stalled legislation to the president's desk on Tuesday to improve energy efficiency in buildings. Passed by voice vote, the bill would require the General Services Administration and Department of Energy (DOE) to create a voluntary energy efficiency standard for commercial buildings. Additionally, it would exempt certain water... -
Congress Passes Bipartisan Bill to Improve Energy Efficiency
Apr 21, 2015 | The New York Times
By Coral Davenport
Congress on Tuesday passed a bill focused on improving energy efficiency in buildings and water heaters, a move celebrated by both parties for breaking longstanding partisan gridlock. The bill, which President Obama is expected to sign into law this week, is a modest one. But its authors, Senator Rob Portman, Republican of Ohio, and Senator... -
House Committee Releases Portion of Energy Bill Focused on Training Workers, Education
Apr 22, 2015 | BNA Daily Environment Report
By Ari Natter
Draft legislation released April 21 by the House Energy and Commerce Committee aims to increase skilled workers in energy and manufacturing fields through increased training and education programs, a bill summary said. The bill, which will be incorporated into broader energy legislation being crafted by the committee, will be the subject ... -
First Plank of House Panel's Bill Focuses on Workforce Development
Apr 21, 2015 | E&E News PM
By Nick Juliano
The House Energy and Commerce Committee today released the first plank of a comprehensive energy bill focused on opportunities to create jobs ahead of a hearing on the subject tomorrow. The "21st Century Workforce" title of the bill committee members are assembling is based on legislation introduced last year by Rep. Bobby Rush (D-Ill.)... -
Utilities Need More Time for Obama Climate Rule, Federal Office Says
Apr 21, 2015 | The Hill - E2 Wire
By Timothy Cama
Utilities will need more time to comply with the Obama administration’s new climate rule, the organization responsible for electricity reliability said Tuesday. In a new report, the North American Electric Reliability Corp. (NERC) took issue with the first round of carbon emissions targets that the Environmental Protection Agency (EPA)... -
Obama Climate Plan Seen Making Coal Plants Less Efficient
Apr 22, 2015 | BNA Daily Environment Report
By Mark Drajem
The Obama administration's plan to cut carbon emissions may force many coal plants to run only when energy demand peaks, making them less cost-effective, the group that oversees the U.S. electric system said. The North American Electric Reliability Corp., a nonprofit that assures adequate voltage and power reserves, in an ... -
EPA Rules on Emissions During Malfunctions, Other Events Bear Watching, Attorney Says
Apr 22, 2015 | BNA Daily Environment Report
By Nora Macaluso
Companies and state regulators need to be aware of changes in Environmental Protection Agency rules on emissions for power plants and other facilities during startups, shutdowns and malfunctions, a Michigan environmental attorney told a clean air conference April 21. The EPA “walks a fine line” on the question of whether... -
EPA's Revised Emissions 'Factors' Could Drive Tougher Refinery Air Rules
Apr 21, 2015 | InsideEPA
By Stuart Parker
EPA's final revised oil refinery emissions “factors” used to estimate the facilities' pollution for Clean Air Act permitting purposes could result in stricter air permit conditions and tougher federal air rules for refineries and chemical plants as the new factors significantly increase some emissions projections, environmentalists say. -
Greater Investments In Energy Infrastructure Stressed in White House Quadrennial Review
Apr 22, 2015 | BNA Daily Environment Report
By Rebecca Kern
The U.S. needs to invest in modernizing and updating its aging energy infrastructure to promote economic competitiveness, energy security and environmental responsibility, an April 21 White House report recommended. The White House's first installment of theQuadrennial Energy Review (QER) specifically focuses on the U.S. energy ... -
McCarthy Approved Six Corrections To Coal Ash Rule Before Formal Publication
Apr 22, 2015 | BNA Daily Environment Report
By Anthony Adragna
The Environmental Protection Agency made a half dozen changes to its final coal ash regulation significant enough to warrant Administrator Gina McCarthy's approval between the unveiling and formal publication of the rule, according to a memorandum obtained by Bloomberg BNA April 21. Officials wrote in the memorandum to McCarthy... -
EPA Revises Estimate on Ozone Precursors From Refineries, Chemical Manufacturing
Apr 22, 2015 | BNA Daily Environment Report
By Patrick Ambrosio
The Environmental Protection Agency has finalized new and updated emissions factors for refineries and chemical manufacturing plants, including an update to how facility operators estimate their emissions from the flaring of gas. The emissions factors, released April 20, include a new value for estimating emissions of volatile organic compounds... -
NERC Retreats From Dire Reliability Warnings On ESPS But Still Seeks Fixes
Apr 21, 2015 | InsideEPA
By Dawn Reeves
The North American Electric Reliability Corporation (NERC), the nation's top reliability watchdog, is backing away from its earlier dire warnings about the potential impacts of EPA's proposed rule governing greenhouse gas (GHG) emissions from existing power plants but the group is still seeking additional flexibility, a reliability assurance ... -
(ACC Mentioned) Lobbying on Crude-by-Rail Doubles Over Year as PHMSA Rule Becomes Final
Apr 22, 2015 | BNA Daily Environment Report
By Rachel Leven
The number of entities lobbying Congress and the administration on requirements for safely transporting crude oil has increased more than 100 percent from the first three months of 2014 compared to the same time frame in 2015, public records show. The increased lobbying by cities and rail and energy trade associations and companies may... -
Rail, Waterways Overtaxed By Growing Energy Needs -- QER
Apr 21, 2015 | E&E News PM
By Sean Reilly and Annie Snider
From skyrocketing volumes of crude-by-rail shipments to the logistics of moving enormous wind turbine components, shifts in the U.S. energy business are squeezing the nation's road, rail and waterway systems, the Energy Department said in a long-term overview released this morning that urges more study and billions of dollars' worth of upgrades.
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(ACC Mentioned) US Chemical Activity Index Rises for Fourth Month
Apr 21, 2015 | Hydrocarbon Processing
The Chemical Activity Barometer (CAB), a leading economic indicator created by the American Chemistry Council (ACC), was up 0.1% in April, as measured on a three-month moving average (3MMA), the group announced on Tuesday.
Reaching an index of 98.1, last seen in January 2008, the CAB remains up 2.6% over a year ago, and suggests gains in business activity will continue into the fourth quarter.
The Chemical Activity Barometer has four primary components, each consisting of a variety of indicators: 1) production; 2) equity prices; 3) product prices; and 4) inventories and other indicators. All components were up in April.
“All of the major production-related indicators are up and we might continue to see a strengthening. Construction-related chemistries have been adversely affected by bad weather so far this year, but we expect an improvement as we get further into spring,” said Kevin Swift, chief economist at the American Chemistry Council.
“The data on plastic resins and polymers for packaging suggest that retail sales should continue to be strong as well,” Swift added.
The Chemical Activity Barometer is a leading economic indicator derived from a composite index of chemical industry activity. The chemical industry has been found to consistently lead the US economy’s business cycle given its early position in the supply chain, and this barometer can be used to determine turning points and likely trends in the wider economy.
Month-to-month movements can be volatile, so a three-month moving average of the barometer is provided. This provides a more consistent and illustrative picture of national economic trends.
The CAB comprises indicators relating to the production of chlorine and other alkalies, pigments, plastic resins and other selected basic industrial chemicals; chemical company stock data; hours worked in chemicals; publicly sourced, chemical price information; end-use (or customer) industry sales-to-inventories; and several broader leading economic measures (building permits and new orders). Each month, the ACC provides a barometer number, which reflects activity data for the current month, as well as a three-month moving average.
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(ACC Mentioned) Leading Economic Indicator Maintains Growth Momentum in April
Apr 21, 2015 | iConnect007
The Chemical Activity Barometer (CAB), a leading economic indicator created by the American Chemistry Council (ACC), was up 0.1 percent in April, as measured on a three-month moving average (3MMA). Reaching an index of 98.1, last seen in January 2008, the CAB remains up 2.6 percent over a year ago, and suggests gains in business activity will continue into the fourth quarter.
The Chemical Activity Barometer has four primary components, each consisting of a variety of indicators: 1) production; 2) equity prices; 3) product prices; and 4) inventories and other indicators. All components were up in April.
"All of the major production-related indicators are up and we might continue to see a strengthening. Construction-related chemistries have been adversely affected by bad weather so far this year, but we expect an improvement as we get further into spring," said Kevin Swift, chief economist at the American Chemistry Council. "The data on plastic resins and polymers for packaging suggest that retail sales should continue to be strong as well," Swift added.
The Chemical Activity Barometer is a leading economic indicator derived from a composite index of chemical industry activity. The chemical industry has been found to consistently lead the U.S. economy's business cycle given its early position in the supply chain, and this barometer can be used to determine turning points and likely trends in the wider economy. Month-to-month movements can be volatile so a three-month moving average of the barometer is provided. This provides a more consistent and illustrative picture of national economic trends.
Applying the CAB back to 1919, it has been shown to provide a lead of two to 14 months, with an average lead of eight months at cycle peaks as determined by the National Bureau of Economic Research. The median lead was also eight months. At business cycle troughs, the CAB leads by one to seven months, with an average lead of four months. The median lead was three months. The CAB is rebased to the average lead (in months) of an average 100 in the base year (the year 2007 was used) of a reference time series. The latter is the Federal Reserve's Industrial Production Index.
The CAB comprises indicators relating to the production of chlorine and other alkalies, pigments, plastic resins and other selected basic industrial chemicals; chemical company stock data; hours worked in chemicals; publicly sourced, chemical price information; end-use (or customer) industry sales-to-inventories; and several broader leading economic measures (building permits and new orders). Each month, ACC provides a barometer number, which reflects activity data for the current month, as well as a three-month moving average. The CAB was developed by the economics department at the American Chemistry Council.
The CAB is designed and prepared in compliance with ACC's Antitrust Guidelines and FTC Safe Harbor Guidelines; does not use company-specific price information as input data; and data is aggregated such that company-specific and product-specific data cannot be determined. www.americanchemistry.com
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Apr 21, 2015 | Zacks
Today, Zacks Equity Research discusses the Chemicals (Part 2), including PPG Industries Inc. ( PPG - Free Report ), Albemarle Corp. ( ALB - Free Report ), Air Products and Chemicals Inc. ( APD - Free Report ), Celanese Corp. ( CE - Free Report ) and LyondellBasell Industries NV ( LYB - Free Report ).
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 Gear
The 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 - Free Report ) acquisition of Mexican paint company Comex and Albemarle Corp.'s ( ALB - Free 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 - Free Report ), Celanese Corp. ( CE - Free Report ) and LyondellBasell Industries NV ( LYB - Free Report ). -
(ACC Mentioned) Free Earth Day Film Screening with Seattle Connections
Apr 21, 2015 | PR Web
A free Earth Day screening of a documentary film that includes several Seattle connections, "Bag It: Is Your Life Too Plastic?," and presentation and about how anyone can make small changes that save money help save the planet will be held at the Brown Paper Tickets Community Resource Room, Wed., April 22. The event will begin with a brown bag discussion led by a leader in re-use of household and construction materials, Mary Anne Carter of Second Use Building Materials, and Brown Paper Tickets' "Doer" supporting makers and artists, including those in the re-making community, Tamara Clammer. The documentary movie screening will follow at 1 p.m., followed by a Q and A with someone who appears in the movie, Heather Trim of Zero Waste Seattle, led by Brown Paper Tickets' recycling team lead, Erika Harder.
The film's Seattle connections include:
Richard Conlin, former President and Seattle City Council member Ellie Rose Founder, Foam Free Seattle Heather Trim of Zero Waste Seattle, the group that fought the American Chemistry Council lobby, that spent more than a million dollars fighting the Seattle bag fee. The Chemistry Council lobby won in the short term, and Zero Waste Seattle won in the long term, bringing a ban on plastic bags.When? Earth Day, Wed., April 22
noon: brown bag lunch break presentation on easy ways to reduce, reuse, remake and recycle as a part of daily life.
1 p.m: screening of the film "Bag It: Is Your Life Too Plastic?"Followed immediately by Q and A with Heather Trim of Zero Waste Seattle led by Brown Paper Tickets recycling team lead, Erika Harder.
Where? Brown Paper Tickets Community Resource Room, 309 N 36th St, Seattle, WA 98103
Cost? Free! Space is limited; RSVP is suggested at: http://www.brownpapertickets.com/event/1470959
--A presentation of the Brown Paper Tickets Doer Corps, a pro bono squad of professional Doers hired by Brown Paper Tickets to help people and communities to thrive.--
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About the Brown Paper Tickets Doer Corps:
A Doer is a community champion with the skills, experience and passion to enact sustainable, positive change, as an ambassador of Brown Paper Tickets. Like a corporate Peace Corps, the Doer Corps tackles the most pressing needs for communities and for people, with no metrics for sales, no corporate agenda, and with no remuneration to the company for their efforts.
Brown Paper Tickets is a Not-Just-For-Profit event registration and ticketing service, and a place for anyone to discover events that fuel an engine for social good. Like a social corporation, a Not-Just-For-Profit company does not seek to make the highest profit; rather, it seeks to provide consumers with amazing products and services that do more to make the world a better place for all.
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(ACC Mentioned) Udall Effort on Chemical Laws Takes Us Backward
Apr 22, 2015 | Albuquerque News
By Sofia Martinez & Richard Moore
A decade of pressure by parents, doctors, scientists, businesses, and state governments has created momentum to finally fix the broken federal law governing chemicals used in commerce, the Toxic Substances Control Act of 1976, which has allowed thousands of hazardous and untested chemicals to be widely used in everyday consumer products.
Unfortunately, while reform of the act is desperately needed to protect the lives of millions from harmful chemicals, efforts in Congress have now been hijacked by the chemical industry.
A new proposal by New Mexico Sen. Tom Udall, a Democrat, and Sen. David Vitter, R-La., claims to be a step toward fixing the act. In reality, the bill could delay action on hazardous chemicals even further than the current law and give the chemical industry a free pass to continue endangering our children.
Udall’s bill also fails to address legacy contaminants and the many environmental justice communities fighting off toxic facilities or waste dumps in their neighborhoods.
While Udall has said the Environmental Protection Agency “has lacked the tools to protect our most vulnerable – infants, pregnant women, children and the elderly,” he fails to mention the disastrous impact his bill may have on the nation’s 3.8 million people living fence-line to many of these facilities, including facilities in New Mexico.
Gaping loopholes in the bill are so enormous they seem to have been left by design.
On March 6, the New York Times reported that the American Chemistry Council “spent more than $4 million during the 2014 election cycle on television and radio spots to help their allies in Congress,” including Udall.
According to the Times, “Mr. Udall had never before received a contribution from the Chemistry Council,” but during the last election cycle the industry “donated tens of thousands of dollars to his campaigns and sponsored a television ad that praised his leadership.”
On March 16, the San Francisco Chronicle reported that when the electronic version of the draft Udall-Vitter bill was examined the paper found “the ‘company’ of origin to be the American Chemistry Council.”
When it comes to regulating toxic chemicals, we believe Udall should be listening to New Mexican families more than the chemical industry.
Although the bill proposes some needed improvements to the Toxic Substances Control Act, at the same time it would create new barriers to federal action and strip states of their right to restrict hazardous chemicals even if the EPA isn’t doing anything.
State leadership on this issue is essential for progress. Over the past decade, 35 states have enacted more than 150 policies addressing some of the worst chemicals in broad categories of household products.
