Posts for August 13, 2010

AUDIT FINDS EFFICIENCY FUNDS GO UNSPENT

August 13, 2010 – LateWire from Manufacturing.net
Government audit finds that most of the money authorized for one of the energy efficiency programs in last year's stimulus plan is going unspent ... continue

BUSINESS INVENTORIES EDGE UP IN JUNE

August 13, 2010 – LateWire from Manufacturing.net
Commerce Department said inventories held by businesses rose for a sixth straight month in June but sales declined for a second month in a row ... continue

CONSUMER PRICES RISE IN JULY

August 13, 2010 – Today in Manufacturing.net
Labor Department said Consumer Price Index, government's most closely watched inflation measure, increased 0.3 percent in July, after three months of declines ... continue

COUNTIES THREATEN NATURAL GAS SUPPLIER WITH LAWSUIT

August 13, 2010 - Christopher Smart - The Salt Lake Tribune (UAE Weekly Energy Update)

Representatives of a dozen counties in four Western states demanded Thursday that a large natural gas supplier back out of an agreement with environmental organizations or face a legal range war.

But officials of El Paso Corp., which is building the Ruby Pipeline from Wyoming to Oregon, said, no way.

County commissioners from Wyoming, Utah, Nevada and Oregon huddled in Salt Lake City on Thursday morning before issuing an ultimatum to the El Paso Corp.: Get out of a $22 million agreement with Western Watersheds Project and the Oregon Natural Desert Association (ODNA) or suffer the consequences, including lawsuits.

The Bureau of Land Management and Federal Energy Resource Commission and other federal agencies recently issued formal approval for El Paso to begin construction on the 680-mile pipeline from Opal, Wyo. to Merlin, Ore. It would pass through Utah’s Rich, Cache and Box Elder counties.

The counties supported the pipeline project until they discovered El Paso had cut a private deal with Western Watershed and ONDA. The commissioners have not seen the confidential agreement, but fear it would arm the environmental groups with money for lawsuits and even to lobby Congress to change grazing laws.

Further, they believe it would set a precedent for such “payoffs” every time a project on public lands comes up for federal approval.

Kent Connelly, a commissioner from Lincoln County, Wyo., characterized Western Watershed as an organization that buys up grazing permits and turns them over to wildlife. “They want to change the West back into sagebrush,” Connelly said. “Getting a secret agreement with El Paso is not upfront and has a serious socio-economic impact on our county.”

Lincoln County will sue the BLM in federal court to stop the pipeline, he said. He invited representatives of other counties to join the action.

Among five items the group of counties identified was withholding local conditional-use permits to halt construction if El Paso does not rescind the agreement.

Jim Cleary, representing El Paso, told the group that $15 million paid to Western Watersheds and $7 million paid to ONDA would not go into the general funds of those organizations. Rather, it will go into a nonprofit organization directed by Western Watersheds and El Paso and a third, neutral director to protect sagebrush habitat.

“It’s not the agenda of the fund to stop grazing on public lands,” he said.

Cleary did say, however, the funds could be used, among other things, to buy conservation easements, make land acquisitions and buy grazing permits from “willing buyers.”

The payments were made to assuage the environmental organizations from protesting the pipeline, he said.

Construction already has begun on the pipeline. Cleary said it will pump millions into local economies, including $70 million in sales and use taxes; $280 million in property taxes in the first 10 years; and, at its peak construction,will provide $3.6 million in daily wages to 5,000 workers.

Debra Ellers, the Idaho director for Western Watershed and president of the new nonprofit fund, said that El Paso’s money cannot be used for litigation, according to the agreement.

“We’re always accused of litigating,” she said. “Now we’re trying to find a different way, and we’re criticized anyway.”

But Elko County Commissioner Sherie Eklund-Brown said the agreement between El Paso and Western Watershed is ethically outside the National Environmental Protection Act.

“When everybody is not at the table … the public process has been violated.”

DOE-EPA REPORT FINDS CARBON CAPTURE AND STORAGE 'VIABLE' BUT NEEDS CARBON CAP

August 13, 2010 - Matthew Bandyk (UAE Weekly Energy Update)

A report from President Barack Obama's Interagency Task Force on Carbon Capture and Storage released Aug. 12 finds that there are no "insurmountable" barriers to the "widespread, cost-effective" deployment of carbon capture and storage technologies within the next 10 years but, nevertheless, significant barriers remain.

The president sent a memorandum to the heads of 14 executive departments and federal agencies Feb. 3 that ordered them to form a task force to research ways to overcome those barriers, "with a goal of bringing five to 10 commercial demonstration projects online by 2016," according to a statement released by the U.S. Environmental Protection Agency and the Department of Energy, the task force's two co-chairs.

