Archive for October, 2011

Crouching NOA, Hidden EIS: Last Week In Environmental Impact Statements

While Federal agencies are required to prepare Environmental Impact Statements in accordance with 40 CFR Part 1502, and to file the EISs with the EPA as specified in 40 CFR 1506.9, the EPA doesn’t yet provide a central repository for filing and viewing EISs electronically. Instead, each week they prepare a digest of the preceding week’s filed EISs, which is published every Friday in the Federal Register under the title, “Notice of Availability” (NOA).

We’ve done the dirty work for you. Below, we’ve located and linked to the EISs referenced in last week’s NOA. Please note that some of these documents can be very large, and may take a while to load.

You can read any available EPA comments on these EISs here.

* * *

EIS No. 20110357, Draft EIS, BLM, NV, Phoenix Copper Leach Project, Proposed Construction and Operation of a New Copper Benfication Facility, Lander County, NV, Comment Period Ends: 12/12/2011, Contact: Dave Davis (775) 635–4000.

EIS No. 20110358, Draft EIS, USFS, ID, Mill Creek—Council Mountain Landscape Restoration Project, Proposed Landscape Restoration Treatment Activities on 51,975 Acres, Council Ranger District, Payette National Forest, Adams County, ID, Comment Period Ends: 12/12/2011, Contact: Steve Penny (208) 253–0164.

EIS No. 20110359, Final EIS, BLM, AZ, Northern Arizona Proposed Withdrawal Project, Proposed 20–Year Withdrawal of Approximately 1 Million Acres of Federal Mineral Estate, Coconino and Mohave Counties, AZ, Review Period Ends: 11/28/2011, Contact: Scott Florence (435) 688–3200.

EIS No. 20110360, Draft EIS, USFS, AK, Tonka Timber Sale Project, Proposed Timber Harvesting, Petersburg Ranger District, Tongass National Forest, Petersburg, AK, Comment Period Ends: 12/12/2011, Contact: Carey Case (907) 772–3871.

EIS No. 20110361, Draft EIS, BLM, 00, Programmatic—Solar Energy Development in Six Southwestern States, To Identifying and Prioritizing Specific Location Best Suited for Utility-Scale Solar Energy Development on Public Land, AZ, CA, NV, CO, UT and NM, Comment Period Ends: 01/27/2012, Contact: Shannon Stewart (202) 912–7219.

EIS No. 20110362, Final EIS, NOAA, 00, Generic—Annual Catch Limits/Accountability Measures Amendment for the Gulf of Mexico Fishery Management Council’s Red Drum, Reef Fish, Shrimp, Coral and Coral Reefs, Fishery Management Plans, Implementing the National Standard 1 Guidelines, Review Period Ends: 11/28/2011, Contact: Roy E. Crabtree (727) 824–5305.

EIS No. 20110363, Final EIS, NOAA, 00, Amendment 2 to the Fishery Management Plan of Puerto Rico and the U.S. Virgin Islands and Amendment 5 to the Reef Fish Fishery Management Plan of Puerto Rico and the U.S. Virgin Islands, Implementation of Annual Catch Limits (ACLs) and Accountability Measures (AMs) for Reef Fish and Queen Conch in the U.S. Caribbean, Review Period Ends: 11/28/2011, Contact: Roy E. Crabtree (727) 824–5308.

EIS No. 20110364, Draft EIS, NRC, MI, Enrico Fermi Unit 3 Combined License (COL) Application, Construction and Operation of a Power Reactor, U.S. Corp of Engineer 10 and 404 Permits, NUREG–2105, Monroe County, MI, Comment Period Ends: 01/10/2012, Contact: Bruce Olson (301) 415–3731.

EIS No. 20110365, Final EIS, FHWA, UT, Provo Westside Connector Project, Improvements to Interstate 15/University Avenue/1860 South Interchange to 3110 West Street in Provo, UT, Review Period Ends: 11/28/2011, Contact: Edward Woolford (801) 955–3500.

EIS No. 20110366, Final EIS, USFS, 00, Nationwide Aerial Application of Fire Retardant Project, Proposing to Continue the Aerial Application of Fire on National Forest System Lands, Implementation, Review Period Ends: 11/28/2011, Contact: Glen Stein (202) 205–1588.

