American Petroleum Institute
American Petroleum Institute
News Article | May 11, 2017
Members of the U.S. Senate are questioning whether Carl Icahn’s lobbying to change the Renewable Fuel Standard creates an ethics conflict with his role as advisor in the Trump administration. In addition to the ethics question, Members of Congress and some in the biofuels industry should examine whether Icahn could even deliver on the purported quid-pro-quo even if he wanted to. In late February 2017, Icahn and a biofuel trade association reportedly discussed a presidential executive order to make Icahn’s desired change to the RFS Point of Obligation (the so-called POO) in exchange for modifications to unconnected policy priorities for biofuel producers. The proposed “deal” essentially was a non-starter, since altering federal policies is a far more challenging task than Icahn or his partners care to admit publicly. In short, the reported “deal” cannot be accomplished simply by waving a magic wand or through a presidential executive order. Icahn claims the RFS exacts a disproportionate toll on his business interests, and he therefore wants to move the POO as far from CVR as possible. Icahn Enterprises owns 82 percent of CVR Energy, which includes two oil refineries – one in Kansas and a small one in Oklahoma – and a rack marketing terminal for selling finished fuel. Despite owning the rack terminal, CVR protests it cannot blend enough biofuel to meet the obligation and must therefore buy Renewable Identification Numbers (RINs) on the market. However, Reuters has reported that CVR sold RINs on several occasions in the past year, creating a short position in the market and apparently gambling that it can escape the obligation or buy the RINs back at a deflated price. Based on Reuters’ reporting, Icahn has made a $50 million windfall on the deal, and Senators are now asking whether he influenced RIN prices through his connections to the administration and campaign while making the trades. When Icahn was named a special advisor to the President on regulatory reform in December 2016, many different stakeholders erroneously believed he would quickly push through changes to the RFS and exempt his refineries from having to purchase RINs. Indeed, the “deal” presented to the White House by Icahn this past February was purported to be “non-negotiable.” But federal laws are made of sturdier stuff than that and several prior attempts to move the POO are now stumbling blocks to Icahn’s goal. In November 2016, EPA proposed to deny petitions filed by the American Fuel and Petrochemical Manufacturers and several independent refiners asking the agency to change the point of obligation. Notably, not all petitioners agreed on who should be obligated, and some of the various petitions may not have exempted CVR. EPA made a strong economic case that moving the POO would not increase production and use of biofuels, as petitioners claimed; in fact it would likely disrupt RFS stakeholders’ investments and thereby decrease biofuel use. By law, if EPA now decided to reverse itself and move the POO, it would have to present a rational argument for doing so – one that countered its own previous evidence. An executive order to change the POO would likely face a Court challenge. EPA would have to undertake a new rulemaking and respond to comments from numerous groups opposed to moving the POO, including most biofuel producers and several oil producers. The other part of the February “deal” floated by Icahn offered a few tidbits for the ethanol industry. Chief among them was a waiver of gasoline volatility standards for blends of 15 percent ethanol (E15) to allow E15 to be sold in summer months. Gasoline evaporation contributes to ozone formation. Ethanol burns cleanly, decreasing engine tailpipe emissions, and therefore the standard 10 percent ethanol gasoline blend (E10) earns a small waiver of evaporative emissions limits. E15 blends reduce both evaporative and tailpipe emissions compared to E10 but don’t qualify for the waiver because Congress’s 1990 amendments to the federal Clean Air Act specify E10. A White House executive order on E15 does nothing to change EPA’s well-documented position on the matter or alter the legal or procedural landscape around the issue. Even worse, EO’s are not legally binding. So the biofuels industry would have no recourse to force regulators to follow through on the E15 waiver. Icahn’s “deal” was rumored to offer the ethanol industry changes to EPA’s Motor Vehicle Emission Simulator (MOVES) model, which is used by the agency and states to develop policies to meet National Ambient Air Quality Standards (NAAQS). The MOVES model is indeed flawed because it uses input parameters from an April 2013 fuel study that was basically designed to attribute tailpipe emissions to the ethanol content in the gasoline. So, to correct the flaws in the model, EPA must redo the study. But in April, the Trump administration proposed to eliminate funding for the EPA office that conducts fuel and engine tests, creating a new potential hurdle that – at a minimum – would conflict with any potential executive order to change the MOVES model. The most absurd part of the Icahn “deal” was a proposal for the extension of the $1 per gallon biodiesel tax credit, which expired at the end of 2016. The White House does not have the authority to grant this or any other tax policy via executive order. Tax policy is set by Congress and Presidential recommendations mean little on Capitol Hill. The biofuels industry has opposed moving the POO primarily because it would require lengthy rulemaking and disrupt an RFS program that only recently got back on track. Further delays and uncertainty on something as fundamental as who’s obligated will hurt advanced biofuels producers more than most. Even the American Petroleum Institute (API) opposes changes to the POO. But the real problem here is even if you like the alleged carrots Icahn dangled in front of ethanol producers to justify moving the point of obligation, an executive order does nothing to change the federal Administrative Procedures Act or the other bodies of law that will prevent the industry from collecting on the “deal” after we’ve given Carl Icahn what he wants. Brent Erickson is executive vice president in charge of the Industrial and Environmental Section at the Biotechnology Innovation Organization (BIO). BIO represents more than 1,200 biotechnology companies, academic institutions, and state biotechnology centers across the United States and in more than 30 other nations. This article was originally published on Biofuels Digest is the most widely read Biofuels daily read by 14,000+ organizations. Subscribe here.
