Coal, Energy Transition, LNG, Emissions

November 06, 2024

US ELECTIONS: Trump prevails, shifting policy focus from climate to deregulation, tariffs

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HIGHLIGHTS

Efforts to scale back Biden GHG rules expected

Return to ‘energy dominance’ agenda likely

Former US President Donald Trump was elected to a second term, promising to strip back regulations, encourage US energy production and impose tariffs to push manufacturers to locate in the US.

The Associated Press called the race early Nov. 6, after Trump was projected to take the swing state of Wisconsin.

As president, Trump is expected to reverse the Biden administration’s whole-of-government drive to mitigate climate change, instead seeking to pare back greenhouse gas emission controls on the gas, oil, coal, power and auto sectors.

The president-elect’s return to a focus on “energy dominance” could mean quick approvals of long-paused LNG export applications, potentially helping pending projects and expansions move forward. And the Trump team is expected to comb through Biden executive actions to weed out impediments to production, some of which have frustrated small producers.

Oil and gas production, however, is already at elevated levels and may be more attuned to market dynamics and producer financial discipline than regulatory evolution in the near term, reducing the likelihood of major production spikes. While Trump has promised to clear away regulatory hurdles for pipeline development to help spur production, litigation against fossil fuel infrastructure remains a barrier.

Offshore wind development, long a focus of Trump’s vocal criticism, could see delays, according to policy analysts. Credits for electric vehicles under the Inflation Reduction Act are another potential target.

Momentum could languish for Biden-era policies to spur long-range electric transmission. However, most analysts see wholesale reversal of IRA clean energy tax incentives as unlikely. And supports for technologies to lower emissions from traditional fuels may continue to enjoy bipartisan support.

On the global stage, the Trump administration is expected to withdraw from the Paris Agreement on climate change.

At the same time, oil markets are watching for whether Trump will revisit his maximum pressure sanctions policy that drove down Iranian crude output or perhaps lift sanctions on Russia in connection with a peace agreement with Ukraine.

The former president could once again shake up trade policy. He has floated the idea of a 60% tariff on imported Chinese goods and up to 20% tariffs on goods imported from all other countries. That has generated concerns among some in the US LNG sector, which faced retaliatory tariffs from China under Trump’s first term.


Editor: