What the industry pathway forward looks like in Washington

The election came and went, and Joe Biden is preparing to take up the presidency on Jan. 20.

The National Stone, Sand & Gravel Association (NSSGA) is also making preparations to work with the Biden administration and the 117th Congress to advance policies that best serve the aggregate industry.

NSSGA has already met with new members of Congress to ensure they’re up on the industry’s top issues and familiar with industry leaders. And as the new government prepares to settle in, NSSGA staff leaders are optimistic about the prospects of getting things done in 2021 and beyond on the issues that matter most to aggregate producers.

“I’m confident the industry is in a good place,” says Michael Johnson, president and CEO of NSSGA. “While elections matter, part of our job at NSSGA is to make sure they don’t matter all that much. We strive to be positioned for whatever happens on Election Day, to make sure we’re ready to drive this industry and policy forward to produce aggregates safely and profitably.”

Biden’s governing approach

Four days after Election Day, Biden delivered a speech pledging to be a president who unites the nation. That, of course, is no easy task, but Johnson argues that the best pathway forward – for the aggregate industry, at least – is through cooperation.

Given much of the rhetoric during the campaign season, it’s clear the U.S. remains a divided nation. Biden will have to pursue a moderate agenda for any healing to take place, but the progressive wing of the Democratic Party has some ideas of its own about the governing approach Biden should take.

Still, given the outcomes of the election, NSSGA leaders expect the Biden administration to take a more centrist approach to doing business. And that approach, NSSGA leaders say, should benefit aggregate producers.

“When you look at the margins in the House getting slimmer and the Democrats’ Green New Deal efforts, those just aren’t real as an avenue for them to pursue,” Johnson says. “On the flip side, the Republicans aren’t going to stop talking about socialism because they want to motivate their base.”

Michele Stanley, vice president of government and regulatory affairs at NSSGA, agrees wholeheartedly that producers can expect Biden to take a more moderate approach as president. The voting public, she says, put checks in place for their government in November, making the most effective policy road ahead for Biden a more moderate one.

“Not only are the margins small in the House, but even if Democrats win the two [Senate] seats in Georgia, there’s still not going to be a big margin in the Senate,” says Stanley, who was named a top 2020 lobbyist in December by The Hill. “To get super-progressive Green New Deal kinds of legislation through the Senate, you would have to not lose any Democrats. So trying to get something super progressive through both chambers is going to be very difficult.”

In the weeks after the election, Stanley was encouraged by early selections Biden made for his Cabinet and other high-profile government positions.

“On the administration front, the Biden administration is going to have to bring forward people who can be confirmed by the Senate,” she says. “If you’ve seen some of the names being put forward, they are very moderate – including some people who have been confirmed before by the Senate.”

Infrastructure

According to Stanley, some of those same people handpicked by Biden made recent statements expressing their interest in addressing the nation’s crumbling infrastructure. Passing a multiyear highway bill for infrastructure investment remains goal No. 1 at NSSGA.

So far, Stanley likes what she’s hearing from Biden administration leaders about this key industry issue.

“The House is already working on their version of the [infrastructure] bill,” she says. “They’re already doing outreach about what changes people would like to see from H.R. 2. At least on the House side, they’re definitely intending to do [infrastructure] in the first 100 days.”

Infrastructure investment is essential to give the economy a boost, Johnson adds. And the opportunity is there this year for at least a couple of reasons.

“The Democratic majority in the House did not expand,” he says. “They have fewer seats, which means they are even less likely to pass bills that are on the progressive extreme. They’re going to have to do legislation they can get through the House and then the Senate.”

And infrastructure happens to be one of those issues where compromise can be had.

“We’re looking at a Senate that is going to either be a small two-seat majority for Republicans or possibly 50-50 with a tiebreaker in the VP for Democrats,” says Johnson, referencing the two Georgia Senate seats that were still up for grabs at the time he was interviewed. “If they get control, I think the Democrats realize their new President Biden needs some victories.”

