By Keith Reid
It’s official—Donald Trump will be the 45th President of the United States. After eight years of an extraordinarily aggressive energy policy that devalued fossil fuels in pursuit of aggressive climate change goals, and a Clinton administration that would’ve likely continued on the same path, a Trump administration almost certainly represents a significant change in direction.
I previously covered the differences between the two candidates in THIS Fuel Marketer News article. While he hasn’t been sworn in and has yet to name a cabinet, we can look to one of his more recent energy-related speeches to get a feeling for where the Trump administration will be heading with its energy policy. Of course no campaign promise is guaranteed, and even if he makes an aggressive effort toward all his initiatives, push back, much of it significant, can be expected.
On September 13, Donald Trump was the keynote speaker at the 2016 Shale Insight Conference. In addition to covering his general, business-friendly economic incentives, such as a significant reduction in excessive regulation and reducing the corporate tax rate from 35% to 15%, he detailed some of the energy-specific initiatives he had in mind.
Trump sees the energy sector as a central component to an American economic resurgence, and sees it playing out to all sectors of society. As he stated in the speech, “America is living on a treasure trove of untapped energy, some $50 trillion in shale energy, oil reserves and natural gas on federal lands in addition to hundreds of years of coal energy reserves. It’s all upside for this country; more jobs, more revenues, more wealth, higher wages and lower energy prices. I’m going to lift the restrictions on American energy and allow this wealth to pour into our communities.”
He remarked that according to the Institute for Energy Research, lifting the restrictions on American energy would increase gross domestic product (GDP) by more than $100 billion each year, while adding over 500,000 new jobs annually. Trump further anticipates a wage increase of more than $30 billion over the next seven years, an increase in state and local tax revenues by almost $6 trillion over 40 years and total economic activity by more than $20 trillion over the next 40 years.
Trump noted that the Obama administration had stonewalled various pipeline projects, including the Keystone XL, with notable negative financial impacts for American workers. In addition, oil and gas production permitting has been stifled. He promised to address both areas by being supportive instead of oppositional. For example, he called the permitting process a disaster and promised to streamline it. In addition, he plans on opening federal lands and offshore areas for increased oil and gas production.
He stated that currently less than 10% of the federally managed surface and mineral estates are leased for oil and gas development, and that almost 90% of America’s offshore acreage is off-limits to energy production.
Where fossil fuel projects are concerned, Trump cited The Wall Street Journal reporting that more than 12 fossil fuel projects worth about $33 billion have been either rejected by regulators or withdrawn by developers, with billions more tied up in projects still in regulatory limbo. He promised this will not be the case in his administration.
Where carbon taxes are concerned, Trump noted that the Democratic Party platform called for a price on carbon. “That’s just political speak for a massive new tax on coal and shale production—a tax on American consumers—and it’s very unfair to our country and it makes it very unfair and very uncompetitive to do business with other countries,” he said. He continued, “Every energy dollar that isn’t harvested here in America is harvested instead in a foreign country,” and often countries that are hostile to U.S. interests. Trump stated that this is not even environmentally sound, as many of these countries lack the environmental standards we currently possess today for energy production.
Trump went on to tie in how the energy sector can help revitalize other industrial sectors. In addition to the obvious link to petrochemicals, he saw light for the steel industry supporting our petroleum and general infrastructure development.
In what should be comforting news to biofuel supporters, he supports an “all of the above” energy policy. “Our energy policy will make full use of our domestic energy sources, including traditional and renewable energy sources—we want everything,” Trump said. In a dramatic departure from the Obama administration, everything now includes domestic coal. “We will end the war on coal and the war on our miners,” he said. “I will rescind the coal mining lease moratorium, which is a horrible moratorium and so unfair, and conduct a top-down review of all anti-coal regulations issued by the Obama administration.”
In addition, he promised to eliminate the Environmental Protection Agency’s (EPA’s) Clean Water Rule, which many see as an extraordinary power grab by EPA to gain regulatory control over vast areas of the country that touch even a marginal water feature.
Those who have strongly supported climate change initiatives for both ideological and financial reasons are understandably concerned about the ramifications of a Donald Trump presidency. He has been both skeptical of the science and ideology behind the climate change movement, as well as critical of the proposed solutions and their impact on America compared to other countries. Similar concerns were expressed by climate change activists over the United Kingdom’s vote to exit the European Union—BREXIT—and likely with good reason. To a great extent, the movement that elected Donald Trump is tied to the anti-establishment, anti-globalization movement that is heating up throughout the world. The impact of that movement on climate change initiatives is covered in greater detail in THIS Fuel Marketer News article.
Where U.S. climate change policy and regulation are concerned, Trump represents a potential sea change in policy. As I have pointed out previously, the degree of assumed inevitability in Washington for even the most invasive and costly climate change policies could easily be less certain than political, environmental and related special interests assume. Polls have shown limited popular resolve for green measures that are truly painful, and we are at a point where such measures are going to become noticeably more painful to the average citizen. And while there has been both political and industry support for these policies, this has been more top-down than bottom-up. The Trump win, as with BREXIT, represents the people challenging such conventions.
In the speech, Trump promised to eliminate the $5 trillion Obama Climate Action Plan and the Clean Power Plan. “These unilateral plans will increase our monthly electric bills by double digits without any measurable improvement in climate whatsoever—very unfair to our people and our workers,” he said. “I will refocus the EPA on its core mission of ensuring clean air and clean, safe drinking water for all Americans. That’s what we want. I believe firmly in conserving our wonderful natural resources and beautiful natural habitats. My environmental agenda will be guided by true specialists and conservation, not those with radical political agendas that are putting our country behind the eight ball.”
One could easily imagine a similar reversal with the range of regulation, such as Corporate Average Fuel Economy (CAFE) mileage standards or the developing Ozone Rule, which impact motor fuels.