News Article | May 12, 2017
When it comes to protectionist trade policies, the Jones Act certainly makes the list. Originally created by congress as a means to ensure the country maintained a domestic sealift capacity to meet civilian and military needs, the Jones Act has outlasted nearly every other form of protectionist trade policy since it was last overhauled in 1920. To be fair, the Jones Act enjoys wide bipartisan support thanks mainly to a strong coalition of maritime industry and labor groups from both political parties. During the waning days of the Obama Administration, a proposal by the Department of Homeland Security's Customs and Border Protection (CBP) was floated that would have dramatically expanded the Act by doing away with decades of exemptions to oil and gas companies drilling offshore. Those waivers allowed the use of international maritime crews instead of domestic workers. As fellow Forbes Contributor David Blackmon recently wrote, "The American Petroleum Institute commissioned a study by Calash that concludes that adoption of these rule changes will cost 30,000 jobs, $9 billion in lost annual GDP, and $1.9 billion in lost annual government revenues between 2017 and 2030. Those numbers would seem to the causal observer to be large enough to get the attention of someone at CBP to maybe take a step back, take a deep breath, and at least take this rulemaking through a normal process that allows all stakeholders time to fully engage." On the other side of the debate, the maritime industry announced its clear displeasure. "The offshore service industry is deeply disappointed in the Administration's decision to delay the revocation of letter rulings that would correctly enforce the Jones Act and put American mariners first," said a statement by Aaron Smith, President and CEO of the Offshore Marine Service Association. While the maritime industry generally exercises significant influence in and around Washington, DC, its ability to garner supremacy at sea is apparently not as absolute as it used to be. Note: The Alliance for Innovation and Infrastructure, a bi-partisan non-profit to which the author belongs, has previously issued a report suggesting that the Jones Act should be revisited. Mr. McCown is a philanthropist, fmr federal gov't executive, public policy expert, and the founder of the non-profit group Aii.org. To learn more, visit him at brighammccown.com or follow @BAMcCown.
News Article | May 9, 2017
DENVER--(BUSINESS WIRE)--TransMontaigne Partners L.P. (NYSE:TLP) (the Partnership, we, us, our) today announced first quarter 2017 financial and operating results. “Our business continued to perform extremely well during the first quarter of 2017: achieving another quarter of record revenue, EBITDA and distributable cash flow; and, distribution coverage of more than 1.6 times,” said Fred Boutin, Chief Executive Officer of TransMontaigne Partners. “We had 1.2 million barrels of new tank capacity in service at our Collins Phase I expansion. Since the end of the first quarter we have completed and placed into service an additional 300,000 barrels of capacity and we expect the entire 2.0 million barrel expansion to be in service and producing revenue before the end of the second quarter. This project, along with the strength of our base business, supported an increase in our distribution of 1.5 cents for the first quarter: up from increases of 1 cent per quarter for each of the previous four quarters. Our distribution of 72.5 cents for the first quarter represented growth of 2.1% over the previous quarter and 6.6% over the first quarter of last year.” Revenue for the first quarter of 2017 totaled $44.9 million, an increase of $4.3 million, or approximately 10.6%, compared to the $40.6 million reported for the first quarter of 2016. Consolidated EBITDA for the first quarter of 2017 of $27.3 million represented a $3.2 million, or approximately 13.3% increase compared to the $24.1 million reported for the first quarter of 2016. The improvement compared to the prior year was primarily attributed to portions of our Collins Phase I terminal expansion coming on-line and re-contracting of storage capacity throughout the past year, including a portion at higher rates and greater utilization. Terminaling services fees from firm commitments were approximately 71% of first quarter 2017 total revenue. Approximately 58% of our terminaling services revenues for the first quarter of 2017 were generated from agreements with remaining firm commitments of three years or more as of March 31, 2017. An overview of our financial performance for the quarter ended March 31, 2017 compared to the quarter ended March 31, 2016, includes: Expansion of the Collins bulk storage terminal. We previously entered into long-term terminaling services agreements with various parties for approximately 2.0 million barrels of new storage capacity at our Collins, Mississippi bulk storage terminal. The revenue associated with these agreements comes on-line upon completion of the construction of the new tank capacity. In December 2016, we placed into service 0.9 million barrels of the 2.0 million barrels of new tank capacity, and in February and May 2017 we placed into service an additional 0.3 million and 0.3 million barrels, respectively. Completion of the remaining 0.5 million barrels of new tank capacity will occur in various stages through the second quarter of 2017. The anticipated aggregate cost of the 2.0 million barrels of new capacity is approximately $75 million. Construction of the Collins expansion project commenced in the first quarter of 2016, and we have spent approximately $48 million as of March 31, 2017. Our Collins/Purvis terminal complex is strategically located for the bulk storage market and is the only independent terminal capable of receiving from, delivering to, and transferring refined petroleum products between the Colonial and Plantation pipeline systems. Our facility has current active storage capacity of approximately 4.9 million barrels and is expected to increase to approximately 5.4 million barrels once the remaining 0.5 million barrels of tankage is completed. We are in the process of permitting an additional 5.0 million barrels of capacity for future construction at our Collins terminal and are in active discussions with several prospective customers regarding this potential future capacity. Senior management changes. On April 25, 2017, Gregory J. Pound notified us of his intention to retire from his position as President and Chief Operating Officer of TransMontaigne GP L.L.C. (the “General Partner”) and the subsidiaries of the Partnership. Mr. Pound’s resignation is currently intended to be effective as of June 30, 2017, subject to adjustment as may be necessary to allow for the orderly transition of his duties. The General Partner is responsible for managing the operations and activities of the Partnership since the Partnership does not have its