Rising natgas prices threaten US chemicals

07 March 2008 19:44  [Source: ICIS news]

WASHINGTON (ICIS news)--US chemical manufacturers warned on Friday that more industry and manufacturing job losses are likely as natural gas prices near $10/m Btu and Congress refuses to open vast domestic natgas reserves to development.

 

The American Chemistry Council (ACC) called on Congress to support long-pending legislation that would open federally owned onshore and offshore regions to energy development.

 

The council’s warning came as the US Labor Department reported that the US lost more than 60,000 jobs in February, the sharpest workforce decline in five years.

 

Congress has maintained a moratorium on energy development in 85% of US outer continental shelf (OCS) regions, which according to decades-old federal estimates hold more than 600,000bn cubic feet (bcf) of recoverable gas.  The US consumes about 22,000 bcf of gas annually.

 

Noting that US prices for natural gas are now more than four times higher than the average 1999 cost of $2,38/m Btu, council president Jack Gerard said Congress must act quickly to avoid further damage to the US economy.

 

“US households, manufacturers, farmers and other natural gas consumers pay dramatically more for natural gas when federal energy policy keeps restrictions on our own domestic supplies,” Gerard said, noting that the US is the only industrialized nation that restricts domestic energy development.

 

The US chemicals industry is heavily dependent on natgas as a feedstock and energy source.

 

Gerard said that the US chemicals sector has lost nearly 120,000 jobs and manufacturing as a whole has seen 3m jobs evaporate in part because increasing gas costs have driven production offshore.

 

He also cautioned natural gas supplies will become crucial and demand will rise as Congress moves to pass climate control legislation that would cap and reduce US emissions of greenhouse gases (GHG).  “Increased access to domestic natural gas supply should be a key feature of any climate policy that Congress considers,” Gerard said.

 

He urged congressional support for and action on a House bill, HR-2784, that would open portions of US offshore regions to gas development.

 

However, the bill’s sponsor, Representative John Peterson (Republican-Pennsylvania), repeated on Friday his complaint that Democrat leaders in the House will not allow the bill to be considered, despite the fact that it has 166 bipartisan cosponsors.

 

($1 = €.65)

By: Joe Kamalick
+1 713 525 2653

< previous article(VIDEO - ICIS news Asia Lunchtime Bulletin 16 October 2009)

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly