Worried, big oil fights back
The US oil and gas industry's leading trade association has launched a powerful campaign aimed at mobilising Americans to oppose legislation it says would hinder economic growth, cost jobs and erode energy security
The American Petroleum Institute (API) held citizen rallies in seven cities in early September to discuss the effect of these measures on jobs and economic recovery.
The API is not acting alone. It lists three-dozen partners, including not only other energy-industry associations, but also such diverse entities as the Council for Citizens against Government Waste, the Hispanic Leadership Fund, the US Chamber of Commerce, the National Association of Manufacturers and the Small Business and Entrepreneurship Council.
API president Jack Gerard argues that higher taxes and increased regulation could have an adverse impact on the energy industry, which supports more than 9.2 million jobs in the US, accounts for 7.5% of the country's economy and has invested nearly $2 trillion in capital projects in the US in the last decade. Proposals to lift the $75m cap on liabilities related to offshore oil spill would be the most harmful of new measures, as it would force most operators out of the Gulf of Mexico because of the unavailability of insurance.
This would jeopardise hundreds of thousands of American jobs and substantially reduce energy production from the Gulf, Gerard claimed. Critics of the cap say it encourages companies to take risks that could lead to spills and also means taxpayers might have to pay for some of the costs associated with a catastrophic event.
Other measures that could adversely affect jobs and energy production, Gerard says, include a bill before the Senate that would increase federal regulation of hydraulic fracturing (the drilling process used in shale-gas plays) and Congress's failure to lift the offshore drilling moratorium. Bills submitted to both houses of Congress would increase federal oversight of hydraulic fracturing fluids, which some environmental groups argue could seep into groundwater and pollute water supplies.
However, lawmakers have taken no action to address the drilling moratorium, imposed by President Barack Obama's Administration as a precaution until the cause of the Deepwater Horizon explosion, and resulting massive oil spill, can be determined.
The API is also fighting new taxes. Gerard cited an industry survey completed from July indicating that voters oppose new energy taxes by a 2-to-1 margin and an API-sponsored study showing that increasing the industry's tax load could significantly reduce domestic oil and gas production next year and cut it by as much as 10% in 2017.
Obama has called for rolling back billions of dollars in tax breaks for oil companies and applying the money to clean-energy research and development. Congress has already hiked the tax energy companies must pay into a fund to finance oil-spill clean-ups and a proposal before the Senate would repeal a tax break to major oil companies.