US chemical, energy sectors welcome new Obama focus

28 January 2010 21:34  [Source: ICIS news]

WASHINGTON (ICIS news)--US chemical, energy and general manufacturing firms on Thursday welcomed President Barack Obama’s new call for expanded domestic energy production and exports, and expressed hope that he has abandoned cap-and-trade climate legislation.

The American Chemistry Council (ACC) noted that in his Wednesday night state of the union speech, the president “recognised the need for expanded domestic energy development in the form of new offshore oil and natural gas production”.

In his address to a joint session of Congress, Obama refocused his administration on jobs creation, putting special emphasis on policies to generate “clean energy jobs”, such as production of solar cells, wind turbines and advanced batteries.

“But to create more of these clean energy jobs,” Obama said, “we need more production, more efficiency, more incentives. And that means building a new generation of safe, clean nuclear power plants in this country”.

“It means making tough decisions about opening new offshore areas for oil and gas development,” Obama added, “And it means passing a comprehensive energy and climate bill with incentives that will finally make clean energy the profitable kind of energy in America.”

Charles Drevna, president of the National Petrochemical & Refiners Association (NPRA), noted that while Obama made reference to the climate change legislation that narrowly passed in the US House last year, “he declined to aggressively promote cap-and-trade climate change legislation, favouring instead incentives for innovation and greater efficiencies”.

“Aside from promoting new ‘green jobs’, we hope that President Obama will focus on preserving and creating red, white and blue jobs,” Drevna added, referring to workers in the US oil, natural gas, refining and petrochemical sectors.

Bill Allmond, vice president for government relations at the Society of Chemical Manufacturers and Affiliates (SOCMA), also welcomed Obama’s call for jobs creation and the president’s goal of doubling US exports in five years.

“But for all the talk about the need to create jobs,” said Allmond, “it was disappointing that the president did not mention how he would specifically assist US manufacturers, who are the drivers behind job creation, innovation and international trade - the things he mentioned as critical to recovery.”

He hailed the president’s declared plan to eliminate capital gains taxes on small businesses that hire new workers, but Allmond also said he was disappointed that Obama did not call for a permanent research and development (R&D) tax credit.

Chris Jahn, president of the National Association of Chemical Distributors (NACD), said he was encouraged by Obama’s pledge to create more jobs.

“We as an industry can only hope that this includes job creation in the domestic manufacturing sector,” Jahn said.

Incentives to revive US manufacturing “would go a long way toward helping our economy recover, as it will result in growth throughout the supply chain, including chemical distribution”, Jahn added.

The American Petroleum Institute (API) also welcomed the president’s renewed attention to offshore oil and gas development, with API president Jack Gerard noting that “Greater access to America’s vast oil and natural gas resources would bring more domestic energy, thousands of American jobs, billions in government revenues and less reliance on imported energy”.

“But to create these jobs,” Gerard added, “we will need policies that allow investment and development - policies that are pro-job, pro-consumer and pro-energy.”

Gerard and others in the US energy and chemicals sectors have been critical of the Obama administration’s development policies during its first year in office, citing actions that restrict or delay exploration and development of oil and gas resources on federal lands.

The Natural Gas Supply Association (NGSA) was cautious about the president’s call for “tough decisions about opening new offshore area for oil and gas development”.

“We wish he had announced a more clear vision for offshore drilling,” said Skip Horvath, NGSA president.

Thomas Pyle, president of the energy industry think-tank Institute for Energy Research (IER), charged that despite Obama’s call for more domestic energy production, “the president and his administration continue to add layers of red tape and bureaucratic hurdles on access to home-grown energy”.

Pyle noted that according to Department of the Interior (DOI) data, in 2009 “this administration has leased less taxpayer-owned land than any other year on record during its first year in office, while realising only one-tenth the amount of revenue from leasing federal lands in 2008”.

The US Chamber of Commerce also hailed the president's shift to jobs creation and boosting US exports.  But chamber president Tom Donohue said that the administration and Congress must act to "ease the uncertainties - in tax, health, environmental, labour, legal and fiscal policies - that are hampering economic growth".

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By: Joe Kamalick
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