US President-elect Donald Trump is putting together a wide-ranging energy package that would be rolled out within days of his taking office, Reuters reported on Tuesday.
The package would be designed to approve export permits for new liquefied natural gas (LNG) projects, and increase oil drilling off the US coast and on federal lands, Reuters quoted two unnamed sources in its reports.
The development comes amid concerns that Trump’s policies would scale back the several climate regulations passed under the incumbent President Joe Biden.
Trump has been vocal about increasing oil and gas production in the US and would ensure that this would rank alongside immigration as his two main agendas.
Trump is also said to repeal some of Biden’s climate legislations such as tax credits for electric vehicles and new clean power plant standards that aim to phase out coal and natural gas, the sources told Reuters.
Export permits
An early priority would be lifting President Joe Biden’s election-year pause on new export permits for LNG and moving swiftly to approve pending permits, the sources told Reuters.
Trump would also look to expedite drilling permits on federal lands and quickly reopen five-year drilling plans off the US coast to include more lease sales, the sources said.
According to the report, Trump is also expected to approve the Keystone pipeline when he takes office.
Among other issues, the pipeline transports tar sands oil, which emits more greenhouse gases than other fuels during extraction and refining.
However, on his first day in office, Biden canceled a key permit, which halted operations at the pipeline.
According to the Reuters report, any company looking to restart operation at the muti-billion dollar pipeline to carry Canadian oil to the US would need to start from the very beginning. This is because things such as easements have been returned to landowners.
There are five US LNG export projects that have been approved by the Federal Energy Regulatory Commission, but are still awaiting permit approvals at the Department of Energy, federal records show.
The US is the top producer of LNG and also became its biggest exporter in 2022. Europe imports LNG from the US to wean itself from Russian supplies.
Trump is expected to hand out export permits, which could lead to the resumption of construction plans for new projects. In January, Biden had stopped new LNG permits to study the environmental impact.
Plans will take time to materialize
Many of Trump’s plans and new policies related to energy could require time to move through Congress.
Trump has promised to declare an energy emergency on his first day in office that could test whether he can bypass those barriers to impose some changes on an accelerated schedule, according to Reuters.
Trump is also likely to call on Congress to approve funds so he can replenish the US’ Strategic Petroleum Reserves (SPR). The SPR serves as an emergency crude oil supply.
Under the Biden administration, the US had sold 180 million barrels of crude oil from the SPR in 2022 to cool down oil prices after Russia invaded Ukraine.
Therefore, if Trump pushes to replenish the reserves, it could increase oil demand and encourage US energy companies to produce more.
Additionally, Trump is expected to put pressure on the International Energy Agency (IEA) as the Paris-based energy watchdog’s recent policies have called for greater focus on policies to reduce emissions.
Trump’s advisers have urged him to withhold funding unless the IEA takes a more pro-oil position, according to Reuters.
Dan Eberhart, CEO of oilfield service firm Canary, told Reuters:
I have pushed Trump in person and his team generally on pressuring the IEA to return to its core mission of energy security and to pivot away from greenwashing.
Drilling on offshore and federal lands
Trump is also expected to accelerate drilling for oil and gas off the US coast and on federal lands.
The average time to complete a drilling permit on federal and Indian land averaged 258 days in the first three years of Biden’s administration, up from 172 days during the four years of Trump’s presidency, Reuters reported.
The sources told Reuters that Trump is expected to expedite pending permits, hold sales more frequently, and offer land that is more likely to deliver oil.
Oil output on federal US lands and waters hit a record in 2023, while gas production reached its highest level since 2016, according to federal data.
Drilling activity on federal lands and waters accounts for about a quarter of US oil production and 12% of gas output.
The US is also the world’s biggest crude oil producer, followed by Saudi Arabia and Russia.
According to the US Energy Information Administration, oil production in the US is expected to average over 13 million barrels per day this year, breaching the 2023 record high levels of 12.9 million barrels per day.
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