Energy Executives Anticipate Faster Drilling Permits Under Trump Administration
As the energy landscape shifts, industry leaders are optimistic about the future. A recent survey by the Federal Reserve Bank of Dallas reveals that energy executives expect a significant reduction in permitting times for drilling on federal lands under President-elect Donald Trump.
A Brighter Outlook for Energy Firms
The survey, which polled 134 energy firms in Texas, Louisiana, and New Mexico, shows a marked improvement in the overall outlook and activity levels in the final quarter of 2024. Uncertainty has decreased, and executives are looking forward to a more favorable business environment.
Pro-Business and Pro-Fossil-Fuel Production
Trump’s “drill, baby drill” campaign mantra has resonated with energy executives, who believe that the new administration will be more supportive of their industry. A third of those surveyed expect the permitting process to become significantly faster over the next four years. “We’re anticipating a decrease in regulatory compliance issues, thanks to an incoming administration that’s pro-business and pro-fossil-fuel production,” said one executive.
Energy Package on the Horizon
Trump’s transition team is set to roll out a comprehensive energy package, which includes the approval of export permits for new liquefied natural gas (LNG) projects and increased federal land and sea oil drilling. This move is expected to benefit hard-hit oilfield services firms, sparking a fresh wave of optimism for the first quarter of 2025.
Greenhouse Gas Emissions: A Divide Between Large and Small Producers
The survey highlights a significant gap between large and small producers when it comes to tackling greenhouse gas emissions. While nearly two-thirds of larger firms plan to cut methane and 86% aim to reduce the burning of unwanted gas, only 29% of smaller firms have similar plans.
Challenges Ahead: Weak Natural Gas Prices and Mergers
Despite the optimism, energy executives face challenges in the form of weak natural gas prices and mergers and acquisitions. Gas prices at the Waha Hub in West Texas fell into negative territory a record number of times in 2024, putting pressure on exploration and production firms. Additionally, mergers and acquisitions have hurt services firms, muting growth compared to the previous three years.
Oil Price Expectations
On average, respondents expect a West Texas Intermediate (WTI) oil price of $71 per barrel by the end of 2025, with responses ranging from $53 to $100 per barrel. Meanwhile, survey participants anticipate a Henry Hub natural gas price of $3.19 per million British thermal units over the same period.
As the energy industry navigates this new landscape, one thing is clear: the Trump administration’s pro-business stance is expected to have a significant impact on the sector.
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