President Makes 54.5 MPG CAFE Proposal Official

Jul 29: Approximately 20 minutes after he addressed the nation on status of debt ceiling negotiations, President Obama announced an historic agreement with thirteen major automakers to pursue the next phase in the Administration's national vehicle program, increasing corporate average fuel economy (CAFE) standard to 54.5 miles per gallon for cars and light-duty trucks by Model Year 2025 [See WIMS 7/28/11]. The President was joined by Ford, GM, Chrysler, BMW, Honda, Hyundai, Jaguar/Land Rover, Kia, Mazda, Mitsubishi, Nissan, Toyota and Volvo – which together account for over 90 percent of all vehicles sold in the United States -- as well as the United Auto Workers (UAW), and the State of California, who were integral to developing this agreement.

 

    Immediately following the nationally televised debt ceiling announcement, the President opened the CAFE announcement saying, "I've been having a lot of fun this week, but -- nothing more fun and more important to the future of the American economy than the agreement that we're announcing today. I am extraordinarily proud to be here today with the leaders of the world's largest auto companies, and the folks who represent autoworkers all across America. . .

 

    "For decades, we've left our economy vulnerable to increases in the price of oil. And with the demand for oil going up in countries like China and India, the problem is only getting worse. The demand for oil is inexorably rising far faster than supply.  And that means prices will keep going up unless we do something about our own dependence on oil. That's the reality. . .

 

    "I've laid out an energy strategy that would do that. In the short term, we need to increase safe and responsible oil production here at home to meet our current energy needs. And even those who are proponents of shifting away from fossil fuels have to acknowledge that we're not going to suddenly replace oil throughout the economy. We're going to need to produce all the oil we can. But while we're at it, we need to get rid of, I think, the $4 billion in subsidies we provide to oil and gas companies every year at a time when they're earning near-record profits, and put that money toward clean energy research, which would really make a big difference. Those are all short-term solutions, though.  In the long run, we're going to have to do more.. .

 

    "And that's why we're here today. This agreement on fuel standards represents the single most important step we've ever taken as a nation to reduce our dependence on foreign oil. Think about that. Most of the companies here today were part of an agreement that we reached two years ago to raise the fuel efficiency of their cars over the next five years. And the vehicles on display here are ones that benefited from that standard.  Folks buying cars like these in the next several years will end up saving more than $3,000 over time because they can go further on a gallon of gas. And today, these outstanding companies are committing to doing a lot more. The companies here today have endorsed our plan to continue increasing the mileage on their cars and trucks over the next 15 years. We've set an aggressive target, and the companies here are stepping up to the plate.

 

    "By 2025, the average fuel economy of their vehicles will nearly double to almost 55 miles per gallon. So this is an incredible commitment that they've made.  And these are some pretty tough business guys. They know their stuff. And they wouldn't be doing it if they didn't think that it was ultimately going to be good business and good for America. . . Think about what this means. It means that filling up your car every two weeks instead of filling it up every week.  It will save a typical family more than $8,000 in fuel costs over time. And consumers in this country as a whole will save almost $2 trillion in fuel costs. . .

 

    "And just as cars will go further on a gallon of gas, our economy will go further on a barrel of oil.  In the next 15 years, we're going to reduce the amount of oil we need by 2.2 million barrels per day. And this will help meet the goal that I've set for America:  reducing our dependence on foreign oil by one-third. Using less oil also means our cars will produce fewer emissions. So when your kids are biking around the neighborhood, they'll be breathing less pollution and fewer toxins. It means we're doing more to protect our air and water. And it means we're reducing the carbon pollution that threatens our climate. Lastly, these standards aren't just about the bad things we'll prevent; it's about the good things that we'll build.  As these companies look for ways to boost efficiency, they'll be conducting research and development on test tracks. They're going to look to startups working on biofuels and new engine technologies. They're going to continue to invest in advanced battery manufacturing. They're going to spur growth in clean energy. And that means new jobs in cutting-edge industries all across America. . ."

 

    The oil savings, consumer, and environmental benefits of this comprehensive program are detailed in a new report entitled Driving Efficiency: Cutting Costs for Families at the Pump and Slashing Dependence on Oil, which the Administration released today. 

 

    U.S. Transportation Secretary Ray LaHood said, "These standards will help spur economic growth, protect the environment, and strengthen our national security by reducing America's dependence on foreign oil. Working together, we are setting the stage for a new generation of clean vehicles." EPA Administrator Lisa Jackson said, "This is another important step toward saving money for drivers, breaking our dependence on imported oil and cleaning up the air we breathe. American consumers are calling for cleaner cars that won't pollute their air or break their budgets at the gas pump, and our innovative American automakers are responding with plans for some of the most fuel efficient vehicles in our history."

    The White House indicated in a release that a national policy on fuel economy standards and greenhouse gas emissions provides regulatory certainty and flexibility that reduces the cost of compliance for auto manufacturers while addressing oil consumption and harmful air pollution. Consumers will continue to have access to a diverse fleet and can purchase the vehicle that best suits their needs.

    EPA and the National Highway Traffic Safety Administration (NHTSA) are developing a joint proposed rulemaking, which will include full details on the proposed program and supporting analyses, including the costs and benefits of the proposal and its effects on the economy, auto manufacturers, and consumers. After the proposed rules are published in the Federal Register, there will be an opportunity for public comment and public hearings. The agencies plan to issue a Notice of Proposed Rulemaking by the end of September 2011. California plans on adopting its proposed rule in the same time frame as the Federal proposal.

 

    Given the long time frame at issue in setting standards for MY2022-2025 light-duty vehicles, EPA and NHTSA intend to propose a comprehensive mid-term evaluation. Consistent with the agencies' commitment to maintaining a single national framework for vehicle GHG and fuel economy regulation, the agencies will conduct the mid-term evaluation in close coordination with California.

 

   In achieving the level of standards described above for the 2017-2025 program, the agencies expect automakers' use of advanced technologies to be an important element of transforming the vehicle fleet. The agencies are considering a number of incentive programs to encourage early adoption and introduction into the marketplace of advanced technologies that represent "game changing" performance improvements, including:

• Incentives for electric vehicles, plug-in hybrid electric vehicles, and fuel cells vehicles;
• Incentives for advanced technology packages for large pickups, such as hybridization and other performance-based strategies;
• Credits for technologies with potential to achieve real-world CO2 reductions and fuel economy improvements that are not captured by the standards test procedures. 

In addition, EPA plans to propose provisions for:

• Credits for improvements in air conditioning (A/C) systems, both for efficiency improvements and for use of alternative, lower global warming potential refrigerant;
• Treatment of compressed natural gas (CNG);
• Continued credit banking and trading, including a one-time carry-forward of unused MY 2010-2016 credits through MY 2021.

    Access the full text of the President's comments (click here). Access a background document listing all auto company attendees, legislators, and officials (click here). Access a White House press release (click here). Access the Driving Efficiency report (click here). Access a CAFE overview from the NHTSA website (click here). Access EPA's Fuel Economy website (click here). Access the May 10 FR announcement (click here). Access the NHTSA docket for this action (click here). [#Energy/CAFE]

 

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House Republicans Press EPA For Explanation On Ozone NAAQS

Jul 28: House Energy and Commerce Committee Chairman Fred Upton (R-MI), Energy and Power Subcommittee Chairman Ed Whitfield (R-KY), and Oversight and Investigations Subcommittee Chairman Cliff Stearns (R-FL) are pressing U.S. EPA Administrator Lisa Jackson for more information concerning the Agency's "discretionary reconsideration of ambient air quality standards for ground-level ozone and its proposal to issue costly new standards." The lawmakers said they object to the Agency's decision to voluntarily revisit and reissue the standards -- a regulatory choice which they say "is expected to destroy jobs, cost tens of billions of dollars, and stifle economic development in local communities across the nation."
 
