President’s Message: 2010 Election… Get Informed, Get Involved & Vote

TCC President & CEO Hector L. Rivero

Citizens and organized groups who actively participate in the political process will determine the future direction of our political system.

It is important that those whose livelihoods depend on the chemical industry get involved and ensure that your business interests are represented in the state capitol, our nation’s capitol, and in the city halls and courthouses where important decisions are made that impact our industry’s viability.

When there is a fair and equitable tax system and regulatory environment, businesses can grow and be successful. Conversely, when unfavorable conditions exist, our economic future can be uncertain at best.

First, get to know the candidates running for office at the local, state and federal levels. Make an effort to meet these candidates, let them know who you are, and educate them about your company, your business, and the challenges that your business faces every day.

Do they understand your business and value the jobs and economic impact that your business makes in your community and to the state?

Next, support those candidate(s) who understand your concerns and share your views.  Contribute some time and money to those candidates.  Volunteer to assist their campaigns by working the phones, distributing yard signs, bumper stickers and campaign literature. Encourage your friends and family to support your candidate(s) of choice. You can also block walk in your community to encourage your neighbors to support your candidate.

Finally, and most important, VOTE! Your vote is your voice in the political process. 

The ability to vote exists as one of the most cherished Constitutional Rights that many Americans have fought and died for throughout our nation’s history.  By not voting, you are allowing others to determine the outcome of the elections and elect those who will make laws that impact your livelihood for years to come.

The importance of voting cannot be overstated.  The entire structure of our government is based on citizens voting to determine their representation, yet most presidential elections are decided by less than 70% of the eligible voting public.  Even fewer people vote in mid-term and local elections.

Each one of us has a stake in the public policies that govern our lives, our companies and our industry. With your vote, you can impact legislative and regulatory policies that determine your company’s success and affect those who depend on your company for their livelihoods.

You can make a difference this election. Get informed, get involved and, most importantly, vote.

Here are a few important dates to be aware of in this general election cycle in the State of Texas:

Vote Early:  Early voting begins on Monday, October 18th, and continues through Friday, October 29th.  Hours for early voting will vary depending on the polling location.  Check with your County Clerk’s office for details on location and hours open.

Vote on Election Day:  The election will be held on Tuesday, November 2nd.  The polls open at 7:00 a.m., and close at 7:00 p.m.

Texas House Committee Members Defend Businesses, Criticize EPA

Texas lawmakers rebuked the Environmental Protection Agency (EPA) Region 6 Administrator last week in a contentious hearing that brought the tug of war between state and federal officials over pollution permits to the state Capitol for the first time.

At the September 30th hearing of the House Environmental Regulations Committee, state lawmakers criticized the EPA and environmental groups’ claims that Texas is flouting the federal Clean Air Act.

The EPA has objected to flexible (flex) permits issued to 130 plants in Texas that emissions caps for facility facility’s minor sources, instead of requiring each unit at a facility to have individual emissions limitations.

Committee members vigorously defended businesses, pointing out that the state’s air quality has improved in recent years. Lawmakers pointed out that EPA’s proposed changes in permitting requirements could not come at a worse time during the national economic recession.  They stated that EPA’s actions will lead to uncertainty for Texas businesses, stymie economic investment and result in further job losses with little, if any, improvement to the state’s air quality.

But EPA Regional Administrator Al Armendariz, who oversees Texas, Louisiana, Oklahoma, Arkansas and New Mexico, said he wants to bring the state into compliance with federal law, which means ending the state’s flex permit programs.

Dr. Al Armendariz EPA Region 6 Administrator

EPA Unveils Voluntary Audit Program for Flexible Permit Holders; Industry Comments

“A company would enter into a Consent Agreement and Final Order with EPA based on the findings of the third-party audit,” the agency said in its announcement. “This audit program and CAFO would resolve any New Source Review non-compliance issues that occurred while operating with the Flexible Permit provided that the companies complete the audit program.”

“Although we have not reviewed the details of the EPA's audit program, we believe individual companies will have to judge for themselves whether or not this is a viable option,” said TCEQ spokeswoman Andrea Morrow. “The state of Texas vigorously defends its Flexible Permits program and expects to prevail in court. Flexible permits are legal and effective.”

Many feel the audit process is more of a fishing expedition than a reasonable effort to ensure compliance. And while EPA says it will offer voluntary participants “a covenant from civil enforcement by the federal government,” many are concerned that participation in this process will instead provide Non-Government Organizations (NGOs) and private individuals with a means to file citizen suits against companies who have been operating in compliance with state and federal environmental laws.

