Industry Challenges and Policy Flaws Threaten US Oil and Gas Industry

Texaco Inc. Chairman of the Board and Chief Executive Officer Alfred C. DeCrane, Jr. warned energy executives at the Arthur Andersen Oil and Gas Symposium in Houston that serious flaws in US energy policies, coupled with discriminatory taxation policies and excessive environmental regulations, have severe consequences for both the industry and the US economy. DeCrane emphasized the need for public policies that are realistic, fair, and truthful, stating that the industry must "sound the trumpet" to counter misinformation and misunderstanding. The oil and gas industry, once considered a major asset, is now threatened by policies that may drive domestic operations abroad, where foreign-based companies may find them more attractive than US operators.

Key Takeaways:

• Serious flaws in US energy policies, discriminatory taxation policies, and excessive environmental regulations threaten the US oil and gas industry, leading to potential economic consequences.
• The industry relies heavily on oil and gas as a major source of affordable energy, with no effective alternative on the horizon, highlighting the need for reconsideration of national policies.
• Changes in energy policies require the American public to understand the value of the industry's contributions to the national economy, weighed against the temptation to tax or regulate the industry excessively.
• Developing countries require stable policies, such as reasonable environmental baselines, privatization of state-owned oil companies, and revised contracts, to attract foreign investment.
• The US industry must prioritize domestic policies, addressing specific problems, like the need for environmental baselines, privatization, and contract revisions, to remain competitive.

Statistics:

• The US oil industry, once the world's greatest exporter, now faces severe challenges due to policy flaws and discriminatory taxation.
• Oil and gas will continue to provide a major share of the world's affordable energy well into the 21st century, with no effective alternative available.
• Developing countries look to the industrialized world to help increase their people's living standards, offering opportunities for American companies.

Sources:

• "Texaco Inc. Chairman Warns of Oil Industry Consequences" (December 6, 1994)
• CONTACT: Texaco Inc. David Dickson, 914/253-4128