Unpacking Trump’s Energy Plan: Impact on State Regulations, Power Generation, and Electric Transmission

On his inauguration day, President Trump declared a national energy emergency. He quickly started issuing Executive Orders (EOs) aimed at rolling back many of the energy policies put in place by the Biden administration. This included a focus on boosting fossil fuel production. Here’s a breakdown of what these Orders entail and their potential impact on energy regulations.

First, let’s look at the rescinded orders. President Trump removed many of President Biden’s EOs concerning energy, some of which were enacted shortly before Trump took office. Key rescissions include:

• **EO 13990**: This order, issued on January 20, 2021, aimed to protect public health and the environment. It revoking the Keystone XL pipeline permit and set up a working group to assess the social cost of greenhouse gases.
• **EO 14008**: This order, from January 27, 2021, paused new oil and gas leases on public lands pending a review of federal leasing practices.
• **EO 14057**: Issued on December 8, 2021, this order aimed for a carbon pollution-free electricity sector by 2035.
• **EO 14082**: This order focused on implementing energy and infrastructure provisions from the Inflation Reduction Act, aimed at enhancing clean energy.
• **Presidential Memorandum** (March 13, 2023): This memo withdrew areas of the Arctic from oil and gas leasing, protecting the entire U.S. Arctic Ocean.

The new energy-focused executive actions taken by Trump included initiatives to promote oil, gas, and coal while rolling back support for renewable resources. They primarily aim to increase energy production on federal lands and waters. Here are a few key points from these actions:

• Federal agencies are directed to revise or rescind regulations hindering domestic energy production.
• The Council on Environmental Quality is tasked with expediting the permitting process for energy projects.
• States should expect increased applications for energy infrastructure projects, including pipelines.
• Federal efforts are encouraged to expedite approvals for liquefied natural gas export projects.

The declaration of a National Energy Emergency specifies energy sources as “crude oil, natural gas, coal, uranium, and biofuels.” Notably, renewable sources like wind and solar are not included. The intention is to ease regulations to promote faster development of fossil fuels, particularly in regions like Alaska. This includes giving broad authority to the Environmental Protection Agency (EPA) and the Secretary of Energy to boost oil and gas production.

A significant impact of these actions could be felt in states such as New Jersey and New York, which have been investing heavily in offshore wind energy. New Jersey aims for 11,000 MW of offshore wind capacity by 2040 and aims for 100% clean energy by 2035. However, the shifts in federal policy could hinder these plans, especially for projects relying on federal approvals.

While support for fossil fuels may seem advantageous, market dynamics also play a critical role. The demand for natural gas is on the rise, particularly due to data center consumption, and utilities plan to add many natural gas-fired plants in the coming years. This trend suggests that the market is driving gas generation more than recent executive actions.

Looking at onshore projects, the federal government’s Memorandum could potentially complicate permitting processes if interpreted to affect essential permits necessary for project development. However, incentives like the Investment or Production Tax Credits remain untouched, as these are determined by Congress.

In terms of electric transmission, increased federal momentum could arise from the EO declaring a national energy emergency. This could lead to a surge in applications for the siting and certification of new transmission lines as agencies work to identify infrastructure needs to support energy production growth. Additionally, since interstate pipelines are federally regulated, states should prepare for changes in applications relevant to their regions.

Reflecting on the Trump administration’s previous policies provides insight into possible future shifts. In 2018, efforts to reshape the clean energy strategy led to controversial plans aimed at propping up traditional energy sources, potentially at significant costs. How these new policies will balance energy needs and environmental concerns remains to be seen.