Huge Differences In Cost & Benefit Estimates Of Tier 3 Low Sulfur Rules

Jan 12: A bipartisan group of Senators, including Senator James Inhofe (R-OK), Ranking Member of the Senate Committee on Environment and Public Works, Senator Lisa Murkowski (R-AK), Ranking Member of the Senate Committee on Energy and Natural Resources, Senator David Vitter (R-LA), Senator John Barrasso (R-WY), Senator Mary Landrieu (D-LA), and Senator Mark Begich (D-AK) joined in a letter to U.S. EPA Administrator Lisa Jackson expressing concern that EPA's Tier 3 standards will greatly increase the cost of gasoline and put jobs at risk at a time when Americans are struggling to make ends meet in a weak economy.

 

    On October 31, 2011, the National Association of Clean Air Agencies (NACAA), representing air pollution control agencies in 53 states and territories and over 165 major metropolitan areas across the United States(formerly STAPPA and ALAPCO), released a report on the benefits and costs of implementing the their recommendations for Tier 3 motor vehicle and gasoline standards. NACAA indicated that the amount of air pollution that would be immediately reduced from lowering the sulfur content of gasoline to an average of 10-ppm is equivalent to removing approximately one in eight cars and light trucks from the roads. They said that result would come at a price of $0.008 -- eight-tenths of a cent per gallon. Such cleaner gasoline would also enable improved technologies on cars and light trucks that could yield substantial vehicle emissions reductions at a cost of about $150 per car [See WIMS 10/31/11].

 

    Specifically, the concerned Senators said EPA is preparing a notice of proposed rulemaking (NPR) that will lower the sulfur content in gasoline from 30ppm to 10ppm -- and they said, "this comes at a high cost." Despite the estimates of NACAA, the Senators cite a study by Baker & O'Brien that estimates the capital and annual operating cost of a 10ppm standard at $17 billion and $13 billion, respectively. They said, "Depending on the stringency of the proposed rule, that could add 12 to 25 cents to each gallon of gasoline." Additionally, they indicated that "several fuel manufacturers will not likely be able to comply, which will force plant closures -- resulting in both direct and indirect job losses." 

 

    The Senators concluded their 3-page letter saying, ". . ."we urge EPA to reconsider the timing of Tier 3 standards for gasoline. We also ask you to provide Congress and the public with as much notice as possible in advance of any formal proposal. We support clean air, but EPA should provide adequate scientific justification for all aspect of the proposed rule, thoughtfully reflect on the results of the yet-to-be completed anti-backsliding study, and understand the cumulative effects of all existing and pending air regulations on families and workers."  

 

    Senator Murkowski said, "A high level of bipartisan concern has emerged over EPA's looming Tier 3 regulations. Gas prices are already high, especially in Alaska, and our nation's economy continues to struggle. Despite this, EPA has chosen to proceed with a rulemaking that could lead to added financial burden on families and businesses. I hope that Administrator Jackson will pay close and careful attention to the unintended negative impacts this rule could have, especially in combination with the rest of EPA's regulatory agenda." Senator Landrieu said, "I am deeply concerned that the EPA is crafting these new Tier 3 regulations without regard to the real-world consequences for American consumers and businesses. With Americans already feeling the pinch from high gas prices, these regulations stand to burden our country even further. I urge the EPA to consider the negative consequences that this rule could have on American families and our economy as a whole." 

 

    S. William Becker, NACAA's Executive Director had a very different view and said in October last year, "As NACAA's report reveals, reducing sulfur in gasoline would not only enable the use of improved emissions control technology on new cars and light trucks, it would also result in an overnight reduction in emissions from the existing fleet -- on the order of approximately 260,000 tons of nitrogen oxides (NOx) -- equivalent to taking 33 million cars off our nation's roads in 2017 when the program begins. I don't know of any other air pollution control strategy out there that can provide emissions reductions as significant and immediate as this."

 

    NACAA indicated in its report that, to independently determine the cost implications of lower sulfur gasoline, the International Council on Clean Transportation (ICCT) contracted with an expert refinery consulting company, MathPro, to update and slightly modify an earlier study MathPro carried out in 2009. In this new study, MathPro estimates the cost of reducing sulfur in gasoline to 10 ppm under differing sets of assumptions.

   

    NACAA indicated, "Based on the MathPro study, it appears the most reasonable, but still conservative, assumptions would be: All existing FCC post-treaters would require revamping to meet the 10-ppm sulfur standard; The average capital expenditure for revamping the fleet of FCC post-treaters is 30 percent of the expenditure for grassroots post-treaters (even though some of the existing units may require no revamping); and The target rate of return on refinery investments is 7 percent before tax. Using these conservative assumptions, MathPro concluded that the per-gallon price of 10-ppm sulfur fuel would be just $0.008 -- eight-tenths of a penny."

 

    When the Baker & O'Brien study was release last summer, Bob Greco of American Petroleum Institute (API) said, "The new EPA requirements could be devastating to consumers and communities across the nation. Consumers would be hurt by the increased cost of fuel projected by the study, and the closing of refineries could put local economies at risk, meaning there would be fewer jobs. In addition, we would be forced to rely even more on foreign fuel supplies, and that can only weaken our nation's economy and national security."

 

    National Petrochemical & Refiners Association President Charles Drevna said, "These regulations don't make sense environmentally or economically. The proposal would increase greenhouse gas emissions, hurt American consumers by adding billions of dollars to the cost of manufacturing gasoline, hurt communities and workers by threatening to put some fuel manufacturing plants out of business, and weaken America's economic and national security."

 

    Access the release and letter from the concerned Senators (click here). Access the 96-page Baker & O'Brien study (click here). Access a release from NACAA (click here). Access the complete 32-page NACAA report (click here). Access a Jul 29 release from API (click here). [#Air, #Transport]

 

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America Is Thinking Too Small On Energy Efficiency

Jan 12: The American Council for an Energy-Efficient Economy (ACEEE) indicates in a major new report that, "America is thinking too small when it comes to energy efficiency, while also making the mistake of 'crowding out' economically beneficial investments in energy efficiency by focusing on riskier and more expensive bids to develop new energy sources. The report, The Long-Term Energy Efficiency Potential: What the Evidence Suggests, outlines three scenarios under which the U.S. could either continue on its current path or cut energy consumption by the year 2050 almost 60 percent, add nearly two million net jobs in 2050, and save energy consumers as much as $400 billion per year (the equivalent of $2600 per household annually).

