IPAA board votes to support oil dumping petition

Independents get behind coalition of oilmen who are asking the feds to investigate whether Venezuela, Iraq, others unlawfully sold crude in the United States at unusually low prices

Michelle Mittelstadt

Associated Press Writer

Oil producers who contend Venezuela and several other oil-producing countries are unlawfully dumping their crude oil on the U.S. market received a boost when a trade association representing independent producers joined their cause.

The Independent Petroleum Association of America’s board of governors, meeting in Charleston, S.C., voted in mid-May to support the dumping petition that was to be filed in late May by Save Domestic Oil Inc., an Enid, Oklahoma-based coalition of oilmen.

Under terms of a 1930 trade law, SDO will ask the International Trade Commission and Commerce Department to investigate whether Venezuela, Mexico, Kuwait and Iraq unlawfully sold crude oil at unusually low prices in the U.S. market. A determination of illegal dumping could trigger tariffs against those countries.

IPAA, which represents 8,000 independent producers, will join SDO’s petition under “interested party” status. That decision “allows us to have a seat at the table as things progress,” IPAA Chairman George Yates said in an interview.

“Our independents are not really alleging that dumping is taking place,” Yates added. “What they are really saying is ‘Let’s participate in the process to determine whether the law has been violated.’”

Representatives of SDO, which is comprised of oilmen from Oklahoma, Texas, Louisiana and other oil-producing states, didn’t return calls seeking comment.

IPAA has been moving on several fronts, including on Capitol Hill and Oil Patch state legislatures, to improve the financial picture for domestic oil and natural gas producers hit by a prolonged slump in worldwide oil prices.

“We’re doing lots of stuff, drilling a lot of wildcat wells,” Yates said of his association’s efforts. “Maybe one of them will come in.”

Addressing IPAA’s mid-year meeting, Energy Secretary Bill Richardson said tough times in the Oil Patch may be easing. With crude oil prices rebounding somewhat in recent months, he said: “I say, and I say this guardedly, I think we’re seeing some hopeful signs.”

IPAA estimates that the industry has lost 52,000 jobs and shut down 136,000 oil wells and 59,000 gas wells since November 1997.

Richardson suggested that independents may be poised to tap new opportunities as major oil companies shift extra investment overseas and some major players combine forces through industry mergers.

“It stands to reason that, as the majors look elsewhere, independent production will likely represent an ever-larger share of our domestic production,” he said. “Our policies of enhancing domestic production converge with the needs and interests of independent producers.”