May 11, 2022
CEO, Huntsman Corporation
Senior Vice President, Policy, U.S. Chamber of Commerce, President, Global Energy Institute, U.S. Chamber of Commerce
Energy security, defined by the International Energy Agency as “the uninterrupted availability of energy sources at an affordable price,” is crucial to a sustainable economy. With many organizations focusing on energy transition and greener alternative energy sources, understanding the current and future state of energy security is vital.
On day two of the U.S. Chamber of Commerce’s 2nd Annual Global Forum, Huntsman Chairman, President, and CEO Peter R. Huntsman shared his insights. Learn more about energy prices, theUnited States’ role in delivering energy to allies, and why infrastructure is critical for a carbon-neutral future.
Market Volatility Causes Energy Pricing Fluctuation, Has Ripple Effects on the Economy
Energy prices have fluctuated wildly throughout the pandemic, with demand outpacing supply worldwide as lockdown restrictions were lifted. These tight markets have only been exacerbated by Russia’s invasion of Ukraine and its associated sanctions.
“We used to price our products on a quarterly basis — it was not unusual to have prices in our industry that would be locked in for three, six, even 12 months at a time,” explained Huntsman. “In the last year, we went from quarterly pricing to monthly pricing, to weekly pricing [...and] particularly in Europe and in Asia, we’re moving prices on a daily basis.”
“[From] a consumer point of view, stability in pricing [impacts everything] — whether it be fertilizers, which is a raw material for the entire food industry, or [...] insulation materials, which is the raw material for [...] getting food from the field freshly to the grocery store,” he continued. “These prices are going to be fluctuating and changing, I dare say almost on a daily basis or weekly basis.”
The U.S. Must Consider How It Values Its Energy Assets
The United States has become a significant exporter of natural gas, which is considered a mainstay of the energy transition toward a low-carbon future.
When asked about America’s role in delivering energy to allies and partners around the world, Huntsman said he had “really mixed emotions.”
“We shouldn’t be exporting our energy resources at the competitiveness of our own manufacturers. We ought to be exporting cars instead of exporting the raw materials for metal and energy,” he stressed. “We ought to be looking at how we value our energy assets in this country, rather than just exporting them at the lowest possible cost.”
A Decarbonized Economy Will Require Massive Infrastructure and Permitting Capacities
With the important yet ambitious goals of reducing greenhouse gas emissions, the United States will need to build a massive amount of infrastructure to support efficient, affordable energy delivery. However, creating the necessary buildout requires the proper permitting — a process that takes a significant amount of time, according to Huntsman.
“It’s great that we’re putting aside all this money and talking about building cars, building the supply chain, building the energy raw materials for electric batteries, and so forth,” Huntsman added. “But it takes us 9 to 10 months to build new capacities for electrolytes [for electric vehicles, and] it takes us almost two years to get the permits to be able to build that out.”
“When we think about this regulation, we think about wanting to build out the infrastructure [to] deliver cheap and affordable energy [...], and we have pipelines that take 20 years to build over the Appalachians that ought to be taking us six months to build,” he continued. “That’s where regulation doesn’t become a regulation, it just becomes a killer for these sorts of advancements.”
From the Series