Archive for November, 2010

GAO Aims for Richer Government and Cleaner Air by Capturing Lost Gas

Photo Source: EPA and GAO. Some rights reserved.

Written in October, but released just yesterday, the GAO has published a report on the opportunities and benefits of capturing wily gas on federal leases that is currently either released into the atmosphere (vented) or burned (flared).

The Department of the Interior (DOI) leases public lands for oil and natural gas development as a source of federal income. DOI’s Bureau of Land Management (BLM) manages leases onshore, and the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) is responsible for offshore leases.

According to the GAO, the DOI received around $9 billion in royalties from these leases in 2009. However, the GAO posits that those royalties could be substantially increased (and GHG emissions substantially decreased) if the DOI took steps to curb gas lost to leaks and releases from ongoing operational and safety procedures. It is this gas which must be vented or flared, processes which not only throw away royalties, but add to climate change – venting releases methane, and flaring emits carbon dioxide, both of which are greenhouse gases.

As a part of this study, GAO was asked to “(1) examine available estimates of the vented and flared natural gas on federal leases, (2) estimate the potential to capture additional gas with available technologies and associated potential increases in royalty payments and decreases in greenhouse gas emissions, and (3) assess the federal role in reducing venting and flaring.”

Interestingly enough, EPA data and GAO analysis suggest that nearly 40 percent of vented and flared gas (from onshore federal leases) could be “economically captured with currently available control technologies,” increasing royalty payments by about $23 million, and reducing GHG emissions by more than 16 million metric tons! You can read the report for the full set of recommendations, but generally the GAO proposes that Interior “improve its venting and flaring data and address limitations in its regulations and guidance.” (The BLM currently uses guidance from 1980. See NTL-4A.)

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While the DOI has official oversight responsibilities for federal leases, the EPA voluntarily works with the oil and gas industry to encourage gas saving technology. Read more here: Natural Gas STAR program.

To view federal oil and gas operations regulations, see the following CFR Parts:
43 CFR Part 3160 (onshore) and 30 CFR Part 250 (offshore).

Candy is Dandy and Liquor is Quicker, but Mothballs Make You Sicker

The EPA is asking you to join in the investigation of Fuji Lavender Moth Tablets, a whimsically-packaged toxic pesticide from China that snuck past the U.S. border without EPA registration.

Pretty, pretty Fuji Lavender Moth Tablets. Photo courtesy of the EPA.

Nearly 5,000 packages of Fuji Lavender Moth Tablets were discovered in a warehouse in Kearny, New Jersey – all without an EPA-approved label. Lack of registration with the EPA means that a product may have not been thoroughly tested for toxicity, nor assessed for proper use and disposal. These illegal pesticide products may also contain unlisted ingredients. (Read more about illegal pesticide products here.)

What makes the already unfortunate infraction worse is the colorful packaging that may make these misleading “treats” appealing to children. According to the EPA, even inhaling the para-dichlorobenzene in these candy-like mothballs can lead to vomiting, diarrhea, respiratory distress and other illnesses. Swallowing it can damage the nervous system and, in extreme cases, can cause coma or death.

Drawing aesthetic comparisons between toxic products and delightful edibles reminded me of a poster in my doctor’s office growing up, which juxtaposed potentially dangerous pills with popular candies or gum. Thus well-informed, the holiday spirit never moved me to adorn my office desk with a bowl of green Ferrous Gluconate and red Mesoridazine.

The EPA is trying to determine whether or not Fuji Tablets have made it into stores. If you have seen or purchased Fuji Lavender Moth Tablets, you should contact them at 732-321-4461.

FERC’s VER NOPR

Late last week, FERC released, amidst investigations, an Order, and an enforcement recap, a Notice of Proposed Rulemaking (NOPR) that helps set the stage for reliability and integration of rapidly-growing renewable energy sources.

Photo by Brian Shaw. Some rights reserved.

The proposed reforms update requirements for public utility transmission providers to help address the irregularity of energy derived from such sources as solar, wind, and hydrokinetic facilities. Variable Energy Resources (VERs), as they are called, are defined by their renewability, but even more so by their inability to be stored and the fact that level of production is out of the hands of the facility operator.

According to a recent Mayer Brown Legal Update, this variability can strain transmission systems, and, in return, the transmission systems may impose unanticipated costs on the generators and purchasers of such power. To help ensure “undue discrimination and unjust and unreasonable rates,” FERC is specifically proposing to: (1) require public utility transmission providers to offer 15-minute transmission scheduling; (2) require interconnection customers whose generating facilities are variable energy resources to provide meteorological and operational data to public utility transmission providers for the purpose of power production forecasting; and (3) add a generic ancillary service rate schedule through which public utility transmission providers will offer regulation service to transmission customers delivering energy from a generator located within the transmission provider’s balancing authority area.

FERC hopes that together, these three changes will remove barriers to the integration of VERs. Mayer Brown anticipates that, “if adopted, the proposed rules should promote the stability of the transmission system, encourage the development of wind and solar power, and provide greater certainty for all parties as to the costs that VERs and the purchasers of their output must bear.”

