Oil & Gas Group Seeks Broad Changes in Energy, Environment Policy

Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--The race is on, across all industries, to shape the policies and personnel of the incoming Trump administration and Congress. One week after the election, the American Petroleum Institute (API) (Washington, D.C.) issued an energy policy roadmap for 2025, a year when Republicans will hold a majority of seats in the Senate. The leadership of the House remains in question, as over a dozen races have not yet been called.

The 12-page energy policy roadmap put forth by the oil and gas trade group included specific recommendations in these areas:

• "Protect Consumer Choice,"
• "Bolster Geopolitical Strength,"
• "Leverage our Natural Resources,"
• "Reform our Permitting System," and
• "Advance Sensible Tax Policy"

The categories sound bland, but the specific proposals contained within each cluster are far-reaching, essentially undoing all or nearly all of the Biden administration's energy and environmental achievements.

The API would say, "Exactly."

Under the "Protect Consumer Choice" cluster, the trade group urged three things:

• Repeal the Environmental Protection Agency's (EPA) vehicle tailpipe rules, finalized earlier this year, which require 68% of new light-duty vehicles sold in the U.S. to be electric or plug-in hybrid vehicles by 2032. "These rules severely restrict consumer choice and limit access to a broader range of vehicle options," the group said in its roadmap. For more on the final rule, see March 22, 2024, article - Final EPA Rule on Vehicle Tailpipe Emissions Draws Wide Range of Responses.
• Repeal the National Highway Traffic Safety Administration's higher Corporate Average Fuel Economy (CAFE) standards. "These rules impose strict requirements aimed at phasing out liquid fuel vehicles by aligning with EPA's EV (electric vehicle) mandate and assuming California's plan for 100% EV sales is implemented on schedule," the API said in its roadmap. "These standards are not technology-neutral, limit consumer choice, undermine energy security and likely lead to higher upfront costs for consumers.
• Deny or rescind the EPA's Waiver for California's Advanced Clean Cars II (ACCII) rule, which the group asserted is "nothing short of a 100% EV mandate by 2035."

"Energy was on the ballot last Tuesday," API President and Chief Executive Officer Mike Sommers told reporters in a Tuesday conference call. "In Michigan, it was the Biden administration's EV mandate. In Pennsylvania, it was fracking. Voters voted their wallet. Post-election polling said voters were most concerned about economic stability and affordability. We need pro-growth energy policies that put consumers first."

In the cluster of recommendations relating to bolster geopolitical strength, the API urged the new administration to:

• Lift the Department of Energy's (DOE) liquefied natural gas (LNG) permitting pause. "The LNG pause is terrible policy, and the negative consequences are already being felt," the API's roadmap said.
• Swiftly process all pending LNG export applications now languishing at DOE.
• Ensure the open access of American energy to global markets.

Sommers said the DOE permitting pause was "a political act," and he expects the forthcoming report from the DOE on whether to extend that pause will be "a political document." He urged the incoming administration and Congress to ignore the report and overturn the permitting pause. He said the group would continue to work with Congress and the new administration to lift it.

Sommers sidestepped reporters' questions where the group, or some of its members, might see things differently from the incoming administration.

For example, Exxon Mobil Corporation (NYSE:XOM) (Spring, Texas) Chairman and Chief Executive Officer Darren Woods has urged the incoming president not to withdraw the U.S. from the Paris Agreement to limit carbon dioxide (CO2) emissions as a way to counter global warming. The API CEO said, "We support the ambitions of the Paris Agreement," noting that the U.S. is a leader in oil and gas production, which is sought by overseas nations for reasons of energy security.

On the subject of tariffs, a mainstay of candidate Trump's campaign, Sommers said, "API is a free-trade organization. We want our product to compete around the world. Free trade is needed for energy dominance."

Regarding Trump's promise to claw back some of all of the unspent federal funds under the Inflation Reduction Act (2022) and the Infrastructure Investment and Jobs Act (2021), Sommers noted that the API opposed the IRA when it was first proposed, but "many provisions are supported by our members," such as increased incentives for hydrogen production and carbon capture, utilization and storage (CCUS). Despite its appeal as an applause line on the campaign trail, many Republican members of Congress oppose clawing back those unspent government funds, as they are leading to job creation in their home districts.

The API also advocated for several measures that would optimize domestic natural resources and advance "sensible" tax policy.

On the fifth cluster of recommendations, reform of the U.S. permitting system, Sommers said the group supported, in the upcoming lame duck session of Congress, a bipartisan compromise on infrastructure permitting forged by Senator John Barrasso (Republican-Wyoming) and outgoing Senator Joe Manchin (Independent-West Virginia). That compromise bill would get the oil and gas industry "about 75%" of what it needed in terms of streamlining permitting, Sommers said, adding that his group would work with the next congress to get the remaining 25%.

In drafting that bill, Barrasso and Manchin displayed "a vision of energy leadership and a return to common sense," Sommers told reporters. "Enactment would ensure the American people have reliable, sustainable and affordable energy."

Also contained in permitting reform was a repeal of the Biden administration's changes to the National Environmental Policies Act (NEPA), a bedrock environmental law that had gone largely unchanged for decades until Trump made significant changes to it in his first administration. The Biden administration reversed those changes and added several tough new provisions.

The API also advocated limiting the scope of what parties could make legal challenges to permit applications, and when and where those who oppose infrastructure projects could file their claims.

Sommers said the API supported, and America needed, a return to an "all-of-the-above" energy policy that was pursued under the first Trump administration. Energy "should not be a partisan issue," he said, adding that it needed to "reflect energy realities" and not be built on "heavy-handed mandates," he said.

"The U.S. leads the world in oil and gas production as well as CO2 emissions reduction," Sommers continued. "The world's future energy needs will require more oil and gas. We think it's best to produce it here."

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