High Regulatory Period Continues
While the 113th Congress could yield the fewest laws in 60 years, a variety of federal government agencies have been busy issuing a large number of new rules and regulations that are impacting the metalcasting industry.
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With gridlock in the 113th Congress and continued to resistance to the administration’s legislative agenda, President Obama is utilizing federal agencies to achieve his policy agenda. Dozens of federal regulations, directives and policies are being pushed through via government agencies such as the U.S. Environmental Protection Agency (EPA), National Labor Relations Board, U.S. Department of Labor and the Occupational Safety and Health Administration (OSHA). The wave of regulations is reflected by the fact that over the last five years, 157 new major regulations have been released, many of which have direct impact on U.S. manufacturing and the metalcasting industry.
A major regulation is defined as a rule with $100 million or more in expected economic impact. Since President Obama was elected, a record 3,659 final rules and 2,594 proposed rules have been issued. Those that are not deemed significant are not required to include a cost-benefit analysis, even as their layered implementation has a cumulative economic impact on businesses. More regulations are on the docket for 2014, 2015 and 2016 addressing issues like health care, crystalline silica, power plant emissions and ozone protection.
Among the several EPA regulations recently introduced, the power plant rule, ozone legislation and the proposed waters of the U.S. rule may have the most impact on metalcasters.
Power Plant Regulation
EPA’s Clean Power Plan Rule, released June 2, proposes emission guidelines for states to follow in developing plans to address greenhouse gas emissions from existing fossil fuel-fired electric generating units. Specifically, EPA is proposing state-specific rate-based goals for carbon dioxide emissions from the power sector, as well as guidelines for states to follow in developing plans to achieve the state-specific goals.
Manufacturers will be hit twice by greenhouse gas regulations, both as users of the energy being regulated and as industries considered next in line to receive similar regulations from EPA.
The current proposed power plant rule would substantially increase electricity and natural gas costs and create reliability problems, all for a relatively small global climate impact. For example, EPA says the proposed rule would eliminate 730 million metric tons of carbon by 2030. From 2010 to 2011, China’s carbon dioxide emissions rose by 705 million tons. The rule would substantially reduce use of coal-fired generation. Coal-fired power is a low cost and reliable source of electricity. Importantly, coal competes with natural gas on a Btu basis and helps keep electricity prices from rising. Many in the business community believe the EPA power plant rule would increase dependency on natural gas for power generation.
A lawsuit against EPA challenging the agency’s failure to assess the job-loss impact of its power plant rules has been allowed into federal court (Murray Energy Corporation v. U.S. Environmental Protection Agency, No. 14-1112). A three-judge panel was expected to hear the case this month.
In September, EPA extended the comment period for its “Clean Power Plan Rule” 45 days, until December 1. The American Foundry Society (AFS) is in the process of receiving input from its members and drafting comments. Based on comments from EPA staff, the agency still intends to finalize the rule by June 2015.
This summer EPA’s Advisory Panel and staff recommended to the EPA Administrator that the national air standards for ozone be lowered to 60-70 parts per billion (ppb) from the current 75-ppb standard, which was set in 2008. The agency cites scientific data and exposure information that “provide strong support” for revising the health-based national ambient air quality standard for ozone of 75 ppb.
The EPA Office of Air Quality Planning and Standards, which prepared the assessment, said a revised standard set within that range “could reasonably be judged to provide an appropriate degree of public health protection, including for at-risk populations and life stages.”
The regulation could become the most costly in U.S. history if the new standard is implemented. In 2010, EPA estimated the annual compliance costs for a 60-ppb standard would be $90 billion in 2020. The National Association of Manufacturers (NAM) released a report in July that estimated a revised ozone standard of 60 ppb could cost the U.S. economy up to $270 billion per year and result in the closure of one-third of the nation’s coal-fired power plants. The lower standard will require large reductions in NOx and volatile organic compound (VOC) emissions from power plants, manufacturing facilities and mobile sources such as cars, trucks and off-road vehicles. Requiring a reduction to 60 ppb would leave nearly all of the U.S. in a so-called “nonattainment zone.” Metalcasting facilities of all sizes in nonattainment areas would not be able to make investments and expand operations without other businesses reducing their emissions or, worse yet, shuttering their operations. EPA has until December 1 to decide whether to keep or change current national air quality standards for ozone. President Obama delayed EPA’s previous attempt to promulgate a lower ozone air quality standard in 2011. A final rule is expected to be made by October 2015.
