With a presidential election looming in 2024, Donald Trump is far outpacing all competition in the Republican party field and leading incumbent Joe Biden in some recent polls. Boosters of the energy transition and Joe Biden’s Green New Deal-based energy policies are growing concerned that a second Trump term would see a gutting of his agenda. The Financial Times recently reported such concerns, focusing specifically on the idea that Trump might target some of the green subsidies and tax breaks contained in Biden’s Inflation Reduction Act (IRA), an almost Orwellian name for such legislation.
Other than vague sloganeering on the campaign trail, Trump hasn’t really focused on energy policy specifics to date, but there is little question he would bring in a set of senior officials and advisors whose energy views differ strongly with those of Biden officials. A new Trump team would indeed probably set out to try to rebalance the national energy equation by going after some IRA policies, especially those whose real cost likely far exceeds the legislative score placed on them by the Congressional Budget Office in 2021. The green subsidy provisions in the IRA came with an official price tag of $369 billion over 10 years, but some estimates suggest that the real cost to the federal budget could exceed $1 trillion.
As he did in the initial months of his first term, Trump would also seek to roll back much of the Biden regulatory and permitting agenda that has sought to hamstring the domestic coal, oil and gas industries. The Biden agenda has become so wide-ranging and impactful that it has emboldened the International Energy Agency and some private sector analysts to start talking about the likelihood of “peak oil” demand before 2030.
Rather than celebrate that notion, some energy experts are concerned the Biden agenda is making the US increasingly reliant on China for its energy needs and negatively impacting energy security. Some are unequivocal in their belief of the need to reverse this policy philosophy.
“Biden’s current plan is like an Opium War reversed, with Americans forced to buy energy that weakens them from China,” Dan Kish, Distinguished Senior Fellow at the Institute for Energy Research think tank, told me in an interview.
Tim Stewart, President of the US Oil and Gas Association based in Washington, DC, sees the Biden agenda as being very similar to the recent energy plans of the UK and Germany. Both nations now have extremely expensive energy and have seen industries depart as a result.
“The Biden Administration loathes to admit it, but the rest of us have learned through the sad experience of Germany and the UK that linking our energy security to European climate policy is the single worst thing the United States can do for its economy,” Stewart says. “President Trump certainly recognizes that. He doesn’t care what the Europeans think, and he doesn’t care what the cocktail crowd says about him at the embassy dinners.”
There can be no doubt about that latter statement. Mr Trump obviously has no compunction about upsetting the DC establishment, and we saw in his first term the sort of full-frontal pushback that engenders. But his pugnacious approach was also highly effective where energy policy is concerned, as he and his team were successful in rolling back much of the Obama/Biden agenda in a matter of months after taking office.
That success was achieved through a combination of executive orders and through working with Republican majorities in both houses of congress during Trump’s first two years. But such majorities tend to be fleeting in US politics. It does seem possible now, a year in advance of Election Day 2024, that Republicans could retain their current House majority and seize at least a small majority in the Senate. But recent events have clearly shown how difficult it is for a GOP Speaker and Senate Majority Leader to manage small majorities as effective vehicles for legislation.
Mr Trump would also face the reality that the expanded investment tax credit and other IRA provisions are also being accessed by some of the big players in the oil and gas industry and other business interests which might otherwise be supportive of a return to the “drill baby drill” agenda of his first term. ExxonMobil, for example, recently revealed plans to become one of the nation’s largest suppliers of lithium via a project that qualifies for IRA tax benefits, one that might not move forward were that provision to be repealed.
As is so often the case in American politics, this is all quite complicated and messy. While there can be little doubt a Trump energy agenda would differ greatly from the Biden agenda, the end result would likely become one that leaves proponents frustrated and supporters of the status quo relieved.
David Blackmon had a 40 year career in the US energy industry, the last 23 years of which were spent in the public policy arena, managing regulatory and legislative issues for various companies. He continues to write and podcast on energy matters