Refiners in crosshairs as NPRA annual meeting opens

22 March 2010 04:37  [Source: ICIS news]

PHOENIX (ICIS news)--A sour mood opened the annual meeting of the National Petrochemical and Refiners Association (NPRA) on Sunday as the US refining industry finds itself in the legislative and governmental policy crosshairs.

“The policy challenges this year are plentiful…the Obama administration and Congress will continue to pursue some form of climate change or energy legislation before the mid-term elections in November,” said NPRA president Charlie Drevna.

The 108th annual meeting of key energy and oil executives and leaders brought together policy discussions and technical panels to Phoenix, Arizona, with challenges some claim are like none other have been faced before.

“If you look at 2010, the biggest challenge refiners have is the economy. If people are not working, then the industry is not selling products,” NPRA chairman and Valero chief executive officer William Klesse said.

With less refining operating rates and a weak economy, demand for petroleum products is down, Klesse said.

“As we look longer term, though, many of the policies in Washington are very disturbing,” Klesse said.

Last year, Congress considered including a federal low-carbon fuel standard (LCFS) as part of a cap-and-trade legislation narrowly passed by the House of Representatives, but ultimately declined to ensure it had sufficient votes.

“An LCFS carries broad, negative implications for supply, costs and security,” Drevna said.

Drevna said that the most affected by LCFS policies would be the facilities that rely heavily on Canadian oil sands products. With interest growing for an LCFS in numerous states, Congress could revisit a federal standard.

Such stringent initiatives will carry significant negative economic consequences for consumers and businesses alike, Drevna said.

Obama’s new budget proposal includes a repeal of accounting practices and manufacturing incentives for the domestic oil, refining and gas community.

“Elimination of these measures would only threaten continued energy investment, and place our businesses at a competitive disadvantage with other manufacturers, impeding their ability to compete globally,” Drevna said.

The conference, which runs through Tuesday 22 March, features several speakers including Claiborne Deming, executive director of Murphy Oil, former Arkansas governor Mike Huckabee, author Stephen Dubner and political pollsters Peter Hart and Frank Luntz.

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By: Steven McGinn
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