Meanwhile, the EPA and the Texas Commission on Environmental Quality (TCEQ) continue to negotiate on an alternative that addresses the EPA’s concerns.

On September 16th, EPA proposed another option for those companies that choose to “de-flex” their flex permits.  The process involves using TCEQ’s current rules to transition from a flex permit to a New Source Review (NSR) State Implementation Plan (SIP)-approved permit.  On September 30th, the Texas Chemical Council and three other trade associations (Texas Oil & Gas Association, Texas Association of Business and Texas Associations of Manufacturers) sent comments to EPA regarding the draft process of transitioning Flexible Permits to NSR SIP-Approved Permits.  The comments can be found here: Comments.  EPA has not indicated a timeframe for finalizing this alternate proposal.

Projected State Budget Shortfall Could be $21 billion

The working estimate of the looming state budget shortfall has grown to about $21 billion in the face of smaller-than-expected tax revenues and projected higher costs for education and health care, according to legislative staff. Previous estimates topped out at about $18 billion for the upcoming two-year budget period.

Dale Craymer

“There are a lot of moving parts to the budget, and unfortunately, a lot of them are moving in the wrong direction,” budget expert Dale Craymer, President of the Texas Taxpayers and Research Association, said of the new estimate.

The latest estimate from legislative budget staff comes after the state closed the books on the 2010 fiscal year Aug. 31. Tax collections dampened by the recession are about $1 billion worse than anticipated, according to figures discussed by staff.

Senate Finance Committee Chairman Steve Ogden, R-Bryan, took issue with the $21 billion estimate. He said the figure “takes into account about 15 assumptions, all of which may not be right.” Ogden acknowledged a “structural deficit” of $10 billion to $11 billion, his tally for one-time fund balances and stimulus money used to fund the current budget.

For example, when asked whether the state must give more money to schools to cover increased enrollment, Ogden said, “You'd like to, but you don't have to. ... We'll certainly look for every way to avoid any type of cuts to public education, because it’s that important. But stay tuned.”

Rep. Richard Raymond, a Democrat from Laredo who is vice-chairman of the House Appropriations Committee, said he has suggested to Pitts that the budget-writing committee start hearings right after the election.

Committees already have been at work during the interim. House Speaker Joe Straus appeared before Pitts’ committee in May to call for lawmakers to close the budget gap without new taxes while suggesting that “significant cuts” will be needed.

The shortfall estimate includes the use of one-time sources to balance the current budget. It also assumes revenue coming in shy of predictions and a need to cover growth in public school enrollment and health care.

The state faces continuing pressure from a decision to take on more of the cost of public education by lowering local school property tax rates without raising state taxes enough to cover the expense.

Lawmakers have a rainy day fund that's estimated to have $8.2 billion next year, but it takes a super-majority (100 member) vote to spend the money.

Mike McMullen to Leave TCC in November

Mike McMullen

TCC Regulatory Affairs Director Mike McMullen will be leaving TCC in November. McMullen will be pursuing new consulting opportunities later this year.

“Mike has been an invaluable member of our TCC team,” said TCC President Hector Rivero.   “He has successfully represented TCC at the TCEQ and at the State Capitol. We will miss Mike a great deal and wish him and his family all the best!”

Mike and his wife, Becca, recently gave birth to their second child, which factored into Mike’s decision to change fields and pursue a career which will allow him to spend more time with his family. Mike has served as Director of Regulatory Affairs for TCC since 2007.

Mike has been actively involved in helping us recruit his successor and will stay on through the end of October to assist with the transition for his replacement. TCC hopes to announce his successor very soon.

Please join us in thanking Mike for his service to TCC and wish him success in his new endeavor!

Texas Hammers EPA on Science of Global Warming

Essentially putting global warming science on trial, Texas officials have expanded their arguments in a lawsuit meant to prevent the federal regulation of greenhouse gases.

Attorney General Greg Abbott

The briefs build on a federal suit filed in February by Texas and other states against the EPA, which in December issued an endangerment finding that carbon dioxide emissions threaten the public health and welfare of current and future generations.

The endangerment finding, which opens the way to further regulations, spun out of a 2007 U.S. Supreme Court ruling that the EPA had the authority to regulate greenhouse gases.

The EPA said its scientific conclusions were based on work by three groups: the U.S. Global Climate Research Program, the United Nations’ Intergovernmental Panel on Climate Change and the National Research Council, which synthesize thousands of studies to convey a consensus on what scientific literature shows about climate, according to the agency.

