For President-elect Donald Trump, the oil and gas sector has a list of things to do.
Trump has been urged by the advocacy group American Petroleum Institute to expeditiously approve the export of liquefied natural gas, increase drilling on federal lands, ease pipeline permits, remove stringent vehicle emissions and fuel economy regulations, and maintain the current corporate tax rates.
The industry sees this five-point plan as a way to turn Trump’s three-word catchphrase—drill, baby, drill—into actual legislation. In an interview with NBC News that aired Sunday, Trump stated without going into further detail that he plans to sign executive orders pertaining to energy when he takes office on January 20.
Trump is establishing a National Energy Council, which he claims would supervise a strategy to reduce red tape and achieve U.S. energy dominance. North Dakota Governor Doug Burgum, his choice for interior secretary, will serve as both the council’s chair and a member of the National Security Council.
Following his appointment by Trump, Burgum stated in a statement that the council would include all federal agencies involved in energy production, distribution, generation, permitting, and regulation.
Regarding the upcoming administration, API President Mike Sommers stated that the Energy Council is aiming for a whole-of-government strategy for energy security. According to Sommers, the council should concentrate on ensuring that there is adequate production and infrastructure in place to safeguard American energy security for the next 25 years.
Chris Wright, the CEO of Liberty Energy, Trump’s choice for energy secretary, will also be on the council. Kevin Book, managing director of the energy research firm ClearView Energy Partners, said the president-elect’s choice of Burgum and Wright shows the administration plans to drastically reduce regulation.
According to Book, Burgum and Wright are linked to independent, smaller oil and gas firms that favor more extensive deregulation because they are more burdened by compliance than are the larger firms.
With a $2.8 billion market valuation, Wright’s Liberty Energy is a comparatively tiny oilfield services company. According to Book, Burgum is the head of a state where the production of fossil fuels accounts for a sizable amount of its GDP and where a large number of the oil and gas operators are tiny businesses.
According to Book, Chris Wright’s appointment as energy secretary likely reflects a more autonomous voice from the oil and gas industry and a deeper deregulatory bent. According to the expert, it is likely safe to assume that Burgum holds this opinion.
More LNG exports, drilling
According to Department of Energy data, the United States has been producing more oil than any other nation in history for the past six years, despite Trump’s council’s declared goal of energy dominance. Additionally, according to DOE data, the United States was the largest natural gas exporter in the world in 2023.
In contrast to OPEC and other producers, Book thinks the incoming Trump administration is attempting to further expand the U.S. share of the global oil and gas market.
According to the analyst, the question is what this council can do to increase market share and the United States’ competitiveness in comparison to other hydrocarbon producers worldwide.
On his first day in office, API wants Trump to expeditiously process pending LNG export applications and lift the halt on new LNG export projects. The suspension was enforced by the Biden administration to examine the economic and environmental effects of LNG shipments.
According to the group, the incoming government should expand federal leases for the development of onshore and offshore oil and gas regions in Alaska, the Gulf of Mexico, and New Mexico.
The Interior Department claims that under a plan that permitted corporations to drill in no more than three additional locations solely in the Gulf of Mexico through 2029, the Biden administration provided the fewest offshore oil and gas leases in U.S. history.
According to Sommers, they are production leases that last 30 to 40 years. In order to continue producing for the future, we must have that inventory now.
According to Bob McNally, a former energy advisor to President George W. Bush, additional leases to expand output may boost supplies in the medium to long term, but investment choices ultimately rely on the fundamentals of supply and demand in the oil market.
According to McNally, presidents can hinder productivity by implementing poor policies, but they are powerless to swiftly boost output.
According to McNally, the president essentially has no control over the price of oil, which ultimately determines how much is invested in production.
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