own officers or employees. The board of the General Partner and its officers and employees wish to thank Mr. Pound for his significant contributions to the Partnership since its inception and wish him the best in his retirement. On April 26, 2017, the board of directors of the General Partner promoted Jim Dugan to the position of Executive Vice President, Engineering and Operations of the General Partner and the other subsidiaries of the Partnership, each to be effective as of June 30, 2017. Since January 2008, Mr. Dugan, age 59, has served as the Senior Vice President, Engineering and Operations for the General Partner and the subsidiaries of the Partnership. Mr. Dugan joined TransMontaigne Inc. as Engineering Manager in 1998. He has over 16 years of experience in senior leadership positions overseeing domestic and international petroleum marine terminals, pipelines and engineering divisions. Mr. Dugan began his career as a Project Engineer for Gulf Interstate Energy in 1986 and in 1993 he joined Louis Dreyfus Energy as a Project Engineer. He has served on the board of directors for the International Liquid Terminals Association (ILTA) since 2011, and he holds a tank inspector certification through the American Petroleum Institute. At March 31, 2017 our outstanding borrowings on our revolving credit facility were $292.5 million. For the trailing twelve months, our Consolidated EBITDA was $99.4 million, resulting in a debt to Consolidated EBITDA ratio of 2.94x. For the first quarter 2017 we reported $9.5 million in total capital expenditures, $7.4 million of which was in our Southeast terminals segment associated with our Collins terminal expansion. As of March 31, 2017 the remaining expenditures for approved projects are estimated to be approximately $30 million. Approved expenditures primarily include the construction costs associated with the tank expansion at our Collins terminal, as further discussed above. We expect to fund our investment and expansion expenditures with additional borrowings under our revolving credit facility. On March 13, 2017 we amended and restated our revolving credit facility to extend the maturity date to March 2022, increase the maximum borrowing line of credit from $400 million to $600 million and allow for up to $175 million in additional future “permitted JV investments”. The terms of the credit facility also permit us to issue senior unsecured notes. Further, at our request, the maximum borrowing line of credit can be increased by an additional $250 million, subject to the approval of the administrative agent and the receipt of additional commitments from one or more lenders. “Our recent revolving credit facility amendment adds significant flexibility to our already strong balance sheet position,” said Robert Fuller, Chief Financial Officer of TransMontaigne Partners. “Our amended revolver adds meaningfully to our liquidity and extends the maturity profile of our debt, positioning us well and providing ample liquidity to pursue potential acquisitions and additional growth projects, such as a potential Collins Phase II expansion.” The Partnership previously announced that it declared a distribution of $0.725 per unit for the period from January 1, 2017 through March 31, 2017. This $0.015 increase over the previous quarter reflects the sixth consecutive increase in the distribution and represents annual growth of 6.6% over the prior year. This distribution was paid on May 8, 2017 to unitholders of record on April 28, 2017. On Tuesday, May 9, 2017 the Partnership will hold a conference call for analysts and investors at 10:00 a.m. Eastern Time to discuss our first quarter 2017 results. Hosting the call will be Fred Boutin, Chief Executive Officer, Rob Fuller, Chief Financial Officer and Gregory Pound, Chief Operating Officer. The call can be accessed live over the telephone by dialing (888) 401-4642, or for international callers, (719) 457-2552. A replay will be available shortly after the call and can be accessed by dialing (844) 512-2921, or for international callers (412) 317-6671. The passcode for the replay is 9488673. The replay will be available until May 16, 2017. Interested parties may also listen to a simultaneous webcast of the conference call by logging onto TLP’s website at www.transmontaignepartners.com under the Investor Information section. A replay of the webcast will also be available for approximately seven days following the call. TransMontaigne Partners L.P. is a terminaling and transportation company based in Denver, Colorado with operations in the United States along the Gulf Coast, in the Midwest, in Houston and Brownsville, Texas, along the Mississippi and Ohio Rivers and in the Southeast. We provide integrated terminaling, storage, transportation and related services for customers engaged in the distribution and marketing of light refined petroleum products, heavy refined petroleum products, crude oil, chemicals, fertilizers and other liquid products. Light refined products include gasolines, diesel fuels, heating oil and jet fuels. Heavy refined products include residual fuel oils and asphalt. We do not purchase or market products that we handle or transport. News and additional information about TransMontaigne Partners L.P. is available on our website: www.transmontaignepartners.com. This press release includes statements that may constitute forward looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Although the company believes that the expectations reflected in such forward looking statements are based on reasonable assumptions, such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Among the key risk factors that could negatively impact our assumptions on future growth prospects and acquisitions include, without limitation, (i) our ability to identify suitable growth projects or acquisitions; (ii) our ability to complete identified projects and acquisitions timely and at expected costs, (iii) competition for acquisition opportunities, and (iv) the successful integration and performance of acquired assets or businesses and the risks of operating assets or businesses that are distinct from our historical operations. Key risk factors associated with the Collins terminal expansion include, without limitation: (i) the ability to complete construction of the project on time and at expected costs; (ii) the ability to obtain required permits and other approvals on a timely basis; (iii) disruption in the debt and equity markets that negatively impacts the Partnership’s ability to finance capital spending, (iv) the occurrence of operational hazards, weather related events or unforeseen interruption; and (v) the failure of our customers or vendors to satisfy or continue contractual obligations. Additional important factors that could cause actual results to differ materially from the Partnership’s expectations and may adversely affect its business and results of operations are disclosed in "Item 