API President Jack Gerard said he was supporting a proposal to preserve a state role in regulating oil and natural gas operations. Supporters of the legislation say a one-size-fits-all federal policy would overlook individual cases.
"This legislation recognizes that an unnecessary and duplicative layer of federal restrictions would pose a needless cost to taxpayers, could slow domestic energy production, and interfere with environmental stewardship by the states," Gerard said in a Friday statement.
Critics of President Obama's energy policies say the federal government is handicapping the energy sector. The administration says oil and natural gas production are at record highs.
API said last week the U.S. oil and natural gas sector supported 8 percent of the U.S. economy in 2011, up from the 7.7 percent reported in a 2009 assessment.