    In a letter to Administrator Jackson they said, "If finalized, these standards will impose unprecedented costs, ranging from $19 billion to $90 billion annually by your agency's own estimates, and result in new regulatory burdens for employers, businesses and already cash-strapped states and communities struggling to grow their local economies and create jobs. These would be the single most expensive environmental standards ever to be imposed by any Administration on the U.S. Economy." 

 

    EPA announced on July 26, that it would not meet its July 29 deadline for releasing new National Ambient Air Quality Standard (NAAQS) for ozone [See WIMS 7/26/11]. An Agency spokesperson said that although it would not issue the final rule on July 29th, which it had intended, it would be finalizing this standard shortly and would be "based on the best science and meet the obligation established under the Clean Air Act to protect the health of the American people. In implementing this new standard, EPA will use the long-standing flexibility in the Clean Air Act to consider costs, jobs and the economy."

 

    They House Republicans said in their letter, "We are committed to continuing our nation's progress towards a cleaner environment and seeing related improvements to public health. It is well documented that, under existing standards and regulations, air quality in the United States has improved considerably and will continue to do so," the members wrote. In light of the economic climate, it is important to note that your decision to issue these onerous regulations at this time is a choice -- it is completely discretionary on your part. There are already stringent ozone ambient air quality standards in place that were issued as recently as 2008. Your choice to promulgate alternate costly new standards outside of the Clean Air Act's normal five-year review cycle defies common sense. The discretionary basis for such expensive decisions also raises serious questions about the Administration's priorities at a time when the nation's focus should be on economic recovery and job creation. The appropriate approach for the agency would be to follow the Clean Air Act's normal five year review process."
 
    The letter requests Administrator Jackson's participation in future committee hearings that will examine the standards and their economic consequences and asks her office to provide written responses to a series of questions concerning the development of the proposed ozone standards.

 

    Following EPA's announcement of a delay in releasing it proposal, the Union of Concerned Scientists (UCS) issued a release saying the White House should let EPA do its job on ozone and called the delay "unacceptable." Francesca Grifo, director of UCS's Scientific Integrity Program said, "The science has been in for three years. It's past time to set the new standard. The law says the Environmental Protection Agency (EPA) has to base its decision on the science. At this point, setting a standard outside the range scientists have determined is a clear violation of the Clean Air Act. The first step to protecting public health is setting the standard based on science."

    UCS said that according to the Clean Air Act -- and reinforced by a 2001 Supreme Court decision in Whitman v. American Trucking Associations (Nos. 99-1257, 99-1426) -- ground-level ozone standards must be set solely according to the findings of EPA scientists and the EPA's Clean Air Scientific Advisory Committee, an independent panel of experts. According to the law, states and localities can take economics into consideration during the implementation process. UCS said, "The Obama administration promised in 2009 to revisit an unscientific Bush administration decision to define dangerous levels of ozone at 75 parts per billion. That decision, which was later challenged in court, disregarded public health scientists' finding in 2007 that only a standard of 60 to 70 parts per billion was scientifically justifiable. In 2010, the EPA issued a proposed rule in that range. However, a final rule with a specific numerical standard has been repeatedly delayed." [See WIMS 12/9/10]. 

    Access a release from House Republicans and link to the complete letter (click here). Access a release from UCS with links to related information (click here). Access EPA's ground-level ozone regulatory website for complete background (click here). [#Air]

Keystone XL Pipeline Bill Passes House 279-147

Jul 26: The U.S. House passed the controversial Keystone XL pipeline -- the North American-Made Energy Security Act (H.R.1938) by a vote of 279-147 [See WIMS 7/26/11]. The bill, authored by Representatives Lee Terry (R-NE) and Mike Ross (D-AR), is designed to expedite the permitting process the pipeline and would require that the final Presidential Permit be issued by November 1, 2011. The vote included 232 Republicans and 47 Democrats -- 3 Republicans and 144 Democrats voted against the measure.

 

    Representative Terry issued a release stating, the bill requires the President through the Secretary of Energy to set a schedule for the analysis and decision process regarding the construction and operation of the Keystone XL pipeline. It now moves to the Senate for consideration. Terry indicated, "This pipeline has been the subject of more than 1000 days of consideration and a coordinated review by more than a dozen federal agencies. All other cross-border pipelines which have received Presidential permits have taken between 18 and 24 months. In June, the International Brotherhood of Teamsters, the Laborers' International Union of North America, the International Union of Operating Engineers, and the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the U.S. and Canada wrote a letter urging the passage of the bill. The letter pointed out the project will directly create 20,000 high-wage jobs and generate $6.5 billion in income for workers."

    He said, "This bipartisan bill has a simple and straightforward objective – set a schedule, coordinate that schedule, and execute a decision process. The more we delay this decision, the more reliant we become on oil from countries in the Middle East. This bill means less reliance on foreign oil, more jobs, and an energy policy which doesn't rely on less-than-friendly foreign nations. We cannot afford any more delay."

    House Energy and Commerce Committee Fred Upton (R-MI) said, "This pipeline, Keystone XL, if approved, would dramatically improve our energy security. According to the Department of Energy, the pipeline would "essentially eliminate" our Middle East oil imports. It would provide a massive influx of stable oil into the market – something desperately needed as threatened supplies in North Africa send prices into orbit. This country needs the president to make a decision on the Keystone XL's permit. The uncertainty has gone on too long, and if we don't act, these energy supplies will go some place else. This is why we have this legislation, H.R. 1938. This bipartisan bill doesn't tell the president how to decide, it just requires him to make a decision. I commend Representatives Terry and Ross for finding a commonsense, and yes, bipartisan solution. If we don't build this pipeline, Canada will find another buyer. The Chinese have expressed significant interest in Alberta's oil sands. Are we going to stand by and watch China receive imports from our ally while we are forced to rely on imports from unstable countries? I sure hope not."

    Cosponsor, Representative Mike Ross said, "The unrest in Libya and the indecisiveness of OPEC are proof that it is in our nation's financial and national security interests to reduce our dependence on Middle Eastern oil as soon as possible. We will never fully revive our economy until we lower gas prices in the short term, and stabilize gas prices in the long term. This Canada-to-Gulf pipeline will carry about one million barrels of North American oil a day to refineries on the Gulf, creating jobs here at home and lowering the price of fuel for all Americans. I'm pleased the House passed this bill and I remain hopeful it will pass the U.S. Senate. The federal government has dragged its feet for way too long on this project and we are simply asking that it set a timetable and make a decision by November 1, 2011."

    On July 22, the State Department outlined a schedule that would lead to a decision by the end of the year. The State Department said, ". . .the Administration hasn't issued a formal statement of Administration position yet on that, so can't give you a formal Administration opinion. From our perspective here at the State Department, we think it's unnecessary, since we've already committed publicly to finishing his process by the end of the year, which is 60 days after November the 1st." [See WIMS 7/25/11]. An amendment to H.R.1938 to extend the deadline for permit decision to 120 days after final environmental impact statement or until January 1, 2012, failed on a voice vote.

