The U.S. government's proposed regulatory rollbacks are not expected
to have much impact on the country's energy sector, global rating agency
Fitch Ratings said Wednesday.
The U.S.' President Donald Trump proposes to rollback regulations on the country's oil, natural gas and coal industries.
During his candidacy and after taking office in the White House, Trump promised to "unleash" an energy revolution in the U.S.
Although
he signed executive orders to remove some regulatory limitations on the
sectors, a comprehensive bill was not presented to Congress.
"The
proposed rollbacks and delayed implementations of a number of federal
environmental regulations should modestly benefit the cost structure of
parts of the U.S. exploration and production (E&P) industry," Fitch
Ratings said.
"However, this is likely to have only a small effect
on the E&P industry's activity levels in the short term, with
efficiency gains and hydrocarbon pricing continuing to be a much bigger
driver of overall activity levels," it added.
The rating agency
stressed that it would be economics of the industry, rather than
regulations, that would make an impact on the energy sector.
"Fitch
expects E&P capex and rig counts to increase markedly in 2017 as
regulatory change is not likely to be the principal driver," Fitch said.
"Rising capex and output should continue to be largely driven by efficiency gains," it added.
With
efficiency gains, American oil producers managed to increase the U.S.
production level up more than 10 percent from 8.47 million barrels per
day (mbpd) last October to 9.35 mbpd last week.
(Anadolu Agency)