Donald Trump promised sweeping reforms to the energy industry during the campaign. He vowed to bring back coal jobs, boost domestic oil and gas production, while repealing climate change regulations and gutting the Environmental Protection Agency. Essentially, his plan aims to reverse much of what the Obama administration delivered on energy and climate in the last eight years. Now that Trump is the president-elect, how much of that will he actually be able to do? These are some of the biggest challenges President Trump is likely to face on the energy front:
A shovel digs coal at Cloud Peak Energy’s Antelope mine. June 2, 2016.
Bring Back Coal Jobs
After Trump’s victory, coal company stocks surged.
But there is broad agreement that his bold claim that he will bring back coal jobs is unlikely to be fulfilled. President Trump may staunch the bleeding, but he will not be able to restore this sector of the American economy.
In recent years, natural gas has been coal’s biggest enemy, as fracking unleashed vast reserves that sent prices tumbling to record lows, making natural gas-fired electricity cheap. Hundreds of coal-fired power plants have been converted to natural gas plants, or been shut down and replaced. Once those plants are closed, they typically don’t reopen, and there are currently no new coal-fired power plants in the pipeline. Still, there will likely be some kind of emissions regulations imposed on the power sector in the future. In their long-term planning, which goes far beyond Trump’s presidency, utilities will probably continue to hedge their bets against coal.
Trump could have some influence on the regulation front, but repealing existing regulations would be difficult, and drawn out. He could, however, easily lift the federal government’s three year moratorium on coal leasing on federal land, as well as end the federal government’s recently announced efforts to strengthen regulations that ensure companies, not taxpayers, are on the hook for cleanup costs. The former would not do much for the coal industry’s bottom-line, since companies operating on federal land already have decades worth of coal under lease, and have shown little interest of late in leasing more. The latter could have some impact, but many of the biggest would-be beneficiaries are currently subject to court-ordered agreements that likely wouldn’t allow them to take advantage of any regulatory changes.
Emily Guerin
The Milton R. Young Station in Center, North Dakota burns coal from the mine next door.
Rescind Clean Power Plan
Trump has pledged to rescind the Obama administration’s Clean Power Plan, an EPA rule aimed at reducing carbon emissions from existing power plants. That plan would have accelerated the move away from coal-fired power plants. It is currently on hold while the courts consider legal challenges. If the plan is upheld, there are a number of legal or congressional actions that the Trump administration could take to gut or repeal the plan. If the plan is struck down by the court, the administration could simply not defend it. Either way, the plan is almost certainly dead.
There are numerous reports that Trump has selected a noted climate change skeptic, Myron Ebell, to head up his transition plans for the EPA. Ebell has called the Clean Power Plan illegal. Trump has also pledged to scale back the EPA and reduce its regulatory functions.
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The “Seine” meeting hall at the Paris climate summit.
Backing Out Of Paris
In addition to the Ebell pick, Trump is putting together a transition team dominated by fossil fuel lobbyists and climate change skeptics. His cabinet picks are reported to include a host of prominent Republicans who have consistently fought the Obama administration’s climate actions. He has called climate change a hoax and has promised to pull out of the Paris Climate Accord. In Morocco, where negotiators are meeting this week to hammer out the details of implementing the accord, Trump’s victory was met with deep concern. According to Dana Fisher of the University of Maryland, quoted in the AP: “The Paris Agreement and any U.S. leadership in international climate progress is dead.”
On a conference call organized on Wednesday afternoon by the environmental group World Resources Institute, a number of climate activists expressed cautious optimism that the Trump administration would come around to accepting the science of climate change and the economics of clean energy. It was optimism leavened with fervent hope. Andrew Steer, President and CEO of WRI, opined that the U.S. has played a “major leadership role of the last four years” in climate change initiatives. “We wouldn’t have Paris without U.S. leadership,” he said, “we are hoping and praying the U.S. will not relinquish this.”
Although technically simple for Trump to effectively withdrawn from the Paris Accord, he will likely face immense pressure from other countries, including China, not to do so.
Andrew Cullen
A pumpjack works throughout the night, bathed in the light from flares and electric lights on oil well pads near Watford City, North Dakota, which also illuminate low-hanging clouds.
Making Oil And Gas Great Again
The oil and gas industries come out clear winners with the Trump victory. He has vowed to lift regulations and has spoken clearly in favor of more exploration and production, both onshore and offshore. Trump has promised to open up all federal lands to fossil fuel production. He is likely to roll back regulations on methane emissions in oil and gas production as well as new fuel-economy standards for cars and trucks. The Trump administration could also fast-track liquified natural gas (LNG) export terminals and new cross-border oil and gas pipelines.
Oil executives were giddy with the Trump victory. The Washington Post quoted Stephen Brown, vice president of government relations for Tesoro, who predicted that obstacles and “procedural hurdles” to infrastructure projects like pipelines would be reexamined and regulations about the social cost of carbon and other environmental impacts would be “gone.”
Still the industry faces its own challenges that no President can solve. Record production in the Middle East and the United States has left the market overflowing with crude oil, which in turn has pushed down prices significantly. Trump’s plan to boost production even further would only exacerbate the problem and keep prices lower for longer.
Amy Sisk / Inside Energy
Police guard protesters arrested for refusing to leave a camp on private land along the Dakota Access pipeline route.
The Dakota Access Pipeline
Trump is a fan of pipelines and all energy infrastructure. He has promised to ask TransCanada to renew its application for the Keystone XL pipeline, an infrastructure project rejected by the Obama administration. If the controversial Dakota Access has not already been built by the time Trump takes office, he is likely to push its construction through. Trump himself has investments in the company behind the pipeline, Energy Transfer Partners.
Currently a lawsuit filed by the Standing Rock Sioux tribe to stop the pipeline is under appeal in U.S. District Court. The case will likely not be heard until the next administration is in office.
However, the lame-duck Obama administration could take action on the Dakota Access pipeline before then. The Army Corps of Engineers could issue the required easement for the pipeline to be completed under the Missouri River. Or the Obama administration could put a temporary halt to the whole process by requiring the company to carry out a more exhaustive environmental analysis of the project.
If either Trump or Obama moves ahead with construction, the project will undoubtedly face renewed protests and demonstrations, in North Dakota and across the nation. This is not a project that will go away quietly.
Rebecca Jacobson
An array of solar panels provide emergency power to critical buildings at Fort Carson Army Base in the event of a blackout on the larger electric grid. on May 26, 2015.
Slowing Down The Renewable Surge
Together, wind and solar comprise 70 percent of new additions to the electric grid in 2016, driven by dropping prices and state renewable fuel standards. Trump has called solar and wind installations ugly and decried “millions” of bird deaths from wind turbines, but he may find it difficult to outright oppose them. Whatever happens in Washington, state government renewable energy mandates will remain in place in nearly 30 states. These require utilities to boost their use of renewables and many companies are already moving toward meeting those goals.
The solar and wind industries have grown tremendously in recent years and are significant economic drivers in some parts of the country. Some believe the tax credit for solar may be in jeopardy under a Trump administration and, if the the Clean Power Plan is dumped, some of the momentum the industry has enjoyed could slow. But the electricity sector is already moving strongly in the direction of cleaner energy mandated by the plan. That is not likely to change with the new administration.
In conclusion, come January, President Trump may find that taking action on all the energy promises made during his campaign is a more difficult challenge than he anticipated. Economist Roy Godby of the University of Wyoming put it this way:
“President Obama found out it was hard to change energy policy; President Bush found out it was hard to change energy policy, and President Trump is going to find out that its hard to change energy policy.”