    On July 22, U.S. Senator Mike Johanns (R-NE.) who has continually pressed the State Department to adequately review the project, said he was pleased with the Department's announcement of two public meetings in Nebraska. Sen. Johanns indicates on his website, "As your U.S. Senator, it is my duty to review federal actions that might impact resources critical to the State of Nebraska. I have repeatedly raised my concerns with federal regulators to urge the involvement of the correct agencies and experts in the permit review. We must ensure that regulatory actions related to this application safeguard the irreplaceable natural resource of the Ogallala Aquifer."

    Noah Greenwald, endangered species director at the Center for Biological Diversity (CBD) said, "This bill circumvents environmental protections that keep our air, land, water and wildlife from being polluted. Rushing construction of this pipeline before a full environmental review can be completed is a shameless giveaway to the oil industry. This pipeline is an environmental disaster in the making. Critical habitat for endangered species will be destroyed and hundreds of miles of wild landscapes, rivers and streams from Canada to the Gulf Coast will be recklessly put at risk from a spill. Instead of pushing building of the Keystone XL pipeline, legislators need to move toward more sustainable, less polluting sources of energy."

    Jeremy Symons, National Wildlife Federation (NWF) senior vice president said, "The oil companies behind this bill are playing a high stakes game of hide the ball. They are desperate for Congress and the administration to rush the approval of this pipeline before its full costs comes to light. Keystone XL will turn the U.S. into the middlemen of world dirty fuels market. We inherit the risks and higher costs while Canadian oil giants reap the rewards. The real answer is homegrown U.S. clean energy that creates jobs and makes us energy independent." An NWF senior attorney said the bill is legally unworkable says , since it would attempt to bypass existing provisions of cornerstone environmental laws."

    Access a release from Rep. Terry (click here). Access a release from Rep. Ross (click here). Access legislative details for H.R.1938 including amendments and roll call votes (click here). Access the full text of the State Department 7/22 briefing including the questions and DOS responses (click here). Access the State Department Keystone Project website for complete information (click here). Access a release from Senator Johanns and link to extensive information on his website (click here). Access a release from CBD (clickhere). Access a release from NWF and link to a teleconference the legal aspects of the bill (click here). [Energy/OilSands]

Government Deadlock: No Agreement On Debt Crisis

Jul 25: In a nationwide, primetime address President Obama outlined two approaches to the looming debt crisis and indicated that with just eight days to go, the nation faces an unprecedented financial crisis if the issue is not resolved. He stressed the need for a bipartisan solution and reminded Washington that compromise is not "a dirty word." He spoke to the frustrations ordinary Americans feel with the political process. Reactions from Republican leaders indicate no change in their position and the Federal government deadlock prevails.

 

    The President said, "The first approach says, let's live within our means by making serious, historic cuts in government spending.  Let's cut domestic spending to the lowest level it's been since Dwight Eisenhower was President.  Let's cut defense spending at the Pentagon by hundreds of billions of dollars.  Let's cut out waste and fraud in health care programs like Medicare -- and at the same time, let's make modest adjustments so that Medicare is still there for future generations.  Finally, let's ask the wealthiest Americans and biggest corporations to give up some of their breaks in the tax code and special deductions. This balanced approach asks everyone to give a little without requiring anyone to sacrifice too much. It would reduce the deficit by around $4 trillion and put us on a path to pay down our debt.  And the cuts wouldn't happen so abruptly that they'd be a drag on our economy, or prevent us from helping small businesses and middle-class families get back on their feet right now. . ."

 

    Then he continued, "The only reason this balanced approach isn't on its way to becoming law right now is because a significant number of Republicans in Congress are insisting on a different approach -- a cuts-only approach -– an approach that doesn't ask the wealthiest Americans or biggest corporations to contribute anything at all.  And because nothing is asked of those at the top of the income scale, such an approach would close the deficit only with more severe cuts to programs we all care about –- cuts that place a greater burden on working families.

    "So the debate right now isn't about whether we need to make tough choices.  Democrats and Republicans agree on the amount of deficit reduction we need.  The debate is about how it should be done. Most Americans, regardless of political party, don't understand how we can ask a senior citizen to pay more for her Medicare before we ask a corporate jet owner or the oil companies to give up tax breaks that other companies don't get.  How can we ask a student to pay more for college before we ask hedge fund managers to stop paying taxes at a lower rate than their secretaries? How can we slash funding for education and clean energy before we ask people like me to give up tax breaks we don't need and didn't ask for?

    "That's not right.  It's not fair.  We all want a government that lives within its means, but there are still things we need to pay for as a country -– things like new roads and bridges; weather satellites and food inspection; services to veterans and medical research. And keep in mind that under a balanced approach, the 98 percent of Americans who make under $250,000 would see no tax increases at all.  None. . ."

 

    Despite the President's pleas, House Speaker John Boehner (R-OH) held firm on the Republican stalwart position of no tax increases and/or no revenue increases. Speaker Boehner said, "Where most American businesses make the hard choices to pay their bills and live within their means, in Washington more spending and more debt is business as usual. I've got news for Washington – those days are over. . . What we told the president in January was this: the American people will not accept an increase in the debt limit without significant spending cuts and reforms. And over the last six months, we've done our best to convince the president to partner with us to do something dramatic to change the fiscal trajectory of our country. . .something that will boost confidence in our economy, renew a measure of faith in our government, and help small businesses get back on track. . .

 

    "The president has often said we need a 'balanced' approach -- which in Washington means: we spend more. . .you pay more. Having run a small business, I know those tax increases will destroy jobs. The president is adamant that we cannot make fundamental changes to our entitlement programs. As the father of two daughters, I know these programs won't be there for them and their kids unless significant action is taken now. The sad truth is that the president wanted a blank check six months ago, and he wants a blank check today. That is just not going to happen. . .

 

    ". . .this week, while the Senate is struggling to pass a bill filled with phony accounting and Washington gimmicks, we will pass another bill – one that was developed with the support of the bipartisan leadership of the U.S. Senate. I expect that bill can and will pass the Senate, and be sent to the President for his signature. If the President signs it, the 'crisis' atmosphere he has created will simply disappear. The debt limit will be raised. Spending will be cut by more than one trillion dollars, and a serious, bipartisan committee of the Congress will begin the hard but necessary work of dealing with the tough challenges our nation faces. . ."

    Many Washington inside observers wondered why the President was still discussing the idea of revenue increases, when apparently the White House has indicated it would support a proposal by Senate Majority Leader Harry Reid (D-NV) which calls for $2.7 trillion in cuts and no revenue increases. Considering the two basic proposal currently on the table in the House and Senate, neither of which call for any revenue increases; it would appear that Republicans have won a significant portion of the battle. It seems the only major issue yet to be resolved is whether the debt ceiling increase will be "short term" (6-9 months) which Republicans are supporting; or, "longer-term (through 2012) which the President and Democrats are supporting.

    Frustrated by the stalemate, President Obama said, "The American people may have voted for divided government, but they didn't vote for a dysfunctional government.  So I'm asking you all to make your voice heard. If you want a balanced approach to reducing the deficit, let your member of Congress know. If you believe we can solve this problem through compromise, send that message."

