Monday, October 6th, 2014

SPI Supports APBA Referendum on California SB 270

By William R. Carteaux, President and CEO, SPI: The Plastics Industry Trade Association

William R. Carteaux, President and CEO, SPI

William R. Carteaux, President and CEO, SPI

As I mentioned last week in my comments at the 2014 Global Plastics Summit, California recently enacted SB 270, the nation’s only statewide plastic bag ban. SPI: The Plastics Industry Trade Association always has and always will advocate for science and fact-based legislation, but SB 270 does not fit this description. In a press release issued last Tuesday, the American Progressive Bag Alliance (APBA) announced it would take the steps necessary to gather signatures and qualify a referendum to repeal it:

“The approval of SB 270 by the California legislature and Governor Jerry Brown could serve as a case study for what happens when greedy special interests and bad government collide in the policymaking process. 

“Senator Padilla’s bill was never legislation about the environment. It was a back room deal between the grocers and union bosses to scam California consumers out of billions of dollars without providing any public benefit—all under the guise of environmentalism. If this law were allowed to go into effect it would jeopardize thousands of California manufacturing jobs, hurt the environment and fleece consumers for billions so grocery store shareholders and their union partners can line their pockets.”

SPI supports the APBA in opposing SB 270 and seeking a referendum. We do not believe that in passing SB 270 California lawmakers acted in the public interest, and we trust that the public will repeal it at the ballot box.

Plastic bags are the smartest, most environmentally-friendly choice at the checkout counter. Ninety percent (90%) of Americans reuse their plastic bags as trashcan liners, pet waste bags, lunch bags, etc., despite the fact that SB 270’s proponents have attempted to brand plastic bags as “single-use.” This is a myth that’s disproven every day in homes across America. When plastic bags outlive their usefulness, they can be recycled: they are 100% recyclable and can be converted into building materials like decking, fencing and playground equipment. Moreover, they consume less than 4% of the water, generate less than 80% of the waste and require less than 70% of the energy necessary to manufacture their paper counterparts. In addition, consumers will be forced to pay at least 10 cents for every paper bag they purchase.

As for the bags that are oil-derived and made in China, which SB 270’s proponents promote, most are made from nonwoven polypropylene, which isn’t recyclable. In addition, cotton grocery bags must be used 131 times before their contribution to global climate change becomes lower than that of a plastic bag used just once. These bags also have been found to contain toxic lead and harbor harmful bacteria.

Further, plastic bags make up less than two percent (2%) of California’s municipal waste stream and just fourth-tenths of a percent (0.4%) of the overall American waste stream. Thus the bill’s environmental impact will be negligible if not nonexistent. Proponents have been forced to acknowledge this, choosing instead to label SB 270 “a good start.” For them, plastic bags are just the beginning, and plastic bottles, cutlery and other materials are now in their crosshairs.

apba logo_2012That is the issue at hand. The lack of science or logic in SB 270 sets a disconcerting precedent for what legislators could do under the guise of environmental stewardship. This should concern the plastics industry at large: unscientific bills supported by special interests could encourage bans on other plastic products. This must be the beginning of a discussion that plastics recyclers, suppliers, manufacturers and processors have about the future of the industry. The APBA has started this conversation, and we hope the entire plastics supply chain chooses to be a part of it.

Wednesday, October 1st, 2014

At GPS, a Positive Outlook for Plastics but Risks Remain

As a manufacturing sector, plastics has outpaced its counterparts in terms of economic growth since the 1980s. The industry looks poised to continue this trend too, as a panel of economic and plastics experts testified this morning at the Global Plastics Summit (GPS) in Chicago, hosted jointly by IHS and SPI: the Plastics Industry Trade Association.

IMG_0190However, risks remain for the plastics industry, most notably the lower levels of productivity that are restraining the pace of economic growth. “That productivity issue represents some real risks,” said David Witte, senior vice president of IHS Chemical, tying the issue to a lack of education on the part of the public regarding the number and type of careers available in the plastics and manufacturing industries. “There’s some really, really good jobs out there that are more trade related and I think we have to start focusing on that shortfall.”

