Industrials Regulatory News and Trends - March 24, 2023
President approves major drilling project in Alaska. Over vociferous objections from environmental groups, on March 13 the Biden Administration approved the massive Willow drilling project in Alaska. The final scope of the project will cover 68,000 fewer acres than what ConocoPhillips was initially seeking. “This was the right decision for Alaska and our nation,” Ryan Lance, ConocoPhillips chairman and CEO, said in a statement. “Willow fits within the Biden Administration’s priorities on environmental and social justice, facilitating the energy transition and enhancing our energy security, all while creating good union jobs and providing benefits to Alaska Native communities.” The same day, President Biden also announced sweeping new protections for federal lands and waters in Alaska in conjunction with the Willow approval.
Canadian court will rule on key plastics pollution case. In what several media outlets say is one of Canada’s most consequential environmental court cases, a federal judge in Toronto heard arguments March 10 from representatives of the plastics industry contesting a Canada-wide ban on some single-use plastic products. The ban affects plastic bags, straws, and stirrers. Some prohibitions have already taken effect, while others won’t go into force until 2025. The legislation was pushed through by Prime Minister Justin Trudeau and his Liberal Party after the completion of a scientific assessment of plastic pollution published in 2020. Notably, the Canadian government has labeled plastics “toxic,” a conclusion that is contested by the companies bringing the case before the court. These companies – Dow Chemical Canada, Imperial Oil, and Nova Chemicals, along with the provinces of Alberta and Saskatchewan and the Responsible Plastics Use Coalition – argue that the Canadian government has failed to provide scientific evidence to justify the regulations.
Biden Administration proposes strict limits on PFAS chemicals in drinking water. On March 14, the Biden Administration announced that it is proposing the first-ever enforceable Safe Drinking Water Act limits for six PFAS chemicals. See our Environmental Alert.
GOP legislators announce their energy regulatory priorities for 2023. On March 9, Republicans in the US House of Representatives announced a new set of energy proposals that will be known as HR1, indicating that it is the majority party’s top priority for this congressional session. HR1 includes many business-friendly proposals that are aimed at speeding up the approval process for energy and mining projects, as well as limiting states’ ability to block projects like pipelines that run through their waters. The bill will also include suggestions from the House Energy and Commerce Committee, which recently took up legislation that would prohibit a ban on fracking, limit the President’s authority to block cross-border project permits (such as President Biden’s blocking of the Keystone XL pipeline), remove restrictions on natural gas imports and exports, and repeal portions of the Inflation Reduction Act that provided funding to address climate change and pollution.
How industrial “end-of-life” processes can help manufacturers. States and cities are constantly considering and adopting mandatory recycling proposals that can impose additional costs on businesses. But according to a recent article in a journal published by the National Association of Manufacturers, manufacturers can be a part of the solution by developing “end-of-life” processes for their goods that can mitigate the environmental impact of disposing of them. The bottom line for manufacturers, according to the March 9 article, is that “manufacturers stand to realize many benefits from intelligent disassembly” of their products, since components with sensitive data can have machine-driven proof of destruction and systems with usable parts can be repurposed rapidly. According to the article, this is an important way for manufacturers to collectively reduce carbon footprints and electronic waste while delivering business value.
New jobs under Biden manufacturing plan may not promote union labor. On March 6, Reuters reported that under President Joe Biden’s Inflation Reduction Act, which is intended to promote US manufacturing and a transition to clean energy, a large majority of the $50 billion of announced investments in domestic manufacturing has been in states that make it harder for workers to unionize. Of the more than 50 electric vehicle battery, solar panel, and other factories that have been announced since the act was passed, 83 percent are to be found in so-called right-to-work states, which bar companies from requiring workers to pay union dues as a condition of employment. In response to the Reuters survey, a White House official noted that just six months have passed since the IRA was signed into law, and investments in that time represent a fraction of what will ultimately stem from Biden's economic agenda.
House panel moves to overturn Biden rule on water regulation. On February 28, the US House of Representatives’ Transportation and Infrastructure Committee approved a joint resolution to overturn the Biden Administration’s new proposed Waters of the United States (WOTUS) rule, which would define anew which bodies of water qualify for federal regulation. This is the first step in a process that could result in the overturning of the rule and the continuation of a Trump-era rule that is less stringent. “With today’s committee action, the House has taken the first step necessary to rescind the Biden Administration’s flawed WOTUS rule,” said Water Resources and Environment Subcommittee Chairman David Rouzer (R-NC). “The rule needs to be repealed so Americans across the country are protected from subjective regulatory overreach making it harder to farm, build and generate economic prosperity.”
