The 2024 election of President Donald Trump, along with a Republican-controlled House and Senate and a conservative-leaning Supreme Court, establishes a unified government prepared to implement a comprehensive energy policy. Trump’s administration has set ambitious goals with potential impacts on U.S. energy markets, prices, and the broader energy transition. His primary objectives include:
Energy Independence and Lowering Energy Costs
Trump has made increased fossil fuel production a cornerstone of his energy strategy, pledging to increase oil and gas extraction on public lands and offshore sites. By tapping into domestic reserves, which he refers to as America’s “liquid gold,” Trump argues the U.S. can reduce its reliance on foreign oil, bolster energy security, and reduce consumer costs. He claims this approach could cut energy prices by as much as 50% within 12 months by boosting production and reducing regulatory obstacles.
Experts agree that increased domestic production could exert temporary downward pressure on prices, assuming global demand remains constant. However, oil prices are driven by the global market, which is sensitive to broader supply and demand dynamics. As such, the effectiveness of this approach could be moderated by international responses, such as potential production adjustments by OPEC.
Revitalizing the Coal Industry
Trump’s policy agenda includes a significant revival of the coal industry. He plans to roll back environmental regulations that he perceives as overly restrictive for coal mining and coal-fired power plants. Such deregulation could increase coal production and provide economic benefits to coal-dependent regions, particularly in Appalachia and the Midwest. Trump’s administration may also look for ways to reduce emission requirements for existing coal-fired plants, potentially extending their operational life. However, these deregulations are likely to face challenges from environmental advocacy groups, with the outcomes potentially hinging on judicial interpretations of regulatory changes.
Scaling Back Support for Renewable Energy
The Trump administration has expressed intentions to scale back federal support for renewable energy initiatives, including subsidies and tax incentives that have fueled growth in the wind and solar sectors. Trump has argued that while renewables are gaining traction in certain areas, they lack the reliability and affordability of fossil fuels. By reducing or eliminating federal subsidies, his administration could slow the growth of these sectors, though private and state-level investments in renewable energy are expected to continue independently.
Expanding Nuclear Energy
Nuclear energy, particularly small modular reactors (SMRs), is a notable focus within Trump’s energy agenda. He has indicated plans to modernize the Nuclear Regulatory Commission to streamline the approval process for new nuclear technologies. By expanding nuclear energy, Trump aims to support low-carbon energy sources while reducing reliance on foreign imports. This shift could have long-term implications for U.S. energy independence and carbon reduction, especially if SMRs become widely adopted.
Impact on the Inflation Reduction Act (IRA)
The Inflation Reduction Act (IRA)—a central climate policy enacted under the Biden administration—may undergo considerable revisions or cuts under Trump. This policy allocated substantial funding for renewable energy, electric vehicles (EVs), and clean technologies, with a goal of reducing U.S. greenhouse gas emissions by 40% by 2030. However, Trump has criticized the IRA, referring to it as a costly “green new scam” and expressing intentions to eliminate unspent funds and reduce provisions supporting clean energy.
Key Areas Targeted for Changes:
Challenges to Full Repeal:
While Trump’s administration may attempt to cut or redirect IRA funding, a full repeal of its tax credits and subsidies is constrained by procedural and political challenges. Structured to withstand repeal attempts, the IRA’s ten-year tax credits and state-funded projects across political divides have already sparked considerable investment, especially in traditionally Republican districts. This bipartisan support could deter lawmakers from fully dismantling the IRA, with some Republicans advocating for retaining provisions beneficial to their states to avoid disrupting local economies.
Administrative Adjustments and Rule Changes:
While a complete repeal would require substantial congressional support, the Trump administration could still weaken the IRA through administrative means. The Department of the Treasury could impose more restrictive eligibility criteria for tax credits, potentially reducing clean energy incentives while easing access for fossil fuel projects. Additionally, the administration could rewrite agency rules governing EV credits and renewable energy subsidies. This process could span up to 18 months but may create immediate uncertainty, potentially slowing investment in clean energy sectors reliant on IRA support.
Impact on U.S. Clean Energy and Industry:
Reducing IRA-backed incentives and funding could decelerate U.S. renewable energy initiatives, affecting solar and wind capacity, EV manufacturing, and critical mineral supply chains. Analysts suggest that while the IRA’s structure provides resilience against complete dismantlement, scaling back key provisions could delay or reduce the scope of the clean energy transition, influencing emission-reduction goals and economic growth tied to renewable energy.
Outlook for America’s Energy Future
Unified Republican control of the executive, legislative, and potentially judicial branches offers a clear path for Trump’s energy agenda. Prioritizing traditional energy sources and increasing fossil fuel production could lessen regulatory burdens on energy companies. The federal shift away from clean energy support may slow the progress of U.S. renewable projects, although private and state-led investments in renewable energy could continue driving growth independently.
While Trump’s policies may aim to provide immediate cost reductions and energy independence, their broader impact on environmental goals, carbon reduction commitments, and the pace of the clean energy transition remains a subject of significant debate.