INSIGHT: Change in US Congress means turmoil

09 November 2006 15:15  [Source: ICIS news]

By Joe Kamalick

 

WASHINGTON (ICIS news)--Democrats swept to unfamiliar power in the US Congress in this week’s US mid-term elections and are in position to launch a variety of legislative initiatives in the New Year that could have a broad impact on the country’s chemicals industry.

 

Bob Slaughter, president of the National Petrochemical & Refiners Association, said: “There’s no getting around the fact that the political playing field on Capitol Hill has changed significantly.”

 

Jack Gerard, president of the American Chemistry Council, agreed, saying: “We expect that the agendas in Congress will shift dramatically” as a result of the Democrat victory.

 

Democrats won a net gain of 28 seats in the US House of Representatives, giving them majority control in that chamber for the first time since 1994. They had won four of six seats they needed to wrest control of the Senate from Republican control, and Democrat candidates were leading in final ballot counting in two key Senate contests on Thursday 9 November.

 

However, both Slaughter and Gerard argued that the shift in the political balance of power in Congress does not necessarily reverse chemical industry objectives.

 

“Our message doesn’t change,” Slaughter said, “and this doesn’t change the needs of refiners, petrochemicals producers and consumers for a supply-based energy policy, including more access to offshore natural gas”. Natural gas is the principal feedstock for US chemical manufacturers and has been under price and availability pressures for five years.

 

“We have to be able to tell our story to whoever is in power in Congress,” Slaughter said.

 

Gerard said that industry hopes for more offshore gas access are not necessarily diminished by the change of power on the Hill.  “In the last year, we have made historic progress in moving Congress on this issue.” 

 

In separate Senate and House bills passed this year, he noted, “Congress said we need renewed access to offshore energy resources”.

 

Gerard said his council will focus in the near term on getting the last session of the current Congress - scheduled to resume for a brief session beginning on Thursday - to pass a narrow offshore gas development bill before the new Democrat majority Congress convenes in January.

 

The council’s focus on an urgent effort to get an offshore energy bill through the so-called lame duck session of Congress this month perhaps says something about how much more difficult it may be to get an offshore bill out of the Democrat-controlled 110th Congress that will convene in January.

 

Not so, said Gerard. “Despite the change in the political landscape on the Hill, the US energy crisis does not simply disappear”, he said.  “There is pressing demand for more access to available natural gas reserves from across the country and in industries - paper and forestry, agriculture, and many other manufacturing and energy sectors other than chemicals - that the new Congress will have to deal with.”

 

“It would be a breach of responsibility for Congress to not deal with this energy issue,” he said.

 

Slaughter suggested that a new balance of power in Congress may well mean that Democrats will order a renewed look at the use of inherently safer technology as a plant site security measure. 

 

In the current Congress, Democrats were much more disposed toward imposing a safer technology mandate - requiring less toxic feedstocks and lower temperature and pressure processes, for example - as part of chemical plant site security requirements.

 

However, Slaughter thinks that Congress might have many other issues on its mind in the New Year and will be disinclined to try very soon to pass yet another chemical site security package. 

 

The site security measure approved by Congress in September is an interim measure (it will expire in three years) that will see initial enforcement by the Department of Homeland Security by mid-2007.

 

“I think many in Congress will want to see how that regulatory process plays out and develops,” Slaughter said, “rather than rush into another round of legislation on site security”. 

 

He suggested that a new plant security bill might have trouble getting through even a Democrat-majority Congress and may be put off until the 111th Congress convenes in January 2009 after 2008 presidential and congressional elections.

 

More likely, said Slaughter, is a renewed focus in a Democrat majority Congress on environmental concerns such as global warming and oversight of Environmental Protection Agency (EPA) actions in the chemicals industry.

 

“There are Democrats on record,” Slaughter noted, “as being in favour of legislating a US version of the European Union’s Reach programme,” the registration, evaluation and authorisation of chemicals.

 

“That,” said the council’s Gerard, “would be an irresponsible thing for Congress to do”.

 

However, both industry leaders said a US Reach measure might well be introduced in the new Congress, although both doubt that it would get much traction. 

 

One thing is certain, the New Year and the new Congress are going to bring a large measure of uncertainty for the US chemicals industry.

By: Joe Kamalick
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