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What Happens To The Oil and Gas Industry Now? · Conversations: Special Guests with Preston Scott

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  Speaker 1: Thrilled to have on the program Gifford Briggs. He is
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  Speaker 1: the regional director for the Gulf Coast the American Petroleum Institute,
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  Speaker 1: formerly president of the Louisiana Oil and Gas Association. Gifford,
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  Speaker 1: welcome to the program. How are you, sir, Good morning.
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  Speaker 2: Thank you for having me. I'm doing great today in
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  Speaker 2: this beautiful morning in Tallahaffey.
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  Speaker 1: Tell me, let's give listeners a little bit of an outline.
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  Speaker 1: When I say American Petroleum Institute, you say, describe it
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  Speaker 1: to our listeners.
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  Speaker 2: Sure, so, very simply, we're a national trade association that
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  Speaker 2: represents the oil and natural gas industry across the United States,
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  Speaker 2: but we're also a global organization and that we are
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  Speaker 2: the premier standards setting organization for the oil and natural
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  Speaker 2: gas industry. And so for people that are listening and
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  Speaker 2: maybe driving in their car right now, when you go
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  Speaker 2: get a can of motor oil, there is an API
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  Speaker 2: certification see on that on that motor oil that says
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  Speaker 2: that it's been refined according to the API standards. And
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  Speaker 2: so that's something that people touch, you know, you know,
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  Speaker 2: on a regular basis. Uh, just one of the one
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  Speaker 2: of the nearly eight hundred standards that we've set across
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  Speaker 2: the industry.
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  Speaker 1: If we put a percentage, what would their guess be
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  Speaker 1: the percentage of things that make up somebody's home, apartment,
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  Speaker 1: their possessions that have petroleum in them.
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  Speaker 2: I mean, I you know, that's a uh it would
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  Speaker 2: be a very high percentage. Maybe you know, forget about
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  Speaker 2: I guess maybe the lumber that is that makes up
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  Speaker 2: the frame. But you know, oil or natural gas is
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  Speaker 2: used to make up just about everything and certainly is
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  Speaker 2: used to uh to you know, even if you look
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  Speaker 2: at something like lumber that it's it's used in the
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  Speaker 2: process to create the two by fours that ultimately you know,
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  Speaker 2: go into your home. So oil and natural gas touches
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  Speaker 2: everything we do all day long.
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  Speaker 1: One of the things that I've done, Gifford over the
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  Speaker 1: years is try to explain to people just how present
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  Speaker 1: petroleum based products are in their day to day life,
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  Speaker 1: and then to imagine a world without any of it,
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  Speaker 1: and how far back we are from being anywhere near
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  Speaker 1: being quote independent of our need for fossil fuels. But
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  Speaker 1: it still staggers me that there are people that don't
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  Speaker 1: think that the last four years have been a problem
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  Speaker 1: for us. How would you describe the last four years
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  Speaker 1: under the Biden administration from a petroleum and gas perspective.
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  Speaker 2: Yeah, certainly. You know, the previous administration through as much
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  Speaker 2: uncertainty as the industry as possible. You know, while we
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  Speaker 2: support you know, solar and wind and renewable forms of energy,
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  Speaker 2: we support of all of the above proach, we're going
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  Speaker 2: to need more energy tomorrow than we app today and
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  Speaker 2: in five years from now, we're going to need a
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  Speaker 2: lot more energy than we have today. And it's going
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  Speaker 2: to take everything you know, in the previous administration, whether
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  Speaker 2: it was you know, pausing, you know, the permitting of
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  Speaker 2: energy exports facilities, shutting down the Gulf of Mexico, Uh,
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  Speaker 2: you know, in you know, ridiculous environmental regulations. You know,
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  Speaker 2: all of those things really sort of hampered the industry
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  Speaker 2: and the outlook that in the investments that people want
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  Speaker 2: to make, which you know put us more at risk
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  Speaker 2: not today but five years down the road, and you know,
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  Speaker 2: it threatens our energy security. We never want to end
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  Speaker 2: up in a situation like our allies in Europe did
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  Speaker 2: where they were dependent on you know, Russia or China
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  Speaker 2: for their energy and we see how that's worked out
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  Speaker 2: for him. So certainly under this administration, we've we've you know, uh,
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  Speaker 2: a cataclysmic shift in in policy and and wanting to
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  Speaker 2: renew American energy dominance and contain American energy security and
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  Speaker 2: really be able to export our American you know, energy
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  Speaker 2: progress around the globe.
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  Speaker 1: Natural gas oil industry sports a lot of jobs and
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  Speaker 1: the margins are incredibly small when compared to industries across
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  Speaker 1: the country and around the world. Just for a second,
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  Speaker 1: touch on that, Gifford, because one of my other complaints
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  Speaker 1: is people talk about the oil and gas industry how
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  Speaker 1: they're just hoarding all these profits and all this money.
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  Speaker 1: Let's talk about the margins inside the industry.
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  Speaker 2: Yeah, I mean, look, it's a and it you know,
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  Speaker 2: it really depends on where you look at it when
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  Speaker 2: you're out in the in the you know, I came
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  Speaker 2: from in Louisiana from the small independent side of the industry.