    Access an overview, video and full text of the President's remarks (click here). Access the full text of Speaker Boehner's remarks (click here). Access the Senate Democratic proposal (click here). Access the House Republican proposal (click here). [#All]

EPA Can't Achieve Children's Health Goals With A Voluntary Program

Jul 21: U.S. EPA's Office of Inspector General (OIG) issued a report entitled, EPA's Voluntary Chemical Evaluation Program Did Not Achieve Children's Health Protection Goals (No. 11-P-0379, July 21, 2011). OIG indicates that it conducted the review to determine the outcomes of EPA's Voluntary Children's Chemical Evaluation Program (VCCEP) toward meeting its original goal and the goals outlined under the Chemical Right-to-Know Initiative (ChemRTK).

 

    Executive Order (EO) 13045 directed Federal agencies to place a high priority on protecting children from environmental and safety risks. The goal of the 1998 ChemRTK was to give citizens information on the effects of chemicals to enable them to make informed choices in the home and marketplace. ChemRTK satisfied EO 13045 by directing EPA to undertake testing on chemicals to which children are disproportionately exposed. EPA accordingly established the VCCEP pilot.

 

    OIG found that the VCCEP pilot did not achieve its goals to design a process to assess and report on the safety of chemicals to children. The pilot's design did not allow for desired outcomes to be produced. Specifically, the pilot had a flawed chemical selection process and lacked an effective communication strategy. Programmatic effectiveness was hampered by industry partners who chose not to voluntarily collect and submit information, and EPA's decision not to exercise its regulatory authorities under the Toxic Substances Control Act (TSCA)  to compel data collection. EPA has not demonstrated that it can achieve children's health goals with a voluntary program. The VCCEP is no longer operational, and the Agency has no plans to revive, replace, or terminate the program. As a result, the Agency is not meeting the intent of EO 13045, ChemRTK, or the VCCEP pilot, and there remains no readily understandable source of chemical exposure information that the general public can access to determine potential risks to children.

 

    OIG recommends that EPA design and implement a new process to assess the safety of chemicals to children that: (1) identifies the chemicals with highest potential risk to children; (2) applies TSCA regulatory authorities as appropriate for data collection; (3) interprets results and disseminates information to the public; and (4) includes outcome measures that assure valid and timely results.

 

    OIG reported that the Agency concurred with the findings, indicating that work ongoing by the existing chemicals program addresses many of OIG's concerns. EPA agreed with OIG recommendations related to improving its chemical selection process and developing performance measures for children's health protection. EPA did not explicitly agree to develop a workable data collection strategy for applying TSCA regulatory authorities or a communications strategy for public information dissemination, but provided information on the program's current activities. Also, no target dates were provided by which to assess the completion of EPA's actions taken to address the OIG recommendations.

 

    Access the complete 30-page report (click here). [#Toxics]

Michigan Delegation Warns President On CAFE Standards

Jul 22: The entire Michigan delegation, with the exception of Rep. John Conyers Jr. (D), sent a letter to President Obama saying the Administration's current proposals for new corporate average fuel economy (CAFE) are overly aggressive and may exceed what is technologically achievable for U.S. automakers. The said the proposal would put U.S automakers at a disadvantage and may prevent them from selling larger vehicles that U.S. consumers want to buy. The Administration is on schedule to complete a CAFE proposal this September and plans to make a final decision by July 2012. The complete letter follows:

 

    "We write to you today on the issue of a single national program for vehicle fuel economy and greenhouse gas emissions for model years 2017-2025. This issue, if handled in the wrong way, would have a negative effect on our economy, stalling our economic recovery, and would result in critical American job losses with no benefit to the environment. The Center for Automotive Research recently published a report, based on data from the National Academy of Sciences, which suggested that overly stringent standards would cost approximately 260,000 jobs and add $10,000 to the cost of a new vehicle. An unsound program would both negatively impact U.S. jobs and drive consumers to used car lots for vehicles that are less fuel efficient, which would be a loss to environmental progress.

 

    "We are deeply concerned that the Administration's 'starting' proposal of a five percent annual increase for cars and light trucks -- to reach a goal of 56.2 miles per gallon in 2025 -- is overly aggressive and not reasonably feasible. Such a proposal would push beyond the limits of reasonably feasible technology development and would have significant negative ramifications for U.S. jobs and competitiveness. Technology and economics must reasonably support the targets and goals for fuel economy improvement and greenhouse gas emissions reductions, and we are concerned that the Administration's current approach is not leading in that direction. With that in mind, as members of the Michigan delegation, we want to bring to your attention several issues of concern in the ongoing discussions and suggest an approach to help bring the parties to an agreement.

 

    "We understand that the Administration is now considering a 3.5 percent annual increase for light duty trucks for 2017-2021 and is working with the auto manufacturers to determine what flexibilities would be required to achieve that target. We also understand that the Administration is considering the possibility of a different approach for certain work trucks. While we appreciate the Administration's efforts to understand the auto manufacturers' future product plans, to understand the constraints the companies would face in meeting aggressive targets, and to offer credits and flexibilities to help with compliance, we believe that the overall targets currently proposed may exceed what is technologically achievable for the U.S. automakers that produce and sell the majority of the larger pickup trucks and sport utility vehicles that U.S. families and businesses -- and tens of thousands of autoworkers -- depend upon.

 

    "More significantly, we are concerned that the Administration's current approach for light duty trucks may have a discriminatory impact on these U.S. manufacturers. An approach to higher fuel economy that relies on the generation of credits from other than truck classes to reach compliance is not sustainable over the long-term and could have detrimental effects on U.S. automakers by expanding the gap between the regulatory requirements and what is technologically and economically achievable. This approach will put an increasingly heavy burden on U.S. auto manufacturers, who already must rely on credits earned for high fuel economy passenger cars to reach the aggressive fuel economy targets for light duty trucks in the regulatory requirements for model years 2012-2016, and may prevent them from selling these larger vehicles that U.S. consumers want to buy. Meanwhile, manufacturers that produce primarily smaller vehicles will have an unfair competitive advantage and will still be able to sell these larger vehicles that are no more fuel efficient. In other words, this has the potential to negate the significant reforms achieved by the Congress in 2007 that eliminated the discriminatory features of the old corporate average fuel economy (CAFE) system.

 

    "We are also deeply concerned about the Administration's plans for model years 2022-2025. As you know, the proposed standards cover a time horizon that is unprecedented in the history of fuel economy rulemaking. The initial year of the new standards is five model years away, and the endpoint stretches nearly fifteen years into the future. No previous fuel economy rulemaking has exceeded five model years or had a starting point so far into the future. That is why Congress has limited the authority of NHTSA to set fuel economy standards to no more than five model years at a time -- in this case, 2017-2021. The purpose of the five-year limitation was to prevent standards being set too far out into the future, based on speculation or unreliable market and technology projections including the cost of technology, the cost of fuel, and consumer acceptance. Some of the undersigned question EPA's authority to regulate motor vehicle fuel economy, directly or indirectly. However, if that authority is accepted, we believe that the same limitation of five years is appropriate for EPA regulation of greenhouse gas emissions.