1A. Risk Factors" in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2016, filed with the Securities and Exchange Commission on March 14, 2017. The forward looking statements speak only as of the date made, and, other than as may be required by law, the Partnership undertakes no obligation to update or revise any forward looking statements, whether as a result of new information, future events or otherwise. SELECTED FINANCIAL INFORMATION AND RESULTS OF OPERATIONS Our terminaling services agreements are structured as either throughput agreements or storage agreements. Most of our throughput agreements contain provisions that require our customers to throughput a minimum volume of product at our facilities over a stipulated period of time, which results in a minimum amount of revenue. Our storage agreements require our customers to make minimum payments based on the volume of storage capacity made available to the customer under the agreement, which also results in a minimum amount of revenue. We refer to these minimum amounts of revenue recognized pursuant to our terminaling services agreements as being “firm commitments.” Revenue recognized in excess of firm commitments and revenue recognized based solely on the volume of product distributed or injected are referred to as “variable.” Our revenue was as follows (in thousands): The amount of revenue recognized as “firm commitments” based on the remaining contractual term of the terminaling services agreements that generated “firm commitments” for the quarter ended March 31, 2017 was as follows (in thousands): The following selected financial information is extracted from our quarterly report on Form 10-Q for the quarter ended March 31, 2017, which was filed on May 9, 2017 with the Securities and Exchange Commission (in thousands, except per unit amounts): Selected results of operations data for each of the quarters in the years ended December 31, 2017 and 2016 are summarized below (in thousands): The following summarizes our distributable cash flow for the period indicated (in thousands):
News Article | May 24, 2017
A powerful industrial lobby group has moved to withdraw from a landmark climate change lawsuit brought against the federal government by 21 young people, arguing that it trusts the Trump administration to fight the case. In a surprise reversal, the National Association of Manufacturers filed court documents on Monday saying it no longer wanted to fight alongside the federal government in the children’s lawsuit. The lawsuit argues that young people have been harmed by the failure to reduce greenhouse gas emissions and limit global warming. The organization stands by its original position, its senior vice president and general counsel, Linda Kelly, said in a statement to The Washington Post. [This climate lawsuit could change everything] But she said that — after joining the lawsuit during the Obama administration — the business organization was now confident that the Trump administration would strongly defend the case. That made it less of a priority for the manufacturing association, she said. “After every election, the NAM evaluates what cases we need to be involved in to protect manufacturers’ interests. As the dynamics have changed over the last several months, we no longer feel that our participation in this case is needed to safeguard industry and our workers,” said Kelly. But activists suggested the group’s request to withdraw was a sign that industry was feeling uneasy about landing up on the opposite of the children who brought the lawsuit — as well as sweeping requests for information from their lawyers. The court is not required to grant the organization permission to withdraw from the lawsuit. The case is expected to go to trial before the end of 2017. Two other industry associations, the American Petroleum Institute, the main oil lobby, and the American Fuel and Petrochemical Manufacturers, remain involved in the case. Activists have suggested that the organization’s request to withdraw from the lawsuit was prompted by a May 25 deadline to respond to various questions posed by lawyers for the children. In seeking to exit the landmark case, the manufacturing association avoids having to answer questions submitted by the plaintiffs, which were expected to press NAM about its positions on climate change. This would mean stating whether they agree with the basic principles in the case, including that CO2 influences the climate, that fossil fuel extraction has been responsible for elevated levels of CO2, and that greenhouse gas pollution endangers the health of current and future generations. “They don’t want to take a public position on the facts of climate change,” said Julia Olson, an attorney representing the young people. She added that the association would have been at risk of having to produce confidential documents on its internal discussions on climate change if it stayed in the case. The young people, aged 9 to 21, bought the case to the District Court in Oregon in August 2015, while President Barack Obama was in office. All three organizations applied to intervene in the lawsuit, arguing at the time that they did not believe their interests would be adequately represented by the Obama administration. They pointed to concern over emissions regulations and other measures implemented in Washington, D.C., which they said were at odds with their own interests. NAM intervened to fight the litigation in January 2016, arguing that constraints on fossil fuel production would directly harm the businesses they represent. The group, which includes ExxonMobil, Devon Energy and Arch Coal among its members, was a long-standing opponent of climate change regulations, including Obama’s Clean Power Plan. Frank Volpe, an attorney for the business groups, said at proceedings on Thursday that, as well as NAM, “there may be another and maybe all three” who decide to leave the case, although neither association has yet confirmed their position. API told The Washington Post that they do not comment on pending litigation. While many of the businesses represented by NAM have independently opposed action on climate change, others have spoken out about the dangers posed by burning fossil fuels, supported the Obama administration’s efforts to reduce emissions, and made steps toward sustainability themselves. Olson suggested NAM was under pressure from those members unhappy at the organization’s efforts to block Obama-era regulations. “It’s very likely there’s disagreement among the members of NAM,” she said. Most NAM members contacted by The Washington Post, including Shell, BP, Intel, Proctor & Gamble, Boeing, and Toyota, on whether they attempted to influence the decision to withdraw from the lawsuit did not respond in time for publication. General Electric and Microsoft refused to comment, and a spokeswoman for American Electric Power said they did not have any discussions with NAM about the case.
