As the dust settles from the recent presidential election, the outlines of the new administration’s energy policies are becoming clearer, although many uncertainties persist. The incoming government is poised to make significant shifts in the nation’s energy landscape.
Immediate Actions on Energy Policy
On his first day in office, President-elect Donald Trump intends to expedite the approval process for liquified natural gas (LNG) export permits, aiming to boost oil and gas production and reduce energy costs. This policy shift includes encouraging oil exploration on federal lands and reshaping the Department of Energy’s (DOE) approach to LNG export licenses under the Natural Gas Act. Additionally, Trump has pledged to withdraw the United States from the Paris Agreement on climate change, relieving the country from the obligations of the non-binding national climate plan due by February 2025.
Trump’s administration is also set to challenge recent Environmental Protection Agency (EPA) regulations, including the newly introduced methane fee for oil and gas companies. The Congressional Review Act (CRA) may be utilized to overturn this rule, which was finalized in the past 60 legislative days. Other potential targets include power plant regulations mandating carbon capture for gas-fired plants and the DOE’s energy efficiency standards for various appliances, which remain unfinalized. The energy budget, particularly offices like the DOE’s Office of Energy Efficiency and Renewable Energy (EERE), could face reductions, subject to Congressional approval.
The future of offshore wind energy projects under Trump’s leadership remains uncertain. The administration could impose restrictions on offshore leases and delay federal permits for ongoing projects. Similar interruptions occurred during Trump’s previous term, notably impacting the 806-megawatt Vineyard Farm project in Massachusetts. Proposed tariffs on imported wind and solar components could further strain these industries, already challenged by rising costs and supply chain issues.
Congressional Dynamics
The Republican majority in both the House and Senate will significantly influence the legislative agenda. The Senate, with a 53-47 Republican majority, will see John Barrasso (R-WY) chairing the Senate Energy and Natural Resources Committee. Barrasso is known for advocating deregulation of federal lands and scrutinizing electric vehicle (EV) benefits. Meanwhile, Martin Heinrich (D-NM), a proponent of renewable energy and EVs, is expected to assume a leadership role within the committee.
In the House, leadership changes are pending, particularly for the Energy and Commerce Committee. Candidates for chairmanship include Reps. Bob Latta (R-OH) and Brett Guthrie (R-KY), both of whom have expressed interest in diverse energy strategies. The ranking member, Rep. Frank Pallone (D-NJ), is focused on promoting clean energy initiatives. Similar shifts are expected in the House Committee on Natural Resources, with Jared Huffman (D-CA) likely to assume a leadership position.
Agency Leadership and Strategic Directions
Chris Wright, currently CEO of Liberty Energy, has been nominated as Secretary of Energy. Known for his critical stance on terms like “energy transition” and “climate crisis,” Wright’s leadership may reflect Trump’s energy agenda. However, his ties to geothermal and nuclear energy companies suggest a potentially nuanced approach. Wright will join Doug Burgum, the nominee for Secretary of the Interior, and Lee Zeldin, tapped to lead the EPA. These appointments are expected to advance oil, gas, and coal extraction while revisiting EPA regulations.
The fate of the Inflation Reduction Act (IRA) is uncertain under Trump’s presidency. Despite Trump’s criticism of the IRA, its benefits, particularly in Republican districts, complicate efforts to dismantle it. Nonetheless, some elements, such as EV tax credits and clean energy incentives, may face revisions or eliminations. The DOE is working swiftly to secure funding commitments for existing projects, aiming to safeguard them from potential budget cuts.
Permitting Reform and Bipartisan Opportunities
Permitting reform emerges as a bipartisan issue, with both parties acknowledging the need for streamlined processes to support energy infrastructure development. The Barrasso-Manchin permitting bill, proposing timelines for permit processing and transmission development, is a focal point for potential legislative progress. If not passed in the current session, budget reconciliation may be considered to enact changes.
There are additional areas where bipartisan collaboration is possible, such as the development of small modular nuclear reactors and geothermal energy. Recent legislative efforts, like the HEATS Act, aim to expedite geothermal energy projects. Furthermore, discussions around hydropower technologies and cross-border carbon tariffs indicate potential for cross-party cooperation.
Original Story at www.mintz.com