NPRA ’07: US chemicals are being driven offshore

26 March 2007 01:21  [Source: ICIS news]

SAN ANTONIO, Texas (ICIS news)--High feedstock costs and regulatory pressures could significantly increase the flight of US chemicals manufacturing to low-cost offshore locations, top industry officials warned on Sunday.


Charles Drevna, executive vice president of the National Petrochemical and Refiners Association (NPRA), told a press conference that a range of US federal policies and regulatory programmes is putting mounting pressure on domestic chemicals manufacturers.


“If left unchecked and present policies stay in place, the likelihood that they could drive the US chemicals industry offshore is very real,” Drevna said.


Speaking at the association’s 32nd annual petrochemicals conference, Drevna said that conflicting federal policies are making it increasingly difficult for US chemicals producers to remain competitive in the global marketplace.


He cited in particular federal environmental rules that encourage use of natural gas for electricity generation while Congress bars access to largely untapped domestic reserves of oil and gas. The US chemicals industry is almost wholly dependent on natgas as a feedstock.


Drevna also drew attention to developing legislation in Congress that would impose emissions limitations on the US manufacturing sector, noting that emissions caps would more heavily impact chemicals and refining than, for example, agriculture and electric utilities.


If US chemicals capacity is increasingly driven offshore, he warned, other sectors of the US economy would ultimately suffer.  “If the US no longer produces plastic pellets, then soon there would be no reason for the US to manufacture the many things that are made from plastics,” he said.


"When those manufacturing segments move offshore, manufacturing jobs go with them," he said.


Drevna said his association will have to work harder to educate Congress and other policymakers on what he termed the vital role of chemicals in the US economy.


The petrochemicals conference runs through Tuesday.

By: Joe Kamalick
+1 713 525 2653

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