INSIDE VIEW ’10: NPRA to face challenges on many fronts

31 December 2009 21:07  [Source: ICIS news]

By Charles Drevna
NPRA, the National Petrochemical & Refiners Association

Editor’s note: US chemical industry association leaders were given the opportunity to express their views on the challenges and opportunities for 2010.

WASHINGTON--Throughout 2009, NPRA maintained its strong position advocating for realistic energy and chemical polices while opposing legislative proposals that would adversely impact American businesses and consumers and undermine our nation’s economic recovery. 

While cap-and-trade climate change legislation was narrowly approved in the House of Representatives during the summer, similar legislation in the Senate faces an unknown fate, particularly during an election year.  Similarly, the House passed legislation to modify key elements of current chemical facility security in November 2009, the measure’s ultimate success in the Senate remains uncertain. 

NPRA also opposed legislation and regulations to mandate the use of mid-level ethanol blends such as E15 without comprehensive testing and adequate liability protection, to modify laws that protect the rights of workers, and impose punitive taxes on the domestic oil and refining community.  Action on these and other measures that will affect our members’ businesses, employees and customers are certain to play major roles in Congress’ agenda for 2010.

Chemical risk management policy will be a prominent legislative topic in the coming year. Environmental and public health groups are pressuring Congress for drastic reform to the Toxic Substances Control Act (TSCA), which has remained essentially unchanged since its enactment in 1976. Proponents of such reform are urging a precautionary approach similar to the system now used in Europe under the Registration, Evaluation, Authorisation and Restriction of Chemical substances (REACH) programme.

The US EPA (Environmental Protection Agency) is also actively pursuing change under the new administration.  The Chemical Assessment & Management Programme (ChAMP) has been abandoned and will be replaced by a command-and-control approach. EPA has announced that it will begin issuing rules mandating increased testing of chemicals, requiring notifications for new uses of existing chemicals, and taking specific risk management actions against certain chemicals.

On the international chemical policy front, Europe’s implementation of Registration, Evaluation and Authorisation of Chemicals (Reach) programme continues. The preregistration phase of REACH saw more than 2,700,000 submissions from approximately 65,000 different companies, significantly exceeding the EU Commission’s expectations. NPRA views the REACH programme as an unnecessary, unwieldy, costly and burdensome social experiment that serves to demonstrate that REACH is not a good model for TSCA reform in the United States.

Congressional efforts to amend the 2007 Chemical Facility Anti-Terrorism Standards (CFATS) will continue in the coming year, as the Senate is likely to begin consideration of chemical security legislation in early 2010. The legislation passed by the House of Representatives in 2009 contains an “Inherently Safer Technology” (IST) provision that would allow government officials to dictate chemical processes to facilities. Such a provision could publicly expose site- and security-related vulnerabilities and may actually undermine the significant progress that has been made to date on securing chemical facilities.

Climate change continues to be a highly prominent issue, both internationally and domestically in the United States.  With the failure of negotiations in Copenhagen during the United Nations’ COP 15, and a challenging election cycle ahead for Congressional leadership, prospects for climate change legislation are uncertain.  The House of Representative passed strict cap-and-trade climate legislation by a slim margin in June 2009, and Senate debate on similar legislation will continue into the new year.

EPA has also proposed or is in the process of implementing far-reaching regulatory greenhouse gas reduction measures including a proposed endangerment finding regarding greenhouse gases, a final greenhouse gas reporting rule that becomes effective in January 2010, an automobile tailpipe standard that will be finalised in March 2010, and a proposed “tailoring rule” that will only require permitting for facilities that emit more than 25,000 tons of greenhouse gases annually. American families and businesses alike will bear the burden of these cumbersome requirements and the accompanying increased costs.

Many of the punitive federal tax proposals seen in 2008 and 2009, such as a “gate fee” on crude oil to support the federal highway trust fund, revisions to the Section 199 manufacturing deduction, and attacks on LIFO (last in, first out) accounting, may be revisited in 2010. It is also likely that new and innovative tax proposals targeting the domestic oil, petrochemical, and refining community will be brought forward in 2010 as Congress sets its sights on domestic industries that are perceived as politically viable targets. Such proposed changes would place American refining and petrochemical businesses at a significant economic disadvantage to their competitors in an already highly challenging global marketplace.

Although the new Administration promised to make modifying existing labour law its first priority in 2009, little occurred other than the introduction of legislation in both the House and Senate. Activity in this area, however, is very likely to increase in 2010 with consideration of the “Employee Free Choice Act” and possible action on the “Arbitration Fairness Act” and the “FOREWARN Act.” These bills all constitute potential setbacks to the original goals of the labour movement, and NPRA will always champion policies that protect the rights of the employees that are the backbone of our businesses and the American economy.

While we continue to face numerous challenges in the year ahead, NPRA remains optimistic that sound policies will ultimately prevail. Efforts in 2009 to implement legislative measures counterproductive to consumers and businesses did not meet with the success that the proponents of those policies had hoped for. In 2010, NPRA will continue to educate policymakers on issues crucial to our businesses, our economy, and American consumers. As we look toward what we hope will be a robust and speedy economic recovery, we remain ready and willing to work with all members of Congress and the Administration toward the crafting of responsible, rational, and effective environmental and energy policy.

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