January 10, 2011

The Honorable Darrell E. Issa

Chairman
Committee on Oversight and Government Reform
U.S. House of Representatives
Washington, D.C. 20515

Dear Chairman Issa:

On behalf of the Brick Industry Association, representing U.S. clay brick manufacturers,
distributors, and suppliers that generate jobs for approximately 200,000 Americans, we appreciate
the opportunity to assist the Committee‟s oversight of regulations that negatively impact brick
industry jobs and economic recovery. We are deeply concerned about the cumulative burden of
costly regulations that provide no commensurate benefit to environment, health and safety, yet
further jeopardize the economic viability of brick companies and domestic brick jobs.

According to the 2009 Annual Brick Industry Report, approximately 9,000 direct manufacturing jobs
and approximately 86,000 indirect brick jobs in distribution, design, installation and related fields
have been lost since the construction recession began in 2006. Because small companies
comprise more than half of the industry, our recovery is particularly threatened by current
rulemaking. The list below begins with two regulations currently being developed that will have the
greatest industry-specific negative impact on jobs unless changes are made to the agencies‟
signaled approaches, followed by broader rules that will intensify the disproportionate regulatory
burden the industry faces. As requested, we also list suggested reforms to the regulatory process.

EPA Brick MACT Rulemaking

Pursuant to the Clean Air Act (CAA) Amendments of 1990, the Environmental Protection Agency
(EPA) is working on reissuing a Maximum Achievable Control Technology (MACT) rule for clay
brick and tile in 2011/early 2012. EPA finalized the original Brick MACT in 2003 to regulate
hydrogen fluoride (HF), hydrogen chloride (HCl), and particulate matter (PM) that might be
produced when the mined raw materials (clay and shale containing natural minerals) are fired in
kilns to make bricks. The industry spent over $100 million to install and operate required control
devices to meet the 2006 compliance date. In 2007, more than a year after states had been
enforcing Brick MACT, the U.S. Court of Appeals for the D.C. Circuit vacated the rule and
instructed EPA to more closely follow the CAA.

EPA now is developing a new Brick MACT that penalizes the industry for its previous good faith
compliance. EPA is using the reduced emission levels from kilns with controls installed for the
vacated rule to calculate a more stringent baseline for all kilns. In March 2010, EPA estimated the
revised Brick MACT would cost the industry $188 million per year. Based on data from the U.S.
Census Bureau, brick manufacturers‟ total revenue in 2009 was approximately $940 million. EPA‟s
estimate results in an unsustainable 20 percent cost-to-sales ratio for this regulation alone. The
outcome will be higher prices and lost jobs as some brick companies may be forced to close plants
because they cannot afford or borrow the money required to replace existing controls or add newly
mandated controls. BIA is urging EPA to include the following reasonable approaches in the

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The Honorable Darrell E. Issa
January 10, 2011
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revised Brick MACT, as allowed under the CAA: exclude non-major sources when calculating the
MACT floor for a category of “major” sources; base the MACT floor on emission limits that real-
world best performing sources can actually achieve; exclude mined, mineral-based raw materials
from the MACT limit evaluation; and include a health-based standard for pollutants that do not pose
a risk because concentrations are below an established safe threshold.

OSHA Crystalline Silica Rulemaking

The Occupational Safety and Health Administration (OSHA) is expected to propose a rule in 2011
on occupational exposure to crystalline silica to substantially decrease the Permissible Exposure
Limit (PEL) across general industry. However, extensive scientific evidence demonstrates that the
risks from exposure to silica from quartz in brick clays and shale are not the same as risks from
quartz used in other industrial settings. Decades of studies indicate that silicosis caused by
exposure to crystalline silica is essentially non-existent in brick industry workers. BIA is concerned
that OSHA has undertaken the peer review process for the silica risk assessment document
without providing an opportunity for input from potentially impacted industries to ensure that this
brick-specific evidence is considered prior to the proposed rule.

The current crystalline silica PEL is amply protective of brick workers, and any reduction in the PEL
for the brick industry would be unwarranted. The increased cost burden of new control
requirements would provide no demonstrated health benefit for brick workers and jeopardize jobs.
Based on a preponderance of evidence, OSHA should differentiate brick operations from other
industries for the silica PEL. OSHA has the statutory authority to maintain the current crystalline
silica PEL for brick manufacturing workers, even if OSHA reduces the PEL for industry in general.

EPA Greenhouse Gas Emission Regulations

Like many other industries, brick manufacturing jobs will be impacted by EPA‟s regulation of
greenhouse gas (GHG) emissions from stationary sources under the Clean Air Act‟s New Source
Review (NSR) program. Although only the largest industrial sources are impacted by the GHG
regulations that began on January 2, 2011, under EPA‟s NSR/Prevention of Significant
Deterioration (PSD), the groundwork is set for smaller sources such as brick kilns to be regulated
in the next few years. The brick industry could be quickly enveloped, resulting in lengthy permit
review processes as states struggle to keep pace with the new permitting requirements. While
EPA may ultimately require little or no change to brick operations, particularly because more than
80 percent of brick kilns are fired by natural gas, significant permitting delays will stifle job creation
and the industry‟s recovery. EPA also has indicated its intent to begin regulation of GHG
emissions from specific industrial categories under other sections of the CAA, e.g., Part 60 New
Source Performance Standards (NSPS). While the brick industry is not the first industry for which
NSPS and other rules will be developed, it is an energy-intensive industry that likely would be
targeted soon.

