Companies in coatings, automotive and adhesives are bracing for yet another listing of a popular solvent as hazardous.
State regulators are close to listing solvent methanol as a hazardous chemical under the state’s Proposition 65 law, requiring employers that use methanol to notify workers and neighbors that they could face harmful health effects.
Methanol is a “wood alcohol” that’s used in antifreeze, cleansing solutions, varnishes, paints and adhesives. It’s commonly used as a chemical agent to help make other industrial chemicals, such as formaldehyde.
Last month, scientists with the Office of Environmental Health Hazard Assessment at the California Environmental Protection Agency released a report saying it is considering listing methanol as a hazardous chemical under Proposition 65.
The report cited extensive prior research that has found methanol to have harmful effects on the development of fetuses.
Industries that use methanol and other interested parties have until Aug. 21 to comment on the findings. Then, if requested, the office will hold a public hearing on the proposed listing. In any event, methanol could be added to the list of Proposition 65 chemicals by the end of the year.
For many manufacturers and other businesses that use methanol, its listing as a Proposition 65 chemical only will mean that they have to add another chemical to already existing notices that are published in community newspapers or are distributed to employees and neighbors.
The listing would have a bigger effect on companies that currently use no other Proposition 65 chemicals.
“For people that don’t want to send out Proposition 65 notices because of the negative publicity that generates, they will be motivated to phase out the use of methanol,” said Ed Laird, president of Huntington Beach-based Coatings Resource Corp.
The company uses methanol in its coatings, Laird said. As a result of the listing, Laird said he plans to switch to ethanol, a close chemical cousin.
“The only difference is that methanol evaporates faster, so if we switch to ethanol it will take a little longer for the coatings to dry,” he said.
Of course, with increasing demand for ethanol as an alternative fuel and a fuel additive, switching to ethanol could become an expensive proposition for companies that use it in bulk.
Appointee Stirs Concerns
Some business interests are concerned by Gov. Arnold Schwarzenegger’s recent appointment of Joseph Lyou to fill a vacancy on the 12-member board of the South Coast Air Quality Management District, the region’s air quality regulator.
Lyou, a resident of Hawthorne who serves as executive director for the California Environmental Rights Alliance, has a long history of environmental activism. He previously worked for one of the state’s top environmental groups, the League of Conservation Voters. In the 1990s, he helped found the Committee to Bridge the Gap, which has pressured regulators to crack down on cleanup of contamination from the Rocketdyne facility in the Santa Susana Mountains.
But not all local businesspeople are as concerned.
Some say Lyou has demonstrated a willingness to work with business, especially in his role on the toxics management working group at the AQMD.
“I’ve seen him working with industry and he does have some middle-of-the-road credibility,” said Laird of Coatings Resource who’s also a longtime AQMD watcher.
Lyou himself said that while he will listen to concerns about the impact of the agency’s regulations on business.
“My foremost concern is the impact of pollution on public health, especially in poor communities,” he said.
Gas Rate Increased Rejected
Citing excessive executive compensation, the consumer watchdog arm of the California Public Utilities Commission last week rejected a request from Southern California Gas Co. for a $139 million rate increase.
The Division of Ratepayer Advocates instead recommended a $68 million rate decrease in its review of rate increases from the Gas Co.’s parent company, San Diego-based Sempra Energy. The division also recommended gas and electricity rates in San Diego and Southern Orange County drop.
The recommendations will be reviewed during a series of hearings conducted by the five-member California Public Utilities Commission, which is expected to vote on the requests by the end of the year. The first hearing is Aug. 6.
In making the recommendation, division director Dana Appling said, “It is patently unfair for consumers to be asked to pay for excessive executive and management bonus, compensation, and stock option programs.”
Appling said division staff reviewed several cost components of Southern California Gas’ request and concluded that the utility overestimated future employee benefits costs (including executive compensation) by $40 million and future base rate costs by $150 million.
Lee Schavrien, senior vice president of regulatory affairs for Southern California Gas Co. and San Diego Gas & Electric, said his team already has identified items in the division’s recommendation “that are in violation of federal and state laws with regard to pension contributions,” and that there might be other errors in the division’s calculations.
He added that the division may be using more current economic assumptions since Southern California Gas and San Diego Gas & Electric submitted their rate increase requests last December.
“The gap between our number and their number will likely reduce between now and the time the hearings are complete,” Schavrien said.
Fine is a staff writer with the Los Angeles Business Journal.
