One year and counting: On its first anniversary, near-term threats abound to implementation of our strong new chemical safety law

By Richard Denison

Richard Denison, a Lead Senior Scientist.

This week marks the first birthday of the Frank R. Lautenberg Chemicals Safety for the 21st Century Act, which was signed into law by President Obama on June 22, 2016, after passing the Senate and House with overwhelming bipartisan support.

The Lautenberg Act significantly overhauled and substantially improved the Toxic Substances Control Act (TSCA), the core provisions of which had never been amended since their adoption in 1976.  Among the enhancements are new provisions that:

  • mandate safety reviews for chemicals in active commerce;
  • require safety findings for new chemicals before they are allowed on the market;
  • replace TSCA’s burdensome safety standard — which prevented the Environmental Protection Agency (EPA) even from banning asbestos — with a pure, health-based safety standard;
  • explicitly require protection of vulnerable populations like children, pregnant women and workers;
  • give EPA enhanced authority to require testing of both new and existing chemicals;
  • make more information about chemicals available, by limiting companies’ ability to claim information as confidential, and by giving states and health and environmental professionals access to confidential information they need to do their jobs; and
  • retain a significant role for states in assuring chemical safety, while strengthening the federal role.

Passage of the Lautenberg Act was made possible by the coming-together of members of both parties and a broad spectrum of stakeholders around two facts:  the old law wasn’t working for anyone, and a stronger federal chemicals management system was needed to restore lost confidence among the public and in the marketplace over the safety of chemicals.

At the one-year mark, Environmental Defense Fund (EDF) remains confident that the law is strong and can and will ultimately deliver on its promises.  At the same time, its effective implementation in the near term is threatened on numerous fronts, unfolding as it is in one of the most anti-environmental and anti-regulatory climates this nation has faced in a long time.  

To be clear, aspects of the bipartisan and broad stakeholder support for the new law remain and are evident in spots:  Thanks to herculean efforts of career staff, along with calls from members of both parties for EPA to meet its deadlines, EPA complied with most of the early milestones set forth in the law.  The same appears likely for the next set of deadlines, some of which fall later this week.  To date, EPA’s reviews of and actions on new chemicals have been undertaken in a manner that adheres to the law’s new requirements, and appropriate additional resources are allowing the agency to eliminate the temporary backlog that resulted from the new requirements becoming effective immediately upon enactment.

This news pales, however, in light of the significant threats that implementation of the new law faces.  Among them:

  • EPA’s BUDGET: The President’s proposed budget would decimate EPA’s funding and staffing, including in areas critical for effective TSCA implementation.  Despite preserving funding for the TSCA office, core agency functions such as enforcement and information management are on the chopping block.  Scientific initiatives on which the TSCA office heavily relies are also proposed to be cut to the bone.  The Office of Research and Development would be cut in half. That office includes:
    • the Integrated Risk Information System (IRIS), which conducts hazard characterizations of chemicals subject to risk evaluations under TSCA, including more than half of the first 10 chemicals slated for such reviews; and
    • EPA’s ToxCast and related initiatives under the agency’s “Chemical Safety for Sustainability” research program, which has been shepherding the development of high-throughput testing and other predictive toxicology methods and computational tools that the Lautenberg Act calls on EPA to look to utilize in filling the major data gaps that exist for many chemicals regulated under TSCA.
  • ANTI-REGULATORY EXECUTIVE ORDERS AND PENDING LEGISLATION: President Trump has signed several executive orders aimed at severely constraining EPA and other federal agencies from carrying out their missions to protect human health and the environment.  And a variety of bills have passed the House of Representatives and are pending in the Senate that would impose even more severe constraints, including by limiting the scientific information EPA can use in developing regulations and the independent scientific advice it can obtain.  One of these bills – the Regulatory Accountability Act – would, among other problems, impose across the entire federal government some of the worst flaws in the old TSCA that were removed by the Lautenberg Act; see here and here.
  • INDUSTRY EFFORTS TO ROLL BACK EARLY TSCA ACTIONS: The Lautenberg Act authorized EPA to take action to address high risks it had identified in previous chemical risk assessments, including certain uses of trichloroethylene (TCE), methylene chloride (MC) and N-methylpyrrolidone (NMP).  EPA proposed such rules in December and January, but much of the chemical industry has sought to derail, delay or dilute these rules, after failing to halt their proposal.  The fate of these rules is uncertain at this point, despite compelling ongoing evidence of the need for them.
    Many in the industry are also urging this Administration to repeal, delay or weaken a modest information-gathering rule on nanoscale materials that was over a decade in the making and was repeatedly scaled back in scope based on the industry’s concerns.  In response, EPA has already granted an initial delay, and the rule’s ultimate fate is uncertain.
    The law’s allowance for EPA to take early action was widely seen as an opportunity to demonstrate that the new law was working, which now may be lost.
  • UNDUE INDUSTRY INFLUENCE OVER IMPLEMENTATION: A senior chemical industry official was recently appointed as principal deputy in EPA’s TSCA office, where, among other things, she has been active in drafting the final “framework” rules under the Lautenberg Act that will set forth the key procedures EPA will use to prioritize and evaluate the risks of chemicals under TSCA.  These rules, which are in their final stages and could be issued as soon as this week, will directly affect the financial interests of companies represented by her previous employer, the American Chemistry Council.

