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PCA’s new man in town

World Cement,

Katherine Guenioui interviews Greg Scott, PCA. This article is an abridged version of the full article, which appeared in the IEEE 2013 supplement of World Cement. Subscribers can view the full article by logging in.

Towards the end of 2012, World Cement Editor Katherine Guenioui went to Washington to interview Gregg Scott, President and CEO of the Portland Cement Association (PCA). Scott first joined the PCA as Senior VP of Government Relations. His previous experience includes Executive Vice President and General Counsel for the American Fuels and Petrochemical Manufacturers (previously the NPRA) and partner in a DC-based law firm representing trade associations in the energy and manufacturing area.

KG: At times, the cement industry gets some negative attention from the media, and of course the oil and gas industry is no stranger to bad press. Do you think this is one way in which your previous position prepared you for this role in the cement industry?

GS: I think the two industries present similar challenges in terms of their public profile. Both industries are making vital components that consumers use every day, but in many cases consumers also take those components for granted. I think the PCA executive committee saw I had expanded NPRA’s lobbying and government relations footprints significantly in the four years that I was there and I think there was a desire to do similar transitioning with PCA. But you’re right, they’re both basic manufacturing industries; they’ve both had swings in terms of the impact of the recession on the industry and the demand for the product. Quite frankly, I think the oil and gas industry has a tougher row to hoe in terms of its public perception than the cement industry does. I think the cement industry is regarded as a strong manufacturing foundation of the United States. I have not heard the President talking about repealing cement industry tax breaks. He’s talked about repealing oil and gas industry tax breaks – he talks about ‘Big Oil’; you don’t normally talk about ‘Big Cement’. The cement industry does not have the profile that the oil and gas industry does – and that’s a good thing.

KG: Was the desire to expand PCA’s lobbying activities part of the reason for moving its headquarters to Washington?

GS: PCA mulled shifting its focus to the Washington DC area for perhaps a decade or more, but it only just this year decided to make that transition. PCA has two missions as outlined by its members: the first is market development. Simply growing the market share of the product. And obviously what goes on in Washington DC – whether it’s the Highway Bill or the Water Resources Bill or the Aviation or Transportation Bill – all contain an enormous amount of money that is going to be spent by federal, state or local governments on construction projects. So that’s the market development side of things. The second is business continuity, and that is: can we continue to manufacture cement in the United States with the cost of environmental and regulatory compliance with the Clean Air Act, the Clean Water Act, etc? If there were at some point to be a price on carbon, how would that impact the domestic industry? So there are two major focus areas and both of those are to a certain degree tied to what goes on here in Washington. Our Skokie operations will continue to be a vital part of PCA; there are no plans at this stage to move or shut down the Skokie operation and move everybody into Washington. It really is a shift in name and personality and not so much in where people are doing their work. The vast majority of the government relations will continue to be done here in Washington; a bit more of the direction of the association will be done out of Washington because that’s where I will be. But much of our technical work, our communications and market intelligence work will continue to be done out of the Chicago-land area for the foreseeable future. So yes, government relations holds a major reason for shifting here to Washington, but Skokie is going to continue to be an important base for PCA for years to come.

KG: Is it true to say, then, that membership to PCA gives cement producers access to a centralised force for market development and government relations?

GS: Yes, those are the two major goals our members have set out for us and we have a strategic business plan that focuses on those two goals. Just about everything spins off them. If it doesn’t relate to those goals, you have a hard time convincing our Board and our Executive Committee that it is a core issue that we should be spending time on. So just about everything we do we ask ourselves ‘how does that relate back to our core goals?’ and, if it doesn’t, let’s reconsider whether we should be spending time on it.

KG: And of course, coming together as one entity must offer cost and time efficiencies in comparison to working alone?

GS: Absolutely. Take building codes as an example: if every member had to go before the code writing bodies individually it would be very inefficient and very costly. Another example is PCA’s work with the Ready Mixed Concrete (RMC) Research and Education Foundation at MIT: the MIT Concrete Sustainability Hub, which is conducting research into sustainability and a lifecycle cost analysis of cement versus other building and paving materials. That’s a perfect example of where, as a collective, we can achieve better results than we can individually and that research can go to the standard setting bodies to help determine what the appropriate standards are for cement and concrete.

KG: What would you say are the short and long-term challenges for the US cement industry?

GS: I think the short-term challenges for the industry are based in both the world and domestic economy.

KG: Are you referring to the fiscal cliff?

GS: Well, more generally, the economy. Shipments are down about 45% since 2005; we’ve seen some growth in the last several quarters in terms of cement demand but we’re starting at a very reduced level, so it’s going to take a while to get back to some of the levels we were seeing in 2006, 2007, at the height of the housing boom. […] Longer-term we have a variety of challenges. Cement is well positioned in terms of both its carbon footprint and its cost – so both in terms of LCA and LCCA analysis – in comparison with competing materials. I think there will be a challenge in the future regarding environmental regulations and potential prices on carbon, which – as you know – is a path the EU has already gone down. So far the US hasn’t gone down the path of carbon tax or a cap and trade system. The cement industry is very energy intensive and trade vulnerable. So as this association did back when Waxman-Markey was being considered in 2008/2009, we’ll be watching what Congress does very carefully in terms of any type of carbon tax or a new cap and trade proposal.

There are a variety of short and long-term challenges. I don’t believe that the 2012 elections changed anything dramatically – we still have a Republican House and a Democratic Senate and a Democratic White House. I think from the point of view of the cement industry and our members, we are hoping that the legislators and the White House will come together on an agreement because that’s what’s good for the country and what’s good for the country’s economy, rather than try and score political points at the expense of the other party. Now is the time for cooperation, not confrontation, but it’s also a time for compromise, not trying to mandate one way or another. That would be our approach. PCA is not saying ‘let this expire’ or ‘do this’, it’s simply saying ‘come together and do not allow your disagreements to impact the US economy’, and that’s our primary motivation in the short-term.

KG: And finally, what do you hope your legacy will be as CEO of the PCA?

GS: What I would like to see as my legacy is as one who successfully manages this transition from being a trade association based outside of DC to one that is headquartered in DC and that has a very strong presence in the federal government relations area. I’d like PCA to be well thought of throughout the federal government in terms of a technical resource, in terms of how we represent our members and how we both offensively and defensively present the issues that we’re involved in. I’d like to look back on my tenure at PCA – let’s say 10, 15 or 20 years from now – and say ‘Boy it was really tough in 2012 but it got better. The economy recovered and the demand for our product went up. We succeeded on both the business continuity and the market development side in opening up opportunities for our members to grow’. I would see that as a wonderful legacy to leave.

Katherine Guenioui interviews Greg Scott, PCA. This article is an abridged version of the full article, which appeared in the IEEE 2013 supplement of World Cement. Subscribers can view the full article by logging in.

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