The limits of Trump’s oil agenda

Presented by Gevo: Your guide to the political forces shaping the energy transformation

Nov 19, 2024 View in browser   By Arianna Skibell Presented by  A flare to burn methane from oil production is seen on a well pad near Watford City, North Dakota, on Aug. 26, 2021. | Matthew Brown/AP President-elect Donald Trump has promised to make oil great again, and he’s assembled a Cabinet full of fossil-fuel-enthusiasts to get the job done. But there’s a limit to what he and his team can actually do, write Mike Soraghan, Heather Richards, Carlos Anchondo and Shelby Webb. Plus, it’s not as though the industry has suffered greatly under the Biden administration. It has enjoyed record-setting oil and natural gas production, the approval of an oil drilling project in Alaska called Willow and a path to completion for the long-embattled Mountain Valley pipeline. Still, industry leaders have chafed at recent pollution restrictions, a new methane fee and a pause on natural gas exports — not to mention President Joe Biden’s trillion dollar climate agenda. So, what can and can’t Trump do about it? Rolling back regulations Trump can, and is expected to, unravel Biden-era environmental rules. One likely target is the nation’s first-ever fee on excess methane emissions, which was finalized last week. The U.S. oil and gas industry emits more than 6 million tons per year of methane, a major driver of climate change that is several times stronger than carbon in its heat-trapping ability. Under Biden’s 2022 climate law, oil and gas operators will be required to pay $900 per metric ton of excess methane they emit. While Trump can’t nix the fee without rewriting the law (which Congress may do), he is expected to make it easier for companies to qualify for exemptions. Drilling and exporting  While Trump has promised to boost drilling to lower prices (in the realm of $2 a gallon of gasoline), he can’t force companies to produce — and they may not want to. To make gasoline that cheap, oil companies would have to cut the cost of a barrel by two-thirds, potentially creating a supply glut, which is bad for business. But Trump can end the Biden administration’s pause on the export of natural gas and speed up the permit process for companies planning to ship the fuel overseas. Reliance on foreign oil While U.S. companies are producing a record amount of crude oil, they still rely on foreign imports, which are easier to refine domestically. One of Trump’s campaign promises was to raise tariffs on imported goods to help pay for domestic tax cuts. But he won’t be able to tax imported oil without causing gasoline prices to spike and wreaking general havoc on the U.S. oil refining industry.   It's Tuesday — thank you for tuning in to POLITICO's Power Switch. I'm your host, Arianna Skibell. Power Switch is brought to you by the journalists behind E&E News and POLITICO Energy. Send your tips, comments, questions to askibell@eenews.net.   A message from Gevo: American-made sustainable aviation fuel (SAF) will strengthen domestic energy security and bolster the rural economy. In South Dakota, Gevo’s Net-Zero 1 SAF facility will create new opportunities for local workers, farmers, and residents – delivering an estimated $116 million in annual value for the local economy. Net-Zero 1 is a critical step in ensuring the long-term competitiveness of American agriculture, energy, and aviation. Learn more.   Listen to today’s POLITICO Energy podcast Today in POLITICO Energy’s podcast: Josh Siegel, Ben Lefebvre and Alex Guillén break down Trump's picks to enact his energy agenda, and how the Cabinet officials would shape the nation's energy policy.   The lame duck session could reshape major policies before year's end. Get Inside Congress delivered daily to follow the final sprint of dealmaking on defense funding, AI regulation and disaster aid. Subscribe now.     Power Centers President Joe Biden speaks about investing in clean energy manufacturing at a wind tower maker in Colorado. | Andrew Harnik/AP Biden races to foil Trump's climate rollbacks The Energy Department is working to close $25 billion in pending loans to businesses building major clean energy projects across the country, write Benjamin Storrow, Kelsey Tamborrino, Brian Dabbs and Jessie Blaeser. The push is one of Biden’s last chances to cement his climate legacy before Trump takes office. Racing against the clock are loans for $9.2 billion for an EV battery project in Kentucky and Tennessee, a $1.5 billion guarantee for sustainable aviation fuel production in South Dakota and $1 billion for electric vehicle charging infrastructure nationwide. Will Trump tango with carbon tariffs? Over the past two years, bipartisan interest has grown around tying climate action to trade policy in the form of carbon tariffs (or something like them). That has led to the introduction of a flurry of bills that would take different approaches to this idea, writes Emma Dumain. The momentum has largely been stalled by opposition from conservatives who fear these bills would be weaponized by a Democratic administration intent on imposing a carbon tax. With Republicans now set to take over the White House, House and Senate next year, proponents say there is reason for optimism that this anxiety will no longer be an obstacle. Biden: 'Nobody can reverse' clean energy revolution Speaking from the Amazon rainforest — as the first sitting president to visit — Biden said nobody can "deny or delay the clean energy revolution that’s underway in America," write Lauren Egan and Myah Ward. The comment comes as as Trump threatens to tear Biden's climate and energy policies to shreds when he returns to White House in January. But Biden said too many people are enjoying the energy transition's benefits. COP Corner Our news roundup from COP29 in Baku, Azerbaijan A woman walks past a mural painted to raise awareness on the issue of global warming and pollution in Varanasi, India, on Nov. 13. | Niharika Kulkarni/AFP via Getty Images Petro-patriarchy and the pope — Women bear the brunt of climate change. A coalition of conservative autocracies wants to stop the world from discussing it. Poor countries push for more aid — Developing countries are publicly doubling down on their call for trillions in climate aid from richer nations — but privately, some acknowledged the European Union's proposal of $200 to $300 billion might be the best they will get for now. In Other News Can the U.K. prime minister save the world? As progressives around the world are washed away by a rising tide of populism, one man stands as the center left’s great hope. Step forward Keir Starmer. G20: Brazil’s president urged the world’s 20 major economies to take more action on climate change.   A message from Gevo:   Subscriber Zone A showcase of some of our best subscriber content. During President-elect Donald Trump's first term in office, EPA's staffing levels dropped. | Illustration by Claudine Hellmuth/POLITICO (source images via Francis Chung/POLITICO and AP) Six former Trump Environmental Protection Agency appointees said that Trump cannot slash environmental regulations if he hallows out EPA staff, which would be charged with the task. The nation's billion-dollar initiative to build a network of electric vehicle chargers is expected to be largely insulated from Trump’s reach despite the program's slow rollout. A new study suggests that relying on natural carbon sinks such as forests and wetlands to help achieve climate targets, as countries around the world are doing, could be a mistake. That's it for today, folks! Thanks for reading.   A message from Gevo: Sustainable aviation fuel will bolster American energy security and unleash new markets for American farmers. In South Dakota, Gevo’s Net-Zero 1 plant will offer farmers new premiums for their crops as it sources locally grown feedstocks to produce 60 million gallons of SAF per year. According to research from Charles River Associates, Net-Zero 1 is also projected to create thousands of local jobs at the facility and across the agricultural, manufacturing, and transportation industries, generating more than $100 million in annual economic impact. Learn more about how investments in American-made SAF can strengthen American farmers, energy security, and competitiveness here.     Policy change is coming—be the pro who saw it first. Access POLITICO Pro’s Issue Analysis series on what the transition means for agriculture, defense, health care, tech, and more. Strengthen your strategy.       Follow us on Twitter Arianna Skibell @ariannaskibell   Follow us

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