The incoming Trump Administration will renew confidence in energy industry investors and bring about a different regulatory environment with more realistic guidelines for the introduction of electric vehicles and other concerns.
So say State Rep. Brooks Landgraf and Waco economist Ray Perryman, who expect a noticeable improvement.
“As the energy industry powers not only our economy here in Texas but also strengthens our national security, having a president in the White House who values and supports this critical sector is a welcome change,” Landgraf said. “I expect the Trump Administration will work closely with federal agencies to eliminate the looming threats and reduce the regulatory burdens that have challenged our producers during the past four years.
“By cutting the red tape and providing regulatory consistency I have no doubt we will see renewed capital investment in American energy, investment that translates into good-paying jobs, technological innovation and sustainable growth for years to come.”
The Odessa Republican said this type of regulatory certainty will give energy companies the confidence to expand, adapt and innovate, which will benefit not only the industry but also the entire State of Texas.
“I look forward to seeing these instrumental policies support a strengthened energy-driven economy that meets the needs of today and secures prosperity for the future,” he said.
Perryman said the potential changes under the Trump Administration are multifaceted with the likely regulatory framework being more favorable for fossil fuels.
“Some of the more stringent provisions may well be modified such as those from the Environmental Protection Agency which effectively limit the number of gasoline or diesel vehicles that can be sold to meet overall emissions targets,” Perryman said. “The process for obtaining federal leases may also change, which could be particularly beneficial in the New Mexico segment of the Permian Basin.”
He said other aspects of various climate bills which heavily favor renewable energy may also shift, thus improving the relative position of natural gas in the energy complex.
“There is no doubt that the development of oil and gas resources must be accomplished in responsible ways which limit environmental impacts and are responsive to global climate concerns,” Perryman said. “The major producers are well aware of this fact and they are investing billions of dollars in such initiatives over and above those mandated by any regulations.
“At the same time it is apparent that oil and gas are going to be needed to meet future energy demand, particularly given the current state of green technologies. The recent acquisitions of shale resources by major oil companies provide ample evidence that this is recognized within the industry.”
The economist said there will be some lessening of barriers to oil and gas industries under the Trump Administration, but any such changes are unlikely to have major effects on production.
“Companies factor in many criteria in drilling and production decisions ranging from shareholder expectations to future price projections and any decisions will be influenced by a variety of factors,” he said. “It should be remembered that oil and gas production in the Permian Basin and the U.S. as a whole shattered prior records during the Biden Administration.
“The ultimate pattern in energy markets tends to be driven by forces which go far beyond the domestic policy framework.”