Energy and Environmental Predictions and Issues for the Trump Administration

Energy and Environmental Predictions and Issues for the Trump Administration

Since everyone is scrambling to predict how the incoming Trump administration will affect energy markets and practices and environmental regulations I thought I would join the prediction bandwagon and make a few. It seems pretty likely he will try to overturn Obama’s executive orders such as the Clean Power Plan, the new federal methane leakage rules, the Clean Waters rule that affects coal companies, rules banning Arctic drilling, fracking and methane rules on federal lands, and coal leases on federal lands. 

In a recent ‘in a nutshell’ report on NPR on environmental regulation changes under Trump, it was basically stated that anything Obama enacted by executive order in the last 60 days of his presidency can be rescinded quickly by congress through existing protocols. This includes the new federal rule on methane emissions from oil & gas sources which was finalized in November. It also includes his executive action making Arctic drilling off limits. Other things like the Clean Power Plan (which is currently held up in the courts after 28 states filed lawsuits) will take more time to rescind since periods of hearings, information gathering, and public comments would be required. The Paris Agreement can be rescinded or at least the commitments can be ignored but the U.S. is already well on the way to meeting the initial requirements of it. It would send an uncooperative signal from the U.S. to the international community. Thus Trump may not bother with it. They also quoted NRDC vowing to sue like crazy with a secondary goal to delay Trump’s overturns. I have also heard that the more radical environmental groups like Sierra Club and Greenpeace have been aggressively raising money for opposition campaigns.  

Trump’s placement of the Competitive Enterprise Institute’s Myron Ebel at the head of the EPA transition has been concerning to many since Ebel has led the conservative media/think tank charge in downplaying the dangers of climate change. Trump has also pledged to downsize and “defang” the EPA. It is unclear how far such changes will go. Attributions of the decline of coal due to EPA regulations are overblown according to most sources. Cheap natural gas and subsequent coal-to-gas switching in power plants is the biggest factor in the decline of coal, followed by mechanization, tighter international markets for both thermal and metallurgical coal, coal depletion in the eastern states, and to lesser extents- competition from renewables and energy efficiency improvements. Despite Trump’s goal to revive coal it does not seem likely that he can do much more than slow down the contraction of the industry. Building new coal-burning power plants has been off the table for a while now for most utilities and none are planned. Such new plants would be stranded asset risks as the economy presumably decarbonizes through the next decades. What he might be able to do is help with delaying retirements of coal plants. He can also rescind Obama’s changes for federal land leasing for coal development on Western lands. Wyoming is the major coal state with big economical reserves remaining and its highly mechanized Antelope Mine the biggest in the country. He will likely roll back the recent clean streams rule that affects mine waste water but that was not considered much of an impediment to coal production. Trump’s vow to end the war on coal is a really just a vow to end some relatively minor restrictions on coal profitability. It is uncertain what he can or might do with the recent federal rule on coal ash waste containment. 

There is little doubt that Trump will do what he can at the federal level to speed up and green light approval for oil & gas infrastructure and pipelines. Any improvements here will be good for the oil and gas industry. Gas pipeline infrastructure is sorely needed to optimize regional availability to new and proposed gas power plants and to help producers from having to sell at bottlenecked or glut prices. Pipeline opposition is one of the biggest new focuses for radical environmentalists and they have succeeded in delaying several pipelines and likely influenced the state of New York to deny environmental permits for the planned Constitution Pipeline. The potentially negative environmental effects of pipeline construction are very likely overblown. While pipeline accidents, leaks, and explosions do occur, we have been building and using them for many decades with overall safety rate pretty good and most issues are caused by old pipelines with corrosion being the most common issue. Newer pipelines are far less likely to leak, although it does occasionally happen.   

  

As the politico article points out, the U.S. is on track to meet commitments for both the Paris Agreement and the Clean Power plan so rollbacks there will have little effect in the real world. One thing they can do is delay retirement of coal-burning power plants in coal states that also burn a lot of coal in power plants. However, there are still gas power plants being built in those regions as well as wind and solar generators. While groups like the Sierra Club like to think their ‘Beyond Coal’ campaign has been a major influence on the decline of coal and similarly Obama’s supposed ‘war on coal’ have merely been minor supports. States and utilities have been planning for quite some time how to move away from high carbon sources, particularly coal. Many utility executives and CEOs are coming to accept decarbonization of the grid as a reality. States and utilities have drawn up plans for compliance with the Clean Power Plan even though it is held up in court and very likely won’t be officially implemented. Many oil and gas companies are already in compliance with the federal methane emissions mandates. Several states have either already implemented or recently proposed very similar methane emissions rules. This simply means that current reductions in methane emissions will remain and further reductions will still be pursued under state rules or existing protocols. Companies can be proactive by over-complying and assuming the rules might come back anyway at some point, whether federally, or in their state. One question is whether periodic assessments and reporting to regulatory agencies will be required. In anticipation with compliance there are already company contracts with leak detection and repair (LDAR) contractors to make those evaluations. Perhaps the assessments will occur less frequently but I guess they will still occur. New and less expensive air emissions detection and measurement equipment is being developed so that companies can also do their evaluations ‘in-house.’ Since leak detection and repair already has been a minor function in oil & gas it will likely remain and benefit from new technology and due to the mere possibility of federal and new state requirements looming. 

One issue I have heard mentioned a couple of times is the possibility of increased federal funding for carbon sequestration, presumably from coal plants. This so-called ‘clean coal’ technology has been barely moving for some time although there are some operations in place and apparently functioning well and as planned. Trump has made no indication that he will do this and while it may help some coal plants stay in business longer it likely won’t affect mining jobs so it would not be a major factor in saving coal. It requires government assistance and should be pursued regardless since if global warming continues to worsen and happen according to model predictions then it would be a required part of decarbonization where fossil fuels are still burned. 

