Manufacturers are leading the way in implementing successful sustainability programs, according to testimony from several witnesses at a Senate Environment and Public Works Committee Subcommittee hearing on “Growing Long-Term Value: Corporate Environmental Responsibility and Innovation.” Executives from four companies – Intel Corporation, Procter & Gamble (P&G), Eastman Chemical Company, and FedEx Corporation – testified before Subcommittee Chair Tom Udall (D-NM) and Ranking Member Lamar Alexander (R-TN) on the ways in which each company is fostering innovation, reducing waste and air emissions, and creating more sustainable products through voluntary initiatives.

All four witnesses noted that the programs have helped improve their company’s bottom line, even though many of the projects require up-front investment. For example,

• Intel has invested $100 million in water conservation initiatives that have yielded over 40 billion gallons of water savings;
• Procter & Gamble stated in its written testimony that its energy savings will be greater than the per-site energy consumption at 80% of its facilities worldwide;
• Eastman has utilized a Department of Energy (DOE) program called Save Energy Now and has found $3 million in savings opportunities so far; and,
• FedEx has significantly reduced its greenhouse gas emissions and improved the mileage of its FedEx vehicles. It recently purchased six solar energy facilities as well.

Dr. Len Sauers, Vice President of Global Sustainability at Procter & Gamble, testifies at the hearing.

Sen. Alexander expressed concern that some costly and overly-burdensome federal regulations, such as the Environmental Protection Agency’s (EPA) Boiler MACT proposal, can often hurt manufacturers’ sustainability efforts by diverting resources towards unnecessary equipment retrofits. Sen. Udall (D-NM) stressed the importance of public-private partnerships between the federal government and businesses in continuing to drive innovation and environmental responsibility. Manufacturers are encouraged by the Senate Subcommittee’s focus on sustainability and acknowledgement that many companies are making significant environmental improvements through voluntary initiatives.

More information on the hearing and the written testimony can be found here.

Forty-five areas across the country got some bad news from the Environmental Protection Agency (EPA) today when it released information about what parts of the country are not meeting the 2008 air quality standards for ground-level ozone (i.e. ozone NAAQS). The map below shows the regions that are considered “non-attainment” areas:

Getting slapped with a non-attainment designation is a big deal for the geographic regions highlighted on the map. Just a few of the economic consequences of being a non-attainment area include:

• Restrictive permitting requirements for new industrial facilities or for existing facilities that make major modifications.
• Greater EPA involvement and oversight in permit decisions and continuing oversight by the Agency in permitting decisions even after the area has met the air quality standards.
• Loss of federal highway and transit funding – beginning one year from the date of the designation, federally-supported highway and transit projects cannot proceed in the area unless the state can demonstrate that the project will cause no increase in ozone emissions.
• Loss of industry and economic development in the area – any company interested in building a facility that emits ozone will probably not build a facility in the area due to the increased costs associated with the restrictive and expensive permit requirements.

Manufacturers continue to be extremely concerned about the EPA’s implementation of the current air quality standards and new standards for particulate matter (i.e. PM2.5) which are scheduled to be proposed in the next few months. As our nations job creators try to get our economy back on track, stringent air quality regulations and standards continually work to derail their progress.

Unilever continues to make progress towards its ten-year sustainability goals, the senior leadership team reported today during a briefing on the Unilever Sustainable Living Plan Progress Report 2011 before key opinion leaders in Washington, D.C.

By 2020, the company aims to help more than one billion people improve their health and wellbeing, halve the environmental footprint of its products, and source 100% of its agricultural raw materials sustainably. In addition, Unilever is designing new products which are more sustainable and encourage people to consume more sustainability. For example, the company manufactures food products with recyclable packaging and other products that will help consumers use less water while washing and showering.

Other highlights of Unilever’s progress include:

• Sustainable sourcing – 100% of its palm oil used in the U.S. is now sourced sustainably (find out more information on sustainable palm oil here).
• Hygiene – 48 million people reached with Lifebuoy soap’s handwashing programs in 2010 and 2011.
• Nutrition – good progress in reducing saturated fat in products and eliminating trans fat.
• Drinking water – 35 million people gained access to safe drinking water from Pureit system since 2005.

Kees Kruythoff, Head of Unilever North America, noted that the company is committed to building upon the progress it has made so far as part of its ten-year plan. We look forward to tracking the company’s success as it continues to enhance the sustainability of its products, its operations and supply chain.

Manufacturers breathed a sigh of at least temporary relief when the Environmental Protection Agency (EPA) yesterday withdrew its long-stalled Preliminary Remediation Goals (PRGs) for dioxin cleanup from review by the Office of Management and Budget (OMB).

