The oil industry actually hasn’t done that well under Trump

The oil industry’s fortunes have been withering on President Donald Trump’s watch, with dozens of oil companies falling into bankruptcy as weak crude prices take a toll on the sector he contends would be abolished if he’s not reelected.

Though some of those industry woes were emerging last year as companies grappled with a glut of oil, people in the business say they were made worse by the president’s trade wars and mishandling of the coronavirus pandemic. So far least 40 U.S. oil companies have sought bankruptcy protection in 2020 while dozens of others have slashed spending and cut tens of thousands of jobs.

Trump frustrated the industry last month by declaring vast swaths of shoreline off Florida and other states off-limits to drilling, an election-year reversal of his past promises to expand offshore production. And even one nominal bright spot for the industry — the administration’s aggressive rollback of regulations — has been so rushed and beset by legal challenges that Democrats may have little trouble reinstating the rules if they reclaim power.

“Three and a half years of rollbacks facing serious litigation ensures a lot of things are ‘to-be-decided,’” said Wayne D’Angelo, an energy lawyer and partner at legal firm Kelley Drye who has represented oil and gas companies and trade associations on federal environmental issues.

More fundamentally, oil and gas executives told POLITICO, the president doesn’t really understand their business — and his famously chaotic White House has set up a system where only a relative handful of favorite energy executives have access to people who can shape policy.

“I don’t think it’s one of these things where we as an industry get in a room and say, ‘Man that was a good four years,’” said one industry executive who requested anonymity because they were not authorized to give their opinion to the media. “It was more like ‘meh.’”

Added Stephen Brown, a long-time energy lobbyist, “It’s a mixed bag at best.”

POLITICO spoke with more than a dozen people tied to the industry — from oil executives in Oklahoma and North Dakota to lobbyists and lawyers in D.C. and Houston, some of them speaking anonymously to protect their relationships in an administration that may still be in power after the November election. While nearly all agreed that Trump’s supportive comments and corporate tax cuts were welcomed by the industry, they were nearly unanimous in also describing an administration that most felt has done little that will survive court challenges and even, in some cases, actively harmed their overall business.

Trump has certainly promised to boost the fortunes of fossil fuels. He’s bragged about record energy production during rallies with oil-patch voters in states like Pennsylvania and Texas, while taking credit for an April deal between OPEC and Russia aimed at propping up fuel prices as the pandemic sent demand plummeting. And after last week’s final presidential debate, he’s been trying to convince voters that Democrat Joe Biden plans to wipe out the oil industry if he wins the White House.

But along with the rising number of bankruptcies, the oil and gas sector’s debt has skyrocketed by a third to almost $180 billion. U.S. oil production has slumped by a quarter from record levels hit in the past year, nearing levels last seen during Trump’s first year in office. Exports of oil, which began during the Obama administration, have dropped. Energy analysts at Platts Analytics expect U.S. oil shipments — which the administration had cited as evidence of the nation’s “energy dominance” — will drop by about a third next year from 2020 levels.

In a symbolic indignity, the Dow delisted Exxon Mobil after more than 90 years to make room for software giant Salesforce “to better reflect the American economy.”

Though some of that pain stems from the pandemic, the industry was wobbling even before Covid-19 struck. Companies ended 2019 on a weak note, shutting down drilling rigs and laying off workers because of overproduction of oil.

Oil and gas companies, once among the world’s most influential, are confronting a new set of realities, with major players like BP and Shell forecasting a peak in global oil demand in the next few years as governments across the globe seek to build low-carbon economies to combat the rising threats from climate change.

Rising and falling fortunes

Despite the overall disappointment, many in the industry still say it’s a major victory having a backer like Trump in the White House.

“I’ve been in the business since 1982,” said Robert Blair, a staunch Trump supporter and chief executive of Comanche Exploration, an oil and gas exploration firm based in Oklahoma. “I consider this administration to be the most oil-and-gas friendly administration in my career. By a long shot.”

Technological advances had lifted the industry’s fortunes since the end of the George W. Bush administration: The U.S. became the world’s largest natural gas producer in 2011, as fracking unlocked the fuel trapped in shale fields in states like Texas and Pennsylvania, and took the top global spot in crude oil output from Saudi Arabia in 2018 after a decadelong expansion of that fracking technology to oil fields.

Like other powerful corporations, oil and gas companies also scored an unequivocal win from the corporate tax cut that the GOP-controlled Congress passed in 2017, which reduced the rates that companies pay on profits from 35 to 21 percent.

But the vast majority of industry players told POLITICO that the Trump administration overall hasn’t delivered the concrete benefits they had hoped for.