National Petroleum Council Origin and Operations

INTRODUCTION

The National Petroleum Council (NPC), a federally chartered and privately funded advisory committee, was established by the Secretary of the Interior in 1946 at the request of President Harry S. Truman. In 1977, the U.S. Department of Energy was established and the NPC’s functions were transferred to the new Department. The purpose of the NPC is solely to represent the views of the oil and natural gas industries in advising, informing, and making recommendations to the Secretary of Energy with respect to any matter relating to oil and natural gas, or to the oil and gas industries submitted to it or approved by the Secretary. The NPC does not concern itself with trade practices, nor does it engage in any of the usual trade association activities.

The NPC is chartered by the Secretary of Energy, under the provisions of the Federal Advisory Committee Act of 1972. The Council membership of approximately 180 persons is selected and appointed by the Secretary of Energy. Individual members serve without compensation as representatives of their industry or associated interests as a whole, not as representatives of their particular companies or affiliations.

In selecting the membership, special attention is given by the Secretary to assure a well-balanced representation from all segments of the oil and gas industries, all sections of the country, and from large and small companies. The Council also has members with interests outside of oil or gas operations, including representatives from academic, financial, research, Native American, and public interest organizations and institutions.

The advice of the NPC is transmitted to the Secretary in the form of reports approved by the Council and is rendered to the government as a public service. The cost of providing this service is borne by voluntary contributions from the Council members. The NPC conducts studies in response to specific requests originating from or approved by the Secretary of Energy. The Council does, however, reserve the right to decline to undertake any study requested of it by the Secretary, if it determines the subject matter to be inappropriate for Council consideration.

At the first meeting in each calendar year, the Council elects a Chair and Vice Chair, the chairs and members of the Agenda and the Appointment Committees, and the at-large members of the Cochairs’ Coordinating Committee. The function of the Agenda Committee is to review and make recommendations to the Council regarding requests from the Secretary of Energy for advice and information on specific subjects. The Appointment Committee advises the Chair of the Council in designating members of a committee to be responsible for developing and presenting a particular study to the Council for its consideration. Under the leadership of the NPC Chair and the Secretary of Energy, the Cochairs’ Coordinating Committee provides a flexible mechanism through which the leadership of the Council and the Department can jointly review the progress of ongoing studies and the industry resources allocated to them, as well as identify issues for possible future consideration by the Council.

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ORIGIN OF THE NPC

The origin of the National Petroleum Council stems from the experience of government/industry cooperation during World War II. The importance of petroleum to the war effort was cited by President Roosevelt in appointing Secretary of the Interior Harold L. Ickes as Petroleum Coordinator for Defense. Secretary Ickes in turn recognized the value of industry advice in the development of petroleum policies and appointed the Petroleum Industry War Council, whose charge was to:

...mobilize most effectively all resources and abilities of the petroleum industry to deal with the emergency conditions under which the industry must operate, and to provide a competent, responsible and representative body.

In May 1946, President Truman stated in a letter to the Secretary of the Interior that he had been impressed by the contribution made through industry/government cooperation to the success of the World War II petroleum program. He felt that it would be beneficial if this close relationship were to be continued and suggested that the Secretary of the Interior establish an industry organization to advise the Secretary on oil and natural gas matters. On June 18, 1946, the Secretary of the Interior established the National Petroleum Council as the peacetime successor to the Petroleum Industry War Council.

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NPC STUDIES

Since its formation in 1946, the Council has prepared over 200 reports, which deal with virtually every aspect of oil and gas operations. NPC reports include: examinations of the ongoing and future operations and requirements of the U.S. oil and gas industries; statistical studies descriptive of these industries; delineations of the U.S. oil and gas resource base; and comprehensive analyses of the domestic energy supply/demand situation. On numerous occasions, the Council has provided advice on governmental response to emergency situations, both prospective and actual. Other studies have focused on environmental and energy conservation, technology, and legal issues.

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NPC STUDY PROCEDURES

The procedures currently governing the preparation of Council reports are based on guidelines set forth in the Federal Advisory Committee Act of 1972, the NPC Articles of Organization as amended June 11, 1980, and on operational experience derived since the Council’s inception in 1946.

A request for the Council to undertake a study must originate from or be approved by the Secretary of Energy and be in the form of an official request letter. Upon receipt, a request letter is reviewed by the Council’s Agenda Committee for recommendation as to whether the request is proper and advisable for Council consideration. This recommendation is then submitted to the Council, which decides whether to accept or reject the study request.

Study Group Establishment

After a study request has been approved by the Council, the NPC Chair, with the advice of the Appointment Committee and the approval of the Secretary of Energy, appoints a representative group of Council members to a temporary working committee. If the request is urgent and the Agenda Committee’s recommendation is favorable, the Council Chair may establish a committee to begin work immediately. The designated committee is responsible for developing a proposed response for the Council’s consideration.

The committee determines an organizational structure that will best fulfill its needs in completing the study. Depending upon the nature of the study request, a committee is generally aided by a subcommittee or, in the case of a larger study, a coordinating subcommittee. The majority of subcommittee members represent their committee member; however, the members of a subcommittee do not have to be Council members or affiliated with Council members’ organizations. A coordinating subcommittee assists in compiling the input of various single-purpose technical subcommittees or task groups. The nucleus of a coordinating subcommittee is usually composed of the chairs of the technical subcommittees and/or task groups.

The Chair of the Council establishes all NPC study committees, subcommittees, and task groups and appoints their membership. The Secretary of Energy, or the designated representative of the Secretary, approves these actions and designates a full-time government official to serve as the government cochair of each group.

Study Execution

Following the organizational meeting of a committee, the subcommittees and task groups hold a series of meetings to develop and compile the data requested by the committee. The data and information are prepared in the form of working drafts or separate sections thereof and are assimilated at progressive levels of organization under the ongoing supervision of the coordinating subcommittee and/or committee.

Study Approval

When a draft report has been completed by a study committee, it is presented to the full Council for its consideration. The Council decides whether to reject, modify, or adopt the report. A draft report is not a “report of the National Petroleum Council” until its adoption by the Council in plenary session. Upon adoption, a report is formally transmitted to the Secretary of Energy by the Chair of the Council. All NPC reports are available to the public.

All study committees, subcommittees, and task groups are established in response to specific requests and are disbanded upon completion of their individual assignments or transmittal of a final report to the Secretary of Energy.

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MEETING PROCEDURES

The National Petroleum Council meets in Washington, D.C. at least twice a year and study groups meet as necessary. The time, place, and agenda of each Council and study group meeting are determined by its respective chair, with the concurrence of the Department of Energy.

To constitute a quorum for the transaction of business at a Council meeting, one-third of the membership must be present. One-half of the membership of a committee or subgroup must be in attendance in order to transact business at a meeting. Action at a Council, committee, or subgroup meeting is taken by a majority of members in attendance. Meetings are open to the public. Documents discussed or presented at a meeting are available for inspection and duplication at the NPC office by members of the public. The government representative in whose presence a meeting is conducted is authorized to adjourn a meeting whenever the representative considers adjournment to be in the public interest.

Verbatim transcripts are kept of all proceedings of Council and committee meetings, and detailed minutes are prepared of subcommittee and task group meetings. The accuracy of all minutes is certified by the chair of the group and by a full-time officer or employee of the government present during the proceedings. These records are available for public inspection at the NPC office and the U.S. Department of Energy.

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NPC STAFF AND FINANCES

The NPC maintains a small staff in Washington, D.C., headed by an Executive Director. The function of this staff is to assist in the coordination of study efforts and to provide administrative and logistical support to the preparation and distribution of Council studies.

The Council’s operations are privately funded through the voluntary contributions of its members, based on a budget approved annually by the membership. These funds are used exclusively to cover the expenses of NPC meetings and the NPC office, including employee salaries and expenses, rent, printing, etc. None of these funds are paid to government personnel, and the NPC receives no government funds.

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NPC OFFICERS

Claiborne P. Deming, Chair
David J. O’Reilly, Vice Chair
Marshall W. Nichols, Executive Director
The Hon. Steven Chu, Secretary, U.S. Department of Energy

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