Each of these factors, which will heavily influence the early implementation of the Lautenberg Act, put at great risk the careful balance struck by the new law.  If that balance is lost to short-term priorities of the new Administration and the chemical industry, the common ground so many of us fought for and found to support last year’s historic passage of the Lautenberg Act will quickly dissipate, and the conditions that led the industry to want reform in the first place – retail regulation and state and local action in response to an ineffective federal system – will pick up even greater steam.  The crisis in confidence will remain unabated.

It was no accident that the Lautenberg Act built in many safeguards against inaction or unsound decisions, including deadlines, mandatory duties, public comment, mandatory documentation of EPA decision-making and judicial review.  All are meant to drive transparency and accountability.  EDF is prepared to use all of these tools to fight back against efforts to undermine scientifically robust and legally sound implementation of the law.

If this post seems too pessimistic, I hope I am wrong.  Even if I am right, I believe what has been created by the Lautenberg Act is durable and will survive the near-term threats I’ve noted, leading in the long run to a stronger federal system that better ensures the safety of chemicals on or entering the market.  Meanwhile, those of us who want to see health-protective implementation of the law certainly have our work cut out for us.


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Purchasing power over politics: American consumers buy more clean energy and electric vehicles

By Jim Marston

Americans are switching to cleaner cars and electricity. In addition to being smart purchases, these clean energy choices could be a political statement. Consumers are choosing to use their hard-earned dollars to show what they want: clean energy, a clean economy, and government policies that reflect their values.

Last month, electric-car company Tesla was valued higher than General Motors, making it the most valuable U.S. carmaker based on market capitalization. Despite low gas prices, U.S. sales of plug-in electric vehicles increased by 70 percent in January from the same month in 2016. The Chevrolet Volt alone saw an 84 percent increase during the same time.

The increase in electric car sales isn’t surprising in light of The Consumer as Climate Activist, a scientific article published by researchers from Yale University, George Mason University, and the University of Texas. They found that Americans are more likely to engage in consumer activism than political activism to combat climate change. And consumer activism for clean energy is on the rise.

According to Dallas-based Clearview Energy, which provides customers with electricity generated by water, solar, wind, and geothermal power, their web sales have increased by 500 percent since the presidential election in November.

Purchasing power over politics: American consumers buy more clean energy and electric cars
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Clearview CEO Frank McGovern says, “Every time Trump threatens to dismantle the EPA, our green energy plan sales skyrocket.”

These trends suggest that Americans could be fighting back with their purchasing power against the Trump administration’s assault on clean energy, which has been far-reaching since his inauguration in January:

