The year 2002 brought
significant challenges for the surface finishing industry. Just
as the nation and the larger manufacturing community, finishers
bristled at what seemed to be a continuous stream of sour news on
the economic front. As steady work from reliable customers disappeared
or moved offshore, the term globalization trickled into the plating
vocabulary as more than a mere abstraction. For many, the accelerating
transformation of the manufacturing supply chain in response to
foreign competitive pressures was downright painful.
The
outlook on the regulatory front contained possibilities equally
as bleak, namely the likelihood that the U.S. Environmental Protection
Agency would manage to finalize for plating operations a set of
draconian yet arguably unjustifiable effluent discharge limits under
the Metal Products & Machinery Rule (MP&M). At an estimated
cost to job shops and captives of more than $1 billion, the MP&M
package looked to be the last thing industry needed. As the year
closed, however, finishers were poised to achieve their biggest
regulatory victory in Washington in a generation, and they were
moving EPA to a decision on MP&M of "no further regulation"
for both job shops and captive operations.
Another
bright spot for some came in the national election results, as Republicans
won back control of the Senate and picked up seats for an expanded
majority in the House. While certainly not a mandate, the election
provided modest traction for the prerogatives of business to be
aired - tort and tax reform, regulatory relief, and a meaningful
economic growth package, to name a few.
But
even this better news remained overshadowed by a controversial decision
by the White House in March to protect the integrated steel industry
with tariffs on foreign steel imports. The action was aimed at providing
relief for a long beleaguered sector and winning political support
in the 2004 presidential elections in key battleground states like
Pennsylvania and West Virginia. The tariffs, however, suppressed
supply and jacked up the cost of domestic steel, putting severe
pressure on a wide range of steel consuming industries and exacerbating
what was already a tough economic climate for the plating industry.
On
all these issues - globalization, regulation, small business relief
and trade - the government relations program in Washington is engaged
to educate policy makers and protect surface finishing interests.
While not exhaustive, the list that follows reviews some key recent
developments on issues affecting the plating industry.
Federal
Court Extends Deadline for EPA to Finalize MP&M Rule
The
Washington DC Federal Court of Appeals granted an EPA request for
a 45-day extension to finalize the MP&M rule. Facing a looming
year-end deadline and the risk of not completing the final MP&M
rulemaking package, EPA recently sought relief from the court. While
the finishing industry's leadership had been concerned that the
primary litigant, Natural Resources Defense Council (NRDC), would
demand significant concessions from EPA in exchange for an extension,
the NRDC did not seek to impose conditions associated with moving
the deadline. Under the new terms of the consent decree, EPA had
until February 14, 2003 to finalize the rule.
Government
Relations met with key Agency officials in December to confirm that
EPA would maintain its current position of "no further regulation"
for job shops and captive operations. One of the reasons for the
delay is that EPA has remained undecided on whether to impose new
MP&M effluent limits on captive facilities discharging directly
to water bodies. At press time, all job shops and all captive facilities
that discharge to municipal waste treatment works are expected to
see no new MP&M limits. Additionally, Government Relations efforts
have succeeded in keeping the Agency from requiring 413 operations
to upgrade to 433 status.
EPA was originally
scheduled to send the final MP&M rulemaking package to the White
House Office of Management and Budget (OMB) for review by mid-December.
After OMB review and comment, EPA's Office of Water is scheduled
to finalize the MP&M rule and submit the package to EPA Administrator
Christie Todd Whitman for her signature.
The significant
efforts of industry and Government Relations and an investment of
nearly $1 million to correct the errors in the proposed rule appear
to have succeeded in saving just job shops an estimated $750 million
in avoided regulatory costs! While the current EPA position is very
favorable for metal finishing job shops and captive operations,
nothing will be final until the EPA Administrator signs the rule
on February 14, 2003. Government Relations does not expect any changes
to EPA's position, and will continue to work closely with EPA officials
to ensure that a "no further regulation" determination
will be included in the final MP&M rule.
Substantial
Progress on RCRA Regulatory Reforms for F006 Sludge
Government
Relations is also working closely with EPA on a proposed rule that
would allow wastewater treatment sludge from electroplating operations
to be managed as a non-hazardous waste. Based on EPA's preliminary
work on this project, wastewater treatment sludge would not be considered
hazardous waste, F006, provided that the sludge meet a minimum metal
content and the sludge is recycled for metals recovery. In addition,
ion exchange canisters that are recharged would not be classified
as F006. Under both scenarios, the sludge could be shipped offsite
on a non-hazardous waste carrier without a hazardous waste manifest.
