Not only did the U.S. government shut down at midnight on Monday, but so did the nine month extension of the 2008 Farm Bill. With no new five-year Farm Bill, the future is uncertain for rural energy programs supported by the U.S. Department of Agriculture (USDA), including the Biorefinery Assistance Program that promotes the development of biorefineries in the U.S.
As we have reported earlier this year, the U.S. Senate passed its version of the next five-year Farm Bill, including funding for farm, nutrition, and energy programs. Importantly, the Senate bill continues and provides mandatory funding for existing Farm Bill energy programs and extends eligibility to renewable chemicals. After failing to pass a combined bill, the U.S. House of Representatives passed a "farm-only" bill this summer and a nutrition-only bill cutting $40 billion in food stamps just last week. The House farm-only Farm Bill contains an energy title without mandatory funding that will instead be subject to annual appropriations, and it does not extend the energy programs to renewable chemicals.
There has been hope that though the differences are deep, the House and Senate will be able to pass a five-year Farm Bill by the end of the year when mandatory funds for commodity subsidies and food stamps expire. Whether this is true now largely depends on how quickly Congress re-opens the government and raises the debt ceiling to ensure the ability of the U.S. to meet its financial obligations.
On August 28, 2013, California's Office of Administrative Law (OAL) approved the California Department of Toxic Substances Control (DTSC) Safer Consumer Products Regulations (Regulations). The Regulations took effect on October 1, 2013.
The Regulations are the much anticipated regulatory implementation of California's Green Chemistry Initiative. DTSC's implementing regulations have gone through several iterations, including an initial draft released on June 23, 2010, a revised draft released on November 16, 2010, an "informal draft" released on October 31, 2011, proposed regulations released on July 27, 2012, revised proposed regulations released on January 29, 2013, another revised proposed regulations released on April, 10, 2013, and revisions proposed on August 23, 2013 (the 15-day comment period for these last comments was open until September 9, 2013, despite the issuance of final Regulations). Memoranda providing background information on past iterations are available online. The Regulations and Final Statement of Reasons are available online.
The California Department of Toxic Substances Control (DTSC or Department) Safer Consumer Products Regulations (Regulations) take effect today. Memoranda providing background information on the Regulations are available online. The Regulations and Final Statement of Reasons are available online.
The most onerous requirements for "responsible entities" (i.e., manufacturers, importers, assemblers, and retailers) will not be felt until DTSC identifies the first Priority Products, that is, a consumer product containing a listed Candidate Chemical for which responsible entities must conduct an Alternatives Analysis (AA) to determine how best to limit potential exposures or the level of potential adverse public health and environmental impacts posed by the substance in the Priority Product.
There are, however, initial steps that companies can take to understand how these Regulations may affect operations in the near future. DTSC has created a Safer Consumer Products Web Portal where it has posted, and will continue to add, information pertinent to the Regulations. Please see BRAG's full memorandum, for more information.
If the Continuing Resolution (CR) currently funding the government is allowed to expire on September 30, it could prove devastating to the U.S. Environmental Protection Agency (EPA). Unlike other federal agencies, EPA cannot claim exceptions for many of its employees. In the event the CR expires, as EPA Administrator Gina McCarthy asserted in public remarks this week, EPA "would effectively shut down." It would only have skeletal staff and would surely impact Renewable Fuel Standard (RFS) and Toxic Substances Control Act (TSCA) work, among others.
This fear about current EPA funding comes at a time when the Republican Members of the Senate Committee on Environment and Public Works sent a letter this week to Committee Chair Barbara Boxer (D-CA) urging her to move ahead with a hearing on EPA's Fiscal Year (FY) 2014 budget request. EPA requested $8.2 billion for FY 2014, which is 3.5 percent less than 2012 enacted funding levels for the Agency.
Improved utility of data, transparent supply chains, and transformative innovation were just some of the topics discussed by regulators, researchers, and industry at the 3rd Safer Consumer Products Summit: National Policy Outlook held in Washington, D.C. this week. Summit Chair Lynn L. Bergeson, Managing Partner, B&C, opened the main summit by noting the dramatic shift in environmental law from the regulation of discharges of chemical substances into the environment (and their subsequent cleanup) to a more proactive focus on the regulation of chemicals in products -- especially consumer products. She then walked the room through the current efforts at TSCA reform, most notably CSIA and gave her insider's analysis of what to expect from Capitol Hill regarding CSIA.
Keynote speaker Jim Jones, Assistant Administrator, Office of Chemical Safety and Pollution Prevention (OCSPP), highlighted the great strides the U.S. Environmental Protection Agency (EPA) has made in increasing access to data, especially with the debut last week of the ChemView searchable database and the positive impact programs such as Design for the Environment and the Green Chemistry Awards have in stimulating the safer chemical market.
In a luncheon keynote, sponsored by BRAG, the "father of green chemistry" Dr. Paul Anastas, Director of the Center for Green Chemistry and Green Engineering at Yale, exhorted the gathered companies, researchers, and non-governmental organizations (NGO) to set a goal of transformative innovation rather than incremental improvements: instead of just looking for safer dyes, develop fiber plants that grow in colors; rather than making a small improvement in paint and waterproofing formulations, mimic the action of waterproof plants to achieve the goal.
A panel discussion with safer product groups and brands, moderated by BRAG's Executive Director Kathleen M. Roberts, included spirited exchanges on the perceived value of "green" to consumers, the need for extreme transparency of ingredients throughout the supply chain, and the question of whether NGOs can engage in recognizing and encouraging good corporate actions in addition to their focus on thwarting the bad. Ms. Roberts made the point that BRAG is actively engaged in helping to level the regulatory playing field between petroleum-based products and their greener alternative biobased products.
