Industry Commitment to Regulatory Compliance Never Goes on Furlough

Mark Green
Posted January 28, 2019

The reopening of the federal government is welcome news for everyone. As one of the country’s most regulated sectors, the natural gas and oil industry urged resolution, recognizing the important federal role in our nation’s energy sector – including infrastructure project review, issuing permits and other activities.

That said, we’ll point out that during the shutdown, industry operated safely and efficiently each and every day, providing the natural gas and oil that support economic expansion, deliver valuable benefits to consumers, strengthen U.S. security and help advance progress on climate and environmental goals.

Industry’s commitment to regulatory compliance was unaffected by the shutdown, including regulation by EPA, the Bureau of Land Management, the Pipeline and Hazardous Materials Safety Administration, the U.S. Coast Guard and other agencies – as well as state regulations. Erik Milito, API vice president of upstream and industry operations:

“All the regulations that oversee our industry remained in effect, federal and state, and our members stayed focused on safe, efficient operations regardless of what was happening in Washington. It’s a false narrative that regulatory compliance would go away because there was a federal government shutdown.”

Safety – for industry employees, the communities where industry operates and the environment – has been and continues to be the No. 1 priority. Technology, industry standards and best practices, training and an overall proactive approach to safe operations all work toward achieving zero incidents. Indeed, company safety programs often include government inspections paid for by operators.

To Milito’s point about industry’s regulatory compliance, offshore inspections were unaffected because the government has funding dedicated to that activity from the fees that companies pay. Furthermore, operators onshore and offshore use independent inspectors to check equipment and operations as part of industry best practices. Again, these initiatives were not affected by the happenings in Washington.

The overarching point: Industry is committed to operating safely. It’s foundational to our compact with the American people.

Again, it’s good that there’s resolution in Washington, and we’re hopeful things will return to normal soon.

One area industry continues to focus on is the U.S. Commerce Department’s processing of Section 232 exclusion requests – U.S. natural gas and oil companies asking to be excluded from the administration’s tariffs on imported steel. The natural gas and oil industry uses significant amounts of steel for pipelines, drilling operations and other uses, so the tariffs have a significant impact.

It’s unclear what effect the shutdown had on the exclusion review process, since that process was moving slowly before parts of the government were shuttered. Industry’s tariff exclusion requests should be expedited, and product exclusions should be granted for U.S. natural gas and oil companies to avoid further impacting domestic energy projects, jobs and consumers. Kyle Isakower, API vice president of regulatory and economic policy:

“Some companies have waited more than six months without a decision. We need officials who are reviewing these tariff exclusions to work more quickly to avoid negative impacts on key U.S. energy projects that could affect jobs and affordable energy for consumers."