US ELECTIONS: Trump win to have policy, price impacts across commodity sectors

Former US President Donald Trump has won the 2024 race for the White House, setting into motion a host of potential impacts for the power generation, natural gas, oil, critical minerals and petrochemicals sectors.

Trump campaigned on promises of deregulatory steps that aim to stamp out current President Joe Biden's climate agenda and clear away barriers for energy production. Attempts to revise the large suite of Biden administration rules appear likely, with implications across energy commodities.

Trade policy shifts could be in store for the LNG, solar, petrochemicals and other sectors, while the US oil market watches for any shift in sanctions policies. At the same time, wholesale reversals are complex undertakings, and tax credits have momentum of their own as individual projects take shape in congressional districts.

The following is a snapshot of potential impacts and vulnerabilities across commodities under the incoming Trump administration.

Power and renewables

Experts do not expect that Trump will rescind existing offshore wind leases, but they do see federal agencies taking a different approach to ongoing court cases where petitioners are opposing wind farms. If the US Interior Department's Bureau of Ocean Energy Management defers to plaintiffs in these cases, that would slow the offshore wind lease and construction license approval process.

A Republican-leaning Federal Energy Regulatory Commission stands to take a different tack on long-term regional electric transmission planning and cost allocation, potentially impacting efforts to connect more renewables to the grid. Offshore wind, solar, pumped storage and electric transmission projects could run into cross-agency permitting challenges as well if Trump moves forward with his intention to pursue sweeping changes to federal employment protections.

Nuclear

Nuclear industry officials have marveled in recent years at growing bipartisan support for nuclear energy. There has been support during two administrations now for federal funding for advanced nuclear reactor demonstration projects, a more independent nuclear fuel cycle free from Russian dominance, and regulatory streamlining.

The Inflation Reduction Act included significant credits for existing and new nuclear units, and congressional support for them remains relatively strong. Republicans in Congress are among the biggest supporters of a ban on Russian-enriched uranium passed this year that takes effect fully in 2028.

Energy Transition

A second Trump administration is expected to withdraw from the Paris Agreement on climate change, and conservative activists are also pushing for a US retreat from the United Nations' Framework Convention on Climate Change.

A potential retreat from these key agreements would cut US diplomats from global negotiations related to transitioning away from fossil fuels and potentially cause Europeans to double down on climate policies. A former Trump policy adviser said it is uncertain whether a president could take executive action to leave the Paris Agreement without Senate approval.

Gas production

Trump appears likely to roll back or loosen US methane capture rules, lowering production costs for drillers. He has also pledged to use executive action to accelerate permits for gas pipelines, which could potentially boost takeaway capacity in key regions.

Trump has indicated support for increasing oil production, and if the economics support it, added oil output could increase the flow of associated gas into the market.

Under a second Trump administration, the Bureau of Ocean Energy Management may also shift its focus onto conventional resources such as offshore oil and natural gas extraction. However, policy action is not likely to move the needle on US gas production in a significant way — in either direction — in the short-term.

Midstream natural gas

Trump has promised to eliminate permitting hurdles for natural gas pipelines and issue a national emergency declaration aiming to make way for more production. Trump is expected to reverse Biden's actions affecting infrastructure, including on climate considerations.

Overall, though, environmental laws and a likely litigation limit what executive action can do. Much depends on Congress and potential permitting reform. And developing gas pipelines out of the US Northeast could still prove challenging given states' roles.

LNG

Trump has promised to approve LNG projects and end the US Energy Department's pause on issuing key export permits as a "day one" priority. Observers expect a second Trump administration to mean more project approvals, but accelerated permitting could open projects up to legal and regulatory risks.

During Trump's first presidency, a trade dispute with China restricted flows to that country's massive market and slowed related commercial negotiations. Loosening methane emissions rules could disadvantage US exporters facing other markets' demands for emissions cuts.

Oil production

A second Trump administration is likely to aim to increase US oil production by rolling back environmental regulations and expanding offshore and federal lands leasing opportunities. Still, producers may not respond with significant increases in output: Oil companies prioritize profitability and shareholder returns, maintaining modest production growth despite more available drilling opportunities.

