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Trump Talks Infrastructure in First State of the Union, But Not Energy

President Trump used his first State of the Union address Tuesday night to ask Congress to pass a $1.5 trillion infrastructure bill, but he only touched on energy issues.

During the 82-minute speech, Trump said his administration has "ended the war on American energy. And we have ended the war on beautiful, clean coal. We are now very proudly an exporter of energy to the world."

However, the remarks were a bit of an exaggeration. The United States remains a net energy importer, although the country is poised to become a net exporter sometime during the 2020s. The United States last year became a natural gas exporter for the first time since 1957, and it is projected to become the largest liquefied natural gas exporter by the mid 2020s.

The United States is a net coal exporter, but it remains a net oil importer.

The president also lauded his biggest legislative achievement to date, last month's passage of a comprehensive tax reform bill.

"We slashed the business tax rate from 35%, all the way down to 21%, so American companies can compete and win against anyone else, anywhere in the world," Trump said.

He later gave a nod to the country’s largest oil and gas company, ExxonMobil Corp., which on Tuesday “announced a $50 billion investment in the United States." ExxonMobil CEO Darren Woods tied the expansion plan, which includes tripling Permian Basin output, in part to the federal tax reform legislation.

Trump also touted how government regulations have been slashed.

"In our drive to make Washington accountable, we have eliminated more regulations in our first year than any administration in the history of our country," he said.

Although short on specifics, Trump called on Congress to "produce a bill that generates at least $1.5 trillion for the new infrastructure investment that our country so desperately needs." Such a bill would presumably include provisions for oil and natural gas infrastructure.

"As we rebuild our industries, it is also time to rebuild our crumbling infrastructure. I am asking both parties to come together to give us safe, fast, reliable and modern infrastructure that our economy needs and our people deserve," Trump said.

"Every federal dollar should be leveraged by partnering with state and local governments, and, where appropriate, tapping into private sector investment, to permanently fix the infrastructure deficit. And we can do it."

Days after slapping tariffs on foreign-made solar panels, Trump promised "to fix bad trade deals and negotiate new ones. And they'll be good ones, but they'll be fair. And we will protect American workers and American intellectual property, through strong enforcement of our trade rules."

The president also briefly touched on government accountability, asking Congress to "empower every Cabinet secretary with the authority to reward good workers and to remove federal employees who undermine the public trust, or fail the American people."

As an aside, Sen. Jim Inhofe (R-OK) brought Continental Resources Inc. CEO Harold Hamm as his guest to the State of the Union. Hamm served as energy adviser to Trump during his campaign for the White House.

Although Rep. Joe Kennedy (D-MA) did not mention energy issues at all during the Democratic response, he derided the Trump administration's "all-out war on environmental protection," a clear swipe at Environmental Protection Agency (EPA) Administrator Scott Pruitt.

"This administration isn’t just targeting the laws that protect us, they are targeting the very idea that we are all worthy of protection," Kennedy said.

Infrastructure Plan Stokes Energy Industry

The oil and gas industry welcomed Trump's appeal to Congress for infrastructure legislation.

CEO Don Santa of the Interstate Natural Gas Association of America, urged Congress to move forward with infrastructure legislation, and he reminded lawmakers that unlike other infrastructure projects, natural gas pipelines are financed with private capital.

"Natural gas pipeline companies are ready, and eager, to invest billions of dollars in infrastructure and can deploy this capital more quickly and efficiently if we have a rational, timely and predictable process for reviewing and permitting proposed projects," Santa said. "The current approval process has become clogged by delay, and therefore threatens the availability of private investment for future natural gas infrastructure projects."

Independent Petroleum Association of America CEO Barry Russell said the United States is a global leader in reducing carbon emissions, in large part because of the shale revolution. Faster permitting for natural gas infrastructure would provide several benefits, he said.

"With new pipeline infrastructure, additional carbon reductions can be made and can benefit communities across America," Russell said. He said "federal and state governments should work together, with energy producers, to promote policies that encourage American-made energy that's good for our economy, environment and national security."

