When President Trump got into White House, many thought, a new fossil fuel era has begun. The Obama days, where environmental issues led the decision-making process, were over.

The industry was elated, for, it had been strongly supporting Donald Trump as a candidate. It had money and it bet on him. Finally, with Trump in the White House, their own man was at the helm.

Initial days matched the expectations. Rex Tillerson, the ExxonMobil veteran was inducted as the Secretary of State. Scott Pruitt, ‘a leading advocate against the Environmental Protection Agency’s activist agenda’, was named to head EPA, the very agency he had been fighting for years.

The approval of the Keystone Pipeline was one of the first few major decisions, the new administration had taken.

All this was music to ears. Even the Saudi Oil Minister Khalid Al-Falih expressed his appreciation for the underlining tilt; the world needed fossil fuel for decades and new investments in the sector need to be promoted, and not discouraged.

But the honeymoon seems over!

There have been reports in past months that despite being the Secretary of State, Tillerson is not on very good terms with Trump. And that the chasm between the fossil fuel industry and the Trump administration, is growing.

The oil and natural gas industry are running into a rough patch with President Trump, Amy Harder wrote. Trade tariffs, ethanol and issues with offshore drilling are causing the two to drift apart, she said, and that the conflict is escalating.

“Now that Trump has carried out tax reforms, he’s going to be doing things more unilaterally and the concern levels are starting to rise,” Bob McNally, president of the consulting firm Rapidan Energy Group and former adviser to President George W. Bush, was quoted as saying.

The tension threatens to override Trump’s positive rhetoric and regulatory rollbacks. Today’s conflicts are more wide-ranging than last year’s main battleground.

Trump seems set to impose steep tariffs on steel and aluminum imports. This is a cause of concern to the industry. Many now believe that it would be a big defeat for major oil and gas companies that have been lobbying hard against such penalties.

They say tariffs will raise pipeline costs because there’s not enough domestic steel available.

Interior Secretary Ryan Zinke’s surprise decision to remove Florida from the draft offshore drilling plan, also faced a lot of criticism from the energy camp. This was an early 2018 stumble for the Trump administration, Harder underlined.

Gas producers openly opposed Energy Secretary Rick Perry’s, now failed, proposal to boost coal and nuclear plant revenues, fearing it could undercut their fuel’s advantage in power markets.

The administration also seems caught in an endless firestorm over a federal ethanol mandate.

The policy, which Congress first passed in 2005, required refineries to blend increasingly large amounts of biofuels, mostly corn-based ethanol, into the nation’s gasoline supply.

The president has been consistently expressing support for the policy, which provides jobs in the political battleground and corn-rich Iowa.

The intensity of the fight grew in the wake of a newly announced bankruptcy at a Philadelphia refinery, which is blaming the mandate for its financial woes. The development is pitting Trump between his ethanol allies in Iowa and blue-collar refinery jobs in Pennsylvania, another key political state.

The energy industry is also worried about changes the administration is endeavouring to make to the North American Free Trade Agreement.

Recent reports say that a provision allowing investors to sue countries for alleged discriminatory practices are being scrapped as part of negotiations. This is a cause of concern to the industry. The provision, known as investor state-dispute settlement, is critical to encouraging American companies to keep investing in Mexico’s burgeoning oil industry, industry lobbyists told Axios.

Eliminating it, “would stifle access to capital because people would be unwilling to underwrite transactions if two sides aren’t bound by a common understanding of how you resolve differences,” Scott Segal, a partner at Bracewell, a firm whose clients include pipeline developers and oil refiners, told the press.

“This administration says it wants energy dominance, but its policies on trade and a number of other issues indicate otherwise,” one oil industry official was quoted as saying.

A barking dog never bites, the old idiom says. Is it true of the present administration? Let’s wait and see.

Published in Dawn, March 4th, 2018