 

    "At a minimum, if the White House insists upon setting standards for 2022-2025, those standards should only go into effect if a mid-term review confirmed that the underlying assumptions were met and should specify that, in the absence of that confirmation, both agencies would commence a new rulemaking for that period. The burden of proof should be on the longer period -- not the shorter one. Furthermore, there must be a clear mechanism for ensuring that any EPA regulations that go into effect are coordinated with the NHTSA rulemaking process and harmonized to continue a single national program for 2022-2025. Similarly, allowing California to be able to wield undue influence is simply not acceptable. Finally, we believe that the mid-term review should include a comprehensive joint agency assessment of the auto manufacturers' experience with the 2012-2016 and 2017+ rules to date at the time of the review to determine whether there have been any problems or concerns that would suggest a need for mid-course adjustments.

 

    "We need a balanced approach to fuel economy regulation with reasonable and achievable targets that will reduce our consumption of oil and greenhouse gas emissions while preserving U.S. jobs and promoting U.S. manufacturing. We do not believe the Administration's current proposal will achieve that balanced approach and believe instead it could have a detrimental effect on the U.S. economy. We urge you to consider further the Administration's thinking in these areas -- with special focus on the two issues we have raised -- and consider carefully the potential impact on U.S. jobs and U.S. manufacturing.

 

    "As a delegation, we bring to the table a range of views on this issue. However, with the Michigan unemployment rate standing at 10.5 percent, we are unanimous in our concern about the consequences of an excessive proposal, and we urge you to continue to work closely with U.S. manufacturers who have the most at stake. In that regard, we urge the Administration to sit down promptly and at one time with all three domestic auto manufacturers and the United Auto Workers to work through an acceptable solution to these issues."

 

    The letter was signed by Sens. Carl Levin (D) and Debbie Stabenow (D), as well as Reps. Fred Upton (R), John Dingell (D), Dale Kildee (D), Dave Camp (R), Mike Rogers (R), Sandy Levin (D), Candice Miller (R), Gary Peters (D), Thaddeus McCotter (R), Justin Amash (R), Tim Walberg (R), Bill Huizenga (R), Hansen Clarke (D) and Dan Benishek (R). Rep. John Conyers Jr. (D) did not sign the letter.

   

    On May 10, 2011, NHTSA issued a Notice of Intent to prepare an Environmental Impact Statement [76 FR 26996-27000] to consider the potential environmental impacts of new fuel economy standards for model years (MY) 2017–2025 passenger cars and light trucks that NHTSA will be proposing pursuant to the Energy Independence and Security Act of 2007. The action will be part of a joint rulemaking with EPA, in which EPA plans to issue greenhouse gas standards for the same model year vehicles. This is the second phase of a National Program under which the two agencies establish harmonized requirements to improve the fuel economy and reduce the GHG emissions of new passenger cars and light trucks sold in the U.S.

   

    In a related matter, Ceres, a national coalition of leading institutional investors and environmental groups, launched an ad campaign today (July 22) promoting the economic benefits of higher fuel efficiency standards, citing recent expert research and polling. The ad campaign, which begins with radio spots in Washington DC and Michigan, is in response to news that the Alliance of Automobile Manufacturers (AAM) had launched a radio ad campaign claiming adverse economic impacts from strong CAFE standards. Ceres President Mindy Lubber said, "The facts are clear, a 60 mpg standard will restore American automakers to a place of global leadership. Higher standards will create new jobs by encouraging automakers to build more of the fuel efficient cars and trucks that drivers want to buy."

    The Ceres radio spots are part of a multiplatform campaign that includes radio, print and online social media advertising in heartland states and the nation's capital. John DeCicco, a faculty fellow at the University of Michigan's Energy Institute said, "American's overwhelming support for higher fuel efficiency standards matches what is technologically feasible. His report, "A Fuel Efficiency Horizon for US Automobiles," shows how optimal use of available and affordable technologies can push new fleet efficiency as high as 74 mpg assuming adequate lead time.

    Recent polling commissioned by Ceres of likely Michigan and Ohio voters shows: 80% of likely Ohio voters and 76% of likely Michigan voters believe a national 60 mpg standard will encourage American car makers to innovate, boosting sales and protecting American auto jobs. Ceres said in Michigan and Ohio -- the heart of the American auto industry -- likely voters overwhelmingly support the 60 mpg fuel efficiency standard. They cite: 78% of likely Michigan voters and 79% of likely Ohio voters say they support 60 mpg; 68% of likely voters in Michigan auto industry households and 72% of likely voters in Michigan manufacturing households support 60 mpg; and 84% of likely voters in Ohio auto industry households and 74% of likely voters in Ohio manufacturing households support 60 mpg.   

    Access the letter (click here). Access a CAFE overview from the NHTSA website (click here). Access EPA's Fuel Economy website (click here). Access the May 10 FR announcement (click here). Access the NHTSA docket for this action (click here). Access a release from CERES with multiple links to related information (click here). [*Energy/Efficiency, *Transportation/CAFE, *Climate] 

 

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Bipartisan Senate Bill Would Extend Time On "Boiler MACT" Rules

Jul 20: U.S. Senators Susan Collins (R-ME), Ron Wyden (D-OR), Lamar Alexander (R-TN), Mary Landrieu (D-LA), Mark Pryor (D-AR), and Pat Toomey (R-PA) introduced bipartisan legislation (S.1392) which they say would allow the U.S. EPA the time it has said it needs to adequately consider new "Boiler MACT" rules [See WIMS 6/24/11]. The bill has been referred to the Senate Committee on Environment and Public Works (EPW), Chaired by Senator Barbara Boxer (D-CA).

    In April 2010, pursuant to court orders, EPA first announced new Maximum Achievable Control Technology (MACT) regulations on many fossil fuel and biomass-fired boilers in the United States. Recognizing that it needed more data and time to write the rule, in December 2010, EPA requested a 15-month extension to rework and finalize the rule, and to receive further public comment, which was rejected by a court. When EPA issued the rule in February of 2011, it immediately proposed that it be open to comment and revision. The bill introduced by the Senators would establish a clear timetable and conditions for reissuance of the regulations.

    Specifically, the bipartisan legislation would:

• Give EPA 15 months from the bill's date of enactment to re-propose and finalize the Boiler MACT regulations.
• Extend compliance deadlines from three years to at least five years which would allow facilities adequate time to comply with the new standards and install necessary equipment.
• Clarify that renewable and carbon-neutral materials remain classified as fuel and not solid waste.
• Direct EPA to ensure that the new rules are achievable by real-world boilers, process heaters, and incinerators, and impose the least burdensome regulator alternatives consistent with the President's Executive Order.

    Senator Collins said, "The EPA performs vital functions in helping to protect the public health by ensuring that the air we breathe is clean and the water we drink is safe. We need, however, to make sure that as the EPA issues new regulations, it does not create so many roadblocks to economic growth that it discourages private investment, which is the key to maintaining and creating jobs. At a time when manufacturers are struggling to retain jobs, it is essential that this rule not jeopardize thousands of jobs in manufacturing, particularly in the forest products industry, by imposing billions of dollars of new costs. Our legislation provides common sense solutions to the challenges the EPA is facing in attempting to implement these complicated rules, which if written without proper data, analysis, and consideration, would cost the industry billions of dollars and potentially thousands of jobs."

    Senator Wyden said, "EPA itself has admitted that its boiler rules need to be fixed. As they are written now, the rules will stymie the burgeoning biomass energy industry and make it very difficult for existing lumber and wood products mills to operate. This legislation directs the EPA to go back to the drawing board and craft boiler rules that are more in line with what is realistic for mills and factories and does not restrict future use of biomass energy."

