(The Daily Advertiser) – The oil and gas industry may realize more support from a Trump administration than it did for the last eight years, but expert onlookers suggest Louisiana and the nation are nowhere near a “Drill, baby, drill” moment.
“The biggest issue or opportunity is on the regulatory side of things,” said Gifford Briggs, vice president of the Louisiana Oil & Gas Association. “Trump will roll back regulations. Oil and gas will look forward to having those conversations.”
Briggs said Trump’s surprise victory means the energy industry will be winners, which he said is good for Louisiana and the United States. Although the president-elect has revealed broad support for a robust energy industry, he has not revealed energy agenda specifics.
“We need to see what direction he will take things in,” Briggs said.
Some things may change, not prices
David Dismukes, director of the LSU Center for Energy Studies, said policies will change but some things won’t change.
The industry has struggled with low commodity prices for two years, since crude oil prices plunged from more than $100 a barrel in 2014 to as low as $26 a barrel early this year. Prices, Dismukes said, are determined by the global market; the price “trajectory won’t change” on that because of the election.
The most dramatic change, Dismukes said, would come in regulations.
“There will be a screeching halt on regulations, particularly at the EPA,” he said.
That doesn’t mean Trump will roll back every federal mandate imposed by the Obama administration, but the new president won’t add new ones. And he may put a halt to the Environmental Protection Agency’s Clean Power Plan, introduced by President Barack Obama in 2015 and under siege in the federal courts, Dismukes said. That plan may end under Trump before the courts can issue an opinion.
Who is inside Trump energy team?
Dismukes suggested that Trump’s closest political advisers include New Jersey Gov. Chris Christie, oftentimes a renewable energy enthusiast and a supporter of green energy subsidies. Chris John, president of the Louisiana Mid-Continent Oil and Gas Association, said Trump’s picks for key energy-related slots in his administration — Energy secretary, Interior secretary and Environmental Protection Agency administrator — may say much about Trump’s agenda when it is more clearly revealed.
John, a former congressman, said most energy executives were certain Democratic nominee Hillary Clinton would win Tuesday’s election.
“They didn’t assume; they knew” she would win, he said with a hearty laugh.
Because of the intensely personal tone of the campaign, John said, little was actually said about energy. Trump’s surprise win sent energy enthusiasts scrambling for hints about the president-elect’s energy outlook and team. Those mentioned include Oklahoma oilman Harold Hamm as Energy secretary and Forrest Lucas, co-founder of Lucas Oil in Indiana, as Interior secretary.
Ostensibly, John said, Trump appears to be “bullish on shale plays, hydraulic fracturing, and access.”
Among oil and gas execs, delight
Mark Miller, president of Merlin Oil and Gas in Lafayette and president of the Independent Petroleum Association of America, said the “mood was high” among oil and gas industry leaders in that organization, who were meeting Wednesday in Atlanta. Hamm is expected to take part in those meetings Thursday.
Miller said low commodity prices have dispirited the industry; in Trump, he said, oil and gas industry leaders believe they have a sympathetic ear.
“We could have worked it out with Hillary,” he said. But on Wednesday, “we had a little kick in our step.”
Briggs said the new administration may be friendlier to opening up the offshore Eastern District in the Gulf of Mexico for more development, something that would help oil and gas service companies around south Louisiana.
The surest ways Trump could boost the Louisiana energy industry would be to open up the Gulf and exploration to development and to reduce corporate tax rates, something that would enable the industry to produce energy cheaper.
Dismukes said Trump’s support for coal may be tested when his first federal budget rolls out in the spring. There may be little money for price supports.
He said clean-burning natural gas usually is the beneficiary when coal suffers setbacks, and Louisiana has been the second-largest natural gas producer in the United States.