President-elect Donald Trump plans to form a National Energy Council, which he claims will promote American “energy dominance” around the world, as he attempts to increase US oil and gas production and shift away from President Joe Biden’s emphasis on climate change.
The energy council, to be overseen by North Dakota Gov. Doug Burgum, Trump’s nominee to lead the Interior Department, will be critical to Trump’s pledge to “drill, drill, drill” and sell more oil and other energy sources to allies in Europe and throughout the world.
The new council will be given broad authority over federal agencies involved in energy permitting, production, generation, distribution, regulation, and transportation, with the goal of reducing bureaucratic red tape, increasing private sector investments, and focusing on innovation rather than “totally unnecessary regulation,” Trump stated.
However, Trump’s energy ambitions are unlikely to be realized. For starters, US oil production under Biden is already at historic levels. The federal government cannot force corporations to dig for more oil, and increased production may drop prices and reduce profits.
A demand for energy supremacy — a word Trump also used in his first term as president — “is an opportunity, not a requirement,” for the oil industry to move forward with drilling projects under terms that are likely to be more favorable to industry than those presented by Biden. said energy analyst Kevin Book.
Whether Trump achieves energy supremacy, as he sees it, “comes down to decisions by private companies, based on how they see supply-demand balances in the global marketplace,” said Book, managing partner of ClearView Energy Partners, a Washington research firm. Don’t expect a sudden influx of new oil rigs on the national landscape, he said.
Trump’s attempt to increase oil supplies — and cut US prices — is hampered by his warning this week to impose 25% import taxes on Canada and Mexico, the two main suppliers of US oil imports. The US oil sector warned that tariffs might boost prices and jeopardize national security.
“Canada and Mexico are our top energy trading partners, and maintaining the free flow of energy products across our borders is critical for North American energy security and U.S. consumers,” said Scott Lauermann, speaking on behalf of the American Petroleum Institute, the oil industry’s leading lobbying organization.
The American Fuel & Petrochemical Manufacturers, which represents U.S. refineries, also opposes proposed duties, stating in a statement that “American refiners rely on crude oil from Canada and Mexico to produce the affordable, reliable fuels consumers rely on every day.”
Scott Segal, a former Bush administration official, said the concept of focusing energy decisions at the White House follows Biden’s precedent, who appointed a trio of White House advisors to lead on climate policy. Segal, a partner at the law and policy firm Bracewell, described Burgum as “a steady hand on the tiller” with experience in fossil fuels and renewables.
Unlike Biden’s climate aides, Gina McCarthy, John Podesta, and Ali Zaidi, Burgum is expected to join the White House as a Senate-confirmed Cabinet member, according to Segal.
Dustin Meyer, senior vice president of policy, economics, and regulatory affairs at the American Petroleum Institute, described the new energy council as “a good thing” for the US economy and trade. “Conceptually it makes a lot of sense to have as much coordination as possible,” he told me.
Meyer stated that “market dynamics will always be the key” to any prospective rise in energy production.
Jonathan Elkind, a senior research scholar at Columbia University’s Center for Global Energy Policy, described energy dominance as a “deliberately vague concept,” but added, “It’s hard to see how (Trump) can push more oil into an already saturated market.”
Trump has promised to cut gasoline prices to $2 per gallon, but analysts say that is highly unlikely because crude oil prices would have to fall drastically to meet that target. Gas prices nationwide were $3.07 as of Wednesday, down from $3.25 a year ago.
Elkind and other experts expect that the new energy council will shift its attention away from oil and toward renewable energy sources such as wind, solar, and geothermal power, as well as nuclear. Neither of these energy sources emits greenhouse gases that contribute to climate change.
“Failure to focus on climate change as an existential threat to our planet is a huge concern, and it translates into a very significant loss of American property and American lives,” said Elkind, a former assistant energy secretary in the Obama administration. He referenced official data showing that two dozen weather disasters this year caused more than $1 billion in damage apiece. In total, 418 persons were killed.
Trump has downplayed the risks of climate change and promised to remove unspent funds from Biden’s major climate and health-care package, the Inflation Reduction Act. He also stated that he will halt offshore wind development when he returns to the White House in January.
Nonetheless, his November 15 announcement of the energy council states that he will “expand ALL forms of energy production to grow our economy and create good-paying jobs.”
That includes renewables, according to Safak Yucel, an associate professor at Georgetown University’s McDonough School of Business.
“The mandate for the energy council is U.S. dominance globally, but what’s more American than American solar and wind?” he inquired. According to an Ernst & Young assessment released last year, solar was the most cost-effective source of new-build electricity in many markets.
In his remarks, Trump stated that he intends to significantly expand baseload power to reduce electricity bills, minimize brownouts, and “WIN the battle for AI superiority.”
Burgum expressed a similar intention to reporters prior to his appointment to the energy position, citing increased need for electricity from artificial intelligence (AI) and rapidly expanding data centers. Burgum stated that the AI war has a wide-ranging impact, including defense, healthcare, education, and national productivity.
While Trump calls the climate law the “green new scam,” Yucel and other experts believe he is unlikely to overturn it. One reason: the majority of its investments and jobs are in Republican congressional districts. Republican members of Congress have encouraged House Speaker Mike Johnson to uphold the measure, which passed with just Democratic votes.
“A lot of Southern states are telling Trump, ‘We actually like renewables,'” Yucel said, noting that Republican-led states had created thousands of jobs in wind, solar, and battery power in recent years.
If renewables make economic sense, he says, “they’ll continue.”