The most plastics-friendly energy legislation to emerge in the U.S. Congress to date took a big step forward May 26, by overwhelmingly passing a Senate committee. But industry officials said it is unclear whether it would have a big impact on lowering natural gas prices.
The bill came out of the Senate Energy and Natural Resources Committee on a 21-1 vote, but the committee effectively punted on some of the most contentious, and most important, issues for plastics manufacturers, hoping to resolve them on the Senate floor.
Provisions such as opening up more natural gas drilling in the Outer Continental Shelf proved too controversial, so supporters backed off the plan with hopes of bringing it up later. The American Chemistry Council said that item is the key part of the bill because the OCS is the largest untapped natural gas reservoir in the United States.
The Society of the Plastics Industry Inc. said the bill is the most favorable legislation on natural gas to emerge yet, and said it would help to moderate price increases that have made North American plastic resin less competitive on the world market.
Natural gas, the key feedstock for large amounts of North American resin, has shot up in price in the past few years from $2.50 per million Btu to about $6.30 currently. It needs to fall into a range of $4-$4.50 for the industry to be competitive, said Gene Steadman, head of Washington-based SPI's energy task force and a lobbyist with Celanese Corp. of Dallas.
Industry officials have not had time to analyze the bill in detail after yesterday's vote, ``but the perception is clear'' that it will not, on its own, get prices to $4, he said.
SPI, ACC and other groups plan stepped-up lobbying and grass-roots efforts in the next few weeks. SPI President William Carteaux urged plastics firms to put renewed pressure on Senators, especially in key Midwestern swing states.
Other provisions favored by industry remain controversial.
The bill would give the Federal Energy Regulatory Commission sole authority over siting terminals to import liquefied natural gas, but expanding federal power continues to be opposed by environmental groups and some senators. There also remain debates that have stymied past energy legislation, such as liability protection for makers of gasoline additive methyl tertiary butyl ether.
Steadman said SPI supports energy-conservation provisions such as raising energy-efficiency standards for home appliances, as a way to reduce demand for natural gas, which has become the preferred supply for most new U.S. power plants.
Environmental groups such as U.S. Public Interest Research Group criticized the bill as paying lip service to conservation because it failed to mandate using renewable energy sources. It also said the legislation would reduce U.S. dependence on oil by only 1 million barrels a day within 10 years, well below projected increases in oil imports of 5 million barrels a day in that time.