U.S. presidents have for decades sought to make America energy independent. Now, President Donald Trump has a different goal; energy dominance.
The White House rolled out the new branding this week to coincide with what the administration has dubbed “Energy Week,” casting “energy dominance” as a break with the Obama era. In a speech this week, Trump touted a “golden era” of U.S. energy that would be asserted via the country’s booming natural gas, coal and petroleum exports.
In what he called a policy of “energy dominance,” Trump re-branded efforts to export liquefied natural gas (LNG) to markets in Eastern Europe and Asia that had been set in motion during the previous presidential administration.
In substance, energy independence and dominance are not so different. And while the Trump administration has sought to differentiate itself from the Obama White House, its position on U.S. energy exports is very similar in some regards.
The first part of that statement dovetails with the goal of every administration since President Richard Nixon faced the Arab oil embargo in 1973. It’s the second part, about exports, that is relatively new.
Technology innovations have allowed U.S. drillers to profitably extract oil and gas from shale rock formations, leading to a boom in fossil fuel production and exports. It has also opened the door to liquefying U.S. natural gas and shipping it around the world.
There is no doubt that Trump touts this revolution more stridently than Obama. But while the messaging is different, U.S. energy posture has not changed much between administrations, said Tim Boersma, a senior research fellow at Columbia University’s Center on Global Energy Policy.
“Unlike the previous administration, this administration is much more comfortable in getting up on the stand and saying that, yes we are a big oil producer. Yes, we are a big gas producer, and we feel good about that,” Boersma told CNBC.
That is in part because booming fossil fuel production does not play well with the Democratic base, he said. Meanwhile, reviving the coal industry and pumping more oil and gas were among Trump’s core campaign promises.
On Tuesday, Perry said President Barack Obama had put up “bureaucratic blockades” to American energy creation.
To be sure, the Obama administration tried to regulate greenhouse gas emissions from the oil and gas sector. It also stopped issuing leases for coal mining on federal land and scaled back plans for offshore drilling auctions following the 2010 Deepwater Horizon oil spill.
But Obama also lifted a 40-year ban on exporting U.S. crude oil in 2015, paving the way for a surge in shipments. Oil and gas industry employment boomed under Obama’s watch, until a protracted oil price downturn led to mass layoffs.
When it comes to liquefied natural gas, or LNG, Obama approved 24 LNG export licenses and denied none, according to an analysis by lawyers at Hogan Lovells. That assessment found LNG export policy was essentially unchanged between administrations.
Obama faced criticism for delaying LNG export licenses, but exporting LNG from the United States only recently became viable, so it took some time to develop the licensing process, according to Hogan Lovells attorney and former Department of Energy counsel Mary Anne Sullivan.
“In the past the U.S. was an importer of LNG, so when the export market started to develop, there was a learning period for everybody to figure out what’s the most efficient way to do this,” she said.
The Obama administration streamlined licensing and the system is now working very well, according to Sullivan. In some cases, the Department of Energy has approved licenses within a few days of the Federal Energy Regulatory Commission completing its review.
“You don’t need anything quicker than that,” she said.
The problem with ‘dominance’
The term “energy dominance” falls flat in two regards, said Jonathan Elkind, former assistant secretary for international affairs at the Department of Energy under Obama.
First, for the U.S. energy sector to thrive, the government needs to invest in new technologies, and Trump’s proposed budget slashes the Department of Energy’s budget for research and development, he said.
“Second, the very people around the globe whom we want to have as our customers — the would-be purchasers of U.S. energy goods and services — do not seek to be ‘dominated.’ Instead, they are looking for our partnership,” said Elkind, now a senior research scholar at Columbia’s Center on Global Energy Policy.
The White House has sought to change what that partnership looks like.
Trump announced he will pull the United States out of the Paris climate agreement and has backed away from U.S. pledges to double spending on clean energy research and development — both Obama initiatives. Trump officials say they will instead focus on exporting U.S. know-how to encourage use of natural gas and development of clean coal and next-generation nuclear energy technology.
Some policymakers doubt there is truly a place for clean energy in Trump’s energy-dominant America.
“This new framing of energy policy around the idea of dominance is a thinly-veiled attempt to justify unfettered development of fossil fuels and rollbacks of environmental protections,” said David Konisky, associate professor at Indiana University’s School of Public and Environmental Affairs.
“The Trump Administration continues to give lip service to clean energy, while simultaneously rescinding the very policies intended to hasten its development,” he told CNBC in an email.
Source: CNBC