New Mexicans can now buy furniture, televisions, infant formula, baby bottles, baby food and many other products made without highly toxic chemicals like bisphenol-A and several polybrominated diphenyl ethers because of reforms enacted by other states that caused product manufacturers to broadly phase out these toxic chemicals from their products sold nationwide. Today, New Mexico children and families are safer because of these actions by other states.
In contrast, the proposed Udall-Vitter bill would require EPA to initially review just 10 out of over 84,000 available chemicals, with no requirements or deadlines for adopting actual restrictions, using a process that will in practice take at least seven to 15 years to complete, while immediately blocking actions by states.
That’s a pretty sweet deal for the chemical industry.
We know the Toxic Substances Control Act must be reformed, but Udall’s effort would take us backward. Giving away the ability of states to protect their residents, while creating new barriers to federal action, in exchange merely for EPA review of a handful of chemicals with no guarantee of restrictions isn’t necessary compromise, it’s bowing down to the chemical industry when we need to be standing up for justice.
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Boxer Pushes for Changes to Bipartisan TSCA Bill Ahead of Expected Markup
Apr 22, 2015 | E&E News PM
By Sam Pearson
Lawmakers need to make changes to a bipartisan chemicals bill ahead of a possible Senate Environment and Public Works Committee markup that could take place as soon as next week, the panel's ranking Democrat said yesterday.
Sen. Barbara Boxer (D-Calif.), a staunch opponent of S. 697, the "Frank R. Lautenberg Chemical Safety for the 21st Century Act," said Sens. Tom Udall (D-N.M.) and David Vitter (R-La.) needed to fix the bill to overhaul the Toxic Substances Control Act of 1976 before the Environment and Public Works Committee takes further action.
Boxer said she had dispatched Sens. Cory Booker (D-N.J.), Jeff Merkley (D-Ore.) and Sheldon Whitehouse (D-R.I.) to negotiate with Udall and Vitter on the bill. Committee Republicans could bring it to a vote as soon as Tuesday, Boxer said.
"They are currently working at this time to try and fix it, but we don't have any announcement to be made on that," Boxer said. "We're very concerned, still, with the bill as it stands."
Boxer reiterated her position that the Udall-Vitter TSCA bill "is actually worse than current law."
She said the bill needed to require U.S. EPA to assess more chemicals, not override state chemicals laws, and single out asbestos and a class of chemicals known as persistent bioaccumulative toxins for expedited restrictions.
"The bottom line is, if the bill makes us worse off than current law, if the health of our children is still threatened by the thousands of chemicals that are on the market, and if the bill provides no path to banning asbestos, despite the fact that it kills 10,000 people a year, we have to roll up our sleeves and fix this bill," Boxer said.
Boxer was joined by Deirdre Imus, the wife of radio personality Don Imus who heads the Deirdre Imus Environmental Health Center at Hackensack University Medical Center in New Jersey, and representatives from the Breast Cancer Fund, Asbestos Disease Awareness Organization and Physicians for Social Responsibility.
Boxer said it was a mistake to advance the Udall-Vitter bill without addressing those concerns and blamed the chemical industry's influence for the "fast track" the bill seems to be on.
The bill "was written by the chemical companies," Boxer said.
Udall spokeswoman Jennifer Talhelm said the bill was not written by chemical companies.
Claims that the chemical industry authored the legislation or that it would prevent the regulation of asbestos or persistent bioaccumulative toxins or worsen current law are "blatantly false," Talhelm said in a statement.
"As he has been from day one, Senator Udall is actively working to expand support for the bill, including on the issues that were raised in the hearing," Talhelm said. "He believes it's crucial for lawmakers to work together to pass legislation now because New Mexico and the vast majority of states have no ability to test and protect their citizens from dangerous chemicals. Senator Udall is very pleased that bipartisan support is growing for his bill -- among progressives, moderates and conservatives -- because there is widespread agreement that we must work together to ensure our kids finally have protection from dangerous chemicals."
Udall wants EPA to use its authority to regulate asbestos, bisphenol A, styrene "and many other dangerous chemicals," Talhelm said.
The bill's supporters have argued that EPA would not be prevented from taking action against asbestos because the requirement that the agency select the "least burdensome" restriction of a chemical -- the legal standard that tripped up EPA when the 5th U.S. Circuit Court of Appeals ruled in 1991 that it had not met the threshold and thus could not ban asbestos -- would be removed under the Udall-Vitter bill.
Kristina Baum, a spokeswoman for EPW Chairman James Inhofe (R-Okla.), said the committee had not set a date for a markup of the Udall-Vitter bill, but the issue remains a top priority for the senator.
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Workers, Consumers May Face Cancer, Other Health Risks From Solvent, EPA Says
Apr 22, 2015 | BNA Daily Environment Report
By Pat Rizzuto
Workers and consumers exposed to 1,4-dioxane (CAS No. 123-91-1), an industrial and a commercial solvent, face an increased risk of cancer and liver, kidney and other health problems, the Environmental Protection Agency found in an initial assessment released April 21.
The EPA will refine its analysis and then decide whether to proceed with a full risk assessment, the agency told Bloomberg BNA by e-mail.
The initial assessment, which describes the issues the agency will explore before it decides whether to conduct a full risk assessment, soon will be published in the Federal Register for a 60-day public comment period, the agency said.
The EPA's Office of Pollution Prevention and Toxics is evaluating 1,4-dioxane as one of more than 80 “work plan” chemicals, meaning the chemical is in commerce and toxicity data, widespread exposures or other available information prompted the agency to select it for risk assessment.
The 1,4-dioxane initial analysis marks the first time the agency has released a problem formulation and initial assessment for a work plan chemical prior to possibly launching a risk assessment.
Additional information about the solvent soon will be posted in a docket the agency has set up for 1,4-dioxane.
Solvent's Uses
As an industrial solvent, 1,4-dioxane is used for purposes including as an inert ingredient in pesticides and fumigants, a chemical used to make other chemicals, a polymerization catalyst, a wetting and dispersing agent and a degreasing agent, the EPA said.
1,4-Dioxane may be used in commercial and consumer products such as lacquers, varnishes, paint strippers, dyes, greases, cleaners and detergents, adhesives, cosmetics and deodorants, although the extent of its use in consumer products is unclear, the EPA said.
1,4-Dioxane also is an unintentional impurity in industrial and household detergents and antifreeze along with products, such as cosmetics, over which the Food and Drug Administration has jurisdiction, the EPA said.
Manufacturers, Processors, Worker Exposures
BASF is among the EU and U.S. manufacturers and importers of 1,4-dioxane. The company's most recent U.S. production volume was confidential to protect proprietary information. In 2005, the previous year for which chemical manufacturers had to report production information to the EPA, 1,4-dioxane was manufactured in the range of 1 million to 10 million pounds, the EPA's analysis.
According to public information, there is one U.S. facility where 1,4-dioxane is manufactured and between 25 and 99 sites where it is processed, the EPA said.
Between 2001 and 2003, a chemical manufacturer collected exposure data from workers who may have been exposed to 1,4-dioxane as a byproduct of manufacturing at facilities in Cincinnati, Ohio; Columbus, Ohio; Witchita, Kans., and elsewhere, the EPA said.
All of the 21 samples taken were below analytical detection limits, which ranged from 0.044 to 0.9 part per million (ppm) (0.16 to 3.24 milligrams per cubic meter (mg/m3), the agency said. The data, however, are too limited to use as illustrative of potential worker exposures that may occur throughout the U.S., the EPA said.
1,4-Dioxane is registered in the European Union for production and importation above 100 metric tons (220,462 pounds) annually by BASF SE, Merck KGaA and the consulting firm Sustainability Support Services (Europe) AB.
Regulations, Recommendations
Occupational limits or recommendations for 1,4-dioxane vary.
The Occupational Safety and Health Administration set a Permissible Exposure Limit (PEL) of 100 ppm, or 360 mg/m3, for an eight-hour time-weighted average.
The National Institute of Occupational Safety and Health recommended exposure limit is 1 ppm (3.6 mg/m3) as a 30-minute ceiling.
The American Conference of Government Industrial Hygienists has recommended a Threshold Limit Value of 20 ppm (72 mg/m3).
EPA's Office of Air and Radiation regulates 1,4-dioxane as a Hazardous Air Pollutant.
EPA's Office of Solid Waste and Emergency Response has found 1,4-dioxane in groundwater and soil at 32 Superfund sites.
Classification as Carcinogen
The U.S. Department of Health and Human Services has classified 1,4-dioxane as reasonably anticipated to be a human carcinogen.
The EPA has characterized 1,4-dioxane as likely to be carcinogenic to humans.
Short-term exposures raise health concerns other than cancer, such as eye and throat irritation, the EPA said.
Chronic exposure may result in dermatitis, liver and kidney damage, eczema and other skin problems, the agency said.
Based on an initial assessment of information including risk assessments in Canada and Europe and a toxicological profile for 1,4-dioxane, which the Agency for Toxic Substances and Disease Registry published in 2012, the EPA's initial assessment ruled out three concerns and described two potential concerns it will further explore to determine whether a full risk assessment is warranted.
First, the EPA will further assess potential risks to workers exposed during product formulation and use as a cleaning agent.
Second, the EPA will further evaluate potential risks to workers and consumers exposed during their use of products that contain 1,4-dioxane as a contaminant, such as paints, varnishes, adhesives, cleaners, and detergents.
Concerns the EPA Will Not Explore Further
The EPA will not further examine the risks 1,4-dioxane could pose to the general population through inhaled air emissions, because exposure is estimated to be low.
The agency also will not explore people's exposure through drinking water, because 1,4-dioxane is being monitored as an unregulated contaminant. The agency's Office of Water will decide whether or not drinking water regulations are warranted.
Finally, the EPA will not further analyze environmental risks of 1,4-dioxane, because it is expected to present few risks to aquatic organisms, the agency said.
Asked about next steps, the EPA told Bloomberg BNA: “If problem formulation and initial assessment indicates risks are not likely or that data are insufficient to conduct a risk assessment, the agency may conclude its work on the chemical and post the analysis performed to make such a conclusion.
“If problem formulation and initial assessment indicates the need to conduct a risk assessment, and there are enough data to do so, EPA will initiate a risk assessment which is the process to estimate the nature and probability of adverse health and environmental effects in humans and ecological receptors from chemical contaminants and other stressors that may be present in the environment.”
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EPA Takes Early Step on Suspected Carcinogen in Some Laundry Detergents
Apr 21, 2015 | E&E News PM
By Sam Pearson
U.S. EPA finished the first step this week toward completing a risk assessment of a solvent that has been on the radar of health officials for decades and that was reduced in some laundry detergents in response to public pressure.
The initial review, called a Work Plan Chemical Problem Formulation and Initial Assessment, is EPA's attempt to identify the scope of exposure to 1,4-Dioxane prior to completing additional work.
The agency determined that its assessment will focus on risks to workers in areas where 1,4-Dioxane is used to make other chemicals and as a cleaning agent. It also will examine potential risks to workers and consumers who may be exposed to 1,4-Dioxane in products such as paints, varnishes, adhesives, cleaners and detergents.
Procter & Gamble Co. agreed to reduce levels of 1,4-Dioxane in its detergents in 2013 after being sued by As You Sow, a California-based advocacy group. The group alleged that Procter & Gamble had violated California law by not including a warning label on its detergents that they contained chemicals known to the state to cause cancer or reproductive harm (Greenwire, Feb. 1, 2013).
According to EPA data filed in 2012, the most recent year available, BASF Corp. was the primary manufacturer of 1,4-Dioxane in the United States. The company reported manufacturing the chemical at a Zachary, La., facility, but did not specify the quantity of 1,4-Dioxane produced because it listed the information as confidential business information.
EPA determined that there is little risk to the public from air emissions, and the agency is monitoring areas where the chemical has been found in drinking water. In addition, EPA scientists do not think the chemical's properties are likely to be harmful in soil or to aquatic organisms. As a result, the agency's future risk assessment will not focus on these areas, EPA said.
EPA did not previously prepare problem formulation documents prior to beginning a risk assessment, but the agency said it is doing so from now on.
The National Toxicology Program has classified 1,4-Dioxane as "reasonably anticipated to be a human carcinogen" since 1981.
In 2013, EPA named the chemical to its list of work plan chemicals, which are targeted for risk assessment under the Toxic Substances Control Act of 1976.
The work plan chemicals program is the agency's attempt to make the most of its existing legal authorities to address existing chemicals that may cause health problems, even as it presses for Congress to strengthen federal law.
EPA's existing process to evaluate chemicals is lengthy, and the agency has not started work on most of the 90 chemicals on its work plan list.
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Industry-Supported, Bipartisan Bill Boosts FDA Oversight of Personal Care Products
Apr 22, 2015 | E&E Daily News
By Sam Pearson
A bill introduced by a top Democrat and a key moderate Republican would grant the Food and Drug Administration new tools to review the safety of personal care products, a persistent concern of chemical advocacy groups.
S. 1014, the "Personal Care Products Safety Act," by Sens. Dianne Feinstein (D-Calif.) and Susan Collins (R-Maine) would be the first update to federal safety regulations of personal care products in 75 years.
"From shampoo to lotion, the use of personal care products is widespread, however, there are very few protections in place to ensure their safety," Feinstein said in a statement.
The bill would require FDA to conduct safety evaluations of at least five chemicals used in personal care products per year. In addition, it would grant the agency the ability to order recalls of personal care products found to pose safety threats and order labeling on products if they should not be used by children or should only be administered by professionals.
The products would be subject to a safety standard of reasonable certainty of no harm, which is the standard U.S. EPA applies to pesticide reviews.
The bill would also require that companies post full lists of ingredients and product warnings on the Internet, and manufacturers of personal care products would be required to register annually with FDA and submit product information to the agency. The new regulations would be funded by user fees collected from the companies.
The legislation specifies that FDA assess five chemicals first -- diazolidinyl urea, a preservative used in deodorants, shampoos and other products; lead acetate, a color additive in hair dyes; methylene glycol, a form of formaldehyde in hair treatments; and the preservatives propyl paraben and quaternium-15.
The lawmakers said the bill was a product of extensive discussions with stakeholders, including industry and the environmental health community.
As a result, the bill has the support of a wide range of organizations. Supporters include the Personal Care Products Council, which represents companies that manufacture products that would be subject to new FDA regulations, including Johnson & Johnson, Procter & Gamble, Revlon, Estée Lauder, Unilever and L'Oreal.
Collins said in a statement that industry groups support the bill because it "aims to protect consumers while also providing regulatory certainty for manufacturers, enabling them to plan for the future."
"While we believe our products are the safest category that FDA regulates, we also believe well-crafted, science-based reforms will enhance industry's ability to innovate and further strengthen consumer confidence in the products they trust and use every day," said Lezlee Westine, president and CEO of the Personal Care Products Council, in a statement.
The bill also has the endorsement of the Environmental Working Group, the Society for Women's Health Research, HealthyWomen and the National Alliance for Hispanic Health, among others.
The bill "would pave the way for assessing many of the riskiest cosmetics ingredients within a decade," EWG said in a blog post.
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Behind the Label: the Blueprint for Safer Chemicals in the Marketplace
Apr 21, 2015 | Environmental Defense Fund
By JPratt
Boma Brown-West is a manager on EDF’s Supply Chain Team within the Corporate Partnerships Program.
If you’re in the business of using chemicals to make consumer products – things like shampoo or baby lotions, spray cleaners or laundry soap – the last few years have likely been anything but dull. State legislatures have been passing laws restricting certain chemicals from products; consumers are demanding more transparency about product ingredients; and some of the nation’s biggest retailers, including Walmart and Target, have issued chemical policies of their own.