SPI CEO and President Bill Carteaux agreed, noting that the long period of exceptional growth in the plastics industry that has persisted since the 1980s because there were always enough workers to fill openings and keep production high. “That growth caught up with us,” he said. “The next generation of the workforce, that issue is not going to be solved in DC, it’s going to be solved on the local level, going back in to the high schools and educating the teachers and guidance counselors to steer these young people into these great careers.”

Carteaux’s point that local activism, education and regulatory support will be key to maintaining the plastics industry’s success was echoed by the rest of the panel. On a federal level, however, the picture is a bit grimmer, but the priority for plastics is educating officials and the public. “We as an industry broadly have the task to educate people on what we do and we’ve done a lousy job,” said Kurt Barrow, vice president of oil markets and downstream at IHS Energy. “What we’re up against is the NIMBY (not in my back yard) mentality and the environment al lobby that doesn’t understand unless it’s a solar cell on top of a car or bicycle. They’re the minority but they’re very vocal in the political realm, and our job is really to kind of get the government engaged.”

“The best thing the government can do is to stay the heck out of the way,” said panelist Nariman Behravesh, IHS chief economist, summarily. “Let me just leave it at that in the interest of time.”

Barrow warned that the sudden institution of strict regulations that affect plastics could conceivably restrict access, increase costs and, in a word, “throw growth off the rails.” SPI has called for regulatory reform as well, to create an environment in which plastics can not only maintain its current state and operate without costly, ill-advised rules that aren’t based on facts, but also grow even faster than its current rate.IMG_0173

Still, the labor shortage for manufacturers continues to be a growth-limiting restriction. “The regulation side is huge,” Carteaux said when asked for what the greatest threats to plastics were. “But I think the other big issue when you look at the investments in plastics is ‘are we going to have enough people to build it? Are we going to see the capacity to put those facilities up?’”

SPI in particular continues to work to eliminate these risks to the plastics industry with its aforementioned call for reform and its recently launched PlasticsU, a one-stop online warehouse of educational resources for companies seeking to train new and existing workers. Learn more about the manufacturing employment landscape here.

Wednesday, September 24th, 2014

USGBC Recognizes Plastics Industry Concerns that LEED v4 Promotes Product De-Selection – Conversation is a Good Thing, Results are Better

By Terry Peters, CAE, SPI Senior Director, Technical and Industry Affairs

There are moments in time where science and logic may prevail. The Aug. 27, 2014, press release – U.S. Green Building Council and American Chemistry Council to Work Together to Advance LEED – could be a harbinger of great things for LEED and our industry. The release announces “a new initiative designed to ensure the use of sustainable and environmentally protective products in building by applying the technical and science-based approaches to the LEED green building program. This new initiative acknowledges USGBC’s success in leading the transformation of the building environment and sets up a pathway to take advantage of the materials science expertise of ACC and its members.”   ACC logo

We applaud USGBC (U.S. Green Building Council) and ACC (American Chemistry Council) for crafting this agreement in principal.  As active members of the American High Performance Building Coalition (the collaborative of 41 organizations working with ACC), SPI is justifiably proud of this announcement and pleased that several years of intense work with Congress and federal agencies have encouraged USGBC to come to this place.

SPI has been a longtime member of USGBC and stands by previous statements supporting the higher goals of LEED (Leadership in Energy and Environmental Design). Over the years we’ve considered ourselves the loyal, if strident, opposition to the materials credits issue. Through the American High Performance Building Coalition (AHPBC) and the Flexible Vinyl Alliance, we have pressured for change.  At our invitation, Brendan Owens, LEED’s vice president, technical, has presented to our Fluoropolymer and Flexible Vinyl Division meetings about a half dozen times and heard our issues and concerns repeatedly stated.

This is beginning the discussions; nothing is yet agreed that addresses our long standing issues on material credits.  There are entrenched opinions and territories. But we are in a better place for this attempt to work together. Let us suspend our skepticism for a moment and look to the good that may come from this announcement.

LEED is the most used green building standards globally, as well as in the United States where more than 400 cities and communities, 39 states and 14 federal agencies currently require builders to meet LEED standards. That is why the plastics industry and other manufacturing associations are working diligently to get the USGBC to modify some portions of LEED, and also why they applaud some of the improvements in LEED v4.

