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(ACC Mentioned) Commentary: Amid a Benign US Economy, Beware a Shift in Global Consumption Trends
Jun 5, 2015 | ICIS
By Joseph Chang
Amid a benign US economic environment, chemical sector production volumes are poised to grow faster than GDP, especially as new projects based on the shale gas competitive advantage ramp up in the coming years. -
(ACC Blog) ‘Chemicals in your popcorn?’ Kristof Cooks Up Another Half-Baked Chemical Scare
Jun 5, 2015 | American Chemistry Matters
By Anne Kolton
Perhaps famed New York Times journalist Nicholas Kristof should start reading The Washington Post. http://blog.americanchemistry.com/2015/06/chemicals-in-your-popcorn-kristof-cooks-up-another-half-baked-chemical-scare/?utm_source=rss&utm_medium=rss&utm_campaign=chemicals-in-your-popcorn-kristof-cooks-up-another-half-baked-chemical-scare -
(ACC Mentioned) ACC Files Appeal Against California Court's DINP Ruling
Jun 5, 2015 | Chemical Watch
By Kelly Franklin
The American Chemistry Council (ACC) has appealed against a California court judgment denying its petition to reverse the state's Proposition 65 listing of diisonoyl phthalate (DINP) as a substance known to the state to cause cancer (CW 12 June 2014). -
(ACC Mentioned) Confidential USTR Emails Show Close Industry Involvement In TPP Negotiations
Jun 5, 2015 | Intellectual Property Watch
By William New
While a full range of stakeholders would be affected by the outcome of the Trans-Pacific Partnership (TPP) agreement under secret negotiation by the United States and a dozen trading partners, corporate representatives have had a special seat at the negotiating table, as shown by hundreds of pages of confidential emails from the US Trade Representative’s office obtained by Intellectual Property Watch. -
(ACC Mentioned) Chemicals Law Reform Bill Moves Toward Full Vote In House Of Representatives
Jun 5, 2015 | Chemical & Engineering News
By Britt E. Erickson
Lawmakers are one step closer to passing legislation this year that would modernize how commercial chemicals are managed in the U.S. Bipartisan legislation to overhaul the 1976 Toxic Substances Control Act sailed through a key House of Representatives committee on June 3. -
US EPA Issues Snurs for 22 Substances
Jun 5, 2015 | Chemical Watch
The US EPA has issued significant new use rules (Snurs) for 22 chemicals that were the subject of pre-manufacture notices under the Toxic Substances Control Act. Two of them are subject to TSCA section 5(e) “risk-based” consent orders. -
Enviros Conflicted After Study Finds Contamination is Not Widespread
Jun 5, 2015 | E&E - Climatewire
By Ellen M. Gilmer
Environmentalists are conflicted in the wake of the Obama administration's release yesterday of a years-in-the-making study of hydraulic fracturing's impacts on water. -
Crude Oil Export Ban: Outdated Energy Policy, Inconsistent Foreign Policy
Jun 5, 2015 | The Hill - Congress Blog
By former Rep. Michael Andrews (D-Texas)
The ban on the export of domestic crude oil dates back to a time when members of Congress did not have computers and Richard Nixon was president. -
EPA Urged To Grant States Flexibility In Regulating PM2.5 Air 'Precursors'
Jun 5, 2015 | InsideEPA
By Stuart Parker
EPA is facing calls from the livestock sector and several states to ensure that a pending final rule on implementing the agency's fine particulate matter (PM2.5) national ambient air quality standards (NAAQS) offers maximum flexibility to states in deciding whether to regulate "precursor" chemicals that can lead to PM2.5 formation. -
Ahead of Clean Power Plan, Alaska Fires Up Old Coal Plant
Jun 5, 2015 | E&E - Energywire
By Margaret Kriz Hobson
At a time when the White House is putting the finishing touches on tough new carbon dioxide regulations for power plants, an Alaska company is firing up a coal-burning unit that was mothballed 15 years ago. -
Better Data, Modeling Needed for Tighter Ozone Limit -- NOAA
Jun 5, 2015 | E&E - Greenwire
By Amanda Peterka
Enforcement of a more stringent U.S. EPA standard for ozone would require better data and improved modeling, National Oceanic and Atmospheric Administration scientists say in a commentary published today. -
Industry Says Flaws In EPA 'Waters' Rule Ensure Return To Supreme Court
Jun 5, 2015 | InsideEPA
By Bridget DiCosmo
Industry officials say EPA's final Clean Water Act (CWA) jurisdiction rule fails to achieve its goal of providing regulatory certainty on the law's reach and contains a host of other flaws, which the sources say ensures litigation that will result in the Supreme Court again having to weigh in on the years-long fight over the law's scope.
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(ACC Mentioned) Commentary: Amid a Benign US Economy, Beware a Shift in Global Consumption Trends
Jun 5, 2015 | ICIS
By Joseph Chang
Amid a benign US economic environment, chemical sector production volumes are poised to grow faster than GDP, especially as new projects based on the shale gas competitive advantage ramp up in the coming years.
Despite the major decline in oil prices since Q4 2014, “the US chemical industry is still very competitive. Even with oil down around 50% from its highs, we are still seeing new project announcements,” said American Chemistry Council (ACC) chief economist Kevin Swift at the ACC annual meeting in Colorado Springs, Colorado, US.
There are 231 chemicals and polymers projects in the US based on shale gas totaling $142bn in investment, he noted. And much of the capacity of major new US plants is expected to be exported – as much as around 65%, said Swift.
The real growth in demand for petrochemicals such as methanol will be “away from the US, and exports will go to emerging markets such as China. A big chunk of the new [methanol] capacity will be export oriented,” said Mark Rohr, chairman and CEO of US-based Celanese, at the ACC meeting press conference.
“Basic chemicals will have to go to emerging economies. We are kind of saturated here,” he added.
American Chemistry Council
ACC CEO Cal Dooley addresses participants at the group’s annual meeting in Colorado Springs
Production of US basic chemicals should grow by rates exceeding 5% in 2017-2019, up from 3.1% in 2015, said the ACC’s Swift.
Overall US chemicals production is expected to rise 3.2% in 2015 and 3.0% in 2016 based on the ACC’s Mid-Year Situation and Outlook report released at its annual meeting. “This is slightly down from ACC’s 2014 outlook as first quarter softness and the strong US dollar weigh on expectations,” said Swift.
