The plastics industry saw one of its key political goals - more natural gas drilling along the U.S. coast - appear to fall by the wayside again in Congress.
A broad coalition of U.S. industries, including plastics and chemicals, had mounted an aggressive lobbying campaign in recent weeks that came undone when leaders in the House of Representatives decided Nov. 9 to strip natural gas drilling provisions from budget legislation.
The move surprised plastics and chemical industry officials, who see drilling as a way to calm markets that have watched natural gas prices spike to more than $14 per million Btu, the highest in the world, and push up the cost of plastic.
``I'm flabbergasted that some in Congress continue to live in a fantasy world, in which the government encourages use of natural gas while cutting off supply, and then they wonder why prices go through the roof,'' said Jack Gerard, chief executive officer of the American Chemistry Council in Arlington, Va.
The natural gas effort is not dead, but it left officials scrambling to figure out whether it could be salvaged before Congress ends its session this year.
The natural gas language, which could have opened up drilling in the Outer Continental Shelf along the coast, was joined at the hip with controversial efforts to drill for oil in the Arctic National Wildlife Refuge in Alaska. The provisions were attached to budget legislation, but House leaders removed them when they saw they could hinder the spending bill.
Bill Carteaux, president of the Society of the Plastics Industry Inc. in Washington, said he was extremely disappointed. He said supporters will look for other places to attach OCS drilling, such as hurricane relief bills.
However, he said he is not optimistic that natural gas provisions will make it out of Congress this session.
The plastics and chemical industry effort had been part of a larger lobbying blitz in recent weeks that had hoped public worries about dramatically higher home-heating bills this winter would make it easier to push the agenda.
Dow Chemical Co. CEO Andrew Liveris, for example, told a congressional committee Nov. 9 that high energy prices were a key reason Dow cut 7,000 of its 25,000 jobs in the United States, closed 23 plants in North America, and shifted production to countries with lower energy costs.
ACC testified that of 120 chemical plants being built around the world, only one is being built in the United States and 50 are going up in China, where natural gas is half of the U.S. cost.
Carteaux wrote, in a letter published Nov. 7 in the Washington Times, that the plastics industry lost more than 300,000 jobs ``largely'' as a result of natural gas price increases. It is the first time SPI has produced a public estimate of plastics-related jobs lost in recent years.
However, the actual number of jobs lost appears to be closer to 210,000, a figure that Carteaux and other SPI officials said is based on new data, which shows that the industry employed 1.55 million people in 2000 and 1.34 million in 2004.
SPI spokeswoman Paula Weis said the trade association cannot determine precisely how many of those jobs were lost due to rising natural gas prices, rather than other factors, but SPI believes that energy costs account for the bulk of the cuts.