Umair
Tariff threats. Growing uncertainty about the economy. And a push for much lower oil prices.
For all of their bravado about U.S. energy dominance and enthusiasm for deregulation, American energy executives are beginning to worry about President Trump’s agenda.
Their concerns crept into conversations in hotel meeting rooms and over private meals this week in Houston, where industry magnates gathered for their most important annual conference.
Surely, some hoped, the president would cut oil and gas companies a break on tariffs. Surely, the administration was not serious about pushing oil prices down another 25 percent. Surely, the turmoil of the last two months would soon pass.
And just as soon as those glimmers of frustration or doubt slipped out, they were gone, overshadowed by praise for Mr. Trump, his cabinet and the administration’s aim to unshackle American energy companies — at least the ones in the business of producing oil, natural gas and nuclear power.
Such is the energy industry’s delicate dance these days. Companies are trying to balance fighting for their interests, which often include free trade, with a strong desire not to offend the president. The oil and gas industry spent more than $75 million to elect Mr. Trump.
“We’re hopeful that as we continue these conversations on trade, that the energy dominance agenda becomes more important than the tariff agenda,” Mike Sommers, chief executive of the American Petroleum Institute, the oil and gas industry’s main trade group, said in an interview at the conference, CERAWeek by S&P Global.
Oil and gas executives are set to meet with Mr. Trump at the White House next week.
“There’s a lot of uncertainty right now — I understand the angst about all that,” Chris Wright, Mr. Trump’s energy secretary, said in an interview with The New York Times after he had meetings with energy executives this week. “But I think we’re going to get to a very good place.”
Just this week, 25 percent tariffs took effect on imported aluminum and steel, both used widely by the energy industry. Mr. Trump also said he would impose heftier fees on metals purchased from Canada, only to backtrack hours later after securing a concession.
Worries about tariffs and the economy were the main reasons that the S&P 500 index slid into a correction on Thursday, down 10.1 percent from a recent high. U.S. oil prices settled at $66.55 a barrel, down nearly 15 percent since just before Mr. Trump took office.
Peter Navarro, a White House aide who has long advised Mr. Trump on trade, has been publicly musing about crude prices dropping to $50 a barrel, saying such a tumble would tame inflation. In most U.S. oil fields, companies generally need prices above $60 a barrel to make money on new wells, according to the Federal Reserve Bank of Dallas.
“You’re not going to find anybody in the industry to criticize the Trump administration,” said Scott Sheffield, who last year sold his large oil company, Pioneer Natural Resources, to Exxon Mobil.
Instead, Mr. Sheffield posed questions for Mr. Trump: “Does he really want $50 oil? Does he know the impact? What it’ll do to the industry?”
Executives who are still managing companies or representing them were generally not as blunt. Many heaped praise on Mr. Trump and his cabinet choices, expressing support for an “all of the above” approach to developing energy.
“It’s refreshing,” Toby Rice, chief executive of natural gas producer EQT, said after attending a dinner that Mr. Wright and Doug Burgum, the interior secretary, had with energy executives. “It’s very clear that this administration is focused on lowering energy bills for consumers.”
At times, people sprinkled in gentle requests for more certainty and less volatility.
“I’m going to say this in about two and a half seconds and move on: We need a common-sense trade policy,” Jay Timmons, chief executive of the National Association of Manufacturers, said over breakfast near the conference. Many laughed as Mr. Timmons quickly returned to more comfortable territory.
His trade group has asked the White House for more predictability and time to adjust to new trade policies. Many manufacturers are growing concerned about rising costs because they often rely on imports for parts or raw materials and are worried about tariff retaliation by other countries.
Ryan Lance, chief executive of ConocoPhillips, one of the largest U.S. oil and gas producers, said he viewed energy as a “poster child” for Mr. Trump’s efforts to create jobs and return manufacturing to the United States.
“I hope they take that into mind as they think about what they’re going to do on the tariff side,” Mr. Lance said. “Whether you exempt energy or not I think is something people ought to look at.”
Mr. Trump has gone back and forth on plans to tax energy from Mexico and Canada. The United States relies heavily in particular on Canadian oil, which refineries combine with domestic crude to make gasoline and diesel fuel.
Other executives were more sanguine about trade policy.
“There is anxiety around the tariffs,” said Abigail Ross Hopper, who leads the Solar Energy Industries Association. “But it is not full-fledged panic like it was in the beginning of the first Trump administration.”
In 2018, during his first term, Mr. Trump placed a 30 percent tariff on imported solar cells and modules, which are the building blocks for panels that turn sunlight into electricity.
Like other renewable energy leaders, Ms. Hopper sought to frame her sector in terms that might resonate with the Trump administration.
“There’s nothing unique about solar manufacturing,” Ms. Hopper said. “It’s just like if you were manufacturing pencils. If nobody needs pencils anymore, then the pencil manufacturer is going to go out of business.”
Many energy companies have set their sights on lowering barriers to securing permits for pipelines, power lines and other infrastructure that can be very difficult to build in many places.
Alan S. Armstrong, chief executive of a pipeline company, Williams, said that tariff-related price increases paled in comparison to the costs and risks associated with permitting.
“If we could pay 25 percent on the pipe to get the permitting, we would take that trade all day long,” Mr. Armstrong said.
Ivan Penn contributed reporting from Houston.
