President’s Message: Yet Another Ozone Standard?

TCC President & CEO Hector L. Rivero

Remember the movie Groundhog Day?  The comedy stars Bill Murray as a cynical TV weatherman sent to Punxsutawney, PA, to cover the Groundhog Day ceremony held every February 2nd.  Murray stumbles into a time warp and winds up repeating the same day over and over again.

So, how appropriate is it that the Environmental Protection Agency (EPA) – which has proposed yet another new standard for ozone – held its public hearing this week in Houston on February 2nd… Groundhog Day?

Here we go again: the proposal will cost billions, keep unemployment high, and put another Washington-based regulation in the way of our country’s economic recovery.

The new proposed rules would lower the limit for ozone to between 60 to 70 parts per billion (ppb) for any 8-hour period, down from the standard of 75 ppb, only recently adopted by the EPA in 2008, and down from the existing 1997 8-hour standard of 84 ppb.

Ground-level ozone is created by a chemical reaction between nitrogen oxides (NOx) and volatile organic compounds (VOC) in the presence of sunlight.  Man-made sources of ozone include mobile sources (cars, trains, marine vessels, lawn mowers, off-road vehicles) and point sources (power plants, chemical plants, refineries, dry cleaners).

The state of Texas has made great strides in reducing NOx emissions in its nonattainment areas, and the most recent emissions data indicates that the Dallas-Ft. Worth (DFW) and Houston-Galveston-Brazoria (HGB) nonattainment areas have achieved attainment under the 1997 8-hour ozone standard.  This achievement is significant considering that the state only has regulatory authority over point sources that account for less than 40% of emissions in the HGB nonattainment area and less than 20% of emissions in the DFW nonattainment area.  

The chemical industry and other state regulated point sources have invested more than $3 billion since 2001 to achieve an 80% reduction in NOx from power plants and industrial manufacturers.  Mobile sources, which make-up 74% of NOx emissions in DFW and 55% in HGB, are regulated by federal law and have made minimal NOx reductions under the Clean Air Act. 

Unfortunately, just as the state achieves this significant milestone – like the movie Groundhog Day – Texas is told to start over again.  Instead of congratulations for finally crossing the finish line, Texas is told the finish line has been moved miles away and cannot be achieved with existing technologies.  Oh, and the costly federal sanctions will continue to be imposed despite your remarkable clean air achievements.

Depending on the level of the final standard, EPA optimistically estimates that by 2020 their proposal could cost up to $90 billion to implement, costs that will be passed on to American businesses and consumers, and result in even more job losses.

Bryan Shaw, Chairman of the Texas Commission on Environmental Quality (TCEQ) expressed his concern by saying, “We don't have many industrial sources in Houston that can lower their emissions without shutting their doors and going elsewhere.”  Cities like Houston would have to try to reduce the emissions from mobile sources using more “intrusive approaches,” such as banning use of drive-in windows at restaurants or allowing lawn-mowing only on certain days, Shaw said.

The new limits will likely put hundreds more counties nationwide in violation of the Clean Air Act, a designation that will require them to find additional ways to clamp down on pollution or face federal sanctions, including the loss of federal highway funds.

Many Texas cities that have demonstrated clean air under the previous standards, will now find themselves out of compliance including San Antonio, Austin, Tyler, and the Rio Grande Valley.

The EPA action may also lack scientific justification.  EPA acknowledges the newer studies on ozone “do not materially change any of the broad scientific conclusions regarding the health effects of exposure.”  And there are conflicting scientific studies and data that fail to support the assertion that the difference between the current standard and the proposed lower standard will result in any measurable improvement in public health. The current standard provides an adequate margin of safety.  There is no new scientific evidence put forward by EPA to justify this new rule.  Nor is there any evidence that the current laws are not working.

The EPA’s new proposed ozone standard is simply irresponsible.  Unfortunately, it will amount to yet another indirect tax on consumers, and threatens the sustainability of the chemical manufacturing sector and other major employers in Texas and across the United States.  Here we go again.

TCC Elects Two New Board Members

Floris Fooij, DSM

ACIT Chairman Appoints Guy Tenini of DuPont to ACIT Board

ACIT Chairman Steve Hazlewood (Dow Chemical) has appointed Guy Tenini of DuPont’s Aniline Enterprise and the First Chemical Corporation to the board of the Association of Chemical Industry of Texas (ACIT). 

A native of Chicago, Tenini received his BS degree in Chemical Engineering from the University of Illinois, Champaign-Urbana campus in 1976. He is Operations Leader for DuPont’s Aniline Enterprise and is Sr. Vice President of Operations for First Chemical Corporation. Tenini is based out of DuPont’s Beaumont Works site.

