Ahead of presidential debate, US oil industry urges action on LNG pause, leasing

The American Petroleum Institute rolled out June 17 a policy wish list ahead of the first presidential debate, set for June 27, focusing on repealing tailpipe emissions rules, lifting the pause in LNG export reviews and overhauling the leasing strategy to bolster production.

The trade group also highlighted its desire for permitting reform legislation to ease barriers for infrastructure development, and it listed tax policies that bolster US energy resources among its priorities.

Energy matters are already featured among other campaign talking points for the debate in Atlanta between President Joe Biden and former president Donald Trump.

The Biden team has touted manufacturing jobs it contends will be spurred by the president's clean energy agenda. Trump, on the other hand, has harped on the need to boost drilling and production, while taking swipes at electric cars and renewable energy.

Ahead of the debate, the oil and gas trade group cast its policy goals under broad messaging themes in its "5 Point Policy Roadmap to Secure American Energy Leadership and Help Reduce Inflation." Those included "protecting consumer choice," "restoring the role of American energy" and advancing "sensible tax policy" among others.

API said it was "calling both candidates, as well as policymakers on both sides of the aisle, to leverage America's energy resources to help protect consumers and cement US energy leadership."

Countering EPA mandates

The trade organization argued that the next administration should repeal the US Environmental Protection Agency's tailpipe rules for light-, medium-, and heavy-duty vehicles, as well as the Department of Transportation's Corporate Average Fuel Economy standards.

EPA in March tightened tailpipe emission standards for light- and medium duty vehicles for model years 2027-2032. Under the rules, the agency estimated that auto manufacturers would choose to produce EVs for 30%-56% of new light-duty vehicles and 20%-32% of medium-duty vehicles from 2030-2032.

API on June 13 filed a lawsuit in the US Court of Appeals for the DC Circuit seeking to overturn the EPA rule.

The DOT on June 7 announced its CAFE standards to increase fuel economy requirements for model years 2027-2031. The standards are meant to dovetail with EPA's rules.

API's policy roadmap also said the Biden Administration's leasing plan is "the worst leasing program in history and should be replaced."

The Department of Interior in December finalized the 2024-2029 National Outer Continental Shelf Oil and Gas Leasing Program. The program includes the fewest oil and gas lease sales in history, with just three auctions in the Gulf of Mexico planned over the next five years.

API has filed a lawsuit to overturn the Biden administration's leasing program, which stands in stark contrast to the Trump Administration's 2018 proposal to hold 47 sales across all US coastal areas.

Democratic US lawmakers have raised concern that Trump allegedly sought $1 billion in campaign contributions from the oil and gas sector in exchange for actions like expanding oil and gas leasing.

But API says those concerns are a distraction, arguing that their officials regularly meet with policymakers and emphasize the same priorities regardless of the candidate.

Emphasizing energy security

Broadly, API emphasized a need to leverage US energy resources to bolster US geopolitical interests.

"Specifically, we should lift the Department of Energy's LNG permitting pause and swiftly approve all pending export applications now languishing at DOE," API said.

The group has long criticized the Biden administration's Jan. 26 announcement that it would pause issuing key LNG export permits until the DOE can reexamine the criteria it uses to determine whether the projects are in the public interest. The pause applies to exports to countries that lack free trade agreements with the US, comprising most of the global LNG market.

API has backed litigation from 16 state attorneys general seeking to block the pause.

As for permitting reform, oil and gas projects have frequently been dogged by legal opposition that stretches out the permitting process and risks overturning final permits.

During debate in Congress over permitting reform, oil and gas companies have favored scaling back the scope and timing of judicial appeals under environmental laws. They also have sought to limit the ability of states to veto projects by exercising their ability to deny water quality certifications under the Clean Water Act.

On the tax front, a looming battle is expected on whether to extend the tax cuts passed under the Trump administration. The Tax Cut and Jobs Act included measures meant to encourage oil drilling and exploration.

"[O]ur nation's tax policy must ensure that taxpayers reap the benefits of continued investments in America's energy resources," API said June 17, without offering specifics.

API has pushed back on Biden administration efforts to end a long-standing tax break on domestic production.

But a Trump administration also carries some risk as the former president has promoted the idea of sweeping new tariffs.

API in the past vocally opposed higher tariffs on Chinese goods, warning they would hamper US energy exports.