EPA NAAQS Review of SO2 and PM

EPA is tightening all of the National Ambient Air Quality Standards (NAAQS) which set maximum
allowable air concentrations of sulfur dioxide (SO2), particulate matter (PM), ozone, nitrogen
dioxide, carbon monoxide and lead. BIA is concerned that EPA‟s approach could cause significant
permitting issues for facilities that are considered “major” sources for each of these pollutants, as
well as impact smaller brick kilns. In the past, state programs to address NAAQS levels were
generally able to demonstrate that they could reach “attainment” levels by focusing on regulation of
“major” sources. However, some of the reduced levels that EPA is considering, such as for SO2,
are so close to current “background” levels that EPA‟s potential new standard could virtually
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January 10, 2011
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eliminate future job growth in certain states and regions. EPA also is changing how “attainment”
with these standards is determined. Under the SO2 NAAQS, an area could not certify that it is in
“attainment” with the new levels if a computer model shows that there could be non-compliance,
even when all existing actual monitors show the area to be in compliance with the new level.

EPA Case-by Case MACT Regulations for States

While EPA is redeveloping the federal Brick MACT rule, the agency also is currently finalizing
regulations to modify the implementation of the case-by-case MACT review required under CAA §
112j. Once finalized, these regulations would require every major source facility within four source
categories, including the brick industry, to conduct a case-by-case MACT analysis with the state‟s
environmental division. The paperwork burden of developing individual permit applications to meet
the requirements of specific states would be significant and unnecessary because EPA has
acknowledged that the revised federal Brick MACT likely will be promulgated before any CAA §
112j permits would be issued. Once the federal Brick MACT rule is reissued and finalized, any
CAA §112j permits by states that are not finalized would not be completed. As BIA and other
stakeholders noted in comments filed with EPA, EPA should not finalize these regulations because
the agency is incorrectly interpreting that a rule‟s vacatur triggers CAA § 112j in the first place.

OSHA Noise Proposal

In October 2010, OSHA issued a notice for a new interpretation of economic feasibility relating to
engineering and administrative controls for its current noise reduction standard, 29 CFR 1910.95.
While the proposal is neither a proposed regulation nor standard and does not lower the threshold
for employee noise exposure, it would be a dramatic change in long-standing OSHA enforcement
policy. Currently OSHA allows employers to provide personal protective equipment (PPE) such as
ear plugs and headphones if they are more cost-effective noise reducers than expensive
engineering controls. OSHA plans to abandon this common-sense practice by requiring employers
to implement all “feasible” controls regardless of costs (or the effectiveness of currently-used PPE)
unless an employer can prove that making such changes would “put them out of business” or
severely threaten the company‟s “viability.” This reinterpretation of existing policy has the potential
to be extremely subjective, disruptive and expensive, diverting resources away from job creation
for no additional reduction in noise exposure. Although the original comment period has been
extended to March 21, 2011, BIA is concerned that OSHA is not compelled to consider stakeholder
feedback because it is attempting these changes outside the formal rulemaking process. This
reinterpretation of policy is an example of federal government regulation without agency
compliance with the full requirements of rule development and should not be allowed.

Suggestions on Reforming Regulations and the Rulemaking Process

Consider Controls and Standards Required by Rules Vacated After the Compliance Date
BIA encourages the Committee to explore possible legislation to prevent the negative economic
impact that industries bear when a regulation is vacated by the courts after the compliance date.
Brick MACT is an ideal example of why Congress should require agencies to „grandfather‟ or give
special consideration to controls, equipment, and work practices that were installed or undertaken
to comply with a regulation that was subsequently vacated after the compliance date. Such a
reform would avert considerable uncertainty and expense for companies and jobs when the
regulatory goalposts are moved despite good faith compliance.

Require Full and Formal Rulemaking Process

Another helpful reform would require agencies to make guidance, interpretations, or proposed
changes to standards or enforcement authority using the full rulemaking process. Formal
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January 10, 2011
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rulemaking compels public comment and review, as well as oversight by the Office of Management
and Budget (OMB) to ensure maximum benefit per dollar invested to comply with regulations. BIA
encourages Congress to examine ways to prevent agencies from regulating through backdoor
“guidance,” “interpretation” or “proposals” outside the formal process because such measures can
create enormous burdens and be even more difficult to challenge legally.

Ensure Regulatory Costs are Reasonable

BIA also supports the goal of the REINS (Regulations from the Executive in Need of Scrutiny) Act,
by Congressman Geoff Davis and Senator Jim DeMint. If Congress were required to pass a joint
approval resolution for any regulation costing more than $100 million, without inhibiting
stakeholders‟ legal rights to challenge regulations, the regulatory burden from across agencies
could be reduced. Congress also should consider adopting a second criterion to ensure that no
regulatory requirement would cost the targeted industry more than five percent of its gross annual
revenue without congressional approval. This reform would ensure that smaller, but still vital,
industries cannot be regulated out of existence without oversight.

Thank you for your leadership and the opportunity to submit our concerns about the negative
economic impact on brick jobs from existing and pending regulations. Because brick jobs are
dependent on a still-recovering residential and commercial construction market, regulatory
overload that further depletes limited resources is a critical industry issue. We look forward to
providing additional details to you and your staff as the Committee undertakes its oversight work in
the months ahead. Please let us know how we can be of further assistance.

Sincerely,

J. Gregg Borchelt
President and Chief Executive Officer