Republican Donald Trump has won the US presidential election in a surprise upset after polls had predicted a comfortable lead for his Democratic opponent, Hillary Clinton. While Trump has given few concrete details about his energy plans, his statements during the campaign indicate he would likely adopt policies that attempt to expand fossil fuel production, ease regulations on industry and roll back President Barack Obama’s clean air policies, according to S&P Global Platts.
Trump has said he supports all forms of energy and wants the market to decide which ones succeed. He has promised to open all federal land and water resources to fossil fuel production, in contrast to Clinton, who had called for new, stricter limits on oil and gas production on public lands and indicated she wanted US offshore production confined to only the Gulf of Mexico. Trump, widely seen as a far bigger supporter of the oil and natural gas industry, will likely rebuff any environmentalist attempts to curb domestic fossil fuel production and will likely give US producers access to far more on and offshore plays than Clinton would have.
Trump has said he will pursue a policy path to promote drilling and, in turn, boost consumption of even cheaper domestic oil and other fossil fuels. Analysts say his broad plans to boost US production and eliminate many of President Obama’s regulatory efforts to combat climate change may result in less demand reduction than if Clinton were elected. According to S&P Global Platts, Trump would likely quash efforts to institute new greenhouse gas performance standards for petroleum refineries and may push to weaken future fuel economy standards for light-duty vehicles, but those possible moves would not necessarily correspond with an increase in demand. This is particularly because efficiency gains already in place in the US vehicle fleet are already forecast to cut gasoline demand as much as 500,000 barrel per day by 2020.
Trump has promised to either dismantle or overhaul the Environmental Protection Agency and roll back Obama administration regulations to curb coal industry pollution. According to Kevin Cramer, a top Trump energy advisor, Trump believes EPA needs to return to its core mission of protecting clean water and clean air, and that Congress has granted it too much leeway in interpreting legislation. Trump is expected to try to scrap the Clean Power Plan. He questions the widely held scientific consensus that human activity is causing climate change.
It is unlikely the next president will have a big impact on future midstream projects, since authority over most oil and gas pipelines falls outside the administrative branch. “But LNG export facilities and cross-border oil and gas pipelines must receive a presidential permit, and Trump’s appointees will be weighing those applications,” Platts said. Trump has said he would spend “at least double” what Clinton planned on infrastructure, funding it with new debt to take advantage of still-low interest rates.
Trump’s possible efforts to end incentives for alternative energy development would boost near-term demand for fossil fuels. For example, a potential cut in the Investment Tax Credit to 10 per cent from the current 30 per cent would slash solar installation demand by 60 per cent, according to S&P Global Market Intelligence.