But more privately, many of those same multinational energy companies were worried about Trump keeping another one of his campaign promises: to rip up the North American Free Trade Agreement, the trilateral trade pact that underpins the work of oil majors across the continent.
“There was genuine concern,” said Joshua Zive, an energy lobbyist at the law and lobbying firm Bracewell.
Now, with a new agreement hammered out between the United States, Mexico and Canada, the sector is finally breathing a sigh of relief.
Count the oil and gas industry among the winners of the new NAFTA — or as Trump is rebranding it, the United States-Mexico-Canada Agreement, or USMCA. The oil business convinced the White House to keep a number of features of the old NAFTA deal in the new agreement, including provisions that help protect U.S. oil companies' investments abroad and allowed for tax-free transport of raw and refined products across borders.
“We're mostly happy that it's been preserved, that many of the provisions in the original NAFTA that had supported the integrated North American energy markets are still in place,” said Aaron Padilla, senior adviser for international policy at the American Petroleum Institute, the nation's biggest oil and gas lobbying group.
Among their biggest concerns was the preservation of a system of resolving international trade disputes called “investor-state dispute settlement,” or ISDS.
Under ISDS, multinationals can sue the governments of nations in which they work when those states issue new regulations. The system has attracted critics both on the left for derailing anti-pollution efforts and on the right for eroding U.S. sovereignty.
Trump's trade negotiators looked at the legal system with skepticism, too. The final deal does limit ISDS, but with a few key exceptions. Oil and gas is one of only five economic sectors, including telecommunications and transportation, to keep ISDS in the crucial Mexican market.
The oil lobby regards that carve-out as a key victory given the investment that multinationals have made there since Mexico opened its oil and gas fields to foreign drilling starting in 2013. Foreign oil companies were booted from Mexico 75 years before then. Now BP, Chevron, ExxonMobil, Shell and Total have all won leases there that could have been jeopardized had Trump torn up NAFTA.
Keeping that arbitration system intact in Mexico was a “higher priority” than doing so in Canada, Padilla said.
Environmental critics, never big fans of the original NAFTA for including ISDS, were quick to criticize the new agreement as more of the same and to note the deal “makes no mention of climate change,” according to Charlie Cray, a political and business strategist for Greenpeace USA.
While Cray said the deal “includes improvements” to ISDS, he added: “Any provisions that give big polluters a way to hold governments over a barrel are unacceptable.”
In another victory, USMCA, like NAFTA before it, would prohibit tariffs on raw and refined oil and gas products, such as gasoline sold by U.S. refiners in Mexico. The deal would also reduce tariffs on a special thinner that helps heavy Canadian crude from Alberta and Saskatchewan flow more easily through pipelines to refineries in the United States.
For the past two years, as a potential NAFTA renegotiation loomed, API and other oil-sector trade groups pressed their case with the White House, the U.S. trade representative and Congress to keep key parts of the pact.
By September of last year, the oil lobby became more publicly vocal about its concerns with ending NAFTA. If the negotiations are not “handled appropriately,” API then-president and chief executive Jack Gerard told reporters at the time, “I think all of us, including those of us in the oil and gas industry, are going to have to look long and hard at the situation.”
GOP leaders in Congress took up those concerns as well. Senate Finance Committee Chairman Orrin G. Hatch (R-Utah) and House Ways and Means Committee Chairman Kevin Brady (R-Tex.), made clear to the White House that eroding investor protections abroad may lose the new agreement the support of some congressional Republicans.
The new trade pact is not a done deal yet. The Senate still needs to approve the renegotiated North American trade pact before it takes effect.
At least for now, the oil industry just appreciates that tense trilateral talks are over.
“The energy industry in North America was desperate for stability,” Zive said. “It can't be stated how important it is to move out of the contentious stage of negotiations.”
|You are reading The Energy 202, our must-read tipsheet on energy and the environment.|
|Not a regular subscriber?|
— EPA to loosen radiation limits: The Environmental Protection Agency is looking to ease current regulations on radiation, and the agency is arguing that a little bit of radiation exposure may actually be good for you, the Associated Press reports. “The government’s current, decades-old guidance says that any exposure to harmful radiation is a cancer risk,” per the report. “And critics say the proposed change could lead to higher levels of exposure for workers at nuclear installations and oil and gas drilling sites, medical workers doing X-rays and CT scans, people living next to Superfund sites and any members of the public who one day might find themselves exposed to a radiation release.
