Parties Remain Far Apart On Energy Policy & Gas Prices

Mar 1: President Obama delivered another major energy speech at Nashua Community College and Nashua, New Hampshire. The speech was very similar to the one he delivered on February 23, at the University of Miami [See WIMS 2/24/12]. He reiterated, "You know that we can't just drill our way to lower gas prices. There are no quick fixes or silver bullets. If somebody tells you there are, they're not telling you the truth. 

    He said, ". . .we've got to have an all-of-the-above strategy that develops every single source of American energy.  Not just oil and gas, but also wind and solar and biofuels. We've got to keep developing the technology that allows us to use less oil in our cars and trucks, less oil in our buildings and our factories. And that's the strategy we've been pursuing for the last three years, and it's the only real solution to this challenge. . .

    "Since I took office, America's dependence on foreign oil has gone down every single year. Every single year. In fact, in 2010, it was under 50 percent for the first time in 13 years -- for the first time. . . one of the reasons our oil -- our dependence on foreign oil is down is because of policies put in place by our administration, but also our predecessor's administration. And whoever succeeds me is going to have to keep it up. This is not going to be solved by one party; it's not going to be solved by one administration; it's not going to be solved by slogans; it's not going to be solved by phony rhetoric. It's going to be solved by a sustained, all-of-the-above energy strategy. . .

    "So when you start hearing a bunch of folks saying somehow that there's some simple solution, you can turn a nozzle and suddenly we're going to be getting a lot more oil, that's not just how it works. Over the long term, the biggest reason oil prices will rise is because of growing demand in countries like China and India and Brazil. Just think about this. In five years, the number of cars on the road in China more than tripled. Over the last five years, the number of cars tripled. Nearly 10 million cars were added in China alone in 2010 -- 10 million cars just in one country in one year. So that's using up a lot of oil. And those numbers are only going to get bigger over time. As places like China and India get wealthier, they're going to want to buy cars like we do, and they're going to want to fill them up like we do, and that's going to drive up demand. . .

    "We have to keep developing new technology that helps us use less energy. . . Because of the investments we've made, the use of clean, renewable energy in this country has nearly doubled -- and thousands of Americans have jobs because of it. We're taking every possible action to develop a near 100-year supply of natural gas, which releases fewer carbons. Now that's something that experts believe will support more than 600,000 jobs by the end of the decade. Our cooperation with the private sector has positioned this country to be the world's leading manufacturer of high-tech batteries that will power the next generation of American cars. . .

    "But over the long term, an all-of-the-above strategy requires the right incentives.  And here's one of the best examples.  Right now, $4 billion of your tax dollars -- $4 billion -- subsidizes the oil industry every year. . . Now, these companies are making record profits right now -- tens of billions of dollars a year. . . It's outrageous. It's inexcusable. And I am asking Congress -- eliminate this oil industry giveaway right away. I want them to vote on this in the next few weeks.  (Applause.)  Let's put every single member of Congress on record:  You can stand with the oil companies, or you can stand up for the American people. . .

    "With or without this Congress, I'm going to continue to do whatever I can to develop every source of American energy -- to make sure that three years from now our dependence on foreign oil is even lower, to make sure that our future is not controlled by events on the other side of the world. . . The easiest thing in the world is to make phony election-year promises about lowering gas prices. But what's harder is to make a serious, sustained commitment to tackle a problem that we've been talking about for 30 years and has not been tackled, has not been solved. . ."

    The American Petroleum Institute (API) President and CEO Jack Gerard responded to the president's call for a vote to "raise taxes on the oil and natural gas industry." He said, "It is factually wrong for the president to say that the industry receives 'subsidies.' A subsidy is a direct payment of money to a person or business by American taxpayers. The president has it backwards, our industry pays the government nearly 90 million dollars a day -- the biggest contributor of government revenue than any other industry in the United States." API release a detailed explanation why oil and gas tax treatments are not unique or "subsidies." API indicates that, "Contrary to what some in politics and the media have said, the oil and natural gas industry currently enjoys no unique tax credits or deductions. Since its inception, the US tax code has allowed corporate tax payers the ability to recover costs and to be taxed only on net income. These cost recovery mechanisms, also known in policy circles as 'tax expenditures', should in no way be confused with 'subsidies', i.e., direct government spending."

    In a Senate Floor speech the day before, Senate Republican Leader Mitch McConnell (R-KY) said, "This President continues to limit offshore areas to energy production and is granting fewer leases on public land for oil drilling. At the same time, he has encouraged other countries, like Brazil, to move forward with their own offshore drilling projects. The Obama administration continues to impose burdensome regulations on the domestic energy sector that will further drive up the cost of gasoline for the consumer. He's proposed raising taxes on the energy sector, a move that the Congressional Research Service has said would drive up costs.

    "And, as we all know, he flatly rejected the Keystone XL Pipeline -- a potentially game-changing domestic energy project that promises not only greater independence from Middle Eastern oil, but tens of thousands of private sector jobs. All these policies help drive up the cost of gasoline and increase our dependence on foreign sources of oil. But perhaps none is as emblematic of the President's simplistic and punitive approach to energy policy as the last one. The President simply can't claim to support comprehensive approach to energy while at the same time standing in the way of the Keystone Pipeline. It's one or the other. Americans know that.

    "And that's why many of us were pleased when the company that's responsible for building Keystone said it plans to move forward with the southern portion of the pipeline, despite the administration's decision to block the northern portion, to alleviate a bottleneck in Cushing, Oklahoma. They're just not going to let this administration punish them or the rest of those who want to build this pipeline. Asked about the impact of delays, the company's President and CEO said they were partly to blame for the recent spike in gas prices, which is presumably why the White House came out in support of the move. But the hypocrisy here is stunning. . ."

    Karen Harbert, president and CEO of the U.S. Chamber's Institute for 21st Century Energy, issued a statement responding to comments from Senate Majority Leader Harry Reid (D-NV) that he would bring up legislation to address oil company tax treatment and subsidies in the near future [See WIMS 2/22/12]. She said, "It is time for responsible rhetoric from lawmakers and the president on oil and gas taxes. Raising taxes on oil and gas is good news for America's foreign competitors and bad news for America's families and businesses.

    "According to a Wood McKenzie study, tax increases of the magnitude proposed by the president will cost America 170,000 jobs and result in a 14% decrease in energy production. This should be no surprise, because our nation saw a sharp increase in imports and a downturn in our economy when Congress imposed a similar scheme in 1980. It is irresponsible to punitively single out the oil and gas industry. Punishing energy producers will do nothing to lower gas prices nor is it a substitute for a real energy policy. The administration and Congress would be much better served spending time on actual solutions to our energy problems, such as making some of the 95% of onshore and offshore lands that are currently blocked for exploration available for energy production and building the Keystone XL pipeline."

    Access the full text of the President's speech (click here). Access a release from API and link to the 2-page detail on oil and gas tax treatments (click here). Access the Floor speech of Senator McConnell (click here). Access the statement from the U.S. Chamber and link to the McKenzie study (click here). [#Energy]

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Senator Bingaman's "Clean" Energy Standard Act of 2012

Mar 1: Senate Energy & Natural Resources (ENR) Committee, Chairman Jeff Bingaman (D-NM) introduced legislation which he indicated would modernize the nation's power sector and guide it toward a future in which more and more electricity is generated with cleaner and cleaner energy. In a release, Senator Bingaman indicated that the Clean Energy Standard Act of 2012, or CES, "employs a straightforward, market-based approach that encourages a wide variety of electricity-generating technologies. It sets a national goal for clean energy and establishes a transparent framework that lets resources compete based on how clean they are, then gets out of the way and lets the market and American ingenuity determine the best paths forward."

