President’s Message: TCC – Your Hurricane Eye

TCC President & CEO Hector L. Rivero

With hurricane season in full swing, we’d like you to be aware of the Texas Chemical Council’s role when a storm threatens our Texas shores.

As tropical storms or hurricanes are forecasted to approach Texas, the State Operations Center (SOC) will initiate conference calls with key stakeholders ranging from local elected officials, industry representatives, the National Weather Service, the Red Cross, the state fuel team (managed by the Texas Oil and Gas Association), electric utilities, shelters, emergency responders, law enforcement, and many others.  TCC’s Director of Regulatory Affairs, Mike McMullen, participates on these conference calls, and provides a daily Hurricane Alert to TCC members until landfall is closer.  When landfall is imminent, these alerts will be sent more frequently and will include important information regarding any evacuation preparations, as well as details for recovery operations. 

Once recovery efforts are underway, it may be necessary for agencies to issue orders or regulatory alerts that could affect our members’ operations.  TCC will monitor these activities and notify members as they become available.  TCC also stands ready to assist members with emergency agency communications, whether it be assistance with re-entry for critical personnel after an evacuation or communications with TCEQ regarding waivers or notifications.
 
A new law you should be aware of (HB 1831 by Rep. Frank Corte) will have a future impact on state hurricane preparations and recovery after a disaster:

• It requires a state emergency plan that addresses initial response planning for providing essential population support supplies, equipment, and service during the first five days immediately following a disaster, including fuel availability, backup power, clearance of debris, obtaining food, water and ice, and basic medical support.
• It requires a phased re-entry plan (including a credentialing process) to govern the order in which particular groups of people are allowed to re-enter previously evacuated areas.
• It establishes a communications coordination group to facilitate interagency coordination and collaboration to provide efficient planning of communications support to joint, interagency, and intergovernmental task forces. 
• It establishes procedures for removing individuals who remain in an area that is under an evacuation order.

While HB 1831 went into effect on September 1, 2009, the Division of Emergency Management of the Texas Department of Public Safety reports that they will not begin writing a plan until October.  In the mean time, TCC will be involved in the planning process and alert members to these rules and procedures as they are implemented – including any changes in credentialing.

Through Hurricanes Rita in 2007 and Ike in 2008, our state and industry have learned to minimize the damage that a hurricane can bring through planning, teamwork, and attention to detail.  We thank the dedicated people, who are making this system work and we continue to look for even better practices and technologies that will help us withstand and recover from these natural disasters.

Texas Chemical Council Endorses Gov. Perry for Re-election Bid

Texas Governor Rick Perry

The Texas Chemical Council has endorsed Governor Rick Perry for re-election in 2010.

“Governor Rick Perry is a proven leader who has solidified Texas’ reputation as the best state in the nation to do business through policies that attract capital investment and generate high-paying, high-quality jobs that sustain our state’s economy,” said TCC President and CEO Hector L. Rivero. “As a major economic engine since the 1940s, the chemical industry is among the first high-tech industries in Texas and continues to be an innovator through advanced research and development.

“Our products improve the quality of life of every American and millions of people around the world. Governor Perry’s leadership to lower taxes, pass meaningful tort reforms, and provide a fair and balanced regulatory system has enabled the Texas chemical industry to compete in the global economy and keep high paying jobs and investment in Texas.”

Governor Perry is a longtime champion of causes important to the Texas chemical industry, which produces nearly 60 percent of the nation’s chemical manufacturing.

“I am thankful to have the support of the Chemical Council, whose member companies represent an integral part of our state’s economy and are providing jobs for hardworking Texans,” said Governor Perry. “I am proud of our state’s chemical industry and look forward to helping maintain its strength in the years to come.”

Gov. Perry Appoints Carlos Rubinstein as TCEQ Commissioner; Shaw as Chairman

TCEQ Commissioner Carlos Rubinstein

Governor Rick Perry recently announced the appointment of Carlos Rubinstein to the Texas Commission on Environmental Quality (TCEQ).   Rubinstein fills the vacancy left by Commissioner Larry Soward whose term expired on August 31st.

