What Did President Trump Accomplish In 100 Days?
First quarter earnings are starting to roll in, and as expected energy sector earnings are much better year-over-year. So far ExxonMobil (NYSE: XOM) and Chevron (NYSE: CVX) have both reported results that beat expectations. These results signal a healthier energy sector, but after a first quarter correction in the sector, you can buy many companies at the same price they were a year ago. Before the market opened today ConocoPhillips (NYSE: COP) announced earnings, so after I have a chance to digest them, I will address the sector trends in Thursday’s article.
For the remainder of today’s article, I want to discuss the first 100 days of the Trump Administration, as it relates to the energy sector.
President Trump passed the 100-day milestone over the weekend, and pundits have been busy grading his performance. While the grades have been broadly negative, he did make some progress in the energy sector.
The most tangible win of his first 100 days in the energy sector was the completion of the Dakota Access Pipeline (DAPL). The timing of the outcome was a direct result of a directive Trump signed two days after his inauguration. It is without a doubt a different outcome than it would have been had Hillary Clinton won the election.
To review, a favorable environmental assessment (EA) was issued for the DAPL during the Obama Administration. But environmental protests around the pipeline garnered lots of media attention. With the DAPL nearly complete, in the last days of Obama’s presidency, the Assistant Secretary of the Army issued a memorandum voiding the original EA and calling for additional pipeline routes to be studied.
On January 18th the Army Corps launched a new environmental review of the pipeline’s Lake Oahe crossing and warned that it could take two years to complete. Bowing to pressure from the left, Hillary Clinton would almost certainly have let the process play itself out, with no clear timing on when (or if) the pipeline would have been completed.
One of President Trump’s first acts was to sign a directive aimed at rescinding the December memorandum. The Army Corps complied and granted the easement necessary to complete the pipeline. Drilling under Lake Oahe began immediately, and the pipeline was completed a short time later. It is scheduled to begin full operation this month.
On the same day President Trump issued the executive action on DAPL, he issued the Presidential Memorandum Regarding Construction of the Keystone XL Pipeline. This memorandum invited TransCanada to resubmit its application to the Department of State for a permit for the construction and operation of the Keystone XL Pipeline, which had been denied by the Obama Administration (after the decision had been delayed for years). Two days later TransCanada resubmitted the application, and the permit has now been granted. While this is an accomplishment, there are still many obstacles to overcome before the Keystone XL pipeline can be completed.
Most of the rest of the President’s energy accomplishments won’t have an immediate impact, but some have the potential to have a long-term impact.
In January President Trump released An America First Energy Plan, which identified goals of rolling back regulations, as well as developing “the estimated $50 trillion in untapped shale, oil, and natural gas reserves, especially those on federal lands that the American people own.”
In February the President signed a resolution overturning President Obama’s Stream Protection Rule, designed to limit pollution from coal mining. The rule had been in effect for less than 30 days.
In March the President issued Presidential Executive Order on Promoting Energy Independence and Economic Growth. Among other objectives, this executive order calls for a review of the Clean Power Plan, one of President Obama’s signature legislative accomplishments. The order also called for a reversal of President Obama’s moratorium on new coal mining leases on federal lands.
Also in March, President Trump announced plans to reexamine and potentially relax Corporate Average Fuel Economy (CAFE) standards, which the auto industry blames for making cars more expensive, and thus leading to job losses in the industry.
Finally, on his 99th day in office, President Trump signed Executive Order Implementing an America-First Offshore Energy Strategy that will direct the Interior Department to review drilling policies for the Outer Continental Shelf. This order aims to reverse the restrictions the Obama Administration put in place on offshore oil and gas production.
Regardless of your opinion of President Trump, it was pretty clear that he would be good for the energy sector. In fact, my top prediction for 2017 was that his actions would result in the completion of the Dakota Access Pipeline. Outside of getting a Supreme Court justice nominated and confirmed, this has indeed been the area of most significant impact in the first 100 days of Trump’s presidency. However, some other actions from the first 100 days have the potential for meaningful and long-lasting repercussions – to the delight of some, and to the horror of others.