Having worked for years to reduce the public’s exposures to hazardous chemicals and drive incentives for safer innovations in chemistry, Environmental Defense Fund is encouraged to see the growing demand for ingredient transparency and chemical safety. But for companies impacted by these new policies, adjusting to new demands may be challenging. As a business strategy, waiting to respond to the next chemical of concern or the next regulatory action, as opposed to taking proactive steps to improve transparency and chemical safety, is an unsustainable means for addressing risk.
What if your company didn’t have to worry about the next retailer’s list of priority chemicals, the next set of state or federal policy changes or regulations, or the next chemical of concern du jour to light up social media outlets?
What if your corporate policies and processes had you ready for pretty much anything?
And what if changing business as usual to improve how your company makes decisions about chemicals could put you in a leadership position, help find new markets, and even save money in the long term?
EDF knows that there is a better way to address the safety of the chemicals in your products. For 25 years, we’ve been working with corporate partners from McDonalds and Fed Ex to AT&T and others to advance beneficial business practices that also support a healthier world. Our planet faces serious challenges, and we know business can and must be part of the solution to protecting human and ecosystem health and turning the corner on climate change.
We believe that 2015 is the year that companies across the supply chain will make truly safer chemical practices an integral part of daily commerce. To support this effort, as part of EDF’s Behind the Label initiative, we will share the learnings we have gathered in working on sustainable chemistry with a multitude of businesses involved in the consumer goods supply chain, including our work with Walmart. We’ll provide a framework for business leadership in the consumer chemicals space and guidance on strategies, tools, employee engagement and other approaches that can help every company adopt best in class safer chemical practices, policies and procedures.
In the first installment of Behind the Label, we’ll preview the basic blueprint for safer chemicals in the marketplace, beginning with what EDF has found to be major pillars of leadership, including transparency, institutional commitment, change for the better, and more. We will discuss what you need to know and where to take the next critical steps toward safer chemicals.
Over the years, a lot has been written on how to make consumer products better and safer. While we’ve seen some improvement, problematic ingredients remain systemic, even as robust new science increasingly indicates old approaches to risk management are inadequate. Through Behind the Label, EDF strives to make safer chemicals actionable, by showing what’s already working for companies like yours, showcasing available tools, explaining the proven business strategies for successful implementation, and flagging what’s ahead, so you can be ready.
We look forward to the conversation.
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Journal Publishes Papers on Certified Reference Materials
Apr 21, 2015 | Chemical Watch
The journal Analytical and Bioanalytical Chemistry has published a collection of papers on a number of the current challenges concerning reference materials for chemical analysis.
The collection consists of 31 manuscripts dealing with a range of certified reference materials (CRMs) topics, from their development and production, to advances in material characterisation and application
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(ACC Mentioned) Court Says Plaintiffs Need Not Prove Drilling Injury Prior to Discovery Phase
Apr 22, 2015 | BNA Daily Environment Report
By Tripp Baltz
The Colorado Supreme Court has ruled that state trial courts may not force plaintiffs alleging natural gas injuries to present initial evidence prior to the discovery phase of a case against the drilling operator (Antero Res. v. Strudley, 2015 BL 111122, Colo., No. 13SC576, 4/20/15).
The state's high court issued a ruling April 20 saying Colorado's Rules of Civil Procedure do not allow a trial court to issue a modified case management order, such as a Lone Pine order, requiring the plaintiff to present prima facie evidence in support of a claim before the plaintiff can exercise its full rights of discovery (see related BNA Insights).
A Lone Pine order is a pre-discovery tool requiring plaintiffs to substantiate their injuries and their scientific connection to hydraulic fracturing operations, emissions or contamination (Lore v. Lone Pine Corp., 1987 BL 20, N.J. Super. Ct., No. L-33606-85, 11/18/86).
Overturns Trial Court
The 24-page decision came in the review of a lower court ruling on a motion by Antero Resources Corp. and three other defendant companies to enter a modified case management order requiring the plaintiffs, William G. and Beth E. Strudley and their two children, to prove they suffered injuries from nearby natural gas operations before full discovery could take place.
The trial court granted the motion and issued a Lone Pine order directing the Strudleys to support their allegations of exposure, injury and causation up front. The trial court dismissed the case after determining the Strudleys failed to present that evidence sufficiently.
The Colorado Court of Appeals then reversed, concluding that, as a matter of first impression, Lone Pine orders are “not permitted as a matter of Colorado law.”
The state supreme court ruling affirmed the appellate court decision. Colorado rules of civil procedure do “not provide a trial court with authority to fashion its own summary judgment-like filter and dismiss claims during the early stages of litigation,” the court said.
‘Judicial Authority Limited.’
The state's rules of civil procedure grant courts “flexibility and discretion to address discovery disputes as they arise,” it said. “But this judicial authority is limited; it does not allow a court to require a plaintiff to establish a prima facie case in the early stages of litigation while simultaneously barring discovery that might expose the very support sought to prove a claim.”
Daniel J. Dunn of Hogan Lovells US LLP in Denver, lead attorney for Antero Resources Corp. and Antero Resources Piceance Corp., named in the appeal petition to the Colorado Supreme Court, told Bloomberg BNA April 21 he would not comment on the ruling.
Also petitioning in the case were Calfrac Well Services Corp., represented by Burns, Figa & Will in Denver; and Frontier Drilling LLC, represented by Davis, Graham & Stubbs in Denver. Attorneys for both firms did not return Bloomberg BNA's requests for comment.
Stan Dempsey, president of the Colorado Petroleum Association, one of several amici curiae in the case, told Bloomberg BNA April 21 industry is “disappointed with the ruling.”
Potentially Removes Tool
“This was a big case,” he said. The ruling could eliminate the benefits of a case management tool for any litigants involved in toxic tort cases in Colorado, he said. “It's going to lead to more litigation costs.”
Requiring claimants to produce prima facie evidence “is a part of the process so parties can have an opportunity to devise a strategy,” he said. “It's important to understand what the other side is saying.”
The ruling could indeed have a broad impact in that it provides “some tighter definition to the discretion that a trial court can exercise in managing the scope of allowable discovery in a case,” Peter W. Thomas of Praxidice in Aspen, attorney for the Strudley family, told Bloomberg BNA April 21.
In doing so, the ruling “stands to provide other parties who have sustained injuries from fracking operations with renewed access to our courts,” he said. The family will now be able to “finally pursue the damages they sustained from the drilling operations next to their house.”
Physical Injuries, Property Damage
In their original complaint, the Strudleys claimed they suffered physical injuries and property damage due to the natural gas drilling operations near their home. They alleged pollutants from the drilling site contaminated the air, water, and ground near their home, causing them to suffer burning eyes and throats, rashes, headaches, nausea, coughing, and bloody noses.
Initial construction of the drilling operations began in August 2010, and the Strudleys assert pollution forced them to move shortly thereafter, the ruling said. While the complaint identified several chemicals that allegedly polluted the property, it did not causally connect specific chemicals to actual injuries, the ruling said.
The companies submitted to the court a report by the Colorado Oil and Gas Conservation Commission, the agency that oversees drilling in the state, finding no “oil & gas related impacts to [the Strudleys’] well,” the ruling said.
Discovery Costly
In its motion, Antero Resources expressed concern discovery would be costly and burdensome for the defendant companies, the court said. The Strudleys objected, arguing they had a right to engage in discovery central to their claims before the court could test the merits of their case.
Thomas said claimants frequently face challenges in establishing proximate cause before “the driller has revealed its secret recipe of the toxic stew they are pumping into the ground.”
Companies still have “all the standard procedural safeguards for obtaining the dismissal of frivolous lawsuits,” he said. “But this opinion makes clear that our courts cannot deprive a claimant in an otherwise meritorious case from obtaining the evidence the claimant is entitled to discover to prove up the claims.”
Had the court ruled otherwise, the effect would have been to force plaintiffs to “come forward with their own evidence of injury” even though companies have nearly all the information, Kevin Lynch, assistant professor of law in the Environmental Law Clinic at the University of Denver Sturm College of Law, told Bloomberg BNA April 21.
“This helps level the playing field,” he said.
Dissent: Rules Encourage Management
In a seven-page dissent, Justice Brian Boatright said active case management by the judge is essential to running an efficient docket and administering justice.
“The rules encourage it, and case law, at times, demands it,” he said. “Yet, today the majority taps the brakes on active case management and sends the message that unless the rules specifically authorize a docket management technique, judges lack the authority to use it in handling their cases.”
Joining the Colorado Petroleum Association as amicus parties were the Independent Petroleum Association of America and the American Petroleum Institute.
Other amicus parties to the case include the National Association of Manufacturers, the American Fuel and Petrochemical Manufacturers, the American Chemistry Council, the American Coatings Association, and the Metals Service Center Institute.
Also filing amicus briefs were the Colorado Trial Lawyers Association, the Colorado Defense Lawyers Association, the Colorado Civil Justice League, the Denver Metro Chamber of Commerce, the Chamber of Commerce of the United States of America, the Coalition for Litigation Justice, Inc., and the American Tort Reform Association.
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Fracking: Good Science Vs. Science Fiction | Commentary
Apr 21, 2015 | Roll Call
By Rep. Lamar Smith
The United States is now the world’s largest oil and natural gas producer, having recently overtaken both Saudi Arabia and Russia. Two decades ago, no one would have believed it. The practice of hydraulic fracturing, or fracking, has fueled this energy boom. Fracking has unlocked vast amounts of what used to be considered economically inaccessible oil and gas. Increased domestic energy production has benefited the environment, the economy and hardworking families who now enjoy reduced energy prices.
Natural gas provides affordable, clean and abundant energy that heats our homes and cooks our food. U.S. carbon-dioxide emissions have also fallen dramatically in recent years, in large part because of the use of natural gas in generating electricity.
But on Earth Day, we’re likely to hear from the vocal minority who refuse to acknowledge this great success story. Some activists would rather halt our energy revolution in its tracks. Unfounded attacks, misinformation and biased media coverage have spread false and misleading information about hydraulic fracturing.
The Environmental Protection Agency is at the forefront of this hypocritical smear campaign. On the one hand, EPA Administrator Gina McCarthy claims “there’s nothing inherently dangerous in fracking that sound engineering practices can’t accomplish.” On the other hand, the EPA is doing everything it can to find reasons to justify new federal regulations.
The EPA has investigated baseless allegations of water contamination in Pavillion, Wyo.; Parker County, Texas; and Dimock, Pa. But in each case, the agency either jumped to conclusions or ceded to political pressure, blaming natural-gas production even before full scientific assessments were completed. The allegations made headlines; the retractions were footnotes.
At the same time, Americans are regularly subjected to stunts performed by activist documentary filmmakers who pose as serious journalists. Although thoroughly discredited, the images of igniting tap water have had a negative impact on public perception of hydraulic fracturing. Scare tactics are used to distort what should be a factual discussion about the environmental safety and benefits of this practice.
Hydraulic fracturing is already effectively regulated at both the state and federal levels. As with any industrial process, technologies continue to improve and industry standards and regulations evolve accordingly. Safeguards are regularly reviewed under the watchful eye of the scientific experts who best understand the local geology.
Hydraulic fracturing has revitalized America’s domestic energy industry and will strengthen our economy for decades to come. It has contributed to a 47 percent drop in the price of natural gas since 2013, benefitting consumers an average of $200 per household each year. Additionally, the economy has seen increased gains of $74 billion per year as a result of fracking.
Accusations of environmental damage are often based on fringe environmental politics instead of fact-based evidence. Scientific experts and top Obama administration officials have testified before the House Science Committee that hydraulic fracturing has never contaminated groundwater. And Department of Interior Secretary Sally Jewell agreed, saying “fracking has been done safely for many, many years.” Jewell also said fracking bans are the “wrong way to go.”
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Obama Proposes $3.5 Billion Gas Pipeline Overhaul
Apr 21, 2015 | PoliticoPro
By Andrew Restuccia & Elana Schor
The Obama administration on Tuesday proposed spending as much as $3.5 billion to replace aging natural gas pipelines nationwide — a move that comes just as POLITICO published a lengthy investigation of the public safety threat posed by pipelines and the numerous problems plaguing the federal agency that regulates them.
The announcement, included in a 348-page government report examining how to upgrade a vast array of the country’s energy infrastructure, is aimed at addressing the dangers to both public safety and the climate from pipelines that leak or rupture.
But the amount of money the administration is proposing is just a fraction of what it would take to replace the hundreds of thousands of miles of decades-old cast-iron and bare-steel natural gas distribution pipes — the lines that are considered most vulnerable to ruptures. A full replacement would cost $270 billion, the report says. And the whole proposal immediately ran into GOP skepticism.
The report, from a sprawling Energy Department study called the Quadrennial Energy Review, calls for creating a DOE program to offer states financial incentives to replace and repair their aging infrastructure, while cutting greenhouse gas emissions from distribution lines that carry natural gas to homes and businesses. The price tag would be $2.5 billion to $3.5 billion over 10 years.
POLITICO’s analysis of federal pipeline data found that the older lines are a major part of the problem. Since 2002, about a quarter of all reported pipeline incidents involved failed parts that had been installed before 1970, including 91 incidents in which the parts were at least 80 years old. During the past 12 years, spills, breaks and other accidents from all gas, oil and hazardous liquids pipelines caused a total of more than $5.5 billion in damage.
While the Energy Department has the authority to create the program, it would rely on Congress to approve the money — setting up a clash with Republicans who see little reason to flood the administration with cash to fix a problem that the industry is already touting its progress in tackling. GOP lawmakers quickly bashed the DOE report’s recommendations across the board.
A senior Republican aide, speaking on condition of anonymity, said it’s “not likely” that the administration would get Congress to sign off on its ambitious pipeline program. Within the industry, the aide said, “they don’t need grants; they need permit and [regulatory] certainty.”
Matt Sparks, a spokesman for House Majority Leader Kevin McCarthy (R-Calif.), pointed to three oil and gas infrastructure bills that the chamber has already passed with Democratic support this year, including a measure that President Barack Obama vetoed that would have approved construction of the Keystone XL oil pipeline. “If the administration is serious about securing our energy future, a good start might be” by working with Republicans on those bills, he said by email.
Still, the administration remains hopeful that it can find a compromise with Congress on a pipeline replacement program that would pay job-creation as well as environmental dividends, particularly as Republicans work on broad energy legislation. “We are eager to engage with Congress and see if we can find common ground,” White House energy and climate adviser Dan Utech told reporters on a conference call earlier Tuesday. “We think this is a really important area for working together.”
Former National Security Council energy adviser Jason Bordoff, a founding director of Columbia University’s Center on Global Energy Policy, said both parties should be able to agree on the administration’s call for addressing “crumbling gas pipelines” and the report’s other recommendations.
“These aren’t things that should be partisan issues,” he said. “It’s obviously hard to come up with money in today’s environment, but these are things that are necessary to do.”
An Energy Department official said DOE will not include the program in its fiscal year 2016 budget request. The department plans to work on designing the program this year and anticipates requesting funding in fiscal year 2017, the official said.
The administration’s proposal would encourage states that are replacing older pipelines to focus their spending on averting electricity rate increases, and lower-income ratepayers would get up to four years of aid to deal with potential price hikes stemming from the replacement program.
That emphasis on lower-income Americans left some in the industry wondering why DOE hopes to create a new way to give electricity rate relief that the government already provides through HHS.