  • Newly-minted Secretary of Energy Rick Perry recently ordered the Energy Department to study whether requiring coal plants to reduce their pollution while incentivizing cleaner energy sources is responsible for coal’s irreversible decline. The results of a study based on this premise are primed for use as propaganda to prop up the uneconomic coal industry, because government data clearly shows low natural gas prices, declining electricity demand, and plummeting costs for renewables are the reasons for coal’s demise.
  • Trump’s 2018 budget proposal, released in March, aimed to significantly defund a number of federal clean energy programs and energy efficiency efforts (including the broadly-supported Energy Star program). While Congress recently reached a budget deal to fund these critical programs through fiscal year 2017, September (when the 2018 budget must be voted on) is now the new showdown date for the future of federally-funded clean energy programs.
  • Trump said he would review car fuel-efficiency protections that require the industry to deliver a fleet average of at least 54.5 mpg by 2025. California Gov. Jerry Brown called the President’s move toward potentially axing clean cars an “unconscionable gift for polluters.” California and New York plan to challenge the action with a lawsuit against the EPA.
  • EPA Administrator Scott Pruitt has publicly questioned whether carbon dioxide is a primary contributor to climate change.

As consumers, we can use our purchases to change the way power is made and change the powers that be. So let’s be smart, let’s be strategic, and let’s fight the good fight. You have choices as a consumer – whether you’re buying your next car, choosing your electricity provider, installing solar on your home roof, or replacing a home appliance. Make a statement and choose to buy clean.

Photo credit: John Rae

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With methane plan, New York doubles down on climate protections

By Mark Brownstein

New York is now the latest in a growing number of states cracking down on methane – the powerful greenhouse gas responsible for about a quarter of global warming.

The effort comes on the heels of a successful senate vote to uphold methane limits for oil and gas companies operating on our nation’s public and tribal lands, and sends yet another strong message to the oil and gas industry that Americans want and expect commonsense standards that  protect our health and natural resources.

Governor Cuomo’s new plan takes a comprehensive approach to tackling methane from the state’s biggest emission sources: landfills, agriculture, and the oil and gas industry. Collectively, the twenty-five reduction strategies outlined will allow New York to significantly curb methane pollution and allow the state to deliver on its 2030 climate target.

One of the biggest opportunities for methane reductions is in the oil and gas sector, where companies can eliminate nearly half of current emissions at minimal cost.

This is a strong move by Governor Cuomo at the exact right time.

The Trump administration has initiated a series of efforts in recent months to dismantle our nation’s clean air safeguards, including those that address oil and gas methane emissions.

Last month, the Environmental Protection Agency issued a stay on protections that would have reduced methane from new oil and gas facilities. And before that the agency announced it would no longer collect data about emissions from existing facilities.

But Trump’s home state is signaling a refusal to be deterred.

Cuomo’s plan will reinstate EPA standards for New York’s oil and gas facilities and calls for additional measures to reduce systematic methane leaks from pipelines, storage facilities and old, abandoned wells.

As one of the nation’s top five consumers of gas, New York has a special responsibility to ensure it is transported and distributed responsibly. By implementing measures to reducing emissions from natural gas gathering lines, transmission facilities and gas utility pipelines, New York is stepping up to the task.

Reducing methane from the oil and gas sector – whether it’s the well head or city pipelines – is one of the most cost-effective ways to take on one of the worst climate offenders and shore up our nation’s energy security.  Standards that require oil and gas companies to take methane out of the atmosphere and deliver more energy to our communities are the exact kind of protections that the majority of American’s support.  Continued state leadership – like this latest effort in New York – is critical to assuring Americans across the country that those safeguards will be in place.

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There’s no avoiding it, business must lead on climate

By Tom Murray

A few weeks ago, I attended the Earth Day Network’s Climate Leadership Gala in Washington, DC.  Each year the event brings together more than 300 leaders from business, government and the NGO community to celebrate achievements in working towards a clean energy future. This year’s top honor, the Climate Visionary Award, was presented to Unilever CEO Paul Polman for his commitment to fighting climate change.

Tom Murray, VP Corporate Partnerships, EDFBold, passionate leadership like Polman’s is essential to tackling climate change while helping to create an economy that benefits us all. He understands that it’s not a choice between business and the environment. In fact, a thriving economy depends on a thriving environment.

Corporate sustainability leadership is now more important than ever. It’s clear that the Trump Administration’s efforts to roll-back environmental protections have thrust U.S. businesses into a critical leadership role on clean energy and climate change. (In fact, I’ll be talking with business leaders later today about how they are “responding to the new norm” at the Sustainable Brands Conference.)