Not all is coming up roses. On a global basis, the economic picture is mixed, with Europe on the mend while China remains mired in slow growth mode, and Brazil enters a recession.
“The US [economy] is steady but it certainly has not rebounded as much as we would have liked. In Europe, sentiment is better versus 2014, with customers more confident,” said Rohr. Automotive and coatings markets are particularly strong in Europe thus far in 2015, he noted.
But Asia “is a different story”. While China’s official GDP growth is around 7%, “we don’t even see 5% chemical growth,” said Rohr. “China started the year slow, and after Chinese New Year, it’s been steady but not very strong.”
And global consumption trends appear to be shifting – something that could cause chemicals and polymers growth to actually lag GDP.
The methanol product chain, in which US-based Celanese plays through its acetyls business, had been “classically growing at GDP, but it doesn’t appear to be growing as fast anymore. Basic chemistry is falling behind,” said Rohr.
“The correlation between global GDP and chemical sales had been strong. If China grew at 7-9%, we’d see 7-9% growth there. But that’s not happening today. The nature of demand has changed,” said Rohr.
“We are moving away from a consumptive trend. It may also be related to demographics,” he added. While this doesn’t appear to be impacting the US market, it is a trend “we need to be conscious of”.
As economies such as China’s evolve away from a goods-oriented, or export market, to one focused more on the domestic market with an inherently larger services component, that reduces the chemical content needed, said the ACC’s Swift.
And demographic headwinds are playing a part. “China’s working age population has peaked or will soon peak. Longer term, GDP growth could be more like 5-6%/year with 7% a good year for the Chinese economy,” said Swift.
“The US is not facing a demographic winter yet such as in Japan and Russia. We still have immigration. But still the labour force growth rate is not what it used to be,” he added.
A slowdown in global consumption of chemicals relative to GDP bears watching, especially in the face of massive capacity expansions in the US based on shale gas.
Even as the US will likely remain cost advantaged versus its global counterparts in the ethylene and methanol chains, the product will have to go somewhere – hopefully to places where there is robust demand growth.
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(ACC Blog) ‘Chemicals in your popcorn?’ Kristof Cooks Up Another Half-Baked Chemical Scare
Jun 5, 2015 | American Chemistry Matters
By Anne Kolton
Perhaps famed New York Times journalist Nicholas Kristof should start reading The Washington Post.
Last week, he would have discovered yet another article pointing to the questionable “scientific” studies peddling sensationalist headlines, and the sloppy reporting by journalists who fail to think twice about whether a “study” or assertion is credible and newsworthy before sharing it with the world.
To be fair, most journalists are not scientists, and they are under tremendous pressure to rapidly produce copy and develop click-bait-worthy headlines. However, Nicholas Kristof is one of the worst offenders — and yesterday, he was back at it again.
Kristof’s latest piece peddles scary assertions about pizza boxes and popcorn that can only be referred to as half-baked.
Kristof makes one bogus assertion after another about fluorinated chemistry, referred to as PFAS. He goes on to attack bipartisan efforts to reform chemical regulation using talking points from extreme activist groups that are working to undermine the progress Congress has made toward reform.
So, let’s set the record straight.
First, chemicals are regulated today. We all agree that chemical regulation needs to be updated, but equating the marketplace with the ‘Wild West’ is nothing more than an attempt to scare people.
Second, Kristof’s claim that there are more than 80,000 chemicals for sale that haven’t been tested is simply untrue — also a scare tactic.
Third, the bills to reform chemical regulation pending in both the House and Senate are the products of years of negotiation. They are both strongly bipartisan: the Senate bill has 20 Democrat and 20 Republican cosponsors. To dismiss these bills is to essentially endorse the status quo.
Fourth, the chemicals Kristof highlights, PFASs, are some of the most robustly studied new chemicals and have been determined by regulators to be safer than their predecessors while still offering unique benefits like durability and stain, water and heat resistance, that have become essential in many modern applications. Government and industry have worked together to advance these safer chemicals and continue to collaborate to phase out the older chemicals globally. Want to read more about the studies, data and benefits on PFASs? Just visit http://www.fluorocouncil.org/Resources/Research.
Fifth, the Madrid Statement cited by Kristof is not science. It is the opinion of a group of coordinated activists with a broad ranging policy agenda.
With his latest piece, Nicholas Kristof veered off course and landed in the company of sloppy science reporting. It would be wise to stick to what he knows, not what he thinks – and certainly not what he thinks he knows about science or chemical regulation.
- See more at: http://blog.americanchemistry.com/2015/06/chemicals-in-your-popcorn-kristof-cooks-up-another-half-baked-chemical-scare/?utm_source=rss&utm_medium=rss&utm_campaign=chemicals-in-your-popcorn-kristof-cooks-up-another-half-baked-chemical-scare#sthash.2O4PFlyb.dpuf
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(ACC Mentioned) ACC Files Appeal Against California Court's DINP Ruling
Jun 5, 2015 | Chemical Watch
By Kelly Franklin
The American Chemistry Council (ACC) has appealed against a California court judgment denying its petition to reverse the state's Proposition 65 listing of diisonoyl phthalate (DINP) as a substance known to the state to cause cancer (CW 12 June 2014).
California's Superior Court refused to reverse the Office of Environmental Health Hazard Assessment's (OEHHA) listing back in March, and the ACC responded by filing an appeal last month. This contended that there is insufficient evidence demonstrating that the substance causes cancer in humans.
“[The OEHHA's] decision to list DINP as a known human carcinogen under Prop 65 is unwarranted and defies the state of the current science”, the ACC's High Phthalates Panel says in a statement. “The listing decision has resulted in warnings that do not reflect the science relating to the hazards and risks to people of exposures to DINP.”
The ACC argued in its original petition that the animal studies examined by the OEHHA's Carcinogen Identification Committee (CIC), which showed a significant increase in kidney tumours, liver tumours and mononuclear cell leukaemia in rodents that had been fed DINP, were not relevant to humans.
They also argued that the OEHHA's hazard identification document (HID) provided to the CIC did not adequately examine the body of science that shows a lack of correlation between rodent studies and human health.
The court sided with the OEHHA, noting in its ruling that its powers do not permit it to reweigh evidence, and that the ACC had failed to prove that the DINP listing was “arbitrary, capricious, or entirely lacking in evidentiary support”, as is required for the court to reverse an agency determination.
