Obama pledges to ease restrictions on natgas-powered industry

29 January 2014 03:35 Source:ICIS News

WASHINGTON (ICIS)--President Barack Obama on Tuesday promised to ease federal regulatory restrictions to help expand industries that use newly abundant US supplies of natural gas, saying that it is "the bridge fuel that can power [the US] economy".

In his annual State of the Union speech before a joint session of Congress, Obama said that "one of the biggest factors in bringing more jobs back is our commitment to American energy".

"Today, America is closer to energy independence than we’ve been in decades," he said.

He noted that in addition to new domestic supplies of natural gas, "More oil is being produced at home than we buy from the rest of the world – the first time that has happened in nearly 20 years".

He said that one of the reasons that the nation is nearing energy independence is natural gas.

"If extracted safely, it is the bridge fuel that can power our economy with less of the carbon pollution that causes climate change," he said.

"Businesses plan to invest almost $100bn in new factories that use natural gas," Obama said. Much of that investment is being made by US and foreign chemicals manufacturers that are building new production facilities in the US.

US petrochemicals producers and downstream chemicals manufacturers are heavily dependent on natural gas as both a feedstock and energy fuel. Major advances in shale gas production over the last five years have restored a significant cost advantage to US chemicals producers.

To facilitate the $100bn in investments, Obama said that he will "cut red tape to help states get those factories built".

In a separate document issued by the White House, Obama said he would call on Congress along with state and local governments to create what he termed "Sustainable Shale Gas Growth Zones" to ensure that "shale gas is developed in a safe, responsible way".

But Obama also indicated that he will be unwilling to open broad areas of federally owned lands to energy development.

"My administration will keep working with industry to sustain [energy] production and job growth while strengthening protection of our air, our water and our communities," he said.

"And while we’re at it, I’ll use my authority to protect more of our pristine federal lands for future generations."

He also promised to move forward with his climate change agenda, saying that the US has to "act with more urgency".

He cited recent moves by his Environmental Protection Agency (EPA) in imposing limits on the amount of carbon dioxide that can be emitted by electric power generating units, indicating that he will not turn back from that course.

"The debate is settled," he said. "Climate change is a fact."

He also warned that if Congress does not cooperate in advancing some of his goals, he will act on his own.

"America does not stand still," he said, "and neither will I."

"So wherever and whenever I can take steps without legislation to expand opportunity for more American families, that’s what I’m going to do," he said.

Obama's willingness to use executive orders and regulations to advance policies that failed to win broad support in Congress — especially on energy issues — has been a sore point in many areas of US business. 

Paul Hodges studies key influencers shaping the chemical industry in Chemicals and the Economy

By Joe Kamalick