A thriving economy depends on a thriving environment – why business must lead on climate – @tpmurray
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Over the past 25 years at EDF we’ve seen corporate sustainability go from simple operational efficiencies to global supply chain collaborations; now it’s time to go further. Business must continue to raise the bar for sustainability leadership.


  1. Set big goals, then tell the world

 Thinking big and setting big goals, are required to drive big innovation and big results.  Many large companies have demonstrated that if you commit to aggressive, science-based, sustainability goals, you can deliver meaningful business and environmental results. For example, Walmart, a longtime EDF partner with a track record of setting aggressive yet achievable climate goals, has recently set its sights even higher by setting a goal to source half of the company’s energy from renewable sources by 2025 and by launching Project Gigaton, a cumulative one gigaton emissions reduction in its supply chain by 2030.

And Walmart is not the only one. Other companies are stepping up as well – especially around commitments to go 100 percent renewable. Whether its online marketplace eBay committing to 100 percent renewable power in all data centers & offices by 2025, Tesco, one of the world’s largest retailers, announcing science-based targets and committing to 100 percent renewable electricity by 2030 or AB InBev committing to 100 percent renewable power, companies from diverse industries are taking a positive step forward.

While setting goals is a great first step, companies also need to communicate about the goals and progress. Not only does this increase transparency into a business’ sustainability efforts, it lets the world know that sustainability is core to its business. Publicly committing to sustainability goals sends a strong signal to suppliers, shareholders and customers.

  1. Collaborate for scale

In December 2016 I wrote about Smithfield Foods, the world’s number one pork producer, and its plan to cut greenhouse gas emissions 25 percent by 2025. The commitment was important both because Smithfield was the first major protein company to adopt a greenhouse gas reduction goal but also because the reductions would come from across Smithfield’s supply chain, on company-owned farms, at processing facilities and throughout its transportation network.

Smithfield understands that some environmental challenges are too big to handle on their own, and they know collaboration is the key to deliver impact at scale.

Other companies are also looking beyond their own supply chain and forming mutually beneficial partnerships. Take the recent partnership between UPS and Sealed Air Corporation, for example. The two companies have announced the opening of a Packaging Innovation Center in Louisville, Kentucky where they will solve the packaging and shipping challenges of e-commerce retailers but also drive new efficiencies while minimizing waste. This is a critical issue that is material to both their businesses, and by joining forces, are finding ways to solve an environmental challenge while improving their bottom lines.

  1. Publicly support smart climate policy

I can’t stress how critical it is right now for business leaders to move beyond their comfort zones and make their voices heard on smart climate and environmental policy. If you want to be a sustainability leader, continuing to hoe your own garden is no longer enough.  You need to align your strategy, operations, AND advocacy.  We know that environmental safeguards drive innovation, create jobs, and support long-term strategic planning.

The good news is leading voices are chiming in, from CEOs signing an open letter to Trump to more than 1,000 companies signing the Low-Carbon USA letter, in favor of environmental policies.

Some companies like Tiffany & Co. are also taking a public stand on their own. The company used its usual ad position in the New York Times to tell President Trump directly that Tiffany is backing policies that will lead us to a clean energy future.

The Way Forward

Taking the leadership mantle is never easy, but now is the time for every corporate leader to get off the sidelines and into the game. There’s plenty of room for more leaders like Polman who are ready to address climate change head-on, creating opportunities for economic growth, new jobs, and a cleaner future.  Will your company be next?

Follow Tom Murray on Twitter: @TPMurray

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Investors Can’t Diversify Away from Climate Risk

By Namrita Kapur

With the U.S. role in the Paris Climate Agreement hanging in the balance, over 280 investors managing a collective $17 trillion in assets spoke up in support of the agreement:

As long-term institutional investors, we believe that the mitigation of climate change is essential for the safeguarding of our investments. . . . . We urge all nations to stand by their commitments to the agreement.

Why do investors care?  As pointed out in a blog earlier this year, for investors, it all comes down to risk and return. And, where climate change is concerned, this is a risk that is omnipresent.

Simply put, investors cannot diversify away from the risks of climate change. Unlike other risks such as currency fluctuations or new regulations, the disruptive impacts of climate change on the global economic system are so pervasive they cannot be offset by simply shifting stock portfolios from one industry to another.

