MIDLAND American Petroleum Institute President-CEO Mike Sommers of Washington, D.C., said here Tuesday that the energy industry “is dealing with a critical moment from a policy perspective” with Congress and the Biden administration.
Having spent two days meeting with oilmen in Odessa and Midland, Sommers said his organization is fervently striving to educate the new administration about energy issues that are crucial to reliability, affordability for consumers and national security.
He reported meeting recently with U.S. Secretary of Energy Jennifer Granholm and White House National Climate Advisor Regina McCarthy; however, he said, “I’m not always certain that they’re hearing us.”
Sommers said the industry was heartened by the August ruling of U.S. District Judge Terry A. Doughty of New Orleans that President Biden had exceeded the scope of his authority with his January prohibition of drilling on federal lands.
He said Biden is obeying Judge Doughty’s order to proceed with leasing on federal lands and off-shore, but he predicted that the administration will appeal to New Orleans’ U.S. 5th Circuit Court of Appeals and to the U.S. Supreme Court if it loses there.
Asked if he had come to the Permian Basin in part to compete for members with the Washington-based Independent Petroleum Association of America, Sommers said the API’s relationship with the IPAA is collegial and non-competitive.
He reported meeting “here in the capital of the American oil and gas industry” with the leaders of Occidental Petroleum, Pioneer Natural Resources, Diamondback Energy, CrownQuest Operating, Chevron, ConocoPhillips and other API members.
“We’re spending a lot of time dealing with the new environmental regulations being brought in by the president and Congress,” Sommers said. “Some things in the budget reconciliation bill are very concerning like punitive tax increases that we don’t think would be prudent for the industry or the country.
“We’ve been able to cut greenhouse emissions by converting from the use of coal to natural gas, so we think natural gas should qualify under the clean industry standards.”
He said that with the exceptions of the late President George H.W. Bush, who served from 1989-93, and his son, President George W. Bush, who was in office from 2001-09, both with deep backgrounds in oil and gas, the industry has had to undertake an extensive educatory process with most new presidents to circumvent damaging governmental initiatives.
But Sommers said in an interview at the Permian Strategic Partnership office downtown that that process has been more challenging than ever this year. “At some point, we have to start taking them at their word,” he said. “Stopping the Keystone Pipeline and banning lease permitting on federal acreage were significant concerns. At the same time, they have had an open door to working with us.
“We have to be literate on climate change and they need to be literate on energy as well because oil and gas will play a very significant role in this country for decades and decades to come.”