Oil lobby says low prices still hurting industry
Mike Sommers, president of the major oil and gas industry group American Petroleum Institute (API), acknowledged on Wednesday that lower prices are hurting the oil and gas industry.
“Prices still are at historic lows. … We’re still only in the $30 to $35 range, and it’s very difficult for producers to make money with those kinds of oil prices,” Sommers said during a webinar.
However, Sommers added that the industry has been able to bounce back in the past.
“This industry historically has been very resilient. It is an industry that understands that these are the commodities cycles that we have to deal with,” he said.
Oil prices have dropped since the beginning of this year due to the coronavirus pandemic and international disputes. On Wednesday afternoon, U.S. crude oil was trading at about $33 per barrel, though prices in April dropped to as low as negative $40 a barrel.
Sommers, in his comments Wednesday, also defended his group’s advocacy for regulatory changes during the coronavirus pandemic.
In March, API wrote to both President Trump and the Environmental Protection Agency (EPA) asking the government to ease certain “compliance obligations” such as record-keeping and training.
Days later, the EPA announced that it might not seek penalties against companies that don’t monitor their pollution. The agency has stressed that polluters will have to prove that the lack of monitoring was linked to the coronavirus pandemic, but opponents of the move argue that by then, the damage will have already been done.
Sommers stated on Wednesday that some of the issues the agency advocated for were “mainly paperwork issues” and said that they were “similar to the IRS changing Tax Day from April 15 to July 15.”
“These weren’t major issues that would have significant detrimental effects on the environment,” he said. “We expect that when we’re through the pandemic, that we’re going to go back to the same regulatory regime that we had before, and we would actually advocate for that.”
Sommers also reiterated that the industry is not looking for a “bailout.”
The industry president’s comments came on the same day that major oil companies like Exxon and Chevron held shareholder meetings.