Challenges Facing Foundries

in the 112th Congress

Stephanie Salmon

American Foundry Society – Washington Office

May 16, 2011

Pennsylvania Delegation

• 2010 ElectionoTurned RedoWon GovernorshipoPicked up seat in Senate - Pat Toomey (R)oGained 5 seats in Houseo Reps. Kelly, Meehan, Fitzpatrick, Marino,

Barletta oRepublicans take control of congressional

delegation for 1st time since 2006oHouse – 12 Republicans – 7 DemocratsoMany serve on key committees

Most Important Issue to Voters• 80% of Americans surveyed say the economy is in poor shape*

1. Unemployment - 38%

2. Federal Budget Deficit - 28%

3. Rising Gas Prices - 21%

4. Mortgage and Housing Costs - 6%

5. Taxes - 4%

*CNN/Opinion Research Corporation Survey – 5/9/11

112th Congress: Issue Priorities

1. Jobs/Economy

a. Budget/Spending Cuts

2. Congressional Oversight & Regulatory Relief

3. Skyrocketing Gas Prices

4. Health Care

5. Tax Reform

Budget Cuts / Debt Ceiling

• Issue: • Concern over long-term impact of the federal deficit

and national debt • Debt Ceiling Looms as Next Big Battle

• Status:oWorking Group led by VP Joe Biden

o Working on deficit reduction package with group of House & Senate lawmakers

oBipartisan Gang of Six Senatorso Working on deficit-cutting plan – may release soon

oSenate Budget Chair Kent Conrad (D-ND)o Mark up as soon as this week own FY 2012 budget resolution

o New tax on millionaires o Restoration of income tax rates of up to 39% on top earners

Skyrocketing Gas Prices

• Issue: • Vote on Oil Subsidy bill in Senate to repeal tax

breaks on 5 major multinational oil companies• Adds approx $2 billion a year in tax revenue to the

Treasury• Sponsors - Sens. McCaskill of Missouri, Tester of

Montana, Menendez of New Jersey & Brown of Ohio – all up for reelection in 2012

• Status:• Unlikely to pass

• All 47 Republicans expected to vote NO plus 2 Democrats, Sens. Landrieu - Louisiana and Begich - Alaska

Health Care• Issue: House Republican plan to overhaul

Medicare & turn into a voucher systemo Report released that shows Medicare’s hospital insurance

fund will become insolvent in 2024 – 5 yrs sooner than previously estimated

• Status: Democrats plan to continue hitting Republicans at home on their effort to revamp Medicareo House Republicans faced anger from seniors & other

constituents at their town halls and other events during the last recess

Health Care

• Issue: Republicans look to repeal and replace law passed last year to overhaul health care system – the Patient Protection Affordable Care Act

oPassage of medical liability reformoAllow purchase of health care across state linesoExpand Health Savings AccountsoUse appropriations bills to prevent implementation of

key programs – over 100 provisions require appropriations

• AFS Priority Issue:oSeeking ways to mitigate impact of law on

metalcasting industry

Tax Reform• Issue: Tax code is broken, burdensome, & complex

• President’s Debt Commission Report calls for $961 billion in tax increases

• Status: Congress examining comprehensive tax reform• Broad agreement across party lines that tax rates could

stand to be lowered and has too many loopholes• Attempt to lower income tax rates for individuals &

businesses through elimination or reduction of many of the tax deductions and credits

• Timeframe: Major reform expected to take 2 years or more 

Unprecedented Regulatory Activity• Issue: Releasing Regulations on Unprecedented Scale

• Existing Regulatory Burden Substantialo $1.75 trillion annual regulatory costso Cost to average U.S. household - $15,000 each yearo Cost to average U.S. business - $200,000+ ($13,000 per employee)

each yearo Nearly half of regulatory costs are associated with environmental

compliance

• Onslaught of Regulations from EPA, OSHA, HHS, DOL…o 29 major rules from EPAo Huge increase in number of Significant Rules - impact of $100 Million

or Moreo $10 billion to implement new regulationso Significant job losses associated with new regulations (16,000 jobs/$1

billion)

• Status: Oversight hearings, legislation to reform regulatory process

Regulatory Reform Legislation• REINS Act (Regulations from the Executive in Need of Scrutiny) - H.R.

