New President and CEO of the Portland Cement Association Speaks Out On the Cement Industry, Its Regulatory Burden and Building Codes, Among Other Topics.
By Mark S. Kuhar
Congratulations on being named president and CEO of the Portland Cement Association. Can you tell our readers a little bit about your background?
It’s a real honor to lead a prestigious organization like PCA, particularly on the eve of its 100th anniversary. PCA has an exceptional history, and with the talented staff we have, I look forward to a solid future.
I came originally from the nuclear energy industry, where I gained appreciation for the critical role an industry can play in our society, as well as experience with tough regulation and environmental responsibility. I have worked in the concrete industry, which is intimately intertwined with the cement industry, for 17 years. I’m also fortunate to have over 30 years’ experience as an association CEO, and I understand the many ways in which a capable association can advance an industry.
What is job number one for you as you get up to speed in the cement industry? As with any new job, there are goals and aspirations. What would you like to accomplish in the coming years?
My top goal is to strengthen PCA’s role as a prime source of knowledge and information to advance the beneficial applications of cement and concrete. I plan to accomplish this by honing PCA’s organizational capabilities and by boosting the level of industry-wide collaboration to new levels.
The regulatory burden never gets any easier. How is the industry adapting to PC MACT NESHAP compliance?
Regulatory challenges have been mounting not only for the cement industry, but also for many other essential American industries. EPA’s NESHAP standards are very strict and will require significant physical and operational modifications to many cement production facilities. Our industry worked with EPA during the NESHAP rulemaking process to arrive at a practical, achievable timeline for accomplishing this.
There are other regulatory issues we will need to address. For example, in response to environmental concerns, some cement plants began burning waste products as a fuel source, and EPA has applied its standards for Commercial and Industrial Solid Waste Incinerators (CISWI) to these facilities. For cement plants, CISWI applies to the same types of air emissions does NESHAP, but CISWI standards are much stricter. We don’t want to discourage cement plants from considering this environmentally responsible activity. And of course, cement and other U.S. industries are concerned about EPA’s planned actions regarding ozone and carbon dioxide.
How will the Waters of the U.S. Rule impact cement operations?
First, EPA’s regulatory authority in this area is still uncertain. As currently proposed, however, the impact of this rule would be substantial. EPA’s rationale, if followed to its logical endpoint, would give it unlimited control over U.S. waterways, lakes, streams, ponds, pools, wetlands, drainage ditches and virtually anything in the environment that contains water at any time.
Cement plants sites typically include limestone quarries, from which the primary raw material for making cement is drawn. Areas along the quarrying sites and access pathways can contain water, at least on occasion. This situation is not unique to cement plants; many industrial and agricultural lands have similar conditions. Under the proposed rule, these areas could be deemed part of the “Waters of the U.S.,” creating new restrictions where none have ever existed. In such cases, industrial and agricultural activities that have been practiced for decades could require permitting, or could possibly be banned altogether.
In the big picture, the real problem is not with our nation’s cement plants or factories or farms. The real problem is a regulatory philosophy that imposes ever-greater costs on U.S. industry, when the environmental and health benefits are insignificant or disputable.
We all want a clean and healthy environment for our children and ourselves. A trip to Beijing will make anyone appreciate the level of environmental responsibility we in the U.S. have exercised over the past four decades, and we should be proud of that. However, in some areas we may have reached the point where tightening controls even further imposes a significant burden on the economy, but has insignificant benefit to the health of our citizens.
PCA Economist Ed Sullivan is very bullish on the construction market, especially residential construction. How do you see that market expanding over the next few years?
I think Ed is bullish, but not “very” bullish. As the economy regains its footing, all sectors of the construction market will recover, at least for several more years. The percent gains projected for residential construction must be viewed in the context of the depressed levels of building activity we’re starting from, which are very weak compared to historical levels.
An expanding market enhances the attention focused on construction, which presents opportunities to advocate durable, resilient and energy-efficient construction, and to showcase concrete products and systems that offer these benefits.
Several good jobs report have been released. How do you see that impacting commercial construction?
Actually, the situation with jobs impacts all types of construction. Here’s why:
First, when you hire a worker, you’ve created a taxpayer. As tax revenues recover and state deficits heal, we will see an increase in spending for public construction.
Next, we expect three million net new jobs to be created this year, and one in five of these will be office jobs – that’s 600,000 additional office jobs. With that momentum, office occupancy rates will increase and leasing rates will firm up. This will in turn improve the return-on-investment motivation for nonresidential construction.
Finally, a stronger jobs market generally drives the formation of new households, which translates into demand for housing.
So all-in-all, jobs is the single biggest contributor to a sustained recovery in construction.
PCA is a strong advocate for building code reform. What would you like to see happen to building codes around the country to avoid tragedies such as Avalon at Edgewater in New Jersey and the downtown fires in Los Angeles?
