BIC Magazine recently spoke to AFPM President Chet Thompson to discuss refining and petrochemical industries' progress and hot topics.
BIC: What is the current state of U.S. refining and the petrochemical industry?
THOMPSON: The U.S. refining sector is strong, and we expect a strong 2018. In 2017, we saw record production and a rise in global demand for refined products. Exports increased by more than 10 percent, totaling 80 billion gallons of gasoline, diesel fuel and other products to almost 100 countries.
The petrochemical industry is strong as well. Companies are making investments in the U.S. at levels we haven't seen in upward of 50 years. Eleven steam cracker projects have been announced since 2011. Additionally, by 2020, petrochemical exports are expected to grow by 60 percent.
BIC: Has the Trump administration been favorable to industry?
THOMPSON: The first year of the Trump administration has been good for our industries. Since day one, it sought to put an end to the war on fossil fuels and to work with industry because it understands the value we bring to our country and the world.
Tax reform was clearly the biggest win of the past year. We are also very pleased with the administration's commitment to regulatory reform, permit streamlining and expanded infrastructure.
However, we need to keep our eyes on global trends. You will see AFPM increasingly engaged on the global stage, taking a longterm view to both promote and protect our industries. This starts with trade policy. Free and fair-trade agreements have been good for our country and us.
As global product demand continues to rise, trade and access to foreign markets will become even more important. This is why we support NAFTA. Tariff-free movement is good for business. Our NAFTA trading partners supply half of our imported crude and account for one-third of our refined products exports. Trade in chemicals has more than tripled over the two decades NAFTA has been in effect.
Reinforcing critical ties with our neighbors and allies is essential to our global competitiveness and our continued ability to support global manufacturing and transportation. We cannot compromise this position by closing our borders to our two most important energy trade partners: Canada and Mexico. We will be working closely with the administration to preserve and modernize NAFTA.
BIC: What will be 2018's most talked about regulations or issues?
THOMPSON: Fuel and vehicle policies will be a priority, and AFPM will continue to work to achieve near and long-term relief from the Renewable Fuel Standard (RFS). We are committed to finding an equitable solution that will provide immediate relief from the high and unreasonable cost of compliance for Renewable Identification Numbers (RINs), with the long-term goal of sunsetting the RFS.
I have renewed optimism that RFS relief is within reach. Productive discussions are happening in the House, Senate and within the administration -- all the way up to the president himself. There are stakeholders at the table who, for the first time, are open to real discussions on common-sense proposals that allow all liquid transportation fuels to compete in a free and open marketplace.
Another important topic will be infrastructure expansion. This administration has made it clear new infrastructure is imperative to grow our economy and cement our role as the No. 1 destination for manufacturing.
And of course, as I mentioned earlier, we need to continue to promote the importance of free trade, which includes maintaining and modernizing the energy chapter of NAFTA. Additionally, the steel and aluminum tariffs are counterproductive and could significantly undermine our industries by increasing the cost of the raw materials necessary for facility expansion and development. We need policies that work together to remain a global leader in the refining and petrochemical industries.
For more information, visit www. afpm.org or call (202) 457-0480.