WASHINGTON — Plummeting oil prices boost the argument for exporting U.S. crude and slowing the advance of new regulations that will affect the industry, American Petroleum Institute CEO Jack Gerard said Friday.
Oil prices have fallen roughly 35 percent since June, with surging U.S. crude production helping boost supply beyond softening demand worldwide.
Gerard cast that as "a temporary adjustment in the price," with some rebound on the horizon, but told reporters in a conference call Friday that the decline should encourage U.S. policymakers to find ways to keep the domestic drilling boom on track.
"The worst thing for us to do would be to put any hurdles in the path of what we're doing here (by way of) the American energy renaissance," he said.
The industry is bracing for a host of regulations, including possible new controls on methane emissions and coming mandates governing hydraulic fracturing on public land.
The Environmental Protection Agency is set to decide later this month whether it will pursue new regulations to clamp down on methane emissions from oil and gas wells, pneumatic controllers, compressors and other equipment. The Bureau of Land Management is expected to soon unveil its final rule for wells that are drilled and hydraulically fractured on public land.
"It's ironic that here we have an American energy renaissance taking place that is unprecedented in the history of our nation, and yet we continue to see repeated efforts to regulate the very activity that is underlying a lot of the job growth that we see in the country today," Gerard said. "We strongly encourage the administration to take a deep breath and look comprehensively at the chilling effect they're sending to the marketplace with repeated regulatory activities that discourage the very activity that is creating these new well-paying jobs."
Oil industry groups, including API, have argued that new methane controls are unnecessary, especially given data suggesting emissions of that potent greenhouse gas are on the decline, even as crude and gas production climbs.
"We don't think additional regulation is needed at this time," said Howard Feldman, API's director of regulatory and scientific affairs, at a separate event Thursday.
On the flip side, oil producers eager to sell their crude overseas see one silver lining amid the price slide: the decline could help them make the case that exports are needed to help keep rigs running in the United States.
Producers see exports helping to bridge the gap between lower-priced domestic West Texas Intermediate oil and its international counterpart, Brent crude. Although the differential is now modest — much smaller than the double-digit differences posted last year — even a small gain could help insulate domestic producers in a bear oil market.
"Now is the time for the U.S. to look for additional markets for our product," Gerard said. "Now is the time for the Congress and the administration to work together in a bipartisan way and say 'We have got huge resources in the United States and let's make sure the United States is positioned to capture some of those markets not only domestically but globally.'"
Gerard added, "That will benefit us all and continue to allow us to create the jobs associated with energy production."
Some Republicans in Congress — notably Sen. Lisa Murkowski of Alaska and Rep. Michael McCaul of Texas — have argued the 39-year-old ban on most crude exports is outdated policy, out of touch with today's domestic oil production. But many rank-and-file Republicans have been less eager to wade into the politically charged issue, especially leading up to the midterm election in November.
A barometer of the House of Representatives' interest in the issue could be next Thursday's Energy and Power Subcommittee hearing focused on crude exports — the first session of its kind to concentrate on the topic.
Witnesses are set to include Adam Sieminski, head of the government's Energy Information Administration; Lucian Pugliaresi, president of the Energy Policy Research Foundation; Charles Ebinger, who heads the Energy Security Initiative at the Brookings Institution; and Deborah Gordon, director of the Energy and Climate Program at the Carnegie Endowment for International Peace.
The witness lineup has one notable absence: the very oil executives who want the freedom to sell their crude overseas. The subcommittee's decision to put academics on the witness stand, however, could keep the focus on policy — and avoid the image of oil executives with their hats out to Congress.