Oil and gas executives will meet with President Trump at the White House on Wednesday to try to influence tariffs, tax credits and deregulation.
Some industry executives who have spent more than $75 million to help Trump elect them are increasingly frustrated with Trump's agenda. Tariffs make essential materials, such as steel pipes, more expensive, while also rattling consumer trust.
Even just before Trump took office, oil prices fell about 14%, down below $67 a barrel. Senior White House aide Peter Navarro spoke about the benefits of oil, which is sold for $50 a barrel. At such a price, businesses operating a wide range of American oil patches will lose drilling new wells.
Some of the industry's priorities are:
Customs
US refineries buy oil from Canada and Mexico, convert it into fuels like gasoline, and export their more valuable products. These trade relations have been formed over decades and are difficult and expensive to solve.
Trump announced a 25% tariff on imports from Canada and Mexico, bringing a 10% share of Canadian energy products down. However, this month he delayed the implementation of these tariffs on most goods, including energy imported under the North American trade agreement. Trump negotiated during his first term. The grace period is expected to end in early April.
The 25% tariff on imported steel, which came into effect earlier this month, is also a major concern for executives. Metals are used in everything from pipelines to wells, making them even more expensive due to customs duties. Trump rejected the idea, but some executives hope to secure the exemption.
Allow reforms
Energy companies are urging Trump and Congress to facilitate rules to make it easier to build transmission lines, pipelines and other infrastructure. Many companies want states to block proposed projects and make it more difficult for environmentalists and other companies to tie together in court.
“If you need more energy in the US and more investment in the US, you have to make sure you can build things up again. New US Energy Secretary Chris Wright summed up feedback from executives he met at Thera Week at the S&P Global Conference in Houston last week. What is allowed? What was it? ”
Tax credit
Some oil and gas companies want to not only capture and store carbon dioxide, which is a major cause of climate change, but also preserve clean energy tax credits to produce hydrogen and renewable fuels.
Vicki Holb, CEO of Occidental Petroleum, a large US oil company that is building a carbon capture plant in West Texas, is hoping to maintain federal incentives to remove greenhouse gases from the sky. That tax credit is known as 45Q based on the location of the tax law.
“To accelerate technology at a pace that requires it to accelerate to have a positive impact on energy independence, there will be 45Q and we will have to stay there,” Hollub told Cerawek.
