Bob Slaughter, President, NPRA, the National Petrochemical & Refiners Association, spoke during the Management Forum of SolArc Ascent 2006: Managing Energy Risk in Turbulent Times. In his remarks entitled "The Truth About 21st Century Energy Needs: Why the U.S. Must Part with Cherished Illusions and Adopt a Supply-Based Energy Policy," Mr. Slaughter said, "The U.S. oil and gas industry faces an unprecedented challenge in satisfying the projected growth in energy demand worldwide by 2030. To meet the challenge, the nation's energy policy must be grounded in reality, keep a long-term focus, and continue to search for solutions based upon sound science and careful analysis of economic and environmental factors."

What role will U.S. refiners play? U.S. refiners have produced record volumes of products in recent years to help meet the major increases in U.S. demand. They recovered in an unbelievably short period of time from two devastating back-to-back hurricanes. And they have invested about $50 billion over the last two decades to make sweeping environmental improvements in their products and facilities. "U.S. refiners have announced plans to add 1.4 million barrels per day of new refining capacity to existing U.S. refineries, an 8% increase," said Slaughter.

Biofuels are not the answer to America's supply problems. Ethanol from corn is not economic or energy efficient. "If we were to seek to replace 10% of U.S. gasoline needs with ethanol in 2020, we would have to plant all of Ohio, Illinois and Indiana, using one-sixth of the total land we currently use for crops just to grow corn for ethanol," explained Slaughter.

NPRA is not opposed to the use of ethanol, biodiesel, E-5 or other alternative fuels based on marketing pricing. "We believe that alternative fuels will be a growing component of the nation's future energy supplies as their economic viability improves. Policymakers, however, have a responsibility to get all the facts before mandating new fuels."

The era of cheap energy appears to be behind us. For the next several decades the U.S. and the rest of the world will require an increasing amount of oil and gas to meet their energy needs and support economic growth. This fact has geopolitical and national political implications. "With the lack of an explicit, supply-based energy policy to address the U.S. energy supply/demand imbalance, we are increasingly in the hands of international and global politics," said Slaughter. "In many ways, America's energy policy is still living in the past when oil and gas were cheap and readily available to meet constantly increasing global energy demand. Policymakers must accept the reality of the situation rather than take expensive and ill-considered steps in an attempt to avoid it."

In closing, Slaughter said, "America can take steps to increase its domestic production of energy, affecting both producers and refiners. Paying appropriate attention to the increasing need for energy will be key to obtaining policies that actually increase domestic production and refining. No nation - not even the United States - can insulate itself from the global energy challenges. We are all in this together."

NPRA is a national trade association with more than 450 member companies, including virtually all U.S. refiners and petrochemical manufacturers.