Trump Turns Transition Over to Climate Deniers, Fossil Lobbyists
While much of the world was still reeling at the United States’ abrupt political turn, President-elect Donald Trump and his advisors began setting priorities and short-listing executive branch candidates for an assault on global climate and his own country’s natural security.
While stock market movements anticipated a resurgent fossil industry and continuing pain for renewable energy companies, deeper analysis showed that the fossils’ market problems and renewables’ mounting advantages were ultimately no different last Wednesday morning than they’d been the previous afternoon. Still, top-line coverage focused on the Trump transition, amid signs the next American president plans to carry through with a radical restructuring of the federal government’s energy priorities.
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An early strategic leak from the transition team meeting in Trump Tower in New York confirmed that the incoming administration was looking for a way to quickly renege on America’s signature on the Paris Agreement. Barely a week after it came into force, “Donald Trump is seeking quick ways of withdrawing from a global agreement to limit climate change,” Reuters reports, citing “a source on his transition team.”
Whether Trump would reverse his position that climate change is a “hoax” once elected appeared to be answered by the selection of Myron Ebell, a professional ideologue rather than a scientist who is one of the United States’ most prominent climate change deniers, to oversee the choice of new chief administrator for the Environmental Protection Agency. During the campaign, Trump mused about abolishing the agency, created more than four decades ago by a previous Republican president, Richard Nixon, entirely.
As the New York Times observes: “Appointees to key White House jobs like chief of staff and cabinet posts wield outsize influence. Their selection will help determine whether the Trump administration governs like the firebrand Mr. Trump was on the campaign trail or the pragmatist he often appears to be behind closed doors.”
In addition to Ebell, a director at the Competitive Enterprise Institute, who is himself being considered to lead the EPA, other candidates according to the Times were Robert E. Grady ,a venture capitalist with ties to New Jersey governor and Trump acolyte Chris Christie, and coal industry lobbyist Jeffrey R. Holmstead. Environment & Energy News [subscription] adds the names of “two top state attorneys who are helping to lead the legal charge to overturn President Obama’s Clean Power Plan in court”—West Virginia Attorney General Patrick Morrisey, and Oklahoma AG Scott Pruitt.
Names being circulated as candidates for two other U.S. departments key to an energy transition away from carbon fuels—Interior and Energy—sent a consistent message.
For Interior, they included Sarah “Drill, Baby, Drill” Palin and, again, Christie pal Robert E. Grady. E&E News’ list included several western governors and Members of Congress from Ammon Bundy country in favour of expanding the leasing of U.S. public lands for energy extraction.
Grady’s name was also on the Times’ short-list for Energy Secretary, joined there by Harold G. Hamm, chief executive of Continental Resources, an oil and gas company. Other prospects being considered by a DoE transition team led, according to E&E News, “by energy lobbyist Mike McKenna,” include several other fossil executives.
Whoever Trump appoints will take command of critical agencies already braced for the worst. “Some employees are in downright panic mode in the aftermath of Donald Trump’s victory,” E&E reports. “U.S. EPA employees were in tears. Worried Energy Department staffers were offered counselling. Some federal employees were so depressed, they took time off. Others might retire early.”
“No one that I know would actually want to stay and work under his administration,” one DoE employee who joined the department during the Obama years told Greentech Media before election day. “What does your mission become if you’re working for him? I don’t know if I could get myself to work every day knowing ultimately [that] we were working for him.”
As Trump’s early moves signalled his mission, other observers turned to its tactics and odds of success, and found them mixed.
Obama’s Clean Power Plan—a centrepiece policy designed among other things to reduce America’s heavy reliance on coal for generating electricity—is unambiguously slated for elimination. “Trump energy adviser Kevin Cramer, a U.S. representative from North Dakota, said Trump is likely to target the Clean Power Plan during his first 100 days in office,” Reuters reported.
In the face of Republican obstructionism in Congress, Obama’s plan resorted heavily to executive branch orders, making it a particularly soft target. “It’s much easier for Trump to repeal rules than statutes,” Brian Potts, a partner at the law firm Perkins Coie LLP, told Utility Dive. “With the Clean Power Plan, he’s got multiple options if he wants to scrap it or cut it back.”
“The simplest outcome may also be the most likely,” Utility Dive suggests. The Plan is before a U.S. Federal Court, on the direction of a U.S. Supreme Court order. If it does “not issue a decision before January 20, when Trump takes office,” the outlet suggested, quoting EPA candidate and coal lobbyist Holmstead, “the Trump administration can basically just tell the court we intend to revisit the rule, so please send it back to us.”
But while the Plan may die, its goals may not. “It has become clear in the past few years that many of the rule’s goals may be easily achieved,” writes InsideClimate News, “with market forces propelling utilities down a cleaner path, and many states, especially in the Northeast and on the West Coast, moving toward deep reductions in greenhouse gas pollution and ambitious gains in the use of renewable energy.”
“There is even a slim chance,” ICN optimistically adds, “that the United States, propelled by market and popular choices, could achieve Obama’s international pledge to cut emissions up to 28% by the year 2025” even with Trump in office.
Against that background, securities markets perceived winners in fossil-based securities and losers in renewable ones—but more thoughtful analysts suggested that not all those instant judgements were likely to pay off in the longer term.
“Oil explorer and driller company bonds were among the top gainers in the corporate bond markets,” Bloomberg reports, “on speculation that Trump will be friendlier to fossil fuels than Clinton would have been.” Shares in Peabody Energy Corporation, which has been in bankruptcy protection, jumped 73%, the same outlet notes separately.
