Donald Trump will assume office for his second term in late January, bringing with him a suite of frequently touted energy policies. Given the pivotal role of the United States in the global energy sector, these anticipated policies are poised to significantly affect both the Middle East and global energy strategies. The United States has positioned itself among the top three crude oil producers globally, joining the ranks of Saudi Arabia and Russia, each with a production capacity exceeding 12 million barrels per day. This elevation was largely due to a surge in production capacity starting in the mid-2010s, driven by a significant increase in shale oil production. Similarly, US natural gas reserves surged during this period, propelled by substantial shale gas output, positioning the country alongside other major gas producers like Russia, Qatar, and Iran. One outcome of this production boom was a dramatic collapse in oil prices, which eventually led to a Saudi-Russian accord and the creation of OPEC+. This coalition, comprising OPEC members and other key producers, has played a crucial role in market stabilization since its inception. The developments of nearly a decade ago precipitated substantial changes in the global energy landscape. The United States transitioned from being a net importer of crude oil and petroleum products to becoming a leading oil producer outside OPEC+, as well as a net exporter of both crude oil and liquefied natural gas. Additionally, the US endeavors to assert an influential role in the arena of sustainable energy production and consumption have been met with mixed outcomes, swayed by partisan disagreements.
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Under Trump’s leadership, political discord intensified, leading to the withdrawal from the 2015 Paris Agreement, a cornerstone global pact aimed at achieving net-zero carbon emissions by mid-century. Trump perceives the shift toward sustainable energy as counterproductive and detrimental to his America First ethos, arguing it undermines the American economy. During his last campaign, Trump pledged numerous changes to energy policy over the next four years, should he win. True to form, he vowed to dismantle most of President Joe Biden’s energy policies. The recent electoral results herald a sweeping Republican victory across the presidency, Senate, and House of Representatives, potentially easing the passage of Trump-backed legislative proposals through Congress. With the Republicans’ triumph across all branches of government, championed by far-right elements, a regression to previous policies appears imminent. In practice, this signifies a revival of oil and gas exploration and drilling, with an emphasis on domestic shale oil while sidelining the advancement of renewable energy sectors like solar and wind. Trump also hinted at potentially withdrawing from the Paris Agreement once more, echoing sentiments from his campaign. Such a policy shift entails an increase in US oil production capacity, broadening its influence in global oil markets and boosting liquefied natural gas exports, especially to European nations severing ties with Russian gas amid the Ukraine war. This strategy could significantly bolster the stock values of shale oil companies, a prospect eagerly supported by wealthy stakeholders in Trump’s inner circle. However, Trump’s proposed policies could detrimentally impact sustainable energy by stalling or scaling back emissions reduction programs. Curtailing US financial support for sustainable energy research and initiatives in developing nations would hamper emissions reduction efforts, increasing the burden on other industrialized countries. The reduced American involvement challenges an already daunting global task of investing trillions into developing carbon capture technologies and lowering the costs of building renewable energy infrastructure.
Trump’s campaign rhetoric underscores his commitment to implementing numerous policies swiftly, promising to draft myriad laws upon his return to the White House on January 20, 2025. Yet, passing such a volume of legislation immediately is an improbable feat, constrained by the constitutional processes requiring congressional review and approval over weeks or even months. Nevertheless, the president can expedite certain initiatives by issuing executive orders, which carry the weight of the law upon signing. Trump is expected to leverage this approach for energy policy changes and stricter measures on illegal immigration—key priorities for the Republican platform. The strategic use of executive orders in the energy domain, particularly at this juncture, could expedite oil drilling approvals on federal lands, many of which have historically been off-limits due to environmental protections. Trump’s intent to facilitate drilling in these areas, including Alaska’s ecologically sensitive reserves, has drawn fierce criticism from environmental advocates, who may now seek judicial intervention. If broadly enacted, Trump’s energy policies would exert profound global ramifications, chiefly by stalling the implementation of the Paris Agreement and consequently delaying the midcentury net-zero emissions target. —Walid Khadduri (translated by Asaf Zilberfarb)