Quite a detailed article about the orange fossil and the whole issue of energy. I admit to being worried about this in general but specifically my investments in several infra trusts involved in US / global green energy whose 🇺🇸 investments are greatly boosted by tax breaks.

Can Trump sweep away green energy tax breaks for ongoing / complete projects or are there any protections? I still don’t know.

Interesting that an estimated 80% of the overall US government spend in this area … goes to Republican controlled states. Would their House and Senate representatives actually vote to knacker all that investment and the jobs it brings? Even if Trump and his new fracking Energy Secretary are bonkers enough to go for that?

Would the US really cede any leadership they have (do they? I dunno) to China in particular?

Finally (sorry!!) … are you changing in or out of the UK listed renewables infras?


What Trump can do to reverse US climate policy − and what he probably can’t change

Published: November 7, 2024 7.40pm GMT
Gautam Jain, Columbia University

As the U.S. prepares for another Trump administration, one area unambiguously in the incoming president’s crosshairs is climate policy.

Although he has not released an official climate agenda, Donald Trump’s playbook from his last stint in the Oval Office and his frequent complaints about clean energy offer some clues to what’s ahead.

Exiting the Paris climate agreement

Less than six months into his first presidency, Trump in 2017 formally announced that he was withdrawing the United States from the Paris climate accord – the 2015 international agreement signed by nearly every country as a pledge to work toward keeping rising temperatures and other impacts of climate change in check.

This time, a greater but underappreciated risk is that Trump will not stop at the Paris Agreement.

Donald Trump looks toward the camera during a UN meeting with other U.S. officials behind him.
Trump attends a session of the United Nations Climate Action Summit in 2019. When he announced he would pull the U.S. out of the Paris climate agreement in 2017, he said he would try to renegotiate the global agreement to make it what he considered more fair to the U.S. AP Photo/Evan Vucci
In addition to exiting the Paris Agreement again, Trump could try to withdraw the United States from the United Nations Framework Convention on Climate Change. The 1992 treaty is the foundation for international climate talks. A withdrawal from that treaty would make it nearly impossible for a future administration to reenter the UNFCCC treaty because doing so would require the consent of two-thirds of the Senate.

The reverberation of such a step would be felt around the world. While the Paris Agreement is not legally binding and is based on trust and leadership, the stance taken by the world’s largest economy affects what other countries are willing to do.

It would also hand the climate leadership mantle to China.

U.S. funding to help other countries scale up clean energy and adapt to climate change rose significantly during the Biden administration. The first U.S. International Climate Finance Plan provided US$11 billion in 2024 to help emerging and developing economies. And commitments from the U.S. International Development Finance Corporation surged to almost $14 billion in the first two years of Biden’s presidency, versus $12 billion during the four years of Trump. Biden also pledged $3 billion to the United Nations’ Green Climate Fund.

Under President Trump, all these efforts will likely be scaled back again.

Targeting clean energy might not be so simple

In other areas, however, Trump may be less successful.

He has been vocal about rolling back clean energy policies. However, it may be harder for him to eliminate the Biden administration’s massive investments in clean energy, which are interwoven with much-needed investments in infrastructure and manufacturing in the Infrastructure Investment and Jobs Act and the Inflation Reduction Act.

Since both are laws that Congress passed, Trump would need majorities in both Houses to repeal them.

Even if Republicans end up with a trifecta – controlling both houses of Congress and the White House – repealing these laws will be challenging. That’s because the laws’ benefits are flowing heavily to red states. Trump’s allies in the oil and gas industry also benefit from the law’s tax credits for carbon capture, advanced biofuels and hydrogen.

However, while the Inflation Reduction Act may not be repealed, it will almost certainly be tweaked. The tax credit to consumers who buy electric vehicles is likely on the chopping block, as is the EPA regulation tightening tailpipe pollution standards, making battery-powered cars uneconomical for many.

Trump may also slow the work of the Department of Energy’s Loan Program Office, which has helped boost several clean energy industries. Again, this is not a surprise – he did it in the first term – except that the impact would be greater given that the office’s lending capacity has since skyrocketed to over $200 billion, thanks to the Inflation Reduction Act. So far, only about a quarter of the total has been doled out, so there is a rush to ramp up the pace before the new administration starts in January.

