Low Energy: What lies ahead for energy policy under President Trump

February 4, 2017

 

The past few months since November have signaled troubling times for environmental activists and professionals in America. The outcome of the US election has introduced Americans to the prospect of a new Secretary of State graduating from oil and gas giant ExxonMobil, a new EPA Administrator who consistently identifies as a climate change skeptic, a new Energy Secretary who once tried to suggest shutting down the Department of Energy in a televised debate but couldn’t recall the name of the department, and a new President who has called global warming “an expensive hoax” that was “created by and for the Chinese.”

 

Climate change deniers celebrate. Scientific research enthusiasts shudder. So it goes.

 

Yet even under the Trump presidency, there is reason to be hopeful for the future of US environmental policy. As the public sector shies away from traditional regulatory methods, the focus will be shifted towards a changing industry: energy.

 

Former Texas Governor Rick Perry, assuming Senate confirmation, will soon be replacing Ernest Moniz, a man with a PhD in theoretical physics, as Secretary of Energy. The anomaly in this succession is clear — Mr. Moniz himself seems almost underqualified for the position when compared to his Nobel Prize-winning predecessor. Mr. Perry will be overseeing the majority of America’s National Laboratories, energy research funding, nuclear weapons and reactor production, and regulation of domestic energy production.  

 

The Trump administration’s intent here is unambiguous. The department will be placed not in the hands of an academic insider, but exposed to managerial focus. A life or death scenario for many of the department’s functions may be in sight.

 

Certain elements of Mr. Perry’s background as a politician are exceptionally distressing. In the past, he has repeatedly expressed skeptical views towards scientific conclusions on global warming, he has served on the board of directors for two energy companies behind the construction of the Dakota Access Pipeline, and most of his political campaign funds have come from fossil fuel investors and firms. After ending his gubernatorial career in 2015, Mr. Perry joined the corporate board of Energy Transfer Partners - the natural gas and propane company headed by CEO Kelcy Warren, who has donated a total of over $1.7 million to Mr. Perry’s campaigns in the past.

 

Make no mistake - Mr. Perry is in no particular way a friend to clean energy. But the former governor is certainly a friend to business interests. An ecological revolution remains unlikely under the Trump administration, but the rising tide of renewable energy investment still has a good chance of thriving.

 

Consider the current state of the US coal industry. Greener business commitments in major coal-importing nations like China and the high potential for workplace automation in resource extraction and transportation have together painted a gloomy picture for the future of the mining industry’s share of labor. President Trump’s promises to coal miners across the nation become hollower with every passing day. Without a doubt, the industry is well on its way to becoming an anachronism.

 

This trend is at its clearest in Mr. Perry’s home state of Texas. Coal-fired energy generation has been reduced as a share of the state’s ERCOT grid production by over 35% since 2010. David Schlissel of the Institute for Energy Economics & Financial Analysis attributes the slowing coal industry to “having more wind and solar in the grid,” assuring that this is “a market transformation, and it’s not a temporary phenomenon.”

 

Mr. Perry is well aware of these trajectories in the energy industry — as governor from 2001 to 2015, he urged for and signed into law the bills and plans that realized the wind energy boom in Texas. EIA data indicates that his terms allowed for a 1850% increase in non-utility renewable energy generation in Texas; today, the state is America’s biggest producer of wind energy, thanks in part to the more than $12 million invested in wind technology and R&D by Mr. Perry’s Texas Emerging Technology Fund.

 

Undeniably, Mr. Perry has a keen eye for public investment opportunities. It is up to alternative energy investors, environmental activists, and resource economists to prove to him that these opportunities lie in renewable energy projects. With foreign energy consumers like Saudi Arabia and China recently indicating interest in clean energy investment and technology, dropping solar panel installation costs, and the thinning economic viability of coal-fired plants, this task may be wholly achievable.

 

In his recent Senate confirmation hearing for the position of Secretary of Energy, Mr. Perry assured his intention to keep his department alive and running. He adopted a stance towards climate change far more friendly to the scientific community than that of President Trump. Granted, that bar has been set incredibly low, but the hearing was a relative relief for environmentalists nonetheless.

 

2016 was a big year for renewable energy. Nations worldwide invested $287 billion in green energy, Google announced its plans to power its data centers with 100% renewable energy throughout 2017, and clean energy generation surpassed coal-fired generation in the UK for the first time. With enough lobbying and investment from America’s environmentalists, green energy firms and startups, academic community, and advocacy groups, hopes for a clean and sustainable future for American energy can be kept alive.

 

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