Court says FAA will not be required to make new rules on airline seats. On March 3, a US appeals court, in a ruling that could affect future specifications for passenger jetliners, refused to order the Federal Aviation Administration to adopt minimum requirements for seat size and spacing. The US Court of Appeals for the DC Circuit Court said that an advocacy group, FlyersRights.org, had no right to force the FAA to adopt seating rules because it was not "clear and indisputable" that tight seating is dangerous. Writing for a three-judge panel, Circuit Judge Justin Walker rejected the group’s claims that tight seating materially slowed emergency exits and posed medical risks such as blood clots, saying the FAA had no compelling evidence of either of these possible effects. No current rules exist for seat size and spacing, except that an airline must be able to evacuate passengers within 90 seconds.
California legislature will consider recycling program for textiles. On February 16, a California state senator introduced a bill in the state legislature that would create a new statewide collection and recycling program for textiles. Under the bill, manufacturers of clothing and other textiles would be required to implement and fund an extended producer responsibility (EPR) program that would enhance recycling and increase reuse in the sector. “Though many people don’t realize it, the clothing and fashion industry currently accounts for fully 10 percent of the world’s carbon dioxide output,” said state Senator Josh Newman. “The rise of ‘fast fashion,’ which revolves around the marketing and sale of low-cost, low-quality garments which tend to go out of style with increasing speed, threatens to have a long-lasting and devastating impact on our planet.”
US official sets forth standards of conduct for space manufacturing. On March 3, the US Space Command released a formal list of what it views as responsible standards of conduct for companies that manufacture in space, in a bid to improve military norms in orbit and to do something about the deluge of “space junk” that is accumulating. “The idea is we hope our adversaries do the same,” Brigadier General Richard Zellmann, deputy director of the command's operations unit, said. “You have to find a way to allow the economy to grow in the space domain, and in order to do that you need to make sure that it remains sustainable,” said Zellmann, who oversees much of the Pentagon's space tracking efforts. At stake are billions of dollars in manufacturing assets, which include the orbital devices crucial to navigation and smartphone maps, text messaging, calls and Internet connections that are used around the world.
White House seeks more money for air traffic control system. On March 13, the Biden Administration released the details of a new proposal that would increase funding for air traffic controllers and would also speed up efforts to modify the air traffic control system. This comes in the context of a recent brief computer outage that led to the first nationwide grounding of commercial aviation since 2001. The National Air Traffic Controllers Association said last year that the Federal Aviation Administration had 1,500 fewer controllers than it had in 2011. The Transportation Department’s $108.5 billion budget request seeks new funding from Congress in the amount of $117 million to hire another 1,800 air traffic controllers in addition to another 1,500 being hired this year. The department also wants $3.1 billion in annual funding for Amtrak, on top of $4.4 billion in funding from the $1 trillion 2021 infrastructure law. It also seeks $700 million for a key New York Hudson River tunnel project.
New Senate bill would use tax code to encourage manufacturing R&D. On March 16, US Senators Maggie Hassan (D-NH) and Todd Young (R-ND) introduced a bill that would restore the prior tax status of research and development expenses for manufacturers, thus presumably encouraging industrial activity. As of 2022, manufacturers are no longer permitted to deduct their R&D expenses in the year in which they are incurred. Instead, manufacturers must deduct or amortize their expenses over several years, which makes R&D much more expensive to undertake. The American Innovation and Jobs Act, which was introduced by Senators Hassan and Young, would restore the immediate deductibility of R&D expenses, an approach that was in place for almost 70 years.
Canada sees new campaign against tiny plastic produce stickers. On March 10, Recycling Product News reported that Friends of the Earth Canada has launched a campaign to persuade the country’s Environment and Climate Change Minister Stephen Guilbeault to expand Canada’s plastic ban to include tiny stickers on fruits and vegetables. In Canada as well as the United States, produce stickers carry a tiny price look-up code (PLU) to help grocery stores track their inventory and, at checkout counters, identify the product and its cost. They are made of plastic or paper coated with plastic. Plastic PLUs don't break down but become plastic pollution in soil and water. The stickers are extremely thin and pliable, so they can pass through screens designed to catch them and other non-compostable items. And if they are put into a compost bin, they will end up at a composting or anaerobic digestion facility, where sorting them out is time-consuming and expensive.
Utah is latest state to regulate advanced recycling as manufacturing. On March 14, Utah became the 22nd state to adopt legislation that regulates advanced recycling as manufacturing. Advanced recycling is a manufacturing process that uses chemistry to enable significantly more plastics to be recycled than with traditional recycling technologies, including often hard-to-recycle films and mixed plastics. This helps displace the need for virgin resources to produce new plastics and reduces the quantity of plastics destined for landfill and incineration. A 2021 report by Closed Loop Partners estimated that advanced recycling could double the plastics packaging recycling rate in the US and Canada by 2030. Both industry and environmental groups often support advanced recycling. “Unique to Utah’s new law is that it recognizes independent, third-party certification systems to trace, measure, and verify recycled plastics made from advanced recycling,” said Joshua Baca, vice president of plastics at the American Chemistry Council. “With HB 493’s passage, the United States is another step closer to becoming a global leader in developing a circular economy for plastics.”