05 February 2007 00:00 [Source: ICB Americas]
US Democrats put green living back on the table
JOE KAMALICK/WASHINGTON, D.C.
THE CHEMICAL industry is facing a Democratic-controlled Congress in 2007, led by legislators long in the minority who want to remedy what they regard as years of Bush administration neglect and wrongdoing in matters environmental. In the Nov. 7, 2006, elections, Democrats won majority control in both the Senate and the House, returning to legislative dominance after 12 years in the minority wilderness.
By all accounts, they have a lot of pent-up energy and long wish lists. Environmental issues are right up there at the top of their agenda.
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Here are just some of the environmental areas that are likely to appear as legislation in the 110th Congress. These issues will not necessarily generate legislation that will win approval in both the House and the Senate, but they most definitely will be debated, and some very well could become law.
First, however, it should be noted that for many in Congress and especially for private sector activists, the term "environmental" can and should encompass a very broad range of issues, including some those in industry might think should fall outside the environmental realm.
For example, environmentalists and many members of Congress consider plant site security, transportation routing, rail car design, feedstock and process selection and energy policy as all coming within the purview of federal and, in most cases, state environmental regulatory authority. They see these issues as central to environmental concerns as global warming and emissions controls.
The Democrats have four fundamental objectives for the coming two years of the 110th Congress.
First, they want to hold wide-ranging oversight hearings to grill Bush administration officials on environment, energy, health care, labor, retirement - dozens of issues. Oversight hearings typically generate separate legislation meant to remedy the wrongs uncovered.
Second, they will want to advance their favorite issues, among them global warming, toxic emissions, alternative energy and renewable fuels.
Third, they will want to impose or increase controls on commercial sectors that they feel have gotten kid-glove treatment from Republicans the past dozen years, among them the energy and chemical industries.
Last, they will want to use all three legislative tactics above to position themselves and the Democratic Party to win it all in 2008: retain control of Congress and take the White House.
All that - along with some cracks in Republican ranks - will translate into a busy legislative and regulatory period.
Here are some of the key areas where the 110th Congress is likely to focus.
Congress passed an interim antiterrorism site security bill in late 2006, but that statute has a three-year sunset provision that means it will expire in 2009 with the expectation that before then Congress will replace it. That effort likely will start right away in 2007.
"I expect new site security legislation very soon in the new year," says Rob McArver, director of government affairs for the Synthetic Organic Chemical Manufacturers Association (SOCMA).
"I fully expect the new Congress will be anxious to look at this again," says American Chemistry Council (ACC) president Jack Gerard. "There are some in Congress who did not get what they wanted in that bill, and they will want to come back to it."
Absolutely. Rick Hind, legislative director for the Greenpeace national toxics campaign, says Democratic Congressional leaders have declared their intent to reintroduce chemical plant site security legislation early in the first session of the 110th Congress.
"This is one of the most glaring pieces of unfinished business from the last Congress," Hind says. The current chemical plant site security law, he said, "is purely temporary and wholly inadequate."
Hind says Greenpeace will press Democrats for two key elements missing from the existing law: a mandate for use of inherently safer technology (IST) as a security measure and federal authority and encouragement for states to legislate their own tougher site security laws.
"IST doesn't just reduce the risk of a terrorist attack at a chemical plant site," Hind says. "It eliminates it."
Hind says Greenpeace and sympathetic Democrat leaders in Congress will push hard for an IST mandate that will oblige producers to find alternative, less toxic feedstocks or process chemicals where feasible and to reduce the quantity of hazardous materials kept on site.
Greenpeace and many Democrats hold that IST must be mandated because it will not happen at all or fast enough if the industry is left to its own timetable.
"If paying income taxes were not an obligation under law, some people I suppose would still pay taxes," Hind says, "but it really wouldn't work on a voluntary basis, would it? IST has to be a requirement under law."
Hind also thinks a new federal mandate for chemical plant site security should not pre-empt state law in this area. Like other areas of federal regulation - the Clean Air Act, the Clean Water Act and civil rights legislation - Congress should set a federal minimum standard for plant site security but expressly allow states to enact their own legislation.
Global warming to spur action
"I worry about the global warming issue," says Bob Slaughter, president of the National Petrochemical and Refiners Association (NPRA), "and about congressional interest in doing something that might impose requirements on industry, such as carbon emissions caps."
The new Congress, says Slaughter, is likely to have momentum on global warming issues. "The new majority in Congress seems eager to legislate on this in the face of meager evidence."
Legislation providing for a limit on US emissions of greenhouse gases, especially carbon dioxide (CO2), would probably install a so-called "cap and trade" system under which the federal government would issue permits to firms giving each the right to emit a certain amount of CO2 annually.
