President Donald Trump’s first speech to Congress did not give many details about a national energy policy, but it made clear his direction on regulation and infrastructure.
Down with the first and up with the second. What does that mean for the utility industry? Who knows yet?
A reading of the transcript of the president’s speech revealed, as anyone who watched it already knows, a focus on hot-button social issues such as crime, immigration, trade and health care. I re-read the speech from the transcript provided in the New York Times (excluding the editorial comments added by the NYT), and will quote the few portions which dealt with the national energy picture.
Trump’s speech did not mention the Clean Power Plan specifically, an Obama-era creation which is currently tied up in federal court and could likely die from lack of executive branch support. The CPP called a 32-percent reduction in carbon emissions (compared with 2005 levels) from power plants by 2030.
This obviously requires a huge closing of coal-fired generation plants, which are the biggest emitters in the sector. And while those closings are already happening, the president promised the coal industry that help was on the way to save it.
“We’re going to stop the regulations that threaten the future and livelihood of our great coal miners,” Trump said last week.
Regulations have always been more of an executive-branch kind of thing, and U.S. electric utility leaders have complained about the layering of federal Environmental Protection Agency edicts for years. CPP was just the latest and greatest new regulation, but the list prior to that included regional haze, cross-state pollution rule and numerous others.
The president did not call these out specifically, but his words left no doubt that a new age of deregulation is just around the corner. And since many of these rules are executive-level creations, it shouldn’t be too hard for Trump-era agencies to do what he says. So it sounds like new EPA chief Scott Pruitt will be busy dismantling much of the EPA apparatus over the next few years, if White House promises come true.
But Pruitt won’t be alone in potentially reducing the regulatory branch of government, as some might call it.
“We have undertaken a historic effort to massively reduce job-crushing regulations, creating a deregulation task force inside of every government agency,” Trump told Congress, “and we’re imposing a new rule which mandates that for every one new regulation, two old regulations must be eliminated.”
The two-for-one deconstruction may sound good to many utility executives, but forgive them if they take an “I’ll believe it when I see it” attitude. No doubt we have heard this before from conservative presidents, if not in the unabashedly direct tone taken by President Trump.
One thing utility planners want is long-term specifics. They’ve got five-year to 10-year plans in mind, not election-cycle semantics.
One key thing that he did not do it was argue for a comprehensive national energy policy incorporating our long-term goals for electricity, oil, coal and renewables. That is no criticism of the new president, as pretty much all of his predecessors (dating back to Nixon) have championed the need for such a policy and yet passed the buck every single time.
Trump’s speech, focused on so many other compelling issues, also did not go there. He did underline his “America First” economic policy, and this speaks to energy, too. In a talk which positively referenced President Eisenhower’s huge interstate highway infrastructure spend, Trump trumpeted his approval for interstate oil pipelines such as the controversial Keystone and Dakota Access projects.
But, it should be noted, Keystone and Dakota Access are privately funded enterprises and are not asking for government money. And here’s the economic rub: If built, these pipelines could help keep American and Canadian crude relatively cheap for years to come. This, in turn, could help maintain low natural gas prices and, ironically, make coal less competitively for electric power generation plants.
It may not be what the president ordered, but the Law of Unintended Consequences also prevails.