President Trump has wasted no time since returning to office, releasing dozens of Executive Orders (EOs) on his first day back in the White House on Jan. 20.
Various EOs are relevant to the propane industry. As global economics is a key market condition that will influence changes in the price of products like propane, here’s a breakdown of those announcements and their impacts on the supply chain industry.
The EOs which will be felt by the propane industry
Of the dozens of EOs released by President Trump, those which will grab the attention of businesses tied to the propane industry and their consumers in particular include actions to:
· Adjust the tariffs which affect the energy sector, with the aim to increase the competitiveness seen within both domestic and international markets.
· Declare an energy emergency, in which high energy prices have been put under the spotlight.
· Increase and streamline energy infrastructure and production domestically, by simplifying permitting processes and cutting down on the number of regulatory barriers.
· Promote energy choice and appliance neutrality, with the introduction of policies which aim to prevent favoritism toward a single energy source or appliance so to create a level playing field in the market.
· Reallocate federal grants which were previously only focused on electric vehicles, so that more opportunities can be created for the research and development of alternative energy initiatives.
How President Trump’s EOs could affect the propane market for the better
Another EO to take note of is President Trump signing one that establishes the National Energy Dominance Council, with a fact sheet on the official White House site detailing how this move can be a positive move for the United States.
Detailed as a means for “positioning American energy for the next century”, this EO looks to develop American energy resources in a way that will allow the nation to rely less on foreign entities.
According to another section of the fact sheet, “American energy dominance is the most reliable way to ensure the stability and affordability of American energy prices”.
Recent history should provide some comfort for how President Trump can empower energy production in the United States. After all, it was the first time in almost 70 years that the country became a net exporter of energy during President Trump’s initial term in the White House.
President Trump’s first term saw millions of acres of land across the United States opened up for the development of domestic energy, many new energy jobs created throughout the nation, and American families saving $2,500 on average per year when it came to their gas and utility costs too.
Speaking recently at the CERAWeek by S&P Global conference, Interior Secretary Doug Burgum acknowledged that the U.S.’ abundant natural resources significantly outweigh the $36 trillion debt.
In fact, the country’s 10-year long-term interest rate would decrease if financial markets were given the opportunity to understand the value of the U.S.’ natural resources.
Concerns in the propane industry about the EOs
There are some trepidations surrounding the introduction of these EOs though.
The National Propane Gas Association (NPGA), which is going to be working to make sure the EOs are implemented throughout each sector that the organization works in on behalf of the propane industry, had a pair of primary concerns.
As outlined by NPGA’s President and CEO Steve Kaminski, one of these concerns is the tariffs that will be placed on equipment and parts that arrive into the United States from across the globe to then be used by businesses in the propane industry.
Another concern of the NPGA is the tariffs on propane that is coming into the United States from Canada. This is because the association lists annual cross-border propane sales from Canada into the United States to amount to $1.9 billion, but a 10% tariff will work out at $190 million per year.
President Trump increasing tariffs on goods from China to 125% and Beijing imposing tariffs of 84% on U.S. imports has also led to speculation about how these moves may impact the U.S. propane industry.
As reported on by Reuters, industry insiders have commented that Chinese petrochemical makers, which currently purchase $11 billion of U.S. propane per year, look set to reduce output or shut for maintenance in the very near future because of tariffs on U.S. imports driving up costs.
Next steps for businesses and consumers
As propane has become one of the talking points following the announcement of President Trump’s EOs, businesses and consumers should investigate the benefits of using this gas without delay.
Start by evaluating your energy needs, bearing in mind that switching to propane can assist with many business operations and provide heating solutions around facilities. Getting in touch with a propane supplier will also help you to understand the cost-saving options of switching or expanding the use of propane.
