Special Issue: What to Expect during the Trump II Presidency

November 12, 2024

Print This Article Share it With Friends

(American Energy Society/Energy Matters) From experience, we all know that when Donald Trump is president, nothing is certain. It is hard to predict how the energy sector will change, both domestically or around the world. This special issue of Energy Matters looks at past policies, recent campaign rhetoric, and what aides and analysts are saying to project what energy and the environment looks like during the next presidential administration.

- O&G production: President Trump has made it clear that he will support "drill baby, drill." However, oil majors have hit their maximum target output in the Permian and will not increase production at the risk of a lower price point. In other words, the Trump II presidency will not affect oil markets because the current market price of ~$80/barrel is ideal ... for the super majors that are drilling in the Permian. (Note: The Permian Basin boasts some of the lowest break-even prices in the world, typically below $50 per barrel for existing wells, while break-even for NOCs, including Saudi Arabia, is about $96/barrel. The market is exactly where the oil majors want it to be.)

- O&G emissions: The Trump II White House will relax regulations on flaring and leaks from O&G facilities.

- LNG: The current pause on LNG export permits will be lifted.

- H2: Grey hydrogen will get support; for instance, IRA hydrogen tax credits will be rewritten to benefit producers making hydrogen from fossil fuel. (Meanwhile, green and blue hydrogen will need to find a competitive price-point or else these sectors will stall.)

...

- Nuclear: SMRs will get more support than large nuclear (which will face quiet opposition from natural gas). Deployment of SMRs will probably happen first in Virginia, where more data centers are being built faster than any other region in the US.
- Critical minerals/metals: Mining in the US will get support through new federal leases and relaxed regulations.
- Solar and wind: There will be talk about ending wind and solar tax credits but not a lot of action. (Much like the way the Trump I White House avoided ethanol/RFS, there is too much support for wind and solar in the Midwest states to cut the credits entirely.)

- OSW: Permits for offshore wind will be withheld, especially in blue-state coastal regions (similar to the way President Biden paused permits for LNG).

...

- Taxes: There will be no extraordinary taxes on energy-intensive goods, but Trump II will propose a carbon tax on Chinese imports.
- Carbon: Federal efforts to assess the impact of carbon pollution (aka "the social cost of carbon") will be abandoned.
- Downsizing government: The Office of Clean Energy will be cut and the scope and scale of the EPA will be reduced.

- In the "hot" seat: California. The White House will attempt to revoke California's authority to set stricter air regulations than other states. Buckle up, this issue is destined for the courts because California will not back down.

...

- Disclosures: Large companies will not be asked (by the SEC) to disclose their risks to climate change.

- FEMA: Related to "hot seat" in the Policy section above, California will have a difficult time getting relief funding from FEMA if there is a natural disaster.
- CB: Virtually all federal climate justice initiatives will be cut, especially programs that are directed to support disadvantaged communities (Community Benefit programs, or "CBs"). The federal government will not support energy sovereignty on Tribal lands.

...

- EVs: EV tax credits will be limited and possibly abolished.
- LPO: Guaranteed loans will be frozen, or possibly redirected to sectors that strengthen energy independence/"dominance". READ MORE

Related articles

Trump 2.0: The Engine of Change? (Engine Technology Forum)

Excerpt form Engine Technology Forum: Renewal of our Renewable Fuels Policy? Reducing carbon emissions can be accomplished in many ways; not just by electrification. The EPA’s tailpipe only emissions policy ignores the life cycle emissions policy that would lead to more practical options by boosting advanced renewable biofuels. EPA’s unwillingness to embrace a growth-oriented renewable fuels policy has failed everyone up and down the supply chain. Will the new Trump administration embrace domestically produced low carbon fuels and follow suit with supportive policies? Let’s hope so.

Renewable fuel producers and petroleum interests have often been at odds debating domestic energy policy. Finding some common ground would go a long way to helping ensure both futures for more traditional fuels and more renewable fuels. It should not be an either-or proposition. Renewable fuels are key to a sustainable future for all internal combustion engines.

Start your engines for new Auto and Commercial Truck Emission Policy. The Biden Administration implemented its climate policy by prescribing automotive and heavy-duty truck emissions policies that follow a similar approach: Adopt aggressive rules with challenging deadlines that push electrification, find out that charging infrastructure is lagging and car and truck buyers aren’t buying it as projected, compliance deadlines and costly penalties loom for all, and manufacturers’ planning and investments are upended. And, as we are now learning, sales of traditional combustion vehicles sustain all.

Automotive Policy: something’s got to give. Automakers are facing a multitude of challenges as they witness what happens when policy mandates run into market realities. Aggressive emission standards adopted by President Biden in March require automakers to produce fewer gasoline powered cars and more electric vehicles. Many factors (inflation, access to charging infrastructure) all contributed to a weaker-than-expected EV market that is expected to reach 9-10% of all new vehicle sales this year. This is substantially off pace to achieve President Biden’s goal of 50% of all new vehicle sales being EVs by 2030.

