Testimony in Support of Ohio House Bill 12 (2013)
Modernizing Ohio's Boiler Safety Law (ORC 4101:4-10)
Ohio House of Representatives
Committee on Commerce, Labor, and Technology
Testimony in Support of House Bill 12
Presented by Lisa Allen, Manager, Issues and Advocacy
Ohio Chemistry Technology Council
Wednesday, February 20, 2013
Good afternoon, Chairman Young, Vice Chair Duffey, Ranking Member Hagan, and members of the committee.
I am Lisa Allen with the Ohio Chemistry Technology Council. Thank you for allowing me to appear today in behalf of our member companies engaged in the business of chemistry in Ohio. The industry employs more than 43,000 Ohioans today, and will be growing dramatically in the next few years as Ohio’s shale resources are developed. Natural gas and natural gas liquids from the shales are important to the chemical industry as both a source of low-cost fuel for generating electricity and as the source of raw materials for the chemical and polymer industries in the state.
I am here today to speak in support of House Bill 12—which outlines important updates of the state’s existing laws governing industrial boilers.
Our members operate more than 100 chemical production facilities across the state—and most of them have at least one boiler that is used to generate power and heat for their manufacturing processes. Boiler safety is crucial to our industry, as it is in any industry that operates boilers. In the latter part of the 19th century and into the first decades of the 20th century, boiler explosions represented a serious threat to human life and property.
In response to those incidents, laws and regulations requiring licensure and continuous surveillance were enacted to require that boilers be routinely maintained and inspected.
Since then, the companies that design, construct and operate large high-temperature, high-pressure boilers have become very sophisticated, with expertise in building boilers that can be run safely at high pressures and temperatures. In addition, several companies in the chemical industry developed novel chemistries that are used to prevent scaling and corrosion in boilers—the principal causes of catastrophic boiler failures in the past.
Boilers are critical to chemical production. At the approximately 120 chemical production facilities our member companies operate in Ohio, there are hundreds of boilers which are managed by trained professionals working from sophisticated control rooms that monitor the performance of every piece of equipment in the production process.
National standards created by the American Society of Mechanical Engineers form the basis for acceptable boiler construction, installation, inspection, treatments, and operations. Each boiler in the chemical industry is monitored at all times during operation, and inspections are done routinely. Chemical treatments are employed (1) to treat incoming water used in boilers and (2) to treat the surfaces of boilers and piping to prevent scale and corrosion.
We believe that House Bill 12 is an appropriate step to update Ohio’s boiler laws to reflect the operating practices and new technologies which I have outlined.
The change proposed in House Bill 12 is one that is consistent with good safety instrumented control system practices. Well designed safety instrumented systems as specified in the stated standards will provide better protection of people and equipment than continuous surveillance by licensed operators.
House Bill 12 achieves that purpose by eliminating the requirement that a state-licensed boiler operator be present during boiler operation-- provided the boiler is operated in compliance with the American Society of Mechanical Engineers CSD-1 standards for safety in automatically fired boilers or the National Fire Protection Association’s Standard 85 dealing with boiler hazards. I would note that boilers in the chemical industry are operated and controlled by a professionally trained individual from a central control room that provides the most up to date technology and computer systems to track boiler operations and systems at all times during operation.
By embracing nationally-recognized and regularly updated consensus standards-- developed by experts in boiler design and operation and fire/explosion prevention--as the basis for its regulations, Ohio will be assured of having the most up-to-date technical standards for boiler safety.
I thank you for your consideration.