The permits would be traded, with more energy efficient companies able to sell their emission credits to firms that exceed their allotted CO2 levels.
Senator Barbara Boxer (D-Calif.) assumes control of the Senate Environment and Public Works Committee in the 110th Congress, and she has promised extensive hearings and legislation on climate change and global warming.
US Reach bill?
Greenpeace's Rick Hind contends that the European Union's adoption of Reach "has put the US in the back seat in terms of chemical safety regulations." The new Democratic majority will seek to remedy that, he says.
Introduction of a US "Reach" bill that would emulate the wide-ranging EU program is virtually certain.
However, neither ACC's Gerard nor NPRA's Slaughter think there is any real prospect of that getting passed by the House and Senate.
The likelihood of a congressional effort toward a Reach-like measure "is one of the reasons why we tried, with friends in Europe, to work on the enactment process in Europe," says Slaughter, "because we knew that eventually Reach would have some impact on the US legislative and regulatory environment."
Still, Slaughter does not think the measure will get much traction on Capitol Hill. "I'd say it would be difficult to go as far as Reach in the US Congress," he says.
Gerard thinks that the negative economic impact of Reach that will become apparent in Europe will help cool US congressional interest. "In light of what the EU has done to themselves with Reach," he says, "I don't think it will be seen as a model for the US."
That doesn't mean a US Reach bill won't be pursued, however. Even if such a measure is introduced, says Gerard, "I'm confident that nothing of the magnitude of Reach could pass in the coming session of Congress - but that doesn't mean they won't try."
More likely of success in the 110th Congress would be an effort to revise and expand the Toxic Substances Control Act (TSCA). First enacted in 1976, TSCA has been broadened with new legislation in 1986, 1988, 1990 and 1992.
Like Reach, TSCA regulates the introduction of new chemical products, although unlike Reach it grandfathered in most chemicals already in use when the law was passed in 1976. Another major difference is that TSCA takes a risk-based approach to regulation while Reach stands as the most significant codification of the precautionary principle.
It is that very distinction that may well be at the center of a TSCA revision bill in the 110th Congress.
Greenpeace's Hind says that TSCA will be a focus of the Democrat leadership in Congress. "TSCA is so broken that there is a question of whether it can ever be fixed," Hind says, calling it "the most industry-friendly law on the books."
Like Reach, US chemical regulation should be based on the precautionary principle, says Hind. "You don't experiment on the public health until you're confident that some chemical is safe," he says. "The risk-based approach just makes no sense. Just substitute the word 'gamble' for 'risk' in risk-based and you have the true meaning of that approach."
MORE TAXES AND REGULATIONS
Other areas of likely legislative and regulatory interest in the new Congress include the following:
Return of the Superfund Tax. Senator Boxer also is pressing for revival of the tax on refining and chemical companies that initially funded the 1980 Superfund law - formally known as the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) - to cover the cost of environmental cleanups at sites across the country. The Superfund tax expired in 1995. Boxer and the Democratic majority may bring the tax back, and it would be tough for President Bush to veto it because of implications it would have for Republicans in 2008.
Rollback of TRI changes. Just before the end of 2006, the Bush administration made changes to reporting requirements in the EPA's Toxic Release Inventory (TRI) program to ease the burden on industry. Democrats in Congress, environmentalists and officials in state governments charged that the reporting changes weakened the program and would allow chemical and other companies to reduce the flow of information about their releases of environmentally hazardous substances. Democrats are almost certain to advance legislation to reverse those reporting changes and may take the opportunity to toughen TRI rules even further.
Raising railroad tank car design and construction standards to make toxic chemical spills less likely in derailments or other accidents. Consequence: higher shipping costs for chemical manufacturers because they own or lease tankers.
Rail tank car routing rules to ensure that chemical cargoes and other hazmat trains are barred from passing through or close to population centers. Consequence: longer shipping times and higher shipping costs for chemical manufacturers, shippers and customers.
Other taxes. Congress may seek windfall profit taxes on energy companies, a higher slice of corporate profits and limits on executive compensation.
If there is a saving grace in all of this, says McArver of SOCMA, "it is that a lot of what we've heard so far about the Democratic agenda is just so much posturing, and a lot of it has to do with getting ready for the 2008 campaign."
Despite the Democratic wins in November, Congress remains very closely divided, especially in the Senate where Democrats hold a razor-thin, one-vote majority. Getting controversial legislation through the Senate - where under an arcane Senate rule known as the filibuster a super-majority of 60 votes in the 100-seat body is needed to pass polemic bills - is extremely difficult.
"By early 2008," McArver said, "we might not have seen much real legislation move at all."
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