One of the unintended consequences of certain environmental regulations is a market distortion toward a particular product over other competing products. For example, potential climate change legislation could leave electric utilities with little alternative but to switch to natural gas. Approximately half of the petrochemicals produced in the U.S. use natural gas liquids as a feedstock. Having to compete with utilities for natural gas will result in a dramatic price increase, placing U.S. petrochemical producers at a severe competitive disadvantage compared to other regions in the global marketplace.
Petrochemical producers need an abundant supply of raw materials and may have to compete with electric utilities and others for their most critical feedstocks.
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