Global market dynamics and producer discipline would remain the primary drivers of US output, so major production spikes are unlikely.

Oil sanctions

As president, Trump pursued a maximum-pressure oil sanctions policy that helped drive down Iranian crude output. Experts say he could try to reverse Tehran's production gains in 2023 and 2024. Trump might also return to strict oil sanctions on Venezuela, though there is less consensus around this strategy. Trump's approach to sanctions on Russia is also unclear and may be contingent on a peace agreement with Ukraine.

Trade

During Trump's presidency, he levied tariffs on solar modules and other imports, which continued under the Biden administration. On the campaign trail, Trump floated a 60% tariff on imported Chinese goods and up to 20% tariffs on goods imported from all other countries.

His "America First" agenda focuses on domestic manufacturing, although some economists and manufacturers say his proposals could prompt supply chain disruptions and higher prices. Tariffs on Chinese imports from Trump's first term have already impacted 75% of the chemical industry, which is dependent on China for many intermediates. A Trump return to the White House also carries the risk of trade disputes.

Inflation Reduction Act

Trump has vowed to reverse what he dubs the "green new scam" — his moniker for the Inflation Reduction Act, the 2022 legislation with $370 billion in energy and climate funding likely to drive investment in clean energy sources. Incentives for technologies that help traditional energy sources cut emissions are less likely to face GOP action.

A sweeping repeal of the bill's tax incentives still appeared unlikely, according to experts. Many of the benefiting energy projects are in Republican congressional districts. Any IRA reversal efforts could be tied to extending Trump's 2017 tax overhaul.

Electric vehicles

Trump tends to frame electric vehicle-friendly policies as harmful to the US auto industry and has floated the idea of rescinding the Biden-Harris administration's $7,500 EV tax credit. Doing so would slow the penetration of EVs in the passenger vehicle market, Commodity Insights analysts say.

Trump has also alluded to opening the market up to the production of Chinese vehicles in the US to boost domestic jobs. The Republican 2024 platform released in July states that the GOP intends to "revive the US auto industry" by reversing "harmful regulations" and "preventing the importation of Chinese vehicles."

Critical minerals

Trump during his first term reopened Minnesota's Superior National Forest to mining, clearing the way for developing a large copper-nickel mine there, although the Biden administration placed a 20-year mining moratorium in the region. Trump also issued an executive order declaring a national emergency over the country's dependence on China and backing domestic mining and critical minerals activity.

Trump has distanced himself from the Project 2025 plan from the Heritage Foundation that several of his past and current associates formulated. The plan includes the elimination of the US Energy Department's Loan Programs Office, which offers billions of dollars to potential critical minerals producers and processors.

Petrochemicals

The second Trump presidency appears likely to depart from the Biden administration's chemicals management and environmental policies. Trump has vowed to dismantle climate initiatives and slash the budgets of regulatory oversight agencies, including the Environmental Protection Agency. Some of the Biden administration's sizable investment initiatives are earmarked for chemical makers and would boost demand for certain specialty chemicals. These incentives could be on the chopping block under Trump's second term.

Coal

Under Trump, climate change is likely take a back seat in energy discussions, opening the door to regulatory changes that could help the industry — even if they do not reverse the shrinking US sector's broader fortunes. Trump previously took action to reverse greenhouse gas emission rules and stream protections; paused a federal study on mountaintop removal; and pursued other policies favorable to coal mining. Still, coal production and employment fell under Trump's previous term in the face of more competitive economics for natural gas and renewable power sources.

S&P Global Commodity Insights reporters Jared Anderson, Jeremy Beaman, Rebecca Coons, Kirsten Errick, Bill Freebairn, Zack Hale, Garrett Hering, Taylor Kuykendall, Jasmin Melvin, Corey Paul, J Robinson, Maya Weber, Daniel Weeks, Kate Winston and Eric Wolff contributed to this article.