A study from Cambridge University found equity portfolios face losses of up to 45% from climate shocks, with only half of these losses being “hedgeable.” Likewise, The Economist Intelligence Unit estimates that investors are at risk of losing $4.2 trillion by 2100, with losses accruing across sectors from real estate to telecom and manufacturing.

Because investors recognize that climate risk is unavoidable, they support a coordinated global effort as envisioned in the Paris Agreement. It is also why investors have already expressed such strong support for regulatory limits on carbon and methane emissions.  Governments globally will need to take further proactive action to limit greenhouse gases, and incentivize technology shifts towards lower-carbon energy.

Seizing opportunities in a low-carbon economy

Technology changes will require significant adjustments in how global capital is allocated, which is an opportunity investors are eager to seize because of the promise of risk-adjusted returns in the space.

It is estimated that a shift to a clean-energy economy will require $93 trillion in new investments between 2015 and 2030 and the rise of impact investing shows markets are starting to respond to opportunities in renewable energy, grid modernization, and energy efficiency among others.

For example, the green bond market has grown from $11 billion to $81 billion between 2011 and 2016 with projections for 2017 as high as $150 billion. On top of this, leading global investment banks have already pledged billions towards sustainable investing.

And where capital flows, so do jobs.

As we’re seeing in the US, renewable energy jobs grew at a compound annual growth rate of nearly 6% between 2012 and 2015 and the solar industry is creating jobs 12 times faster than the rest of the economy.  Similarly, the methane mitigation industry is putting Americans and Canadians to work limiting highly potent emissions from oil and gas development.

Technology and capital changes are already happening, but are unlikely to happen quickly enough on their own.  Government policies and frameworks that speed this transition, like a price on carbon, will be critical.

Which brings us back to the importance of the Paris Agreement…

The Paris Agreement is crucial to addressing climate change

Investors vote with their dollars, and are strongly backing U.S. participation in the Paris Agreement. Global investors understand the risk of climate change and see the Paris Agreement as a good return on investment, with an optimistic $17 trillion nod to the power of capital markets to provide the innovation and jobs we need if the right policies are in place. The U.S. administration should ensure it is considering the voice of investors and the capital they stand ready to put to use as it makes its decision.

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Scott Pruitt, the public has spoken – and it wants health protections, not rollbacks

By Martha Roberts

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Earlier this year, Environmental Protection Agency (EPA) Administrator Scott Pruitt announced an effort to seek public input on EPA safeguards that should be revoked or rolled back to “reduce regulatory burden.”

What was the overwhelming message he heard in response?

Let EPA do its job and protect Americans from dangerous pollution.

Numerous news articles have detailed the tens of thousands of responses EPA received from individual Americans decrying Pruitt’s biased, predetermined effort to gut important safeguards. These public comments are still being uploaded onto an official website — but already there are more than 183,000 of them, and the overwhelming majority are in favor of strong EPA safeguards.

As one comment reminded Pruitt:

Future generations are counting on us to leave an environment that supports good health, and a world worth living in. Don’t jeopardize the progress that has been made by rolling back regulations that are taking us in the right direction. Your job is to protect the environment for the benefit of all, not to squander progress for the financial gain of a few.

Another citizen noted during a listening session:

I actually enjoy breathing clean air and drinking clean water and would find it quite burdensome not to.

It’s well documented that EPA safeguards are an incredible American success story, saving countless lives and improving health across the country. We’ve made tremendous strides in improving air quality, reducing toxic lead and mercury pollution, addressing acid rain, and other remarkable achievements — all while the economy has grown and added jobs.

We still have more work to do though. According to the American Lung Association, more than 125 million Americans live in communities with unhealthy levels of air pollution.

Industry pushes for rollbacks

EPA senior officials are due to present a report to Pruitt today on their progress in identifying safeguards to repeal or roll back – not even two weeks after the rushed public comment period ended.

It’s hard to know if this report will be made public, but we are starting to get a glimpse of the input that Pruitt and his team are hearing from those who oppose vital safeguards.

For instance, the American Petroleum Institute’s (API) 25-page list of requests includes weakening protections against smog and undercutting common-sense standards to curb harmful methane and toxic air pollution from oil and gas production.

