New SEC rules will put U.S. companies at a competitive disadvantage
Washington, August 22, 2012 – A new rule by the Securities and Exchange Commission (SEC) that will force SEC-listed companies to report payments made to foreign governments could put U.S. firms at a competitive disadvantage and interfere with ongoing and more effective efforts to increase transparency, according to API Chief Economist John Felmy:
“This unilateral approach to revenue disclosure will harm the U.S. economy. U.S. firms could lose business, U.S. jobs might not be created, and potential revenue to our government could be lost.
“The rules will give foreign oil and natural gas companies access to confidential, proprietary information that they could use against U.S. companies when competing for crucial energy resources around the globe. State-owned foreign firms could plunder this information to help them determine the strategies and resource levels of their U.S. rivals.
“Unfortunately, disclosure would not be a two-way street. State-owned foreign companies would have to reveal nothing and might even be favored for projects in host countries reluctant to have financial information disclosed.
“All of this potential harm and sacrifice is unnecessary. A better solution is the Extractive Industries Transparency Initiative approach, which requires that all oil and natural gas companies operating in a country disclose payments made to that government. U.S. companies have been working to increase transparency for more than a decade using this World Bank- and the Obama Administration-backed approach.”
API represents more than 500 companies involved in all aspects of the oil and natural gas industry, leaders of a technology-driven industry that supplies most of America’s energy, supports 9.2 million U.S. jobs and 7.7 percent of the U.S. economy, delivers more than $86 million a day in revenue to our government, and, since 2000, has invested more than $2 trillion in U.S. capital projects to advance all forms of energy, including alternatives.