Watching Government: A politically audacious idea

Oct. 20, 2008
The full-page, A-section advertisement in the Oct. 9 Washington Post stood out from others; it was not for a major commercial bank saying how much it appreciated its depositors.

The full-page, A-section advertisement in the Oct. 9 Washington Post stood out from others; it was not for a major commercial bank saying how much it appreciated its depositors. But “The Unshaken Pillar” made an important point, which has been quietly spreading.

“When key pillars of our economy—housing, banking, autos—have been shaken, one pillar stands unshaken and provides the stability that our economy so desperately needs at this critical time.... That pillar is energy,” said the open letter signed by the chief executives of four large US corporations: Chevron Corp.’s David J. O’Reilly, American Electric Power Co.’s Michael G. Morris, FedEx Corp.’s Frederick W. Smith, and Dow Chemical Co.’s Andrew N. Lewis.

“Today, Americans understand that a strong and diverse energy sector is vital to our economic well-being and prosperity. They know that energy produced here at home creates good-paying American jobs, reduces our dependence on others, and spurs the necessary investment and innovation needed to develop all forms of energy,” it continued.

The letter called for exploring for more oil and gas domestically, intensifying initiatives to develop alternative and renewal energy forms, and continuing to improve efficiency and conservation.

Jobs, revenues, security

Doing so would “add more high-paying American jobs across all sectors of our economy; provide billions [of dollars] in new tax revenues that can be used by local, state, and federal governments to fund important programs that are at risk due to the current credit crisis; and reduce our dependence on foreign energy sources and the outflow of US capital to foreign countries,” it stressed.

Candidates aren’t talking much about it now, but oil and gas industry leaders agree that energy remains a major issue in the 2008 elections and will loom large for Congress and the next president.

“Public concern over prices hasn’t been this high since the oil shocks of the 1970s and with good reason. The global energy market has been reshaped in ways that are deeply affecting our economy, and those effects are intensifying. This renewed public concern presents an opportunity,” O’Reilly told a Washington audience on Sept. 17.

Convincing lawmakers

The critical question, however, is whether industry leaders can persuade federal lawmakers in the next few weeks to consider the US oil and gas business more a source of new economic growth than a convenient sector to tax. American Petroleum Institute Pres. Red Cavaney thinks the oil and gas business could help the general economy recover. “It provides well-paying jobs. We could be seen as a growth industry again,” he told me recently.

Discussions of how to make such a case will be on the minds of many people attending API’s annual meeting Oct. 19-20 in Scottsdale, Ariz. Cavaney will remain part of the effort even though he is retiring from API Oct. 31. He will then join ConocoPhillips as senior vice-president of government affairs (p. 36).