API’s list also complains that EPA’s Clean Air Scientific Advisory Panel is “biased” because “it can be difficult for industry representatives to be included on the committees.”

As we wrote about in an earlier post, these industry requests come on top of an earlier solicitation by the Trump Administration for industry proposals to roll back protections — one where trade associations brazenly asked for cuts to important health studies and safeguards.

Politicians target safeguards against mercury, smog, and other dangers

One remarkable letter to EPA came from eight state politicians. As has been well documented, while Scott Pruitt was Oklahoma’s Attorney General he spearheaded an intertwined alliance between state attorneys general and major fossil fuel industries — going so far as to submit industry requests to EPA on Oklahoma letterhead and later noting that’s “actually called representative government in my view of the world.”

In the new letter, Pruitt’s attorney general allies detail a list of twenty bedrock safeguards to weaken or eliminate. These include protections against mercury pollution, smog, soot, and many others.

These eight politicians even ask EPA to reject the agency’s science-based conclusion that greenhouse gases endanger human health and welfare — a conclusion based on an extensive, exhaustive record that was upheld by a federal court of appeals several years ago. Their letter makes no mention of the citizens who would be sickened and harmed by these roll backs.

The signatories are the attorneys general from Michigan, Oklahoma, Indiana, Alabama, Arkansas, West Virginia, Louisiana, and South Carolina.

Scott Pruitt: don’t put Americans’ health at risk

With EPA’s help, we’ve made remarkable progress in cleaning up our air and water. The American public just delivered a clear and overwhelming message to Scott Pruitt – don’t risk that tremendous progress, or the health of our families, by rolling back EPA safeguards.

Administrator Pruitt should listen.

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On methane regs, Canada must stand tall against industry

By Drew Nelson

In a sign of growing recognition of the global methane opportunity, the Government of Canada today proposed new regulations that aim to curb methane emissions across the Canadian oil and gas industry. This marks the first regulatory package to be introduced by the Trudeau administration for Canada to meet its overall climate goals. Now that the proposal is out, the draft federal methane rules will be open for public comment before they are finalized later this year. The new rules, if passed, will reduce waste, save money, create jobs, pollute less, and have Canada keep pace with jurisdictions across the globe that are addressing methane.

Methane is an extremely potent greenhouse gas with over 80 times the warming power of carbon dioxide for the first 20 years it’s in the atmosphere. A common byproduct of oil production, methane is also used widely in the form of natural gas. This means that there is an incentive for oil and gas companies to control these emissions and stop needless energy waste.

During the lead up to the release of the Canadian methane rules, however, the inverse proved true. The Canadian oil and gas lobby worked to weaken and delay implementation of the proposed regulations. Because of concessions that have already been made to appease industry, Canada now has ground to make up to retain its ability to deliver on its climate goals.

Here are four opportunities for Canada to do just that:

  1. Reset the Timeline

The most significant watering down of the regulations was the delayed implementation timetable by as much as three years. These delays will allow an estimated 55 million tons of additional greenhouse gas emissions. Trudeau needs to reset the timetable so the regulations begin in 2019 (not 2020) and full implementation occurs by 2022 (not 2023).

  1. Require Quarterly Leak Inspections

Leaks are one of the largest sources of methane emissions in Canada. A recent study from the David Suzuki Foundation found significantly more emissions were escaping from Canadian oil and gas operations, suggesting that there are actually more leaks than what is being reported. However, operators are not currently required to look for, let alone fix these leaks at most oil and gas facilities. This doesn’t pass the common sense test. After all, how can industry reduce these leaks if they don’t even have to look for them?

Methane is invisible and odorless, and many leaks are intermittent. So, if you’re not looking for leaks, you won’t find them. The scientific literature is clear that with more frequent monitoring, the more likely you are to catch and fix leaks. This is a central reason why quarterly leak detection and repair is required in some capacity by both federal and state regulations across the U.S.  Canada’s federal proposal calls for inspections only three times a year, but this should be improved by following best practices that have been proven in other jurisdictions.

