Donald Trump’s energy revolution

By Simon Wilson

How will US energy policy change?

As in other areas, the Trump administration has committed itself to policies and principles that it says put “America first” and downplay the need for domestic regulation or international co-operation. Within minutes of Trump’s  inauguration, the White House’s webpage on tackling global climate change was removed and replaced with “An America First Energy Plan” in which climate change doesn’t get a mention.

The plan’s stated principles are “energy policies that lower costs for hardworking Americans and maximise the use of American resources, freeing us from dependence on foreign oil”. It commits the new government to embracing the shale and gas revolution, fostering clean coal technology and reviving America’s coal industry, “which has been hurting for too long”.

Any specifics?

Yes – cutting “burdensome regulation”. President Trump is committed, says the Plan, to “eliminating harmful and unnecessary policies, such as the Climate Action Plan and the Waters of the US rule”. The former is America’s plan to cut carbon emissions and prepare for the effects of climate change. The latter expanded the rivers, lakes and wetlands that come under the remit of the Environmental Protection Agency (EPA). This will now be led by Scott Pruitt,

who as Oklahoma attorney-general has been a long-time opponent of the agency’s actions.

Good news for fossil fuels, then?

On the face of it, yes – a feeling backed up by key appointments. Trump himself has previously described climate change as a “hoax” – and that the “concept of global warming” was “created by and for the Chinese in order to make US manufacturing non-competitive”. Exxon’s Rex Tillerson is America’s new chief diplomat. And both the EPA’s Pruitt and Trump’s pick for energy secretary, the former Texas governor Rick Perry, have been accused by campaigners of being “climate change deniers” (though both, in their confirmation hearings, conceded that global warming is at least in part due to human activity).

Trump appeared to set the tone this week when he cleared the way for two major oil pipelines that had been blocked under Obama, and set in motion a plan to curb environmental regulations that slow other building projects. On the other hand, argues Paul Raeburn in Newsweek, in some respects Trump’s policies are rather bland restatements of existing trends.

In what way?

Trump claims his goal is to free the US from dependence on foreign oil, whereas in fact imported oil use has declined every year since Obama took office. In 2010, for the first time the US imported less than half the oil it consumes, and – notwithstanding Obama’s focus on climate change – the country is now producing more oil than at any time in the last eight years. Trump says his goal is to embrace the shale oil and gas revolution.

That’s all very well, but the shale boom is already well established, and it is the prime factor in coal – the dirtiest fossil fuel – getting squeezed out of the US market. That’s a situation, driven by market forces, that is unlikely to change whatever Trump does. Equally, given that much of America’s action on cutting carbon emissions occurs at the level of state government and individual businesses (and jobs in the clean energy sector exceeded those in oil drilling for the first time in 2016), the impact of the federal government’s change of direction could be more limited than many expect.

Are the Paris accords finished?

Not necessarily. On the campaign trail Trump repeatedly said he would withdraw the US from the Paris climate deal, which has been signed by 196 nations. Since his victory, Trump has rowed back quite a bit, telling The New York Times that “I’m looking at it very closely. I have an open mind”. Rex Tillerson, confirmed as Secretary of State this week, is also equivocating, saying “I think it’s important that the US maintain its seat at the table.” So Trump may not formally withdraw. On the other hand, he could do just as much damage by staying in the process.

How so?

Paris is not a legally binding treaty. In effect it is a voluntary deal, under which the US has pledged to cut greenhouse emissions by at least 26% below 2005 levels by 2030. However, the current deal (which came in to force a few days before Trump’s election in November) does not come close to keeping global temperature increases below the 2˚C that scientists say is a critical tipping point for contain global warming.

The next step is supposed to involve countries submitting new, more ambitious proposed targets (known as nationally determined contributions or NDCs) by 2020. But there is nothing to prevent the US trying to weaken its emission targets, rather than strengthen them – or to try and negotiate down its funding commitments – thus allowing Trump to claim that he is “negotiating a better deal”. And if that happens, other big emitters will feel less pressure to keep their own promises – or to agree to the transparency standards demanded by the US.

Should the US quit the Paris agreement?

Climate scientists are unsure whether it would be better for the US to withdraw from the Paris deal or not. “It isn’t clear whether [Trump’s] ‘seat at the table’ will be as a good dinner guest or the drunk uncle,” Jake Schmidt of the Natural Resources Defence Council told news website Vox.

“Will the US go in and try to undercut the agreement from the inside as Saudi Arabia, Venezuela and Russia did for years, or will the US try to make sure that the rules of the agreement are as strong as possible?” The former route could prove disastrous; the latter might prove a blessing. If China emerges as the new champion of green energy, it may be that America is unwilling to cede the field./moneyweek