In support of its claim that carbon capture and storage is "viable," the task force said that "up to ten integrated CCS demonstration projects supported by DOE are intended to begin operation by 2016 in the United States. These demonstrations will integrate current CCS technologies with commercial-scale power and industrial plants to prove that they can be permitted and operated safely and reliably."

The task force's report finds a close relationship between carbon capture and storage technologies and pending cap-and-trade legislation.

On one hand, the report argues that widespread carbon capture and storage can reduce the economic cost of complying with climate change legislation. "CCS can play a major role in reducing [greenhouse gas] emissions, with 20-40 percent of global CO2 emissions in 2050 projected to be suitable for capture — including 30-60 percent of all emissions from electric power," according to the report.

At the same time, the report finds that the technologies' commercial viability cannot grow without laws placing a price on carbon. "Widespread cost-effective deployment of CCS will occur only if the technology is commercially available at economically competitive prices and supportive national policy frameworks, such as a cap on carbon pollution, are in place," the report said.

Furthermore, "a climate policy designed to reduce our nation's GHG emissions is the most important step for commercial deployment of low-carbon technologies such as CCS, because it will create a stable, long-term framework for private investments," according to the report's executive summary.

As an example of national policies to support carbon capture and storage, the task force examined bonus allowances to provide incentives for plants to move toward those technologies.

Bonus allowances are free emission allowances under a cap-and-trade system that go to industrial facilities and electricity generators. As currently envisioned by the task force, projects can be awarded allowances based on tons of CO2 sequestered or percentage of emissions sequestered, or in a reverse auction for which the government acts as a "sequestration buyer."

Models in the report found that bonus allowances could shift the deployment "15-20 years ahead of when it would deploy in their absence."

But if policymakers go too far with bonus allowances, the economic costs of climate change legislation could be increased.

"The bonus allowances encourage firms to invest in CCS even though there are less costly means of achieving emissions reductions that do not receive bonus allowances. To the extent that such additional financial incentives distort the efficiency of the market, the overall economic cost of meeting the carbon target would be expected to rise," according to the report.

Another potential problem with carbon capture and storage is the effect on electricity prices. A recent report from the U.S. Government Accountability Office said the technology could increase electricity costs from 30% to 80%.

The task force report, while not analyzing the issue in great depth, finds similar results, but the exact impact depends greatly on whether the CO2 is captured before or after combustion.

An example of pre-combustion CO2 capture technology involves the use of an acid gas removal solvent called selexol. The report finds that the selexol process to capture CO2 at an integrated gasification combined-cycle power plant "increases the [cost of electricity] by approximately 40 percent relative to the same plant without a capture system."

In contrast, "installing current amine post-combustion CO2 capture technology on new conventional subcritical, supercritical, and ultra-supercritical coal-fired power plants would increase the COE by about 80 percent."

The task force also found that post-combustion capture "offers the greatest near-term
potential" for reducing emissions because it can be used to retrofit existing plants.

The report recommends several steps for the federal government to speed up the regulatory process and make carbon capture and storage more viable. It advocates that the DOE and EPA create a "federal agency roundtable to act as a single point of contact for project developers seeking assistance to overcome financial, technical, regulatory, and social barriers facing planned or existing projects."

It also recommends that by the end of this year, the EPA finalize Safe Drinking Water Act rules for geologic sequestration wells and Clean Air Act rules for CO2 storage facilities to report greenhouse gas emissions — two of the major regulatory barriers identified in the report.

EPA PROPOSES GREENHOUSE GAS PERMITTING RULES

August 13, 2010 – LateWire from Manufacturing.net
Agency is continuing to roll out more greenhouse gas emission rules amid numerous legal challenges to its broader effort to regulate the heat-trapping pollutants ... continue

EXPORT WEST: UTAH IS THE PLACE!

August 13, 2010 – Global Utah Weekly

Utah's three large metropolitan areas generated more than $10 billion dollars worth of exports in 2008. At 11.2 percent of the metros' total production, this equated to an export intensity almost one full percentage point higher than that of the nation's top 100 metro areas. And even more strikingly, the three metros of the Wasatch Front--the eight-county megapolitan region stretching along I-15 from Ogden-Clearfield in the north, through Salt Lake City and to Provo-Orem in the south--grew their exports by more than 70 percent each from 2003 to 2008. National exports, in comparison, grew by only 46.2 percent.
Read More »

FDA SAYS CHINA IMPROVING FOOD, DRUG SAFETY

August 13, 2010 – Today in Manufacturing.net
Agency says China is improving oversight of exporters following of scandals over bogus or substandard drugs and foods ranging from vaccines and infant formula to dog chow ... continue

FED OFFICIAL SAYS LOW RATES 'DANGEROUS'

August 13, 2010 – LateWire from Manufacturing.net
Federal Reserve official says keeping interest rates at record lows is a 'dangerous gamble' that could hurt the economy by unleashing inflation or new speculative bubbles ... continue

IMMIGRATION UPDATE

August 13, 2010 – NAM Capital Briefing

As the possibility for consideration of a comprehensive immigration reform bill diminishes this year, there is increasing discussion of border security and a piecemeal approach. As a result, Sen. Schumer (D-NY) has offered a border security bill that raises revenue by increasing fees by for employers who have more than 50 employees and more than 50 percent of their workforce on H-1b and/or L visas. The House and Senate passed Sen. Schumer's bill this week. Details: Christine Scullion, (202) 637-3133.