News Article | May 26, 2017
This story has been updated. All three industry groups involved in a landmark climate-change lawsuit being brought against the federal government have filed motions to withdraw from the litigation. On Thursday evening, the American Petroleum Institute and American Fuel and Petrochemical Manufacturers — trade associations representing members of the fossil-fuel industry — moved to withdraw from the lawsuit being brought by 21 youth plaintiffs arguing that the federal government has violated their right to a healthy climate system. A third industry group, the National Association of Manufacturers, filed a motion to withdraw earlier this week. The organizations had joined the litigation last year as “intervenor-defendants.” This means that, while none of them were originally involved in the lawsuit, they were permitted to join as defendants alongside the federal government on the basis that their interests were likely to be significantly affected by the outcome of the case. Because the three industry groups were not original parties in the lawsuit, they say they have the right to request a withdrawal from the case, which the court may or may not decide to grant. [Just don’t call it ‘climate change’: Rebranding government in the age of Trump] The lawsuit, Juliana v. United States, has garnered international attention, with some experts characterizing it as the “biggest trial of the century.” The 21 plaintiffs, who range in age from 9 to 21, allege that the government has violated their constitutional rights to life, liberty and property by promoting the production of fossil fuels and greenhouse-gas emissions and contributing to the progression of climate change. This, they charge, is a violation of the public-trust doctrine, which dictates that the government must preserve certain common resources for public use, including the climate system, the plaintiffs argue. The case, originally brought against the Obama administration, has been inherited by the Trump administration, which is the major reason the industry groups say they now wish to withdraw. Earlier this week, National Association of Manufacturers Senior Vice President Linda Kelly told The Washington Post that the group evaluates the cases it wishes to be involved with after each election and had decided that “as the dynamics have changed over the last several months, we no longer feel that our participation in this case is needed to safeguard industry and our workers.” The American Fuel and Petrochemical Manufacturers issued a similar statement to The Post on Friday. “AFPM has decided to withdraw from this case, as we are confident that the U.S. Department of Justice will rigorously defend its position and that the court will conclude that setting national environmental policy is the role of Congress and the president,” spokeswoman Diana Cronan wrote. [Scientists just published an entire study refuting Scott Pruitt on climate change] A statement emailed to The Post by API media director Eric Wohlschlegel said, “We continue to focus on the progress the U.S. is making leading the world in reducing carbon and other emissions, and we have full confidence that the courts will recognize that Congress and the Executive branch have the constitutional authority to write and execute the laws of the U.S.” In moving to withdraw from the litigation this week, the industry groups may be able to avoid having to respond to a request for admission from the plaintiffs. This is a series of allegations or complaints presented by the plaintiffs, mainly surrounding the issue of climate change and its effects in this case, that the defendants are required by the court to address. They include questions about the industry’s position on the effects of climate change on water supplies, agriculture and other natural systems, as well as the ability of human societies and natural ecosystems to adapt. The questions are used as a discovery tool in the lawsuit, a means of accumulating evidence for a trial. The deadline for this response had been set for Thursday; the industry defendants had requested an extension until June 7. [Pope Francis presents Trump with a ‘politically loaded gift’: His encyclical on climate change] “After these youths sued the government, the trade associations pleaded their members’ interests would be destroyed if they weren’t allowed to be in the case, but now they are running for the hills,” Julia Olson, co-lead counsel for the plaintiffs and executive director of the advocacy group Our Children’s Trust, said in a statement Thursday evening. “Now, they’ve decided they’re better off being on the sidelines than subjecting themselves to discovery.” The industry groups did not refer to the response deadline as a factor in their decision to withdraw. The lawsuit has already faced a number of hurdles. The Obama administration filed to have the case dismissed — a motion that Judge Ann Aiken, a U.S. District Court judge in Oregon, denied in November in a landmark ruling that cleared the case to continue to trial. More recently, the Trump administration filed an appeal with the U.S. Court of Appeals for the 9th Circuit requesting that Aiken’s ruling be overturned. On May 1, U.S. Magistrate Judge Thomas M. Coffin recommended a denial of the appeal. Judge Aiken has yet to make a final decision on whether to allow the appeal. The court also has the power to decide whether to grant the trade associations’ requests to withdraw from the case. Each group has argued that joining the case is not an irreversible decision and that permitting withdrawal would help simplify the judicial process by reducing the number of parties participating in the proceedings. But Philip Gregory, another co-lead counsel with the plaintiffs, has argued that the motions fail to present a concrete reason for withdrawal. “They plead with the court to let them out, yet fail to give Judge Coffin any reason behind their change of heart,” he said in a statement Thursday.