  1. Tighten the “Potential to Emit” Threshold

“Potential-to-emit” (PTE) is a measurement of how much methane a facility could, in theory, emit. A recent study by Environmental Defence shows that oil facilities have higher methane emissions than gas facilities. This is problematic because many of these high-emitting oil facilities fall below the PTE threshold in the draft regulation. This is a serious gap; you don’t let a driver with a history of speeding have a higher speed limit, so why would you let the leakiest sites avoid having to reduce their emissions? As currently proposed, the regulations would apply to facilities with a PTE greater than 60,000 cubic meters per year, but lowering this threshold and requiring systematic would ensure that the leakiest sites are included.

  1. Demand Real Equivalency

Many provinces are expected to develop their own oil and gas methane regulations and petition the federal government to drop federal requirements in exchange for the provincial requirements.  They will maintain that these provincial regulations will achieve equivalent reductions to the federal proposal. Federal Environment and Climate Change Minister Catherine McKenna needs to ensure that what the provinces do are in fact equivalent in terms of reductions, and not just politically expedient. If they let provinces get by with weaker regulations than the federal proposal, then the federal government is explicitly allowing provinces to stymie Canada’s efforts to reach its climate goals.

Reducing methane emissions from the oil and gas industry reduces waste, creates jobs, pollutes less, and ensures Canada keeps pace with the rest of the world. Additionally, these reductions are one of the most effective and affordable ways for Canada to deliver on its climate commitments. For these promising regulations to make a meaningful impact, Canada’s leaders will have to resist the oil and gas lobby, and strengthen the rules before they’re adopted. EDF looks forward to working with the government and other concerned stakeholders to ensure this happens.

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Lawmakers take note: Pennsylvania’s methane emissions are way up

By Andrew Williams

The one fact that Pennsylvania lawmakers needed to hear today is this: Natural gas waste is up 28%.

And yet, the state senate held a hearing yesterday to discuss the impacts of natural gas development in the state, and not one environmental expert was on tap to speak. Consequently, senate leaders don’t have the full picture.

Here’s what state legislators need to know.

Industry-reported data made available this week by the Pennsylvania Department of Environmental Protection indicate that in the year ended 2015, emissions of methane – the main component of natural gas – were up over 28% although production grew by only 12%.

The amount of methane waste is even higher than what was found via a preliminary analysis of the data earlier this month. The simple truth is that while some companies are working to do the right thing and reduce emissions, the bulk of the oil and gas industry in Pennsylvania has a significant methane pollution problem.

Methane is the same product that these companies are aiming to sell. That means there is usable energy, and real dollars, literally going up into thin air. With emissions increasing nearly 30% without a congruent rise in production, it’s clear the industry isn’t doing an adequate job of controlling emissions and conserving Pennsylvania’s natural resources.

This is not only a problem for industry’s bottom line, it’s a problem that impacts millions of Pennsylvanians.

More than 1.5 million Pennsylvanians live within half a mile of an oil or gas facility, and methane isn’t the only emission that’s concerning. These facilities also emit other harmful pollutants that can trigger asthma attacks, increase smog, and exacerbate health problems.

The good news is that Pennsylvanians don’t have to choose between their environment and their economy. With the right policies in place, both can thrive. But that’s only possible if the state moves forward to address industry’s methane emissions.

Fortunately, technologies that can reduce nearly half of these emissions are some of the most affordable pollution controls in the energy industry. And many of the service and manufacturing companies that develop these technologies are headquartered in Pennsylvania, meaning there’s a huge opportunity for companies to affordably reduce their pollution as they grow good-paying jobs.

With emissions on a rapid rise, it’s clear that the state should step in and require pollution controls to be implemented statewide.

In January 2016, Governor Tom Wolf proposed a blueprint to reduce industry’s emissions. A year and a half later, there has been little action.

That’s due in no small part to a bill championed by many of the same senators in yesterday’s hearing that aims to prevent Pennsylvania from taking any action on methane that goes beyond federal efforts. That’s hugely problematic, and here’s why.

In April, the Environmental Protection Agency issued a 90-day stay on existing protections that would have cut methane pollution from new oil and gas facilities, and there is a possibility that the agency will rescind these protections altogether. This means that if Pennsylvania defers to the federal government for protections, well, they won’t be there. Tying Pennsylvania policies to whatever is happening in D.C. hardly serves the interest of Pennsylvania citizens and communities – instead, it’s a bouquet to industry.

