Worldenergy Blog

Trump on Energy in Politics...?

Friday, May 27, 2016

Donald Trump gives his first Energy Policy speech... Well Sort of. 
We know his stance on immigration and we certainly know where he stands when dealing with the media.

It seems everyone is talking about the "Donald" these days.  Now that he has locked up the nomination, according to AP, will he actually build the wall, is he conservative or opportunistic?  How Donald Trump would govern is a good question to ask, our current President was elected with "hope and change" and no real descriptions.  Donald Trump seems to be getting along with "Make America Great Again".  He has managed to diffuse any real questions about his policies and is now beginning to unite the party around his controversial run for the presidency.

While he promises that he will make everything better, up until now details, especially when it comes to Energy have been hard to find. However, with the low oil prices, the advent of LNG, the export ban being dropped and gasoline prices not hurting the consumer perhaps a discussion on Energy is not really relevant to getting elected.

So what have we heard, well the Republican Nominee has stood up in front of the annual Williston Basin Petroleum Conference in Bismarck, North Dakota and gave an "energy" speech.  Or did he, he gave a rousing speech professing to support coal, bash Hillary, and put America first.  All good, but what does it mean.

Up until now we had seen only snap shots that tell us where Mr. Trump is likely to be when it comes to energy and energy policy, and that certainly hasn't hurt him with even undeclared delegates now saying they will vote for him.  With oil prices at an all time low, natural gas prices scraping by and LNG spot prices around the world dropping it would be convenient to say that Energy is not going to be an issue in the coming election.  And if Hillary hadn't decided that coal mines would be shut down, that still might be the case.  However, Trump took direct aim at the Democrat and said he would bring the coal mines back online and unleash the economic benefits of coal mining.  This sounds good in West Virginia and other coal states, but the economics may not hold up to natural gas.

 

Additionally the drop in oil prices, the growth in jobs and in economic strength led by Texas and other producing states is being wiped out as we watch. Our shale producers are shutting down and even OPEC is beginning to cry uncle.  During this year's CERA Week the discussions all circled around the US shale producers and when they would begin to shut in wells. What we do now will shape the "Energy Future" of the planet.  With both Exxon and BP reports showing that oil is going to be the go to for energy for the foreseeable future we need to be focused on how we lead, not just proclaim victory.  However, even as we speak the dynamic is changing.  US production is falling, oil jobs are going away and OPEC is battling Iran for market share.  All the while the price is creeping back up, topping $50 for the first time in a long time.


Comments like “NOPEC” and stating that OPEC is playing us might lead us to believe that he would be for creating a trade war. However, he has used such statements to preface the need to build our domestic resources of natural gas and oil.  He also points out that OPEC is a group of speculators and blames them for price volatility even going so far as to say that if they did this in America it would be illegal.  For their part, OPEC does say they are talking to everyone except the US, so maybe Trump will talk to them.  But what does he really mean by that, now we see another catch phrase, I will put America First.   He does think he can get "a better deal", what that is going to look like, we really don't know.

 

Most of us that question “Climate Change” enjoy Mr. Trump’s comments on the weather, and the “Climate Change” experts trying to explain that the weather has nothing to do with “Climate Change”.  Mr. Trump says what most of us would love to say if we had a loud enough megaphone.  Either prove that we are causing climate change or change the focus of the debate to how we adapt to an ever-changing climate.  Here, Donald Trump doubled down, he now says he will pull back from the Paris treaty and that Climate Change is being pushed to make us uncompetitive.  His opponents now can clearly identify him as a "Denier". 

So is he really a "denier" or does he want to use that stance to enhance his ability to negotiate?  Again, where Mr. Trump stands on the issue is not really clear when one pushes away the volume and the bombastic nature of some of his tweets.

Mr. Trump has stated repeatedly that he is in favor of fracking.  I’m not sure that really counts for much.  Fracking is a technology deployed to break up source rock and free hydrocarbons.  Being for “fracking” is like saying "I like high definition television."  However, once again he couches his support with an economic truth, something he does know about.  He understands that to be successful, the United States needs low cost, cleaner energy.  Right now that means natural gas and natural gas means fracking.  We also need to supply our own oil, and yes, today that means more fracking if we want to drive our cars.  If tomorrow we discovered how to drive our cars on water, he would be for drilling water wells.

One place that Mr. Trump stands head and shoulders above other candidates is when he talks about building things.  He is an experienced developer and master planer of communities and luxury developments.  He knows how to run a budget and how to get things built on time.  His buildings will likely last for centuries.  When he talks about rebuilding infrastructure in America, I bet he can tell the difference between shovel ready jobs, and jobs that might materialize sometime in the future.  He has publicly stated that he is in favor of exporting oil, where does he stand on building the XL pipeline and other key infrastructure. Well he told a group in Manchester, NH  “I want a piece of the profits. Let’s make a good deal.” He is reported to have called for a 25% or greater tax on profits from the XL pipeline.  That doesn't sound like a conservative idea, but is it an idea that will encourage votes?

If we are going to become a major player on the global stage with Energy we are going to need to change a few things and I would like to know what he thinks needs to be done.

I would like to see a strategy, beyond put America First, that gives us energy security and allows us to use our resources to further our international agenda. But hey, I would like to see World Peace as well.