Last week, I described elements of Trump’s Unleashing American Energy executive order. It:
- Expands oil and gas exploration on federal lands
- Promotes mining and recovery of rare and exotic earth minerals for manufacturing leadership
- Targets federal spending on electric car infrastructure and EV mandates
- Something about lightbulb and appliance standards that is OBE (overtaken by events)
- Pauses spending for portions of the Investment Reduction Act (IRA) and Infrastructure Investment and Jobs Act (IIJA)
I surmised that this EO only affects spending in the short term. Tax deductions and credits cannot be signed away with the President’s Sharpie Armada without Congressional action. I also deduce that the current administration cannot unilaterally cancel programs approved by past congresses and signed into law by past presidents. But then, at the recommendation of DOGE and Elon Musk’s team of baby-faced assassins, the President laid off about 10,000 USAID employees, essentially eliminating the sub-agency and its ability to carry ridiculous and maybe couple worthwhile programs forward. The agency cannot be closed without Congress, but it is incapacitated with only a couple hundred souls left. I see a strategy here.
National Energy Emergency
A second Trump EO, Declaring a National Energy Emergency, garnered less attention from the media, which makes sense because it is more important. This EO alleges that “our Nation’s inadequate energy supply and infrastructure causes and worsens the high energy prices that devastate Americans, particularly those living on low and fixed incomes.” That may be partially true for petroleum products but not for electricity, which is under the control of state and local governments, NIMBY actors, and a thousand other Lilliputians grinding critical electricity generation and delivery expansions to a halt.
Figure 1 Stakeholders Hold Down Utilities
The Energy Emergency EO cites the nation’s increasingly unreliable grid – a subject I have written about at least two dozen times in this blog. Here is a sampling of recent ones[1][2][3][4][5][6][7][8][9][10][11][12]. The EO calls out the Northeast and West Coast as being most vulnerable. Wow. I must ask if the White House is reading this blog. Last December, I called that shot, citing shortage issues with California, Oregon, New England and the Mid-Atlantic.
The EO also calls for emergency agency activities to “facilitate the identification, leasing, siting, production, transportation, refining, and generation of domestic energy resources” and to “allow the year-round sale of E15 gasoline to meet any projected temporary shortfalls in the supply of gasoline across the Nation.” What? Gasoline shortages? Is this the 1970s?
Figure 2 Gas Shortage in 1970
The rest may be summarized as declaring an emergency to get the federal bureaucracy in line or out of the way: Environmental Protection Agency, National Security Affairs, Department of Energy, Assistant for Economic Policy, Army Corps of Engineers, Secretary of the Army, Clean Water Act, Office of Management and Budget, National Economic Council, Endangered Species Act, Secretaries of Commerce, and Interior, etc. and et al.
The term “energy” or “energy resources” includes everything you would imagine, including hydro, but not wind, solar, efficiency, load management, or storage (except for hydro).
What is Next?
I don’t know, but here are some things to consider.
A tax and spending package must be passed by March 14, 2025. Hopefully, or more accurately, wishfully, we will have clarity on the paused spending by then. The agencies’ homework I mentioned last week was due to the Office of Management and Budget on Monday, February 10, 2025.
Neither party has the stones for spending cuts, except maybe for Diversity, Equity, and Inclusion programs and EV subsidies. In general, red states get the manufacturing and construction where NIMBY is less prevalent, and blue states get what they want in terms of “clean energy.” As for DEI and EV subsidies, the January 27 OMB memo paused spending on “financial assistance for foreign aid, nongovernmental organizations, [USAID] DEI, woke gender ideology, and the Green New Deal.” My guess is the “Green New Deal” means wind and solar subsidies.
There is a reason for massive and ever-expanding presidential EOs, which I deplore because of the uncertainty they create. It is Congress’s dysfunction to appropriate spending for all 12 appropriations bills. In 50 years, they have only pulled it off four times; the last one happened when Newt Gingrich was Speaker and Bill Clinton was President. Congress’s cowardice is why we have DOGE, Musk, and baby-faced assassins.
Figure 3 Congress’s Abysmal Appropriations Performance
Trump’s Secretary of Energy, Chris Wright, advocates natural gas and nuclear fission as reliable and affordable sources of electricity. As for decarbonizing the electricity supply, he suggests they are the real “needle mover[s].” I must say, I agree per Case Studies in Decarbed Electricity. He notes that “trillions” in solar and wind subsidies “supply a tiny fraction of the electricity market.” Mr. Wright cruised through confirmation with zero resistance.
The word “tariff” is Trump’s favorite. It’s a very complex strategy that folks oversimplify. The Wall Street Journal notes that in 2018, the tariffs were meant to drive manufacturing onshore, but now they are meant to pay for his agenda. It looks to me to be a way to close the borders to illegal human and fentanyl crossings.
Trump likes manufacturing, building infrastructure, leading the world in technology like artificial intelligence, and lowering energy prices. When you add those things to the local Lilliputian tie-down of power generation, transmission, and distribution, we will have tremendous grid stress. So, it would seem to me, if not in the next year or two, that the need for state-level efficiency and load management will be strong. I see the pint glass is half full of Old Rasputin – making the world a better place, one pint at a time.
