President Bush, in an election campaign appearance in Oklahoma City, said his administration is taking several steps to help the U.S. oil industry.
Bush said, "I know full well how difficult times have been in the past few years in this state for the oil and gas business. Our domestic oil and gas industry is important to our national economy. It's important, it's vital, to our national security."
Bush vowed to work with Congress for passage of an omnibus energy policy bill and to get the oil industry some relief from the alternative minimum tax.
"The AMT, as applied to the energy industry, is hurting our economy and helping no one," Bush said. "It is unfair to independent producers. And it's costing us jobs."
A BOOST FOR GAS
Bush noted his administration is taking several steps to eliminate some of the regulatory barriers that have hampered the gas industry.
"These actions will provide significant relief to industry, but they are no substitute for prompt action by Congress to pass my energy legislation," he said.
The White House said the Environmental Protection Agency soon will issue a final rule allowing electric utilities to make certain physical and operational changes at existing power plants without having to undergo expensive and time consuming "new source" reviews.
It said the "WEPCo fix rule," referring to a Wisconsin Electric Power Co. case, will facilitate utilities' conversions to natural gas or gas cofiring power generation and "should lead to increased natural gas usage as well as lower electricity rates."
It said the final rule will be substantially the same as the proposed rule.
The White House said the Federal Energy Regulatory Commission will discuss Mar. 11 a proposed incentive regulation policy that would give electric utilities and gas pipelines more motivation to reduce operating costs than does the traditional cost of service approach.
It predicted, "Over time, this new approach will increase consumption of natural gas by electric utilities as well as other consumers of natural gas. When fully implemented, moreover, a shift to incentive regulation should ultimately reduce total electricity and natural gas transportation costs by $1-3 billion/year, thereby significantly reducing utility rates to consumers."
Martin Allday, FERC chairman, said the commission will discuss Mar. 25 and vote by Apr. 1 on the "mega-NOPR," a sweeping rulemaking to unbundle pipeline rates.
FERC soon will consider a rule to exempt from regulation most local sales of compressed natural gas used to fuel motor vehicles and issue a blanket authorization for gas companies it cannot exempt.
The White House said in a few weeks EPA will issue proposed emissions standards for natural gas vehicles, and they will not contain separate total hydrocarbon standards that would place natural gas vehicles at a competitive disadvantage.
Nick Bush, Natural Gas Supply Association president, said the administration's actions should be a boon for the industry.
Mike Baly, American Gas Association presidents said they recognize the importance of the natural gas industry to U.S. economic health and security.
"These proposals have the potential to increase the demand for natural gas, which should stimulate the depressed exploration and production segment of the industry," Baly said.
SYMPTOMS OF DEPRESSION
Energy Sec. James Watkins released Energy Information Administration data that detailed the depression in the oil industry.
EIA said the industry spent nearly $34 billion on U.S. exploration and development in 1990, 62% below the level of 1981.
It said during 1982-88 U.S. major oil companies reduced their employment by 600,000 persons, or more than 40%. And since 1982, drilling and production sector employment has fallen 373,000 jobs, while service and supply companies have dropped 293,000 jobs.
Copyright 1992 Oil & Gas Journal. All Rights Reserved.
