American Petroleum Institute CEO Mike Sommers joined Yahoo Finance Live to discuss the energy sector's outlook is under the Biden's administration.
Video Transcript
SEANA SMITH: I want to take a look at the energy sector because the Biden administration has suspended new oil and gas drilling permits on federal land. Of course, this has implications for the sector. So for that, we want to bring in Mike Sommers. He is the CEO of American Petroleum Institute. And Mike, great to have you on the program. Let's just start with this tighter regulatory environment that your sector could be facing here under the new administration. How do you think that this is going to affect your business?
MIKE SOMMERS: Well, we're very concerned about some of the proposals that have been put forward by the administration so far. This concept of eliminating the ability to get leases or to get permits on federal lands and waters could have huge implications for the industry, and particularly for America's national security. We get about 20% of our oil and natural gas from onshore leases and the offshore as well.
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And so, this is a very, very concerning development. It is just a 60-day decision. But at the same time, this is what President Biden promised on the campaign trail. So we're watching these new regulatory efforts with great concern.
ADAM SHAPIRO: And Mike, let's take a step back from this because I'm old enough to remember sitting in Granny's 1978 Buick LeSabre in a 1980 or '81 gas line. So I understand the concerns. But back then, we imported something like 65% of our oil. As of 2014, before these restrictions had-- they were in place then. Then they were lifted. Now they might go back in place. In 2014, we were importing 35%. We're back to the levels that we used to have that were considered healthy. And most of it's coming from Canada. So why is everybody all upset with this? What's the danger?
MIKE SOMMERS: Well, if you think about the fact that in November of 2020, we imported zero barrels of oil from Saudi Arabia, that is a completely different picture than what we've seen any time in our history. And what President Biden has actually inherited is what every president and the last nine presidents have wished for, which is American energy security, American-- close to American energy independence.
And, you know, every president since Jimmy Carter has wished for this opportunity. And we want to make sure that we continue to have American energy security, because the world is a hostile place. And really, the question is whether the United States is going to be getting its energy from American resources or whether it's going to be getting its energy from American resources or resources from regimes that are hostile to the United States.
ADAM SHAPIRO: But Mike--
MIKE SOMMERS: So--
ADAM SHAPIRO: A great many of us agree with you that energy security is crucial to the United States. But only 16% comes from the Middle East. I don't think the Canadians are about to attack us. And I'm being--
MIKE SOMMERS: Well, let's think about--
ADAM SHAPIRO: I don't want to be sarcastic, but--
MIKE SOMMERS: I know.
ADAM SHAPIRO: --the picture is that we're shifting away from fossil fuel, and our exposure is not what it was in the 1980s, 16% from the Middle East, according to the federal government.
MIKE SOMMERS: Well, let's think about also what the other executive order was from this president earlier this week. He shut down the possibility of the development of the Keystone XL pipeline, which is the safest way to transport that oil that you speak of from Canada to the United States, canceling with the stroke of a pen 10,000 good-paying union jobs to get that oil from Canada into the United States to refine those products in American refineries.
So and just because we're only getting, quote, 16% from the Middle East, that's-- we need to make sure that the United States is in a position of power when dealing with our foreign adversaries. We need to make sure that the United States has a supply of its own to ensure that America has that energy security going forward.
SEANA SMITH: Well, Mike, talking about going forward here, I think the big question is, how can you better engage with the Biden administration, what you can do just in terms of addressing some of your concerns, while also working with some of their priorities. So where do you see that potential, I don't want to say partnership, but really coming together and advancing this so both parties will be happy?
MIKE SOMMERS: Well, we have a number of things in common with the Biden administration. There are a number of things that we want to work on with the Biden administration, things like regulation of methane. We support the federal and direct regulation of methane, both for new and existing sources. And we want to work with them on what that regulatory regime looks like.
But we also want to work with them on trade policy. We want to be able to export American environmental progress. Really, the reason why the United States leads the world in emission reductions is because we've made that switch from coal to natural gas. And we think if we're going to continue to be successful from an international perspective, that we need to be able to export that American environmental progress by shipping liquefied natural gas all over the world.
Think about the fact that China still uses-- 2/3 of its energy still comes from coal. India, 3/4 of its energy still comes from coal. If the United States can get access to those markets, it could be a boon to American producers, but also a boon for American environmental progress.
SEANA SMITH: All right, Mike Sommers, CEO of American Petroleum Institute, thanks so much for taking the time to join us.