US House mulls boost to small business via shale gas bonanza

03 March 2014 23:05  [Source: ICIS news]

BALTIMORE, Maryland (ICIS)--The US Congress is eyeing ways to use the nation’s newly resurgent natural gas resources to spur increased development of domestic small- and medium-sized businesses, a top chemicals industry official said on Monday.

Bill Allmond, vice president for government and public relations at the Society of Chemical Manufacturers & Affiliates (SOCMA), said that the House Committee on Small Business “is looking at what Congress and the administration can do to encourage more chemical companies to maintain if not expand their operations in the US versus opening manufacturing facilities overseas”.

He said that SOCMA, whose 300 member firms generally are small- to medium-size specialty chemical and batch producers, “has been engaged by the committee to answer some of those questions”.

Allmond said that the House panel is “trying to determine whether shale gas, which has been a game-changer for industrial chemicals manufacturers, can also generate a similar boost among smaller producers”.

“If so,” he said, “what actions can Congress and the administration take to encourage that?”

He said that the broader objective in staff-level discussions at the committee is to boost US exports.

Speaking on the side-lines of the annual GlobalChem conference, Allmond said that the committee’s subsidiary panel on Economic Growth, Tax and Capital Access wants the federal government to enhance energy-related developments that already are increasing the competitive edge for US small businesses.

That subcommittee is chaired by Representative Tom Rice (Republican-South Carolina).

Citing the newly abundant supplies of shale gas, Allmond noted that for US manufacturers dependent on natgas, “feedstock costs are improving, while the quality of work done for them overseas has been questionable, especially in East Asia”.

US manufacturers who keep their production capacity stateside also have more control over processes, and labour costs in Asia are increasing in any event.

US-based manufacturers also face less risk for theft of their intellectual property rights compared with foreign-based operations, he said.

Allmond said that SOCMA member companies have told the subcommittee that among policies that could help accelerate the re-shoring of US manufacturing would be legislation to make the research and development (R&D) tax credit permanent instead of renewing it annually - and occasionally letting it lapse.

“Small businesses need to know whether they can rely on that tax credit being there,” Allmond said.

He also said that better federal protections for and effective sanctions against theft of intellectual property and technology would greatly aid small producers.

He said that “76% of global intellectual property [IP] resides here in the US, and much of that is in chemistry”.

“We can do more to protect IP, and that would be a great way to maintain and encourage production here,” he added.

Allmond said that there is no bill crafted as yet but that discussions with Congressman Rice and his staff are continuing.

Cosponsored by SOCMA and the American Chemistry Council (ACC), the annual GlobalChem regulatory conference runs through Wednesday of this week.

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

By: Joe Kamalick
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