Negotiations reportedly are on going to bring together onceagain the Washington lobbying activities of large oil and naturalgas producers in the form of the American Petroleum Institute (API)and the Natural Gas Supply Assoc. (NGSA).

API announced in early May that as part of a majorreorganization plan it intended to establish a natural gascomponent, one of six components including upstream, downstream,pipeline, marine and allied services. At the time a spokesman saidthe group was not targeting members of current natural gasassociations. He did say, however, that with the restructuringmembers could restrict activities to one or more components and paydues for maintaining just that segment. Lower dues would allow itto attract medium-to-small sized companies.

But last week new API Chairman Red Cavaney responded to aquestion at a press briefing on the organization’s restructuringsaying API’s role in the natural gas arena will be “additive.” Hementioned synergies and pointed out that while NGSA has been veryactive in regulatory affairs, API tends to be more an upstreamorganization.

API so far has concentrated on downsizing and has not namedanyone to head its natural gas segment. That segment conceivablycould aim more toward the statistical and research side of naturalgas which has been malnourished. Sources say the organization hasinserted itself into the Natural Gas Council, and an API managementcommittee reportedly is studying the question of natural gasactivities, which could be brought up at the group’s annual meetingthis fall.

In the past, API’s most prominent members have been largeintegrated oil companies with an international focus. And in fact,NGSA was spun off by those members in 1965 to pursue deregulationof domestic natural gas. Those who would fold it back into API saythere is not enough activity on the current environmental, royaltyand electric restructuring issues to justify a separate natural gasorganization.

NGSA has been downsized and had its budget cut, as have all thegas associations. Some say that budget of about $2 million hasreached the vanishing point for running an effective lobbyingeffort in the nation’s capital. API’s 1997 budget was more than $58million, but will be decreasing in 1999 by 10-15%.

Those who favor maintaining NGSA as an independent group citeAPI’s reputation in Washington as a petrified bureaucratic monolithwhich, as one source put it “is still dealing with the War of1812.” API is best known for wheeling and dealing on internationalissues and maintaining reliable databases of facts and figuresabout the oil industry.

It is not surprising that the chairman of the pipelineassociation which frequently locks horns with NGSA over issues atthe Federal Energy Regulatory Commission voiced support last weekfor API’s entry into the natural gas arena. The older and largeroil-focused organization would not be expected to be as fleet andfeisty and thrust so many obstacles into the path of natural gaspipelines now pushing for their own form of deregulation.

Meanwhile NGSA last week continued its barrage againstpipelines, asking FERC Chairman James Hoecker to put off action onColumbia Gas’ filing for negotiated terms and conditions while itacts on the issue generically.

Ellen Beswick

©Copyright 1998 Intelligence Press, Inc. All rightsreserved. The preceding news report may not be republished orredistributed in whole or in part without prior written consent ofIntelligence Press, Inc.