It's hardly a revelation that there never has been a time when the petroleum industry lacked challenges.
It just seems that today's are more complex than usual.
So Oil & Gas Journal asked the presidents of several oil and gas associations to elaborate on major challenges their groups face.
TAX OPTIONS
Harold B. Scoggins, who has handed in his resignation as president of the Independent Petroleum Association of America, cited industry divisiveness over tax options that could result from budget deficit negotiations.
He said, "This is the best opportunity we've had in years to accomplish positive things in the way of correcting mistakes in the tax code and getting some new provisions that would help stimulate activity. But we have too many other organizations going in different directions, so our friends on the Hill are not getting any sort of a clear signal. When congressmen get in that position, they just back off and say, 'We're not going to do anything.'
"Some of the smaller organizations get so focused on one problem they lose sight of the big picture. They need to recognize that politically, they're not going to get anything if they don't work within a framework of the total industry. Then they might not get everything they want, but getting something is better than getting nothing at all."
Nicholas Bush, president of the Natural Gas Supply Association, sees a similar problem. Bush said it is difficult getting producers to recognize the value of coalitions, coalescing ideas, and then working to implement strategies they have agreed upon.
With such cooperation, he said, "I think industry would be more optimistic about its ability to achieve its policy goals. The producing community is increasingly competitive. Not only are they competitive by nature, but also their business strategies differ."
Charles DiBona, president of the American Petroleum Institute, said he's finding "the API business is environmental issues, with a few tax issues mixed in."
He said industry faces sweeping environmental change that will affect costs, the kind of products produced, and companies' liabilities, resulting in "tremendous uncertainties about what you can do in the future. The immense complexity of these things and the difficulty of getting permits is affecting every part of the business."
He thinks the pressures may moderate when the public perceives it is being hurt by environmental rules or their costs. "People are committed enough to protecting the environment that you won't see a backing away from that, but you're going to see a more reasonable administration of laws and better balance. But we're going to live through some years of this incredible imbalance first."
GAS OPPORTUNITIES
George Lawrence, American Gas Association president, said his industry's major challenge is capitalizing on its current market opportunities.
But a subproblem is getting quicker certification of projects from the Federal Energy Regulatory Commission.
Lawrence said, "One of the things we learned from last December--although we came through quite well--is that there are a lot of little potential bottlenecks that could be eliminated with 20-30 mile pipeline loops and connections, extra compressor capacity here and there, and more storage capacity."
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