On 3rd February 2017 – just two weeks into an all Republican government – President Trump’s administration voted to overturn President Obama’s rule that sought to reduce methane emissions being released into the environment. Two weeks on and Donald Trump has made yet another declaration of regulatory reform in the Oil & Gas Industry.
Donald Trump has signed legislation to roll back anti-corruption rules for energy companies. The resolution, known as the Securities and Exchange Commission rule (SEC), came into force as part of the 2010 Dodd-Frank legislation, under Obama’s administration.
What is the Securities and Exchange Commission rule?
While in office, President Obama introduced a number of measures designed to improve transparency amongst oil and gas companies. This included the SEC rule requiring companies to disclose any payments made to foreign governments. It was put in place to fight corruption in resource-rich countries, instructing US companies to disclose the royalties and other payments that oil, natural gas, coal and mineral companies make.
Supporters argued that this disclosure could significantly reduce scope for bribery and corruption within the Oil & Gas Industry. However, critics claimed the regulation was an unnecessary intrusion into the finances of private oil and gas companies, putting US companies at a significant disadvantage to foreign competitors that did not have to comply.
Supporting small businesses
Trump’s administration called the SEC rule a “misguided federal regulation”. Press Secretary Sean Spicer argued it could inflict real cost on the American people and put US businesses, especially small businesses, at a significant disadvantage.
“It’s a priority for the Trump administration to fix our broken regulatory system so that it enhances American productivity and well-being without imposing unnecessary costs and burdens. Signing this joint resolution is one more step toward achieving this goal.”
The future for oil and gas companies
With a new president comes new policy and while this will benefit some industries, it will disadvantage others. The legislation put in place by President Obama was largely geared towards supporting energy suppliers of the future – solar, wind and other renewables. To date Donald Trump and his administration have been acting more in the interests of the oil and gas sector, most recently allowing the Dakota Access and Keystone pipelines to start construction. The Oil & Gas Industry is poised to benefit over the next four years with President Trump spearheading industry reform.
Read about Trump’s previous reform in the Oil & Gas Industry HERE