Category

Energy

Permit Traps – Proceed at Your Own Risk

By | Energy, Infrastructure, Manufacturers’ Center for Legal Action, Shopfloor Legal, Shopfloor Policy | No Comments

Government decisions derailing permits for infrastructure projects raise serious questions about future access and the cost of energy in this country. Affordable energy supplies are critical to the viability and competitiveness of U.S. manufacturers, but equally important is the ability to obtain a wide variety of other permits to carry on routine manufacturing operations. After successfully navigating federal, state and local government requirements, as well as opposition from national environmental groups during the permit approval process, a company is authorized to do business as long as it follows the permit.

When a Clean Water Act permit is approved and the individual is in compliance, the Act provides a shield against arbitrary enforcement actions and citizen suits. The permit sets those limits. Unfortunately, a company can be forced to defend itself in court when someone tries to claim that the permit requires more than it does. If undermined, the permit shield can be no shield at all, or at least a very expensive one to maintain.

That’s the situation in a case now before the U.S. Court of Appeals for the Fourth Circuit in Richmond. A citizen’s group wants the court to insert new limits in a permit that the government had considered and decided not to include. In an amicus brief, the Manufacturers’ Center for Legal Action argued that suits like this upend the process for setting and implementing water quality standards by second-guessing the interpretations of those responsible permitting authorities. They also create serious after-the-fact liability without fair notice.

This kind of regulation by litigation threatens to add another layer of government control, activated by special interest groups, on regulatory decisions. Enforcing permit requirements is appropriate, but changing the terms of a permit in the middle of production is an entirely new problem that increases uncertainty, saps the life from productive investments, and dampens our ability to create and sustain jobs.

Pipeline Permitting and the Limits of Executive Power

By | Energy, Manufacturers’ Center for Legal Action, Shopfloor Legal, Shopfloor Main | No Comments

The tortured, roundabout, drawn-out process that led last fall to the final disapproval of the Keystone XL pipeline project was equal parts astonishing and frustrating.  After a seven-year process, in the wake of determinations clearly to the contrary by the State Department, and in the face of unambiguous Congressional support, the Administration finally disapproved of the pipeline, finding that it was not in the national interest to approve the project.  Supporters of the pipeline wondered how it could be possible that the Executive branch could have such sweeping authority to kill a private commercial project that enjoyed strong bipartisan Congressional support and which the Administration had previously supported.  The decision clearly appeared to be one based on politics, but was it also one based on legitimate Constitutional authority?   In a brief recently filed by the Manufacturers’ Center for Legal Action in the US District Court for the Southern District of Texas, we join TransCanada in arguing that it was not.

In our amicus brief in TransCanada v. Kerry, we argue that the State Department’s prohibition of the pipeline violated the Constitutional separation of powers.  The Constitution explicitly grants to Congress the authority to regulate foreign commerce.  A cross-border pipeline clearly falls in the domain of foreign commerce.  While the Executive branch possesses the implied authority to regulate foreign affairs, which is oftentimes exercised collaboratively with Congress, and has relied upon that authority in this case, it does not have the authority to usurp the power of Congress to regulate commerce, particularly when Congress has clearly and repeatedly acted to demonstrate its support for construction of the pipeline.

While the President has noted that the pipeline crosses an international border, thereby implicating foreign affairs interests that fall within the realm of the implied power of the Executive, the justification offered for regulating the pipeline has nothing to do with border crossing, relations with Canada, or national security.  Rather, the President encroached on Congressional authority to regulate commerce in this case to create a helpful bargaining chip in the unrelated matter of the Paris Climate Change talks.  While this may be a legitimate political concern, it is not a permissible exercise of the foreign affairs power.

Stay tuned as this case progresses through the courts.  Not only are the specifics of the case very important, but in this era of heightened Executive branch power, the underlying separation of powers principles are equally so.

Innovation in Manufacturing Can Improve Sustainability

By | Energy, Shopfloor Policy | No Comments

Here’s a great example of how innovation in manufacturing can improve sustainability and our world. ExxonMobil is investing in FuelCell Energy, a company developing technology that could reduce carbon dioxide emissions from power plants. As the Times reports, ExxonMobil hopes that its relationship with FuelCell will allow it to take a promising new approach to carbon capture and sequestration “from the lab to the market.” This technology could potentially mean that power plants could “isolate and compress” CO2 “while producing enough power to more than make up for the energy cost of capturing the carbon.”

Read more about how FuelCell and ExxonMobil’s partnership could help power plants reduce emissions.