The OEHHA listed DINP in 2013 based on the CIC's determination that “the chemical was clearly shown, through scientifically valid testing according to generally accepted principles, to cause cancer” (CW 16 December 2013).
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(ACC Mentioned) Confidential USTR Emails Show Close Industry Involvement In TPP Negotiations
Jun 5, 2015 | Intellectual Property Watch
By William New
While a full range of stakeholders would be affected by the outcome of the Trans-Pacific Partnership (TPP) agreement under secret negotiation by the United States and a dozen trading partners, corporate representatives have had a special seat at the negotiating table, as shown by hundreds of pages of confidential emails from the US Trade Representative’s office obtained by Intellectual Property Watch. The emails give a rare and fascinating perspective on how policy is developed in the trade office.
Years into the negotiation, the TPP is said to be nearing completion and is the subject of a US congressional debate over renewal of fast-track negotiating authority for the president (limiting Congress to a yes or no vote). But the TPP text has never been made available to the public of the countries negotiating it, except through periodic leaks of parts of the text, making these emails timely for the debate.
Through a US Freedom of Information Act request, Intellectual Property Watch has obtained some 400 pages of email traffic between USTR officials and industry advisors. Most of the content of the emails is redacted (blacked out), but they still give insight into the process.
The released emails, ranging from 2010 to 2013, are made public for the first time here (1 of 4), here (2 of 4), here (3 of 4), and here (4 of 4) [all pdf].
The FOIA request is the subject of a lawsuit brought on behalf of IP-Watch by the Yale Law School Media Freedom and Information Access Clinic. Intellectual Property Watch does not take a position on trade negotiations, but has argued that the extreme secrecy of the TPP has made it too difficult to write meaningful stories about the negotiations. Typical press stories are limited to the dates of meetings and the list of agenda items, with no detail.
What is striking is not that government negotiators seek expertise and advice from leading industry figures. But the emails reveal a close-knit relationship between negotiators and the industry advisors that is likely unmatched by any other stakeholders.
Records of engagement with other stakeholders, such as members of Congress, small businesses, public interest advocacy groups, academics, or any other “non-cleared” advisors, were not requested by IP-Watch, so it is not possible to directly compare their level of access. But it is difficult to imagine that, for instance, activists representing the general public interest would receive this level of tight-knit treatment, even if they also could be considered experts.
The cleared advisors in the email exchanges represent a range of industries and companies, including law firms. Among them are (in no particular order): Recording Industry Association of America, PhRMA, General Electric, Intel, Cisco, White and Case, Advanced Medical Technology Association (AdvaMed), Motion Picture Association of America, Wiley Rein, Entertainment Software Association, Fanwood Chemical, American Chemistry Council, CropLife, Medtronic, American Continental Group consultants, and Abbott. There is also an exchange with generics pharmaceutical industry representatives.
Many of the industry representatives are themselves former USTR officials.
Examples of Exchanges
Exchanges between officials and industry cover just about any topic affecting the TPP that came up during the period, such as expansion of the TPP to include Japan and other countries, a transparency agreement among negotiating countries, a public statement by USTR about access to medicines, Canada and culture, US patent reform, IPR and environmental information, software patentability, relations with the European Union, other trade agreements and international developments, and as expected numerous consultations over elements of the draft treaty text.
For instance, General Electric Aviation division representative Tanuja Garde asks, “On trade secrets, can you share the language you tabled or discuss by phone?” To which the USTR official Probir Mehta answers, “Let’s chat; How about sometime Monday?” Elsewhere, Garde writes to Mehta: “I heard about what was tabled in Dallas – great job. Have you briefed the Chamber? [referring to the US Chamber of Commerce, an industry association] Mehta replies: “Thanks Tanuja – actually the thanks go to you and Joe!” [referring to USTR official Joe Whitlock] We’ve briefed the US Chamber led TPP IP Task Force last week.”
A number of other big companies are included in discussions on trade secrets, such as DuPont, Corning, Microsoft and Qualcomm.
In another example, Entertainment Software Association (ESA) Vice President Stevan Mitchell provides a draft ESA analysis on technological protection measures (TPM) in the negotiation. The USTR reply is, “Are you free next week for lunch at some point?”
Jennifer Sanford of Cisco Systems engaged on TPP and supply chain issues. Greg Slater of Intel provided a memo on an undisclosed topic. Timothy Brightbill of Wiley Rein is asked on short notice to provide language on state-owned enterprises (SOE) for a government interagency proposal.
RIAA reviewed the telecommunications chapter and had questions, discussed a “selected ITAC members’ re posted TPP copyright and enforcement text,” made comments on language regarding internet service providers, and provided information about legitimate online music services available in New Zealand. The International IP Alliance also weighed in on the copyright and enforcement text. In addition, copyright industry representatives sent their views on copyright limitations and exceptions and secondary liability options, and safe harbors.
An ITAC is a USTR Industry Trade Advisory Committee, for which there are several by industry sector.
At one point early on, Doug Nelson of CropLife said his team had been lobbying government officials in Kuala Lumpur and Vietnam on “agchemical data protection,” and that “their reception to our TRIPS Article 39.3 emphasis on data exclusivity was very positive.” He asked if CropLife could make a presentation at an upcoming round of TPP talks in New Zealand or if there was a spot on the US delegation for a representative. USTR official Stan McCoy replied simply that they did not know how the New Zealand government was going to handle private sector side meetings.
At another point, Jim DeLisi of Fanwood Chemical said he had just seen the text on rules of origin, and remarked, “Someone owes USTR a royalty payment. These are our rules. … This is a very pleasant surprise.”
In a further example, Ralph Ives of AdvaMed had an exchange with Barbara Weisel of USTR about a CEO letter on TPP. Weisel said she would not comment until she had seen the letter, and “please don’t name names of negotiators in the letter, although I appreciate the thought.” Ives responds apparently with a draft of the letter, saying, “I’m not asking you to edit, of course, but let me know if something like this would be ok to send.” Weisel responds with a request to meet with him on it before he sends anything, and proceeds to make meeting arrangements. Elsewhere, AdvaMed is involved in a discussion about technical barriers to trade (TBT).
An Australian medical industry association is included in direct engagement with USTR officials.
Among other things the emails show is that negotiators – and industry representatives – work very hard and long hours, including weekends and holidays, with countless trips around the world.
