Mixed reviews: Trump & Utah energy development

By Brice Wallace

While a few speakers at the recent Governor’s Utah Energy Development Summit were optimistic that a new presidential administration will result in a new day for energy development, others cast doubts about whether it can happen in four years, if at all.

The concerns of the latter group focused on whether President Trump’s policies will trickle down to the decision-makers at the regional office levels of federal agencies.

Among those expressing hope were Jack Gerard, president and chief executive officer of the American Petroleum Institute, and Gov. Gary Herbert. They told the 1,100 summit attendees that Trump could prompt several changes, including shifting decision-making power to states on energy matters.

Herbert was among several speakers who said they believe the Trump administration will have an “all-of-the-above” approach to energy development, with different types of energy being developed responsibly while also protecting public lands.

“We’ve had administrations that don’t want you to do anything as far as extraction in the energy development and other administrations have been more willing, in fact, to develop in certain areas,” Herbert said, adding that Interior Secretary Ryan Zinke has said he understands that the Bureau of Land Management’s charter calls for multiple use of federal lands.

Gerard said Trump’s early actions as president are helping redirect and reverse policies “that needlessly hinder domestic energy development.” Of Trump’s first 27 executive orders, six are tied in some way to energy, he said.

“He has signaled through his early actions a new direction for energy policy that embraces a true all-of-the-above approach based on respect for the role of market and what they play and do in the area of innovation … and on doing what’s best for the consumer,” Gerard said. “Few would have predicted our nation’s positive transformation just a short decade ago, which was achieved in the face of federal regulatory onslaught that frankly discouraged the development of fossil fuels.”

While oil and gas production on federal lands nationwide has dropped nearly 12 percent since 2008, increases of 82 percent were seen on state and private land. Between 2008 and 2015, the number of drilling permits on federally controlled onshore land were down 47 percent and the number of wells was down 68 percent. Meanwhile, private and state land saw oil production rise 156 percent and natural gas production increase 56 percent, Gerard said — “all of which demonstrates that this disparity is not due to geologic differences but due to political decisions that were made in Washington, D.C.”

“The [administration’s] executive orders’ goal to put the energy needs of America’s families and businesses first and continue implementing a plan that ensures energy security and economic vitality for decades to come is an important and significant shift in tone and direction from the federal government,” he said.

But at a breakout session, a few panelists said Trump’s talk now must translate to changes throughout the federal government. Former Wyoming Gov. Dave Freudenthal said the changes must “get down to not the sort of swamp level in D.C. but to the district offices” of federal agencies.

“It’s like the Depression [when] everybody ran around singing, ‘Happy Days are Here Again,’ only they really weren’t,” said former Wyoming Gov. Dave Freudenthal. “You had to wait for World War II.”

Freudenthal said he is hopeful, “but you have to see some matching actions to the rhetoric. Right now, they’re still chasing some shiny objects and litigating the last [administration]: ‘By god, we’re going to show them because we’ve got a new day.’ Well, we’ll know if it’s a new day when the BLM regional biologists and the BLM archeologists will actually approve an application for a permit to drill.”

Understanding the mechanics of government and integrating change “is the greatest challenge,” he said.

Freudenthal said he “loves the tone” of the new administration but believes “coercive federalism” is still in place because the agencies remain in place, as do courts and energy-related court decisions. “This stuff is there and it’s not going to go away,” he said.

Roxane Perruso, vice president and general counsel of Transwest Express LLC, agreed that “boots on the ground” in federal agencies will need to reflect administration policy in order for real change to occur.

“You can have all of these great policies and aspirations, but it doesn’t really matter until you get to how are they going to be implemented and are they really going to come down to the field offices and the forest supervisors and the people that are making those decisions?” Perruso said.

While Perruso said a shift from focusing on climate change and environmental regulations to looking at broader issues is occurring, she said agencies often act like their own kingdoms. The administration needs to look at altering agency structure and decision-making processes so that there is consistency among agency decisions, she said.

David Ludlam, executive director of the West Slope Colorado Oil & Gas Association, said agency personnel need to learn more about the industries they regulate and should move closer to where the issues are “and not have this very heavy, top-down approach like we’re seeing right now in Washington.”

Freudenthal suggested federal agency personnel be based at state headquarters. “Unless they get to that level, this revolution will be interesting, it will be a lot that people will feel good about, but we will not have changed the core ethic by which government operates,” he said.

One tricky element of change will involve states. They will compete among themselves about changes they want to see but nonetheless must develop a unified message for the federal government, he said.

States “need to come up with a cohesive vision because we have spent so much time defining ourselves by this singular notion of opposition,” Freudenthal said. “Actually, cooperative governing is much more difficult than unified opposition. … It’s going to be harder for us to get to that than it was for us to sit around and rail about the Obama administration.”

While “eight years of being the loyal opposition and despising everything out of D.C.” was a unifying principle, the question remains as to what happens with another political party in control of the federal government, he said.

The panel was not all doom and gloom. Ludlam said he has seen a noticeable change in “a fundamental sentiment” expressed in “Make America Great Again.”

People are discovering that building, shipping, manufacturing and industrializing things “is no longer something that you’ve got to be ashamed of to do, and it’s no longer something you just do when you have to,” he said. “It’s something that you celebrate.”