Chiming in on an ongoing dispute that has all parties involved in need of a few aspirin, Bayer Corp. said Thursday that it is urging the U.S. Congress and the Bush administration to lift restrictions on natural gas production in the Gulf of Mexico and the Outer Continental shelf and to encourage more natural gas supplies from Canada.

As the natural gas supply situation continues to tighten, forcing prices upward, chemical companies that rely on gas as a feedstock for their products are finding that it is getting more difficult to continue business. Bayer said high prices, diminishing supplies and rising demand threaten the U.S. chemical industry and economy.

“The U.S. chemical industry uses 11% of all natural gas in the United States as feedstock material and to run its plants,” explained Attila Molnar, Bayer Corp. CEO. “Yet at the same time, demand for this clean-burning fuel is rising and supply is diminishing, leading to uncertainty, shortages and soaring natural gas prices.

“We need a reliable supply of natural gas at globally competitive prices. Natural gas prices should [currently] be between $2.50 and $3.50/Mcf to keep the U.S. chemical industry competitive in worldwide markets,” Molnar said. “This year, it has sold for as much as $30/Mcf — six times the price of just three years ago. According to American Chemistry Council calculations, that’s equivalent to paying $16 for a gallon of milk, more than $9 for a gallon of gas or nearly $13 for a pound of beef.”

Bayer said it is also calling for legislation that would promote conservation incentives for utilities and government agencies, incentives to use cleaner and more energy-efficient co-generation facilities, and increased use of renewable energy sources.

In order to improve increasingly unsatisfactory profit margins, it is continually exploring energy conservation at its plants, ways to increase supply chain efficiencies and new pricing strategies, according to Ian Paterson, head of the Bayer Polymers Americas Region and CEO of Bayer Polymers LLC.

“In the polymers industry, the clear trend is toward commodities — products that are manufactured in large quantities and primarily sold on the basis of price and supply chain excellence,” Paterson said. “To assure long-term competitiveness for American industry in general and the polymers industry in particular, the U.S. urgently needs a robust energy policy — one that encourages the best use of energy resources and strengthens the energy infrastructure through expansion of North America’s vast natural gas resources.”

Bayer Corp. is a member of the worldwide Bayer Group, a $32 billion international health care and chemicals group based in Leverkusen, Germany.

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