It is also clear that USTR officials try to stay within the rules they are given, and may not even agree with level of secrecy of the talks. At one point in 2012, Jared Ragland, director of the USTR Office of Intellectual Property and Innovation, tells a lobbyist, “Happy to have a quick call with you, and interested members, if necessary, altho ugh I can’t really talk text with non-CAs as you know” (referring to non-cleared advisors).
And at another point, there is a reference made to a request by USTR lead negotiator Barbara Weisel for industry not to keep repeating itself.
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(ACC Mentioned) Chemicals Law Reform Bill Moves Toward Full Vote In House Of Representatives
Jun 5, 2015 | Chemical & Engineering News
By Britt E. Erickson
Lawmakers are one step closer to passing legislation this year that would modernize how commercial chemicals are managed in the U.S. Bipartisan legislation to overhaul the 1976 Toxic Substances Control Act sailed through a key House of Representatives committee on June 3.
The bill—the TSCA Modernization Act of 2015 (H.R. 2576)—won near unanimous approval in the Energy & Commerce Committee. But several Democrats urged committee leaders to clear up ambiguities regarding how states may enforce their own chemical control laws before the bill is considered by the full House.
Democrats also raised concerns about a provision that would require the Environmental Protection Agency to evaluate any chemical requested by a manufacturer. Such requests, they said, could tie up EPA’s resources, preventing the agency from reviewing the riskiest chemicals.
Both the chemical industry and most public health groups agree the bill would be a huge improvement over current law.
More than 150 trade groups, including the American Chemistry Council and other organizations representing chemical manufacturers, are urging the House to quickly pass the bill. “H.R. 2576 represents another significant milestone in the growing momentum in the House and the Senate to enact meaningful TSCA reform legislation this year,” says ACC CEO Calvin M. Dooley.
Some activist groups, however, claim that the bill falls short of what’s needed to ensure that everyday chemicals are safe. In a letter to committee leaders, a coalition of such groups warns that “industry-initiated reviews will overwhelm” EPA’s review program.
The House is expected to vote on the bill before the Fourth of July recess.
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US EPA Issues Snurs for 22 Substances
Jun 5, 2015 | Chemical Watch
The US EPA has issued significant new use rules (Snurs) for 22 chemicals that were the subject of pre-manufacture notices under the Toxic Substances Control Act. Two of them are subject to TSCA section 5(e) “risk-based” consent orders.
The action requires persons who intend to manufacture, import or process these substances for any activity that is designated as a significant new use to notify the agency at least 90 days in advance.
The chemicals that are subject to the “risk-based” consent orders are those where the EPA determines that activities associated with them may present unreasonable risk to human health or the environment. The orders require protective measures to limit exposures, or otherwise mitigate the potential unreasonable risk.
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Enviros Conflicted After Study Finds Contamination is Not Widespread
Jun 5, 2015 | E&E - Climatewire
By Ellen M. Gilmer
Environmentalists are conflicted in the wake of the Obama administration's release yesterday of a years-in-the-making study of hydraulic fracturing's impacts on water.
While the draft report from U.S. EPA finds that fracking has contaminated drinking water in specific instances, it concludes that the controversial oil and gas production process has not caused widespread, systemic impacts -- leaving environmental groups feeling both validated and critical (Greenwire, June 4).
"This study provides solid scientific analysis that fracking has contaminated drinking water around the country," Natural Resources Defense Council policy analyst Amy Mall said in a statement. But, she added, "the study is missing some critical elements, hamstringing its comprehensiveness."
The report, commissioned by Democratic lawmakers in 2010, analyzed the "life-cycle" effects of fracking and related processes -- from water acquisition to injection to wastewater management -- and identified vulnerabilities that have led to water pollution. In a press call yesterday, EPA science adviser Thomas Burke noted that fracking itself had contaminated drinking water in some instances, but he declined to describe the process as "safe" or "unsafe."
"The assessment is about improving our understanding of the process, identification of vulnerabilities and ultimately to be better informed to protect our public drinking water supplies," he said, adding that it was not intended to quantify every instance of contamination.
Many environmental groups have accused the agency of caving to industry's demands throughout the years of work on the study, resulting in the final conclusion that fracking hasn't caused widespread impacts.
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"Sadly, the EPA study released today falls far short of the level of scrutiny and government oversight needed to protect health and safety of the millions of American people affected by drilling and fracking for oil and gas," Food & Water Watch Executive Director Wenonah Hauter said in a statement. "The fate of our precious water resources should not be decided by an industry-driven study that will be used to justify the industry's desire to drill and frack many thousands of new wells across the country each year."
Lauren Pagel, policy director for Earthworks, told EnergyWire she takes issue with EPA's use of the term "systemic" because the agency acknowledged its limited access to certain relevant information.
"I'm not sure that they have enough data to make that conclusion," Pagel said.
Indeed, EPA noted in its study that the relatively small number of documented cases of contamination could owe in part to insufficient data and a lack of long-term studies.
"This finding could reflect a rarity of effects on drinking water resources, but may also be due to other limited factors," the study said. "These factors include: insufficient pre- and post-fracturing data on the quality of drinking water resources; the paucity of long-term systematic studies; the presence of other sources of contamination precluding a definitive link between hydraulic fracturing activities and an impact; and the inaccessibility of some information on hydraulic fracturing activities and potential impacts."
The landmark findings are still subject to peer review and public comment, and the study is scheduled to be finalized next year.Victory lap for industry
Industry, meanwhile, has been ringing the victory bell since the study's unveiling.
"The report contradicts the most prevalent claim from anti-fracking activists, which have made 'water contamination' the very foundation of their campaign against hydraulic fracturing," Energy in Depth's Katie Brown wrote in a blog post after the release.
The American Petroleum Institute's Erik Milito said in a statement yesterday that industry had already strengthened protocols for the various above- and below-ground contamination vulnerabilities EPA noted in the report.
"Surging production of natural gas is a major reason U.S. carbon emissions are near 20-year lows," he said. "Remaining questions cited by EPA have all been addressed by a wide array of strong state regulations, industry standards and federal laws."
Burke of EPA emphasized yesterday that states and tribal governments have the lead role in regulating fracking and should use the study as a resource "to better protect our resources." The study highlights EPA's limited role.
