Input Stories

Russia’s missile attack on Ukraine last Saturday hit vital energy infrastructure, underscoring the need for the Biden administration to lift its more than three-month-old ban on U.S. liquefied natural gas export permits.

What’s going on: “The [missile] attack targeted ‘the power grid and the gas transit system, particularly the gas infrastructure that ensures the security of deliveries to the EU,’” Ukrainian President Volodymyr Zelenskyy said (POLITICO Pro, subscription).

• “Russia has intensified its assaults against Ukrainian power stations in recent weeks, and its missiles are now also hitting gas storage facilities that were used by some EU companies last winter to prevent energy shortages.”
• The strikes also hit four thermal plants in Ukraine and injured a worker.

Why it’s important: “With Russia targeting energy supplies in Europe, it is critical that we lift the ban on LNG exports so the United States can fill any unexpected gaps,” said NAM Director of Energy and Resources Policy Michael Davin. “Lifting the moratorium is a national and energy security issue.”

What Americans want: People in the U.S. overwhelmingly support natural gas exports, a recent NAM poll found, with 87% of respondents saying the U.S. should continue to export the energy source.

The EPA recently finalized a rule that establishes a process for conducting risk evaluations for certain chemicals—but it will only hamstring U.S. manufacturing competitiveness if implemented, the NAM said this week.

What’s going on: In a final rule issued late last month under the Toxic Substances Control Act, the EPA “will now consider exposure to chemicals in air and water and, when possible, combined risks from exposure to multiple chemicals” (Chemical & Engineering News).

• “The [agency] will also consider risks to workers without assuming that they are wearing personal protective equipment [and] … chemical uses required for national security or critical infrastructure.”

Why it’s important: The final regulation will unnecessarily cost manufacturers in both time and money.

• The “new TSCA risk evaluation rule adds too many additional barriers and requirements on manufacturers and risks creating de facto bans on chemistries essential to both existing technologies and the development of new innovative materials,” the NAM said Monday.
• “Manufacturing relies heavily on new and existing chemicals, which are the building blocks of technologies that make modern life possible,” NAM Vice President of Domestic Policy Brandon Farris told the agency last December. “To ensure continued access to the newest chemicals which can make essential technologies even more effective and efficient, TSCA should be administered in a manner that protects health and the environment while avoiding unnecessary adverse economic impacts on business enterprises.”

What should be done: The agency should revise the final rule, the NAM said.

In advance of a Senate hearing on health care costs, the NAM is ensuring that senators understand the importance of biopharmaceutical innovation to patients and the U.S. economy—and the damaging impact of policies that hinder drug development.

What’s happening: The Senate Armed Services Committee will hold a subcommittee hearing today on whether harmful policies like price controls, compulsory licensing and weaker intellectual property protections for new medicines could reduce servicemembers’ health care costs.

NAM pushes back: The NAM is highlighting the extraordinary investment—in both time and capital—that it takes to bring a lifesaving treatment to market. According to the NAM:

• The average cost of developing a new drug was $2.3 billion as of 2022;
• Across the industry, biopharmaceutical manufacturers spent $139 billion on R&D in just 2022 alone;
• It can take 10 to 15 years for a breakthrough scientific discovery to move through early-stage research, clinical trials, Food and Drug Administration approval and manufacturing; and
• Only 12% of investigational drugs that enter a Phase I clinical trial ultimately receive FDA approval—to say nothing of the hundreds of discoveries that never make it into clinical trials.

Lifesaving impact: In 2023, the FDA approved a record-breaking 71 new medicines that will improve the lives of patients.

• The biopharmaceutical industry behind these breakthroughs is also stimulating the U.S. economy: Biopharmaceutical manufacturers accounted for $355 billion in value-added output to the U.S. economy in 2021 and directly employed 291,000 workers in the U.S.

Innovation under threat: In recent years, biopharmaceutical manufacturers have been subject to harmful policies that will limit innovation and slow efforts to develop lifesaving medicines.

Read the full story here.

The Federal Communications Commission voted Thursday to restore Obama-era broadband regulations—a move that is outside the agency’s remit and will erode investment in telecom infrastructure, the NAM said.

What’s going on: “The commission voted along party lines to finalize a proposal first advanced in October to reinstate open internet rules adopted in 2015 and reestablish the commission’s broadband authority” (Reuters, subscription).

