Photo: Matthew Brown Archives Associated Press Oil pump jacks in McKenzie County, western North Dakota
Maxine Joselow – The Washington Post
April 2, 2024
- United States
When he was president, Donald Trump pledged to impose American “energy dominance.” During the election campaign, he summed up his energy policies with the slogan “drill, baby, drill”.
Still, a possible Trump victory in the 2024 election wouldn't make oil and gas executives as happy as one might think, according to interviews with several business leaders at a recent energy conference in Houston.
Fossil fuel companies benefited from President Joe Biden's climate law, the Inflation Reduction Act ( IRA), which Trump has pledged to dismantle. The law offers lucrative tax credits to companies that capture and store carbon dioxide — subsidies that several oil giants are eager to exploit, even as they pump record amounts of crude oil and post profits almost as high as in the past.
Additionally, Trump has championed an “America First ” approach to trade policy, which prioritizes high tariffs on imported products. This approach could drive up the costs of building new oil pipelines and other energy infrastructure and increase fears of a global trade war.
Fossil fuel industry executives, however, criticized Biden's decision to withhold approval of new exports of liquefied natural gas. During the Republican presidential primaries, oil barons filled Trump's campaign coffers far more than those of his competitors.
If a poll were taken among energy executives about the 2024 election, the results “would be a little more balanced than people might expect,” believes Alan Armstrong, president and CEO of the Williams gas pipeline company, during an interview at the CERAWeek conference organized by S&P Global.
According to Mr. Armstrong, many fossil fuel industry executives believe the Biden administration has unfairly demonized their industry because of the role it plays in climate change. But this is a personal point of view, not a professional opinion, he adds.
“If you ask people their opinion, they will probably tell you that they are tired of being told that they are bad people by the current government,” Mr. Armstrong said. But from a more objective, business point of view, the portrait would be more balanced. »
Grant support
According to senior campaign officials and advisers to the former president, Trump, if he returns to the White House, plans to gut the IRA, including its generous appropriations tax for clean energy and electric vehicles.
Still, several oil industry executives have praised the IRA for helping their companies develop unproven green technologies, such as carbon capture and hydrogen. Green. The subsidy for carbon capture particularly benefited ExxonMobil, acknowledged Darren Woods, CEO. of the company, during the CERAWeek congress.
“I was very supportive of the IRA — I still am — because the IRA focuses on carbon intensity and, in theory, doesn't take technology into account, a Mr. Woods said. They are not trying to impose any particular technology. »
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Vijay Swarup, senior director of climate strategy and technology at Exxon, added that the IRA “moves projects forward.” Exxon has contracts to store captured carbon at an ammonia plant and steel mill in Louisiana, as well as a yet-to-be-built hydrogen plant in Texas, Mr. Swarup said in an interview.
Of course, Trump could not unilaterally repeal the IRA subsidies. To do this, Congress would have to pass legislation, which means Republicans would have to retain control of the House of Representatives and retake the Senate, in addition to taking over the White House.
In such a scenario, Mike Sommers, CEO of the American Petroleum Institute, says the trade group would aggressively lobby against any proposal to eliminate green subsidies that have helped the industry.
“I think when we try to repeal the IRA — and it will happen — we'll end up taking a more scalpel approach than a butcher's knife approach,” Sommers says. And we will defend the provisions we support. »
Commercial tensions
When he was in the White House, Donald Trump proclaimed himself “ Tariff Man“, “the tariff man “, and he has no intention of abandoning this title that he gave himself if he is re-elected.
Publicly, he floated the idea of imposing 10% tariffs on all goods entering the United States. Privately, he discussed with advisers the possibility of imposing flat 60 percent tariffs on all Chinese imports, the Washington Post
At a rally in Ohio this month, Trump also pledged to impose 100 percent tariffs on Chinese vehicle imports, part of a broader tirade in which he warned of a “bloodbath” for the U.S. auto industry if he is not re-elected.
Mr. Sommers argues that these proposals, which are widely seen as potentially triggering a global trade war, carry “risks” for his industry.
“Particularly for products made here in the United States, we need free trade to keep those goods moving,” he says. I think we're concerned about a sort of retreat towards a more nationalist approach to trade policy. So this is an example of an area where we will not be aligned with a possible President Trump. »
Dan Eberhart, CEO of the oil services company Canary and a supporter of Donald Trump, notes that he is not worried about the former president's trade policies. He said any negative impact of tariffs would be offset by other pro-fossil fuel policies, such as increased sales of deep-sea oil and gas leases in the Gulf of Mexico.
“In general, I don’t like protectionist policies,” Mr. Eberhart said. But I do think a Trump administration would be more pro-oil and gas than a Biden administration might be. »
The Trump campaign did not respond to questions posed to them for this article. In an emailed statement, spokeswoman Karoline Leavitt wrote that “from day one, President Trump will unleash the full potential of America's energy sector to lower inflation for all Americans, pay down the debt, strengthen national security and make the United States the manufacturing superpower of the world.”
At the time of writing this article, the Biden campaign team had not responded to our requests for comment.