US oil industry pushes Trump to turn away from Biden-era energy policy

United States President-elect Donald Trump should turn away from the climate-focused policies of US President Joe Biden, the leading US oil and gas industry trade group said Nov. 12, arguing the decisive nature of Trump's Nov. 5 win made it clear US voters preferred an "all-of-the-above" energy approach.

The American Petroleum Institute revealed a five-point policy roadmap it said it had also shared with President-elect Trump and his transition team. The document urges the incoming administration to spike Biden-era vehicle emissions standards that critics have called an electric vehicle "mandate," reverse an ongoing pause on LNG export permit approvals, and repeal leasing rules the industry believes were too restrictive under Biden's leadership, among other proposals.

"Looking at the results of last week's election, it is clear that energy was on the ballot," API CEO Mike Sommers said on a call with reporters. "Whether it was EV mandates in Michigan or fracking in Pennsylvania, voters across the country and on both sides of the aisle sent a clear message to policymakers that they want an all-of-the-above approach to energy, not government mandates and restrictions."

Trump win, production boom?

Despite oil and gas industry pushback against Biden's climate agenda, the US was the world's the largest producer of both, oil and gas, throughout the outgoing president's four-year tenure. Trump frequently told campaign rallies he would "drill, baby, drill," promising to rapidly increase US production and lower the cost of gasoline. In a Sept. 5 speech at the Economic Club of New York, Trump said that if he had been president "oil production today would be four times higher than it is right now."

Analysts expect the immediate production impact of Trump's policies on production to be muted. While Trump's pledges to open up more federal lands to leases are part of API's roadmap, production increases are likely to be more heavily influenced by demand and market incentives.

"We continue to regard global supply-demand balances (and, concomitantly, prices) and investor appetites as primary drivers of upstream development decisions," ClearView Energy Partners wrote in a Nov. 7 research note. "As we have noted, the global liquids supply appears poised to exceed demand by ~0.9 million b/d during 1H 2025. That could dampen operator enthusiasm for upstream investment in any regulatory environment."

Still, the industry believes Trump's policies will create an environment to facilitate the long-term growth it says it needs to satisfy global demand through 2050.

"I do think there's a question between short term and long term," Sommers said. "We want to make sure that, over time, we can continue to increase production, but that's going to require thoughtful energy policy."

Other policy pushes

Alongside new leases and more support for LNG exports, API said it would push the second Trump administration to reverse the Biden administration Environmental Protection Agency's 2027-2032 tailpipe emissions rule and the National Highway Traffic Safety Administration's Corporate Average Fuel Economy (CAFE) standards, both of which received the support of the US auto industry but were criticized by Republicans and fuel industry advocates for forcing consumers to purchase EVs.

"If you look at places like Michigan, where this issue was truly on the ballot, American consumers continue to vote with their wallet and at the ballot box to say that this is not a mandate that they want in place," Sommers said.

Sommers also said that while some API members support the concept of a methane fee on oil and gas facilities, the organization opposes the EPA's updated proposed Waste Emissions Charge rule, released Nov. 12, that would charge producers $900 per ton of excess methane produced in 2024 with increasing penalties in 2025 and 2026.

Speaking at COP29 in Baku Nov. 12, ExxonMobil CEO Darren Woods advised Trump to remain in the Paris Climate Accord. "We need a global system for managing global emissions," Woods told the New York Times.

"We support the ambition of the Paris Climate Accords, but regardless of whether we stay in or out, our focus will be on the dual challenge of emissions reduction and on meeting the world's energy needs," Sommers said.

API also urged Trump and the new Congress -- where the GOP will control the Senate and is projected to assume a slim House majority -- to pursue permitting reform that "ensures transparency, predictability, timeliness and durability." Sommers said the group is optimistic that the Energy Permitting Reform Act of 2024, co-sponsored by Senator Joe Manchin, Democrat-West Virginia, and John Barrasso, Republican-Wyoming, could still make progress during the so-called "lame duck" legislative session of the current congress, citing the bipartisan compromise the bill represents.

Sommers also said the industry supports certain provisions in Biden's 2022 Inflation Reduction Act legislation, such as the 45Q tax credit designed encourage investment in carbon capture and storage and the 45V credit, an incentive for producing clean hydrogen.

"While we opposed the Inflation Reduction Act when it was passed, there are many provisions that our membership supports," Sommers said. "We'll be working with the Congress and the White House on their ideas on the Inflation Reduction Act, and I think there are a number of things within the policy roadmap that congress will focus on -- particularly the importance of building out our infrastructure to reduce emissions."