Guy succeeds Tim McDaniel of DuPont’s Corpus Christi site who served on the ACIT Board since 2008.

TCC Comments on Section 185 Fee Rule Proposal

On January 25th, TCC submitted comments to the Texas Commission on Environmental Quality (TCEQ) on the draft rule to implement Sections 185 and 182(f) of the federal Clean Air Act (CAA). The CAA Section 185 requires each state to impose a requirement for the assessment and collection of a fee for major stationary sources of volatile organic compounds (VOCs) and nitrogen oxide (NOX) located in a severe or extreme nonattainment area if the area fails to attain the National Ambient Air Quality Standard (NAAQS) for ozone by the applicable attainment date.

TCC commented that it supports the main principles set forth in the TCEQ proposed rule, as well as the inclusion of Equivalent Alternative Obligations. Some specific principles that we support include:

In a recent guidance document, EPA stated that an area that it determines is attaining either the 1-hour or 1997 8-hour ozone NAAQS, based on permanent and enforceable emissions reductions, would no longer be obligated to submit a fee program State Implementation Plan (SIP) revision to satisfy the anti-backsliding requirements associated with the transition from the 1-hour standard to the 1997 8-hour standard. Accordingly, TCC also suggested that TCEQ withdraw this rulemaking pending a decision from EPA as to the area’s attainment status.

If you have any questions or need additional information, please contact Mike McMullen at (512) 646-6404 or via email at mmcmullen@txchemcouncil.org.

TCC Comments on IR Camera Proposed Rules

If you have any questions or need additional information, please contact Mike McMullen at (512) 646-6404 or via email at mmcmullen@txchemcouncil.org.

Benzene to be Removed from the Air Pollution Watch List at Several Sites

TCEQ recently announced that as a result of successful reductions in air emissions, it is removing pollutants from the Air Pollutant Watch Lists (APWL) in the Lynchburg Ferry area of Houston, Texas City, and Beaumont. And the TCEQ is removing the Corpus Christi area from the APWL entirely.

The TCEQ maintains APWLs for areas of Texas where specific pollutants have been measured at levels that exceed the effects screening level (ESL) for that compound. The ESL is a measured level at which no health effects would be expected, but readings above the level will trigger further investigation by the TCEQ.  When an area is listed on the APWL, it allows the TCEQ to focus agency resources such as facility inspections, field investigations, and enforcement activities on the area, and work with the regulated industry in the area to identify and reduce emissions. Additionally, permitting of new or modified sources of these emissions undergo a more stringent review, encouraging concurrent reductions with the permitting actions.

Lynchburg Ferry – Benzene will be removed from the Lynchburg Ferry APWL. Benzene levels in the Lynchburg Ferry area have been dropping steadily since 2005.  Intense inspections, investigations, and enforcement; pollution reduction programs with industry; and coordination with the U.S. Coast Guard have resulted in benzene levels dropping 65% from 2005 through 2008. The current level, .9 parts per billion (ppb), is well below the ESL of 1.4 ppb.

Texas City – Acrolein, butyraldehyde, and valeraldehyde will be removed from the Texas City APWL. These compounds were placed on the APWL due to odor complaints. Through working with industry, odor complaints have dropped to extremely low levels and ambient concentrations of these chemicals are at levels that are no longer expected to cause nuisance odor complaints.

Beaumont – Benzene will be removed from the Beaumont APWL. A recent TCEQ health assessment for benzene indicates that the reported annual levels are below those of health concern.  For example, the latest year for which data is available, 2008, shows a reading just over .8 ppb, well below the 1.4 ppb ESL. The TCEQ is in the process of relocating the existing monitoring site to a residential area so it will be closer to the recently expanded ExxonMobil facility.

Corpus Christi – Benzene will be removed from the Corpus Christi APWL, and because it is the only pollutant on the list, the APWL will be removed.  Since 2002, benzene levels have been on a steady decline. In 2008, the benzene level was .9 ppb, well below the 1.4 ppb ESL.

More information on APWLs can be found at: www.tceq.state.tx.us/implementation/tox/AirPollutantMain/APWL_index.html  If you have any questions or need additional information, please contact Mike McMullen at (512) 646-6404 or via email at mmcmullen@txchemcouncil.org.

TCEQ Appoints TCC Member to Pollution Control Property Advisory Committee

TCC Member John Nichols of Dow Chemical has been appointed to the Tax Relief for Pollution Control Property Advisory Committee.  On January 27th, TCEQ Commissioners appointed members to the Advisory Committee as required by House Bills 3206 and 3544 passed last session. HB 3206 and 3544, 81st Legislature (2009), amended Section 11.31 of the Texas Tax Code (TTC) to require the TCEQ to form a permanent advisory committee that will make recommendations to the TCEQ Commissioners on matters relating to property tax exemptions for pollution control property. TTC §11.31(n) requires the advisory committee to have representatives from industry; appraisal districts; taxing units; environmental groups; and members who are not representatives of any of the aforementioned entities but have substantial technical expertise in pollution control technology and environmental engineering.