Rubinstein has served as TCEQ Deputy Executive Director since June of 2008, serving as the chief operating officer and assisting the Executive Director in the administration of the agency.  Rubinstein’s background and experience will certainly be an asset as he assumes his new role as Commissioner.

“As Deputy Executive Director, Carlos has performed his duties with temperance and objectivity,” said TCC President Hector L. Rivero.  “He has demonstrated an ability to work with stakeholders to identify pragmatic and reasonable solutions to complex issues.  TCC congratulates Carlos on his appointment and looks forward to working with him in his new capacity as Commissioner.”

Previously, Rubinstein served as the TCEQ director of field operations for the border and South-Central Texas area, which includes the Austin, San Antonio, El Paso, Laredo, and Harlingen regions.  In this capacity, Rubinstein provided oversight and direction and coordinated strategic planning, budget, purchasing, and human resource issues for the five regional offices.

Rubinstein also served as the Rio Grande Watermaster, responsible for allocating, monitoring, and controlling the use of surface water in the Rio Grande basin from Fort Quitman to the mouth of the Rio Grande River.

Rubinstein began his career at the agency as a waste program manager and moved up to serve as the regional director for the Harlingen and Laredo offices.  He also worked for the city of Brownsville as the health and EMS director, health and permitting director, operations manager, and rose to the rank of city manager.  Rubinstein earned a Bachelor of Science in Biology and Chemistry from The University of Texas - Pan American.

TCEQ Chairman Bryan Shaw (as of September 10)

In addition to the appointment of Rubinstein, Governor Perry named Commissioner Bryan Shaw as the new Chairman of the Commission (effective September 10, 2009).  “TCC congratulates Commissioner Shaw and looks forward to working with the Commission in the future,” said Rivero.

Zak Covar has been named to succeed Rubinstein as Deputy Executive Director.  Covar has served as the Assistant Deputy Executive Director and has held positions as Environmental Policy Advisor to Governor Perry and as Committee Clerk for the House Environmental Regulations Committee.

Other TCEQ staff announcements include the departure of former Chief Engineer David Schanbacher who has left the agency for a position at the State Comptroller’s office.  Susana Hildebrand, formerly the Director of the Air Quality Division, takes over as Chief Engineer.  Dan Eden, former Director of the Office of Permitting and Registration, has retired.  Richard Hyde, formerly the Director of the Air Permits Division, has been promoted to Director of the Office of Permitting and Registration.

Rep. Hunter receives TCC Legislative Award at ACIT South Texas Luncheon

TCC President & CEO Hector L. Rivero with Rep. Todd Hunter (R-Corpus Christi)

Representative Todd Hunter (R-Corpus Christi) was recently presented with the TCC Legislative Award at the ACIT South Texas 3rd Quarter Luncheon at Flint Hills Resources – Corpus Christi.  The award is of an acknowledgement of Representative Hunter for his outstanding leadership during the 81st Legislature.  Hunter received the award in front of a large crowd of industry representatives and community leaders.

Rep. Hunter, who chairs the House Judiciary and Civil Jurisprudence Committee, was “instrumental in defeating several trial lawyer attacks on the tort reforms that our industry has worked so hard to pass over the last decade,” said TCC President Hector L. Rivero.

ACIT also presented an award to Tom Curlee of the Port Industries of Corpus Christi for his outstanding contributions to the ACIT South Texas Region and the Texas chemical industry.  Curlee has been instrumental in ACIT’s community outreach and work on with the ACIT South Texas Regional Planning Committee.

The August 26th luncheon was a huge success with 157 attendees, including several local elected officials, including several Corpus Christi City Council members and a port commissioner. 

A special thanks to our event sponsors for their generous support:

• beAed
• CITGO
• Flint Hills Resources
• Gexa Energy
• Great Western Metals
• Las Brisas Energy Center
• Mascoat Products
• NuStar Energy LP
• Turner Industries
• Wyatt Field Service

U.S. Senate Delays Release of Cap-and-Trade Climate Bill

U.S. Senate Democrats announced this week a new delay on climate change legislation, which could make it more difficult for President Barack Obama to win progress on that front before a global environmental summit in December.

