GOP Efforts to Block EPA Climate Rules Face High Hurdles

Sen. Lisa Murkowski

Republicans in both the Senate and House are working to block U.S. EPA climate rules, but critics of agency climate regulations will likely face a tough slog as they work to secure the support of both chambers and the president.

Alaska Sen. Lisa Murkowski and Texas Rep. Joe Barton are each spearheading efforts to circumvent normal committee procedures in order to effectively veto EPA’s finding that greenhouse gases endanger human health and welfare. The determination, released earlier this month, opens the door for rules aimed at slashing emissions from a broad range of sources.

Rep. Joe Barton

The resolutions are the latest in a series of congressional efforts this year aimed at tying EPA’s hands as the agency works to finalize several major climate regulations due out by March.

Murkowski, ranking member of the Senate Energy and Natural Resources Committee, and Barton, the top Republican on the House Energy and Commerce Committee, say they hope to win support from fellow lawmakers who oppose EPA’s efforts, but even Murkowski acknowledged that she faces an “uphill battle” finalizing the measure.

Overall, “the odds of this becoming law are very slim,” said Daniel Weiss, senior fellow at the Center for American Progress Action Fund. “It would have to pass the Senate, the House, President Obama would likely veto it, and they'd have to override the veto with two-thirds majority of each house,” he said.

But while even proponents of the resolution acknowledge that it will be difficult to clear both Democrat-led chambers and the Obama administration, some expect that the threat of EPA regulations will spur many lawmakers to act to stave off EPA rules.

Andrew Wheeler, former Republican staff director for the Environment and Public Works Committee who now works for B&D Consulting, said there is a chance that Murkowski’s measure could clear the Senate.op

“I question whether or not enough of the senators fully understand what the EPA endangerment finding will mean,” Wheeler said. “I'm not positive that the momentum is there yet for all the members to fully understand what the endangerment finding means.” However, the resolution is less likely to clear the House, Wheeler said, where the Democratic majority is so large.

Senate
Murkowski plans to introduce her resolution as soon as the Senate returns from the holiday recess, according to spokesman Robert Dillon.

In the Senate, the disapproval resolution would be referred to the Environment and Public Works Committee. If the committee does not favorably report the resolution within 20 calendar days, it can be discharged once 30 senators sign on. The resolution would then be placed on the Senate calendar, where it would be subject to expedited consideration on the floor and not subject to a filibuster.

Key Senate Democrats say they expect the effort to fail. “It's very difficult to use that procedure to undo any initiative from any regulatory agency,” said Sen. Tom Carper (D-Delaware).

Sen. John Kerry (D-Massachusetts), the leading author of the Senate energy and climate bill, last week said Murkowski “won't get the requisite votes” to clear the Senate.

Sen. Lindsey Graham (R-South Carolina), who plans to co-sponsor Murkowski's resolution, was more optimistic. “I think it'll pass the Senate,” Graham said. “I just think too many senators understand that the regulatory approach is the worst of all worlds. It adds a bunch of burdens without providing benefits,” he said.

Still, “I hope we'll do more than just disapprove of that action,” added Graham, one of the leading architects of a Senate energy and climate bill.

Sen. John Thune (R-South Dakota) also said he intends to co-sponsor Murkowski’s effort. He said some moderate Democrats may be willing to sign on to the measure but acknowledged that getting the measure through the Senate would only be the first step.

“To get the votes here is one thing,” Thune said. “To get the president to sign it and when he vetoes it to be able to override it – which takes 67 votes – that’s a pretty heavy lift, obviously.”

House
Barton and his co-sponsors on the House side are also expected to face challenges finalizing the resolution.

The House cannot use the same expedited procedure as the Senate, but House lawmakers can use a discharge motion to bypass the committee of jurisdiction and bring the resolution to the floor.

Under House rules, co-sponsors need 218 signatures to send the discharge motion to the “discharge calendar.” Once it has been added to the calendar, the motion can be adopted with a simple majority and the House can immediately consider the disapproval resolution, which would come to the floor in the form introduced with no amendments and no written report.

House Republican Leader John Boehner of Ohio praised Barton and Republican co-sponsors Reps. Jim Sensenbrenner of Wisconsin, Darrell Issa of California, and Lamar Smith and Ralph Hall of Texas for their plans to introduce the measure.

“This EPA rule amounts to a backdoor national energy tax on every American who drives a car, flips on a light switch, or buys a product manufactured in the United States,” Boehner said in a statement last week.

Seamus Kraft, a spokesman for Issa, said it is too soon to know how the effort will fare in the House. “We do think that there is a broad feeling of distrust and resentment in the administration’s approach, which appears to undermine and usurp congressional responsibilities,” Kraft said. “We also have a strong sense that members of Congress who support cap and trade would back our resolution -- because it is just the wrong thing to do in these tough economic times.”

