Crochet, Kinder Morgan
As did many people throughout the U.S. and around the world, Earl Crochet sat up until the wee hours of the morning Nov. 9, 2016 to see who had won the presidential election. Most were astounded the Electoral College had determined Republican candidate Donald J. Trump would be the 45th president of the U.S.
“The next morning, we were discussing it, and most of the mainstream media were crying and moaning that the world would come to an end, the stock market would crash and the sun would stop shining,” he said. “But that didn’t happen, did it? We actually survived, whether we were a Republican or a Democrat.”
According to the Washington Post, candidate Trump made as many as 282 specific promises in his presidential campaign.
“If you’re a politician, whether it’s on a local school board or anything else, politicians are known to promise everything and deliver, normally, very little,” noted Crochet, director of engineering and operational optimization for Kinder Morgan Terminals.
However, just prior to passing the one-year anniversary of his inauguration, President Trump had signed approximately 52 pieces of legislation.
Discussing President Trump’s agenda thus far at the 10th Annual National Aboveground Storage Tank Conference and Trade Show held recently in Galveston, Texas, Crochet reviewed some of those promises and their future impact on the energy industry.
Promises made, promises kept
As President Trump and his White House staff often remind the press, the stock market is currently at an all-time high, consumer confidence is at a 16-year high, unemployment is at a 16-year low, food stamps are at a seven-year low, and more than 1.5 million jobs have been created.
“That’s a lot of jobs,” Crochet said.
Additionally, mortgage applications are at a seven-year high, and investments from major corporations including Foxconn, Toyota and Ford are on the rise.
In terms of defense, President Trump has also delivered on his promises to sanction Iran’s missile programs, change the rules of engagement against ISIS and reduce the production cost of Lockheed Martin’s F-35 Lightning II, a stealth-combat aircraft designed to perform ground attack and air superiority missions.
“The F-35 is at a reduced cost,” Crochet said. “I guess that’s good if you’re a taxpayer, but maybe not if you work on the F-35 program.”
President Trump has also signed executive orders aiming to promote energy independence and economic growth.
“Regardless of your political affiliations or leanings, the chief executive signing an order doesn’t really do a whole lot,” Crochet said. “He also signed an order that said companies in the United States should only use American steel for new pipelines. But of course, if you’ve already bought the steel, that doesn’t really matter. And if there is no steel to be had, that really doesn’t matter.”
Other promises Trump has kept include implementing part of a travel ban, a rollback of President Barack Obama’s Cuba policy, reducing the White House payroll and donating his salary to nonprofit organizations.
“The salary of the president of the United States is, like, 400 grand a year. If you’re a billionaire, that really doesn’t matter,” Crochet said. “Does that really do anything? No. Is it a nice gesture? Yes.”
Climate and controversy
To the dismay of environmentalists, Trump followed through on his pledge to remove the U.S. from the Paris Accord, an agreement within the United Nations Framework Convention on Climate Change. Likewise, he also promised to unwind the Obama Administration’s Clean Power Plan.
“That’s pretty much what killed the coal industry,” Crochet said.
On the other hand, Trump prioritized his promise to reduce regulations many believe impeded business.
“One of my favorite signings of executive orders is cutting two existing regulations for every new rule introduced,” Crochet said. “If you’re a typical, all-around operator, you don’t like regulations. If your job is to deal with regulations in the industry or in government, maybe you do like regulations.”
U.S. industry will be bound by fewer net regulations within the next three years or so, Crochet predicted. “For our industry, that’s a really good idea,” he said.
Trump also announced in January offshore drilling off the coast of the U.S. (Florida being the exception) and drilling in the Arctic National Wildlife Refuge (ANWR) would become a reality.
“It is estimated that 65 billion recoverable barrels of oil are around the United States that they haven’t found,” Crochet said. “So all of a sudden, offshore is looking pretty good not only for the oil companies but also for people who make the rigs and people who make the steel who make the rigs; there’s a trickle-down effect.”
