WASHINGTON (AP) — President-elect Donald Trump will create a National Energy Council that he says will establish American “energy dominance” around the world as he seeks to boost oil and gas production in the U.S. and diverge from President Joe Biden Biden’s focus on solving climate change.
The Energy Council — led by North Dakota Gov. Doug Burgum, Trump’s pick to lead the Interior Department — will play a key role in Trump’s promises to “drill, drill, drill” and deliver more oil and other energy sources to allies in Europe and Europe for sale around the globe.
The modern council will be given broad authority over federal agencies dealing with energy permitting, production, generation, distribution, regulation and transportation, with a mandate to reduce bureaucratic hurdles, encourage private sector investment and focus on innovation rather than on to focus on “completely unnecessary regulation”. “said Trump.
But the president-elect’s energy aspirations will likely face real limits. On the one hand, US oil production under Biden is already at record levels. The federal government can’t force companies to drill for more oil, and increases in production could drive down prices and cut profits.
The call for energy dominance – a term Trump also used in his first term as president – is “an opportunity, not a requirement” for the oil industry to advance drilling projects on terms likely more favorable to the industry than those offered by Biden, he said energy analyst Kevin Book.
Whether Trump achieves energy dominance – however he defines it – “depends on decisions made by private companies based on how they view the balance between supply and demand in the global market,” said Book, managing partner at ClearView Energy Partners, a Washington research firm “Don’t expect an immediate influx of new rigs into the national landscape,” he said.
Trump’s attempt to boost oil supplies – and drive down U.S. prices – is complicated by his threat this week to impose 25% import tariffs on Canada and Mexico, two of the biggest sources of American oil imports. The U.S. oil industry warned that the tariffs could drive up prices and even threaten national security.
“Canada and Mexico are our most important energy trading partners, and maintaining the free flow of energy products across our borders is critical to North America’s energy security and U.S. consumers,” said Scott Lauermann on behalf of the American Petroleum Institute, the country’s main lobbying group Oil industry group.
American Fuel & Petrochemical Manufacturers, which represents U.S. refiners, also opposes possible tariffs, saying in a statement: “American refiners rely on crude oil from Canada and Mexico to produce the affordable, reliable fuels consumers rely on every day to count.”
Scott Segal, a former Bush administration official, said the idea of concentrating energy decisions at the White House follows an example set by Biden, who appointed a trio of White House advisers to lead climate policy. Segal, a partner at law and policy law firm Bracewell, called Burgum “a steady hand at the helm” with experience in fossil fuels and renewable energy.
And unlike Biden’s climate advisers — Gina McCarthy, John Podesta and Ali Zaidi — Burgum will likely take his White House post as a Senate-confirmed Cabinet member, Segal said.
Dustin Meyer, senior vice president for policy, economics and regulation at the American Petroleum Institute, called the modern energy council “a good thing” for the U.S. economy and trade. “Conceptually, it makes a lot of sense to have as much coordination as possible,” he said.
Nevertheless, “market dynamics will always be the key to a possible increase in energy production,” said Meyer.
Jonathan Elkind, a senior research fellow at Columbia University’s Center on Global Energy Policy, called energy dominance a “deliberately vague concept” but said, “It’s hard to see how (Trump) can push more oil into an already saturated market.”
Trump has promised to cut gasoline prices below $2 a gallon, but experts say that is highly unlikely because crude oil prices would have to fall dramatically to achieve that goal. Gasoline prices averaged $3.07 nationwide on Wednesday, down from $3.25 a year ago.
Elkind and other experts said they hope the modern energy council will go beyond oil and focus on renewable energy such as wind, solar and geothermal energy, as well as nuclear energy. None of these energy resources produce greenhouse gas emissions that contribute to climate change.
“Failure to focus on climate change as an existential threat to our planet is a major problem and is resulting in a very significant loss of American property and American lives,” said Elkind, a former deputy secretary of energy in the Obama administration. He cited federal government statistics showing that two dozen weather disasters this year caused more than $1 billion in damage. A total of 418 people were killed.
Trump has downplayed the risks of climate change and promised to withdraw unspent money in the Inflation Reduction Act, Biden’s landmark climate and health care law. He also said he would stop offshore wind development when he returns to the White House in January.
Still, the Energy Council’s Nov. 15 announcement said it will “expand ALL forms of energy production to grow our economy and create good-paying jobs.”
This includes renewable energy, said Safak Yucel, an associate professor at Georgetown University’s McDonough School of Business.
“The mandate for the Energy Council is U.S. global dominance, but what is more American than American solar and American wind?” he asked. A report from Ernst & Young last year showed that solar power was the cheapest source of electricity for modern construction in many markets.
Trump said in his statement that he wants to dramatically enhance baseload power to reduce electricity costs, avoid blackouts and “WIN the battle for AI supremacy.”
In comments to reporters before his appointment to the energy post, Burgum cited a similar goal, citing increased electricity demand from artificial intelligence, commonly known as AI, and rapidly growing data centers. “The AI battle affects everything from defense to healthcare to education to productivity as a country,” Burgum said.
While Trump derides the climate law as a “green new scam,” he is unlikely to repeal it, Yucel and other experts said. One reason: Most investments and jobs are in Republican congressional districts. GOP members of Congress have urged House Speaker Mike Johnson to keep the law, which passed with only Democratic votes.
“A lot of Southern states are telling Trump, ‘Actually, we like renewable energy,'” Yucel said, noting that Republican-led states have created thousands of jobs in wind, solar and battery energy in recent years.
If renewables make economic sense, he added, “they will continue to exist.”
