U.S. energy policy was at the heart of the 2024 presidential campaign in more ways than one. Many voters cited economic concerns in their decision to return President Trump to the White House, with energy costs top of mind, but U.S. energy policy impacts everything from domestic manufacturing and decarbonization efforts to resource development and international trade. In today’s RBN blog, we look at the executive orders issued by Trump on the first day of his second term and how they fit into his plan for the U.S. to exert “energy dominance.”
If you feel like U.S. energy policy has been on a bit of a see-saw for the last decade, you’re not alone. While policy can swing significantly from administration to administration, the shifts have been particularly sharp over the past eight years, with Trump attempting to reverse many priorities of the Obama administration, followed by President Biden trying to do the same to Trump. But Trump is back in office, on a campaign that promised to lower prices for consumers, unleash U.S. energy production — “Drill, baby, drill!” — and undo many of the clean-energy initiatives established during the Biden administration. The Trump team had been planning for Inauguration Day for some time, aiming to make the start of his second term in office as impactful as possible. To that effect, the returning chief executive issued just under 50 executive orders Monday, with five directly seeking to remake U.S. energy policy and another that rescinded several orders issued during the Biden administration.
Trump’s boldest order (so far) was his declaration of a national emergency for U.S. energy, which orders executive departments and agencies to identify and exercise any emergency authorities available to them to facilitate domestic energy production. Specific actions noted include emergency permitting under the Clean Water Act and exemptions from the Endangered Species Act — two laws whose provisions have slowed or even killed a number of energy-related projects. As justification for the emergency declaration, the order said insufficient energy production, transportation, refining, and generation constitutes an “unusual and extraordinary” threat to national security and the economy.
Figure 1. U.S. Crude Oil and Natural Gas Production, 2000-24. Source: EIA
Another executive order, Unleashing American Energy, is intended to accelerate the permitting process and reduce environmental reviews for many types of energy infrastructure projects, including LNG export terminals, transmission lines and pipelines. The order, which Trump highlighted during the campaign, aligns with his pledges to reduce energy prices by expanding oil and gas production, boosting power generation, and allowing the energy industry to expand as needed. But U.S. production of crude oil and natural gas (navy and orange lines, respectively, in Figure 1) are already pushing to record highs, and there is some doubt that oil and gas producers — which have been laser-focused on capital discipline over production growth in recent years — are ready to accelerate spending, as we noted in Writing’s on the Wall. If anything, lower prices would be more likely to limit production growth.
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