10/S. 299 o Require Congress vote to approve new regulations with economic effects

of $100 million+ annually before they could take effect

• Regulatory Flexibility Improvements Act of 2011 - H.R. 527• Require EPA and other federal agencies to review their rules’ indirect

impacts on small entities

• TRAIN Act (Transparency in Regulatory Analysis of Impacts on the Nation Act of 2011) o Interagency Panel to review the cumulative effects of various EPA rules on

economic competitiveness, employment & energy priceso Vote expected in House

• Comprehensive Assessment of Regulations on the Economy (CARE) Act – S. 609o Interagency Federal panel undertake a “cumulative economic analysis” of

EPA regulations

• Snowe Amendment o Defeated - require EPA & other fed agencies to establish detailed plans for

analyzing sm business impacts of each existing regulations

112th Congress: Key EPA Issues• AFS Priority Issues:

o Regulation of Greenhouse Gas Emissions Under the Clean Air Act

o Revised National Ambient Air Quality Standards (NAAQS)o Particulate Matter DustoBoiler MACT

• AFS Actions:• Lobbying Congress to stop and/or delay these

regulations• Submitted list of Burdensome Rules to key

committees• Testified before House Committee• Lawsuits through NAM

Greenhouse Gas (GHG) Emissions

• Issue: On January 2, 2011, EPA began regulating GHG emissions from stationary sources under Clean Air Act o Only largest facilities will be regulated first

• Impact:oSets the stage for future regulation of much

smaller sources – including small foundriesoStates are unprepared for the new permitting

requirements, which will cause significant delaysoPermitting gridlock will discourage manufacturers

from building new facilities or expanding their current facilities, hurting competitiveness and discouraging job creation

National Ambient Air Quality Standards (NAAQS)

• Issue: EPA proposes to tighten NAAQS standard from existing 75 parts per billion (ppb) to range between 70 ppb and 60 ppb – Jan 2010

• Impact: o Significantly higher compliance costs o Unlikely to expand production/operations

o New emissions controls, higher electricity priceso Nearly 80% of counties could be in non-attainment with 60 ppb

o Study estimates if level reduced to 60 ppb result in loss of 7.3 million jobs by 2020

o Add $1 trillion in NEW regulatory costs per yr b/w 2020 and 2030

• Timeframe: o EPA delayed finalizing rule until July 2012 o Continue analysis of epidemiological & clinical studies

Particulate Matter Dust

• Issue: Stop the EPA from lowering the PM 2.5 standards• Current level 15 ppb • EPA considering drastic cut to 11 - 13 ppb, represents a reduction

of up to 27% relative to current standard

• Impact: • Previous air dispersion models only had to account for filterable

particulate • NEW air permits now require condensables to be included in total

PM 2.5 emissions, making standard much more difficult to meet• If lower standards are implemented, it will be extremely difficult

for foundries to expand and/or build new operations

• Timeframe:• Release Summer 2011

GHG Legislation• Energy Tax Prevention Act - HR 910/S 482

o Block EPA from using CAA to create new regulations that curb greenhouse gases and impose backdoor energy tax

o Passed House 255 to 172, all R’s + 19 DemsoReps. Jason Altmire, Mark Critz, & Tim Holden

o Next - Use debt-ceiling legislation as a vehicle to limit federal climate change rules?

• EPA Stationary Source Regulations Suspension Act - S 231o Delay EPA Regulation of GHG emissions for 2 years

o4 Senate GHG Amendments Defeated oMcConnell/Inhofe - 50-50

o Total of 64 Senators voted for one or more of the amendments 

Boiler & Incinerator Emissions Rules

• Issue:• On March 21, EPA published the final Boiler MACT rule setting strict

emission standards from industrial boilers and process heaters and 3 other related rules.• Emissions standards for hazardous air pollutant standards for boilers

used in major source commercial, industrial, and institutional settings• New source performance standards for solid waste incinerators for

commercial and industrial use 

• Impact:• Final rules still long way from being achievable or affordable for foundries• Although most boilers already are well controlled for key pollutants, the Boiler

MACT rule will require more than 90% of boilers to make significant changes. • Thousands of power plants and facilities depend on affordable energy from boilers • This broad-reaching proposal could cost manufacturers more than $20 billion in

compliance costs and place hundreds of thousands of jobs in jeopardy

• Status:

