President-elect Donald Trump has vowed to declare a national energy emergency as soon as he takes office on Monday, having promised voters months earlier that he would cut their electricity and gasoline prices in half during his first year in office.
“To achieve this rapid reduction in energy costs, I will declare a national emergency so that we can dramatically increase energy production, generation and supply,” Trump told his supporters at a rally in Potterville, Michigan, last August. “From day one, I will authorize new drilling, new pipelines, new refineries, new power plants, new reactors and we will cut the red tape.”
As recently as December 22, the president-elect reiterated his intention to “declare a national energy emergency” on the first day of his term. He promised to issue a series of executive orders to reverse the Biden administration's policies on natural gas exports, drilling and emissions standards.
Trump plans to create a National Energy Council under the leadership of North Dakota Governor Doug Burgum, whom he handpicked to lead the Interior Department. Burgum said during a Senate hearing on his nomination this week that he expects the council to be established by an executive order.
It's unclear whether the emergency declaration would be largely symbolic or invoke broader powers beyond the energy executive orders Trump is expected to issue on Monday. The president-elect's transition team did not respond to a request for comment.
“My expectation is that it will be a rhetorical declaration of an energy emergency,” said Mike Sommers, president of the oil industry lobbying group American Petroleum Institute. “Putting the executive orders together will be the answer to what can be done about the energy emergency.”
There are several emergency laws Trump could invoke related to energy, said Glenn Schwartz, director of energy policy at consulting firm Rapidan Energy. Emergencies are often loosely defined in federal law, giving the president wide discretion to use them as he sees fit, Schwartz said.
And Trump would likely face little resistance from the courts, which are reluctant to challenge presidential national security decisions, Schwartz said.
“The bottom line is that even if Trump were to expand his emergency powers in unprecedented ways, it is not clear that courts would step in to stop the resulting actions,” the analyst said.
Probably emergency authorities
There is a clear precedent for Trump to invoke emergency authority to boost power generation and expand the nation's fuel supply, Schwartz told clients in a research report released last Thursday. Authorities using these powers would waive certain environmental and pollution regulations in the energy sector.
Trump could issue fuel exemptions under the Clean Air Act to allow gasoline to market that would otherwise violate federal air quality standards, the analyst said. Presidents have often used such exemptions when they need to expand the country's gasoline supply and keep prices under control, he said.
Trump could also invoke the Federal Power Act to order power plants to run at maximum capacity and not meet pollution limits, Schwartz said. The Secretary of Energy can invoke the law in times of war or when a sudden increase in demand or a shortage of electricity creates an emergency situation.
The provision has rarely been used since World War II and is mostly reserved for situations in which extreme weather conditions have overwhelmed power plants, Schwartz said.
The largest grid operator in the US, PJM Interconnection, has warned of a blackout as coal-fired power plants are shutting down faster than new capacity is coming online. PJM operates the network in all or parts of 13 states in the Mid-Atlantic, Midwest and South.
The situation could worsen as electricity demand increases significantly as the tech sector builds power-hungry data centers to support artificial intelligence applications.
The first Trump administration in 2018 considered invoking the law to order utilities to buy electricity for two years from coal and nuclear plants that were at risk of closing. The government at the time eventually dropped the idea after it faced pushback from industry.
Trump could also opt for a broader law that would allow the president to suspend pollution laws for industrial plants, power plants, oil refineries, steel mills, chemical plants and other industrial facilities in emergency situations, Schwartz said.
According to Schwartz, under federal law there is less support for the president to force new production. Trump could direct federal agencies to speed up environmental reviews for energy projects he supports, such as pipelines, but the president cannot use emergency authorities to circumvent basic environmental policies such as the National Environmental Policy Act and the Endangered Species Act, the analyst said.
Expected Executive Orders
Oil industry lobbyists at the American Petroleum Institute expect Trump to issue a series of energy-related executive orders as early as Monday.
The administration is expected to issue an order lifting the Biden team's pause on new liquefied natural gas export facilities, Sommers said. The president-elect will also likely seek to reverse President Biden's recent decision to ban drilling in 625 million acres of federal waters. Trump's authority to do so is disputed and such an order would likely end up in court.
“We believe he has the ability to turn this around and we will defend that in court,” Sommers said.
The industry expects the president will also direct the Interior Department to increase sales of oil and gas leases in the Gulf of Mexico, Sommers said. The Biden administration awarded the fewest rental contracts in history as part of a program that runs until 2029.
These decisions are not expected to have an immediate impact on production. The US has been the world's largest oil producer for six years, overtaking Saudi Arabia and Russia. The CEOs of Exxon and Chevron have made it clear that production decisions are based on market conditions, not who is in the White House.
“You can lead a horse to water, but you can’t make him drink,” Schwartz said. “He can give them all the resources they need to drill, but I haven't seen anything that suggests he can force them to get it out of the ground.”
Trump is expected to withdraw the US from the Paris climate agreement. Executive orders targeting exhaust emissions and fuel economy standards for cars are also expected.
Still, only so much can be accomplished through an executive order, Sommers said, and policies often have to go through a rulemaking process that takes time. The oil industry is more focused on pushing for more permanent policy changes in the Republican-controlled Congress, he said.
“There's not much they can do on day one except direct the feds to fulfill their promise of energy dominance,” Sommers said.
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