Trump’s Energy Agenda: Challenges and Promises for U.S. Energy Dominance
President-elect Donald Trump is making bold promises to restore U.S. energy dominance in his upcoming second term, focusing on ramping up oil and gas production, expanding fracking, and lifting restrictions on liquefied natural gas exports. His campaign rhetoric has sharply contrasted with the policies of the Biden administration, prompting questions about how Trump plans to enact these sweeping changes.
At a rally in Pennsylvania last month, Trump criticized the Biden administration’s energy policies, which he claims have undermined key industries like steel, coal, oil, and gas, while outsourcing jobs to China and other foreign nations. He argued that his approach would reverse these losses and reclaim America’s energy leadership.
Trump has long used energy and climate issues to draw a distinct line between his agenda and that of his predecessor. Among his promises for a second term are re-exiting the Paris climate agreement, rolling back emissions standards for vehicles and power plants, and significantly boosting U.S. oil and gas production, particularly through fracking, a controversial technique for extracting natural gas from shale rock.
Industry groups representing major oil and gas producers have expressed confidence that Trump will follow through on these commitments. American Petroleum Institute (API) President and CEO Mike Sommers said that energy was a key issue in the 2024 election, and that Trump’s victory signals a desire for an “all-of-the-above” energy strategy that prioritizes U.S. resources and builds on successes from his first term.
However, some areas of Trump’s energy agenda face significant hurdles. One of the most challenging tasks will be undoing the Inflation Reduction Act (IRA), the cornerstone of the Biden administration’s climate and clean energy agenda. The IRA allocated $369 billion in subsidies for electric vehicle manufacturing, battery production, and clean energy projects like wind and solar, and Trump has repeatedly criticized it as the “greatest scam in history.”
Despite his criticisms, undoing the IRA may not be a straightforward task. Since much of the funding has already been allocated, particularly to Republican-led states, a full repeal would be difficult. While Trump could not unilaterally repeal the law, he may attempt to restrict certain tax credits or incentives related to clean energy.
One potential move Trump could make is tightening eligibility for electric vehicle (EV) tax credits, which would raise manufacturing costs and, in turn, increase prices for consumers. He has also signaled his intention to impose tariffs on Chinese-made EVs, potentially as high as 60%, in an effort to encourage more manufacturing in the U.S. However, experts warn that such tariffs could backfire, raising costs for U.S. consumers and provoking retaliatory tariffs from China and other trading partners.
Additionally, the API has outlined several policy goals for the incoming administration, including rolling back stringent fuel economy standards for vehicles and issuing a five-year plan for expanding offshore oil and gas drilling. API President Sommers emphasized that controlling U.S. energy is vital for national security and economic stability.
Despite these ambitious proposals, some remain skeptical. The auto industry, which has already invested billions in electric vehicle technology, may be resistant to abrupt policy shifts. Mark Schirmer, director of industry insights at Cox Automotive, noted that the auto industry is driven by long-term investment strategies and that presidents come and go, but the industry’s momentum will likely continue.
As President Trump prepares to take office, the energy sector remains at the forefront of his agenda, but how effectively he can enact these changes remains uncertain, particularly as he faces political, legal, and economic challenges in the process.