Transportation and Infrastructure

The Biden administration’s new fuel-economy standards are too aggressive and add conflicting mandates to on-the-books regulations, the NAM said Friday.

What’s going on: The Department of Transportation’s National Highway Traffic Safety Administration issued a proposal calling for a revision of current Corporate Average Fuel Economy standards for cars and light-duty trucks—to a fleet average of 58 miles per gallon by 2032.

• The draft rules are a complement to regulations released “in April that are the strictest on record and push automakers to make the majority of their sales electric vehicles,” reports Auto Dealer Today.

Why it’s problematic: “Auto manufacturers have been making historic investments to ensure that electric vehicles will have a growing place on America’s roads,” said NAM President and CEO Jay Timmons. “However, the NAM has concerns over the three different sets of standards governing light- and medium-duty vehicles. For instance, the Environmental Protection Agency’s proposed regulation on light- and medium-duty vehicles would require 67% of new manufactured vehicles to be battery electric by 2032 and is too aggressive.”

• Some of the rules that have been put forth recently by federal and state agencies conflict with one another, and some—particularly those released by the EPA—would increase the cost of both manufacturing and purchasing vehicles.
• “In addition, the federal government should not dictate the vehicle choices offered to consumers,” Timmons pointed out. “The administration should allow the market and consumers to grow the number of electric vehicles, rather than depending on a single technology to meet this goal.”

What can be done: “[T]hese regulations should be harmonized to create a single unified standard for vehicle emissions, so manufacturers do not have to navigate three often-conflicting targets, which raise costs for manufacturers and consumers,” Timmons continued.

What we’re doing: In June, the NAM and members of the NAM’s Council of Manufacturing Associations and Conference of State Manufacturing Associations launched Manufacturers for Sensible Regulations, a coalition aimed at addressing the negative effects of the multiple, often contradictory regulations being handed down by federal agencies.

Washington, D.C. – In response to the National Highway Traffic Safety Administration’s release of new Corporate Average Fuel Economy standards, National Association of Manufacturers President and CEO Jay Timmons released the following statement:

“Auto manufacturers have been making historic investments to ensure that electric vehicles will have a growing place on America’s roads. However, the NAM has concerns over the three different sets of standards governing light- and medium-duty vehicles. For instance, the Environmental Protection Agency’s proposed regulation on light- and medium-duty vehicles would require 67% of new manufactured vehicles to be battery electric by 2032 and is too aggressive.

“Federal and state agencies are promulgating competing rules, and the EPA’s rules, in particular, would make it costlier for manufacturers to make these vehicles and for consumers to purchase them. When you add the drastic need to build transmission lines to accommodate the demand for charging infrastructure and the challenge of obtaining critical minerals for batteries—many of which are extracted or processed in China—you create a scenario where an ambitious rule becomes a nearly impossible benchmark.

“Consumers and the industry need a more realistic path to reducing vehicle emissions. Federal and state agencies should draft rules that recognize the longer timeframe needed for our nation to build the charging infrastructure and a reliable supply chain for the critical minerals to make batteries to support more electric vehicles. Rules should also be structured to allow the industry additional time to make more electric vehicles available for consumers, and in the quantities needed to eventually achieve the administration’s goals. In addition, the federal government should not dictate the vehicle choices offered to consumers in meeting this goal. Plug-in hybrids, fuel cell electric vehicles and battery-electric cars can all help reduce vehicle emissions over time. The administration should allow the market and consumers to grow the number of electric vehicles, rather than depending on a single technology to meet this goal.

“Finally, these regulations should be harmonized to create a single unified standard for vehicle emissions, so manufacturers do not have to navigate three often-conflicting targets, which raise costs for manufacturers and consumers. The NAM looks forward to working with the administration to ensure vehicle standards meet consumer demand while providing manufacturers in the U.S. more opportunities to create jobs, develop new technologies and become even more globally competitive.”

Background: Recently, the NAM, members of the NAM’s Council of Manufacturing Associations and Conference of State Manufacturers Associations launched Manufacturers for Sensible Regulations, a coalition addressing the impact of the current regulatory onslaught coming from federal agencies.

According to the NAM’s Q2 2023 Manufacturers’ Outlook Survey, more than 63% of manufacturers report spending more than 2,000 hours per year complying with federal regulations, while more than 17% of manufacturers report spending more than 10,000 hours. The NAM survey also highlighted that only 67% of manufacturers are positive about their own company’s outlook, the lowest since Q3 2019. It shows the consequences of regulations: If the regulatory burden on manufacturers decreased, 65% of manufacturers would purchase more capital equipment, and more than 46% would increase compensation.

