31 December 2010 18:00 [Source: ICIS news]
By Joe Kamalick
WASHINGTON (ICIS)--The ?xml:namespace>
In the November 2010 national elections, the Republican Party - broadly viewed as more business friendly than the Democrats - picked up a whopping 63 seats in the US House of Representatives and gained six seats in the Senate.
In the 112th Congress that convenes in January, Republicans will hold a solid 242-193 majority in the 435-seat House. While Democrats retained their majority in the Senate, it has been reduced from 59-41 in the 111th Congress to 53-47 in the new body.
Republican leaders in both the House and Senate have declared their intent to rein in what many regard as runaway regulation under the first two years of the Obama administration, especially at the Environmental Protection Agency (EPA).
Even if Republicans cannot marshal enough votes in Congress to undo some of the Obama administration’s regulatory initiatives, the Republican majority in the House will control the federal purse strings and could deny funding to those programmes they cannot otherwise change.
The industry has an opportunity to make major progress on key regulatory and energy issues with the new 112th Congress, according to Cal Dooley, president of the American Chemistry Council (ACC).
He said that work to be done in the new Congress could update outdated regulatory programmes “that will allow the chemicals industry to remain at the forefront of developing technology, advancing our economy and ensuring that we maintain jobs and our industry’s international competitiveness”.
Perhaps top on the list is reform and modernisation of the Toxic Substances Control Act (TSCA), the principal
That 34-year-old statute has not been substantially revised since its enactment in 1976. Legislation proposed by Democrats in the US House and Senate last year came under heavy chemical industry criticism as being draconian.
With the new balance of power and politics in Congress, industry has an opportunity to help shape a TSCA reform bill much more to its liking and one that could give the sector and its downstream customers a sense of certainty and dependability in chemicals controls that could last well into mid-century.
A TSCA rewrite that emerges from the new Congress in 2011 or 2012 would be considerably different from the Democrat-sponsored reform bills of this year that Dooley and others termed “extreme”.
Those bills, he warned, “would have stifled the ability of the
Dooley indicated that Democrats in Congress and environmental groups had been unwilling over the past year to meet industry concerns halfway on TSCA reform.
“We were disappointed that we didn’t have an opportunity to have a constructive engagement to move that legislation to some middle ground,” he said, adding that environmental groups “were not willing to make accommodations”.
“We hope in the next Congress that we can create a different dynamic, engage the NGOs [environmental groups], Republican leaders and work with Democrats who are committed to advancing TSCA reform that embodies our principles and those of the EPA to ensure the safety of chemicals in commerce,” Dooley said.
Another top target of chemicals sector concern is the imminent plan by the EPA to begin regulating and limiting emissions of carbon dioxide (CO2) and other greenhouse gases from electric utilities, refineries, chemical plants and a broad range of other manufacturing facilities.
The EPA’s controversial greenhouse gases rule takes effect on 3 January.
Dooley, a former seven-term Democrat member of the House, said that regulatory plan “would have significant economic consequences on the chemicals sector, industry in general and the nation’s economy”.
Opponents of the EPA greenhouse gases rule contend that it would force the shutdown of factories, create job losses, ship still more US manufacturing capacity abroad, and raise US energy costs significantly.
The EPA’s bid to single-handedly alter the nation’s emissions profile was already unpopular among both Republicans and Democrats in the 111th Congress, where efforts were pending to suspend EPA’s authority to regulate greenhouse gases for two or more years until the legislature could craft a comprehensive climate change law.
But in the wake of the November 2010 election and the major shift of power in the House, the goal of suspending EPA’s greenhouse gases rule has given way to an outright effort to revoke permanently the agency’s authority to regulate CO2.
EPA also is likely to face greater scrutiny and congressional opposition to the agency’s plans to impose much more strict emissions controls on industrial boilers.
The agency’s plan to impose “maximum achievable control technologies” (MACT) requirements on industrial boilers used for power, heat or processes is known as the Boiler MACT - and is widely opposed by industry.
“As proposed, the Boiler MACT is so onerous as to impose some $20bn [€15bn] in new capital costs on industry overall, and in the chemicals sector almost a $4bn hit,” Dooley said.
In yet another area of major industry concern, new Republican leaders in the House have already indicated that they will not approve any draconian changes to the four-year-old federal mandate over anti-terrorism security measures at major
Those rules, known as the Chemical Facility Anti-Terrorism Standards (CFATS), were to expire at the end of 2010 unless renewed by Congress.
But the standards and the Department of Homeland Security’s enforcement of the rules have been carried over into the first quarter of 2011, when they will get renewed consideration by the new Republican-controlled House.
Representative Peter King (Republican-
Permanent authorisation of CFATS has been a goal of the chemicals industry since the standards were first put in place in 2006. Chemical producers have been wary of repeated changes to the rules if they were to be reconsidered annually or every other year.
King indicated he does not favour and would not propose more strict security measures such as those included in a Democrat-sponsored bill that was approved by the House late last year.
That bill, HR-2868, would have given the department authority to impose inherently safer technologies (IST) on high-risk chemical facilities in order to reduce their attractiveness as potential terrorist targets.
King said that Republican legislation to be put forward next year to update and codify CFATS “will avoid giving DHS unfettered authority to mandate how facilities should manufacture their products”, a reference to the IST provision in last year’s Democrat bill.
US chemical makers have long opposed such an IST mandate, fearing that it would give DHS power to force changes in feedstocks, processes and even end products at specific plants. That mandate now appears to be off the table.
US petrochemical producers and downstream chemical makers - along with a broad range of other manufacturers - also hope that the new year and the new Congress will mean more access to domestic US onshore and offshore oil and gas resources.
The ACC’s Dooley said that the new Congress would offer “an opportunity to get bipartisan support for a more comprehensive energy proposal”, including measures to “fully develop our domestic energy, offshore and onshore, along with alternative and renewable energy sources”.
Many in the
Some in Congress and the Obama administration also seek restrictions on hydraulic fracturing (fracking), the drilling and production technology essential to development of shale gas reserves.
“We have at this point a development in domestic energy that we have not seen in 50 years,” Dooley said, referring to the greatly expanded natural gas resources previously inaccessible in deep shale rock formations.
“One of our highest priorities in this country is to establish energy security and to reduce our dependence on imported oil,” he said, “and we see a game-changer here with our ability to capitalise on what is estimated to be a 100-year supply of natural gas in shale deposits.”
With domestic gas supplies abundant and reasonably inexpensive, US chemical makers have a competitive edge in the global market compared with overseas chemicals producers that are generally dependent on higher-cost naphtha feedstock.
($1 = €0.75)
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