INSIGHT: US styrene industry at risk while Congress, courts fiddle

26 April 2012 12:50  [Source: ICIS news]

By Joe Kamalick

Whimsical styrene light fixturesWASHINGTON (ICIS)--Even if Congress and the US courts ultimately reverse a federal ruling that styrene is a carcinogen, the damage may have been done – and still more US manufacturing jobs will move offshore.

The US styrene industry is fighting a nearly year-old ruling by the federal National Toxicology Program (NTP) that styrene – probably, maybe, could, likely, possibly, might – cause cancer in humans.

But even if they win the battle, the war might be lost.

A de facto if not de jure determination by federal regulators that styrene is probably a carcinogen could well be overturned years down the road by the federal courts or other US regulatory science panels.

But by then, warn US styrene officials, the damage will have been done, production capacity lost and jobs shipped abroad.

US styrene industry officials this week told Congress that a federal government finding that styrene likely causes cancer was the result of a flawed process that lacks scientific credibility and needs a congressional overhaul.

James Bus, Dow Chemical’s director of external technology, toxicology and environmental research, told the House Subcommittee on Investigations and Oversight that there are multiple scientific shortcomings with how the federal government evaluates the health impact of chemical substances.

Speaking for the Styrene Information and Research Center (SIRC), Bus said the NTP “falls well short of producing evidence-based listing decisions”.

The NTP is part of the US Department of Health and Human Services (HHS).

Bus and other styrene industry officials testified about the business and commercial consequences of the NTP’s ruling of last year that styrene probably causes cancer in humans.

In June 2011, the NTP issued its 12th Report on Carcinogens (RoC), in which styrene is characterised as “reasonably anticipated” to be a human carcinogen.

Styrene industry interests – including the SIRC – immediately challenged the NTP decision, and filed a lawsuit in federal court seeking to reverse what the styrene producers' group termed a “scientifically bankrupt” decision.

Later, in June last year, the US District Court in Washington, DC, declined to issue a temporary stay order against the NTP, but the court said it would consider the SIRC’s request for a permanent injunction. That case is pending.

As a final court resolution of the matter could be years away, styrene industry officials asked Congress to order an immediate and comprehensive scientific review of the NTP decision on styrene by the US National Academy of Sciences (NAS). In December last year Congress authorised funding for the NAS to conduct that review, which is expected to get under way sometime this year.

The NAS is a taxpayer-funded agency that advises the US government on scientific and technical issues, and its findings typically influence Congress.

Bus charged that the NTP chemicals review process lacks formal scientific structure and – by the NTP’s own account – only includes external scientific input “as needed”.

In addition, he said the NTP’s RoC process “lacks adequate checks and balances, including peer review” and “fails to employ scientific best-practices”.

Executives of companies that use styrene as a feedstock told the House panel that if allowed to stand, the NTP’s determination of styrene as a possible carcinogen would force them out of business – and drive some 250,000 US manufacturing jobs to other countries.

Bonnie Webster, vice president at Monroe Industries in Avon, New York, told the panel that her seven-employee cast polymer firm is facing collapse because of the RoC determination.

“We are very concerned that the listing of styrene in the 12th Report on Carcinogens could make it very difficult for us to stay in business,” she said.

This is because her company, which uses styrene-based resins to produce high-end custom bathroom and kitchen installations, could lose its insurance coverage through the RoC determination.

“Currently, there is only one company that will insure us,” she said. 

If that underwriter should learn that the NTP has labelled styrene as a carcinogen – regardless of how conditional and tentative the determination – Webster said that her small company’s insurance costs could triple or quadruple, or coverage simply might not be available at all.

She said the NTP ruling also jeopardises Monroe Industries’ workmen’s compensation insurance coverage, and the company also could be hit with liability lawsuits claiming worker or community health damages.

Monroe Industries is of course insured against such a possibility. However, it is common for underwriters to rush to settle a liability suit – and then dump the client firm for fear of similar court challenges.

The NTP ruling also raises state-level risks for styrene-based US manufacturers, she told Congress.

“Many state air pollution regulatory agencies will look at the RoC listing and set styrene ground-level exposure limits based on a presumption of carcinogenicity,” she said. “This will make it impossible for composite manufacturers in those states to get or renew operating permits.”

Many small composites firms like hers, said Webster, “do not have the luxury, if you can call it that, of moving production offshore”.

If the carcinogenic ruling by the NTP stands, and Monroe Industries suffers the liability consequences, she said, “we will have no choice but to liquidate our companies”.

John Barker, environmental affairs manager at Strongwell Corporation of Bristol, Virginia, also warned that his 465-employee firm is at risk because of the NTP ruling on styrene.

He told the House panel that an online search of “styrene toxic tort” will generate a list “of many law firms that now claim to specialise in ‘styrene injury suits’”.

“Styrene was not a business opportunity for these law firms a year ago,” he said, referring to the June 2011 NTP ruling.

“Because we self-insure, Strongwell has had to place a significant amount of money into reserves to protect ourselves against potential liability lawsuits,” he said, noting that: “The money we must reserve for liability purposes could be used for investment and job expansion if it weren’t for this styrene [carcinogenic] listing.”

Barker added: “Because there is no legitimate substitute for styrene and because the costs of liability and compliance could increase astronomically, there is concern that the federal treatment of styrene could drive composites jobs offshore.”

“Our competitors in Mexico, China, Canada, South America and Japan do not face the same regulatory barriers,” he told the House panel. “Even Denmark and other countries in the EU welcome composites manufacturing, because they recently looked carefully at the styrene data and determined that it is not a carcinogen.”

US regulators ultimately could come to the same conclusion – but by then the horse may well be gone and there will be little point to closing the barn door.

($1 = €0.76)

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

By: Joe Kamalick
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