President-elect Donald Trump has vowed to declare a national energy emergency as soon as he takes office on Monday, months after promising voters he would halve their electricity and gas prices in the first year of his administration.
“To achieve this rapid reduction in energy costs, I will declare a national emergency to allow us to dramatically increase the generation, production and supply of energy,” Trump told supporters at a rally in Potterville, Michigan in August the past. “Starting from day one, I’m going to approve new drilling, new pipelines, new refineries, new power plants, new reactors, and we’re going to cut red tape.”
The president-elect reiterated by Dec. 22 his intention to “declare a national energy emergency” on the first day of his administration. He vowed to issue a series of executive orders to change the Biden administration’s policies on natural gas exports, drilling and emissions standards.
Trump plans to create a National Energy Council led by North Dakota Gov. Doug Burgum, his pick to lead the Interior Department. Burgum said during a Senate hearing on his nomination this week that he expects the council to be created through an executive order.
It is unclear whether the emergency declaration would be largely symbolic or would require broader powers that go beyond the energy executive orders that Trump is expected to issue on Monday. The president-elect’s transition team did not respond to a request for comment.
“My prediction is that it will be a rhetorical statement of an energy emergency,” said Mike Sommers, president of the oil industry lobby group American Petroleum Institute. “When you put the executive orders together, this will be the answer to what to do about the energy emergency.”
There are several emergency statutes Trump could use that deal with energy, said Glenn Schwartz, director of energy policy at consulting firm Rapidan Energy. Emergencies are often loosely defined under federal law, giving the president broad discretion to use them as he sees fit, Schwartz said.
And Trump is likely to face little pushback from the courts because they are reluctant to challenge presidential determinations related to national security, Schwartz said.
“What you end up with is that even if Trump were to expand his emergency powers in unprecedented ways, it’s not clear that the courts would step in to stop any of these resulting actions,” the analyst said.
Likely emergency authorities
There is clear precedent for Trump to invoke emergency authority to promote energy production and expand the nation’s fuel supply, Schwartz told clients in a research report published last Thursday. Authorities using the powers will waive some energy-related environmental and pollution rules.
Trump could issue fuel waivers under the Clean Air Act to allow gasoline on the market that would otherwise violate federal air quality standards, the analyst said. Presidents have often used such concessions whenever they needed to extend the nation’s gasoline supply and keep prices in check, he said.
Trump could also invoke the Federal Energy Act to order power plants to operate at maximum capacity and not comply with pollution limits, Schwartz said. The Secretary of Energy may be called into action during wartime or when a sudden increase in demand or a shortage of electricity creates an emergency situation.
The provision has rarely been used since World War II and is mostly reserved for situations where extreme weather has overwhelmed power plants, Schwartz said.
The largest US grid operator, PJM Interconnection, has warned of a power shortage as coal-fired power plants retire faster than new capacity comes online. PJM operates networks in all or parts of 13 states, in the Mid-Atlantic, Midwest and South.
The situation could become more acute as electricity demand rises sharply as the tech sector builds power-hungry data centers to support artificial intelligence applications.
The first Trump administration considered invoking the act in 2018 to order utilities to buy two years of power from coal and nuclear plants that were at risk of shutting down. The administration at the time eventually abandoned the idea after facing pushback from the industry.
Trump could also opt for a broader statute that allows the president to suspend pollution laws for industrial facilities, power plants, oil refineries, steel mills, chemical plants and other industrial facilities in emergency situations, Schwartz said.
Under federal law there is less support for the president to compel new production, Schwartz said. Trump can direct federal agencies to fast-track environmental reviews of energy projects he supports, such as pipelines, but the president cannot use emergency authorities to override foundational environmental policies such as the National Environmental Policy Act and the Endangered Species, said the analyst.
Pending executive orders
Oil industry lobbyists at the American Petroleum Institute are predicting that Trump will issue a series of energy-related orders as soon as Monday.
The administration is expected to issue an order lifting the Biden team’s pause on new LNG export facilities, Sommers said. The president-elect will also try to reverse President Biden’s recent decision to ban drilling in 625 million acres of federal waters. Trump’s authority to do so has been contested, and such an order would likely end up in court.
“We think he has the ability to change that and we will defend him in court,” Sommers said.
The industry is anticipating that the president will also direct the Interior Department to increase oil and gas lease sales in the Gulf of Mexico, Sommers said. The Biden administration had issued the lowest rents in history under a program that will last until 2029.
These decisions are not expected to have any immediate impact on production. The US has been the world’s largest producer of oil and gas for six years, overtaking Saudi Arabia and Russia. The CEOs of Exxon and Chevron have made it clear that production decisions are based on market conditions, not in response to who is in the White House.
“You can lead a horse to water, but you can’t make him drink,” Schwartz said. “He can give them all the resources they need to be able to drill, but I haven’t seen anything that suggests he can force them to get it out of the ground.”
Trump is expected to withdraw the US from the Paris climate agreement. Executive orders targeting gas emissions and fuel economy standards for cars are also expected.
However, only so much can be done through executive order, Sommers said, and directives often must go through a time-consuming rulemaking process. The oil industry is more focused on pushing for more lasting policy changes in the Republican-controlled Congress, he said.
“There’s not much they’re going to be able to do on day one, other than direct federal agencies to fulfill their promise of energy dominance,” Sommers said.
