First 100 Days: Where Do We Go from Here?
What does the future of the HVACR industry have in store?
Unprecedented. Unconventional. Chaotic. Exhausting. Whatever adjective you use to describe them, the first 100 days of the Trump presidency were a crazy time for our nation. People across the country — and around the world — have watched and tried to understand the policy directions of this White House. What have the first 100 days meant for the HVACR industry and what do they portend for the future?
We know from history that campaign promises should always be taken with a grain of salt. It’s common for many to never come to fruition — situations change, Congress gets in the way, or it could be that certain promises were never sincere to begin with. So, it should not be surprising that, of the 10 major legislative proposals that President Donald Trump pledged to introduce and pass during his first 100 days, few have been enacted. The administration’s recent experience with the “repeal and replace” of the Affordable Care Act has shown that the president must walk a fine line in his own party if he is to find consensus. Other promises, such as labeling China a currency manipulator, have been reversed. It’s becoming clearer that the realities of governing will temper some of the promises of the campaign.
The failure to get health care through the House and the Senate has had a domino effect on the Trump agenda’s forward progress. While the future of health care remains up in the air, the potential for tax reform becomes more difficult to predict. And infrastructure spending is dependent on a tax bill. The thigh bone is connected to the hip bone and so on.
Further down Congress’s priority list is a series of energy-related bills that could favorably impact our industry. Sens. Rob Portman, R-Ohio, and Jeanne Shaheen, D-N.H., have reintroduced the Energy Savings and Industrial Competitiveness Act, which received bipartisan support in the last Congress and was 90 percent of the way through the legislative process when the clock ran out before it had the chance to be voted on by both chambers. This bill would, among other things, promote more energy conservation in almost 900,000 federal buildings, improve energy efficiency in manufacturing facilities, and help strengthen model energy codes. Important legislation has also been sponsored by Reps. Donald Norcross, D-N.J., and David McKinley, R-W. Va., that would boost workforce development programs in the energy field.
In the White House, the first 100 days witnessed many signing ceremonies of executive orders. It has been made clear that we should not expect the Clean Power Plan (CPP) to be enacted in this presidency. Besides encouraging the shift from coal, the CPP also emphasized energy-efficiency programs and would have created more jobs in that sector.
As of this writing, the fate of the U.S.’s role in the Paris Climate agreement is unclear. President Trump first said he would pull out of it, but has since seemed to change his stance. There are reports that his advisors are pulling in different directions. What’s just as interesting is that a diverse set of companies — including Exxon, GE, Intel, Bank of America, and several in the HVACR industry — see potential business opportunities in the Paris agreement and are publicly advocating that the U.S. remain part of it while also calling for the private sector to increase its investment in low-carbon technologies. It will take both if the U.S. is to assume global leadership in the transition to a sustainable energy economy.
We still do not know how the Trump administration’s policies will affect the march toward lower-GWP (global warming potential) refrigerants. For some refrigeration applications, high-GWP refrigerants, such as R-404A, are already banned from most new equipment. But, the U.S. Environmental Protection Agency (EPA) has not yet acted on phasing down the use of high-GWP refrigerants from rooftops and central air conditioners, and it is not clear when or if that will happen. And, with the administration’s announcement of a significant downsizing of EPA staff, it will be more difficult to promulgate new regulations. Add to that the fact that the EPA is the subject of at least two legal suits challenging its authority to regulate hydrofluorocarbons (HFCs), and the result is an uncertain future for which manufacturers, distributors, and contractors need to plan. At the same time, the state of California has just approved a plan to design its own phasedown of high-GWP substances, so the possibility exists that it, and possibly other states, could mandate different equipment standards than the rest of the country. Certainly, that should be of great concern.
CHANGE FOR THE GOOD
Of particular interest to equipment manufacturers and the HVACR community as a whole is an effort to update the 1975 legislation that authorizes the U.S. Department of Energy (DOE) to develop equipment testing procedures and to set minimum efficiency standards. Manufacturers pushed for the passage of the Energy Policy and Conservation Act (EPCA) of 1975, preferring a consistent national standard to a smattering of state standards, but the DOE process has become outdated, burdensome, and, most importantly, does not always result in the best outcome for consumers. Why care? Because minimum efficiencies have pushed most HVACR equipment to their economic limits. Certainly, more energy productivity can be extracted through better installation and maintenance practices. And, in many cases, the full system — equipment, ductwork, pumping, controls, etc. — can be the source for additional energy efficiency. EPCA reform could result in ceasing the endless cycles of equipment regulations, more affordable equipment, and a change of focus to improving full system efficiency.
As the 100-day mark has come and gone, many questions and unknowns remain for our industry. This is a great opportunity to voice your interests, either individually or through your trade associations. Democracy is not a spectator sport. Let your legislators know about your interests and those of your company.
There may be more than 1,300 days left in this term, but don’t wait to let your views be known.
Publication date: 6/5/2017