News & Information » Press Releases

« Back to 1999 News Releases

IPAA Reacts To Commerce Ruling On Oil Dumping Case

Statement by Independent Petroleum Association of America Chairman George Yates on today's decision by the U.S. Department of Commerce to deny standing to Save Domestic Oil in its oil dumping petition against Venezuela, Mexico, Saudi Arabia and Iraq.

"We are disappointed in today's decision by the Commerce Department. The petitioners deserved their day in court. Their purpose was simple: to determine if U.S. trade law had been violated.

"Based on the information IPAA submitted to the Commerce Department as an "interested party" in support of SDO's petition, we believed that support for the SDO petition was at least 25 percent of U.S. oil production in the affected region (PADD I-IV).

"Our industry has been pushed to the precipice over the last 18 months as a result of low oil prices. Even with today's oil prices hovering around $20 a barrel, the damage has already been done. Our industry has shrunk 15 percent; more than 100,000 oil wells and more than 50,000 gas wells have been shut-in; and domestic oil production is down to 5.8 million barrels a day from 6.4 million in 1997. It's history repeating itself. In 1986, as a result of the last price crisis, oil production decreased by two million barrels a day over the next ten years while U.S. production was undergoing fundamental changes.

"While many of the energy experts around the country, including President Clinton's former chief of staff Mac McLarty, and Pulitzer Prize winning author Dan Yergin (Washington Post, Aug. 8) disagreed with SDO's petition, they agree that domestic producers have been harmed as a result of this oil price crisis. More importantly, they agree that legislative and administrative action should be taken to help strengthen independent oil producers - action that won't weaken our position in the world - action that will help the producers who are rapidly becoming the dominant players in U.S. oil production.

"On that basis, we urge Congress and President Clinton to finally provide the leadership our industry desperately needs. There is remedial action our government can take to ease the pain and prevent further erosion of this country's energy heritage; it's oil and gas resources.

"Soon the Department of Commerce will release the findings of its investigation on the impact of imports of crude oil and petroleum products on national security. We fully expect the Department of Commerce to reprise its 1995 ruling when it determined that increased oil imports do indeed pose a national security threat. At that time, U.S. imports accounted for 50.8 percent of demand. Today, imports have increased to more than 55 percent.

"Section 232 of the U.S. Trade Expansion Act is an ideal vehicle to meet head-on the problems of our industry. Namely, needed reform of the tax code and the creation of financial instruments to aid the industry in troubled times and improve capital development. And finally, the United States must step up to the plate and declare the importance of "Made in the USA" energy. As the second largest producing nation in the world and the largest consuming nation, U.S. policymakers have an obligation to step up to the international table and participate in decisions that preserve our domestic resources."

---------------------------------

Last revised: 12/17/99