-NAM-

The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs nearly 13 million men and women, contributes $2.91 trillion to the U.S. economy annually and accounts for 55% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org.

“Policy can’t be developed in a vacuum,” says Dawn Crandall, executive vice president of government relations for the Home Builders Association of Michigan. “People need to look at how one policy impacts that next thing. Everything is tied together.”

That’s Crandall’s message for the Environmental Protection Agency, as it considers a proposed air quality rule to restrict particles called PM2.5. While the regulations might not appear to impact the housing industry directly, they could prevent manufacturers from expanding facilities and creating jobs in Michigan—which does affect the housing market.

The concern: If manufacturers are unable to grow in the state or open new facilities, fewer people will need housing. That’s bad news for homebuilders.

• “If you put in these EPA regulations that are going to create a barrier for companies looking to move here, and then they decide they don’t want to, that’s going to impact Michigan’s ability to be an economic destination,” said Crandall.
• “And if you make it harder for businesses to employ employees, then they don’t need housing. That has a big impact on us.”

A shaky foundation: Michigan’s housing industry is still recovering from the significant downturn it experienced about 15 years ago.

• That slump was dramatic: according to Crandall, the number of permits filed in Michigan for single-family homes fell sharply from 54,721 in 2005 to around 15,000 two years later, bottoming out to about 6,900 in 2009.
• Although the industry has seen some recovery since then, new construction remains relatively low, and Crandall worries that shocks caused by the EPA’s proposed regulations could do further harm.
• “I think we’ve hit rock bottom, and we’re slowly coming out of it,” said Crandall. “But we’re only projecting 16,000 single-family permit builds this year—and anything that’s going to impact residential construction is not good for the state of Michigan.”

Another challenge: Ultimately, Crandall is concerned that the EPA’s proposed rule will simply add to a long list of challenges for homebuilders.

• “We’re already facing enough hurdles,” said Crandall. “There’s a lack of skilled workers who can do residential construction. Material costs peaked during COVID. We get a lot of our lumber from Canada, so these Canadian wildfires could have an impact. So if PM2.5 is going to affect economic development in our state, that’s going to have an impact on us, too.”

The big idea: “We’re all connected in some form or fashion,” said Crandall. “Michigan needs to grow our population, and we can’t do that if companies don’t bring people into our state who want to live, work and play here. We’re one big ecosystem.”

Regulatory inertia on self-driving cars is putting manufacturers in the U.S. at a disadvantage, but Congress can help by expanding automakers’ ability to test and ultimately sell the vehicles, industry advocates said at a House Energy and Commerce Committee hearing Wednesday, according to ABC News.

What’s going on: “Currently [automated vehicle] manufacturers can deploy a maximum of 2,500 self-driving vehicles for testing, provided they have permission from the National Highway Traffic Safety Administration. AV advocates have complained that the limits represent a bottleneck that is holding back the growth of the industry at a crucial time.”

What’s being requested: One of the bills considered during Wednesday’s markup is an updated version of a 2017 measure on AV regulations that passed the House but stalled in the Senate.

• AV advocates point to data that shows reports of accidents involving these cars are exaggerated and the cutting-edge safety technology can be more reliable than human drivers in avoiding crashes.
• The issue of liability in case of an accident, however, remains a major point of contention in legislative progress. “Each one of these [crashes] is still going to be subject to a plaintiff’s lawyer, an insurance company and a defense lawyer,” Rep. Kelly Armstrong (R-ND) said. “And until we’ve figured that out, this is just a science project.”

Safety data: An analysis of the first 1 million miles of AV use by Cruise AV—the self-driving vehicle unit of General Motors—showed the cars to have a significantly better safety record than human drivers, CEO Kyle Vogt said on an earnings call this week.

• There were 54% fewer collisions and 92% fewer crashes in which the AV was at fault, Vogt said.

The last word: “The expansion of AVs into our national transportation system is an opportunity to lead by enhancing safety on our roadways, improving transportation mobility and increasing efficient goods movement across our strained supply chains,” said NAM Director of Transportation Policy Ben Siegrist.

• “Manufacturers are on the cutting edge of vehicle technology research and development, and improving the federal regulatory landscape is a necessary step to grow the American AV industry into a global economic engine.”

The Senate voted overwhelmingly to create a Nuclear Fuel Security Program aimed at bolstering U.S. supplies of enriched uranium, according to the Senate Committee on Energy and Natural Resources.

What’s going on: On Thursday, the Senate voted 96–3 to include Sen. John Barrasso’s (R-WY) Nuclear Fuel Security Act amendment in next fiscal year’s National Defense Authorization Act.

