November 10, 2016
Last month I wrote an article about the potential course of events for environmental and energy policies if either presidential candidate was elected. Now we know there will be a Donald Trump administration. So first I will repeat the thoughts about what a Trump administration might look like when it comes to energy/environmental policy, and I’ll present some early policy areas being considered. Nothing here is written in favor or against any policy, but future issues facing the energy/environmental professional.
Energy: Donald Trump has been severely critical of current energy and environmental policy and has stated he will reverse many of President Obama’s initiatives. During a May 26 speech, Trump reflected a desire to achieve US energy independence by reducing federal regulations on the energy industry, increase investments in fossil fuel development and infrastructure to bring it to market (such as supporting the Keystone Pipeline), and reduce federal investment in renewable energy, as he has criticized both solar and wind power. Trump also supports increased use of nuclear power.
Environment: Trump has stated he would rescind a number of President Obama’s environmental rules, such as the Clean Power Plan. As a real estate developer, Trump has a particular aversion to environmental rules which he felt has cost him unnecessary money and delayed his projects. He has also specifically pointed to the Clean Water Act as another regulation he would greatly weaken. Reversing or weakening these and other EPA rules would require EPA rulemaking, requiring a public notice process. A Trump Justice Department may just not defend these and other environmental rules when challenged in court by industry. Neither approach would ensure success, as environmental and other groups would surely marshal forces in defense of the rules. Furthermore, courts could rule that these regulations are valid, legal, and necessary.
Climate Change: Trump stated on the campaign trail several times that climate change has not been proven. However, closer to the election, he was more neutral about the topic. He certainly feels it is not a high priority. He has expressed his intention to withdraw the US from the Paris Climate Agreement, which may be difficult to do. Trump could do as little as possible to implement it, which has weak enforcement mechanisms. He has also stated he would stop all US payments toward UN climate change initiatives.
One of Trump’s main advisors on environmental issues is Myron Ebell, a known climate change denier. There is speculation that he may be put in charge of the EPA. Mr. Ebell has been very critical of not only climate change, but also of recent Obama environmental rules. There is speculation that he may even call for the repeal of signature environmental rules, such as the Clean Air Act and Clean Water Act, and the dismantling of the EPA. This would likely require passage by Congress. Both houses of Congress are controlled by Republican majorities, but slim ones. There are many Republicans who believe in climate change and environmental rules or live in districts with constituents who would be bothered by radical change like this.
Published reports have stated that Mike McKenna has been a major advisor for the transition team on energy issues. He is a former DOE employee, and has been a lobbyist for several oil & gas and chemical companies. It is believed that a Trump-led DOE and Republican Congress would open up more federal land for oil exploration and encourage more coal production by repealing rules discouraging it. This would lead to greater energy supply, lowering prices for consumers, but also potentially raising risks of costly environmental damage. Many have argued that with other countries willing to supply much oil, gas, and coal to the global market and with rising exploration costs, the market may convince many oil & gas and coal firms to restrain anyway. With fracking and a large natural gas supply, coal and oil may yet be too expensive to invest in even with reduced regulations. But it appears that’s the direction of the new administration.
While this is happening on the federal level, it is certainly conceivable that states or groups of states will re-double their efforts to enforce meaningful environmental rules. However, with weak federal rules, one state’s lax rules could attract new businesses in place of a state with stricter rules to protect its public’s health.
And finally, there is the market. Many people were shocked by Trump’s electoral victory, but the sun still came out the next day, and with it solar and other renewable energy. While Trump has been critical of its implementation, the market has certainly favored this and being more energy efficient, as renewable power and energy efficiency programs have grown tremendously in the last few years. Renewable power is generally cheaper, growing in reliability, and reduced in cost compared to many fossil fuel applications. While dis-incentivizing these programs may set them back, positive results in the market should still attract business.
CCES can help you evaluate your company’s energy use and environmental impacts and can perform the technical aspects to determine compliance with current rules and develop opportunities to reduce your energy usage and diversifying sources, saving you money and decreasing business risk. Contact us today at 914-584-6720 or at karell@CCESworld.com.