Trump’s Energy plan

donald-trump-wind-turbines-photo-25346.jpg.492x0_q85_crop-smart

Figure 1: Trump isn’t exactly known as a fan of wind farms

Trump recently released his energy plan. As you can imagine it was slim on details but included the expected, bashing renewables, wanting to renegotiate the Paris deal and lifting numerous environmental restrictions on fossil fuel production, nuke the Whales, burn down the Amazon, usual. Needless to say the environmentalists are aghast at the prospect, as too are many other commentators on energy.

Putting aside the issues of the environment, his plan seems to be based on a simpleton vision of “green stuff bad” and “fossil fuels good”. However, not so, renewables, are creating far more jobs in the US than coal or the oil industry. Cutting off renewables at the knees will cost many American’s their jobs, not save jobs. The US renewables industry now employ’s over 750,000 people and is worth tens of billions of dollars.

Also the fundamental problem facing US coal producers, who are seeing their industry decline, is competition with natural gas producers. Yes, renewables, in particular wind energy are part of the reason they are getting hammered on price, but their main competitor is the natural gas industry. If Trump promotes more drilling, then those coal miners he was promising more work too will instead be all out of a job.

natural-gas_coal-for-power-generation

Figure 2: The decline in coal is closely matched by a rise in Natural gas demand [EIA & Zerohedge.com, 2012]

Of course, the oil and gas industry is stuck in the doldrums not because of Obama, but because of low oil and gas prices worldwide. Making more oil and gas available will not improve their situation, it would in fact lower prices even further. And similarly making the US energy independent would not lower prices. So long as America is connected to free markets, it is connected to changes in the global supply of oil and gas. If prices go up in other parts of the world, they will go up in the US.

The only way he could please both fossil fuel lobbies would be by intervention in the energy market and artificially inflating energy prices (i.e. what Sarah Palin would call “central planning“). Of course that may not be terribly popular with voters paying more for energy, in particular higher prices at the pumps. President’s have lost elections over rising energy prices before. Oh, and while a lost of subsidies would hurt renewables, higher energy prices would actually make them more competitive.

Indeed he’s hinted in speeches that he might directly intervene in the industry, baring the sale of oil to this country or that (in which case he’d be hit with retaliatory sanctions), blocking certain projects he disagrees with, etc. Well the problem straight away with that is that while American fossil fuel production has increased recently its still short by some margin, about 24% short in the case of oil. So cutting the US off from international markets would straight away push up prices and lead to 70’s style queues outside petrol stations.

gasconsumption

Figure 3: US monthly motor oil demand, seasonal fluctuations [EIA 2012]

Also its worth remembering that oil supply/demand fluctuates, so even if the US was at 100%, there are times of the year (such as the summer driving season) when supply does not match demand and without imports from overseas, the price would skyrocket and there would be shortages. The opposite then happens during lean times.

But would such policies increase the rate of oil drilling? There’s a possibility the answer is no. Investors might well take fright at such direct action by the government. They would worry that while it benefits them now, it would be a step towards nationalisation of the energy industry longer term. After all, if the government pulls populist levers today, what about when energy prices rise in the future (back to where they were in 2007) and he’s under pressure from voters come the next election to bring down prices?

And what about the environment? He’s also talked about getting rid of the department of environmental…..until it was pointed out that there’s no such department (so the EPA might be safe because he can’t spell its name!). Also the only wall he’s building right now is a wall in Scotland to protect his precious golf course from future sea level rise, which he doesn’t believe will happen.

trump-scot

Figure 4: Climate denier Trump wants a wall in Scotland to protect his golf course for sea level rise…don’t think the Mexicans will pay for it tho!

Well quite apart from the long term impact of climate change, there’s the issue of pollution. Trump seems to assume everyone but hippies is okay with the pollution caused by oil and gas drilling. However this is not true. If the federal government reneges on its responsibilities, that will throw the decision back to state legislators. However, many of them will oppose such plans, as they will be besieged by lots of angry voters looking to get such projects stopped. Keep in mind, not everyone in West Virginia supports the coal industry. There are many voters in large cities in the Marcellus shale region who worry about the impact on drinking water from shale gas drilling.

Grassroots environmental campaigns have derailed major energy projects before. Recall that in the wake of three mile Island almost every single US nuclear reactor project then under construction was halted, generally due to pressure put on state or county level politicians by concerned voters and grassroot movements. And some of those reactors were only a few screw turns from going online. So there’s every chance his policy could have some unintended consequences.