    According to ACEEE, the secret to major economic gains from energy efficiency is a more productive investment pattern of increased investments in energy efficiency, which would allow lower investments in power plants and other supply infrastructure, thereby substantially lowering overall energy expenditures on an economy-wide basis in the residential, commercial, industrial, transportation, and electric power sectors.

    ACEEE Director of Economic and Social Analysis John A. "Skip" Laitner said, "The U.S. would prosper more if investments in new energy were not crowding out needed investments in energy efficiency. The evidence suggests that without a greater emphasis on the more efficient use of energy resources, there may be as many as three jokers in the deck that will threaten the robustness of our nation's future economy. These include the many uncertainties surrounding the availability of conventional and relatively inexpensive energy supplies, a slowing rate of energy productivity gains and therefore economic productivity, and a variety of potential climate constraints that may create further economic impacts of their own. Given all of this, large-scale energy efficiency advances are by far the smartest investment for America."

    ACEEE Executive Director Steven Nadel said, "Large-scale energy efficiency advances will require major investments. But the good news is that the investments will generate a significant return in the form of large energy bill savings. After paying for the program costs and making the necessary investments as we pay for them over time, the economy will benefit from a net energy bill savings that ranges from 12 to 16 trillion dollars cumulatively from 2012 through 2050. In other words, the energy efficiency scenarios outlined in our report will spur an annual net energy bill savings that might range up to about $2600 per household annually in constant 2009 dollars."

    Examples of potential large-scale energy efficiency savings identified by ACEEE include the following:

• Electric Power -- "Our current system of generating and delivering electricity to U.S. homes and businesses is an anemic 31 percent energy efficient. That is, for every three units of coal or other fuel we use to generate the power, we manage to deliver less than one unit of electricity to our homes and businesses. What the U.S. wastes in the generation of electricity is more than Japan needs to power its entire economy. What is even more astonishing is that our current level of (in)efficiency is essentially unchanged in the half century since 1960, when President Dwight D. Eisenhower spent his last year in the White House."
• Transportation -- "The fuel economy of conventional petroleum-fueled vehicles continues to grow while hybrid, electric, and fuel cell vehicles gain large shares, totaling nearly three-quarters of all new light-duty vehicles in 2050 in the report's middle scenario. Aviation, rail, and shipping energy use declines substantially in this scenario through a combination of technological and operational improvements. In the most aggressive scenario, there is a shift toward more compact development patterns, and greater investment in alternative modes of travel and other measures that reduce both passenger and freight vehicle miles traveled. This scenario also phases out conventional light-duty gasoline vehicles entirely, increases hybrid and fuel cell penetration for heavy-duty vehicles, and reduces aviation energy use by 70 percent."  
• Buildings -- "In residential and commercial buildings the evidence suggests potential reductions of space heating and cooling needs as the result of building shell improvements of up to 60 percent in existing buildings, and 70-90 percent in new buildings. The ACEEE scenarios also incorporate advanced heating and cooling systems (e.g., gas and ground-source air conditioners and heat pumps, and condensing furnaces and boilers), decreased energy distribution losses, advanced solid-state lighting, and significantly more efficient appliances."
• Industry -- "In the industrial sector, energy efficiency opportunities reduce 2050 energy use by up to half, coming less from equipment efficiency and more from optimization of complex systems. The ACEEE analysis focuses on process optimization in the middle scenario, but also anticipates even greater optimization of entire supply chains in the most aggressive scenario, allowing for more efficient use of feedstocks and elimination of wasted production."

    In response to the question: "Are such advances in energy efficiency realistic?" the ACEEE report points out, the U.S. already has achieved considerable advances in the energy efficiency context and is poised to do more:  "The U.S. economy has tripled in size since 1970 and three-quarters of the energy needed to fuel that growth came from an amazing variety of efficiency advances -- not new energy supplies. Indeed, the overwhelming emphasis in current policy debates on finding new energy supplies is such that emphasis on new supplies may be crowding out investments and innovations that can help to achieve greater levels of energy productivity. Going forward, the current economic recovery, and our future economic prosperity, will depend more on new energy efficiency behaviors and investments than we've seen in the last 40 years."

    Access a release from ACEEE (click here). Access the complete 96-page report (click here, free registration required). [#Energy/Efficiency]

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DC Judge Vacates EPA's Boiler MACT & CISWI Delay Notice

Jan 9: U.S. Washington, DC, District Court Judge Paul Friedman has issued a critical 42-page ruling regarding U.S. EPA's recently proposed Clean Air Act standards for boilers and certain incinerators (i.e. "Boiler MACT" rules, Proposed rules) [See WIMS 12/2/11]. EPA had proposed to delay finalization of the rules until the spring 2012, including the rule for Major Sources: Industrial, Commercial, and Institutional Boilers and Process Heaters (i.e.Boiler MACT) and for Commercial and Industrial Solid Waste Incineration Units (CISWI).

 

    However, in the case of Sierra Club v. Jackson (U.S. EPA), Case No. 11-1278, the Court vacated EPA's decision to delay. The Court indicated it would "grant in part and deny in part the parties' cross-motions for summary judgment. It will enter judgment for EPA on Claim 1 and Claim 2 and for Sierra Club on Claim 3. As a result, the Court will declare unlawful EPA's Delay Notice will vacate the Delay Notice, and will remand the Delay Notice to EPA for further proceedings consistent with this Opinion." Petitions for review of the decision have already been filed with the U.S. Court of Appeals, D.C. Circuit and the matter may be addressed quickly by the Appeals Court.

