AFPM ’15: US to keep petchem, refining competitiveness

Interview article by Joseph Chang

SAN ANTONIO, Texas (ICIS)–The US petrochemical and refining sectors have undergone “tectonic shifts” over the past several years in terms of cost position and investment, and stand to maintain their strong competitive position in the future, the president of the American Fuel & Petrochemical Manufacturers (AFPM) said on Saturday.

“We’ve seen tectonic shifts in both US refining and petrochemicals with the industry investing billions of dollars. We are the most competitive industry in the world and can compete with anyone as long as we play on a level playing field and government interference is kept to a minimum,” said Charles Drevna, president of the AFPM.

“Great things are happening in the supply chain downstream and we have a tremendous opportunity to get manufacturing in the US to a dominant position,” he added.

US energy security from the shale revolution combined with a strong economy and manufacturing base that benefits from low-cost energy creates a “win-win situation for US consumers”, Drevna noted.

However, challenges include a somewhat tepid economic recovery in the US and uncertain performance and outlooks for the global economy – from China to Europe to Latin America, he said.

“Some economists just put points up on a chart and connect the dots [to show steady growth rates going forward] but the economy is cyclical with ups and downs,” said Drevna.

“Regardless, we believe the US is well poised to take advantage of the peaks and weather the troughs,” he added.

The US regulatory environment also poses a major challenge for the petrochemical and refining sectors, he said.

“One of the biggest challenges involves zealots in the environmental community and the federal government that say we don’t need a manufacturing community in the US – that we don’t need fossil fuels anymore,” said Drevna.

One example is the recent proposal by the US Environmental Protection Agency (EPA) to lower the ozone standard to between 65-70 parts per billion (ppb) versus the current 75 ppb.

“A NAM [National Association of Manufacturers] study shows that this would cost hundreds of billions of dollars and cut thousands of jobs. Already ozone levels have been reduced by 30% since 1980. To reduce them further would be all cost and no benefit,” said Drevna.

AFPM’s International Petrochemical Conference (IPC) ends on Tuesday.