Amended Notices

EIS No. 20110355, Final EIS (scroll halfway down the page), FHWA, CA, Northwest Corridor Improvements, I–75/I–575 Construction, New Alternative, USACE Section 404 Permit, NPDES Permit, Cobb and Cherokee Counties, GA, Review Period Ends: 11/21/2011, Contact: Rodney N. Barry (404) 562–3630.

Revision to FR Notice Published 10/21/2011: Correction to the State from CA to GA.

This Week in Environmental Disclosure

As we’ve posted in the past, public companies must generally disclose environmental legal proceedings in various reports to the SEC, and whether or not those proceedings have a material effect on the company’s financial position. Companies may also disclose business risks related to current or pending environmental regulation.

Below is the juiciest stuff we could find that was filed with EDGAR this week.

* * *

  • RAILAMERICA INC /DE | Form 10-Q | 10/27/2011

On August 28, 2005, a railcar containing styrene located on the Company’s Indiana & Ohio Railway (“IORY”) property in Cincinnati, Ohio, began venting, due to a chemical reaction. Styrene is a potentially hazardous chemical used to make plastics, rubber and resin. In response to the incident, local public officials temporarily evacuated residents and businesses from the immediate area until public authorities confirmed that the tank car no longer posed a threat. As a result of the incident, several civil lawsuits were filed, and claims submitted, against the Company and others connected to the tank car. Motions for class action certification were filed. Settlements were achieved with what the Company believes to be all potential individual claimants. In cooperation with the Company’s insurer, the Company paid settlements to a substantial number of affected businesses, as well. All business interruption claims were resolved. Total payments exceeded the self insured retention, so the IORY’s liability for civil matters was exhausted. The incident also triggered inquiries from the Federal Railroad Administration (“FRA”) and other federal, state and local authorities charged with investigating such incidents. A settlement was reached with the FRA, requiring payment of a $50,000 fine but no admission of liability by the IORY. Because of the chemical release, the U.S. Environmental Protection Agency (“U.S. EPA”) investigated whether criminal negligence contributed to the incident, and whether charges should be pressed. A series of conferences with the Company’s attorneys and the U.S. EPA attorneys took place through 2009 and into 2011, at which times legal theories and evidence were discussed in an effort to influence the U.S. EPA’s charging decision. The IORY submitted a proffer addendum in May 2009 analyzing its compliance under the Clean Air Act. The statute of limitations was extended by a tolling agreement as to the IORY only (the Company had been dropped from this violation) through February 27, 2011. The U.S. EPA attorneys decided not to press charges and allowed the statute of limitations to lapse resolving this matter. As a result, the Company released approximately $1.2 million previously accrued for this incident, in Casualties and insurance on the Consolidated Statements of Operations, in February 2011.

 

  • SHERWIN WILLIAMS CO | Form 10-Q | 10/27/2011

Reference is made to the following legal proceeding brought by the United States Environmental Protection Agency — Region III (the “EPA”) in Philadelphia, Pennsylvania, which was reported in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2010. On June 23, 2010, the Company received correspondence from EPA alleging that the Company had violated the Resource Conservation and Recovery Act and the State of Maryland Hazardous Waste Management Regulations at the Company’s manufacturing facility in Baltimore, Maryland. The EPA alleged various violations, including those relating to handling drums, totes and other containers, addressing spills of hazardous waste, and recordkeeping and other regulatory activities. During the third quarter of 2011, the Company entered into a consent agreement and final order with the EPA pursuant to which the Company paid a civil penalty of $570,000 in settlement of the EPA’s allegations.

 

  • CONSUMERS ENERGY CO | Form 10-Q | 10/27/2011

Bay Harbor: As part of the development of Bay Harbor by certain subsidiaries of CMS Energy, and under an agreement with the MDEQ, third parties constructed a golf course and park over several abandoned CKD piles left over from the former cement plant operations on the Bay Harbor site. The third parties also undertook a series of response activities, including constructing a leachate collection system in one area where CKD-impacted groundwater was entering Little Traverse Bay. Leachate is produced when water enters into the CKD piles. In 2002, CMS Energy sold its interest in Bay Harbor, but retained its obligations under environmental indemnities entered into at the start of the project.

In 2005, the EPA, along with CMS Land and CMS Capital, voluntarily executed an Administrative Order on Consent under Superfund, and the EPA approved a Removal Action Work Plan to address contamination issues. Collection systems required under the plan have been installed and effectiveness monitoring of the systems at the shoreline is ongoing. CMS Land, CMS Capital, and the EPA agreed upon augmentation measures to address areas where pH measurements were not satisfactory. Several augmentation measures were implemented and completed in 2009, with the remaining measure completed in 2010.

