IPC ’15: Drevna, AFPM turn chemical focus toward US legislative priorities

By Ben DuBose
Online Editor

SAN ANTONIO, Texas -- The outlook for the US petrochemical industry remains largely optimistic, but positive developments on the regulatory front are crucial for the domestic industry moving forward.

Charlie T. Drevna, president of AFPM, addressed a number of these topics with reporters this week at the opening press conference to kick off the 2015 International Petrochemical Conference.

Joined by Melissa Hockstad, AFPM’s vice president for petrochemicals, Drevna cited a number of new challenges as potentially restrictive to positive petrochemical business in the US.

“When we last met here a year ago, we talked about a future of great opportunity and potential growth and prosperity for our nation, and how innovation and new investment in our industry are opening up so many new possibilities,” Drevna said.

“Today those opportunities still exist, but we continue to face a number of challenges that could restrict our ability to do business,” he added.

Chief among those challenges would appear to be modernization of the Toxic Substances Control Act (TSCA), which allows the EPA to regulate the manufacture, processing, distribution in commerce, use and disposal of chemical substances and mixtures.

Although past efforts to modernize the rule stalled, activities have started back again with the introduction of the “Frank R. Lautenberg Chemical Safety for the 21st Century Act, “, introduced by Senators David Vitter (R-Louisiana) and Tom Udall (D-New Mexico) in early March.

“AFPM supports the bipartisan process that is now being led by Senators Vitter and Udall as an important first step in modernizing TSCA and strengthening the public’s confidence in the chemicals that make 21st century living possible,” said Drevna.

Drevna and Hockstad said AFPM has dissected every line of the bill, and though the group remains publicly neutral, it has found some things it likes and some it doesn’t.

“We like the provisions that, for the first time, explicitly require EPA to use sound science in its assessments and risk management decisions,” Drevna said.

“We also like the requirement for EPA to prioritize chemicals based on very specific factors, such as hazard and exposure,” he noted.

Drevna said AFPM is working with committee staff in both houses to address issues it believes deserve further consideration. Among the problems, Drevna says many US lawmakers are trying to paint the latest proposal as an “industry bill”.

“Some on Capitol Hill are trying to paint this as an industry bill, but it clearly is not,” Drevna exclaimed. “An industry bill would have much stronger preemption and would place more stringent requirements on the EPA.

“TSCA modernization has been a solid bipartisan effort, and, if done right, can restore confidence in our federal chemical laws,” Drevna said. “We will continue to work with committee staff in both houses to understand industry’s position.”

Another issue of importance for AFPM is the ozone National Ambient Air Quality Standards, or ozone NAAQS. Officials with AFPM say the EPA’s proposal to reduce ozone NAAQS levels below the current standard of 75 parts per billion (75 ppb) threatens to be very costly to industry.

“The proposed ozone standard, to reduce as low as 65 ppb, stands to be the costliest regulation in history,” Drevna said. “A National Association of Manufacturers study shows that it would result in a GDP reduction of $270 billion per year, cost 2.9 million jobs per year and a loss of $1,570 in individual household consumption.”

Drevna said that other studies had similar findings and that if enacted, the standard could lead to millions of jobs lose and cost US business hundreds of billions of dollars each year, likely ending the nation’s manufacturing renaissance.

At the same time, AFPM says lowering the current ozone NAAQS would do very little to improve the environment, pointing out that the US has cut ozone levels by 30% since 1980.

“That trend will continue without lowering the current standard, as counties and states across the nation continue to implement the current standard,” Drevna said.

The AFPM president pointed out that any new job-creating projects in the refining and petrochemical industries, which it represents, could be significantly delayed if EPA does issue a stricter ozone standard.

Additionally, Drevna says a further reduction of the ozone standard would likely result in a big chunk of the US being in nonattainment. Based on government estimates, that could cost $90 billion annually.

“Over time, the number of nonattainment areas will grow, triggering fines imposed for those failing to reduce emissions by 20% from its baseline,” Drevna said. “Fines for stationary sources in these nonattainment areas can cost from $5,000 to $9,000 per ton of NOx annually until attainment is reached.

“This will make it significantly harder for a community to attract new business or expand existing plants,” Drevna said.

While not pointing to specific bills, AFPM also said 2015 could be an important year for tax policy and climate change. On the former, Drevna cited a need for “pro-growth tax policies” to make America an attractive place to do business.

“All we want is to ensure that our manufacturing sector is treated like all other capital-intensive manufacturing sectors when it comes to corporate taxes,” he said.

Drevna also said climate change would remain a “defining and divisive issue” for the foreseeable future.

“We’ve got to be extra attentive to ensure that knee-jerk policies that stifle growth without any tangible benefits are not the result,” he said.

Drevna confirmed that he still intends to retire as president of AFPM in late April of this year, ending a lengthy stint that began in 2007. The group says it will officially name his replacement later this week so that work on the transition can begin.

But even though Drevna will no longer have the formal title, he insists that he’ll still be near the forefront of the debate on these and other key regulatory issues for the petrochemical industry.

“I still hope to do some positive things for both the refining and petrochemical sides of the family,” Drevna said. “I just won't be doing it as president of AFPM.

"I'm not going to go golfing and fishing, because I don't,” he quipped. “I'm not going to hang around the house, because my wife won't let me. I'm going to continue to promote the industry as best I can.”

Hydrocarbon Processing is the official show daily provider for this year's International Petrochemical Conference. For all news from IPC, please check out our our daily editions.

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