    Bingaman said that the CES seeks to make sure that "as we continue to grow and power our economy, we leverage the clean resources we have available today, and also provide a continuing incentive to develop the cheaper, cleaner technologies that we'll need in the future. We want to make sure that we drive continued diversity in our energy sources, and allow every region to deploy clean energy using its own resources. And we want to make sure that we do all of this in a way that supports home-grown innovation and manufacturing and keeps us competitive in the global clean energy economy."

    He said his design for the CES draws on extensive Energy Information Administration (EIA) modeling done at his request last year, and EIA's results showed that a properly designed CES would have almost zero impact on GDP growth, and little to no impact on national electricity rates for the first decade of the program. Under the plan, all generators of clean energy are given credits based upon their carbon emissions; greater numbers of credits are given to generators with lower emissions per unit of electricity. This flexible framework naturally allows a wide variety of sources (solar, wind, nuclear, natural gas, coal with carbon capture and storage, etc.) to be used to meet the standard, allows market forces to determine what the optimal mix of technologies and fuels should be, and makes it easy for new technologies to be incorporated.

    To be considered "clean," a generator must either be a zero-carbon source of energy, like renewables and nuclear power, or have a lower carbon intensity than "a modern, efficient coal plant." Carbon intensity is defined as the amount of carbon dioxide emitted per megawatt-hour of electricity generated. Accounting for "clean" this way means that the cleanest resources have the greatest incentive, and also that every generator has a continuing incentive to become even more efficient.

    Senator Bingaman indicated that in addition to driving cleaner electricity generation in the power sector, the CES also rewards industrial efficiency. Combined heat and power (CHP) units generate electricity while also capturing and using the heat for other purposes. These units are treated as clean generators under the CES. This will help deploy this kind of efficiency and provide another source of inexpensive clean energy. CES requires is that the generation used (and added to the fleet) gradually becomes cleaner over time. He said it is also important to point out what the CES does not do:

• It does not put a limit on overall emissions.
• It does not limit the growth of electricity generation to meet the demands of a growing economy.
• It does not cost the government anything, and it doesn't raise money for the government, either.  If any money does happen to come into the Treasury as a result of the program, it goes straight back to the particular state from which it came, to fund energy efficiency programs.

    Senator Bingaman said, "The goal of the CES is ambitious -- a doubling of clean energy by 2035. But analysis has shown that the goal is also achievable and affordable. Meeting the CES will yield substantial benefits to our health, our economy, our global competitiveness and our economy." Additional Senators co-sponsoring the bill include: Wyden (D-OR); Sanders (I-VT); Mark Udall (D-CO); Franken (D-MN); Coons (D-DE); Kerry (D-MA); Whitehouse (D-RI) and Tom Udall (D-NM).

    Access a release from Senator Bingaman (click here). Access the full text of the Clean Energy Standard Act of 2012 (click here). Access the CES Two-Page Summary (click here). Access the CES Section-by-Section Summary (click here). Access the Twitter conversation on this bill (click here). [#Energy/CES]

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U.S. Named Global Leader In Renewable Energy Investment

Feb 28: According to Ernst & Young's latest quarterly Renewable Energy Country Attractiveness Index (CAI), In 2011, American renewable energy investment in solar and wind technologies dominated the global market, propelling the United States past China into the leadership position. The company also issued a new forward-looking report -- United States Renewable Attractiveness Indices -- that benchmarks the U.S. state investments that were the driving force behind the shift, offering insight into the nation's diverse renewable energy markets, energy infrastructures and their suitability for individual technologies. Most notably, the report highlights that, despite uncertain macroeconomic conditions, renewable energy -- particularly in states like Massachusetts, Colorado, Texas and California -- is positioned very favorably to benefit from future investments.

 

    On the global scale, Ernst & Young indicates that while 2011 saw record levels of new investment into clean energy, especially solar technologies, the outlook for 2012 is far less certain. The renewables sector will continue to prosper in 2012 in the emerging markets, thanks to ambitious installation programs securing investments, while more established markets will face increasing financial constraints, especially within the Eurozone. The company explains that the sovereign debt crisis continues to stifle renewable energy investment in the Eurozone, along with Governments scaling back their ambitions for the sector. Simultaneously capital scarcity and increased competition from Asia will continue to put pressure on developed markets for the foreseeable future. This will lead to almost inevitable consolidation of the wind and solar sectors and increased vertical integration, as equipment manufacturers seek ever more innovative routes to market.

 

    Regarding the COP17 agreement in Durban to sign up to an unspecified legally binding treaty by 2020, Earnst & Young indicated the agreement "was welcome but weak." They said, "It did not remove carbon and climate change wholly from the agenda, but it hardly provided an imperative to invest. The subsequent withdrawal of Canada, Japan and Russia from the Kyoto Protocol, fresh after the home planes had landed, foretells the difficulties to come. The 2015 to 2020 negotiations will thus take place at a time when a material increase in global emissions by the new growth economies is likely to have outstripped any reductions in the West, even after any impacts from a recession. Higher rises in global temperatures than the two to three degrees currently contemplated may by then be on the cards -- if emerging scientific consensus is accepted."

    On the U.S. front, Earnst & Young indicate, "While California's dominance of the All Renewables Index was anticipated, the top five rankings of states like Colorado, Massachusetts and Texas demonstrate a commitment to growing energy infrastructures across the nation. For instance, New Mexico and Colorado came in second and third respectively in the 'All Renewable Index' because of consistent growth and strong potential across all renewable energy technologies. Massachusetts and Texas tied for fifth with a strong draw for solar and wind investment respectively."

    Michael Bernier, Senior Manager, National Tax, Ernst & Young LLP said, "The State Attractiveness Indices data enables us to look at specific states and regions and understand what they are doing with renewable energy development and infrastructure on a microscopic level. It enables us to fine-tune the discussion about the overall U.S. market. Moreover, this report uncovers the new national leaders in energy infrastructure. Massachusetts, for example, is a top-five solar market due to a multitude of state-level initiatives, even though it is not the sunniest market. Like Colorado, Massachusetts is building up its research and development in addition to its manufacturing facilities. These factors make renewable energy development in these states possible and further investment probable."

    In addition to providing a baseline for future reports which will be released semiannually, the United States Renewable Attractiveness Indices looks at issues that will enhance or impair further development in the renewable energy markets, such as incentives like the Production Tax Credit, wind power's key incentive. The continuance of this tax credit would have a significant impact on what has become a thriving domestic manufacturing sector.

    Access a release from Ernst & Young (click here). Access the global report (click here). Access the U.S. report (click here). [#Energy/Renewable]

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Keystone XL Proceeds With White House Encouragement

Feb 27: TransCanada Corporation announced it has sent a letter to the U.S. Department of State (DOS) informing the Department the company plans to file a Presidential Permit application (cross border permit) in the near future for the Keystone XL Project from the U.S./Canada border in Montana to Steele City, Nebraska. TransCanada said it would supplement that application with an alternative route in Nebraska as soon as that route is selected. The company also informed the DOS that what had been the Cushing [Oklahoma] to U.S. Gulf Coast portion of the Keystone XL Project has its own independent value to the marketplace and will be constructed as a stand-alone Gulf Coast Project, not part of the Presidential Permit process. The approximate cost is US$2.3 billion and subject to regulatory approvals. The company said it anticipates the Gulf Coast Project to be in service in mid to late 2013.

