Charles DiBona, American Petroleum Institute president, is not optimistic about what legislators and regulators have in store for the U.S. oil industry this year.
DiBona expects little from Congress. "Everything they do will be affected by two factors: a presidential election year and a relatively short legislative session. The latter will limit how much gets done. And there are political difficulties passing certain kinds of legislation in an election year."
CHANGES IN CONGRESS
DiBona predicts a substantial turnover in Congress as a result of general elections in November. He said the public is increasingly dissatisfied with Congress and concerned about the economy, so more incumbents could be defeated than usual.
"Also," DiBona said, "there's going to be a fair number of retirements because this is the last year congressmen can keep contributions to their reelection campaigns if they retire.
"It's going to be an interesting year. But I don;t know how the changes in Congress will cut for the oil industry."
Due to the recession, DiBona does not expect Congress to pass additional gasoline or consumer taxes. He said it is possible it could approve an investment tax credit that will benefit the oil industry.
DiBona said it's a little hard to see how an omnibus energy policy bill is going to pass in this session of Congress. Even a modified bill would have trouble passing the Senate.
But he said if the legislation were dissected, individual sections could be passed.
He sees only a 50-50 chance Congress will pass a bill this session changing and reauthorizing the Resource Conservation and Recovery Act. If a reauthorization increased regulation of oil field wastes, it would create a tremendous amount of job loss in the industry.
DiBona said, "There is growing public concern that these extensive environmental demands are costing a loss of jobs in the U.S. We could start seeing a little more rationality in environmental matters."
On the regulatory front, API is concerned about the forthcoming Environmental Protection Agency rules setting standards for reformulated gasoline, limiting air emissions from fixed sources, and governing disposal of used motor oil.
The association is monitoring the Coast Guard's work on rules requiring contingency spill plans for tankers, as well as a Fish and Wildlife Service proposal to fine spillers for the public's loss of natural resources during spills.
WEATHER, ECONOMY
DiBona said the best thing that could happen for the oil industry this year would be increased product demand from colder weather or a strong economic recovery.
"Also," he said, "we need more public recognition that environmental regulations are costing the economy jobs."
He is optimistic about the long term future of U.S. oil companies. "This industry is going to survive and prosper because we are desperately needed in the U.S., we are trim and efficient, and technically we are the best in the world."
But DiBona stressed that economics and U.S. environmental restrictions increasingly are forcing the oil industry to shift efforts to non-U.S. exploration.
Copyright 1992 Oil & Gas Journal. All Rights Reserved.
