Looking for Opportunity

1. Regulatory Change Opportunities

Executive Order 13650, signed by Obama in August 2013, was signed to help improve chemical facility safety and security following several catastrophic incidents in the United States. The Environmental Protection Agency has issued proposed rule changes called the Risk Management Modernization Rule to satisfy the intent of this order. These rule changes can be found at www.gpo.gov/fdsys/pkg/FR-2016-03-14/pdf/2016-05191.pdf. Facilities that use extremely hazardous substances are required to develop and maintain a detailed Risk Management Plan. The Risk Management Plan or RMP, addresses hazard assessment, prevention, and emergency response programs for facilities that fall under the requirements of the EPA's Risk Management Program.

One of the proposed rule changes centers around increased independent third party audits of covered facilities. These independent audit companies must have knowledge of RMP requirements, be experienced with the facility type and the covered process, be trained or certified in proper auditing techniques, have at least one member who is a licensed P.E., and have not done business of any kind with the host company in the previous three years and will not do business with the host company for two years following the audit. With these kind of stringent requirements, I believe we will see a drastic increase in the demand for independent third party auditing companies. Most existing auditing companies currently have consulting contracts or some form of relationship with facilities that require RMP and therefore would not be eligible to satisfy the "independent" caveat. Every RMP covered facility in the United States (well over 15,000 sites) could be a potential customer of a newly formed company designed strictly for auditing of Risk Management Plans. Recruiting team members would be fairly easy, simply drawing from industry workers, auditing professionals, and licensed Principle Engineers. Business would be good.

Another opportunity coming from the same proposed rule change is based on Emergency Response preparedness. RMP facilities must coordinate with local response authorities (EMS, Fire, Hazmat) to ensure resources and capabilities are in place to respond to and protect against accidental release of hazardous substances. Field exercises must be conducted, and if found to be inadequate, must be brought up to standards with the burden placed on the host facility, not local response authorities. This means that a facility must have employees trained extensively on emergency response and be equipped with the appropriate emergency response gear. We will see an increased need in training and consulting companies to assist facilities with their emergency response programs. Again, forming a company of this sort would be fairly easy drawing from industry workers and local response authority workers. 

I have extensive knowledge about the proposed rule changes because I am currently the Risk Management Plan and Process Safety Management Coordinator at a facility in Bradenton, FL. Industry feedback to the EPA is that these rule changes could place undue burden on facilities, but I believe they will be approved non the less, and can offer some opportunities to aspiring businesses.

2. Economic Trend Opportunities

This wont be as long and drawn out as the regulatory change opportunities because I am just going with my gut here a little bit. For nearly ten years the federal funds rate has been either 0.0 or 0.25%. Many things have a relationship with this rate including account interest paid by banks (which has been next to nothing), and mortgage interest rates charged by banks for loans they issue (which has been historically low). The news of an impending interest rate increase is everywhere, but I will credit an article I read on CNNMONEY.COM. 

Raising the interest rate will likely give the banks some more money in their pockets because of course they will be raising interest rates on the loans they issue. They in turn give customers slightly higher interest on the accounts they have with those banks. The opportunity here is for the banks to increase their account holders by finally giving a decent interest rate on CD's, savings, checking accounts ect. In doing so, they will have more money to lend at a higher rate and the world keeps spinning. It should easy for the banks to attract new customers by simply sharing some of their new found profit with customers.

For the customer, increasing interest rates means that home mortgages are going to get more expensive. The monthly payment on $200,000 loan at 4% is less than what it will be at 4.5% no matter how you slice it. An opportunity here is for real estate professionals to push their listings on buyers now before the rates go up. If someone is considering a home purchase, the thought of paying more per month for the exact same thing is motivation to act now. Realtors should see a nice bump in business.

I pay attention to this economic trend because years ago I had my real estate license and bought several homes to rent. I followed every piece of information I thought would help me out. I no longer use my real estate license, and now have only one rental house, but I still keep an eye out.