DiBona urges consolidation of Washington oil associations

Former API President Charles DiBona [12,447 bytes]

Former American Petroleum Institute Pres. Charles DiBona says the oil industry should consolidate some of its Washington, D.C., associations.

In an interview, DiBona said that if some of those groups were merged into API, it would save money and effort for all concerned.

DiBona has been API president and CEO since Jan. 1, 1979. He stepped down Oct. 1 but will remain with the association as a consultant until Jan. 1.

His successor is Red Cavaney, former president and CEO of the American Plastics Council (see related story, pp. 44-45).

Consolidation

DiBona said, "The industry does not need all of the oil and gas trade associations that it now has" but oil company CEOs have been loath to open the battle to merge them.

"I have thought for a long time the industry would be better served, and we could have done our job better, if there had been some consolidation. We don't need the diversity we now have. I couldn't speak out on this before because it would have been construed as empire building. I can say it now."

He noted that many oil companies belong to several Washington-based associations, and those associations create task forces to plot strategy and lobby together on most major issues-raising the question of why separate groups were needed in the first place.

DiBona said, "One reason that it has been so hard to do something like this that makes such logical sense is the belief that the large companies run API."

In fact, he said API has 300 member companies and a handful of majors.

"The majors understand that they need to work with the independents in order to have a united front. And increasingly, their interests and the interests of the majors are the same. A lot of the independents are operating offshore, and many are operating abroad. The big independents have the same problems as the majors."

API evolves

DiBona said after an effort in Congress in the early 1970s to break up the largest oil companies, an internal API study concluded the association should build its analytical capabilities in order to focus more on public policy issues.

"That's when we developed much of the capabilities we have used in other things. That includes all of the outreach stuff and the ability to find allies and build coalitions and work with the academic community. Analytical capacity really didn't exist when I came."

Battles

DiBona said the industry's major achievement during his tenure was getting price controls removed from oil and gas: "That's what has made energy more abundant and lower priced in real terms.

"The thing that gave me the most satisfaction was the defeat of the BTU tax (proposed by the Clinton administration in 1993), because for a long while, we were the only ones fighting it, and when we started, no one thought we could win.

"Everyone felt like this was a sure win for the administration. To turn this around was a tremendously important thing."

In his remaining months at API, DiBona will continue to work against the Environmental Protection Agency's new ozone and particulates rule.

Although opponents apparently have enough votes to pass a bill delaying the rule, they lack the votes to sustain a presidential veto.

DiBona hopes congressmen will proceed with a bill. "We hope we can get a vote on it. Even if the president vetoes it and we're unable to override it, it would certainly send a message. We certainly haven't given up."

He said the issue has been tough to fight because the economy is doing well and the consequences of the regulations will be masked for a while.

"In this whole debate, what's constraining the administration most is they don't dare say that the only way they can bring about (CO2) reductions is with an immensely high energy tax, higher than the BTU tax, and that's because we so decisively defeated the BTU tax before."

DiBona said sanctions are a key threat to oil companies with interests overseas, as is the taxation of foreign income.

"But the major issues facing the industry are environmental issues, big and little. It's everything from climate change, production wastes, gasoline quality, and such. These are complex problems and a lot tougher to deal with than some of the issues we've faced in the past."

DiBona is wary about the prospect that Vice President Albert Gore might succeed President Clinton.

"You would have to worry about a person whose approach to this thing (the environment and global warming) borders on religious fanaticism, without any scientific basis.

"And you would worry about someone who says that we should phase out and completely eliminate the internal combustion engine in 15 years-he said that in the House of Representatives 7 or 8 years ago. Anybody who would make a statement like that is not a thoughtful person."