By Jennifer A Dlouhy, Bloomberg |
Donald Trump will tout surging U.S. exports of oil and natural gas during a week of events aimed at highlighting the country’s growing energy dominance.
The president also plans to emphasize that after decades of relying on foreign energy supplies, the U.S. is on the brink of becoming a net exporter of oil, gas, coal and other energy resources.
As with previous White House policy-themed weeks, such as a recent one focusing on infrastructure, the framing is designed to draw attention to Trump’s domestic priorities and away from more politically treacherous matters such as multiple investigations into Russian interference in the 2016 election.
With “Energy Week,” Trump is returning to familiar territory — and to the coal, oil, and gas industries on which he’s already lavished attention. Trump’s first major policy speech on the campaign trail, delivered in the oil drilling hotbed of North Dakota in 2016, focused on his plans for unleashing domestic energy production. The issue has also been a major focus during Trump’s first five months in office, as he set in motion the reversal of an array of Obama-era policies that discourage both the production and consumption of fossil fuels.
Plans for the week were described by senior White House officials speaking on condition of anonymity because the details hadn’t yet been formally announced.
Exports Equal Influence
Trump is set to deliver a speech at the Energy Department on Thursday focused almost entirely on energy exports — describing how the foreign sale of U.S. natural gas, oil and coal helps strengthen the country’s influence globally, bolster international alliances, and help stabilize global markets. Energy Secretary Rick Perry may touch on similar themes when he speaks Tuesday with analysts and executives at the U.S. Energy Information Administration conference in Washington.
“The fact that we’re no longer in the age of energy scarcity — that we’re in the age of energy abundance — positions the United States in a totally different place,” said Dave Banks, a special assistant to the president for international energy. “This gives access to affordable, reliable energy in the United States, and gives the U.S. a major competitive advantage.”
The focus on exports dovetails with Trump’s policy priorities, including improving the balance of trade, rebuilding heavy manufacturing and modernizing infrastructure, said Benjamin Salisbury, a senior energy and natural resources analyst with FBR & Co. The Trump administration seems to appreciate the synergy between extractive industries and manufacturing, Salisbury said, with cheap energy powering factories that are in turn churning out the equipment used to produce and export those resources.
Crude Ban Lifted
With U.S. oil production booming, former President Barack Obama signed a law lifting a decades-old ban on most crude exports in December 2015. Since then, the U.S. has exported more than 157 million barrels of crude to countries other than Canada, which had been exempted from the export ban.
The federal government has also authorized 21 billion cubic feet a day of natural gas to be liquefied and sent to countries that don’t have free trade agreements with the U.S. Since starting up last year, Cheniere Energy Inc.’s Sabine Pass terminal in Louisiana — the first major facility sending shale gas overseas — has shipped more than 100 cargoes of LNG to countries including Mexico, China and Turkey.
Trump is set to talk about opportunities for growth, including in sales of coal to Europe and Asia. A recent increase in the production of metallurgical coal used in steel manufacturing has helped East Coast terminals ship more of the resource overseas.
Wind, Solar, Nuclear
And the president is expected to describe openings for other energy exports, including U.S. technology that harnesses power from the wind and sun, and a new generation of advanced and modular nuclear reactors. Some nuclear power advocates have argued that the U.S. government process of licensing advanced reactor designs is so lengthy that it discourages investment.
The administration could go further to expand opportunities for using U.S. energy abroad by seeking to undo an Obama-era ban on the Export-Import Bank financing coal plants overseas. That could have special political resonance with coal miners who helped propel Trump to victory with wins in Pennsylvania, West Virginia and other states that have seen jobs tied to the fossil fuel decline.
The Trump administration has begun reversing a slew of regulations and policies that have limited energy development or made it more expensive, such as by ending a moratorium blocking new coal leases on federal land, and overturning a rule governing coal mining pollution in streams.
The president has ordered agencies to remove regulatory barriers to producing domestic energy resources, kicking off a broad government-wide review. Even as that analysis continues, the Interior Department has begun repeals or revisions of Obama-era mandates governing hydraulic fracturing and discouraging methane leaks from oil wells. A White House office is also vetting a proposal to repeal the Clean Power Plan, the Obama administration rule forcing states to slash greenhouse gas emissions from electricity production. And the Trump administration is considering more auctions of oil and gas leases in the Arctic and Atlantic oceans.
“It’s about utilizing our abundance of resources at home to create jobs and grow the economy, and at the same time use those to strengthen America’s leadership and influence abroad,” said Michael Catanzaro, a special assistant to the president on domestic energy.
Ironically, some of Trump’s policies could exacerbate the market challenges facing oil, gas and coal, by spurring more domestic production at a time when a supply glut is already suppressing prices.
The U.S. is on track to produce 10 million barrels of oil per day on average next year, according to a forecast from the Energy Information Administration — a milestone that would shatter a record set in 1970.
Trump’s theme of “energy dominance” marks an evolution. For years, the catch phrase of choice has been “energy independence,” as politicians and industry officials sought to highlight how a new era of abundance was helping the U.S. wean itself from foreign sources of oil and natural gas.
That was in turn a dramatic change from the 1970s, when former President Jimmy Carter turned down the White House thermostats and used a televised address in February 1977 to urge consumers to conserve energy amid a permanent “shortage.” After that, federal energy policy became rooted in the view that oil and gas were in short supply.
“Trump is reorienting our national rhetoric toward ‘dominance,’” said Kevin Book, analyst with ClearView Energy Partners LLC. “Captives crave independence; competitors strive to dominate. It’s a shift from getting by to getting ahead.”