First oil

For those of us Americans who resisted the urge to sleep, and stayed up into the wee hours of Nov. 9 to watch vote returns from the U.S. presidential election, the reward was witnessing one of the truly remarkable (and unexpected) victories in the country’s history. Those who stayed up can now say that they watched one of the great historical moments of the U.S. unfold on television—literally one for the ages.

Republican Donald Trump’s significant and thorough 306–232 defeat of Democrat Hillary Clinton in the Electoral College—where it really matters—will set the U.S. on a far different course and agenda than those of the last eight years. And a couple of things come to mind, now that Donald J. Trump is President-elect and in the middle of selecting his administration members: 1) The long nightmare of presidential Executive Orders, aimed at restricting E&P activity, is about to come to an end; and 2) The national media—who for so long have functioned like a designated enemy of this industry—have been rebuked severely for their one-sided, inaccurate campaign coverage by the votes of citizens across the country. Their credibility is down the drain, whether on general matters, or on specific oil and gas issues.

Now that the dust has settled after Trump’s win on Nov. 8 and 9, we’re beginning to see more clearly the shape that his oil and gas policy may take. Soon to be gone are the anti-industry policies and actions of Barack Obama. In their place, we will see a much more oil-and-gas-friendly set of policies from Mr. Trump. 

As our contributing editor for Washington, Roger Bezdek, stated so succinctly in his pre-election article in World Oil’s October 2016 issue (p. 57), President-elect “Trump’s energy platform is almost a mirror image of Clinton’s.” Out on the campaign trail, Trump had said numerous times that as President, he would approve the Keystone XL pipeline, noting that it would create and support more than 42,000 jobs, and not impact the environment significantly. He also said that “cheaper energy will boost American agriculture. We will get the bureaucracy out of the way of innovation, so we can pursue all forms of energy…The government should not pick winners and losers. Instead, it should remove obstacles to exploration.”

We’ve been told that President-elect Trump has a 100-day action plan for oil and gas. In addition to what we’ve already mentioned, some of the items include: Encouraging expansion of hydrocarbon production; rescinding all of Obama’s executive actions; scrapping any oil and gas regulations that are outdated, unnecessary, bad for workers, or contrary to the national interest; stopping the use of the EPA, BLM and Endangered Species Act as methods of barring E&P activity; lifting moratoria on energy production on specific federal lands; revoking unreasonable restrictions on new drilling technologies; providing regulatory certainty; and giving more responsibility to state and local officials.

We know that it will take a little while for Mr. Trump to unwind Obama’s considerable rulemaking and Executive Orders. But everyone can now look forward to our industry finally emerging from eight long years of regulatory wilderness.

OPEC’s own little miracle. Just as the U.S. industry received a most welcome gift in the form of Donald Trump’s election as the next President, so has the global E&P industry received a gift by way of OPEC’s Nov. 30 agreement to cut its collective production. This deal, which calls for a reduction of 4%, from 33.8 MMbopd to 32.5 MMbopd, is the group’s first agreement to cut output in eight years.

Our managing editor, Roger Jordan, has more to say on the mechanics and impacts of this deal in his monthly column, “The Last Barrel.” Suffice to say, whether this sudden gift to the global market has any staying power remains to be seen. We’ve been down this OPEC path before, only to be let down and disappointed by squabbling and cheating within the group that have destroyed similar agreements. Let’s hope that this time is different.  

About the Authors

Kurt Abraham

World Oil

Kurt Abraham kurt.abraham@worldoil.com