American Geological Institute

Government Affairs Program

Update on Oil & Gas Issues: 1-25-97

One of the missions of AGI's Government Affairs Program is to keep the geoscience community informed of developments in Washington that affect geoscientists. As part of that mission, GAP tracks issues of concern to the industries that are major employers of geoscientists. These reports are an effort to communicate what we hear in Washington to the rest of the community.

In order to keep abreast of issues confronting the oil and gas industry, GAP senior advisor John Dragonetti attends monthly meetings of Washington representatives hosted by the Independent Petroleum Association of America (IPAA). The meeting provides an opportunity to hear what issues are of leading importance to both the independents and major oil and gas companies. The following is a brief summary of the January meeting. For additional information, contact John Dragonetti by e-mail or by phone at (703) 379-2480.

The primary focus of the meeting was a presentation of the IPAA Government Relations objectives for the 105th Congress, and envisioned relationships with other organizations. Although the discussions generally centered around the seven topical areas which parallel IPAA's Government Relations units -- Taxes, Lands & Royalties, Crude Oil, Offshore, Natural Gas, Environment & Safety, and Public Education -- there was considerable interplay among the subject areas. The exchanges covered an extremely broad range of issues, but this report will only address the dominant themes.

Taxes: IPAA will concentrate on matters related to what has been termed "corporate welfare." Ensure the continued deductibility of all business expenses related to oil and gas exploration, development and production. Meet with the Internal Revenue Service concerning that agency's proposal to tax hydrocarbons in the ground as inventory.

Lands & Royalties: Restrict executive branch withdrawal of public lands similar to the recent Utah experience (Executive order creating the Escalante-Grand Staircase National Monument). Work to reform the regulatory practices of the Bureau of Land Management (BLM) and work with the Minerals Management Service (MMS) on rule-making related to the enacted Royalty Fairness legislation.

Crude Oil: Support the Interstate Oil and Gas Compact Commission (IOGCC) study to transfer federal land responsibilities to the states. Discourage the use of production from the Strategic Petroleum Reserve to solve national budgetary problems.

Offshore: Prevent the establishment of a permanent moratorium on offshore development (2 bills are currently in the Congress). Assist MMS in the development of OPA 90 regulations.

Natural Gas: Seek new legislation and work with the Justice Department to modify antitrust laws to permit producers to form natural gas marketing cooperatives. Ensure that the deregulation of the electric power generating industry is accomplished without disruption of existing contractual agreements between oil and gas suppliers and electric generation markets.

Environment & Safety: Maintain the oil and gas industry exemptions from the Toxic Release Inventory which has not been given permanent status. Support the IOGCC effort to transfer EPA controls to the states. Prevent EPA's expansion of hazardous pollutants requirements to include the oil and gas industry. Pay close attention to regulatory activities related to the Endangered Species Act and wetlands permitting.

Public Education: Establish and implement a comprehensive national public oil and gas education program voluntarily underwritten by the oil and gas industry. Continue work on the joint American Petroleum Institute (API) -IPAA task force to create a positive public image for the industry.

Please send any comments or requests for information to the AGI Government Affairs Program.

Contributed by John Dragonetti, AGI Government Affairs.

Last updated January 25, 1997

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