With just a day remaining before the U.S. general elections on Nov. 7, Andrew Liveris, chairman and chief executive officer of Dow Chemical Co., wonders why politicians aren't even talking about one of the key issues for American manufacturers.
The lack of a substantial energy policy plays a big part in decisions made every day that impact where firms like Liveris' Midland, Mich.-based Dow will invest in new plants and new jobs.
But politicians, consumers and voters alike seem to be in the dark. So Liveris and other Dow executives are trying to shine a light on what, for them, is a central issue: the fluctuating prices for the natural gas Dow and its competitors rely on for feedstocks used to make plastics and chemicals.
``The price of natural gas has jumped to a much higher plateau in the U.S., putting the manufacturing sector at a disadvantage,'' he told members of the Detroit Economic Club during an Oct. 30 speech in Rochester. ``But you would hardly know any of this by reading the papers or watching TV or listening to the debate in Congress.''
The only time the general public or politicians recognize the energy crisis is when they fill up at the pump or open the home heating bill, he said. Manufacturers see the impact all the time. They have seen prices climb from $2 to $3 per million Btu to more than $15 in the wake of the Gulf Coast hurricanes in 2005. Prices now fluctuate between $3.60 and $8.60, he said, and increasing demand could push prices up even further.
In 2002, Dow spent $8 billion on feedstocks and energy from natural gas. This year it will spend ``well over'' $20 billion, he said.
A coherent energy policy, Liveris said, would focus on the use of limited fossil fuels, including natural gas, in industries that add value, such as plastics. It would emphasize the potential of clean-burning coal technologies for heating and electrical production. And, it would address both conservation and further exploration, he said.
Other countries, he said, have addressed those issues, leading to a more stable future for natural gas; the U.S. has not.
``At the end of the day, companies like mine have to decide where to invest for the future,'' Liveris said. ``Where will we build our next $2 billion plant and, along with it, create high-paying jobs for thousands of people?''
The answer, increasingly, is not the United States. Dow has new plants under construction in Oman, Saudi Arabia, Kuwait, China and Thailand - all with a guaranteed stable supply of fossil fuels. Those plants will add more than 10,000 jobs to Dow's employment base.
``When faced with the choice of investing in the U.S., with the certainty of higher and more volatile natural gas prices, how can I recommend investing here?'' Liveris asked.
Manufacturers like Dow have to put the energy issue into terms that everyone can understand, said George Hamilton, president of the firm's automotive group. That may mean pointing out the connections between higher energy prices, higher resin prices and higher costs for car parts - as well as recognizing the jobs lost when companies go out of business because of the squeeze between higher resin costs and lower prices from their customers.
``It's the whole value chain,'' Hamilton said.