WASHINGTON, March 22, 2013 – The American Petroleum Institute (API) and a coalition of concerned business groups presented oral arguments today in the D.C. Circuit Court of Appeals in API’s lawsuit challenging the U.S. Securities and Exchange Commission’s implementation of Section 1504 of the Dodd-Frank Act.
“U.S. companies are already leading the way to increase transparency of their operations, and they can do it without compromising competitive information,” said API Executive Vice President Marty Durbin. “But t his rule damages the competitiveness of American companies and is not the most effective way to increase transparency in business investment abroad. The rule requires business sensitive information to be shared with America’s global competitors, giving state-owned companies in China and Russia an advantage since they are not required to disclose similar information.”
Durbin said the industry is working with civil society groups and the Obama administration to implement the Extractive Industries Transparency Initiative (EITI), a program that would effectively promote transparency without harming American companies and investors. The initiative has already been established in 36 countries and continues to grow.
“This rule will also hurt the millions of Americans who own shares in oil and natural gas companies and will cost jobs and damage America’s energy security by making it more difficult for U.S. companies to gain access to resources abroad,” Durbin said. “With reasonable changes, the SEC could have achieved the goal of increased transparency while still remaining faithful to its core mission to protect American investors.”
The SEC rule requires publicly traded energy companies to release commercially sensitive, detailed payment information about foreign and U.S. projects, according to API. Firms would have to reveal extensive data about how much they pay in licenses, taxes, royalties and other fees – giving their competitors an upper hand when bidding for energy contracts. The SEC conservatively estimates that the rule will impose at least $14 billion in costs on American companies and investors.
API is a national trade association that represents all segments of America’s technology-driven oil and natural gas industry. Its more than 500 members – including large integrated companies, exploration and production, refining, marketing, pipeline, and marine businesses, and service and supply firms – provide most of the nation’s energy. The industry also supports 9.2 million U.S. jobs and 7.7 percent of the U.S. economy, delivers $85 million a day in revenue to our government, and, since 2000, has invested over $2 trillion in U.S. capital projects to advance all forms of energy, including alternatives.