    The legislation is supported by the American Forest and Paper Association, National Association of Manufacturing, U.S. Chamber of Commerce, National Federation of Independent Business, Business Roundtable, Biomass Power Association, and approximately 25 other national associations.

 

    On June 24, as part of a filing with the U.S. Court of Appeals for the DC Circuit, U.S. EPA has set a schedule for issuing updated air toxics standards for boilers and certain solid waste incinerators (i.e. "Boiler MACT" rules). EPA said that to ensure that the standards are based on the best available data and the public is given ample opportunity to provide additional input and information, it would propose standards to be reconsidered by the end of October 2011 and issue final standards by the end of April 2012. EPA said that "this is the best approach to put in place technically and legally sound standards that will bring significant health benefits to the American public." [See WIMS 6/24/11].

 

    On June 22, responding to what they say are "urgent calls from job creators across a range of industries, bipartisan members of the U.S. House Committee on Energy and Commerce have introduced H.R.2250, the EPA Regulatory Relief Act of 2011. The proposal would direct EPA to develop achievable standards affecting non-utility boilers and incinerators and grants additional time for development of and compliance with the rules. The legislation would stay the boiler and incinerator rules and calls for EPA to repropose the rules within 15 months and extend compliance times from 3 to 5 years [See WIMS 6/22/11].

 

    Access a release from Senator Collins including a link to the industry support letter (click here). Access legislative details for S.1392 (click here). Access legislative details for H.R.2250 (click here). Access complete information and background on the Boiler MACT rule from EPA (click here). [*Air]

 

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Administration's National Strategy For Electronics Stewardship

Jul 20: At an event in Austin, Texas, at a certified electronics recycling center, U.S. EPA Administrator Lisa Jackson, General Services (GSA) Administrator Martha Johnson, and White House Council on Environmental Quality Chair Nancy Sutley were joined by the CEOs of Dell Inc. and Sprint, and senior executives from Sony Electronics to release the Obama Administration's "National Strategy for Electronics Stewardship" -- a strategy for the responsible electronic design, purchasing, management and recycling which the Administration says "will promote the burgeoning electronics recycling market and jobs of the future here at home."

 

    The announcement includes the first voluntary commitments made by Dell, Sprint and Sony to EPA's industry partnership aimed at promoting environmentally sound management of used electronics. The Administration's strategy also commits the Federal government to take specific actions that will encourage more environmentally-friendly design of electronic products; promote recycling of used or discarded electronics; and advance a domestic market for electronics recycling that will protect public health and create jobs.

    According to a release from EPA, every year, Americans generate almost 2.5 million tons of used electronics, which are made from valuable resources such as precious metals and rare earth materials, as well as plastic and glass. From computers and cell phones, to portable communication and music devices -- United States is, and will continue to be, a global leader in designing and developing new and improved electronic technologies. The responsible management of electronics provides an opportunity to create economic development and jobs by developing a strong domestic electronics recycling market while preventing pollution at home and abroad.

    As outlined in the strategy report, the Federal government will: promote the development of more efficient and sustainable electronic products; direct federal agencies to buy, use, reuse and recycle their electronics responsibly; support recycling options and systems for American consumers; and strengthen America's role in the international electronics stewardship arena.

    Under the strategy, GSA will remove products that do not comply with comprehensive and robust energy efficiency or environmental performance standards -- from its information technology purchase contracts used by Federal agencies, and will ensure that all electronics used by the Federal government are reused or recycled properly. In addition, EPA and GSA will promote development of new environmental performance standards for categories of electronic products not covered by current standards. Several Federal agencies will work together to identify methods for tracking used electronics in Federal agencies to move toward reuse and recycling.

    A key component of this strategy includes the use of certified recyclers and increasing safe and effective management and handling of used electronics in the United States and working with industry in a collaborative manner to achieve that goal. As a first step in this effort, Administrator Jackson signed a voluntary commitment with Dell Inc. CEO Michael Dell and Sprint CEO Dan Hesse to promote a U.S. based electronics recycling market. Sony Electronics Inc. representatives were also present and also committed to improving the safe management of used electronics.

    The collaboration with industry aims to encourage businesses and consumers to recycle their electronics with certified recyclers, and for electronic recyclers to become certified. There are two existing domestic third-party certification recycling entities, R2 (independent nonprofit affiliated with Institute of Scrap Recycling Industries and E-Stewards (operated by the Basel Action Network). The electronics recycling industry is increasingly embracing these certification programs. Certified recyclers are regularly audited by these certification entities to ensure that electronics are recycled in a manner that is safe for human health and the environment. As the next steps in this collaborative effort, EPA will continue to work with industry to encourage other companies to voluntarily commit to help grow the domestic recycling market, create the green jobs of the future in the United States and educate consumers. 

    Administrator Jackson said, "A robust electronics recycling industry in America would create new opportunities to efficiently and profitably address a growing pollution threat. The participation of industry leaders like Dell, Sprint and Sony is absolutely essential to this effort, and will help ensure that the work of the federal government -- the largest electronics consumer around -- is protecting our people from pollution at the same time we support savings and job creation through e-cycling and re-use of valuable materials."

    Nancy Sutley, CEQ Chair said, "Through a strong federal partnership, and coordination with manufacturers, retailers, recyclers, State and local governments, and other stakeholders, the actions outlined here will help address the potential health and environmental problems caused by the mismanagement of discarded electronics. This strategy will encourage the recycling of these valuable resources and allow the U.S. to take advantage of the economic opportunities of remanufacturing and create jobs of the future here in America." GSA Administrator Martha Johnson said, "The Nation's largest single consumer of electronics, the Federal Government, will now be the Nation's most responsible user of electronics. The steps outlined in the report will ensure that government leads by example and that the billions of dollars in IT equipment the government cycles through annually will be either reused or recycled properly."

   

    According to the Strategy report, it provides four overarching goals. Action items under each goal are identified and the projects that will implement each action item are listed. These recommendations are summarized described in more detail in the main body of the report. The four major goals are:

• Build Incentives for Design of Greener Electronics, and Enhance Science, Research and Technology Development in the United States
• Ensure that the Federal Government Leads By Example
• Increase Safe and Effective Management and Handling of Used Electronics in the United States

• Reduce Harm from US Exports of E-Waste and Improve Safe Handling of Used Electronics in Developing Countries

    An on-line annex of benchmarks of projects under each of the goals is posted on Internet and lists each of the projects, the primary agency responsible for the project and any agencies supporting the primary agency in that effort, and the target date for completion of the project. As the National Strategy is developed in further detail by the departments and agencies, and as the Strategy is implemented, the annex will be updated. As appropriate, action items and projects under them may be realigned as efficiencies and opportunities for further improvement are identified.

    The Institute of Scrap Recycling Industries, Inc. (ISRI) issued a release applauding the Obama Administration "for taking concrete, practical steps to address how the U.S. Government will manage its used and end-of-life electronics while refuting an effort to ban such legitimate international trade, a move that would deliver a serious blow to the vibrant U.S. scrap recycling industry." ISRI President Robin Wiener said, "the Administration's announcement closely mirrored ISRI's position for stepped up enforcement of the federal CRT [Cathode Ray Tubes] rule to stop illegal exports, increased third-party certifications of responsible recyclers and continued exchange of U.S. technology and best practices to help strengthen the environmentally responsible processing of electronics globally."