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  Speaker 2: My father was you know, built a service company up
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  Speaker 2: from ground zebra and put everything that he had into it.
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  Speaker 2: And the and you know, there's a lot of people
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  Speaker 2: in the oil field that uh, you know are small
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  Speaker 2: family businesses that you know, produce one barrel of oil
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  Speaker 2: a day. And when you you know, you look at
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  Speaker 2: the cost that they have to put in and the
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  Speaker 2: risk that they take UH and then and at the
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  Speaker 2: end of the day, the the what they receive is
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  Speaker 2: totally out of their control. For a long time, you know,
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  Speaker 2: OPEC was able to control the price of a barrel
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  Speaker 2: of oil. And so one day you're selling your product
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  Speaker 2: at you know, fifty dollars and the next day it's
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  Speaker 2: it's five dollars. And you know, we saw it go
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  Speaker 2: down a negative fifty during COVID UH and so you know,
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  Speaker 2: there's a it's a it's a high risk industry from
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  Speaker 2: a financial perspective. And then when you get into the
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  Speaker 2: refining side of the industry, you know where you know,
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  Speaker 2: you see the sort of traditional you know, Majors and
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  Speaker 2: Exon and Chevron Shell and those companies. When you go
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  Speaker 2: speak to those refinering managers, they are talking about fractions
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  Speaker 2: in ease every day of where they can, you know,
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  Speaker 2: find ways to make the process a little bit more
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  Speaker 2: efficient because that that's how thin their margins are on
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  Speaker 2: the refined product. Obviously you're talking about you know, tremendous
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  Speaker 2: volume and if you go visit a refinery, you know,
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  Speaker 2: I think people are so used to it. And we
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  Speaker 2: kind of touch on this about making a gallon of gasoline.
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  Speaker 2: But when they you know, when they send a barrel
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  Speaker 2: of oil through a refinery, you know they're they're they're
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  Speaker 2: using you know, uh, different processes to take fractions of
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  Speaker 2: a molecule off to be able to use it to
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  Speaker 2: help us make medicine or to make candles or hand sanitizer.
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  Speaker 2: I got to visit the largest refinery and that makes
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  Speaker 2: the most hand sanitatis that are on the planet. And
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  Speaker 2: so these are things that we don't think about that
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  Speaker 2: are very important to the industry. And and those and those,
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  Speaker 2: you know, those fractions of the pennies are what make
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  Speaker 2: a difference producing.
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  Speaker 1: Let me back up exploring securing producing. It's cleaner in
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  Speaker 1: this country than anywhere in the world, and cleaner than
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  Speaker 1: it's ever been. Is that accurate?
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  Speaker 2: That that is one hundred percent accurate? I mean, our
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  Speaker 2: industry invests, you know, billions of dollars to you know,
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  Speaker 2: pull oil and natural gas out of the ground and
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  Speaker 2: do it in the most environmentally responsible way possible. In
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  Speaker 2: the United States has seen our emissions drop year after year,
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  Speaker 2: while other countries have not seen that. And that's in
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  Speaker 2: large part due to you know, particularly the growth of
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  Speaker 2: the natural gas industry. I mean, in two thousand and seven,
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  Speaker 2: you know, we thought we had a seven year supply
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  Speaker 2: of natural gas, and then with horizontal drilling and hydraulic
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  Speaker 2: fracturing and shale plays like the Ainesville Shale in others,
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  Speaker 2: we've gone to a two hundred year supply of natural gas.
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  Speaker 2: And we've been able to replace a lot of the
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  Speaker 2: cold fire power plants, which has greatly reduced the missions
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  Speaker 2: profile of our country. And we want to export that
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  Speaker 2: progress around the world and help you know, use clean
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  Speaker 2: burning American natural gas and other places which helps bring
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  Speaker 2: down you know, missions globally.
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  Speaker 1: Gifford, there are some inside the industry that believe the
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  Speaker 1: volatility their word, not mine, of President Donald Trump means
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  Speaker 1: uncertainty and not good times for the oil and gas industry.
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  Speaker 1: I think the policies of the previous administration versus the
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  Speaker 1: policies of this one say just the opposite. What do
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  Speaker 1: industry insiders say about that, well, I mean, I.
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  Speaker 2: Think it's pretty clear from the campaign trail that President
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  Speaker 2: Trump's approach to energy was going to be as he said, drill, baby, drill,
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  Speaker 2: and you know, unleashing American energy dominant, securing our energy security.
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  Speaker 2: And you know, if you look at just some of
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  Speaker 2: the action he's taken already, you know, undoing the president
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  Speaker 2: itms freeze on l G permits. You know, the the
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  Speaker 2: last year was the first year that we never had
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  Speaker 2: a golf UHH lease sale in what is now the
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  Speaker 2: Gulf of America. And President Trump's come in and he's
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  Speaker 2: undone a lot of that. So, you know, for industry
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  Speaker 2: and having conversations about you know, permitting reform, you know,
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  Speaker 2: we want, we need to be able to have access
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  Speaker 2: to energy. We need to be able to access to
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  Speaker 2: the areas in the Gulf of America where there are
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  Speaker 2: abundant natural resources, and we need to be able to export.
