Donald Trump’s election victory brings a renewed focus on US energy independence, promising policy shifts that could benefit oil and gas production while reshaping the nation’s approach to climate and green energy efforts.
With an agenda emphasizing “energy dominance,” Trump has vowed to unwind what he calls the “green new scam,” pledging to ease regulations on fossil fuels and curtail support for renewables.
At the core of Trump’s plan is a commitment to ramp up oil and gas extraction across federal lands and waters, a stark contrast to policies under President Biden that slowed fossil-fuel development. Trump has said he will “unleash American energy,” a stance that could result in new leases for offshore drilling, expedited pipeline construction, and increased fracking on public lands. Industry leaders, including Dan Eberhart, CEO of oilfield services firm Canary LLC, predict a return to a “drill baby drill” philosophy aimed at driving down energy costs for consumers.
While Trump’s initiatives could accelerate oil production, these efforts will require executive actions and may face legal and regulatory hurdles. However, the president-elect has indicated he’ll prioritize reducing costs and boosting domestic output, viewing energy independence as a cornerstone for economic stability and job creation.
Trump’s energy approach could also mean significant adjustments for the electric vehicle market. His campaign focused on ending incentives for EVs, which have accelerated under Biden’s policies. Trump is expected to target an Environmental Protection Agency (EPA) rule that mandates stricter tailpipe emissions, a regulation designed to compel automakers to shift toward more electric and hybrid models.
Additionally, Trump may seek to close tax credit loopholes that benefit certain EVs, potentially limiting which models qualify based on production location and supply chain sources. This shift could affect EV sales and influence automakers’ strategies, especially those that rely on federal support to make electric vehicles more competitive in the US market.
A pause on liquefied natural gas (LNG) exports initiated by the Biden administration may be one of the first targets Trump addresses, with plans to restart the permitting process for LNG facilities to meet growing demand, particularly in Asia. This focus on natural gas is expected to benefit companies like Energy Transfer LP and Commonwealth LNG, which have long advocated for expanded export options.
For the burgeoning offshore wind sector, however, the outlook under Trump is uncertain. Although he has not outlined a specific approach, his vocal criticism of offshore wind projects for environmental impacts suggests he may curtail new offshore wind leases or impose stricter permitting requirements. A potential moratorium on new leases would present a challenge to the offshore wind industry, which has been expanding along the US East Coast. While Republican allies in regions benefiting economically from wind projects could push back, Trump’s emphasis on traditional energy suggests that renewable investments may face heightened scrutiny.
The Inflation Reduction Act (IRA) has been central to supporting clean energy initiatives, but Trump’s victory brings potential changes to how these funds are allocated. Rather than a wholesale repeal, which could face opposition even among some Republicans, analysts expect Trump to use executive authority to redirect or limit IRA funds in ways that could favor traditional energy and manufacturing over renewable investments.
Trump may also adjust eligibility criteria for specific tax credits, particularly in sectors like green hydrogen and carbon capture. Additionally, his administration could consider limits on companies with ties to China, reflecting Trump’s focus on strengthening US manufacturing and minimizing foreign influence in critical industries.
Trump’s election casts doubt on the future of the Department of Energy’s Loan Programs Office, which has been instrumental in funding green technology development. Trump has previously criticized the office, and while Congress would ultimately decide on its future, Trump may attempt to reorient its mission toward supporting natural gas and nuclear power projects. Advocates argue that the office has generated substantial returns, but it could face budget cuts or policy shifts under Trump’s administration.
Trump’s approach to energy also extends to power generation, where he intends to rollback EPA regulations aimed at reducing emissions from coal and gas-fired plants. He contends that rising demand from sectors like AI and manufacturing requires a larger, more resilient power grid. By repealing pollution controls, Trump aims to prolong the operational life of coal plants and add capacity for gas-fired generation, aligning with his vision of affordable and reliable energy.
Bloomberg, Financial Times, Reuters, an Axios contributed to this report.
