NPRA '08: US petchems should lift political role

01 April 2008 21:06  [Source: ICIS news]

SAN ANTONIO, Texas (ICIS news)--The US petrochemical industry should engage itself more, and in a more long-term way, in political debate to avoid falling victim to policy mistakes, prominent conservative leader Newt Gingrich said on Tuesday.

Speaking at the closing luncheon of the National Petrochemical & Refiners Association (NPRA) annual meeting in San Antonio, Texas, the former US House speaker said the US is "wallowing in a period of stunning political stupidity".

But whereas chemical companies might invest massive amounts of time and money into a new project, they take a short-term and half-hearted approach to helping set the political agenda to avoid harmful regulations that hurt the industry, he said.

Gingrich cited as an example record energy prices, which he said were not a surprise given perhaps 15 or 20 political decisions in the last 20 years that made the US more dependent on high-priced and scarcer oil supplies.

The US chemical industry should also be careful to make its business decisions in the context of a world market, Gingrich said. The emergence of China and India means that for the first time since 1840, the US has economic rivals of the same potential scale, he said.   

The speech by Gingrich drew to a close the 33rd annual NPRA meeting, which was held against a backdrop of unprecedented upstream costs, a US economy sliding into recession, and a spurt in exports due to the weakness of the US dollar.

Participants at the meeting reported difficulty along the petrochemical chain in passing along feedstock costs amid a softening demand picture, creating squeezes on production margins that have trimmed output in some cases and tightened supplies.

While some in the US industry contended that the fears about a recession may be overblown, others cited sustained export availability that reflected both weakness in the domestic market and the stimulus provided by the US dollar's decline.

European producers at the meeting in particular expressed frustration at the challenge of selling into the US market with the currency trend against them.

By: Stephen Burns
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