WASHINGTON D.C.—The U.S. Chamber’s Institute for 21st Century Energy this week weighed in on new rules proposed by the Securities and Exchange Commission (SEC) required under the Dodd-Frank Act that could significantly threaten energy security and economic growth.
The Energy Institute responded to the SEC’s call for public comments on a rule regarding Disclosure of Payments by Resource Extraction Issuers.
“The SEC has proposed a rule that would place U.S. oil and gas companies at a major competitive disadvantage against the vast, state-owned National Oil Companies that already control over 90% of the world’s oil supplies,” said Karen Harbert, president and CEO of the Energy Institute. “These rules could shut off access to some of the world’s largest oil markets for American companies, severely threatening our energy security and economic growth. ”
Since the SEC’s rules only apply to U.S.-listed companies, foreign owned National Oil Companies (NOCs) that compete with U.S. companies for oil and gas contracts overseas would not be forced to comply. In many cases, NOC’s already have advantages over these companies due to government financing and fewer regulations.
Because nations that enter into extraction contracts often seek to keep terms confidential, it could become difficult for U.S. companies operating overseas to find willing partners for exploration and production if they are required to disclose the specifics of their agreements.
“The net effect of these rules—by adding costly reporting requirements and making the U.S. oil and gas industry less competitive in the global market—could very well lead to higher prices for consumers,” Harbert said. “Given the hostile environment for exploration here at home, which has driven companies out of the U.S. and into overseas markets, one must begin to wonder exactly where American companies are supposed to turn to obtain the oil and gas that we currently rely on for more than 95% of our transportation fuel.”
The Energy Institute is urging the SEC to promulgate a rule that is consistent with the its mandate to promote competition and efficiency and protect investors, and also with President Obama’s Executive Order on Improving Regulation and Regulatory Review, while still satisfying Dodd-Frank’s requirements.
The SEC is expected to complete final rulemaking on the issue by April 15, 2011, with implementation expected to take place in 2012.
The mission of the U.S. Chamber of Commerce's Institute for 21st Century Energy is to unify policymakers, regulators, business leaders, and the American public behind a common sense energy strategy to help keep America secure, prosperous, and clean. Through policy development, education, and advocacy, the Institute is building support for meaningful action at the local, state, national, and international levels.
The U.S. Chamber of Commerce is the world’s largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations.
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