“More than anything, we’re puzzled by this request, because it’s such a convoluted approach when there’s such an obvious solution — funding the documented need in” the HHS Low Income Home Energy Assistance Program, said an industry source tracking the proposal who addressed it on condition of anonymity.
The Energy Department would set guidelines to evaluate the applications based on their expected benefits to public safety, cost effectiveness and the degree to which the proposal will cut emissions of methane — a greenhouse gas that’s shorter-lived than carbon dioxide but over 20 times more potent.
“While I am pleased to see the continued Administration support for natural gas in our clean energy future, it is critical to recognize the significant work already underway, and the contributions current industry efforts are making,” American Gas Association President Dave McCurdy said in a statement on the DOE report.
Green groups that have long pushed for greater government and industry investment in upgrading natural gas pipelines cheered DOE for highlighting the issue. Natural Resources Defense Council senior policy analyst Carl Zichella pointed in an interview to the “huge public safety implication” of a multibillion-dollar program to tackle “aging infrastructure that’s becoming increasingly dangerous.”
Indeed, the DOE report says most natural gas pipeline accidents occur on distribution lines located near dense population centers. Cast-iron and bare-steel pipelines account for 9 percent of the country’s distribution pipelines even while they result in 30 percent of methane emissions from gas distribution systems, the report said.
DOE projects that investments in interstate natural gas pipelines will range between $2.6 billion and $3.5 billion annually over the next 15 years.
Modernizing pipelines also would pay dividends for Obama’s climate agenda, given the propensity for older infrastructure to leak methane. Environmentalists note that one-third of the leaks that persist come from older lines that are prevalent in the northeast, where Massachusetts Democratic Sen. Ed Markey hailed the DOE report on Tuesday and vowed to reintroduce legislation that would speed up replacement of aging pipes.
N. Jonathan Peress of the Environmental Defense Fund noted in March that although the industry has upgraded almost 40 percent of the most out-of-date pipelines as of 1990, the majority of them are still in operation “and still leaking.”
Rob Jackson, a professor of environmental sciences at Stanford who has studied pipeline infrastructure, called the QER recommendation a “great first step.”
“There are many reasons to repair and replace these old pipelines and climate change, methane emissions, that’s only one reason,” he said in an interview. “Pipeline replacement programs will improve consumer safety, improve air quality and create jobs as well.”
He estimated that a major campaign to replace the country’s aging pipeline infrastructure would take at least 10 to 20 years.
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Senate Bill Would Allow Federal Use Of Fuels Made From Coal, Oil Shale
Apr 22, 2015 | BNA Daily Environment Report
By Ari Natter
Senate legislation introduced April 21 would repeal a section of a 2007 energy law that prohibits the Defense Department and other federal agencies from buying transportation fuels produced from unconventional sources, including fuel made from coal-to-liquid processes, oil sands and oil shale, unless the contract specifies that the life-cycle greenhouse gas emissions of that fuel are no greater than the amount that would be produced from conventional petroleum.
Specifically, the bill (S. 1026) introduced by Sen. John Barrasso (R-Wyo.) would repeal Section 526 of the Energy Independence and Security Act of 2007, a frequent target for elimination by Republicans.
“Instead of giving preference to oil imported from overseas, Washington should look to North American coal, oil shale and oil sands, all of which provide an affordable, abundant and alternative source of fuel,” Barrasso said in a statement. “In addition to increasing cost effectiveness options for the government, it will also increase America's energy security.”
The provision, which is opposed by groups such as the American Petroleum Institute, is intended to keep the government, the largest single fuel purchaser in the U.S., from using taxpayer dollars to buy high-carbon fuels such as Canadian tar sands, liquid coal, and oil shale, according to the Natural Resources Defense Council. “This is seen as a big line in the sand for global warming advocates,” the group said in a blog post.
Reliance on Foreign Oil
Trade groups representing Royal Dutch Shell PLC and TransCanada Corp. are in support of repealing Section 526, arguing that doing so would decrease the nation's dependence on foreign oil, among other benefits.
“It is imperative to ensure that our nation, in particular the military, is not inhibited from using fuels produced with oil from our friendly neighbor to the north, Canada, which will reduce our reliance on imports from hostile areas of the world,” the American Fuel & Petrochemical Manufacturers said in a statement.
House Republicans have passed several bills that would have repealed Section 526 in previous Congresses, but the measures have died in the Senate, which was controlled by Democrats.
The bill introduced by Barrasso is co-sponsored by Sens. Joe Manchin (D-W.Va.), Heidi Heitkamp (D-N.D.), Mike Enzi (R-Wyo.) and John Hoeven (R-N.D.)
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Oil, Gas Industry Sees Price of Federal Rules; Interior Urges Access With Safe Development
Apr 22, 2015 | BNA Daily Environment Report
By Nushin Huq
The Bureau of Land Management rulemaking that could raise royalty rates, requirements and civil penalties on oil and gas companies working on federal lands will drive more jobs off public land, an industry group official predicted.
“Despite the renaissance on state and private lands, energy production on federal lands has fallen, and yet another set of costly changes to federal rules could drive more economic development and job creation off public lands,” Erik Milito, upstream group director for the American Petroleum Institute, told Bloomberg BNA April 21.
A day earlier, Interior Secretary Sally Jewell said at the IHS Energy CERAWeek conference that the BLM's advance notice of proposed rulemaking (RIN 1004-AE41) that also could raise rental payments, minimum bid levels and bonding requirements on oil and gas companies working on federal onshore lands is really about giving the Interior Department some flexibility (75 DEN A-6, 4/20/15).
Offshore has that flexibility already, she said. The department can provide a royalty break for well sites that are pioneering plays, for example. The current rate for offshore royalties are 18.75 percent, while for onshore plays it is about 12.5 percent.
“It's not a matter of trying to push back on industry,” Jewell said. “We appreciate where oil prices are. But these haven't been looked at ever, really.”
Milito said: “Clear, consistent leasing and royalty terms are part of what makes investments possible, so preserving certainty in the process is critical for the consumers and workers that benefit from domestic production. We will review the proposal carefully, and we encourage regulators to make America's energy security a priority.”
Increase Budget for Onshore
The department's proposed budget also includes a stronger program for onshore that would charge fees for onshore permitting and inspections, as the department does for offshore, Jewell said at the energy conference. The proposed changes would align the offshore permitting and onshore permitting with the demand from industry, she said.
“We end up in a situation where we don't have a supply-demand match,” Jewell said.
Oversight is also an issue. Within 10 years, the number of wells under the department's stewardship has increase from 50,000 to 100,000—spread across millions of acres, she said.
“We've got about 150 people to do that job,” Jewell said. “We're going to ask the industry for their help, so we can help them.”
Five-Year Plan
The federal government is trying to strike a balance between access to oil and gas resources and making sure development is done safely, she said.
The department goals for the remainder of President Barack Obama's term include supporting the energy economy by providing access to areas where it makes sense to develop, Jewell said.
“Importantly, we need to also state where it doesn't so we can bring predictability to industry,” she said.
“We want to have something final by the end of 2016,” she said about the draft five-year plan for the Outer Continental Shelf (76 DEN B-1, 4/21/15).
The plan includes parts of the Gulf of Mexico as well as the Arctic.
Rulemaking Process
Referring to the rulemaking process, she said, “We still have two more rounds.”
The 14 potential lease sales to occur from 2017 to 2022 in the Interior Department's draft plan are likely to be further narrowed 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.
When asked about the fate of the plan if the next U.S. president has a different environmental agenda, Jewell said she was confident that the plan wouldn't change.
“The next administration has the right to change the plan, but it's a lengthy process,” she said.
The department is also in the process of drafting its proposed rules for venting and flaring and expects to conclude the process by midsummer, Jewell said.
Five Years After Deepwater Horizon
On the five-year anniversary of the Deepwater Horizon explosion, she said drilling has become safer than it was five years ago, but there is still a need to be vigilant (80 DEN A-11, 4/28/10).
“There were no winners,” Jewell said about the explosion. “The consequences were immediate and far reaching.”
One consequence is that people lost confidence in offshore drilling. In the five years since the spill, new measures have been put in place, and technologies have advanced.
New measures, such as the recently released well control rules, have made offshore drilling safer, Jewell said. The well-control rule is mostly for offshore wells and is based on what was learned from Deepwater Horizon, she said.
Hydraulic Fracturing Rules
During a media briefing, Jewell spoke about hydraulic fracturing regulation.
“We have 32 states where there are BLM leases for oil and gas development,” Jewell told reporters. “Of those, 16 have some form of standards for fracking. The other half have little or no standards. Many states don't know about fracking.”
Federal regulations for oil drilling are more than 30 years old, and regulation hasn't kept pace with developments in the industry, she said.
“The public is worried about fracking, and there is misinformation and generally not a lot of understanding,” Jewell said.
Having minimal standards will help make people feel safe, Jewel said. While three-fourths of oil and gas activity are on state and private land, she said she hoped that states looking to adopt regulations for fracking would look to the federal rules.
And the new rules issued by the department in March have produced a lot of reaction (55 DEN A-14, 3/23/15).
“Well, within minutes of issuing the rules, we got sued by an industry group,” Jewell said. “And we had another group issue a statement that we sold out to the industry.”
She added that the draft proposed rules produced 7 million comments, each that had to be read and addressed. The department is working hard to strike a balance between energy needs and environmental ones while trying to make rules that have enough flexibility to keep up with changing technologies, Jewell said.
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BLM Proposal on Oil, Gas Fees Out for Comment
Apr 22, 2015 | BNA Daily Environment Report
The comment period has opened on an advance notice of proposed rulemaking that raises the prospect of increases in financial requirements and civil penalties for oil and natural gas exploration and production on federal onshore lands. The notice from the Bureau of Land Management was published April 21 (80 Fed. Reg. 22,148). It is available at http://1.usa.gov/1G3DyrE. The public will have until June 5 to comment on whether and how much to raise royalty rates, minimum bids, bonding requirements and civil penalties. The proposal already has drawn some negative response as a set of changes that could discourage job creation and economic opportunities (75 DEN A-6, 4/20/15).
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Apr 21, 2015 | The Hill - Congress Blog
By Charlie Williams
America runs on energy - and compared to many other countries, we use a diverse mix. Wind, solar, nuclear and other forms of energy all help power our daily lives. No fuels play a greater role than oil and natural gas, which account for more than 60 percent of all the energy used in the U.S. today.
As with all sources of energy, ensuring that Americans have access to affordable and reliable oil and natural gas must go hand-in-hand with protecting the environment and personal safety.
Following the 2010 Deepwater Horizon incident in the Gulf of Mexico, industry and regulators have worked relentlessly to improve the safety of offshore oil and natural gas development.
This work began immediately after the accident with an exhaustive review of existing standards, practices and procedures. I was personally involved in this effort and can attest that no stone was left unturned in this mission to identify areas for improvement.
In the five years since, the industry has stepped up to address the concerns that review identified.
Preventing accidents from happening at all is job number one. With this goal in mind, more than 100 industry standards have been developed or enhanced that cover everything from blowout preventers and cement to well design and worker safety.
Significant investments have also been made in the industry’s ability to rapidly respond if something does go wrong. Advanced systems for capping wells at the ocean floor are now pre-positioned in ports on the Gulf of Mexico, ready to be deployed at a moment’s notice. In fact, companies are now required by regulation to prove one of these systems is available and accessible before any drilling can take place. The industry has also doubled its capacity for surface clean-up in the Gulf of Mexico.
One of the most important steps has been the creation of the Center for Offshore Safety. Founded in 2011, the mission of COS focuses entirely on helping the offshore oil and natural gas industry learn and improve the safety of its operations and practices.
At COS, we’ve worked collaboratively with industry to create tools to help companies develop new, or enhance existing, safety and environmental management systems. Long promoted through industry standards, these systems are now required by federal regulation. Additionally, by sharing data and lessons learned among our member companies -- and by certifying independent, third-party auditors to examine companies’ safety programs -- COS helps its members and the industry strengthen an ever-growing positive culture of safety on a daily basis.
As the head of an organization whose sole focus is continual safety improvement, I am always amazed by the small minority of voices who fail to recognize these dramatic changes to the safety and oversight of offshore energy development.
Recently, the Center for Offshore Safety did something no one in the industry had ever done before: We published indicators of safety performance, information about third-party audits of companies’ safety programs, and data about lessons that companies have learned from incidents.
By making this information available to anyone, we’re setting a baseline for future safety performance – as well as a new standard for accountability and transparency.
The good news is that the overall safety record of America’s offshore oil and natural gas industry is strong. Through more than 42 million work hours in 2013, our members did not suffer a single worker fatality or loss of well control. This is no doubt due in part to the fact that 96 percent of planned critical maintenance, inspections and testing were performed on schedule.
Our work is not finished, of course, and won’t be until there is no more room for improvement. Based on our report, today the highest priority areas for improvement are the safe use of mechanical lifting devices like cranes and hoists, risk management and maintenance, and following safe work practices.
The bar has been set for making offshore oil and natural gas development even safer, and we’ll continue working every day to raise it even higher.
At the Center for Offshore Safety, our goal will always be zero accidents and zero spills.
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New Studies Link Earthquakes With Oil, Gas Drilling
Apr 21, 2015 | The Wall Street Journal
By Miguel Bustilloand Dan Molinski
New scientific findings released Tuesday linked earthquakes to the practice of injecting wastewater from oil and gas operations deep underground, adding to a growing consensus among researchers that energy development is probably causing seismic activity in Oklahoma, Texas and other parts of the U.S.
The Oklahoma Geological Survey released a statement Tuesday saying that it now “considers it very likely” that most of the hundreds of earthquakes in the state’s center in recent years were “triggered by the injection of produced water in disposal wells.” Produced water is salty fluid that naturally flows up wells along with oil and gas.
Meanwhile in Texas, a team of college and federal researchers headed by scientists at Southern Methodist University released a new study concluding that a string of earthquakes that began in 2013 northwest of Fort Worth was also likely caused by wastewater injection.
Oklahoma Gov. Mary Fallin, a Republican, called the findings by state geologists significant and said the state was working to toughen regulations in response to an increase in quakes. “State agencies are already taking action to address this issue and protect homeowners,” she said in a statement.
Oklahoma last year experienced 585 earthquakes of 3.0 or greater magnitude—big enough to be felt indoors—according to the state, more than in the previous 30 years combined.
The energy industry has called for more research into the issue before conclusively linking wells to specific seismic events. Several industry representatives said Tuesday that the research by experts in Oklahoma and Texas constituted a step forward, but more study was needed.
Kim Hatfield, the president of Crawley Petroleum Corp. and chairman of the Oklahoma Independent Petroleum Association’s regulatory committee, noted that oil and gas companies have been injecting fluids in central Oklahoma for many years.
“It worked out smashingly right up to the point where it didn’t,” Mr. Hatfield said. “Something changed and we need to figure out why that is.”
The team behind the Texas study, which also included researchers from the U.S. Geological Survey and the University of Texas, also linked the quakes, centered on the town of Azle, Texas, to the extraction of produced water from nearby natural gas wells. It published its findings in the journal Nature Communications.
“This is new, the possible role that extraction or removal of water could play,” said Heather DeShon, an SMU seismologist.
Geologists concluded decades ago that injecting fluid into a geologic fault can lubricate slabs of rock, causing them to slip and triggering earthquakes. But concerns over man-made quakes have intensified in recent years. Every year, companies have to dispose of billions of barrels of briny, toxic water that comes out of wells along with oil and gas, as well as a smaller amount of fluid called flowback left over from hydraulic fracturing.
