Energy Policy Changes in a Trump Administration

Many in the sustainability sector are worried about what a Trump administration will mean for energy policy. Trump made campaign promises to increase coal and hydraulic fracturing (commonly known as fracking). He also pledged to roll back the Clean Power Plan, the linchpin in the Obama administration’s strategy to reduce greenhouse gas emissions. Meanwhile, he said very little about renewable energy. What will that mean for energy policy?

Analysts for Bloomberg Intelligence, Bloomberg’s research division, looked at how a Trump administration will likely affect energy policy.

Trump's campaign focused on fossil fuels, namely limiting regulations on oil and gas production and ramping up coal use in the power sector. He said he wants to stop the Clean Power Plan. But if the plan is left intact, it could support new wind and solar power in some regions. The Supreme Court stayed the plan in February, and the U.S. Court of Appeals for the D.C. Circuit heard arguments challenging the plan in September.

Trump hasn’t said he would back policies which increase clean energy capacity, while other Republican leaders went on record saying the government should not support clean energy projects.

What could be at stake are the recently extended wind and solar tax credits. Congress may roll them back. Even if they don’t, Trump could push for tax reform, and that would “threaten the value of the credits for project owners,” wrote BI's analysts. The wind energy tax credit is likely safe under Trump’s administration and the next Republican-controlled Congress. However, Congress will probably let the tax credit phase out in 2019.

It is likely Trump and the Republican-controlled Congress will sideline federal clean energy policies, so the focus will shift to states.

As Susan Tierney, senior advisor to the BI Analysis Group and former assistant secretary of policy for the U.S. Department of Energy, told Clean Technica, “Most of the states have been pushing for deeper investments in energy efficiency.” And state policies “pushing for rooftop PV (photovoltaics) and utility-scale solar have transformed those markets.” States are leading the way and will likely continue to do so under President Trump.

Trump could be good for coal but not so good for offshore wind

Under Trump, coal may be king. During his campaign, Trump made promises to the coal industry to revive mining jobs. In May he said, “Let me tell you: The miners in West Virginia and Pennsylvania, which was so great to me last week and Ohio and all over, they’re going to start to work again, believe me.”

The Clean Power Plan aims to reduce annual coal use in the U.S. by about 230 million tons by 2030. If the courts either remand or overturn the plan, it would give Trump “wide latitude” to create a replacement rule, as BI's analysts put it. A halt on the Plan could also lead to decreased natural gas in electric power and more coal use. Trump may also try to reverse Obama’s moratorium on new coal leases on federal land.

Market forces are not on the side of coal, and all the changes Trump might make can’t change that fact. Cheap natural gas is “coal’s true rival,” as recently reported in the MIT Technology Review. Through hydraulic fracturing, commonly known as fracking, natural gas volume has increased while coal mining jobs declined.

Meanwhile, offshore wind has a huge potential. Over 2,000 gigawatts could be accessed in state and federal waters along the U.S. coasts and the Great Lakes. The Interior Department under President Obama has set a goal to reduce the time and costs connected with federal permitting of offshore wind projects. The agency under Trump’s administration will likely not have such a focus.

The federal government now holds auctions to grant leases for offshore wind energy sites that are under federal jurisdiction. There is an upcoming auction for leases off the shores of New York and it could attract more new companies than previous auctions. However, BI analysts said the U.S. offshore wind industry, which is still in its infancy, may need incentives to “spur significant project development.” Those incentives will likely come from states and not the federal government under the Republican-controlled Congress. An example is a new law passed in August by Massachusetts Gov. Charlie Baker, a Republican, requiring the state to procure offshore wind energy contracts that could drive 1.6 GW of offshore wind energy.

Image credit: Flickr/Michael Vadon