President Donald Trump has long been a supporter of traditional energy. During his campaign, he spoke negatively about electric vehicles, wind and other renewable energy sources.
But in his first day in office, the new president began a historic shift in United States energy policy away from green energy and back to hydrocarbon energy.
On Jan. 20, President Trump signed five wide-ranging executive orders that radically change U. S. energy and climate policy. These actions restore efforts to promote coal, natural gas, oil, hydropower, nuclear and biofuels, while curtailing support for wind and electric vehicles (EVs).
The Trump executive orders also rescinded orders issued by former president Joe Biden and closed federal departments established to promote climate change policies and green energy.
The executive order regarding offshore wind and wind projects immediately impacted the world wind industry. The U.S. government owns all land from three miles (4.8 km) to 200 miles (322 km) offshore, so wind companies require a federal lease to build offshore systems.
The order withdrew “all areas within the Offshore Continental Shelf” from wind leasing. The order also requires that the new Secretary of the Interior, Doug Burgum, “conduct a comprehensive review” to determine the necessity for “terminating or amending any existing wind energy leases” and to submit a report to the president.
The order also put a hold on LS Power’s Lava Ridge wind project in Idaho, pending a review by Burgum. The Biden administration approved the project in December.
Trump’s wind order shocked energy markets. The stock price of Orsted, a Danish wind system supplier, dropped 17% to its lowest price in seven years. Orsted proposed to build Sunrise Wind, the largest planned U.S. offshore wind system, to be located southeast of New York City. The company immediately took a US$1.7-billion impairment charge on U.S. wind projects.
Wind suppliers RWE (FRA: RWE) of Germany, Equinor (NYSE: EQNR) of Norway, EDP Renováveis (LIS: EDPR) of Portugal, and Vestas Wind Systems of Denmark (COP: VWS) also suffered stock price declines. Italy’s Prysmian (MIL: PRY) announced that it would abandon a plan to build a plant in the U.S. to make cables for offshore wind systems.
Wind energy plans for several states have been crippled. California planned to install 25 gigawatts of offshore wind energy by 2045, with initial projects at Morro Bay and Humbolt Bay, but these plans are on hold for at least the next four years.
Maryland, Massachusetts, New Jersey, New York, North Carolina, South Carolina, Rhode Island, and Virginia are constructing or planning east coast offshore systems, but these programs will be reviewed, limited, or halted if not yet started.
The “Unleashing American Energy (UAE)” executive order calls for elimination of the “electric vehicle mandate” to promote consumer choice and access to gasoline-powered automobiles. It’s true that the U.S. has no formal EV mandate, but 22 states have zero-emissions vehicle laws or executive orders prohibiting sales of gasoline cars by a future date, typically 2035.
On Mar. 20 of last year, the Environmental Protection Agency (EPA) issued updated emissions standards that would force auto manufacturers to sell an increasing number of EVs, rising from about 8% last year to about 56% of new light vehicle purchases by 2032.
The Trump orders also call for termination of state emissions waivers “that function to limit sales of gasoline powered automobiles.” The 1970 Clean Air Act established the federal government as responsible for regulating pollution, except where a waiver is granted by the EPA to a state.
For years, California has set emissions standards, receiving EPA waivers to do so, with other states following California’s lead. The orders seek to terminate these waivers to California and restore emissions control to the EPA.
This month, California withdrew its request for a waiver for regulations to electrify heavy trucks and locomotives because it appeared that Trump’s EPA would not grant that request.
The order also calls for the “elimination of unfair subsidies and other ill-conceived government-imposed market distortions that favor EVs.” This probably refers to coming efforts to eliminate the US$7,500 tax credit on new EV sales and also efforts to eliminate the Corporate Average Fuel Economy standards issued by the Department of Transportation, which force auto manufacturers to sell a larger share of EVs.
The U.S. economy today includes several green energy industries which probably would not exist without the vast array of federal and state subsidies and tax credits. Wind, solar, EV charging, carbon dioxide (CO2) capture, and green hydrogen receive a limitless stream of subsidies and tax credits from the Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act (IIJA), both of which were passed during the Biden presidency.
The Washington, D.C.-based CATO Institute, a libertarian think tank, estimates that renewable energy will receive about US$80 billion in federal funds during fiscal year 2025.
During his campaign, Mr. Trump vowed to eliminate the money flow from these two acts, and his first-day executive orders reflect this. The UAE order calls for “termination of the Green New Deal,” and a halt to the disbursement of funds from the IRA and IIJA. President Trump will probably need to pass Congressional legislation to permanently reduce the flow of IRA and IIJA funds.
Wind and solar systems are intermittent, use 100 times the land area, and require at least double the transmission infrastructure compared to traditional coal, gas or nuclear power plants.
Few utilities would build wind and solar systems if not for the fear of human-caused global warming. But the new executive orders make it clear that the U.S. will no longer pursue efforts to “mitigate” climate change.
In the executive order titled “Putting America First in International Environmental Agreements,” the President directs the U.S. Ambassador to the United Nations, nominee Elise Stefanik, to notify the UN in writing that the U.S. withdraws from the Paris Climate Agreement, effective immediately. The order also states that the U.S. will immediately cease financial payments under the Framework Convention on Climate Change.
The orders direct executive branch officials to cancel at least five Biden executive orders on climate change, and to disband the Climate Change Support Office, the American Climate Corps, and The Working Group on the Social Cost of Greenhouse Gases.
The orders also call for the EPA to review the 2009 Endangerment Finding for “continuing applicability.” That finding concluded that carbon dioxide endangered U.S. citizens and is the basis for regulating CO2 emissions in the U.S.
The Trump actions also seek to boost the development of hydrocarbon energy in the spirit of “drill, baby, drill.” Key actions include re-opening the licensing of liquified natural gas terminals, opening federal lands for onshore and offshore oil and gas production, reopening Alaska lands for energy production, and reducing efficiency regulations on dishwashers, stoves, and furnaces.
The President also declared a national energy emergency to speed the deployment of pipelines and other energy infrastructure. The Trump EPA and Department of Energy will roll back regulations on oil and gas to expand U.S. production.
Trump’s executive order bomb, followed by Congressional action to limit funds from the IRA and IIJA, promises to gut, or profoundly reshape, the U.S. green energy movement. January 2025 may begin a long decline for green energy and a return to sensible energy policy.
Steve Goreham is a speaker on energy, the environment and public policy. He’s the author of the book Green Breakdown: The Coming Renewable Energy Failure. This article appeared previously on MasterResource, an energy markets and public policy forum that’s skeptical of government intervention.
January 29, 2025
January 28, 2025
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