House targets SEC
overreach with vote
on disclosure rule
by Bob Tippee, Editor
Repeal of mandates for overly detailed
disclosure of payments to foreign governments relates more to competition and
regulatory balance than to transparency.
When the US House voted on Feb.
1 to reject the Securities and Exchange
Commission rule for extractive industries,
however, objections implied otherwise.
“Voting to roll back basic transparency
rules provides zero benefit for the public
but will instead allow corrupt elites to continue to stuff their pockets with oil money
and steal from their citizens,” complained
Isabel Munilla, senior policy advisor for
extractive industries at Oxfam America.
In fact, SEC didn’t impose “basic
transparency rules.” If it had done so, the
American Petroleum Institute, Independent
Petroleum Association of America, and
others would not have sued in 2012 to
challenge the commission’s first rule.
Like most industry representatives, they
support disclosure of payments to foreign
governments as an antidote to corruption.
But the SEC stretched beyond basic
transparency. In 2013, the US District
Court for the District of Columbia ruled the
commission also went beyond Sect. 1504
of the Dodd-Frank financial-reform law.
Contrary to many media reports, producers don’t object to reporting payments
to governments. They resist having to
divulge what they, specifically, pay in relation to specific projects.
That’s proprietary intelligence, especially valuable to competitors with no
comparable requirements. In many cases,
moreover, the required disclosures violate
contracts with host-country governments.
Illuminating aggregated payments to
governments should move systems halfway
toward basic transparency. The other,
harder, half is tracing money after it enters
Transparency activists insist accountability and enforcement require disclosure
at company and project levels. Their anti-corruption fervor is laudable. But the impracticably specific reporting they demand
push projects increasingly toward entities
required to make no disclosure at all.
The SEC imposed maximum regulation,
discouraging work by affected companies.
When rebuked in court, it responded with
more of the same.
The House thus did not vote to roll
back basic transparency. It voted to roll
back a stifling overreach dreadfully typical
of the previous administration.
(From the subscription area of www.ogj.
com, posted Feb. 3, 2017; author’s e-mail:
stream payrolls during December was
205,300, down 11.6% year-over-year
and down 32.9% from the December
According to TPI estimates, the
trough of upstream employment in Texas before the expansion ending December 2014 was 184,640 in October 2009.
During the previous growth cycle, industry employment peaked at 225,965
in October 2008.
Crude production in Texas in 2016
totaled 1.177 billion bbl, down 6.3%
from the 2015 total, ending a string of
8 consecutive years in which statewide
With crude wellhead prices declining 12.2% to average $39.84/bbl, the estimated value of Texas-produced crude
declined 17.8% to $46.8 billion.
With natural gas prices declining
6.3% to average $2.39/Mcf, the estimated value of Texas-produced gas decreased 13.6% to $19.4 billion.
The statewide working rig count averaged 237, down 44.8% from the 2015
average. The TRC issued 8,113 drilling
permits, down 23.1% from the 2015 total.
About 209,455 Texans on average
were employed in the oil and gas production, drilling, and service sectors,
representing a 19% decline from the
tion and the number of oil and gas wells
completed,” commented Karr Ingham,
economist and TPI creator.
“Still, even with the $6-8/bbl added
to the price of crude oil by the [Orga-nization of Petroleum Exporting Coun-tries’] plan announced in late-November
to remove 1.2 million b/d from global
crude oil markets, oil prices are still less
than half what they were in advance of
the downturn,” Ingham said.
“So, while there is little sense the Texas oil and gas exploration and production economy in 2017 will recoup all that
has been lost over the course of the contraction, the industry is moving into the
new year with a sense of optimism and
resurgence for the first time in 3 years,”
Crude oil production in Texas during
December totaled 98.5 million bbl,
down 5.1% from the December 2015
With oil prices in December averaging $48.69/bbl, the value of Texas-produced crude amounted to $4.8
billion, up 36.8% from the December
Texas natural gas output was an estimated 649.7 bcf, a year-over-year decline of 9.5%. With natural gas prices
in December averaging $3.46/Mcf, the
value of Texas-produced gas increased
63.8% year-over-year to $2.24 billion.
The Baker Hughes Inc. count of active drilling rigs in Texas averaged 310,
down 4.3% year-over-year.
Drilling activity in Texas peaked in
September 2008 at a monthly average of
946 rigs before falling to a trough of 329
in June 2009.
In the most recent economic expansion, which began in December 2009,
the statewide average monthly rig count
peaked at 932 in May and June 2012.
The number of original drilling permits issued by the Texas Railroad Commission (TRC) was 1,009, up 38.8%
Based upon revised quarterly data
from the Texas Workforce Commission,
the estimated average of Texans on up-
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