Wednesday, June 27, 2007

Washington Give and Take

Chemical makers have notched some key victories in Washington over the past two years, most notably on the plant security and natural gas fronts. However, activity in Washington last week, particularly concerning proposed energy legislation, demonstrates that a more challenging environment lies ahead.
Politicians are already gearing up for the 2008 presidential election in the U.S., which is likely to slow some legislative activity. Also, if a Democratic president is elected in 2008, industry could be put on the defensive on critical issues including natural gas and energy, security, and climate change legislations, the latter of which could look at hard carbon dioxide and greenhouse gas targets. Meanwhile, the European Union’s Reach legislation presents global challenges, particularly if it is exported to other countries.
Activity in the Senate over the energy bill last week shows how tough the environment has become for key industry issues. The Senate bill failed to do anything to increase domestic energy supply as efforts to allow natural gas exploration off the U.S. East Coast, a key goal for chemical and other manufacturers, were rejected. In the House, a bill sponsored by representatives John E. Peterson (R., PA) and Neil Abercrombie (D., HI) that would increase access to outer continental shelf resources was introduced last week. The bill’s prospects in the House, however, are doubtful, and its chances in the Senate are even slimmer. The Senate also rejected amendments that would have authorized incentives for coal-to-liquids fuel production. The bill passed by the Senate would require biofuel production to ramp up to 36 billion gals/year by 2022, a seven-fold increase over production last year. The package would also raise the corporate average fuel economy standards to 35 miles/gallon for passenger cars and light trucks produced by 2020. Meanwhile, EPA proposed a rule that would lower the current standard for ozone, a move that ACC says will further drive up already sky-high energy prices and reduce or restrict affordable energy choices for consumers and industrial users.
ACC president Jack Gerard acknowledged the challenges ahead at ACC’s annual membership meeting earlier this month. “The test for our organization will be to stay disciplined and focused and advocate on issues important to us,” he says.

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