April 2020 /// Vol 241 No. 4

Features

Editorial opinion: A reply from API

On April 7, World Oil posted an editorial, which discussed the potential for the U.S. government to take action in the oil market, and API’s role in the situation. Here, now, is API’s response.

Mike Sommers, API

Dear Editor:

In your April 8 editorial, you correctly say natural gas and oil companies face “an unprecedented situation,” with a pandemic, a significant decrease in energy demand, and an oversupply of oil.

Unfortunately, you also assert that the American Petroleum Institute “seems to be working overtime to stifle discussion of some potential remedies.” That could not be further from the truth.

API represents 600-plus companies – independent drillers and integrated corporations, service companies and shippers, pipeline operators and refiners. We use the experience and expertise of our members and staff to encourage a wide variety of viewpoints within a strong, viable, essential industry.

While there is always more that unites our industry than divides us, the challenges we face are big enough that there will be many approaches to solving it—one company’s solution simply may not work for another. Likewise, government intervention that might help one segment of the industry could have unintended consequences for other segments, or for the broader U.S. economy.

For example, your editorial argues for tariffs, but protectionist trade measures would do more harm than good for our industry. While the U.S. today is a net energy exporter and far less reliant on foreign oil due to American energy leadership, refineries do rely on some imports to process different types of crude for jet fuel, gasoline, and other products. Creating new challenges for American refineries would only exacerbate the current situation.

Others have called for quotas. Two things are clear: New Department of Energy data show U.S. production is declining without a mandate due to reduced demand from COVID-19. And abandoning competitive market dynamics that enabled our industry to become a world leader would enable foreign oil to fill future demand.

We’ll continue to support efforts to deliver affordable and reliable energy through this market disruption, accelerating a global recovery and avoiding policies that history has shown will hurt more than help.

Throughout, we’ll hear nonsense from some politicians calling for an end to our industry. So while there may be disagreements among industry stakeholders along the way, it’s critical to remember we have far more in common than not.

We’re an industry united in employing millions of American workers, delivering reliable energy, reducing emissions, and strengthening U.S. national security.

The best way for the natural gas and oil industry to recover – like others – is to reinforce federal efforts to overcome this pandemic and enable demand to grow again. Although the Saudi-Russia price war has worsened the situation, the fact remains that current market conditions are largely due to historic drops in demand.

As natural gas and oil companies navigate today’s economic turbulence, it’s important to position this industry to come back even stronger. API remains committed to supporting all our members as they work day and night to deliver energy across the world in a safe, prompt, and environmentally sensitive manner.

Mike Sommers

American Petroleum Institute

President & CEO

The Authors ///

Mike Sommers Mike Sommers is the president and CEO of the American Petroleum Institute.

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