 

    As WIMS has reported previously, despite the recent disapproval of the Presidential permit, talks of alternative pipelines and oil being sold to China, TransCanada Corporation, in its Annual Report to Shareholders Disclosure documents, is projecting the "in-service date" of the Keystone XL pipeline by early 2015. The company indicated that, "while disappointed, [it] remains fully committed to the construction of Keystone XL. Plans are already underway on a number of fronts to largely maintain the construction schedule of the project. TransCanada said it would re-apply for a Presidential Permit (which it is now doing) and expects a new application to be processed in an expedited manner to allow for an in-service date of early 2015." [See WIMS 2/16/12].

    In a lengthy release on the companies plans, Russ Girling, TransCanada's president and chief executive officer said, ""Our application will include the already reviewed route in Montana and South Dakota. The over three year environmental review for Keystone XL completed last summer was the most comprehensive process ever for a cross border pipeline.  Based on that work, we would expect our cross border permit should be processed expeditiously and a decision made once a new route in Nebraska is determined."

    TransCanada said it will continue to work collaboratively with the State of Nebraska on determining an alternative route for Keystone XL that avoids the environmentally sensitive Sandhills area.  TransCanada has been working on assessing the routing in Nebraska since November 2011, following the State Department's notice to delay a decision on a Presidential Permit until an adjusted route that avoids the Sandhills was developed.

    The company said that U.S. crude oil production has been growing significantly in States such as Oklahoma, Texas, North Dakota and Montana.  Producers do not have access to enough pipeline capacity to move this production to the large refining market at the U.S. Gulf Coast.  The Gulf Coast Project will address this constraint. Girling said,  "The Gulf Coast Project will transport growing supplies of U.S. crude oil to meet refinery demand in Texas. Gulf Coast refineries can then access lower cost domestic production and avoid paying a premium to foreign oil producers.  This would reduce the United States' dependence on foreign crude and allow Americans to use more of the crude oil produced in their own country."

    The company noted that reapplying for the Keystone XL permit is supported by words used in President Obama's statement January 18, 2012 when he said the denial of the permit was not based on the merits of the pipeline but rather on an imposed 60-day legislative timeline to make a decision on the project [See WIMS 1/23/12]. With respect to moving forward on an initiative like the Gulf Coast Project, President Obama stated:  "In the months ahead, we will continue to look for new ways to partner with the oil and gas industry to increase our energy security - including the potential development of an oil pipeline from Cushing, Oklahoma to the Gulf of Mexico."

    TransCanada said its  commitment is to treat landowners with honesty, fairness and respect.  The company said it has already negotiated over 99 per cent of voluntarily easements in Texas and close to 100 per cent in Oklahoma.  Easements make up the route of a pipeline and are similar to an easement for water, sewer and utility lines.  Residents maintain ownership of the land and landowners receive a payment equal to or greater than the land's market value. 

    The company said the Keystone XL remains in the national interest of the United States as it would allow Americans to move closer toward achieving energy security and create thousands of much needed jobs.  Building the Gulf Coast Project would be a positive step in creating approximately 4,000 jobs.  Also, the company notes that the U.S. manufacturing sector would continue to experience the economic benefits of the project, as the company has contracts with over 50 suppliers in various states including: Texas, Missouri, Pennsylvania, Michigan, Oklahoma, South Carolina, Indiana, Georgia, Maryland, New York, Louisiana, Oklahoma, Minnesota, Ohio, Arkansas, Kansas and California.  And, there are hundreds of additional suppliers sub-contracted through our suppliers for our material and equipment.

    The White House issued a statement on the TransCanada announcement saying, "The President welcomes today's news that TransCanada plans to build a pipeline to bring crude oil from Cushing, Oklahoma, to the Gulf of Mexico. As the President made clear in January, we support the company's interest in proceeding with this project, which will help address the bottleneck of oil in Cushing that has resulted in large part from increased domestic oil production, currently at an eight year high. Moving oil from the Midwest to the world-class, state-of-the-art refineries on the Gulf Coast will modernize our infrastructure, create jobs, and encourage American energy production. We look forward to working with TransCanada to ensure that it is built in a safe, responsible and timely manner, and we commit to take every step possible to expedite the necessary Federal permits.

    "Separately, TransCanada gave the State Department advance notice of its intention to submit a new application for the cross-border segment of the Keystone XL pipeline, from Canada to Steele City, Nebraska, once a route through Nebraska has been identified. House Republicans forced a rejection of the company's earlier application in January, by not allowing sufficient time for important review or even the identification of a complete pipeline route. But as we made clear, the President's decision in January in no way prejudged future applications. We will ensure any project receives the important assessment it deserves, and will base a decision to provide a permit on the completion of that review."

    At a White House press briefing later in the day, a reporter asked why the Administration was "so supportive of a pipeline that goes from Oklahoma to the Gulf of Mexico. . ." Press Secretary Jay Carney responded:

"Well, I'll make a couple of points.  One, it's a global oil market.  Two, we made clear back in January, in the President's statement, that the pipeline from Cushing to the Gulf could potentially be important precisely because there are bottlenecks in Cushing right now that prevent what is essentially a glut of domestically produced oil from getting to market, getting to refineries and getting to market.  That glut exists in part because of the increase in oil production domestically in this country over the last eight years.  We are at an eight-year high, as you know. 

"And it highlights a little known fact -- certainly you wouldn't hear it from some of our critics -- that we approved -- pipelines are approved and built in this country all the time.  And this one is important because of the reasons I just mentioned -- the bottleneck that exists, the glut of oil that exists, and we need to get that oil to the state-of-the-art refineries in the Gulf and get it to market.  And that's an important process.  And we'll make sure that any federal permitting that is involved in the Cushing pipeline will be acted on very quickly.

"Everything will be done by the book and by the -- as it always is.  Again, it's important, because a lot of these issues get confused in the political debate -- the reason why Keystone XL required the review that it did is because it crossed -- that pipeline crossed an international boundary.  And the State Department, by tradition and rule, reviews those requests for permits and was in the process of doing just that when the Republicans forced it to -- forced us to deny it because they tried to compel the administration to grant a permit to a pipeline, the route for which didn't even exist, which was obviously not the right thing to do.

"And as I think the statement also went on to say, that TransCanada indicated that it would -- had plans to, anyway, to resubmit a new proposal, a new pipeline route, and that will certainly be reviewed by the book, without prejudice, because the decision the President made earlier had nothing to do with the merits of a pipeline proposal, it was simply that because of the decision by Republicans to play politics with this, forced him -- forced the administration to deny the permit request because there wasn't even a pipeline route identified."

    Senator James Inhofe (R-OK), Ranking Member of the Senate Committee on Environment and Public Works (EPW) said he welcomed the announcement by TransCanada. He said he was asking EPW Chairman Barbara Boxer (D-CA) to hold a field hearing in Cushing, Oklahoma to address the permitting process. He said, "The largest obstacles standing in the way of this pipeline from Cushing to the Gulf are Army Corps of Engineers permits under the Clean Water Act and potential consultations by the US Fish and Wildlife Service."

    House Energy and Commerce Committee Chairman Fred Upton (R-MI) issued a release saying,  "I am pleased to see TransCanada is moving forward, but remain deeply disappointed that construction of the full pipeline has not been approved after more than three years of stringent environmental review. Since President Obama has proved unwilling to make a decision on the permit for this project, we have passed legislation to take that decision out of his hands. The House has now voted three times to end the president's delay, and we will continue to fight to see that the permit is approved and the pipeline is built."

