On November 26, 2024, according to two informed sources who spoke to Reuters, Donald Trump’s transition team is working on a comprehensive energy plan that will be rolled out after he takes office. The plan will approve new liquefied natural gas (LNG) export projects and increase oil drilling on coastal and federal lands in the United States.
This energy plan not only largely reflects the promises Trump made during his campaign, but is also set to be launched on his first day in office to ensure that oil and gas production moves forward in sync with addressing immigration issues, both of which constitute pillars of Trump’s early agenda.
Sources say that Trump also plans to repeal some key climate legislation and regulations put in place by his Democratic predecessor, such as electric vehicle tax credit policies and new clean power plant standards aimed at phasing out coal and natural gas.
One of Trump’s top priorities will be to overturn President Biden’s decision to halt the issuance of new LNG export permits during the election year, and to swiftly approve pending permits. He will also seek to expedite approval of drilling permits on federal lands and quickly restart a five-year drilling plan along the U.S. coast to include more lease sales.
Trump will also seek approval for the construction of the Keystone Pipeline, a move with symbolic significance. The Keystone Pipeline had been a focal point of environmental issues and was forced to halt after Biden revoked critical permits on his first day in office. With easements and other issues now returned to landowners, any company wishing to invest billions of dollars to transport Canadian crude oil to the U.S. will need to start from scratch.
Karoline Leavitt, a spokesperson for Trump’s transition team, stated in a release, “The American people can trust that President Trump will use his executive powers to fulfill the promises he made to voters during his campaign on his first day in office.”
Many aspects of this plan will require time to be reviewed by Congress or the national regulatory system. Trump has pledged to declare a national energy emergency on his first day in office. This will depend on his ability to bypass numerous obstacles and expedite the implementation of certain reforms.
Trump will also urge Congress to provide new funding to replenish the U.S. Strategic Petroleum Reserve. The reserve was established for emergency crude oil supply, but has been depleted during Biden’s tenure, used to help address the Ukraine crisis and soaring prices during the pandemic-induced high inflation. Replenishing the reserve will boost short-term oil demand and encourage U.S. oil production.
It is expected that Trump will also pressure the International Energy Agency (IEA), based in Paris, to shift its focus to be more favorable to the oil industry. Republican critics argue that the IEA is too focused on emission reduction policies. Trump’s advisors are urging him to suspend funding to the IEA unless the agency adopts a stance more beneficial to the oil industry.
Dan Eberhart, CEO of oilfield services company Canary, stated, “I have personally urged Trump and his team to pressure the International Energy Agency to return to its core mission of energy security and stop greenwashing.”
Biden froze new LNG export permits in January to study their environmental impact, with the true purpose being to court support from green voting blocs within the Democratic Party.
Developers cannot advance long-standing construction plans for new projects without export permits. Delayed projects include Venture Global’s CP2, Commonwealth LNG, and Energy Transfer’s Lake Charles complex, all located in Louisiana.
The United States is the world’s largest natural gas producer and became the leading LNG exporter in 2022 as Europe sought to reduce imports from Russia following the invasion of Ukraine.
Sources indicate that the Biden administration pledged to release an environmental impact study before Trump’s inauguration on January 20, but this will not have any impact on the incoming government.
An informed source said, “The liquefied natural gas issue is on the table, and he (referring to Trump) plans to push strongly on this issue.”
Federal records show that the Federal Energy Regulatory Commission has approved five U.S. LNG export projects, but they are still awaiting permits from the Department of Energy.
Due to the Biden administration halting necessary environmental reviews, some of these reviews may still require five pending energy department permits to pass legal review.
Trump will seek to expedite drilling on coastal and federal lands in the U.S.
According to federal data, the average time for obtaining drilling permits on federal and Native American lands during the first three years of the Biden administration was 258 days, higher than the 172 days during Trump’s first term. Sources indicate that the Trump administration is expected to speed up the processing of pending permits, hold sales events more frequently, and offer land more likely to yield oil.
Despite delays in permit approvals, the Interior Department under Biden approved a higher average number of onshore oil drilling permits than Trump’s first administration.
Federal data shows that in 2023, oil production on federal lands and waters reached a historic high, and natural gas production hit the highest level since 2016. Drilling activities on federal lands and waters accounted for about a quarter of U.S. oil production and 12% of natural gas production.
(This article referenced reports from Reuters)