A needle is dropped. Music starts. And children start marching around a small circle of chairs. Then, suddenly, the music stops. In a panic, the kids race wildly to find an open seat, all ending up in a different spot. It’s total chaos. To me, that’s what it’s like whenever a new president gets elected. The policies of one White House resident gets chucked out the door when an opposite-thinking leader moves in. It’s as if right when the music stops in Washington and everyone runs to grab a seat – SCREECH! The needle drops again, and another set of policymakers begin to march in circles. For this new administration, however, the policies they plan to introduce will be a radically different tune. And for marketers and station owners, the positive effect on the retail fuel industry could be tremendous.
The election is over. There’s a coming transition. And many people in the oil and gas industry are overjoyed. More to the point, they’re happy to see the departure of Biden’s troubling regulations, including his climate policy, methane fee, and liquefied natural gas (LNG) export pause. Although oil and gas production was statistically high during his term, the limits on federal leases and severe environmental restrictions that companies had to deal with made their daily operations frustratingly difficult. By contrast, in their first few days, the new administration is expected to introduce an across-the-board energy plan that will feature ramping up offshore oil drilling and greenlighting export permits for new LNG projects.
Of major importance to our industry, there will be the changes within the agencies that we deal with on a daily basis, like the EPA and the Energy Department. Over the past few years, there have been so many baffling regulations handed down that it’s become difficult for many marketers to manage them, even leading some to give up and sell their businesses. Striking a sharply different tone, Trump has tapped Chris Wright, CEO of Liberty Energy, as Secretary of Energy, and Rep. Lee Zeldin to head up the EPA. Both allies of the oil and gas industry, they will help Trump as he works to sever Biden’s regulations on oil and gas development.
As a result, this will likely send a signal to others, like state and local agencies, that many of them have gone too far, in a regulatory sense. In fact, a recent landmark Supreme Court decision will cause agencies to either dramatically peel back regulations or face being taken to court. In West Virginia v. EPA, the high court officially recognized – for the first time ever – the major questions doctrine, a principle of statutory interpretation that requires agencies to clearly show congressional authorization when claiming authority to make decisions of vast political and economic significance.
Further, as his administration kicks into gear, Trump will likely champion a restart of the Keystone Pipeline, as well as push to have restrictive climate change and transportation regulations come under review. I have to admit, it’s music to my ears.
That said, things won’t change overnight. And not everything will go as expected. For example, Trump plans to take immediate action to expand the public land and water available for oil and gas production. However, it’s up to oil companies to bid on federal lease sales. Trump may push “drill, baby, drill,” but U.S. presidents can’t command oil production. If production escalates beyond what the world markets dictate, oil prices would drop – causing companies to ease drilling. That idea, of course, also supports “drill, baby, drill”: Let the markets decide. A bold, pro fossil fuel policy will provide the industry the confidence to make those important choices, when their business dictates, free from the shackles of crippling regulations.
As I write this article, it’s still 2024 – New Year’s Eve. The poignant strains of Auld Lang Syne echo nearby. But by the time this gets published in the coming year the outlook for our industry, I think, will be upbeat. Many of the new administration’s policies should be implemented or on their way. Some, though, could be entangled in legal troubles or lingering regulations. But if we stay the course, and keep our heads, I think we’ll all be singing a happy tune down the road – and in a better place whenever the music stops.
At the Spirit® Brand, we’re looking forward to the potential changes that loom ahead. If you’re wanting more information on what’s coming down the track, contact us at 509-203-7357or [email protected] so we can provide you with resources that will help.