Long-term impact on energy
One of candidate Trump’s most impassioned promises was to bring back coal and steel jobs.
“Whether you’re a Democrat or a Republican, it doesn’t matter who’s in office. The president himself cannot do that,” Crochet said. “But you can make a case that he can influence that by doing some regulatory things or by pushing things in the right direction. Have there been more steel and coal jobs since the election last year? The answer is yes.”
Coal-burning in the U.S. is subject to “all kinds of regulatory stuff to make it clean,” Crochet said. “I can assure you that most other countries throughout the world don’t burn their coal nearly as environmentally friendly as we do. If you’re really a worldwide environmentalist, it would be better for you to burn your coal here, where we take care of it.”
Coal, because of regulations, could have “some new uptick to it,” he said.
“Is it going to come back like it was, or would I encourage my young grandchildren to get into the coal business? No,” Crochet said. “Coal is still a piece of the puzzle, but is it ever going to be dominant again? I don’t think so.”
The U.S. steel industry, he said, has been “going downhill for a couple of generations now,” but he added if infrastructure improvements occur or if the wall at the Southern border is built, “there’s a possibility it could pick up.”
Trade, infrastructure, SCOTUS and the future
Though candidate Trump promised to reduce the U.S.’s ongoing trade deficit, it has continued to climb in his first year in office.
“All that means is we’re buying more foreign stuff than they’re buying from us,” Crochet said.
Trump also promised to renegotiate the North American Free Trade Agreement (NAFTA).
“Have we renegotiated NAFTA? The answer is no. Are we talking about it? Yes,” Crochet said. “Will that help or hurt? It depends. The economy is not necessarily a zero-sum game.”
The Trans-Pacific Partnership is another trade deal Trump promised to pull out of.
“That one is also in the works,” Crochet said.
However, promised improvements to U.S. infrastructure have been unaddressed so far, Crochet admitted.
“According to the American Society of Civil Engineers (ASCE), the average infrastructure grade in the United States for roads, bridges, etc. is a D, so there’s lots of room for improvement,” Crochet continued. “Many of our roads are inadequate for the kind of traffic in any big city. And you’ll have lots of bridges that fail.”
The electrical infrastructure in the U.S. is also woefully inadequate, Crochet said.
“Unfortunately, infrastructure can cost a lot of money, so we need more tax base, which most people don’t want,” he said. “But it would be a boon to lots of industries.”
Candidate Trump also said he would approve Keystone XL and Dakota Access pipelines.
“Did that happen? Yes, it did!” Crochet said, adding there have been some core challenges with Keystone.
“Several natural gas projects were shut down recently, and in this cold weather, people have been running out of gas,” he said. “People who are getting cold and hungry are all of a sudden thinking that natural gas pipelines might be a good idea.”
President Trump also signed a new bill to cut taxes, as promised.
“You can do all the stereotypical ‘the average family of four will save X amount of dollars,’ but the reality is this: The major part of the tax cuts bill was not on a personal level,” Crochet said. “Corporations do not pay taxes; people pay taxes.”
But as many as 2 million people will receive bonuses directly tied to tax cuts, Crochet said.
“An extra $1,000 in their pockets doesn’t matter to some people, but for a lot of other people, it does,” Crochet explained. “Does it have an effect? Yes, because people spend it and it goes right back into the economy.”
Perhaps the most significant of Trump’s kept promises is his pledge to nominate a conservative as justice to the Supreme Court.
“With any luck, there will be an opportunity to appoint another one,” Crochet said. “In the long term, a conservative Supreme Court is more pro-business, more pro-energy.”
While he is optimistic President Trump’s legacy will be remembered as favorable to business, Crochet admits that forecasting the future is at best a risky enterprise.
“Forecasting is the art of saying what will happen and explaining why it didn’t,” he said. “It’s like predicting the weather or predicting anything. If you really want to predict something, flip a coin. You’re going to be right half of the time, and that’s probably better than most predictions.”
For ongoing industry updates, visit BICMagazine.com.
