According to Jim Fitterling, chairman and CEO of Dow, the progress the U.S. makes in the next decade on hydrogen carbon capture “will be enormous” in reducing CO2 emissions.
But Fitterling also said, if the U.S. wants to spur growth in its manufacturing economy, it must first “relearn what the supply chains are” for that manufacturing economy.
“We’ve got an aspirational policy that says we want to return our manufacturing economy here to the U.S., but let’s be honest,” Fitterling said. “Until the shale gas revolution, we weren’t very interested in having a growing manufacturing economy here, and we don’t have all the natural resources to support that.”
It’s not that the aspirational policy is wrong, per se, Fitterling said. “But if you get yourself too far ahead on the aspirational side, you can’t afford it. If your foreign policy starts to cut off relationships, you’re just hurting yourself, and you’re hurting all of the industries that have now become dependent on China.”
Increased manufacturing, carbon goals hinge on policy reform
Pictured from left are Daniel Yergin with S&P Global Commodity Insights, Jim Fitterling with Dow Chemical and Martin Brudermüller with BASF SE participating in a panel on chemical industry actions to reduce emissions at the 38th Annual World Petrochemical Conference in Houston.
“We have some realities that we have to deal with,” Fitterling reiterated. “It’s a tough balancing act to manage.”
Moderating a panel focused on how industry leaders can best turn climate goals into action at the 38th Annual World Petroleum Conference by S&P Global in Houston, Dr. Daniel Yergin, vice chairman of S&P Global, referred to a perceived gap between political and economic realities.
“Politically, there are a lot of gaps between what we hear and economic reality,” Fitterling said, eliciting a wave of laughter from the conference audience.
“Policymakers have the right intent, which is to bring manufacturing back to our country, but we’re going to have to address things like the labor force in the United States,” he said.
Lack of sufficient natural resources coupled with a shrunken workforce are obstacles to increasing manufacturing in the U.S. — made more complex by increasing environmental regulations.
Fitterling observed that “critical, precious metals and polysilicons, and the capacity for these materials,” have moved to China.
“So now you’re wanting to have debates with China about trade as a weapon,” Fitterling said. “We haven’t done mining here for precious metals for how long? And if you started that today, it would be a decade before you had enough material to make those.”
Dr. Yergin added that electric cars require at least twice as much copper as cars with combustion engines, “and that’s being conservative.”
“And we don’t have the labor force to pull it off unless we make some big changes in immigration policy,” Fitterling said. “And then the regulatory process can really slow things down. Right now, it doesn’t matter if you’re in clean energy or in conventional energy — you can’t get anything permitted.”
Permitting reform is “front and center,” Fitterling said. “But it’s hard to say if and when it will get addressed in this Congress. But certainly, I think you’re going to see some attempts in the area of permitting reform.”
Dr. Yergin noted that the European Commission has been “very productive in terms of turning out lots of regulations.”
Dr. Yergin’s sentiment was endorsed by Martin Brudermüller, chairman of the board of executive directors for BASF SE.
“We have around 14,000 pages of regulations, and my guess is there will be 25,000,” Brudermüller said, adding that compliance with these regulations may be something larger companies may be able to handle far more readily than smaller companies.
“So that is endangering our whole ecosystem,” Brudermüller said. “You have to start with a timeline. You have to tell them what you’re going to do and how you’re going to do it. This is tough because it’s happening in a lot of areas at the same time.”
“If we become too insular and focused on just America, we forget that we’re one of maybe a handful of nations that supply energy to the world,” Fitterling concluded. “We have a role to play in the bigger global economy. The things that will help us restore manufacturing here are the same things that we need to help the rest of the world with as it further industrializes.”
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