• The rules, repealed by the Trump administration in 2017, will reclassify broadband as a telecom service under a law originally passed in 1934. This change will subject 21st century high-speed internet to regulations designed for the era of the rotary phone.
• The Biden administration has been seeking a return to the 2015 regulations since 2021, when the president signed an executive order urging the FCC to reinstate them.

Why it’s important: The resuscitated regulations will have a significant and negative impact on the U.S. economy, as historical evidence shows.

• From 2011 to 2022, attempts to impose so-called “net neutrality” restrictions depressed telecom infrastructure investment by $8.1 billion each year, decreased employment by approximately 195,600 jobs and reduced gross domestic product by $145 billion annually (Phoenix Center).

Our view: “Ultimately, [the FCC]’s broadband regulations are a solution in search of a problem,” the NAM wrote in a social post. “The U.S. already has an open and fair internet. This is just the latest in a long line of decisions adding to the regulatory onslaught facing manufacturers in America.”

The U.S. fertility rate is at record lows (The Wall Street Journal, subscription).

What’s going on: “The total fertility rate fell to 1.62 births per woman in 2023, a 2% decline from a year earlier, federal data released Thursday showed. It is the lowest rate recorded since the government began tracking it in the 1930s.”

• The data reflect a continuing trend: American women, across ethnic groups, are delaying or foregoing having children.
• In 2023, the number of U.S. births was the lowest in 44 years.

Why it’s happening: “A confluence of factors are at play. American women are having fewer children, later in life. Women are establishing fulfilling careers and have more access to contraception.”

• As a group, they are also increasingly uncertain about their futures “and spending more of their income on homeownership, student debt and child care.”

The details: From 2022 to 2023, birthrates declined more among younger women.

• “Women in their mid-to-late 30s are having children at similar rates to those in their early to mid-20s. Birthrates for women 35–39 fell to 54.7 births per 1,000 women—closer to the rates for women 20–24, which dropped 4% to 55.4 births per 1,000 women in 2023.”
• Birthrates among women in their 40s stayed the same.

Why it’s important: Fewer U.S. births could reshape the economy and “other facets of American life.”

• However, “[a]n influx of people immigrating to the U.S. could offset the impact of lower birthrates on the U.S. population’s size,” said Brady Hamilton, a co-author of the Centers for Disease Control and Prevention report that includes the data findings. “Immigration has risen in recent years, easing labor shortages and expanding the population of big metropolitan areas.”

​​​​​​​Read more: For a comprehensive blueprint on U.S. immigration reform, download “A Way Forward,” the NAM’s recommendations to Congress on the subject.
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Inflation, as measured by the Federal Reserve’s preferred gauge, remained elevated last month (CNN).

What’s going on: “The Personal Consumption Expenditures price index … accelerated to 2.7% for the year ended in March. … That rate was above economists’ expectations for a 2.6% gain and landed above February’s reading of 2.5%.”

• Prices increased 0.3% on a monthly basis, the same pace as in February.

Core PCE: So-called “core” PCE, which excludes often-volatile food and energy prices, remained steady at 2.8%.

Spending: Consumer spending stayed strong in March, rising 0.8% from February and exceeding economists’ expectations.

Final rules released Thursday by the Environmental Protection Agency to reduce greenhouse gas emissions from traditional fuel-fired power plants are not achievable without permitting reform—and they pose a threat to U.S. national and economic security, the NAM said yesterday.

What’s going on: The new rules, part of President Biden’s pledge to create a carbon-free energy sector by 2035, mandate that:

• Existing coal-fired plants and new natural gas–fired facilities cut or capture 90% of their emissions by 2032;
• Coal-fired plants drastically reduce wastewater runoff and severely tighten the emissions standard for heavy metals; and
• Coal ash—including past deposits “placed in areas that were unregulated at the federal level until now”—be managed in storage ponds.

A first: “The power plant rule marks the first time the federal government has restricted carbon dioxide emissions from existing coal-fired power plants” (Associated Press).

• The new regulations—which face almost certain court challenges—set emissions caps that plant operators would be required to meet.

Targeting major energy sources: Natural gas generates approximately 43% of all U.S. electricity, while coal generates about 16% (AP).

Why else it’s problematic: While manufacturers appreciate that the EPA heeded the input of their industry and did not include existing gas plants in the new requirements, as written the final rules are unattainable because the administration and Congress have not undertaken much-needed, comprehensive permitting reform, according to NAM President and CEO Jay Timmons.

