Trump’s energy goals face limits | Arkansas Democratic Newspaper

WASHINGTON — President-elect Donald Trump is moving to create a National Energy Council that he says will establish American “energy dominance” around the world as he seeks to boost U.S. oil and gas production and move away from President Joe Biden’s focus on climate change. .

The Energy Council, led by North Dakota Gov. Doug Burgum, Trump’s pick to lead the Interior Department, will play a key role in Trump’s promise to “drill, drill, drill” and sell more oil and other energy to U.S. allies. Europe and around the world.

The new board would be given broad authority over federal agencies involved in permitting, producing, generating, distributing, regulating and transporting energy, with powers to cut bureaucratic red tape, increase private sector investment and focus on innovation instead of “completely unnecessary regulation.” “Trump said.

But Trump’s energy desires are likely to face real limits. First, US oil production has already reached record levels under Biden. The federal government can’t force companies to produce more oil, and more production could drive down prices and reduce profits.

The call for energy dominance, a term Trump also used in his first term, “is an opportunity, not a requirement” for the oil industry to move forward with drilling projects on terms that are likely to be more favorable to the oil industry. industries than those proposed by Biden, said energy analyst Kevin Book.

Whether Trump achieves energy dominance (however he defines it) “depends on the decisions of private companies based on how they see the balance of supply and demand in the global market,” said Book, managing partner of ClearView Energy Partners, a Washington-based research firm. solid. Don’t expect an immediate influx of new oil rigs dotting the national landscape, he said.

Trump’s attempt to increase oil supplies – and lower U.S. prices – is complicated by his threat this week to impose 25% import tariffs on Canada and Mexico, the two largest sources of U.S. oil imports. The US oil industry has warned that tariffs could raise prices and even harm national security.

“Canada and Mexico are our primary energy trading partners, and maintaining the free flow of energy across our borders is critical to the energy security of North America and U.S. consumers,” said Scott Lauermann, speaking on behalf of the American Petroleum Institute, the oil industry’s top lobbyist. group.

American Fuel & Petrochemical Producers, which represents U.S. refineries, also opposes potential tariffs, saying in a statement that “U.S. refineries depend on crude oil from Canada and Mexico to produce the affordable and reliable fuel that consumers rely on every day.” “

Scott Segal, a former Bush administration official, said the idea of ​​centralizing energy decisions in the White House follows the lead of Biden, who has named three White House advisers to lead climate policy. Segal, a partner at the law and policy firm Bracewell, called Burgum “a steady hand on the wheel” with experience in fossil fuels and renewable energy.

And unlike Biden’s climate advisers Gina McCarthy, John Podesta and Ali Zaidi, Burgum will likely take her White House post as a Senate-confirmed Cabinet member, Segal said.

Dustin Meyer, senior vice president for policy, economics and regulatory affairs at the American Petroleum Institute, called the new energy council a “good thing” for the U.S. economy and trade. “Conceptually, it makes sense to have as much coordination as possible,” he said.

However, “market dynamics will always be the key” to any potential increase in energy production, Meyer said.

Jonathan Elkind, a senior fellow at Columbia University’s Center for Global Energy Policy, called energy dominance “a deliberately vague concept” but said, “It’s hard to see how (Trump) can push more oil into an already saturated market.”

Trump has promised to cut gasoline prices below $2 a gallon, but experts say that is unlikely because crude oil prices would have to fall sharply to achieve that goal. National gas prices averaged $3.07 on Wednesday, down from $3.25 a year ago.

Elkind and other experts said they hope the new energy council will look beyond oil and focus on renewable energy sources such as wind, solar and geothermal power, as well as nuclear power. None of these energy resources produce greenhouse gas emissions that contribute to climate change.

“The failure to focus on climate change as an existential threat to our planet is a huge concern and is resulting in a very significant loss of American property and American lives,” said Elkind, a former assistant secretary of energy in the Obama administration. He cited federal statistics showing there have been two dozen weather disasters this year, each causing more than $1 billion in damage. A total of 418 people died.

Trump has downplayed the risks posed by climate change and vowed to eliminate unspent money in the Inflation Reduction Act, Biden’s signature climate and health care bill. He also said he would halt offshore wind development when he returns to the White House in January.

Despite this, his Nov. 15 statement to the energy council said he would “expand ALL forms of energy production to grow our economy and create good-paying jobs.”

That includes renewable energy, said Safak Yucel, an assistant professor at Georgetown University’s McDonough School of Business.

“The Energy Council’s mandate is for U.S. dominance in the world, but what could be more American than American solar and American wind?” he asked. A report last year by Ernst & Young found that solar power is the cheapest source of electricity for new construction in many markets.

Trump said in a statement that he wants to dramatically increase baseload power to lower energy costs, avoid blackouts and “win the battle for AI supremacy.”

In comments to reporters before his energy appointment, Burgum made a similar point, noting increased demand for electricity from artificial intelligence, commonly known as AI, and fast-growing data centers. “The AI ​​battle is affecting everything from defense to healthcare to education to national productivity,” Burgum said.

Although Trump has ridiculed the climate law as a “new green scam,” he is unlikely to repeal it, Yucel and other experts say. One reason: Most investment and jobs are concentrated in Republican congressional districts. GOP members of Congress called on House Speaker Mike Johnson to preserve the legislation, which passed only with Democratic votes.

“A lot of Southern states are telling Trump, ‘We really like renewable energy,’” Yucel said, noting that Republican-led states have added thousands of jobs in wind, solar and battery energy in recent years.

If renewables make economic sense, he added, “they will continue.”