— Door revolves again: The EPA named a former Koch Industries chemical engineer to serve as the deputy chief of the agency’s Office of Research and Development, the Courthouse News Service reported. David Dunlap will replace Richard Yamada for the role, which does not require Senate confirmation, after Yamada left the job last month without explanation, per the report.
— Trump administration ends law enforcement program on wildlife refuges: The U.S. Fish and Wildlife Service told employees last month that national wildlife managers would be stripped of their law-enforcement capacity along with their firearms, according to an internal memo obtained by Public Employees for Environmental Responsibility. An agency retiree told The Hill, which first reported the story, the change would lead to “lots of violations, wildlife violations as in over-bagged hunting areas, damaged fences, signs, roads and all kinds of damage to the environment.”
— Bill re-upping LWCF moves forward: The Senate Energy and Natural Resources Committee on Tuesday voted to advance a bipartisan bill to reauthorize the Land and Water Conservation Fund, which had expired as of this week. It was the second time in three years Congress had failed to reauthorize the fund. But the bill, led by Sen. Maria Cantwell (D-Wash.), the top Democrat on the committee, would permanently authorize the fund by making $900 million in funding for the LWCF mandatory every year. The bill was approved Tuesday on a 16-7 vote with support from 11 Democrats and five Republicans.
But as seen in the tongue-in-cheek tweet below from the office of Sen. Lisa Murkowksi, the committee's chair, reporters were a bit more interested in talking to the Alaska Republican about Judge Brett M. Kavanaugh:
— Climate change forcing changes to insurance industry: The business and finance world is beginning to calculate the price of the warming globe, and as concerns about rising temperatures increase, some premiums may go up, too. “Insurers are at the forefront of calculating the impact,” the Wall Street Journal reports in a new series. “For the most part, insurers are acting on climate change by building models that aim to better estimate the impact. That leaves the industry with the tough question of how to reflect in premiums the new understandings of the underlying risk… For most insurers, rates aren’t rising—yet. A flood of capital into the industry from pension and hedge-fund investors, driven by low interest rates, has increased competition and pushed down property-catastrophe reinsurance prices in the past decade.”
— A dearth of climate-focused campaigning: Despite record wildfires and floods this year, climate change seems barely a blip at all in campaign messaging for candidates for the House and Senate. “The vast majority of Democrats and Republicans running for federal office do not mention the threat of global warming in digital or TV ads, in their campaign literature or on social media,” the New York Times reports. “Environmental activists and political scientists say it is a reflection of the issue’s perpetual low ranking among voters, even Democratic voters."
— It’s been a freakishly nice fall in Alaska: The nation's northernmost state is seeing uncharacteristically sunny, warm and dry weather this early autumn, The Post’s Jason Samenow reports. "While a warming climate is known to bring harmful effects to Alaska’s infrastructure, food supply and way of life, this particular weather pattern is an example of how climate change might occasionally support some beneficial effects," he adds.
— Saying nope to OPEC: A Senate Judiciary subcommittee on antitrust issues is set to hear testimony Wednesday regarding a bill that would change antitrust law and allow the United States to sue the Organization of the Petroleum Exporting Countries. Chances of passage for the bill, called the No Oil Producing and Exporting Cartels Act or NOPEC, were once thought to be a long shot but “may have increased" due to Trump's frequent criticism of OPEC in recent months, Reuters reports.
— The road ahead for Tesla: The company announced it had met its production goal for the third quarter, making 53,239 of its electric Model 3 sedans. The car is a “key element of the company’s plans to turn an annual profit for the first time,” The Post’s Hamza Shaban reports.
— Exxon is reportedly thinking of selling its Gulf assets: The nation's biggest oil company is looking into the potential sale of its assets in the Gulf of Mexico, a move prompted by high prices, Reuters reports. “Major oil companies have been looking to concentrate development operations in a few key areas,” per the report, and ExxonMobil "is focusing on promising acreage in offshore areas such as Guyana and Brazil and onshore in the Permian basin of Texas."
- The Senate Committee on Environment and Public Works Subcommittee on Superfund, Waste Management, and Regulatory Oversight will hold a hearing on the EPA's implementation of sound and transparent science.
- The Energy Department and Carbon Utilization Research Council will hold an event on fossil energy technology on Thursday.
— This swampy, brown map sums up September in the eastern United States: "There are very few positive ways to describe the month of September," writes The Post's Angela Fritz. "It was hot, steamy, oppressive and smelly. The mud was never-ending. The mushrooms are still growing. The most generous thing I can say for the month is that it’s finally over."