Why Is Big Oil Backing Clinton Over Trump?
As a general rule of thumb concerning Big Oil and heated presidential elections, the US oil and gas sector routinely donates to the Republican candidates, leaving the “greener” Democratic candidates out in the cold.
This year around, as far as energy money is concerned, Democrats and Republicans are changing places, largely due to their interesting candidate choices this time around Hillary Clinton and Donald Trump.
According to data collected by the Center for Responsive Politics, although the oil and gas industry has so far donated US$18.3 million to candidates with a clear-cut 96.3-percent preference for Republicans, Clinton has managed to raise US$550,971 versus Trump’s measly US$153,974. More than half of the industry’s donations this time around were splashed on previous players, most notably Republicans Jeb Bush ($9.7 million), Rick Perry ($1.6 million) and John Kasich ($1.6 million), all of whom have since thrown in the towel.
Consider Trump By a Landslide?
While it may not be surprising to see Clinton’s oil and gas money not even making the top 20 of her contributions by industry (unsurprisingly, securities and investments would be the number one contributor at $47.5 million), the paltry O&G contributions to Trump show that the industry doesn’t believe that America under his presidency “will accomplish complete American energy independence”.
On the contrary, Trump’s proposed wall is surely not sitting well with the big US oil companies which have seen that Mexico is an attractive investment destination since the US’ southern neighbor liberalized its energy market in 2014.
“Given Trump’s full-throated defense of domestic oil and gas production, one might think that CEOs in the oil and gas sector would be far more supportive of his campaign than they have been up to this point,” Jerry Taylor, president of libertarian think-tank Niskanen Center, says in an interview with Forbes.
However, Big Oil is reluctant to donate to the campaign because it considers Trump unfit to run the country and because his hostility to free oil trade potentially hurts company interests in the global oil and gas markets, Taylor notes.
The latter is likely of greater concern than the former, and this breakaway mentality has been the cause for many individuals to align themselves with Trump. This year, no conventional Republican candidate would suffice for the masses, despite Big Oil’s clear candidate of choice being Jeb Bush. It’s precisely this unknown element of Trump’s personality—his unpredictable and unconventional nature—that is supremely unsettling to major industry players.
Read also Trump vs Clinton: How Will Energy Fare?
Case in point—Trump’s flip-flopping remarks on fracking have unnerved the shale industry, even if Trump’s potential energy secretary appointee was said to be Continental Resources (NYSE:CLR) chief executive Harold Hamm.
Clinton, on the other hand, is being harshly criticized for supporting fracking abroad, but being much more reserved when it comes to projects at home.
So Big Oil is shunning Trump and putting a bit of money on Clinton, and energy groups are still uncertain how the Democrat candidate—if elected—would handle fracking at home, renewables subsidies, or new oil and gas exploration permits. Big Oil will likely be a loser with either candidate—it’s just a matter of degrees at this point.
Speaking of degrees, the latest CNN/ORC poll showed Trump leading Clinton by 2 percentage points, and what many analysts have called a sure thing for Clinton may now be a closer race than many thought possible.
Whoever does becomes the next US president will be a target of a group of independent exploration and production (E&P) companies, the Panhandle Import Restriction Initiative (PIRI), who plans to petition the President next year to cut US foreign oil imports.
The crude price downturn and the impressive US shale production call for restrictions on oil imports, the initiative’s chairman Tom Cambridge has told Rigzone.
In a memo to the initiative’s supporters, Cambridge wrote last month that OPEC is flooding North America with cheap oil, putting many small companies out of business. The US shale has also opened new reserves for the country, Cambridge argues, and supports a proposal to replicate Dwight Eisenhower’s 1959 plan to restrict the US oil imports to 10-12 percent of consumption. Eisenhower’s restrictions remained in force for 14 years.
According to figures from the US Energy Information Administration (EIA), some 24 percent of the petroleum consumed in the US in 2015 was imported. Although this is the lowest level since 1970, it’s clearly too much for the industry.
Even if such petition were to strike a sympathetic chord with a possible president Trump, he will probably have to see to the good fortunes of the big business first.
By Tsvetana Paraskova for Oilprice.com
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