According to two informed sources, Trump's transition team is developing a broad energy plan to launch within days of his inauguration, which will approve export licenses for new liquefied natural gas (LNG) projects and increase oil drilling on U.S. coastal and federal lands.
This energy plan largely reflects Trump's commitments made during the campaign, but the timeline for rolling out the plan ensures that oil and gas production will be a cornerstone of Trump's early agenda alongside immigration.
Sources say that as a Republican, Trump 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.
Sources pointed out that an early priority is to lift the Biden administration’s freeze on the approval of new liquefied natural gas export licenses and to quickly approve the licenses currently under review. Trump is also said to seek to expedite drilling permits on federal lands and swiftly restart the five-year drilling plan offshore, introducing more offshore leases for bidding.
Trump will symbolically seek approval for the Keystone XL pipeline project, a large oil infrastructure project crossing the U.S. and Canada that has been a controversial topic in U.S. energy policy. On his first day in office, Biden signed an executive order to cancel the project's construction permits. Restarting this project will be difficult. Any company hoping to invest billions to transport Canadian crude oil to the U.S. will need to start from scratch, as easements and other rights have already been returned to landowners.
Trump's transition team spokesperson Karoline Leavitt said in a statement: 'The American people can expect Trump to use his executive power on day one to fulfill the promises he made to them during the campaign.'
Many aspects of Trump's energy plan will take time to pass through Congress or the national regulatory system. He has promised to declare an energy emergency on his first day in office, which may test whether he can navigate these obstacles to implement some reforms on an accelerated timeline.
Trump will also call on Congress for new funding so that he can replenish the Strategic Petroleum Reserve (SPR). The SPR was established as an emergency oil supply and has been depleted during Biden's administration to help manage rising oil prices caused by the Russia-Ukraine conflict and high inflation during the pandemic. Replenishing the reserve will boost short-term oil demand and encourage U.S. oil production.
Trump is also expected to pressure the International Energy Agency (IEA). The IEA, based in Paris, provides energy policy advice to industrialized countries. Republicans have criticized the IEA for focusing on emissions reduction policies. Trump's advisors have urged him to stop funding unless the IEA takes a more oil-friendly stance.
Dan Eberhart, CEO of oilfield services company Canary, said: 'I have personally pressured Trump and his team to get the IEA back to its core mission of energy security, stop trying to greenwash.'
Trump 'plans to take strong action on LNG'
Biden suspended new LNG export licenses until January next year to study the environmental impact, a move aimed at garnering support from the party's environmentalist group during an election year. Without export licenses, developers cannot proceed with years-long construction plans for new projects. Delayed projects include Venture Global's CP2, Commonwealth LNG, and Energy Transfer's Lake Charles facility, all located in Louisiana.
The United States is the world's largest producer of natural gas and became the largest LNG exporter in 2022, as Europe relied on the U.S. to reduce its dependence on Russia's vast energy supplies after the outbreak of the Russia-Ukraine conflict.
Sources say the Biden administration has committed to releasing the environmental study report before Trump takes office on January 20, but this will not affect the incoming new government.
One of the sources said: 'The LNG issue is a long-standing problem, and he plans to take a hard line on this issue.'
Federal records show that five LNG export projects in the U.S. have been approved by the Federal Energy Regulatory Commission but are still awaiting approval from the Department of Energy.
The Biden administration's suspension of new LNG export licenses has also led to a pause in necessary environmental reviews, and five pending licenses from the U.S. Department of Energy may still require some environmental review to withstand legal scrutiny.
More drilling on coastal and federal lands
Trump will seek to expedite drilling on U.S. coastal and federal lands.
According to federal data, the average time to complete drilling permits on federal and Indian lands during the first three years of the Biden administration was 258 days, longer than the 172 days during Trump's presidency.
Sources say Trump is expected to expedite the approval of pending licenses and hold more sales activities, offering lands for lease that are more likely to yield oil.
Federal records show that despite the lag in license approvals, the average number of onshore oil drilling permits approved by the Biden administration exceeds that during Trump's first term.
According to federal data, oil production on federal lands and waters reached a record high in 2023, while natural gas production reached 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.
Article forwarded from: Jin Shi Data