What Trump’s victory could mean for oil companies and climate-change policy

Former President Donald Trump’s return to the White House could reverse the gains the United States has made in fighting global warming, experts said, by cementing his plans to unleash domestic fossil fuel production, dismantle key environmental rules, and scale back federal support for renewable energy and electric vehicles.

It has also raised fears among U.S. allies and even some major energy executives who warn a U.S. exit from global climate efforts will hurt American industry as the rest of the world shifts away from fossil fuels.

Trump’s election creates “a very long pathway for fossil fuels,” Ben Cahill, an energy scholar at the University of Texas at Austin, said in a phone interview Wednesday. “Investors will feel the outlook is brighter. The industry will be under less pressure.”

While energy was not a focal point of a presidential campaign consumed by immigration, abortion, and the future of democracy, it is a policy area where presidents have the authority to make sweeping changes.

Trump — who has dismissed climate change as a “hoax” and courted oil company executives throughout the campaign — has outlined plans that have the potential to boost oil and gas profits as well as greenhouse gas emissions that threaten the world’s climate goals.

Trump is expected to immediately take aim at the Paris climate accord. His plan to withdraw the United States from the pact — as he did during his first term — comes at a critical moment for the compact aimed at limiting warming to 1.5 degrees Celsius (2.7 degrees Fahrenheit) above preindustrial levels. Climate scientists are already warning the planet is on track to blow past that target: on Wednesday the European climate agency Copernicus announced that 2024 is assured to be the first calendar year where the global temperature rise has averaged 1.5 degrees Celsius.

Trump has planned a flurry of other actions to bolster U.S. oil and gas companies. He is expected to ease a suite of restrictions on the oil industry’s emissions of methane, a potent greenhouse gas. And he will probably cancel the Biden administration’s pause on permits for new liquefied natural gas export projects, clearing the way for the industry to build billions of dollars worth of infrastructure that could increase U.S. emissions and keep gas flowing to other nations for decades to come.

Oil companies welcome the radical policy shift. "Energy was on the ballot, and voters sent a clear signal that they want choices, not mandates, and an all-of-the-above approach that harnesses our nation's resources and builds on the successes of his first term," Mike Sommers, president of the American Petroleum Institute, said in a statement.

At the same time, climate activists have been scrambling to regroup in the aftermath of the election. As during Trump’s previous term, they are looking to state, local, and international leaders to take up the fight as the White House transitions from one of the world’s most influential crusaders for climate action to its biggest impediment.

“One can only hope that Donald Trump will put conspiracy theories to the side and take the decisive action to address the climate crisis,” Dan Lashof, U.S. director of the World Resources Institute, said in a statement. “But I won’t hold my breath, and neither will the global community nor U.S. state and local leaders. We are moving forward.”

Even some in the energy industry are unnerved by Trump’s plans, coming at a time that clean energy subsidies championed by the Biden administration have given a big economic boost to red states. These conservative areas are home to vast wind and solar farms, clean technology manufacturing plants, and huge green energy research and development projects that employ tens of thousands of voters.

Trump is expected to take aim at these investments by targeting President Joe Biden’s signature climate law, the Inflation Reduction Act, which he has repeatedly called a “green new scam.” But he would likely need Congress to repeal the law, and some Republican lawmakers may balk.

Cahill said that the law’s tax credits for consumers, including those for EVs, rooftop solar panels, and heat pumps “will definitely be on the chopping block” but “the investment incentives for wind, solar, and battery storage have proven to be quite popular with big business.”

The incoming president will have much more latitude to reverse dozens of environmental rules that oil and gas executives find burdensome. During an April dinner at his Mar-a-Lago Club, Trump asked oil executives to steer $1 billion toward his campaign while promising to relax industry regulations.

The oil industry responded by donating tens of millions of dollars to his campaign and crafting a playbook for the new administration. It includes draft executive orders that would end restrictions on drilling on public lands and shift the Interior Department’s priorities away from protecting vulnerable species and ecosystems.

Trump has argued that unshackling oil companies from environmental rules could drive the price of gasoline below $2 per gallon. But energy analysts are skeptical. Prices at the pump typically have little connection to White House policies, and are largely driven instead by the coalition of oil-producing nations led by Saudi Arabia and Russia. And Trump will take office at a time when the United States is already producing more oil and gas than any country ever has.

During his first term, Trump weakened or wiped out more than 125 environmental rules and policies touching everything from toxic chemicals to endangered species. He faced internal resistance, however, to his plans to pull out of the Paris agreement. Then-Secretary of State Rex Tillerson and Ivanka Trump, the president’s daughter and adviser, urged him to stay in the deal.

No such resistance is expected in a second Trump administration stuffed with loyalists.

“I don’t think there will be anyone arguing to stay in Paris,” said Myron Ebell, who led Trump’s transition team at the Environmental Protection Agency in 2017 and is chairman of the board of the American Lands Council. “I think the president will get out of it, and I hope he does it in the first week.”

When Trump withdrew from the Paris agreement for the first time, a group called America Is All In announced that dozens of states, cities, and corporations were committed to the pact. Gina McCarthy, the former White House climate czar under Biden and the managing cochair of America is All In, vowed in a statement Wednesday to continue that fight.

“No matter what Trump may say,” she said, “the shift to clean energy is unstoppable and our country is not turning back.”

If Trump pulls the United States from the Paris agreement, it will deal a symbolic blow to the international efforts, given America’s place as the largest historical emitter of planet-warming pollution. Under Biden, the United States has produced record amounts of oil, but it had also positioned itself as a climate leader. Last year, minutes after nations agreed to a historic pledge to transition away from fossil fuels, then-climate envoy John F. Kerry addressed delegates, touting a moment of “multilateralism” and unity, and expressing a sense of “awe.” His remarks drew loud applause.

Collins Nzovu, who served until recently as Zambia’s green economy and environment minister, said in a recent interview that the global climate process is less credible if the “superpower is not at the table for discussing an existential threat.”

Poorer countries are also depending on the United States to help finance plans that are essential to the world’s climate goals.

“No mitigation efforts can work without America at the table,” Nzovu said. “No adaptation can happen without America at the table.”

Some climate policymakers expressed hope that the world would manage to move ahead on its climate goals despite Trump. Earlier elections this year — notably in Brazil and Britain — helped vault into power leaders with more ambitious climate agendas. Policymakers also expressed optimism that cheap, renewable technologies would be able to displace fossil fuels simply on economic grounds.

“There is powerful economic momentum behind the global transition,” said Laurence Tubiana, CEO of the European Climate Foundation.