    Noah Greenwald, endangered species program director with the Center for Biological Diversity (CBD) issued a release indicating that there has been no analysis of how the pipeline from Cushing to the Gulf Coast in Texas will affect wetlands or imperiled species in the region, including the whooping crane, interior least tern, Arkansas shiner and piping plover. He said, "Government engineers have already said that Keystone XL will leak oil, so building a pipeline through endangered species habitat will put those species directly in harm's way.

    "The Obama administration today vowed to take every step possible to expedite the necessary federal permits. This isn't the time to be cutting corners on protecting our wildlife and environment. The Obama administration should be willing to take a hard look at this project and make sure it follows laws that protect clean water, wetlands and endangered species. The American people have spoken clearly against this project. Segmenting the project and building it in sections does nothing to reduce the tremendous damage that would be caused by this pipeline and further tar sands development."

    Access the TransCanada release (click here). Access the White House statement (click here). Access the White House press briefing transcript (click here). Access a release from Senator Inhofe (click here). Access a release from Rep. Upton (click here). Access a release from CBD (click here). Access the TransCanada Keystone XL project website for additional information (click here). Access complete details and background from the DOS Keystone XL Pipeline Project website (click here). [#Energy/Pipeline, #Energy/KXL, #Energy/OilSands, #Energy/TarSands]

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EPA Proposes Step 3 For The GHG Tailoring Rule

Feb 27: U.S. EPA said it is proposing not to change the greenhouse gas (GHG) permitting thresholds for the Prevention of Significant Deterioration (PSD) and Title V Operating Permit programs. The said its proposal is part of a "common-sense, phased-in approach to GHG permitting under the Clean Air Act." EPA is also proposing steps which it said would streamline the permitting process for large emitters already covered by the Agency's program, including sources that account for nearly 70 percent of the total GHG pollution from stationary sources. EPA will accept comments on this proposal for 45 days after it is published in the Federal Register and a public hearing will be held on March 20, 2012, in Arlington, VA.

    EPA's said the proposal is consistent with its phased-in approach, announced in 2010, to "tailor" the requirements of the Clean Air Act to ensure that industrial facilities and state governments have the tools they need to minimize GHG emissions and that only the largest emitters need permits. After consultation with states and evaluating the process, EPA said it believes that the current approach is working well, and that state permitting authorities are currently managing PSD permitting requests. Therefore, EPA has proposed not to include additional, smaller sources in the permitting program at this time.

    EPA indicated in a release that the GHG permitting program follows the same Clean Air Act process that states and industry have followed for decades to help ensure that new or modified facilities are meeting requirements to protect air quality and public health from harmful pollutants. As of December 1, 2011, EPA and state permitting authorities have issued 18 PSD permits addressing GHG emissions. These permits have required new facilities, and existing facilities that have chosen to make major modifications, to implement energy efficiency measures to reduce their GHG emissions.

    EPA said the GHG Tailoring Rule would continue to address a group of six greenhouse gases: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6). The PSD permitting program protects air quality and allows economic growth by requiring facilities that trigger PSD to limit GHG emissions in a cost effective way. An operating permit lists all of a facility's Clean Air Act emissions control requirements and ensures adequate monitoring, recordkeeping and reporting. The operating permit program allows an opportunity for public involvement and to improve compliance.

    Under the approach maintained in the proposal, new facilities with GHG emissions of at least 100,000 tons per year (tpy) carbon dioxide equivalent (CO2e) continue to be required to obtain PSD permits. Existing facilities that emit 100,000 tpy of CO2e and make changes increasing the GHG emissions by at least 75,000 tpy CO2e, must also obtain PSD permits. Facilities that must obtain a PSD permit, to include other regulated pollutants, must also address GHG emission increases of 75,000 tpy or more of CO2e. New and existing sources with GHG emissions above 100,000 tpy CO2e must also obtain operating permits. 

 

    EPA proposals for streamlining the GHG permitting process includes two approaches:

• The first would increase flexibilities and improve the usefulness of plantwide applicability limitations (PALs) for GHGs. A PAL is an emissions limit applied sourcewide rather than to specific emissions points. With a PAL, a source can make changes to the facility without triggering PSD permitting requirements as long as emissions do not increase above the limit established by the PAL. This would allow companies to respond rapidly to changing market conditions while protecting the environment.
• The second approach would create the regulatory authority for EPA to issue synthetic minor permits for GHGs where EPA is the PSD permitting authority. A GHG source could agree to an enforceable GHG emissions limit set below a level that would trigger PSD permitting requirements. The process for obtaining a synthetic minor permit is generally less complicated than the PSD permitting process for a major source. This action would give facilities a mechanism to keep themselves out of major source permitting requirements for GHG as long as the source minimizes its GHG emissions.

    Access a release from EPA (click here). Access a fact sheet on the proposed rule (click here). Access the 127-page prepublication copy of the proposed rule (click here). [#Climate, #Air]

 

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Gas Prices & Energy Issues Are Front Burner In Political Discussions

Feb 23: At a lengthy and rousing energy speech at the University of Miami, President Obama tried to head off criticisms of rising gasoline prices and the Administration's energy policies. The President said:

"In the State of the Union, I laid out three areas where we need to focus if we want to build an economy that lasts and is good for the next generation, all of you.  (Applause.)  We need new American manufacturing.  We've got to have new skills and education for America's workers, and we need new sources of American-made energy.

 

Now, right now we are experiencing just another painful reminder of why developing new energy is so critical to our future.  Just like last year, gas prices are climbing across the country. . . Now, some politicians they see this as a political opportunity. . . Only in politics do people root for bad news, do they greet bad news so enthusiastically. . . You can bet that since it's an election year, they're already dusting off their 3-point plan for $2 gas.  And I'll save you the suspense.  Step one is to drill and step two is to drill. And then step three is to keep drilling. We heard the same line in 2007 when I was running for President. We hear the same thing every year. We've heard the same thing for 30 years. . .

 

"You know there are no quick fixes to this problem. You know we can't just drill our way to lower gas prices. If we're going to take control of our energy future and can start avoiding these annual gas price spikes that happen every year -- when the economy starts getting better, world demand starts increasing, turmoil in the Middle East or some other parts of the world -- if we're going to avoid being at the mercy of these world events, we've got to have a sustained, all-of-the-above strategy that develops every available source of American energy. Yes, oil and gas, but also wind and solar and nuclear and biofuels, and more. . .

 

"We're not going to transition out of oil anytime soon. And that's why under my administration, America is producing more oil today than at any time in the last eight years. That's why we have a record number of oilrigs operating right now -- more working oil and gas rigs than the rest of the world combined. Over the last three years my administration has approved dozens of new pipelines, including from Canada. And we've opened millions of acres for oil and gas exploration. All told we plan to make available more than 75 percent of our potential offshore oil and gas resources from Alaska to the Gulf of Mexico. . .

 

But here's the thing -- it's not enough. The amount of oil that we drill at home doesn't set the price of gas by itself. The oil market is global; oil is bought and sold in a world market. And just like last year, the single biggest thing that's causing the price of oil to spike right now is instability in the Middle East -- this time around Iran. When uncertainty increases, speculative trading on Wall Street increases, and that drives prices up even more. . .