The practice of disposal wells isn't new, and not limited to the oil and gas industry, but has proliferated in recent years with the U.S. energy boom. That in turn has led a number of states to begin enacting tougher regulations amid a spike in seismic activity in oil- and gas-producing states.
A team of researchers led by a Cornell University professor last year tied a central Oklahoma quake swarm to nearby disposal wells. Homeowners who suffered damage and injuries following a particularly severe earthquake near Prague, Okla., in 2011 have filed lawsuits against two energy companies, raising concerns in the industry that it could be forced to pay for damages if found liable for quakes.
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State’s Hochstein: Energy Production Won’t Be Foreign Policy Lever
Apr 21, 2015 | PoliticoPro
By Darren Goode
The State Department’s top energy diplomat said Tuesday that the U.S., unlike some countries that own and operate energy companies, doesn’t use energy production as a lever for the country’s foreign policy goals.
“We don’t control our own energy production and we don’t use it as weapons or tools or leverages for pursuit of other policies,” State Department energy envoy Amos Hochstein told POLITICO at the IHS CERAWeek Conference. “It doesn’t mean that countries that used to be our suppliers now don’t look at us in a different light, that there’s not new opportunities for cooperation.”
Several companies are developing plants to export liquefied natural gas, but the conversation is still in the early stages on whether Washington should lift the 40-year-old ban on crude oil exports.
“I think the gas export debate is over,” Hochstein said. “We will be an exporter in the coming months and that will increase over time as the facilities are built. That debate is over. The United States will be a gas exporter. We will have completed the transformation from a significant importer to neutral to an exporter.”
But Hochstein urged some caution on oil exports.
“From my part, I think it’s important for us to listen and understand what it all means, what the implications may be. And to approach this cautiously,” he said.
The oil majors and independent oil producers joined with Senate Energy and Natural Resources Chairwoman Lisa Murkowski in making the oil export ban a major topic of discussion here. The Alaska Republican told the conference Monday she is planning to introduce a bill that would end the export ban, although the timing and strategy for moving it are unclear, including whether her legislation would phase out the ban or just lift it altogether.
Murkowski and oil CEOs — including Hess Corporation’s John Hess and Harold Hamm of Continental Resources — kept up the drumbeat by citing the potential lifting of sanctions against Iran’s oil exports are another reason to end the U.S. export ban.
“It’s high time that we lift the self-imposed sanctions on U.S. crude exports,” Hess said Tuesday.
But Hochstein said it is far too early to predict the effect of lifting the Iran sanctions, or whether the sanctions will even being lifted at all.
“In this conference at CERAWeek, that subject seems to come up once every 30 minutes and I tend to get a lot of questions,” Hochstein said. “And it’s hard to go to any conference on any topic, I can go to a conference on Southeast Asia energy and be asked, ‘Well, what do you think about Iranian sanctions?’”
But, he said, “We’re putting the cart before the horse. … The talks continue and there is no agreement yet.”
“So we have to wait and see kind of deal we’re able to reach, if we are able to reach one,” he added. “Take a deep breath and calm down.”
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Murkowski, EPA Spar Over New Clean Power Plan Analysis
Apr 21, 2015 | E&E News PM
By Hannah Northey
The Republican chairwoman of the Senate Energy and Natural Resources Committee today criticized U.S. EPA for calling a high-profile reliability review of the agency's Clean Power Plan "premature."
A spokesman for Sen. Lisa Murkowski of Alaska noted that the North American Electric Reliability Corp. is required by Congress to ensure the reliability of the bulk power system and was designated as the country's electric reliability organization. NERC is also nonpartisan and independent, and EPA should welcome the review, Robert Dillon said.
"And while the EPA is attempting to become the nation's energy planner, that is not that agency's mission," Dillon said. "It is not the expert on grid reliability. If it were, EPA would not be dismissive of an analysis as 'premature.'"
NERC earlier today released an assessment of EPA's landmark proposal to reduce greenhouse gas emissions from power plants and called for a delay to provide utilities and states with breathing room to coordinate and adjust to an accelerated shift to natural gas and renewables and account for long lead times needed to build new generation, pipes and wires (Greenwire, April 21).
John Moura, NERC's director of reliability assessments, told reporters that NERC did not find that the Clean Power Plan would trigger blackouts but noted the report reflects a growing need for new infrastructure, given a raft of expected plant retirements. He said he's hopeful EPA will include state relief or extensions for those regions facing tight construction and permitting timelines.
EPA spokeswoman Liz Purchia later defended the rule and called NERC's analysis premature given that the final rule will not be issued until this summer and that states are still in the early stages of planning for and developing implementation plans. "The Clean Power Plan has benefited from several years of extensive outreach and engagement with the public, industry, environmental groups, other federal agencies, and state and regional energy reliability officials," she said.
Other groups took issue with NERC's assumptions.
The Natural Resources Defense Council criticized NERC for not putting more focus on energy efficiency and the building momentum for wind and solar. John Moore, a senior attorney for the Natural Resources Defense Council's Sustainable FERC Project, said that NRDC has confidence the final rule will not weaken reliability despite NERC's analysis.
"This is not the first time that some utilities and grid operators have cried wolf," Moore said in a statement. "Their warning is as misplaced as it premature because EPA hasn't yet issued its final rule."
But Moura said NERC felt it had an obligation to do the review early to inform policymakers, adding that there will be additional chances in the future to reassess reliability of the bulk power system once states formalize and submit their plans.
NERC's review, he said, was a "snapshot" of what the system looks like today and what it can handle, and that there are physical limitations built into the existing energy system, mainly with baseload power plants. NERC only considered compliance options that are technical achievable today, and those don't currently include things like storage and microgrids, Moura said.
"Those aren't going to make a dent in energy and capacity as we see it," he said, adding that NERC is mainly concerned about EPA's 2020 interim timeline.
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Why States Should Boycott the Federal Clean Power Plan
Apr 21, 2015 | The Wall Street Journal
By Kenneth C. Hill
Senate Majority Leader Mitch McConnell (R., Ky.) set off a firestorm recently when he advised states not to comply with the Environmental Protection Agency’s Clean Power Plan. Yet that advice isn’t as radical as his detractors make it sound. As a state public utilities commissioner who deals with the effects of federal regulations on a regular basis, I also recommend that states not comply.
Proposed last summer and with a final rule due in June, the Clean Power Plan aims to reduce overall U.S. carbon-dioxide emissions by 30% from 2005 levels by 2030. Each state must cut its emissions by a different amount, ranging from an 11% reduction in North Dakota to 72% in Washington, using a baseline established by the EPA.
From the EPA’s perspective, states have two options for achieving these reductions. The agency’s preferred option is for states to comply and create their own State Implementation Plans, or SIPs, which would allow the feds to share the blame for the ensuing electricity-rate increases and destabilized energy grid.
The other option, which Sen. McConnell and I support, is refusal to comply, at which point the EPA would impose a Federal Implementation Plan that risks even greater harm. The EPA designed this threat to force state lawmakers into compliance. But while letting the feds call the shots may seem risky, it will force them to own the individual implementation plans and the overall regulation. This also places the feds in a legally tenuous position that is fraught with political repercussions.
States choosing to comply with the regulation have until next summer to submit their SIPs. They can achieve emissions reductions through four “building blocks”—reducing coal use, increasing natural-gas use, using more renewable and nuclear energy, and enhancing energy-efficiency standards.
No matter which building blocks the states use, electricity rates are expected to soar. According to a recent study by NERA Economic Consulting, electricity costs will increase by as much as $366 billion between 2017 and 2031, with 43 states seeing double-digit rate increases each year. Coal-dependent states like Utah, Wyoming and Montana will see their rates increase the most—an estimated 20%, 18% and 16%, respectively, each year. Less coal-dependent states will likely see their rates increase by around 10%.
Moreover, in a 2014 report the North American Electric Reliability Corp. warned of threats to the stability of the U.S. energy grid as the regulation moves toward full implementation in 2030. “Constructing the resource additions, as well as the expected transmission enhancements,” NERC said, “may represent a significant reliability challenge given the constrained time period for implementation.”
Any state that doesn’t comply will be assigned a federal plan. But the problem for the EPA is that the federal government lacks the legal authority under either the Constitution or the Clean Air Act to enforce most of the regulation’s “building blocks” without states’ acquiescence. This severely limits the EPA’s ability to tailor a federal plan to a state’s unique needs.
Any federal plan will likely rely heavily on building block No. 1—reducing coal usage—which will require draconian cuts to the number of coal-reliant power plants in noncompliant states. The likely result will be even greater electricity-rate increases than if states were to draft their own plans.
Proponents of the Clean Power Plan therefore argue that any state lawmakers who oppose the regulation—not the EPA that created it—will be responsible for higher energy costs. As such, they argue, states opposed to the EPA’s demands should comply with the regulation to prevent even greater harm.
This argument should be dismissed out of hand. While the short-term effects may be painful, the long-term consequences of submitting to this federal power grab are far worse.
For one, compliant states will enter into a “Mother may I?” relationship with the federal government. Not only will the initial SIP require the EPA’s blessing, so will any future modifications. This gives the EPA de facto veto power over any proposed state energy regulations, thus centralizing all energy decisions in Washington.
Compliance also would absolve the federal government of accountability once the disasters of this regulation begin to unfold. The regulation is designed so states will share blame with the EPA when electricity rates skyrocket. If federal regulators want to raise Americans’ electricity bills by thousands of dollars each year, they can do that. State lawmakers would be wise to let them walk that road alone.
The more states that refuse to give in to the EPA’s demands, the more likely it is that the agency will be forced to hold back the most burdensome elements of its Clean Power Plan. This could mean anything from nonenforcement to amending provisions of the regulation to mitigate their impact.
All of this assumes the regulation will ultimately go into effect, which is far from certain. Thirteen states are challenging the plan in federal court as unconstitutional and in violation of the Clean Air Act. Such liberal legal scholars as Harvard Law School’s Laurence Tribe have supported this position.
With the first SIPs not due until June 2016, state lawmakers still have plenty of time to weigh their options. As they do, they should understand the long-term implications of their final decision. Giving in to Washington’s demands might seem like the easy option now, but it will ultimately do far more harm in the long run.
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Electric Reliability and the Clean Power Plan: Perspectives of a Former Regulator
Apr 21, 2015 | Environmental Defense Fund
By Cheryl Roberto
There is no great disagreement that the U.S. energy system is transforming. With or without additional environmental regulations, like the U.S. Environmental Protection Agency’s (EPA) proposed Clean Power Plan, this transition is occurring. Our history and experience have demonstrated that we can weather it without threatening our uniform and non-negotiable commitment to reliability.
But to do that, we need to tap all of the tools at our disposal to ensure a robust, reliable, and integrated energy system that is no longer dependent exclusively upon centralized, fossil fuel generation. Done right, the resulting change can deliver benefits to customers, the economy, the environment, electric companies, innovators, and workers alike.
EPA’s proposed Clean Power Plan would place national limits on carbon pollution from existing fossil fuel power plants for the first time ever. In doing so, it would create long-term market signals that will help drive investments in energy efficiency, demand response, and renewable energy for years to come – not only reducing carbon pollution from the power sector to 30 percent below 2005 levels by 2030, but also by putting us on a path to a more reliable and resilient energy system.
As a former Commissioner of the Ohio Public Utilities Commission and electric system operator, I understand preserving the reliability of electric service is a paramount public responsibility for energy and environmental regulators, and for the power companies they oversee. As a Commissioner, I served as vice chair of the Critical Infrastructure Committee, a member of the Electricity Committee, and on the Task Force for Environmental Regulation and Generation within the National Association of Regulatory Utility Commissioners (NARUC). I co-chaired the National Electricity Forum 2012 to modernize the nation’s electricity infrastructure. At the request of the Federal Energy Regulatory Commission (FERC) and the U.S. Senate Committee on Energy and Natural Resources, I have provided testimony on reliability of the bulk power system before both of those bodies.
Prior to my appointment to the Commission, I served for six years as the Deputy Director and then Director of the City of Columbus, Ohio Department of Public Utilities. My duties there included running the City’s electric distribution utility. This hands-on experience meeting the daily needs of electricity customers as both a regulator and a system operator – while protecting the financial integrity of the system – gives me a keen appreciation for the real-world demands and importance of system reliability.
From that perspective, perhaps the most critical feature of the proposed Clean Power Plan is the flexibility it provides to states and power companies to craft individualized compliance plans that reduce pollution while preserving and strengthening electric reliability. EPA’s approach gives clear guidance on what limits and metrics must be met, but leaves states the flexibility to design solutions that will boost the economy and meet those requirements as they see fit.
That flexibility acts as a built-in “safety valve,” affording each state multiple pathways for compliance and providing leeway for states to make plans that are appropriate to their unique circumstances. Moreover, this flexibility complements the robust framework of operating practices, market instruments, and planning processes that already exist to address short-term and long-term reliability issues.
Leading experts on energy policy and electric reliability have recently weighed in to confirm reducing carbon pollution goes hand in hand with electric reliability, thanks to the flexible structure of the Clean Power Plan and our existing reliability tools and processes. According to a recent report by The Brattle Group, the combination of the ongoing transformation of the power sector, the steps already taken by system operators, the large and expanding set of technological and operational tools available, and the flexibility under the Clean Power Plan are likely sufficient to ensure compliance will not come at the cost of reliability.
And, just last week, Dr. Susan Tierney – a former Assistant Secretary for Policy at the U.S. Department of Energy and former Commissioner of the Massachusetts Department of Public Utilities— joined two other energy policy experts in sending a letter and report to the Chairman of the Federal Energy Regulatory Commission (FERC) concluding:
evidence does not support the argument that the proposed CPP will result in a general and unavoidable decline in reliability.
The report provides examples of recent instances in which grid operators, FERC, and other entities have effectively used existing processes and tools to deftly address other kinds of reliability challenges in recent years, some of which were significant and unanticipated.
In 45 years of implementing the Clean Air Act, clean air standards have never caused the lights to go out. And nothing about the proposed Clean Power Plan – with all of its tremendous flexibility – will alter that record.
That’s a remarkable testament to the institutions and processes that exist to protect reliability, as well as the careful process EPA uses in developing clean air standards – and it is great news for families and communities who want and deserve clean air in addition to reliable, affordable electricity. The Clean Power Plan, like our other vital clean air standards, will help deliver both.
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House Clears Energy Efficiency Bill
Apr 21, 2015 | The Hill - Floor Action
By Cristina Marcos
The House sent long-stalled legislation to the president's desk on Tuesday to improve energy efficiency in buildings.
Passed by voice vote, the bill would require the General Services Administration and Department of Energy (DOE) to create a voluntary energy efficiency standard for commercial buildings.
Additionally, it would exempt certain water heaters from new DOE energy efficiency requirements.
Lawmakers said the measure would help conserve energy and consumers' money.
"This legislation finds that spot - energy efficiency - where we can join in embracing the enormous benefit of creating ways where homeowners and business owners of commercial buildings can figure out how to cut down on their bills," said Rep. Peter Welch (D-Vt.).
The measure, authored by Sens. Rob Portman (R-Ohio) and Jeanne Shaheen (D-N.H.), was bogged down in the Senate for more than a year by tensions over unrelated issues. It almost made it to the Senate floor last year for a vote, but Republicans filibustered the bill after then-Majority Leader Harry Reid (D-Nev.) refused to allow votes on amendments that would, among other things, approve the Keystone XL pipeline and eliminate the health care employer contributions received by lawmakers and their staff under ObamaCare.
