Potential Conflicts Emerge Between Trump and Energy Sector
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Over a decade ago, oil and gas executives popularized the term “all of the above,” suggesting that climate advocates and policymakers should integrate natural gas alongside renewable energy sources in their vision for the future of energy. They argued that a reliable supply of natural gas was essential for backup power when renewable sources like wind were insufficient.
The situation has now reversed. With the Trump Administration targeting renewable energy, energy industry leaders are using the “all of the above” approach to emphasize the vital role of renewable energy, particularly solar power, in maintaining a consistent energy supply.
At a CERAWeek side event, NextEra Energy CEO John Ketchum stated, “We believe in all forms of energy. When engaging with customers, our primary goal is to provide the most cost-effective solution, whether it involves wind turbines or gas turbines.” NextEra Energy is the world’s most valuable electricity company.
Some activists suggest the Trump Administration blindly follows the interests of its fossil fuel backers. Publicly, many top executives praise Trump and cultivate close relationships with the White House. However, behind closed doors, industry perspectives are more nuanced and sometimes critical.
Forecasts of increasing power demand in the U.S. are driving utility executives to utilize all available power sources, including wind and solar, even as the Trump Administration attempts to. Tariffs have impacted profitability, and oil executives are realizing that Trump’s desire for low oil prices conflicts with the goal of boosting domestic production and profits.
While these tensions might remain concealed, given corporate reluctance to oppose Trump, market forces could maintain the energy sector’s alignment with expectations. Nevertheless, understanding these often counterintuitive nuances is crucial for identifying opportunities to reduce emissions in the coming years.
The annual CERAWeek conference by S&P Global in Houston is an ideal venue to gauge energy industry sentiments and trends. Last week’s conference attracted energy executives and government officials worldwide.
This year’s conference, which I attended, exemplified the idea that “two things can be true at once.” Industry leaders generally commended the new administration’s deregulatory actions while also voicing significant concerns about the uncertainty created by Trump.
Chevron CEO Mike Wirth stated on the CERAWeek main stage, “Swinging from one extreme to another is not the right policy approach. We have allocated capital for decades-long projects, requiring consistent and durable policies.”
Cheniere CEO Jack Fusco lauded the administration for shifting the “regulatory machine” toward fairness and transparency. However, he tempered his praise by expressing hope that the agenda would “hold up in a rule of law,” acknowledging the litigation and uncertainty surrounding much of Trump’s policy agenda.
Even attacks on the , former President Joe Biden’s landmark climate change law, have some corners of the industry worried. Oil and gas companies had planned to pursue tax incentives for technologies like hydrogen and carbon capture and storage—and dedicated billions in capital to doing so. “We’re looking for the continuation of 45Q,” said Vicki Hollub, the CEO of Occidental Petroleum, referring to a tax credit for carbon capture on the conference main stage. “To accelerate the technology at the pace that the U.S. needs it to accelerate, to start having the positive impact on our energy independence, we need 45Q to happen and to stay in place.” (The provision is thought to be one of the credits most likely to survive though everything will be in play during negotiations).
Behind the scenes, many executives voiced greater concerns. Amidst stock market declines on the conference’s opening day, executives worried about tariffs imposed by Trump , which is heavily integrated with the U.S. More broadly, Trump’s unpredictable approach was a source of anxiety. In the long run, differing views on oil prices could trigger the biggest conflict. Trump has repeatedly expressed his desire for oil prices as low as $50 per barrel (currently, the U.S. benchmark for crude oil is around $72 per barrel). While voters appreciate low energy prices due to affordable gas, oil companies suffer when prices drop too low, impacting their profitability.
For utility executives, the challenge of rising power demand remains a key concern. Analysts predict soaring electricity demand as technology companies expand their data center presence in . Consequently, the industry is pursuing all available electricity sources, including both natural gas and solar power.
As I’ve written before, the of the Trump Administration’s policymaking makes it difficult for companies to plan. And predicting what comes next is folly. But whatever happens it’s safe to say that the convenient narrative of a Trump Administration moving in lockstep with the energy sector is, at the very least, missing several puzzle pieces.
It also means, oddly, that the most influential advocates in Washington for some decarbonization provisions—like carbon capture, sustainable aviation fuel, and hydrogen—may be energy executives embracing the “all of the above” mantra. But even that may not be enough to save climate-friendly tax incentives.
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