Worley Blog

THE ENVIRONMENT / SUPPLY CHAIN CUNUNDRUM

Posted on: January 15th, 2020 by Clifford F. Lynch

 

As Meet the Press suggested on Sunday, Washington is preoccupied with three things right now – Iran, Impeachment and Iowa (caucuses), all of which are important. But there are some other initiatives being considered that will impact on the supply chain, either directly or indirectly. Two of these could affect the environment as well, and sometimes what is good for the supply chain is not necessarily good for the environment and vice versa.

Last Thursday, President Trump proposed an amendment to the National Environmental Policy Act, a 50-year old law that impacts nearly every pipeline, highway, bridge, and other Federal construction project. Under this Act, major projects that may impact the environment require a review or an environmental impact study. The proposed new rules would narrow the range of projects that would require that and impose new tighter guidelines for completion of the reviews

Today, such reviews can take as much as ten years, often causing major delays in important projects. The new rules would also eliminate the need for agencies to consider the cumulative impacts of the projects such as greenhouse gases and the effect on global warming. This is of course, bad news for the environmentalists and good news for those who believe we have a desperate need for infrastructure improvement. Hopefully, some common ground can be found that will at least partially satisfy both sides. It would seem to make more sense to develop the long-promised infrastructure improvement plan first, then worry about the environmental impact. However, the administration appears more intent on rolling back environmental regulations than developing a solution to the deteriorating road and bridge system of the country.

The other environment related issue is a little closer to home for the supply chain, in that it would have a direct impact on the trucking industry by possibly increasing its costs and that of its shippers. On January 6, the EPA issued an Advance Notice of Proposed Rule (ANPR), asking for comments on a rulemaking proposal called the Cleaner Trucks Initiative (CTI). The proposal would establish new emission standards for nitrogen dioxides and other pollutants from heavy duty engines. The rules would also suggest ways to streamline certification procedures. (Nitrogen dioxide has been linked to both asthma and lung disease.)

The new rules are supported by the trucking industry as a necessary federal move to override states that may establish their own higher standards. California already is moving ahead with requirements that would cut emissions of nitrogen dioxide by as much as 95%, and it is feared that other states may follow suit. The proposed EPA policy would provide for reductions of 25-50%. The California proposal is part of an effort to neutralize what the state sees as President’s aggressive dismantling of efforts to fight climate change. The California position seems to be reinforced by the state’s wildfire problem which many feel is a result of climate change. A 2018 National Climate Assessment produced by 13 federal agencies concluded that “if greenhouse gas emissions from burning fossil fuels continue to increase at current rates, the frequency of severe firs in the west could triple.”

The Federal concern about California, the world’s fifth largest economy, is that it has been a leader in environmental matters, often influencing other states to take similar actions. The EPA’s proposed nitrogen dioxide rules are an effort to curtail that.