API testified before the Senate Committee on Energy and Natural Resources and discussed the challenges facing the U.S. natural gas and oil sector during the COVID-19 pandemic and the industry’s role in the economic recovery.
“We remain confident that economic recovery and oil demand are inextricably linked, and we see signs of recovery and demand increases continuing into the second half of 2020,” API Senior Vice President of Policy, Economics and Regulatory Affairs Frank Macchiarola said. “Our industry remains resilient in the face of these challenges, and we are committed to providing the affordable, reliable and cleaner energy that people need to sustain everyday life, enhance standards of living and increase prosperity around the world.”
Macchiarola explained the market impacts of COVID-19 and emphasized how the historic downturn has primarily been related to a significant decrease in demand. However, EIA projects a relatively more rapid recovery for demand than supply.
According to Macchiarola, this projection “underscores the importance of an energy policy in the United States that allows markets to work and thus helps enable U.S. producers to ramp back up as the economic recovery progresses.” U.S. oil demand was 17.6 million barrels per day in the week ended June 5, an increase of 3.8 million barrels per day over the low point in the week of April 10.
“With respect to policy, API has been clear from the outset of this historic crisis that we are not seeking industry-specific financial assistance or legislative authorizations as a result of the market disruption caused by the COVID-19 pandemic,” Macchiarola said. “In keeping with our free market-based principles, we discourage retaliatory trade measures that could disrupt global markets. In addition to substantial global interests within the U.S. oil and natural gas industry, U.S. refiners require diverse crude slates, including from imports, to deliver essential petroleum products to American consumers.”
“While several unique factors coincided to create these unprecedented conditions, our industry has experienced difficult times before,” Macchiarola said. “As our nation recovers from this public health crisis and economic downturn, the oil and natural gas industry is committed to providing our nation – and billions of people around the world – with more affordable, reliable and cleaner energy for better years to come.”
Read Macchiarola’s full testimony here.