Last year, as energy markets were already under pressure with issues ranging from supply chain disruptions to Russia’s invasion of Ukraine, the demand on an already outstripped energy supply was accelerated.
Taking immediate steps to try and limit the flow of Russian O&G, major economies scrambled to secure energy. According to AFPM President and CEO Chet Thompson, increased production allowed for ample supply for the U.S. and its allies.
"Our abundant natural resources, our world-class refining and petrochemical assets, our unparalleled infrastructure and our incredible workforce are the envy of the world and have helped us from the worst impacts of this global chaos," said Thompson. "Last year, U.S. refiners led the world in production of fuel, manufacturing a whopping 280 billion gallons of finished product, more than enough to meet not only U.S. needs, but those of our allies."
As traditional energy trading patterns were dramatically altered, this period made it evident that U.S. refiners and petrochemical manufacturers were best positioned to deliver products cleaner, safer and more efficiently, according to Thompson.
$110B investment in next five years
AFPM President and CEO Chet Thompson
"American refiners last year reinvested $13 billion back into their domestic facilities," said Thompson. "That’s an increase of 23% from the year before, and over the next five years, we expect them to invest more than $60 billion right here at home. Same story for the American petrochemical manufacturers; they invested $7 billion into their domestic operations last year, and they expect to invest another $50 billion over the next five years."
Thompson noted that premature transitions to newer technologies can hinder growth and compromise security.
"Renewable energy and petroleum products go hand in hand. There would be no renewable energy, no PV solar panels, no wind turbines without us," said Thompson. "But policies that force the premature transition or mandate specific technologies before we as a country have the infrastructure in place to use them, before we know how we’re going to secure the necessary resources to develop them, before we can reckon with the full lifestyle impacts of these changes and before we fully understand the national security implications of such moves is a recipe for disaster and will put the U.S. on a dangerous, vulnerable path."
Making renewable and sustainable technologies affordable and accessible to all, while maintaining the strength of refining and petrochemical industries, is key in fostering U.S. energy security, explained Thompson at the recent 2023 AFPM Annual Meeting in San Antonio.
"Our American energy security is rooted right here. This is where we have built a clear advantage over the rest of the world. Our refining and petrochemical sectors are a source of strength and security," said Thompson.
Looking forward, Thompson noted that the U.S. should embrace policies that help advance low carbon liquid fuels, carbon capture and sequestration and green hydrogen production, among other sustainable products and solutions.
"We’re only beginning to scratch the surface of what these technologies and these products can achieve. We need policies that foster their growth, not impediment," said Thompson.
Investing in American refineries and manufacturing will increase efficiency, enhance job safety and allow for the further development of renewable, sustainable products, according to Thompson.
"We must continue to evolve, become safer and cleaner, be part of solutions to the world’s most pressing challenges," said Thompson. "For us, that means supplying the world with the energy and petrochemicals it needs to thrive, while being responsible stewards of our environment, for the sake of our children and our children’s children. These are the current challenges that our industry faces every single day, and we embrace them as fundamental to our mission."
