It’s still a bit early to know for sure, but folks have been trying to predict the potential changes in the energy policies of a Trump administration. One of the difficulties in making predictions is that President Trump tends to voice one position initially and then change the approach in practice.
It is interesting to look at the following individuals nominated for the President’s cabinet: Secretary of State – Rex Tillerson, the former CEO of Exxon Mobil; Secretary of Energy – Rick Perry, the former Governor of Texas; and Administrator of the Environmental Protection Agency (EPA) – Scott Pruitt, the former Attorney General of Oklahoma. We think that it is safe to say that these individuals would be more inclined to favor oil and natural gas development, pipeline construction and less restrictions of the use of fossil fuels (such as coal and natural gas) than their predecessors in the Obama administration.
In the Obama administration, the EPA was the lead agency in developing and enforcing a “de facto” national energy policy. One of the trends that we may have seen in the confirmation hearings is toward a conscious decision to avoid a national energy policy and return to the practice of allowing each state to develop their own approach.
For North Carolina, the transition from coal to natural gas generation has been driven largely by economics rather than by policy. So, we would not expect big changes if a state-by-state approach were allowed. For other states, such as Wyoming and the Dakotas, the changes (or lack thereof) would be significant. We think those states would simply continue to use their vast coal reserves to generate electricity.
Of course, the state-by-state approach would not produce the dramatic reductions in carbon dioxide emissions required by our international climate change agreements. At the moment, we think those requirements are the lower priority for the Trump administration.
As time goes by, the energy policy direction will become clearer. And we could see the approach change over time.
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