In yet another example of EPA overreach, the Agency lowered the cleanup levels from 1,000 parts-per-trillion (ppt) to 72 ppt. This new goal was near background levels, making it almost impossible to achieve these reductions. The EPA also used questionable science to set the PRGs; the Agency essentially “cherry picked” the data to support its plan regardless of methodological flaws.

The EPA’s proposal would have had severe economic consequences if finalized. The PRG would have forced many municipalities to dig up large tracts of land – even areas that have already been cleaned up to levels approved by the U.S.
government with enormous costs and serious implications for businesses, manufacturers, homeowners and farmers. It would have also stifled brownfield redevelopment at a time when we are trying to put people back to work.

Due to effective regulation and voluntary industry environmental stewardship, the levels of dioxins found in the air, water, soil and our food, have greatly declined. In fact, dioxin emissions from municipal incinerators have declined more than 99 percent from 1987, and according to the EPA’s own analysis, U.S. dioxin emissions from man-made sources have declined by more than 92 percent since 1987.

Manufacturers are still operating under a cloud of regulatory uncertainty as the EPA tries to get it right with its PRGs for dioxin cleanup. We urge the Agency to keep the current guidelines. Any new goals that are adopted, however, should be based on sound science and have undergone a thoughtful cost-benefit analysis.

The Environmental Protection Agency (EPA) today announced that it would retain the current secondary National Ambient Air Quality Standards (NAAQS) for nitrogen oxides (NOx) and sulfur oxides (SOx). Under the Clean Air Act, secondary standards are established to protect the environment from certain emissions where primary standards are established to protect human health. The EPA noted in its fact sheet on the final rule that the independent Clean Air Scientific Advisory Committee (CASAC) had recommended preserving the current standard based on its review of the available science.

NOx and SOx emissions come from a variety of natural and man-made sources including cars, trucks, buses, power plants, industrial facilities, waste incineration and agricultural sources. The fact sheet also stated that, “since 1980, levels of NOx and SOx in the air have fallen by more than 50 percent and more than 80 percent, respectively.” The resulting decrease has helped mitigate the impact of acid rain or acid deposition on the environment.

We are pleased that the EPA decided to maintain the current standards, but we urge caution as the Agency works to develop a new “multipollutant standard” for NOx and SOx that will also address acid rain deposition. Manufacturers have made great strides to reduce air emissions, and the last thing we need in this tough economy is another overly stringent standard that will do little to improve the environment.

The Senate Environment and Public Works Committee has not been very active on examining Environmental Protection Agency (EPA) regulations that impact manufacturers, but today the Committee’s Clean Air and Nuclear Safety Subcommittee held a hearing on the Agency’s recently-finalized Utility MACT rule.

This rule is of particular concern for manufacturers because it is expected to increase electricity costs and may jeopardize grid reliability as coal-fueled power plants are taken off-line. We’ve already begun to see plant closures resulting from this overreaching rule (see our post on the GenOn Energy plant closures).

Despite concerns from utility companies that more time is needed to comply with the rule, Gina McCarthy, EPA Assistant Administrator for the Office of Air and Radiation, stated that the three-year time frame (plus the possibility of an additional year from the state permitting authority) was sufficient. The NAM has been a strong supporter of increasing the compliance time frame, so coal-fueled power plants are able to install new emission control technology without compromising grid reliability. You can read our comments on the proposed rule here.

Rob James, a City Council member from Avon Lake, Ohio, noted that his community is already feeling the effects of this rule. Avon Lake will lose 80 jobs from the GenOn Energy plant closure, and the local economy will also feel the pinch from lost tax revenue and the increase in electricity prices.

We are pleased that this Senate panel is examining the economic impacts of this rule, but more needs to be done. We strongly urge Senators to support Sen. Inhofe’s (R-OK) Resolution of Disapproval (S. J. Res. 37) that would repeal the rule, sending the EPA back to the drawing board to develop a more achievable regulation (read out letter to the subcommittee here). We expect a vote on this resolution in June or July – yet another opportunity for the Senate to show its support for manufacturing jobs.

Environmental Protection Agency (EPA) regulations could sharply reduce drilling for natural gas and oil production, according to a new study from the American Petroleum Institute (API). The proposed New Source Performance Standards (NSPS) for oil and natural gas production will impact new hydraulically fractured gas wells and existing gas wells that are “re-fractured.”

According to the API press release, the study found that the proposed regulations would:

• Reduce drilling for natural gas using hydraulic fracturing by up to 52 percent;
• Reduce natural gas production by up to 11 percent; and,
• Reduce oil production by up to 37 percent.

