Tag: economy

We wish we were making this up: Federal Government has no idea how it is managing environmental reviews

A new report on the Obama Administration admits a stunning lack of oversight of our nation’s bedrock environmental law, the National Environmental Policy Act (NEPA). NEPA is the law that requires all major projects — think highways, bridges, pipelines, transmission lines — to submit to a comprehensive review of their potential environmental impacts prior to construction. NEPA is often the largest, costliest, most time-consuming regulatory hurdle developers face before they can build. It also is a common target for abuse, as there are countless ways to throw a wrench in the process and make the review take even longer (see XL, Keystone). The longer the delay, the more likely the developer walks away. Project opponents don’t even need a “win” on NEPA to win; the delay is often enough.

The White House Council on Environmental Quality (CEQ) administers NEPA, and for the past few years has assured us that it is best suited to streamline the environmental review process. Today’s report shows CEQ hasn’t even been watching. Consider what the General Accountability Office (GAO) found:

  • The Administration does not have accurate data on the number or type of environmental reviews conducted each year.
  • The Administration does not know how much it spends on environmental reviews, or how much typical environmental reviews cost.
  • The Administration has no idea how long a typical NEPA review takes. GAO instead cites to a nonprofit group, the National Association of Environmental Professionals (NAEP). NAEP estimates that the average environmental impact statement (EIS) takes 4.6 years, the highest it’s ever been. NAEP also estimates that the time to complete an EIS increased by 34.2 days each year from 2000 through 2012.
  • The Administration thinks the majority of NEPA reviews are the shorter Environmental Assessments (EA) or Categorical Exclusions (CE), but it really doesn’t have any data.
  • No government-wide system exists to track NEPA litigation or its associated costs.
  • Delays sometimes occur because agencies assume they will be sued and spend more time making the review “litigation-proof.” Yet there is no evidence that these efforts actually improve the review document.

The White House opposed efforts to streamline NEPA in a bill passed by the House last month. Yet the President promised again this year that he would cut the red tape plaguing these reviews. How in heavens name is the Administration properly able to cure what ails NEPA when they’ve made no attempt whatsoever to diagnose the problem?

It’s time for Congress to step in here. Please.



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New NAM Video Explains Impact of Ozone Regulations

I have continued to underscore the importance of reducing regulatory burdens and regulatory uncertainty, particularly as our economy continues to recover. With that in mind, and after careful consideration, I have requested that Administrator Jackson withdraw the draft Ozone National Ambient Air Quality Standards at this time.” –President Obama, September 02, 2011

With the unemployment rate hovering above 9% and in the early stages of his reelection campaign, in September 2011, President Obama told the Environmental Protection Agency (EPA) to stop its work on a new ozone regulation – a regulation that by the administration’s own estimate would have cost industry and consumers as much as $90 billion per year. Now, just two and a half years later, the administration is once again considering a new ozone regulation, and again the costs to manufacturers and the economy could reach never-before-seen levels.

While we are still months away from the release of a proposed ozone rule, the rulemaking process is very much underway – EPA has developed its draft documents, its science advisors have met and environmental advocacy groups are in court seeking to expedite the whole process. Meanwhile, manufacturers are becoming uncomfortably reacquainted with the concept of the administration levying a regulation that makes expansion in many, if not most, parts of the country difficult at best and in some cases impossible.

With so much at stake for manufacturers, the NAM is committed to being involved at every stage of the ozone review and rulemaking process to ensure the administration gets it right. We will work with elected and appointed officials at all levels of government and educate the general public about the regulation, the steady and consistent air quality improvements that have been made over the last 30 years and the improvements that will continue to take place based on laws already on the books. But we will also work to ensure the public understands the consequences of the administration going too far by proposing unattainable standards and how with the right policies we can have both a clean environment and a strong manufacturing economy.

Below is a video the NAM developed that provides some background information on EPA’s review of a new ozone regulation and what’s at stake for manufacturers and the economy.

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Manufacturers Testify Before House Ex-Im Panel

Yesterday, manufacturers like Boeing and FirmGreen participated in a panel hosted by House Financial Services Committee Ranking Member Maxine Waters (D-CA) to highlight the critical importance of reauthorizing the U.S. Export-Import (Ex-Im) Bank. Ex-Im Bank faces a tough reauthorization fight in Congress this year.