Environmental Impact Statement Released for Washington State Export Terminal

By | Energy, Shopfloor Policy | No Comments

On Friday, Cowlitz County, Wash., and the Washington Department of Ecology (WDOE) released a draft environmental impact statement (EIS) for Millennium Bulk Terminals – Longview, a planned export terminal for coal and other bulk commodities along the Columbia River in Cowlitz County. Today’s EIS was produced by the state and county under the State Environmental Policy Act (SEPA), which is essentially Washington’s version of the National Environmental Policy Act (NEPA), the federal environmental policy statute that requires environmental impact analysis of major federal actions affecting the environment. Disputes over the scope of the EIS for this terminal among Cowlitz County, WDOE and the Army Corps of Engineers has led to the production of dual EIS analyses: one produced by the Army Corps, which analyzes site-specific impacts as is traditional practice, and today’s SEPA analysis, which broadens the scope dramatically to include cumulative, lifecycle impacts not only of the terminal but the commodities being shipped through that terminal. It’s an unusual practice to say the least and has had manufacturers concerned for a long time, given the potential precedent that could be set for all exports of manufactured goods.

We’re just now digging into the hundreds (thousands?) of pages making up the SEPA analysis. One area that immediately gives us concern is how the WDOE and Cowlitz County evaluate the greenhouse gas (GHG) footprint of the facility and the mitigation measures recommended. This is largely uncharted territory from both a legal and policy standpoint, and one that could have a significant impact on similar analyses in Washington and other states. Manufacturers depend heavily on exports, and conditions placed on one exported product could cascade to other products as well. If those conditions get in the way of trade or unduly delay exports, it could also violate U.S. international treaty obligations under World Trade Organization agreements.

A 45-day comment period is now underway for the Millennium Bulk EIS; comments can be submitted here.

Senate Ozone Implementation Bill Encouraging Development for Manufacturers

By | Energy, Shopfloor Policy | No Comments

Manufacturers were encouraged by today’s introduction by Sens. Shelley Moore Capito (R-WV) and Jeff Flake (R-AZ) of the Ozone Standards Implementation Act of 2016, a bill that would provide some much-needed relief and flexibility to the Environmental Protection Agency’s 2015 final ozone rule. The Capito-Flake Ozone Implementation Bill is similar to the NAM-supported H.R. 4775 in the House, introduced by Rep. Pete Olson (R-TX). Both bills offer a balanced approach that ensures continued air quality improvements, while giving states and manufacturers the flexibility necessary to limit some of the economic growth restrictions that exist under the current regulation.

Since 1980, ozone levels are down nationwide more than 30 percent—and down nearly 20 percent in just the past decade. With new investments coming online utilizing the best and cleanest technologies available, these trends will continue. Unfortunately, while modern manufacturing has evolved into a sleek, technology-driven industry, and air quality has improved vastly, many of our environmental policies, such as the ozone rule, have failed to keep pace. Read More

Has the EPA Gone Too Far on Ozone?

By | Energy, Shopfloor Legal | No Comments

We think so. The Environmental Protection Agency’s (EPA) latest round of rulemaking setting a National Ambient Air Quality Standard for ozone lowers the tolerance level from 75 to 70 parts per billion (ppb). Though the change in the numbers is small, it is expected to be very difficult to achieve and, we argue, not “appropriate” as required by the Clean Air Act.  This is particularly true in areas of the country that are already struggling to comply with the previous levels, and the new rule will subject additional regions to stricter emission controls or permit denials.

Today, in our first major legal brief challenging the rule in court, we detailed why the EPA has actually exceeded its statutory authority to reduce the level. A key reason stems from background ozone levels. The new limits will simply be impossible to achieve if ozone naturally occurs at 70 ppb without any cars, trucks, power plants or manufacturers in this country.

The EPA said it was prohibited from considering the effect of background levels of ozone when setting its standard. Unfortunately, background levels fluctuate. Spikes in ozone can occur from natural phenomena like wildfires, lightning storms and weather conditions that transport ozone and the substances that create it from other countries, including those as far away as China. Even vegetation like pine trees produce gases that react to create ozone. Studies show that lightning can add as much as 25-30 ppb and wildfires can add more than 50 ppb. One modeling study estimates that Asian emissions contributed 8-15 ppb in certain areas of our country and that nearly half of springtime ozone readings above 70 ppb in the southwestern United States would not have occurred without migration of these pollutants from Asia.

A region fails to comply with the standard if it exceeds the ozone limits for an average of four days a year. Shouldn’t there be an exception when there are identifiable spikes from uncontrollable external sources? The law requires that standards be attained, but lowering the standard to this new level makes that much harder, if not impossible, in some areas. The EPA must take appropriate account of the evidence that background ozone concentrations that cannot be controlled can reach levels that will prevent attainment. The act requires such consideration, and failure to do so is arbitrary.

