The presidential changeover was clear on Wall Street.
Natural gas stocks, like EQT, soared in the five trading days after Donald Trump won the presidential election. Meanwhile, clean energy stocks, such as Houston-based solar company Sunnova, fell 34% in the same period.
Investors are bracing for a federal government likely to roll back aid for clean energy projects and to ease regulatory pressures on oil and gas companies, said Dan Pickering, chief investment officer for Pickering Energy Partners.
“There’s clearly pluses and minuses, and most of the pluses stack up on oil and gas, and most of the minuses are stacking up on clean energy,” Pickering said.
Here’s a deeper look at some of the biggest likely winners in the state’s oil and gas industry in the new Trump administration.
LNG developers
On the campaign trail, Trump promised to undo a freeze on export permits for multibillion-dollar natural gas facilities implemented by the Biden administration earlier this year. The freeze was put in place to allow time for a review of climate impacts from the facilities. Lifting it could help more natural gas export projects proceed — a boost for the companies trying to build these liquefied natural gas projects.
The LNG industry became a key target for climate advocates in recent years as the industry boomed because of overseas gas shortages ignited by the war in Ukraine.
While the Biden era pause had no impact on fully permitted projects already under construction, it threw a wrench in a long, costly process for others that were already years into the development of multibillion-dollar gas export projects.
Commonwealth LNG: Houston-based Commonwealth LNG’s marquee project in Louisiana had been nearing the regulatory finish line when the pause took effect in February. Commonwealth had already been waiting more than a year for the Department of Energy to approve its export permit after the Federal Energy Regulatory Commission greenlit the project in November 2022.
Port Arthur LNG: a “phase 2” expansion of Port Arthur LNG under development by Sempra Infrastructure, California-based Sempra’s Houston subsidiary, and Aramco, Saudi Arabia’s state-owned oil company, was near the regulatory finish line before the permitting pause. Sempra CEO Jeffrey Martin said Wednesday, during an earnings call following the election, “we have growing confidence” that the project would receive federal permits early next year, according to a transcript provided by Capital IQ.
Lake Charles LNG: Energy Transfer’s Lake Charles LNG had an export permit under review with the DOE when the pause took effect, throwing the project into limbo. Energy Transfer’s Co-CEO Marshall McCrea said during an earnings call last week that Trump’s win offered the “rational, reasonable” leadership necessary to advance the Louisiana project, according to a transcript provided by Capital IQ.
NextDecade, the Houston LNG company whose construction permit was struck down by a federal court in August, also appears to be getting a boost from Trump’s win as it tries to build its marquee project in Brownsville. Its shares jumped 7% in the five days since Trump won. NextDecade CEO Matt Schatzman said last week in a statement the company is “committed to taking any and all available legal and regulatory actions” to keep the project on budget and on time.
Gas producers
With more export facilities moving forward along the Gulf Coast, there will need to be more natural gas to feed them. That means demand for more natural gas, extracted from shale-producing regions in Texas and Louisiana and piped into massive facilities that super-cool the gas into a liquid, making it easier to export overseas.
Investors appeared to be anticipating this increase in demand as shares for natural gas companies jumped following the election. In addition to EQT’s double-digit share growth, shares for Expand Energy, previously known as Chesapeake Energy, jumped 7% in the five days after the election.
Oil companies of all sizes
Trump’s picks for key regulatory agencies affecting oil and gas companies are likely to be friendlier to the industry, easing the way for these companies of all sizes.
Former U.S. Rep. Lee Zeldin, Trump’s pick for the nation’s top environmental regulator, said Monday on X that he would help unshackle the nation’s energy industry. “We will do so while protecting access to clean air and water,” he said.
Trump is expected to roll back Environmental Protection Agency initiatives that would have limited methane emissions from oil and gas production, as well as reduce federal environmental regulations across all fronts — a win for small oil and gas companies that feared costs related to the new rules would sink their companies.
The president-elect is also expected to open up access to oil and gas drilling on federal lands and waters, providing more opportunities for big oil companies such as Chevron, BP and Shell operating offshore in the Gulf of Mexico.
Additionally, big oil companies eyeing mergers that could trigger Federal Trade Commission review also have less to fear under Trump, who is likely to pick an FTC leader who is friendlier to the industry. This could clear the way for a megamerger like Shell merging with BP, which has been recently rumored.
Texas Railroad Commission
The purview of the Texas Railroad Commission, which regulates oil and gas, is expected to grow as Trump’s EPA is likely to grant the agency the right to permit carbon dioxide storage wells. The commission has been waiting since August of last year for EPA approval — seen within the industry as crucial to speeding up development of carbon capture projects.
Trump’s plans to diminish the role of environmental agencies also means less friction for the Texas oil and gas regulator, which has pursued litigation against Biden era regulations in the oil patch. The commission encouraged Texas Attorney General Ken Paxton to challenge a federal endangered species listing earlier this year that threatened oil production. The commission also asked Paxton to sue over the EPA’s methane rule.
Trump has promised to cut funding for federal environmental agencies responsible for the federal policies that the commission disagreed with, ensuring smoother sailing.
“The easiest and quickest way to decimate regulations is just to get rid of the cop on the beat,” said Tyson Slocum, director of Public Citizen’s Energy Program. “You can have a speed limit school zone in your neighborhood; if you’ve got no traffic cameras and no police officers to enforce it, it doesn’t mean anything.”
‘Zombie wells’
An EPA review that might have resulted in policy changes addressing a rash of so-called “zombie wells,” or wells that should be plugged but are coming back to life and spewing toxic water, is less likely to move forward under Trump’s administration.
Researchers predicted in a July study that more zombie wells are coming. Regulators may not be able to stop the current onslaught, but an EPA review could apply pressure and expertise to a costly, complex problem that appears to be confounding Texas regulators.
The EPA began reviewing the Railroad Commission’s management of oil and gas wastewater in response to a March petition from environmental groups concerned about wastewater injection, which has been tied to a recent rash of zombie wells.
However, if Trump carries out significant cuts of the EPA, the diminished agency is less likely to intervene in state affairs, said Virginia Palacios, executive director of the nonprofit advocacy group Commission Shift, whose petition prompted EPA review.
“We certainly know that the Trump administration has set a goal of eliminating the EPA and other key federal agencies, and so there’s not much standing in the way of the oil and gas industry and the worst environmental outcomes from their activities,” Palacios said.
Source: By Amanda Drane from