The energy council — to be led by North Dakota
Gov. Doug Burgum, Trump’s choice to head the Interior Department —
will be key in Trump’s pledge to “drill, drill, drill” and sell more oil and
other energy sources to allies in Europe and around the globe.
The new council will
be granted sweeping authority over federal agencies involved in energy
permitting, production, generation, distribution, regulation and
transportation, with a mandate to cut bureaucratic red tape, enhance private
sector investments and focus on innovation instead of “totally unnecessary
regulation,” Trump said.
But the president-elect’s energy wishes are
likely to run into real-world limits. For one, U. oil production under Biden
is already at record levels. The federal government cannot force companies
to drill for more oil, and production increases could lower prices and reduce
profits.
A call for energy dominance — a term Trump
also used in his first term as president — “is an opportunity, not a
requirement,’' for the oil industry to move forward on drilling projects under
terms that are likely to be more favorable to industry than those offered by
Biden, said energy analyst Kevin Book.
Whether Trump achieves
energy dominance — however he defines it — “comes down to decisions by private
companies, based on how they see supply-demand balances in the global
marketplace,’' said Book, managing partner at ClearView Energy Partners, a
Washington research firm. Don’t expect an immediate influx of new oil rigs
dotting the national landscape, he said.
Trump’s bid to boost
oil supplies — and lower U.S. prices — is complicated by his threat this
week to impose 25% import tariffs on Canada and Mexico, two of the
largest sources of US oil imports. The oil industry warned the tariffs could
raise prices and even harm national security.
“Canada and Mexico are
our top energy trading partners, and maintaining the free flow of energy
products across our borders is critical for North American energy security and
US consumers,” said Scott Lauermann, speaking for the American Petroleum
Institute, the oil industry’s top lobbying group.
American Fuel &
Petrochemical Manufacturers, which represents U.S. refineries, also opposes
potential tariffs, saying in a statement that “American refiners depend on
crude oil from Canada and Mexico to produce the affordable, reliable fuels
consumers count on every day.”
Scott Segal, a former
Bush administration official, said the idea of centering energy decisions at
the White House follows an example set by Biden, who named a trio of White
House advisers to lead on climate policy. Segal, a partner at the law and
policy law firm Bracewell, called Burgum “a steady hand on the tiller” with
experience in fossil fuels and renewables.
And unlike Biden’s
climate advisers — Gina McCarthy, John Podesta and Ali Zaidi — Burgum will
probably take his White House post as a Senate-confirmed Cabinet member, Segal
said.
Dustin Meyer, senior
vice president of policy, economics and regulatory affairs at the American
Petroleum Institute, called the new energy council “a good thing” for the US
economy and trade. “Conceptually it makes a lot of sense to have as much
coordination as possible,” he said.
Still, “market
dynamics will always be the key’’ for any potential increase in energy
production, Meyer said.
Jonathan Elkind, a
senior research scholar at Columbia University’s Center on 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
bring gasoline prices below US$2 a gallon, but experts call that highly
unlikely, since crude oil prices would need to drop dramatically to achieve
that goal. Gas prices averaged US$3.07 nationally as of Wednesday, down from US$3.25 a year ago.
Elkind and other
experts said they hope the new energy council will move beyond oil to focus on
renewable energy such as wind, solar and geothermal power, as well as nuclear.
None of those energy resources produces greenhouse gas emissions that contribute
to climate change.
“Failure to focus on
climate change as an existential threat to our planet is a huge concern and
translates to a very significant loss of American property and American
lives,’' said Elkind, a former assistant energy secretary in the Obama
administration. He cited federal statistics showing two dozen weather
disasters this year that caused more than US$1 billion in damage each. A total of 418
people were killed.
Trump has played down
risks from climate change and pledged to rescind unspent money in the Inflation
Reduction Act, Biden’s landmark climate and health care bill. He also
said he will stop offshore wind development when he returns to the
White House in January.
Even so, his Nov. 15
announcement of the energy council says he will “expand ALL forms of energy
production to grow our Economy and create good-paying jobs.”
That includes
renewables, said Safak Yucel, associate professor at Georgetown University’s
McDonough School of Business.
“The mandate for the
energy council is US dominance globally, but what’s more American than American
solar and American wind?’' he asked. A report from Ernst & Young last
year showed that solar was the cheapest source of new-build electricity in many
markets.
Trump, in his
statement, said he wants to dramatically increase baseload power to lower
electricity costs, avoid brownouts and “WIN the battle for AI superiority.”
In comments to
reporters before he was named to the energy post, Burgum cited a similar goal,
noting increased demand for electricity from artificial intelligence, commonly
known as AI, and fast-growing data centers. “The AI battle affects everything
from defense to health care to education to productivity as a country, ″ Burgum said.
While Trump mocks the
climate law as the “green new scam,” he is unlikely to repeal it, Yucel and
other experts said. One reason: Most of its investments and jobs are in
Republican congressional districts. GOP members of Congress have urged House
Speaker Mike Johnson to retain the law, which passed with only Democratic
votes.
“A lot of Southern
states are telling Trump, ‘We actually like renewables,’” Yucel said, noting
that Republican-led states have added thousands of jobs in recent years in
wind, solar and battery power.
If renewables make
economic sense, he added, “they’ll continue.’'
