Policy & Enforcement Briefing: $5 Billion Superfund Settlement, EPA Proposes Largest Cleanup in History
$5 Billion National Settlement Yields Hundreds of Millions for Superfund Sites in New Jersey and New York
Kerr-McGee Corporation and certain of its affiliates (“New Kerr-McGee”), and their parent Anadarko Petroleum Corporation will greatly benefit environmental cleanups at the Welsbach Superfund site in Gloucester City, New Jersey and the GCL Tie and Treating Superfund site in Sidney, New York, and reimburse the federal government for substantial cleanup costs at the Federal Creosote Superfund site in Manville, New Jersey. The United States has entered into the settlement agreement with the companies in a fraudulent conveyance case brought by the United States and co-plaintiff Anadarko Litigation Trust in the bankruptcy of Tronox Inc.
The bankruptcy court had previously found, in December 2013, that the historic Kerr-McGee Corporation (“Old Kerr-McGee”) fraudulently conveyed assets to New Kerr-McGee to evade its debts, including its liability for environmental clean-up at contaminated sites around the country. Pursuant to the settlement agreement, the defendants agree to pay $5.15 billion to settle the case, of which approximately $4.4 billion will be paid to fund environmental clean-up and for environmental claims. This is the largest environmental enforcement recovery ever by the Department of Justice.
The settlement includes more than $440 million for several sites in New Jersey and in New York.
Approximately $224 million will be paid to EPA for cleanup of thorium contamination at the Welsbach Superfund site in Gloucester City, New Jersey. Approximately $217 million will be paid to the federal Superfund in repayment of costs previously incurred by EPA cleaning up the Federal Creosote Superfund site in Manville, New Jersey. The federal Superfund will receive a portion of approximately $43 million for past and future costs paid by EPA to clean up the GCL Tie and Treating Superfund site in Sidney, New York.
In its decision, the court found that Old Kerr-McGee transferred assets with the intent to hinder or delay creditors, in particular environmental creditors, and also transferred those assets for less than their fair value, which left Tronox insolvent, unable to pay its debts when they came due, and undercapitalized.
More information can be obtained at the following web sites:
Case Summary: Settlement Agreement in Anadarko Fraud Case Results in Billions for Environmental Cleanups Across the Countryhttp://www2.epa.gov/enforcement/case-summary-settlement-agreement-anadarko-fraud-case-results-billions-environmental
Welsbach Superfund Site in Gloucester, New Jersey http://www.epa.gov/region02/superfund/npl/welsbach/
GCL Tie and Treating Superfund Site in Sidney, New York http://www.epa.gov/region02/superfund/npl/0203408c.pdf
Federal Creosote Superfund Site in Manville, New Jersey http://epa.gov/region02/superfund/npl/federalcreosote/
China to Set New, Far Reaching Environmental Law
China is set to pass a new law that would give Beijing more powers to shut polluting factories and punish officials, and even place protected regions off-limits to industrial development.
Amendments to China’s 1989 Environmental Protection Law are expected to be finalised later this year, giving the Ministry of Environmental Protection (MEP) greater authority to take on polluters.
While some details of the fourth draft are still under discussion, it has been agreed that the principle of prioritizing the environment above the economy will be enshrined in law.
New Hampshire Solar Garden Company Promotes “Group Net Metering”
A New Hampshire law, enacted in July 2013, allows groups of people or businesses to band together and create a solar-power system as part of which they can be paid for excess electricity returned to the grid. Variations of the new law exist in several other states Community Renewable Energy Development. Previously, net metering has allowed New Hampshire residents to sell electricity back to their utility from small systems, defined as under 15 kilowatts (kW). At present, the new legal structure allows groups to share the financial return from systems up to 100 kW in peak output. NH Solar Garden is the first company in New Hampshire to offer group net metering. An initial 66 kW solar array has already been designed and construction is expected to begin in Spring of 2014. The only requirement to qualify for the service is that locations receiving power must be serviced by the same utility.
CARB Truck and Bus Regulation Information Session – Bay Area, APRIL 17
The California Air Resources Board is offering a free information session in the California Bay Area for diesel truck owners, operators, fleet managers, motor carriers, and brokers in the process of complying with the Truck and Bus Regulation.
When: Thursday April 17,2014 10:00 AM – 1:00 PM
Where: College of Alameda Building F, Student Center 555 Ralph Appezzato Memorial Parkway (Atlantic Ave) Alameda, CA 94501
Limited Seating, Reservations Required. Contact: Michael Donnelly (916) 445-7599 email@example.com
For more information: https://ssl.arb.ca.gov/training/DisplayCourse.php?SectionNumber=7598
New Study Links Fracking to Dallas-Fort Worth Smog
Clean Air Watch says that results of a new UNT study linking fracking pollution to DFW’s chronic smog problem will be presented at this Thursday’s regional clean air meeting in Arlington after local citizens groups fought for its inclusion on the agenda. According to its author, the report directly contradicts the Texas Commission on Environmental Quality’s (TCEQ) assertion that Barnett Shale mining and production pollution has no significant impact on local ozone levels.
