During his confirmation hearing to become Secretary of Energy, former Texas Governor Rick Perry sensibly walked back his 2011 recommendation that the Department of Energy (DOE) be eliminated. After a few weeks on the job, it is now apparent that Secretary not only thinks the DOE should continue to exist but recognizes it’s an essential element of our national security.
President Trump’s inaugural address called for an “America First Energy Plan.” Although admittedly short on details, the Trump plan seems to comport with Secretary Perry’s historically close relationship with the oil and gas industry. Our colleagues in Austin, however, remind us that Perry promoted the development of wind and solar projects during his days in the governor’s mansion, so all may not be lost from a renewable energy perspective. Our guess is that Secretary Perry will largely take his cues from the president on these issues, however, and that the further promotion of clean coal technologies will be part and parcel of the Trump-Perry energy policy roadmap if things ever settle down in Washington.
The President wants to promote energy independence by easing regulatory burdens on mining operations, pipeline infrastructure, and hydraulic fracking, which in theory would make it cheaper and more efficient to get energy to consumers. We wouldn’t be surprised to see executive orders calling for significant cutbacks in regulatory personnel at DOE, the Environmental Protection Agency (EPA), the Occupational Safety & Health Administration (OSHA), the Mine Safety & Health Administration (MSHA), the Department of Transportation (DOT) and the Department of the Interior in the coming weeks. We also anticipate a boom of sorts in the energy infrastructure business as the administration attempts to spur development of strategically placed pipelines that can more efficiently deliver fossil fuels to consumers.
The timing of President Trump’s executive orders advancing the Keystone XL and Dakota Access Pipelines (DAPL) – within hours of him taking office – provide the biggest early clue that oil pipeline development will be a major priority in this administration. In our view, the president’s actions signaled the beginning of a new, pro-fossil fuel era in American energy policy, in stark contrast to President Obama’s green-friendly regulatory posture. It’s becoming increasingly clear, however, that the Democrats do not intend to go down without a fight.
Recent maneuvers at the Federal Energy Regulatory Commission (FERC) may provide a preview of what we expect to be a continual partisan battle over energy policy in the next four years. Shortly after his inauguration, President Trump moved Cheryl LaFleur into the powerful chairman’s seat at FERC, displacing fellow Obama appointee Norman Bay from the agency’s top job. LaFleur was viewed by some as more likely than Bay to work with the Trump administration in advancing pro-pipeline development policies, so this was not altogether unexpected. The big surprise came several weeks later when Bay decided to quit the commission altogether. This opened up a third vacancy at FERC, meaning the agency no longer has a quorum with to act on pending applications, including several major gas pipeline applications currently in the hopper (as former FERC Chairman James Hoecker discussed in an earlier post).
Despite all of the noise, Bob believes Trump can still succeed in implementing his energy policies, although it depends on the administration’s ability to make the American public understand the role that energy can play in the improvement of the American economy. Adam agrees, but wonders aloud whether the cacophony and chaos of these past few weeks will subside long enough for the Trump team to develop the necessary Washington ground game to implement these policies.