Energy Policy:

Air Liquide's Graff discusses climate for energy investments in U.S.

With Washington focusing on the economy and jobs, what is the climate for investments and growth at energy and manufacturing companies? During today's OnPoint, Michael Graff, CEO of Air Liquide, USA, discusses his company's growth prospects. He also gives an update on the FutureGen 2.0 carbon capture project, which Air Liquide is heavily involved in.

Transcript

Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. Joining me today is Michael Graff, CEO of Air Liquide USA. Mike, thanks for coming on the show.

Michael Graff: Thank you, Monica.

Monica Trauzzi: Mike, with Washington's focus on the economy and jobs, how would you qualify the climate for investments in growth at Air Liquide? Have you succeeded at aggressively growing the company considering how things stand in the U.S.?

Michael Graff: You know, Monica, I think that we clearly continue to invest and grow in our business, joint with our customer's needs. You know, Air Liquide has got 45,000 employees in 80 countries around the world and here in the U.S. we've got about 5000 employees that serve the needs of just about every industry and enable every industry that's out there. And over the course of the last 3 to 4 years, we've actually more than doubled our level of investment in the U.S., as compared to prior periods. So, we've continued to grow with key sectors and key industries that we serve. Be that chemicals, be that refining, be that the upstream oil and gas markets, foods, pharmaceuticals, health care, electronics, we continue to grow.

Monica Trauzzi: How would you compare the U.S. market to other markets that Air Liquide is in?

Michael Graff: You know, in the U.S. market, clearly, we're a more mature market than some of the emerging markets and yet when you compare the U.S. to the mature markets of Western Europe or Japan, I think we've seen a much more rapid recovery, at least in the customers we serve coming out of the recessionary environment, than others might've seen. For us right now, we continue to look at kind of this balance of the legislative and regulatory climate and trying to understand where the clarity may be as to the balance between environmental regulation and fiscal needs and the recognition that we need to promote the long-term growth of manufacturing and industrial production to keep our economy healthy and strong.

Monica Trauzzi: On the regulatory front, the Obama administration has taken some interesting steps over the last couple of weeks, rolling back on some of EPA's regulations. Have they gone far enough? Do you think they've done enough to please the manufacturing community and industry?

Michael Graff: You know, I think when you look at the evolution of environmental regulations and you look at the impact on industrial growth and manufacturing long-term, we've got to make sure we continue with the right balance. I think that many companies out there would say we need balance and we need clarity. And I think that's what we're trying to strive for and we really look to the administration and the legislative and regulatory branches to work together to help us understand that.

Monica Trauzzi: So, you're heavily involved in the FutureGen 2.0 project. With all the controversy surrounding DOE loans at this point, are there any concerns that you have on your end about the future of that investment?

Michael Graff: Well, as you know, FutureGen 2 is all about demonstrating, in a commercial sense, the ability to take an aging, coal-fired power plant and really retrofit it to go ahead and burn coal in a clean way. And so for us this is with some technologies we've developed around oxy-combustion. And so in order to take what is a vast resource in the U.S., indigenous coal, and then gasify that with pure oxygen, basically reducing the amount of greenhouse gas emissions that are formed, and then capturing all that CO2 that's formed, liquefying it and then sequestering it, is clearly the goal of FutureGen 2. And, as we look at it today, we are clearly very focused on being able to demonstrate that. The Department of Energy has been strongly behind that and we look forward to continuing in that program.

Monica Trauzzi: But DOE did back down on the original FutureGen project. Are there any concerns on your end that they could back down on this one, especially with all the controversy?

Michael Graff: With FutureGen 2, I think with our partners Air Liquide, Babcock & Wilcox, and Ameren, very clearly we've worked very hard to try and meet the milestones and the needs. And I think we've continued to demonstrate that and I think that there's really a drive to understand how we can go ahead and cleanly burn coal, and I think that's very important.

Monica Trauzzi: GE and the University of Wyoming backed down on their carbon capture project earlier this summer. So, how would you qualify the state of the carbon capture industry then?

Michael Graff: Well, I think the evolution and the need to demonstrate the commercial capability to deliver in large volumes our country's energy needs, to do that in a sustainable way and to demonstrate that you really can go ahead and capture large volumes of CO2 and sequester it, I think is clearly important to the long-term future of energy diversification for the country. And so I think it's very important we continue with that program. I think FutureGen 2 is that opportunity, because when you look at this, there's something like 647 aging coal-fired power plants in the greater Midwest. And if we can demonstrate this technology, we can demonstrate how it works, not only can we diversify how we meet our energy needs for the future in the country, but we create the associated jobs that go along with it.

Monica Trauzzi: What's your take on the state of political discussions surrounding energy in the United States right now?

Michael Graff: Well, I think when you think about energy and you think about energy policy, I think there's an evolution and I think, clearly, the diversification of our sources of energy is recognized as critically important. I think there's a lot of discussion about oil, about gas, about coal, about photovoltaics and I think even with biofuels, I mean they all play a role in our energy future. And I think it's very important we work multiple and parallel paths to demonstrate how we can go ahead and meet the future needs of the country and how each of these fits together in that overall plan.

Monica Trauzzi: We've heard many complaints from industry, from the manufacturing sector about the Obama administration's treatment of the business community. How would you qualify the Obama administration's actions towards business?

Michael Graff: Well, I think when you look at the industry as a whole, I mean, and you think about I would say the looked for continued growth, from a manufacturing standpoint you look for a continued growth in industrial production, you look at how that drives our energy needs then to go ahead and support our economy and what we need to do, it's critically important that we find that right balance point. If you think about regulatory issues, we want to make sure we do the right things for the environment. If you think about fiscal policy and fiscal responsibility, clearly we need to have that in the right place for the country. But we also need to recognize the overall impact on industrial production, on manufacturing and to supporting energy needs that go along with that. And so we need to find that right balance between all of those. And I think that with that balance and with the clarity of that we'll be able to go ahead and foster the long-term growth that we need.

Monica Trauzzi: OK, we'll end it right there. Thank you for coming on the show. Nice to see you.

Michael Graff: Thank you, Monica.

Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.

[End of Audio]

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