NACD: US agencies get heavy-handed

11 November 2011 13:11  [Source: ICB]

 Capitol Hill
Chemical distributors wait while Capitol Hill considers legislation
US federal agencies are taking an increasingly hard-line approach to regulating chemical distributors, raising compliance and operational costs that far outweigh benefits

The whole regulatory environment is "intense" according to Jennifer Gibson, vice president for government affairs at the National Association of Chemical Distributors (NACD).

"The tone has shifted to a heavy-handed and punitive approach," Gibson says, in contrast to a more compliance assistance oriented approach that was typical of earlier years. "It has become a big concern for us and for our members."

Dave Richards, chairman of NACD's government affairs committee, agrees. "Several of our members have been visited by the EPA [Environmental Protection Agency] and have been subjected to much deeper levels of inspection, and in a different form and fashion than we have been used to in the past," Richards says.

EPA is moving forward, says Richards, with new requirements for air transport rules, regulations on industrial boilers and incinerators, and more stringent air rules that will impact power generation. In the absence of congressional action to modernize the principal US law for regulation of chemicals in commerce - the Toxic Substances Control Act (TSCA) - the EPA is seen as moving on its own to toughen controls.

"In our talks with EPA about TSCA, we sense that they are working to expand TSCA regulation in a way that will be more onerous than before," Richards notes. Gibson also charged that the EPA "is making rule changes on its own."

As have other NACD officials, Gibson notes that the EPA has made increasing use of the "general duty" clause under the Clean Air Act (CAA), a catch-all provision of the law that allows regulators - at least in the EPA's view - to allow on-the-spot rule-making.

CAA, TSCA and other federal regulations specify a wide range of limits and prohibitions, especially on threshold amounts of allowed chemicals, and means of storage and transport, among others. Those authorities are recognized, Gibson says, and NACD members work hard to meet their requirements.

"But EPA is regulating items that are not on the list, imposing requirements under the 'general duty' clause. This gives EPA broad discretion in deciding what is a hazardous material and what operating systems are safe or not, and a lot of what they are doing is not spelled out in the regulations," she says.

In addition to EPA, Gibson and Richards say distributors are facing a broad new regulatory push by the US Department of Transportation (DoT). One issue of concern to distributors is DoT's proposed changes to hours of service rules for truck drivers, changes which would seriously reduce transit times for each driver.

The proposed hours of service rule, first aired last year and soon to be published in final form, "would simply require that distributors hire more drivers and would compound the driver shortage," Gibson states. "The existing rules have been in place for seven years and they seem to be working pretty well. Accident fatalities have gone down."

Richards, vice president for compliance at Barton Solvents of Des Moines, Iowa, sees the coming DoT changes to drive times as unwarranted. "Transporters have been traveling more hours, but the accident rates are dropping, so the current system is effective," he explains, "so more DoT changes don't seem warranted or necessary."

Gibson and Richards note that the DoT drive time changes are getting some push back from members of Congress, especially in the House of Representatives where Speaker John Boehner has termed the rules change expensive and has asked the White House and DoT to reconsider.

DoT is aggressively pushing all chemical truck carriers to install electronic on-board data systems to record hours of service.

"We have no objection to onboard recorders," Gibson says, "but it should be an option for carriers, not a federal requirement." She points out that an existing rule - now being challenged in court - requires onboard recorders for carriers that have poor safety records.

"So if the onboard recorders are required to correct the performance of those with poor safety records, why make everyone else do it?" she asks. "Our objection is the cost factor," she adds, arguing that an across-the-board need for onboard recorders imposes an unfair economic burden on carriers with good safety records.

DoT is pressing forward with new rules on procedures for loading and unloading liquid cargo tank motor vehicles. This new requirement, which Gibson says might become final later this year or early next year, would impose additional demands for worker training and process safety checks.

"Our main concern is that we believe DoT has grossly underestimated the costs involved, and that the PHMSA requirement would be duplicative of other existing rules."

The DoT's proposed "wet lines" rule would require liquids carriers to completely empty or dry tubing and valves used in offloading cargoes.

Richards adds that the wet-lines rule apparently grew out of two or three incidents over several years that involved product discharge lines, "but I'm not convinced that those few instances warrant the changes or that there is a cost benefit that is worth it."

 Frank Lautenberg

Senator Frank Lautenberg's proposed revisions to TSCA are seen as too onerous

Copyright: RexFeatures

Gibson has her eye on Capitol Hill, where two major items of legislation are pending. "We would like to see CFATS get a long-term extension," Gibson says, referring to the five-year-old federal mandate for chemical site security, formally known as the Chemical Facility Anti-Terrorism Standards (CFATS).

Under CFATS, the Department of Homeland Security (DHS) sets antiterrorism security criteria for chemical output, distribution or storage sites deemed to be at "high risk" for a possible attack by terrorists seeking widespread off-site casualties. While DHS sets the standards, facility owners and operators are free to select security measures to meet the department's criteria.

First enacted for a three-year span, CFATS has twice been extended for one year, while members of Congress wrangled over whether to toughen the law. The standards are on course to be extended for another year, but distributors and other chemical industry players would rather see a multi-year extension and a resulting period of regulatory certainty.

CFATS renewal bills pending in the House and Senate would boot the program forward for three to seven years, but it remains to be seen if either chamber can give final approval before year end.

Neither of the extension bills imposes a need for inherently safer technology (IST) on the chemicals industry. Gibson notes that even if legislation for a long-term extension of CFATS is not likely this year, "at least there appears to be a realization in Congress that major changes to the existing rules, especially any IST measures, don't make sense."

Although passage this year looks slim, it is possible an extension could get approval. "If we get one or another bill through one body of Congress, there's a good chance that the other chamber would just pick it up and pass it."

On a much broader scale, Gibson says, NACD is watching movement on renewal and reform of TSCA, the chemicals control statute.

There is a draft TSCA reform bill under discussion on Capitol Hill and among various stakeholders, including the chemicals sector and environmentalists, but final action on a bill before next year's national elections is unlikely.

Senator Frank Lautenberg (Democrat-New Jersey) has circulated a revised version of his TSCA-update bill, the Safe Chemicals Act, and his staff has held several meetings with chemical sector officials, but Lautenberg's bill generally is seen by industry as still far too onerous.

"Lautenberg has indicated that he wants to get his bill through the [Senate] Environment and Public Works Committee this fall," Gibson says. But that is probably as far as the bill is likely to get this year. "Even if he gets his bill through committee, I can't see it moving to the Senate floor," she adds. "And there is certainly no appetite in the House for taking up TSCA this year or next."

By: Joe Kamalick
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