The 2016 U.S. Presidential election was one the wildest and most contentious in the country’s history. But now that the results are in and Donald Trump has been named the next President of the United States, what does that mean for America in terms of energy, and how does Trump’s energy policy compare with that of Australia?
Trump – what’s his energy policy?
While a common criticism of Donald Trump leading up to the election was his lack of clarity or a formulated plan on key issues, one area in which many pundits agree he is likely to have an immediate impact is energy.
Trump’s “America First Energy Plan” promises to “unleash an energy revolution” that will bring “vast new wealth” to the U.S. by accessing untapped shale, oil and natural gas reserves, as well as “hundreds of years in clean coal reserves.” President-elect Trump has not been shy about his plans to reform energy regulations and lift moratoriums in order to “save the coal industry.” According to Jeff Rottinghaus of the T. Rowe Price US Large Cap Equity Fund, a relaxed regulatory environment could help energy investments as it could “lower companies’ costs to pull resources out of the ground.”
But while fossil fuel companies are likely to benefit from Trump’s energy policy, the future of renewable energy under the incoming administration remains unclear. A plunge in shares in Denmark’s Vestas – the world’s large wind turbine maker –along with a number of U.S. solar companies the day after the election suggests that renewable energy may be vulnerable under the Trump administration. The incoming President has also ridiculed wind farms in the past and criticised the costs of wind and solar power. S&P Global Market Intelligence estimates that if Trump were to end “investment tax credit incentives for renewables,” solar installation demand would be “slashed” by 60 percent.
Comparing Australian energy policy
While there are clear differences between current Australian energy policy and those proposed by President-elect Trump, there are a couple of key similarities that are telling in terms of how both Australia and the U.S. approach energy.
Donald Trump has positioned himself as a “coal guy” and has made it clear that coal will be a significant focus of his energy policy as he seeks to save the industry. Currently coal is a key component of Australia’s energy production. In fact, most of Australia’s energy is generated by coal – 73 percent in 2014.
Trump’s skepticism related to renewable energy is also reminiscent of the energy policy of the current Australian government, which is often criticised for its lack of investment and short-sighted approach to renewables.
The bottom line
While the finer points of the U.S. energy policy under a new administration are yet to be determined, it is clear that energy will be in the spotlight as Donald Trump takes office. Both the United States and Australia are in the midst of major shifts in regards to the way energy is sourced, distributed and consumed. It will be imperative for world leaders in these countries and beyond to craft policies that respond to changes in demographics and energy consumption while ensuring systems and infrastructure exist to provide adequate supply and meet their countries’ needs.
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