Manufacturers, especially small and medium-sized manufacturers, cannot afford a lapse in the financing support that helps them stay competitive in the global marketplace. Most of the Bank’s financing deals help small businesses, Ex-Im Chairman and President Fred Hochberg told the panel. Hochberg spoke with the NAM’s Member Focus magazine last year about efforts to help businesses of all sizes.

Unfortunately, manufacturers are already facing the consequences of the uncertainty surrounding Ex-Im’s reauthorization. FirmGreen CEO Steve Wilburn told lawmakers that his company lost a $57 million contract to a South Korean competitor because reauthorization legislation faces an uncertain future in Congress. “I just want you to understand the impact on people in my company, me personally and the people in the Midwest that I can’t give those jobs to,” he said. “To me, it’s unconscionable that we allow this debate to rage on a partisan basis.”

Ted Austell, Boeing’s vice president of executive, legislative and regulatory affairs, said that Ex-Im supports the company’s 160,000 employees, 15,000 suppliers and vendors, and hundreds of thousands of workers connected to the aerospace sector. “In a word, it’s jobs,” he said.

House Democratic Whip Steny Hoyer (MD) addressed the panel yesterday afternoon, and he indicated that he will make Ex-Im a legislative priority. The NAM appreciated Rep. Hoyer’s outstanding leadership during the last reauthorization of Ex-Im, and we are very pleased that he continues to make this issue a priority. It is a critical tool that allows our small, medium and larger manufacturers to compete globally. Rep. Hoyer announced at a press conference earlier today that he is including Ex-Im Bank reauthorization in his manufacturing initiative.

This evening, Rep. Denny Heck (D-WA) and other members of the New Democrat Coalition will take to the House floor to discuss the Ex-Im Bank’s positive impact on American jobs during a “special order.” You can follow along with the New Dems on Twitter here.

The NAM will continue to advocate for Ex-Im Bank’s reauthorization on Capitol Hill and with the Administration. In March, we spearheaded a letter that was joined by more than a dozen other business leaders to urge the Senate Banking, Housing and Urban Affairs Committee and the House Financial Services Committee to take immediate action on legislation. We’re also engaging our members to add their voices and influence. Click here to learn more about what manufacturers can do today.

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White House Releases Methane Strategy Document

The benefit to manufacturing from the U.S. energy boom is undeniable. In September, the NAM participated in a study that found the unconventional oil and gas value chain could support 3.9 million jobs by 2025. The study cautioned that with the wrong policies in place, much of this economic potential could be lost.

Today, the White House released a strategy document that contemplates new “policy tools” for the oil and gas sector.

As the suppliers of goods to service this sector and the beneficiaries of the low-cost energy it produces, manufacturers encourage the administration to work with industry to build on the progress that has already been made in lowering emissions as opposed to issuing additional, inflexible regulations.

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Manufacturers Push for Regulatory Reform

NAM President and CEO Jay Timmons and Arizona Chamber of Commerce & Industry President and CEO Glenn Hamer recently co-authored an op-ed in the Arizona Daily Star, emphasizing the direct impact federal regulations have on local energy prices, consumers, and manufacturers.

Though these policy discussions take place on the national level, Timmons and Hamer note the implications are often most felt on the local level.  According to the authors, “Arizona manufacturing has rebounded to levels beyond pre-recession output. Thanks to hard work and smart investments, manufacturers in the state now employ almost 6 percent of Arizona’s workforce. But those gains could be put at risk by misguided federal energy policies.”

RegReform EventAs manufacturing continues to grow jobs and expand nationwide, the NAM has made a concerted effort, partnering with the National Federation of Independent Business (NFIB), to advance common sense regulatory reform. A month ago on Capitol Hill, the NAM co-sponsored a “State of U.S. Regulations” event with the NFIB, during which both groups announced they “will utilize the full weight of their grassroots networks in an effort to engage with Congress and the Administration on the need for regulatory improvements.”

