U.S. Energy Secretary Rick Perry says there is ‘sheer optimism’ in the American energy industry, despite concerns about impending tariffs on steel and aluminum.
The optimism is in part due to the Trump administration’s effort to scale back regulations.
Energy companies have warned that the tariffs will negatively impact their business.
Concerns about trade wars, the future of NAFTA and impending steel and aluminum tariffs loomed over a major energy conference this week, but U.S. Energy Secretary Rick Perry said the overall tone in the energy industry is one of “sheer optimism.”
The Trump administration aims to encourage innovation in the energy sector by scaling back regulations, according to Perry. The prospect of a future bound in less red tape and the technology-driven surge in U.S. oil and gas production is what’s underpinning that optimism, in his view.
“It’s less concern than it is pure optimism. Everybody’s got concerns about their particular sector, whether it’s the utility guys or the infrastructure guys,” Perry told CNBC on the sidelines of the CERAWeek by IHS Markit energy conference.
“There are concerns out there. Don’t get me wrong, but the overall message here is one of just sheer optimism.”
Energy Secretary Rick Perry said the old reality of the energy sector is about regulation, while the new reality points to innovation.
To be sure, many energy executives at the conference said the growth in U.S. energy production is poised to continue as the industry adopts technology like data analytics and machine learning. And there was widespread support for a White House seen as slowing the Obama administration’s expansion of energy-sector regulations.
“The old reality was we’re going to regulate, and the new reality is we’re going to innovate,” Perry said. “And the innovation that’s coming out of the private sector, the innovation that comes out of U.S. Department of Energy national labs, working together, is a fascinating story about what American ingenuity can do.”
But the prospect of President Donald Trump’s anticipated tariffs on steel and aluminum have raised the hackles of many corners of the energy industry.
On Monday, ExxonMobil CEO Darren Woods told CNBC the tariffs could undo some of the positive impacts from GOP tax cuts and Trump’s deregulatory agenda. Siemens CEO Joseph Kaeser also voiced concerns when interviewed by CNBC at CERAWeek, though said the specific impact on Siemens business would be minor.
Pipeline players are particularly worried, given the reliance on foreign steel for many projects at a time when U.S. supply is booming. They warn that tariffs will raise costs and lead to a rush on U.S. metal supplies, potentially causing some projects to be delayed or canceled. Some analysts say tariffs will not have an outsized impact on the industry, because the price of raw steel is a relatively small part of overall costs.