For example, LEED v4 is pioneering the use of verified life cycle assessment data to determine the environmental impacts of products. As such, there will be a new credit when manufacturers provide Environmental Product Declarations or third-party verified life cycle assessments for their products. There also will be credits for buildings that exceed the established ASHRAE 90.1 standard for energy efficiency by 5 percent and 10 percent.

That is a perfect way of incentivizing builders to reach those levels because it allows you as a designer or builder to choose the material that works best. It doesn’t tell you to use fiberglass or foam, or what not to use. The energy chapter of LEED is an excellent chapter. It is performance-based and material-neutral.

Since it was formed two years ago, the AHPBC has consistently argued that USGBC has developed its LEED standards with a disregard for science, without involving industry and without using a consensus-based approach as is done by organizations such as the American National Standards Institute (ANSI).

LEED has helped make buildings more energy- and resource-efficient. But the latest version disparages and discriminates against vinyl and other materials. As pointed out by my colleagues at The Vinyl Institute, “USGBC’s own Technical and Scientific Advisory Committee examined the environmental impacts of PVC and other materials and concluded that credits to encourage avoidance of any material could lead to use of less-desirable products. Unfortunately, USGBC utterly ignored its own scientific conclusions in LEED v4.”

SPI agrees. This material discrimination should be eliminated. The best materials should be judged by application. We hope this overture of partnership, applying our real world material science to the aspirations of LEED, can work.

Thank you, USGBC.  Now, let’s get to work.

Wednesday, September 10th, 2014

Highlights from Today’s NAM Report on the Cost of Federal Regulation

The National Association of Manufacturers (NAM) issued a report this morning detailing the enormous, burdensome costs that manufacturers bear in order to stay in compliance with federal regulations. Based on a survey of NAM members, the report, titled “The Cost of Federal Regulation to the U.S. Economy, Manufacturing and Small Business,” indicated that the average American manufacturer pays $19,564 per employee per year in compliance costs, almost double the $9,991USCapitol per employee per year that non-manufacturers pay. Overall, America’s manufacturers pay $2.028 trillion every year in order to stay compliant with federal regulations.

“As the nation’s third-largest manufacturing sector employing 900,000 men and women, the plastics industry is no stranger to regulations,” said SPI President & CEO William R. Carteaux in a response to this morning’s report. “While many of these rules and regulations are proposed and implemented with good intentions, the devil has always been in the details and as the NAM report makes clear, America’s regulatory framework is in need of a serious reboot,” he said, adding that “comprehensive reform is necessary to allow the nation’s manufacturers to grow their businesses, hire more workers and keep America competitive abroad.”

In addition to detailing the staggering costs that the manufacturing industry pays every year, the NAM report also contained several other important insights:

  • Federal regulation was by far the most frequently identified business challenge: Eighty-eight percent of survey respondents indicated that “federal government regulation was a challenge that had recently affected their firm or that they expected their business to face in the future.” Additional information provided by respondents went further, detailing the regulatory cost information for specific expenditures. “Estimating the cost of outlays for manufacturing as a whole from the respondents’ data indicates that direct expenditures related to regulation in the past year were $138.6 billion,” the report said, noting that this figure is larger than the economies of 19 U.S. states, to put things into perspective.
  • If the cost of regulatory compliance fell, the resulting funds would be reallocated in interesting places: Survey respondents were asked how their company might reallocate funds if their regulatory compliance costs were reduced. Their open-ended answers fell into one or more of five general categories: investment, employee initiatives, sales, ROI or debt reduction and other. Within the investment category, which was the most popular with 63 percent of responses, survey participants identified four areas of investment spending that would be likely to increase if regulatory compliance costs decreased: “capital investment and expenditures, growth and acquisition, research and development and general unspecified investment.” Within the employee initiatives category, which was the second most popular response with 22 percent, respondents identified three areas of employment spending that would likely increase if regulatory costs decreased: “creating or preserving jobs, employee training and wages and/or benefits.”
  • Regulation compliance takes a toll on morale in addition to each manufacturer’s bottom line: A number of themes arose in the additional comments offered by survey respondents about federal government regulations, but one important one was the fact that respondents observed deterioration in morale, well-being and work environment as a consequence of regulation. Many reported “an adversarial perspective by regulators toward businesses, where a firm ‘is approached as an evil entity’ populated by ‘bad guys.’” According to the report, in most cases these comments reflected the perspective that regulators fail to understand the circumstances of the businesses they are regulating, which in turn creates greater uncertainties.
  • The costs reported in the survey do not capture the total cost of regulations on a sector, or on the economy as a whole: While $2.028 trillion is a hefty price tag that the nation’s manufacturers pay for federal compliance, the total costs could be considerably higher. While the survey specifically asked for information regarding federal regulation and how it related to “the distribution of employees’ time; the cost of outside advisers; purchasing and maintaining tangible items; emissions credits or offsets; and costs resulting from federal government compliance-related activities,” respondents discussed other ancillary costs in their open-ended responses. According to the report, “inefficient planning as a consequence of uncertainty, including federal regulation in the production location calculus, R&D and capital investment consequences and reductions in employment and in competitiveness” were among the additional costly consequences that respondents associated with federal regulation.

