Energy Policy Under President Trump
I have always felt lucky that I have been around to observe so many diverse and important events in the course of human history during my lifetime. But just when you get around to thinking you’ve seen it all, the arena of presidential politics rears its unpredictable head.
By the time you read this, Donald J. Trump will have been inaugurated as the 45th President of the U.S. No matter what your political persuasion might be, one can’t help but marvel at the high drama of the election result that surprised almost everyone, as well as the sometimes farcical vaudevillian aspects of the campaign itself. From a multitude of Republican candidates, Trump secured his party’s nomination and then, against all the odds, managed to beat Hillary Clinton by gaining the required number of electoral votes.
All that is now history, and I started pondering what President Trump’s election would mean for basic energy policy in this country as we move into the future. I must confess surprise when Rex Tillerson of ExxonMobil was nominated to be America’s top diplomat as Secretary of State. Given his experience, I would have thought him to be a more viable nominee as Secretary of Energy. Nonetheless, then-President-Elect Trump nominated former Texas Governor Rick Perry to head the Department of Energy.
This is an area in which the Trump administration will probably make a rapid impact. My research on this topic led to three broad conclusions. The first is that those who concern themselves with the environment and regulate or legislate to protect it will have less say on energy matters in this administration than they did with the last one. The second is that alternative energy sources such as wind and solar will lose their favored political status and will garner support only in proportion to their contribution to supply in the energy matrix of the U.S. Thirdly, market forces, rather than regulatory ones, will have a greater role as to which types of energy will supply the U.S. population and its economy.
One of the first things to go may be the Clean Power Plan put forth by the Obama administration and the EPA in August 2015. This was touted as an “historic and important step in reducing carbon pollution from power plants,” but in February 2016 the U.S. Supreme Court stayed the implementation of the plan pending further judicial review. It’s possible this further review may become unnecessary, but it is likely the plan will not be scrapped in its entirety in an attempt to mollify the environmental lobby.
Somewhat related to this will be the possibility that some of the restrictions against burning coal in power plants imposed during the Obama years will be reduced or rolled back. This is good news for coal-producing regions and coal-burning utilities, but coal will be forced to compete under existing market conditions. This means it will be up against natural gas, which is cheaper now than when the coal restrictions were imposed.
President Trump campaigned on opening, or perhaps re-opening, more federal lands to energy development. If so, oil and gas reserves will go up, as will federal revenues from drilling leases and production, and increased reserves will help keep prices down. There may be some careful stepping required here because any serious environmental breach could be a publicity disaster for the Trump administration.
Obviously, the few items covered here only represent the basics of a far more complex energy policy dealing with many more detailed issues.
All we can do now is watch and see what changes occur and how they directly affect our industry.
Dean M. Peters, Editor