The NOPR is based on a Notice of Inquiry that was published earlier this year and subsequent comments from stakeholders. If you’d like to comment on the current NOPR, you can submit your thoughts within 60 days of publication in the Federal Register, Docket RM10-11-000.

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You can view FERC’s related studies and other materials on their Integration of Renewables page.

Van Ness Feldman has also published a detailed Issue Alert on the topic.

Snow, Salt, and Sand

Here in Seattle, we’re bundling up our extremities, blasting our heaters, and preparing for the treacherous and snail-paced commutes that come hand-in-hand with the first snowstorm of the year.

Photo by Peter Whitcomb. Some rights reserved.

A predicted 1.5 inches might not sound like much to the snow-savvy, but here in the Northwest, we’re ill-equipped to clear our roads in a hurry. In 2008’s “snowpocalypse” deicing nightmare, favoring sand over salt left us with icy, icy streets and a debate that has yet to be settled.

Salt, according to the EPA, “contributes to the corrosion of vehicles and infrastructure and can damage water bodies, ground water, and roadside vegetation.” Sand, however, when overused, “often ends up in the environment, either as dust particles that contribute to air pollution or in runoff to streams and rivers.”

Local news site PubliCola reports that Seattle’s Mayor McGinn has a new snow response plan – and it calls for both salt and sand. Before you voice your opinion loudly in front of those you aim to impress, best gather all the facts from the following EPA guidance:

Managing Highway Deicing to Prevent Contamination of Drinking Water

Road Salt Application and Storage

What You Should Know About Safe Winter Roads and the Environment

Last Week in Environmental Contingencies and Proceedings Disclosure

As we posted a few weeks ago, public companies must generally disclose material legal proceedings in their annual and quarterly reports to the SEC. Today we check back in with some recent filings to see who is disclosing what in the land of environmental enforcement.

 

Environmental Litigation. On December 1, 2000, a section of the lower Willamette River known as the Portland Harbor was included on the National Priorities List at the request of the U.S. Environmental Protection Agency (the “EPA”). While the Company’s Portland, Oregon manufacturing facility does not border the Willamette River, an outfall from the facility’s storm water system drains into a neighboring property’s privately owned slip. The Company and over 100 other parties have been notified by the EPA and the Oregon Department of Environmental Quality (the “ODEQ”) of potential liability under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”). As of September 2010, more than 280 potentially responsible parties on and nearby the river have been asked to file information disclosure reports with the EPA. By agreement with the EPA, the ODEQ is charged with ensuring that all upland sites have “source control” to prevent future contamination to the river. A remedial investigation and feasibility study of the Portland Harbor is currently being directed by a group of potentially responsible parties known as the Lower Willamette Group (the “LWG”). The Company made a payment of $175,000 to the LWG in June 2007 as part of an interim settlement, and is under no obligation to make any further payment. A draft remedial investigation report was submitted to the EPA by the LWG in the fall of 2009. The feasibility study is underway and is expected to be completed by the LWG in 2011.”

 

  • KATY INDUSTRIES INC | Form 10-Q | 11/15/2010

“The matter with W. J. Smith, a subsidiary of the Company, originated in the 1980s when the United States and the State of Texas, through the Texas Water Commission, initiated environmental enforcement actions against W.J. Smith alleging that certain conditions on the W.J. Smith property (the “Property”) violated environmental laws. In order to resolve the enforcement actions, W.J. Smith engaged in a series of cleanup activities on the Property and implemented a groundwater monitoring program.

In 1993, the EPA initiated a proceeding under Section 7003 of the Resource Conservation and Recovery Act (“RCRA”) against W.J. Smith and the Company. The proceeding sought certain actions at the site and at certain off-site areas, as well as development and implementation of additional cleanup activities to mitigate off-site releases. In December 1995, W.J. Smith, the Company and the EPA agreed to resolve the proceeding through an Administrative Order on Consent under Section 7003 of RCRA. While the Company has completed the cleanup activities required by the Administrative Order on Consent under Section 7003 of RCRA, the Company still has further post-closure obligations in the areas of groundwater monitoring and ongoing site operations and maintenance costs, as well as potential contractual obligations related to real estate matters.

Since 1990, the Company has spent in excess of $7.0 million undertaking cleanup and compliance activities in connection with this matter. While ultimate liability with respect to this matter is not easy to determine, the Company has recorded and accrued amounts that it deems reasonable for prospective liabilities with respect to this matter.”

