WASHINGTON WATCH
The Regulatory Season Ahead
Omar S. Nashashibi – The Franklin Partnership
What will the government do for you? That’s a common question to hear around election season. Twice a year, however, the regulated community hears the question: What will the government do to you?
Through July 31, 2022, federal agencies released 1,793 final rules, proposed another 1,236 rules and published over 13,000 notices. Total pages? 46,813. Not easy poolside reading.
Yes, this is a lot for only seven months of the year, but if industry does not look closely, regulators may catch them by surprise. I recognize that the topic of regulations is dense and often abstract to manufacturers and the regulated community, but policies set in Washington, D.C. have a dramatic impact on industrial operations.
For example, the Department of Energy (DOE) is undertaking the decarbonization of industry initiative and specifically identifies process cooling and industrial refrigeration as accounting for 5.7% of industrial energy consumption, with industrial heating making up a significant fraction of the energy consumed by the industrial sector. The DOE also says that traditional fuel-fired industrial (thermal) processes can be inefficient and difficult to control. Driven by fossil fuels today, industrial heating is also a significant contributor to emissions. This sounds like an industry being primed for regulatory action based on my 24 years in Washington, D.C.
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This summer, the Office of Management and Budget, an arm of the White House, released the spring 2022 Unified Agenda of Regulatory and Deregulatory Actions. In non-government speak, this is a list of short- and long-term rules and regulations federal agencies plan to release in the coming year.
Lobbyists and manufacturing consultants like me look to this to help businesses and industry better prepare for a changing landscape – whether an OSHA heat rule, lockout/tagout procedures, EPA’s greenhouse gas reductions or Defense Department contracting.
A quick look at the government’s agenda for you shows a heavy slate of activity, but here is some perspective. Many regulations, especially environmental, ultimately face court challenges that can take years to litigate, with many falling around the 18 months to two years mark. This is a significant timeline for the Biden administration, which will have just over two years left at the end of 2022 in this first, and possibly only, term in office.
This means that if regulators want to defend their work in court, they need to issue their major rules by this fall and winter and prepare for the legal challenges. Otherwise, they risk drifting into the next administration, which – if Republican – will certainly not only refuse to defend the rules in court but actively seek to reverse the regulations. This is why we expect a flurry of activity throughout the remainder of the year.
In the spring 2022 regulatory agenda, the EPA announced it would amend the National Emission Standards for Hazardous Air Pollutants for Major Source Industrial, Commercial, and Institutional Boilers and Process Heaters. This is a rule started under the Trump administration that aims to implement orders from courts due to challenges from environmental groups. Action slated for July 2022 is still pending.
In October 2022, the EPA is expected to release a rule reviewing which states are in attainment of the levels of ozone permitted based on the National Ambient Air Quality Standards. This action, which calls on states to develop plans to reduce their emissions, can lead to reduced industrial and manufacturing activity and constraints on expansion in regions of nonattainment. It is an example of one administration reviewing the work of the previous White House occupant. Also on the EPA’s list for the coming year is new passenger vehicle, heavy-duty truck and commercial aircraft emissions; the possible elimination of chemicals and solvents such as Bromopropane and Trichloroethylene; and changing the formula for how the EPA calculates the social cost of carbon emissions in the U.S.
Over at OSHA, the indoor and outdoor heat rule continues to receive extensive attention from industry as the agency determines how to move forward with a regulation to cover indoor work environments with the heat index exceeding 80°F. Sources indicate that OSHA is continuing to focus on the stakeholder working group and may convene a panel to review the impact of such a rule on small employers late this year or early next, putting a proposed rule off until at least next year. The lockout/tagout rule is slated for March 2023, walking working surfaces in October 2022 and injury illness recordkeeping requirements in December 2022.
These are just a few samples of the regulations readers should expect. We have a saying here in Washington, D.C.: If you can’t legislate it, regulate it. This phase is about to go into hyperdrive if Democrats lose the U.S. House, Senate or both. As the ability to legislate any of his priorities disappears with the GOP in control, President Biden will see the need to regulate increase if he wants to move his environmental, energy and workplace policies forward.
We expect a very busy regulatory season ahead, but at least policymakers in Washington provide industry with a menu of rules and regulations to expect. That may not make industry feel better, but at least they should feel better prepared.
Omar S. Nashashibi
Founding Partner
The Franklin Partnership, LLC.