 

    The Court explains that after EPA initially issued its Boiler and CISWI rules which were being challenged in the Court of Appeals, ". . .on May 18, 2011, two days before the Boiler Rule and the CISWI Rule were to go into effect, EPA issued a notice, referred to by the agency as the 'Delay Notice,' staying the effective date of both rules 'until the proceedings for judicial review of these rules [in the court of appeals] are completed or the EPA completes its reconsideration of the rules, whichever is earlier[.]' 76 FED.REG. at 28,664. In the Delay Notice, EPA made explicit that it was staying the effective date of these two rules 'pursuant to the APA[, that is, the Administrative Procedure Act], rather than . . . the Clean Air Act.' Id. at 28,663. Specifically, EPA stated that it was acting pursuant to its authority under 5 U.S.C. § 705 of the APA, rather than under 42 U.S.C. § 7607(d)(7)(B) of the Clean Air Act." Sierra Club then filed this lawsuit on July 14, 2011 to challenge the validity of EPA's Delay Notice.

 

    Sierra Club argues that it is entitled to summary judgment on all three of its claims and requests that the Court declare the Delay Notice unlawful and vacate it. First, Sierra Club contends that the Delay Notice is unlawful because EPA promulgated it without providing the public with notice and an opportunity for comment; Second, Sierra Club contends that EPA lacked the authority to issue the Delay Notice; And third, Sierra Club contends that the Delay Notice is arbitrary and capricious for "at least four reasons, each of which independently requires vacatur." EPA opposes Sierra Club's motion for summary judgment and has filed its own cross-motion for summary judgment. As EPA describes it, the agency had the authority to promulgate the Delay Notice; the agency provided adequate justification for the Delay Notice; and the Delay Notice is not a rule and therefore is not subject to notice and comment requirements.

 

    The Court ruled on Claim 1: ". . .the Court concludes that the Delay Notice does not constitute substantive rulemaking, see 5 U.S.C. § 551(4), and therefore is not subject to notice and comment requirements. See id. §§ 553(b), (c). The Court will grant EPA's motion for summary judgment on Claim 1 and will deny Sierra Club's motion for summary judgment on that claim." On Claim 2: "The Court therefore concludes that EPA had the authority to issue the Delay Notice under Section 705 of the APA. The Court will grant EPA's motion for summary judgment on Claim 2 and will deny Sierra Club's motion for summary judgment on that claim."

 

    And, on Claim 3: "The Court concludes that the Delay Notice is arbitrary and capricious for three separate reasons: (1) the standard for a stay at the agency level is the same as the standard for a stay of agency action by a court, and EPA has not even attempted to justify its decision under that standard; (2) EPA is bound by its own precedents to apply the four-part test for stays and injunctions unless it provides a reasoned decision for its change of position, which it has not done; and (3) because EPA relies on Section 705 authorizing it to stay agency action 'pending judicial review,' the reasons it articulates to justify the stay must be based on the underlying litigation in the court of appeals, which they are not."

 

    The National Association of Manufacturers (NAM) Vice President for Energy and Resources Policy Chip Yost issued a statement on the decision saying, "The court's ruling to revoke the stay of the Boiler MACT and Incinerator rules will severely harm manufacturers' competitiveness, add to their uncertainty and cost vital jobs. It is already 20 percent more expensive to manufacture in the U.S. compared to our trade partners, and regulations such as Boiler MACT continue to set us back. The ruling by the court underscores the critical need for Congress to pass legislation to address the damaging Boiler MACT and Incinerator regulations. The EPA Regulatory Relief Act [H.R.2250, See WIMS 10/14/11] received bipartisan support when it passed the House last October, and manufacturers urge the Senate to act now to save jobs. Manufacturers are looking to Washington for policies that will eliminate the uncertainty of harmful regulations such as Boiler MACT and enable them to invest, grow and create jobs."

 

    House Republicans on the Energy and Commerce Committee issued a release stating, "By vacating EPA's stay, yesterday's ruling speeds the rules' compliance schedules, which were already unworkable. As a result of the ruling, facilities will be forced to determine how to implement the rules even though they are still being reconsidered." Committee Chairman Fred Upton (R-MI) said, "The ruling increases the already significant regulatory and legal uncertainty surrounding these complex rules, which by EPA's own estimates impose new costs in excess of $5 billion. It is increasingly clear that Congress must intervene to provide regulatory relief. The House-passed EPA Regulatory Relief Act provides EPA the framework to fix these rules and offers American businesses the flexibility and certainty they need to invest and create jobs. I urge the Senate to pass this legislation so we can put an end to the uncertainty and finally get the EPA to move forward in a way that protects jobs."

 

    Access the complete ruling (click here). Access the statement from NAM (click here). Access the release from House Republicans (click here). [#Air]

 

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NAS Report Explores Municipal Wastewater As Drinking Water

Jan 10: The National Academy of Sciences' National Research Council has issued a report entitled, Water Reuse: Potential for Expanding the Nation's Water Supply Through Reuse of Municipal Wastewater. According to a release, with recent advances in technology and design, treating municipal wastewater and reusing it for drinking water, irrigation, industry, and other applications could significantly increase the nation's total available water resources, particularly in coastal areas facing water shortages.

 

    The report also notes that the reuse of treated wastewater, also known as reclaimed water, to augment drinking water supplies has significant potential for helping meet future needs. Moreover, new analyses suggest that the possible health risks of exposure to chemical contaminants and disease-causing microbes from wastewater reuse do not exceed, and in some cases may be significantly lower than, the risks of existing water supplies. R. Rhodes Trussell, chair of the committee that wrote the report and president of Trussell Technologies, Pasadena, CA said, "Wastewater reuse is poised to become a legitimate part of the nation's water supply portfolio given recent improvements to treatment processes. Although reuse is not a panacea, wastewater discharged to the environment is of such quantity that it could measurably complement water from other sources and management strategies."

 

    The report examines a wide range of reuse applications, including potable water, non-potable urban and industrial uses, irrigation, groundwater recharge, and ecological enhancement. The committee found that many communities have already implemented water reuse projects -- such as irrigating golf courses and parks or providing industrial cooling water in locations near wastewater reclamation plants -- that are well-established and generally accepted. Potable water reuse projects account for only a small fraction of the volume of water currently being reused. However, many drinking water treatment plants draw water from a source that contains wastewater discharged by a community located upstream; this practice is not officially acknowledged as potable reuse.    

 

    The report outlines wastewater treatment technologies for mitigating chemical and microbial contaminants, including both engineered and natural treatment systems. These processes can be used to tailor wastewater reclamation plants to meet the quality requirements of intended reuse applications. The concentrations of chemicals and microbial contaminants in reuse projects designed to augment drinking water supplies can be comparable to or lower than those commonly present in many drinking water supplies.  The committee emphasized the need for process reliability and careful monitoring to ensure that all reclaimed water meets the appropriate quality objectives for its use.