Lisa Allen--Phone: 614-224-1730 firstname.lastname@example.org
Testimony on “Natural Gas—America’s New Energy Opportunity: Creating Jobs, Energy, and Community Growth”
Witness: Jack R. Pounds, President, Ohio Chemistry Technology Council
U.S. House of Representatives
Committee on Natural Resources
Subcommittee on Energy and Mineral Resources
February 27, 2012
Good morning, Mr. Chairman:
My name is Jack Pounds, and I am president of the Ohio Chemistry Technology Council, the non-profit association for the chemical industry in the state of Ohio. The chemical industry in Ohio has always been a major part of the manufacturing-based economy of the state. Our chemical companies are engaged in the research, development, and production of highly-sophisticated chemistries that are sold to customers around the world who use them as the basic building blocks for the thousands of products that make our modern lifestyles possible. The value of chemicals produced in Ohio is more than $28 billion annually, with approximately 20% of those representing sales to customers outside the United States.
Unfortunately, the chemical industry in Ohio--and in the United States as a whole--has been in a state of slow to no growth for much of the past decade. This reflects (1) recession or near-recession conditions in the largest markets for the products of chemistry, most notably the auto, construction, and manufacturing sectors of the economy; and (2) the advantage chemical companies outside the U.S. have in terms of feed stock and energy costs.
While tax and regulatory policies in this country have also played a role in the industry’s decline, the most significant factor has been the unpredictability in the costs of chemical feed stocks and purchased energy.
The basic feed stocks that are purchased and further processed by the chemical industry around the world are primarily derived from oil and natural gas. In the United States, more than 80% of the chemical industry’s feed stocks come from natural gas. In recent years, natural gas prices have fluctuated dramatically—reaching over $13 per million British Thermal Units (BTUs) in the early to mid-2000s, and continues to be very volatile. For our chemical companies in Ohio, unpredictable natural gas supply and pricing—coupled with recession in major markets for chemicals—have stifled new investment and job creation in an industry that is the foundation for almost all manufacturing in the U.S. and that is a technology resource that is vital to our long-term economic viability and national security.
The chemical industry is a major energy user, and purchased electricity is a large component of production costs. The threat that coal may not be a long-term source of electric power in Ohio has loomed over the industry for many years, and has a definite impact on where new investments are located by major chemical companies.
Ohio’s Shale Gas Represents a Potential “Renaissance” in Ohio’s Chemical Industry:
As recently as two years ago, no one in our industry in Ohio saw any “magic bullet” solution to the dual challenges of high and unpredictable costs of raw materials and purchased electricity.
Now, with the emergence of Ohio’s vast shale gas reserves onto the scene, it is my belief that Ohio’s chemical industry is about to experience a “renaissance”. I say this because sensible, responsible development of the shales will make Ohio’s chemical industry competitive with companies in any region of the world—except for Saudi Arabia and Canada. That is because the shale gas can provide both (1) ) lower cost feed stocks that our chemical companies will use to create innovative, high-technology content products of chemistry for sophisticated customers around the world, and (2) a long-term supply of natural gas to fuel utility boilers to generate low-cost electricity.
The feedstock benefit reflects that much of Ohio’s shale formations contain high levels of “wet gases”, which are fractions such as ethane, butane, and propane. These fractions are the critical feed stocks for the chemical industry today—and when they are processed through a cracking facility, will yield basic chemicals, most importantly, ethylene from ethane.
If I may refer to the chart here, a copy of which has been provided to the subcommittee, I can point out the route from a natural gas well to ethane collection to a cracker where ethylene is produced to other major chemicals and then to some examples of the thousands upon thousands of products that are critical to each of us.
Last year, the American Chemistry Council’s Economics Division published an economic analysis (Shale Gas and Petrochemical Investments in Ohio—provided to the subcommittee) that concludes that a new cracker facility in this region with the capacity to create 1 million metric tons of ethylene from ethane could trigger construction of new chemical production facilities in Ohio that would:
- · add $4.8 billion in additional chemical production (+17%);
- · lead to the direct, indirect, and induced creation of 17,000 new jobs in Ohio, $600 million in new payrolls, and $170 million in new tax revenues for Ohio governments; and,
- · provide our existing 2,500 polymers (plastics) businesses in the state with a reliable, competitive, and close by supply of the ethylene derivatives they use in their businesses.
