Oil Executives Fume as Trump Shakes Up Climate Rules Again

President Donald Trump has been busy reversing the Biden administration’s so-called climate policies from the moment he was sworn in.

He declared a national energy emergency, revoked the Biden ban on new LNG export capacity, and suspended some $300 billion in funding for transition projects in the country. With that, he has made one unlikely group angry: Big Oil executives.

The 47th president’s political agenda is nothing if not oil and gas friendly. In fact, oil and gas are among Trump’s top priorities, and he has wasted no time in making life easier for the industry players after four years of extra regulatory and political pressure under Biden. Yet oil executives’ apparent frustration with Trump’s reversal of Biden policies is unlikely and perhaps surprising on the surface.

Below this surface sits all the money that Big Oil invested in its own transition, under pressure, indeed, but quite a lot of money. The projects this money has been invested in may well become stranded assets now, in an ironic twist of environmentalists’ warnings that oil and gas fields are about to become stranded assets in a transitional world.

Reuters reported this week that some in the oil industry were unhappy about Trump’s withdrawal of the United States from the Paris Agreement. This is the second time Trump has done it and, again according to Reuters, it would jeopardize global efforts to reverse global climatic trends. Not only that, but the withdrawal would reduce the availability of cash for transition investment and confuse investors as the paths of the U.S. and Europe diverge.

According to the report, some executives in the energy industry believe that they could have a greater say over the energy transition if the United States is in the Paris Agreement. Yet industry players have more immediate priorities, and these have nothing to do with any climate pacts.

“While we prefer that the U.S. government remain engaged in the UN climate process, the private sector is committed to developing the solutions necessary to meet the energy needs of a growing global economy while addressing the climate challenge,” Marty Durbin, president of the Global Energy Institute at the U.S. Chamber of Commerce told Reuters.

There is a rather practical reason energy executives would prefer the U.S. government to remain engaged in the UN climate process: those transition investments. Every large oil company has been forced to devise a transition strategy in the recent past, and every large oil company has done so. They have been pushed to invest in low-carbon alternatives to their core products and they have invested, often heavily—and they have received subsidies to pursue these alternatives further.

Occidental Petroleum’s direct air capture plans are a case in point. The oil major back in 2023 bought a company developing technology that can suck carbon dioxide straight from the air. Oxy spent $1.1 billion on that purchase, eyeing a market that BloombergNEF said could grow into a segment worth $150 billion annually. And the Biden administration was shouldering part of the costs with subsidies. Now, these are gone, threatening the very survival of direct air capture—and more conventional carbon capture investments. No wonder Occidental’s chief executive approached Trump directly during a campaign event to argue the case for leaving IRA funding for carbon capture untouched. Oxy is far from the only one spending big on the transition and carbon capture. Exxon has also spent heftily on developing a carbon capture business.

“It’s critical that any conversation about addressing climate change must be global in nature, and also recognize that America is the world leader in both energy production and emissions reductions,” the president of the American Exploration and Production Council, Anne Bradbury, told Reuters.

Indeed, after so much money spent on transitioning, even partially, it must be frustrating for oil executives to be thrown back into an industry-friendly environment, positive as it is for their business. This is, in fact, the uncertainty that analysts—and industry executives—have been talking about for years. All industries like certainty, even if this is the kind of certainty that would affect their industry negatively, like Biden’s climate policies. They were harmful to oil and gas, but they were certain, so companies could take steps to mitigate the impact.

Now, with Trump, it’s back to normal, but companies could never know what would happen in four years, so they will be wary of reversing their current priorities too suddenly. The good news is that most of them are already walking back their transition targets after those targets proved quite unrealistic. Even European Big Oil is going back on transition promises after discovering these promises could not be fulfilled—not at a profit, at least.

So, what many hoped would happen during Trump’s presidency may indeed happen: Big Oil protecting its transition investments and pressuring Trump into not completely doing away with Biden’s climate laws, at least until there’s hard proof carbon capture does not make money, but loses money.