The committee membership is as follows:

If you have any questions or need additional information, please contact Mike McMullen at (512) 646-6404 or via email at mmcmullen@txchemcouncil.org.

“Global Warming” Ranks at the Bottom of the Public’s List of Priorities

As President Barack Obama begins his second year in office, the public’s priorities for the President and Congress remain much as they were one year ago.  According to an annual study, strengthening the nation’s economy and improving the job situation continue to top the list.

But dealing with “global warming” ranks at the bottom of the public’s list of priorities.  Just 28% consider this a top priority, the lowest measure for any issue tested in the survey.

Since 2007, when the item was first included on the priorities list surveyed by the Pew Research Center for the People & the Press, dealing with global warming has consistently ranked at or near the bottom.  Even so, the percentage that now says addressing global warming should be a top priority has fallen 10 points from 2007, when 38% considered it a top priority.

Such a low ranking is driven in part by indifference among Republicans: just 11% consider global warming a top priority, compared with 43% of Democrats and 25% of independents.

Protecting the environment fares somewhat better than dealing with global warming on the public’s list of priorities, though it still falls on the lower half of the list overall.  Some 44% say that protecting the environment should be a top priority for Obama and Congress, little changed from 2009.

The Pew Research Center for the People & the Press is an independent, non-partisan public opinion research organization that studies attitudes toward politics, the press and public policy issues.

Obama Administration Embraces Copenhagen Accord

President Barack Obama

SEC to Require Disclosure of Climate Change Risks

A politically divided Securities and Exchange Commission (SEC) recently voted to make clear when companies must provide information to investors about the business risks associated with climate change.

The commission, in a 3 to 2 vote, decided to require that companies disclose in their public filings the impact of climate change on their businesses – from new regulations or legislation they may face domestically or abroad to potential changes in economic trends or physical risks to a company.

Chairman Mary L. Schapiro and the two Democrats on the commission supported the new requirements, while the two Republicans vehemently opposed them.

“I can only conclude that the purpose of this release is to place the imprimatur of the commission on the agenda of the social and environmental policy lobby, an agenda that falls outside of our expertise and beyond our fundamental mission of investor protection,” Republican commissioner Kathleen L. Casey said.

Democratic commissioner Elisse B. Walter said the new requirements are “designed to improve the quality of disclosures filed by U.S. public companies for the benefit of investors.”

Schapiro said companies already must disclose anything that can have a significant effect on their bottom lines. But she said the SEC’s action on Wednesday was intended to provide more guidance on what might be taken into account. “The commission is not making any kind of statement regarding the facts as they relate to the topic of climate change or global warming,” Schapiro said.

A number of large institutional investors had been urging the SEC to put more pressure on companies to disclose more details about the effects of climate change on their businesses.

ACC Report Indicates Positive Growth for Chemical Industry

According to a recent American Chemistry Council report, which highlights the changes in chemical production over the past year, November (2009) saw world production finally turn positive again versus the previous 12 months, for the first time since August 2008.

For an industry used to steady growth in line with GDP, the past 15 months have been traumatic. And, of course, as the ACC notes, total production in 2009 seems likely to be down 3.8% versus 2008.

The strength of China's recovery is also highlighted in the report, with Asia Pacific output up 8% versus November 2008.  North America and Western Europe also saw production rebound, although at a slower 3% rate. This was in line with the Middle East's performance, although the latter was more impressive as it grew steadily until May 2009, before entering a shallow downturn.

Still showing negative annual growth is Latin America, down 4%, and Central/Eastern Europe, down 9%. The report highlights how those with small domestic regional markets have been most affected by the overall fall in demand.  Hopefully, these regions will see a return to annual growth during 2010.

Upcoming TCC & ACIT Events

February 17 – ACIT/ABC Joint Mid-Coast Luncheon at the River Place Center in Freeport.  The guest speaker is Texas Land Commissioner Jerry Patterson. 

February 24 – ACIT South Texas and the Port Industries of Corpus Christi will host a Political Forum Luncheon at Flint Hills in Corpus Christi.

February 25 – The ACIT Houston Ship Channel Spring Breakfast Meeting at Brady’s Landing in Houston. 

March 18 – ACIT Golden Triangle Crawfish Boil in Beaumont.

All 2010 ACIT events are now listed on the TCC website: Click here. 

On March 2, registration will open for the EHS Seminar to be held June 7 – 10, 2010 at Moody Gardens.  Register at www.ehs-seminar.com.