• The “[a]mendment … directs the Department of Energy (DOE) to prioritize activities to increase domestic production of low-enriched uranium (LEU) for existing reactors and accelerate efforts to ensure the availability of high-assay, low-enriched uranium (HALEU) for advanced reactors,” according to the committee press release.
• The bipartisan measure was introduced in February by Sens. Barrasso, Joe Manchin (D-WV) and Jim Risch (R-ID); in May, it was passed by voice vote.

Why it’s important: Most of the advanced nuclear reactor concepts set to come online in the next few years require HALEU—and Russia is the only viable commercial supplier, according to E&E News’ ENERGYWIRE (subscription).

• “Russia now supplies 24% of our enriched uranium imports,” Sen. Barrasso said before the committee on Thursday. “We spend nearly $1 billion each year on Russian uranium. Russia uses these revenues to fund its invasion of Ukraine. Here in America, we have the resources to fuel our own reactors. My amendment authorizes the Department of Energy to take the steps necessary to expand U.S. nuclear fuel production.”

​​​​​​​The NAM’s role: The NAM has strongly advocated for the development of nuclear energy, which will play a critical role in U.S. energy security and decarbonization efforts.

• As NAM President and CEO Jay Timmons told Congress in June, “Nuclear energy can help the U.S. generate more clean energy, stabilize our grids and improve our energy security.”

The Biden administration is hoping offshore wind farms will provide enough power for 10 million homes by the end of this decade—but energy companies are having trouble financing the projects, according to POLITICO.

What’s going on: “Up and down the Northeast—the center of the burgeoning [wind power] industry … energy companies have struggled to finance their projects, going hat in hand to governors and utility regulators asking for more money so they can start building the turbines they have already promised to deliver.”

• Many consumers concerned about already increasing energy costs are wary of more taxpayer funds going to such projects—but without additional government funds, many current wind projects may not get built at all.

The big picture: “Offshore wind takes a combination of state and federal green lights to work. … Federal, state and local permits all have to be secured to make the projects a reality, which gives opponents numerous chances to stall or kill projects.”

• Thus far, federal regulators have approved just three offshore wind projects nationally—underlining the dire need for permitting reform, which the NAM has long called for.
• Meanwhile, “Only seven offshore wind turbines are producing power and just two of the larger projects are truly under construction,” according to POLITICO.

States struggle: Wind-power projects in New Jersey and Massachusetts are facing financial hurdles, with the costs for one project increasing 30% since approval two years ago.

• Geopolitics and the larger economy have weighed on U.S. wind power, too. “Inflation is up—the cost of steel has soared since the pandemic—interest rates are higher and the labor market is tighter. Paradoxically, the war in Ukraine made clear how important domestic energy is while at the same time driving up the costs to produce it.”

The NAM says: “Manufacturers depend on access to reliable and affordable energy, which is why the NAM strongly supports reforms that would foster transparent, streamlined and timely federal regulatory processes,” said NAM Vice President of Domestic Economic Policy Brandon Farris.

• “Our antiquated permitting system is driving up construction costs and has the potential to reduce energy security. The NAM will continue to fight for common-sense permitting reforms that expedite the development of many energy projects, including renewables.”

Sales of new single-family homes dropped 2.5% in June after increasing for three consecutive months, according to U.S. Census Bureau data.

What’s going on: New construction sales fell to a seasonally adjusted 697,000 units last month from a revised May rate of 715,000 units.

• The median sales price of new homes in June was $415,400, down from $416,300 in May.
• Purchases of new homes declined in Midwest and West, but continued to grow in the Northeast and South.

Still higher than 2022: However, June’s sales rate is 23.8% above last June’s estimated rate of 563,000 units.

Supply: June also saw a new-home supply of 7.4 months, up from May’s 7.2 months.

The NAM’s take: “The housing market continued to be challenged by affordability issues and an uncertain economic outlook,” NAM Chief Economist Chad Moutray said. “Still, with inventories low, tremendous demand and need exist for more housing.”

Washington, D.C. – Following a request from White House Environmental Justice Advisory Council Chair Brenda Mallory asking the Environmental Protection Agency to lower the annual primary standard for particulate matter (PM2.5) to 8.0 μg/m³ and to lower the primary 24-hour standard to 25.0 μg/m³, National Association of Manufacturers Vice President of Domestic Economic Policy Brandon Farris released the following statement:

“Moving the PM2.5 standard all the way down to 8.0 μg/m³ as the White House Environmental Justice Advisory Council suggested means 40% of the U.S. population will live in an area considered ‘out of attainment,’ essentially halting construction on bridges, roads, manufacturing facilities and agriculture projects in areas that desperately need development.