 

    The committee indicated that the costs of water reuse for potable and non-potable applications vary widely because they depend on site-specific factors. Water reuse projects tend to be more expensive than most water conservation options and less expensive than seawater desalination and other new supply alternatives. Although the costs of reclaimed water are often higher than current water sources, the report urges water authorities to consider other costs and benefits in addition to monetary expenditures when assessing reuse projects. For example, water reuse systems used in conjunction with a water conservation program could be effective in reducing seasonal peak demands on the drinking water system. Depending on the specific designs and pumping requirements, reuse projects could also have a larger or smaller carbon footprint than existing supply alternatives or reduce water flows to downstream users and ecosystems.   

 

    The report indicates that water reuse regulations differ by state and are not based on risk-assessment methods. Adjustments to the Federal regulatory framework could help ensure a high level of public health protection, provide a consistent minimum level of protection across the nation, and increase public confidence in potable and non-potable water reuse. The report notes that existing legislative tools could be applied to improve the quality of water for reuse, including updating the National Pretreatment Program's list of priority pollutants to include a wider inventory of known toxic substances. Also, it lists 14 areas of research to help guide the country on how to apply water reuse appropriately.  Such research would require improved coordination among federal and nongovernmental organizations.

 

    Access a release from NAS (click here). Access the complete 200-page report (click here). Access links to additional information on the report (click here). [#Water, #Drink]

 

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Climate-Related Global Changes Impact Trillions In Investments

Jan 5: The National Academy of Sciences' National Research Council indicated that a draft 10-year strategic plan (i.e. 10-Year U.S. Carbon Cycle Science Plan) [See WIMS 1/5/12] for the U.S. Global Change Research Program (USGCRP) -- which shapes and coordinates climate and related global environmental change research efforts of numerous agencies and departments across the federal government -- is "evolving in the right direction," but several key issues could strengthen the planning efforts.

 

    The committee that wrote the report found that the proposed broadening of USGCRP's scope to address not only climate change but also other climate-related global changes is appropriate and an important step. However, the committee said, "the draft plan does not always acknowledge significant challenges, such as increasingly constrained budget resources, involved in meeting its goals, nor does it offer clear strategies for how such challenges could be addressed.  There is also the practical challenge of maintaining clear boundaries for an expanded program."

 

    The committee emphasized the need to identify initial steps the program would take to achieve the proposed broadening of its scope, develop critical science capacity that is now lacking, and link the production of knowledge to its use. It also stressed that without a strong governance structure that could compel reallocation of funds to serve overarching priorities, the program would likely continue as merely a compilation of efforts deriving from each member agency's individual priorities.

 

    Broadening the program to better integrate the social and ecological sciences, inform climate change mitigation and adaptation efforts, and emphasize decision support is welcome and essential for meeting the legislative mandate for the program, the committee said. Nevertheless, implementing this wider scope requires more than incremental solutions. For instance, there is insufficient expertise within member agencies in the social and ecological sciences, and some agencies lack clear mandates to develop the needed expertise.

 

    The report also suggests that the USGCRP plan could be strengthened by:

• offering a more coherent summary of past important accomplishments, including an assessment of successes that were possible only because of USGCRP actions;
• establishing clear processes for setting priorities and phasing in and out elements of the program;
• employing iterative processes for periodically evaluating and updating the program and its priorities; and
• more carefully defining the education, communication, and work-force development efforts that belong within the program and which efforts would be best organized by entities outside the program.

    The report emphasizes that, "The Plan says that the decisions being made today about systems affected by global change

are worth billions of dollars. This is both a drastic underestimate and an imprecise argument for establishing the importance of foundational research in adaptation and mitigation. The countless decisions that are being made -- related to infrastructure, natural resource use, water management, agriculture, zoning, and development of our nation's energy system – could easily account for

trillions, rather than billions, of dollars in investment in the coming decades. These decisions have the potential to be made more effectively with better knowledge and foresight about future global change, about ways to reduce the inherent vulnerabilities of these systems, and about the ways in which adaptation or mitigation efforts could affect these systems. The Plan does not articulate these sorts of arguments clearly or with sufficient documentation."

 

    Access a release from NAS (click here). Access the complete NAS 72-page report from NAS (click here). Access an announcement from USGCRP (click here). Access more information about the U.S. Carbon Cycle Science Program  (click here). Access the complete 81-page Strategy (click here).  [#Climate]

 

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Countdown Is On For Keystone XL; But How Many Jobs?

Jan 5: On December 23, 2011, President Obama signed into law a bill requiring approval of the Keystone XL pipeline within 60 days unless he determines the pipeline would not serve the national interest. On January 4, the U.S. House Energy and Commerce Committee posted its new Keystone XL clock to track how much time has passed since the day the President signed the bill demanding action on the project that they say will "create tens of thousands of jobs and significantly increase America's energy security."

 

The President reluctantly agreed to the Keystone XL provision that was attached by Republicans to the payroll tax reduction bill which he supported [See WIMS 12/16/11]. Earlier, the President said he would veto any Keystone XL amendments to the bill and had delayed the Keystone XL decision until further environmental review could be made to satisfy major concerns raised by the Nebraska Governor and environmental groups [See WIMS 12/8/11]. The delay was expected to extend well into 2013, while the various agencies examined in-depth alternative routes that would avoid the Sand Hills area of Nebraska. [See WIMS 11/14/11 & WIMS 11/11/11].

 

    Energy and Commerce Committee Chairman Fred Upton (R-MI) said, "The clock is now ticking, and soon, President Obama must finally make a decision on the long-awaited Keystone XL pipeline. After waiting more than three years for this pipeline while the country faces prolonged unemployment, the American people are fed up with the president's inaction on a project that can quickly create jobs. The president is now required by law to approve the project unless he believes it is not in the national interest, and with millions of Americans still out of work this New Year, our national interest would clearly be well served when the president says yes to tens of thousands of new shovel-ready jobs. Republicans and Democrats alike agree this is a win-win for America."

