Will Trump’s new term stop the renewable energy boom in the United States?
Mihai Nicut (e-nergia.ro)
Donald Trump’s return to the White House will redirect the country’s energy policy towards maximizing oil and gas production, but a Republican victory in Tuesday’s presidential election is unlikely to dramatically slow the US renewable energy boom , Reuters writes.
That’s because a Biden-era law that provides a decade of lucrative subsidies for solar, wind and new clean energy projects would be nearly impossible to repeal, thanks to support from Republican states, while very few would have another leverage available to the next president. impact, analysts say.
“I don’t think President Trump can slow down the transition,” said Ed Hirs, an Energy Fellow at the University of Houston. “The transformation is in full swing.”
Renewable energy sources such as solar and wind power are the fastest growing generation segments on the electric grid, according to the Department of Energy, thanks to federal tax credits, state renewable energy mandates and technological advances that have lowered costs.
In 2022, President Joe Biden signed the Inflation Reduction Act (IRA) into law, which guarantees billions of dollars in subsidies for solar and wind power for another decade as part of his larger effort to decarbonize the energy sector by 2035, to combat climate change.
Before the election, Trump criticized the IRA, saying it was too expensive, and vowed to cancel all unspent money allocated by the law – a threat that, if carried out, could put a chill on the US green energy boom states
But doing so would require lawmakers, including those whose states have benefited from IRA-related investments such as solar panel factories, wind farms and other projects, to vote to repeal it.
“Jobs and economic benefits have been so important in red states that it’s hard to see an administration saying we don’t like this,” said Carl Fleming, a partner at law firm McDermott Will & Emery, who advised House White Biden on renewable energy policy.
Many of Trump’s allies also benefit from the IRA through their investments in clean energy technologies, Reuters previously reported.
Fleming said Trump, however, could slow things down on the fringes by reining in federal agencies that issue grants and IRA loans, or by cutting federal leasing for projects like offshore wind.
“You could see a new administration that can very quickly start cutting budgets or limiting budgets or limiting the freedom of agencies to do certain things related to funding,” he said that really depends on them, so I don’t thought it would have a knock-on effect.”
The Biden administration has rushed to ensure it spends most of the money available for grants under the IRA before a new president arrives, Reuters previously reported.
One way Trump could slow the transition is through executive action, changing the lease of public lands, analysts say. The Biden administration has sought to expand lease auctions for offshore wind in federal waters, along with solar and onshore wind.
“I think more priority would be given to fossil fuel extraction on public lands and waters,” said Tony Dutzik, associate director and senior policy analyst at the Frontier Group, a nonprofit think tank on sustainable development.
This could have a huge impact on the offshore wind industry, which aims to locate projects in federal waters. Most onshore solar and wind projects are located on private property, as is the vast majority of oil and gas drilling.
Trump has said he plans to end the offshore wind industry “on day one,” saying it is too expensive and a threat to whales and birds, a dramatic policy reversal after his administration first support the development of offshore wind.
Bernstein Research said Trump is likely to enact a moratorium on new offshore wind leases.
Meanwhile, US fossil fuel production is likely to remain the same under Trump, experts say. The United States has already become the world’s largest oil and gas producer under the Biden administration, thanks to a drilling boom in areas such as the Permian Basin in Texas and New Mexico. Trump has set the stage for this boom by cutting red tape during his time in the White House and could expand US fossil fuel production in his second term by undoing Biden’s climate initiatives, according to his campaign statements. Trump, for example, could promote drilling in protected areas in Alaska.
Biden has blocked permits previously issued by Trump for drilling in Alaska, but even if Trump opens up the area as environmentalists love, it’s not certain that companies would be willing to work in nor is this more difficult to reach Arctic area.
“Presidents may make a lot of noise about US oil and gas plans, but ultimately it’s the individuals and companies responding to global commodity prices that decide when to drill,” said Jesse Jones, Head of Upstream North America at Energy Aspects.