News of the Week
CARTER PROPOSES REGULATORY REFORM In a "call for common sense" President Carter has sent Congress a comprehensive proposal "to reduce, rationalize, and streamline the regulatory burden throughout American life." Noting that it has been 30 years since the last comprehensive regulatory reform package was passed, Carter explains that when he came to Washington two years ago he found a "regulatory assembly line which churned out new rules, paper work, regulations, and forms without plan, without direction, and seemingly without supervision or control." The result was that "with the best of intentions, 90 separate regulatory agencies were issuing 7000 new rules every single year." To correct this situation, Carter's legislative proposal first would require a federal agency, when developing a major rule, to list alternative means of accomplishing its objective and the costs and benefits of each alternative. The agency then would have to select the least costly way to achieve the rule's objectives. The legislation also would require each federal agency to: • Establish a schedule to review its major and minor rules, identify those that have become outmoded and/or ineffective, and either update or eliminate them. • Publish semiannual agendas of upcoming rules. • Revamp procedures for rulemaking hearings to eliminate needless legal formality and delay. • Set deadlines on most proceedings. To increase public participation in rule-making procedures the bill provides for more advance notice to the public, a longer comment period, and consultation with affected state and local governments. It also authorizes limited government funding for public groups that want to participate in the procedures, but can't afford to. In the future, Carter says, he will be sending Congress proposals to reform several individual regulatory statutes. A proposal to deregulate the surface transportation industry already has been sent to Capitol Hill. Others—on drugs, nuclear plant siting, meat and poultry inspection, and communications—will follow, he promises. 6
C&EN April 2, 1979
Carter: reduce regulatory burden
Carter also strongly supports the so-called "sunset" proposals now before Congress. These set a schedule for Congressional review of each federal program once every 10 years, with related programs being reviewed
simultaneously. Spending authority for the programs would terminate if Congress did not act to renew or revise the program. But the President is just as strongly opposed to Congress' retaining a veto power over the regulations that agencies issue as it has been doing in some laws passed recently, such as for the Department of Energy. "Any serious effort to administer the legislative veto," Carter says, "would require a major increase in Congressional staff and threaten the Constitutional division of power." In the nonlegislative area, Carter says that the Administration is working on revisions of all Occupational Safety & Health Administration safety standards to make them simpler and more flexible; streamlining Environmental Protection Agency permit procedures; developing a coordinated policy on identification and regulation of cancercausing substances; and increasing research to improve the factual basis for regulations on toxic chemicals, air pollutants, and radiation. D
OPEC increases alter ch mical price outlook Just when U.S. chemical prices showed the first signs of easing off their supercharged pace of the past four months, the new increases in world oil prices from the Organization of Petroleum Exporting Countries throw uncertainty into the chemical price outlook. In effect, after adjusting quite effectively to the rise in world oil prices this winter, U.S. chemical companies must get ready for a possible new round of adjustments in the next half-year. One difference this time is that world oil prices are spread over a wider official range, from $14.54 per bbl for Saudi Arabian light-grade crude to more than $18 per bbl for crude oil, mostly light, from Algeria, Libya, and Nigeria. The last three countries have added their own surcharges to the benchmark Saudi price, which itself is up 9% from the level of $13.34 established in January. Hence, there is theoretically more room for oil customers to bargain with producers. However, in practice, some considerations act to limit any such
shopping around. For one thing, U.S. oil purchasers are largely stuck at the high end of the price scale, since most U.S. refineries must use light grades of crude. In addition, the current tight supply of world oil and the threat of possible production cutbacks by Saudi Arabia and others help preserve the current equilibrium of supply and demand. The current economics boom in U.S. manufacturing, including the chemical industry, does nothing to cool the world oil market. In chemicals, for example, a near-shortage psychology has aided companies in boosting prices dramatically for many important products, particularly the basic aromatics, since this past summer. For the consumer, economic signals are more mixed, but demand continues high for gasoline, the number one product from crude oil. Hence, chemical prices in the next few months could climb again. In the past few weeks, as the world price of a key chemical raw material, naphtha, retreated from very high levels, widespread signals appeared of sim-
ilar retreats in aromatics prices—for example, about 5 cents a gal in ben zene from about $1.50 for large lots in the U.S. spot market. Now that world oil prices are again rising, chemical prices could follow after a short lag. But this is not yet certain. A U.S. re cession, which many economists now think guaranteed by current eco nomic excesses, would change the picture again. Π