Drill, baby, drill?

Trump also talks about increasing fossil fuel production, and he almost certainly will take steps to boost the industry via deregulation and opening up more federal lands for drilling. But prospects of massively ramping up oil and gas production seem dim.

The United States is already producing more crude oil than any country ever. Oil and gas companies are buying back stocks and paying dividends to shareholders at a record pace, which they wouldn’t do if they saw better investment opportunities.

The futures curve indicates lower oil prices ahead, which could be further weighed down by slowing demand from any resulting economic weakness if Trump follows through on his threat to impose tariffs on all imports, leading to the risk of lower profitability.

Trump will likely try to roll back climate policies related to fossil fuels and emissions, which are the leading source of climate change, as he did with dozens of policies in his first administration.

That includes eliminating a new federal charge for methane emissions from certain facilities – the first attempt by the U.S. government to impose a fee or tax on greenhouse gas emissions. Methane is the primary component of natural gas and a potent greenhouse gas.

Trump has also promised to support approvals of new liquefied natural gas, or LNG, export terminals, which the Biden administration tried to pause and is still working to slow down.

The markets have a say in clean energy’s future

One clean energy source that Trump is likely to rally behind is nuclear energy.

And despite his criticism of wind and solar power, investments in renewable energy will likely continue rising because of market dynamics, especially with onshore wind and utility-scale solar projects becoming more cost effective than coal or gas.

Nevertheless, a U.S. withdrawal from the Paris Agreement and the regulatory and policy uncertainty under Trump would likely slow the pace of investments. The expected inflationary impact of his economic policies is likely to negate the benefits of lower cost of capital that were expected to flow through with central banks lowering interest rates this year. It’s an outcome that the warming planet can ill afford.

Must admit that I am really confused as US is already in energy surplus and, there is no economic reason for producers to extract at ever lower prices.

Charlie Munger took the view that all energy exports should be banned............ let everyone else run out.

It is another Trump slogan not a policy.

The renewables thing is, in my opinion, more of a pushback against woke. and silliness. I lived in Florida, what is good in Miami isn't good in Crystal River and the US grid is piss poor. They will take decades to get to where we are today. Federal policy was never going to happen, it couldn't. A bit like banning all ICE cars across Europe.

10-20 years and they face elections 3 Nov 26.

It isnt a system designed to embrace change :)

If in doubt, just sell up from that exposure and shift to something else..... like oil and gas...

Better to do that IMHO than to 'find out' what he might do.

It does seem likely to me that 'something' will happen. And if you wait until everyone knows what that 'something' is then it would be too late.

Trump declaring an “emergency” on day-1 of his new orange free-state might induce a wry smile I guess. But here we are.

https://www.cnbc.com/amp...-energy-emergency-.html

President-elect Donald Trump has vowed to declare a national energy emergency as soon as he takes office Monday, months after promising voters that he would cut their electric and gasoline prices in half in the first year of his administration.

"To achieve this rapid reduction in energy costs, I will declare a national emergency to allow us to dramatically increase energy production, generation and supply," Trump told supporters at a rally in Potterville, Michigan last August. "Starting on day one, I will approve new drilling, new pipelines, new refineries, new power plants, new reactors and we will slash the red tape."

The president-elect reiterated as recently as Dec. 22 his intention to "declare a national energy emergency" on the first day of his administration. He vowed to issue a series of executive orders to reverse Biden administration policies on natural gas exports, drilling and emissions standards.

Trump plans to establish a National Energy Council led by North Dakota Gov. Doug Burgum, his pick to lead the Department of the Interior. Burgum said during a Senate hearing on his nomination this week that he expects the council to be established through an executive order.

It is unclear whether emergency declaration would be largely symbolic or would invoke broader powers that go beyond the executive orders on energy that Trump is widely expected to issue Monday. The president-elect's transition team did not respond to a request for comment.

"My anticipation is that it will be a rhetorical declaration of an energy emergency," said Mike Sommers, president of the oil industry's lobby group American Petroleum Institute. "When you bundle together the executive orders, that will be the answer to what to do about the energy emergency."