 

So what does this mean for us? It means that anybody who tells you that we can drill our way out of this problem doesn't know what they're talking about, or just isn't telling you the truth. . . The United States consumes more than a fifth of the world's oil -- more than 20 percent of the world's oil -- just us. We only have 2 percent of the world's oil reserves. We consume 20; we've got 2. And that means we can't just rely on fossil fuels from the last century.  We can't just allow ourselves to be held hostage to the ups and downs of the world oil market. We've got to keep developing new sources of energy.  We've got to develop new technology that helps us use less energy, and use energy smarter. We've got to rely on American know-how and young engineers right here at the U who are focused on energy. That is our future. And that's exactly the path that my administration has been trying to take these past three years. . .

 

Now, it's the easiest thing in the world to make phony election-year promises about lower gas prices. What's harder is to make a serious, sustained commitment to tackle a problem. And it won't be solved in one year; it won't be solved in one term; it may not be completely solved in one decade. But that's the kind of commitment we need right now. That's what this moment requires. . . And I know we can do it. We have done it before. And when we do, we will remind the world once again just why it is that the United States of America is the greatest country on Earth."

    Karen Harbert, president and CEO of the U.S. Chamber's Institute for 21st Century Energy, issued a statement in response to President's remarks saying, "As the President said, there is no silver bullet that will decrease gas prices and improve our energy security. However, there are a series of significant steps that this President could take that would lead us to a more secure energy and economic future, but this Administration has rejected that path. Today's speech contained two fundamental mischaracterizations. The first is the notion that raising taxes on oil companies is going to lower gas prices. It won't, and we know it won't because it has been tried before. The result was higher prices and more imports. 

    "The second is that this Administration is somehow responsible for the uptick we've seen recently in domestic production. It's not. Because of the restrictions this Administration has placed on accessing public land, as well as the ever-increasing amount of red tape, the energy industry has moved to produce oil and gas on private lands. Also, credit is due to policy decisions made years ago in previous Administrations. The fact that the administration would repeatedly try to take credit for this shows a troubling lack of understanding of energy production in this country. 

    "The results of the President's 'just say no' energy policy will be felt in the years to come. The facts speak for themselves. President Obama's administration has issued 50.7 percent fewer annual leases on public lands than President Clinton's did. Gulf of Mexico energy production is down 16 percent since 2009 and is projected to decrease even further in 2012. President Obama denied the Keystone XL pipeline permit, which would have created thousands of jobs and provided all Americans with a steady supply of oil from a friendly ally. He also has banned new offshore areas from oil and gas exploration, and recently his Administration took one million acres of onshore land rich with oil shale off the table. The American people can see that the current approach is not working. But we cannot have a constructive conversation about energy policy as long as this Administration fails to put forward any new ideas, relying instead on four year old campaign rhetoric. It isn't enough just to be for an 'all of the above' energy policy in a speech. It's time to actually propose one."

 

    The American Petroleum Institute (API) challenged the President to back up his energy statements with policies that will enhance, not hinder an 'all the above' energy strategy to benefit consumers. API President & CEO Jack Gerard said, "In an effort to ease the pain at the pump the president is misleading Americans about his energy strategy. President Obama says he's committed to domestic oil and natural gas production, but the fact is his record shows otherwise.

    "Since taking office he has declared 85 percent of our offshore areas off limits, decreased oil and gas leases in the Rockies by 70 percent, rejected the Keystone XL pipeline and has ten federal agencies planning more regulation of hydraulic fracturing, which is key to oil and natural gas development. The president's Jekyll and Hyde approach to energy security is hurting consumers. We urge the president to work with our industry to generate more supply to the market and create new American jobs. If the president didn't think supply mattered in the price equation, why did he tap into the SPR last year? Instead of raiding our emergency reserves again, we hope the president will put this industry to work so we can produce more oil and natural gas for American by Americans."

 

    Michael Brune, Executive Director of the Sierra Club, issued a statement saying, "The Sierra Club is encouraged by the President's continued commitment in his speech today to double down on clean energy sources like wind, solar and energy efficiency for economic growth and job creation. We applaud the President's goals for ramping up new American manufacturing, new skills and education for American workers and new sources of American-made energy -- there is no better way to fulfill those goals than with a clean energy economy. As the President said, rising gas prices are a painful reminder of why we need to move beyond oil. We will not drill our way out of this perennial problem. We need to move beyond dirty fossil fuels and keep fragile, treasured places like the Polar Bear Seas in the Arctic out of polluters' reach.

    "The President's historic fuel economy and pollution standards will put better, more fuel efficient cars on the road. These standards are the biggest single step we can take to break our dangerous addiction to oil and they will save Americans billions at the pump. We urge the President to deliver our cleanest, quickest and cheapest options first, and resist falling back on more expensive and dangerous new nuclear power and fracked natural gas. As it stands, the Sierra Club has no confidence in the secretive and toxic practices of natural gas fracking, nor do we think that new nuclear has any role to play in America's clean energy future. The more we leverage cheap energy efficiency, the fewer new power plants and fracking wells we will need."

    Access the full text of the President's speech (click here). Access a video of the President's speech (click here). Access the statement from the U.S. Chamber (click here). Access a release from API (click here). Access the statement from Sierra Club(click here). [#Energy]

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EPA & Corps Submit Final Water Guidance To OMB

Feb 22: With little fanfare U.S. EPA and the Army Corps of Engineers have submitted final guidance to clarify protection of waters under the Clean Water Act to the Office of Management and Budget for Federal interagency review. EPA indicates that the guidance "will provide more predictable and consistent procedures for identifying waters and wetlands protected under the Clean Water Act." EPA indicates that the guidance is focused on protection of smaller waters that feed into larger ones, to keep downstream water safe from upstream pollutants. The focus is also on reaffirming protection for wetlands that filter pollution and store water and help keep communities safe from floods.

 

    In April 2011, the EPA and the U.S. Army Corps of Engineers released draft guidance to clarify protection of waters under the Clean Water Act [See WIMS 4/27/11]. The proposed Guidance was published in the Federal Register on May 2, 2011 [76 FR 24479-24480]. About 230,000 public comments on the draft guidance were received by the agencies. Most recognized the importance of effective implementation of the Clean Water Act to protect human health and water quality.

 

    EPA said, "The guidance will not extend federal protection to any waters not historically protected under the Clean Water Act and will be fully consistent with the law, including decisions of the Supreme Court. The guidance will also maintain all of the existing exemptions for agricultural discharges and waters, and also identify specific types of water bodies to which it does not apply – areas like artificial lakes and ponds, and many types of drainage and irrigation ditches."

 

    EPA and the Corps of Engineers also said they have heard requests from Congress, industry organizations, environmental groups, states and the public for rulemaking to further clarify the requirements of the Clean Water Act consistent with decisions of the Supreme Court. The agencies propose to finalize the guidance and to continue work on a rulemaking.

 

     Earthjustice President Trip Van Noppen, commended EPA and other Federal agencies for the latest action to preserve the nation's waters and said, "We are pleased that the Obama administration is taking this important step to protect rivers, streams and all of our waterways from pollution. The public depends on clean water and demands programs that limit water pollution. This new guidance replaces two bad Bush administration guidances that left millions of miles of streams and acres of wetlands without safeguards from pollution. Clean water is critical to public health, the economy, and communities."

 

    Jan Goldman-Carter, senior manager, wetlands and water resources for the National Wildlife Federation (NWF) said, "More than 250 state and local sportsmen organizations, watershed groups and outdoor businesses from 11 Great Lakes, Southern and Western states recently have called on the administration to act quickly to finalize the guidance and proceed with rulemaking."

