The new secretary of state? The CEO of ExxonMobil. The new head of the EPA? Part of a secretive alliance with fossil fuels companies. But those two are just the oily tip of the power oil, gas, and coal are building within the Trump administration.
The oil, gas and coal industries are amassing power throughout Washington — from Foggy Bottom, where ExxonMobil chief executive Rex Tillerson is Trump’s nominee to be secretary of state, to domestic regulatory agencies including the departments of Energy and Interior as well as the Environmental Protection Agency. …
A slew of Obama administration policies on fossil fuels are expected to be reversed after Trump is sworn into office on Jan. 20. Eliminating these regulations — which limit carbon emissions on power plants and restrict oil, gas and coal extraction — would represent major gains for the industry.
Don’t expect any of these changes to create jobs. Oil and gas prices are already so low that drilling companies are idle and 160 oil companies have filed for bankruptcy in the last year. Those low gas prices have closed 300 coal-burning power plants, so there’s not going to be any burst of work on that side of the line.
At a rally Tuesday night in West Allis, Wis., Trump vowed to “eliminate all wasteful job-killing regulations. On energy, we will cancel the restrictions on the production of American energy, including shale, oil, natural gas and clean beautiful coal.”
What both industries will gain isn’t jobs. It’s profit.
By being able to avoid current environmental and safety regulations, the industry will be able to squeeze even more dollars out of each barrel or ton. Oil companies will likely face fewer restrictions around fluids used in fracking. Coal companies will find it easier to fill streams with waste from mountaintop removal.
Ultimately, based on the highly competitive race-to-the-bottom that has defined the oil industry over the last decade, the regulatory changes will likely drive the cost of oil and gas even lower, erasing any additional edge. However, in the short term, the larger companies with reserves and technology to take advantage of changes will be able to move more quickly, gain advantage, and put more of their smaller competitors out of the market.
The result will be fewer jobs, but more dollars.
Oil and gas favorites have been nominated to lead the Cabinet agencies that regulate the industry: former Texas governor Rick Perry as energy secretary, Oklahoma Attorney General Scott Pruitt as EPA administrator and Rep. Ryan Zinke (R-Mont.) as interior secretary.
Chuck Schumer is positioning Democrats as a barrier to Trump’s energy company bonanza.
“It’s pretty clear that the bottom line of oil companies is going to take precedence over clean air and water protections for American families,” Schumer said in an email. “We’re going to fight hard to make sure that the Senate is a bulwark against those who want to undo environmental protections next year.”
But it’s unlikely Democrats can represent more than a road bump with Republicans at the helm of every government branch.
The influence of oil and gas isn’t limited to domestic policy. Secretary of State nominee Rex Tillerson has negotiated a $500 billion deal with Russia, the biggest business deal in history, that requires both sanctions against Russia to be dropped and the United States to walk away from limits on pollution in the Paris agreement.
Paul Bledsoe, an energy consultant who served as a climate change adviser in the Clinton White House, said the permeation of “big oil” in the emerging Trump administration reflects the president-elect’s vision of geopolitics.
“Trump seems to view fossil fuels as at the center of U.S. economic power at home and abroad, providing cheap energy for the dream of increased domestic manufacturing and also lucrative export markets for U.S. oil, natural gas and coal,” Bledsoe said. “Overseas, he appears stuck in a ’70s-era world view of oil and gas power plays, where flows of energy are the key to global geopolitics — perhaps because Russia and other traditional foes are so dependent on oil and gas revenues.”