I attended a panel discussion a few days ago with Ohio University Environmental Studies professors and students to discuss environmental regs in a Trump administration. This was not officially, but quite apparent, a left-leaning group, as are many higher education institutions in the U.S. despite the name of the sub-school derived from former Ohio Republican governor George Voinovich. While several issues pointed out here were brought up and analyzed similarly to my analysis, there were a few general differences. Clearly ‘anti-pipeline-ism’ continues to gain ground and negative views of the oil and gas industry pervade despite acknowledgement that inexpensive natural gas has been the major driving force for reducing U.S. carbon emissions (not to mention cheap gasoline, cheaper electricity, cheaper heating, reduced air pollution, and reduced water pollution compared to coal).  While Trump will likely aid approval of and avoid obstruction of pipelines at the federal level as he can, there was the absurd allegation by some students and one professor that his infrastructure spending plans could include oil & gas pipelines. Of course, the U.S. government has not to my knowledge funded pipelines in any way since World War II so this is basically nonsense. While Trump has also vowed to bring the Keystone XL Pipeline back on the table they have been working on other outlets in Canada, the tar sands industry has contracted and has been defunded a bit since the oil price downturn, and due to the current glut in the U.S. and globally as well as some refineries being re-outfitted to process U.S. light crude rather than heavy tar sands crude, the economics and the effects on supply do not look good. From a geo-political standpoint tar sands crude is preferable to “conflict” oil from some countries but from an environmental and climate standpoint tar sands crude is more problematic. The professors there did have some data on previous environmental regulation rollbacks of both incoming Republican and Democrat administrations and both were pretty low – less than 10%. 

One thing I disagreed with that they seemed to be in agreement with was the need for social activism regarding the environment and climate change. I think such activism had been over-used by the more radical environmentalist elements and very often is counterproductive to problem-solving. They seemed to think that more was needed. They also advocated educating people more and more about the dangers of climate change. However, that assumes there is little uncertainty regarding if, when, and at what levels those dangers will occur. My own opinion is that social activism should be reserved for human rights issues and not for differences of opinion regarding degree of risk for environmental issues. Unfortunately, environmentalists frequently try to present such issues as human rights issues much like the Standing Rock protests are depicted as indigenous rights issues. I even thought so at first but after a while it became clear that they had been thoroughly co-opted by the ‘Keep It in the Ground’ movement and it is basically a bogus ‘difference of opinion’ issue spurred by radical environmentalism. Much of this wholesale opposition to any proposed project is simply bogus. There was also the characterization of Trump conservatives as “anti-science” and while that may appear to be the case in many instances I think for the most part the (perceived) anti-science stances are really a proxy for ‘anti-policy,’ or what they see as austerity policies coming about as a result of the science.

    

Certainly, I would expect the tone of the Trump presidency to avoid much mention of climate change and of environmental issues. He certainly intends to orient federal policies toward a pro-business stance. But many industries like oil & gas are primarily regulated at the state level and even though there are many Republican governors and many Republican state houses there are no state plans to my knowledge to rollback regulations. Oil & gas companies, coal companies, and utilities are all oriented toward a lower carbon future and while that could be relaxed slightly it is not likely to have a significant effect. There is a very real possibility that Trump will seek to reduce or eliminate any U.S. commitments to international climate change funds and to reduce money for climate research, especially newly proposed climate research. The defunding of research into climate change can indeed be seen as anti-science because we need as much data as we can gather to accurately assess the dangers. Indeed it was recently reported in the Guardian that Trump plans to defund NASA’s Earth Science Division. This is a bit disturbing considering important new satellites have just gone up and a bit odd since some satellite temperature measurements have been a general support for those who say the climate is not warming very much since satellite temps have stayed fairly flat compared to surface temps. However, he could seek to increase funding for innovation and technology which could lead to better energy efficiency and climate change mitigation technologies.  So far with Trump there remains quite a bit of uncertainty and his expressed desire for unity may lead to positive surprises in these regards although many people doubt that will happen.

The EDF article points out that much of the rest of the world has agreement at various levels and resolve toward mandating climate issues (including China’s planned carbon market). They also note that there is wide support for environmental issues in the U.S. and that clean energy is advancing and challenging fossil fuels in some areas. They also reiterate that states also have well underway policies addressing climate change and emissions. Cities and regions also have various levels of planning underway, including resilience planning for climate-related events like drought, wildfires, floods, storm surges and sea level rises, heat waves, and changes in biological species ranges and survivability. The military has long been involved in such planning as well.   

  

References:

Environmentalists Get A Dose of Good News – by Michael Grunwald, in Politico (politico.com), Nov. 18, 2016

Why Trump Can’t Make Coal Great Again – by Michelle Nijhuis, in National Geographic, Nov. 29, 2016

Environmental Policy and Politics: What’s in Store with a Trump Administration Nationally and Internationally, panel discussion by Ohio University Voinovich School of Leadership and Public Affairs, Environmental Studies Program, Nov. 28, 2016

4 Pieces of Climate Progress President Trump’s Policies Can’t Undo – by Keith Gaby, in EDF Voices, Environmental Defense Fund, Nov. 23, 2016

Trump’s Plan to Defund NASA’s Climate Research is … Yikes: Climate Change Doesn’t Care About Politics – by Mary Beth Griggs, in Popular Science, Nov. 23, 2016