Oil Fee Proposal a Bad Deal for Manufacturers

By | Energy, Shopfloor Policy | No Comments

Today, the Obama administration announced the details of a request in its upcoming 2017 budget proposal for a $10 fee on every barrel of oil to fund what the administration describes as “a more sustainable transportation system.” The administration is calling it a fee, but let’s be clear about what this really is: a wealth transfer that will ultimately be paid for by manufacturers at their plants and consumers at the pump.

In today’s global economy, U.S. manufacturers must be assured of an adequate supply of competitively priced oil for industrial and commercial use and for transportation fuels. We are, therefore, very concerned with yet another new policy that increases prices—and particularly a fee of this size, which would increase the price of each barrel of oil by more than 30 percent at today’s prices.‎ The American Petroleum Institute estimates that the president’s fee would cost consumers as much as 25 cents per gallon of gasoline.

Manufacturers support improvements to our nation’s crumbling infrastructure and fought hard to get the $305 billion long-term highway reauthorization successfully signed into law this past December. But the president’s oil fee budget proposal would make manufacturers less competitive.

Energy Bill, TSCA Reform Show Momentum Building for Congressional Solutions on Energy, Environment

By | Energy, Policy Experts, Shopfloor Policy | No Comments

This week, the Senate is debating S. 2012, the Energy Policy Modernization Act, on the floor. The bill, introduced by Senate Energy Committee Chairman Lisa Murkowski (R-AK) and Ranking Member Maria Cantwell (D-WA) and passed by the committee on a decisive 18-4 vote, is expected gain broad support from both sides of the aisle. There is a lot to like in the bill, including a wide range of measures on energy efficiency and improvements to the licensing process for liquefied natural gas (LNG) exports. The debate on S. 2012 comes on the heels of successful passage of legislation to reform the Toxic Substances Control Act (TSCA) by the Senate at the end of 2015. (The House passed a similar TSCA reform bill earlier in the year by a 398-1 vote, and the two bills await a conference.)

For years, Washington earned a well-deserved reputation for gridlock and an inability to solve problems. But these two bills, much like the recent successes on tax, infrastructure and trade, are a sign that the gridlock may be starting to ease. And if that’s the case, there are no shortage of energy and environmental issues that manufacturers would like some real, bipartisan solutions on. We talk about a lot of these in the our “Competing to Win” platform document, unveiled today by NAM President and CEO Jay Timmons as he kicked off this year’s State of Manufacturing Tour. Read More

Manufacturers Concerned with Yet Another Energy-Limiting Regulation

By | Energy, Shopfloor Policy | No Comments

Manufacturers are disheartened by yet another regulation that will create additional barriers to accessing critical energy resources. The Bureau of Land Management’s newly proposed rule addressing production of oil and natural gas on federal lands comes at a time when methane emissions are already falling and a suite of other regulations—from ozone, to the Clean Power Plan, to many others—threatens to increase energy costs across the board. Our economy and the companies that make things in it depend on energy—all forms of it—to stay in business, compete globally and add jobs. Manufacturers call on the administration to rethink this rule and instead seek policies that promote a true “all-of-the-above” energy strategy.

Interior Reviews Coal Lease Program Leaving Manufacturers in Dust

By | Energy, General, Shopfloor Main, Shopfloor Policy | No Comments

Friday, the Department of Interior announced it would develop new guidelines for development of coal resources on federal lands. Included in the announcement was a moratorium on new leases of coal on these federal lands until a new environmental impact study is completed. These studies take years, and Secretary Sally Jewell said the moratorium on new leases will be in place until the study is complete.

“Manufacturers need reliable energy sources and a robust energy mix, and this new plan from the president erodes our energy future. As the leading industry in cutting climate-related emissions, we understand and face the challenge, but manufacturers need to remain competitive in today’s global economy. The American energy boom has been beneficial to manufacturers, but this action by the administration will diminish that advantage.” – Ross Eisenberg, vice president of energy and resources policy, National Association of Manufacturers

As users of one-third of the nation’s energy, manufacturers need a robust energy strategy that looks at all forms of energy, conventional and unconventional, to ensure an affordable and reliable supply. A key to our increasing global competitiveness, in addition to continuing growth in productivity, is reliable and affordable energy. Coal still provides nearly 40 percent of our electricity and gives manufacturers an advantage in a local economy. Also concerning in this announcement is the failure to examine the costs to manufacturing and the millions of supply-chain jobs directly and indirectly impacted by such a sweeping action. Read More