 

    During the heat of the highly controversial debate on the issue a principle argument has been the number of jobs created by the project. The State Department estimated the number of construction jobs at 5,000 to 6,000; however, as the debate has continued the number of jobs to be created by the project has increased to 20,000; to tens of thousands; to hundreds of thousands and has high as 250,000 or more. Most of the high-end estimates have been reported by TransCanada, the project developer.

 

    A recent study by the Cornell University Global Labor Institute entitled, Pipe Dreams? Jobs Gained, Jobs Lost by the Construction of Keystone XL, provides an in-depth look at the numbers and the uncertainty surrounding many of estimates. The 40-page paper indicates, "The purpose of this briefing paper is to examine claims made by TransCanada Corporation and the American Petroleum Institute that, if constructed, TransCanada's proposed Keystone XL (KXL) pipeline will generate enough employment to kick-start important sections of the US economy through the creation of tens of thousands -- perhaps even hundreds of thousands -- of good, well-paying jobs for American workers." The main points in the briefing paper are summarized as follows:

• The industry's US jobs claims are linked to a $7 billion KXL project budget. However, the budget for KXL that will have a bearing on US jobs figures is dramatically lower—only around $3 to $4 billion. A lower project budget means fewer jobs.
• The project will create no more than 2,500-4,650 temporary direct construction jobs for two years, according to TransCanada's own data supplied to the State Department.
• The company's claim that KXL will create 20,000 direct construction and manufacturing jobs in the U.S is not substantiated.
• There is strong evidence to suggest that a large portion of the primary material input for KXL -- steel pipe -- will not even be produced in the United States. A substantial amount of pipe has already been manufactured in advance of pipeline permit issuance.
• The industry's claim that KXL will create 119,000 total jobs (direct, indirect, and induced) is based on a flawed and poorly documented study commissioned by TransCanada (The Perryman Group study). Perryman wrongly includes over $1 billion in spending and over 10,000 person-years of employment for a section of the Keystone project in Kansas and Oklahoma that is not part of KXL and has already been built.
• KXL will not be a major source of US jobs, nor will it play any substantial role at all in putting Americans back to work.
• KXL will divert Tar Sands oil now supplying Midwest refineries, so it can be sold at higher prices to the Gulf Coast and export markets. As a result, consumers in the Midwest could be paying 10 to 20 cents more per gallon for gasoline and diesel fuel. These additional costs (estimated to total $2–4 billion) will suppress other spending and will therefore cost jobs.
• Pipeline spills incur costs and therefore kill jobs. Clean-up operations and permanent pipeline spill damage will divert public and private funds away from productive economic activity.
• Rising carbon emissions and other pollutants from the heavy crude transported by Keystone XL will also incur increased health care costs. Emissions also increase both the risk and costs of further climate instability.
• By helping to lock in US dependence on fossil fuels, Keystone XL will impede progress toward green and sustainable economic renewal and will have a chilling effect on green investments and green jobs creation. The green economy has already generated 2.7 million jobs in the US and could generate many more.

    The paper concludes, "Put simply, KXL's job creation potential is relatively small, and could be completely outweighed by the project's potential to destroy jobs through rising fuel costs, spill damage and clean up operations, air pollution and increased GHG emissions. As noted. . . it is unfortunate that the numbers generated by TransCanada, the industry, and the Perryman study have been subject to so little scrutiny, because they clearly inflate the projections for the numbers of direct, indirect, and long-term induced jobs that KXL might expect to create. What is being offered by the proponents is advocacy to build support for KXL, rather than serious research aimed to inform public debate and responsible decision making. By repeating inflated job numbers, the supporters of KXL."

 

    Access a release from House Energy and Commerce Committee GOP leadership (click here). Access the House Energy and Commerce Committee tracking clock and related information (click here). Access the complete Cornell paper (click here). Access a lengthy StarTribune/Washington Post article "Fact checker: Keystone pipeline jobs claims" (click here). Access a pro-industry article on the KXL project from the Washington Times (click here). Access legislative details for H.R.2055 (click here). [#Energy/Pipeline, #Energy/KXL]

 

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EPA Lacks Information & Resources To Manage Nanomaterial Risks

Dec 29: U.S. EPA's Office of Inspector General (OIG) issued a report entitled, EPA Needs to Manage Nanomaterial Risks More Effectively (No. 12-P0162, December 29, 2011). OIG said the purpose of the review was to determine how effectively EPA is managing the human health and environmental risks of nanomaterials.

    OIG indicates that nanomaterials are currently used in a wide variety of applications, including consumer products, health care, transportation, energy, and agriculture. The Agency considers nanomaterials as chemical substances that are controlled at the scale of approximately one-billionth of a meter. EPA has the authority, through several environmental statutes, to regulate nanomaterials. Although the development of nanomaterials and nanomaterial-enhanced products is expanding rapidly, the health implications of nanomaterials have not yet been determined.

    OIG found that "EPA does not currently have sufficient information or processes to effectively manage the human health and environmental risks of nanomaterials. EPA has the statutory authority to regulate nanomaterials but currently lacks the environmental and human health exposure and toxicological data to do so effectively." The Agency proposed a policy under the Federal Insecticide, Fungicide, and Rodenticide Act to identify new pesticides being registered with nanoscale materials. After minimal industry participation in a voluntary data collection program, the Agency has proposed mandatory reporting rules for nanomaterials under the Federal Insecticide, Fungicide, and Rodenticide Act, and is also developing proposed rules under the Toxic Substances Control Act.

    However, OIG said "even if mandatory reporting rules are approved, the effectiveness of EPA's management of nanomaterials remains in question for a number of reasons" including:

• Program offices do not have a formal process to coordinate the dissemination and utilization of the potentially mandated information.
• EPA is not communicating an overall message to external stakeholders regarding policy changes and the risks of nanomaterials.
• EPA proposes to regulate nanomaterials as chemicals and its success in managing nanomaterials will be linked to the existing limitations of those applicable statutes.
• EPA's management of nanomaterials is limited by lack of risk information and reliance on industry-submitted data.

    OIG said, "These issues present significant barriers to effective nanomaterial management when combined with existing resource challenges. If EPA does not improve its internal processes and develop a clear and consistent stakeholder communication process, the Agency will not be able to assure that it is effectively managing nanomaterial risks. OIG concludes by recommending that, "the Assistant Administrator for Chemical Safety and Pollution Prevention develop a process to assure effective dissemination and coordination of nanomaterial information across relevant program offices. The Agency agreed with our recommendation and provided a corrective action plan with milestone dates."

