OUTLOOK ’14: Industry hopes for action on TSCA, CFATS

06 January 2014 16:00  [Source: ICIS news]

WASHINGTON (ICIS)--The US chemicals industry hopes to get congressional approval in the new year for a long-needed modernisation of rules governing control of chemicals in commerce and an as-is extension for a federal mandate for plant site security - but both have to happen by mid-year or else get mired in the midterm election mess.

Cal Dooley, president of the American Chemistry Council (ACC), said he is hopeful that Congress will come to an agreement early in 2014 on the proposed bipartisan bill, the Chemical Safety Improvement Act (CSIA).

First sponsored by Republican Senator David Vitter of Louisiana and the late Senator Frank Lautenberg (Democrat-New Jersey), the bill would replace the 37-year-old Toxic Substances Control Act (TSCA), which all sides agree is sorely in need of an update.

As Dooley noted, the chemicals industry is largely accepting of the Vitter-Lautenberg bill because it continues the science- and risk-based approach of TSCA while giving the Environmental Protection Agency (EPA) more regulatory authority without smothering innovation.

“This is the first time since TSCA was enacted that we have a bipartisan proposal to modernise and reform TSCA in a way that certainly enhances EPA’s authority and ability to assess the safety of chemicals and make an affirmative determination on this,” Dooley said.

But, he added, the CSIA manages that modernisation “in a balanced way that allows our member companies and the broader value chain entities to continue to ensure that the US, as a regulatory construct, allows us to continue to be on the forefront of innovation and development of new technologies”.

He said that he believes issues raised by some in the environmental community about the CSIA “are all very manageable and can be addressed in an appropriate way that will hopefully lead” to passage in the Senate and House.

“We think there is a real opportunity to see action that would result in a floor vote in the House in the first half of next year,” Dooley said, adding: “And we think that continues to build momentum that could result in enactment of and signing of a version of CSIA prior to the November elections.”

Bill Allmond, vice president for government and public affairs at the Society of Chemical Manufacturers and Affiliates (SOCMA), also has hopes for a TSCA modernisation bill early in the new year - but he thinks it had better get done sooner rather than later.

Key to getting a TSCA reform bill through the Senate is opposition by Senator Barbara Boxer of California, the Democrat chairperson of the Senate Environment and Public Works Committee.

She is said to be uneasy about the CSIA provision giving the federal law pre-emption over state regulations on chemicals in commerce.

Boxer wants to ensure that any replacement measure for TSCA does not torpedo her state’s own chemical controls regulations.

Allmond thinks that Boxer will come around on the issue.

“Optimistically, we may see Senator Boxer come to an agreement on the Vitter-Lautenberg bill so that TSCA reforms can move forward in the first quarter,” he said.

“I have no special intelligence information on Boxer, but she’s been sitting on this bill long enough and I think she’ll get off the dime in the first quarter and make sure it moves forward,” he said.

“I think there will be some changes in CSIA,” he said, perhaps addressing Boxer’s concerns about pre-emption. “There may be some substantive changes in the bill, but nothing that will be a deal-breaker.”

But if it is going to happen, said Allmond, Congress will have to complete action on a TSCA reform bill before June. 

After mid-2014, every member of the House and one-third of sitting senators will be wholly focused on getting re-elected in the November elections. Traditionally, members of Congress do not favour taking a stand on any sort of controversial legislation just prior to a re-election vote.

Another key item on the legislative menu for 2014 is a possible multi-year extension for the Chemical Facility Anti-Terrorism Standards (CFATS), the federal mandate for anti-terrorism security measures at high-risk chemical production, storage and transit facilities nationwide.

Enacted in 2006 but plagued by rollout and implementation problems since then - including a scandal over mismanagement by the Department of Homeland Security (DHS) - the programme has been given one-year extensions in a process that has left chemical site operators and compliance officials on the edge of their seats year after year.

Industry would like to see a multi-year extension of CFATS so that plant site operators can have some measure of certainty for at least a couple of years without fear that Congress might move the goal posts at any time.

Allmond noted that chemical producers had been hoping for a five- to seven-year extension of CFATS as it is, but that in the wake of the DHS mismanagement scandal - which featured personnel misplacement, pointless equipment purchases and broad waste - it is not likely that Congress will be willing to leave DHS unsupervised for so long a period.

“I think realistically we can get a two- or three-year extension of CFATS as a best-case scenario,” Allmond said.

“I think we’ll see that oversight committees in Congress have more confidence that DHS is hitting its stride in implementing CFATS,” he said. “There is less concern in Congress around issues of waste, fraud and abuse.”

But, as with the legislative effort to get the TSCA done in 2014, Allmond says that any measure to give the CFATS a multi-year run will have to be approved by Congress before June lest it fall into the re-election swamp.

At the American Fuel & Petrochemical Manufacturers (AFPM), there is more concern about what might happen on the regulatory side in the new year.

David Friedman, AFPM vice president for regulatory affairs, does not expect much out of Congress on environmental legislation in the new year.

“We haven’t seen a major piece of environmental legislation out of Congress since the 1990 amendments to the Clean Air Act,” he said, adding: “It is very difficult to get anything environmental out of Congress, given the party split.”

Republicans hold the majority in the US House while Democrats hold the gavel in the Senate; legislation passed by one chamber faces an uncertain future at best in the other.

Instead, Freidman is focused on the EPA and its looming regulatory assault on carbon dioxide (CO2) emissions by so-called “stationary sources”, meaning electric utilities, refineries, chemical plants and other manufacturing and energy-consuming commercial facilities.

“On the rules side, it’s all about the climate,” Friedman said, citing coming EPA rules capping emissions by any new electric power plants and later similar restrictions on carbon releases by existing utilities.

Those rules could have a profound effect on refiners and chemicals producers because both are major consumers of electric power, and the coming EPA limitations are expected to drive the cost of electricity considerably higher.

Friedman also is eyeing work in the EPA on an air toxics rule concerning refineries, which will mandate use of maximum available control technologies (MACT) for both refiners and chemical plants.

In another area of legislative or regulatory concern, chemicals manufacturers want Congress to renew the miscellaneous tariffs exemption.

That exemption eliminates US tariffs on more than 200 imported substances, chemicals or other items that are not produced domestically but are used in production of or as end-product components in US manufactured goods and materials.

If domestic producers have to pay tariffs on those component materials, it makes those US finished goods more costly domestically and less competitive when exported abroad.

Here, too, Congress typically has renewed this exemption year-by-year or for at most a two-year period.  The exemption expired at the end of 2012, and SOCMA’s Allmond and many others would like to see it given a multi-year, long-term extension.

However, a great many industry sectors, lobbyists and interest groups are going to be pressing for urgent action by Congress on this or that critical issue in the first half of the new year.

Chances are that Congress will fail to take action on most if not all of those earnest petitions before the wave of re-election panic sweeps all before it around mid-year.

By: Joe Kamalick
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