On September 18, 2013, the 9th Circuit Court of Appeals reversed a December 2011 district court ruling and held that California's Low Carbon Fuel Standard (LCFS) does not violate the Dormant Commerce Clause of the U.S. Constitution on its face. The district court had sided with groups from the oil and gas, ethanol, and trucking industries and found that the LCFS violated the Dormant Commerce Clause because the statute gave higher carbon intensity values to out-of-state, Midwest, ethanol, putting that fuel at a disadvantage in California. At the time of the 2011 decision, the district court had also issued a preliminary injunction preventing the California Air Resources Board (CARB) from enforcing the LCFS.
In its decision this week, the appeals court held that the LCFS does not violate the Dormant Commerce Clause on its face, and it remanded to the district court whether the statute violates the clause "in purpose or in practical effect." The appeals court also vacated the preliminary injunction.
It has been reported that the ethanol industry is looking at their legal options in light of the appeals court decision.
The U.S. Environmental Protection Agency (EPA) reportedly has completed its proposed rule setting the 2014 renewable volume obligations (RVO) for obligated parties under the federal Renewable Fuel Standard (RFS). The proposal is now being reviewed by the Office of Management and Budget before being published in the Federal Register, which will open the public comment period. By law, EPA is required to set the following year's RFS RVOs by November 30. The 2013 RVOs were not prepared in final until August of this year, which was likely due to EPA concerns about setting the volumes amidst legal, legislative, and regulatory challenges by obligated parties to the final 2011 and 2012 RVOs.
EPA included language in the final 2013 RFS rule indicating that it may reduce the overall RVOs in its upcoming 2014 RFS rulemaking. Just before EPA issued the 2013 final rule containing this language, leading trade groups representing the oil and gas industry, the American Petroleum Institute (API) and American Fuel & Petrochemical Manufacturers (AFPM), filed a joint waiver petition with EPA requesting that the Agency reduce the overall 2014 statutory RVOs to 9.7 percent of the U.S. transportation fuel supply due to what they argue are their blend wall concerns. The joint waiver petition is available online. This week, Valero Energy Corporation, the world's largest independent refiner, also sent in a petition requesting that EPA waive the 2014 RVOs. Valero cited the burdensome and high costs of Renewable Identification Numbers (RIN) needed for RFS compliance.
Several members of the biofuels industry have stated publicly that they believe there are several options that could, at least in part, address the impending so-called blend wall. The Renewable Fuels Association made this point in its letter to EPA urging the Agency to deny the waiver petition. RFA's letter is available online.
On August 28, 2013, the Solid Waste Association of North America (SWANA) and the National Solid Wastes Management Association (NSWMA) sent a letter to U.S. Environmental Protection Agency (EPA) Administrator Gina McCarthy urging EPA to (1) issue quickly a final rule clarifying how biogenic carbon emissions will be treated under Prevention of Significant Deterioration (PSD) and Title V permitting requirements and (2) determine that biogenic carbon emissions from municipal solid waste (MSW) should be categorically excluded from the new PSD and Title V greenhouse gas (GHG) reporting requirements. A copy of the letter is available online. In July, the U.S. Court of Appeals for the District of Columbia vacated EPA's rule temporarily exempting bioenergy and other biogenic sources of GHG emissions from the new GHG permitting requirements, which has created uncertainty for the industry going forward. BRAG's report on this decision is available online.
In their joint letter, SWANA and NSWMA argue that emissions from the biogenic portions of MSW should be permanently exempted from the new GHG reporting requirements in part based on EPA's recent calculation of the lifecycle GHG analysis of landfill gas as a renewable fuel feedstock. Under this analysis, EPA "assumed that the biogenic portions of MSW (which produce the biogas) pose no land use-related GHG emissions associated with its production and use as a fuel feedstock." In addition, the groups state subjecting the biogenic emissions to the new reporting requirements could deter renewable fuel production and progress on projects designed to promote the beneficial use of landfill gas and energy.
On August 1, 2013, over 100 groups sent a similar letter to EPA urging the Agency to find that bioenergy and other biogenic sources of GHG emissions are carbon neutral for purposes of new GHG permitting requirements under EPA's Tailoring Rule. More information on this letter is available online.
On August 26, 2013, the U.S. Court of Appeals for the District of Columbia Circuit granted a petition by several industry groups, including the American Forest & Paper Association and the National Alliance of Forest Owners, for an extension to file an appeal to the court's recent decision to vacate the U.S. Environmental Protection Agency's (EPA) rule temporarily exempting biogenic sources of greenhouse gas (GHG) emissions from new GHG permitting requirements. For more information on the decision issued in July, please visit online. Groups will now have until 30 days after the U.S. Supreme Court decides whether it will consider several lawsuits challenging EPA's GHG regulations to appeal this biogenic carbon decision.
EPA was scheduled to post a video on its YouTube channel providing an overview of the Agency's plans to regulate GHG emissions from existing power plants. Under President Obama's Climate Action Plan (CAP) announced on June 25, 2013, EPA is directed to propose emissions guidelines for existing power plants by June 1, 2014. EPA's YouTube page is available online.
U.S. House Energy and Commerce Subcommittee on Energy and Power Chair Ed Whitfield (R-KY) has announced that he will hold a hearing on the President's CAP on September 18, 2013. Chair Whitfield, who does not support the CAP, has invited representatives from 13 federal agencies, including EPA, to testify at the hearing. The Subcommittee's press release (available online) states that "we seek to hear from relevant Federal agencies about U.S. climate change policies and the administration's second term climate agenda, and to obtain fuller information regarding the Federal government's past, current, and planned domestic and international activities, climate research programs, initiatives, and new regulatory requirements."