As American manufacturers champion their contributions to economic competitiveness and product innovation today, the industry has yet another reason to celebrate – U.S. manufacturing employment is still on the rise.
Right now, members of Congress are debating a series of taxes as part of the multi-trillion-dollar reconciliation package that could make the crude oil that runs through U.S. refineries more expensive.
COVID-19 upended energy markets. Demand disappeared and producers scaled back. Now that economies are reopening, and the demand for goods and services is rebounding, the demand for energy all along the supply chain is increasing, driving up not only the cost of the feedstocks and fuels refineries and petrochemical manufacturers use, but also the cost of the energy used at every step of the supply chain.
WASHINGTON, D.C. – "Federal policy is discouraging supply by shutting down pipelines, putting future production off limits, talking down the future of the petroleum business, and imposing expensive requirements on refineries, chief among them a burdensome Renewable Fuel Standard. The Administration is blaming others when it ought to take a sober look at its own energy policy."
We are surprised and disappointed by the President’s letter. Any suggestion that U.S. refiners are not doing our part to bring stability to the market is false. We would encourage the Administration to look inward to better understand the role their policies and hostile rhetoric have played in the current environment.
The return of fuel demand to pre-pandemic levels and the slower rebound of crude oil and fuel production has created concerns about whether supplies of gasoline, diesel and jet fuel will be sufficient to meet global demand. U.S. refineries are up and running at near maximum utilization. Other major refining countries, for a variety of reasons, have not kept pace bringing their facilities back into operation or resuming sales of fuel to the market. As a result, wholesale fuel prices have increased and so have refinery “crack spreads."
A Strategic Petroleum Reserve (SPR) release—which basically involves making additional barrels of crude oil available for sale to the world market—is meant to increase global supply. Meeting today’s demand with more supply is a recipe for lower prices. The United States released millions of barrels from our SPR in the past several months, as did many other countries.
The U.S. refining industry is the most competitive in the world, which is a benefit to American households. Our complex facilities are uniquely suited to handle difficult-to-refine crude oil and other petroleum feedstocks that refineries elsewhere cannot process. This creates competitive advantage. At the same time, the United States is able to sell some of our higher-quality crude to countries that need it. This combination is powerful.
AFPM opposes the Inflation Reduction Act as written. We evaluated the bill against our core principles, specifically whether the legislation would support strong U.S. refining and petrochemical industries and whether it pursued emissions reductions in a market-based and cost-effective manner. Unfortunately, the IRA falls short of these goals.
AFPM director of transportation and infrastructure, Rob Benedict, discusses the potential impacts proposed steel tariffs would have on the fuels and petrochemical industries.