Already facing a tough fight in the Senate and dwindling time before the summit to pass a bill, Democrats said they would not be able to unveil their legislation until “later in September.”

Initially, the plan was to introduce a Senate bill to reduce emissions of carbon dioxide and other greenhouse gases by around late July – a timetable that had already slipped to early September before the latest delay.

Even so, Senate Majority Leader Harry Reid “fully expects the Senate to have ample time to consider this comprehensive clean energy and climate legislation before the end of the year,” spokesman Jim Manley said.

Senate Environment and Public Works Committee Chairman Barbara Boxer and Senate Foreign Relations Committee Chairman John Kerry said in a statement they were making progress toward crafting a bill that Democrats will introduce.

More time was needed because of the struggle in Congress over healthcare legislation – another of Obama’s top priorities, which has been running into turbulence.  Boxer and Kerry also noted the death last week of Democratic Senator Edward Kennedy and hip surgery Kerry had this month, further complicating efforts.

With some moderate Democrats joining many Republicans in opposition to a climate change bill, Boxer and Kerry also could need more time to work out suitable language.

The House of Representatives narrowly passed a bill in June that would reduce U.S. carbon emissions by 17 percent by 2020, from 2005 levels. Boxer has said she would work off that bill, making “tweaks” to it.

Democrats are racing against a December deadline, when the United Nations is scheduled to hold a global summit in Copenhagen to discuss the next steps on controlling greenhouse gas emissions.

Obama badly wanted Congress to approve legislation by then as a way of demonstrating to the world the U.S. commitment to cutting pollution.  Other large polluters, such as China and India, are closely watching Washington’s response to the global environmental problem following years of little action.

The latest Senate delay also could take some of the steam out of a late September meeting of G20 countries – large economies with a similarly large stake in world climate talks.

Some U.S. backers of climate change legislation were hoping that Boxer’s Environment and Public Works Committee would have been able to approve a bill around the time of the G20 meeting in Pittsburgh.

“It would've helped out a lot” if the G20 could have convened as the Senate advanced a U.S. bill, said one international climate change expert.

EPA’s Jackson: Agency Will Declare Carbon Dioxide a Pollutant

EPA Administrator Lisa Jackson

Carbon dioxide will soon be declared a dangerous pollutant, the head of the Environmental Protection Agency said recently.  EPA Administrator Lisa Jackson told reporters that a formal “endangerment finding,” which would trigger federal regulations on greenhouse gas emissions, probably would “happen in the next months.”

Jackson announced her timeline even as top senators said they were delaying plans to introduce legislation that would set new limits on carbon dioxide emissions.  Senators had been scheduled to unveil legislation next Tuesday, but the date has now been pushed back to later in September.

The EPA kick-started the regulatory process in April when it proposed declaring carbon dioxide and five other greenhouse gases as pollutants that jeopardize the public health and welfare.  EPA scientists believe the greenhouse gases contribute to global warming by trapping heat in the Earth's atmosphere.

The EPA can formalize the finding anytime, now that it has closed a 60-day public comment period that netted more than 300,000 responses.  A formal endangerment finding would obligate the agency to regulate greenhouse gas pollution under the Clean Air Act – even if Congress doesn't pass a final climate-change bill.

President Obama and Jackson have said they would prefer that Congress – rather than the EPA – take the lead in implementing new greenhouse gas limits.  Businesses and energy industry leaders also have largely favored congressional action over EPA-imposed limits, because they believe lawmakers are better positioned to combine economic safeguards with any new carbon cap.

“Legislation is so important, because it will combine the most efficient, most economy-wide, least costly (and) least disruptive way to deal with carbon dioxide pollution,” Jackson said. “We get further faster without top-down regulation.”