The combination of Biden and Sen. Mitch McConnell (R-Kentucky) could also bode well for passage of a multiyear highway bill, according to Johnson.

“Looking at Joe Biden and Mitch McConnell as the Republican leader in the Senate, I’d challenge you to go back and look at the major pieces of legislation passed during the Obama administration,” Johnson says. “You’ll find that most of those bills were the result of Joe Biden and Mitch McConnell coming together.”

Regulatory watch

While working to see that a multiyear infrastructure bill is passed remains the priority at NSSGA, association leaders are readily assessing the regulatory environment and potential changes now that the government is in transition.

Will the regulatory environment present more challenges under Biden? Johnson suspects this is a possibility. But he is somewhat optimistic on industry regulation, again, because of the checks the voting public just put in place.

“I think President Biden realized that, if he manages to lose the House or have the Republicans either retake or expand a majority in the Senate in two years, then he’s essentially a ‘two-year’ president,” Johnson says. “I think you’ll see the extremes on both sides be mitigated by the reality in Washington, which is very slim margins.”

On the bright side for producers, Stanley says any new regulations the Biden administration pursues will take years to come to fruition. Take, for example, Biden’s attacks on the oil and gas industry during the campaign. Aggregate producers, obviously, rely heavily on the oil and gas industry. They could not effectively run their plants or equipment without it.

But, even if Biden decides to put limits on fracking or eliminate it entirely, Johnson argues he’ll have to go through a few Senate Democrats who might resist such action.

“What I have heard and read out of the Biden campaign – and I haven’t heard anything different out of the president-elect yet – is that he would end federal subsidies for fracking,” Johnson says. “I think there will be a lot of members of Congress from the president’s own party who will have a lot to say about that, including (Sen.) Joe Manchin (D-West Virginia) and (Sen.) Sherrod Brown (D-Ohio). They’re important votes. Sen. [Bob] Casey (D-Pennsylvania) is an important vote, too. They will have an opinion on that.”

Energy policy is especially important to NSSGA now that it has an Industrial Sand Division.

“They are a big part of American energy independence and producing energy at home that strengthens our economy,” Johnson says.

Still, if Biden does pave a new pathway forward for energy, aggregate producers could potentially benefit.

“One of the things we see as an upside to some of the additional energy infrastructure ideas are the large amount of aggregate that goes into windmills and solar farms – things like that,” Stanley says. “It presents an opportunity for our members to sell and use more of their products in energy’s way forward.

“We try to look for opportunities in anything that comes out of either chamber of Congress or the administration,” she adds. “This would be another one of those opportunities.”

Other considerations

If necessary, NSSGA leaders are prepared to play defense with the Biden administration or the next Congress, too.

The Waters of the U.S. (WOTUS) rule, for instance, could once again be the target of changes under the Biden administration, according to a Wall Street Journal report. If lawmakers once again zero in on the rule, NSSGA is prepared to step in and advocate on behalf of the industry, Stanley says.

Fortunately, the association is more confident about WOTUS’s standing following the 2020 rule that was put in place.

“I think the Biden administration is going to face significant challenges in undoing the 2020 WOTUS rule,” Stanley says. “The 2020 rule, unlike 2015, doesn’t have any significant legal setbacks yet. There are 13 states where there’s litigation, but none of them have gone like they did in 2015. We feel this new rule is lawful and reasonable, and we communicated its importance to economic recovery and the infrastructure side directly to the administration.

“It will take years, if anything does happen,” Stanley adds. “We’re preparing for some sort of amending of the rule.”

One area of concern at NSSGA is the Department of the Interior. This is one federal department where Johnson would particularly like to see a secretary appointed who’s willing to work with the industry.

“We cannot afford to have someone in that position who thinks all mining is bad mining, restricting access to aggregates across this country,” Johnson says. “We have, and will continue to express, a strong opinion about being able to access aggregates to keep infrastructure affordable and help communities build homes, schools and other things. All of those things are essential and need to be done locally.”