Other major energy producing states, including: Colorado, Wyoming and Ohio, have been successful at crafting policies that require companies to use affordable and readily available technology to reduce emissions. And industry growth hasn’t been impacted – seven out of 10 gas companies surveyed in Colorado confirm that.

Since promising to reduce methane emissions, Pennsylvania has green-lighted nearly 2000 new drilling projects, yet zero new protections have been implemented.

With emissions increasing at an alarming rate, that has to change. We have to have a better balance. Pennsylvania’s elected leaders must be willing to put measures in place that can support Pennsylvania’s economy while protecting the health of our citizens and communities. The record clearly shows that both are possible.

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California carbon auction sells out after auctions upheld by appeals court, allowances sell above the floor

By Erica Morehouse

Tower Bridge in Sacramento. Photo: public domain via pixabay.

Auction results from the May California-Quebec carbon auction showed increased demand after a California Court of Appeal upheld the legality of California’s auction design last month.

These auction results should send a clear message to legislators that California has a strong carbon market design that can weather legal challenges and the inevitable bumps of the political process.

They also indicate it’s high time to extend, adapt, and strengthen the cap-and-trade program as the backbone of California’s effort to meet its ambitious 2030 target – something the California legislature has an opportunity to do by June 15 in concert with the governor’s budget.

Results from the May 16 auction

  • The auction offered more than 75 million current vintage allowances (available for 2017 or later compliance) and all of them sold at a price of $13.80, 23 cents above the minimum floor price. This is the first time the auction has cleared above the floor since November of 2015.
  • Allowances held by the utilities, Quebec, and ARB sold with over $500 million expected for California’s Greenhouse Gas Reduction Fund (GGRF).
  • Almost 10 million future allowances were offered that will not be available for use until 2020 or later; a little over 2 million of those allowances sold. This is significantly higher than the 600,000 that sold in February but future allowances tend to have the most variability in demand.

Demand increased significantly from February, but why?

1. The market has clearly reacted positively by increasing demand in the wake of the Court of Appeals ruling. The appeal to the California Supreme Court and uncertainty about cap-and-trade’s future after 2020 may still be impacting market behavior, however.

2. Regulated businesses need a certain number of allowances to cover their emissions. Demand for allowances is in part driven by this simple reality, and since businesses have been laying low the last few auctions, it makes sense they would need to buy allowances this quarter. Economist Chris Busch describes why these “market fundamentals” led him to predict that at least 50-65 million allowances would be sold in this auction.

3. The stabilizing forces built into California’s program prevent big price swings when the market reacts to new developments. We can see this through California’s private secondary market, which shows daily allowance prices, and acts as a kind of barometer for how and whether the market is reacting to particular events. For example, after the California Court of Appeal on April 6 upheld the legality of California’s auction design, prices on the secondary market went up by 54 cents. When the California state senate on May 1 introduced SB 775, which would have overhauled the current cap-and-trade program and eliminated the auction allowances after 2020, the market dipped by roughly 20 cents – but recovered May 10 after the bill did not come up for a vote as anticipated. This means price shifts have been very small – mostly less than one dollar.

What will happen in the auctions if the legislature extends the cap-and-trade program?

An extension of the cap-and-trade program would lead to more robust demand for allowances — leading to a rising allowance price that better reflects the cost of a ton of carbon pollution reductions, taking into account the 2030 target that was put into law last year. With the price likely rising above the floor, we would expect to see future auctions being fully subscribed — translating into significantly more revenue for the GGRF to invest in projects that reduce carbon pollution.

Some observers have painted a dire picture of allowance prices spiking overnight. But that’s not how we’ve seen carbon markets behave in the past — and there’s no reason to think it will happen now. Instead, we’d expect a gradual strengthening of the allowance price over time, as compliance entities weighed the current price of allowances against the anticipated cost of reducing emissions in the future as the cap becomes more ambitious.

What’s more, the system already has a number of design features in place to protect against such a surge in prices, including offsets, the ability to draw on allowances “banked” from previous years, and a reserve pool of allowances (the “allowance price containment reserve”) that would be released into the market if prices rise high enough.

The governor is pushing hard for a deal on cap and trade by the budget deadline of June 15, so I’m hopeful the next auction will give us much to celebrate.

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