(Editor's note: Video clips of an
exclusive interview with Drevna can be found at the bottom of
HOUSTON -- US fuel and petrochemical companies must shake
off past inclinations toward energy protectionism if they are
to fully take advantage of the shale revolution, the president
of a leading downstream industry trade group said.
Speaking on Tuesday at the 2013 Womens Global
Leadership Conference in Energy and Technology, Charles T. Drevna told
attendees that Americas past did not have to be its
How devastatingly ironic would it be if those calling
for restricted natural gas exports end up limiting the very
supply of natural gas that they desire?, asked Drevna,
who serves as president of the American Fuel & Petrochemical Manufacturers (AFPM).
Thats very well what could happen.
Drevna did not identify any company by name, but some
US-based petrochemical companies -- most notably, Dow Chemical and Celanese -- have
touted restricted US exports as a way to maintain domestic
energy security and thus keep the price benefits within the
However, Drevna -- a man who represents both refining and petrochemical companies --
believes that artificial limits to exports could ultimately
lead to the demise of upstream development, thus deflating the
very bubble that most want to protect.
The conventional wisdom long held that the US was
blessed with natural resources but not nearly as fortunate when
it came to domestic oil and natural gas, he said.
It was supposed to be dwindling. The memories of a decade
ago and the gas supply shortages still resonate in the minds of
many industrial users. And I can understand their apprehension
to some extent.
But that was the very catalyst that brought us
todays production surge, brought on by advancements in technology, and thats turned
the supply-demand ratio on its head, he added.
Its difficult to fathom a belief that limited
markets and lower prices will stimulate additional supply. Tell
me how that works.
In 2006, the Energy Information Administration (EIA)
forecast the US to be a long-term net importer of liquefied
natural gas (LNG). However, in its outlook for 2012, the EIA
reversed course and predicted the US to become a net exporter
Just a few years after saying we would be a net
importer, the EIA realized the tremendous shale
potential, Drevna said. Its a game changer.
Why? Because the free market decided we could invest in technology, mainly hydraulic
fracturing combined with horizontal drilling. Were smart.
We can do these things.
Today, the US has a manufacturing renaissance well underway,
according to Drevna. We have a chance, a big, big, big
chance, to do things right, he said.
However, industry companies aligning with environmental groups such as Sierra
Club could pose a significant risk to further development.
By aligning with those opposed to hydraulic
fracturing, even if not intentionally, theyre falling
into the trap that could very well destroy their own global
competitiveness, Drevna said.
For anyone on the fence, Drevna said the past could serve as
a template for how not to do things in the future.
The history of natural gas is a story of market
distortion, he said. Its been boom or bust,
driven by federal regulations. Its most often led to
Our past doesnt have to be our prologue.
Historically, supply problems were not caused by excessive
demand but artificial barriers to resource
Drevna recalled a 2012 interview with conservative US
talk-show host Bill OReilly as an example of the
mentality that must be overcome.
A year and a half ago, I was on with Bill
OReilly, and Bill, whether you like him or dont
like him, hes a smart guy, said Drevna.
But he doesnt get this, he continued.
We had a knock-down drag-out argument on the exports of
refined products. I told him, if you think refined products
staying here are going to lower price at the pump, youre
nuts. All it will do is close some refineries and perhaps cause
supply shortages in some parts of the country and see some
prices rise. He just couldnt get it.
Thats what were up against.
Now, nearly two years later, Drevna says more and more
Americans are moving toward his view. But further work does
We now have OPEC leaders wringing their hands and
mashing their teeth, asking what in the heck is going on in the
United States of America. They thought they would be
exporting LNG to the US, not vice-versa. This is a game
changer. This is going to work to our advantage.
But in order for us to fully succeed in this, we
cant have that protectionism mentality. If that happens,
our prologue will be our past.
The 2013 Womens Global Leadership
Conference In Energy & Technology continues
through Wednesday at the Hyatt Regency in downtown
Drevna describes the impact of US gas exports
on the nation's petrochemical industry.
offers his outlook into the near-term future of US
tells what lessons history tells us about US gas market
addresses attendees at the Women's Global Leadership