INSIDE VIEW: Stewardship, economic recovery begin with US chems

07 March 2012 16:10  [Source: ICIS news]

ACC CEO Cal DooleyEditor’s note: This article is an opinion piece and the views expressed are those of the author and do not represent those of ICIS.

By Cal Dooley, President and CEO
American Chemistry Council (ACC)

Every year, GlobalChem gives industry and regulators from around the world the opportunity to take stock of the current regulatory landscape and assess what it means for us all.  As we review developments and update our international colleagues, it’s critical that we not lose sight of what is at stake.  Without a rational, efficient approach to chemicals regulation in all major jurisdictions, our industry’s ability to create jobs and drive global economic growth, and our ability to innovate and create new products that will help overcome the many challenges facing the planet, will be in jeopardy.

You can look no further than the current state of the US industry to understand the implications.  The US business of chemistry is driving an American manufacturing renaissance by transforming domestic energy supplies into a stronger economy and new jobs. Ethane-rich natural gas from shale gives the United States an advantage over other countries – one that starts with the business of chemistry.

Thanks to affordable, abundant supplies of domestic shale gas, the chemical industry recouped 140,000 jobs lost over the last few decades. This growth has been felt by our industry and has rippled throughout the US economy, as downstream manufacturing industries like plastics and steel reap the benefits of affordable natural gas prices and a growing chemical industry.

While a comprehensive energy strategy that encourages the development of natural gas from shale will be critical to our sustained success, a chemical regulatory system that promotes safety, instills public confidence and supports innovation is equally important.

As we seek to modernize America’s chemical management system, innovation and safety must be viewed as twin priorities.  Innovation brings about new, safer chemicals.  Innovation in chemistry leads to new products that revolutionize our lives and meet global needs by providing food, shelter, medicine and energy to the world.  Innovation creates economic activity, growth and jobs that sustain communities.

The emergence of new approaches to chemicals management in Europe and other countries has raised questions about whether the United States has ceded its leadership position on these issues.

Some have suggested that the EU’s REACH should serve as the model for changes to TSCA, but there is ample reason to be skeptical of REACH as a model for the US. In fact, there is no evidence that REACH will successfully promote safety and innovation.

A recent report from Indiana University identified several ways REACH would not work in the United States. The report found REACH to be “much more complex and burdensome than the program needs to be to accomplish its objectives.”

The US has a record of demonstrating the kind of sensible, pragmatic leadership that is needed on chemicals management to promote safety, encourage innovation and support a thriving industry and overall economic growth.  With respect to my European colleagues, the EU’s record is not as strong.

For example, genetically-modified organisms (GMOs), present the promise of enhanced food security at a time when global demand for food, water and arable land is growing.  Yet, Europe’s approach to regulating this sector has effectively shut it down.  As a result, some companies, including BASF, are leaving the European plant biotechnology market to focus elsewhere. We may see similar consequences related to nanotechnology.

Rather than adopting seemingly flawed approaches for the sake of convenience, we must learn from these lessons and assert US leadership by crafting a new regulatory regime that can serve as the gold standard for global chemicals management.

Unfortunately, there has been little progress toward legislative reform of TSCA. The current proposal in the Senate, the Safe Chemicals Act, is a non-starter and would NOT achieve the goals of safety, innovation and future growth of the domestic chemical industry.

The bill is based on an unworkable safety standard.  It would modify the new chemicals program, widely viewed as effective, to be even more restrictive than REACH; and it fails to require systematic, scientifically-based prioritization of chemicals for review.

ACC has put forth detailed proposals to modernize TSCA.  If implemented, these recommendations would reflect our commitment to safety and instill public confidence in US chemicals regulation, while also allowing for continued growth, innovation and global competitiveness of the US chemical industry and the manufacturing sectors it supports.

It is highly unlikely that the political environment in Washington will allow for serious progress on TSCA this year, which is why we maintain our focus on improving EPA regulations under the current TSCA. We have worked to improve the Chemical Data Reporting rule ensuring EPA has high quality information to inform prioritized reviews of chemicals.

ACC proposed a transparent, science-based prioritization system that will allow EPA to use the information it collects to focus its resources on assessing chemicals with the greatest need.  We were pleased to see that elements of ACC’s prioritization proposal were reflected in EPA’s work plan for new chemicals released on March 2. And we are focused on ensuring that EPA makes fundamental changes to the IRIS program so when the risks associated with chemicals are assessed, the results are credible.

Among our highest priorities is ensuring that EPA’s regulatory proposals don’t undermine the competitive nature of the free market. An EPA rule now under review at OMB would severely restrict the ability of chemical companies to protect chemical identity as confidential business information.

The results of this proposal could be devastating to new product innovation.  For example, a few years ago one of ACC’s members invested over $150 million to develop the chemicals needed for a new detergent that would revolutionize the way Americans do their laundry, allowing cold water washing to produce the same results as hot water, saving money on energy bills and reducing CO2 emissions.

It was critical that the chemical identities in this product be claimed confidential when submitted to EPA to prevent competitors from developing a similar product. Had EPA’s proposed rule been in place at that time, the company would have had to disclose its confidential business information to competitors.

ACC, with support from the American Cleaning Institute and the International Fragrance Manufacturers of North America, developed an alternative approach that would ensure that appropriate health and safety information is available without compromising our industry’s competitive edge.
Sound chemicals regulation isn’t the only prerequisite to ensure global growth and continued innovation for our industry. We must work together to eliminate trade barriers so we can improve access to world markets and ensure a level playing field.   In the US, the chemical industry makes up roughly 10% of all exports, so facilitating increased trade by our industry will have a noticeable impact on our ability as a nation to meet the ambitious export growth goals set forth by President Obama.

From crafting sensible health and safety regulations, to encouraging innovation at home and abroad, to boosting US exports and driving job creation, chemical management is indeed a global concern with worldwide ramifications. But that doesn’t mean the United States should not take the steps necessary to maintain our country’s competitive advantage. And it doesn’t mean the United States cannot lead the way. We can, we should, and we will.

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