What Oil Industry Leaders Expect from President Trump

Executives from the oil and gas sector are scheduled to meet with President Trump at the White House on Wednesday, aiming to sway his decisions regarding tariffs, tax incentives, and deregulation.

Some industry leaders, who contributed over $75 million to Mr. Trump’s campaign, are growing increasingly dissatisfied with his policies. The tariffs are driving up the costs of essential materials such as steel piping, thereby undermining consumer confidence.

Since before Mr. Trump took office, oil prices have decreased by approximately 14 percent, now below $67 a barrel. Peter Navarro, a senior aide at the White House, has suggested that oil priced at merely $50 a barrel has advantages. However, such prices could lead to financial losses for companies involved in the drilling of new wells across vast areas of the American oil landscape.

Below are some key priorities highlighted by the industry:

Tariffs

U.S. refineries procure oil from Canada and Mexico, refine it into fuels like gasoline, and then export those higher-value products. These trade relationships have been established over many years and would be complex and costly to dismantle.

Mr. Trump recently announced a 25 percent tariff on imports from Canada and Mexico, with a lower rate of 10 percent specifically for Canadian energy products. However, earlier this month, he postponed the implementation of these tariffs for many items, including energy imports under a North American trade agreement he negotiated during his first term. This delay is set to lapse in early April.

The 25 percent tariff on imported steel, which took effect recently, is also a major concern for industry executives. Steel is crucial for everything from pipelines to drilling wells, and its cost is rising due to the tariffs. Despite hopes for exemptions from this tariff, Mr. Trump has dismissed that notion.

Permitting Reform

Energy companies are urging Mr. Trump and Congress to simplify permitting regulations to facilitate the construction of transmission lines, pipelines, and other infrastructure. There is a desire among many firms to make it harder for states to obstruct proposed projects and for environmental groups to delay them through legal challenges.

“If the goal is to increase energy production in the United States and attract more domestic investment, we need to be able to resume building infrastructure. I’ve frequently heard this from executives,” remarked Chris Wright, the new U.S. energy secretary, last week, reflecting on impressions he gathered during the CERAWeek by S&P Global conference in Houston. “My response is to request specifics. Which permit? What was the issue?”

Natural-Gas Exports

Earlier on Wednesday, the Energy Department granted conditional approval for a significant natural-gas export initiative on the Gulf Coast, known as CP2 LNG. This aligns with the interests of oil and gas companies as well as the Trump administration, both aiming to boost natural gas sales internationally.

In January 2024, former President Joseph R. Biden Jr. halted permitting to investigate the climate change implications of such projects, among other factors.

Natural gas primarily comprises methane, a potent greenhouse gas that can escape from wells, pipelines, and other sources. Although burning natural gas emits carbon dioxide—a greenhouse gas—it does so at a lower rate compared to coal.

The Biden administration ultimately concluded that a significant increase in U.S. natural gas exports might lead to a slight rise in global greenhouse gas emissions and contribute to pollution in communities surrounding export terminals. However, a different study released this month by S&P Global indicated that enhanced U.S. exports could help stabilize global emissions by replacing other, more polluting energy sources.

After waiting over three years for approval, the developer of CP2, Venture Global, received the green light from the Energy Department on Wednesday, which stated that the project would benefit the U.S. economy and bolster the energy security of the nation and its allies.

Tax Credits

Certain oil and gas firms are advocating for the retention of clean energy tax incentives aimed at hydrogen production, renewable fuels, and carbon dioxide capture and storage, a key factor in addressing climate change.

Vicki Hollub, CEO of Occidental Petroleum, a leading U.S. oil company that is developing a carbon capture facility in West Texas, is campaigning to maintain federal support for extracting greenhouse gases from the atmosphere. This tax credit, known as 45Q, is named for its position in the tax code.

“In order to advance technology rapidly enough to meet our energy independence goals, it’s crucial that the 45Q tax credit remains intact,” Ms. Hollub emphasized at CERAWeek.