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Will President Trump be good for the Texas oil and gas industry?

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Written by Jeffrey Weiss

Click HERE to Read the Article by the Publisher.


Energy businesses in Texas and across the country are talking up hope for better times under President Trump. But there’s still plenty of uncertainty about exactly what the new administration will do.

The price of West Texas Intermediate crude oil reflected some of that ambiguity Wednesday. In the morning after Trump became president-elect, it plunged to the lowest price in three months, $43.07. But a few hours later, the price had resettled to $45.45 — 47 cents higher than the close on election day.

Here’s the victory lap taken Wednesday by Todd Staples, president of the Texas Oil and Gas Association:

“America’s prosperity and security is anchored by a strong oil and natural gas industry, a vision that emerged victorious last night. We look forward to federal policies that protect the environment, while putting Americans back to work and keeping our nation secure.”

Ditto for a victory lap statement released by the Texas Alliance of Energy Producers with the headline “Texas Alliance Congratulates President Elect Trump.”

“The victory by President-elect Donald Trump indicates that there will be many changes in energy policy,” it says. “Candidate Trump said during the campaign that the oil and natural gas industry is overregulated by the federal government.”

Irving-based Exxon Mobil released a slightly less exuberant statement that was nonetheless upbeat.

“We intend to work constructively with the President-elect and his administration,” it said. “Key focus areas are tax policy, free trade in energy, enhanced access to domestic oil and gas and including sound science and economic cost-benefit analysis in future regulatory initiatives.”

One issue that Trump had hammered on since the day his campaign started has raised concerns in the Texas energy business: Would his insistence on a harsher relationship with Mexico affect the multi-million dollar sale of natural gas across the Texas-Mexico border?

Texas Railroad Commissioner Ryan Sitton said that the tone of Trump’s late-night victory speech should have allayed some of the fears. Sitton focused on these lines from the speech:

“…[W]hile we will always put America’s interests first, we will deal fairly with everyone, with everyone — all people and all other nations.”

That should mean fair trade with other countries, Sitton said.

“I think we will continue to do a substantial amount of trade with Mexico, and primarily in oil and gas,” he said.

Another section of the speech may offer hope for greater demand for Texas produced energy — and better transportation for petro products, Sitton said.  Trump promised to “to fix our inner cities and rebuild our highways, bridges, tunnels, airports, schools, hospitals.”

That,  Sitton said, could become a bipartisan opportunity.

Sitton, like many analysts nationwide, also predicted that the Trump administration would reduce regulations and restrictions that have affected the oil and gas business.

Ken Anderson, a member of the Texas Public Utility Commission, figures that Trump will be good for Texas specifically because he expects Trump to eliminate the EPA Clean Power Plan.

“The CPP disproportionally affects Texas by imposing arbitrary, unnecessary and uneconomic restrictions and burdens that fail to give the state credit for its early and effective adoption of renewable wind energy and other actions,” he said.

Anderson thinks the EPA plan would actually create conditions that would risk the of reliability of the Texas electrical grid and raise costs to consumers.

Across the country, energy analysts and activists put in their best guesses for what will happen under Trump. All were handicapped by a lack of specifics in the president-elect’s plans.

S&P Global Platts released a statement that said many factors beyond government control affect the demand for energy and its prices.  Demand, the report said, may be much more tied to the American and world economy than any policies Trump has suggested.

JP Morgan Chase said that uncertainty about the new policies could drag down economic growth across the board. Trade and immigration could cut sales. But tax cuts and a focus on infrastructure spending could boost sending and demand, the report said.

One major project with a Dallas connection is the Dakota Access pipeline, being built by Dallas-based Energy Transfer Partners. Construction has been halted along a short stretch in North Dakota bu the Obama administration. Trump hasn’t addressed this. But some analysts say his support of the Keystone XL pipeline project that was halted by President Obama is an indication that the Dakota project will get a green light in the next administration.

Trump has also said repeatedly that he supports fracking, the drilling technology that has been unusually successful in Texas.

Even some energy industries that may find their path turns uphill under Trump tried spinning a hopeful tone.

The American Wind Energy Association released a statement saying that it was “ready to work with President-elect Donald Trump and his administration to assure that wind power continues to be a vibrant part of the U.S. economy.”

Wind is a major player in Texas, called the “Saudi Arabia” for wind power. But during the campaign Trump blamed wind turbines for killing birds and suggested he’d cut tax breaks associated with wind power.


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Written by Jeffrey Weiss

Click HERE to Read the Article by the Publisher.

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