2015 Washington Report Khary Cauthen Sr. Director, Federal Relations American Petroleum Institute Prepared for API Spring Accounting Meeting – Washington, DC 1220 L Street, NW • Washington, DC 20005 - 4070 • www.api.org 1
A Review of API 1220 L Street, NW • Washington, DC 20005 - 4070 • www.api.org 2
Mission To influence public policy in support of a strong and viable U.S. oil and natural gas industry essential to meet the energy needs of consumers in an efficient and environmentally responsible manner. 1220 L Street, NW • Washington, DC 20005 - 4070 • www.api.org 3
As the U.S. oil and natural gas industry’s primary trade association, API: Engages in federal and state legislative and regulatory advocacy that is based on scientific research; technical, legal and economic analysis; and public issues communication; API also provides the Provides an industry forum to develop opportunity for standards consensus policies and collective development, technical action on issues impacting its cooperation and other members; and activities to improve the industry’s competitiveness Works collaboratively with all industry through sponsorship of oil and gas associations, and other self-supporting programs. organizations, to enhance industry unity and effectiveness in its advocacy. 1220 L Street, NW • Washington, DC 20005 - 4070 • www.api.org 4
About API The only national trade association that represents all aspects of America’s oil and natural gas industry. Represents members on legislative, regulatory, and other policy issues impacting the industry. Speaks on behalf of the industry in a variety of forums and public events, including the media. Provides services to members at both the national and state level, with over 250 staff located in Washington, D.C. and in 33 state capitals, and 5 global offices. 1220 L Street, NW • Washington, DC 20005 - 4070 • www.api.org 5
API Engagement Legislative & Regulatory o Federal Level o State Level Communications Mobilization Technical o Standards Development o Certification o Safety o Training 1220 L Street, NW • Washington, DC 20005 - 4070 • www.api.org 6
U.S. Industry Size/Strength OIL & NATURAL GAS 2.8 MILLION Machinery Manufacturing 989,000 Rail Transportation 212,000 Biorefineries 9,000 Coal 81,000 Utilities 565,000 Building Construction 1.4 million 1220 L Street, NW • Washington, DC 20005 - 4070 • www.api.org 7
API Mobilization Assets 1220 L Street, NW • Washington, DC 20005 - 4070 • www.api.org 8
Mobilization Model EXPANDING Micro-Targets Engage & Educate THE ENERGY BASE Minority Voters Women Conservation & Outdoor Affordable Energy Economic Growth & Reliable Energy Increased More Jobs/ & Employment Native Americans Energy Energy Production Security Investors Retirees Increased Access to Oil & Natural Gas Royalty Holders Resources Vendors & Suppliers Labor Groups Employees & Families Increased Access to Oil & Natural Gas Business Groups Resources Veterans Motivate Activate Environmental Performance Affinity Groups & Integrity 1220 L Street, NW • Washington, DC 20005 - 4070 • www.api.org 9
Allies and Strategic Partner Recruitment Minority Outreach Labor African Am Grow High Outreach Native Am Hispanic Impact Asian Strategic Veterans Partnerships Outreach Outreach Academia State Veteran Ldrs for Maximum Agriculture Vet Org Partners Chambers Influence Demo- graphic Seniors Women Students 1220 L Street, NW • Washington, DC 20005 - 4070 • www.api.org 10
How it all works… Maximize value by reaching outside of Capitol Hill to build key, long-term ally relationships relying on the principle that conditioned allies are likely to be better advocates and be willing to underscore implications on Election Day . Industry Voices Industry, fact-based expertise and perspective Local Influentials Energy Voters to the policy-making Community-based value Empower rank and file process proposition of the industry constituent and industry through elected officials voices to demonstrate and staff, business leaders, widespread support and small business owners, communicate the personal/community impact community leaders, media . of industry and energy Policy Maker policy 1220 L Street, NW • Washington, DC 20005 - 4070 • www.api.org 11
API Assets Nationwide SPC’s Allies Micro-targets: 25 Million, 32 states Combined Energy Forums: 23 states Energy Citizens: 1,400,000, 50 states Energy Nation: 250,000, 50 states 1220 L Street, NW • Washington, DC 20005 - 4070 • www.api.org 12