But Jackson insisted the EPA would continue on a path that began when the Supreme Court ruled in 2007 that greenhouse gases qualified as pollutants and could be regulated if the government determined they threatened the public.

“Two years is a long time for this country to wait for us to respond to the Supreme Court's ruling,” Jackson said.

Supporters of climate change legislation are hoping the threat of EPA-mandated limits will spur congressional action.

Chemical Companies Prepare for Widespread Flu Absences

The US operations of several major chemical companies are stressing preventative measures as they prepare for an anticipated second swine flu (H1N1) outbreak in North America.

“We are closely monitoring the developing scenario involving H1N1 flu, and are in the initial stages of implementing our plans in line with recommendations of the World Health Organization,” LyondellBasell spokesman David Harpole said.  “A coordination team is working together with local focal points to assess information being communicated by health authorities worldwide and to prepare regional action plans as the situation merits,” he added.

Recently, the President’s Council of Advisors on Science and Technology (PCAST) warned that swine flu could infect up to half of the US population this North American autumn and winter, hospitalizing as many as 1.8 million and causing up to 90,000 deaths, three times the mortality of a typical flu season.

As a result, the US Centers for Disease Control and Prevention (CDC) spent much of the summer warning employers about potential of widespread absences as the virus travels and mutates around the globe.

The CDC has asked companies to allow employees to stay home if they are sick, without fear of losing their jobs.  In addition, the CDC is asking companies to waive any requirements for a doctor’s note to validate an illness due to the expected high demand for medical care.

To that end, Eastman Chemical said its mitigation plans include more remote work as well as social distancing.  “IT programs and functionality are being expanded and tested to support working from home as needed,” said Bill Hendon, corporate safety and security manager with Eastman.

Vaccines for swine flu are not expected to be available until mid-October at the earliest, according to news reports.  But even so, the prognosis for those afflicted does not appear as dire as it did in the spring.  Back then, the CDC recommended staying home at least seven days from the onset of flu symptoms.  For the fall, that figure has been reduced to 24 hours.

“In the great majority of cases, H1N1 continues to be a relatively mild disease,” Shell spokesman Bill Tanner said.  “In addition to tracking cases of H1N1 among employees, we are also engaged in internal educational efforts to remind employees to consider treatment for suspected cases as quickly as possible to avoid the illness spreading,” he added.

Shell said it has influenza response teams in place who are designing contingency plans for production facilities in the event of widespread absenteeism.  The specifics of those plans, however, would not be unveiled until a situation dictates them as necessary, the company said.

Likewise, Eastman said it already had plans in place to mitigate any production loss, including building product inventories high enough to withstand a temporary disruption.

Shell, LyondellBasell, Eastman and Huntsman all said they would emphasize basic hygiene practices as well, such as washing hands frequently with soap and water and increasing the cleaning of surfaces and handles at most office locations.

“One of the key actions that we are taking at this time is increased communication to employees to remind them of protective measures that they can take to avoid becoming ill,” Harpole said.  “From a business perspective, our objective is to minimize the interruption of our ability to make, sell and deliver our products to customers,” he added.

To date, the H1N1 virus has caused 556 US deaths and 2,184 deaths worldwide, with more than 209,000 cases reported globally, according to the CDC.

Seattle Voters Don't Buy Shopping-Bag Charge

Seattle, Washington, voters firmly rejected a referendum last month, which would have made Seattle the first city in the nation to go after both plastic and paper shopping bags.

The defeat – 58 percent to 42 percent – means an ordinance passed by the Seattle City Council last year will not take effect.  Had Referendum 1 passed, grocers, convenience marts and drugstores would have charged shoppers 20 cents for each bag they were provided at checkout counters.

Supporters of the charge pinned the loss on a heavily funded opponent that outspent them 15-to-1, but they said the campaign had laid the grass-roots foundation for future efforts.  Most of the anti-fee campaign’s $1.4 million budget came from the American Chemistry Council.  Seattle Ethics and Elections Commission staff said that group's $500,000 contribution in mid-July was the largest for a local ballot measure in recent history.

