20 October 2022 • 5 minute read
Industrials Regulatory News and Trends
Welcome to Industrials Regulatory News and Trends. In this regular bulletin, DLA Piper lawyers provide concise updates on key developments in the industrials sector to help you navigate the ever-changing business, legal and regulatory landscape.
- California governor calls for windfall tax on oil companies. On October 7, California Governor Gavin Newsom called on the Democratic-controlled state legislature to consider his proposal for a windfall tax on oil companies. Noting that while gasoline prices in the rest of the country are stable or falling, Newsom said he would call for a special session of the state legislature to discuss the proposal. Revenue stemming from the tax, he said, would go directly back to California taxpayers through refunds or rebates aiming to alleviate the burden of higher gas prices. Newsom also called on the California Air Resource Board to allow refineries to make an early transition to winter-blend gasoline, which is cheaper to produce.
- Weight of electric cars triggering regulatory and lobbying battle. Largely because of their batteries, electric cars weigh at least 1,000 pounds more than their gasoline-engine counterparts. This has created problems for the car-hauling industry, which transports vehicles to dealerships, and which is bound by decades-old weight limits: 80,000 pounds of gross vehicle weight, including the truck and trailer. Now the car-hauling industry is calling on Congress and the Biden Administration to increase truck weight limits on major interstate highways, which would allow them to transport more of these heavier vehicles. However, some rail industry and safety advocates oppose such a change, citing safety concerns. The car haulers say that if weight limits are not increased, truck deliveries of electric vehicles would slow and costs could go up.
- Climate measures in IRA bringing major investments, major transformation. The Inflation Reduction Act, signed into law earlier this year, provides nearly $370 billion for renewable-energy and climate-change programs. According to E&E News Greenwire, this law has changed everything for manufacturing companies that make products that can be classified in these ways. The investment is so massive that, nearly two months after President Joe Biden signed the bill into law, businesses, lawmakers, administration officials, environmentalists, and others are still figuring out how it’s going to work. “The country hasn’t embarked on this level of industrial transformation since the New Deal,” said Sam Ricketts, co-founder of Evergreen Action and a senior fellow at the Center for American Progress. “This is going to be a thing we are all going to be figuring out together. I mean, the CEO of the energy storage company, the line worker at [International Brotherhood of Electrical Workers] in Missouri, the environmental justice advocate in Houston and [a policy advocate] in Washington, DC.” Many experts say that the amount of private-sector investment prompted by the Inflation Reduction Act may be in the tens of trillions in coming years. See our coverage of the Inflation Reduction Act here.
- Group foresees major upcoming costs from plastic pollution. The Minderoo Foundation, an Australian environmental group, issued a study October 14 claiming that the costs to society from plastic pollution – including environmental cleanup, ecosystem degradation, shorter life expectancy and medical treatment – exceed $100 billion per year. The foundation’s research also asserted that plastic pollution is not just damaging to the environment but to human health. Joshua Baca, vice president of plastics at the American Chemical Council, responded by deeming the foundation “detached from reality,” stating, “America’s plastic makers remain laser-focused on creating a circular economy in which these essential materials are captured and remade, over and over, so that society can retain the myriad benefits that make modern life possible.”
- Pentagon waiver permits Lockheed Martin’s jet to be sold with Chinese-origin material. On October 8, William LaPlante, the Pentagon’s chief weapons buyer, signed a waiver that will permit deliveries to resume to the Defense Department for Lockheed Martin Corp.’s F-35 jet, even though a part of the jet’s engine contains a Chinese-origin alloy. In September, the Pentagon stopped accepting new F-35 jets after it discovered that a magnet in the fighter's engine was made with unauthorized material from China. The acceptance of the aircraft is necessary for national security interests, LaPlante said in a statement announcing the waiver, adding that the determination applies until the last aircraft under the contract is accepted – currently projected to take place in October 2023. The pump supplier, Honeywell International Inc., said it is seeking an alternative source for the metal for future lubricant pumps.
- DOE asks for ways to use new authority to strengthen US power grid. On October 3, US Energy Secretary Jennifer Granholm announced a Request for Information to determine how DOE could best leverage the Defense Production Act (DPA) authority invoked recently by President Joe Biden to accelerate domestic production of key technologies, strengthen US power grid reliability, and deploy clean energy. “The Defense Production Act provides us with a vital tool to make targeted investments in key technology areas that are essential to ensuring power grid reliability and achieving our clean energy future,” Granholm said. “DOE is eager to continue hearing ideas from industry, labor, environmental, energy justice, and state, local and Tribal stakeholders about how we can best use this powerful new authority to support the clean energy workforce and technologies needed to combat climate change.” She noted that the war in Ukraine makes it even more urgent for the nation to ensure it is free from foreign sources of energy and of grid components.
The authors thank these contributors for their help with this issue: