Official touts energy transparency rules

The State Department's Carlos Pascual says proposed transparency rules would create a more level playing field. Energy companies, however, say the rules would be expensive to follow and would force them to reveal confidential contractual data. less The State Department's Carlos Pascual says proposed transparency rules would create a more level playing field. Energy companies, however, say the rules would be expensive to follow and would force them to ... more Photo: Melissa Phillip Photo: Melissa Phillip Image 1 of / 1 Caption Close Official touts energy transparency rules 1 / 1 Back to Gallery

Proposed transparency rules for energy companies working overseas would boost competition and begin a worldwide change in how the companies operate outside their home countries, a senior State Department official with an energy focus said Monday in Houston.

Carlos Pascual, the department's special envoy and coordinator for international energy affairs, endorsed the regulations, which would require all companies listed on the New York Stock Exchange to disclose payments to foreign governments for activities related to the exploration and development of oil and natural gas.

Part of Dodd-Frank

The Securities and Exchange Commission is reviewing the regulations as part of the Dodd-Frank Act, a comprehensive overhaul of regulations governing financial services signed into law in 2010.

"It basically says to those companies and countries, if you want to continue to get the benefit of being listed on the NYSE, there are certain actions you are going to have to take to make sure that you follow certain rules on transparency, that are going to create a more level playing field in oil and gas and more broadly, in extractive industries," Pascual said in an interview with the Houston Chronicle.

Pascual, a former U.S. ambassador to Mexico, has been nominated to be assistant secretary of state for the Bureau of Energy Resources.

He was a keynote speaker at the University of Texas' Latin America Forum on Energy and the Environment, which continues Tuesday at the Crowne Plaza Houston-Downtown.

U.S. energy companies have complained that the provisions would be costly and would require them to reveal confidential contractual information.

Increasing coverage

Pascual noted, however, that if key European stock exchanges adopted the same rules, they would cover more than 70 percent of all energy companies worldwide.

"Once you start getting that coverage and that kind of comparability in performance, you begin to reduce the space that individual companies can have to violate the rules and operate differently in the energy sector and potentially bring in other kinds of payments and investments and factors that might distort the market," Pascual said.

Pascual emphasized that government's role is to enhance the innovation coming out of the private energy sector in the U.S. in order to sustain its rapid growth and potential for U.S. energy exports.

"The innovation that we have seen out of the private sector in the U.S. has been transformative," Pascual said. "The oil and gas industry has changed the entire process of resource production in the U.S. With strong market signals combined with sound regulation, we can continue to be a leader in this field for decades to come."

emily.pickrell@chron.com