Thursday’s meeting starts at 10 am and is expected to run until 12 Noon at the headquarters of the North Texas Council of Governments, 616 Six Flags Drive in Arlington.
List of Approved Spent Fuel Storage Casks: HI-STORM 100 Cask System; Amendment No. 9; Corrections
The U.S. Nuclear Regulatory Commission (NRC) published a document in the Federal Register (FR) on December 26, 2013, which corrected and delayed the effective date of a direct final rule published in the FR on December 6, 2013. The notice corrected several Agencywide Documents Access and Management System (ADAMS) accession numbers and delayed the effective date of the direct final rule from February 19, 2014, to March 11, 2014. The direct final rule amends the NRC’s spent fuel storage regulations by revising the Holtec International HI-STORM 100 Cask System listing within the “List of Approved Spent Fuel Storage Casks” to include Amendment No. 9 to Certificate of Compliance (CoC) No. 1014. This action is necessary to provide notification that the NRC is amending its regulations by revising the Holtec HI-STORM 100 Cask System listing within the “List of Approved Spent Fuel Storage Casks” to correct the effective date of Amendment No. 9 to CoC No. 1014.
For more information: Gregory Trussell Phone 301 415-6445 Email: firstname.lastname@example.org Office of Federal and State Materials and Environmental Management Programs, Washington DC 20555-0001
HUD Releases Preliminary Affordability Determination-Energy Efficiency Standards
The Energy Independence and Security Act of 2007 (EISA) establishes procedures for the U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of Agriculture (USDA) to adopt revisions to the 2006 International Energy Conservation Code (IECC) and to the 2004 energy codes of the American Society of Heating, Refrigerating, and Air-conditioning Engineers (ASHRAE), referred to as ASHRAE 90.1-2004, subject to: (1) A determination that the revised codes do not negatively affect the availability or affordability of new construction of single and multifamily housing covered by EISA, and (2) a determination by the Secretary of Energy that the revised codes “would improve energy efficiency.”1 This Notice announces the preliminary determination of HUD and USDA, as required under section 481(d) of EISA, that the 2009 IECC and (with the exception of the State of Hawaii) ASHRAE 90.1-2007 will not negatively affect the affordability and availability of housing covered by EISA. As of September 2013, 32 States plus the District of Columbia have already adopted the 2009 IECC, its equivalent, or a higher standard for single family homes. Thirty-eight States plus the District of Columbia have already adopted ASHRAE 90.1-2007, its equivalent, or a higher standard for multifamily buildings. For those States that have not yet adopted either of these standards, this Notice relies on several studies that show that these codes are cost effective, in that the incremental cost of the additional efficiency measures pays for itself with energy cost savings on a life-cycle basis.
Statement by Secretary Moniz on IPCC’s Working Group Report on Climate Change Mitigation
Energy Secretary Ernest Moniz issued the following statement on the Intergovernmental Panel on Climate Change’s Working Group report on climate change mitigation:
“The Intergovernmental Panel on Climate Change’s latest report on mitigation makes it clear that the next ten to twenty years are critical if we are to avoid the worst consequences of climate change. The IPCC report notes that it will be substantially more difficult to maintain low GHG concentrations in the long term if we do not act aggressively now. The report also points out that there are many low-carbon energy pathways to a prosperous future while mitigating climate change risks to a significant degree.
“Recognizing this imperative to act, the United States has been doing our part. The President’s Climate Action Plan lays out a series of new initiatives that are underway to bring new sources of renewable power online faster, reduce emissions from our fossil fuel plants and transportation sector, sustain nuclear power, and drive greater energy efficiency across our communities, businesses and industries. In recent years, the United States has more than doubled the amount of electricity generated from wind and solar. President Obama set the mark high when he called for another doubling of renewable electricity generation by 2020, a doubling of new vehicle fuel efficiency by 2025, and a doubling of economy-wide energy productivity by 2030. The President’s all-of-the-above approach entails making the technology investments that will enable all fuel sources to have a role in the future low-carbon marketplace – carbon capture and sequestration for fossil power plants, advanced biofuels and electrification for vehicles, next generation nuclear power, lower cost renewables, modernized energy infrastructure, and the manufacturing advances that will underpin a clean energy economy.
“A previous IPCC report indicated that even as we mitigate climate change risks, we also need to address the changes that are already happening as a result of global warming. The President’s Climate Action Plan lays out initiatives for enhancing energy infrastructure resilience to these changes. However, greenhouse gas reductions are essential, and ultimately, a much lower cost option than managing climate impacts from unrestrained emissions growth. This IPCC report makes clear that prudence calls for doing all that we can now and in the years ahead.”
