At least one aspect of Donald Trump’s vision for the nation’s energy future may already be close to coming true, according to new federal projections. A report, released this week by the U.S. Energy Information Administration (EIA), suggests that the United States could become a net energy exporter by 2026 — perhaps even sooner under favorable economic conditions.
“The U.S. could be completely, [to use] the phrase that was used at one time, energy independent,” said EIA Administrator Adam Sieminski during a Thursday news conference.
Becoming energy independent is a cornerstone of the president-elect’s energy plan. At a petroleum conference in North Dakota last May, Trump outlined his vision for the country’s energy future, noting that “America’s incredible energy potential remains untapped.”
“Under my presidency, we’ll accomplish a complete American energy independence,” he added.
But the strict definition of “independence” may depend on whom you ask. Sieminski’s comments suggest energy independence in the form of net exports — in other words, while importation still occurs, there’s overall more oil and gas going out than coming in.
The new report, which is the latest installment in a series of annually released U.S. energy outlooks, presents projections for the U.S. energy market through 2050, including a number of possible economic, technological and policy-related scenarios. Under the reference scenario, which assumes that current economic conditions and energy-related policies remain the same, the report projects an increase in oil and gas production, which combined with an increase in natural gas exports and a decrease in oil imports indicates that the country could become a net energy exporter in the next 10 years.
The reference case makes these projections without factoring in the possibility of any major policy changes enacted under the incoming Trump administration. This means a form of energy independence may already be around the corner without any major overhauling of Obama-era energy policies.
This is important, as Trump has vowed to dismantle many of the environmental and energy-related rules the outgoing administration put in place, often using his goal of energy independence as a rationale for reducing existing regulations over the oil, gas and coal industries. Among these, a promise to do away with the Clean Power Plan — the Obama administration’s flagship effort to address its self-determined climate goals by cutting down on carbon emissions from the power sector — is particularly notable.
The report’s reference case assumes that the Clean Power Plan does go into effect. But it also includes a scenario in which the rule is repealed — and these projections speak to the significant effects the plan’s absence could have on the U.S. energy mix and the carbon emissions it’s responsible for.
Under the business-as-usual reference case, which includes the Clean Power Plan, there’s a continuation of some familiar recent trends — namely, a decline in coal and an increase in the market shares of both natural gas and renewables.
“Seventy gigawatts of new wind and solar [capacity] is added over the period between now and 2021,” Sieminski noted at the news conference. “That’s going to be encouraged by declining capital costs and availability of tax credits.” After that, much of the new capacity added through midcentury will be split between solar and natural gas, he added.
But coal consumption, already on the decline, is expected to continue decreasing in this scenario, while natural gas and renewables take over its market share. Competition from cheap natural gas has been the greatest blow in the decline of coal so far, but the assumed implementation of the Clean Power Plan is a major factor in future projections, forcing the retirement of older and less-efficient power plants and making room for more efficient energy sources.
At least partly thanks to continued reductions in coal power, energy-related carbon dioxide emissions are expected to decline in most scenarios — in the reference case, these emissions fall by about 0.2 percent each year between 2016 and 2040. That said, the report notes that this is a slower rate than in the past. Between 2005 and 2016, energy-related carbon dioxide emissions fell by an average of 1.4 percent annually.
A scenario assuming the demise of the Clean Power Plan tells a slightly different story, however. In the absence of the Clean Power Plan, coal consumption remains much more flat over the next few decades, while energy-associated carbon dioxide emissions actually increase slightly between 2016 and midcentury.
“If coal is going to be flat … instead of going down, you don’t have a lot of room for anything else to come in there,” Sieminski pointed out. The reason there isn’t a lot of room for growth in all areas, as Sieminski noted, is because energy consumption is expected to remain fairly flat over the next few decades, growing by just 5 percent between 2016 and 2040 in the reference case. Much of this is likely thanks to assumed improvements in fuel and energy efficiency in the transportation sector, buildings and industrial activities.
“Without the Clean Power Plan, you end up getting less natural gas and less renewables [than in the reference scenario],” Sieminski added.
That said, even if coal consumption flattens out for a while, many experts agree that Trump’s plan to revive the industry is far-fetched overall, given that market forces, rather than federal regulations, are most responsible for its demise. Additionally, any scenarios included in the report that result in a quicker arrival at net energy exportation generally involve technological progression and changes in the price of oil, not the presence or absence of the Clean Power Plan.
And even if the Trump administration kills the rule, the report notes that natural gas and renewables will still continue to expand, albeit more slowly, and will remain the primary sources of new electricity generation capacity in the coming decades. This again speaks to the power of the private sector in the U.S. energy landscape — the report attributes the dominance of these energy sources to low natural gas prices and falling costs of renewables, as well as the incentives provided by federal tax credits for wind and solar.
In terms of energy independence, there are other priorities established by the incoming Trump administration not taken into account by the new report, which could nonetheless affect projections involving oil and gas production — vows to reduce regulations for drilling operations on public lands is one example. But it is notable that the United States is already on its way to becoming a net energy exporter (and has been for some time, according to previous EIA reports) without any major overhauling of federal rules so far.
And when it comes to the continued expansion of less carbon-intensive energy sources, such as natural gas, wind and solar, the report suggests that this is a march that likely can’t be stopped.