Trump is likely to abandon an Obama initiative to increase the royalties fossil extractors pay to the U.S. treasury for resources taken from public lands, and end the current president’s moratorium on new extraction leases, InsideClimate observes. But the fossil industry “has to bear in mind that it already owns enough leases to supply demand for 20 years.”
“We’re going to get those mines open,” Donald Trump told a crowd in West Virginia coal country in May, the Christian Science Monitor recalls. “And for those miners, get ready. Because you are going to be working your asses off.” The president-elect won close to 70% of votes there, and in other coal states like Wyoming and Kentucky. But reality is likely to “fall far short of what the candidate promised, as a tide of natural gas remains likely to keep coal from retaking its former prominence in energy markets.”
“There is not much a Trump administration can do to protect coal producers, who have mostly been the victim of economic forces rather than politics and the Obama administration’s ‘war on coal,’ ” notes Reuters.
The flip side of market enthusiasm for fossils in the wake of Trump’s election was its flight from renewables, whose stocks were “hammered,” according to Marketwatch. But that flash reaction may be premature, and Trump’s impact on the shift to clean energy limited.
Tax incentives that have supported America’s renewable energy boom are “an investment that really helps prop up rural communities and provide a significant amount of revenue for operators,” energy lawyer Tim McMahan told Utility Dive. “Along with Democratic support for the tax incentives, the presence of renewable energy facilities and manufacturing in many heartland states means Congressional Republicans are likely to balk at repealing them before they phase out,” the outlet added.
“State efforts will continue to drive utilities toward renewables, particularly in western and northeastern states,” Utility Dive added. “Trump could attempt to thwart these state and regional efforts through FERC [the Federal Energy Regulatory Commission] appointments or amendments to the Federal Power Act, but each energy lawyer Utility Dive spoke with indicated that is unlikely.”
“The renewables train has left the station,” Boston energy and sustainability lawyer Merril Kramer observed to the same outlet. “Economics as much as energy policy is driving the markets. [F]racking is not economic at current gas prices, worldwide demand for oil is down, and the cost of coal retrofits is prohibitive. Conversely, the cost of solar PV panels and wind turbines continue to decline.”
As for the high-flying darling of renewable investors—Palo Alto, California-based Tesla Motors—the House that Musk Built is better positioned than might be expected to ride out a Trump attempt to turn federal favour toward fossils.
The company’s electric cars may face resurgent competition from gas-guzzling conventional vehicles if the loosening of regulations, including an impending new fuel-efficiency standard, under a Trump administration sustains a continuing glut of gas and diesel supply and cheap pump prices. “Stocks of Detroit carmakers have predictably surged,” Bloomberg notes, “while Tesla shares fell 4.9% in the two days after the election.”
Nonetheless, the outlet adds, the election’s “impact on Tesla won’t be catastrophic. The price of batteries is dropping rapidly, and by the early 2020s electric cars should be cheaper and better performing than their gasoline-powered equivalents across the board. Lowering efficiency standards will make gasoline cars a bit cheaper to manufacture, but will also make them more costly to drive over the life of the vehicle.”
Meanwhile Tesla is better-positioned than its gas-driven rivals to benefit from—or at least lose less by—Trump’s much-promised campaign against trade deals in general, the North American Free Trade Agreement (NAFTA) in particular. While companies like Ford and Toyota have invested heavily in parts supply chains and production facilities in Mexico, Tesla’s production is essentially all-American.
The bottom line for those who share the planetary climate with Trump is still unclear, but most argument is over the degree, not the direction of the effect.
“A disaster for the planet,” headlined the Guardian. “A Trump presidency might be game over,” the paper quoted climate researcher Michael Mann as saying. “It might make it impossible to stabilize planetary warming below dangerous levels.”
“Scientists say the world is already behind the needed trajectory of emissions reduction to meet the Paris goal,” Utility Dive adds, “and investments in more fossil fuel assets scheduled to be in service for up to 40 years could commit the world to see the most catastrophic consequences of climate change if they are not retired early.”
But if that implication seemed hard to avoid, Trump’s election may also have had the effect of galvanizing resistance to a program that places in danger communities far beyond America’s borders.
While crowds reported to be in the tens of thousands demonstrated against Trump in several US cities, Reuters reports, a variety of activist groups were finding that “environmentally minded people angered by the [election] outcome are rallying to their cause.”
In Seattle, people packed a volunteer drop-in meeting for the local chapter of 350.org, organizer Emily Johnston told Reuters. “This was surprising to me, because I personally was so shaken that I felt practically paralyzed, and I know many other people did, too,” Johnston said. “The fact that many others responded by immediately engaging is incredibly heartening.”
It could also signal a new militancy for such groups, Johnston hinted. “All these pipelines, all these tankers, all these trains have to go through thousands of miles,” she pointed out, and could be potential protest targets.
Whatever the tactical and strategic future for clean energy and the global climate, The Energy Mix curator Mitchell Beer carried a message of hope from Marrakech, where the Paris Climate Accord is proceeding through to implementation, with or without the cooperation of a future Trump administration. In an essay in the first post-election edition of the Mix that was also carried by the National Observer, Beer urged climate, energy, and environmental activists to recall the words of Martin Luther King, assassinated for fighting for civil rights in the United States: “The arc of the moral universe is long. But it bends toward justice.”