CAPE CORAL, Fla. -- There has been much glee in our industry as of late because of the unexpected election of Donald J. Trump as our 45th president.
Sure, it’s good news for the fossil-fuel business, with less regulatory oversight, the opening of federal lands and promises to retain the coal industry. Trump’s presidency will benefit oil drillers, because the administration is expected to ease regulations on issues such as methane emissions from oil and gas drilling, ozone rules and the use of renewable fuels.
On the other hand, it’s bad news for renewable energy, because Trump believes that climate change is a “hoax,” and has threatened to scrap the historic Paris climate agreement.
Our industry is generally not involved in any of the above, so why does his election cause us such joy? In short: It is the promise that the status quo will remain, and that we will be fueling a gasoline-powered transportation sector for many years to come.
There is the perception that his policies will result in an ever-growing glut of oil, which will ensure low gasoline prices, which will increase vehicle miles traveled (VMT). Low pump prices make Americans more comfortable with buying larger vehicles with larger appetites for gasoline, and they make electric vehicles (EV) less appealing to consumers who base their car purchase on fuel costs.
There are many people who don’t believe a Trump presidency is bound to last, myself included. Right before America, he supports Trump first. His current unwillingness to divest himself from his business empire leads me to believe that once he is inaugurated and has achieved his place in history, in true Trump fashion, he will cut a fantastic deal and resign with dignity, leaving us with a grateful GOP and a Pence administration in his place.
Our industry would not be concerned about this either. Former Gov. Mike Pence presided over Indiana, ranked as the nation's eighth-largest coal producer in 2014, according to the U.S. Energy Information Administration. That same year, Pence overturned an energy-efficiency program enacted by his Republican predecessor, saying it was too expensive for the state's manufacturers. In June 2015, Pence wrote to President Obama saying that Indiana would not comply with the Clean Power Plan regulating power plant emissions, calling it "ill-advised."
Certainly, this is nothing but good news for our industry!
Or is it? As I often ask my clients, is this strategy sustainable?
There is much hand-wringing in the environmental sector, which worries that Trump’s election has effectively destroyed all chances for controlling climate change and that we are doomed. But I must offer a contrarian view: Nothing has substantially changed.
Donald Trump actually helped the Paris climate deal become law a year ahead of schedule. In their fear of a Trump presidency, world governments rushed to sign the agreement as the election tightened towards the end. Even China, viewed as one of the world’s biggest polluters, has criticized Trump policy regarding climate change. Xie Zhenhua, China's top climate-change negotiator, has stated, “If they resist this trend, I don't think they'll win the support of their people, and their country's economic and social progress will also be affected.”
I stated much of this in an earlier column, before the election was decided. As I revisit my words, I realize nothing has substantially changed. The genie has been let out of the bottle regarding clean energy. Research regarding it is not likely to stop, and innovation continues to make EVs and other clean transportation options increasingly likely to decrease in cost.
If the election was one with an overwhelming mandate, one could feel comfortable in believing that the policies of the coming administration will have lasting and profound effects on our industry. However, the U.S. electorate has an uncanny tendency to balance the country’s leadership if it moves extremely to the right or left, and a Republican House and Senate have a slim chance of remaining in place two years from now.
And as divided as this election cycle was, I do not expect four years from now to see an easy re-election of the current administration. In fact, history shows that two-term presidencies are not the norm unless there is overwhelming approval of the policies. The divisiveness is unlikely to evaporate.
In theory, the earliest date for withdrawal from the Paris climate agreement is Nov. 4, 2020, around the time of the next U.S. presidential election. The Trump administration could use possible legal sleights of hand to exit the agreement. But the accord has become international law. Any withdrawal by the United States would surely have repercussions in trade agreements and in our relationships with other countries. All of this would increase the likelihood of a one-term presidency.
No one should expect the direction of this country or the world to change greatly over time. Those of us who benefit from the election should enjoy it while it lasts.
Norman Turiano is principal of Turiano Strategic Consulting. Reach him at TSC.USA@comcast.net.