WASHINGTON, Nov. 15, 2016 - Expect that “energy infrastructure, the power sector, the transportation sector, and upstream (oil and gas) production will be hotly debated in Washington during 2017.”
That was the consensus reached last week in a post-election forum featuring policy experts from the Bracewell law firm and its Policy Resolution Group (PRG). The debate is already well under way as competing energy industry stakeholders clamor for President-elect Donald Trump’s attention. But according to Bracewell partner and PRG head Scott Segal, some issues already seem settled. He and his colleagues conclude that:
#1. “Trump has made it clear that an infrastructure-driven jobs program will be his central economic priority in the initial months of his presidency… (and) it is reasonable to expect that it will include provisions designed to fast-track the energy infrastructure (e.g. pipelines, terminals, etc.) necessary to maximize the economic benefits of domestic energy production.”
#2. “A Trump administration is clearly in favor of enhanced exploration and production of oil and gas as a tenet of energy, economic and national security policy... Trump has pledged to unleash domestic energy production onshore and offshore.”
#3. “Trump has made it clear on the campaign trail that he intends to dismantle President Obama’s Clean Power Plan (CPP) . . . In any event, the regulatory burden facing the utility industry is likely to be dialed back substantially.”
#4. “Trump’s comment in North Dakota that he would ‘cancel the Paris Climate Agreement’ is expected to be another major aspect of his climate policy.”
#5. “While Trump has been generally supportive of ethanol, he has stated that he thinks current implementation of the renewable fuels policy has created some unfairness for refiners and small business in the unstable world of high prices for tradable credits (or RINs). There could well be action in reforming that part of the renewable fuel program and fairly soon.”
Despite these expectations, Segal wrapped up by warning that “Just as there was some unpredictability in the way the Trump campaign was run, we suspect there will be some unpredictability in the way a Trump administration will govern.” Segal explained that because Trump did not limit himself to traditional Republican positions during his campaign, “there is a freedom in a Trump administration to take policy positions that are not necessarily doctrinaire or even particularly conservative.”
Ernie Shea, project coordinator for the 25x’25 renewables advocacy non-profit, tells Agri-Pulse that Trump “has publicly advocated for an all-of-the-above energy future. As such we expect him to support enabling policies to allow the full potential of renewable energy to be realized. Renewable energy development has been a huge economic engine for rural America, the beneficiaries of which helped him win the election. Their contribution and future will not likely be forgotten by President Trump.”
Shea adds that 25x’25 welcomes Trump’s “vigorous support for the federal Renewable Fuel Standard and for the biofuel industry in general” and urges the new administration “to stay the course that has accelerated the wide development and deployment of other renewable energy technologies in rural America, such as biomass, wind, solar, hydropower and geothermal.” Shea says these deployments have put the U.S “on track to meet 25 percent of its energy needs coming from renewable energy sources” by 2025 – the organization’s goal.
Shea is concerned by Trump’s pledge to dismantle Obama’s court-stayed Clean Power Plan that is intended to limit power-plant carbon emissions for the first time. But Shea says that even if Trump tries to scrap the CPP, “we expect litigation will remain a primary tactic for shaping future federal energy and climate policy.”
He concludes that “Regardless of one’s position on climate change, the reality is that the world is migrating to a low carbon energy future. With our ingenuity and technological prowess, we can lead the global energy transformation and reap the economic, energy, national security, public health and environmental benefits that a lower carbon energy future will provide.”
The Bracewell forum’s forecast that Trump administration energy policies will favor fossil fuels echoes Trump’s commitments listed on his post-election Great Again website and what he said in his frequent energy comments during his campaign.
Trump’s new website includes renewable energy in its promise that “The Trump administration will make America energy independent … while protecting the country’s most valuable resources – our clean air, clean water, and natural habitats.” The statement adds that “Rather than continuing the current path to undermine and block America’s fossil fuel producers, the Trump administration will encourage the production of these resources by opening onshore and offshore leasing on federal lands and waters.” It also promises to “streamline the permitting process for all energy projects, including the billions of dollars in projects held up by President Obama, and rescind the job-destroying executive actions under his administration.”
Trump’s pledge to open more onshore and offshore areas for oil drilling is already being challenged. In a statement issued Tuesday, Billionaire Democratic activist Tom Steyer called on President Barack Obama to invoke largely untested authority to permanently block offshore oil drilling in the Atlantic Ocean and Arctic before Donald Trump takes office.
Turning to coal, the Trump energy policy statement pledges to “end the war on coal, and rescind the coal mining lease moratorium, the excessive Interior Department stream rule, and conduct a top-down review of all anti-coal regulations issued by the Obama administration.” Yet ironically, the greatest threat to coal may be Trump’s support for fracking (injecting high-pressure water, sand and chemicals deep underground to release trapped oil and natural gas). That’s because fracking has increased production, driving natural gas prices down sharply and undermining coal’s competitiveness.
In addition, the Trump statement promises the new administration will “scrap the $5 trillion dollar Obama-Clinton Climate Action Plan and the Clean Power Plan and prevent these unilateral plans from increasing monthly electric bills by double-digits without any measurable effect on Earth’s climate.”
Without mentioning international concerns about global warming’s already costly negative impacts, the Trump statement concludes that unleashing far greater U.S. fossil fuels production is “all upside: more jobs, more revenues, more wealth, higher wages, and lower energy prices.”
Such statements ignore multiple examples of America’s changing energy landscape. Iowa’s Republican Gov. Terry Branstad, for example, proudly announced last month that “Iowa now gets 35 percent of our electricity generation from wind.” He has explained that this low-cost wind power is “drawing companies to Iowa who are seeking low energy costs” and that along with lowering consumers’ electricity bills, “Every wind turbine you see in Iowa means income for farmers, revenue for counties, and jobs for Iowa families.”
American Wind Energy Association CEO Tom Kiernan insists that “An unstoppable shift to a cleaner energy economy is underway” and that AWEA is ready to work with Trump “to assure that wind power continues to be a vibrant part of the U.S. economy.”
Rejecting claims that shifting to renewable energy drives up consumer costs, Kiernan says the wind industry “is saving consumers money by connecting low-cost wind power to more parts of the country… Utilities and major corporations are flocking to buy more wind, finding it to be the biggest, fastest, cheapest way to keep the air clean while keeping electric rates low.”
Promising “an America-First energy plan” in Pittsburgh in September, Trump committed his administration to “opening federal lands for oil and gas production, opening offshore areas, and revoking policies that are imposing unnecessary restrictions on innovative new exploration technologies.” He also promised to “eliminate all needless and job-killing regulations now on the books” in order to unleash fracking and make other changes to boost oil, natural gas and coal production.
Trump’s campaign and post-election promises have been welcomed by the oil and gas industry. Jack Gerard, president and CEO of the American Petroleum Institute says API looks forward to “working with the new administration on smart energy policies that protect the United States as the global leader in oil and natural gas production, development, and refining, as well as in reducing carbon emissions.”
Gerard says the best path forward is to implement Trump’s promises “with policies that embrace our nation’s energy renaissance including increased energy production and infrastructure development while rejecting policies that could potentially harm job creation or raise costs on American consumers and businesses.”
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