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The dramatic rise of AI, shifting geopolitics, and industry overcapacity are putting energy and chemicals at a crossroads. Victoria Meyer sits down with Steve Lewandowski and Adrian Calcaneo of Chemical Market Analytics to unpack how these forces are driving volatility and change across global markets. From increased US exports of natural gas liquids to oversupplied chemical sectors and the challenges facing Europe and Asia, the discussion lays out the most immediate pressures—and potential responses—for the industry.
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Killer Quote: “For me, in chemicals, more rationalizations are going to be announced. It’s just impossible not to happen because cash flow is just too big of a problem right now. No matter where, where oil goes, you know, those guys running heavier feeds are still going to be weak on margin. … You’ve got to survive today, but you’ve also got to plan for tomorrow. So don’t lose sight of things coming, you know, in the future.” — Steve Lewandowski
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Overcapacity or Opportunity? Critical Chemical Decisions Shaping 2026 with Steve Lewandowski and Adrian Calcaneo of OPIS
The intersection of energy and chemicals is never static and rarely more uncertain than heading into 2026. On this episode of The Chemical Show, Victoria sat down with industry experts Steve Lewandowski and Adrian Calcaneo for a conversation covering everything from the multiplying impacts of AI, to the strains on Europe’s energy security, to the question of capacity rationalization that’s on every leader’s mind. This episode offers business professionals across the chemical sector an inside look at what’s driving market dynamics, and what strategies may be needed to navigate the year ahead.
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The State of Play: Energy Markets in Flux
The energy landscape remains volatile, but also flush with supply in key areas. Adrian, drawing on decades of energy experience, points to two main forces at work: continued geopolitical uncertainty—think Venezuela, Iran, and the lingering impacts of the Russia-Ukraine conflict—and an overall environment of oil oversupply. OPEC continues to hold spare capacity in reserve, with supply growth mostly muted by subdued demand.
Natural gas tells a more nuanced story. The European scramble to replace Russian imports created a surge in global LNG activity. At the same time, the rapid scaling of AI technologies is unexpectedly pushing up electricity and thus natural gas demand. In the U.S., the abundance and logistical convenience of gas are fueling both expansion and regional competitiveness, especially as operators contemplate building new data centers wherever gas lines are accessible.
Chemical Oversupply: When Growth Outpaces Demand
On the chemicals side, Steve calls 2026 a year marked not by demand shortfalls, but by dramatic overbuilding of capacity, particularly in China. After a massive wave of ethylene and propylene projects, China is not yet self-sufficient, but is approaching that objective. With another 14-15 million tons of ethylene capacity “waiting in the queue,” the effect is a persistent global surplus even as underlying petrochemical demand slowly grows. Compounded by a steady stream of new U.S. facilities and expansions elsewhere, this disconnect between production and consumption is now the central challenge for the industry.
The Interplay of Energy and Chemicals: A Feedstock Balancing Act
For U.S. producers, the shale and NGL boom has made the country the world’s largest supplier of natural gas liquids. Adrian highlights how production growth in liquids is outstripping what the chemical industry can absorb leading to high inventories and increased exports. Surplus propane and butane are increasingly being absorbed by non-chemical sectors, such as household fuel in rapidly developing nations like India, Indonesia, and across Africa.
Steve notes that petrochemicals now have extensive feedstock flexibility (LPG, ethane, naphtha, even circular pyrolysis oil), which amplifies market imbalances. When pricing for one feedstock gets squeezed, crackers can often pivot, creating further challenges for refiners and producers tied to less flexible infrastructure.
Europe’s Ordeal: Policy Meets Reality
In Europe, the disconnect between energy policy ambitions and supply realities has come sharply into focus. As Adrian describes, the continent’s energy transition depended on continued access to low-cost Russian gas, an assumption upended by the war in Ukraine. The scramble for replacement LNG required a rapid build-out of import infrastructure, driving up costs for both energy and feedstocks. Europe’s chemicals sector, already reliant on less-competitive LPG and naphtha, now faces a “perfect storm” of expensive energy, restrictive policy, and increased competition from outside the region.
