On February 4, 2014, the House Committee on Energy and Commerce's Subcommittee on Environment and the Economy held its fifth hearing this term on potential reform of the Toxic Substances Control Act of 1976 (TSCA). The Subcommittee is working on drafting its version of a TSCA reform bill. This latest hearing focused on potential reforms to Sections 4 and 8 of the law. TSCA Section 4 covers when and under what circumstances the U.S. Environmental Protection Agency (EPA) may require chemical substances to be tested, and TSCA Section 8 authorizes EPA to keep an inventory of potentially harmful chemicals.
Seven witnesses representing the gamut of stakeholders -- from the chemical and healthcare industries to environmental groups -- testified at the hearing. Generally, chemical industry stakeholders stressed the need for any new TSCA requirements on industry to be limited in scope and focused on the most harmful chemicals. On the other hand, environmental stakeholders urged the expansion of EPA authority to require chemical testing, among other things.
Bergeson & Campbell, P.C. has issued a comprehensive summary and commentary on the hearing, which is available online. There is a renewed sense of urgency for TSCA reform to be completed this year in the wake of the chemical spill into the Elk River in West Virginia last month, and the recent announcements that House Energy and Commerce Ranking Member Henry Waxman (D-CA) is retiring this year and that Senator David Vitter (R-LA) is running for the Governor of Louisiana. Representative Waxman is a champion of environmental issues and may view accomplishing TSCA reform important before he leaves, especially since it appears unlikely that a bill to address climate change -- one of his most passionate issues -- will pass this year. Senator Vitter is the co-sponsor of the Senate's bi-partisan TSCA reform bill, S. 1009, the Chemical Safety Improvement Act (CSIA).
On February 4, 2014, the Senate Committee on Environment and Public Works' Subcommittee on Water and Wildlife held a hearing on "Examination of the Safety and Security of Drinking Water Supplies Following the Central West Virginia Drinking Water Crisis." A full list of witnesses is available online.
Senator Mark Udall (D-CO) spoke at the hearing and stressed the need for reform of TSCA in the wake of the January 9, 2014, chemical spill in West Virginia. Senator Udall has been working closely with Senator David Vitter (R-LA) to make improvements to CSIA (S. 1009), the Senate's bi-partisan TSCA reform bill. Senator Udall suggested that much needed information on the health effects of 4-methylcyclohexane, the chemical which spilled into West Virginia's Elk River, would be available if CSIA were enacted.
On February 10, 2014, the House Committee on Transportation and Infrastructure is scheduled to hold a field hearing in Charleston, West Virginia, to examine the effects of and response to the January 9, 2014, chemical spill into the Elk River. More information on the hearing is available online.
On February 3, 2014, the U.S. Department of Energy's (DOE) Office of Energy Efficiency and Renewable Energy announced that up to $12 million in funding would be made available to advance the production of cost-competitive, high-performance carbon finer material from renewable non-food based feedstocks. Feedstocks could include agriculture residues and woody biomass. This funding supports DOE's Clean Energy Manufacturing Initiative. A copy of DOE's press release on this announcement is available online.
Monroe Energy, LLC (Monroe), a refinery and subsidiary of Delta Airlines, has filed another lawsuit challenging EPA's implementation of the federal Renewable Fuel Standard (RFS). In this latest suit, Monroe argues that blenders, not refiners and importers, of fuel should be deemed the obligated parties under the RFS. Monroe does not have blending capacity like some larger refiners.
Monroe asserts that the fact that EPA in its proposed rule to set the 2014 RFS renewable volume obligations (RVO) now proposes to consider the practical ability to blend the amounts of renewable fuels under the law warrants a reconsideration of the obligated parties defined under the final RFS rule issued in 2010. Because Monroe lacks blending capacity, the Company argues that it is forced to spend millions of dollars to comply with its requirements as an obligated party under the law.
On February 4, 2014, EPA filed a 113 page brief in the U.S. Court of Appeals for the District of Columbia. In its brief, EPA attempts to defend its final rule setting the 2013 RFS in the face of challenges to it by Monroe, the American Petroleum Institute, and American Fuel and Petrochemical Manufacturers. EPA argues that it was reasonable to maintain the total renewable and advanced biofuel levels under the RFS statute for 2013 because it determined that sufficient compliance options would be available to obligated parties to comply with the requirements that year. The court has not yet set a date for oral arguments.
