API Blogger Conference Call: Energy Issues Post Deepwater Horizon - 7.22.10

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On July 22, 2010, API hosted a conference call with 11 bloggers to discuss pressing energy issues following the Deepwater Horizon incident, including the drilling moratorium, the potential economic impact of new taxes being considered by Congress, oil spill liability issues, and new ethanol standards proposed by the EPA.
    API BLOGGER CONFERENCE CALLMODERATOR: Jane Van Ryan, API SPEAKERS: Dr. Tim Considine, Natural Resource Economics Inc.Stephen Comstock, Manager of Tax Policy, APIMarty Durbin, Federal Relations APIJohn Felmy, Chief Economist, APIRussell Jones, Senior Economic Adviser, APIAndy Radford, Upstream/Industry Operations, APIRichard Ranger, Upstream/Industry Operations, APIRobin Rorick, Group Director, Marine & Security, API Thursday, July 22, 2010 Transcript byFederal News ServiceWashington, D.C.     Bloggers on the call included Brian Westenhaus from New Energy and Fuel, Carter Wood from Shopfloor.org, Gail Tverberg from The Oil Drum, Geoff Styles from Energy Outlook, Jazz Shaw from The Moderate Voice, Joy McCann from Little Miss Attila, Marlo Lewis fromOpenMarket.org, Merv Benson from Prairie Pundit, Pejman Yousefzadeh from The New Ledger,Steve Maley from RedState, Tim Hurst from Ecopolitology 00:12 MS. VAN RYAN: It sounds like we have quite a few people on the call. This isJane Van Ryan for those of you who are just joining us. And I have several people in the roomwith me here at API and Tim Considine, the author of a new study on the Marcellus shale, whoalso has dialed in. And I think John Felmy is dialing in as well, who is traveling in Houston.Many of you have talked to John in the past. He is our chief economist here at API. Let’s start the call today by first finding out who all we have on the phone. A number of you indicated  –  a number of bloggers, I should say  –  indicated that they intended to be on the call. Let’s see if we can get a quick roll from everyone. Who would like to go first?  00:58 GAIL TVERBERG: This is Gail from the Oil Drum.01:00 MS. VAN RYAN: Great. Thank you, Gail.01:07 BRIAN WESTENHAUS: Brian Westenhaus.01:08 MS. VAN RYAN: Hey, Brian. I’m glad you could join us. Who else is on?   01:12 CARTER WOOD: Here. Well, we’ve got the Ecuador trip revisited because Carter is on the line, too.01:16 MS. VAN RYAN: Carter, hey, nice to have you on the line. Anyone else?01:22 STEVE MALEY: Steve Maley with Redstate.com.01:24 MS. VAN RYAN: Yes, Steve. Thank you so much for joining us. And who elsedo we have? 01:29 JAZZ SHAW: Hey, Jane, it’s Jazz.  01:30 MS. VAN RYAN: Hey, Jazz. Good. All right. And who else?01:37 GEOFF STYLES: Geoff Styles, Energy Outlook.01:39 MS. VAN RYAN: Wonderful, Geoff. Keep going. I know there are more of you. And who hasn’t told us that they’re on line yet?  01:54 TIM HURST: This is Tim Hurst from Ecopolitology.   01:56 MS. VAN RYAN: Great. Thank you, Tim. Nice to hear your voice. Anyone else? I’m expecting several more bloggers so maybe they’ll be joining us shortly. I think you allknow the rules for our blogger conference call: Everything is recorded; everything is on therecord. The audio file and the transcript will be provided online hopefully as early as tomorrowafternoon. It always takes us a little while to get the transcript provided. We’re happy to talk about most any questions that you might have. You’ve seen a partial list of the people who are going to be participating in the call today as speakers, who can provideinformation. And there is another individual who just walked in that I want to introduce to you.He is not on the list that I provided to you but I think, if you’re comfortable with this, Marty, I’mgoing to put you upfront and you can explain what’s happening on the Hill. This gentleman is Marty Durbin. He is in charge of our federal relations initiatives he re at API and of course he’smonitoring the Hill activities very, very carefully today. So Marty, why don’t we start with you?   03:10 MARTY DURBIN: Okay. Sure. Thanks, Jane. I’m just kind of being updated by the minute here  –  you know, literally, getting these e-mails, articles from Roll Call, The Hill andwhat have you. But the Senate is really where people are paying the most attention right now.Sen. Reid has been trying to determine whether they can bring a bill to the floor nextweek or the following week before they leave for August recess. The plan for months now hasbeen to try to put a bill up there that would address climate and