COVERAGE AREA and macrothesis

President Donald Trump cited his mercurial nature as a selling point during his campaign, so it may be more prudent to think in terms of “Trumpitude” (tendency) rather than “Trumpism” (fixed doctrine). Even so, several themes are emerging. Trump’s America First energy policy emphasizes economic growth, but manufacturing-sector priority suggests heavy industry could prevail when end-user priorities come into conflict with producer goals. The President appears to prefer the “little (big) guys” – independent producers and refiners – to international supermajors. He appears likely to judge energy policy using the metrics he applies to the broader economy: jobs created by his intervention and bilateral trade balances. His deregulatory agenda appears likely to eliminate supply-killers (e.g., access limits, performance standards, etc.) sooner than demand-killers (e.g., efficiency standards), adding to the importance of energy exports.

On the Hill, despite GOP control of both chambers, the Senate remains narrowly divided, and swift realization of an infrastructure package and tax reforms seems unlikely. Obamacare repeal via Congressional Budget Act reconciliation – a partisan parliamentary shortcut – could salt the soil of compromise, creating three alternative scenarios to Speaker Paul Ryan’s (R-WI) Better Way reform proposal: (1) “other way” reforms that go line-by-line through the code; (2) “look away” reforms (or tax cuts) that do not offset new outlays; and (3) “no way” (gridlock).

A comprehensive understanding of energy trends requires a look beyond supply and demand. The U.S. may not have any state-owned energy companies, but political leaders and regulators influence economic outcomes all the way from the mine mouth to the smokestack and from the wellhead to the gas pump. Our coverage looks at everything from macro-level political trends to politician-specific economic incentives. Our annual Energy Policy by the Numbers survey provides clients with our analytical tool set, including comprehensive, economic and political dashboards with state- and district-level granularity. We incorporate these tools into all of our research, including as-needed notes, reports and flash blasts regarding key U.S. policy or political issues. In addition, our quarterly Macro Energy Briefing for upstream investors tracks key themes, contextualizes recent developments and outlines our forward-looking projections of relevant economic and policy trends.