Donald J. Trump’s victory is welcome news to many companies, including those in the energy business.
There is no doubt that Trump supports a strong domestic oil and gas industry. His “drill, baby, drill” slogan was believed to signal to the industry and others that he support policies that will keep the U.S. as the largest oil and natural gas producing country in the world.
Even though crude oil prices remained relatively flat at $71 per barrel, the stock market surged the day after the election. It was the fifth-best one-day on U.S. stock markets, according to the Wall Street Journal. The Dow rose some 1,500 points a 3% increase for a record high. The Nasdaq and the S&P 500 both exceeded 2% gains, while the Russell 2000 jumped 4%.
Energy sector stocks increased an average of 3%. The stocks of integrated oil companies ExxonMobil and Chevron rose 5% and 7% respectively and refiner Valero witnessed a 10% rise while midstream pipeline operator Kinder Morgan’s stock was up 8% during the week ending on Nov. 6.
Utility stocks also had gains. NRG had a 2% rise and CenterPoint was up 3%.
Wind and solar, however, were down. Vestas and Orsted, both international wind providers, declined 19% and 9%, respectively, during the week ending on Nov. 6. Solar companies also had a rough week as First Solar’s stock dropped 14% and Enphase declined 18%.
President Trump said during the campaign the money that remained in the Inflation Reduction Act for wind and solar subsidies would not be spent if he won.
Trump also clearly stated he intended to counter many of the policies and regulations adopted by the Biden administration.
Biden on his first day in office began reversing many of the regulatory changes implement by the Trump administration during his first term.
The Interior Department revoked the “American Energy Independence” goal, and decided to change the leasing procedures for oil and gas exploration and production on federal lands.
Biden’s Securities and Exchange Commission sought a regulation (the ESG Rule) requiring oil and gas producers to consider the economic effects of climate change and other environment social governance factors.
The Environmental Protection Agency proposed new rules governing methane emissions. “Environmental justice” became a major theme at EPA and the Department of Justice.
Biden also proposed additional taxes of $150 billion on the oil and gas industry.
And recently the Biden administration a moratorium on exports of liquefied natural gas while they study it further. A federal court has issued a stay on that order.
Although it is unclear which regulations will be changed, the industry expects a new attitude from the White House. Instead of the President proposing regulations and laws that deter domestic oil and gas production, the new Trump administration looks to work with industry.
Alex Mills is the former President of the Texas Alliance of Energy Producers.
- Energies Media Staffhttps://energiesmedia.com/author/oilmanwp/
- Energies Media Staffhttps://energiesmedia.com/author/oilmanwp/
- Energies Media Staffhttps://energiesmedia.com/author/oilmanwp/
- Energies Media Staffhttps://energiesmedia.com/author/oilmanwp/
- Energies Media Staffhttps://energiesmedia.com/author/oilmanwp/
- Energies Media Staffhttps://energiesmedia.com/author/oilmanwp/
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