In February, Abbott said that in relying on the U.N. panel’s data, the EPA “outsourced the scientific basis for its greenhouse gas regulation to a scandal-plagued international organization that cannot be considered objective or trustworthy.”

Abbott drew attention to claims that scientists for the U.N. panel from at least two universities – East Anglia University in England and Penn State University – had suppressed or falsified data that could undermine global warming science.

“By delegating its judgment on climate science to the (U.N. group) and others, EPA exposed its conclusions to the errors and biases of unaccountable volunteer scientists, and undermined the validity of the endangerment finding,” reads a brief filed by the Texas attorney general’s office.

The state is challenging proposals to limit emissions of greenhouse gases from light-duty-vehicle tailpipes and large industrial facilities. Abbott and Gov. Rick Perry have said greenhouse gas rules could cripple the Texas economy.

Kerry: Politics Led to Climate Bill Demise

Senator John Kerry

Cooler Weather May End Hurricane Threats for Gulf Chemicals

Recent cold fronts moving south over the U.S. could signal an end to 2010 hurricane threats for the chemical and oil-producing region of the Gulf – the area along the Texas, Louisiana and Mississippi coasts.

Storms are less likely to target that area based on wind shifts associated with frontal boundaries, said Frank Billingsley, chief forecaster with Houston television station KPRC. After these cold fronts plunge into the Gulf, he said, any subsequent storms in the area would likely be pushed away.

“As those first fall fronts move through, that is a sign that the Westerlies are kicking in,” Billingsley said. “Those are the strong west winds off of the Rocky Mountains that drive cooler air in our direction. More importantly, that westerly and even southwesterly upper-level wind flow can steer hurricanes in the Gulf away from us and toward the eastern states, like Florida,” he added.

Milder weather would likely cool water temperatures in the region, zapping the energy source needed for strong storms.

Hurricanes can disrupt the North American petrochemical industry, since oil and gas production is concentrated in the Gulf of Mexico and much of the country’s plants are on the U.S. Gulf coast. Hurricane season officially lasts through November 30th, but the peak of the US season is from mid-August until about the first week of October.

Storms in October and November typically take aim at southern regions, such as Caribbean islands and Mexico. In those locations, water temperatures are higher and cold fronts rarely influence wind patterns. As a result, the hurricane threat remains active for Mexican producers and logistics operations, which have been under siege from hurricanes Alex and Karl and Tropical Storm Hermine.

Meteorologists predicted an active Atlantic storm season in 2010, and the season has delivered after a slow start. The season has brought 12 named storms, with six growing into hurricanes (winds at least 74 miles/hour) and five into major hurricanes (winds at least 111 miles/hour).

An average season has 11 named storms and two major hurricanes, according to the NHC. However, storms have been more active in the eastern Atlantic than in the Gulf, with a majority of systems remaining at sea before dissipating. That trend has largely spared US producers, and it appears likely to continue that way for the remainder of 2010.

Texas Manufacturing Picks Up and Outlook Improves

Texas factory activity rose slightly in September, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index – a key measure of state manufacturing conditions – edged back into positive territory following a reading near zero in August.

Other factory activity indicators also improved in September. The new orders and shipments indexes remained negative for the fourth month in a row but moved up from their August levels. The growth rate of orders index jumped from –13 to zero, suggesting the pace of incoming orders may be stabilizing. Meanwhile, the September capacity utilization index climbed back into positive territory, with the share of manufacturers reporting an increase rising from 22 to 28 percent.

Measures of general business conditions continued to worsen. The general business activity index pushed further negative this month, falling to –18. The company outlook index dipped back into negative territory, with 25 percent of firms reporting a worsened outlook, the highest share in more than a year.

Labor market indicators improved slightly in September. The employment index turned positive, up from a negative reading in August. Nineteen percent of respondents said they hired additional employees, while 17 percent noted layoffs. Hours worked were largely unchanged, while wages and benefits rose modestly.

Prices firmed last month. After doubling in August, the raw materials price index remained at 24 in September, with 31 percent of manufacturers reporting higher input prices. Finished goods prices stabilized, ending a three-month streak of declines. The future indexes for both raw materials prices and finished goods prices were positive and posted large increases over last month.

The six-month outlook improved in September. Most future indexes of manufacturing conditions rose this month after falling in August. The future indexes for production and new orders jumped up; nearly half of manufacturers expect increases in these indicators in coming months. The future general business activity index advanced from –4 to 5, and the future company outlook index rose as well, with 80 percent of firms anticipating flat or improved activity six months from now.