Senators finally approved the legislation by voice vote last month after a marathon vote-a-rama on the GOP budget resolution that concluded in the early morning hours.
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Congress Passes Bipartisan Bill to Improve Energy Efficiency
Apr 21, 2015 | The New York Times
By Coral Davenport
Congress on Tuesday passed a bill focused on improving energy efficiency in buildings and water heaters, a move celebrated by both parties for breaking longstanding partisan gridlock.
The bill, which President Obama is expected to sign into law this week, is a modest one. But its authors, Senator Rob Portman, Republican of Ohio, and Senator Jeanne Shaheen, Democrat of New Hampshire, who had worked together for years on more ambitious energy-saving legislation, called it a significant victory.
“On the bill’s merits — creating jobs, saving consumers money and reducing pollution — it was never a hard sell,” Ms. Shaheen said. “The tough part was convincing Washington to not play politics with a good idea.”
Mr. Portman said, “Our targeted energy efficiency bill has garnered widespread support because of a simple fact: It is good for the economy and good for the environment.”
The two senators have been working together since 2011 on their broader energy efficiency measure. That bill, which also has bipartisan support, would create incentives for federal mortgage writers to incorporate energy-efficient heating and cooling systems into the value of a home, establish training programs in energy-efficiency construction, create programs to increase the energy efficiency of manufacturing supply chains, and direct the Energy Department to work with manufacturers on energy-efficient technology.
But efforts to bring the bill to the Senate floor have been thwarted by partisan debates over issues like climate change and the Keystone XL oil pipeline.
This year, the senators introduced a bill that incorporated a few elements of the broader measure. The narrower bill would create a voluntary program for landlords and tenants to improve energy efficiency in commercial buildings, mandate that large electric water heaters be run in a highly energy-efficient manner and require federal agencies to perform energy-use assessments on commercial buildings that they lease.
That measure was passed by a voice vote at 4 a.m. on March 27, at the end of an all-night voting session on amendments to a budget bill. The House then passed a companion bill on Tuesday, also by a voice vote.
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House Committee Releases Portion of Energy Bill Focused on Training Workers, Education
Apr 22, 2015 | BNA Daily Environment Report
By Ari Natter
Draft legislation released April 21 by the House Energy and Commerce Committee aims to increase skilled workers in energy and manufacturing fields through increased training and education programs, a bill summary said.
The bill, which will be incorporated into broader energy legislation being crafted by the committee, will be the subject of an April 23 hearing and encourages minorities and other “underrepresented groups” to enter the energy field as a “national priority,” according to the bill's text.
The bill also encourages the departments of Energy and Labor and other federal agencies to solicit input from the oil, gas, coal, renewable, nuclear, utility, advanced manufacturing and pipeline industries in developing guidelines for training programs.
“Through the promotion of science, technology, engineering, and mathematics, or STEM, education for minorities, women, and veterans this bill will help tap a reservoir of talented Americans who are hungry for their chance to experience the American Dream,” Energy and Power Subcommittee Ranking Member Bobby Rush (D-Ill.) said in a statement.
In addition to the “Energy Workforce” title of the bill, the broad energy bill, which committee members plan to bring to the floor later this year, includes titles on infrastructure, “energy diplomacy” and energy efficiency, according to a framework released by Republican committee leaders in February (27 DEN A-1, 2/10/15).
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First Plank of House Panel's Bill Focuses on Workforce Development
Apr 21, 2015 | E&E News PM
By Nick Juliano
The House Energy and Commerce Committee today released the first plank of a comprehensive energy bill focused on opportunities to create jobs ahead of a hearing on the subject tomorrow.
The "21st Century Workforce" title of the bill committee members are assembling is based on legislation introduced last year by Rep. Bobby Rush (D-Ill.) and enjoys bipartisan support. The legislation would direct the Department of Energy to establish a comprehensive job-training program directed at finding opportunities in energy and manufacturing, especially for underserved populations such as women, minorities and veterans.
"Through the promotion of science, technology, engineering, and mathematics, or STEM, education for minorities, women, and veterans this bill will help tap a reservoir of talented Americans who are hungry for their chance to experience the American Dream," Rush, the ranking member on E&C's Energy and Power Subcommittee, said in a statement. "Further, if enacted, this bill would provide an invaluable opportunity to affect real change in the lives of American families throughout the nation, by engaging underrepresented communities in the lucrative sectors of energy and manufacturing-related jobs, careers and entrepreneurial opportunities and help them climb their way into the Middle Class."
The subcommittee will hold a hearing on the bill Thursday (E&E Daily, April 20).
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Utilities Need More Time for Obama Climate Rule, Federal Office Says
Apr 21, 2015 | The Hill - E2 Wire
By Timothy Cama
Utilities will need more time to comply with the Obama administration’s new climate rule, the organization responsible for electricity reliability said Tuesday.
In a new report, the North American Electric Reliability Corp. (NERC) took issue with the first round of carbon emissions targets that the Environmental Protection Agency (EPA) has proposed.
While the rule will fully take effect in 2030, the EPA has also proposed targets for 2020. NERC said that in order to ensure reliability, those targets should be pushed back.
“The time required for new facilities to be developed and placed in service may likely exceed the [plan’s] proposed compliance targets,” wrote NERC, a non-profit that has been designated by the federal government to oversee reliability.
“Because the industry will be implementing plans simultaneously, it is uncertain whether adequate equipment (e.g., generators, solar panels, wind facilities, transformers, and conductors) and resources (e.g., engineering, procurement, and construction) will be available to support those plans,” the group said.
NERC’s findings could empower Republicans who have long said that the Obama administration’s plan threatens access to affordable electricity and could lead to blackouts as coal-fired power plants are forced to retire.
The last NERC report on the rule, which came out in November, fed into Republicans’ objections.
NERC’s latest report said both power generation and transmission will need to be established as power plants are retired and new ones come online to comply with the regulation.
“While replacement capacity may be able to repower coal to gas generation, others will require greenfield development, which on average will take between four and five years,” the group said.
Transmission projects take six to 15 years to complete, NERC said.
The EPA defended the rule and said that reliability is one of its top priorities.
“We have a long-standing commitment to safeguard not only public health and the environment but also a reliable and affordable supply of electricity for all Americans,” spokeswoman Liz Purchia said in a statement.
She also criticized the report
“We appreciate NERC’s efforts to report on possible impacts of the proposed Clean Power Plan, however, the report is premature because EPA has yet to issue a final rule, and states are still in the early stages of planning for and developing implementation plans,” Purchia said, adding that the final rule will reflect extensive outreach to the public and various stakeholder groups.
Janet McCabe, head of the EPA’s air pollution office, has hinted in recent months that the EPA might try to make the 2020 targets easier for states in the final rule.
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Obama Climate Plan Seen Making Coal Plants Less Efficient
Apr 22, 2015 | BNA Daily Environment Report
By Mark Drajem
The Obama administration's plan to cut carbon emissions may force many coal plants to run only when energy demand peaks, making them less cost-effective, the group that oversees the U.S. electric system said.
The North American Electric Reliability Corp., a nonprofit that assures adequate voltage and power reserves, in an assessment Tuesday asked the Environmental Protection Agency to delay the 2020 deadline to start implementing the Clean Power Plan, saying pipelines, transmission lines and plants are needed to prevent the cuts from disrupting electric service.
“The generation mix in the North American power market is going through a fundamental change,” Thomas Burgess, vice president of the group, said on a conference call. “The Clean Power Plan is expected to accelerate some of those changes.”
President Barack Obama's plan to combat global warming is built around the EPA's carbon proposal, which would require a 30 percent cut in emissions by 2030. The plan is designed to replace coal as the main source to generate electricity with increased use of natural gas, renewable power and efficiency measures.
The emissions plan will have wide-ranging effects on utilities, forcing changes that will upend models used for a century for the generation and distribution of electricity. The EPA has said 40 years of clean-air actions have never caused power outages, and other analysts have said cheap alternatives such as natural gas and renewable energy will mean the decline in coal won't cause major disruptions.
State ‘Flexibility.’
The EPA said the power-plant proposal is designed to protect domestic power supplies.
“The agency's plan will provide states and utilities the time and flexibility needed to continue their current and ongoing planning and investing to modernize and upgrade the power system,” the EPA said in a statement. “We have a long-standing commitment to safeguard not only public health and the environment but also a reliable and affordable supply of electricity for all Americans.”
To meet the outlines of the EPA's proposed plan, the industry would need to build natural-gas power plants producing an additional 46 gigawatts by 2020, said John Moura, the group's reliability director. Those would replace shuttering coal plants.
Researchers See Job Gains
While grid operators worry about the proposed rule's impact on reliability, researchers said the proposed Clean Power Plan could create 273,000 net jobs by 2040, according to a report released April 21. The report, Assessment of the Economy-wide Employment Impacts of EPA's Proposed Clean Power Plan, was prepared by Industrial Economics Inc. and the University of Maryland Department of Economics.
Doug Meade, director of research at the University of Maryland's Interindustry Forecasting Project (Inforum), told reporters April 21 that the job gains were largely being driven by reduced electricity costs for consumers caused by increased use of efficiency measures and resulting productivity improvements.
“They have more money left over to purchase goods and services,” he said.
Though the proposal is expected to have a positive net impact on jobs, Meade said industries such as utilities and coal mining could see job losses under the rule. The power sector could lose 40,000 jobs by 2040 as aging power plants close and coal mining could lose 10,000 jobs.
The EPA in its regulatory impact analysis of its proposed rule that it could create as many as 29,000 jobs by 2020. The University of Maryland analysis, which took a broader economic view of the rule's impact, said the Clean Power Plan could create as many as 74,000 jobs by 2020.
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EPA Rules on Emissions During Malfunctions, Other Events Bear Watching, Attorney Says
Apr 22, 2015 | BNA Daily Environment Report
By Nora Macaluso
Companies and state regulators need to be aware of changes in Environmental Protection Agency rules on emissions for power plants and other facilities during startups, shutdowns and malfunctions, a Michigan environmental attorney told a clean air conference April 21.
The EPA “walks a fine line” on the question of whether excess emissions during those times are violations of new source performance standards under the Clean Air Act if a company has a plan for minimizing them, said Paul Collins, an attorney at Miller, Canfield, Paddock and Stone PLC and the author of many of Michigan's air quality regulations.
The Clean Air Act states that emissions limitations apply continuously and can't be exempt during certain periods, Collins said at the conference sponsored by the Michigan Manufacturers Association and the State Bar of Michigan.
The Court of Appeals for the District of Columbia Circuit in a 2008 decision interpreted that definition to mean there can be no exemptions for startup, shutdown or malfunction events, and the EPA subsequently revised its standards (Sierra Club v. EPA, 551 F3d 1019, 1027). Yet, there are issues that remain unaddressed, as other circuit courts have found the EPA is entitled to deference when it comes to interpreting the rules, he said.
The EPA has also proposed removing a provision from federal air toxics standards that shielded cement kiln operators from civil penalties for emissions violations that occur during equipment malfunctions, following a 2014 ruling by the U.S. Court of Appeals for the District of Columbia Circuit (NRDC v. EPA, 749 F.3d 1055, 78 ERC 1369, 2014 BL 108218 (D.C. Cir., 2014); 223 DEN A-15, 11/19/14).
Affected Industries
Some industries that may be affected are petroleum refineries, off-site waste and recovery operations, oil and natural gas and boilers and process heaters, Collins said at the annual conference titled “Clearing the Air in 2015: An Overview of Federal, Regional, and State Air Quality Issues.”
State implementation plans for air rules need to reflect changes in EPA standards, and utilities and state regulators need to keep track of whether requirements for construction and operating permits are different as a result, he said.
Companies also need to watch legal timelines, S. Lee Johnson, an attorney at Honigman Miller Schwartz and Cohn LLP, told the conference. A recent court ruling that found that a company forfeited its argument that it was exempt from an EPA rule by failing to raise the issue within the required comment period shows “you can't take anything for granted,” Johnson said.
The U.S. Court of Appeals for the Sixth Circuit found that St. Marys Cement Inc. wasn't exempt from an EPA rule requiring it to retrofit a plant with pollution-control equipment because it didn't raise that argument to the EPA within the required 30-day window (St. Marys Cement Inc. v. EPA, 2015 BL 80274, 6th Cir., No. 13-3105,3/24/15; 58 DEN A-12, 3/26/15)).
“There's a lot of ways you can lose your legal rights if you don't bring issues to the forefront immediately,” Johnson said.
Most Violations Resolved Informally
For companies receiving notices of air pollution violations, it's generally best to negotiate consent orders with regulators, attorneys at the conference said.
In Michigan, “well north of 90 percent of air violations are resolved informally,” said Peter Manning, chief of the environment and Natural Resources Division of the Michigan Attorney General's Office. “Very few actions get to the point where a judicial order is entered,” he said.
Federal agencies also expect companies to settle rather than go to court, said Steve Kohl, an attorney at Warner Norcross and Judd and chair of the firm's resource and environmental group. “They know the game” and don't expect companies to spend huge sums of money to fight the Justice Department, he said.
“It's important when you're dealing with EPA to do some real research,” Kohl said. “Dig into what you can find.” Consent agreements and other documents are available online, and the EPA aims to be consistent in its enforcement, he said. “It's worth the time and effort to look at 10, 20, 30, 40 analogous settlements across the country to see where you may fall in,” he said.
Compliance Called Agency Priority
“EPA's first priority is always going to be to get you back into what they consider compliance,” Kohl said. Penalties, he said, will be influenced in part by how well a company cooperates. In addition, a company's first contact with the EPA “can be quite important,” so having qualified staffers interact with agency officials is necessary, he said.
Scott Sinkwitts, corporate counsel at Consumers Energy Co., agreed with that assessment. “I can't over-emphasize the employee education portion of making your compliance easier,” he said. If there's an issue, “I don't want to hear about it on Day 29 of a 30-day rolling period,” he said. “I want to hear about it early and often.”
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EPA's Revised Emissions 'Factors' Could Drive Tougher Refinery Air Rules
Apr 21, 2015 | InsideEPA
By Stuart Parker
EPA's final revised oil refinery emissions “factors” used to estimate the facilities' pollution for Clean Air Act permitting purposes could result in stricter air permit conditions and tougher federal air rules for refineries and chemical plants as the new factors significantly increase some emissions projections, environmentalists say.
Under a consent decree deadline agreed to with advocates, EPA April 20 issued its updated emissions factors for equipment found at refineries and at some chemical plants. The final rule substantially increases the amount of ozone-forming and sometimes highly toxic volatile organic compounds (VOCs) the agency estimates are released by flares. Flares are used to destroy air toxics that otherwise would be released and act as a safety device to burn off excess gas.
While EPA has modified the emissions factors for flares, and introduced new emissions factors for other pieces of equipment that previously did not have them, it left VOC emissions factors unchanged for storage tanks and wastewater treatment systems. EPA also opted against setting tough new emissions factors for nitrogen oxides (NOx) despite proposing them, after industry groups questioned the quality of the agency's emissions data.
“Based on our review of NOx emissions data for flares and additional information received after proposal, we have determined that the data was not adequate to support revising the NOx emissions factor for flares,” EPA says on its website. Flaws in the data “rendered the data quality suspect,” the agency says.
EPA also revised emissions factors for carbon monoxide (CO) from flares; for NOx, CO and total hydrocarbons (THC) for sulfur recovery units; for THC from catalytic reforming units; and NOx from hydrogen plants.
