With State Of The Union, Trump Missed An Opportunity On Energy

President Trump scarcely mentioned the energy industry in his State of the Union address, and what he did say wasn’t completely correct.

During President Trump’s State of the Union address, the energy industry was scarcely mentioned. In fact, his full comments on energy were: “We have ended the war on American energy. And we have ended the war on beautiful, clean coal. We are now very proudly an exporter of energy to the world.”

I believe the president missed an opportunity. But let me first address what he did say, starting with energy exports.

In 2011, the U.S. became a net exporter of refined products like gasoline and diesel. The U.S. likely became a net importer of natural gas in 2017. The U.S. is also a net exporter of coal.

But the U.S. is still a large net importer of oil, and the result is that we are still an overall net importer of energy. In last year’s Annual Energy Outlook, the Energy Information Administration (EIA) forecast that the U.S. would likely become a net exporter of energy between 2020 and 2030:

The U.S. is projected to become a net energy exporter during the next decade.

Contrary to what the President said, the U.S. is not yet a net energy exporter.

As far as ending the war on “beautiful, clean coal” — I am not sure what that means.

Presumably, it means that the Trump administration has eliminated policies that penalized coal because of its environmental impact. That much is true, but “clean coal” means something else. When someone refers to “clean coal,” what is meant is the sequestration of carbon dioxide emissions associated with coal-fired power. Clearly, that wasn’t the way he meant that phrase to be used.

Regarding the war on American energy, I think what he meant is “fossil energy.” It is true that President Obama often took an antagonistic position with respect to the fossil fuel industry. The Obama administration blocked pipelines, banned offshore drilling in the Arctic and parts of the Atlantic, and placed additional rules and regulations on the fossil fuel industries.

President Trump has eliminated many of the rules President Obama put in place. Those changes will likely lead to increased fossil energy production — but the biggest impact of those policies won’t be felt for several years. His most immediate first-year impact was most likely cutting through bureaucracy and speeding up approval for some stalled oil pipelines.

But I think President Trump missed an opportunity to highlight what will likely happen this year in U.S. energy production. The president could have argued that “the state of American energy has never been stronger.” I will get into that in more detail in my next column, but 2018 is shaping up to be a record year for U.S. energy production.

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10 thoughts on “With State Of The Union, Trump Missed An Opportunity On Energy”

  1. Clean coal as I saw term used about 15 years ago was not carbon sequestration but cleaner burning (e.g. gassification or certain new types of boilers). I know I was in the industry.

  2. Obama’s “antagonistic position” on oil resulted in a near-doubling of domestic crude production during his administration. Had he cracked down on hydraulic fracturing it would have been a different story, but he didn’t. Obama made a trade-off and the cheap natural gas produced by fracking replaced the dirtier, old coal plants, with the oil and gas industry winning the “War on Coal.”
    Today we have Perry at Energy promoting coal, an outdated technology and a loser in the competitive marketplace, and nuclear, another even bigger loser. One of the biggest under-reported energy stories currently is the cancellation of two of the newest and best reactors in South Carolina — after $9 billion was spent — and the pending demise of the other two in Georgia because they too will not produce power at a competitive price, despite massive government subsidies.
    Trump’s so-called energy policy is entirely governed by political payback and has nothing to do with an objective of providing affordable power for America’s future. Quite the opposite, actually.

    1. “Obama’s “antagonistic position” on oil resulted in a near-doubling of domestic crude production during his administration.”

      Well, no. I have written a lot about this. Obama was fortunate enough to be in office when the shale boom took off. He did clamp down on fracking somewhat on public lands, and in fact, federal production of oil did decline during his term as oil production on private land soared.

      In reality, no President is responsible for the surge. The natural gas surge actually began under Bush, but he didn’t do that. Oil took off during Obama’s first year in office, but he didn’t do that. I will probably write an updated article on this soon, showing the delayed cause and effect between what a President does and when it actually impacts production.

  3. For lack of better place for this question… and which is “out of left field” as well…

    What do you make of this Canapux idea? In terms of btu/kg (the commercial Canapux needs to float in water) how effective would exporting a trainload of this stuff compete with the liquid pipeline form of exporting bitumen?

    1. I don’t know that much about it, but it’s adding costs to bitumen production, and then transporting by rail is definitely more expensive than via pipeline. I would guess you are talking about at least $10/bbl more to process and transport this via rail for any significant distance.

      1. Thanks.

        One cost saving part of it is that cheap open-top railcars, previously used for moving coal, could be used for CanaPux. I wonder if if there could also be some savings in the form of reduced insurance / liability, and cheaper handling costs at eastern or western Canadian ports. Also, cheaper shipping costs than liquid handling ships? It seems like there may be a bunch of hidden efficiencies over the whole supply chain.

  4. It is interesting what gets completely left out of modern political dialogues, as Rapier points out.

    Yes, we are for free markets and drilling for oil—but what about our huge mandated and subsidized domestic ethanol program? Oh, that. It is now about 10% of national “gasoline” supplies.

    Meanwhile, some real breakthroughs may be on the cusp in solid-state batteries. We are talking about battery cars with double the range and dropping in costs as production methods improve.

    Entire nations have scheduled bans on ICE new cars sales done the line.

    Far from “peak oil” it is possible to outline a dying, dinosaur industry. Unless oil can be delivered at $60 a barrel, it will face a shrinking future. It likely face a diminished future anyway.

    A cleaner and more-prosperous future is out there—if the world acts like, say Japan or Canada, and not Venezuela or Iraq. Time will tell.

    1. ethanol is some nasty stuff too. Have to transport separaley and hae blending near market. Picks up water and is corrosive. Hate it.

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