Trump Highlights Energy and Trade in State of the Union Address

Image courtesy of the White House

By The Maritime Executive 02-06-2019 02:02:26

In his annual State of the Union address last night, President Donald Trump highlighted his administration's priorities and achievements in energy, trade and infrastructure. 

"We have unleashed a revolution in American energy — the United States is now the number one producer of oil and natural gas anywhere in the world," Trump said. "And now, for the first time in 65 years, we are a net exporter of energy."

Thanks to technical innovations pioneered by small, independent oil companies, previously untapped "tight oil" resources locked in shale formations have become highly profitable for drilling and extraction, even at low oil prices. Mature fields in Texas' Permian Basin are the centerpiece of this "shale revolution" in onshore oil: production from the Permian has skyrocketed, rising from 1.0 million barrels per day (bpd) to 3.8 million bpd over the past seven years. Permian Basin producers are sending so much oil to seaports on the Gulf Coast that they are hitting the limits of current pipeline capacity, and the resulting export boom has changed the balance of America's international energy trade.

In a statement after the president's address, Secretary of Energy Rick Perry called for a focus on reducing regulatory hurdles in order to maintain the momentum on energy production. "Continued American leadership in energy will require that we come together to reduce burdensome regulations and invest in vital national infrastructure projects," said Perry. "In doing so, we can keep delivering affordable, reliable energy more securely, cleanly and efficiently, while creating jobs and increasing opportunity here and around the world."

The National Offshore Industries Association (NOIA), the voice of the offshore oil and gas community, called for the Trump administration to open federal waters to drilling as part of its energy strategy. The rollback of regional restrictions on leasing activity is one of the Department of the Interior's top policy priorities. "The Draft National Offshore Oil and Gas Leasing Program [would] maximize access to federal offshore areas," NOIA wrote. "The eventual Final Program, if fully realized, could create hundreds of thousands of new jobs, generate billions in new federal, state and local revenue and deliver affordable and reliable energy produced here in the U.S."

Trump did not discuss climate change, carbon emissions or renewable energy in his address, but his political opponents in Congress highlighted the challenges and opportunities posed by a changing climate before and after the speech.  

Tariffs and trade

The president also discussed his administration's sweeping changes in trade policy, including the renegotiation of the North American Free Trade Agreement, the new tariffs imposed on foreign aluminum and steel, and the growing trade war with China. 

We are now making it clear to China that after years of targeting our industries, and stealing our intellectual property, the theft of American jobs and wealth has come to an end. Therefore, we recently imposed tariffs on $250 billion dollars of Chinese goods," Trump said. "I have great respect for President Xi, and we are now working on a new trade deal with China. But it must include real, structural change to end unfair trade practices, reduce our chronic trade deficit, and protect American jobs."

In a response, the National Retail Federation called for an end to the trade war with China, and asked Congress - including the Democrat-controlled House - to "restore" its role in setting trade policy.  

“We commend the president for his efforts to restore balanced trade relationships, and we hope the U.S. and China will continue to move toward a deal and avoid further escalation. Achieving structural reforms, ending existing tariffs and putting an end to the trade war would provide much-needed certainty and relief for American businesses and families, said NRF president and CEO Matthew Shay. "We encourage the administration to continue to focus on the end goal, and for Congress to restore rather than further neglect its role in trade policy."


Trump also called on Congress to work together with his administration on an infrastructure funding package. "Both parties should be able to unite for a great rebuilding of America's crumbling infrastructure," he said. "I am eager to work with you on legislation to deliver new and important infrastructure investment, including investments in the cutting edge industries of the future. This is not an option. This is a necessity."

The American Association of Port Authorities, which represents the interests of America's seaports, called on the government to include waterborne transportation in an infrastructure bill.

“AAPA looks forward with great anticipation to an infrastructure package this year that focuses on America’s transportation investment needs, including land and waterside  connections to ports," said AAPA president and CEO Kurt Nagle. "We’re also hopeful for legislation that includes AAPA’s long-term funding solution to end the decades-old dilemma of Harbor Maintenance Tax underspending and inequitable funds distribution."

The American Petroleum Institute also highlighted the need for federal infrastructure investments to sustain growth in the energy sector. "Investing in 21st century energy infrastructure remains critical to meeting that demand by safely and reliably delivering affordable natural gas and oil to America’s families and businesses. We look forward to working with the House, Senate and the administration to develop a strong infrastructure package that addresses our country’s growing energy needs," API said in a statement.