AFL-CIO begins "save OSHA" campaign Organized labor has launched its spring legislative offensive with a goal of saving the Occupational Safety & Health Administration (OSHA) from what it describes as attacks from the "radical right" threatening the exis tence of the agency. In announcing the campaign, AFL-CIO industrial union depart ment president Jacob Clayman de clared the labor lobbying drive to be a "holy crusade to save life." He con ceded, though, that the reason behind labor's renewed interest in job safety is that "the opposition has been outgunning us" and "OSHA is in danger. "This session of Congress will present the gravest challenge to OSHA since its birth," Clayman told trade unionists meeting in Washing ton, D.C. "The conservatives and the right wing mean to do in OSHA. They are almost hysterical in their bitter opposition to that agency." Whether OSHA is as critically ill as AFL-CIO believes is less than certain. But what is evident is that conserva tive groups have been successful re cently in trimming the job safety agency's broad powers over private industry. Last year, for example,
groups such as the American Con servative Union's Stop OSHA Project succeeded at the Supreme Court in limiting OSHA's warrantless inspec tion powers. Another Supreme Court case is pending over OSHA's power to set stringent workplace exposure limits for benzene, a suspected car cinogen. Given this backdrop, AFL-CIO's Oil, Chemical & Atomic Workers In ternational Union (OCAW) and the industrial union department of AFL-CIO have launched a major lobbying drive. Last week their members swarmed to Capitol Hill to sell members of Congress on the virtues of the agency. A major obstacle organized labor must overcome in its lobbying efforts is years of relative inactivity in the
safety area. After the Occupational Safety & Health Act was enacted in 1970, labor perceived that the job safety battle was largely over. Notes OCAW president Al Grospiron, "Ironically, we let this movement erode from view after passage of the act. This vacuum was filled by the industry lobbyist who successfully developed a line that [industry] was now the victim of an overwhelming government bureaucracy." But since few political observers believe that OSHA is in nearly the danger labor says it is, there may be another reason for AFL-CIO's re newed safety campaign. Labor hasn't won many battles on Capitol Hill lately. Even a small victory would give organized labor something positive to point to. •
White House shapes science policy
The White House prepared a 30-page message to Congress that amounts to a statement of the Administration's science and technology policy. The message—the first such policy state ment since one issued in 1972 by the Nixon Administration—seeks Con gressional support for science and technology programs in President Carter's 1980 budget. Science and technology receive strong support in the policy state ment, which articulates the Admin istration's approach in bringing science and technology to bear on six domestic objectives: stimulating in novation in industry; meeting energy, natural resource, and food needs; promoting better health; improving the regulatory process; expanding the beneficial use of space; and under standing the forces of nature, natural disasters, and changes induced by man. The policy's thesis is that "new technologies can aid in the solution of many of our nation's problems. These technologies in turn depend upon a fund of knowledge derived from basic research. The federal government , should therefore increase its support both for basic research and, where appropriate, for the application of new technologies." The policy statement also deals with science and technology in terms of international relations. It states the Administration's support for pro grams involving international coop eration, scientific exchanges that bridge national differences, aid to developing countries, and cooperation in management of technologies with global impact. National security also is considered, with Carter expressing concern over the declining support for Grospiron: let safety movement erode research and technology evinced in
the defense budgets early in the décade. As for the Administration's strategy for managing science and technology, the policy calls for renewed attention to the partnership between the federal government and universities. "We need to ensure accountability of research funds without stifling progress in research," Carter says. The policy also calls for a better awareness of partnership among the federal agencies and it cites a need for efforts to strengthen the universityindustry partnership. D
Corco write-down turns profit to loss It's almost as if Commonwealth Oil Refining could not stand a profit. After announcing its first year in the black since 1974, the Puerto Rican refiner has taken a write-down on carrying charges for three of its joint venture operations. This has turned an $11.1 million profit for 1978 into a $53.9 million loss. The announcement of the writedown, which totaled $65 million, was made by Corco president and chief executive officer C. Howard Hardesty Jr. following a meeting of the board of directors at the company's Penuelas, P.R., complex. The re-evaluation covered provisions for estimated impairment of Corco's 50% interest in Puerto Rico Olefins (PRO) and Oxochem Enterprises. The carrying value of the two companies was reduced from $86.2 million to $22.5 million. Corco also wrote off about $1.3 million invested in Caribe Isoprene. April 2, 1979 C&EN
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