Industry optimistic Trump, Congress will pursue pro-oil policies

The oil and gas industry expected a pro-fossil fuel agenda in the new Trump era and were not disappointed by his day-one orders to “unleash America’s energy dominance.”

In a series of actions in his first hours back in the White House, Trump addressed many of the industry’s most urgent concerns, including ordering the government to resume processing of LNG export permits, reversing the previous administration’s actions to close parts of Alaska and federal waters to oil and gas development, pumping the brakes on the transition to electric vehicles, and bidding adieu to the Paris climate accords.

Trump also declared a national energy emergency that he said gives him authority to lessen environmental restrictions on oil and gas projects and streamline permitting for new energy infrastructure.

The emergency declaration and other administrative moves to ease energy permitting will likely face legal challenges unless Congress also acts. The new Congress should make energy-permitting reform, with changes to the National Environmental Protection Act (NEPA), a top legislative priority, industry representatives told Oil & Gas Journal. 

Resumption of LNG permits

Trump threaded the needle on LNG, effectively reversing the export-permit pause Biden put in place in early 2024 while his Department of Energy (DOE) studied the environmental and economic effects of exporting US natural gas. 

By extending the comment period on the Biden administration’s study to Mar. 25, 2025, from Feb. 18, 2025, instead of declaring the pause over, the Trump administration might help the industry by building out the rationale for LNG exports.

Industry lobbied Trump’s energy transition team to address the DOE report that found damage to the environment and the economy outweighed the benefits of new LNG infrastructure.

“The industry wants any new permits to be legally durable,” said Charlie Reidel, president of the Center for LNG. Environmental groups will “certainly” challenge new export authorization, he noted. “LNG sponsors need to feel confident” before they invest $15-20 billion,” Reidel said.
Action by DOE or Congress will “stand the test of time,” American Petroleum Association (API) president Mike Sommers said. He urged the incoming administration “to swiftly process all pending export applications now languishing at DOE.”

More than a dozen LNG projects await approval, including those by Commonwealth LNG, Venture Global, Cheniere Energy, Energy Transfer, and Sempra. 

Addressing the study could help already-approved LNG projects currently tied up in the courts—including NextDecade Corp.’s 27-million tonne/year Rio Grande LNG plant—by bolstering legal arguments for exports, said National Ocean Industries Association (NOIA) president Erik Milito. 

A federal appeals court in August 2024 overturned a permit for the plant under construction in Brownsville, Tex., ruling that the Federal Energy Regulatory Commission (FERC) failed to conduct a robust study of the environmental impacts.

Offshore, onshore leasing

Trump also started the process to reverse the previous administration’s energy and environmental policies, including orders issued by Biden in January that restrict federal oil and gas leasing in US coastal waters—including all waters off the east and west coasts, the eastern Gulf of Mexico, and portions of the Northern Bering Sea in Alaska—from all future oil and gas leasing.

He revoked Biden’s memorandum to make off-limits for future oil and gas leasing 16 million acres of offshore and onshore acreage, including permanently withdrawing 2.8 million acres of the Alaskan Beaufort Sea north of the National Petroleum Reserve-Alaska.

Trump opted not to reverse the previous administration’s ban on leasing on 625 million acres of federal lands in Alaska’s Arctic National Wildlife Refuge (ANWR), despite industry urging.  
Still, Congress could repeal the ANWR ban as part of the budget reconciliation act or in stand-alone legislation to boost government revenues.

Washington energy insiders also expect Congress to force Interior Department agencies—like the Bureau of Land Management (BLM) and the Bureau of Ocean Energy Management (BOEM)—to beef up federal leasing plans. Without action by Congress, Trump’s administrative actions related to federal lands and waters could face legal challenges, they say.

“I believe there will be an effort to work with Congress on oil and gas activities managed by the Interior Department agencies, particularly to re-do the anemic 2024-2029 lease program, which is the smallest program in the history of leasing,” NOIA’s Milito said.

President Trump has made it clear that he wants to promote domestic production, Milito said, and “leasing is a big part of that.”

Congressional approval is not a slam dunk, despite a “trifecta” of power, with Republican’s controlling the presidency and both chambers of Congress, Interstate Natural Gas Association of America (INGAA) president Amy Andryszak said.

Senate and House the majorities are narrow and could shrink to 217-215 with the departure of two lawmakers to serve in Trump’s cabinet.

Permitting, NEPA reform

The oil and gas industry wants a bipartisan permitting bill passed this legislative session. 
“The saying is ‘drill, baby, drill,’ but it’s also ‘build, baby, build,’” said Independent Petroleum Association of America (IPAA) president and chief executive officer Jeff Eshelman. “We need to build LNG facilities and pipelines.”

“We are interested to see if Congress can advance any proposals to ease the permitting process,” INGAA’s Andryszak echoed. 

She said she hopes Congress will work “more directly to speed up the process for pipeline infrastructure,” including by addressing NEPA.

Trump took aim at NEPA on his first day by directing the White House Council on Environmental Quality to coordinate agency-level rewrites to expedite energy approvals. 
Industry wants Congress to go further by including directives to agencies to speed up and limit the scope of NEPA reviews. “NEPA is an important law, but it’s become an albatross” for the oil and gas industry, said NOIA’s Milito. NEPA reform is a major ask of the energy industry, which has seen courts utilize NEPA reviews that reverse or delay federal project approvals. 

