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Energy

Manufacturers File Brief Supporting Energy Access

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

Yesterday, the Manufacturers’ Center for Legal Action (MCLA), the legal arm of the National Association of Manufacturers, along with eight other business and manufacturing trade groups, filed an amicus brief supporting Constitution Pipeline in the U.S. Court of Appeals for the Second Circuit. After extensive environmental, safety and economic review, the Federal Energy Regulatory Commission (FERC) had approved the critical energy infrastructure project. However, the state of New York attempted to block the project, undermining the collaborative approval process. Constitution is challenging New York’s denial of its Section 401 water permit for construction of the new natural gas pipeline.

For manufacturers, who use one-third of our nation’s energy, access to abundant and reliable energy sources are essential to our continued growth and ability to compete globally. While states play an important role under the Clean Water Act, they should not be allowed to use their permitting processes, including the issuance of water quality certificates, to unreasonably delay, exact concessions from, or scuttle federally approved projects.

“As some of the largest producers, transporters, and users of natural gas in the country, many of amici’s members are directly affected by the decision under review, which denied a certification necessary for the construction of an important interstate pipeline,” said parties in the brief.  “Further, amici are concerned by the broader impacts of certification denials like this one on the development of much-needed natural gas infrastructure.  Total natural gas demand, driven in particular by manufacturing and power generation, is poised to increase by 40 percent over the next decade, and the U.S. supply is expected to increase by 48 percent over the same period. Further, explosive growth in shale gas requires the construction of new pipeline capacity.  Amici thus have a strong interest in the effectuation of Congress’s policy for the efficient, transparent, and predictable approval of natural gas pipelines.”

Earlier this year, the NAM released a new comprehensive study that reveals how natural gas has strengthened manufacturing and encouraged U.S. manufacturing growth and employment. This study underscores the need for critical energy infrastructure.

“Over the next decade our nation’s demand for natural gas is only going to grow, and much of that growth is from manufacturing,” said NAM President and CEO Jay Timmons. “Our study unequivocally shows that if our growing demand is not taken seriously by policy makers, we will have a serious lack of infrastructure that will jeopardize our growth. Natural gas is responsible for millions of jobs, tens of thousands in manufacturing alone. We can’t afford to let misguided policies rob us of this valuable domestic resource.”

The MCLA serves as the leading voice of manufacturers in the courts, representing the more than 12 million men and women who make things in the United States. The MCLA strategically engages in litigation as a direct party, intervenes in litigation important to manufacturers, and weighs in as amicus curiae on important cases. To learn more about the MCLA, visit our website.

Senate Committee Discusses Ozone Implementation Relief

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Manufacturers are encouraged today to see leaders on the Senate Environment and Public Works Committee hold a meaningful hearing on ways to ease the implementation burdens from the Environmental Protection Agencys (EPA) 2015 ozone regulation. Manufacturers across the United States have shown that environmental progress and job creation can go hand in hand, but the ozone standards finalized by the administration last fall take us further from that goal. By setting the strictest ozone standards ever at a time when states and manufacturers were still working toward meeting the existing requirements, the administration decided to add another layer of red tape to job creation and economic progress.

The objectives of both bills discussed at today’s hearing—Sens. Shelley Moore Capito (R-WV) and Jeff Flake’s (R-AZ) S. 2882, the Senate companion bill to the House-passed H.R. 4775, and S. 2072, a bill offered by Sens. Orrin Hatch (R-UT) and Claire McCaskill (D-MO)—would help ease the burden from the ozone rule, while ensuring our nation’s air quality continues to improve.

At the hearing, Glenn Hamer, president and CEO of the Arizona  Chamber of Commerce & Industry, which is the National Association of Manufacturers (NAM) state allied group in Arizona, spoke to the challenges business and manufacturers in his state face to implement this regulation. Earlier this year, Hamer and NAM President and CEO Jay Timmons coauthored an op-ed highlighting those roadblocks to growth.

Ozone 70 Infographics (700x350)

Manufacturers encourage Senate leaders to continue working to address these issues and ultimately bring an ozone implementation relief bill to the floor for passage

From Poverty to Prosperity

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In a small town once praised for its inspiring ability to overcome obstacles and win support for a high school rocket-building project, there’s another story of opportunity on the horizon. A new pipeline is bringing natural gas to a diverse community in a remote part of the Southwest.

Even after building a 10 megawatt solar facility in recent years, energy was still at a premium, and bringing economic development to Presidio, Texas, has been a real challenge. But as the new pipeline winds its way south, a chili processor is now willing to invest in the city’s future.

Previously, the lack of natural gas had prevented investment, but Don Biad, managing partner of the Biad Chili Company, explained that the pipeline is a game-changer for small manufacturers. “It’s the difference between whether or not our company is profitable or not profitable.”

While this economic opportunity brings a wave of hope, the pipeline also brings environmental protection into view for the local communities because much of the natural gas will power modern electricity just across the border in Mexico. Building the pipeline is also helping to rebuild the railroad—once the lifeblood of trade through the town. That’s because transporting the steel pipes sparked investments in the rails that moved them from manufacturing facilities to the pipeline construction.

Presidio sits where the Rio Conchos joins the Rio Grande in the Big Bend of Texas; as the hardworking people in this international port town like to say, the rivers join us. So when you talk to Brad Newton, executive director of the Presidio Municipal Development District, his can-do-it optimism is anchored in unity.

“We’ve been stuck in the politics of poverty, but now we’re turning the page to the promising politics of progress. And natural gas is our best, new hope for a future—a bright future.”

As Newton put it, “The people of Presidio aren’t looking for a handout; we just want a level playing field in a world economy. That’s what natural gas gives us—a chance to compete.”

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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 manufacturers in the United States, 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

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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

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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

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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?

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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

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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.