EPA agreed to review the factors for flares, storage tanks and wastewater systems under the consent decree that ended litigation brought by several environmental groups, in Air Alliance Houston, et al. v. EPA, before the U.S. District Court for the District of Columbia. Under the Clean Air Act, EPA must review the factors every three years, but had failed to do so, prompting advocates' deadline suit that led to the settlement.
Flaring Emissions
In an April 21 statement by environmental groups, Eric Schaeffer, executive director of the Environmental Integrity Project (EIP) -- one of the groups that sued EPA to force the update to the factors -- says, “The VOC air pollution plume from flares is four times larger than we thought, and that multiplies their contribution to health problems. Based on this new data, flares deserve more attention from state and local regulators.”
Environmental groups including EIP have for some time been warning that EPA and local regulators have dramatically underestimated emissions from flares, prompting the agency to include tougher conditions on their correct operation in its proposed refinery air rules, and also to include flare operation requirements in settlement agreements with refining companies settling environmental enforcement actions.
Schaeffer notes that flares are also used at oil and gas drilling operations. EPA has already moved to minimize flaring from drilling operations by requiring “green completion” of wells to capture escaping gas.
The statement also notes that EPA found that fluid catalytic cracking units, used to process oil into fuel at refineries, emit 10 times more of the “powerful neurotoxin” hydrogen cyanide per year than previously thought in the earlier factors. Hydrogen cyanide is emitted by fluid catalytic cracking units.
An EIP source tells Inside EPA that EPA's findings on hydrogen cyanide could still influence the final shape of a major refinery air rule EPA is due to issue by a consent decree deadline of June 16.
The group submitted comments to EPA on the agency's proposed refinery rule, asking the agency to include tough limits on hydrogen cyanide, absent from the proposal, in the final version.
The source says that environmentalists are still evaluating EPA's basis for not revising emissions factors for tanks and waste water treatment. In their statement, environmentalists say, however, that “EPA has conducted studies that show its current emissions reporting guidelines for tanks and wastewater treatment plants used at refineries, chemical plants, and oil and gas facilities also underestimate air pollution by as much as tenfold.” It is therefore too early to say whether litigation over emission factors for those pieces of equipment will continue, the source says.
Industry's Concerns
Refining sector sources declined to comment on the new factors, saying they are still studying the changes, but one industry source previously told Inside EPA that the proposed version of the factors overstated emissions from flares.
The refining industry has also voiced concerns over the stringency of EPA's proposed refinery rules, which combine maximum achievable control technology air toxics standards and tougher new source performance standards to ensure better operation of flares. Industry sources have said that a prior EPA risk review under the Bush administration showed that refinery risks were acceptable and no further regulation was necessary, and therefore EPA's move to tighten the standards is not justified.
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Greater Investments In Energy Infrastructure Stressed in White House Quadrennial Review
Apr 22, 2015 | BNA Daily Environment Report
By Rebecca Kern
The U.S. needs to invest in modernizing and updating its aging energy infrastructure to promote economic competitiveness, energy security and environmental responsibility, an April 21 White House report recommended.
The White House's first installment of theQuadrennial Energy Review (QER) specifically focuses on the U.S. energy transmission, storage and distribution infrastructure, which includes the pipelines, wires, storage, waterways, railways and other facilities that make up the energy system.
Vice President Joe Biden discussed the report, along with Energy Department Secretary Ernest Moniz, April 21 at PECO Energy Co., an energy delivery subsidiary of Exelon Corp., in Philadelphia.
Biden said the U.S. energy infrastructure system is outdated, with much of it built decades ago, and it's unable to handle today's increased energy demands.
“So the first installment of the report offers a road map to bring the energy infrastructure to the 21st century by taking advantage of new technologies and building on our resilience to the threats that exist from climate change,” he said.
“We've dramatically increased production and reduced the cost of renewable energies like solar and wind,” he said. “Since 2009, solar power generation has increased 20-fold and wind power has tripled.”
Over the next decade, the review recommends investing in energy transmission, storage and distribution infrastructure, including accelerating pipeline replacement and maintenance of natural gas distribution systems. The review also advises investing in modernizing the electric grid and upgrading the Strategic Petroleum Reserve.
The QER is part of President Barack Obama's climate action plan issued in June 2013. He created a review task force, made up of 22 federal agencies, to submit the assessments every four years.
Investing In Infrastructure
The QER envisions ensuring resilience, reliability, safety and security of the transmission, storage and distribution infrastructure by funding various state grant programs.
The DOE would establish a competitive financial assistance program for states to encourage applicants to speed up pipeline replacement and enhance the maintenance of natural gas distribution systems.
The funding would target transitional assistance to help low-income households absorb initial rate increases from improvements; it also would provide incentives to reduce methane emissions through system repairs. This program would cost $2.5 billion to $3.5 billion over the next decade.
The DOE also would take on a multi-year program to support state energy assurance plans to help states develop plans to respond to current and future energy disruptions. The DOE has already requested $35 million in its FY 2016 budget for this program. The program would cost $350 million to $500 million over the next decade.
Additionally, the DOE would establish a state grant program to award states that demonstrate creative approaches to infrastructure hardening and resilience, and the program is estimated to cost $3 billion to $5 billion over 10 years.
Modernizing Electric Grid
The review also recommends modernizing the electric grid through state grant programs as well.
One state financial program would award states that cooperate with public utility commissions, energy offices and environmental regulators; counterparts in other states; and infrastructure owners and operators that oversee the power system. The program is estimated to cost $300 million to $350 million over five years.
Additionally, DOE has requested $27.5 million in its FY 2016 budget request as part of a cross-cutting grid-modernization initiative to develop foundational technology, improve security and encourage stronger institutional and stakeholder involvement. This program would cost $3.5 billion over a decade, the review estimates.
Invest In Strategic Petroleum Reserve
The review recommends investing in the country's Strategic Petroleum Reserve, currently the world's largest emergency supply of crude oil, located in the Gulf of Mexico.
The DOE authorized a test sale of Strategic Petroleum Reserve oil to test the distribution of the petroleum reserves. Moniz said the DOE found problems while conducting the test.
As a result, the review includes a “significant proposal for essentially modernizing and improving [the Strategic Petroleum Reserve] and improving the distribution system,” Moniz said during a Bloomberg meeting for reporters in Washington, D.C., April 20.
The review estimates the investments would cost $1.5 billion to $2 billion.
Executive Actions Announced
The White House announced two executive actions April 21 as part of its announcement of the QER release.
The DOE is creating a partnership with 17 energy companies to improve infrastructure resilience against extreme weather and climate change. The companies include investor-owned, federal, municipal and cooperative utilities, including Consolidated Edison Inc., Dominion Resources Inc., Exelon Corp., PEPCO Holdings Inc. and the Tennessee Valley Authority.
Separately, the U.S. Department of Agriculture announced it's investing $72 million to support six new rural electric infrastructure projects, including investments toward solar energy. The loans are also for transmission line improvements.
‘Strong Stakeholder Process.'
Moniz discussed the supportive stakeholder feedback that the agencies received throughout the process of compiling the QER.
“We had a very, very strong and powerful and informative stakeholder process,” Moniz said during his April 21 speech in Philadelphia.
The Edison Electric Institute (EEI), the largest association of investor-owned electric utility companies, said it was pleased with the opportunity to provide its recommendations throughout the review process.
“We appreciate the QER's focus on the reliability, resiliency and safety of the electric grid. The industry is actively engaged with DOE and the Administration on significant efforts to improve the security of the grid,” Tom Kuhn, EEI president, said in an April 21 statement.
The American Wind Energy Association (AWEA), which represents the wind industry, said it was pleased with the review's proposals to invest more in transmission infrastructure for wind power.
“By adding more transmission, as today's report recommends, we can tap more of this made-in-the-USA supply of energy. Such grid upgrades more than pay for themselves by reducing electricity costs and improving electric reliability for consumers,” Tom Kiernan, AWEA chief executive officer, said in an April 21 statement.
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McCarthy Approved Six Corrections To Coal Ash Rule Before Formal Publication
Apr 22, 2015 | BNA Daily Environment Report
By Anthony Adragna
The Environmental Protection Agency made a half dozen changes to its final coal ash regulation significant enough to warrant Administrator Gina McCarthy's approval between the unveiling and formal publication of the rule, according to a memorandum obtained by Bloomberg BNA April 21.
Officials wrote in the memorandum to McCarthy that the changes were to “correct inadvertent errors, correct potentially confusing cross references, and clarify preamble language.”
Some representatives from industry and environmental groups expressed concern about the new language and said the changes went far beyond incorporating technical corrections and fixing typos. Others said the changes did not significantly alter the rule.
The EPA announced its decision on Dec. 19 to regulate coal ash under the nonhazardous waste provisions under the Resource Conservation and Recovery Act, but the final rule was not formally published in the Federal Register for almost four months (80 Fed. Reg. 21,302; 74 DEN A-4, 4/17/15).
Six Changes Requested, Approved
Among the changes made between the announcement of the rule and its formal publication in the Federal Register were:
• inserting language making it clear that facilities must post all groundwater monitoring results on a publicly available Internet site;
• clarifying that only coal mines will be excluded from the definition of a coal ash landfill—the regulatory text, as originally written, would have excluded all underground and surface mines;
• adding language to clarify coal ash surface impoundments could either retrofit with a composite liner or close—the original version did not allow facilities the option to retrofit.
• revising paragraphs outlining requirements for facility owners when a deficiency or release from a coal ash unit is identified during an assessment or inspection;
• deleting potentially confusing language for the time frames to complete closing surface impoundments; and
• altering the preamble to clarify that lead does not have a maximum contaminant level.
The EPA sent its recommended changes to McCarthy for review on March 18 and the administrator approved them on March 20, according to the memorandum.
Other changes corrected grammar or formatting issues in the final rule, according to a review of a document showing changes conducted by Bloomberg BNA.
‘More Than Typos or Corrections.'
One attorney closely watching the rulemaking told Bloomberg BNA the changes were “more than ‘typos' or ‘corrections'” and said they had “never seen anything quite like this.”
In particular, the attorney said the change to specify only coal mines would be excluded from the definition of a coal ash landfill was major.
Lisa Evans, an attorney with Earthjustice closely involved in the rulemaking, told Bloomberg BNA the published version “contains another nod to industry” by allowing companies to close or retrofit their coal ash surface impoundments. The December version of the rule did not have that option.
One positive change, according to Evans, was making explicit the requirement that companies would have to post results of groundwater testing to publicly available Internet sites.
John Ward, chairman of Citizens for Recycling First, which advocates for the recycling of coal ash products, disagreed with the others and said he did not see any major changes to the final rule.
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EPA Revises Estimate on Ozone Precursors From Refineries, Chemical Manufacturing
Apr 22, 2015 | BNA Daily Environment Report
By Patrick Ambrosio
The Environmental Protection Agency has finalized new and updated emissions factors for refineries and chemical manufacturing plants, including an update to how facility operators estimate their emissions from the flaring of gas.
The emissions factors, released April 20, include a new value for estimating emissions of volatile organic compounds, a precursor to ground-level ozone formation, from flares.
Emissions factor values, which are assumed to represent long-term averages of emissions from all facilities in a source category, are used to estimate a facility's air pollutant emissions by relating the quantity of pollutant released to the atmosphere to a measure of activity associated with the release of that pollutant, such as heat generation or amount of coal burned.
The new emissions factor of 0.57 pound per 1 million British thermal units for flaring is about four times greater than the preexisting factor that had been used to estimate VOC emissions from flaring, Eric Schaeffer, executive director of the Environmental Integrity Project, said.
Schaeffer told Bloomberg BNA April 21 that past use of a 0.14 pound per 1 million British thermal units emissions factor and incorrect assumptions about the efficiency of flares in use at refineries led to underestimates of VOC emissions.
The EPA reviewed its emissions factors for refineries under a consent decree with Air Alliance Houston, the Environmental Integrity Project and other organizations that sued the agency for missing a Clean Air Act deadline to review emissions factors every three years.
Prior to this review, the agency hadn't reviewed the emissions factors for flares since 1991 and the emissions factors for storage tanks and wastewater treatment systems since 2006 (Air Alliance Houston v. McCarthy, D.D.C., No. 13-621, proposed consent decree filed 2/11/14; (37 DEN A-5, 2/25/14).
Factors Based on Data Collected in 2011
The EPA based the new flaring emissions factors on data collected during a 2011 information collection request from refineries.
Based on that data, the EPA also decided to set a revised emissions factor for carbon monoxide emissions from flaring and new emissions factors for fluid catalytic cracking units, sulfur recovery units, hydrogen plants and catalytic reforming units.
The agency determined available data didn't support revising existing emissions estimation methods for wastewater treatment systems and liquid storage tanks at refineries.
The flaring emissions factors do not apply to oil and gas operations at drilling sites, the EPA told Bloomberg BNA in an April 21 e-mail statement.
The EPA said the new and revised emissions factors will aid facility operators in estimating how much air pollution is emitted as a result of flaring and other processes but noted that use of the emissions factors isn't required.
Other Tools Can be Used
Facilities can use other tools, such as monitoring actual emissions levels, in order to determine their emissions, the EPA said.
However, Schaeffer said many companies “default” to using emissions factors, especially when seeking a permit under the Clean Air Act, rather than collecting monitoring data to show their actual level of emissions.
The EPA's determination that flaring results in higher emissions of VOCs also provides a greater economic incentive for facilities to control those emissions, Schaeffer said.
Generally, the VOCs lost during flaring is gas that can either be resold or reused if its is controlled, Schaeffer said. Based on the finding that more VOCs than previously thought are emitted, that could make it “worth” taking steps to recover it, he said.
Effect on Refinery Rule Predicted
The EPA said in its e-mail statement that the flaring emissions value revisions are “completely separate” from the agency's review of emissions standards for the refinery sector. The proposed refinery rule, released in May 2014, would revise standards for flaring to achieve significant emissions reductions (95 DEN A-1, 5/16/14).
Schaeffer said the EPA will “almost certainly” use the new emissions values for VOCs and carbon monoxide in the cost-benefit analysis for the final refinery rule. Using the new value will show a greater emissions reduction from the flaring provisions than was assumed in the proposed rule.
The EPA has until June 16 to finalize the refinery rule (RIN 2060-AQ75). The agency previously had an April 17 deadline under a consent decree with environmental groups, but that deadline was extended after the EPA extended the public comment period on the proposal.
The American Fuel & Petrochemical Manufacturers did not respond to an April 21 request for comment on the new emissions values.
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NERC Retreats From Dire Reliability Warnings On ESPS But Still Seeks Fixes
Apr 21, 2015 | InsideEPA
By Dawn Reeves
The North American Electric Reliability Corporation (NERC), the nation's top reliability watchdog, is backing away from its earlier dire warnings about the potential impacts of EPA's proposed rule governing greenhouse gas (GHG) emissions from existing power plants but the group is still seeking additional flexibility, a reliability assurance mechanism and more time for the sector to comply.
NERC April 21 released a long-awaited report, the first of three, that identifies potential reliability risks resulting from generation changes due to EPA's proposed rule.
The report generally reiterates the group's prior assessments that as much as 36 gigawatts of baseload generation could retire due to the existing source performance standards (ESPS) by 2025. It calls for more time for industry to build needed transmission and other infrastructure to allow a smooth transformation, urges the agency to provide a reliability assurance mechanism to limit uncertainty and seeks to ensure that state and regional compliance plans be developed in consultation with reliability authorities.
