NGSA, API in Tug of War Over Industry Representation

Negotiations reportedly are on going to bring together once again the Washington lobbying activities of large oil and natural gas 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 major reorganization plan it intended to establish a natural gas component, one of six components including upstream, downstream, pipeline, marine and allied services. At the time a spokesman said the group was not targeting members of current natural gas associations. He did say, however, that with the restructuring members could restrict activities to one or more components and pay dues for maintaining just that segment. Lower dues would allow it to attract medium-to-small sized companies.

But last week new API Chairman Red Cavaney responded to a question at a press briefing on the organization's restructuring saying API's role in the natural gas arena will be "additive." He mentioned synergies and pointed out that while NGSA has been very active in regulatory affairs, API tends to be more an upstream organization.

API so far has concentrated on downsizing and has not named anyone to head its natural gas segment. That segment conceivably could aim more toward the statistical and research side of natural gas which has been malnourished. Sources say the organization has inserted itself into the Natural Gas Council, and an API management committee reportedly is studying the question of natural gas activities, which could be brought up at the group's annual meeting this fall.

In the past, API's most prominent members have been large integrated oil companies with an international focus. And in fact, NGSA was spun off by those members in 1965 to pursue deregulation of domestic natural gas. Those who would fold it back into API say there is not enough activity on the current environmental, royalty and electric restructuring issues to justify a separate natural gas organization.

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

Those who favor maintaining NGSA as an independent group cite API's reputation in Washington as a petrified bureaucratic monolith which, as one source put it "is still dealing with the War of 1812." API is best known for wheeling and dealing on international issues and maintaining reliable databases of facts and figures about the oil industry.

It is not surprising that the chairman of the pipeline association which frequently locks horns with NGSA over issues at the Federal Energy Regulatory Commission voiced support last week for API's entry into the natural gas arena. The older and larger oil-focused organization would not be expected to be as fleet and feisty and thrust so many obstacles into the path of natural gas pipelines now pushing for their own form of deregulation.

Meanwhile NGSA last week continued its barrage against pipelines, asking FERC Chairman James Hoecker to put off action on Columbia Gas' filing for negotiated terms and conditions while it acts on the issue generically.

Ellen Beswick

©Copyright 1998 Intelligence Press, Inc. All rights reserved. The preceding news report may not be republished or redistributed in whole or in part without prior written consent of Intelligence Press, Inc.