American Gas Association CEO Dave McCurdy said "there are communities in our nation that have limited or no access to natural gas service and the comfort and affordability that it provides. Addressing our nation's infrastructure challenges would enable these communities to participate in the energy revolution that is helping us achieve our national goals of boosting our economy, protecting our environment and enhancing our national security."

American Petroleum Institute CEO Jack Gerard added that "private investment in our nation's energy infrastructure is a $1 trillion proposition that could support 1 million jobs per year through 2035. As the administration and Congress work on their plans to promote infrastructure, they should keep in mind the enormous benefits that promoting America's energy infrastructure would bring to our nation."

Executive Director Charlie Riedl of the Center for Liquefied Natural Gas said regulatory certainty was important for liquefied natural gas (LNG) exports, too. "Providing a clear path forward for the industry signals to project developers that the United States is the best place to make multi-billion dollar investments to help deliver clean natural gas around the world," Riedl said.

Natural Gas Supply Association CEO Dena Wiggins said it currently takes an average of four years for permits to be issued for natural gas pipeline construction. The permitting timeframe is "unnecessarily long," she said.

"We hope that Congress and the administration will work together on reforms to enable a timelier permitting system, so that American homes and businesses don't face needless delays in getting the reliable heat and electricity they need," Wiggins said. "Greater use of natural gas here in the U.S. and through LNG exports can yield tremendous benefits to our economy and environment, but these can only be realized without unnecessary regulations that slow infrastructure and responsible development."

American Energy Alliance President ticked off a list of accomplishments that he said had made it possible for Trump to declare an end to the "war on American energy,” including advancing the Keystone XL and Dakota Access oil pipelines; preparing to withdraw the United States from the United Nations global climate agreement; ordering the EPA to repeal the Clean Power Plan; andexpanding offshore oil and gas leasing.

Pyle urged the administration to consider ultimately rewriting Internal Revenue Service guidance for the Production Tax Credit (PTC). Although the credit is to be phased out, "lenient guidance written by the Obama administration allows the wind industry to exploit the credit. The PTC is but one way in which the war on American energy is far from vanquished. Year one of the Trump presidency has been a success, but we cannot rest until there is a level the playing field for all energy sources."

Environmental Groups Bash Speech

Environmental and other groups ideologically opposed to Trump accused the president of supporting fossil fuel development at the expense of everyday Americans.

Will Marshall, president of the nonprofit Progressive Policy Institute (PPI), which has ties to the Democratic Party, said passage of the tax reform bill by Republicans "will make it harder to tackle the infrastructure challenge.

"For example, House Republicans have proposed to kill the exemption for 'private activity bonds' that help leverage private investment in repairing and upgrading infrastructure. And if Republicans use revenues from repatriating overseas profits to offset the cost of their rate cuts, that money won't be available to finance the big infrastructure push we need," he said.

PPI strategic adviser Paul Bledsoe was more blunt. "Trump's infrastructure promises are lies, because he's given away all the money needed to pay for them," he said. "Democrats should propose rescinding the Republican tax giveaway to the rich and put forward middle class tax cuts and a robust U.S. infrastructure plan to benefit everyone."

Oil Change International spokeswoman Janet Redman said "calling this disaster of a plan simply an infrastructure plan doesn't do the nightmare justice. It's a ‘Make Big Oil Happy’ plan. It's a ‘More Climate Disasters’ plan. It's a ‘Taxpayer Dollars in Oil Executives' Wallets’ plan. It's a ‘Bankrupt Our Communities’ plan."

The Sierra Club stated that "Trump's takeover of the federal government has put corporate polluters fully in charge of virtually every major position of responsibility for protecting the public from health and environmental threats."

Rainforest Action Network spokeswoman Ginger Cassady took it a step further, citing an ongoing investigation into alleged Russian meddling in the 2016 presidential race, and alleged collusion between Russia and the Trump campaign. "We need to prepare ourselves for the fallout from the disastrous policies and precedents that this administration has been pushing forward if and when this administration comes to an abrupt conclusion," she said.

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