This regulatory change, if fully implemented, would represent a
substantial achievement for the industry and a significant savings
in transportation costs alone.
In addition
to the conditional exemptions for sludge destined for recycling
and ion exchange canisters, EPA is also considering a generic delisting
for sludge that has minimal levels of hazardous constituents. Excluding
such electroplating wastewater treatment sludges from hazardous
waste regulations would provide the proper incentive for facilities
to use source reduction and pollution prevention techniques to minimize
hazardous constituents in its sludge.
While these
developments can provide significant savings to the metal finishing
industry without increasing any potential risks to human health
and the environment, EPA is still working on the details for the
proposed regulation.
EPA expects
to complete the proposed rule by Spring 2003. Following the proposal,
EPA would allow a comment period before finalizing the rule in approximately
two years. Once promulgated, this federal regulation would have
to be adopted in individual states. Government Relations is working
with EPA and state officials to lay the groundwork for prompt state
adoption of these key changes at the federal level.
Chrome
MACT Amendments Will Ease Burdens
EPA
proposed Chrome MACT Amendments in the Federal Register on June
5, 2002. The suggested changes are consistent with previous discussions
between industry and EPA's Office of Air and Radiation. These amendments
provide greater flexibility for facilities to demonstrate compliance
with currently applicable chrome MACT standards.
The proposal
includes the following changes to the current Chrome MACT:
- Flexibility
for plating tank reconstruction to avoid review under New Source
Review program;
- Flexibility
for enclosed tanks "technically" out of compliance with
emission standard;
- Expanding
pressure drop allowance; and
- Streamlining
the current chrome MACT to allow the use of fume suppressants
for hard chrome in lieu of mechanical control equipment without
having to complete a source test.
Government
Relations submitted comments offering the industry's support and
clarification of the proposed amendments. EPA had expected to finalize
the amendments in late spring or early Summer 2003, but the Agency
slowed the process in late 2002 as new information was reviewed.
On related
state issues, Government Relations worked in the past year with
California metal finishers and U.S.EPA officials on local enforcement
actions against companies using only fume suppressants rather than
control technology to meet MACT standards. At the urging of California
finishers, GR brought this issue before EPA and convinced EPA's
Chief of Emission Standards to engage local regulators to clarify
the intent of the Chrome MACT standard and turn back unnecessary
local enforcement activity.
OSHA
Chrome PEL
Early in 2002, Ralph Nader and the Public Citizen Health Research
Group, along with the Paper, Allied-Industrial Chemical and Energy
Workers Union, petitioned a federal court to direct OSHA to issue
a hexavalent chrome workplace permissible exposure level (PEL) rulemaking.
In partial response to this petition, OSHA issued in the August
22, 2002 Federal Register a Request for Information (RFI) on issues
relevant to occupational exposure to hexavalent chromium.
OSHA sought
scientific studies and data in the RFI on such topics as the health
effects caused by hexavalent chromium, industry profiles for the
use of the chemical, the potential economic impact of any new requirements,
and training programs and the use of personal protective equipment.
The agency stated it intended to address what it views as complex
and difficult issues related to occupational exposures in an effort
to resolve these issues and determine whether additional regulatory
controls are needed.
In response,
Government Relations became a more active player in the national
Chrome Coalition, comprised of key interested industry producers
and users of chromium, to submit appropriate comments and data on
applicable health studies regarding exposure to chrome in the workplace.
In a rather
ominous development late in the year, OSHA signaled it was committed
to developing a new chrome PEL. The Agency will consider the available
data and information to determine to what extent a more stringent
chrome worker exposure limit is necessary. Pressure from the labor
and activist communities is driving OSHA to consider lowering the
PEL to between 0.5 and 5 micrograms / cubic meter. A rulemaking
schedule was under discussion in mid-December 2002 between industry,
the unions and the Labor Department solicitor's office.