There are several emergency statutes Trump could invoke that are related to energy, said Glenn Schwartz, director of energy policy at the consulting firm Rapidan Energy. Emergencies are often loosely defined under federal law, giving the president broad discretion to use them as he sees fit, Schwartz said.

And Trump would likely face little pushback from the courts because they are reluctant to challenge presidential determinations related to national security, Schwartz said.

"What you end up with is that even if Trump were to expand his emergency powers in unprecedented ways, it is not clear that courts would step in to halt any of these resulting actions," the analyst said.

Likely emergency authorities
There is a clear precedent for Trump to invoke emergency authority to promote power generation and expand the nation's fuel supply, Schwartz told clients in a research report published last Thursday. Authorities using the powers would waive certain environmental and pollution rules related to energy.

Trump could issue fuel waivers under the Clean Air Act to allow gasoline onto the market that would otherwise violate federal air quality standards, the analyst said. Presidents have often used such waivers whenever they needed to stretch the country's gasoline supply and keep prices in check, he said.

Trump could also invoke the Federal Power Act to order power plants to run at maximum capacity and not comply with pollution limits, Schwartz said. The energy secretary can invoke the act during wartime or when a sudden increase in demand or a shortage of electricity creates an emergency situation.

The provision has been rarely used since World War II and has mostly been reserved for situations where extreme weather has overwhelmed power plants, Schwartz said.

The largest grid operator in the U.S., PJM Interconnection, has warned of a power shortfall as coal plants are retired faster than new capacity is brought online. PJM operates the grid in all or parts of 13 states, in the Mid-Atlantic, Midwest and South.

The situation could become more acute as electricity demand increases significantly as the tech sector builds out energy-hungry data centers to support artificial intelligence applications.

The first Trump administration considered invoking the act in 2018 to order utilities to buy two years of power from coal and nuclear plants that were at risk of shutting down. The administration at the time ultimately dropped the idea after facing push back from industry.

Trump could also opt for a broader statute that lets the president suspend pollution laws for industrial facilities, power plants, oil refineries, steel mills, chemical plants and other industrial facilities in emergency situations, Schwartz said.

There is less support under federal law for the president to force new production, Schwartz said. Trump could direct federal agencies to fast track environmental reviews on energy projects he supports, such as pipelines, but the president cannot use emergency authorities to circumvent bedrock environmental policies such as the National Environmental Policy Act and the Endangered Species Act, the analyst said.

Expected executive orders
Oil industry lobbyists at the American Petroleum Institute are anticipating that Trump will issue a series of orders tied to energy as soon as Monday.

The administration is expected to issue an order lifting the Biden team's pause on new liquified natural gas export facilities, Sommers said. The president-elect will also likely try to reverse President Biden's recent decision to ban drilling in 625 million acres of federal waters. Trump's authority to do this has been disputed and such an order would likely end up in court.

"We are of the view that he has the ability to reverse that and we'll defend that in court," Sommers said.

The industry is anticipating the president will also direct the Interior Department to increase oil and gas lease sales in the Gulf Mexico, Sommers said. The Biden administration had issued the fewest leases in history under a program set to run through 2029.

These decisions are not expected to have any immediate impact on production. The U.S. has been the world's largest producer of oil and gas for six years, outpacing Saudi Arabia and Russia. The CEOs of Exxon and Chevron have made clear that production decisions are based on market conditions, not in response to who is in the White House.

"You can lead a horse to water, but you can't make them drink," Schwartz said. "He can give them all the resources they need to be able to drill, but I haven't seen anything that suggests he can force them to take it out of the ground."

Trump is expected to withdraw the U.S. from the Paris climate agreement. Executive orders targeting tailpipe emission and fuel economy standards for cars are also expected.

Still, only so much can be done through executive order, Sommers said, and the directives often have to go through a rulemaking process that takes time. The oil industry is more focused on pushing for more durable policy changes in the Republican-controlled Congress, he said.

"There's not a lot of stuff that they're going to be able to do on day one, other than direct federal agencies to fulfill their promise of energy dominance," Sommers said.