 

  • MACE SECURITY INTERNATIONAL INC | Form 10-Q | 11/15/2010

“During January 2008, the United States Environmental Protection Agency (the “EPA”) conducted a site investigation at the Company’s Bennington, Vermont location and the building within which the facility is located. The Company leases 33,476 square feet of the building from Vermont Mill Properties, Inc. (“Vermont Mill”). The site investigation was focused on whether hazardous substances were being improperly stored. After the site investigation, the EPA notified the Company and the building owner, Benmont Mill Properties, Inc. (“Benmont”), that remediation of certain hazardous wastes was required. Vermont Mill and Benmont are both owned and controlled by Jon Goodrich, the president of the Company’s defense spray division. The EPA, the Company and the building owner entered into an Administrative Consent Order under which the hazardous materials and waste were remediated. All remediation required by the Administrative Consent Order was completed within the time allowed by the EPA and a final report regarding the remediation was submitted to the EPA in October 2008, as required by the Administrative Consent Order. On September 29, 2009, the EPA accepted the final report. On February 23, 2010, the EPA issued the Company an invoice for $240,096 representing the total of the EPA’s oversight costs that the Company and Benmont were obligated to pay under the Administrative Consent Order […] A total estimated cost of approximately $786,000 relating to the remediation, which includes disposal of the waste materials, as well as expenses incurred to engage environmental engineers and legal counsel and reimbursement of the EPA’s costs, has been recorded through September 30, 2010, leaving an expense accrual balance of $6,000 at September 30, 2010.

The United States Attorney for the District of Vermont (the “U.S. Attorney”) is conducting an investigation of the Company relating to possible violations of the Resource Conservation and Recovery Act (“RCRA”) at the Company’s Bennington, Vermont location. The Company believes the investigation is focused on the same facts that resulted in the Company entering into the Administrative Consent Order. The U.S. Attorney subpoenaed documents which were supplied by the Company in 2008. During 2009 and 2010, the U.S. Attorney interviewed several persons in connection with its investigation before a grand jury. The U.S. Attorney has advised the Company that it is actively pursuing its investigation and may likely bring a criminal charge against the Company. The Company has made no provision for any future costs associated with the investigation as it cannot estimate the amount of any potential costs or fines.”

EPA Takes You To School

Earlier this week, the EPA released draft voluntary guidelines intended to help local officials and community members select safe locations for establishing new schools. According to the EPA, more than 1,900 new schools (serving about 1 million children and costing more than $13 billion) opened in the 2008-2009 school year. In the case of such large scale projects, prevention is key. As the EPA points out, “the potential impacts on children’s health and education, as well as the damage to the community when school environmental hazards are later identified, are significant.”

Photo by The-Lane-Team. Some rights reserved.

The guidance materials were developed pursuant to a provision in 2007’s Energy Independence and Security Act (see Subtitle E—Healthy High-Performance Schools) that required the EPA – along with the Departments of Education and Health and Human Services – to develop model guidelines on school siting that took into consideration “special vulnerabilities of children to hazardous substances or pollution exposures in any case in which the potential for contamination at a potential school site exists,” as well as transportation availability and energy efficiency.

While I scoured the EPA website for “the draft guidelines” document, it turns out that the guidelines, at this point at least, are only a collection of topical webpages that include tables, charts, FAQs, and lots and lots of bullet points. The three main content areas are: siting criteria, environmental review process, and public involvement, but the information is also broken up by stakeholder, and there are sections for parents/teachers, local officials, state officials, and tribal officials. Siting criteria range from “air quality” and “impact on community’s long range vision” to impacts on the environment from the school, such as “changes to surface and storm water drainage patterns” and “loss of habitat, including for endangered species.”

Initial versions of the guidelines were refined based on input from a special task group comprising a wide range of stakeholders. If you weren’t lucky enough to sit on the task group, it’s not too late to give feedback. Once you have reviewed the draft guidelines, you can submit comments here. Comments will be accepted until February 18, 2011.

Leaked Corps Notice Favors Renewable Energy Over Wetlands

Will the Army Corps of Engineers move forward with a plan to permit construction of renewable energy facilities on wetlands and streams?

Original photos by TANAKA Juuyoh and Nigel Cox. Some rights reserved.

A draft proposal leaked earlier last week reveals that the Corps is contemplating creating three new nationwide permits (NWPs) that would allow for the discharge of dredged or fill material into non-tidal waters of the United States for the construction, expansion, modification, or improvement of renewable energy productive facilities.

The proposed permits cover “land-based” solar, wind, or geothermal projects, “hydrokinetic” (wave, tidal, current) projects, and wind or geothermal projects sited in navigable waters. All the permits propose a one-acre limit on project sites, with the loss of no more than 300 linear feet of stream bed. The permits make unfortunate allowances for attendant features such as roads, parking lots, and utility lines.

According to a recent Chapman and Cutler Update (see the third story down), the permit requirements for these renewable energy projects would be more relaxed than those of their traditional counterparts. Nonprofit Public Employees for Environmental Responsibility (PEER), who published the leaked proposal, points out that “in most areas of the country, Nationwide Permits limit or eliminate review by the Environmental Protection Agency (EPA), Fish and Wildlife Service, and National Marine Fisheries Service.”

It is difficult to say whether the Corps sees the trade off of wetlands for renewable energy facilities a net gain for the environment, or whether they are yet another government agency feeling compelled to usher “green” projects to the front of the line (see: USPTO’s Green Technology Pilot Program). Care to tell them your opinion? Though it is unclear when the proposal will be published in the federal register, once it is, you will have 60 days to submit comments.

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You can review current Nationwide Permits Information here.

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