News Article | May 10, 2017
This story has been updated. The Senate on Wednesday narrowly blocked a resolution to repeal an Obama-era rule restricting methane emissions from drilling operations on public lands — with three Republicans joining every Democrat to preserve the rule. The 51-to-49 vote on a procedural motion marked the first time since Trump’s election that Republicans have failed in their attempt to use the Congressional Review Act to overturn Obama-era rules. Thirteen other resolutions, based on the 1996 law that allows Congress to overturn rules within 60 legislative workdays of their adoption, have succeeded. Thursday is the deadline for using the Congressional Review Act this way. The methane emissions rule, issued by the Interior Department’s Bureau of Land Management in November, addresses a potent greenhouse gas that is accelerating climate change. The rule would force oil and gas companies to capture methane that had been previously burned off or “flared” at drilling sites. According to federal estimates, the rule would prevent roughly 180,000 tons a year of methane from escaping into the atmosphere and would boost federal revenue between $3 million and $13 million a year because firms only pay royalties on the oil and gas they capture and contain. Sen. John McCain (R-Ariz.) unexpectedly voted no against a motion to proceed with consideration of the resolution, along with GOP Sens. Susan Collins (Maine) and Lindsey O. Graham (S.C.). Two Democrats who had considered backing the rule’s elimination — Heidi Heitkamp of North Dakota and Joe Manchin III of West Virginia — voted against the motion, and sent a letter asking Interior Secretary Ryan Zinke to make it less burdensome. In a floor speech after the vote, Sen. Tom Udall (D-N.M.), said “the very first victory” lawmakers have had in beating back a Congressional Review Act bill this year came from a combination of Democratic unity and a few Republicans’ willingness to buck their leadership. “Thank you so much for coming forward and seeing the common-sense nature of this issue,” Udall said, referring to Collins, Graham and McCain. [Earth could break through a major climate threshold in the next 15 years, scientists warn] Jamie Williams, president of the Wilderness Society, hailed the vote as an example of how grass-roots organizing can work. “In recent months, thousands of Americans asked the Senate to stand up for clean air and against the oil lobby, and their efforts were successful today,” he said. Republicans and industry officials said they would now switch their focus to getting the Interior Department to rewrite the rule, and Trump officials confirmed Thursday they would seek to either change or pull it back altogether. Barry Russell, president of the Independent Petroleum Association of America, said his group “looks forward to working with the Interior Department on a targeted, meaningful solution that will achieve the common goal of ensuring the American taxpayers receive a fair and equitable return in the form of royalties while developing a workable regulation, instead of this one-size-fits-all approach.” [EPA dismisses half of key board’s scientific advisers; Interior suspends more than 200 advisory panels] And Senate Environment and Public Works Committee Chairman John Barrasso (R-Wyo.) said in a statement that Interior should withdraw the regulation outright. “If left in place, this regulation will only discourage energy production, job creation, and economic opportunity across the West.” Kate MacGregor, Interior’s acting assistant secretary for land and minerals, said in a statement that as part of President Trump’s energy plan and related executive order, Interior “has reviewed and flagged the Waste Prevention rule as one we will suspend, revise or rescind given its significant regulatory burden that encumbers American energy production, economic growth and job creation.” “The vote today in the Senate doesn’t impact the administration’s commitment to spurring investment in responsible energy development and ensuring smart regulatory protections,” she added. Before this year, Congress had only nullified one rule, a regulation on ergonomics former president Bill Clinton enacted during his final year in office. In less than four months, Republicans have wiped away rules covering everything from limits on the dumping of waste from surface-mining operations to enlarging states’ power to offer retirement accounts to private-sector workers. But the move to strike a rule requiring companies to limit the practice of flaring, or leaking, methane from oil and gas operations on federal and tribal land had given some Republicans — who control 52 seats in the Senate — pause. Many Republicans and fossil-fuel producers criticized the regulation after it was finalized last year, and a resolution to repeal it passed quickly in the House of Representatives at the end of January. But despite Trump’s support, the repeal measure had been sitting in the Senate for months. It had to pass by Thursday to be eligible to be signed into law. Democrats, as well as environmental and public-health groups, ran a months-long campaign to persuade Heitkamp and Manchin not to disclose their position publicly while arguing to centrist Republicans that abolishing the rule would cost taxpayers money as well as harm the environment. [Trump undertakes the most ambitious regulatory rollback since Reagan] Sen. Rob Portman (R-Ohio) also remained on the fence until Monday, when he announced in a statement that he would vote to overturn the BLM regulation. Two other wavering Republicans, Cory Gardner (Colo.) and Dean Heller (Nev.), ultimately joined Portman in voting to proceed with the bill’s consideration. “Unfortunately, the previous administration’s methane rule was not a balanced approach,” Portman said. “As written, it would have hurt our economy and cost jobs in Ohio by forcing small independent operators to close existing wells and slowing responsible energy production on federal lands. There’s a better way.” He added that he believes the Interior Department should still work to reduce venting and flaring on public lands. Last week, Portman wrote to Interior Secretary Ryan Zinke, calling for a commitment that the department would continue to work to reduce methane waste if the Obama rule were reversed. On May 4, Zinke responded, affirming that “the Department is committed to reducing methane waste, and under my leadership, we will take important steps to accomplish this goal.” Environmentalists urged Portman to reconsider. In a statement on Tuesday, Environmental Defense Action Fund Executive Director Fred Krupp said Zinke’s assurances were “unfounded” and argued that the strategies for reducing methane waste outlined in his letter would have little impact. A coalition of industry groups have argued that they are taking steps to reduce fugitive methane emissions because they recognize capturing them can yield additional profits. The American Petroleum Institute noted that the Environmental Protection Agency data, released in March, shows about an 8 percent drop in methane emissions from petroleum production since 2014, largely because of improved gas venting and flaring techniques. The legislative window for Congressional Review Act resolutions to be considered ends Thursday, though a handful of conservative analysts believe that agencies’ failure to submit a two-page report on previous rules to Congress could open the door to reconsideration of dozens of much older rules. Curtis W. Copeland, a regulatory expert who specialized in American government at the Congressional Research Service, said in an email that regardless of how many rules this Congress ultimately overturns, “The CRA can no longer be described as ‘obscure’ or ‘little known.’ It now has to be viewed as a substantive tool of congressional oversight regarding an outgoing President’s rules, and it is likely be used again in the future.” ‘We all knew this was coming’: Alaska’s thawing soils are now pouring carbon dioxide into the air New EPA documents reveal even deeper proposed cuts to staff and programs For more, you can sign up for our weekly newsletter here and follow us on Twitter here.