The Biobased and Renewable Products Advocacy Group (BRAG™) sponsored the 5th Annual Next Generation Bio-Based and Sustainable Chemicals Summit, which took place February 4-7, 2014, in San Diego, California. The Summit is considered one of the premier biobased and sustainable chemicals information and networking events for biobased start-ups, global chemical majors, brand owners, feedstock providers, venture capitalists, and academics. This year's Summit provided a detailed overview of the critical developments the industry is currently facing, including innovative feedstocks, end-user applications, and progress of established and new chemical production platforms and applications.
Lynn L. Bergeson, Managing Partner of Bergeson & Campbell, P.C. and Of Counsel to BRAG, chaired the pre-Summit Business Strategy Conference. During the Summit's Strategic Business Forum to explore policy, economics, investment, and global partnering to support the growth of the biobased industry, Ms. Bergeson gave a presentation that focused on key regulatory issues pertinent to renewable, biobased chemical feedstocks that manufacturers must anticipate and address to ensure scaling-up manufacturing operations proceed as planned. In addition, Kathleen M. Roberts, Executive Director of BRAG, gave opening remarks on the first day of the Summit and moderated a panel discussion on "Spurring Market Adoption: Brand Owner and Chemical Major Perspectives." More information is available online.
On February 6, 2014, it was announced that Versalis, the chemical subsidiary of Eni, and Elevance Renewable Sciences, Inc., a producer of specialty chemicals from natural oils, have signed a Memorandum of Understanding (MoU) to establish a strategic partnership to jointly develop and scale a new metathesis technology to produce bio-chemicals from vegetable oils.
According to a press release by Elevance, "Versalis and Elevance intend to focus on jointly developing and scaling new catalysts, leveraging the significant progress of this technology that has been already accomplished by Elevance. In addition, the partners will assess the design and construction of the first world-scale ethylene metathesis-based production that will utilize renewable oils at the Versalis Porto Marghera site. This will also take advantage of existing infrastructures and production streams. The market applications of the future bio-chemicals production will be personal care, detergents and cleaners, bio-lubricants and oilfield chemicals."
A copy of the press release is available online.
Kia Motors Corporation announced this week that "the company's new Soul EV (electric vehicle), which will have its world premiere at the 2014 Chicago Auto Show starting later this week, has achieved UL Environment validation for bio-based organic carbon content for 10% of its interior materials. UL Environment is the environmental business unit of UL (Underwriters Laboratories), a global independent safety science company." The Company explained that "[v]arious bio-based materials have been applied to the Soul EV, such as bio degradable plastic, bio-foam and bio-fabric. Unlike previous plastic materials that are based from oils, bio-based materials are derived from biomass, which is a photosynthate. Such modern biochemical technologies have replaced the majority of the existing chemistry industry by offering an alternative through development of new bio-materials." A copy of the Company's press release is available online.
On Monday, the 41 member bicameral Farm Bill Conference Committee announced that it had reached agreement on a compromise Farm Bill, the Agriculture Act of 2014. A copy of the legislation is available online. The Conference Committee was led by House Agriculture Committee Chair Frank Lucas (R-OK), Ranking Member Collin Peterson (D-MN), Senate Agriculture, Nutrition and Forestry Committee Chair Debbie Stabenow (D-MI), and Ranking Member Thad Cochran (R-MS). A copy of the Senate Agriculture Committee press release on the compromise legislation is available online.
The bill includes $881 million in mandatory funding for renewable energy programs over the next ten years, and extends eligibility to renewable chemicals for the first time. It continues the majority of the energy programs covered under the 2008 Farm Bill, including the Biobased Markets and Biorefinery Assistance Programs, and the Biomass Crop Assistance Program to help encourage and facilitate the growth of purpose grown energy crops to be used for energy production. The legislation will modify the existing Biorefinery Assistance Program to create the Biorefinery, Renewable Chemical and Biobased Product Manufacturing Assistance Program that would expand funding eligibility to producers of renewable chemicals and biobased products. This mandatory funding and expanded eligibility marks a big victory for the biofuels and renewable chemicals and products industries.
The House of Representatives passed this compromise Farm Bill on Wednesday, January 29, 2014. The Senate is expected to take it up for consideration and potentially vote on it as early as the end of this week. The President is expected to sign it.
The January 9, 2014, chemical spill in which 7,500 gallons of a coal processing chemical, 4-methylcyclohexane methanol, stored in an above-ground tank owned by Freedom Industries leaked into the Elk River upstream from the local water utility's intake pipe serving Charleston, West Virginia, has prompted new calls for chemical safety and security legislation. For instance, concerns have been expressed about the adequacy of information regarding chemical safety and health risks, an issue that has been repeatedly raised with respect to chemicals "grandfathered" under the Toxic Substances Control Act (TSCA). The Biobased and Renewable Products Advocacy Group's (BRAG™) report on the spill and call for new legislative action is available online.