• “Congress and the president have not enacted permitting reform—making it impossible to achieve the EPA’s highly aspirational mandates,” Timmons said. What’s more, the final rules threaten “grid reliability because of the unrealistic timeline for power plants to adopt technologies within the next 10 years that have yet to even be proven at scale.”
• Pushing through yet another set of regulations in the absence of systemic reforms burdens an already overtaxed national electrical grid, jeopardizing U.S. security in a way that “literally could leave Americans in the dark and factories offline.”

What should be done: The EPA should partner with—not undermine—manufacturers “to achieve a more balanced regulatory framework to help reach our climate goals.”

The NAM told the Office of the United States Trade Representative this week that it must use existing trade and investment tools to promote supply chain resilience for manufacturers in the U.S.

What’s going on: “Manufacturers and workers in the U.S. need USTR to undertake a proactive and competitive trade and investment policy that opens markets, eliminates barriers, enables the sourcing of necessary inputs and creates opportunities for inbound and outbound investment,” the NAM said Monday.

• The suggestions were in response to a USTR call for comment on “strategies that [will] advance U.S. supply chain resilience” (Federal Register).

What should be done: While manufacturers appreciate engagement with partners through frameworks such as the Indo-Pacific Economic Framework and the Americas Partnership for Economic Prosperity, the NAM encourages the government to “aggressively pursue ambitious agreements that include market access and the true removal of barriers to economic engagement with our partners.” The USTR can help manufacturers by:

• Adjusting or eliminating “current tariffs on manufacturers and ensur[ing] they are applied in such a way that creates a competitive environment for manufacturing in the U.S.”;
• “Negotiating more high-quality, modernized trade agreements with foreign partners” to remove trade barriers and address discriminatory measures; and
• Enforcing on-the-books trade agreements “to ensure that our trading partners are playing by the rules.”

Why it’s important: The aforementioned actions (and others) by the USTR would create “a competitive environment for manufacturers in the U.S. to succeed,” the NAM said.

Two major U.S. West Coast ports saw continued cargo growth in March, coinciding with supply chain fallout from the Francis Scott Key Bridge collapse in Baltimore (Los Angeles Daily News).

What’s going on: The Port of Los Angeles “processed 743,000 twenty-foot equivalent units (TEUs, the industry’s standard measurement for cargo units) last month—up 19% from March 2023. It was the port’s eighth-consecutive month of year-over-year growth.”

• The Port of Long Beach last month moved 654,082 TEUs, a cargo increase of 8.3% from March 2023. Its imports rose 8.4% compared to last year.
• The ports anticipate April—traditionally “slack season” for the entry points—being “another busy month,” Port of Los Angeles Executive Director Gene Seroka said.

Why it’s important: The growth is reflective of “resilient consumer spending, [which] is key to our nation’s growth,” Seroka continued. “U.S. economic indicators remain positive even with some uncertainty regarding interest rates and the latest inflation data.”

Shoring up systems: The Port of Los Angeles is working to ensure the safety of its systems following the March 26 Key Bridge collapse and an executive order by President Biden that increases cybersecurity regulations at all U.S. ports.

The Biden administration has placed new restrictions on traditional energy exploration and production in large portions of Alaska’s Arctic (Law360, subscription).

What’s going on: A rule handed down last Friday by the U.S. Department of the Interior’s Bureau of Land Management puts “[n]ew limits on fossil fuel production in the National Petroleum Reserve-Alaska,” a 22.8 million–acre site that holds large reserves of oil and natural gas.

• The rule limits future oil-and-gas leases and industrial development and “codifies a ban on new leasing across a further 10.6 million acres of the reserve, about 40% of its total area,” according to the agency.
• The regulation also rules out construction of a road proposed by the Alaska Industrial Development and Export Authority to allow miners to reach mining sites in Alaska’s north-central region.

Why it’s problematic: The move—which the administration said is intended to protect wildlife habitats and “honor the culture [and] history” of Alaska Natives—erodes U.S. energy security and independence while financially harming local indigenous people.

• “The final rule ‘will hurt the very residents the federal government purports to help by rolling back years of progress, impoverishing our communities, and imperiling our Iñupiaq culture,’ Voice of the Arctic Iñupiat President Nagruk Harcharek said.”
• The NPR-A contains approximately 8.7 billion barrels of oil and 25 trillion cubic feet of natural gas resources, according to the U.S. Geological Survey.

The last word: “The rich resources of the Arctic should be part of a responsible, all-of-the-above approach to U.S. energy security and independence,” said NAM Director of Energy and Resources Policy Michael Davin. “This rule is a step backward on the path to achieving a sustainable energy future.”