News Article | May 10, 2017
FILE - In this Oct. 22, 2015 file photo, workers tend to oil pump jacks behind a natural gas flare near Watford City, N.D. The Republican-controlled Congress is moving to overturn an Obama administration rule intended to clamp down on oil companies that burn off natural gas during drilling operations on public lands. (AP Photo/Eric Gay, File) WASHINGTON (AP) — In a surprising win for environmentalists and Democrats and a blow to the fossil-fuel industry, the Senate on Wednesday failed in a bid to reverse an Obama-era regulation restricting harmful methane emissions that escape from oil and gas wells on federal land. The vote was 51-49 in the Republican-led Senate with three GOP lawmakers — Maine's Susan Collins, Lindsey Graham of South Carolina and John McCain of Arizona — joining forces with the Democrats to block efforts to overturn the rule. Graham and Collins had publicly opposed the repeal effort, but McCain's vote surprised many on both sides of the debate. McCain said in a statement he is concerned that the Interior Department rule may be "onerous," but said passage of a resolution undoing the rule through the Congressional Review Act would have prevented the federal government from issuing a similar rule in the future. "I believe that the public interest is best served if the Interior Department issues a new rule to revise and improve the (existing) methane rule" administered by the federal Bureau of Land Management, McCain said. The Obama administration finalized a rule in November that would force energy companies to capture methane that's burned off or "flared" at drilling sites because it earns less money than oil. Energy companies frequently "flare" or burn off vast supplies of methane — the primary component of natural gas — at drilling sites because it earns less money than oil. An estimated $330 million a year in natural gas is wasted through leaks or intentional releases — enough to power about 5 million homes a year. Gas flaring is so prevalent in oil-rich North Dakota that night-time flaring activity on drilling sites is visible in NASA photos from space. For months, Republicans have rammed through reversals of rules issued by President Barack Obama on issues including gun rights, coal production, hunting and money for family planning clinics. The GOP has used the previously obscure Congressional Review Act, which requires just a simple majority in both chambers to overturn rules recently imposed by the executive branch. The latest target was the Interior Department rule on methane. A coalition of groups with ties to the fossil-fuel industry and the conservative Koch Brothers had waged a public campaign to overturn the rule, which they said would decrease energy production on federal lands, raise energy costs and eliminate jobs. Republicans and industry groups call the rule an example of federal overreach under Obama and say it duplicates state rules in place throughout the West. Democrats and environmental groups countered that the rule protects the public health and generates millions of dollars in revenue for state, local and tribal governments. Gleeful Democrats hailed the vote as a breakthrough in the GOP-controlled Congress. "Today's vote is a win for American taxpayers, a win for public health and a win for our climate," said Sen. Ed Markey, D-Mass. "Rejecting this Republican attempt to allow oil and gas companies to continue wasting natural gas owned by the American people will ensure that American taxpayers will not get burned. And it will ensure we don't lose control of managing methane emissions on public lands that contribute to climate change." The American Petroleum Institute, the oil and gas industry's top lobbying group, called the Senate vote disappointing, but said in a statement it looks forward to working with the Trump administration on policies to boost energy production. Jamie Williams, president of the Wilderness Society, an environmental group that had pushed to defend the Obama rule, said the Senate vote was the result of grassroots efforts by voters across the country. "In recent months, thousands of Americans asked the Senate to stand up for clean air and against the oil lobby, and their efforts were successful today," Williams said. For more news videos visit Yahoo View, available now on iOS and Android.
News Article | May 10, 2017
A pumpjack brings oil to the surface in the Monterey Shale, California, in a file photo. REUTERS/Lucy Nicholson WASHINGTON (Reuters) - The U.S. Senate on Wednesday rejected a resolution to revoke an Obama-era rule to limit methane emissions from oil and gas production on federal lands, dealing a blow to President Donald Trump's efforts to free the drilling industry from what he sees as excessive environmental regulation. The Congressional Review Act resolution received just 49 votes after Republican leaders scrambled for weeks to secure the 51 needed to pass it. The resolution would have revoked the rule and prevented similar regulations from being introduced. Getting the Trump administration to repeal the BLM rule had been a top priority of the oil and gas industry. Companies said it was unnecessary, would could cost them tens of thousands of dollars per well and hinder production. But not all Republicans supported the measure, in part because it would have made regulating methane waste more difficult in the future. Republican Senator John McCain of Arizona made a surprise vote against the resolution, joining fellow Republicans Lindsey Graham of South Carolina and Susan Collins of Maine in opposition to torpedo it. "While I am concerned that the BLM rule may be onerous, passage of the resolution would have prevented the federal government, under any administration, from issuing a rule that is ‘similar’," McCain said in a statement. He said the Interior Department should issue a new rule on to replace the existing one on methane leaks, which he called a public health and air quality issue. The rule, finalized by President Barack Obama in his last weeks in office, updated 30-year-old regulations that govern flaring, venting and natural gas leaks from oil and gas production. Obama's administration said it would preserve up to 41 billion cubic feet (BCF) of natural gas per year that is currently lost to leaks and flaring. The American Petroleum Institute and other industry groups have said the methane rule is unnecessary because companies have made strides in reducing leaks on their own. "The rule could impede U.S. energy production while reducing local and federal revenues," said Erik Milito, API's Upstream and Industry Operations Group Director. Members of the Western Energy Alliance, which include Devon Energy , Whiting Petroleum and EOG Resources had also been strongly opposed to the rule. Environmental groups hailed what they depicted as a rare victory for the environment after several regulatory rollbacks by the Trump administration. “In recent months, thousands of Americans asked the Senate to stand up for clean air and against the oil lobby, and their efforts were successful today," said Jamie Williams, president of the Wilderness Society. The Western Values Project estimated that if the rule had been rescinded, the U.S. Treasury would have lost out on $800 million in lost potential royalties from leaked or vented natural gas over the next decade. Republican Senator John Barrasso of Wyoming, chairman of the Senate Committee on Environment and Public Works who supported the resolution to kill the rule, called on Interior Secretary Ryan Zinke to act unilaterally to revoke it.