Ongoing effort
If the congressional efforts fail, GOP lawmakers have vowed to look to other vehicles to limit EPA’s authority.

“The other scenario, of course, is we're going to continue to try to offer amendments to appropriations bills to prevent EPA from moving forward with the endangerment finding until Congress acts,” said Thune, who worked with Murkowski earlier this year on a failed appropriations rider to limit EPA regulatory authority.

Sen. James Inhofe (R-Oklahoma) said he does not think Murkowski's resolution will become law, but added, “I don't think it makes too much difference.”

Inhofe said he expects that imminent lawsuits will “effectively kill the endangerment finding.” Legal challenges over the science upon which the finding is based and other lawsuits over pending EPA regulations will stop anything from happening, he said. “So I've never been concerned about the endangerment finding,” Inhofe added. “It's never going to happen.”

Obama Promotes Home Energy Efficiency Program

President Barack Obama said last month that home insulation “is sexy;” his newest appeal for Congress to pass incentives for homeowners who make their homes more energy efficient.

“Here’s what’s sexy about it. It saves money,” the president said at a Northern Virginia Home Depot store. He was joined at the outlet by members of Congress representing Virginia and labor and business leaders involved in services to lower use of natural resources consumed by homeowners.

Calling insulation the in-thing, Obama’s pitch was part of a broader administration push to lower the nation’s 10 percent unemployment rate. And it marked the fourth time in less than two weeks that the president has presided over high-profile events that call attention to efforts to curb joblessness.

The week before, Obama advanced a new spending plan that would provide tax breaks for energy-efficient retrofits in homes. The plan also calls for small business tax cuts and new spending on highway and bridge construction. The administration hasn’t put a price tag on the plan, but it could total more than $150 billion.

The administration is hoping to tap into money paid back by banks or not needed from last October's emergency $700 billion bailout program that pulled the country’s financial system back from the precipice of meltdown.

The White House hopes the appeal of the retrofitting program — which some administration officials have dubbed Cash for Caulkers — will be similar to the now-expired Cash for Clunkers program, which offered rebates for trading in used vehicles for more fuel-efficient ones. At a White House jobs forum earlier in the month, Obama told Home Depot chairman Frank Blake that home improvement companies would be key partners in this program.

Obama has also proposed expanding stimulus initiatives that promote energy efficiency and clean energy jobs. Currently, about $8 billion of the $787 billion stimulus package goes toward energy-saving investments in homes. The White House has said investments like installing insulation, sealing leaks and modernizing heating and air conditioning equipment will pay for themselves many times over.

In a memo for the president, Vice President Joe Biden said stimulus spending and other initiatives would lead to 1 million home energy-efficiency retrofits by 2012. The report also said the U.S. is on track to double renewable energy generation, including solar, wind and geothermal, in three years.

U.S. Senate Committee Passes Bill to Help Captive Rail Customers

In mid-December, a U.S. Senate committee marked an important milestone in the long effort to obtain legislative improvements in the railroad regulatory program that could benefit captive rail customers, including many chemical manufacturers.

The Senate Commerce, Science and Transportation Committee, by a bipartisan, unanimous voice vote, ordered reported S.2889, the Surface Transportation Board (STB) Reauthorization Act of 2009.  A copy of the bill is on the CURE web site: www.railcure.org
 
The bill is the product of a ten-month negotiation among and between Chairman Jay Rockefeller (D-WV), Committee Ranking Republican Kay Bailey Hutchison (R-TX), Surface Transportation Subcommittee Chairman Frank Lautenberg (D-NJ), Subcommitte Ranking Republican John Thune (R-SD) and Senator Byron Dorgan (D-ND).  During this process, the bipartisan committee staff reached out to the captive rail community, the railroads, the STB and perhaps others to develop this legislation.

Sen. Jay Rockefeller

This legislation is a major victory for Chairman Rockefeller, who has championed the cause of captive rail customers since entering the Senate in 1985.  Until becoming Chairman of the Committee this January, Senator Rockefeller had been frustrated at every turn in his effort to achieve legislative improvements for captive rail customers.  When he became Chairman, Senator Rockefeller made the captive rail issue a high priority, established a process for reaching a bipartisan consensus and prodded the process forward doggedly.
 
CURE member Robert Szabo of the D.C. law firm Van Ness Feldman said, “I saw real investment in this compromise legislation by a wide spectrum of Members and enthusiasm for achieving a compromise on a very difficult subject – in fact a subject that Chairman Rockefeller said was more resistant to compromise than the health care reform issue.”  Szabo added, “I also saw bipartisan enthusiasm for seeing this legislation enacted into law this Congress; indeed a number of Senators on both sides of the aisle made this specific statement.”

