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Trump win brings potential for significant oil and gas policy effects

11th November 2016

According to Will Scargill, GlobalData's senior oil & gas analyst covering upstream fiscal & regulatory regimes Donald Trump’s election as the 45th President of the United States may have significant effects for the global oil and gas industry.

Donald Trump, 45th President of the United States
Donald Trump, 45th President of the United States

“The policy platform laid out during the campaign on both domestic issues and foreign affairs includes several elements with notable impacts on regulation, tax and investment opportunities in the sector,” Scargill says. “The Republican Party’s retention of its majority in both the House of Representatives and the Senate, should facilitate legislation to progress the new administration’s initiatives. The lack of detail of Trump's platform and absence of a track record in public office cast uncertainty over the policies that will be enacted and the effects they will have, but the tone of the campaign suggests a priority on domestic energy policy over international.

“Domestic energy policy statements during the election campaign suggest a positive outlook for the oil and gas sector. This is supported by reports that his adviser Harold Hamm, CEO of Continental Resources, is in the running for Energy Secretary. Trump’s energy plan sets out support for the shale industry and open leasing of federal lands and offshore areas for upstream operations. During the campaign, he also noted opposition to environmental regulation including the Paris climate agreement adopted at the COP21 summit, suggesting that the industry will face a reduced regulatory burden under his presidency.

“The expansion of offshore lease sales would likely be supported by the Republican-controlled Congress, particularly for Alaska’s Outer Continental Shelf (OCS) and perhaps also for the frontier Atlantic OCS. The Obama administration had initially proposed a lease sale in the Atlantic OCS in the 2017-2022 program but later removed it due to environmental concerns. However, Trump’s support for the shale industry may be more difficult to realize from the Oval Office. He will have control over some regulations such as wastewater and emissions standards through the Environmental Protection Agency, but most regulatory barriers have been imposed at local or state level which are currently decoupled from Federal involvement.”

 

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