INSIGHT: Obama EPA continues to worry US chems

22 September 2009 15:47  [Source: ICIS news]

HOUSTON (ICIS news)--US chemical companies are trying to play nice with the suddenly-feared US Environmental Protection Agency (EPA) under President Obama.

But will the administration respond in kind?

So far – nice or not – Obama’s EPA appears far more restrictive to the industry than the one during the Bush years, a potentially ominous sign for the nation’s producers.

Chemical industry leaders had warned for months of increasingly stringent environmental policies putting companies at a competitive disadvantage globally, all the while instructing companies to take a positive tone, telling politicians that they wanted to become “part of the solution”.

The warning signs culminated earlier this month, when the EPA announced that it found many parts of Texas’ clean-air permitting programme to be illegal under the US Clean Air Act.

That includes the use of flexible permits, which allow producers all along the Texas Gulf coast – the nation’s petrochemical hub – to exceed emissions limits in particular units, so long as they are under an overall emissions average for the facility.

It was welcome news to environmental groups, who for years have accused the Texas Commission on Environmental Quality (TCEQ) of allowing substandard emissions permits.

“This means that President Obama and [EPA] administrator Lisa Jackson have solidly put the EPA back where it is supposed to be – aggressively protecting the human and environmental health of this country,” said Matthew Tejada, executive director of the Galveston-Houston Association for Smog Prevention.

According to the Sierra Club, most chemical plants in the Houston area use such permits.

“Everyone obviously expected or hoped that this programme would be approved,” Jeff Robinson, chief of the air permit section for the EPA’s Region 6 in Dallas, told the Corpus Christi Caller-Times.

“They took advantage of the mechanism that Texas had on the books,” he added.

The chemicals industry, however, sees those permits as necessary, given the regular changes to operating rates and capacities at their facilities.

The elimination of such permits has the potential to harm flexibility in production, one producer said. For example, if demand for a certain chemical were to skyrocket, a given company might be unable to ratchet up production to meet that demand – even if it greatly reduced emissions in other units to compensate.

Many see it as an unnecessary hurdle for an industry that already believes it is on the right path.

“By EPA’s own measures, the chemical industry has reduced toxic emissions by over 73% since the late 1980s, even as our chemical production has increased,” said Tiffany Harrington, spokeswoman with the American Chemistry Council (ACC).

“The chemical industry has been demonstrating for decades that our commitment to environmental improvement is the cornerstone to our operations,” she added.

But despite the apparent disagreement, producers on the record were hesitant to use harsh language toward the EPA – even given the potentially serious consequences of the permit ban. Instead, they opted to spin the issue to focus on positive environmental steps taken.

David Harpole, spokesman with LyondellBasell, said the permits allowed his company to responsibly operate refineries from a production standpoint while also reducing emissions and maintaining environmental compliance.

“We have demonstrated that we can manage our business effectively and continue our focus on reducing emissions,” he said.

The EPA also announced last week that it would review the smog rules that were enacted during the Bush administration to determine whether they comply with the Clean Air Act.

In a broader political sense, those EPA issues are part of the administration’s continued emphasis on energy efficiency, much to the chagrin of chemical leaders.

A study earlier this year from the non-partisan research group Resources for the Future found that as many of 40% of vulnerable industries, including chemical manufacturing could leave the US over time as a result of proposed environmental policies.

“At the end of the day, manufacturers must be able to compete globally,” said Eastman Chemical chairman Brian Ferguson.

Ferguson suggested the chemical industry combat the environmental issue by pointing out that it was already contributing to greater energy efficiency through the production of products such as building insulation, solar panels, plastics contributing to lightweight vehicles, reflective coatings, and energy-efficient light bulbs.

“It’s important that the administration knows that we’re working toward the same objectives of developing a responsible energy policy, creating jobs for Americans, and growing our economy,” he said.

Chemical companies seemingly took that advice in the aftermath of the permit announcement, carefully crafting their words in response to the decision.

But if that issue is any indication, making nice is not bringing the industry the results it desires.

To discuss issues facing the chemical industry go to ICIS connect  

By: Ben DuBose
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