Building codes were originally intended for a single purpose – to set standards for building safe structures. In more recent times, particularly during the recent economic downturn, arguments were made that codes should also consider “affordability.” In response to this pressure, step by step, code criteria for the cores and shells of buildings have been relaxed.
It’s disputable whether this compromise has actually worked as intended. Lower construction costs definitely benefit builders and developers, but generally not occupants; reduced safety definitely harms occupants, but generally not builders and developers. This scenario has resulted in structures that cannot withstand fires or excessive forces of nature.
Most occupants of residences and offices have no say in how their buildings are constructed. They have no say in matters such as safety, durability, resilience, energy efficiency and maintainability. Many organizations, PCA included, have tried to sound the alarm bell on behalf of building occupants. Ultimately, though, the only authority that can consistently protect the interests of building occupants is the building code. But we may have gone too far in trading away safety in exchange for lower cost in our building codes.
PCA recommends improving our building codes in three areas. First, stop trading off structural fire resistance and other fire-related requirements just because a building has automatic fire sprinklers. Sprinklers can provide an additional layer of safety, but cannot substitute for a fire-resistant structure. Second, demand that buildings be designed with increased load capacity and better-performing materials to withstand severe weather events, as recommended by the insurance industry. Third, mandate that building designers recognize realistic base flood elevations, and stop assuming that levees that are frequently breached or overtopped are flood protective. Alternatively, require designers provide increased distance from projected flood levels up to the bottoms of habitable floors (freeboard).
The Avalon Apartment complex was a luxury apartment building. Affordability was probably not a major factor to its residents, who nonetheless saw their homes and possessions totally destroyed. But the concern here goes beyond any one building – it impacts the entire community. A catastrophic fire in an individual building, even if it is under construction and unoccupied, can affect adjacent structures, put first responders at risk, consume public safety resources, and generally disrupt lives and businesses in the area. In the aftermath, it is little consolation to realize that the builder or developer was probably able to save 1 or 2 percent on construction costs thanks to less stringent building codes. If life and property matter, then building codes matter.
Now let’s talk about sustainability. We hear a lot about the “sustainability” of different competing building materials. In reality, most of a building’s energy and environmental impact results from its operation, not its construction. But whatever the energy and environmental impact of construction may be, it’s all wasted if the structure is destroyed early in its life by fire, storm, or other force of nature and can never be used again. Buildings need the strength to stand up to such forces. Also, if damage to a community is severe and widespread, the community itself can perish. We have all seen cases where a tornado has virtually wiped a small town off the map. Critical structures within a community need to be able to withstand natural forces and rapidly “bounce back” to serve the needs of the impacted population. This is resilience. If sustainability matters, then strength and resilience matter.
The future of buildings can be bright, if we make it bright. PCA will do its part to make our future bright by providing information and support to code officials and other decision makers, stressing the importance of building safe, strong, and resilient structures. We are confident that others who understand these issues will join us.
Can you comment on the controversy with the new McInnis Cement Port-Daniel–Gascons plant in Canada, and whether or not that plant is indeed Canada’s attempt to “illegally subsidize” the cement industry, to the detriment of the U.S. market?
This sounds like an interesting topic, but is not something of concern to PCA.
What are your hopes for a U.S. infrastructure bill? What do you think the chances are that cooler heads will prevail in Washington this year to get an adequately funded bill passed and signed?
We’re past the point of “hopes.” The Highway Trust Fund will run out of money very soon. The last comprehensive transportation bill expired seven years ago, and we’ve been limping along with temporary funding patches since then. We simply must make sure that a multi-year transportation bill is passed by Congress and signed into law, and soon.
Overall, the roads in this country are in poor shape. The civil engineers have given them a grade of “D,” which means most are substandard with significant risk of failure. The U.S. needs to build new roads, repair old roads, fix dangerous intersections, relieve congestion, and generally bring its transportation infrastructure up to the standards of the world’s leading economy. We hear about intelligent transportation systems, which use sensors and computers to improve transportation safety and efficiency. But how can the U.S. develop the transportation infrastructure of the future, when we don’t even fix the substandard roads we have?
Users pay taxes and rely on their state and federal governments to monitor and maintain the quality of their transportation system. At the federal level, government has let them down. States are reluctant to invest in new multi-year projects when the federal government cannot make commitments for more than one year at a time, so many desperately needed projects sit on the back burner.
I think that our elected officials in Washington understand this, and see how the failure to pass a long-term transportation bill has held us back. I believe that they want to avoid getting to the point where serious transportation issues are in the news every day. Fortunately, we see bipartisan support for a fully funded, multiyear highway bill. What we don’t yet see is agreement on a funding mechanism, but that’s what we pay our legislators to figure out.