Mr. Chairman, as a native of this part of the state who has seen its young people move away to find opportunities to make a better life for themselves, I have a strong personal interest in seeing things change here. The opportunities for Ohioans to benefit from sensible development of our shale resources represent a once in a lifetime opportunity. I would urge the Congress to look upon this as an exciting first step in making our state, this part of the state, and our people players in the global economy, with a standard of living that befits a great people with a great work ethic.
Thank you again for the opportunity to share my excitement with you.
OCTC OPPOSES HB 112 Proposal to Mandate Bittering AgenT in Anti-Freeze--ARGUES EXISTING FEDERAL CONSUMER PRODUCT SAFETY PROGRAMS ARE ADEQUATE; DECRIES OHIO IMPLEMENTING DUPLICATIVE AND UNNECESSARY REGULATIONS
Testimony of Jack R. Pounds, President, Ohio Chemistry Technology CounciL
In Opposition to House Bill 112
Transportation, Public Safety, & Homeland Security Committee
Ohio House of Representatatives
May 18, 2011
Chairman Combs, and Members of the Committee:I am Jack Pounds, with the Ohio Chemistry Technology Council. I am appearing today in behalf of our member companies engaged in the business of chemistry in Ohio.
I thank you for the opportunity to offer brief testimony in opposition to House Bill 112, a proposal that would result in Ohio government entering into an entirely new area of regulation of commerce—namely the content and formulation of products that are sold around the world.
Should Ohio enter into this area of regulation, it will be duplicating or inconsistent with effective national product safety regulatory programs. Today, American consumers are able to purchase potentially-hazardous products that are designed, formulated, and packaged to the highest standards in the world. These include regulatory programs that require products be:
(1) labeled to warn of hazards;
(2) contain appropriate warning symbols;
(3) be sold in child-proof packaging; and,
(4) be formulated to pose no unacceptable risk when used properly.
Today, the Federal government’s Consumer Products Safety Commission (“the Commission) has the mission to protect all Americans from unreasonable risks of injury or death from thousands of consumer products—including household chemicals such as anti-freeze, which is the subject of House Bill 112. The Commission works to ensure the safety of consumers through a comprehensive regulatory program supported by hundreds of employees, a significant budget, and the authority to take immediate action, including prosecution, when a product poses an unacceptable risk. In the thirty years the Commission has existed, the rate of deaths and serious injuries associated with consumer products has declined by some 30%.
In addition to the Commission’s work, the United States Environmental Protection Agency (U.S. EPA) and the Federal Food and Drug Administration (FDA) each play a role in regulating respectively pesticides and foods and drugs sold to American consumers.
In today’s global economy, businesses in Ohio are competing for survival in a fiercely competitive environment. The state as you know well is doing everything possible to retain good jobs and business investment in Ohio, and to attract new jobs and investment. One of the most notable accomplishments in Ohio in the past several years—due to the leadership of both the General Assembly and the Strickland and Kasich Administrations--has been the elimination of unnecessary regulatory burdens on businesses. My member companies deeply appreciate the strong bipartisan support given to Senate Bill 2, which will reduce the cost of regulations on all businesses in the state.
But House Bill 112 goes the other way by pushing state government into an entirely new arena--the regulation of the content of specific products. Proven Federal regulatory programs that have been both effective and consistent across the entire country make the bill unnecessary. If House Bill 112 is enacted, the precedent will have been set for bill after bill regulating the content and use of additional products. Other states that have taken that route—most notably California—have invested in large, expensive bureaucracies to regulate products. California’s fiscal crisis is a testament to that state’s insatiable appetite to duplicate or exceed effective Federal regulatory programs.
At a time when you are struggling to provide funding to important state services and dealing with a still-ailing economy, I urge you to allow effective Federal product safety programs to provide Ohioans with the protections they deserve.
I do want to assure those who support House Bill 12 that our opposition to this legislation does not reflect lack of concern for the safety of humans and family pets. We simply believe that this problem is not unique to Ohio. The solution must be one for the entire country developed by existing Federal agencies that our taxes support.
