Welcome to Industrials Regulatory News and Trends. In this regular bulletin, DLA Piper lawyers provide concise updates on key developments in the industrials sector to help you navigate the ever-changing business, legal and regulatory landscape.
- US Senate will vote on amendment to phase out HFCs, granting a boon to US manufacturing. On September 15, Senator Thomas Carper (D-DE), issued a statement noting that the US Senate will soon vote on the Kigali Amendment, which aims to phase down hydrofluorocarbons (HFCs) by cutting their production and consumption. HFCs are currently used as replacements of hydrochlorofluorocarbons (HCFCs) and chlorofluorocarbons (CFCs) because they have no impact on the ozone layer; however, they are powerful greenhouse gases. “I’m beyond pleased that the Senate is on the precipice of considering the Kigali Amendment,” Carper said. “In ratifying this agreement, the United States will join 137 other nations to phase down the use of these powerful greenhouse gases. Importantly, Kigali ratification will finally allow U.S. heating, ventilation, air conditioning, and refrigeration manufacturers to access international markets, resulting in massive economic benefits and job creation.”
- White House announces a flow of new federal money to biotech companies. On September 12, President Joe Biden signed an executive order to push more government dollars to the US biotechnology industry. The order allows the federal government to direct funding for the use of microbes and other biologically derived resources to make new foods, fertilizers, and seeds, as well as making mining operations more efficient, administration officials said. The order specifically “directs the federal government to ensure biotechnologies invented in the United States of America are made in the United States of America,” President Biden said. The White House did not provide any specifics on how much money would be available, where it would come from or how it would be allocated.
- DOE announces new goal to exploit vast reserves of geothermal energy. The US Department of Energy on September 12 announced a new plan that could bring new life to the nation’s geothermal power industry. Energy Secretary Jennifer Granholm announced that her department’s goal is to make enhanced geothermal systems (EGS) a widespread renewable energy option in the US by cutting their cost by 90 percent, to $45 per megawatt hour, by 2035. The DoE says it wants to unlock the Earth’s nearly inexhaustible heat resources to provide reliable, clean power to American communities. More than five terawatts of heat resources – enough to meet the electricity needs of the entire world -- exist in the United States, so the capture of even a small fraction of them could affordably power more than 40 million American homes. EGS can also enable technologies for widespread deployment of geothermal heating and cooling, which will further allow buildings and whole communities to decarbonize. “The United States has a vast, geothermal energy resource lying right beneath our feet, and this program will make it economical to bring that power to American households and businesses,” Granholm said. “DOE’s Enhanced Geothermal Shot will move geothermal technology from research and development to cost-effective commercial adoption, helping energy communities and workers transition to producing clean energy for the future.”
- NTSB and FAA formally divide responsibility for investigation of future space accidents. On September 9, the National Transportation Safety Board (NTSB) and the Federal Aviation Administration (FAA) entered into a formal agreement under which the NTSB will take the lead in investigating future commercial space accidents in which a person is killed or seriously injured. The NTSB will be the lead investigative agency in those incidents, whether the person was on a commercial space launch or a reentry vehicle. The NTSB will also take the lead if there is damage to property not associated with the commercial space launch or reentry activities or the launch site from debris that could reasonably be expected to cause death or serious injury. The FAA will be the lead investigative agency for all other commercial space mishaps. Under the law, the NTSB, an independent federal agency, investigates all fatal airplane crashes and other serious transportation accidents.
- In response to US environmental and energy security concerns, company signs deal for lithium extraction. On September 14, Compass Minerals International Inc. announced that it will use a lithium extraction technology developed by EnergySource Minerals LLC to produce lithium ion batteries used in battery electric vehicles. This action was taken in response to pressure by the Biden Administration for US companies to boost domestic production and processing of “critical minerals” used in EV batteries, and reduce the nation’s reliance supply of such minerals from China and certain other foreign sources. Compass plans to use EnergySource's direct lithium extraction technology alongside existing evaporation ponds to produce the battery metal from Utah's Great Salt Lake.
- Some uncertainty remains over FAA approval of Boeing planes. On September 15, David Calhoun, the CEO of Boeing, said that there is still a chance that the Federal Aviation Administration could approve the manufacturer’s 737 MAX 10 plane before the end of 2022 and that he thinks the company will also get approval for the smaller 737 MAX 7 in the coming months. Boeing faces a late December deadline set by Congress to win certification of the two variants of the MAX before a new safety standard on cockpit alerts takes effect. However, Billy Nolen, acting administrator of the FAA, said the agency would not commit to a timeline to approve either the Boeing 737 MAX 7 or MAX 10. He noted that Congress has required Boeing to submit system safety analyses as part of the 2020 aircraft certification reform bill and that they must be approved by FAA before the planes can be approved.
- State court rules for environmental groups against petrochemical plant. On September 14, a state court judge in Louisiana vacated air-quality permits for a plastic and petrochemical plant proposed to be built along Louisiana's coast, delivering a major blow to a project that has faced years of fierce opposition from residents. Judge Trudy White, sitting in Baton Rouge, ruled in favor of environmental and local community groups, who had appealed the decision by Louisiana's Department of Environmental Quality to issue air permits to Formosa Plastics for its Sunshine Project. The judge said that state regulators used selective and inconsistent data in evaluating the permit application and failed to consider the air quality impacts of the project on the predominantly black local community of St James Parish. “Because the agency's environmental justice analysis showed disregard for and was contrary to substantiated competent public evidence in the record, it was arbitrary and capricious,” the judge wrote in her opinion.
- Environmental groups sue FERC over granting permit to LNG facility. On September 7, environmental groups Wednesday sued the Federal Energy Regulatory Commission for having given Cheniere Energy Inc. an extension of time to complete the expansion of its liquefied natural gas export project in South Texas. The lawsuit, filed by the Sierra Club and Public Citizen in the US Court of Appeals for the District of Columbia Circuit, argues that FERC should have been required to revisit its initial approval of Cheniere's Corpus Christi Stage 3 LNG project and its associated pipeline before granting it a 31-month extension of its certificate.
- Defense industry seeks relief from inflation in new lobbying push. Defense industry associations have begun a push, now that Congress has reconvened in September, to lobby Congress to seek relief for contractors from inflation. The idea will be to shape the stopgap funding measure known as a continuing resolution that Congress is expected to use to keep the government functioning past September 30. A continuing resolution provides funding for the government, including defense spending, but does not include any adjustments for inflation. The defense industry would like this to change. Leaders from several defense groups met August 26 with Pentagon Comptroller Mike McCord and Undersecretary for Acquisition and Sustainment Bill Laplante at the Pentagon to preview the proposal, which would allow the Pentagon and the rest of government to expend funds at a faster rate and adjust otherwise firm-fixed price contracts to account for inflation.
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