(The Center Square) – Energy policies included in the U.S. House budget reconciliation package represent a “significant shift in U.S. energy policy,” those in the Texas energy sector argue.
This is after the industry has expressed trepidation over Trump energy and tariff policies that created uncertainty in the market by driving up costs, reducing domestic output and dissuading domestic producers from investing in exploration and expanded production, The Center Square reported.
While the Texas oil and natural gas industry reported job gains in January and February, it reported losses in March for the first time in months as rig counts dropped, The Center Square reported. The industry slightly rebounded in April, according to the latest employment data, The Center Square reported.
Uncertainty in the industry remains due to federal energy policies and “numerous economic and geopolitical factors” that continue to impact domestic production and related investment decisions, the Texas Independent Producers and Royalty Owners Association (TIPRO) said. This includes Trump administration tariffs on steel and aluminum and encouraging OPEC+ countries to increase production, driving down domestic production and profits, The Center Square reported.
However, a positive development is a commitment to reversing Biden administration-era policies, TIPRO notes. This includes Congress prioritizing pro-energy policies in its budget reconciliation bill, referred to by President Donald Trump as one “big, beautiful bill.” The policies include expanding federal fossil fuel leasing, reducing royalty rates, streamlining the permitting process, repealing so-called clean energy incentives, refilling the Strategic Petroleum Reserve and delaying the Methane Emissions Reduction Program (MERP).
The proposals were included in the energy sections of the House Ways and Means Committee and House Natural Resources Committee packages, including prioritizing expanding fossil fuel production, TIPRO notes. The sections were included in the package before the House Budget Committee, which failed to advance it on Friday.
TIPRO and others have called for prioritizing domestic energy production, expanding critical infrastructure, including LNG ports and pipelines, protecting key tax provisions essential to the industry, among other priorities.
Included in the House package is a requirement for at least 30 oil and natural gas lease sales to be made on federal land and in the Gulf of America over the next 15 years. In Alaska, it requires six lease sales for Cook Inlet and authorizes leasing to begin in the National Petroleum Reserve and Arctic National Wildlife Refuge. It also reinstates quarterly onshore oil and gas lease sales, generating an estimated $12 billion in revenue, TIPRO notes.
House energy proposals also reduce royalty rates to 12.5% for onshore and offshore drilling, down from 16.67% and 18.75%, respectively, and put processes in place to increase permitting approvals for energy projects.
House Republicans also repealed provisions of the Inflation Reduction Act, including clean energy incentives that provided tax credits for electric vehicles and renewable energy projects. They also curtailed the hydrogen production credit and expired “technology neutral” clean energy credits by 2031, TIPRO notes.
The House proposal also allocated $1.5 billion to replenish the SPR and delayed MERP by 10 years.
“With the exponential growth in energy demand forecasted in the coming years, oil and natural gas will continue to play a dominant role, but we must have the right strategy in place to provide regulatory and economic certainty to our members for the benefit of our country and allies,” TIPRO President Ed Longanecker said.
With Texas continuing to lead the U.S. in oil and natural gas production, emissions reductions and job growth, “sound policies that support fair business practices and laws that keep our state competitive are necessary if Texas is going to continue to benefit from oil and natural gas activity,” Texas Oil & Gas Association President Todd Staples said.
This article was originally published at www.thecentersquare.com
