Trump starts reshaping US energy with focus on oil and gas
Trump initiated the shift in a series of orders and memoranda directing action by the federal government, with implications that reach across the entire energy landscape, from oil fields and wind farms to light bulbs and pickup trucks
Highlights:
- President issues raft of orders after taking office Monday
- Directives underscore commitment to ending Biden-era policies
President Donald Trump launched a sweeping overhaul of US energy policy hours after taking office Monday, putting the weight of the federal government behind fossil-fuel production and pulling back from the fight against climate change.
Trump initiated the shift in a series of orders and memoranda directing action by the federal government, with implications that reach across the entire energy landscape, from oil fields and wind farms to light bulbs and pickup trucks.
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The Republican cast the changes as integral to his vision for achieving domestic prosperity and fighting inflation, since energy prices touch every part of the economy. And, with the US on the cusp of an unprecedented surge in electricity demand tied to the growth of artificial intelligence and domestic manufacturing, Trump called the nation's oil and gas bounty an unparalleled advantage.
"We have something that no other manufacturing nation will ever have: the largest amount of oil and gas of any country on earth. And we are going to use it," Trump said in his inaugural address. "We will bring prices down, fill our strategic reserves up again, right to the top, and export American energy all over the world."
The first-day directives underscore Trump's commitment to dismantling Biden-era policies meant to curb fossil-fuel demand and fight climate change, even if the moves will take years for federal agencies to execute. The regulatory changes will generally be subject to a lengthy federal rulemaking process and procedural requirements that bogged down some key Trump energy initiatives in his first term. And even when finalized, the weightiest energy and environmental actions are likely to be fought over for years in federal courts.
"A lot of this will have to be followed up with good policy," Senator Kevin Cramer, a North Dakota Republican, said in an interview.
Even so, the initial flurry of activity underscores Trump's commitment to make good on a frequent campaign pledge: to unlock more of America's vast stores of energy. It also responds to the wishes of the oil industry, one of Trump's top constituencies, which has long sought more opportunities to drill.
"The new administration recognizes the importance of American energy dominance at home and abroad," Jeff Eshelman, president of the Independent Petroleum Association of America, said in a statement. Trump's actions, he said, mark an end to "misguided, irrational energy policies" in Washington.
Yet environmentalists excoriated Trump's efforts, calling them a giveaway for oil barons who helped fund his campaign
"These actions are an unprecedented handout to billionaires," said Aru Shiney-Ajay, executive director of the Sunrise Movement activist group. "They will make a small handful of rich men unimaginably richer while killing good-paying jobs and threatening our health and homes."
Still, it isn't clear if Trump's policies will dramatically increase oil and gas production. US fossil fuel producers have shifted focus to capital discipline, efficiency gains and returns to shareholders — not ambitions for booming output.
"Probably the market has more control over fossil-fuel companies," said Xuan Sheng Ou Yong, sustainable fixed-income lead for Asia-Pacific at BNP Paribas Asset Management in Singapore. Equity and bond investors in fossil-fuel companies are asking "don't invest in capex, and return the money to investors in the form of dividends and buybacks," said Ou Yong.
Trump grounded some of his directives in a declaration that the US is in the midst of a national emergency — despite record-setting production of oil and gas that soared under former President Joe Biden.
When it comes to energy and critical minerals, current US leasing, development production, transportation and generation capacity "are all far too inadequate to meet our nation's needs" and are making high prices worse, Trump said in an executive order declaring the energy emergency. US policies "have driven our nation into a national emergency, where a precariously inadequate and intermittent energy supply and an increasingly unreliable grid require swift and decisive action," he said.
Trump's wide-ranging directive unlocks authorities that could expedite permitting for some projects and curtail endangered species reviews. It also directs an assessment of the Defense Department's ability to obtain and transport the energy, electricity or fuels needed to protect the US, including an analysis of the nation's refining and pipeline infrastructure. The review could enable Trump to invoke emergency powers to fast-track projects that address the problems, including pipelines.
The president has vowed to slash energy costs, but his efforts will cut unevenly across different electricity sources, bolstering fossil fuels while potentially hobbling domestic wind power generation encouraged by Northeast US states. Renewable power advocates warned that Trump's decision to halt offshore wind leasing and permitting not only imperils a key source of American energy but also jobs building ships and making steel to service the sector.
Trump has promised to ease regulations that stifle planet-warming pollution from power plants and automobiles. The US is the second-largest emitter of greenhouse gases, and those mandates are considered critical for the country to meet its promise to at least halve that pollution by the end of the decade.
On Monday, Trump ordered an elimination of the "electric vehicle mandate," a reference to US pollution curbs and fuel-economy requirements that effectively compel the sale of electric vehicles. Without changes, the Biden-era measures — including fuel-economy requirements and tailpipe pollution standards — are set to chip into domestic oil demand in coming years.
Trump also directed the US to withdraw once again from the Paris Agreement, the 2015 pact under which nearly 200 nations agreed to slash greenhouse gas emissions.
He is also taking action to bolster oil, gas and mineral development in Alaska, where a series of Biden-era regulations limited development while promoting conservation of habitat for caribou, grizzly bears and migratory birds. That includes the National Petroleum Reserve-Alaska, an Indiana-sized tract of land in the northwest corner of the state that's home to ConocoPhillips' massive Willow oil project and, all told, an estimated 8.7 billion barrels of recoverable crude.
At the same time, Trump revoked Biden-era proclamations that blocked the sale of drilling rights in most waters along the US East and West coasts.
Trump said he was seeking to "empower consumer choice" as he directed changes in federal regulations governing the operation of shower heads, toilets, washing machines and light bulbs. During Trump's first term he eased energy efficiency standards for appliances that have become symbolic of government overreach, though many of them were required by energy legislation signed into law by former President George W. Bush, a Republican.
The president is also directing his Energy Department to resume reviewing applications to export liquefied natural gas to Asian countries and other nations that don't have free-trade agreements with the US. The move reverses a moratorium Biden ordered last January that disrupted plans for multi-billion-dollar export projects by Venture Global LNG Inc., Energy Transfer LP, Commonwealth LNG and others.
Some of Trump's moves are recycled from his first term, representing new bids to impose policy after pullbacks by Biden.
In some cases Trump has tried — and failed — to execute similar changes before. It's unclear whether Monday's moves will be more successful, though the confirmation of more conservative judges and recent Supreme Court decisions restraining federal agency powers could make the changes easier to achieve.
During his first term, Trump invoked emergency powers typically reserved for natural disasters and other crises to try and keep unprofitable coal and nuclear plants running. His administration also weighed tapping a Cold-War era statute to keep coal plants online. Both efforts were abandoned.
And when Trump last sought to reverse a presidential withdrawal of US waters from oil and gas leasing, it was rejected by a federal district court.
Nonetheless, oil and gas enthusiasts were celebrating Trump's initial actions as a sign of things to come.
"They're going look for all kinds of ways to expedite energy production and development in the country," Senator John Hoeven, a North Dakota Republican, said in an interview. "It's going to be everything from streamlining the permitting process to reducing regulatory burdens to finding new ways to develop energy of all kinds."
