Chemical Industry to Congress: EPA Regulations Pose Significant Threat to U.S. Competitiveness and Innovation
Chemical industry advocates cautioned in congressional testimony on Oct. 18 that the Biden administration's approach to regulating the sector could have catastrophic impacts on U.S. economic competitiveness and innovation.
House Republicans Cathy McMorris Rodgers, of Washington, and Bill Johnson, of Ohio, called the House Energy and Commerce Committee hearing, titled "Exposing EPA Efforts to Limit Chemicals Needed for Life-Saving Medical Devices and Other Essential Products.”
In his testimony, American Chemistry Council (ACC) President Chris Jahn cited Europe as an example of where the U.S. chemical industry and economy could be headed if the EPA follows through with proposed regulations.
“Once a manufacturing powerhouse, Europe’s share of worldwide chemical production is half of what it was only two decades ago,” he said in his testimony. “We are witnessing the deindustrialization of Europe across most manufacturing sectors. This is the direct result of ill-conceived regulations and energy policies. The consequences are fewer jobs, less innovation, and higher prices. Do not let America fall into the same trap.”
Europe has faced historically high energy prices in 2023, and chemical manufacturers in the region have complained that government policies are hurting the industry. In February, BASF announced it would cut 2,600 jobs and close plants due to “overregulation” and high energy prices.
ACC cited about a dozen proposals specifically targeting the chemistry industry that would cost to the U.S. economy nearly $7 billion dollars annually.
Peter Huntsman, president and CEO of Huntsman Corp., also testified, reiterating the importance the chemical industry plays in everyday products including electronic devices and pharmaceuticals. He also stressed the vital role that fossil fuels play in the development of chemical products.
“The most utilized starting atoms, or ‘feedstocks,’ for chemical manufacturing are hydrocarbons derived from petroleum, natural gas, natural gas liquids and coal, otherwise known as fossil fuels,” Huntsman said. “Without abundant access to fossil fuel feedstocks, we cannot manufacture chemicals.”
He added that many government and business leaders lack a basic understanding of “how things are made.”
“In the current policy, political and business arenas, opposition to natural resource extraction manifests itself in the idea that American society – and the world – can somehow ‘transition’ away from fossil fuels and their derivative materials, including chemicals, and somehow maintain our way of life. Until the advent of new technology or a massive expansion of nuclear power, this is simply untrue and not physically possible. To believe so is both naïve and dangerous,” according to his written testimony.
Both Huntsman and Jahn stated the Environmental Protection Agency is imposing new regulations without sufficient scientific evidence.
However, Tracey Woodruff, director for the Program on Reproductive Health and the Environment at the University of California, San Francisco, testified that regulation has led to new innovations.
“Since 1970, environmental regulations led to a 78% decrease in 6 different air pollutants while at the same time our GDP increased 304%,” according to her testimony, citing a 2011 EPA study. “This success is due to both environmental regulations and American innovators.”
She noted that updates to the Toxic Substances Control Act, or TSCA, has protected vulnerable populations like pregnant women, children, workers and people living in proximity to clusters of polluting facilities from harmful chemicals.