Finally, I would note that within my industry—Ohio’s chemistry industry—only a few companies sell directly to the consumer. None make or sell anti-freeze. But they are all supportive of a strong consumer safety program that applies consistently to all Americans.
Also, these companies, regardless of whether sales are made directly to consumers or to sophisticated commercial customers, all have product stewardship programs in place. These are designed to assure that the products they sell are developed, transported, and used safely. When products are planned for specific applications, one of the most critical questions raised is “How can we formulate a product that meets the customers’ needs and, at the same time, has the least hazardous properties?” If a hazard can be reduced, then that happens. For example, if addition of an additional ingredient would reduce the possibility of accidental ingestion of the product or other undesired result without affecting the quality or effectiveness of the product, then the formulation would be changed. That is done routinely within the chemistry industry through formal product stewardship reviews.
I respectfully submit that neither product safety nor economic growth in Ohio will be advanced through the legislation before you.
I thank you for your consideration.
Support of the office of consumers' counsel budget request (HB 153)
Ohio House of Representatives
Finance Subcommittee on Agriculture and Natural Resources
April 6, 2011
Testimony in Support of the Office of the Ohio Consumers’ Counsel Budget Request
(House Bill 153)
Jack R. Pounds, President, Ohio Chemistry Technology Council
Chairman Balderson and Members of the Committee:
I am Jack Pounds, representing the members of the Ohio Chemistry Technology Council, who operate some 120 facilities across Ohio and are engaged in research, development, and production of high value-added chemistries. In Ohio today, there are some 50,000 of our citizens who have high-paying jobs in the chemistry industry. Annually these companies produce high-technology content products valued at more than $24 billion—with more than $5 billion worth of these products sold to customers outside the United States.I am here this morning to speak in support of the budget request of the Ohio Consumers’ Counsel for SFY 2012-2013.
That needs explanation—because the Consumers’ Counsel does not directly represent businesses such as those in my organization. In fact, we sometimes find ourselves in disagreement with specific positions the Counsel takes. But the Counsel does provide indirect benefit to our industry through its engagement in the rate cases of the electric utilities. We also have been pleased with the interest the Counsel’s office has shown in working with our industry to pursue sensible energy efficiency programs and practices in Ohio.
The near- and long-term cost of electricity is the most critical issue facing Ohio’s chemical industry today—and that is exactly the same statement I made six years ago when we supported enactment of SB 221, the adoption of a sweeping new energy policy for Ohio. For large production facilities, expenditures on purchased electricity and natural gas can run into the millions of dollars per month. The industry is energy intensive. But chemical companies don’t waste energy. Since 1974, the industry has reduced energy consumed in making a pound of product by nearly 50%. That has been accomplished through aggressive demand side conservation programs, reengineering processes, and investment in advanced control equipment and less energy intensive production equipment.
Where we see benefit to our industry from the Consumers’ Counsel is in the office’s role as an arm of government that brings the expertise and influence of an independent body to bear in rate cases and other matters related to the price and availability of electricity in Ohio. We see value in having a diversity of viewpoints and technical assessments in the policy mix in the electric marketplace in Ohio.We also recognize that the markets for electricity and natural gas in Ohio have changed dramatically since the Office of the Consumer’s Counsel was created in Ohio in 1976. Those changes have been profound; and they have affected the policy arena in which the Consumers’ Counsel operates. While some refinement of the Counsel’s role is worth considering in light of these changes, we do not believe that simply cutting the office’s budget in half is the best course. We urge support of the Counsel’s original budget request so that the advocacy and engagement the office provides are not lost.Thank you.
OCTC SUPPORTS ADOPTION OF TAILORING RULE LIMITS FOR OHIO EPA PERMIT PROGRAM
Testimony Delivered before Joint Committee on Agency Rule Review
Monday, March 7, 2011
Joint Committee on Agency Rule Review, March 7, 2011
Testimony in Support of Ohio EPA Rules 3745-31-34 and 3745-77-11
Jack R. Pounds, Ohio Chemistry Technology Council
Mr. Chairman and Members of the Committee:
I am Jack Pounds, representing the members of the Ohio Chemistry Technology Council.
