WASHINGTON - If there's one thing to key in on for the plastics industry in the energy debate, it's what happens with natural-gas supplies.
That's because natural gas is the fuel of choice for 90 percent of the country's new electric power plants, and it's very important as a raw material for the U.S. plastics resin industry, according to industry lobbyists.
``We are going to see an increasing demand for natural gas,'' said Marty Durbin, director of federal and international affairs with the American Plastics Council in Arlington, Va. ``At the same time, you have folks in Congress who are looking to restrict access to natural gas.''
Industry officials point to huge estimates of growth in natural-gas consumption, up to 50 percent in the next decade or two, and say they worry that supply will not keep pace. Prices of natural gas in January shot up to more than $10 per million Btu, a 20-year high, but since have come back down closer to historic levels.
One energy industry consultant downplayed the risk of fundamental shortages in natural gas.
The United States has about 1,800 trillion cubic feet of natural gas that can be recovered economically, and removes only about 21 tcf a year now, said John Blaney, managing director of the environmental group at energy management firm ICF Consulting Group in Fairfax, Va. Projections call for yearly demand to reach 30 tcf by 2015, he said.
Still, even at that level, the market can respond without significant price increases, Blaney said.
``Our own forecast is, we can produce 30 tcf of natural gas a year without a significant increase in price above levels of $2 to $2.50 to $3,'' he said. ``We think there is plenty of natural gas available.''
The average price for natural gas in 1998 and 1999 was $2.18 per million Btu, according to the American Chemistry Council, also in Arlington.
The plastics industry needs low feedstock costs to remain competitive internationally, said Maureen Healey, vice president and chief regulatory and state affairs officer at the Society of the Plastics Industry Inc. in Washington.
Traditionally, low feedstock prices in the United States have helped the plastics industry's balance of trade. The United States generated a trade surplus of $5.2 billion in resins in 1999 and $600 million in plastics parts, according to SPI figures.
The industry is arguing to lawmakers that its economic health is important for the country as a whole. The chemical sector is the country's largest exporter, but high energy costs pushed the chemical industry into a trade deficit in January, its first monthly deficit in 70 years, ACC said.
SPI is putting together a task force of industry representatives who will develop and advocate specific policies and pursue research.
``There is no single solution,'' Healey said. ``The policies we'll support are enhanced supplies of fuels and conservation and efficiency.''
The Bush administration's push to increase supplies of oil, natural gas and coal is running into increasing political opposition, and Durbin said the industry faces a tough sell in Washington.
``One of the challenges here - there are very few members of Congress and very few staff members who have an appreciation of the link between natural gas and plastics as a feedstock issue,'' he said.
While ICF's Blaney said the United States has plenty of coal and natural gas and is not experiencing a long-term energy crisis, some plastics industry officials take a different view. Durbin said APC members do not see any indication that their energy problems are abating.
``There is a huge apparent disconnect between what the public thinks and what is really happening,'' said another Washington-based plastics industry lobbyist, speaking on condition of anonymity. ``The facts from the Department of Energy show that you have an energy issue.''