 

    On January 4, 2012, the Nanotechnology Panel of the American Chemistry Council (ACC) released a statement about the OIG report. Jay West, senior director of Chemical Products & Technology at ACC said, "The Nanotechnology Panel feels that the Office of Chemical Safety and Pollution Prevention (OCSPP) has demonstrated leadership in nanotechnology management and that the agency overall has made an enormous investment of time and talent in this area. We were surprised by OIG's assertion that EPA is not communicating an overall message to external stakeholders regarding policy changes and information about nanomaterials.

    "We agree with OIG that the agency should have an internally consistent and coordinated approach across all offices, and are supportive of the recommendation that EPA develop an inter-office process for sharing information about nanomaterials. Creating a single public website about nanotechnology management, as OIG recommends, is one possible outcome of this information sharing and could help refute the notion that there is a lack of data about the potential health and environmental effects of nanomaterials and insufficient action being taken by EPA."

    In a related matter, on December 21, a coalition of nonprofit consumer safety and environmental groups sued the Food and Drug Administration (FDA) in the first lawsuit over the health and environmental risks of nanotechnology and nanomaterials. The lawsuit demands FDA respond to a petition the public interest organizations filed with the Agency in 2006, nearly six years ago. The coalition is led by the International Center for Technology Assessment (CTA), on behalf of fellow plaintiffs Friends of the

Earth, Food and Water Watch, the Center for Environmental Health, the ETC Group, and the Institute for Agricultural and Trade Policy.

 

    The eighty-page petition documents the scientific evidence of nanomaterial risks stemming from their unpredictable toxicity and seemingly unlimited mobility. The 2006 petition requested FDA take several regulatory actions, including requiring nano-specific product labeling and health and safety testing, and undertaking an analysis of the environmental and health impacts of nanomaterials in products approved by the Agency. Nanomaterials in sunscreens, one of the largest sectors of the nano-consumer product market, were also a focus of the action. The petitioners called on the agency to regulate nano-sunscreens to account for their novel ingredients rather than assume their safety, and to pull such sunscreens from the market until and unless the agency approves them as new drug products.

 

    The groups said that since 2006, numerous studies and reports, including agency publications by EPA, OIG, and the U.S. Government Accountability Office, acknowledge significant data gaps concerning nanomaterials' potential effects on human health and the environment. Most troubling are studies using mice that show that nano-titanium dioxide when inhaled and when eaten can cause changes in DNA that affect the brain function and may cause tumors and developmental problems in offspring. One study found titanium dioxide nanoparticles were found in the placenta, fetal liver and fetal brain.

 

    Wenonah Hauter, executive director of Food & Water Watch said, "It is unacceptable that the FDA continues to allow unregulated and unlabeled nanomaterials to be used in products consumers use every day. It is past time for this agency to live up to its mission and protect public health by assessing the health and environmental risks of nanomaterials, and to require labeling so that consumers know where these new materials are being used."

 

    Access the complete 28-page report from OIG (click here). Access the statement from ACC and link to more information from ACC on nanotechnology (click here). Access a release from CTA and the coalition (click here). Access the coalition complaint (click here). Access the coalition 2006 petition (click here). [#Toxics]

 

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NRC Approves Westinghouse's AP1000 Nuclear Reactor Design

Dec 22: The Nuclear Regulatory Commission (NRC) voted to approve a rule certifying an amended version of Westinghouse's AP1000 reactor design for use in the United States. The amended certification, which will be incorporated into the NRC's regulations, will be valid for 15 years. NRC Chairman Gregory Jaczko said, "The Commission is able to reach this final step in approving the amended AP1000 reactor design due to the staff's dedicated work ensuring the design meets NRC's safety requirements. The design provides enhanced safety margins through use of simplified, inherent, passive, or other innovative safety and security functions, and also has been assessed to ensure it could withstand damage from an aircraft impact without significant release of radioactive materials."

 

    The Commission also found good cause to make the rule immediately effective once it is published in the Federal Register. NRC rules normally become effective 30 days after publication. The Federal Register notice and the Commission's directions to the staff on publishing the approved rule will include a discussion on the good cause finding. The final rule was published in the Federal Register on December 30, 2011 [76 FR 82079-82103].

 

    The design certification process provides for public participation and early resolution of safety issues for proposed reactor designs. NRC certification, in the form of a final rule, means the design meets the Agency's applicable safety requirements. If an applicant for a nuclear power plant license references a certified design, the applicant need not submit safety information for the design. Instead, the license application and the NRC's safety review would address the remaining safety issues specific to the proposed nuclear power plant.

 

    The AP1000 is a 1,100 megawatt electric pressurized-water reactor that includes passive safety features that would cool down the reactor after an accident without the need for human intervention. Westinghouse submitted an application for certification of the original AP1000 standard plant design on March 28, 2002; the NRC issued a rule certifying that design on Jan. 27, 2006. Westinghouse submitted an application to amend the AP1000 on May 27, 2007. The NRC's extensive technical review of the amendment request focused on ensuring the agency's safety requirements have been met.

 

    NRC indicated that the transparent process, including input from the Advisory Committee on Reactor Safeguards, led to the NRC issuing a final safety evaluation report on the amended AP1000 in August. The NRC issued a proposed rule for the amended design in January. Stakeholders provided more than 12,000 comments on the proposed rule; the NRC staff considered these comments in developing the final rule.

 

    The NRC said it is currently reviewing six Combined License applications that reference the amended AP1000 design. The NRC has certified three other standard reactor designs: the Advanced Boiling Water Reactor; System 80+; and AP600. The Agency is currently reviewing applications to certify the Economic Simplified Boiling Water Reactor, the U.S. Advanced Pressurized Water Reactor and the EPR pressurized-water reactor.