• Two lawsuits filed April 29 in D.C. Circuit challenging EPA’s Rules• Urge Congress to legislatively stay the Boiler MACT and the three

related rulemakings to give EPA the time to properly develop the rules with stakeholder involvement

OSHA: Top Priority Issues 2011

• EnforcementoComprehensive Inspections & Higher

PenaltiesoSignificant increase in $100,000+ penaltiesoGreater utilization of General Duty Clause

oContinued focus on ManufacturingoNoise abatement, reducing fatalities in 4 leading

causes of deaths –falls, electrocutions, struck by, & caught in equipment/machines

o Increase awareness, health & safety risks of hazardous chemicals

• Developing New Regulations

OSHA Enforcement Efforts: Plan, Prevent, Protect

• Increase Deterrence with 4 Strategies:

1. Targeted Program for Recalcitrant Employers - Severe Violators Enforcement Program

2. Coordinated Multiple Site Inspections

3. Strengthened Penalty Structure

4. Increased Transparencyo Public Access to Data o Use of Publicity/Media to Expose “Bad Actors”

USA

OSHA Inspection Priority

Priority Category of Inspection

1st Imminent DangerReasonable certainty an immediate danger exists

2nd Fatality/CatastropheReported to OSHA; inspected ASAP

3rd Complaints/ReferralsWorker or worker representative can file a complaint about a safety or health hazard

4th Programmed InspectionsCover industries and employers with high injury and illness rates, specific hazards, or other exposures

Severe Violators Enforcement Policy

• 4 Conditions that Triggers Enforcement:• Fatality/Catastrophe

• Fatality or 3 or more employees are hospitalized, & where 1+ or more willful, repeat, or failure to abate citations issued

• High-Emphasis Hazards• 1 or more specified high-emphasis hazards where 2 or more willful,

repeat violations or failure to abate citations issued. Such as hazards for falls, amputations, combustible dust & airborne contaminants

• Potential Release of a Highly-Hazardous Chemical• 3 or more willful potential release of highly-hazardous chemicals,

repeat, or failure to abate citations are issued

• Egregious Cases• Especially serious safety hazards for which OSHA opts to cite

employers separately for every employee exposed

Changes to Penalty Structure

• Examine:

oHistory ReductionoTime frame for considering employer's OSHA

history expanded from 3 to 5 yrsoHistory Increase o10% increase in penalty if cited within past 5

yrs for serious, willful, repeat violationsoRepeat ViolationsoTime period increased from 3 to 5 yrs

o Severe Violator Enforcement Program

oHigh gravity serious violations no longer grouped or combined & may be cited as separate violation

Changes to Penalty Structure continued…

• Gravity-Based Penalty• Raise gravity-based penalties from Range of $1,500 to

$7,000 to Range of $3,000 to $7,000

• Size Reduction • Reduce area directors' discretion for penalty reductions• Penalty reduction between 10 and 40% with less than 250

employees / No size reduction 251 or more employees

• Good Faith • Continues UNLESS receive high gravity, serious, repeat

violations

• Additional Modifications to Penalty Calculation• Apply final penalties serially, start with the gravity-based

penalty and deduct history, good-faith, size & quick-fix reductions

OSHA Enforcement: Additional Programmed Inspections

• Other Programs• 15,000 letters to companies with twice the national average injury & illness rate – March 2011

• Site-Specific Targeted Inspections

• National Emphasis Programs

Programmed Inspections: Site Specific Targeting (SST-10)

• Focus on 4,000+ High Hazard Work Sites• Identify facilities from OSHA 2009 Data Initiative • Targets 3,300 Manufacturers• List not released to public

• Primary = DART rate at or above 7 OR a DAFWII case rate at 5 or above (only one of these criteria must be met)

• Secondary = DART rates of 5 or greater but less than 7 OR DAFWII case rate of 4 or greater but less than 5

• Low-Rate Establishments in High-Rate Industries not included – since Recordkeeping NEP in-place

• Effective 1 year – Expires – August 18, 2011

2011 Regulatory Agenda: Top Rules Impacting Foundries

• Potential RulesoCrystalline SilicaoCombustible DustoInjury & Illness Prevention Rule

