Bergeson & Campbell, P.C.

2011 Predictions for U.S. Chemicals Management

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Courtesy of Bergeson & Campbell, P.C.

The trends established by the Obama administration will continue despite the Congressional midterm elections in November, says Lynn L. Bergeson. The elections’ impact, notably the new Republican majority in the House and the razor thin Democratic majority in the Senate, will nonetheless have an important, but uncertain impact on the US Environmental Protection Agency. Early indications are jobs and the economy will enjoy a new prominence in the environmental policy debate and will have a major impact on the direction of environmental law and regulation.

TSCA legislation

Bipartisan support never materialised for Senate Bill 3209 (Safe Chemicals Act of 2010) and House of Representatives Bill 5820 (Toxic Chemicals Safety Act of 2010), the two Toxic Substances Control Act (TSCA) reform bills introduced last year and. Nor was it expected, given the nature of the reforms sought under each bill. Indeed they fuelled the hope by some that the super-charged regulatory initiatives issued under EPA’s Enhanced Chemical Management Program would stave off the push for wholesale TSCA legislative reform.

With the change in Congressional politics, TSCA reform is unlikely any time soon. Most notably for EPA, House Energy and Commerce Committee chair Henry Waxman (D-CA) was replaced by Fred Upton (R-MI). In the Senate, Barbara Boxer (D-CA) was re-elected and will continue to chair the Senate Environment and Public Works (EPW) Committee. Senator Frank Lautenberg (D-NJ) was not up for re-election and is expected to continue to champion TSCA reform and attempt to keep it among committee priorities. While other legislative priorities will make that task challenging, senator Lautenberg reopened debate early by convening a Subcommittee on Superfund, Toxics and Environmental Health hearing on 3 February entitled “Assessing the effectiveness of US chemical safety laws”. Witnesses included EPA assistant administrator Steve Owens, American Chemistry Council president Cal Dooley, former EPA assistant administrator Dr Lynn Goldman, BASF Corp vice president Steve Goldberg, SC Johnson vice president Kelly Semrau and Francis Beinecke, president of NGO the Natural Resources Defense Council. Some speculate that if greenhouse gas legislation stalls or becomes too hot to handle, TSCA reform may regain momentum, but in a more business friendly form. Wholesale legislative reform may give way to targeted fixes that are more than tweaks, but less than what the ambitious proposals that surfaced last year portended.

Administration reaction to Republican resurgence

Notwithstanding expected oversight hearings of legislative proposals, the Obama administration has considerable leeway to pursue its priorities. Presidents can, for example, unilaterally sign Executive Orders (EO), which is exactly what President Obama did on 18 January when he issued an Improving Regulation and Regulatory Review EO. Under the EO, each agency has 120 days to develop and submit to the information and regulatory affairs office in the Office of Management and Budget (OMB) (which is part of the White House) a preliminary plan, which must be consistent with law and its resources and regulatory priorities. Each agency must periodically review its existing significant regulations to determine whether any such regulations should be modified, streamlined, expanded, or repealed to make its regulatory programme more effective or less burdensome in achieving the regulatory objectives.

Whether and how exactly the EO might impact EPA chemical management policy is unclear. Smart money is betting that at the least the EO telegraphs that the Obama administration is mindful of the need to view all initiatives, including chemical management policies and rules, through a business lens of impact on jobs and the economy.

EPA’s Enhanced Chemical Management Program

In 2009 EPA Administrator Lisa Jackson targeted chemical management as a top priority, catapulting chemical management into unfamiliar high-profile status. The period since then has seen an unprecedented number of chemical management initiatives and many exhibited a high level of innovative thinking.

The first two years saw the introduction of the Chemical Action Plan. EPA released proposals for four chemicals or groups of chemicals in 2010; bisphenol A, benzidine dyes, hexabromocyclododecane (HBCD) and nonylphenol/nonylphenol ethoxylates. This equalled the number it released in 2009.

A key item under consideration is EPA’s proposed “chemicals of concern” list under TSCA Section 5(b)(4). In May 2010 the proposed rule was submitted to OMB, which formally extended the review period. This rule is being subjected to close scrutiny because of the policy, legal, and commercial implications for chemical manufacturers and users.

There are eight EPA Office of Pollution Prevention and Toxics (OPPT) actions that were submitted to OMB since the November elections. These include chemical action plans for toluene diisocyanate (TDI) and methylene diphenyl diisocyanate (MDI), the combined TSCA Section 4 test rule and significant new use rule (SNUR) on certain polybrominateddiphenyl ethers (PBDEs), a notice on testing of bisphenol A, SNURs for the glymes and certain uses of elemental mercury, and a reporting rule for certain nanoscale materials. The PBDEs action is interesting because it will attempt to combine SNUR requirements with a test rule, forcing industry to choose to abide by the SNUR or confront potentially significant testing costs if a chemical such as decabrominateddiphenyl ether (deca-BDE) is to remain on the market.

The SNUR is also likely to break new ground with the inclusion within its scope of imported articles containing penta-BDE, octa-BDE and/or deca-BDE. This is the first time that EPA will attempt to manage importation of articles containing a chemical as a significant new use. This is a potentially difficult undertaking considering that it remains to be established that such importation is not ongoing and that EPA has stated it intends to allow continued reprocessing of PBDE-containing foam and plastics that would then be involved in domestic manufacture of new PBDE articles. Importantly, the rule promulgating the proposed changes to the inventory update rule (IUR) was also submitted to OMB for review in January. Whether industry obtains some of the fixes it requested will be telling.

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