In May 2011, CMS Energy received approval from the EPA on a revised scope of remedies that CMS Energy had submitted in December 2010. CMS Energy is presently in negotiations with the MDEQ to finalize an agreement that will identify the remaining final remedies at the site. In December 2010, the MDEQ issued an NPDES permit that authorizes CMS Land to discharge treated leachate into Little Traverse Bay. This permit requires renewal every five years. Discharge of treated leachate under the permit commenced at the East Park portion of the Bay Harbor site in October 2011. Additionally, CMS Land has committed to investigate the potential for a deep injection well on the Bay Harbor site as an alternative long-term solution to the leachate disposal issue. In 2008, the MDEQ and the EPA granted permits for CMS Land or its wholly owned subsidiary, Beeland Group LLC, to construct and operate an off-site deep injection well in Antrim County, Michigan, to dispose of leachate from Bay Harbor. Certain environmental groups, a local township, and a local county filed lawsuits appealing the permits. The legal proceeding was stayed in 2009 and can be renewed by either party at any time.

 

  • WASTE MANAGEMENT INC | Form 10-Q | 10/27/2011

As of September 30, 2011, we had been notified that we are a PRP in connection with 79 locations listed on the EPA’s Superfund National Priorities List, or NPL. Of the 79 sites at which claims have been made against us, 17 are sites we own. Each of the NPL sites we own was initially developed by others as a landfill disposal facility. At each of these facilities, we are working in conjunction with the government to characterize or remediate identified site problems, and we have either agreed with other legally liable parties on an arrangement for sharing the costs of remediation or are working toward a cost-sharing agreement. We generally expect to receive any amounts due from other participating parties at or near the time that we make the remedial expenditures. The other 62 NPL sites, which we do not own, are at various procedural stages under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, known as CERCLA or Superfund.

The majority of these proceedings involving NPL sites that we do not own are based on allegations that certain of our subsidiaries (or their predecessors) transported hazardous substances to the sites, often prior to our acquisition of these subsidiaries. CERCLA generally provides for liability for those parties owning, operating, transporting to or disposing at the sites. Proceedings arising under Superfund typically involve numerous waste  generators and other waste transportation and disposal companies and seek to allocate or recover costs associated with site investigation and remediation, which costs could be substantial and could have a material adverse effect on our consolidated financial statements. At some of the sites at which we have been identified as a PRP, our liability is well defined as a consequence of a governmental decision and an agreement among liable parties as to the share each will pay for implementing that remedy. At other sites, where no remedy has been selected or the liable parties have been unable to agree on an appropriate allocation, our future costs are uncertain.

 

Corning has been named by the Environmental Protection Agency (the Agency) under the Superfund Act, or by state governments under similar state laws, as a potentially responsible party for 18 hazardous waste sites. Under the Superfund Act, all parties who may have contributed any waste to a hazardous waste site, identified by the Agency, are jointly and severally liable for the cost of cleanup unless the Agency agrees otherwise. It is Corning’s policy to accrue for its estimated liability related to Superfund sites and other environmental liabilities related to property owned by Corning based on expert analysis and continual monitoring by both internal and external consultants. At September 30, 2011, and December 31, 2010, Corning had accrued approximately $30 million (undiscounted) for the estimated liability for environmental cleanup and related litigation. Based upon the information developed to date, management believes that the accrued reserve is a reasonable estimate of the Company’s liability and that the risk of an additional loss in an amount materially higher than that accrued is remote.

 

  • Dr Pepper Snapple Group, Inc. | Form 10-Q | 10/26/2011

The federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, also known as the Superfund law, as well as similar state laws, generally impose joint and several liability for cleanup and enforcement costs on current and former owners and operators of a site without regard to fault or the legality of the original conduct. In October 2008, DPS was notified by the Environmental Protection Agency that it is a potentially responsible party for study and cleanup costs at a Superfund site in New Jersey. Investigation and remediation costs are yet to be determined, but through September 30, 2011, the Company paid approximately $425,000 since the notification for DPS’ allocation of costs related to the study for this site.

We like cheap goods! No, wait, we hate cheap goods!

Photo by Dominic's pics. Some rights reserved.