Waters of the U.S. Rule
In March, EPA and the Army Corps of Engineers proposed a new rule to redefine the term “waters of the United States” and the agencies’ jurisdiction over waters they can regulate under the Clean Water Act. The rule extends federal jurisdiction well beyond traditional navigable waters to tributaries, adjacent waters (such as ponds) and vaguely defined “other waters.” EPA’s proposal exposes new facilities and expansion projects to additional federal permitting, triggering new upfront costs, project delays and threats of litigation. Permitting requirements could cost metalcasters nearly $200,000 in some cases.
On September 10, the U.S. House of Representatives passed the Waters of the United States Regulatory Overreach Protection Act (H.R. 5078), which requires EPA and the Corps to revisit the proposed rule with direct consultation with state and local officials to determine which bodies of water should be covered under the Clean Water Act. The White House has issued a veto threat against this legislation, and the Senate is unlikely to take up the Overreach Protection Act this year.
EPA has received more than 500,000 comments to date on the proposal, and the comment period was extended to Nov. 14. The AFS Environmental Health and Safety 10-F Committee assembled comments from the industry on how the new permitting requirements will impact metalcasters. Information about the proposed rule can be found at www.epa.gov/uswaters.
OSHA’s top priorities in President Obama’s second term have included increased injury reporting requirements, crystalline silica, combustible dust and increased enforcement. 2014 has shown a continued focus on high hazard industries such as metalcasting through the use of national and local emphasis programs, such as the silica and primary metals national emphasis programs.
Crystalline Silica Standard
Of perhaps largest concern to the metalcasting industry is the proposed standard on occupational exposure to respirable crystalline silica. OSHA formally unveiled the comprehensive regulation to control crystalline silica in September 2013. It is one of the safety agency’s most far-reaching regulatory initiatives ever proposed for the metalcasting industry and a number of other key sectors. In addition to the 50% reduction in the permissible exposure limit (PEL), OSHA is proposing requirements including, but not limited to, medical surveillance, record keeping and prohibitions on certain work practices, including compressed air and dry sweeping.
AFS believes the current PEL is adequate to protect the health of exposed workers from silica-related disease when it is fully complied with and enforced. OSHA estimates the rule will result in approximately $44 million in annual costs to the industry. This stands in sharp contrast to the industry analyses whereby AFS estimates a conservative cost to the industry of $2.2 billion per year, or 276% of profits. OSHA expects to issue a final rule by 2016.
For the past year, AFS has been working on gathering and submitting detailed comments and background materials for OSHA, including: prehearing comments submitted Feb. 11; testimony at a March 28 public hearing in Washington, D.C.; post-hearing comments responsive to OSHA’s request for additional information June 3; and the post-hearing brief filed on August 18.
With the docket closed, metalcasters can continue to educate their lawmakers about the impact that rule will have on their metalcasting facility and our industry. The metalcasting association in its meetings with lawmakers is focusing on the regulatory overreach, feasibility and cost of the proposed standard.
Metalcasters also should be aware of an initiative launched last year to better train and protect the safety of temporary workers. The OSHA Temporary Worker Initiative includes outreach, training and enforcement.
At least 14 temp workers died during their first day at a new worksite in 2013 across all industries. In recent months, OSHA has investigated reports of temporary workers suffering serious or fatal injuries and cited a number of businesses. The agency and the National Institute for Occupational Safety and Health (NIOSH) has released recommended practices for staffing agencies and host employers to protect temporary workers from hazards on the job. The new publication highlights the joint responsibility of the staffing agency and host employer to ensure temporary workers are provided a safe work environment.
The new guidance recommends that staff agency/host employer contracts clearly define the temporary worker’s tasks and the safety and health responsibilities of each employer. The new Recommended Practices publication is available at: www.osha.gov/Publications/OSHA3735.pdf.
Injury and Illness Reporting
Two proposals on injury and illness reporting were reclassified as long-term action in May, including the Injury and Illness Prevention Program (I2P2), which would require employers to establish formal written plans to find and fix real and potential workplace hazards, and the MSD Column to OSHA’s Form 300 Injury and Illness Log, which would be used to enforce ergonomics.
Combustible Dust Standard
The Chemical Safety Board documented hundreds of fatalities and serious injuries resulting from combustible dust explosions in a 2006 study. As a result, OSHA began working on a potential rule in 2009 that would require industries, including metalcasting, to better control combustible dust hazards. A number of OSHA standards address aspects of this hazard, but the agency does not have a comprehensive standard. According to the agency’s current regulatory agenda, OSHA intends to initiate a review panel on the proposed rule in December, as required under the Small Business Regulatory Enforcement Fairness Act (SBREFA). If OSHA does commence a review panel, AFS plans to have a member company be part of the discussions. While a proposed standard is not expected soon, OSHA is gathering information and currently regulating combustible dust through a national emphasis program.