• New National Emphasis ProgramoPrimary Metal

Crystalline Silica – NPRM • Key Issues:

o High priority for OSHAo Change in Permissible Exposure

o Lower standard will be challenging for many foundries to meeto Substantial non-compliance with current standard

o Poor analytical capability - hard to measure levels lower than current PEL

o Economic Feasibilityo How much would it cost to meet a lower level?

o Technological feasibility

• AFS Top Priority Issue o Initiated AFS Silica Working Group – Feb 2011o Working with economist / coordinating data collectiono Meetings with lawmakers and Office of Management &

Budget

Substantial Non-Compliance with Current PEL (100 mg/m3)

0

10

20

30

40

50

60p

erce

nt

of

sam

ple

s

10-19 20-49 50-99 100-499 >500

micrograms/m3

OSHA Silica Sample Results

From Yassin A., Yabesi F., and Tingle R. Occupational Exposure to Crystalline Silica Dust in the United States, 1988-2003. Environmental Health Perspectives 113:3 p.255-260. 2005

OSHA Silica Exposure Results by Occupation in the Gray Iron Foundry

0 20 40 60 80 100 120 140 160

ladle repair

inspector

cleaning department

craneman

core setter

furnace operator

reline cupola

sorter

abrasive blast operator

molder

grinder

coremaker

charger

hunter operator

spruer

Respirable silica in micrograms/m3 (geometric mean)

From Yassin A., Yabesi F., and Tingle R. Occupational Exposure to Crystalline Silica Dust in the United States, 1988-2003. Environmental Health Perspectives 113:3 p.255-260. 2005

Potential Elements of Crystalline Silica Standard• PEL – Three levels considered by OSHA

o 100, 75 and 50 mg/m3

• Restricted Areas where Exposure over PELo No eating, drinking, or smoking

• Protective Work Clothingo Disposable or must change

• Hygiene Facilities and Practiceso Showers

• Recordkeeping• Employee Health Screening

• Timeframeo Pending at OMBo OSHA to release rule this summer

Combustible Dust

• Preliminary rulemaking on Dust is underwayo 281 incidents 1980 – 2005o Concerns with significant cost and feasibility of a “one size fits

all” ruleo KSt Test

o Hazard assessment must not rely solely on a positive “explosion severity” - Positive KSt alone is not necessarily indicative of a hazard

o OSHA should consider reasonable threshold KSt value or adopt sophisticated test that considers variety of factors

• AFS Priority Issueo Urging cost effective regulatory solutions o Filed comments in 2010o Participated in 2010 Stakeholder Meetingso Small Business Panel – Fall?

o AFS member company participating

Injury & Illness Prevention Program

• #1 Priority for OSHA• Required to develop / implement comprehensive workplace

safety & health program• Proactively find & fix workplace hazards - both “real and

potential” • Effectively amend EVERY OSHA standard to require hazard

assessments to detect non-compliant conditions or practices

• Concerns• Easy for employers to be found noncompliant • Open door to areas not covered by rules – i.e. ergonomics,

indoor air, combustible dust and multi-employer worksites

• AFS Priority Issue• Participated in OSHA stakeholder meetings – Summer 2010• Small Business Panel (SBREFA) – June 2011

• AFS member to participate in Panel

Enforcement: National Emphasis Programs

• OSHA conducts thousands of national & local emphasis program inspections

oCrystalline SilicaoCombustible DustoHazardous Machinery/AmputationsoHexavalent ChromiumoLeadoRecordkeepingoPrimary Metal

National Emphasis Program for Primary Metal

• Wall-to-Wall Inspections• Material handling and storage, cranes & forklifts• Lockout/tagout and machine guarding• Hazard assessments, including PPE, fire explosion

hazards with molten metal and emergency action plans• Air Contaminants (List of 41 substances) • Review all safety and health programs • Ergonomic hazards

• Primary Target List • SIC Code 33 - Iron, Steel, Aluminum & Copper

Foundries

• Status• Under Final Review with OSHA Administrator

Concluding Thoughts

• Press for Sound Science and Data Driven Decisions• Economic Impacts and Jobs

• Environmental Justice• Regulatory Agency Funding• Elections - November 6, 2012

• Presidential• House• Senate – 1/3 up for re-election

For additional information, please contact:

• Stephanie Salmon – AFS Washington OfficeVice President, Government Affairs202/842-4864

• ssalmon@afsinc.org• www.afsinc.org