 

    Access the statement from Earthjustice (click here). Access a release from NWF and link to groups letters and lists of organizations (click here). Access the OMB OIRA website for this action (click here). Access EPA's website on Clean Water Act Definition of "Waters of the United States" for complete background (click here). Access the FR announcement (click here). Access the dockets for this action for background and comments (click here). [#Water]

 

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Tax Reform Calls For Elimination Of Oil & Gas Tax Preferences

Feb 22: President Obama released what he is calling a "Framework for Business Tax Reform." The President said, "In my State of the Union, I laid out a blueprint for an economy that's built to last -- where everyone gets a fair shot, everyone pays their fair share, and everyone plays by the same set of rules.  That includes a tax code that rewards companies who invest and create jobs in the United States of America. Our current corporate tax system is outdated, unfair, and inefficient. It provides tax breaks for moving jobs and profits overseas and hits companies that choose to stay in America with one of the highest tax rates in the world. It is unnecessarily complicated and forces America's small businesses to spend countless hours and dollars filing their taxes. It's not right, and it needs to change. 

    "That's why my administration released a framework for reform that simplifies the tax code, eliminates dozens of tax loopholes and subsidies, and promotes job creation right here at home.  It's a framework that lowers the corporate tax rate and broadens the tax base in order to increase competitiveness for companies across the nation. It cuts tax rates even further for manufacturers that are creating new products and manufacturing goods here in America. Finally, because no company should be able to avoid paying its fair share of taxes by moving jobs and profits overseas, this framework includes a basic minimum tax for every multinational company. This reform is fully paid for, and it won't add a dime to the deficit.

    According to information from the Administration, the President's Framework would eliminate dozens of different tax expenditures and fundamentally reform the business tax base to reduce distortions that hurt productivity and growth. It would reinvest the savings in reducing the rate from 35 percent to 28 percent. The combination of a broader base and a lower rate would alleviate a number of the significant economic distortions identified above that cause businesses to base investment decisions on tax rules rather than economic returns. Furthermore, this would encourage greater investment here at home and reduce incentives for U.S. companies to move their operations abroad or to shift profits to lower-tax jurisdictions. Where appropriate, the changes would allow adequate transition periods to permit affected parties to adjust to the new permanent tax rules. Finally, this reform would bring certainty to a business tax code that annually features the expiration of dozens of business tax incentives. Many of these temporary provisions would be eliminated and those that remain would be made permanent -- helping to improve incentives to allocate capital efficiently and to simplify the tax code.

    Among other items, the proposal calls for elimination of "oil and gas tax preferences." According to the Framework, "The tax code currently subsidizes oil and gas production through tax expenditures that provide preferences for these industries over others. The Framework would repeal tax preferences available for fossil fuels. This includes, for instance, repealing the expensing of intangible drilling costs, a provision that allows oil companies to immediately write-off these costs rather than recovering the cost over time as for most capital investments in other industries. This also includes repealing percentage depletion for oil and natural gas wells, which allows certain oil producers and royalty owners to recover the cost of oil and gas wells based on a percentage of the income they earn from selling oil and gas from the property rather than on the exhaustion of the property. Percentage depletion allows deductions that can exceed the cost of the property."

 

    Some other items include:  refocusing the manufacturing deduction and using the savings to reduce the effective rate on manufacturing to no more than 25 percent, while encouraging greater research and development and the production of clean energy; eliminating incentives to locate production overseas or engage in accounting games to shift profits abroad; and provide tax reform to make tax filing simpler for small businesses and entrepreneurs so that they can focus on growing their businesses rather than filling out tax returns.

 

    Specifically on clean energy, the Framework indicates, "The President's Framework would make permanent the tax credit for the production of renewable electricity, in order to provide a strong, consistent incentive to encourage investments in renewable energy technologies like wind and solar. As with the R&E Tax Credit, the United States has to date provided only a temporary production tax credit for renewable electricity generation. This approach has created an uncertain investment climate, undermined the effectiveness of our tax expenditures, and hindered the development of a clean energy sector in the United States. In addition, the structure of renewable production and investment tax credits has required many firms to invest in inefficient tax planning through tax equity structures so that they can benefit even when they do not have tax liability in a given year because of a lack of taxable income. The President's Framework would address this issue by making the permanent production tax credit refundable."

 

    The U.S. Chamber of Commerce issued a release and President and CEO Thomas Donohue issued said, "It's appropriate for the White House to acknowledge that the corporate tax code stifles economic growth, undermines the competitiveness of U.S. firms, and needs reform. We welcome the opportunity to work with the administration and Congress to improve the system, strengthen the economy, and help American companies compete and win. However, we're disappointed the White House proposal does not adopt a territorial tax system that would put an end to the double taxation of profits earned by U.S. companies overseas. America is the only major country that disadvantages its own firms competing globally. These companies employ millions of Americans here at home and make significant contributions to our economy.

    "Also, we will be forced to vigorously oppose pay-fors that pit one industry against another or lavish favors on some while punishing others. What's really needed is a comprehensive overhaul of the entire system that broadens the tax base, lowers rates for individuals and corporations, and simplifies compliance. Such reform would be a boon to economic growth, jobs, and American competitiveness." 

 

    Access the statement from the President (click here). Access a release from the Administration (click here). Access the 25-page Framework (click here). Access a release from the U.S. Chamber (click here).

 

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Legal & Legislative Assault On EPA's Utility MACT Rule

Feb 16: Senator James Inhofe (R-OK), Ranking Member of the Senate Committee on Environment and Public Works (EPW), filed a joint resolution of disapproval under the Congressional Review Act (CRA) that will prevent the Obama-EPA from going through with its Utility Maximum Achievable Control Technology (Utility MACT, a.k.a. Mercury and Air Toxics Standards or MATS) rule [See WIMS 1/3/12]. Senator Inhofe said:

"The failure of the United States Senate to rein in the Obama-EPA is having a devastating impact on the pocketbooks of American families and threatens the jobs and livelihoods of millions of Americans. Over the past year, more than a dozen Senate Democrats have claimed that they want to stop EPA's destructive agenda, yet when the time comes, they hide behind alternative bills they know will never pass. This way, they can tell their constituents they are trying to help -- when the reality is their actions are enabling them to protect President Obama's left wing ideals. The House has passed numerous bipartisan bills, yet not a single one has passed the United States Senate. It's time for the Senate to do its job and stop this regulatory nightmare.

"Today the United States Senate can look forward to having one more opportunity to stand up to President Obama's war on affordable energy: I am introducing a legislative measure that will put a halt to the Obama-EPA's Utility MACT rule -- one of the most expensive environmental rules in American history, second only to his proposed cap-and-trade rules that failed to pass legislatively.   

 

"When one cuts through EPA's propaganda, the health benefits the Agency touts are virtually nonexistent. In reality, Utility MACT is designed to kill coal. As EPA admits, this extension of Obama's cap-and-trade agenda will cost American families up to $11 billion in electricity rate increases (over 11 percent increase, on average), and destroy up to 1.4 million jobs. Workers recently laid off in Ohio, Kentucky, and West Virginia are feeling the devastating impacts of this rule. Sadly, these lost jobs are a part of President Obama's wider war on coal as well as fossil fuels, which he admitted was his goal on the campaign trail in 2008 when he said, 'if somebody wants to build a coal-fired plant they can. It's just that it will bankrupt them' and 'under my plan of a cap-and-trade system, electricity rates would necessarily skyrocket.'