Jay Timmons, president and CEO of the NAM, said of the partnership, “This will be a strong and effective partnership because manufacturers and small businesses face a disproportionate burden of all regulatory costs. While manufacturers recognize the need for regulation, the scope and complexity of rules have made it harder to do business and compete in recent years. This is a trend that simply cannot continue and is easily solved with common-sense reforms. We can achieve a streamlined regulatory process with increased accountability and transparency that will protect businesses, manufacturers and consumers.”

The event, which coincided with Congressional debate on regulatory reform, included a keynote address by U.S. Representative Kevin McCarthy (R-CA), House Majority Whip, and opening remarks from Jay Timmons, President and CEO of the NAM, and Dan Danner, President and CEO of NFIB. Following the opening remarks, a panel of policy experts, which included former Governor George Allen (R-VA) and former U.S. Senator Blanche Lincoln (D-AR), discussed the complications within the federal regulatory system, noting how complexities create unintended consequences for manufacturers and small business.

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Manufacturers Deeply Concerned about WOTUS Proposal

On Tuesday, March 25, the Environmental Protection Agency (EPA) and the Army Corps of Engineers (Corps) released a copy of the proposed Clean Water Act rule on the Waters of the United States (WOTUS). The rule’s intended purpose is to clarify current regulations on EPA and the Corps’ jurisdiction over “navigable waters” of the United States, but unfortunately it has only created more uncertainty.

The proposed rule expands their jurisdiction to further regulate things such as fire ponds, dry ditches, ephemeral or seasonal streams, cooling ponds, isolated mosaic wetlands, snowmelt and storm drainage ponds. In doing so, this will significantly impact manufacturers’ ability to build new or expand existing facilities, and in some cases it will impact the ability to conduct day to day operations.

There are hundreds of activities that currently do not require a clean water permit, but with this new rule many of these activities will now need a permission slip from the government; or at the very least require companies to inquire of the agencies to determine if a permit is necessary. Waiting for these agencies to respond could take anywhere from weeks to months.

Another troubling aspect of this proposed rule is that the EPA chose not to wait for a final peer review of their “Connectivity of Streams and Wetlands to Downstream Waters: A Review and Synthesis of the Scientific Evidence” study. This study has been touted as the basis of the rule, but has not been peer reviewed by the EPA’s own Science Advisory Board (SAB). Further, a number of members of that board raised concerns with deficiencies in the report at a recent meeting.

Manufacturers are concerned about the negatives impacts and uncertainty that this rule will create, and will continue to provide input to the EPA and Army Corps.

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LNG exports take center stage in House, Senate

Today, both the House and Senate will hold committee hearings relating to liquefied natural gas (LNG) exports. Both hearings will focus on not only the economic impact but also the increasingly-relevant geopolitical aspects of exporting energy. The House Energy and Commerce Committee hearing will focus on a specific piece of legislation: H.R. 6, the Domestic Prosperity and Global Freedom Act. H.R. 6 would provide expedited processing of all new LNG export applications to the Department of Energy (DOE), and would approve all applications pending in the DOE’s queue as of March 6, 2014.

Like any major infrastructure project, LNG export terminals must run the gauntlet of a long, drawn-out permitting process. One of the earliest steps in the permitting process, a license from DOE, has become a regulatory choke point for LNG exports. Some applicants have been waiting years for a decision, with no end in sight. At DOE’s current pace, some of the applications in the queue could be waiting until 2016 or later before they can move to the next step in the process.  While the national interest determination requirement by DOE isn’t itself a problem–we support a process that is open, transparent and objective–the way it’s been carried out is creating a major barrier to free trade and open markets in the area of LNG exports. It also may be running afoul of our international obligations: a recent report by former World Trade Organization (WTO) Appellate Body Chairman James Bacchus, who is testifying before the House today, concluded that the delay by the DOE to issue licenses to export LNG to foreign countries likely constitutes, in and of itself, a violation of our international obligations under the WTO. (He reached the same conclusion for coal export permitting delays.) As the United States leads the world in enforcing global commitments to prevent export restrictions, such as those that China has placed on raw materials and rare earths to the detriment of U.S. industry and workers, we should not ourselves be in violation of those same commitments.

