Big Moves in Energy Markets
Inside sources reveal that a broad energy plan is scheduled to be launched within days of taking office, promoting natural gas exports and oil drilling.
According to two informed sources, the transition team is crafting an extensive energy plan to be rolled out within days of his inauguration, which will approve export licenses for new liquefied natural gas (LNG) projects and increase oil drilling off the U.S. coast and on federal lands.
This energy plan largely reflects the commitments made, but the early timeline for its introduction ensures that oil and gas production will stand alongside immigration as pillars of the early agenda.
Sources say that there are also plans to repeal some key climate legislation and regulations from his Democratic predecessor, such as tax credits for electric vehicles and new clean power plant standards aimed at phasing out coal and natural gas.
It is pointed out that early priorities include lifting the government's suspension of approval for new LNG export licenses and swiftly approving those under review. It is also said that efforts will be made to expedite drilling permits on federal lands and quickly resume the five-year offshore drilling plan along the U.S. coast, offering more offshore leases for bidding.
Advertisement
Symbolically, the approval of the Keystone XL pipeline project will be sought, a large-scale oil infrastructure project spanning the U.S. and Canada that has been a contentious issue in U.S. energy policy. Reviving this project will be challenging. Any company hoping to invest billions to transport Canadian crude oil to the U.S. would need to start from scratch, as easements and the like have been returned to landowners.
Transition team spokesperson Karoline Leavitt said in a statement: "The American people can count on him to use his executive power on day one to fulfill the promises he made to them."
Much of the energy plan will take time to pass through Congress or the nation's regulatory system. He has pledged to declare an energy emergency, which may test his ability to bypass these obstacles and implement some reforms on an accelerated timeline.
He will also call on Congress to provide new funding so that he can replenish the Strategic Petroleum Reserve (SPR). Restocking the reserve will boost short-term oil demand and encourage U.S. oil production.
It is expected that pressure will also be put on the International Energy Agency (IEA). The IEA, an energy regulatory agency based in Paris, provides advice on energy policy for industrialized nations. Republicans have criticized the IEA for focusing on emission reduction policies. Advisors have urged him to stop funding unless the IEA adopts a more pro-oil stance.
Dan Eberhart, CEO of oilfield services company Canary, said: "I have personally lobbied his team to have the IEA return to its core mission of energy security and stop trying to greenwash."
"Plans to take strong action on LNG"
The suspension of new LNG export licenses until next January to study environmental impacts was a move made during the election year, aimed at garnering support from the party's environmentalist faction. Without export licenses, developers cannot proceed with multi-year construction plans for new projects. Delayed projects include Venture Global's CP2, Commonwealth LNG, and Energy Transfer's Lake Charles complex, all located in Louisiana.
The U.S. is the world's largest natural gas producer and became the largest LNG exporter in 2022, as Europe relied on the U.S. to break its dependence on Russia's vast energy supplies following the outbreak of the Russo-Ukrainian conflict.
Sources say that the government has committed to releasing the environmental study report before January 20th next year when the new administration takes over the White House, but this will not impact the incoming government.
One of the sources said: "The LNG issue is a thorny one, and he plans to take strong measures on this issue."
Federal records show that the U.S. has five LNG export projects approved by the Federal Energy Regulatory Commission (FERC), but is still awaiting许可 approval from the Department of Energy.
The suspension of new LNG export licenses has also led to a halt in necessary environmental reviews, and the five pending licenses from the U.S. Department of Energy may still require some environmental reviews to withstand legal scrutiny.
Drill more off the coast and on federal lands
Efforts will be made to expedite drilling off the U.S. coast and on federal lands.
Sources say that the approval of pending licenses is expected to be accelerated, and more sales events will be held to offer land leases that are more likely to transport oil.
According to federal data, oil production on federal lands and waters reached an all-time high in 2023, while natural gas production hit its highest level since 2016.
Drilling activities on federal lands and waters account for about a quarter of U.S. oil production and 12% of natural gas production.