A strong chemical industry is essential to American prosperity

By Peter Huntsman

This is a lightly edited excerpt of testimony recently provided to the U.S. Senate’s Environment and Public Works Oversight Subcommittee hearing "Examining the Beneficial Use and Regulation of Chemicals.”

American prosperity, security and power are entirely dependent on a strong, thriving and properly regulated chemical sector. Without it, modern life is not possible. That is not hyperbole. It is a physical, immutable reality. 

One of the biggest threats to American power, security and prosperity is the belief that we can choose not to extract our natural resources and convert them into the materials that enable our citizenry to thrive. 

Since the beginning of recorded history to the modern-day international system, human beings and nation states have used natural resources to survive, prosper, trade and project power. This has been an invariable part of human nature and will always be so.

In the current policy, political and business arenas, opposition to natural resource extraction manifests itself in the idea that American society – and the world – can somehow “transition” away from fossil fuels and their derivative materials, including chemicals, and somehow maintain our way of life. Until the advent of new technology or a massive expansion of nuclear power, this is simply untrue and not physically possible. To believe so is both naïve and dangerous. Serious countries and people understand this reality. 

Until relatively recently, the notion that we could eliminate fossil fuels while still sustaining modern society was mostly a fringe idea and dismissed by serious leaders in government and industry Over the last two decades, as seemingly well-intentioned policy proposals developed to attempt to manage an ever-changing climate, anti-fossil fuel extraction policy has become normalized in Europe and, more recently, in the United States. 

Many governments have organized themselves around stopping natural resource extraction in the name of reducing carbon dioxide emissions to “net zero.” In the business community, many companies have made “commitments” that may (or may not) come to reality in less than three decades.

The most notable example of the danger of “net zero” government policy is Germany. Through a series of government decisions over two decades and exacerbated by Russia’s invasion of Ukraine, Germany has chosen to embark on a once-in-a-century deindustrialization that will have enormous global impacts, including in the United States.

Just a few years ago, it would have been inconceivable that the birthplace of the chemical industry could be deindustrializing. Yet here we are, waiting to see whether one of the most advanced economies and societies in modern history will be able to provide cheap, reliable, and abundant heat and electricity to power its economy. 

I encourage all U.S. elected officials to study deeply the policy decisions Germany made as it presents a real-life example of how not to organize electricity, manufacturing, natural resource, energy, and industrial policy.

If the goal of government and business is to reduce carbon dioxide emissions across society, U.S. government policy and regulation should be calibrated to increase natural resource extraction and chemical manufacturing more efficiently and productively. 

It is the chemical sector that develops the molecules and the innovations that allow individuals and society collectively to lower their emissions. This is evident in almost every sector across the economy. 

In the aerospace sector, fossil fuel-derived carbon composite airplanes fly longer distances using less fuel than their aluminum predecessors. Automobiles are constructed using carbon fiber material versus steel in years past. Modern homes include insulation materials that create a building envelope, securing the valuable hot and cold air inside the home.

The world population recently reached 8 billion people and, for the most part, everyone has access to food. The mass starvation that we witnessed as recently as the mid-1980’s in sub-Saharan Africa is virtually obsolete. This is a new phenomenon in human history and has been made possible only by chemical fertilizer and cold chain storage. Simply stated, a vibrant chemical industry means it is within our ability to lower emissions, grow the economy, and improve lives.

I am highly optimistic about the future. The United States, with its combination of freedom, capitalism, scientific inquiry, deep capital markets, legal protection, and entrepreneurial spirit, possesses the power to solve humanity's problems. As the geopolitical tides churn and countries reassess their priorities in a more dangerous world, regionalized supply chains will take precedence. 

Government policy around natural resources, self-sufficiency and manufacturing have returned to the forefront of policymaking. Industrial policy, regulatory decisions and capital expenditures made today by government and business leaders will impact America and the world for generations to come. We don’t need to look far to see the damaging impact of bad public policy around natural resources, energy, electricity, chemicals, and material innovation.

Peter Huntsman is the Chairman, President, and Chief Executive Officer of the Huntsman Corporation. 

_{*The opinions expressed in this column are those of the author and do not necessarily reflect the views of EnergyPlatform.News.}