Reuters reported that Donald Trump, the US president-elect is putting together a comprehensive energy package which will be rolled-out within days after he takes office.
Reuters reported that two anonymous sources said the package was designed to increase oil drilling on US federal lands and off US coasts, as well as approve new LNG export permits.
This development is amidst concerns about Trump’s policy, which could reduce the climate regulations that were passed by the current president Joe Biden.
Trump is vocal in his desire to increase oil and gas production and immigration will be two of the main priorities for him.
Reuters reported that Trump will also repeal Biden’s climate laws, such as the tax credit for electric cars and standards to clean up power plants. These new standards aim to eliminate coal and gas.
Export permits
Reuters sources said that lifting the pause President Joe Biden imposed during his election year on approving new LNG export permits and expediting the approval of pending permits would be a priority.
Sources said that Trump also hoped to speed up drilling permits for federal land and to reopen the five-year plans to drill off the US coastline to include additional lease sales.
The report states that Trump will also approve the Keystone Pipeline when he becomes president.
The pipeline is used to transport tar sands, which, during the extraction process and refinement, emits significantly more greenhouse gasses than any other fuel.
On his first day as president, Biden cancelled a permit that was critical to the operation of the pipeline.
According to Reuters, any company that wants to restart operations at the multi-billion-dollar pipeline carrying Canadian oil into the US will need to begin from scratch. It is due to the fact that easements and other land rights have been given back to landowners.
Five US LNG projects have been approved but still await permit approvals from the Department of Energy. Federal records indicate that.
In 2022, the US will be its largest exporter of LNG. Europe is importing LNG from US in order to reduce its dependence on Russian gas supplies.
Trump will likely issue export permits. This could result in the restarting of new construction projects. Biden stopped issuing new LNG permits in January to investigate the impact on the environment.
It will take some time for plans to be realized
It could take some time for Congress to pass many of Trump’s energy-related plans.
Reuters reports that Trump promised to declare a state of energy emergency during his first days in office. This could be a test to see if he is able to bypass these barriers and impose changes at a faster pace.
Trump will also ask Congress for funds to replenish US Strategic Petroleum Reserves. SPR is a crude oil reserve for emergency situations.
After the Russian invasion of Ukraine, under the Biden administration the US sold 180 millions barrels crude oil to the SPR by 2022 in order to lower oil prices.
If Trump insists on replenishing the oil reserves, this could lead to an increase in demand for US energy and may encourage US companies to make more.
Trump will also put pressure on the International Energy Agency, a Paris-based agency that monitors energy policies. Recent policies of the Paris-based watchdog have called for a greater focus on policies aimed at reducing emissions.
Reuters reports that Trump’s advisors have urged the president to stop funding the IEA until it adopts a pro-oil stance.
Dan Eberhart CEO of Canary Oilfield Services told Reuters that:
I’ve pressed Trump personally and his entire team to pressurize the IEA in order to get back to its mission, which is energy security.
Drilling offshore and on federal land
Trump will also likely accelerate the drilling of oil and gas on US federal land and off US coastlines.
Reuters reports that the average completion time for a drilling license on Indian and federal land was 258 days over the first three-year period of Biden’s administration. This is up from 172 during Trump’s four-year presidency.
Reuters reported that sources said that Trump would expedite pending permit applications, increase the frequency of sales, and provide land more likely to produce oil.
According to data from the federal government, oil production on US federal lands and water reached a new record in 2023. Gas production also hit its highest levels since 2016.
About a quarter (25%) of US gas and oil is produced on federal land and water.
Saudi Arabia, Russia and the US are also amongst the top three crude oil producers in terms of production.
The US Energy Information Administration predicts that oil production will average more than 13 million barrels a day in this year. This is a record-breaking increase over the previous high of 12,9 million barrels / day set by the US Energy Information Administration for 2023.
As new information becomes available, this post Trump’s plan for increased US oil and gas drilling may change.
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