{"id":12394,"date":"2024-11-10T09:29:34","date_gmt":"2024-11-10T09:29:34","guid":{"rendered":"https:\/\/roydadnaft.ir\/English\/?p=12394"},"modified":"2024-11-10T09:29:34","modified_gmt":"2024-11-10T09:29:34","slug":"us-oil-industry-eagerly-awaits-donald-trumps-deregulatory-push","status":"publish","type":"post","link":"https:\/\/roydadnaft.ir\/English\/12394\/","title":{"rendered":"US oil industry eagerly awaits Donald Trump\u2019s deregulatory push"},"content":{"rendered":"

RoydadNaft – <\/a><\/span>\u00a0US oil executives are eagerly awaiting Donald Trump\u2019s expected rollback of environmental regulations, but despite the president\u2019s pledge to \u201cdrill, baby, drill\u201d, production is unlikely to increase significantly during his second term in office.<\/p>\n

Trump made energy policy a pillar of his campaign, vowing to slash red tape and unshackle US oil producers to drive up production and bring down prices for consumers.<\/p>\n

\u201cWe have more liquid gold than any country in the world \u2014 more than Saudi Arabia,\u201d Trump said as he claimed victory early on Wednesday morning.<\/p>\n

The former president\u2019s re-election is a boon for the industry, which had a tumultuous relationship with Joe Biden\u2019s administration. It is also a big pay-off for the corporate leaders who poured money into his campaign war chest.<\/p>\n

\u201cI couldn\u2019t be more thrilled by president-elect Donald Trump\u2019s victory,\u201d said Continental Resources founder Harold Hamm, a Trump donor. \u201cThis is a monumental win for American energy and the future of our nation\u2019s security.\u201d<\/p>\n

Jeff Miller, chief executive of Halliburton, one of the country\u2019s biggest oilfield service companies, echoed those sentiments. \u201cIt could only be positive. In fact, I\u2019m quite optimistic,\u201d he said.<\/p>\n

On taking office next January, the industry expects Trump to slash many of the environmental rules imposed by Biden. Mike Sommers, head of the American Petroleum Institute, said there had been a \u201cregulatory onslaught\u201d during the past four years that would now be reversed.<\/p>\n

\u201cJust the signal from the administration that they want a robust oil and gas industry in the US is going to be a major component to getting this industry the investment that it needs to continue to grow,\u201d he said.<\/p>\n

Among the changes the industry expects are the abolition of rules on tailpipe emissions designed to push motorists towards electric vehicles, as well as expanded access to hydrocarbons through increased leasing in the Gulf of Mexico and on public lands, and the dilution of protections for endangered species. Trump is also predicted to end a pause on new licences for liquefied natural gas terminals.<\/p>\n

Trump has vowed to slash corporate tax and unpick Biden\u2019s signature climate legislation, the Inflation Reduction Act. But many in the industry benefit from the IRA and are lobbying against its wholesale removal.<\/p>\n

Trump has already begun to shape the team that will be responsible for making these changes. North Dakota governor Doug Burgum is in contention for a new \u201cenergy tsar\u201d role that will co-ordinate the deregulatory drive across a patchwork of government agencies.<\/p>\n

But despite the anticipated regulatory overhaul, analysts warned that a rapid increase in output during Trump\u2019s second term was unlikely. Production has hit record levels during Biden\u2019s term in office, reaching a fresh high of 13.4mn barrels a day in August despite the regulations.<\/p>\n

But investors \u2014 burnt after years of debt fuelled drilling binges \u2014 are keen for companies to prioritise returns over growth. The model of capital discipline they have imposed on the sector is unlikely to change.<\/p>\n

\u201cPrice and Wall Street are the regulators of US production, not the president,\u201d said Jim Burkhard, head of research for oil markets at consultancy S&P Global.<\/p>\n

Production is set to average about 13.2mn barrels a day this year, according to S&P, rising to 13.6mn b\/d in 2025 before probably slipping the following year, driven by lower prices. Trump\u2019s re-election does not change its near term outlook.<\/p>\n

Macroeconomic factors, however, may help Trump keep his promise to bring down prices at the pump: sluggish Chinese demand coupled with Opec+ plans to increase supplies are likely to depress prices in the months ahead. But that would have a negative impact on oil producers.<\/p>\n

\u201cThe market is oversupplied because the Chinese economy is not delivering the kind of demand that it has in the past,\u201d said Daniel Yergin, a Pulitzer Prize-winning energy historian and author of The New Map<\/em>. \u201cThat is the biggest overhang for the global and US oil industry.\u201d<\/p>\n

Bob McNally, president of consultancy Rapidan Energy and a former energy adviser to the George W Bush administration, said that while \u201cany president has very limited tools to impact the price of oil in the short term\u201d if strong global supply growth outpaces demand in the coming years, Trump \u201cmay get lucky and witness a sharp decline in oil prices\u201d.<\/p>\n

\u201cHowever, he would relearn a lesson from 2020, which is that low oil prices may please consumers, but they also hurt the US shale oil sector,\u201d he said. \u201cIn fact the biggest threat to the US shale sector is sharply lower oil prices.\u201d<\/p>\n

Trump showed during his first term he was willing to play an active role in shaping the oil price. In 2018, he browbeat Opec into increasing production to bring down prices at the pump, before convincing them to slash it in 2020 to save the US shale patch from bankruptcy as prices plunged in the wake of the coronavirus pandemic.<\/p>\n

Trump has also vowed to exert maximum pressure on Iran, ramping up sanctions on its oil exports, which could push up the global oil price.<\/p>\n

One of the most fundamental changes sought by the industry is for Trump, aided by Republican control of the Senate and potentially the House of Representatives, to push through far reaching permitting reform legislation after years of failed attempts.<\/p>\n

Alan Armstrong, head of pipeline giant Williams said he was \u201cvery hopeful with more Republican control that the permitting issue finally gets dealt with in a durable and meaningful way\u201d.<\/p>\n

Despite Trump\u2019s plans to tear up environmental rules, analysts expect large public oil companies to remain motivated to curb emissions \u2014 especially when it comes to methane, a potent greenhouse gas.<\/p>\n

\u201cI think the expectation that they will be reducing emissions and investing in clean energy does not go away because Donald Trump was elected,\u201d said Paul Bledsoe, a former climate adviser to the Bill Clinton administration.<\/p>\n

\u201cI think that\u2019s a public expectation. That\u2019s an investor expectation.\u201d<\/p>\n

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