Few industries are subject to change quite like the energy industry. Market conditions can fluctuate as quickly as the weather changes. Likewise, actions taken by companies within the energy sector are guided largely by political choices made at all levels of government, whether local, state, regional, national, international—or all of the above.
Given the current political climate in the United States, this lesson is clearer than ever. After this presidential election, the transfer of power is finally complete between the Obama and Trump administrations. There is much debate on a number of energy issues, both foreign and domestic.
President Trump has nominated former Texas governor Rick Perry as the head of the Department of Energy and former Oklahoma Attorney General Scott Pruitt has been confirmed as Administrator of the Environmental Protection Agency, an entity he sued over a dozen times as attorney general.
Sweeping changes are likely ahead for the energy sector on the heels of the 2016 presidential election. As such, it is more important than ever to educate yourself on current events within the industry. Staying informed about emerging trends and changing energy policies will help you to make smarter energy decisions for your business.
So what changes could we expect to see, in terms of energy policy, in President Trump’s first 100 days and beyond?
The basic premise guiding Trump’s energy policy is to increase America’s energy independence. His official energy plan, which can be seen in its totality here, stresses “energy policies that lower costs for hardworking Americans and maximize the use of American resources, freeing us from dependence on foreign oil.”
Trump aims to achieve energy independence by ramping up domestic energy production. In order to do so, it is likely that Trump will ease regulations in a number of ways during his first few months in office. He has outlined a plan that would expand leasing options for energy companies looking to extract resources on federal land, lift a freeze on the production of new coal mines and other regulations that can slow energy projects.
One of Trump’s first executive orders called for expediting the review and approval of infrastructure projects that are deemed to be in the national interest. This order was aimed at getting the proposed Keystone XL and Dakota Access pipelines approved at the Federal level.
Critics have argued that renewable energy is likely to take a backseat to fossil fuels in the Trump White House. However, Trump’s campaign proposal suggests that the two camps might have some common ground after all. If Trump views energy diversity as a matter of national security, as his proposal suggests, it is possible that he may give more credence to renewables than critics have suggested.
Also, the explosive growth of the wind and solar markets in recent years could provide Trump a chance to satisfy both sides of the aisle.
According to the Department of Energy’s “2017 Energy and Employment Report,” the solar industry now employs more Americans than oil, gas and coal combined. Not only has the renewable energy market become a critical pillar of the U.S. economy, but further investment could reinforce Trump’s stated goal of creating American jobs and reducing reliance on foreign resources.
While Trump looks for ways to reduce the amount of energy being imported, he’s looking to increase exports too. The U.S. has become a prominent producer of liquefied natural gas (LNG) over the past decade. Although the first exports to Europe were delivered only last year. It is likely that Trump’s Department of Energy may ease regulations for companies seeking to sell their natural gas in Europe. There is also long-term potential that Trump will revive a proposed natural gas pipeline project, which would cross the Atlantic to provide Europe with a steady supply of LNG.
Of course, the transition of power from President Obama to President Trump won’t be without conflict.
In mid-December, President Obama announced a permanent ban on oil and gas drilling in wide swathes of the Atlantic and Arctic Ocean. President Trump has also taken a different course from the previous President by enacting to resume construction of both the Keystone and Dakota Access Pipelines—both of which have been political lightning rods over the past several years.
Not much was known about President Trump’s energy policy heading into the 2016 election. Still just weeks into his presidency, however, Trump’s energy policy is beginning to come together. It remains to be seen what the coming weeks and months will hold. Although it is likely that we will continue to see plenty more changes in the energy sector. As such, keep a close watch of current events here on our blog to see how your business may be impacted.