The NAM was founded over 100 years ago to promote open markets and free trade for American manufacturers. In the context of all exports, including those of energy, the NAM fundamentally supports open markets and promotes exports of all products. We believe the market, if allowed to work, will provide equilibrium.  For the past year, we’ve called on DOE to speed up its licensing process to provide applicants an up-or-down decision as expeditiously as possible. In recent weeks, the editorial boards of the Washington Post, Wall Street Journal, the New York Times and others have called for similar action.

As part of our commitment to exports and free trade, the NAM supports H.R. 6, the Domestic Prosperity and Global Freedom Act. H.R. 6 would put the United States in compliance with its own international obligations under the WTO, and would and help bolster U.S. efforts to eliminate other countries’ export restrictions. H.R. 6 does not impact the economic, environmental or safety studies that the Federal Energy Regulatory Commission (FERC) and other agencies are required to conduct, nor does it remove any other regulatory requirement. It would promote the development of infrastructure to allow the export of a product–a principle that manufacturers support.

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Manufacturing Leaders Convene to Discuss Growth and Competitiveness

Photo by David Bohrer/NAM

Photo by David Bohrer/NAM

Yesterday, NAM President and CEO Jay Timmons joined manufacturing executives at a Chicago panel focusing on growing manufacturing in the United States. The panel, hosted by The Chicago Council on Global Affairs, featured Tenneco Inc. Chairman and CEO and NAM Board Vice Chair Gregg Sherrill, Snap-on Incorporated Chairman and CEO and NAM Board member Nicholas T. Pinchuk and Eli Lilly and Company Senior Vice President and Lilly Diabetes President and NAM Board member Enrique A. Conterno.

The discussion, titled “Manufacturing an Agenda for American Growth,” focused on modernizing the U.S. workforce and infrastructure and developing competitive tax, energy and trade policies. Phil Levy, The Chicago Council’s senior fellow on the global economy, moderated the discussion.

Tenneco Chairman and CEO and NAM Board Vice Chair Gregg Sherrill. Bohrer/NAM

Tenneco Chairman and CEO and NAM Board Vice Chair Gregg Sherrill. Bohrer/NAM

Timmons discussed the manufacturing comeback, but also cautioned that ill-advised policies out of Washington are holding manufacturers back. “I am struck by manufacturers’ optimism about the future. But I also see the frustration—frustration with a government that talks a lot about strengthening manufacturing, but then does little to back it up. The fact is that the growth in our sector, modest as it is, has come in spite of Washington and not because of it. Think how much more we could do if Washington stopped making it harder to do business.”

Sherrill focused on the need for fiscal and entitlement reform and the importance of a competitive tax code, while Conterno highlighted the importance of expanding trade to strengthening the manufacturing economy. Finally, Pinchuk discussed the need to address a growing skills gap in the manufacturing workforce.

After taking questions from the audience, Timmons ended the panel by highlighting the importance of getting involved in the political process, noting that “public policy matters, and manufacturers—with their outsized impact on the economy—have a responsibility to ensure policymakers hear our voices.”


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A Better Way to Do Business in India: Scrap Discriminatory Policies and Engage on Constructive Solutions

How can India grow its emerging electronics equipment and ICT manufacturing sector? Not with a costly and discriminatory Preferential Market Access (PMA) policy. That’s what Stephen Ezell concludes in a paper released by the Information Technology and Innovation Foundation.

India’s PMA policy mandates local content requirements for as much as much as 30 percent of India’s $20 billion ICT market. By the end of next year, a quarter of the value of mobile phones and computer tablets, desktops, printers, keyboards, servers, memory cards and network equipment must be added in India. That share will rise to 45 percent in 2015 and to 80 percent by 2020.

PMA would block U.S. exporters from a large segment of India’s fast growing ICT market. India boasts the world’s second largest telecommunications network, with a subscriber base that has ballooned from less than 40 million in 2001 to nearly 850 million in 2011. Even without trade distorting preferences, the value of India’s ICT equipment production more than doubled between 2004 and 2009.

