In introducing tariffs, proposing a coal and nuclear bailout and threatening to upend NAFTA, President Trump is crimping an industry he once heralded.
An employee of Halliburton Company monitors a carbon dioxide vapor release valve at a natural gas well site on June 4, 2007, outside of Hope, in eastern New Mexico.
President Donald Trump catapulted to office with the support of the natural gas industry and pledged to introduce an era of U.S. “energy dominance” led by gas and coal, report agencies.
But since taking office, Trump has repeatedly taken steps that promise to crimp the industry he once showered with praise and drive up costs for taxpayers he had promised to help.
His most recent move, an announcement last week that his administration will once again try to prop up ailing coal and nuclear plants drew widespread condemnation from a diverse array of groups and experts across the political spectrum – including the CEO of the country’s largest nuclear generator, which would stand to gain from the proposal.
The impact, however, would clearly fall most heavily on natural gas, which competes with coal and nuclear plants in electricity markets. And with U.S. electricity consumption having leveled off and even fallen since 2010 from strides in energy efficiency, one power plant’s gain is almost inherently another’s loss.
“If you’re going to support some subset of the market and have them run more than they would otherwise – coal and nuclear, for example – someone else is going to have to give. You’re going to supply the same amount of electrons either way,” says John Larsen, director in the energy and climate practice at Rhodium Group, a research firm. “Any support for coal and nuclear plants means less market share for natural gas in the electric power sector.”
Trump’s policies at times have threatened to harm a natural gas industry that, amid a boom in the cheap and abundant domestic resource, has in many quarters been regarded as the successor to coal and nuclear plants, especially among conservatives who are often more skeptical of renewables like solar and wind.
“I don’t think President Trump is necessarily trying to be specifically anti-natural gas, but the outcome of his actions is certainly turning out that way in some cases,” says Samantha Gross, a fellow in foreign policy focused on international energy and climate at the Brookings Institution, a left-leaning think tank. “He has not been as good for the oil and natural gas industry as he’d like to think he is, because he’s introducing all these uncertainties and challenges that weren’t there before.”
Oil and gas trade groups say the impact of the president’s bailout proposal is already being felt by the companies that own and operate natural gas plants, even as it has yet to be implemented, and even then still faces major legal hurdles.
“You’re seeing things in some jurisdictions where companies that had plants on the drawing board aren’t moving forward as quickly as they could have been,” says Todd Snitchler, group director for market development at the American Petroleum Institute, the industry’s largest lobbying group. “Projects that would have commenced construction or would have hired folks for the development phase of their construction are now waiting to see if it would be a good idea to build that facility.”
Snitchler said the effect of the president’s proposal, if it were fully implemented, would be “immediate and profound” – language reminiscent of the type used to describe the actions of the previous administration, which the trade group regularly accused of declaring war on oil and gas in aiming to address climate change.
The Trump administration, to be clear, has taken steps to support other facets of the gas industry: It’s called for reducing royalty rates for oil and gas wells on public lands, expanding access to protected areas to increase oil and gas drilling, easing environmental reviews and regulations for pipelines and other infrastructure and increasing exports of the two commodities.
Notably, the bailout announcement last week followed on the heels of a Trump’s