CBO Report on S. 2080, National Fish Habitat Conservation Act
As ordered reported by the Senate Committee on Environment and Public Works on April 3, 2014
S. 2080 would authorize the appropriation of $29 million over the 2015-2018 period for the Department of the Interior (DOI) to fund projects to conserve fish habitats. The legislation also would establish a National Fish Habitat Board and authorize the appropriation of $6 million over the same period to establish a National Fish Habitat Partnership Program, cover certain planning and administrative expenses, and provide technical and scientific assistance to the board, Fish Habitat Partnerships (FHPs), and conservation project participants.
CBO estimates that implementing S. 2080 would cost $32 million over the 2015-2019 period and $5 million after 2019, assuming appropriation of the specified amounts. Because the legislation would authorize DOI to accept and use gifts and donations, enacting the bill could affect offsetting receipts and associated direct spending; therefore, pay-as-you-go procedures apply. However, CBO estimates that the net effect on direct spending would be negligible in each year. Enacting the bill would not affect revenues.
S. 2080 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would impose no costs on state, local, or tribal governments.
GAO Report: Industry’s Outlook Depends on Market Changes and Key Environmental Regulations
GAO Findings: -Stakeholders GAO contacted and information reviewed by GAO identified the following three major changes that have recently affected the domestic petroleum refining industry: -Increased production. U.S. and Canadian crude oil production have increased, leading to lower costs of crude oil for some refiners. After generally declining for decades, monthly U.S. crude oil production increased over 55 percent compared with average production in 2008. -Declining consumption. Domestic consumption of petroleum products declined by 11 percent from 2005 through 2012, resulting in a smaller domestic market for refiners. -Key regulations. Two key regulations—the Environmental Protection Agency’s (EPA) and Department of Transportation’s (DOT) coordinated fuel economy and greenhouse gas (GHG) vehicle emission standards, as well as EPA’s Renewable Fuel Standard (RFS)—have contributed to declining petroleum-based fuel consumption. For some refiners, compliance with the RFS increased costs in the first half of 2013, though costs have since declined to some degree from their peak. According to some stakeholders GAO contacted, this was primarily due to RFS requirements exceeding the capability of the transportation fuel infrastructure to distribute and the fleet of vehicles to use renewable fuels. Moreover, EPA has missed the statutory deadline to issue regulations establishing annual RFS blending standards since 2009. EPA has not systematically identified the underlying causes of these delays or changed its approach in order to avoid them. A late RFS contributes to industry uncertainty, which can increase costs because industry cannot plan and budget effectively, according to some stakeholders.
Stakeholders GAO contacted and information reviewed generally suggested that the U.S. refining industry’s outlook depends on the following factors: -Domestic consumption. Future consumption of petroleum products is uncertain, with projections ranging from stable to slightly increasing through 2020 but not returning to consumption levels of the past. Forecasts GAO reviewed suggest higher future refinery production in scenarios with higher domestic consumption. -Costs of key regulations . The extent to which requirements in the key regulations increase costs for refiners will affect the industry’s outlook. For example, future costs to comply with RFS may depend on the annual renewable fuel volumes EPA sets and whether EPA issues annual RFS standards on time. In general, increasing costs may be absorbed by refiners (i.e., by reducing their profits), be passed on to consumers through higher prices, or both. -Foreign markets. The U.S. refining industry has increasingly relied on foreign markets. Exports grew from 7 percent of production in 2007 to 17 percent in 2012. The extent to which domestic refiners export their products will depend on the competitiveness of U.S. refiners. Factors that may affect competitiveness include domestic environmental regulations, levels of U.S. and Canadian crude oil production, and the balance between global refining capacity and demand for petroleum products.
GAO recommends that EPA identify the underlying causes of delays in issuing RFS standards and implement a plan to issue RFS standards on time. EPA generally agreed with GAO’s findings and recommendations. For more information, contact Frank Rusco at (202) 512-3841 or email@example.com.
EPA Proposes Plan to Remove Toxic Sediment from the Passaic River; Largest Cleanup in EPA History
The U.S. Environmental Protection Agency has proposed a plan to remove 4.3 million cubic yards of contaminated sediment from the lower eight miles of the Passaic River in New Jersey. The sediment in the Passaic River is contaminated with dioxin, polychlorinated biphenyls (PCBs), heavy metals, pesticides and other contaminants from industrial activity. The lower eight miles of the Passaic is the most heavily contaminated section of the river. Ninety percent of the volume of contaminated sediments in the lower Passaic are in the lower eight miles of the river.
The EPA is proposing bank-to-bank dredging – one of the largest volumes ever to be dredged under the EPA’s Superfund program – followed by capping of the river bottom.