But on an April 21 call with reporters, the group's officials appeared to back away from their warnings last November that EPA's rule could shut down parts of the grid. Instead, they told reporters that they are not predicting blackouts will result from EPA's rule, noting that many of the strategies EPA proposes for states to reduce emissions -- such as building more natural gas and renewable energy to displace coal -- are already happening in sufficient numbers to be “transfomative” on the electric grid but will be accelerated by the EPA rule.
Despite the group's softer tone, EPA and environmentalists strongly criticized NERC's latest report. In a statement, EPA called the report “premature” because the rule is not yet final. The report also “does not reflect the full degree of flexibility afforded to states” under the proposal “and therefore exaggerates its effect.
“NERC presents detailed information only on the number of power plants that they project might retire” while ignoring “the fact that new power plants and other infrastructure are always and continually being built,” EPA said. NERC also “ignores recent trends in electricity supply and demand” such as record new level of renewable energy being built, the agency complained.
EPA said it is “confident” that the final ESPS “will provide states and utilities the time and flexibility needed.” The agency also noted its responsibility to “safeguard not only public health and the environment but also a reliable and affordable supply of electricity for all Americans.”
And EPA noted that NERC had previously overstated reliability concerns about its mercury and air toxics standard (MATS) that takes effect this year and “is being implemented smoothly. . . . There is no reason to expect that the [ESPS] will have a different outcome,” the agency said.
Reliability Concerns
EPA's proposed ESPS to cut GHGs from the power sector generally requires states to reduce the carbon intensity of their power generation based on an EPA assessment of each state's resources. But the rule has prompted significant concern that the rule will shutter many coal plants that provide baseload power, undercutting grid reliability.
NERC's initial report, issued last November, bolstered the concern, after warning that the steep emissions cuts over a short time frame required by the ESPS posed potentially “greater reliability impacts compared to prior environmental compliance programs.”
For example, congressional Republicans cited the NERC findings in their successful push for the Federal Energy Regulatory Commission (FERC) to hold a series of technical conferences to address potential reliability impacts of the rule. Those meetings have yielded a general agreement to create a reliability safety valve but FERC is still grappling with the details.
However, NERC's April 21 report, “NERC Special Assessment: Potential Reliability Impacts of EPA's Proposed Clean Power Plan Phase I,” lacks some of the dire warnings contained in the November report.
NERC officials noted on the conference call that although the report predicts negative electricity reserve margins in two key regions -- the Northeast and Texas -- in 2020 they stopped short of saying that the rule's implementation could lead to blackouts in those regions.
Blackouts are “not really a finding of our analysis,” John Moura, NERC's director of reliability assessment, told reporters on the call.
Instead, he said the analysis shows those possible dire impacts only if new capacity is not built. The new construction needs will “take a lot of time and coordination” and NERC is hoping to see changes in the final rule -- due this summer -- to allow relief options for areas that need new infrastructure. “So it's really a partnership,” he said. “If EPA wants certain reductions by a certain time, it needs to understand how long it takes to get to those.” Reports like this “helps us pave the way for that discussion.”
Also NERC's Thomas Burgess, vice president and director of reliability assessment and performance analysis, said it is too soon to say how much extra time states will need, and that it will depend on each state implementation plan and whether the states form regional markets.
On a reliability mechanism, Burgess said “that is in the hands of the EPA itself” to include in the final rule, and did not respond to a question on what indications the agency was signaling on its reliability request.
Top EPA officials have indicated they are working to create many of the flexibilities groups like NERC are seeking and to assure both reliability and emissions cuts. For example, they have said they will work to create a reliability safety valve and are working to redesign the rule so the interim targets -- that states must meet on an average basis beginning in 2020 -- do not require steep reductions in the early years of the program.
Moura added on the call that NERC does not get into specifics of how much more time it thinks states may need to meet interim targets because “we don't really see that as our role to dictate that kind of policy.” Many states will not require additional time, and some states such as those that participate in the Regional Greenhouse Gas Initiative and California, have already observed achievements. “We do say the 2020 interim goal . . . is too soon for many to complete the necessary infrastructure projects that are needed,” he said.
He added that specific time extensions will not be known until states start drafting their compliance documents and will “be very plan specific.” But the flexibility mechanisms should be addressed in EPA's final rule, he added.
NERC in a statement released with the report said its goal is to “call attention to potential areas of concern for reliability” and identify ways to “ease the transition and allow for both environmental and reliability goals to be achieved.”
Reliability Impacts
Although NERC appears to have softened its concern, it is nevertheless warning of significant changes in generation. For example, while NERC and others have long warned of likely coal plant retirements, Moura noted that the group is now expecting remaining coal-fired generation that does not retire to shift from baseload generation to peaking power, potentially eroding the “economics and operating feasibility” of such plants.
That change, along with a switch to more gas-fired generation, will require more infrastructure and pipeline capacity whose construction time frames vary widely, he said as he discussed the report's highlights.
Moura said the biggest potential impact on reliability comes from significantly changing operational dispatch for coal generation, and in the years 2019-2020 he identified “a cliff” where many existing coal units will reduce capacity from their existing 70 to 80 percent to about 30 percent, or a 40 percent reduction in coal-fired generation.
At the same time, natural gas generation will increase about 40 percent, he explained, and noted the transmission impacts of those changes. “Resources are one thing” because plants are built individually and can deliver power “but only if the transmission network is there,” he said.
NERC found a need for thousands of miles of new transmission lines, that can take between 64 months to 15 years to build.
NERC also assessed studies on the reliability impacts of the ESPS released by other reliability authorities, such as PJM and the Southwest Power Pool, to conclude that the studies “confirm generation shifts” but that the results differ among areas with different resources mixes. None of the studies address likely changes in neighboring electricity systems. Some of the studies raised reliability concerns while others implied that compliance will not be difficult.
However, Moura noted that there is so much uncertainty about impacts of the ESPS over the next four to five years that “is a reliability concern” itself.
Echoing this, National Rural Electric Cooperative Association (NRECA), whose members face significant generation retirements due to the ESPS, said in a statement that the NERC report underscores that EPA's interim targets “are, quite simply, not workable. While EPA projects co-ops will have to shutter, at minimum, 21 percent of their coal generation fleet by 2025, NERC’s modeling shows the generation and transmission additions necessary to fulfill the capacity requirements would not be completed until 2031, at the earliest.
“While we wish EPA had not given reliability such short shrift prior to issuing the [proposed rule], we firmly believe it is now incumbent on the Agency to heed NERC’s warnings before the rule is finalized.”
But the Natural Resources Defense Council downplayed the concern, charging that NERC “virtually ignores energy efficiency and the building momentum of wind and solar power.” The group echoed EPA, saying it is confident the final rule will provide significant flexibilities. The report is the first of a three-part series taking a deep dive into resource and transmission adequacy.Phase II, expected to be released in December, will include a conventional reliability assessment based on the final requirements. Phase III will follow submission of state compliance plans and will include “a more granular reliability-focused” look at regional and individual state plans. The target date for this analysis is December 2016.
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(ACC Mentioned) Lobbying on Crude-by-Rail Doubles Over Year as PHMSA Rule Becomes Final
Apr 22, 2015 | BNA Daily Environment Report
By Rachel Leven
The number of entities lobbying Congress and the administration on requirements for safely transporting crude oil has increased more than 100 percent from the first three months of 2014 compared to the same time frame in 2015, public records show.
The increased lobbying by cities and rail and energy trade associations and companies may have been sparked by increased public interest and media coverage, the upcoming finalization of a federal rule and additional congressional action itself addressing crude-by-rail safety, environmental and industry lobbyists and representatives told Bloomberg BNA. They disagreed on whether the increased lobbying would translate to crude-by-rail laws passed by Congress.
“Passing any legislation in this Congress is going to be a challenge—on any issue, not just this issue,” Jessica Ennis, a senior legislative representative for Earthjustice, told Bloomberg BNA.
The spike in lobbying on this issue follows an increase in the frequency of crude oil train derailments— incidents that have caused property and environmental damage and, in some cases, have harmed public health. Increased crude oil production in areas without adequate pipeline infrastructure has pushed much of the oil onto rail to be shipped, meaning this transport has similarly become more frequent.
Bloomberg BNA conducted its review of Senate Office of Public Records lobbying disclosures using the search term “crude by rail.” The deadline for disclosing lobbying activities from the first quarter of 2015 was April 20.
Lobbying Numbers
Lobbying on the transport of crude oil increased 105 percent year over year from the first quarter of 2014 to the first quarter of 2015, with at least 20 entities and 41 entities lobbying on it in the respective time frames.
That increase occurred quickly. Lobbying on the issue increased 86 percent from the last three months of 2014 to the first three months of 2015—from at least 22 entities to 41 entities.
There was a similar bump from the fourth quarter of 2013 to the first quarter of 2014, from six lobbying entities to 20 lobbying entities, respectively.
As recently as 2012, only one company—BNSF Railway Co.—disclosed lobbying on the issue using the terms “crude by rail.” BNSF declined to comment for this article.
Interest by Public, Industry
Lobbying disclosures largely indicate interest by industry, whether rail or energy. For example, in the first quarter of 2015, companies and groups such as BNSF, CSX Corp., Shell Oil Co., BP America Inc., the Association of American Railroads, the American Petroleum Institute and the American Chemistry Council all lobbied on the issue.
Ennis said there is also a mounting concern from the cities and towns. The public is learning more about the issue with each derailment and realizing how it could affect their own communities, she said.
“Many cities and towns that are struggling with this issue right now just don't have the resources to lobby on it,” Ennis said. “This is where it becomes so important for members of Congress to become more involved on this issue.”
Ennis said it is likely at least part of the increase could be attributed to the Pipeline and Hazardous Materials Safety Administration rule that would govern transport of certain flammable liquids, including crude oil. As with any agency's decision to “tak[e] on a big issue like this,” there is generally “a flurry of activity” both in lobbying the administration and in lobbying Congress, she said.
Frequency of Derailments
Ken LaSala, director of government relations and policy for the International Association of Fire Chiefs, said his own group began focusing more on crude-by-rail due to the increased frequencies of the derailments over the last two to three years, such as the July 2013 derailment in Lac-Mégantic, Quebec, and the increased action on Capitol Hill over the last six months to a year.
LaSala said it was important to ensure that local jurisdiction have the resources to plan, train, prepare and equip themselves for these incidents.
Meanwhile, Ed Greenberg, a spokesman for the Association of American Railroads, told Bloomberg BNA that the freight industry's lobbying has been in response to “a heightened recognition of the importance of this issue.” The freight industry has sought to provide relevant information to Congress regarding the industry's efforts and commitment to move crude oil safely, Greenberg said.
“We recognize that members of Congress who represent members of the public and federal agencies are both important to this industry and that it's important to ensure that we are responding to any questions that they have,” Greenberg said.
American Petroleum Institute Spokesman Brian Straessle told Bloomberg BNA in an e-mail that API's members similarly are committed to working with railroads, regulators and Congress to identify safety solutions on this issue.
Congressional Action
But what this increase in lobbying means for pending legislation on crude oil by rail safety remains unclear.
Until the Transportation Department's final rule comes out, Capitol Hill is largely in a “wait-and-see” state, Ennis said. And even after the rule is finalized, it isn't clear whether any bills that have been introduced on the issue could become law due to congressional dynamics, she said.
One area where LaSala said there could be movement on Capitol Hill is through the upcoming surface transportation bill. That bill always has a rail safety component and, in recent years, has been where the hazardous materials program is reauthorized, he said.
“We're waiting to see how that bill comes out and it seems like that would be a potential legislative vehicle for addressing this crude oil issue, too,” LaSala said, highlighting that certain crude-by-rail could be included in the bill or added as amendments at some point during the process.
At least one bill introduced in Congress—the Crude-by-Rail Safety Act (S. 859) from Sen. Maria Cantwell (D-Wash.)—is along the same lines as the rail industry's “vision” for transporting crude oil safely, Greenberg said. However, he declined to comment on the likelihood of this bill or other legislation becoming law.
More Hazmat Transport
Whether Congress passes legislation, the crude oil derailments could bring attention to the needs of first responders, LaSala said.
To a certain extent, these incidents have offered LaSala's team an opportunity to educate more lawmakers regarding the needs of fire stations for all hazmat transport incidents, he said.
“The number of incidents we've had and the focus on crude oil has served as an example regarding the challenges we face,” LaSala said. “Overall, our members are doing a good job of educating their members of Congress that there's more than crude oil by rail.”
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Rail, Waterways Overtaxed By Growing Energy Needs -- QER
Apr 21, 2015 | E&E News PM
By Sean Reilly and Annie Snider
From skyrocketing volumes of crude-by-rail shipments to the logistics of moving enormous wind turbine components, shifts in the U.S. energy business are squeezing the nation's road, rail and waterway systems, the Energy Department said in a long-term overview released this morning that urges more study and billions of dollars' worth of upgrades.
The stress may be most severe on the freight rail network, where shipments of crude oil -- most of it from North Dakota's Bakken Shale formation -- soared some 4,400 percent in recent years, according to the Quadrennial Energy Review (QER). In 2010, there were six rail-loading facilities for oil; by 2013, they totaled more than 60.
In 2013-14, a combination of near-record harvests and an unusually severe winter left farmers in the Upper Midwest fuming about rampant delays in getting crops to market. While smaller harvests have since eased pressure, the review cites Agriculture Department findings that rising rates for shippers have contributed to record profits for freight railroads.
The surge in the crude-by-rail business has also fanned fears of a catastrophic accident similar to a derailment that killed 47 people in Lac-Mégantic, Quebec, two years ago. Among its recommendations, the review suggests more work to better understand "safety-related challenges" surrounding rail transportation of both oil and ethanol.
It also urges more than doubling the yearly funding for the TIGER (Transportation Investment Generating Economic Recovery) infrastructure grant program to $1.25 billion, accompanied by a more targeted initiative that would spend up to $2.5 billion over the next decade to streamline transportation of energy products.
Competition is also fierce on the inland waterways, where barges carry coal, petrochemical products and agricultural commodities to market, but where infrastructure is aging and failing.
Congress has made some recent moves to speed up construction of lock and dam projects, implementing an industry-backed diesel fuel tax increase that will bring more money into the Inland Waterways Trust Fund, and shifting the costs for the system's largest project more to federal taxpayers than the usual 50-50 cost share with industry.
In the QER, the administration also throws its weight behind alternative funding mechanisms and public-private partnerships for such projects, although industry has mixed views on these approaches.
The report also calls for a comprehensive assessment of the needs and opportunities for upgrading infrastructure on the water transport system that is important to the energy sector.
The review, which mainly summarizes already available information, notes that the impact of added energy production registers in more picayune ways.
Just the development of a single well pad in Appalachia's Marcellus Shale region can take more than 1,600 truck trips, leading to as much as $23,000 in extra road maintenance expenses per well, according to the report. At the other end of the production process, the high cost of transporting drilling-related wastewater has helped prompt reliance on underground injection wells for disposal.
And as wind turbines grow in size, moving their parts is becoming a correspondingly complex challenge. Turbine blades can now be more than 160 feet long, or roughly three times their length in the 1980s; another component can weigh more than 80 tons. Three years ago, it took an estimated 689 truckloads, 140 rail cars and eight vessels to complete a 150-megawatt wind project, according to the report.
As a result, it adds, "the limits of the existing transportation infrastructure are now constraining component designs as manufacturers try to balance optimal energy production with transportability."
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