Middle East turmoil, Japan disaster to affect US producers

23 March 2011 14:27  [Source: ICIS news]

Smoke rising from a fire in Japan after a deadly earthquakeBALTIMORE, Maryland (ICIS)--Social and political unrest in the Middle East and the still-unfolding natural and nuclear power disasters in Japan will have an impact on US chemicals manufacturers, an industry leader said on Wednesday.

Lawrence Sloan, president of the Society of Chemical Manufacturers and Affiliates (SOCMA), said that even though little or no Libyan oil serves as feedstock for US manufacturers, ultimately there would be a spill-over effect for domestic producers.

He said that some of SOCMA’s member firms have customers in Europe who are experiencing the loss of business in Libya and elsewhere in North Africa because of the popular uprisings there. That loss of business does work its way back up the supply chain, he said.

Addressing chemical sector executives on the closing day of the annual GlobalChem regulatory conference, Sloan said: “Social unrest in the Middle East and natural disasters in Asia have had or will likely have measurable impacts for domestic manufacturers here at home.”

He noted that while the price of oil edged down in the immediate aftermath of the earthquake and tsunami in Japan, the global price of crude has again inched up.

Both the disaster in Japan and the ongoing turmoil in Libya could impact oil prices over the long haul, he said, which in turn would necessarily raise costs for chemicals producers dependent on crude and derivatives for feedstocks.

Sloan also warned of increasing government regulations as a threat to US chemicals manufacturers.

Speaking with reporters, he cited in particular the Environmental Protection Agency’s (EPA) developing plans to expand Inventory Update Reporting (IUR) rules.

That proposed rule, which was expected to become final within months, would dramatically lower the threshold of chemical emissions that must be reported by production facilities, significantly increase the capture and control requirements for those emissions, and toughen criteria for businesses seeking protection for confidential business information (CBI) in reports to the agency.

He said that SOCMA had run preliminary compliance tests with a half-dozen member firms and found that the new IUR requirements could impose significant new labour and operational costs.

Sloan said that while both the Obama administration and members of Congress recognise the need for a balanced approach to regulation, that understanding was no guarantee of a positive outcome.

“If we are to continue to be a global leader, we must fight for fair and practical laws and regulations,” he said.

GlobalChem is cosponsored by SOCMA and the American Chemistry Council (ACC). The conference runs through Wednesday.

Paul Hodges studies key influencers shaping the chemical industry in Chemicals and the Economy

By: Joe Kamalick
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