Energy Executives Lobby Trump Administration on Deregulation and Tariffs
Oil and gas industry leaders convened with President Trump at the White House on Wednesday, seeking to influence his administration on key matters ranging from deregulation to tariffs.
Despite contributing over $75 million to support Mr. Trump’s election, some industry executives are expressing growing dissatisfaction with aspects of his agenda. They are concerned that tariffs are inflating the cost of essential materials like steel pipe and undermining consumer confidence.
Crude oil prices have decreased by approximately 14 percent since just prior to Mr. Trump assuming office, currently trading around $67 per barrel. Senior White House advisor Peter Navarro has publicly discussed the potential benefits of oil prices as low as $50 per barrel. However, such prices would render new drilling ventures unprofitable for many companies operating across significant portions of the American oil sector.
Administration officials stated that crude oil prices were not addressed during Wednesday’s meeting.
“There is nothing we could have articulated in that setting that would have altered the situation, consequently it was not truly a subject of discussion,” Interior Secretary Doug Burgum informed reporters.
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Focus on Permitting and Infrastructure
Instead, according to Mr. Burgum, the discussions centered on topics such as streamlining the process to secure permits for energy projects. He conveyed the industry’s urgency, stating, “We need to build, baby, build to ensure we possess the necessary infrastructure to propel our economy forward.”
Industry Priorities
Permitting Reform
Energy companies are urging the Trump administration and Congress to relax permitting regulations to facilitate the construction of transmission lines, pipelines, and other critical infrastructure. Many businesses aim to limit the ability of states to obstruct proposed projects and to reduce the avenues for environmental groups and others to impede projects through legal challenges.
Chris Wright, the newly appointed Energy Secretary, summarized feedback he received from executives at the CERAWeek by S&P Global conference in Houston last week: “If increased energy production and investment within the United States are desired outcomes, we must regain the capacity to build infrastructure. This sentiment has been consistently voiced. My response is: Provide specifics. Which permit? What is the precise obstacle?”
Tariffs and Trade Concerns
U.S. refineries depend on crude oil imports from Canada and Mexico, which they process into refined fuels like gasoline for both domestic consumption and export. These established trade relationships have evolved over decades and would be complex and costly to disrupt.
Mr. Trump initially declared tariffs of 25 percent on imports from Canada and Mexico, with a reduced 10 percent rate for Canadian energy products. This month, he postponed these tariffs on the majority of goods, including energy imports under the North American trade agreement he negotiated during his initial term. This delay is scheduled to expire in early April.
The 25 percent tariff on imported steel, already in effect this month, is also a significant concern for industry leaders. Steel is a vital component in various aspects of energy infrastructure, from pipelines to wells, and its rising cost due to tariffs is impacting project economics. Some executives remain hopeful for exemptions, although Mr. Trump has previously dismissed this possibility.
Mr. Wright informed reporters on Wednesday that tariff discussions are still ongoing within the administration.
Natural Gas Export Expansion
Earlier on Wednesday, the Department of Energy granted conditional approval to a major natural gas export project on the Gulf Coast known as CP2 LNG. This initiative aligns with the shared objectives of oil and gas companies and the Trump administration to increase natural gas exports.
In January 2024, former President Joseph R. Biden Jr. temporarily suspended permitting to assess the potential climate change impacts and other considerations associated with such projects.
Natural gas primarily consists of methane, a potent greenhouse gas susceptible to leaks from wells, pipelines, and related infrastructure. Burning natural gas also releases carbon dioxide, another greenhouse gas, although in significantly lesser quantities compared to coal combustion.
The Biden administration’s assessment ultimately concluded that a substantial increase in U.S. natural gas exports could lead to a modest rise in global greenhouse gas emissions and contribute to pollution in communities near export terminals. However, a separate study released this month by S&P Global suggests that increased U.S. exports could contribute to global emissions reduction by displacing more carbon-intensive energy sources.
Venture Global, the developer of CP2, had been awaiting Department of Energy approval for over three years. The department stated on Wednesday that the approval was granted based on the project’s potential to benefit the U.S. economy and strengthen the energy security of both the United States and its allies.
Tax Incentives for Clean Energy Technologies
Certain oil and gas companies are advocating for the preservation of tax credits supporting hydrogen and renewable fuel production, as well as carbon capture and storage technologies, which address carbon dioxide, the primary driver of climate change.
Vicki Hollub, Chief Executive of Occidental Petroleum, a major U.S. oil producer currently developing a carbon capture facility in West Texas, is actively promoting the continuation of federal incentives for direct air capture of carbon dioxide. This particular tax credit is designated as 45Q within the tax code.
“To accelerate technology deployment at the necessary pace for the U.S. to positively influence our energy independence, the 45Q tax credit needs to be maintained and effectively implemented,” Ms. Hollub emphasized at CERAWeek.
Mr. Burgum indicated that clean energy tax incentives were not a topic of discussion during Wednesday’s meeting.