 

    U.S. Department of Energy (DOE) Secretary Steven Chu issued a statement in support of the NRC decision to certify the AP1000 nuclear reactor design, which DOE indicated is a significant step towards constructing a new generation of U.S. nuclear reactors. In February 2010, the Obama Administration announced the offer of a conditional commitment for a $8.33 billion loan guarantee for the construction and operation of two AP1000 reactors at Alvin W. Vogtle Electric Generation Plant in Burke, Georgia [See WIMS 2/17/10 & WIMS 2/16/10]. Secretary Chu said, "The Administration and the Energy Department are committed to restarting America's nuclear industry -- creating thousands of  jobs in the years ahead and powering our nation's homes and businesses with domestic, low-carbon energy. Today's decision certifying the AP1000 reactor design marks an important milestone towards constructing the first U.S. nuclear reactors in three decades."

 

    Karen Harbert, president and CEO of the U.S. Chamber's Institute for 21st Century Energy, issued a statement on the NRC's approval saying, "Today's unanimous decision by the Nuclear Regulatory Commission (NRC) to approve the Westinghouse AP1000 nuclear reactor design speeds up momentum towards expanding the use of clean, safe, and reliable nuclear energy in the United States. With the approval of the AP1000 design, the NRC may now issue a combined Construction and Operating License (COL) for two new reactors at Southern Company's Plant Vogtle, as well as two new reactors at a plant in South Carolina. The issuance of a COL for these projects would be the first issued for new construction of a reactor in 34 years. 

    "The AP1000 contains the newest and best technology available. The design was thoroughly tested by the NRC and found to be able to withstand a multitude of scenarios, from earthquakes to plane crashes. The approval of this design clears the way for future expansion and construction of nuclear plants across the nation, allowing Americans to benefit from nuclear energy for decades to come and creating thousands of skilled jobs. I urge the NRC to issue the licenses for the two pending applications expeditiously."

 

     Representative Edward Markey (D-MA) released a lengthy release and statement regarding the NRC approval of the final rule for the Westinghouse AP1000 design and which he said also granted a rule change requested by Southern Company to allow construction to begin before the NRC staff have incorporated and published all reactor design changes adopted by the Commission. Rep. Markey said that one of NRC's longest-serving staff warned in NRC documents that the reactor's containment could shatter "like a glass cup" due to flaws in the design of the shield building if impacted by an earthquake or commercial aircraft. In the publicly released votes on the matter, Chairman Greg Jaczko disapproved the proposal to allow the acceleration of reactor construction, Commissioner George Apostolakis voted to approve it, and Commissioner William Magwood's vote did not refer to it. In the final vote, Chairman Jaczko was overridden by his colleagues.
 
    Rep. Markey said, "Today, the NRC has presented its holiday gifts to the nuclear industry. Instead of doing all they should to protect nuclear reactors against seismically-induced ground acceleration, these Commissioners voted to approve the acceleration of reactor construction. While they continue to slow walk the implementation of recommendations of the NRC professional staff's Near-Term Task Force on Fukushima, they have fast-tracked construction of a reactor whose shield building could 'shatter like a glass cup' if impacted by an earthquake or other natural or man-made impact."

 

    Access a release from NRC (click here). Access the FR announcement (click here). Access more information about the amended AP1000 design review (click here). Access a release from DOE (click here). Access the statement from the U.S. Chamber (click here). Access the release and statement from Rep. Markey (click here). Access links to the Commission voting records on the AP1000 approval (click here). [# [#ENERGY/Nuclear]

 

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EPA issues Final Mercury & Air Toxics Standards With Provisos

Dec 21: As expected and in response to a court deadline, only a few days late, U.S. EPA issued the final Mercury and Air Toxics Standards (a.k.a. MATS or "Utility MACT) [See WIMS 11/29/11], the first national standards to protect American families from power plant emissions of mercury and toxic air pollution like arsenic, acid gas, nickel, selenium, and cyanide. EPA said the standards will "slash emissions of these dangerous pollutants by relying on widely available, proven pollution controls that are already in use at more than half of the nation's coal-fired power plants." The Agency estimates that the new safeguards will prevent as many as 11,000 premature deaths and 4,700 heart attacks a year. The standards will also help America's children grow up healthier – preventing 130,000 cases of childhood asthma symptoms and about 6,300 fewer cases of acute bronchitis among children each year. EPA said it estimates that for every dollar spent to reduce pollution from power plants, the American public will see up to $9 in health benefits. The total health and economic benefits of this standard are estimated to be as much as $90 billion annually. 

    EPA Administrator Lisa Jackson said, "By cutting emissions that are linked to developmental disorders and respiratory illnesses like asthma, these standards represent a major victory for clean air and public health– and especially for the health of our children. With these standards that were two decades in the making, EPA is rounding out a year of incredible progress on clean air in America with another action that will benefit the American people for years to come. The Mercury and Air Toxics Standards will protect millions of families and children from harmful and costly air pollution and provide the American people with health benefits that far outweigh the costs of compliance."

 

    In a rare accompanying action which attempts to respond to various industry and Republican concerns, President Obama issued a Presidential Memorandum to the EPA Administrator entitled, "Flexible Implementation of the Mercury and Air Toxics Standards Rule." The Memorandum indicates in part, "The MATS Rule can be implemented through the use of demonstrated, existing pollution control technologies. The United States is a global market leader in the design and manufacture of these technologies, and it is anticipated that U.S. firms and workers will provide much of the equipment and labor needed to meet the substantial investments in pollution control that the standards are expected to spur. . .

    "Analyses conducted by the EPA and the Department of Energy (DOE) indicate that the MATS Rule is not anticipated to compromise electric generating resource adequacy in any region of the country. The Clean Air Act offers a number of implementation flexibilities, and the EPA has a long and successful history of using those flexibilities to ensure a smooth transition to cleaner technologies. The Clean Air Act provides 3 years from the effective date of the MATS Rule for sources to comply with its requirements. In addition, section 112(i)(3)(B) of the Act allows the issuance of a permit granting a source up to one additional year where necessary for the installation of controls. As you stated in the preamble to the MATS Rule, this additional fourth year should be broadly available to sources, consistent with the requirements of the law. . . The EPA has concluded that 4 years should generally be sufficient to install the necessary emission control equipment, and DOE has issued analysis consistent with that conclusion. While more time is generally not expected to be needed, the Clean Air Act offers other important flexibilities as well. . ."

