Every newly-elected President faces a common struggle: how to turn the many promises made on the campaign trail to various stakeholders into actual governmental action. Following his inauguration, President-elect Donald Trump will be no different.
In this series of blogs, we’ll consider how President Trump discussed energy policy on the campaign trail, his plans for implementing his vision, and the obstacles he may face.
The State Department, Department of Energy, Department of the Interior, and Environmental Protection Agency all play a key role in determining the direction of the country’s energy policy. One of the biggest challenges involved in predicting the policy positions of Donald Trump’s presidency is the fact that he simply has not been a political figure for most his life. This is contrasted with the typical presidential candidate who has an extensive history of sponsoring or opposing legislation and an official voting record. To many of Mr. Trump’s supporters, his lack of experience in Washington is his greatest asset, but it does present a challenge when trying to predict specific policy positions.
One of the tools we can use as a guide to the Trump Administration is to examine his cabinet nominees. The men identified by President-elect Trump to lead these agencies signal he is looking to make good on his campaign promises to support and grow oil and gas production in the US. The makeup of Trump’s cabinet has potential to drive growth for the oil and gas industry. Let’s take a closer look at each one of these nominees.
A Former Oil CEO as Chief Diplomat
In a somewhat surprise move, President-elect Trump has tapped Rex Tillerson, Chairman and CEO of Exxon Mobil Corporation to run the Department of State. Although Tillerson does not have official diplomatic experience, it is clear President-elect Trump values Tillerson’s experience leading large overseas business transactions. In a tweet announcing the move, the President-elect described Tillerson as a “world class player and dealmaker”.
As CEO of Exxon Mobil, Tillerson sought to expand the company’s global footprint and to expand oil exploration into new markets. After a 2011 deal that gave Exxon access to Russia’s Arctic Shelf, Tillerson was awarded the Order of Friendship from Russia. These close ties to Russian state-run energy companies have caused some Republicans in Congress, led by Senators John McCain, Lindsey Graham and Marco Rubio, to raise questions about Tillerson’s appointment to Secretary of State. After spending his entire career with Exxon Mobil, Tillerson may soon find himself able to use his vast connections in the international business community to drive Mr. Trump’s policy goals of expanding US oil production and exportation.
Rick Perry to Lead the Agency he Previously Wanted to Eliminate
Prior to reports that he was being considered for Energy Secretary, most Americans probably associated Rick Perry’s attitude toward the Department of Energy with his performance in a 2011 Presidential debate. During the debate, the former Texas Governor famously suggested that he would eliminate three federal agencies: Commerce, Education, and…one more he could not recall. That final agency turned out to be the Department of Energy. Perry’s nomination to run the department he once planned to eliminate continues President-elect Trump’s stated goal of choosing unconventional picks to lead federal agencies.
While the Department of Energy’s primary mission includes management of the country’s nuclear assets, it also provides funding for scientific R&D in the national laboratory system. Under the Obama Administration, the department spent heavily to promote renewable energy. The appointment of Governor Perry would seem to signal a shift in that policy as he has previously been quoted criticizing Obama for “creating obstacles for onshore and offshore oil and gas production”. As governor of a leading oil-producing state in Texas, Perry has close ties to the industry and currently serves on the board of directors of Energy Transfer Partners; the company building the controversial Dakota Access Pipeline through Standing Rock Indian Reservation.
Interior Candidate to Open Federal Lands?
The President-elect’s “America First Energy Plan” calls to “open onshore and offshore leasing on federal lands, eliminate moratorium on coal leasing, and open shale energy deposits”. Critically, the Department of the Interior controls energy leases on federal lands and waters and the legislator President-elect Trump has targeted to oversee the agency is Ryan Zine, a first-term Representative from Montana and member of the House Natural Resources Committee. Congressman Zine is a supporter of coal, oil, and gas exploration who has previously supported the building of the Keystone XL Pipeline. Under the Obama Administration, the Department of the Interior sought to block oil and gas drilling on federal land and water as well as freezing new leases for coal mining on public lands. Zine’s role within the Trump Administration would give him the authority to undo those rules and create opportunities for expanded drilling on federal lands.
A Shift in Mission May Be Coming for EPA
The final key driver of energy policy has been the Environmental Protection Agency. The agency’s Clean Power Plan was the signature piece of President Obama’s Climate Action Plan. Of course, the Clean Power Plan is currently facing legal challenge in court and in a somewhat ironic move, President-elect Trump’s pick to run the EPA is currently a part of that legal challenge. Oklahoma Attorney General Scott Pruitt is representing one of 28 states currently suing the EPA to block implementation of the Clean Power Plan. On his own website, Pruitt is described as a “leading advocate against the EPA’s activist agenda”. Like other appointees listed above, Pruitt comes from an oil-producing state and enjoys a close relationship with the industry. Somewhat controversially, Pruitt is known to have sent letters to the EPA, Interior, and President Obama himself suggesting that the EPA was overestimating the amount of methane emissions from natural gas. However, it was later determined that those letters were drafted by lawyers representing Devon Energy. Supporters of Mr. Pruitt’s nomination, including members of the oil and gas industry, have lauded his understanding of the legal issues surrounding the energy industry and believe he will refocus the EPA away from an activist role in driving policy.
President-elect Trump’s nominees for key cabinet positions offer a glimpse into his administration’s priorities as he continues to move toward his inauguration tomorrow. President-elect Trump’s cabinet appointees will be tasked with maintaining his campaign promise of unleashing the oil and gas industry by lowering regulations to increase production. The career experiences and industry relationships of these appointees have them poised to put his plan into action.