Corporate tax cuts helped some businesses in
the energy sector, but President Trump’s trade war with China is causing
significant damage. The unpredictability of the Trump administration has also
effectively shut down capital markets, causing problems even worse than onerous
tariffs. And the idea of “energy independence,” touted for decades by numerous
administrations, is “kind of a fraud.” These are just some of the powerful
insights from a session at the 2019 HERWorld Energy Forum.
The panel, titled “The Energy Revolution in
the Era of Trump,” brought together three of the top experts in their areas of
- Hillary Holmes, partner in the Houston office of Gibson, Dunn & Crutcher, co-chairs the firm’s Capital Markets Practice and is part of its Energy and Infrastructure, Securities Regulation and Corporate Governance, and Mergers and Acquisitions practice groups.
- Bethany McLean is author of Saudi America: The Truth About Fracking and How It’s Changing the World. She was co-author of Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron, and serves as a contributing editor at Vanity Fair.
- Leslie Shockley Beyer is president of the Petroleum Equipment & Services Association (PESA). Earlier in her career she spent 15 years in Washington, D.C. serving in the Senate; multiple presidential campaigns; the White House, Executive Office of the President; State Department and Department of Housing and Urban Development.
Watch the Full Video of this panel here.
Here are a few highlights from “The Energy Revolution in the Era of Trump”:
"The fracking revolution has changed the world, but it relies on immense gobs of debt in order to fund it."
Bethany McLean, Journalist/Author
"There’s a real question if the capital dries up how sustainable the fracking revolution is," Mclean said.
"I don't think it’s going to cause a financial crisis. I don't think it’s going to entirely go away. But I think the mammoth gains and output that everybody is counting on may be more questionable or a little shakier than most people realize.”
“And the world is always a little more fragile and a little more interesting than we would all like it to be."
On Tariffs and the Trade War
“This administration has been kind of a mixed bag for the industry,” Beyer said.
"Corporate tax cuts have helped a number of our businesses, but the trade war, the ongoing issues with China, is really hurting a lot of our businesses.”
Leslie Shockley Beyer , PESA President
Trump’s steel and aluminum tariffs have
“significantly damaged some of our businesses,” she said. “I work with oil
field service companies and equipment manufacturers upstream, and it makes a
difference that the costs are rising with these tariffs.”
And the trade war with China “dramatically”
impacts upstream manufacturing and operations, Beyer said. “There are pieces of
equipment that are manufactured in China that our supply chains have developed
over years and years that we can’t get from other countries.”
“The unpredictability of the Trump administration has had an impact on the ability of oil and gas companies to raise capital, Holmes said.
“The capital markets have basically been shut down for the last seven months.”
Hillary Holmes, Partner at Gibson, Dunn & Crutcher
“The unpredictability is bad for everybody. It
would almost be better if we had certainty that there was this tariff at this
price, at this level, even if it was onerous, because then we could be the
creative, resourceful industry we are and work around it.
“But when we don’t know what’s going to happen, the capital markets shut down because investors don’t like unpredictability, they want certainty.”
On Energy Independence
For decades, presidents have touted the idea
of “energy independence,” McLean said. But “the more you think about this
concept the more you realize it’s kind of a fraud. If that’s what our policy is
based on, it’s insane.”
Oil prices are set by global markets, and “we’re completely enmeshed in events around the world,” she pointed out.
“Here we are patting ourselves on the back about ‘energy dominance’ while the world is transitioning to renewables.”
Bethany McLean, Journalist/Author
To hear how these three speakers responded to each other’s views -- and to hear stories of facing sexism in their careers -- join Pink Petro and watch the full video.