SolarWorld Industries America Inc., represented by law firm Wiley Rein, has filed petitions with the U.S. Department of Commerce and the International Trade Commission (ITC), requesting antidumping and countervailing duty investigations into imports of solar cells from China.

Specifically, the petitions claim that Chinese manufacturers of solar products are “illegally dumping crystalline silicon solar cells into the U.S. market,” and “are receiving massive illegal subsidies from the Chinese government,” according to a news release from the Coalition for American Solar Manufacturing – a group made up of the seven U.S. producers of solar cells and panels that are behind the petition, led by SolarWorld (SolarWorld is the only manufacturer involved in the kerfuffle whose name has been released).

The news release goes on to claim that, “[a]s a result of the dumping and illegal subsidies, the U.S. industry is suffering severe harm to employment, pricing, production and shipment.”

Following the petition came a notice from the ITC, announcing the institution of antidumping and countervailing duty investigations to determine whether “there is a reasonable indication that an industry in the United States is materially injured or threatened with material injury, or the establishment of an industry in the United States is materially retarded, by reason of imports from China of crystalline silicon photovoltaic cells and modules, […] that are alleged to be sold in the United States at less than fair value and alleged to be subsidized by the Government of China.” The ITC must reach a preliminary determination in antidumping and countervailing duty investigations in 45 days. You can follow the ITC’s investigation here.

Salazar to Oversee U.S. Extractive Industries Transparency Initiative

Photo by Clinton Steeds. Some rights reserved.

The White House announced yesterday evening in a press release the appointment of Interior Secretary Ken Salazar as the Obama administration’s “Senior Official Responsible for Oversight of Implementation of Extractive Industries Transparency Initiative.” This announcement comes a month after President Obama announced that the U.S. would become a part of an eight-year-old pact between countries to ensure that federal profits from energy and mining industries go towards providing public benefits, as part of the United States Open Government National Action Plan that was released last month.

The U.S. itself collects nearly $10 billion a year from these industries, and this EITI ensures that these profits will be closely monitored and publicly disclosed. The international program aims to clean up corruption involving these industries in underdeveloped yet mineral-rich countries in Africa and the Middle East. The Press Release assures that the implementation of the EITI is just “the latest in a long series of steps designed to make the U.S. government more open and more accountable to the American people.”

“U.S. vs. EU ETS” More Than One Year Later

Photo by chimothy27. Some rights reserved.

While I had every intention of throwing the Green Mien a one-year anniversary party, the day (September 8th) slipped by unnoticed.

One thing that hasn’t slipped by unnoticed? The European Union’s Emissions Trading Scheme (ETS), which was spotlighted on the Green Mien just over a year ago.

The EU’s Directive 2008/101/EC, which requires airlines with operations “to, from and within the EU” to limit their aircrafts’ carbon dioxide emissions and/or buy allowances to cover their emissions, is still scheduled to go into effect in 2012. But to say it’s an unpopular plan stateside would be an understatement.

Just yesterday, the House of Representatives passed a bill (H.R. 2594) that prohibits “operators of civil aircraft of the United States from participating in the European Union’s emissions trading scheme.” There will be no playing nicely with others here.

H.R. 2594 calls the EU trading scheme “inconsistent with long-established international law and practice,” claiming that it “undermines ongoing efforts at the International Civil Aviation Organization to develop a unified, worldwide approach to reducing aircraft greenhouse gas emissions and has generated unnecessary friction within the international civil aviation community as it endeavors to reduce such emissions.”

The Hill’s Floor Action Blog has more.

Crouching NOA, Hidden EIS: Last Week In Environmental Impact Statements

While Federal agencies are required to prepare Environmental Impact Statements in accordance with 40 CFR Part 1502, and to file the EISs with the EPA as specified in 40 CFR 1506.9, the EPA doesn’t yet provide a central repository for filing and viewing EISs electronically. Instead, each week they prepare a digest of the preceding week’s filed EISs, which is published every Friday in the Federal Register under the title, “Notice of Availability” (NOA).

We’ve done the dirty work for you. Below, we’ve located and linked to the EISs referenced in last week’s NOA. Please note that some of these documents can be very large, and may take a while to load.

You can read any available EPA comments on these EISs here.

* * *

EIS No. 20110349, Final EIS, USFS, NV, Ely Westside Rangeland Project, Authorization of Livestock Grazing, To Improve the Health of the Land and To Protect Essential Ecosystem Functions and Values, Implementation, Humboldt-Toiyabe National Forest, Lincoln, Nye, and Pine Counties, NV, Review Period Ends: 11/21/2011, Contact: Vern Keller 775–355–5356.

