WASHINGTON — The Bush administration's blueprint for solving the nation's energy problems is generally good for plastics, although it does contain one troubling element, industry officials said.
Plastics and chemical industry lobbyists said that while the long-awaited proposal is short on specifics, they like the emphasis on increasing supply. Industry lobbyists expressed concern that Bush's May 17 plan appears to want to change federal law in a way that would hurt companies that use their own cogeneration power plants at their factories.
"The biggest thing from the [American Plastics Council] member standpoint is they want to be able to get rid of the volatility in the natural gas prices," said Marty Durbin, APC's director of federal and international affairs. "That is what is really hurting our members. It hurts them on electricity, and it is their feedstock."
But natural gas also is very important to electric generators — 90 percent of all electric plants built in the next 20 years probably will use natural gas because it is more economical and pollutes less than coal, the administration's report said.
More power plants that use coal, nuclear or other sources would help take some of the strain off very tight natural gas supplies, said Jim McVaney, director of federal government relations with the American Chemistry Council in Arlington, Va. APC also is based in Arlington.
But environmental groups including the Natural Resources Defense Council favor natural gas as the most environmentally sound of the big three — coal, nuclear and gas.
The U.S. plastics industry has enjoyed a historical economic advantage because of its reliance on cheaper natural gas, but gas price spikes are changing that, Durbin said. About 70 percent of U.S. polyethylene is derived from natural gas, while 70 percent of Europe's PE comes from oil, APC said.
Cheaper oil feedstocks give European producers an advantage now, he said.