trend of increasing imports of a variety of products. The petroleum refining industry is not unique in facing pressure from imports. Those in the independent petrochemical industry can sympathize with our colleagues in the refining industry faced with pressure from foreign producers. Indeed, the decline in our industry's favorable trade balance during 1983 and 1984 has been caused more by increased petrochemical imports into the U.S. than reduced exports. 31/ But the imposition of a crude oil or petroleum product import limitation will weaken the competitive position of the manufacturing industries downstream of crude oil and petroleum product production and very possibly force these other industries to come before you with their claims for protec tion. The independent petrochemical industry joined many other industries in welcoming the termination of oil price and allocation controls, including the oil import program. It would be a drastic step backward into time and to reregulation of the energy and petrochemical industries to resurrect an import control program now. 31/ See, Trade Trends in Petrochemicals: 1983, p. 26. 99th CONGRESS 1st Session IN THE HOUSE OF REPRESENTATIVES Amendment to H.R. 2354 To clarify the classification of certain petrochemical feedstocks described as both a petroleum product and a benzenoid chemical. On Page 3, strike line 16 and insert in lieu thereof: " (2) 475.35 by amending item 475.35 to read as follows: Napthas (including petrochemical per gal. per gal (3) by amending headnote 1 by inserting after the phrase, "except fuel oils, motor fuel, and before the word "and", the words "petrochemical feedstocks"." On page 3, line 17, strike "(3)" and insert in lieu thereof " (4)" On page 4, strike lines 3-4 and insert in lieu thereof: "(5) by adding after subdivision (b) of headnote 2 the following new subdivisions:" On Page 4, after line 9 insert the following: (d) "Petrochemical feedstock" is any product provided for in this Part 10, however produced, derived from petroleum, shale oil, or natural gas, or combinations thereof (except motor fuel) which is actually used as a feedstock for petrochemical production. An amendment to H.R. 2354 to clarify the classification of certain petrochemical feedstocks described as both a petroleum product and a benzenoid chemical. Mr./Ms. Mr. Speaker, I am today introducing an amendment to H.R. 2354 which would clarify the tariff treatment the U.S. Customs Service should accord certain petrochemical feedstocks. The petrochemical industry is a major contributor to the overall U.S. economy. Petrochemicals appear in a wide variety of products which we consume and use every day: medicines, plastics, automobile parts, and textiles, to name just a few. We have all benefitted from the U.S. petrochemical industry's ability to keep the cost of these products low. In addition, in spite of the high value of the dollar which has hurt so many other American industries, the petrochemical industry has remained a net exporter--a positive contributor toward reducing our balance of trade problems. However, to compete in world markets, this industry must have access to raw materials, referred to as feedstocks, that are priced at competitive levels in the world marketplace. If the costs of these raw materials exceed those costs incurred by foreign competitors, U.S. petrochemical producers simply cannot produce competitively priced products. The U.S. industry's exports will decline, while overseas manufacturers will gain the market share lost by U.S. producers. More American jobs will be lost while we continue the export of our manufacturing employment. We are faced with just such a possibility. High tariffs currently being levied on certain types of imported naphthas used for petrochemical feedstocks are blocking the industry's access to an import source of raw materials available to foreign petrochemical producers. We must not allow this to continue. The amendment I am introducing today will clarify that these petrochemical feedstock naphthas should not be assessed the high tariffs applicable to benzenoid chemicals but currently being applied in some cases to naphtha for This amendment will issure that these feedstock use. feedstocks will remain available to the U.S. petrochemical industry. I urge my colleagues to support this amendment, and with it, support the continued vitality of the U.S. petrochemical industry. Senator NICKLES. Thank you very much, Mr. Rathburn. We appreciate your comments. Mr. Hancock, and also Mr. Bill McGough from Tulsa, OK. STATEMENT OF NOLAN W. HANCOCK, DIRECTOR, CITIZENSHIPLEGISLATIVE DEPARTMENT, OIL, CHEMICAL AND ATOMIC WORKERS INTERNATIONAL UNION Mr. HANCOCK. Thank you, Mr. Chairman. My name is Nolan Hancock. I am the legislative director of the Oil, Chemical and Atomic Workers International Union, with offices here in Washington, DC. We represent-our union primarily represents the workers in the energy fields-the oil, the chemical, the natural gas, the uranium energy field. We represent the human resource that we're talking about here today, families that are being affected by the actions that we have taken in the past, actions that have not been taken and actions that are going to be taken in the future. In my union alone over the last 4 years we have seen the loss of more than 50,000 members. Now these are individual families and we need to relate to them because they are your constituents and were our members. I'd like to limit my remarks today to the three areas the imports of refined products, the human cost, and the current conditions of the domestic refining industry. And I think we've discussed, we've gone into some depth on the current conditions of the domestic refining industry. But let me say that the members that we represent are efficient, they are hardworking, they are well-trained, and they make the oil industry competitive in this country and internationally. The problem that we see that faces the members of our union is that they are forced to compete on a situation where subsidized products are coming into this country at costs below the production in this country, the refining industry, the ammonia industry, the uranium industry. And while we've talked about it over the last 4 years, we have seen a viable uranium industry decline until there is no industry left. Our concern is we see that scenario starting to happen in the oil and the petrochemical industry. As long as we continue to have subsidized product imports, our members are unable to compete and the companies they work for are unable to compete. The situation in the refining industry has changed since the fallout of the earlier refiners in 1983. The refineries now that are being closed are those refiners who are in energy-producing States where they are close to the crude. They have the sophistication and the modernization of the equipment to refine both the light sweet and the heavy sour and the mix. These are refineries that are in geographic locations close to crude markets and cities or areas where the marketplace can handle their products. But here again the refineries are closing because there's no profit margin in the refining industry, and only those refineries can stay in business that have access to crude supplies at-where they can take the loss in the refining industry and continue to make a profit on their crude supplies. |