"The time for political charades and talk is over. A majority of the members of the US Senate understand that EPA is destroying jobs and harming our economy.  The President himself admitted as much when he stopped EPA from issuing new ozone standards. With this CRA, the Senate can either stand with American families, small businesses, and manufacturers, or continue to enable the Obama-EPA's job-killing regulatory agenda."

    According to background information provided by Senator Inhofe, the Congressional Review Act (CRA) provides for an expedited Senate floor procedure to overturn executive agency rules by a simple majority vote. If passed by both chambers and signed into law, the joint resolution would effectively send the rule back to EPA to be rewritten in conformance with Congressional direction. Sen. Inhofe said, "Contrary to claims, disapproved rules don't necessarily require statutory reauthorization before further agency action can occur. Rather, an Agency's ability to issue a new rule depends on the nature of its regulatory authority and the specific objections raised by Congress to the disapproved rule. EPA has broad authority and discretion to regulate hazardous air pollutants under the Clean Air Act. As such, in the event the Utility MACT rule and its 'Franken MACT' approach were disapproved, it would not be barred from seeking achievable, cost effective emissions reductions from power plants."

 

    Additionally, on February 16, the National Mining Association (NMA) President and CEO Hal Quinn announced the association's legal petition for review of EPA final Utility MACT rule. He said, "NMA petitioned the U.S. Court of Appeals for the District of Columbia today for review of EPA's final Utility MACT rule, in National Mining Association v. United States Environmental Protection Agency. EPA has dangerously underestimated the impact of the Utility MACT and related rules on the reliability of the nation's electricity grid. Within a matter of weeks of the final rule's unveiling, the announced retirements of electricity plants already exceeds EPA's dubious estimate.

    "These announcements demonstrate the cruel reality of EPA's regulatory agenda -- less reliability, higher costs to consumers and businesses and lost employment. EPA has compounded the flaws in its high-cost, tight-compliance regulatory strategy by hiding their real-world consequences to households and businesses. NMA will continue to advocate policies that support, rather than discriminate against, America's most abundant and secure fuel—U.S. coal—and the men and women, businesses and communities that rely on coal to provide reliable, affordable electricity."

    Environmental groups responded in a joint release saying, "Today representatives of the nation's dirtiest polluters and their friends at special interest groups like the National Mining Association, filed the first lawsuits to block long overdue action to clean up toxic mercury pollution, acid gases and other hazardous air toxics. Toxic mercury is a potent brain poison that threatens prenatal babies and young children, and is linked to severe learning disabilities, deafness, blindness, cerebral palsy and other life-threatening illnesses."

    These final rules were published in the Federal Register on February 16 [77 FR 9304-9513]. EPA estimates that the new safeguards will prevent as many as 11,000 premature deaths and 4,700 heart attacks a year. EPA also said 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. 

    In response, a coalition of environmental and clean air advocacy groups issued a number of statements. The groups included: Sierra Club; Earthjustice; Environmental Defense Fund (EDF); Clean Air Task Force; President, Natural Resources Defense Council; Southern Environmental Law Center; Conservation Law Foundation, Natural Resources Council of Maine, Environment America, Izaak Walton League of America and the Ohio Environmental Council.

    For example: EDF's President Fred Krupp said, "The Mercury and Air Toxics Standards are one of the most important public health measures we've seen in a generation. They'll save thousands of lives every year and protect the developing brains and nervous systems of countless American children. Unfortunately, a few utility companies will probably spend lots of money on lobbyists and lawsuits to stop these standards. I would hope that, instead, they'd spend that money to reduce the mercury emissions from their plants and protect the health of their customers." Michael Brune, Executive Director, Sierra Club said, "Today's attack by corporate polluter front groups on the health of American families and the safety of prenatal babies and young children is outrageous and contemptible, but it's no surprise. The country's dirtiest polluters want to keep their license to pollute the air we breathe and the water we drink without limits or consequences. It's time to put an end to that pollution spree, and protect American children from toxic mercury pollution."

    Access a release from Sen. Inhofe and link to the CRA resolution (click here). Access a release from NMA (click here). Access the joint release from environmental groups (click here). Access the FR announcement (click here). Access legislative details for S.J.Res.37 (click here). [#Air, #Toxics]

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EPA Releases Final Reassessment Of Dioxin Toxicity

Feb 17: U.S. EPA announced that it had finalized its non-cancer science assessment for dioxins, which was last reviewed in the 1980s. Dioxins are toxic chemicals that naturally exist in the environment and can be released into the environment through forest fires, backyard burning of trash, certain industrial activities, and residue from past commercial burning of waste. EPA said its "findings show that generally, over a person's lifetime, current exposure to dioxins does not pose a significant health risk."

    Over the past two decades EPA has worked to reduce emissions from all of the major industrial sources of dioxins. As a result of efforts by EPA, state governments and industry, known and measurable air emissions of dioxins in the United States have been reduced by 90 percent from 1987 levels. The largest remaining source of dioxin emissions is backyard burning of household trash. EPA indicated that most Americans have low-level exposure to dioxins. Non-cancer effects of exposure to large amounts of dioxin include chloracne, developmental and reproductive effects, damage to the immune system, interference with hormones, skin rashes, skin discoloration, excessive body hair, and possibly mild liver damage.

    EPA said it has identified many known sources of dioxins. Working with other Federal partners, such as the U.S. Department of Health and Human Services and the U.S. Department of Agriculture, EPA has taken steps to address dioxin. This includes supporting research on dioxin exposure and effects; assessing dioxin human health risks; measuring dioxin levels in the environment, our diet and in our bodies; and reducing exposure to dioxin.

    The non-cancer health assessment for dioxin released today could be considered in a range of agency activities, from establishing cleanup levels at Superfund sites, to reviewing the dioxin drinking water standard as part of EPA's regularly scheduled review process, to evaluating whether additional Clean Air Act limits on dioxin emissions are warranted. EPA findings are contained in the Reanalysis of Key Issues Related to Dioxin Toxicity and Response to NAS Comments, Volume 1. The document provides hazard identification and dose-response information on 2,3,7,8- tetrachlorodibenzo-p-dioxin (TCDD) and the most up-to-date analysis of non-cancer health effects from TCDD exposure. The report also include an oral reference dose (RfD) and a detailed and transparent description of the underlying data and analyses.

 

    According to the abstract of the Volume 1 report, "This document comprises the first of two EPA reports (U.S. EPA's Reanalysis of Key Issues Related to Dioxin Toxicity and Response to NAS Comments Volumes 1 and 2 [Reanalysis Volumes 1 and 2])  that, together, will respond to the recommendations and comments on 2,3,7,8-Tetrachlorodibenzo-p-Dioxin (TCDD) dose-response assessment included in the 2006 NAS report, Health Risks from Dioxin and Related Compounds: Evaluation of the EPA Reassessment. This document, Reanalysis Volume 1, includes (1) a systematic evaluation of the peer-reviewed epidemiologic studies and rodent bioassays relevant to TCDD dose-response analysis; (2) dose-response analyses using a TCDD physiologically based pharmacokinetic model that simulates TCDD blood concentrations following oral intake; and (3) an oral reference dose (RfD) for TCDD. An RfD of 7x10-minus10 mg/kg-day is derived based on two epidemiologic studies: (a) a study that associated TCDD exposures with decreased sperm concentration and sperm motility in men who were exposed during childhood and (b) a study that associated increased thyroid-stimulating hormone levels in newborn infants born to mothers who were exposed to TCDD. A qualitative discussion of uncertainties in the RfD and a focused quantitative uncertainty analysis of the choices made in the development of points of departure for RfD derivation are also provided."