MANUFACTURERS PREPARE FOR TAX INCREASES

August 13, 2010 – NAM Capital Briefing

The latest economic report on gross domestic product (GDP) shows that the pace of our nation's recovery has slowed to 2.4 percent from 3.7 percent in the first quarter. The slowdown is further evidence of the fragile state of the economy and the urgent need for policies that encourage job creation and competitiveness. However, small and medium manufacturers are about to face a series of tax increases that will do just the opposite.

The individual tax rate cuts enacted in 2001 and 2003, which dramatically lowered the tax rate on smaller companies organized as pass-thru entities that pay income taxes at the individual rate, will expire on December 31. The top marginal tax rate will rise to nearly 40 percent. The estate tax, which was temporarily repealed for 2010, will go back into effect in 2011 at the jobs-killing rate of 55 percent. In addition, dividend tax rates will revert back to the top individual rate of 39.6 percent from the current rate of 15 percent, and capital gains taxes will increase to 20 percent.

Small and medium manufacturers already face a high tax burden with payroll taxes, unemployment insurance taxes and federal and state income taxes. And recent surveys indicate that small and mid-sized companies are increasingly concerned about the looming tax hikes.
While some members of Congress have expressed reservations about the coming tax increases, the Administration announced its intention to allow tax rates to go up. While the timing of any congressional action remains uncertain, the consequences of congressional inaction are clear:
Allowing these low tax rates to expire will harm small and medium manufacturers and limit their ability to create jobs.

Contact your member of Congress and urge them to extend the 2001 and 2003 tax rate cuts so that manufacturers can boost hiring. For more information, contact NAM Director of Tax Policy Dena Battle at dbattle@nam.org or (202) 637-3079.

NAM Spearheads Efforts to Challenge EPA Regulations

August 13, 2010 – NAM Capital Briefing

The National Association of Manufacturers (NAM) is continuing to challenge in the U.S. Court of Appeals for the D.C. Circuit the Environmental Protection Agency's (EPA) efforts to regulate the emissions of greenhouse gases. The EPA is misusing the Clean Air Act and seeking to achieve through regulation the policies Congress has explicitly rejected.

To respond to the EPA's regulatory overreach, the NAM and a coalition of 17 business associations filed four lawsuits on July 6, challenging EPA regulations from 1978, 1980 and 2002 that are now part of the EPA's effort to regulate greenhouse gases from stationary sources. No one anticipated that these previously issued rules would now be used to mandate greenhouse gas permit requirements, but that is the interpretation the EPA has adopted. These lawsuits challenge each of the four older rules to the extent that the EPA considers them to allow the regulation of pollutants such as greenhouse gases that are not subject to a National Ambient Air Quality Standard (NAAQS).

The NAM and other business groups have also filed federal petitions in response to four key EPA actions:

1. Revised Johnson Memo. This interpretive memo to EPA regional administrators details when the government must regulate carbon emissions from new and modified stationary sources. The EPA updated this memo in April 2010 with a new interpretation finding that greenhouse gases will be "subject to regulation" when the new tailpipe rule's provisions apply, which will also prompt emissions controls on a wide range of manufacturing and other stationary sources.

2. Endangerment Finding. The EPA determined that greenhouse gas emissions in the atmosphere "threaten the public health and welfare of current and future generations." While the finding alone did not impose any requirements on industry or any other entity, this action set the stage for the EPA to begin regulating carbon emissions under the Clean Air Act.

3. Tailpipe Rule. The tailpipe rule set emissions and mileage standards for automobiles and light trucks and marked the first time the Clean Air Act was applied to greenhouse gases. It also triggered Clean Air Act permitting requirements for stationary sources of greenhouse gases, such as manufacturers and other industrial facilities, and will take effect on January 2, 2011.

4. Tailoring Rule. This sets out the EPA's schedule for enforcing emission controls on stationary sources, covering the nation's largest industrial and commercial facilities. It will also go into effect on January 2, 2011 and will initially apply to the nation's largest emitters of greenhouse gases. However, the EPA also is planning to conduct a new rulemaking process on expanding permitting requirements for smaller sources.

