With President-elect Donald Trump set to take the reins in a little over a week, we can expect significant changes to ripple through the oil and energy industry. Mr. Trump has publicly stated he intends to hit the ground running on energy and environmental policy, and from day one you should expect a shake up to the way things have been done for the last eight years. Good or bad, here’s what you can expect in 2017:
The Clean Power Plan will be no more.
For those that supported the EPA’s Clean Power Plan in the November elections, it didn’t turn out so well. Of the 14 Senate races with candidates that strongly supported the plan, 11 lost. Many think that the Clean Power Plan was a major contributor to Hillary Clinton losing in Great Lakes battleground states like Pennsylvania, Ohio, Michigan, and Wisconsin. Yes, The American people want to care for our earth and reduce carbon dioxide emissions, but a clear message was sent that the Clean Power Plan is not the solution they were looking for. Expect Trump to swiftly eliminate the Clean Power Plan. But I don’t expect him to be completely cold hearted when it comes to global warming proponents. Don’t be surprised, if he extends the olive branch of alternative policies that address carbon dioxide emissions in a more affordable, fair, free-market manner.
Federal land should open up for increased energy production.
Over the last 8 years fracking and domestic production has increased. The improved production; however, has occurred in spite of – rather than because of – Obama administration policies. In 2017 don’t be surprised if the Trump administration opens up more federal lands to energy production, which will further increase US oil and natural gas production. Expect this to lower energy prices, increase royalty payments to offset our national debt, and bolster the US economy.
The slow death of coal will be postponed.
Under the Obama administration, we saw restrictions on coal production and coal power like never before. With a new sheriff in town, we can expect many of the restrictions imposed by the Obama administration to be lifted. Although this won’t completely revive coal power (which faces strong competition from inexpensive and cleaner natural gas) it will help it stay afloat for a while longer.
Wind and solar are no longer the “favorite child”.
As ironic as it may be… wind power (the environmentally friendly power source) has received a free pass on the 1.4 million birds and bats the industry kills each year - including endangered and protected species like the bald eagle! Even recently the Obama administration dramatically increased the number of bald eagles wind power companies can kill without penalty. Wind and solar have also received subsidies during the past eight years that dwarf all other energy sources. I wouldn’t expect this special treatment to hold up in the years ahead. President-elect Trump will most likely reverse this course and make the wind power industry accountable to the same environmental protections that apply to everyone else. We’ll also see wind and solar advantages slowly erode, leaving them to play on a level field with other competing energy sources.
Ethanol will finally be exposed.
In 2007 the Energy Independence and Security Act, enacted into law costly ethanol requirements on America’s gasoline consumers. However, in the last ten years, the Energy Independence and Security Act research has since proven ethanol is in many ways worse for air pollution and the environment than gasoline. Consumer advocates, free-marketers, and environmental groups have united in opposition to ethanol. Expect the Trump administration to take a good hard look at ethanol and consider rolling back federal ethanol mandates.
The future will be bright for nuclear power.
Let’s be honest, spent fuel issues are not the only reason nuclear power isn't competitive with coal and natural gas power. Energy economics and excessive government regulations make traditional large nuclear power plants expensive and difficult to run. However, there is a light at the end of the tunnel when it comes to small, next-generation nuclear reactors utilizing new technologies. Case in point, many scientists, economists, and environmentalists see tremendous potential for small molten salt reactors powered by thorium. Although nuclear power government approvals and permits have been slow to be processed in the past, we should expect the new administration to prioritize removing government obstacles, clearing the way for new nuclear power designs that will provide more emissions-free power.
The future will be even brighter for hydroelectric power.
During the Obama administration we have seen the removal of multiple hydropower dams despite hydropower providing affordable, emissions-free electricity. The U.S. Department of Energy stated the US currently has the capability of increasing hydropower production by 50% in the near future with minimal environmental impact. Don’t be surprised to see a resurgence of hydropower in the coming years.
Natural gas exports will increase.
Considered a transitional or gateway energy source, natural gas is in high demand globally. Asia is working to rid themselves of extreme air pollution caused by Chinese coal. Europe is overly dependent on Russian natural gas, making them vulnerable to aggressive Russian foreign policy. And US natural gas exports have been hampered by the Obama administration’s block of natural gas export terminals that would allow American energy companies to deliver natural gas to countries in need. Expect a complete 180 under the Trump administration when it comes to natural gas. More natural gas exports will bring environmental improvement to Asia and political relief to European countries dependent on Russian exports – all while benefiting America’s economy and political relations.
So there you have it, all the changes you can expect to see in 2017 and beyond. The new presidential administration looks to be a champion for more abundant energy, more affordable energy, and environmental policy that addresses true environmental concerns rather than serving as a shelter for politically favored energy sources.
All in all, it’s an exciting time to be in the oil and energy industry!