Recession Prompts Shift in Chemical Strategies

After a tough 2009, the chemical industry is looking for new ways to grow. In particular, companies are seeking to capitalize on long-term societal “megatrends,” including renewable energy and the need for improved food and water supplies.

Increasingly, companies are realigning their research and development (R&D) capabilities with these trends. DuPont allocated more than three quarters of last year’s $1.4 billion R&D budget to three megatrends: increasing food production, decreasing dependency on fossil fuels and protecting people, assets and the environment.

The global economic recession is marking a shift in companies’ long-term strategies, said Paul Hodges, chairman of consultancy International e-Chem. There is increased pressure on the world’s resources, and this is prompting firms to identify growth opportunities in areas such as energy, food and water, he said.

“Downturns of this scale are generally periods of transition,” Hodges said. As we emerge from the downturn, in three or four years, companies will be focusing more on low carbon technologies, he said. “Sustainability is going to be fantastically important. It hasn’t been important until now because we’ve always had a buffer stock of spare oil production. Today, supply and demand are closely balanced.”

Hodges points to two other periods of transition during his career in the chemical sector. The first, in the early ‘80s, was the move from national to global businesses. The second, in the early ‘90s, involved the increased focus on consumption-related products, resulting in the development of new products for the housing, automotive and electronics markets.

It is important “not to waste a good crisis,” DuPont CEO Ellen Kullman stated last year. DuPont has evolved through three transformations during its 207 years, emerging stronger after each economic downturn, she told delegates at the Wharton Leadership Conference in Philadelphia, Pennsylvania, in June. “We must be prepared for the world the way it was before the recession, but prepare to succeed in the different world that we'll encounter when the recovery eventually comes,” she added.

The chemical industry has been adept at developing products aimed at improving efficiencies and has the skills required to optimize supply chains and adapt to new feedstocks, said Hodges.

“It started off using coal as a feedstock, then moved to oil. A move to bio-based products should be no great surprise and should not cause great difficulties,” he explained.  The current transition involves “doing more with less.” Increased food production, for example, will require an analysis of the supply chain, with the emphasis moving “away from obesity and towards a more responsible outlook.”

A study conducted by research group McKinsey, commissioned by the International Council of Chemical Associations (ICCA), shows the contribution that products developed by the chemical industry are making to cut carbon emissions. For every unit of carbon dioxide or equivalent greenhouse gas (CO2e) emitted in chemical industry production processes, the resulting products save two to three units of CO2e emissions, the study says. In other words, McKinsey calculates that in 2005, without the innovative products of the chemical industry, there would have been 8-11% more emissions of CO2e. Products that achieve these carbon savings include building insulation materials, lighting, marine coatings, automotive plastics and low-temperature detergents.

Cutting long-term global greenhouse gas emissions “will require greater use of innovative, energy-saving chemical products and technologies,” said the ICCA's president, Christian Jourquin.

Increasing urbanization is driving many of the megatrends, says Peter Cartwright, global executive director for environment, health and safety (EHS) at US-based silicon technology company Dow Corning. Quite soon, 50% of the global population is expected to be in big cities, he says. “Big towns are going to need secure energy supplies and clean water, and will have to deal with climate change, too.”

Dow Corning says much of its innovation efforts will be linked to trends involving green energy, clean and accessible water and a sustainable urban environment. “Our solar silicon is a key provider of low carbon and renewable energy,” said Cartwright.

Other firms designing their innovation pipelines around megatrends include Bayer, Dow Chemical and Evonik Industries.

German chemical and pharmaceutical major Bayer is focusing on health care, nutrition and climate protection, with an overall commitment to sustainability. “We are making specific contributions to balance commercial success with the protection of the environment and the needs of society,” states Chairman Werner Wenning.

The Dow Chemical Company has said that it is focusing its organic growth on four global megatrends: energy, transportation and infrastructure; health and nutrition; and consumerism. In transportation, for example, the company has introduced new plastics and bonding solutions to make cars tougher and lighter, increasing efficiency and safety.

German specialties producer Evonik is developing new business activities around megatrends including: energy efficiency; globalization and demographic change; and health and wellness.

Renewables
The chemical industry has played a vital role in the development of renewable energy technologies, from photovoltaics for solar panels to composite materials for wind turbine blades.

About 80% of the energy consumed globally today relies on fossil fuels and non-renewable energy resources, says Peter Cartwright, Dow Corning's global executive director for environment, health and safety (EHS). “As those resources are depleted and climate change regulations come in, the market for renewable energy is enormous.” Solar energy, for example, accounts for just over 1% of today's energy consumption, he notes.

Global petrochemicals firm ExxonMobil estimates that wind, solar and biofuels will grow sharply through 2030, at an average of nearly 10% per year. However, they are starting from a small base which means their contribution by 2030 will remain relatively small, perhaps 2.5% of total energy, the U.S. energy group said in its “Outlook for energy: a view to 2030” report.