"EPA's authority is limited by statutory or regulatory exemptions under the Clean Water Act, Safe Drinking Water Act, the Comprehensive Environmental Response, Compensation and Liability Act, and the Resource Conservation and Recovery Act," it says. "Where EPA's exemptions exist, states may have authority to regulate unconventional oil and gas extraction activities under their own state laws."
Congressional Republicans, meanwhile, say the rule undermines the Obama administration's justification for new regulations of fracking on public and Indian lands. Lawmakers said in statements yesterday that they intend to use the study to try to block the Interior Department's fracking rule (E&ENews PM, June 4).
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Crude Oil Export Ban: Outdated Energy Policy, Inconsistent Foreign Policy
Jun 5, 2015 | The Hill - Congress Blog
By former Rep. Michael Andrews (D-Texas)
The ban on the export of domestic crude oil dates back to a time when members of Congress did not have computers and Richard Nixon was president. Much has changed in the past 40 years. Today, that antiquated law is severely restricting the nation’s energy policy and damaging the integrity of American foreign policy.
In 1973, the Organization of Arab Petroleum Exporting Countries (OAPEC) instituted an oil embargo as a result of the involvement of the United States in arming Israel during the Yom Kipper War. At the time, America was the largest oil consumer in the world and was heavily reliant on oil imports. The Arab embargo, coupled with dramatic drops in the U.S. stock market and a steady decline in domestic oil production, had an enormous and disastrous economic impact on the American economy.
The Congress responded by banning the export of domestically produced crude oil without a license. The purpose of this new energy policy of was to protect domestic oil reserves and reduce the dependence on foreign oil. For decades the policy was not challenged, primarily because of a rising economy. The new policy was not particularly successful in the 1970s, and today that flawed policy is disastrous.
In 2015, the playing field has changed dramatically. The recent sharp increase in U.S. oil production has the export ban in the spotlight once again. The United Sates is no longer dependent on foreign oil for its economy. In fact, the United States is now truly energy independent. According to a study by the Pew Research Center, domestic crude oil production in 2008 sunk to 5 million barrels a day. In part, because of advancements in hydraulic fracking, domestic oil production is now at 9.2 million barrels a day. In the last five years, oil production in the U.S. has grown faster than any country in the world. In addition, refined oil exports, which are not restricted by the law, are being exported at a rate of 3.7 million barrels per day. Within the past year, several oil companies have received licenses to export some domestic crude oil, but the process is cumbersome and lacks certainty.
The continued imposition of the ban and the precipitous drop in the price of crude oil in recent months is costing American jobs. Oil technology and equipment provider Schlumberger has cut 20,000 jobs, and giant oilfield services corporation, Halliburton, has cut its global workforce by 10 percent.
Opponents of removing the export ban claim that the price of gasoline at the pump will rise, but that argument has been refuted by numerous independent studies. According to a recent report of the bipartisan Congressional Budget Office, lifting the ban could actually lower domestic prices and world crude oil prices.
The continued export ban undermines our country’s foreign policy. Historically, the United States has been a strong proponent for free trade and open markets. President Obama has repeatedly challenged countries like China that impose strenuous import bans on American goods and at the same time flood our market with their products. The president is now forcibly urging the Congress to give him trade promotion authority to negotiate the Trans-Pacific Partnership (TPP) agreement. The president has championed a policy that encourages more U.S. exports. It is inconsistent for the United States to demand open markets by our Asian trading partners while blocking the exportation of domestic crude oil. This position undermines the very arguments America is making to its strongest competitors.
By removing the export ban, America will be in a much stronger and more leveraged position in the world’s marketplace. The U.S. will be able to provide assistance to our important allies and like our European trading partners that are heavily dependent on Russian oil. Europe is the market for 88 percent of Russian oil exports.
One reason the ban was enacted was because of national security concerns, but those issues can be addressed by allowing a president the authority to impose restrictions in a national or international emergency.
Lifting the ban will encourage more investment by energy companies in new technologies, increase competition and production levels, add more jobs and insure a more consistent and reliable market place. It is time for Obama and the Congress to act.
Andrews, an attorney with the law firm of King & Spalding, served in the House from 1983 to 1995.
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EPA Urged To Grant States Flexibility In Regulating PM2.5 Air 'Precursors'
Jun 5, 2015 | InsideEPA
By Stuart Parker
EPA is facing calls from the livestock sector and several states to ensure that a pending final rule on implementing the agency's fine particulate matter (PM2.5) national ambient air quality standards (NAAQS) offers maximum flexibility to states in deciding whether to regulate "precursor" chemicals that can lead to PM2.5 formation.
The push for flexibility is outlined in recent comments filed on the agency's proposed rule detailing how states should craft state implementation plans (SIPs) that list the air pollution measures they will adopt in order to cut PM2.5 emissions and attain the agency's NAAQS for the pollutant. EPA most recently updated the NAAQS in 2012, tightening the standard from 15 micrograms per cubic meter annually (ug/m3) to 12ug/m3.
In its March 23 proposal, EPA sought comment on options to regulate PM 2.5 precursors including nitrogen oxides (NOx), sulfur oxides (SOx), volatile organic compounds (VOCs) and ammonia.
The National Cattlemen's Beef Association (NCBA) in a May 27 comment letter notes that all of the precursors are emitted by the agriculture sector. The issue of regulating PM2.5 precursors is particularly acute in California, which has historically experienced high levels of PM2.5 in the Central Valley, an intensively farmed region.
Pursuant to a 2013 ruling by the U.S. Court of Appeals for the District of Columbia Circuit in National Resources Defense Council v. EPA, states must now implement the PM2.5 NAAQS under strict Clean Air Act "subpart 4" emission control provisions, rather than the less-prescriptive "subpart 1" provisions EPA previously required.
Part of the tougher provisions under subpart 4 is a mandate that EPA and states regulate precursors of PM2.5 from "major" stationary sources in non-attainment areas except where the administrator determines that one or more precursors do not contribute significantly to pollutant concentrations. The bid for flexibility aims to ensure that states can opt against regulating precursors if they can prove they are not hindering NAAQS attainment.
The PM2.5 SIP rule addresses this and a host of other issues, such as the timelines according to which states must submit various SIP components. EPA offers three options for "precursor demonstrations" to avoid regulating precursors by showing they do not contribute significantly to NAAQS attainment problems.