GR
Efforts Shape EPA "Second Look" on Anti-Metals Initiative
Through Government Relations and other industry discussions with
top political officials at EPA, the Agency agreed in 2002 to have
its own independent Science Advisory Board (SAB) review the persistent,
bioaccumulative and toxic (PBT) chemical methodology for metals
and develop a Metals Action Plan for addressing potential health
risks from metals. Government Relations has been tracking SAB's
scientific review and participating in meetings as an agency action
plan is formulated.
The SAB recently
issued a report stating that the PBT criteria used by EPA to assess
various chemical hazards are inappropriate for metals and that metals
should not be included on the PBT chemical list. It also urged EPA
to rely on sound environmental chemistry principles and focus its
analysis on the bioavailability of metal compounds. The SAB also
concluded that EPA should speciate metal compounds when making toxicity
assessments. This report represents significant progress in challenging
EPA's development of the PBT list and how the list is used for regulatory
purposes.
Industry
Informs EPA on Nickel Human Health Assessment, Problems Posed by
U.S. Dept of Health & Human Services
Government
Relations in 2002 advanced nickel-risk discussions with key EPA
research officials in order to ensure the Agency incorporated appropriate
data and joint industry-EPA risk assessment studies in the Agency's
pending formal risk assessment for soluble nickel compounds. The
Agency's so-called human health assessment is scheduled for publication
in early 2003 through EPA's Integrated Risk Information System (IRIS).
Once the Agency
makes public its conclusions on soluble nickel compounds through
IRIS, the information will be picked up and used by federal, state
and local regulators in any regulatory action considered for nickel-plating
processes. Thus far, EPA appears to have acknowledged the conclusions
of the so called TERA report, a study funded a few years ago by
the nickel plating and producing industries, EPA and Environment
Canada on the risks and cancer-causing potential of soluble nickel
compounds. The TERA document, which was peer reviewed by a group
of independent scientists, concluded that evidence is lacking to
deem soluble nickel compounds cancer-causing agents.
While EPA appears
to acknowledge the scientific validity of the industry's position
on soluble nickel compounds, its sister federal agency, the Department
of Health and Human Services (HHS), was moving forward at press
time to list all nickel compounds as known human carcinogens in
its 10th Report on Carcinogens. While the HHS report is not intended
for use as the final word on risks associated with a chemical or
compound, regulators have in the past misused the list as a basis
for regulation.
In addition
to the federal initiatives on nickel, several states are examining
whether it would be appropriate to impose chrome-like environmental
controls on nickel-plating tanks. While no state has taken affirmative
action to regulate emissions from nickel tanks, serious threats
of such regulatory controls are under consideration by California,
New Jersey and other state regulatory agencies. Government Relations
is working with local industry branches and affiliates in several
states to prevent further unnecessary regulatory actions.
Pending
Issues and News
As the industry
kicks off 2003, Government Relations will continue work on these
and other more critical strategic issues for the finishing industry.
A preview of initiatives we'll cover in follow-up articles to this
one includes:
- EPA's Flawed
Internet-Based Tool to Assess Risks at Metal Finishing Facilities
- Finishing
Activity and Progress on Global Competitiveness, Trade Policy
and China
- Retooling
the Strategic Goals Program to Focus on Benchmarking Best In Class
Performance and Environmental Management Systems for Finishers
FINAL COMPLIANCE NOTE: Lead TRI Reporting
Requirements
EPA
over a year ago issued the final rule that lowered the TRI reporting
threshold for lead and lead compounds to 100 pounds. It requires
facilities to calculate the amount of lead and lead compounds that
they manufacture (including coincidental manufacture), process or
otherwise use to determine whether they trigger the 100-pound threshold
starting January 1, 2001.
Given the relatively
low reporting thresholds, this new reporting requirement applies
to many metal finishing operations. Facilities are required to report
any releases of lead and lead compounds if it exceeds the reporting
threshold of 100 pounds for lead or lead compounds in a calendar
year on the Form Rs submitted on July 1, 2002.
The new lead
reporting requirements present serious compliance challenges for
metal finishing facilities. Through discussions with EPA officials
regarding lead TRI reporting concerns, Government Relations is working
closely with the Agency to develop a metal finishing specific guidance
on TRI as a compliance assistance tool. In addition, the recent
conclusions reached by EPA's Science Advisory Board in its report
on PBT chemicals could alter, but not eliminate, some of the new
TRI reporting requirements for lead and lead compounds.
