While low crude oil prices and the resultant squeeze on margins may be the biggest current issue troubling the US petrochemical industry, it's certainly not the only challenge producers will have to overcome in the coming years, Stephen Pryor, the president of ExxonMobil Chemical from 2008 to 2014, said Monday.
Pryor, speaking at the International Petrochemical Conference while accepting the Petrochemical Heritage Award, said opposition to free trade, regulatory issues and a shortage of skilled technical workers will be major hurdles for the industry over the next decade.
The US petrochemical industry has seen heavy investment and a host of new projects as the result of cheaper, shale-based feedstocks. The end result for much of that new production will be plastics and end-products that support a rising middle class in the developing world.
"Now, more than ever, chemicals are more indispensable for human progress and development," Pryor said.
However, moves to restrict free trade could jeopardize North America's ability to supply those products, and the chemicals and feedstocks used to make them to other regions.
"We don't like free trade if it doesn't suit our interest," Pryor said. "We have to stand up for free trade and do it even when you think, 'right now my interest won't be better served'," he said, adding that long-term ramifications should outweigh the short term in these cases.
Using natural gas as an example, Pryor said exports from the US would increase more demand and opportunities for the US, along with greater production of natural gas liquids and chemical feedstocks.
Stricter regulatory restrictions also could create barriers for the industry, Pryor said.
He said regulation and environmental issues are important and necessary, and he believes the industry works to behave in an environmentally responsible way.
"We have to fight for and promote regulations based on sound science and economic common sense," he said. "And that is a real challenge in this country, and not just in this country -- in Europe."
Finally, Pryor pointed to the continued need to develop skilled technical workers in the US, pointing to ExxonMobil's initiatives to work with universities and technical schools to help grow the workforce. The new plants being built by ExxonMobil and other petrochemical producers are creating thousands of new jobs, he said, and the industry has a responsibility to help make sure they have the employees to fill them.
"We're building all these plants and we can't find technical skilled workers for them," Pryor said. "So my view is, don't sit there and wait for the government to fix it, let's do something about it ourselves."
