Dow first expressed alarm about high energy prices in 2002. At that time, our total annual energy and feedstock bill was $8 billion. In 2008, we spent over $27 billion. At this level, our energy expenditures are by far the largest component of our production costs, and equate to nearly half of our total revenues.
Because of volatile energy costs, Dow has had to take a number of actions to remain viable as a company. We have focused relentlessly on improving our energy efficiency, shut down dozens of uncompetitive plants, and pursued alternative energy and feedstocks. We have also invested preferentially in parts of the world where energy costs are lower. Our investments in Brazil, China, Kuwait, Libya and Saudi Arabia will create 10,000 direct and 60,000 indirect jobs. Many of these jobs could have been created in the U.S. had it not been for the high cost of natural gas over the past decade.
As the premier chemical producer and one of the largest industrial energy users, no one has more at stake in the solution — or more of an ability to have an impact on — the overlapping issues of energy supply and climate change than we do. Dow is uniquely positioned to continue to innovate concepts that lead to energy alternatives, less carbon-intensive raw material sources, and other products and solutions not yet imagined.
The current state of our economy requires bold action on many fronts. Most of the recessions occurring since World War II have been preceded by a spike in energy prices. We must take comprehensive action to strengthen and diversify our energy portfolio. There is no single silver bullet. Concerted bipartisan action will be necessary to achieve an energy policy that is up to the challenges of the 21st Century.
