HOUSTON — European leaders visited Washington this week, urging U.S. lawmakers to allow more natural gas exports overseas to help reduce their dependency on Russia as an energy provider.
But the largest American chemical company had a simple response: tough luck.
Jim Fitterling, Dow Chemical’s executive vice president for feedstocks, performance plastics and supply chain, said if Europe wants to reduce its need for Russian natural gas, it should produce it on its own.
“Let’s not forget, Europe has the resources and the capability to provide for its own energy needs,” Fitterling said at an IHS petrochemical conference in Houston this week. “Just because they rejected nuclear energy and horizontal drilling and left themselves at the mercy of others shouldn’t create an obligation for us to bail them out,” he said.
Fitterling’s comments were the latest salvo in the ongoing dispute between advocates for increase exports of liquefied natural gas, and chemical companies and manufacturers who argue those exports could hurt their business.
His remarks come at a time when a growing number of lawmakers and energy producers have pushed for a renewed emphasis on LNG exports, saying the influence of an increasingly aggressive Russia can be minimized if the U.S. provides Europe with more natural gas.
But Fitterling — like others in the chemical sector — opposes the rush for more LNG exports. As it stands, companies like his, as well as manufacturers, have benefited from cheap natural gas prices, since the fuel is a key ingredients for petrochemicals that are used to make plastics and other components of manufacturing.
While energy producers have been frustrated by low natural gas prices in the U.S., a new report says those low prices have helped crate 196,000 new manufacturing jobs in major metropolitan areas and given a $124 billion boost to sales for energy-intensive products, such as fabricated metals and plastics.
Natural gas producers hope to export more of their product to other parts of the world where it commands a much higher price — even with the cost of shopping factored in. Chemical companies and U.S. manufactures fear those exports will increase the cost of their feedstocks and hurt the business.
As it stands six LNG export facilities have received federal approval to broadly export; approximately two dozen are pending. Last year, chemical makers and manufacturers formed a coalition to lobby against the onslaught of LNG exports.
Meanwhile, Fitterling’s remarks come at a type when the U.S. chemical industry is booming. He said the sector is poised to have revenues of $1 trillion by 2018, citing data from the American Chemistry Council.
There’s a wave of chemical infrastructure investment in the U.S. as well. He said the chemical sector has announced 120 projects worth more than $100 billion in the U.S, with much of that total being spent along the Gulf Coast. That’s good for the economy, he said, arguing that the U.S. benefits more from cheap chemical feedstocks than it does from increased natural gas exports.