California might be known for giving birth to the high-tech industry during the 1970s, but North Carolina, with our famed Research Triangle Park, is quickly becoming Silicon Valley East. Over the past three years, Apple announced it would invest $1 billion to build a new Research Triangle campus. Epic Games is converting a defunct mall into its new headquarters. Wolfspeed is building a state-of-the-art manufacturing facility in Chatham County. These companies are joining IBM, SAS, IQVIA, and Cisco, which already call the Raleigh area home.
None of this happened in a vacuum. North Carolina has historically cultivated a robust business environment, with the Research Triangle Park serving as an oft-cited example of a public-private partnership fostering economic development. It is no wonder that in 2022, CNBC designated us the No. 1 State for Business in America and that the Raleigh and Charlotte areas routinely crack lists of the top 10 places to live in the United States.
Meanwhile, on the other side of our country, California has aggressively moved in the opposite direction, imposing massive taxes and regulations that are causing businesses to flee the once-Golden State. While many elected officials in North Carolina understand this, regulations from the administrative state anchored in Washington, DC, could handcuff the progress we have achieved.
Recently, the Environmental Protection Agency, led by Michael S. Regan, a Goldsboro native who previously served as the secretary of the North Carolina Department of Environmental Quality, announced it is considering taking regulatory action on the chemical formaldehyde. Scientists refer to formaldehyde as a “building block” chemical, and it is used in hundreds of industrial applications, including automobile manufacturing, construction, health care, consumer goods, and semiconductors. It is a critical element of aerospace components, including electrical systems, brake pads, airline wings, lubricants, and seatbelts.
Several federal agencies, including the Occupational Safety and Health Administration, have a record of support for formaldehyde’s safety in various applications at certain levels. Even the generally heavy-handed European Union regulators have determined that any health risks presented by formaldehyde can be adequately controlled.
The semiconductor industry is very important to North Carolina’s economy — and without our state, the global semiconductor industry would literally not be able to function. But if the EPA takes a swing at formaldehyde, the Tar Heel State might not be able to keep producing these products that our nation so desperately needs.
Another important consideration is the military. Our men and women who serve our nation on bases like Camp Lejeune, Fort Liberty, and the Johnson Air Force Base rely on formaldehyde to keep us safe. Formaldehyde is a critical component in rubber, oil and gas, explosive materials, electrical systems, construction materials, and lubricants, all of which are indispensable in the effectiveness and readiness of our Armed Forces.
If regulations are implemented, the high-tech community and our military readiness will not be the only areas affected. Other industries, many of which are based in North Carolina, would also be impacted. For example, North Carolina — the First in Forestry State — has over 139,000 jobs (and $184 million in state taxes) tied up in its robust forest-products manufacturing industry. Our state is also the furniture manufacturing capital of the world, employing more than 35,000 people.
EPA restrictions or bans on formaldehyde would have a dramatic impact on these essential jobs-producing sectors of our economy, placing domestic producers at a competitive disadvantage relative to manufacturers in foreign countries like China.
EPA’s risk assessment would establish an exposure standard that manufacturers could not meet. No exaggeration is needed to see that this proposed EPA rule represents a departure from the consensus of other government agencies and international regulators. That is why one member of Congress said it was “one of the most studied, understood, and regulated chemical substances in commerce today.”
We all want workers to be safe; however, some regulatory proposals miss the mark. And once they are enacted, they have unforeseen consequences. The EPA must adhere to sound science and consider the collateral effects of such a broad regulatory scheme on economic prosperity and national security. In this case, the consequences are plain for all to see. Imposing new regulations on formaldehyde will cost jobs, stifle innovation, and threaten the readiness of the US Armed Forces. The burden is on the EPA to demonstrate otherwise.