But, as Ezell points out, PMA is just as bad for India. Beyond the damage to U.S. and other overseas suppliers, the policy would “impose costs on India’s economy and citizens” without delivering production growth, increased security or better products or services. Overseas investors are already fleeing the sector. FDI in India’s telecommunications sector fell from $2 billion in the period from April 2011-March 2012 to just $300 million from April 2012-March 2013.

Ezell calls on the Indian government to repeal PMA and replace it with measures that can truly drive manufacturing growth and competitiveness. Specifically, he urges India to invest in infrastructure, workforce training and scientific research. He recommends tax and investment incentives to lure overseas firms and an end to an inverted Indian tariff structure that makes it more costly to import component parts than finished equipment.

Manufacturers in the United States are eager to engage on these and other constructive solutions. We continue to seek meaningful dialogue. But to get there, India must end its destructive “talk to the hand” approach to bilateral trade and commercial concerns. The U.S.-India Trade Policy Forum has not met since 2010. No other relevant forum, such as the High Tech Cooperation Group, or the ICT working group has met since 2011.

Early next month, the Indian people will go to the polls to choose new leadership. Manufacturers look forward to working closely with India’s next government. Together, we can find a better way of doing business.

The National Association of Manufacturers is co-chair of the Alliance for Fair Trade with India (AFTI). Click here for more information.

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KORUS Agreement Has Shown Strong Results on Two-Year Anniversary

March 15th marked the two-year anniversary of the Korea-U.S. Free Trade Agreement’s (KORUS FTA) entry into force and the facts are clear. Despite what some trade critics say, exports of U.S. manufactured goods to Korea have increased.  Thanks to KORUS, more than 95 percent of U.S. industrial and consumer goods are entering the Korean market duty-free, and as a result, exports of U.S. manufactured goods to Korea have gone up 3.1 percent or $1 billion since the agreement was implemented. Specifically, exports of electrical equipment, appliances and other components jumped 22.5 percent and exports of pharmaceuticals experienced a huge increase of 52 percent! Moreover, U.S. manufactured goods saw an increase in exports to Korea of 9.2% from January 2013 to January 2014, while manufactured goods exports from Korea to the U.S. only increased 3.1 percent.

The U.S. Trade Representative’s (USTR) Office released a fact sheet on the enhanced opportunities the KORUS agreement has created over the last two years. “In its second year, this landmark agreement continues to provide tangible benefits for American businesses, workers, and farmers exporting to our sixth-largest trading partner,” USTR stated.  As USTR notes, the overall U.S.-Korea trade balance has been negatively impacted by decreases in corn and fossil fuel exports due to the U.S. drought in 2012, but those events are unrelated to the agreement’s implementation. USTR also noted slowed economic growth in Korea over the past two years was associated with decreased demand for all of its imports – not just those from the United States. In addition, the European Union’s free trade agreement with Korea entered into in July 2011, so it is likely that manufacturers in the EU had the advantage of moving their products into Korea’s market first.  As the global economy continues to improve, we hope to see even stronger U.S. exports to Korea.

At the same time, the NAM is working closely with our members, USTR and the Korean government to resolve some key issues with KORUS implementation including customs issues for certain U.S. exports to Korea and an array of non-tariff barriers, especially in the auto sector, which greatly impede manufacturers’ access to the Korean market. Last week, Korean ambassador to the United States Ahn Ho-young expressed a commitment to addressing any outstanding issues with implementation of the KORUS agreement. It is critical that Korea remain focused on resolving these challenges and that the Korean government continue working with the U.S. government to respond to market access concerns from manufacturers in the United States – especially if it is serious about seeking accession to the Trans-Pacific Partnership (TPP) agreement.

Additionally, more work needs to be done to ensure that manufacturers in the United States are aware of the new export opportunities in Korea resulting from the KORUS FTA. Manufacturers can visit FTA Tariff Tool to determine tariff levels for their exports to Korea.

While it’s still too early to determine the full impact of KORUS on U.S. manufactured goods exports, a closer look at the numbers reveal that they are headed in the right direction, and manufacturers believe that continued cooperation with Korea will only strengthen our economic ties and expand the benefits of the KORUS agreement.

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