Dow To Europe: Drop Dead!
I don’t want it to seem like I am picking on Dow this week.
This was the first day of IHS’s World Petrochemical Conference in Houston. This is my 15th annual conference. So far, this conference is better than average. The place is packed with more than 1,300 people.
Dow executive vice president Jim Fitterling gave an address on the beneficial economic effects of shale. We have been hearing a lot of this kind of thing in recent years. However, Fitterling went way beyond the usual touting of big numbers related to shale petrochemical investment. He said that shale will help lead to a renaissance in American manufacturing in general and is even stimulating greater R&D spending in the U.S. as manufacturers invest in technological research to support their operations. He pointed to Dow’s own planned R&D facility in Lake Jackson, Texas, near its Freeport operations, as an example. Very exciting stuff and very positive.
About that headline. He also took the opportunity to complain about all the liquified natural gas export capacity being planned in the U.S. So called “unfettered” exports would drive up natural gas prices and ruin everything for everybody, companies like Dow say. “No it won’t,” oil companies usually retort.
Now if you have been following this issue, you might have heard the suggestion that U.S. exports of natural gas to Europe would loosen the energy stranglehold Vladimir Putin has on Europe. “Don’t even go there,” Fitterling said. No, he didn’t say that. Actually he said this:
Now we are pointing to the Ukraine and arguing that we must fast track LNG exports to help our allies in Europe. Even our own energy secretary says that’s a weak argument, especially given the long lead time and financing to build these terminals. And let’s not forget, Europe has the resources and the capability to provide for its own energy [consumption]. Just because they have rejected nuclear energy and horizontal drilling, and left themselves at the mercy of others, shouldn’t create an obligation for us to bail them out by shipping our advantage to them.
If Europe really wants to be energy competitive and energy secure, it cannot walk away from nuclear and they must embrace horizontal drilling and exploration. The same policies that made America competitive are available to Europe today.
The real question we should ask is a simple one: what is our foreign policy, especially when it comes to our valuable energy resources? Shouldn’t we know that with some certainty before we just launch ahead blindly?
I heard at least one person attempt to start a round of applause while he was still talking. He rocked the house at the chemical conference to the extent that the house at a chemical conference can be rocked. And I am willing to bet that more than a few European chemical executives, who aren’t slow themselves to gripe about Europe’s high energy costs, agreed.