A mixed chemicals report card for the 108th Congress

08 October 2004 22:26  [Source: ICIS news]

WASHINGTON (CNI)--As the 108th Congress neared closure, a top chemicals industry official noted Friday that legislators had failed to act on some key issues important to chemicals and the broader US economy.

 

Bob Slaughter, president of the National Petrochemical & Refiners Association (NPRA), told CNI today that “You would have to say that this Congress had mixed results and would rate a mixed report card.”

 

Chief among legislative failures, said Slaughter, is the inability of Congress to pass a long-sought comprehensive US energy policy bill. This marks the second consecutive year that Congress failed to pass an energy bill.

 

That failure, said Slaughter, is “a major disappointment to the chemicals industry and to all industries in the country.” As a consequence, he noted, “there is, again, no action by Congress on natural gas issues,” a critical item for the chemicals industry given continuing natgas cost increases at record levels.

 

Movement on a national energy policy bill was again thwarted by a dispute over limited legal liability for US producers of the gasoline additive methyl tertiary butyl ether (MTBE). Chemicals manufacturers argue Congress should provide them some liability protection for the manufacture of a substance that they claim the federal government mandated.

 

On the plus side, Slaughter noted that Congress appeared unwilling to pass a chemical plant site security measure, which NPRA has opposed. The lack of action on this issue, said Slaughter, “is a good thing, we think, because it is not at all clear that an additional layer of federal regulation would be helpful in improving site security.” He said the industry “is already working closely with state and other local security agencies as well as with the federal government to ensure security at our plant sites and refineries, and I’m not convinced that additional federal legislation in this regard would be helpful.”

 

In any event, he added, “it appears that a site security bill is not going to happen, at least not for the time being.”

 

Slaughter praised the Congressional effort to repeal the Foreign Sales Corporation (FSC) tax structure that has been ruled an illegal export subsidy by the World Trade Organization (WTO). Under authority of last year’s WTO ruling on the FSC, the European Union (EU) has been assessing an ever-increasing rate of punitive tariffs on a range of US exports. The legislation to repeal FSC also will cut corporate tax rates across the board for US manufacturers and exporters, so chemicals manufacturers and other industrial sectors have been anxious to see the measure pass.

 

As Friday drew to a close, it was still uncertain whether Congress would approve the FSC repeal bill. A final Saturday session is possible. And, failing that, Congress likely will return for a ten-day session in mid-November after the US national elections on 2 November. But such a so-called “Lame Duck” Congressional session is not expected to deal with much other than essential appropriations bills.

 

Looking forward to the convening of the 109th US Congress next January, Slaughter said industry legislative objectives again will be focused on trying to get a national energy bill - with limited liability for MTBE producers - and federal stimulus for domestic production of natural gas. Slaughter also said NPRA will again work with Congress on facilities security, “so that Congress can see that federal legislation in this area may not be necessary.”

 

Washington, DC-based NPRA represents some 500 petrochemical companies and refiners.

By: Joe Kamalick
+1 713 525 2653

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