Critical Infrastructure

In a tight refined product market it has been U.S. refiners that have stepped up. Our industry ran full-out for most of 2022 making sure American consumers, our domestic economic centers and our allies had enough gasoline, diesel and jet fuel to keep everyone moving. Our refining sector leads the world in liquid fuel production and is effectively doing more than any other to bring better balance to the global market.

Eight midwestern governors have petitioned the EPA seeking to opt their states out of the federal 1-pound Reid Vapor Pressure (RVP) waiver which is a requirement to sell the current summertime blend of E10 gasoline. If these requests are granted, the E10 gasoline currently sold in most of the country during summer months will no longer be offered for sale in these states and annual costs to introduce a new gasoline bend will range from $500-$800 million each year.

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.

Some policymakers are rumored to be considering a ban on crude oil and/or U.S. refined product exports. This would be a mistake. Ending U.S. crude oil or refined product exports won’t help U.S. consumers by lowering prices at pump. In fact, it could make things even worse. Let’s take a closer look at how a refined product export ban would affect gasoline and diesel supplies and, thus, prices in the United States and around the world.

AFPM President and CEO Chet Thompson and API President and CEO Mike Sommers sent a letter to President Biden responding to recent letters the Administration sent to major U.S. fuel refiners suggesting that these companies, their workforces and facilities throughout the country aren’t doing their part to bring fuel to the market and lower energy costs for consumers.

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.

To address freight rail concerns, leaders from LyondellBasell and the Surface Transportation Board (STB) held discussions and toured LyondellBasell’s facility in Morris, Illinois. LyondellBasell’s Morris Complex is unique in that it is served by more than one major rail carrier. Nearly 80 percent of U.S. refineries and petrochemical facilities operate in regions served by just one freight rail provider.

The United States has the most complex and efficient refining industry in the world, but we also have less refining capacity than we used to. Where the issue of refining capacity is concerned, it’s important to understand what refining capacity is, why we’ve lost capacity in the United States and how policies can advance the competitiveness of our refineries in the global market.

AFPM Senior Petrochemical Advisor Jim Cooper talks about the central role of petrochemicals in health care, and why the petrochemical industry is considered critical infrastructure.