News Article | May 11, 2017
US Customs and Border Protection (CBP) has withdrawn the proposed modifications to the country’s Jones Act which regulates maritime commerce in US waters and between US ports. The changes, which were presented on January 18, 2017 by President Barack Obama’s administration, would have revoked waivers that helped oil and gas operators to stay in line with restrictions, Reuters cited US Customs and Border Protection’s data. CBP said that, based on the comments received on the matter, both supporting and opposing the proposed action, and CBP’s further research on the issue, “we conclude that the agency’s notice of proposed modification and revocation of the various ruling letters relating to the Jones Act should be reconsidered.” The agency added that the move, relating to customs application of Jones Act to the transportation of certain merchandise and equipment between coastwise points, came info effect on May 10. Following the announcement, the American Petroleum Institute (API) welcomed CBP’s action, describing the proposed modifications as “harmful new Jones Act rulings.” “A recent report projected that this proposal could have resulted in the loss of thousands of American jobs, reduced U.S. oil and natural gas production, and diminished revenues for federal and state government,” Erik Milito, API Upstream Director, said. “By rescinding the proposal, CBP has decided not to impose potentially serious limitations to the industry’s ability to safely, effectively, and economically operate,” Milito added.
News Article | March 3, 2017
The Environmental Protection Agency Thursday announced it was withdrawing a request that operators of existing oil and gas wells provide the agency with extensive information about their equipment and its emissions of methane, undermining a last-ditch Obama administration climate change initiative. The EPA announcement was a first step towards reversing an Obama administration effort – which only got underway two days after Donald Trump’s election – to gather information about methane, a short-lived but extremely powerful climate pollutant which is responsible for about a quarter of global warming to date. The agency cited a letter sent by the attorneys general of several conservative and oil-producing states complaining that the information request “furthers the previous administration’s climate agenda and supports … the imposition of burdensome climate rules on existing sites, the cost and expense of which will be enormous.” Scott Pruitt, the EPA administrator, said the agency took those complaints seriously. “Today’s action will reduce burdens on businesses while we take a closer look at the need for additional information from this industry,” he said in a statement. Environmental advocates saw the move as something else entirely. “With this action, Administrator Pruitt is effectively telling oil and gas companies to go ahead and withhold vital pollution data from the American public,” Mark Brownstein, vice president climate and energy at the Environmental Defense Fund, said in an interview. “This was a good faith effort on the part of the agency to collect additional information on oil and gas industry operations and the pollution that comes from them. [Now], it’s a complete lack of transparency.” The EPA announcement further advances efforts by the White House and Republicans in Congress to undo the Obama administration’s efforts to regulate emissions from oil and gas production. Congress, through the Congressional Review Act, is already moving to dismantle an Interior Department regulation, finished very late in the Obama administration, that would have restricted methane emissions from wells drilled on public lands in particular. The EPA did not issue its request for information from companies until November 10, two days after Donald Trump was elected president. “The exercise imposed significant costs on companies to produce additional paperwork and added unnecessary burdens on producers’ technical teams to prepare and submit rushed comments under enormous time constraints,” said Lee Fuller, executive vice president of the Independent Petroleum Association of America, in a statement. But the EPA announcement could result in the United States emitting more greenhouse gases to the atmosphere in coming years. At the very least, it means that the United States will not be tracking those emissions as closely. Not everyone, however, thinks that withdrawing an information request is the same as an intention not to regulate. “The withdraw doesn’t necessarily means that the Trump folks are not planning to regulate methane from existing oil and gas operations,” said Jeffrey Holmstead, a former EPA deputy administrator and a lawyer with Bracewell LLP, which has clients in the energy industry. “They may well come out with a less-burdensome request at some point, but they needed to withdraw the Obama request right away to ensure that the industry wouldn’t be forced to spend a lot of money to produce information that may not be necessary.” The Obama administration’s efforts to tackle methane emissions got going in May last year when the EPA announced new regulations to restrict methane emissions from new or modified oil and gas operations. Simultaneously, the agency sent out an information request to existing facilities — by far a bigger source of methane — asking for them to provide extensive information about their emissions and how they were seeking to control them. This was widely considered as a first step towards an eventual regulation of these facilities, as well. The request for information was a way of “really launching our work to address methane emissions from existing sources,” EPA administrator Gina McCarthy said at the time. But after Trump’s inauguration, the EPA began to give companies more time to supply that information. Many of those companies assumed that the request itself would ultimately be undone. Now, it has. “This step will reduce the significant uncertainties and burdens on the oil and gas industry,” Howard Feldman, senior director for regulatory and scientific affairs at the American Petroleum Institute, said in a statement. “The United States is leading the world in the production and refining of oil and natural gas and in the reduction of carbon emissions, and we look forward to working with the administration on lawful, common sense regulations that create jobs and benefit American consumers.” But Vera Pardee, a senior attorney with the Center for Biological Diversity’s Climate Law Institute, said the “appalling decision” demonstrates how Pruitt is turning the EPA into an oil industry vending machine.” “Just one day after oil-friendly state governments complain about efforts to collect methane pollution data, out pops this cancellation,” she said in a statement. “The Trump administration doesn’t want this data because it doesn’t want to rein in oil companies’ massive emissions of this dangerous greenhouse gas.”