Under option one, states can provide two independent analyses: an attainment planning analysis demonstrating that control measures for a particular precursor are not needed for expeditious attainment, and a "technical demonstration" showing major stationary sources of a particular precursor do not contribute significantly to levels that exceed the PM2.5 standard. Major sources are those emitting 100 tons per year (tpy) or 250 tpy of pollution, depending on the pollutant.
Under option two, states could submit a single analysis demonstrating that all emissions of a particular precursor from within an area do not significantly contribute to PM2.5 levels that exceed the NAAQS, meaning that control requirements for emissions of the precursor from major stationary and area sources, as well as mobile sources, would not be required for expeditious attainment.
Option three would require an attainment planning analysis demonstrating that control measures for all types of sources of a particular precursor are not needed for expeditious attainment, which also would be deemed to meet the technical demonstration requirement. This would mean that the state would not need to regulate emissions of the particular precursor from major stationary sources under the Clean Air Act nonattainment new source review permitting program or other control requirements for major stationary sources.
Precursor Determination
However, NCBA says the requirements are unclear. "NCBA is concerned by EPA's failure to clearly define the requirements for a precursor demonstration," the group says, urging EPA to clarify its rule.
One feature NCBA supports is a "sensitivity analysis" available under option two that would enable states to make decisions on which precursors to regulate based on how much the chemical at issue actually contributes to PM2.5 formation in a given area. This would be useful in areas where ammonia from farming -- such as California's Central Valley and parts of Utah -- is elevated but is not the main driver of PM2.5 formation, NCBA says.
NCBA urges the agency to reject its "bright line" suggestion for determining when a precursor contributes significantly to NAAQS nonattainment, which the group says would preclude the sensitivity analysis. Instead, the organization favors use of a "no threshold" approach that would eschew a hard numeric limit triggering regulation of a precursors in favor of a more nuanced approach.
The group further warns that EPA's options two and three both unlawfully expand the reach of precursor regulation into the mobile source domain -- which would include cars, trucks and farm vehicles. "NCBA opposes any attempt to expand regulatory authority to control precursor emissions from area and mobile sources," the group says.
NCBA is already suing EPA in the D.C. Circuit suit NCBA v. EPA, a case challenging a prior PM2.5 NAAQS implementation rule issued in 2007 outlining how states should meet the 2006 PM2.5 NAAQS of 15 ug/m3, or 35 mg/m3 over 24 hours. NCBA in the case challenges EPA's regulation of "crustal material," or farm dust, as PM2.5, which is key to determining whether a rural area is designated "nonattainment" for the PM2.5 NAAQS and subjected to potentially costly pollution controls. The case has, however, been held in abeyance for years.
EPA in a May 5 status report asked the court to keep the case in abeyance pending the finalization of the latest PM2. 5 implementation rule, citing "significant overlap" between the issues addressed in the litigation and the rule.
Regulatory Flexibility
Some state air pollution regulators are also seeking flexibility on regulation of precursors in the PM2.5 implementation rule. California's San Joaquin Valley Air Pollution Control District, which regulates air emissions in large parts of the Central Valley, in May 28 comments says that EPA should include all three options in its final rule to give local and state air regulators maximum flexibility. Echoing NCBA, the air district calls for clarification of the rule, and recommends that EPA allow regulators flexibility not to regulate ammonia emissions.
"In the San Joaquin Valley, analyses conducted for prior PM2.5 attainment plans have demonstrated that reducing ammonia precursor emissions is ineffective at reducing PM2.5 concentrations. Additionally, major sources of ammonia emissions in the San Joaquin Valley comprise a small portion of total ammonia emissions and do not contribute significantly to PM2.5 concentrations that exceed the standard," the air district says.
The Nevada Division of Environmental Protection in May 27 comments likewise urges EPA to include all three options in the final rule, and not to include a "bright line" numeric significance threshold for precursors.
The Virginia Department of Environmental Quality (DEQ) in its May 29 comments, meanwhile, identifies serious timing problems inherent in developing the required SIPs under subpart 4. The proposed rule requires the submittal of a SIP for areas in "moderate" nonattainment with the PM2.5 NAAQS within 18 months of their designation and classification. Such SIPs must include a base year emissions inventory, an attainment year emissions inventory, attainment year air quality assessments showing compliance with the NAAQS, and standards of pollution control known as reasonably available control measures and reasonably available control technology, DEQ notes.
DEQ says that "finalizing a SIP submittal that encompasses all these elements plus others within 18 months is simply not possible, regardless of the level of resources a state may have at its disposal." The state therefore urges EPA to revisit its timelines for SIP submittal.
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Ahead of Clean Power Plan, Alaska Fires Up Old Coal Plant
Jun 5, 2015 | E&E - Energywire
By Margaret Kriz Hobson
At a time when the White House is putting the finishing touches on tough new carbon dioxide regulations for power plants, an Alaska company is firing up a coal-burning unit that was mothballed 15 years ago.
Golden Valley Electric Association, based in Fairbanks, is restarting the burners at its 50-megawatt coal plant in Healy, Alaska, just south of Denali National Park.
The unit was originally developed as a demonstration project for the Energy Department's 1989 Clean Coal Technology Program. Once built, however, the facility was eventually shuttered after disagreements between the project partners.
Known as Healy 2, the plant was sited next to a 25 MW coal-fired power plant that's been producing electricity for central Alaska for 50 years. Both facilities will burn coal from the nearby Usibelli Mine.
To get the dormant Healy 2 power plant back online, the company overhauled the facility by removing obsolete electronics and updating environmental control equipment.
Last week, GVEA fired up the boiler using oil to test the steam turbine. Next week, the utility plans to begin producing a small amount of electricity. If all goes well, coal-fired electricity production is scheduled to begin on July 27.
GVEA officials say they're reactivating the long-dormant coal-fired power plant as an alternative to the firm's natural gas- and oil-fired power plants, which have been plagued by fuel price fluctuations.
But after investing $187 million to bring the former experimental coal plant online, GVEA officials worry that they may soon face even stricter environmental mandates under U.S. EPA's upcoming Clean Power Plan.
The agency's final carbon reduction regulations are expected to be released in August (E&ENews PM, June 2).
"That's the million-dollar question -- what are the final regulations and how will they affect each plant?" said Lynn Thompson, vice president of power supply for GVEA.