“Manufacturing in the U.S. is already among the cleanest in the world, and we don’t have to make a choice between cleaner air and economic prosperity. The EPA can choose both by finalizing a reasonable standard that doesn’t thrust much of the country into an area where no growth can happen.

Background: A new report conducted by Oxford Economics and commissioned by the NAM warns that the EPA’s proposed air quality regulations for PM2.5 could threaten $162.4 billion to $197.4 billion of economic activity and put 852,100 to 973,900 jobs at risk, both directly from manufacturing and indirectly from supply chain spending. In addition, growth in restricted areas may be constrained, limiting investment and expansion over the coming years. Due to these limited opportunities for expansion or investment, these areas in nonattainment could lose out on an additional $138.4 billion in output and 501,000 jobs through 2027.

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The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs nearly 13 million men and women, contributes $2.91 trillion to the U.S. economy annually and accounts for 55% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org.

Today’s atmospheric pollution could become tomorrow’s building materials.

In February, Central Concrete, a subsidiary of Vulcan Materials Company, and carbon-removal firms Heirloom Carbon and CarbonCure, achieved an industry first: permanently trapping carbon dioxide from direct air capture in concrete using reclaimed-water technology.

How they did it: The firms took carbon dioxide captured from the air by Heirloom’s technology to a Central Concrete plant, and in a process developed by the Nova Scotia–headquartered CarbonCure, injected it into water that had been used to wash out concrete trucks. That water was then used to make new concrete.

• “Carbon dioxide reacts with calcium ions in the cement mix and turns into limestone—calcium carbonate,” said Alana Guzzetta, manager of Vulcan Materials Company’s National Research Laboratory in San Jose, California. “Once it’s there, it is very stable and stays as that limestone throughout the life of the concrete, even after demolition.”

Why it’s important: “Concrete is the most-used manmade material in the world,” Guzzetta said. “One reason is its versatility. We can take the same core ingredients and get a variety of capabilities and any shape. That’s where the topic of reducing embodied carbon [the greenhouse gases emitted during manufacturing and construction] becomes a big one.”

• The February demonstration captured approximately 66 pounds of carbon dioxide, or the equivalent of a car driving about 75 miles, according to reporting by Reuters.
• The process is also “going to better allow us to reduce the potable water demand,” Guzzetta said. “We’re implementing it and doing testing to figure out the right levels of carbon dioxide [to get] the best reclaimed water consistency, CO2 sequestering and performance with the potential to reduce embodied carbon.”

Sustainability-minded: February’s direct-air capture demonstration is one of many efforts that builds on the company’s decades-long dedication to environmental sustainability. In 2022, Vulcan also:

• Met its goal of securing 5% of all electricity from renewables;
• Supported biodiversity by maintaining projects certified by the Wildlife Habitat Council at 40 sites;
• Sustained a 98% environmental compliance rate across its 22-state footprint; and
• Supplied 2.1 million tons of recycled asphalt pavement and 1.7 million tons of recycled concrete to projects.

Moving forward: Vulcan Materials’ National Research Laboratory continues to test new products and form collaborations with other entities to develop lower carbon concrete and concrete with more sequestered CO2.

• “Any way that we can continue to trap additional carbon dioxide on the production side continues to offer us more ways to do lower-carbon construction projects,” Guzzetta said. “It just keeps moving us forward.”

California’s port system will get a $1.5 billion upgrade, according to Sourcing Journal (subscription).

What’s going on: “The Port of Los Angeles has been awarded $233 million in grants, while the Port of Long Beach received $383 million. The Port of Oakland got $119 million in funding, and the Port of Hueneme received $80 million.”

• “$1.2 billion will go to 15 projects designed to increase the capacity to move goods throughout the state’s global trade gateways while lessening environmental impacts on neighboring communities.”
• At Los Angeles, grant-funded improvements are set to include “a project that augments an existing partial roadway that directly serves 10 percent of all waterborne containers entering and exiting the entire United States.”

The background: The investment announcement by California Gov. Gavin Newsom late last week came less than a month after the Pacific Maritime Association and the International Longshore and Warehouse Union—dockworkers and their employer, respectively—reached a tentative six-year labor agreement at all 29 West Coast ports.

Why it’s important: The grants will decrease port congestion, boost business, add jobs and help operations use more zero-emissions energy, sources told the publication.

What we’re saying: “These types of congestion- and capacity-focused upgrades will ensure that ports across California remain operationally sound for years to come,” said NAM Director of Infrastructure, Innovation and Human Resources Policy Ben Siegrist.

• “As with the historic investment funded by the bipartisan infrastructure law, these improvements will keep products flowing and manufacturing lines open.”