Oilmen's Mixed Views on Clinton
Industry plans to take wait-and-see stance
THE oil industry wants the Clinton administration to put a floor under crude oil prices, stimulate demand for natural gas, provide additional relief from taxes, and offer tax incentives for drilling.
Then again, it may just want to be left alone.
Several hundred oil company executives at accounting firm Arthur Andersen's annual oil and gas symposium here this week expressed a range of opinions on what kind of energy policy they expect from President-elect Clinton, and what kind they desire.
"We still don't know what Bill Clinton really has in mind for oil and gas," says C. J. Silas, chairman of both Phillips Petroleum Company and the American Petroleum Institute, the lobby for major oil firms.
"What is shaping up so far is an administration with contradictions built in on the ground floor," Mr. Silas adds.
The appointment of Sen. Lloyd Bentsen (D) of Texas to be treasury secretary means that "oil and gas will have a friend who has the president's ear," Silas says. "Perhaps the best news of all" is that Mack McLarty, who heads Arkla, one of the nation's largest natural gas companies, will be White House chief of staff, "the new administration's command post."
Silas worries, though, about the appointment of Carol Browner to lead the Environmental Protection Agency (EPA), and the possibility of Sen. Tim Wirth of Colorado over the Department of Energy. "These folks sound suspiciously like true believers [who] treat the environment as a new religion," Silas says.
He criticizes the "disturbing" message of Vice President-elect Al Gore's book, "Earth in the Balance," and describes talk of higher energy taxes and mandates for alternative fuels as "bad advice."
"If the true believers take over in Washington, the next four years could be pretty rough," Silas says. But he takes heart from the fact that, in naming Ms. Browner, Mr. Clinton chided the agency for issuing contradictory regulations and creating unneeded burdens on industry.
Eugene Ames, chairman of the Independent Producers Association of America, the lobby for smaller oil companies, notes that Clinton has advocated growth through investment, switching from oil to natural gas, and retaining the Resource Conservation and Recovery Act, a tough antipollution law coming up for reauthorization.
Also, Clinton has opposed a carbon tax and has increased reliance on oil imports and nuclear energy. Those positions give Mr. Ames ground for optimism. "We should all think positively about the Clinton administration and wait to see what their energy policy will really be."
Ames notes that an increase in United States oil production of 3.8 million barrels per day envisioned by President Bush's National Energy Strategy cannot be achieved as long as the industry is locked out of federal lands and subject to increasing regulation.
DAVID TURNER, vice president at Mitchell Energy, calls for Clinton to put a floor under oil prices. The government already protects the US steel industry, so why not the energy industry, he asks.
While many in the industry are excited that Clinton proposes to stimulate demand for natural gas, Larry Besson, chief financial officer for Grace Energy of Dallas, is circumspect. Nothing Clinton does will reflect in natural gas prices for at least two years, he says. For instance, converting 1,000 cars a day to burn natural gas would barely affect demand even after five years, he says.
"The best thing Clinton can do is stay out of the way," he adds.
John Stephens, controller of Petroleum Inc. of Wichita, Texas, expects Clinton to raise tax rates. If that happens, "the wealthy people looking for investments may invest in oil exploration again," because a greater portion of the dollar they risk will have been paid to the government.
Steve Shaw, vice president of Tulsa-based Helmerich & Payne Inc., says Clinton's talk of reducing dependence on imports makes him doubt Clinton grasps the reality of the US energy situation. "There's going to be dependency on foreign crude," Mr. Shaw states flatly.
But Shaw is undecided about what he wants Clinton to do on energy. Mr. Bush gave the industry three things it sought: relief from the alternative minimum tax, removal of price controls on natural gas, and incentives for enhanced production methods.
"Maybe we asked for the wrong things," Shaw says, "because it's still the pits."