The oil and gas industry has spent a record amount of money to support Mr. Trump and the Republicans' return to the most powerful position in the world ... And here is the list of priorities they want in return. Will the US energy industry mark a significant reversal from here, along with many climate and energy policies?
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| President Trump is back 'more powerful than ever', the US fossil energy industry will revive strongly. (Source: arabcenterdc.org) |
The US oil and gas industry has given more money to Republican candidates and political groups in the 2024 election cycle than any previous election, according to the independent financial watchdog group Open Secrets.
And as Donald Trump's picks for top US energy jobs face congressional hearings this week, the US oil industry's top lobbying group has been unabashed in detailing its recommendations for the incoming administration.
"Overwhelming victory" of fossil fuels
The American Petroleum Institute (API) has released a new energy "roadmap" for the Trump administration and the Republican-controlled Congress.
At the top of the priority list are expanding drilling areas and reversing Biden administration regulations on auto emissions and natural gas exports.
"In November 2024, American energy is on the ballot and American energy has won," Mike Sommers, president and CEO of the American Petroleum Institute (API), announced at a press conference, revealing the goal - trying to turn the Republican victory in the race for the White House and Congress into a roadmap to redevelop fossil fuels.
Open Secrets data shows that the US oil and gas industry's total spending on politics in the 2024 election cycle was about $239 million, a 60% increase over the industry's campaign spending in the 2020 election cycle. About 89% of the industry's "investment" went to Republican or conservative groups, mostly in the form of so-called "soft costs" or outside spending.
While oil and gas production has skyrocketed under President Biden — the U.S. now produces more crude than any other country ever — Sommers said Trump should start by reversing his predecessor Joe Biden’s recent ban on new offshore drilling permits along the Atlantic, Pacific, and Gulf coasts of Florida.
“It’s time to restore our approach to energy and send a signal that America is open for energy investment,” Sommers said. API is prepared to argue in court that President Trump has the authority to overturn former President Biden’s bans, but many environmental law experts say such a move would require a decision from Congress.
Mr. Sommers also wants President Trump to lift Mr. Biden’s suspension of new permits for liquefied natural gas (LNG) export terminals. Europe has become a major consumer of U.S. gas shipped this way, after fuel disruptions caused by the Russia-Ukraine military conflict.
Environmentalists and climate advocates, however, argue that LNG exports increase greenhouse gas emissions and undermine the development of cleaner energy sources. Some consumer groups have also expressed concerns about how U.S. gas exports will affect domestic energy prices.
In a study released last month, the US Department of Energy (DoE) found that a single LNG export terminal would “by itself generate more greenhouse gas emissions each year than 141 countries combined in 2023.” Additionally, the DoE warned, expanding LNG exports would result in higher prices for US consumers for both the natural gas and the electricity it generates.
The API leader countered that sentiment with findings from a new study by S&P Global that the LNG industry has contributed more than $400 billion to the US economy's GDP over the past decade and supported hundreds of thousands of jobs.
The API also wants to end former President Biden’s fees for excess methane emissions from oil and gas drilling and transmission. Methane, the main component of natural gas, is a potent greenhouse gas when released into the atmosphere from leaky drilling sites and pipelines.
New monitoring technologies have revealed leaks that are contributing to rising levels of methane in the atmosphere globally. Aerial monitoring of US oil and gas production last summer found methane emissions eight times higher than the target the country’s oil industry had agreed to meet. Meanwhile, a study published in the online journal Frontiers in Science in July 2024 found that atmospheric methane is growing “well beyond the projected growth rate.”
Still, API CEO Sommers said the oil industry is committed to reducing methane emissions and acknowledges “the government needs to play a role,” but API remains steadfast in its opposition to the fees the Biden administration has imposed.
The reason given was, "we're really concerned that, over time, that would cut production for this energy source - a critical energy source that powers much of the US economy," Mr. Sommers said.
In addition, the US oil industry's recommendations extend to its main customer base, the automotive industry.
... The future may not depend on support.
Donald Trump has often been outspoken about his preference for fossil fuels, a view shared by many in the industry. Support for increased US oil and gas production was also a key element of his campaign.
In fact, to put his plan into action, President Donald Trump has picked a number of cabinet positions that are pro-oil industry figures. For example, Secretary of Energy Chris Wright, not only is an oil and gas CEO, he is also a climate crisis denier and has pledged to support Trump’s plan to maximize U.S. oil and gas production.
Or President Trump's nominee for Secretary of the Interior - Governor of North Dakota once said that "the Biden administration needs a 180-degree change in energy policy", because the continued growth of traditional energy production is a national security issue. According to him, greenhouse gas emissions can be reduced with carbon capture technology, but renewable energy, if heavily subsidized, will cause other problems.
Will domestic and foreign support for the US oil industry mark a significant reversal from here? And how might America’s oil-producing friends in the Middle East take the Trump administration’s oil market and diplomatic priorities?
One of the most predictable policies of the Trump 2.0 administration is its enthusiastic support for increasing US oil and gas production as a key commodity. However, according to analysts, the willingness of US oil and gas companies to increase production depends more on market signals than on "green light" signals from the President or the federal government.
In fact, the president can push for deregulation or reductions, loosening permitting and access to drilling on public lands and waters, and reversing the previous administration’s moratorium on LNG export permits. Trump can also combine his push for LNG exports with a campaign to pressure U.S. allies to buy American LNG. And with Republicans in control of Congress, they can even change the law.
But if market indicators point in the opposite direction, most oil executives will look to ignore the federal government. With U.S. oil production hitting record highs this year, U.S. oil investors will continue to favor capital discipline over increased production as a new strategy under President Joe Biden.
The situation makes President Trump’s choices more difficult, with economic interests split fairly evenly between those who benefit from higher oil prices and those who benefit from lower ones. The oil industry and its financiers benefit when prices are high, while manufacturing and transportation (and consumers) benefit when prices are low. Even auto fuel standards—a target that could be reversed with Biden’s tightening policy—are another double-edged sword.
The new problems pose different challenges than those of Trump 1.0. Even America’s partners in the Gulf now appear less enthusiastic about his tough policies on traditional oil and gas that they supported during his first term.
Observers say that in the new situation, President Donald Trump's unorthodox methods and unpredictable diplomatic style signal another period of upheaval for American and global norms. Once again, international relations and traditional positions on all issues will be challenged.
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