energy and, now, more recently,the oil spill issues.They appear to have thrown the towel in on being able to put climate on the floor before the August recess. At best they can have a very narrow energy bill. And, frankly, I’m still skeptical that they can even get any of the energy provisions on the floor  –  which kind of leavesyou with the oil spill issues and how much they can put on the floor. And we really are talkingabout next week. The Democratic Caucus has been meeting now for the last hour and they’re just rightnow having a press conference with Sen. Reid, Sen. Kerry and Carol Browner. And we’ll know   more probably in about an hour or so because then they’re going to begin another leadershipmeeting to determine what they’re going to do next week.  We do hear that they will  –  if they do get into the oil spill -- it will probably stay focusedon two main areas, one being the reorganization of the Department of the Interior and thenbeefing up some regulations of offshore  –  offshore drilling and then liability that has beendebated in the Senate in the Environment and Public Works Committee.Again, tha t’s very fluid right now. And the Senate calendar is very clogged. They’re trying to finish work on a small business bill this week; they have a supplemental appropriationsbill. There are a few other things hanging out there. And then, before they leave, they have to  –    they intend to approve the nomination of Elena Kagan to the Supreme Court. So that’s kind of the lay of the land right now in the Senate. That’s really what we’re paying more attention to. Idon’t want to dismiss the House because they’re also scrambling , trying to get an oil-spill related   bill onto the floor next week before they leave. They’re leaving next week. The Senate stays around for an additional week after, so the first week of August.05:45 MS. VAN RYAN: That gives you a quick summary. And because of everything happening on the Hill, that’s one of the reasons why we wanted to have the blogger conferencecall today, this week. And, of course, I’ve sent you all a number of materials involving tax issues, oil spill liability, Marcellus shale, even some polling results that we got yesterday. Sowith that, I just want to open this, open the floor to your questions. You can ask anything that you have on your mind, anything that you’re interested in and we’ll do our best to a nswer yourquestions. Who would like to go first? Oh, and please identify yourselves.06:19 MS. TVERBERG: This is Gail. I was just going to ask   –  you mentioned the oil-spill liability. To what extent do you think the choice or the limit is going to make a differenceon which companies are willing to drill in the Gulf? I know there has been talk that having toohigh a limit is going to eliminate the smaller companies from play.06:44 MR. DURBIN: If I can  –  this is Marty. Frankly it will make a big difference.Essentially, the higher you put the liability limit the fewer people that are going to beeconomically able to continue to produce in the Gulf.  Now, it’s a –    it gets a little complicated because there’s essentially two different issues: You know, there is raising the cap on liability; there has been a lot of focus around a $75 million cap on economic damages. That’s just, you know, once BP in this case has finished cleaning upeverything, statutorily, as long as they aren’t found to have bee n reckless or negligent or whathave you, there is a $75 million cap on economic damages for, you know, restaurants andeveryone else that was affected.The bigger issue for companies that are operating offshore, what they call the financialassurance requirements, where you have to get a certificate of financial responsibility. That isgenerally  –  currently, in the range of $35 million to $150 million. Even if you have a very highcap on the economic damages, yet you have a reasonable financial responsib ility in that, it won’t put as many people out of play.And, again, unfortunately, those proposals out there right now are very unreasonable. They’ll either eliminate the cap, put the financial responsibility over a billion dollars. That essentially mea ns you’re going to be down to the largest privately owned companies and nationally owned companies.08:25 MS. TVERBERG: Right, and the nationally owned companies could very well besomebody from overseas, of course.08:31 MR. DURBIN: Correct.08:35 MS . VAN RYAN: Another question, please? You’re all being too kind, toocourteous of one another. Don’t hesitate.  
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