Energy, the Global Economy & Veterans

AICC, through its membership in the Council of Manufacturing Associations, is pleased to present the "Top Takes on Manufacturing, Politics and Policy” from the NATIONAL ASSOCIATION OF MANUFACTURERS (NAM).

Top Headlines:

• “Hundreds of IRS employees are skipping work. That could delay tax refunds.” (The Washington Post, subscription)
• “Trump won’t soften hardline on China to make trade deal: advisers” (Reuters)
• “Republican urges Trump to ‘jump start’ infrastructure push” (Roll Call)

The Shutdown and the Energy Sector

Will the government shutdown soon cut into oil and gas production? While many federal government operations that affect the industry are still chugging along, for now, some in the energy sector are worried that this state of affairs will end soon... because the shutdown looks like it won’t.

The Houston Chronicle takes a look (subscription). Here’s what the government is still doing:

• “While most of the Bureau of Land Management is closed, the agency says it continues to issue permits for oil and gas drilling on federal land. And under the Bureau of Safety and Environmental Enforcement’s shutdown plan, it will continue to inspect offshore oil rigs in the Gulf of Mexico.”

However:

• “Even as permits for near-term projects are issued by skeleton staffs at federal agencies, the harder work of assessing the effects of future projects on the environment, Native American sites and wildlife has come to a virtual halt within government offices, industry officials and attorneys say.”
• “The Bureau of Land Management has yet to delay any [federal] lease sales, with a big sale in Wyoming scheduled for next month. But Dan Naatz, senior vice president of government relations at the Independent Petroleum Association of America, said he wouldn’t be surprised if they were delayed.”
• “‘It’s that uncertainty that can really cast a long shadow as you’re trying to make investments, especially for our smaller companies,’ he said.”

And meanwhile, certain important operations have been shut down:

• “The U.S. Department of Transportation’s Maritime Administration, which oversees the permitting of deep water oil and natural gas import and export terminals, has been closed.”
• “That has put at least three proposed crude oil export terminals along the Gulf Coast in limbo, including an export terminal south of Galveston developed by Houston pipeline and storage terminal operator Enterprise Products Partners.”
• “Also, the Trump administration’s efforts to repeal Obama-era environmental laws has ground to a halt during the shutdown.”
• “With the Environmental Protection Agency closed, no employees are reviewing the thousands of comments on the administration proposal to rewrite regulations limiting methane regulations from oil and gas wells or to work on a proposal to roll back a sprawling water protection regulation.”

Here’s the latest from Washington: the Senate will vote this week on two bills that would end the shutdown, neither of them likely to succeed. Chance of further shutdown: 98 percent.  

But as they say, it’s tough to make predictions, particularly about the future. For a more optimistic view, you might want to watch yesterday’s CNBC interview with Carlyle Group’s David Rubenstein, where he predicted the shutdown will end “relatively soon.” 

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