As API changes leaders, it must change leadership

With Jack Gerard stepping down as head of the American oil and gas industry’s most powerful trade association, industry has an important opportunity to change with the times.

The oil and gas industry and its ecosystem are evolving rapidly before our eyes. Technology improvements allow ever more efficient production. Resource discovery in areas like the Permian Basin unlock opportunity and drilling activity that few ever thought possible. But the most profound change is happening above ground—the steadily growing calls for climate action by investors, governments, corporate energy users, and society at large.

The future of industry—its very prospect of surviving, let alone thriving, in a decarbonizing world—depends on its ability to meet society’s demands, not just for energy, but for leadership.

An unsustainable path

Unfortunately, the path charted by Mr. Gerard has been neither environmentally sound nor economically sustainable. With global temperatures and demands for action on climate reaching record highs, the American Petroleum Institute’s approach to climate action under Mr. Gerard can be summed up in three simple words: “Just say no.”

A perfect example of this is the trade association’s relentless, multi-year attack on sensible safeguards to limit potent methane emissions and other harmful air pollutants from well pads and other facilities. API’s lobbying assault on issues like methane regulation paints the picture of a retrograde industry on a collision course with legitimate social and environmental needs.

Could there be a new way?

Few would dare hope that a trade association—representing the wants of hundreds of members with diverse views and capabilities—could set the highest possible bar for industry. Negotiation, representation, and consensus building are inherent in the work of a trade association leader. But all too often, the result has been lowest-common-denominator lobbying agendas and activities, which tarnish the reputation of industry, including those more forward thinking members who will increasingly need to distance themselves from their own trade association.

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Therefore, basic qualifications for API’s next leader must be understanding the value to industry of keeping up with the times, and possessing the leadership skills to steward the association to responsible lobbying positions and engagement with governments, NGO’s, and others. It will serve industry’s own license to operate to come to the negotiating table in good faith, seeking development of workable rules and regulations that level the playing field.

In announcing his departure, Gerard reportedly remarked: “We’re integral to everything, and the ongoing challenge is just to continue articulating that vision.”

But time’s up on business-as-usual.

Any industry with a self-interest in keeping up with a dynamic world cannot ignore legitimate social and environmental demands. If API heeds Gerard’s call for business-as-usual with more slick “education” campaigns, lackluster voluntary programs, and anti-environmental lobbying, industry may hasten the day when it learns it is not so integral after all.

I hope there is a day in the not too distant future where API engages constructively to advance climate and environmental safeguards that work for business and the environment. Let’s hope API’s forward thinking members use their influence to hire a leader who responds to the real challenges the industry faces.

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