Trump’s energy plan is in short a recipe for chaos. Fundamentally, what it reveals is that he’s less an advocate of free markets and more of a national socialist. He seems to mix all the worse aspects of Hugo Chavez with North Korean Juche, crony capitalism and an almost cartoonist hatred of the natural world.

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About daryan12

Engineer, expertise: Energy, Sustainablity, Computer Aided Engineering, Renewables technology
This entry was posted in climate change, economics, energy, fossil fuels, politics, power, renewables, Shale Gas, subsidy, sustainability. Bookmark the permalink.

2 Responses to Trump’s Energy plan

  1. theloudamerican says:

    It’s a sh*tty non-plan. But it does give me a chance to mention some things about American energy politics.

    I believe you mentioned somewhere that the election of Trump meant that America has committed itself to doing the post-fossil energy transition ‘the hard way’ e.g via crash programs and possible rationing, and forced to import the technology.

    I say the last part of that is already happening and has been happening ever since we allowed China to overtake the US in solar manufacturing. Many state and local governments have promised to continue global warming mitigation policies despite Trump (e.g the great irony of Trump’s “Pittsburgh vs Paris” speech contradicted by Pittsburgh’s mayor) so the need for drastic crash programs may be averted. If not; however, I strongly suspect that when the US does suddenly change course, our political establishment will discard the remnants of any support for economic orthodoxy- we’ll be at the WTO demanding that they change the rules to allow all kinds of renewables protectionism, possibly nationalizing parts of the energy industry, and possibly reinstating the oil export ban. And we might intentionally run huge budget deficits doing all that. As you have mentioned elsewhere, the US has a habit of inventing crummy economic orthodoxies and then abandoning them when any real pressure is applied. I think this will be especially the case if Washington DC suddenly wakes up and decides to implement national policies to switch to renewables.

    But back to current events…recently two big PV manufacturers filed ITC complaints against China, requesting higher tariffs on foreign PV panels. The case will land on Trump’s desk by the end of this fall. Apparently the SEIA is opposing the complaint and essentially accusing the plaintiffs of being pains-in-the-a$$ who are going to hurt the industry if they get their way. Which is a semi-legitimate point- higher tariffs might hurt solar sales in the short term. But what about all those blue states and blue cities with their vaunted commitments to renewable portfolio standards and complying with Paris despite Trump? Can’t the SEIA approach the bluest blue states on behalf of the solar manufacturing plaintiffs to get assurances that the industry won’t have anything to worry about in the near future even with slightly higher prices (or probably more correctly, a delay /slowdown of price decreases)? Or is it now just an American tradition to always shaft the manufacturer?

    Despite that intentional dramatic touch, I can respect how in the short term, with republicans running the federal government, supporting protections for American PV manufacturers might (might!) not be the best thing to do if that really is the case. But I think it also again reveals what a truly effective protectionist energy transition policy would look like. For example, I think some decent ideas for “green protectionism” include the following (and I bet that in a few years some of these ideas won’t be considered to be so radical):
    -Increasing the size/funding of NREL by about an order of magnitude
    -implementing strict national energy codes for buildings and vehicles. The fashionable thing these days is to claim that ‘flexible market-based’ programs like taxes and permit trading are inherently more effective/cheaper/better. I think the track record says otherwise. And I see coal burning bans in the future.
    -steep tariffs on imported solar/wind equipment, subsidies to US-manufactured renewables, possibly the founding of a state renewables utility-scale developer. The Solyndra harping is silly and myopic; Toyota failed at making cars for decades and had to be bailed by the Japanese government out after WW2 before becoming what it is today.
    -an export ban on e-waste, PV waste, scrap aluminum, and rare earth raw materials (even under Obama the DOE indicated its intention to develop rare earth extraction in the US- see the ‘critical materials strategy’ documents). PV waste will really start to matter in the future as more of it piles up, a metals recycling program would have the added effect of rescuing the Midwest from economic ruin, and if the future is as energy-scarce as you think it might be then perhaps cheap bauxite from the other side of the world will be a lot less cheap than recycling aluminum (one of the things that I find particularly ironic about the current status of globalization is that Alcoa mines bauxite in the third world even though that takes ~20 times as much energy as recycling aluminum. Meanwhile, they’ve been shutting down aluminum processing plants in the US. In a post-fossil-fuel world I wonder if stuff like that won’t make sense anymore)

    By the way, it might amuse you to know that the ever-flip-flopping Trump recently floated the idea of covering his Mexico wall with solar panels to pay for it since he’s apparently given up on making Mexico pay. It’s really too bad that it’s the only place he seems to want to see renewable energy.

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