World Energy Blog

Trump Cabinet Picks, who’s on first, what’s on second, and I don’t know who’s running Energy.

12/3/2016 12:00:00 AM

One thing is certain, Trump is quickly assembling a team of advisors for his cabinet and there is no shortage of opinions, praise and criticism from the talking heads in the media.  The focus of the mainstream media has been the elevators in front of Trump tower and the constant interruptions telling us who arrived and who just left as if this really counts as news and gives us a clue as to who will be on “first”.

Some picks have been made and widely discussed.  Some of the more controversial are General James Mattis for Secretary of Defense and Jeff Sessions for Attorney General, perhaps Romney for Secretary of State.  However, when it comes to Energy we have only had hints on the posts that affect the industrial oxygen for our nation.

There are several posts that are critical to our industry, Secretary of the Interior, Secretary of Transportation, the Environmental Protection Agency and of course the Secretary of Energy. The combination of these is a very potent force within our industry and sets a tone for the administration going forward.

When thinking of Energy most focus on the Secretary of Energy, or more recently the investment bank of energy under President Obama.  The focus of this agency of late has been funding “green” adventures for friends of the White House and tapping down support for fossil fuels.  Under a Trump Administration this attempt to shape near term energy mix needs to change, think Solindra.

President Elect Trump has not given us any signals on an Energy head yet, most are betting on Harold Hamm, but at the head of Continental Resources, a company he built from scratch, which might be a tuff sell.  Others have suggested that former Governor Perry would be a good choice but we will have to wait and see.  Either way the incoming secretary needs to be thinking long term.  This agency has been focused in so many directions of late that it is beginning to look like NASA, one day we are going back to the moon and the next we are focused on temperatures on planet earth.  A long-term focus will set goals for our energy future and will let the market pick the winners and losers along the way.

One of the most important Secretary posts for the Energy Industry is for the Department of the Interior.  This agency rules over federal lands and our coastal waters.  Of late, this group has been focused on preventing resource development, but going forward we need to take a long-term view toward our land management.  We need to open those areas that can be safely developed and not get hung up on endless studies that don’t produce any meaningful result.  One contender for this post is a long Sara Palin.  However, she can be outspoken and her reputation was tarnished by her run with John McCain as his Vice Presidential candidate.  However, she has the experience with the oil and gas industry, the need to balance land management with resource development, and she is not afraid to push for production when oil companies would prefer to hold and wait.

“Push as much of the regulation to the local level as possible, level the playing field when it comes to energy production by equalizing the tax code, and set some longer term goals than trying to fund today’s shinny new toy” Jeff Johnson, CEO of EPUS Global Energy.  “Of late, the Department of Energy has really become it’s own Energy Investment Fund, and it was never intended to play that role.”

One agency that doesn’t get a lot of publicity but is very important for Energy is transportation and here Trump has made his pick.  In a surprise move he chose a government insider, Elaine Chao, a former Secretary of Labor under George Bush and a known entity in DC.  Her department will decide how our transportation fleet, our infrastructure and other consumers of energy will behave.  She will oversee drones, driverless cars, and hybrid technology.  Her department will ultimately decide on CAFÉ standards and a move toward electric cars.  We will have to see what happens here.

The other agency that counts is the EPA.  Candidate Trump claimed over and over again that he would reform this agency and rain in their over reach and heavy handed approach to fossil fuels, especially coal.  Whoever takes the reins here will need be ready to battle both the bureaucracy and the needs of industry.  Some very important decisions will need to be made here.  Of late the EPA has been heavily focused on battling carbon emissions, hence the heavy-handed approach to coal.  Under a trump administration hopefully we can return to a fight on pollution that matters and leave the climate to mother nature.  A focus on smog producing emissions, water pollution and waste disposal would be very refreshing.

With so much at stake, these agencies will need to be led by strong individuals that can get on the Trump agenda fast and not get caught up in politics as usual.  President Elect Trump should resist using these positions to feather the nests of supporters and continue putting people that he thinks will do the job.  However, at the end of the day, he does know how to say “You’re Fired” to those that don’t get the job done.