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  Speaker 2: You know that that progress across the country. And so
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  Speaker 2: President Trump's approach is certainly a welcomed one within the industry.
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  Speaker 2: That is is going to allow investments to flow in
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  Speaker 2: the industry, which is critical to our long term success.
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  Speaker 1: So would it be fair to say then that any
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  Speaker 1: volatility comes from the fact that you you can go
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  Speaker 1: from one president that for example, Joe Biden's first day
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  Speaker 1: in office was killing the Keystone own XL pipeline, to
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  Speaker 1: another president, and that what needs to happen is Congress
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  Speaker 1: needs to come in and solidify policy as a matter
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  Speaker 1: of This is what we do in America, correct.
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  Speaker 2: I mean, one of the things that we're we're talking
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  Speaker 2: about within API and our policy teams is, you know,
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  Speaker 2: how do we ensure that we've got durable energy policy
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  Speaker 2: that can withstand the you know, the pendulum swings that
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  Speaker 2: our political system and you know and how it works
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  Speaker 2: right now. And so the more that the more policy
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  Speaker 2: that can be you know, put in place by by
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  Speaker 2: Congress that can't be easily undone as we move from
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  Speaker 2: one administration to the other is critically important because you know,
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  Speaker 2: these are our industry and a lot of a lot
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  Speaker 2: most places is not making decisions on the policies today
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  Speaker 2: we're looking at and saying we need We're going to
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  Speaker 2: make it, you know, a twenty billion dollar investment and
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  Speaker 2: adding this component to a refining facility. You know that
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  Speaker 2: that's going to span the course of multiple administrations. And
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  Speaker 2: so the more policy that we can get the better
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  Speaker 2: of the environment to be more predictable and more stable,
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  Speaker 2: the better it is for us to be able to
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  Speaker 2: make those decisions. And certainly President Trump had to undo
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  Speaker 2: a lot of what President Biden did because he just
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  Speaker 2: you know, he was moving away from from you know,
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  Speaker 2: American energy into our oil and nats or gas in
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  Speaker 2: other areas. And so we're we're excited about the approach
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  Speaker 2: that that President Trump is taking and we hope that
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  Speaker 2: you know, that Congress can move and certainly Speaker Johnson
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  Speaker 2: from Louisiana, he's he's in the Hainesville shale area. He
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  Speaker 2: understands the importance of robust energy policy, and hopefully under
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  Speaker 2: his leadership, we can we can see some things moving.
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  Speaker 1: So it's safe to say that regardless of who's in
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  Speaker 1: the White House, that's of value on the short term.
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  Speaker 1: But the most important is the law long term, bigger picture,
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  Speaker 1: and that's where it rests in Congress, in the House
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  Speaker 1: and Senate one hundred percent.
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  Speaker 2: And you know, and there's a responsibility as well at
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  Speaker 2: state and local governments. We're seeing you know, more activism
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  Speaker 2: at state and local governments, whether they're wanting to you know,
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  Speaker 2: ban you know, uh natural gas stows or when I
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  Speaker 2: first took the job at API, there was a resolution
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  Speaker 2: in Tampa to prohibit the constructions of petroleum infrastructure, so
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  Speaker 2: no more gas stations. Uh, And so you know, we're
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  Speaker 2: seeing more of these policies at the local level that
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  Speaker 2: are also a challenge, and so we need to make
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  Speaker 2: sure it's not just the president, it's not just Congress,
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  Speaker 2: but also that there's policy at the state and local
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  Speaker 2: level that allow for the continued development, the transportation, the refining,
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  Speaker 2: and the consumption of oil and natural gas.
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  Speaker 1: Different In closing, what would you say to listeners is
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  Speaker 1: most important for them to know and or do in
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  Speaker 1: response to whether it's President's Trump Trump's Golf of America
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  Speaker 1: Day proclamation, or whether it's just the bigger, broader picture.
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  Speaker 2: Yeah, I think the most important thing is is no
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  Speaker 2: matter you know what noise that may be out there
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  Speaker 2: about the end of the you know, the oil and
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  Speaker 2: natural gas industry and that we need to you know,
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  Speaker 2: need to move away from these fuels. Is that America
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  Speaker 2: and globally is going to consume more oil and more
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  Speaker 2: natural gas in twenty fifty than we do today. And
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  Speaker 2: it is going to take all of our country and
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  Speaker 2: our policymakers working together to ensure that we have the
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  Speaker 2: energy that we need to meet today. And the oil
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  Speaker 2: and natural gas industry is going to pay a critical
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  Speaker 2: role in making that happen different.
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  Speaker 1: Thanks for the time today. I appreciate it.
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  Speaker 2: Thank you.
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  Speaker 1: Gifford Briggs, American Petroleum Institute, he's the Gulf Coast Region director,
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  Speaker 1: and our guests talking a little oil and gas here
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  Speaker 1: on The Morning Show with Preston Scott