The proposed plan is based on a seven-year study of the lower eight miles of the river, known as a focused feasibility study, and was developed in consultation with the New Jersey Department of Environmental Protection, the U.S. Army Corps of Engineers, the U.S. Fish and Wildlife Service, and the National Oceanic and Atmospheric Administration and with outreach to representatives of the many communities along the lower Passaic River. The study examined the contamination and analyzed options for reducing the risks that the contaminants in this segment of the river pose to people’s health and the environment. The EPA will accept public comments on its proposed plan from April 21 to June 20.
The EPA will hold three public meetings to explain the proposal. * May 7, 2014 at 7 p.m. Portuguese Sports Club 55 Prospect Street Newark, New Jersey, 07105
* May 2014 in Kearny, New Jersey Specific date and location To Be Determined
* June 2014 in Belleville, New Jersey Specific date and location To Be Determined
People may submit written comments by mail or email: Alice Yeh, Remedial Project Manager U.S. Environmental Protection Agency 290 Broadway, New York, New York 10007-1866 (212) 637-4427 PassaicLower8MileComments.Region2@epa.gov
The plan for the lower eight miles of the Passaic River is available at http://www.epa.gov/region02/passaicriver or http://www.ourpassaic.org
EPA Enforcement Settlement Addresses Pesticide Violations by Chemical Universe, Inc., of North Kansas City, Mo.
An inspection by the Missouri Department of Agriculture of Chemical Universe, Inc., a pesticide producer in North Kansas City, Mo., has revealed alleged violations of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). Through an enforcement action with EPA Region 7, the company has agreed to pay a $34,740 civil penalty to settle the allegations related to the improperly reported production and distribution of misbranded and unregistered pesticides.
Under FIFRA, distributors of pesticides must ensure that the products are properly registered with EPA. The registration process includes a product label review to ensure its contents contain the necessary information to ensure safe use. When a pesticide is unregistered or its label contains information that has not been accepted by EPA, it is considered to be misbranded under FIFRA. The law also requires pesticide producers to submit a complete and accurate accounting of pesticide production to EPA on an annual basis.
The inspection of Chemical Universe’s North Kansas City, Mo., facility in April 2013 revealed that on at least nine occasions in 2012 and 2013, the company sold quantities of an unregistered and misbranded pesticide. The investigation also revealed that pesticide reports submitted by the company for the years 2011, 2012, and 2013 contained false or incomplete information, in violation of FIFRA.
As a part of the settlement, Chemical Universe, Inc., has certified that it is now in compliance with FIFRA and its regulations.
Liquefied natural gas shows potential as a freight locomotive fuel
EIA projects that liquefied natural gas (LNG) will play an increasing role in powering freight locomotives in coming years. Continued growth in domestic natural gas production and substantially lower natural gas prices compared to crude oil prices could result in significant cost savings for locomotives that use LNG as a fuel source, according to EIA’s Annual Energy Outlook 2014 (AEO2014).
Taken together, the 7 major U.S. freight railroads consumed more than 3.6 billion gallons of diesel fuel in 2012, or 7% of all diesel fuel consumed in the United States. The fuel cost more than $11 billion in 2012 and accounted for 23% of total operating expenses.
These railroads are considering the use of LNG in locomotives because of the potential for significant fuel cost savings and the resulting reductions in fuel operating costs. Given the expected price difference between LNG and diesel fuel, future fuel savings are expected to more than offset the approximately $1 million incremental cost associated with an LNG locomotive and its tender.
However, in addition to the risk surrounding future fuel prices, other factors including operational, financial, regulatory, and mechanical challenges also affect fuel choices by railroads.
Some major railroad operators view the potential of LNG-fueled trains as similar to the switch from steam propulsion to diesel in the 1940s and 1950s, a revolution in freight rail known as dieselization. Others have responded with more caution, likening the potential switch to the more evolutionary advance from using direct current (DC) motors to alternating current (AC) motors, which allows fewer locomotives to pull the same load. The change towards AC motors has been ongoing since the early 1990s.
EIA’s AEO2014 includes two alternative cases (the High and Low Rail LNG cases) that examine the potential effect of LNG in freight rail. In the Reference case, LNG fuel use increases from just over 1 trillion Btu in 2017 to 148 trillion Btu in 2040, or 35% of total freight rail energy consumption. In the High Rail LNG case, LNG fuel consumption increases to 392 trillion Btu in 2040, or 95% of freight rail energy consumption. LNG consumption in the Low Rail LNG case increases to just 64 trillion Btu, or 16% of total freight energy consumption. Even under the High Rail LNG case, overall demand for natural gas as a result of a switch to LNG would increase overall demand for natural gas by less than 1%, resulting in a minimal effect on natural gas prices.
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