    Access a release from EPA (click here). Access the 34-page National Strategy for Electronics Stewardship (click here). Access the  Agency Benchmarks to the Federal National Strategy for Electronics Stewardship (click here). Access the Federal Government Electronics Stewardship website for extensive information (click here). Access EPA's Electronics Stewardship website for additional information (click here). Access the GSA's electronic stewardship goals and promoting Federal agencies' purchasing Environmentally Preferable Products (click here). Access the e-Stewards website (click here). Access the R2 website (click here). Access various WIMS articles regarding electronic waste, e-Stewards and R2 (click here). Access the release from ISRI (click here). [*Haz, *Toxics, *P2]

Senate Hearing On "The Future of Natural Gas"

Jul 19: The Senate Energy & Natural Resources Committee, Chaired by Senator Jeff Bingaman (D-NM), with Ranking Member Lisa Murkowski (R-AK) held a hearing entitled, "The Future of Natural Gas." Witnesses included: Dr. Howard Gruenspecht, Acting Administrator, Energy Information Administration (EIA); Dr. Ernest Moniz, Co-Director, MIT Coal Study, Massachusetts Institute of Technology; and George J. Biltz, Vice President, Energy and Climate Change, The Dow Chemical Company. Among other things the hearing explored a new MIT study on U.S. natural gas supplies.

 

    In an opening statement, Chairman Bingaman outlined five major factors that have combined to raise the prominence of natural gas as a resource.

(1) First, the new application of technologies such as horizontal drilling and hydraulic fracturing has led to an increase in domestic natural gas production and a reassessment of the size of the U.S. technically recoverable resource base.

(2) Second, the international focus on reducing greenhouse gas emissions to address climate change has favored the lower carbon intensity of natural gas for power generation. 

(3) The third factor is the recent tragedy in Japan at the Fukushima nuclear plant has led both Japanese and German officials to speak strongly about fuel switching to natural gas to replace, or at least supplement, their remaining nuclear fleet.

(4) The fourth factor is concerns about our dependence on foreign oil, which have led some to propose switching our cars and trucks from imported gasoline and diesel fuel to domestic natural gas. 

(5) Fifth, proponents of domestic manufacturing have argued that a larger, more stable gas supply at competitive prices will lead to a resurgence of investment in manufacturing and job creation, which is very much desired.

    Bingaman said, "So, in the past several years, there has been an increase in the estimates of natural gas resources available at relatively low prices, leading many experts to suggest that we may now be entering 'a golden age of gas.' I'll leave those specific projections to our witnesses. But, I believe there is agreement that there is a greatly expanded unconventional gas resource available domestically, with potentially 100 years or more gas available if current rates of usage are maintained. This change in the resource base has already had significant impacts on investment decisions in the power sector, in manufacturing and in transportation, and many expect it to continue doing so far into the future. There are many reasons to be optimistic about the natural gas resource that recently have been discussed, but recent history suggests we should be cautious as well. . . 

 

    "The promise of expanded domestic gas resources comes with the responsibility to address environmental concerns about their exploration and production. Recently, the public has expressed concerns that relate to the wastewater management of flowback fluids from natural gas wells, as well as potential for groundwater contamination. The issue of induced seismicity from oil and gas extraction-related activities has been raised. And the National Academy of Sciences study is now being undertaken both at Secretary Chu's and my request. I expect that the environmental concerns related to developing unconventional gas resources can be managed, but only if they are addressed through a transparent and diligent and safe approach to wellsite management throughout each stage of the gas extraction process. . ."

 

    Senator Murkowski said in an opening statement, ". . .Natural gas is clean-burning and abundant; it's well understood and scalable; and it's clearly in our best interest to ensure that we maintain a stable and affordable supply going forward. One of the easiest observations to make is that we're now in the midst of a truly exciting time for the natural gas industry. Just in the past several years, we've witnessed game-changing technological innovations that have unlocked tremendous volumes of previously inaccessible natural gas. . . If this was 2005, our opening statements would probably have expressed at least some concern about our ability to ensure that supply kept pace with demand.  Prices were trending higher, and many forecasts suggested that we'd become increasingly dependent on foreign LNG. . .

 

    "Natural gas was once thought of as "too precious to burn" but that's changed, and for the better.  When I look at the deeply troubling situation in North Africa and the Middle East, I don't see a future where we can afford to play politics with energy at the national level.  The rest of the world has already figured that out, and I'm hopeful we're beginning to see this reality, as well. I'd like to add that developing all of our resources in a responsible way is of paramount importance, and natural gas is no exception. We cannot realize the many benefits of our tremendous natural gas resource unless we commit to safe, environmentally acceptable production and delivery, within a framework of appropriate regulation and access. Contrary to some reports, the industry actually has a very exemplary record in this regard.  I welcome its efforts to proactively seek ways to increase transparency and improve the efficiency of the extraction process. . ."

 

    EIA testified that after a decade of stagnation, U. S. natural gas production increased by almost 17 percent between 2006 and 2010, reaching 21.6 trillion cubic feet (Tcf) in 2010, the highest level since 1973. Production has continued to increase despite a significant and sustained decline in natural gas prices since mid-2008. The growth in U.S. supplies over the past few years is largely the result of increases in production from shale gas formations. Shale gas production grew from less than 3 billion cubic feet per day (bcf/d), representing 5 percent of overall production in 2006, to 13 bcf/d, accounting for 23 percent of overall production in 2010.

 

    Natural gas provides about 25 percent of the primary energy used in the United States, heating about half of U.S. homes, generating almost one-fourth of U.S. electricity, and providing an important fuel and feedstock for industry. About 31 percent of the natural gas consumed in 2010 was used for electric power generation, 33 percent for industrial purposes, and 34 percent in residential and commercial buildings. Only a small portion is used in the transportation sector, predominately at pipeline compressor stations, although some is used for vehicles. EIA's Annual Energy Outlook 2011 uses a total resource estimate for U.S. natural gas (onshore and offshore, including Alaska) of 2,543 Tcf, including 862 Tcf of shale gas, (35 Tcf of proved reserves plus 827 Tcf of technically recoverable unproved resources.)

   

    On the MIT Future of Natural Gas study, which is the fourth in a series that presents the results of an integrated technically-grounded analysis, MIT testified, "we find that, given the large amounts of natural gas available in the U.S. at moderate cost (enabled to a large degree by the shale gas resource), natural gas can indeed play an important role over the next couple of decades (together with demand management) in economically advancing a clean energy system. However, with increasingly stringent carbon dioxide emissions reductions, natural gas would eventually become too carbon intensive, which highlights the importance of a robust innovation program for zero-carbon options. We all recognize that today there is controversy about natural gas and its availability and affordability and about environmental impacts from its production and distribution."

 

    The MIT study concludes in part that, "In a carbon-constrained economy, the relative importance of natural gas is likely to increase even further, as it is one of the most cost-effective means by which to maintain energy supplies while reducing CO2 emissions. This is particularly true in the electric power sector, where, in the U.S., natural gas sets the cost benchmark against which other clean power sources must compete to remove the marginal ton of CO2. In the U.S., a combination of demand reduction and displacement of coal-fired power by gas-fired generation is the lowest cost way to reduce CO2 emissions by up to 50%. For more stringent CO2 emissions reductions, further de-carbonization of the energy sector will be required; but natural gas provides a cost-effective bridge to such a low-carbon future."