Thompson said the utility recently joined other Alaska power companies and state officials in asking EPA to exempt Alaska and Hawaii from the upcoming Clean Power Plan controls.
Both states have isolated, self-contained power systems that are physically unable to buy cleaner energy from other parts of the nation, he noted.
In addition, most Alaska communities are served by local electricity networks, not a statewide grid.
Meanwhile, the only interconnected transmission system, which serves the major population centers around Anchorage and Fairbanks, is in dire need of an expensive upgrade, according to state officials.An experimental plant
The Healy 2 coal plant was built during the mid-1990s, with the aggressive backing of the late Sen. Ted Stevens (R). The influential Stevens was instrumental in securing $120 million in federal funds for the $300 million experimental project.
The Alaska Industrial Development and Export Authority, a state development corporation, contributed another $150 million. The state kicked in $25 million, and GVEA and the Usibelli Coal Mine covered the rest of the costs.
The operation, designed to test an experimental technology to burn waste coal, was envisioned as a partnership between AIDEA and the Fairbanks utility company. The state corporation would build the facility, and GVEA would operate the plant and buy its electricity.
But the project had problems from the start. Completed in 1998, Healy 2 generated power intermittently for a year and ultimately shut down in 1999 after AIDEA and the utility locked horns over needed upgrades.
Over the years, the two companies struggled to resolve their differences, but ultimately ended up in court. Meanwhile, local environmental groups sued EPA to block the restart of the coal plant.
In 2009, GVEA began negotiations to buy the plant from AIDEA. Three years later, the rivals reached a consent decree with EPA that paved the way for the facility to secure critical Clean Air Act permits.
Under that pact, GVEA is installing new pollution controls at the Healy 2 plant and adding new nitrogen oxide controls at the company's older coal-fired unit at the Healy site.
The utility also agreed to contribute $250,000 to the Fairbanks North Star Borough and Denali Borough Woodstove Change-out program, which is attempting to alleviate the particulate pollution problems in the Fairbanks region.
In 2013, the utility company signed the final papers to buy the inactive coal plant for $44 million. Under GVEA's agreement with EPA, once the company begins burning coal at the restarted Healy facility, it will have 24 months to install new equipment to cut nitrogen oxide pollution.
Thompson said the company expects to meet that requirement by late summer 2016.
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Better Data, Modeling Needed for Tighter Ozone Limit -- NOAA
Jun 5, 2015 | E&E - Greenwire
By Amanda Peterka
Enforcement of a more stringent U.S. EPA standard for ozone would require better data and improved modeling, National Oceanic and Atmospheric Administration scientists say in a commentary published today.
In the paper published in the journal Science, NOAA researchers said better information on ozone is needed, especially in the Intermountain West, where natural background levels of ground-level ozone would complicate compliance.
"We find that for average conditions, the models perform well," lead author Owen Cooper said in an interview. "Where the models are less accurate are the extreme events, either extremely high or extremely low ozone levels."
EPA has proposed tightening the national ozone standard from 75 parts per billion to between 65 and 70 ppb, basing those numbers on a review of public health research.
Meeting a lower standard would be "particularly challenging" at higher elevations in the West, where background ozone levels sometimes exceed EPA's proposed range, researchers wrote.
Background ozone is not generated by regional man-made pollution sources. It comes from the upper atmosphere, where it occurs naturally; moves across the Pacific Ocean from Asia; and is generated by wildfires.
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"Background ozone indicates the proportion of observed North American ozone that is beyond the control of domestic air pollution-control measures," the researchers wrote. "These estimates also inform U.S. air-quality managers how much domestic emissions must be reduced in order to attain the ozone standard."
States have a tool for submitting data to EPA showing that an air quality violation is beyond their control. EPA has acknowledged the potentially heavy lift for Western states under a tighter standard and has offered several ways to address background ozone. It plans to update the "exceptional events" tool to make it easier for states to use (Greenwire, Dec. 1, 2014).
But using these tools requires that states and EPA be able to accurately and fairly quickly pinpoint sources of ozone -- and that's where the science and models are not yet up to snuff, the NOAA researchers said.
"If a revised ozone standard is adopted, air quality-control programs will have a greater need to precisely and accurately attribute ozone sources on a continuous basis," the NOAA scientists wrote, "and systematic and long-term efforts of scientists will be required to help identify and fill gaps in observations and modeling capabilities in years to come."
So far, only Wyoming has managed to obtain an exceptional event clearance from EPA for high background ozone levels. The high ozone readings in western Wyoming in June 2012 were caused by an upper-atmosphere intrusion, the state found (Greenwire, Nov. 17, 2014).
In a study last year, Columbia University and NOAA researchers evaluated two computer models for measuring background ozone. They found that their estimates of monthly ozone levels differed by as much 10 ppb -- a significant discrepancy in light of the ozone standard that EPA is considering.
Cooper, who is working on another project to compare global and regional air pollution models with a focus on the West, said a big complication is that emissions trends are shifting rapidly across the world.
At a recent Washington, D.C., conference hosted by the Electric Power Research Institute, Georgia Institute of Technology environmental engineer Ted Russell, who is also comparing air quality models, said that the technology is still "chock full of limitations."
"We have to come up with a way of improving our understanding, or of improving our ability, to quantify pollutant exposures," he said. "And this is going to require a better understanding of the sources of the pollutants. ... We want to know what to control and how much."
According to Cooper and the other researchers in the latest NOAA study, more satellite imaging and new ground-based monitoring sites in the United States would be useful for addressing the limitations in modeling.
A separate NOAA-led study published recently in the journal Nature Communications tied high springtime ozone levels to strong La Niña winters, indicating that regulatory entities may be able to predict when high-ozone days occur as a result of background levels (Greenwire, May 18).
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Industry Says Flaws In EPA 'Waters' Rule Ensure Return To Supreme Court
Jun 5, 2015 | InsideEPA
By Bridget DiCosmo
Industry officials say EPA's final Clean Water Act (CWA) jurisdiction rule fails to achieve its goal of providing regulatory certainty on the law's reach and contains a host of other flaws, which the sources say ensures litigation that will result in the Supreme Court again having to weigh in on the years-long fight over the law's scope.
"This is going to end up in the Supreme Court," says one industry source, even though the last time the justices took up CWA jurisdiction it led to two competing tests for determining the law's scope that EPA's final rule is meant to resolve. Fights over the law's scope could remain unresolved for years, the source says, given the time taken for litigation and the fact that the membership of the Supreme Court several years from now is unpredictable.
