Red's straw poll

As part of his effort to educate himself as the new American Petroleum Institute president, Red Cavaney has spent most of his time since Oct. 1 visiting with oil company executives. He has met with 36 CEOs of big and small companies, upstream and downstream, including some non-members. Cavaney said a consensus on four "macro challenges" facing the oil industry emerged from those talks. "Number one on the list is industry's ability to manage an increasing number and intensity of

Dec. 15, 1997

3 min read

Patrick Crow
Washington, D.C.
[email protected]

As part of his effort to educate himself as the new American Petroleum Institute president, Red Cavaney has spent most of his time since Oct. 1 visiting with oil company executives.

He has met with 36 CEOs of big and small companies, upstream and downstream, including some non-members.

Cavaney said a consensus on four "macro challenges" facing the oil industry emerged from those talks.

"Number one on the list is industry's ability to manage an increasing number and intensity of environmental regulations, coming not only at the federal but also at the state and local levels.

"We're also seeing an increase in regional rules, and even international ones, where regulations are established offshore and are brought back here.

"That, particularly for medium and small-sized companies, is a very daunting task."

Image, workforce

Cavaney said second on the list is a concern for the industry's image.

"There's a general feeling that, particularly in the last 10 years, oil companies have done a great deal to improve the safety of their operations and environmental compatibility, yet the public has the impression industry is still operating as it was 10 or 20 years ago."

He said the CEOs said industry should better "explain better what we have been doing and how we have improved things."

Cavaney said a "fancy PR program" would not work. "The public is knowledgeable enough today that if you are going to make claims about what you have done and are going to do, you need to 'walk the talk' and be committed to do what you promise."

Cavaney said the third major concern is the need to attract and develop a talented work force, especially in the E&P area.

He said the oil industry recruited "its fair share of the best and the brightest" in the past, but in the past decade it has downsized, and oil-related university programs have shrunk.

"Industry people are looking at the pool of manpower that will supply the leaders of the next generationellipseand say we haven't added as much to our capital stock of people as we should have. Are we going to be able to get the same quality of people in the future that we have (in the past) and in the same numbers?"

Technology

Cavaney said the fourth major concern is industry's ability to maintain its high level of technological improvements.

He said most industry leaders cite improving technology as one of the principal reasons they expect continuing opportunities in the business.

"There's a sense of renewal and optimism in the oil industry. All parts of the industry seem to be participating, particularly on the E&P side."

Cavaney said industry leaders also are concerned about specific issues, such as the impact of a treaty limiting greenhouse gas emissions, unilateral sanctions against foreign nations, the Environmental Protection Agency's smog and soot rule, the prospect of higher taxes, and limited access to federal lands.

API's management and public policy committees will meet early in January and establish priorities for the association.

Cavaney expects the four "macro challenges" to be high on the agenda.