Frank-Dodd was supposed to be a reform of the financial services industry. You know, and do stuff like protect consumers from predatory lending and all that other liberal pap. But hiding rotten little easter eggs in legislation has been the hallmark of the 111th Congress.
The bill signed into law yesterday by Obama amends the Exchange Act so that the SEC now requires publicly traded firms listed on US exchanges to disclose any information on payments made to foreign or the US federal government for the commercial development of oil, gas or mineral resources.
This story appears in Rig Zone:
Since SEC-listed companies are mostly American companies and only a few foreign companies, it would put U.S.-based firms at a competitive disadvantage, said API spokesperson Misty McGowen.
"It would not capture payments being made by national oil companies from other countries, and the level of detail required to be reported would allow competitors access to proprietary information when bidding, which they could use to their advantage in contract negotiations," said API spokesperson Misty McGowen.
API does support transparency in disclosure of payments, "but we don't think this level of disclosure is the right way to do things." McGowen said API supports and participates in the Extractive Industries Transparency Initiative, a multi-lateral, international initiative to promote transparency in oil and gas payments.
The intention, echoed through Senator Lugar's Energy Security through Transparency Act (SB 1700) is designed to reduce international corruption in making multi-billion dollar oil, gas and minerals exploration deals. That's a noble idea, but it has little support from the international community, especially among countries (like China) who desperately need to exploit the energy resources of impoverished nations (like Cuba) and have no problem shelling out major coin to corrupt authoritarians. It's a problem, but it's a problem that's been around since the rise of the merchant class.
But to have the US go it alone is sheer stupidity. This places companies like Texaco, Chevron, and Diamond Offshore at a significant competitive disadvantage. Detailed knowledge of transactions between oil companies and those they negotiate leases with would allow competitors to discover or deduce proprietary information, and use it against them. And, some of the competitors are nationalized oil companies, like Mexico's nearly broke Pemex, Brazil's PetroBras and others around the globe.
Isn't a deepwater drilling moratorium and a nearly permanent ban on shallow water drilling anywhere but the Gulf of Mexico enough? Does this cabal want to harm the energy sector, or just kill it outright, negating the need for Cap and Tax?
Gimme some feedback in the comments.