The American College of Environmental Lawyers (ACOEL), representing attorneys in the environmental field, also expects the rule to return to the high court -- though questions whether that will end uncertainty over the reach of the CWA. A May 28 ACOEL blog post says industry litigation is sure to follow the final rule. "That means years of litigation and appellate review across the country, ultimately landing once again before the Supreme Court," the post says. "Whether we get clarity this time from the Court remains to be seen," it concludes.
In addition to the expected legal challenges from various states and industry groups opposed to the regulation, some lawmakers in the House and Senate are pushing bills that would scrap the rule.
The CWA rule, released May 27 jointly by EPA and the Army Corps of Engineers, makes some substantial changes to the proposed version of the rule released in April 2014 to criticism from many industry groups and GOP lawmakers. For example, its revises language on how ditches are addressed and adds first-time physical limits on adjacent waters. But Industry sources say those regulatory definitions invite extensive new litigation over the terms.
While the final rule is an improvement over the proposed version, a second industry source says, "There's a fair amount of new stuff, a lot of things we need to chew over a little longer because they're new" that will likely be hashed out in litigation that could last for years, including the changes to the provisions regarding ditches.
The first industry official says that the final rule's new limits on adjacency for jurisdiction -- which restricts the definition to waters adjacent to jurisdictional waters within a minimum of 100 feet and within the 100-year floodplain to a maximum of 1,500 feet of the high water mark -- will likely also be a target of litigation.
Other provisions that are expected to face legal challenges include the rule's determination that prairie potholes and a host of other regionally based, similarly situated waters tributaries and "adjacent waters" share a "significant nexus" with downstream waters and are jurisdictional. The final rule identifies specific types of other waters, such as prairie potholes, that could share a significant nexus to be assessed on a case-by-case basis.
EPA and the Corps issued the rule to clarify when smaller waters are considered jurisdictional following the prior Supreme Court decisions that confused the issue, but sources say the fact the rule is likely to eventually end up before the high court is likely to result in the agencies having to issuing another CWA rule.
CWA Jurisdiction
The Supreme Court in a 2001 ruling, Solid Waste Agency of Northern Cook County (SWANCC) v. Army Corps of Engineers, found that non-adjacent, isolated waters fall outside of CWA jurisdiction when an ecological connection such as migratory birds is the sole basis for arguing jurisdiction.
In a subsequent 2006 ruling in Rapanos v. United States, Justice Anthony Kennedy said in a concurring opinion that wetlands, whether "alone or in combination with similarly situated lands in the region," pose a "significant nexus" and are therefore jurisdictional when they "significantly affect the chemical, physical, and biological integrity" of downstream, traditionally navigable waters.
By contrast, the plurality opinion in Rapanos written by Justice Antonin Scalia held that only "relatively permanent" waterbodies that connect to traditional navigable waters and wetlands that have a "continuous surface connection" to such relatively permanent water bodies, are jurisdictional under the water law.
The final rule adopts the language from the Kennedy test, finding that tributaries and "adjacent waters" share a significant nexus with downstream waters and are jurisdictional, identifying specific types of other waters, such as prairie potholes, that could share a significant nexus to be assessed on a case-by-case basis.
The rule says that waters have significant nexus and are therefore covered by the CWA if "any single function or combination of functions performed by the water, alone or together with similarly situated waters in the region, contributes significantly to the the chemical, physical, or biological integrity" of the nearest jurisdictional water, traditional navigable waters, interstate waters, or the territorial seas.
To further clarify how significant nexus determinations will be made, the rule offers a list of specific functions to be considered in those decisions, including sediment trapping, nutrient recycling, pollutant trapping, transformation, filtering, flood retention, provision of life cycle dependent aquatic habitat and others.
EPA and Corps officials say the CWA rule sets clearer "boundaries" on which waters are and are not covered by the CWA than both existing law and the April 21, 2014 proposed rule and will provide regulatory certainty for agriculture, utilities, development and other industry sectors by dramatically reducing the need for case-by-case analysis.
While industry is warning of litigation, some sources are praising a few of the final changes to the rule. For example, the second industry source says that the changes to the language on ditches, which clarifies that ditches that flow only ephemerally or those that are not located in or do not drain wetlands, represents a "cleaner exemption" than the proposed rule but without a regulatory definition for ditches, it will remain a "serious ambiguity."
A third industry source adds, "I will grant that the regulations are clearer than the old regime, but that is only because, where previously there was a doubt about jurisdiction, that doubt has now been resolved in favor of jurisdiction" -- echoing GOP concerns that the rule expands the reach of the CWA.
Legislative Efforts
Meanwhile, lawmakers are mounting efforts to block the rule. In the House, Rep. David Rouzer (R-NC) June 1 introduced H.R. 2599, a bill to block certain funds from EPA appropriations until the rule is withdrawn.
In the Senate, S. 1140 introduced April 30 by Sen. John Barrasso (R-WY) would set a Dec. 31, 2016 deadline for EPA and the Corps to issue a revised rule after lengthy consultation with states and other stakeholders and outlines the types of waters that would and would not be subject to CWA requirements. The Senate Environment & Public Works Committee has slated a June 10 markup of the legislation.
In a June 3 Senate floor speech, Barrasso said, "This bipartisan bill protects Americans from runaway bureaucracy -- unaccountable, unelected. It restores Washington's attention to the traditional waters that were always the focus before. The American people don't need more bureaucratic overreach. We don't need more red tape. Congress should act immediately to stop this outrageous regulation before it goes into effect."
The same day as Barrasso's floor speech, the Senate Small Business & Entrepreneurship Committee approved in an bipartisan 11-8 vote panel Chairman Sen. David Vitter's (R-LA) resolution that warns the CWA rule -- which is also known as the Waters of the United States (WOTUS) rulemaking -- "will have a significant economic impact on a substantial number of small businesses," according to a committee press release.
"I am certain that today's Resolution expressing the Sense of the Senate Small Business Committee will stress the importance of including all affected parties -- including America's small businesses -- when issuing major, expensive rules and regulations. WOTUS in particular will have a significant, negative economic impact, which is why I will continue to fight on behalf of America's small businesses and work to repeal the EPA's absurd attempt to expand its authority into our backyards," Vitter said in a statement.
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