Executive insights from HollyFrontier, LyondellBasell, Phillips 66 and Plains All American Pipeline

When faced with extraordinary events, the refining, petrochemical and midstream industries never fail to demonstrate their resiliency.

During the 2021 AFPM Annual Meeting, industry leaders shared their thoughts on the challenges and opportunities they've encountered this past year and their outlook on what's to come.

According to Mike Jennings, president and CEO of HollyFrontier Corp., whatever challenges the industry faces, safety will always remain its most important pillar.

"Looking back over the past year, the greatest challenge has been keeping our people safe and allowing them to work," Jennings said. "We have experience with this as an industry, and we have experience with planned outages along the Gulf Coast. The big takeaway has been the challenge of how to keep the people and the community safe, which we've been doing successfully for more than 14 months."

"What works in one facility doesn't always translate to another," said Bob Herman, executive vice president of refining for Phillips 66. "The ability of our people to adjust to the conditions of their local site and make things happen in short order was nothing short of amazing."

Torkel Rhenman, executive vice president of LyondellBasell, was also amazed at how the industry responded to two unprecedented events that no one could have forecasted.

"Our industry has come away very strong, and I'm optimistic about the future," Rhenman said. "When undergoing a crisis, you can't forget about your long-term strategy. You have to continue to develop your people. Last year, we probably worked more on leadership development than in years prior because we put a special focus on it.

"When entering a crisis, having a strong balance sheet is also important and gives you options to do things. You never know when a crisis will happen, but it will happen. [A strong balance sheet] enabled us to make a major acquisition on the Gulf Coast with the Sasol joint venture. I think this was fantastically timed and is going to serve us very well."

Industry has been providing the critical fuels the world needs for more than 125 years. Today, industry still provides these fuels, but it's also incorporating sustainability into this mission.

"When it comes to sustainability, pipelines are the safest, most reliable and least impactful way to move product from A to B," said Willie Chiang, chairman and CEO of Plains All American Pipeline LP. "I often get asked what the midstream sector will do to transition, as far as creating a lower energy footprint. I don't even like the word 'transition.' The energy 'mix' is going to continue to shift, but hydrocarbons will be a major part of it. When you think about electric vehicles (EVs), in terms of global energy, transportation fuels are 15 percent of the total energy consumed. We're talking about EVs solving a piece of it, but the global energy solution is much, much broader."

According to Herman, the whole idea that industry is the enemy of sustainability is a false narrative.

"We've been powering better things in this world through hydrocarbons and petrochemicals for 130 years," Herman said. "If you take these away, the next 130 years won't see the same progress or the same number of people emerging from poverty to live sustainable lifestyles."

According to Rhenman, LyondellBasell is capturing the growth opportunities that can come with sustainability.

"With plastics, we have a huge issue with waste. We have a huge issue with recycling. As a company, we're investing in mechanical recycling and chemical recycling," Rhenman said. "By the end of this decade, about 10 percent of our polymers will be recycled. LyondellBasell is investing in and committing to this business opportunity."

As far as predictions for what's to come for the rest of 2021 and 2022, these industry executives seem very optimistic.

"There's a lot of pent-up demand out there," Herman said. "At the end of the day, the world needs what we make. I think that will sustain us quite well as an industry. Our biggest challenge is to stay together, and we need to keep pushing the narrative of how important we are as an industry."

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