The Dallas Fed conducts the Texas Manufacturing Outlook Survey monthly to obtain a timely assessment of the state’s factory activity. Data were collected September 14–22, and 100 Texas manufacturers responded to the survey. Firms are asked whether output, employment, orders, prices and other indicators increased, decreased or remained unchanged over the previous month.

Survey responses are used to calculate an index for each indicator. Each index is calculated by subtracting the percentage of respondents reporting a decrease from the percentage reporting an increase. When the share of firms reporting an increase exceeds the share of firms reporting a decrease, the index will be greater than zero, suggesting the indicator has increased over the prior month. If the share of firms reporting a decrease exceeds the share reporting an increase, the index will be below zero, suggesting the indicator has decreased over the prior month. An index will be zero when the number of firms reporting an increase is equal to the number of firms reporting a decrease.

TCC’s Wisdom Speaks at EHCMA Quarterly Breakfast

On September 16th, TCC Vice President & General Counsel Christina Wisdom spoke at the Quarterly Breakfast Meeting of the East Harris County Manufacturer’s Association (EHCMA) and provided a preview of the upcoming Texas Legislative Session, which begins on January 11th. 

Ms. Wisdom reported that in the upcoming session, the Council would be focused on protecting the Texas chemical industry from unnecessary and harmful taxes, mandates and environmental regulations that could stymie expansion and growth in the Texas chemical industry.

ACIT South Texas Hosts Political Forum for Candidates

Texas House District 34 Representative Abel Herrero (D) speaks while his opponent, Connie Scott (R) looks on.

ACIT South Texas and the Port Industry of Corpus Christi hosted a Political Forum and Lunch at Flint Hills Resources on September 29th, with more than 145 attendees.  Sponsors included:
 
•    beAed Corporation
•    Corpus Christi Gasket & Fastener
•    Celanese International
•    CITGO
•    EPSCO International
•    Flint Hills Resources
•    LyondellBasell
•    Ray West Warehouses, Inc.
•    The Mundy Companies
•    Training & Development Systems
•    Turner Industries Group, LLC

ACIT South Texas Region Activities Committee Recognized

In 2010, ACIT would like to recognize and sincerely thank the Activities Committees from each region of ACIT. 

This quarter, we recognize the ACIT South Texas Region, which includes Aransas, Bee, Calhoun, Goliad, Jim Wells, Karnes, Kleburg, Nueces, Refugio, San Patricio, and Victoria counties.  Our Activities Committee member involvement and expertise has been invaluable and has enabled ACIT to bring chemical manufacturers and suppliers together as a united industry voice.  ACIT remains committed to maintaining a globally competitive environment for the chemical industry in Texas and providing networking opportunities for continued business growth and development. 

ACIT would not be successful without the sweat equity of our committee members who do the majority of the planning for each event in their region and to raise income for ACIT and for FREEPAC. Thank you to our member companies for allowing your employees to participate in the ACIT events in this region.

Committee member pictured (left to right) include Tom Curlee, Pete Anderson, Bob Morris, Lorraine McCain, Jovita Martinez, Robert Ybarra and Missy Socha.  Activity Committee members not pictured are Sandra Baucom, Gary Byrd, Scott Esparza and Whitney Havard.

Upcoming TCC & ACIT Events

October 6th – ACIT Mid Coast Economic Outlook Breakfast hosted by Dow Chemical Company in Freeport. State Senator Joan Huffman will give a preview of the upcoming legislative session. For more information, please click here.

October 14th – TCC/ACIT Annual Meeting Luncheon at the Houston Hilton Hobby Airport Hotel. The Luncheon Speaker will be TCEQ Executive Director Mark Vickery. For more information, please click here.

October 21st – ACIT Houston Ship Channel Golf Tournament at the Timber Creek Golf Club. For more information, please click here.

October 19th-21st – ChemInnovations 2010 Conference & Expo. TCC President & CEO Hector Rivero will be among the speakers at this event at Reliant Center in Houston. TCC members are entitled to a $100 discount on the full conference registration using the promo code SUP2010. For more information, click here.

November 10th – ACIT Golden Triangle Economic Outlook Luncheon at the Pompano Club in Port Neches.  More information will be sent out at a later date.

Mark Your Calendars: TCC/ACIT Chemicals Day 2011 at the Texas Capitol will be held on Wednesday, March 9, 2011.

All 2010 TCC and ACIT events are now listed on the website;

Upcoming Member Events

For a listing of TCC & ACIT Member promotions and events, please click here.

(These events are not organized or endorsed by TCC or ACIT.)