EIS No. 20110350, Draft EIS, USFS, AZ, Rosemont Copper Project, Proposed Construction, Operation with Concurrent Reclamation and Closure of an Open-Pit Copper Mine, Coronado National Forest, Pima County, AZ, Comment Period Ends: 01/18/2012, Contact: Bev Everson 520–388–8300.

EIS No. 20110351, Final EIS, BLM, OR, North Steens 230-kV Transmission Line Project, Construction and Operation of a Transmission Line and Access Roads Associated with the Echanis Wind Energy Project, Authorizing Right-of-Way Grant, Harney County, OR, Review Period Ends: 11/21/2011, Contact: Skip Renchler 541–573–4443.

EIS No. 20110352, Final EIS, FHWA, CA, Yerba Buena Island Ramps Improvement Project on Interstate 80 (I–80), Proposals to Replace the Existing Westbound on- and off-ramp, Funding, San Francisco County, CA, Review Period Ends: 11/21/2011, Contact: Melanie Brent 510–286–5231.

EIS No. 20110353, Draft EIS, USFS, UT, Fishlake National Forest Oil and Gas Leasing Analysis Project, To Exploration, Development, and Production of Mineral and Energy Resources and Reclamation of Activities, Beaver, Garfield, Iron, Juab, Millard, Piute, Sanpete, Sevier, and Wayne Counties, UT, Comment Period Ends: 12/05/2011, Contact: Diane Freeman 435–896–1050.

EIS No. 20110354, Draft EIS, NOAA, AS, Fagatele Bay National Marine Sanctuary, Management Plan, Implementation, along the southwestern coast of Tutuila Island, AS, Comment Period Ends: 01/06/2012, Contact: Gene Brighouse 684–633–5155 Ext 264.

EIS No. 20110355, Final EIS (scroll down a bit), FHWA, GA, Northwest Corridor Improvements, I–75/I–575 Construction, New Alternative, USACE Section 404 Permit, NPDES Permit, Cobb and Cherokee Counties, GA, Review Period Ends: 11/21/2011, Contact: Rodney N. Barry 404–562–3630.

EIS No. 20110356, Final EIS, BLM, AZ, Sonoran Solar Energy Project, Construction and Operation of a 3756-megawatt (MW) Concentrated Solar Thermal Power Plant and Ancillary Facilities on 3,702 Areas, Right-of-Way Granting, Maricopa County, AZ, Review Period Ends: 11/21/2011, Contact: Joe Incardine 801–524–3833.

 

Amended Notices

EIS No. 20110241, Draft EIS, NNSA, NV, Site-Wide EIS—Continued Operation of the Department of Energy/National Nuclear Security Administration, Nevada National Security Site and Off-Site Location in Nevada, Comment Period Ends: 12/02/2011, Contact: Linda M. Cohn 702–295–0077 Revision to FR Notice Published 07/29/2011: Extending Comment Period from 10/27/2011 to 12/02/2011.

This Week in Environmental Disclosure

As we’ve posted in the past, public companies must generally disclose environmental legal proceedings in various reports to the SEC, and whether or not those proceedings have a material effect on the company’s financial position. Companies may also disclose business risks related to current or pending environmental regulation.

Below is the juiciest stuff we could find that was filed with EDGAR this week.

* * *

EPA Settlement

 On August 26, 2011, we signed an Administrative Complaint and Consent Agreement with EPA Region 8 to settle allegations of noncompliance with the Clean Air Act Prevention of Significant Deterioration provisions with respect to the absence of emission permits at 76 locations in the Fort Berthold Indian Reservation in North Dakota. We agreed to pay $228,000 in penalties in connection with this settlement.

  • Rentech Nitrogen Partners, L.P. | Form S-1/A | 10/20/2011

Legal Proceedings

We are party to litigation from time to time in the normal course of business. We maintain insurance to cover certain actions and believe that resolution of its current litigation will not have a material adverse effect on us.

