(394a) Fossil Energy Policy in the Trump Administration

Those interested in a federal fossil energy policy are very alert to attempt to read the proper signals early in the Trump Administration. Several circumstances provide a sense of direction. Others will unfold over the June to January timeframe.

What we know now is:

• It appears that the Clean Power Plan is dead. This may be helpful because industry players perceive a somewhat arbitrary “number” representing emission reduction levels on a state-by-state basis. The energy industry is reducing emissions already and can likely meet climate goals more cost-effectively by not having to spend money on compliance costs and to use this capital to reduce emissions broadly instead on arbitrary emissions reduction targets.

• It appears that the Paris Accord is dead. Staying in or pulling out of the Paris Accord may be meaningless from an emission reduction standpoint. The U.S. energy industry is on track to realize the emission reductions represented in the accord. It can achieve emission reductions more cost-effectively without arbitrary reduction levels and regulatory compliance costs. Contributions that the United States would have made to the Green Climate Fund can be used for other purposes consistent with the President’s “America First” campaign promise.

• And the U.S. Department of Energy Fossil Energy budget, this is trickier because while the “budget path” cuts fossil research it also cuts research in the energy efficiency and renewable energy budgets. The administration has strived to stress that the federal role should be basic research, not pre-commercialization research; which they suggest is more appropriately a private sector function.

Much more will be known over the next few months – impacting the fossil fuel research agenda perhaps for years.