While our organization opposes the current efforts by the United States Environmental Protection Agency to regulate so-called “greenhouse gases” as pollutants under the Clean Air Act, we believe that Ohio must make use of the so-called “Tailoring Rule” promulgated by the Federal agency to minimize the hardships of major source permitting on thousands of facilities in Ohio, including small businesses, fast food restaurants, hospitals, colleges, and the like. The rules before you will do just that.
Without the rules proposed by Ohio EPA, it is our counsel’s opinion, and the opinion of other attorneys, that Ohio law would require the state to impose the much more stringent permit thresholds now contained in Ohio’s Air Pollution Control Act. Thus, adopting these “Tailoring Rules” provisions in our regulations, Ohio EPA will not be required to regulate the very smallest sources of greenhouse gases.
We note that the rules proposed have provisions that make the rules go away immediately upon an action of the Federal courts or the Congress that eliminates the U.S. EPA’s authority to regulate so-called greenhouse gases under the Clean Air Act. I thank you for your consideration of our comments.
TESTIMONY IN SUPPORT OF SENATE BILL 2
Small Business Rule Review Process (Senator Hughes)
Ohio Senate Committee on Government Oversight and Reform
Thursday, February 17, 2011 - 9:30 a.m.
Good morning, Chairman Seitz, and members of the committee:
I am Jack Pounds, President of the Ohio Chemistry Technology Council, the trade association for companies in Ohio’s chemistry industry.
I appreciate the opportunity to present brief testimony this morning in support of Senator Hughes’ legislation to lessen unnecessary regulatory burdens on small businesses.
While our Council does have some members who are “small businesses” according to the definition in Senate Bill 2, most are not. We are principally an organization of larger companies. We do know, however, that there are literally hundreds of smaller companies in Ohio that produce or blend a broad range of chemistries. When it comes to regulations on the chemistry industry, these small companies are covered by all of the Federal and state rules governing the production, transportation, and ultimate disposal of materials that have hazardous properties.
Every company in my organization has a vested interested in assuring that the business of chemistry is recognized for the technologies it produces that make our lives better, and that the public has confidence that the industry operates safely and in an environmentally-responsible way. Many of the hundreds of small chemical companies I referenced purchase raw materials or intermediates from our member companies. Our member companies have product stewardship programs in place that emphasize close interaction with their customers to assure that these customers understand the hazards associated with the products they buy, and to provide technical advice and support.
However, these small companies have the responsibility for complying with Federal and state rules governing this industry. Their performance in meeting regulatory obligations and in conducting their businesses safely reflect on the entire industry’s reputation.
Because regulatory compliance for companies engaged in the business of chemistry is very complex, we believe that certain provisions in Senate Bill 2 can be of great help to smaller companies who may not have the regulatory compliance experience, technical personnel, and other resources that larger companies have. We specifically applaud the provision that asks regulators to draft rules that will make requirements as easy to understand as possible. Given the sheer volume and complexity of rules governing the business of chemistry, especially in the air pollution control area, anything that can be done to help a regulated business identify what is required and how compliance is to be achieved will be a tremendous help. I should note that for the past eight years the Ohio Environmental Protection Agency has been doing a very good job of providing small business compliance assistance—and many companies, and not just small ones, have found their educational seminars, one-on-one assistance help line, and on-line guidance to be of great value.
We also appreciate other provisions in Senate Bill 2 that promote predictability, consistency, and flexibility. Finally, cost of compliance analyses versus benefits expected, as emphasized in the bill, are always important.
Senate Bill 2 is a sensible step to assuring Ohio’s regulatory environment is focused on achieving compliance and measurable benefits for our citizens.
Speaking for our member companies, I thank you for the opportunity to provide support for this legislation.