What President Trump's Deregulation Means for Energy in 2017

May 05, 2017 - "Press Releases"

In any election year there are significant policy and regulatory changes. There is either a push for more regulation or less. New administrations push for new taxes or new tax cuts. The change is not unexpected nor irregular. However, the pace and aggressive nature of deregulation under the Trump administration is making history.

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As these deregulations roll out economists and energy experts are all asking the same question, “What will this mean for business?”.

The answer, unsurprisingly, is complex.

Analysts cannot forecast all of the effects of these policy changes in a tidy report. Instead, we are left with a few broad suggestions for what these may mean for America’s energy leaders as the year unfolds. Here are few items to keep in mind as we march through quarter two.


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Deregulation Emphasizes the Importance of Agility


Moving with precision without slowing down has always been a sign of a strong company in the energy sector. It now is a sign of survival.


With deregulation comes a host of changes that affect hiring, bidding, distribution channels, and partnerships. Energy leaders that wish to remain at the top must take a hard look at both internal processes and external relationships to determine how the changes will affect their bottom-line. Lean management is no longer a nice option but a necessity as rules are cut and lines are a bit grayer. Expect competition to increase as barriers to entry dip.


Deregulation Doesn’t Devalue Consumer Perception


 Deregulation of this size has left many consumers unhappy.


As a result, the skepticism around the energy sector remains high. And as Pepsi just showed the world, consumer perception matters to a brand in any industry.


As energy leaders around the country begin to grapple with the deregulation they should understand the people they’re looking to hire, service, and partner with. Profit is not a four letter word, but driving them at the expense of employees, environmental concerns, or social push-back could have consequences for the energy sector.


As energy executives strategize the best way to leverage Trump’s deregulation, look for the company exceptional at balancing free market benefits with sincere appreciation for the resources (human and environmental) they are using in their efforts.


Deregulation Could Offer New Revenue Streams


During an interview last quarter, Executive Director at Michigan Aerospace Manufactures Association, Gavin Brown, predicted that under the new administration defense spending may include more private contracts. America’s defense is an especially popular talking point as Russia and Syria continue to make waves on Pennsylvania Avenue.


And defense carries a large (over $6 billion) appetite. Given President Trump’s rapid response to the events in Syria, one can argue that the defense appetite is only growing. All of these events, paired with the staggering deregulation efforts of the current administration make Gavin’s predictions seem more relevant each day.


Defense is an umbrella that offers opportunity in everything from aerospace to material processing. The savvy executive will have a pulse on private sector opportunities that did not exist under old regulations.


We’ve yet to see the full ramification of deregulation on the energy sector. But as Oil City Iron Works CEO, Eric Myers, has said, “It’s not happening in a tidal wave, but it is coming.” How leaders and strategists handle these changes in policy will determine whether the books bleed red or black this fiscal year.


Looking for more regulatory and policy predictions? Learn more here.









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