Trump’s latest executive orders may be burdensome for oil

NEW YORK – Oil-services giant Halliburton told employees to stay put. An oil trade group is concerned by the proposed border tax. Another global oil company is reconsidering whether to place a crude trader in Houston. And universities that train energy workers across the country estimated that hundreds of students may be affected.

Of all the energy sectors that may feel the pain of President Donald Trump’s executive orders, including temporarily banning people from seven majority-Muslim countries and raising border tariffs, oil and natural gas companies -- industries he vowed to help during his election campaign -- stand to be hit the hardest. On Monday, energy companies led declines in the Standard & Poor’s 500 Index. The American Petroleum Institute said Tuesday it was "concerned" by Trump’s border tax adjustment.

“Oil and gas is going to have the most heartburn from this,” Michael Webber, deputy director of the Energy Institute at University of Texas at Austin, said by phone Monday. “Other parts of the energy sector, like the electricity sector, are more domestically situated with its workforce and its assets.”

Just last week, Trump said during a speech that he’d work to “unleash the full power of American energy.” On Monday, energy companies -- from oil and gas explorers to electric utilities -- withheld comment while working to assess the impact of his immigration order on their businesses.

BORDER TARIFF
A separate order that would impose a border tariff on Mexican goods may hurt refineries that use imported crude, according to Jack Gerard, president of the American Petroleum Institute, a Washington trade group representing the oil and gas industry.

“We’re continuing to do an analysis and we’ll be working with the leaders on the Hill once we figure out its broader implication," Gerard said.

Meanwhile, Halliburton warned workers not to travel to the US if they are from any of the countries named in Trump’s order, including Syria, Iraq, Iran, Sudan, Somalia, Yemen and Libya.

For a look at how the judge who blocked Trump’s order turns immigrants into citizens, click here.

“The company is notifying employees of these nationalities that travel to the U.S. is inadvisable during the travel restriction period,” Lawrence Pope, Halliburton’s executive VP of administration and chief human resources officer, said in an e-mail to employees.

The four worst performers in the S&P 500 at 4:36 pm New York time on Monday were oil and gas companies. The S&P Oil & Gas Exploration and Production Select Industry Index was down 2.9 percent Monday. The index fell 0.3% as of 3:58 pm Tuesday.

San Ramon, California-based Chevron Corp said in a statement Monday that it’s still reviewing the White House’s executive order, adding that it “values the contributions” of all employees, regardless of their countries of origin or religion.

Monday was “a reversal of the initial trade that was based on the idea that Trump would be a traditional Republican, and that his anti-immigration and trade restructuring promises were just to get elected,” Bill O’Grady, chief market strategist at Confluence Investment Management in St Louis, which oversees $6.1-billion, said by telephone.

Energy companies may think twice about basing jobs in the US, said George Stein, MD of New York-based recruiting firm Commodity Talent. Stein said he knows of one “international oil company” that’s already reconsidering posting a new crude trader in Houston.

Another unintended consequence: The countries targeted by Trump’s ban may end up retaliating by refusing to work with US oil and gas companies, according to Webber. Supervisors in Houston could be prevented from visiting employees and clients in nations affected by the executive order, he said.

Iraq’s parliament has already urged its government to bar US citizens from entering the country in response to Trump’s entry ban. Halliburton and Exxon Mobil are among US energy companies that do business there.

Trump’s ban could have long-lasting consequences for the next generation of US energy leaders, Webber said.

Massachusetts Institute of Technology, Stanford University, University of Texas at Austin, University of Houston and  Texas Tech University -- all of which run programmes that train energy professionals -- have a total of almost 700 students, faculty and scholars from the countries listed in Trump’s ban.

TRADE GROUPS
MIT said Monday that two of its students are stranded abroad and barred from reentering the US University of Texas at Austin and University of Houston were among those that advised affected students to refrain from international travel.

“If the best students in the world aren’t joining the American workforce,” Webber said, “‘then they will go somewhere else.”

Major US energy trade groups had yet to take a stance on Trump’s immigration order on Monday.

The American Fuel & Petrochemical Manufacturers declined to comment, and Edison Electric Institute similarly didn’t have a statement.

ELECTRICAL WORKERS
Neal Kirby, spokesperson for the Washington trade group Independent Petroleum Association of America, said it’s not taking a position and that the impact on the group’s members would be “a company-by-company-specific” situation. Similarly, the American Petroleum Institute’s companies are handling that individually on a company-by-company basis, Gerard said.

Mark Brueggenjohann, a spokesperson for the International Brotherhood of Electrical Workers in Washington, said the group doesn’t know how many of its members may be affected by Trump’s order because it doesn’t collect information by nationality or religious affiliation. United Mine Workers of America spokesperson Phil Smith said the union hasn’t seen an impact on its members.

Trump’s order did not spur queries by members of the American Exploration & Mining Association, spokesperson Devon Coquillard said. Newmont Mining, one of the world’s biggest gold miners, said it was still evaluating whether individual employees would be affected. Miners Freeport-McMoRan and Barrick Gold and aluminium giant Alcoa Corp declined to comment, as did steelmakers Nucor and US Steel. 

Equipment suppliers Caterpillar and AK Steel Holding did not respond to requests for comment, and neither the American Iron and Steel Institute nor the United Steelworkers union provided comment. 35% of the 441 000 people working in animal slaughtering and processing are immigrants, according to data compiled by the Migration Policy Institute. Many refugees work in the meat packing and dairy-farm industries across the US, said Eskinder Negash, senior VP at the US Committee for Refugees and Immigrants in Washington. During peak season, California’s farming industry collectively employs about 400 000 and relies “fairly heavily” on foreign-born workers, according to Bryan Little at the California Farm Bureau Federation.