These dramatic reductions in domestic production would result in the federal government losing up to $8.5 billion in royalties and state governments losing up to $2.3 billion in severance taxes.

There is no doubt that the shale gas boom has provided manufacturing operations with a reliable and affordable supply of energy. These proposed EPA regulations, however, threaten to slow fossil fuel production and potentially increase prices as manufacturers are trying to create jobs and boost the nation’s economy. The NAM urges the EPA to ensure these rules allow oil and natural gas producers the appropriate flexibility they need to comply with the regulations in a cost-effective manner.

Alicia Meads is director of energy and resources policy, National Association of Manufacturers.

The Hershey Company recently announced that three of its manufacturing facilities in Pennsylvania have achieved “Zero-Waste-to-Landfill” (ZWL) status due to the company’s ongoing recycling and waste management efforts. According to the press release, ZWL means that manufacturing waste from these three facilities has been eliminated from landfill disposal.

Approximately 90 percent of this waste is recycled, and the remaining 10 percent is converted to energy at nearby waste-to-energy incinerators in Bainbridge, PA and Harrisburg, PA. This announcement underscores the company’s long-standing commitment to environmental sustainability. Founder Milton Hershey started the company’s first recycling center in Hershey in 1937, long before recycling and waste reduction were common practices.

Terence O’Day, Senior Vice President of Global Operations stated in the release, “We are proud of our role as stewards of the environment and of our progress in eliminating waste from our operations. We achieved ZWL at these facilities through a rigorous process of eliminating waste, recycling and converting waste to energy. Our employees understand the importance of sustainability across our company and are working together to reach our reduction goals.”

In addition to its recycling achievements, the company has also invested in solar panels to generate electricity at several facilities and made commitments to reduce its greenhouse gas emissions.

Alicia Meads is director of energy and resources policy, National Association of Manufacturers.

Today, the House Energy and Commerce Committee’s Subcommittee on Energy and Power held a hearing about the impact of the Environmental Protection Agency’s (EPA) Utility MACT regulation on electricity costs. The regulation, finalized in December 2011, requires the installation of emission control technologies by many coal-fired power plants over a relatively short time frame of three years.

The EPA estimates that the rule will have an annual cost of $9.6 billion, making it one of the most costly rules in the history of the agency. Manufacturers, as users of one-third of the energy consumed in this country, are extremely concerned that the regulation will increase electricity rates and also cause grid reliability issues.

One of the witnesses, Anne Smith of the National Economic Research Associates (NERA), argued that the EPA has made some “misleading public statements” about the health benefits of the rule in its Regulatory Impact Analysis (RIA). Her testimony states:

“A closer read of the RIA reveals that all the “saved lives” and virtually all of the $33 billion to $90 billion of estimated benefits EPA has attributed to the MATS [or MACT] Rule are for purported coincidental reductions of . . . fine particulate matter (PM_2.5) that is already regulated to safe levels separately under the [Clean Air Act].”

Thus, the EPA is “padding” its RIA with supposed health benefits that occur because of reductions in emissions not covered by the Utility MACT rule.

Her own economic analysis also indicates that the rule’s net impact to U.S. workers in 2015 will be a reduction in worker income that is the equivalent to approximately 200,000 full-time jobs.

Darren MacDonald, Director of Energy at Gerdau Long Steel North America, expressed concern that the regulations would increase electricity prices, hurt the company’s competitiveness and put jobs in jeopardy. He also noted that the Utility MACT regulation will place increased demand on the suppliers and installers of pollution control technology which could also drive up costs for manufacturers.

The NAM applauds the House of Representatives for passing legislation such as the TRAIN Act (H.R. 2401) which would delay implementation of the Utility MACT rule until an interagency economic study is completed. We urge similar action in the Senate.

Aicia Meads is director of resources and energy policy, National Association of Manufacturers.

Furthering its commitment to sustainability, NAM member Bayer Corporation last week opened an electric vehicle charging station for employees at its U.S. headquarters in Pittsburgh. The Bayer charging station is one of the 45 stations that will be built along Pennsylvania Interstate 376 as part of the “Energy 376 Corridor” project. The project’s goal is to create one of the most extensive charging station networks in the country. The station is located next to Bayer’s EcoCommercial Building Conference Center, which is a net-zero energy facility.

Dan Santmyer, Director of Operations at the Bayer Pittsburgh site, said in a press release, “the installation of the EV charging station is part of the company’s global commitment to sustainability. We are proud to provide our employees with the infrastructure that supports their efforts to drive, rent or purchase EV’s and reduce their personal footprint on the environment.”

Learn more about Bayer’s comprehensive sustainability program here.