State Petroleum Councils API’s State Relations team oversees 33 states and Coalition- maintains offices in 22 states Building Member SPC State/Local Working Government Group Media API’s State Relations team also works with allied oil and gas associations that cover 15 states 1220 L Street, NW • Washington, DC 20005 - 4070 • www.api.org 13
energynation Self- identified industry advocates motivated to speak on behalf of the industry’s policy priorities – 250,000 total advocates nationwide – 74 partner companies Program focus – Issue and advocacy education • Advocacy In Action trainings • Inside Congress workshops – Engagement with legislators and personal networks within their communities 1220 L Street, NW • Washington, DC 20005 - 4070 • www.api.org 14
• Citizens concerned about energy who are self-motivated and active in their communities • More than 1,400,000 members • Powerful online community: Reach and impact • Volume activations • Online discussion impacts issue sentiment now more than ever • Grassroots, community voices: Diverse and active • Local volunteer leaders and organizers in 10 states • Scaleable infrastructure • House parties and member events • Phone banking and canvassing • Meetings with legislators • Earned media 1220 L Street, NW • Washington, DC 20005 - 4070 • www.api.org 15
Example: KXL 2014 • Sent over 535,527 letters to the State Department • Generated 23,532 emails to the White House • State Department letters signed by 250 elected officials and 1,068 veterans • Garnered 31,120 participants on educational telephone townhalls • Generated 63,532 communications to Senators 1220 L Street, NW • Washington, DC 20005 - 4070 • www.api.org 16
Why Mobilization Matters • Complements federal/state relations • Enforces D.C. message on the ground • Voters continue to support the energy sector • Places pressure on members back home • Puts a real face on the issue • Continues the dialogue • Moves the needle • Results in non-traditional allies 1220 L Street, NW • Washington, DC 20005 - 4070 • www.api.org 17
2015 Legislative Outlook 1220 L Street, NW • Washington, DC 20005 - 4070 • www.api.org 18
Overview • GOP Congress with regular order in the Senate • Senate open amendments means tough votes on the floor, and long bill time periods (KXL took 4 weeks) • Allows for more votes, forces POTUS to veto • No direct tax increases on the table for anyone • …but bills must be “paid for” • No real cooperation with White House on anything • Can anything get done? 1220 L Street, NW • Washington, DC 20005 - 4070 • www.api.org 19
2014 Legislative Outlook Will anything substantive happen this year? • Tax Reform • Budget • Highway Bill • Debt Ceiling • Trade Agenda 1220 L Street, NW • Washington, DC 20005 - 4070 • www.api.org 20
Tax Reform Politics • Chairman Camp released H.R. 1 in Dec, 2014 after years of drafts from 2012 on, and Leadership holding him back as long as possible • Why force a tough vote that would go no-where in a Dem Senate? • Under GOP control, Congress has a desire to do reform – but is there a political will and willing partner in the White House? • Business reform only very difficult but “supported” by POTUS • House and Senate seem to be on two different tracks Policies • Per country minimum & denial of interest expense often discussed • Camp draft Impact on energy sector: • Repeal of LIFO • Repeal of percentage depletion • Repeal of Sec. 199 (offset with rate reduction) • MACRS – ADS shift 1220 L Street, NW • Washington, DC 20005 - 4070 • www.api.org 21
Almost Obama Budget $96 billion in new taxes over the next 10 years. 1220 L Street, NW • Washington, DC 20005 - 4070 • www.api.org 22
GOP Budget • House & Senate budgets to be marked-up week of 16 th , on the floor week of 23 rd • Overtures to tax reform • Spending reforms • GOP Blueprint of economy • “Vote -a-rama ” regular order in the Senate • Can expect targeted amendments • Likely over 500 amendments will be filed 1220 L Street, NW • Washington, DC 20005 - 4070 • www.api.org 23
Highway Bill • Trust Fund expires on May 31 st • No clear funding option, likely a short term extension through Fall to provide time • Political will to pay for this package? • Gas tax, VMT, repatriation, per barrel fee • Administration proposal suggested 14% direct tax on foreign earnings (referred to as “repatriation”) • Why should the industry be concerned? 1220 L Street, NW • Washington, DC 20005 - 4070 • www.api.org 24
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