In October 2009, the EPA Region 5 issued a Notice and Finding of Violation pursuant to the CAA related to the number 1 nitric acid plant at our facility. The notice alleges violations of the CAA’s New Source Performance Standard for nitric acid plants, PSD requirements and Title V Permit Program requirements. The notice appears to be part of the EPA’s Clean Air Act National Enforcement Priority for New Source Review/Prevention of Significant Deterioration related to acid plants, which seeks to reduce emissions from acid plants through proceedings that result in the installation of new pollution control technology. We have negotiated an agreement in principle with the EPA for the terms of a consent decree to resolve the alleged violations. Although the consent decree is not final, we do not believe that the resolution of this matter with the EPA will have a material adverse effect on us.

  • WOLVERINE WORLD WIDE INC /DE/ | Form 10-Q | 10/20/2011

(ed. This company wins the “vaguest disclosure award”)

The Company is involved in various environmental claims and other legal actions arising in the normal course of business. The environmental claims include sites where the U.S. Environmental Protection Agency has notified the Company that it is a potentially responsible party with respect to environmental remediation. These remediation claims are subject to ongoing environmental impact studies, assessment of remediation alternatives, allocation of costs between responsible parties and concurrence by regulatory authorities and have not yet advanced to a stage where the Company’s liability is fixed. However, after taking into consideration legal counsel’s evaluation of all actions and claims against the Company, it is management’s opinion that the outcome of these matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

East St. Louis, IL—In response to questions regarding environmental conditions at the former East St. Louis operations, Alcoa and the City of East St. Louis, the owner of the site, entered into an administrative order with the EPA in December 2002 to perform a remedial investigation and feasibility study of an area used for the disposal of bauxite residue from historic alumina refining operations. A draft feasibility study was submitted to the EPA in April 2005. The feasibility study included remedial alternatives that ranged from no further action to significant grading, stabilization, and water management of the bauxite residue disposal areas. As a result, Alcoa increased the environmental reserve for this location by $15 in 2005. The EPA’s ultimate selection of a remedy could result in additional liability. Alcoa may be required to record a subsequent reserve adjustment at the time the EPA’s Record of Decision is issued.

  • EWaste Systems, Inc. | Form 8-K | 10/20/2011

Costs and Effects of Compliance with Environmental Laws; Environmental Matters

Ohio does not have any legislation requiring special permitting or licensing regarding e-waste. According to Ohio’s EPA Advice Document, “Ohio’s hazardous waste rules do not require a facility that recycles electronic equipment to obtain a hazardous waste permit. However, the owner/operator of the facility must evaluate any waste generated from the recycling process and manage it accordingly. Ohio EPA’s Division of Air Pollution Control may require the owner/operator to obtain an air permit for its recycling equipment. The Division of Surface Water or the publically-owned treatment works may require permits for waste water discharges. The Division of Solid and Infectious Waste Management may also require a transfer facility license.” None of these conditions apply to TDI and management does not expect that they will apply in the future. Accordingly, there is no direct cost to the company to remain compliant.

According to the EPA’s website at this date, “At present, there is no Federal mandate to recycle e-waste. There have been numerous attempts to develop a Federal law. However, to date, there is no consensus on a Federal approach. The US EPA does not audit or certify facilities for compliance with any electronics recycling standard.” Registration with the EPA is voluntary, unless the company handles leaded batteries, lamps, or CRT’s which have had the vacuum seal broken. In these exceptions, there may be a requirement for registration as a hazardous waste site. Presently TDI does not process such e-waste streams, and there is no direct cost to the company.

  • CHESAPEAKE ENERGY CORP | Form S-1/A | 10/18/2011

Climate Change. Various state governments and regional organizations comprising state governments are considering enacting new legislation and promulgating new regulations governing or restricting the emission of greenhouse gases from stationary sources such as our equipment and operations. At the federal level, the EPA has already made findings and issued regulations that require Chesapeake to establish and report an inventory of greenhouse gas emissions and that could lead to the imposition of restrictions on greenhouse gas emissions from stationary sources such as Chesapeake’s. Legislative and regulatory proposals for restricting greenhouse gas emissions or otherwise addressing climate change could require Chesapeake to incur additional operating costs and could adversely affect demand for the oil, natural gas liquids and natural gas that it sells. The potential increase in Chesapeake’s operating costs could include new or increased costs to obtain permits, operate and maintain its equipment and facilities, install new emission controls on its equipment and facilities, acquire allowances to authorize its greenhouse gas emissions, pay taxes related to its greenhouse gas emissions and administer and manage a greenhouse gas emissions program. Moreover, incentives to conserve energy or use alternative energy sources could reduce demand for oil, natural gas liquids and natural gas.

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