API President and CEO Sends Statement to Senate’s “Group of 10″

(Compiler's note: United States national security is a risk here. This letter does much to explain why and how. One does NOT need to be an economist to understand. rca)

By Cary Wesberry • August 16, 2008

Red Cavaney, President and Chief Executive Officer of API sent this response to the Senate’s “Group of 10″, ....

API must express its opposition to the approach outlined by the Group of 10 because it falls far short of what is needed.

Unfortunately, the proposal appears to be a classic case of one step forward, two steps back — or in this instance “light on new production/heavy on new taxes”. Current world events only reinforce the critical importance of ensuring that our nation develops the full range of its domestic energy resources for economic competitiveness and national security reasons.

The proposal’s approach to access to federal oil and natural gas resources is far too limited in its scope. And, it is unfortunately paired with the imposition of at least $30 billion in new taxes on the oil and natural gas industry that would have the effect of limiting needed oil and gas investment. A lesson learned well in the 1970-80 period. These measures create an environment that will virtually assure a future with less, not more, domestic production.

While this new proposal would expand access in the waters of the Outer Continental Shelf, it unfortunately limits any expansion over current law to the eastern Gulf of Mexico and waters off four Atlantic Coast states in the South. Even in these areas, development in federal waters less than 50 miles offshore would be banned - despite the fact that offshore facilities would need to be 12 or fewer miles from shore to be visible from land. Leasing in the North Atlantic and off the Pacific Coast would be banned and plentiful hydrocarbon resources in Alaska would remain off limits. Significant regulatory burdens on new development would remain in place. The imposition of $30 billion in clearly discriminatory new taxes, to pay for federal investment in alternatives and renewables, ignores the fact that the industry already provides more than 70 percent of all North American investment in research and development in emerging energy technologies.

Americans today are calling for Congress to do much more to supply their needs for additional energy. Our companies are supplying more energy - and more kinds of energy - to meet this growing demand. The U.S. Energy Information Administration continues to point out that oil and natural gas will be an essential part of this nation’s energy future for decades to come. Opening all available domestic resources to safe and environmentally responsible development would significantly boost U.S. supplies of oil and natural gas; increase the nation’s energy security; add more well-paying American jobs; help with our balance of payments and economic growth during a time of recessionary fears and bring billions of dollars into the Treasury instead of sending them abroad.

Huge and discriminatory new taxes on the U.S. oil and gas industry make no sense. The only beneficiaries of such an ill-advised approach would be international competitors in the global oil markets, who would benefit as US companies were made less competitive in the quest to find and develop global energy supplies. ....