The stark difference between Hillary Clinton and Donald Trump was crystal clear when it came to energy before and after the election. Clinton wanted to killcoal, and since Trump was elected three coal companies stocks in particular didremarkably well in the market: Arch Coal (ARCH), Peabody (BTUUQ and Alliance Resource Partners (ARLP). While clean coal is a myth, and natural gas has been taking over coal since the fracking revolution began in the mid 2000s – Trump’s love for West Virginia coal miners has given those companies – and miners across America new life.
California as an example, which has billions of barrels of oil and trillion of cubic feet of natural gas off its coastlines, will vehemently fight President Trump and his pro-American energy administration. This is just one of the many legal battles the Trump administration may face from pro-environment-movement US states, and certainly California.
President Obama was the greatest partner for California’s quest towards a green economy by expanding renewable energy tax credits, giving away billions in electric car vehicle subsidies to assist firms like Tesla, signing the Paris Climate Accords and writing tougher pollution laws. The Clean Power Plan was one of the many regulations that Californians embraced; yet the rest of the country was cautious at best.
President-elect Trump has called climate change, “an expensive hoax,” to the consternation of Governor Brown and the California legislature, which has embraced global warming and climate change with AB 32 and SB 32. The bills combined look to lower greenhouse gas emissions over 40% below 1990 levels, and the belief is it will spur other nations, and particularly the US, to make environmental issues a top priority.
With the Republicans firmly in control of Congress, the Presidency, and now that President-elect Trump can nominate numerous Supreme Court justices’ not sympathetic to California’s environmental agenda, does this put California into environmental exile? To the dismay of a center-right leaning nation, California will now chart its own course, shaping up to be a fight between fossil fuels versus renewable energy.
A Trump administration wants to expand fossil fuel exploration and limit, if not do away with, tax credits for renewables. While California continues pushing renewables at their peril most other parts of the country have seen the writing on the wall for renewables such as solar, whose stocks have taken a beating since Mr. Trump was elected.
Under the Obama administration’s strict EPA regulations on utility emissions, particularly coal decimated an industry already reeling. Trump more than likely will attempt to roll back these regulations, but it is still a dirty energy rapidly losing luster in the United States (US). California doesn’t allow coal to be shipped out of California ports or railways.
Trump could lead resurgence for coal as a major energy source for US states, and as an export for other energy starved nations. But Trump will also have an affect on controversial, yet possibly needed pipelines.
The President-elect also wants to “clear the approval for oil pipelines,” yet what these approvals show for the US and Canada is leaders recognizing jobs as a viable factor, but all three have missed a key point. The world is already awash in oil, and OPEC continues missing opportunities to peg the price of crude at/or above $60 a barrel or higher.
Even with these issues President-elect Trump has selected Myron Ebell to lead his EPA transition team. A known global warming skeptic to Governor Brownand the legislatures dismay, Mr. Ebell will likely lead the way for energy to rejoice at regulations softening for further oil and natural gas drilling. Further Politico reports Forrest Lucas, the founder of Lucas Oil, is being considered as Secretary of the Interior.
Under the Obama administration public lands have been off-limits for oil and gas exploration though President Obama and his former Interior Secretary Jewell (a former petroleum engineer) and current Energy Secretary Moniz have both been key endorsers of fracking for American energy independence, emission reduction, and as a jobs creator.
What will be seen are regulations being taken away so exploration can be undertaken on Federal lands and coastal areas under Federal moratoriums. This will affect California’s world-class coastline and the Monterrey Shale along with other oil and natural gas rich areas of California. The real issue will then be whether or not Federal regulatory agencies have the ability to overtake California State law outlawing or severely curtailing fossil fuel exploration?
President-elect Trump is now looking too fast-track his way out of the Paris Climate Accords. While this agenda requires Congressional approval it’s not blustering to say this energy policy could revolutionize jobs and more oil and gas exploration since the fracking revolution began in the mid 2000s.
Fracking and drilling for US oil and gas according to President Obama was a key factor, if not the biggest factor, for why the US left the recession quicker than other countries. This agenda could unleash growth that is desperately needed for the tens of millions of Americans and Californians contributing to an all-time low Labor Participation Rate (LRP).
Joel Kotkin surmised it best why Trump won:
“Working and middle-class voters went for Donald Trump and helped him break through in states – Michigan, Wisconsin, Iowa – that have usually gone blue in recent Presidential elections.”
Nothing makes value and supply chains thunder towards jobs prosperity the way oil, gas and mineral exploration does at this time. President-elect Trump is seizing upon an issue that doesn’t resonate in California, but one that Trump knows could possibly bring him a two-term Presidency. As President Clinton understood: “it’s the economy stupid.”
Fossil fuel exploration could lead to a Trump mandate and eventually Pence mandate that hasn’t been seen since FDRs New Deal.