WASHINGTON — Fearing that the Bush administration's new energy policy may not protect the plastics industry adequately, the Society of the Plastics Industry Inc. wants to step up its involvement and build a plastics-specific coalition on the issue.
Exactly what that group would advocate still is taking shape. But Washington-based SPI wants the Bush administration's new energy policy to take into consideration what SPI says is the unique vulnerability of the industry: Rising energy costs hit plastics both in the form of higher electricity prices and in higher feedstock costs for raw materials.
SPI's board agreed May 3 that it wants to devote a lot more of its resources to the issue, SPI President Don Duncan said in a May 10 interview.
The Bush administration's energy policy, being developed by a task force led by Vice President Dick Cheney, is to be released in mid-May. SPI is holding off on specific positions until Cheney's report is released, but Duncan said he is concerned the policy may not consider the importance of oil and natural gas as raw materials.
"Certainly from where I sit, it is not obvious to me that Cheney may be as sensitive to the needs of energy raw materials ... as a feedstock to the plastics industry, as he is for delivering electricity to people's houses and plants," Duncan said.
SPI wants to involve the American Plastics Council and its own members, and explore which broader alliances it wants to be a part of, like the newly formed business coalition the Alliance for Energy and Economic Growth, according to Maureen Healey, SPI's chief regulatory and state affairs officer.
APC officials said their position thus far complements the much-larger American Chemistry Council, which also argues that rising energy costs hit the industry twice. APC officials said they are interested in working with SPI.
Cheney has indicated in interviews that the policy will focus on boosting energy supplies, a point that the AEEG advocated in a May 2 press briefing announcing its formation.
"Supply is the key word here," Jerry Jasinowski, president of the National Association of Manufacturers, said at the AEEG briefing. "We cannot dig ourselves out of the hole we are in by energy conservation alone."
Jasinowski said 25-33 percent of the decrease in corporate profit and growth recently is related to rising energy costs or unavailable energy supplies.
"We think our economic growth is threatened by the failure to develop an energy policy," he said.
Healey said the energy issue is very much an economic issue for SPI members, in part because the industry relies on just-in-time deliveries.
Duncan said SPI's analysis of economic data shows that the plastics industry has experienced negative economic growth for at least the past two quarters. While that meets the textbook definition of a recession, Duncan was reluctant to label it that because the economy as a whole continues to grow.
An informal SPI survey of members at the board meeting found a "mixed bag" on the economy, Duncan said.
In the United States, raw materials suppliers started slowing down in the third quarter of last year and are down 15-30 percent in 2001. For processors, it depends on markets, with automotive and electronics hurting the most and segments like food packaging and medical doing fine, he said. Processors started seeing a much sharper downturn in 2001, Duncan said.
Some processors said this is the first time in memory when all key costs are headed the wrong way at the same time: Energy and resin costs are rising, while sales volumes are down and price pressures remain strong, Duncan said.