Tariff threats. Growing uncertainty about the economy. And an impulse for much lower oil prices.
Despite all his bravery over energy domain and enthusiasm for deregulation, American energy executives are beginning to worry about the agenda of President Trump.
His concerns became conversations in hotel meetings and private meals this week in Houston, where industry magnates met for their most important annual conference.
Surely, some expected, the president would reduce oil and gas companies a break in tariffs. Surely, the Administration did not take the management of oil prices in another 25 percent. Surely, the agitation of the last two months would soon happen.
And as soon as those brightness of frustration or doubt were slipped, they left, eclipsed by compliments for Mr. Trump, his cabinet and the objective of the administration to discredit US energy companies, at least those that were in the business of producing oil, natural gas and nuclear energy.
Such is the delicate dance of the energy industry these days. Companies are trying to balance the struggle 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 choose Trump.
“We hope that as we continue these conversations about trade, that the energy domain agenda becomes more important than the tariff agenda,” said Mike Sommers, executive director of the American Petroleum Institute, the main commercial group of the oil and gas industry, in an interview at the conference, Global S&P Ceraweek.
Oil and gas executives will meet with Trump at the White House next week.
“There is a lot of uncertainty at this time: I understand anguish about all that,” said Chris Wright, Secretary of Energy of Mr. Trump, in an interview with the New York Times after having meetings with energy executives this week. “But I think we are going to get to a very good place.”
Only this week, 25 percent of tariffs entered into force in imported aluminum and steel, both widely used by the energy industry. Trump also said he would impose stronger rates in metals bought in Canada, just to retreat hours later after ensuring a concession.
Concerns about tariffs and the economy were the main reasons why the S&P 500 index slid on a correction on Thursday, 10.1 percent from a recent maximum. The oil prices of the United States were established at $ 66.55 per barrel, almost 15 percent since just before Trump assumed the position.
Peter Navarro, a White House assistant who has long advised Trump about trade, has been publicly reflecting on the prices of crude oil that falls to $ 50 per barrel, saying that such a fall would domesticate inflation. In most American oil fields, companies generally need prices greater than $ 60 per barrel to earn money in new wells, according to the Dallas Federal Reserve Bank.
“You will not find anyone in the industry to criticize the Trump administration,” said Scott Sheffield, who last year sold his great oil company, Pioneer Natural Resources, Exxon Mobil.
On the other hand, Mr. Sheffield raised questions for Mr. Trump: “Do you really want $ 50 of oil? Do you know the impact? What will make the industry?
Executives who still manage companies or who generally represent them were not so forceful. Many praised Mr. Trump and his cabinet elections, expressing their support for a “all of the above” approach to develop energy.
“It is refreshing,” said Toby Rice, executive director of the EQT Natural Gas producer, after attending a dinner that Mr. Wright and Doug Burgum, the Secretary of the Interior, had energy executives. “It is very clear that this administration focuses on reducing energy invoices for consumers.”
Sometimes people sprayed 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 commercial policy,” said Jay Timmons, executive director of the National Association of Manufacturers, during breakfast near the conference. Many laughed when Mr. Timmons quickly returned to a more comfortable territory.
His commercial group has asked the White House more predictability and time to adapt to new commercial policies. Many manufacturers are grown by the increase in costs because they often depend on imports for pieces or raw materials and are concerned about tariff reprisals by other countries.
Ryan Lance, Executive Director of Conocophillips, one of the largest US oil and gas producers, said he saw 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 in the mind while thinking about what they are going to do on the side of the tariff,” Lance said. “Whether it exempts energy or not, I think it’s something that people should look.”
Trump has gone from one place to another in plans to tax the energy of Mexico and Canada. The United States depends largely in particular in Canadian oil, that refineries combine with domestic crude to make gasoline and diesel fuel.
Other executives were more optimistic about commercial policy.
“There is anxiety around tariffs,” said Abigail Ross Hopper, who leads the Association of Solar Energy Industries. “But it is not a complete panic as it was at the beginning of the first Trump administration.”
In 2018, during his first term, Trump placed a 30 percent tariff in imported solar cells and modules, which are the construction blocks for panels that convert sunlight into electricity.
Like other renewable energy leaders, Mrs. Hopper sought to frame her sector in terms that could resonate with the Trump administration.
“There is nothing unique in solar manufacturing,” said Hopper. “It’s as if you were making pencils. If no one needs pencils, then the pencil manufacturer will get out of the business. ”
Many energy companies have put their gaze on the reduction of barriers to obtain permits for pipes, electric lines and other infrastructure that can be very difficult to build in many places.
Alan S. Armstrong, executive director of a pipeline, Williams, said that price increases related to the rate paled compared to the costs and risks associated with permission.
“If we could pay 25 percent in the pipe to get permission, we would take that exchange all day,” Armstrong said.
Ivan Penn Houston contributed reports.