Add to all of that pressure California’s influence that will phase out the sale of gasoline powered vehicles in that state by 2035 conceivably followed by the dozen or so states that are following California. Together these states make up about 40% of the nation’s car market.

Along comes President Trump who has pledged to “eliminate the EV mandate on day 1.” But what does that mean? There is not an EV mandate per se, but rather the stringency of the light-duty car fleet emissions rules effectively forces manufacturers to sell more EVs or hold back on their gasoline vehicle sales. Adding to the uncertainty is the relationship of President-elect Trump and Tesla founder Elon Musk, who has the majority of the EV market in the country. Will Trump end the $7,500 tax credit on EVs that runs until 2032? How will California and its follower states respond to a new automotive policy? How will litigation outcomes impact policies going forward (23 states have challenged EPA’s Heavy Duty truck rules; 15 states are suing California for its truck rules)?

Rescinding or substantially modifying the most recently adopted light duty multi-pollutant rules that the EPA issued earlier in March to ease emissions standards seems to be a likely point of action in the new Administration. With the slowdown on EV adoption currently underway coupled with the new Trump Administration’s likely views on EVs, manufacturers will continue to be sustained by solid sales of their traditional combustion (gas, diesel) vehicles, and improvements in these traditional vehicles and introduce more hybrid technologies. Automakers have substantial investments and their own corporate commitments in zero emissions technology and battery manufacturing and charging infrastructure. These aren’t going away.

Trucking Policy: Something’s got to give here too. Truckers are hopeful that deregulatory and economic boosting policies in the Trump Administration help lift the trucking sector out of the depressed freight market. And it will be just in time as the industry faces a slew of new emissions rules and greenhouse gas reduction requirements from California and the EPA for new vehicles and future fuels.

The EPA’s new greenhouse gas rules for heavy-duty trucks (“Phase 3”) adopted in March effectively dictate starting in 2027 an increasing percentage of fleet sales be zero emissions technology, tied to the sale of conventional diesel and natural gas trucks.

California’s adoption of the Advanced Clean Truck Rule (ACT) and the Advanced Clean Fleets Rule (ACF) together respectively compel manufacturers to produce and sell and fleets to buy zero emissions technology in increasing percentages, which began this year in California. Ten other states have adopted the ACT rule, and nine states are on board with California’s more stringent emissions standards for nitrogen oxides rule. Some reports from California have suggested that already 10-months into the first year of the ACT rule, fleets can’t get the diesel trucks they want to order because of the rules limiting manufacturers from offering them.

And if this is not enough, the industry must make equipment acquisition decisions in 2025 and 2026 in advance of a new EPA emission rule that takes effect in 2027. In previous years facing an emissions milestone, major pre-buys of new equipment occurred in the preceding years, muting any environmental benefit from the new generation of even nearer-to-zero emissions levels.

More so than the auto sector, the commercial trucking industry transition to zero emissions technology is far more challenging. Thanks to the smaller size of the industry overall, the significantly higher infrastructure demands, costs of new equipment in general and zero emissions technology in particular, truckers are making business not emotional decisions. The growing number of state policies impacting vehicle purchase type and use are ultimately hampering both manufacturers and truckers; but can there be a resolution for all?

Truck OEMs, like automakers, have many investments and commitments at stake. They are producing an increasing range of fuel-efficient conventional engines and zero emissions technology for their customers. They too have taken on responsibility to help build out a nationwide heavy-duty truck electric charging infrastructure. These will succeed at some level in the marketplace as one of many options available. READ MORE

Tags

White House Transportation Fuels Policy Texas tax policy tax credits tariffs Securities and Exchange Commission (SEC) Regulations-State Regulations-Federal rare earth metal/critical minerals permitting oil prices nuclear mining minerals loan guarantees Liquified Natural Gas (LNG) Hydrogen/Renewable Hydrogen Price Hydrogen/Renewable Hydrogen GHG (Greenhouse Gas Emissions) Intensity EPA (Environmental Protection Agency) energy security energy independence Electric Car/Electric Vehicle (EV) Department of Energy (DOE) China Carbon Intensity (CI)/Carbon Footprint California Big Oil/Oil Majors Auto manufacturer fossil fuel defossilization life cycle analysis (LCA) heavy duty vehicles (HDV) Heavy Duty Truck Rule internal combustion engine (ICE) Litigation-Federal Litigation-State hybrids trucks Advanced Clean Trucks Rule Advanced Clean Fleets Rule Fleets NOx (nitrogen oxides)

Comments are closed.