In response to the spill and calls for new protections, on January 27, 2014, Senators Joe Manchin (D-WV), Barbara Boxer (D-CA), Chair of the Environment and Public Works (EPW) Committee, and Jay Rockefeller (D-WV) introduced the Chemical Safety and Drinking Water Protection Act of 2014. The bill would amend the Safe Drinking Water Act (SDWA) by adding Part G -- Protection of Surface Water from Contamination by Chemical Storage Facilities. The bill is intended to strengthen states' ability to prevent chemical spills such as that of January 9, 2014. A fact sheet regarding the bill is available online.
Bergeson & Campbell, P.C. (B&C®) has issued a memorandum providing an overview of the new bill. The memorandum is available online.
The Senate EPW Committee has scheduled a hearing on the "Examination of the Safety and Security of Drinking Water Supplies Following the Central West Virginia Drinking Water Crisis." The hearing is scheduled for February 4, 2014, at 10:00 a.m.
The U.S. Environmental Protection Agency (EPA) has taken two actions this month to update Design for the Environment's (DfE) Safer Chemical Ingredients List. On January 23, 2014, EPA announced that it is adding 50 chemicals to the list, "bringing the number of safer fragrance chemicals to 150 and the total number of safer chemicals to nearly 650." The list is available online.
On January 29, 2014, EPA announced that it has issued final DfE alternatives assessments for Decabromodiphenyl ether (DecaBDE) and Bisphenol A (BPA). The 901 page report on alternatives for the flame retardant DecaBDE is available online, and the 519 page report on BPA alternatives is available online.
On January 23, 2014, 13 industry groups sent a letter to President Obama and the Interagency Working Group on Improving Chemical Facility Safety and Security (Working Group) urging the exclusion of any "federal requirement to assess or implement so-called Inherently Safer Technologies (IST)." A copy of the letter is available online. In response to the West Texas fertilizer distributor explosion last year, the Working Group has been tasked with carrying out Executive Order 13650 -- on Improving Chemical Facility Safety and Security.
In the letter, the industry groups express concern with a focus in a recent Working Group report on "safer alternatives." They argue that sufficient safeguards and incentives exist to promote IST where possible, and caution against a federal requirement for IST.
On January 28, 2014, the pro-safer chemicals coalition Safer States released a report in which it found that "at least 33 states are considering policies [to enhance chemical safety]. Some would change disclosure rules for manufacturers, so that concerned consumers will know what chemicals are in their products. Some would phase out the use of chemicals like bisphenol A, formaldehyde and toxic flame retardants." The report is available online.
There is increased momentum for chemical safety legislation in the wake of the January 9, 2014, chemical spill in West Virginia. Several bills have also been introduced at the federal level to increase chemical safety and security. In particular, the Chemical Safety and Drinking Water Protection Act of 2014 was introduced this week (see above). The bill will strengthen states' ability to prevent chemical spills. Additionally, the Chemical Safety Improvement Act (CSIA) was introduced last year to reform TSCA. CSIA has been criticized for having weak state preemption provisions. B&C has issued a summary of both bills, which are available here and here.
EPA received approximately 16,000 comments by the January 28, 2014, deadline for the public to weigh in on the EPA's proposed 2014 Renewable Fuel Standard (RFS) renewable volume obligations (RVO). Industry organizations from all interested stakeholders made submissions.
For the first time, EPA proposed to reduce the statutory RFS RVOs for corn ethanol and advanced biofuels, in addition to cellulosic biofuels. Under the proposal, EPA would use "a combination of" both of its RFS waiver authorities to achieve these reductions. EPA justified its proposed reductions by concentrating on whether there would be sufficient supply of all of the renewable fuels. EPA broadly defined supply to include other factors such as the ability to consume the fuels and distribution capacity.
Representatives of the biofuels industry, including the American Coalition for Ethanol, Advanced Biofuels Association, Biotechnology Industry Organization, Growth Energy, and the Renewable Fuels Association, urged EPA to reconsider the proposed RVOs and warned of negative consequences on biofuels production if it did not. Many comments from the biofuels industry argued that EPA did not have the authority to reduce advanced and total renewable volumes in 2014 as it proposed.
The American Petroleum Institute and American Fuel and Petrochemical Manufacturers filed joint comments in support of EPA's proposal. Among other things, these groups argue that EPA does have the authority to make its proposed reductions to the 2014 RVOs. They warn of significant supply and economic consequences if EPA maintains the statutory RVOs for 2014.
EPA is expected to issue in final the 2014 RFS RVOs this Spring.