Concerns about climate change and future supplies of petrochemical raw materials are also helping to speed up the development of new bio-based materials. Global demand for bioplastics – defined as bio-based or biodegradable or both – is expected to rise fourfold, valued at $2.6 billion in 2013, according to market research company Freedonia.

Solar Energy
Solar silicon producers are expanding their production capacities to meet rising demand for photovoltaic panels. Global polycrystalline silicon production is expected to reach 150,000-180,000 tonnes/year in 2012 compared with approximately 80,000 tonnes/year in 2009, according to Wacker Chemie.

The German specialty chemical producer plans to build a plant in Cleveland, Tennessee, and is expanding its German production. In Germany, the company has expanded its production capacity in Burghausen by 10,000 tonne/year plant to 25,000 tonnes/year and intends to build additional capacity in Nunchritz, said spokesman Christof Bachmair. The 10,000 tonne/year Nunchritz plant is scheduled to start up in 2011.

Dow Corning subsidiary Hemlock Semiconductor, the global leader in solar silicon production, also plans to build a plant in Tennessee. Located in Clarksville, the project is expected to require a $1.2 billion investment. Hemlock is also expanding its production capacity in Hemlock, Michigan, to approximately 36,000 tonnes/year.

Food
The United Nations is predicting that agricultural output will need to double and food production will need to increase by 70% by 2050 to adequately feed the expected global population of 9 billion people.

Sustainable, increased productivity will need to occur as available arable land and resources shift, remain unchanged or, in some areas, decrease, says DuPont. The company has identified increasing food production as a key megatrend, and allocated about half of its $1.4 billion R&D budget to this area in 2009.

Innovations in biotechnology can help address the growing global demand for food and fiber and reduce dependence on fossil fuels, DuPont says. Biotechnology will play a critical role in doubling agricultural output by 2050, when the world’s population is expected to reach 9 billion people, executive vice president James Borel told delegates at the BioJapan World Business Forum in October.

Other areas of focus at DuPont include advancing the nutritional content derived from crops, supplying innovative packaging to preserve food quality and developing efficient quality-testing systems to ensure safe food supply.

DuPont's seed business, Pioneer Hi-Bred, has been working with small-scale farmers to help improve productivity, for example via the West African Seed Alliance (WASA). The Alliance is a partnership between organizations including aid agencies, seed companies, public and private sector plant breeders and governments.

“To sustainably increase small-scale farmer productivity, we must start with the context of the local agriculture practices, infrastructure, culture and government policies,” said DuPont vice president and Pioneer Hi-Bred chairman Dean Oestreich.

Local public-private collaborations can help to increase local agricultural productivity and, ultimately, global food security, said Oestreich, who retired at the end of last year. “By bringing additional focus to the food security and the potential of collaborative, integrated approaches, we can better feed the hungry and contribute to stability and security around the globe.”

Energy Efficiency
Energy efficiency is critical in meeting growing energy needs, asserts Rich Kruger, president of ExxonMobil Production. The U.S. energy group estimates that energy demand will be about 35% higher in 2030 than in 2005 as economies grow and living standards improve worldwide. “We estimate that by 2030, the amount of energy saved through efficiency gains will be equivalent to approximately 145m barrels of oil a day, or about twice the amount of new energy from all sources,” Kruger says.

Products helping to cut energy consumption include Evonik’s flexible ceramic membrane technology, designed to make large-scale lithium-ion batteries safer and more efficient. Li-Tec, a joint venture between Evonik and Daimler, uses the technology to produce large-scale lithium-ion battery cells for automotive and industrial applications in Kamenz, Germany.

There is a wide range of high-tech insulation products for cutting energy losses from buildings. Germany-based Wacker Chemie supplies dispersible polymer powders to the construction sector for use in exterior insulation systems. The powders are added to mortars to protect the outside of the insulation systems from weathering and enable a solid bonding between the insulation system and the building walls.

Water
The World Economic Forum has warned that many places in the world are on the verge of “water bankruptcy.”

About one in three people in the world are affected by water scarcity and the situation is expected to worsen, says Peter Cartwright, Dow Corning’s global executive director for environment, health and safety (EHS). “The population is growing. Unless something is done about this, in the next 20-25 years or so that one third could increase to a half.”

Dow Corning is developing products that can contribute to water conservation. In the textiles sector, the company has created a silicon-based softening technology that allows a reduction in the amount of water and energy used to process and soften denim. The technology can save about 4 gallons (15 liters) of water for every pair of jeans made, potentially saving 7.5 billion gals/year of water, based on 1.9 billion pairs of jeans sold worldwide, the company estimates.

Dow Corning is also marketing powdered shampoo, which requires a fraction of the water normally needed for shampooing, and has a rubber technology used in water irrigation that can cut water usage by 40%, Cartwright says.