New Biden-era NEPA rules have exacerbated permitting obstacles, API’s Sommers said, insisting that “NEPA Phase 1 and Phase 2 rules are inconsistent with the original statutory intent.”

If Congress omits the NEPA provision or fails to pass a permitting bill, the industry still sees several paths to environmental review reform.

The Supreme Court of the United States will rule this summer on a NEPA case over whether the “scope of NEPA has expanded far beyond the initial purpose,” NOIA’s Milito noted.

Milito also hopes the high court opts to hear the Seven County Infrastructure Coalition v. Eagle County, Colorado, case that he said could provide some instruction to federal agencies on how to limit the breadth of regulatory review.

Lower courts will also decide NEPA cases in 2025, INGAA general counsel John Dreskin added. It’s become clear that “any NEPA violations could lead to a court” revoking construction permits, as they have done in several recent energy cases, including Transcontinental Gas Pipeline Co.’s nearly $1 billion Regional Energy Access expansion, he said. 

NOIA’s Milito expects continued lawsuits on LNG rules, LNG projects, oil and gas leases, and how agencies like the Environmental Protection Agency (EPA), the US Fish and Wildlife Service, FERC, and BLM interpret environmental, biological, and species protection laws.

The permitting bill should also address judicial reform to clarify when, where, and who can file legal challenges and alter the Clean Air Act to ensure “the statute is only used as intended, and not as a ‘de facto’ veto for politically disfavored infrastructure projects,” API’s Sommers said.

‘Sensible tax policy,’ pipeline safety bill

Congress should advance sensible tax policy, one of Trump’s legislative priorities, Sommers said. API will work with Congress to retain the 21% corporate tax rate, maintain and extend tax provisions for domestic infrastructure investment, and preserve “crucial international tax provisions” that protect US investments overseas investments from “double taxation.” Many of these tax provisions will expire at yearend without action by Congress.

IPAA members will work to prevent new taxes on the industry and retain tax deductions important to independent producers, including those related to intangible drilling costs and percentage depletion, said Eshelman. 

INGAA wants Congress to reauthorize the pipeline safety bill, which officially ended in September 2023. Two House committees have advanced reauthorization bills, and Andryszak anticipates Senate action this session.

Tariff plan concerns 

While Trump punted on his pledge to impose tariffs on all imports on his first day, he said he would slap a 25% tariff on Canada and Mexico by Feb. 1, 2025, a move the industry warns could raise prices.

“The US is heavily reliant on heavy crude from Canada” and other producing nations because 40% of US refineries are not tooled to refine US crude, API’s Sommers said. “The free flow of goods between the US, Mexico, and Canada” is central to ensuring that the US has enough oil to meet domestic needs, he said. 

While the US is the world’s largest oil and gas producer, it relies on imports to refine gasoline, diesel, and jet fuel. Canada, Mexico, and other foreign nations might retaliate with their own tariffs should Trump pursue his plan.

Orders targeting environment, climate

Trump took first-day action to revoke a 2021 Biden executive to ensure half of all new vehicles sold in the US by 2030 were electric. The policy, a cornerstone of the Biden administration’s efforts to address climate change, was opposed by the oil industry but backed by US and foreign automakers. 

Trump again took the US out of the Paris climate deal, repeating a move he made in his first term. He said the accord puts the US at a competitive disadvantage to geopolitical rivals like China.

He also issued orders to rescind Biden’s actions that integrated climate and environmental justice throughout federal agency decision-making.

Appointees likely to promote oil, gas

Industry representatives are confident that incoming Trump administration political appointees will follow the president’s call for more oil and gas development.

“We are hopeful that Trump will bring in a talented team,” IPAA’s Eshelman said. “We lacked so much energy expertise under the Biden administration,” including by eliminating DOE’s Office of Fossil Fuels.

He praised Trump’s picks of Doug Burgum to lead the Department of the Interior and Chris Wright to run DOE and said he was confident the Senate would confirm both by February’s end.

Burgum—former North Dakota Governor and Trump’s campaign energy advisor—supports the industry’s call to open more federal lands and waters to oil and gas leasing. Burgum will chair a national energy council created by Trump to “oversee the path to US energy dominance.” 
Wright, an advocate for oil and gas development who founded and served as chief executive officer and chairman of Liberty Energy Inc., said in 2023 that there is no climate crisis, and we are not in the midst of an energy transition.

API hopes a new EPA will modify or repeal a slew of regulations, including sections of the Clean Water Act and Clean Air Act, the tailpipe rule, and the Renewable Fuel Standard. Other areas of desired change include recent standards on methane/greenhouse gas and particulate matter reporting as well as the waste emissions charge. 

INGAA sees room for the administration to repeal the Security and Exchange Commission’s climate rule and revise the cyber disclosure rule. It wants the Pipeline and Hazardous Materials Safety Administration to advance the class location, leak detection, and control and recordkeeping rules.

IPAA’s Eshelman hopes DOE will return to its previous policy on buying and selling oil from the nation’s strategic oil stockpile to ensure that the Strategic Petroleum Reserve (SPR) is only used in emergencies. “The Biden administration changed pretty dramatically the SPR policy” in a way that “has the effect of manipulating prices,” he said.

Trump in his first day in office vowed to fill the SPR “right to the top.” After the invasion of Ukraine, Biden released a record 180 million bbl of crude oil from the reserve to keep gasoline prices in check. The sales brought SPR storage stocks to the lowest level in 40 years before refill purchases began.

Trump will likely seek funds from Congress in the coming weeks to pay for oil purchases to further fill the SPR.