“I think the results confirm what the coalition has said from the beginning, that it was a costly and unnecessary tax,” said Adam Parmer, spokesman for the Coalition to Stop the Seattle Bag Tax. “I think you saw Seattle voters saying that this was not the right approach to protecting our environment.”

The city hoped the 20-cent charge would encourage Seattle consumers to stop using throwaway shopping bags and instead take their purchases home in recycled bags or reusable totes, reducing waste.

Stores with annual revenues of less than $1 million would have kept the 20 cents to cover their costs, while those grossing more would have kept 25 percent and passed the rest on to the city for recycling, environmental education and reusable bags for low-income consumers.

The City Council ordinance was to take effect this year, but opposition forces quickly collected enough signatures to put the issue before voters.

Opponents regularly labeled the charge a tax rather than a fee and called it unnecessary and misguided.  They said it would backfire – that as throwaway bags were phased out, people who now reuse them at home in various ways would start buying sturdier plastic bags that are even worse for the environment.

Huntsman Signs Stalking Horse Agreement for Tronox Assets

Texas-based chemicals maker Huntsman Corp. has said it would bid $415 million for some assets of bankrupt rival Tronox Inc. to expand its pigments business.  On the table are titanium dioxide facilities in the Netherlands and the United States, a 50 percent joint venture interest in a titanium dioxide facility in Australia, and electrolytic production facilities.

Huntsman said it signed a “stalking horse” agreement, making its offer the first at a bankruptcy auction and creating a base bid price for the assets.

The offer could be trumped, and requires approval by the bankruptcy court. It was not immediately clear who else might want the assets, which have been on the market for months. Tronox filed for Chapter 11 protection last January.

The deal, expected to close in early 2010, would make Huntsman the world's second-largest producer – behind DuPont – of titanium dioxide, a pigment used in products such as tattoo inks, food dyes and sunscreen.

Huntsman said it would finance about 50 percent of the purchase price with debt and the other half with cash.  The acquisition would add to operating earnings and cash flow immediately, it said.  “I believe this will be one of the best acquisitions we've ever done,” Chief Executive Peter Huntsman told Reuters.

Some analysts where skeptical about the deal, due in part to excess capacity in the titanium oxide business.  While Huntsman acknowledged there is excess titanium dioxide capacity in the market, he said the assets he is seeking are "among the most competitive" in the world.  Tronox likely would have had better performance as a stand-alone titanium dioxide company if it did not have environmental liability problems, Huntsman said.

Tronox filed for bankruptcy protection to contend with environmental remediation and litigation costs the Oklahoma City-based company inherited when it was spun off from Kerr-McGee Corp in 2006.  Huntsman would not be responsible for the environmental litigation, and is not bidding for Tronox facilities in Savannah, Georgia.

Lyondell Changes Plans, Keeps Chocolate Bayou HDPE Unit Open

LyondellBasell will keep its high-density polyethylene (HDPE) unit open at its Chocolate Bayou site in Texas, reversing an earlier decision to shut down and dismantle the plant, a spokesman said recently
 
LyondellBasell had planned to shut down the plant by 30 September.  The bankruptcy court held a hearing on 11 August to consider approving Lyondell's plans to close the plant.  However, operating costs and HDPE margins have improved, said David Harpole, Lyondell spokesman.

In general, demand for PE has strengthened due to rising demand from Asia.  As a result, the company decided to keep the plant running, he said.

LyondellBasell’s decision had nothing to do with an objection that INEOS filed in bankruptcy court, Harpole said.  INEOS objected because it wanted to buy the plant.

Harpole said a sale was always an option for the Chocolate Bayou unit – just as it was for any of LyondellBasell’s plants. However, the company would consider such a sale only if the price justified a deal.  “We have not received any offer of value that would cause us to proceed with the sale of the site," he said.

The Chocolate Bayou HDPE plant has a capacity of 180,000 tons/year.  LyondellBasell has not changed its plans for an olefins unit at Chocolate Bayou, which has been closed since December, Harpole said.