 

    Dow Chemical Company submitted 42-pages of testimony including an American Chemical Council (ACC) study on shale gas, describing the company's "views on natural gas supply and demand, and the value-add created by U.S. manufacturers who use natural gas. Dow believes that natural gas will play a critical role in US energy policy. Because US manufacturing jobs are dependent on the US natural gas market, policies that impact natural gas will have a direct impact on jobs in the US manufacturing sector. We recommend that any natural gas policies carefully consider the need to preserve and enhance the competitiveness of U.S. manufacturers."

 

    Dow indicated that, "US manufacturers provide the highest value-add of any sector. Using natural gas to make petrochemicals results in eight times the value over simply combusting it. This productivity stems from the fact that the chemical industry uses natural gas not just for fuel and power, but also as a raw material or 'feedstock.' When natural gas prices are low relative to oil, US chemical manufacturers have a competitive advantage."

 

    Dow said it is in "general agreement" with the MIT report, but said it "has concerns, however, with two of the report's recommendations. While the study does not openly call for government subsidies for natural gas vehicles, it does call for the government to revise its policies related to CNG vehicles in order to lower up-front costs of such vehicles and the necessary infrastructure. The study also does not recognize another fact: Electric vehicles are three times more efficient than natural gas vehicles. In addition, the infrastructure for an overnight, low-voltage charging infrastructure already exists -- our power grid -- and it is cheaper to scale up.

 

    "The second disagreement relates to the development of an efficient and integrated global gas market. It [the report] states, 'Greater international market liquidity would be beneficial to U.S. interests. U.S. prices for natural gas would be lower than under current regional markets, leading to more gas use in the U.S." It is hard to understand how this can be. The U.S. has very competitive natural gas prices and exposing it to the rest of the world, where prices are linked to oil price, will not lower domestic prices. In our view, a global market will raise US prices which will be bad for competitiveness of all US energy intensive industries including chemicals. If the US were to begin exporting natural gas, the world market would equilibrate to one world price (with transportation cost differences) which would bring lower prices outside the US and higher prices for US consumers. . ."

 

    Access Sen. Bingaman's opening statement (click here). Access Sen. Murkowski's opening statement (click here). Access the hearing website for links to testimony and a webcast (click here). Access a link to the complete and extensive MIT report (click here). [*Energy/NatGas]

Final LRRP Rule Says Lead-Dust Clearance Testing Unnecessary

Jul 15: As part of a settlement of litigation over certain post-renovation cleaning requirements of the 2008 Lead Renovation, Repair, and Painting Program (LRRP) rule, U.S. EPA agreed to propose a number of revisions to the 2008 LRRP rule that established accreditation, training, certification, and recordkeeping requirements as well as work practice standards for persons performing renovations for compensation in most pre-1978 housing and child-occupied facilities and to subsequently take final action on the proposed rule by July 15, 2011. The action is EPA's final action on all aspects of the May 6, 2010 proposal and will become effective 60-days after publication in the Federal Register which is currently expected to occur in the week of July 24, 2011. EPA said, "The Agency is not imposing additional "clearance" requirements because existing LRRP work practices and cleaning protocols effectively reduce lead hazards."

 

    EPA indicated it has decided not to promulgate dust wipe testing and clearance requirements as proposed. However, EPA is promulgating several other revisions to the LRRP rule, including a provision allowing a certified renovator to collect a paint chip sample and send it to a recognized laboratory for analysis in lieu of using a lead test kit, minor changes to the training program accreditation application process, standards for e-learning in accredited training programs, minimum enforcement provisions for authorized state and tribal renovation programs, and minor revisions to the training and certification requirements for renovators. EPA is also promulgating clarifications to the requirements for vertical containment on exterior renovation projects, the prohibited or restricted work practice provisions, and the requirements for high-efficiency particulate air (HEPA) vacuums.

 

    In further explanation EPA said, "After carefully weighing the issues at stake and considering the concerns raised by commenters, and as explained in greater detail below, EPA has concluded that, on balance, the information before the Agency does not support imposing a dust wipe testing or clearance requirement on renovations. In particular, EPA is convinced that the work practices established in the 2008 LRRP rule are reliable, effective, and safe, and that imposing a dust wipe testing or clearance requirement is unwarranted."

 

    Senator James Inhofe (R-OK), Ranking Member of the Senate Committee on Environment and Public Works (EPW) issued a release welcoming the announcement which he said recognizes "that current lead-safe work practices and clean up requirements will protect people from lead dust hazards and it is not necessary to impose lead-dust clearance testing requirements in the Lead Renovation, Repair and Painting Rule (LRRP)." He said the decision addresses the concerns voiced in an April 15 letter to EPA Administrator Lisa Jackson in which Senator Inhofe, along with eleven other senators, expressed deep concerns about the Agency's proposed amendments to LRRP, which would have required "clearance testing" to prove the presence or absence of lead following a project's completion. He said, "These additional requirements would have created confusion and complications for renovators who have already completed their lead-based paint training and imposed significant additional costs."

 

    In the release Senator Inhofe indicated he supports the intent of the rule, which is to protect pregnant women and children from lead dust hazards, he has been a staunch critic of EPA's implementation. On April 22, 2010, LRRP went into effect even though EPA only had 204 training providers nationwide. This meant that contractors did not have enough access to the training programs required to achieve compliance with the rule. In response, Senator Inhofe and Senator Collins (R-ME) introduced an amendment to the supplemental appropriations bill, which blocks funds from being used to "levy against any person any fine, or to hold any person liable for construction or renovation work performed by the person."  He said the amendment, which passed by a vote of 60 to 37, sent a clear bipartisan message to EPA that it must alleviate the widespread confusion over the rule's implementation. By May 2010, EPA announced a memorandum extending the LRRP deadline for renovators to enroll in training classes to September 30, 2010; it also extended the deadline for contractors to complete training to December 31, 2010. Most importantly, the Agency agreed to work to provide additional trainers in areas of need.

 

    Senator Inhofe said, "I am pleased that common-sense has once again prevailed at the EPA regarding the lead-based paint rule. The intent of the rule, public health protection especially for children and pregnant women, is something everyone supports, but it needs to happen in a way that does not place costly or confusing burdens on those trying to implement it. I applaud the Agency for responding to our concerns and making the right decision, which will provide maximum benefits for all. " 

 

    Senator Snowe (R-ME) said, "Today's ruling is a major victory for small business owners nationwide saddled with needlessly onerous regulations that are stifling their ability to grow and prosper during these difficult economic times. As we learned during its initial implementation back in 2009, this well-intentioned effort to protect pregnant women and children from lead exposure presented significant unintended consequences and undue burdens for renovators and homeowners alike. It is essential that agencies account for the impact new federal regulations will have on the economy, families and small businesses before rules are promulgated. I am pleased that, in this instance, EPA has withdrawn a proposed regulation deemed unnecessary and urge the agency to continue its stringent evaluations to mitigate the effects of rules that impose government costs and burdens where they are not necessary."

 

    Access the prepublication copy of the EPA final rule (click here). Access EPA's LRRP website for extensive background and documents (click here). Access a lengthy release from Senator Inhofe with links to related information (click here). [*Toxics]