These regulations will impact manufacturers across the United States. The EPA estimates they will lead to new permitting requirements on more than 6 million stationary sources, including 200,000 manufacturing facilities, approximately 20,000 farms and 200,000 other sources such as universities, hospitals, restaurants and homes.

The EPA's effort to impose an unprecedented regulatory regime on greenhouse gas emissions — never authorized by Congress — would severely damage U.S. competitiveness. This overreach by the EPA will destroy jobs, hinder manufacturers' ability to expand their businesses and ultimately undermine economic recovery.

In the coming months, the D.C. Circuit will be sorting out the many challenges filed by numerous business groups, environmental groups and states and will develop a briefing and argument schedule. The NAM is preparing its statement of issues on the legal challenges and will continue its opposition to EPA actions that harm America's manufacturers. Oral arguments in the lawsuit against the EPA's endangerment finding are expected next spring, and a final decision is likely by the summer, which is after the regulations are scheduled to go into effect in January.

NO EASY FIX AHEAD FOR STRUGGLING RECOVERY

August 13, 2010 – LateWire from Manufacturing.net
Jump-starting the economy rests on everyday Americans and businesses, who can spend money and accelerate the cycle of growth, but both are in a frugal mood ... continue

PRESIDENT SIGNS MISCELLANEOUS TARIFF BILL

August 13, 2010 – NAM Capital Briefing

In a signing ceremony in the East Room of the White House August 11, President Obama signed into law H.R. 4830, the U.S. Manufacturing Enhancement Act of 2010, better known as the Miscellaneous Tariff Bill (MTB). The ceremony was attended by NAM member companies who will benefit from the tariff-suspending provisions in the bill, which removes duties on key products unavailable in the United States. The NAM has been working relentlessly to educate Congress on the importance of the MTB and how it will preserve and expand good American jobs, cut the costs of doing business in the United States and boost American manufacturing exports. The NAM's leadership broke a log-jam earlier this year and led to bipartisan passage in both the House and Senate. To read more on the MTB, click here. Details: Doug Goudie, (202) 637-3078.

PRESIDENT SIGNS SPENDING BILL WITH INTERNATIONAL TAX OFFSETS

August 13, 2010 – NAM Capital Briefing

On August 10, President Obama signed into law legislation (H.R. 1586) that uses $10 billion in international tax increases and other revenue raisers to offset the cost of a $10 billion Education Jobs Fund to prevent teacher layoffs and temporarily increase the Federal Medical Assistance Percentage (FMAP). The Senate approved the measure on August 5. Although the House already had left for the August recess when the Senate passed the measure, House Speaker Pelosi called House members back to Washington to vote on the measure. In advance of the House and Senate votes, the NAM sent key vote letters to both bodies opposing the legislation.

REPUBLICANS VIEW BALANCED BUDGET AMENDMENT AS CAMPAIGN TOOL

August 13, 2010 – Taxing Times, Utah Taxpayers Association
US Senate Republicans will return to Washington after the August recess to push for a balanced budget amendment to the Constitution. The Congressional Budget Office reported last week that the federal deficit reached $1.2 trillion after the first 10 months of the fiscal year. US Senate candidate Mike Lee has endorsed the idea of amending the Constitution to include a balanced budget amendment.
- The Hill: Republicans See Balanced Budget Amendment As Potent Campaign Weapon

Utah Ranked Second Best Pro-Business State

August 13, 2010 – Taxing Times, Utah Taxpayers Association

Utah has been ranked as the second best pro-business state in the country according to the Pollina Corporate Top 10 Pro-Business States report. The report evaluates 31 factors influencing business growth including tax policy, energy costs, infrastructure and economic development efforts. Utah was praised as a model for the rest of the country. Virginia was the only state to beat Utah.
- KSTU Video: Report Ranks Utah Second Most Business Friendly

FDA SAYS CHINA IMPROVING FOOD, DRUG SAFETY

August 13, 2010 – Today in Manufacturing.net
Agency says China is improving oversight of exporters following of scandals over bogus or substandard drugs and foods ranging from vaccines and infant formula to dog chow ... continue

SENATORS AGREE ON FOOD SAFETY BILL FRAMEWORK

August 13, 2010 – Today in Manufacturing.net
Bipartisan group of senators said they have reached agreement on legislation designed to enhance the safety of the nation's food supply ... continue

CONSUMER PRICES RISE IN JULY

August 13, 2010 – Today in Manufacturing.net
Labor Department said Consumer Price Index, government's most closely watched inflation measure, increased 0.3 percent in July, after three months of declines ... continue

AUTO SALES BOOST JULY RETAIL SALES RESULTS

August 13, 2010 – Today in Manufacturing.net
Retail sales managed a modest increase in July after two consecutive declines, but the strength was concentrated in higher sales of autos and gasoline ... continue