    The President indicates that, "To address any concerns with respect to electric reliability while assuring MATS' public health benefits, I direct you to take the following actions:

"1. Building on the information and guidance that you have provided to the public, relevant stakeholders, and permitting authorities in the preamble of the MATS Rule, work with State and local permitting authorities to make the additional year for compliance with the MATS Rule provided under section 112(i)(3)(B) of the Clean Air Act broadly available to sources, consistent with law, and to invoke this flexibility expeditiously where justified.

"2. Promote early, coordinated, and orderly planning and execution of the measures needed to implement the MATS Rule while maintaining the reliability of the electric power system. Consistent with Executive Order 13563, this process should be designed to "promote predictability and reduce uncertainty," and should include engagement and coordination with DOE, the Federal Energy Regulatory Commission, State utility regulators, Regional Transmission Organizations, the North American Electric Reliability Corporation and regional electric reliability organizations, other grid planning authorities, electric utilities, and other stakeholders, as appropriate.

"3. Make available to the public, including relevant stakeholders, information concerning any anticipated use of authorities: (a) under section 112(i)(3)(B) of the Clean Air Act in the event that additional time to comply with the MATS Rule is necessary for the installation of technology; and (b) under section 113(a) of the Clean Air Act in the event that additional time to comply with the MATS Rule is necessary to address a specific and documented electric reliability issue. This information should describe the process for working with entities with relevant expertise to identify circumstances where electric reliability concerns might justify allowing additional time to comply."

    EPA indicated it estimates that manufacturing, engineering, installing and maintaining the pollution controls to meet these standards will provide employment for thousands, potentially including 46,000 short-term construction jobs and 8,000 long-term utility jobs.

    EPA said power plants are the largest remaining source of several toxic air pollutants, including mercury, arsenic, cyanide, and a range of other dangerous pollutants, and are responsible for half of the mercury and over 75 percent of the acid gas emissions in the United States. EPA also indicated that more than half of all coal-fired power plants already deploy pollution control technologies that will help them meet these achievable standards. Once final, these standards will level the playing field by ensuring the remaining plants -- about 40 percent of all coal fired power plants -- take similar steps to decrease dangerous pollutants.

    EPA indicated that the Mercury and Air Toxics Standards and the final Cross-State Air Pollution Rule, which was issued earlier this year [See related article below], are the most significant steps to clean up pollution from power plant smokestacks since the Acid Rain Program of the 1990s. EPA said that combined, the two rules are estimated to prevent up to 46,000 premature deaths, 540,000 asthma attacks among children, 24,500 emergency room visits and hospital admissions. The two programs are an investment in public health that will provide a total of up to $380 billion in return to American families in the form of longer, healthier lives and reduced health care costs. EPA also released two summaries of support comments from organizations, medical associations, environmental organizations, House & Senate members and others [See links below].

    The U.S. Chamber of Commerce President and CEO Thomas Donohue issued a statement saying, "We are tremendously disappointed with the administration's decision to ignore the significant risks that will result from the implementation timeline of the Utility MACT rule. In the final rule, the administration acknowledged the need to provide utilities additional time to comply.  However, without any certainty that utilities will actually be able to secure additional time in the future, the rule as currently issued could threaten America's electricity reliability, global competitiveness, and job creation.  The Utility MACT rule is unprecedented in its size and scope and could literally leave our nation's economy in the dark.

    "We wholeheartedly share this and previous administrations' goals of protecting public health and the environment, but the rushed implementation of this rule could undermine the nation's economic recovery. Utility companies and the independent organizations responsible for the reliability of the electric grid have expressed their grave concerns about this rule for months.  Yet the final rule, like the earlier proposed rule, provides no certain additional time. The rule will require power plants to be shut down, significantly modified, or replaced, and for gas pipeline and electric transmission infrastructure to be built. Making these sweeping changes to business operations is a long-term process and it is unrealistic to think businesses can comply with this rule within three years, with an uncertain prospect for limited additional time, particularly in light of the significant regulatory burdens companies will face in siting and permitting these large projects. We urge the administration to reconsider the unrealistic implementation timetable for the Utility MACT rule and the effects it will have on American businesses of all sizes.  Jobs, our economy, and the reliability of our electricity grid are at stake."

    The Edison Electric Institute (EEI) President Tom Kuhn issued a statement saying, "EPA's MACT rule is the most expensive rule in the agency's history. It will require a significant number of electric generating units to design, obtain approval for and install complex controls or replacements in a very short timeframe. In some cases, it will mean that new transmission and natural gas pipelines will have to be built. EPA has made useful technical changes from its original proposal. Nevertheless, we believe the Administration is underestimating the complexity of implementing this rule in such a short period of time, which can create reliability challenges and even higher costs to customers. The Administration is not using all the available authorities in the Clean Air Act to coordinate implementation, to ensure electric reliability, and to avoid excessive costs."

 

    House Energy and Commerce Committee leaders, including Chairman Fred Upton (R-MI) and Energy and Power Subcommittee Chairman Ed Whitfield (R-KY) also commented on the new rules. Chairman Upton said, "Electricity not only lights our homes, it powers all sectors of our economy, including our businesses, hospitals, communication systems and critical infrastructure. Analyses predict EPA's rules will force the premature retirement of power plants that are needed to provide affordable, reliable power to consumers and our growing economy. Other plants will require multi-million dollar retrofits that will result in higher electricity bills. I am concerned the administration decided to issue this rule without a comprehensive analysis assessing how it will affect jobs and the price and reliability of electricity. Under the rules, parts of the country face very real threats of rolling brownouts and blackouts. Most concerning is the tremendous impact this rule will have on low-income families who are struggling just to keep the lights on." Representative Whitfield said, "Not only has President Obama's regulatory agenda made it harder for new electricity generation to be built, but these new regulations will increase energy prices for Americans who can least afford to pay more to light and heat their homes, and for businesses that need reliable, affordable energy to compete globally. These rules hurt consumers, they hurt businesses, and they hurt jobs."

 

   Access a release from EPA (click here). Access the Presidential Memorandum (click here). Access the EPA MATS website with extensive background and details and state-by-state benefits (click here). Access supporting comments (click here); and (click here). Access the U.S. Chamber statement (click here). Access the statement from EEI (click here). Access the statements from Reps. Upton & Whitefield (click here). [#Air]

 

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