When coupled with aggressive carbon targets and uneven support for strategic industry segments, this has put significant pressure on European chemical operators. The region’s integrated oil and chemical business model, once a pillar of competitiveness, is now being tested as never before.
Rationalization: Seeking Balance in an Overbuilt World
So how does the industry get “healthy” again? Both Steve and Adrian point to the need for rationalization, removing excess capacity to restore margins and support reinvestment. In ethylene alone, an estimated 18-20 million tons may require shuttering or cancellation. While some shutdowns have already been announced, the pace has lagged what might be required to rebalance the market.
The conundrum: as facilities close, remaining operators may see a light at the end of the tunnel and try to ride out the storm, hoping that recovering margins will justify their staying power. Meanwhile, markets like Korea and Europe, heavily naphtha-based and most exposed to competitive pressure, are feeling the squeeze most acutely.
Looking Ahead: Survive Today, Plan for Tomorrow
If there’s one takeaway, it’s that short-term survival strategies must be balanced with long-term positioning. As Steve puts it: “You got to survive for today, but you got to also plan for tomorrow.” Rationalization is coming, but so are new opportunities, from AI-driven efficiency gains to fuel switching in the developing world and future technology breakthroughs.
The path forward? Stay alert, stay flexible, and keep your sights on both the present and what lies ahead. For business leaders in chemicals and energy, 2026 will be a test of both discipline and vision.
About Adrian & Steve:
Adrian Calcaneo -Vice President for Energy and Feedstocks
Adrian Calcaneo is the Vice President for Energy and Feedstocks and leads the NGL & Naphtha research at OPIS, a Dow Jones Company. His responsibilities include spearheading global development efforts across multiple product lines, including Liquefied Petroleum Gas (LPG), Ethane, and Naphtha. With over 20 years of experience, Adrian is a key resource within the company, offering deep insights into the broad energy market.
In his role, he collaborates closely with stakeholders throughout the energy, petrochemical, and financial sectors, providing global support and strategic insights. His current focus involves leading the development of new energy products and enhancing the company’s market intelligence deliverables and insights.
Before assuming his current position, Adrian managed the NGL market research for 43 countries in Latin America and the Caribbean. His extensive experience also includes consulting for multinational energy companies and working in international trade, energy policy, and global economics at think tanks and international non-governmental organizations.
Mr. Calcaneo holds a Bachelor of Arts in International Studies and Business, a Master of Public Administration, focusing on Energy Policy, from Texas A&M University and a Master’s Degree in Data Science from Harvard University.
Steve Lewandowski – Vice President, Global Olefins
During a career spanning 30 + years in the refining and chemical industry, Steve has experience across the spectrum of refining and petrochemical hydrocarbon value chains covering a wide array of financial, strategic, technical and commercial roles. Before his move to CMA, Steve was Senior Manager of Base Chemicals at TOTAL Petrochemicals & Refining, Inc. In that capacity, he managed the P&L of the base chemicals business including: joint venture relationships, strategic guidance to the partnerships, plant operational interfaces, project development, and the commercial responsibility for olefin and aromatic monomers including styrene.
Prior to the Base Chemical Senior manager role, Steve had increasing responsibilities within the Petrochemical business at TOTAL. The Latest assignment was overseas, Brussels Belgium, responsible for the Global aromatics long term commercial business activity. The assignment included P&L responsibility and strategic project development for TOTAL around the world. Prior to the Belgian assignment he worked as manager of the US aromatics business. Before 2000 Steve was involved in the refining and fuels side of the Hydrocarbon chain both for what was then FINA Oil and Chemical and for Star Enterprise (a joint venture between Texaco and Saudi Aramco) working as a process engineer, optimization engineer, fuels blending optimizer, branded/unbranded fuels marketing and supply lead, and in a business development role.
Steve earned a Bachelor of Science in Chemical Engineering from Michigan State University in 1987 and an MBA with of focus on finance and economics from the University of Texas at Dallas in 2000.