 

    The Environmental Working Group (EWG) said the release of the safety standard for dioxin toxicity for risks other than cancer, was "a crucial advance in protecting Americans from exposure to this ubiquitous industrial pollutant." Olga Naidenko, PhD, senior scientist with EWG said, "Our bodies, our children's bodies and our food supply have all been contaminated with dioxin for decades as a result of unregulated industrial emissions. Today's decision will serve as the cornerstone of the agency's initiatives to protect public health from chemical contaminants and provide the necessary guidance to states and public health agencies to minimize dioxin exposure." The U.S. government labeled 2,3,7,8-Tetrachlorodibenzo-p-dioxin, or TCDD, a known human carcinogen in 2001. Other serious health hazards of dioxin exposure, particularly during early life, are changes in the neurological and immune systems as well as reproductive and hormonal disorders such as decreased sperm count and motility in men exposed to TCDD as boys.

 

    Environmental Health News reported that, "The EPA broke the risk assessment into two parts; today's release includes only the non-cancer effects of dioxins. The EPA left a key number the same as when a draft was unveiled in 2010. The daily level of exposure considered acceptable has been set at 0.7 picograms of dioxins per kilogram of body weight. Back in 2010, industry groups criticized the EPA for setting this so-called "reference dose" too low, saying it would alarm consumers and drive costly regulations. The level set by the World Health Organization/United Nations in 2001 is about three times higher. The assessment does not have enforceable standards. But it is critical to guiding many actions, such as cleanup of Superfund and other hazardous waste sites, industrial emission controls, drinking water standards and dietary guidelines for fish."

 

    Lois Gibbs, Executive Director of the Center for Health, Environment & Justice (CHEJ) said in a release, "We applaud EPA Administrator Lisa Jackson and the Obama Administration for finalizing this important health report on dioxin, one of the most toxic chemicals on the planet. After twenty seven years of delays, I quite honestly never thought this report would ever see the light of day. Today the American people won a major victory against the chemical industry, who has been working behind closed doors for decades to hide and distort the truth about the dangers of dioxin. The science is clear: dioxin is toxic to our children's health and development. We strongly urge the EPA to now finish the job by finishing their review on dioxin and cancer, and to develop a comprehensive action plan to further reduce dioxin emissions and exposures. To start, the EPA should finalize the EPA's proposed cleanup standards for dioxin at toxic sites, which have been languishing at the White House OMB since 2010.  We call on the Obama Administration to dust off the prestigious National Academy of Sciences report on dioxin in food to explore innovative policies to reduce the levels of dioxin in the food supply."

 

    Representative Edward Markey (D-MA), Ranking Member on the Natural Resources Committee and senior member of the Energy and Commerce Committee, praised EPA's announcement that the non-cancer health assessment of dioxin has been finalized after two decades of delays. Rep. Markey said, "Today, the Environmental Protection Agency has taken a major step toward protecting the public from dioxin by shining light on some of the health impacts this dangerous chemical has on the public. By releasing this important part of the scientific assessment, we can begin to develop a cohesive plan to safeguard American families from dioxin exposure. It is also time for industry groups and chemical companies to stop their efforts to block completion of this important public health document. I urge EPA to continue this progress forward by moving quickly to finalize the cancer portion of the dioxin assessment as well as its cleanup goals for soil at waste sites containing dioxin."

 

    Access a release from EPA (click here). Access complete information from EPA and link to the complete report (click here). Access the Environmental Health News article (click here). Access a release from CHEJ (click here). Access a release from Rep. Markey with links to related information (click here). [#Toxics]

 

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Automakers Comment On Proposed 2017-2025 CAFE Rules

Feb 13: The Auto Alliance, which represents both U.S. and foreign automakers, filed comments on the NHTSA and U.S. EPA's proposed fuel economy/greenhouse gas standards for 2017-2025 [See WIMS 11/16/11]. The regulations, announced on November 16, 2011, and published in the Federal Register on December 1, 2011, originally included a comment deadline of January 30, 2012, which was extended until February 13, 2012. The proposed program for model year 2017-2025 passenger cars and trucks is expected to require increases in fuel efficiency equivalent to 54.5 mpg if all reductions were made through fuel economy improvements. The automakers indicated the highlights of their comments as follows:

"Regulations are built on a host of assumptions, especially when the rulemaking reaches 13 years into the future. A strong mid-term review, coupled with regular check-ups, will show if assumptions about consumer buying patterns, for instance, are becoming reality.

"The Alliance supports the proposal to include an in-depth mid-term evaluation process that will allow the agencies to review a broad range of factors and make appropriate adjustments. This process will provide better data and insight on a range of issues relevant to the appropriateness of the MY 2022-2025 standards, including consumers' willingness to buy the vehicles that are required to comply with the standards; future fuel pricing; and technology and raw materials costs. The Alliance comments on the mid-term evaluation include additional topics that the agencies should review. We recommend that, in addition to the proposed formal mid-term evaluation, the agencies continue their open dialogue and also conduct a series of smaller, focused technical evaluations - or "check-ins" - on the key assumptions of the proposal. The Alliance also requests a more specific description of the mid-term evaluation process and the specifics to be reviewed, including the timeline and procedures for assuring that the studies relied upon by the agencies are appropriately peer reviewed.

"To increase energy independence, we need to use all the tools available, including innovative, proven ways to reduce fuel use and greenhouse gas emissions (GHGs). These approaches should be recognized by the government, starting right away with the current standards for MYs 2012-16.

"The objective of the CAFE and GHG standards is to reduce actual fuel consumption and actual GHG emissions from vehicles driven on American roads. In some cases, however, the laboratory testing used by the agencies to measure fuel economy and GHG emissions may not fully reflect the improvements built into a vehicle by the manufacturer, due to limitations of laboratory-based tests. For instance, improvements that reduce refrigerant loss from air conditioning systems can reduce GHG emissions from vehicles while having little or no impact on fuel economy. It is important for the rules to properly account for such factors. Otherwise, manufacturers would be encouraged to focus solely on the test procedures, and opportunities for real-world GHG reduction and fuel economy improvement would be lost. The Alliance believes that the various credit provisions proposed by EPA and NHTSA are essential elements of the rulemaking package. And, recognition of the real-world improvements provided by these innovations should begin with the very first vehicle employing approved technologies, and there should be no ceiling on the deployment of these effective technologies.

"Automakers should not be required to account for utility GHG emissions. The proposed rule indicates that the agencies expect electric vehicles to become an increasingly large part of the car park. Yet the rule leaves open the possibility of requiring manufacturers to account for upstream emissions from electricity generation in the event that the Administration is unable to control these emissions through other channels. In other words, automakers may now be called on to not only make an unprecedented investment into vehicles with lower GHG emissions, but to also fill the void between this rulemaking and a comprehensive national energy policy. If Americans agree that programs to address upstream GHG emissions are appropriate, then such programs should be put in place through appropriate regulation of electricity generators, not by imposing additional burdens on vehicle manufacturers."

    Access a release from the Auto Alliance (click here). Access complete information on the EPA/NHTSA proposal (click here). Access the docket for this action (click here). [#Energy/CAFE, #Climate, #Air]

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