Last July 18 at the Republican National Convention in Cleveland, I noted that the market had begun a rally as it just considered the possibility of Donald Trump becoming President. It was dubbed the "Trump Rally." By now, no one can deny that the economy has shifted into a higher gear with President Donald Trump in the White House. Growth was a pitiful 1.6 percent in the last year of Obama and now it is growing at just above 3 percent since the beginning of the 2nd quarter of this year. The stock market and business confidence levels point to continued optimism for the future.
Why is it happening? President Trump is a pro-business president and he replaced a president, who I can say from first-hand experience and as one of the largest employers in the state of North Dakota, was most often a hindrance, not a help to American job creators. I believed then — and it is has proven to be true — there was a large amount of pent up potential for growth in America that could be realized. We are seeing that play out.
Nowhere is the Trump effect more evident to date than on energy policy. Early on, the Trump administration unleashed a new American energy renaissance by pursuing the nearly inexhaustible supplies of oil, natural gas and coal in this country. President Trump has called for "American energy dominance" in the years ahead, and that is a future that is highly attainable before the end of his first term.
"Democrats say that President Trump wants to cut taxes for the rich, but it would be more accurate to say that he wants to cut taxes so the economy can get its mojo back after 15 years of middle class stagnation."
Has anyone noticed what has happened with American mining and drilling jobs since the election? The latest job report has 60,000 jobs in the energy and minerals industry alone.
With the onset of horizontal drilling, America now has a more than 100-year supply of natural gas and a 500-year supply of coal. We are also on a trajectory to become independent for our needs on crude oil in this decade.
Natural gas is the cheapest, cleanest and most abundant fuel source in the world. It is now being liquefied and exported all over the world. On June 8, the White House permitted LNG shipments to the Netherlands and Poland — the first American LNG exports into northern and central Europe. This relieves Poland from being entirely beholden to Russian natural gas. These exports are also a part of the larger picture of U.S. energy independence. We are now past the point of the U.S. being energy-independent with natural gas. We are shipping around the world, and now with infrastructure being built and put into place, we will continue to export even more through time. This is just the beginning.
President Trump is, in no small part, responsible for turning the tap on for these exports. He wants to build out the American energy infrastructure rapidly and comprehensively. He wants more pipelines across the country to get American oil and gas to the more energy-scarce areas of the country. He wants refineries and he wants to modernize our ports so they can handle much larger volumes of exports.
President Trump has declared that he wants to free up millions of acres of federal lands for energy development. A study by the Committee to Unleash Prosperity estimates that the value of oil and gas and coal under federal lands could reach $50 trillion. Obama took energy lands offline, President Trump wants to bring them online, when it comes to non-environmentally sensitive federal lands.
President Trump's focus on promoting all forms of American energy production has substantial downstream benefits to almost every other industry. U.S. manufacturing is staging a big comeback in no small part due to cheap natural gas from shale. The U.S. has virtually the lowest electric power costs in the world today and what a competitive advantage for steel producers, chemical companies, auto manufacturers, high tech companies, and farmers. Those who say "go green," should look at how shutting down domestic fossil fuel use in Germany almost deindustrialized that nation a decade ago because of high energy prices.
The last piece to this great American energy renaissance is pro-growth tax reform. If we had a level tax playing field with the nations with which we compete, the 3 percent growth that President Trump has already elevated the economy to in his first year in office, could reach 4 percent or more in 2018 and beyond. Democrats say that President Trump wants to cut taxes for the rich, but it would be more accurate to say that he wants to cut taxes so the economy can get its mojo back after 15 years of middle class stagnation.
The Trump boom may just be getting started. But the key is for Republicans — and hopefully pro-business Democrats — to pass a meaningful tax cut this fall.
Commentary by Harold Hamm, the CEO and chairman of Continental Resources and the chairman of the American Leadership Council.
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