January 4, 2017 at 3:55 pm ET
Oil, Gas Industry Has High Hopes for GOP, Despite Tax Plan Concerns
American Petroleum Institute CEO Jack Gerard laid out high expectations for the Trump administration and congressional Republicans on Wednesday, but also expressed concern over House Republicans’ tax reform plan.
The plan proposed by House Speaker Paul Ryan (R-Wis.) and House Ways & Means Chairman Kevin Brady (R-Texas) would tax imports and provide a tax exemption for exports. Brady said in a December statement that the tax plan “helps level the playing field for exports and imports.”
Gerard said API is expressing concerns to members of both parties about that proposal, though the group says it hasn’t taken a clear stance for or against the measure. Gerard, who was speaking Wednesday at API’s annual State of American Energy event, said the group is conducting an analysis to determine what the tax plan’s overall effect would be.
The tax plan would encourage exports over imports. On one hand, that jibes with some of API’s top priorities, such as increasing crude oil and liquefied natural gas exports. On the other hand, Gerard said it disadvantages companies that import crude oil and refine it in the U.S., which creates domestic jobs.
The tax plan has also drawn criticism from Charles and David Koch, who warned in December of “devastating” effects on the economy. Like the Kochs, Gerard expressed a broadly pro-trade outlook on Wednesday.
“We’re all about free trade,” Gerard said. “We’re all about those opportunities.”
Aside from API’s concerns over the tax plan, the group is optimistic about Republican plans to rein in the Obama administration’s regulations on the oil and gas industry, Gerard said.
Overall, Gerard said API sees an opportunity in the next four years for Republicans to broadly change the way the federal government issues regulations. The group is supportive of the REINS Act, which would give Congress oversight of major executive actions, and the Midnight Rules Relief Act, which would allow Congress to pass bundles of resolutions blocking executive actions, Gerard said. The House is scheduled to vote on the Midnight Rules Relief Act on Wednesday.
Gerard also mentioned the possibility of reforming or repealing the Renewable Fuel Standard, and said Congress should “look at the regulatory regimes” such as the Endangered Species Act or the National Environmental Policy Act.
Collectively, those moves would significantly reduce the executive branch’s influence over energy and environmental issues.
“We’re supportive of those measures that say let’s get back to the people’s House,” Gerard said.
More specifically, Gerard criticized the Obama administration’s regulations limiting methane emissions from oil and gas systems and limiting venting and flaring of natural gas on public lands.
Gerard declined to talk specifically about the group’s stance on the Paris climate accord, other than to say that the private sector, particularly natural gas, has driven much of the U.S.’s reduction in greenhouse gas emissions. He said increasing liquefied natural gas exports could help other countries do the same.