A full copy of the NAM report can be found here.

Friday, September 5th, 2014

The California Bag Ban and a Lesson on How Not to Legislate

By Lee Califf, Executive Director, American Progressive Bag Alliance (APBA)

The California State Senate approved SB 270 last week, sending a fee on paper bags and the nation’s first statewide ban of plastic bags to Governor Jerry Brown (D) for consideration. Several environmental groups have all but danced in the streets to celebrate the bill’s advance, despite the fact that:

  • plastic bags comprise less than a half of a percent of the U.S. municipal solid waste stream and banning them will have little, if any, effect on reducing litter;
  • plastic bag production generates 80 percent less waste and requires 70 percent less energy to manufacture than paper counterparts; and
  • plastic retail bags are 100 percent recyclable, reusable and made with American natural gas, an environmentally-friendlier alternative to other fossil fuels.

But each of these facts obscures a bigger point about the legislative process that brought SB 270 to Governor Brown’s desk: this so-called “environmental” legislation never had anything to do with the environment.

The Bag “Bargain”

In the process of making environmental policy choices, it often doesn’t take long for the discussion to veer away from the scientific and toward the emotional. Broad considerations for the planet’s future touch deep ideological nerves, so this makes sense, but it can often stifle conversations about actual science, as well as the real environmental ramifications of the policy proposal.apba logo_2012

Recognizing this, proponents of SB 270 decided never to entertain the very good environmentally-friendly reasons to vote against the bill, some of which are outlined above, but instead stood on the assumed truths that have similarly derailed so many other policy discussions. Furthermore, money spoke louder than environmental imperatives or the supposedly inherent evil of plastics, as supporters of the bill made grocers and unions an offer they couldn’t refuse: support SB 270 and we’ll direct the fees collected from the paper bags to you.

The Future

The bill’s lack of real environmental bona fides, along with its enactment via back-room deal, should lead anyone to scoff at the suggestion that SB 270’s success will somehow amount to a win, for any constituency, environmentally-focused or otherwise. For them it’s a symbolic victory, and while they’re celebrating the nation’s only statewide bag ban, all the baggage that comes with this deal isn’t commendable.

In many ways, the bill effectively scams consumers out of billions of dollars in bag fees. It’s a tax, of sorts, but typically taxes go back into state coffers to further benefit the public. In SB 270’s case, the fees collected from consumers won’t be used to pay for a road, a fire truck, a better school or even a marginal environmental benefit; they’ll be used to line the pockets of California grocers.

California has created a prime example of how not to legislate (fleecing consumers and damaging the state economy, all in the name of an imaginary environmental benefit), and other states might not be too eager to follow in California’s footsteps for that very reason, as well as some additional legal concerns. Most states probably won’t be willing to put this kind of fee on bags and give the money to grocery stores, and even if they were willing to do so there are some serious constitutionality questions about that. In effect it’s a tax that’s not going to the government. The private interest gets the money.

But on a more basic level, most states also wouldn’t, or shouldn’t, want to enact a tax on their citizens that essentially amounts to a form of corporate welfare for grocers, all while threatening the state’s economy. SB 270 puts 2,000 Californians that are employed at risk of being unemployed, all for the sake of a dirty deal between California grocers and union bosses. APBA stands with those workers, and with all Californians, as we continue to fight this dangerous and misguided piece of legislation.