TRUMP has won. A new era is set to begin. Things in Washington are fluid as uncertainty rules. What would he do – remains the big question? If the commitments and pronouncements made by the President-elect during the long election campaign are any indication, disruptive and tectonic shifts in US policies, in all major sectors, could just be round the corner. Energy is no exception. It has always been a major concern of policymakers in Washington. In past presidential campaigns, energy was often cited as one of the key issues confronting the sole surviving superpower of the world. This election campaign was but different. Although energy was mentioned, yet, courtesy the shale revolution, there was no real, detailed and heated debate on the issue during the campaign. After all, the US is no more that dependent on imported oil, especially from the ‘unstable' Middle East, as it used to be - once upon a time. The country›s production has gone up from about 5.3 million bpd in Obama's first year in office to 9.4 million bpd in 2015. Currently, it stands at around 8.7 million bpd. Fineprint of the energy policy, to be pursued by the newly elected president, are yet to be made public. As John Kemp writing for Reuters said, ‘Trump›s energy-related policies are probably not even known in detail to the president-elect himself - much less knowable by anyone else.' Yet hints, detailing the broader outlines of the Trump administration energy policy, were dropped during the election campaign, emitting interesting signals. The induction of Donald Trump in the White House, as the 45th president of the country, could entail major changes in the energy policy of Washington. And those would carry long-term geopolitical consequences too. The Republicans have always been close to the energy industry. Donald Trump is no different. He is already being regarded as business friendly - as far as the energy sector is concerned. The President-elect has vowed to boost the nation›s oil, natural gas, and coal production by rolling back regulations and increasing drilling on federal lands. The US Bureau of Land Management issued 852 leases for oil and gas drilling on a total of 810,000 acres last year. That›s down from a five-year high of 2,188 leases issued in 2011 for more than 2 million acres of federal land. Trump wants to change that. "America is sitting on a treasure trove of untapped energy - some $50 trillion dollars in shale energy, oil reserves and natural gas on federal lands, in addition to hundreds of years of coal energy reserves," he said during a keynote speech at the Shale Insight conference in Pittsburgh. Unlike his predecessor, who had climate issues in sight, Trump has been saying, he would open federal lands for oil and gas production, and free up offshore areas to energy development. "I am going to lift the restrictions on American energy and allow this wealth to pour into our communities." All this mean that the glut is here to stay, longer than initially projected, carrying serious and long term implications to the health of the global energy sector. OPEC needs to take cognizant. During the campaign, Trump cast himself as fossil-fuel friendly. But he is also a businessman. He is also keeping an eye on the overall bottom line for the country. While promising the electorates, independence from the Organization of Petroleum Exporting Countries, he vowed to stop buying oil from Arab countries unless they commit ground troops to combat Islamic State or reimbursed the US for its efforts. This was pure arm twisting to extract a deal. The US energy industry is thus euphoric. Shares of most oil and gas producers, energy construction firms and pipeline operators rose after the election results. Climate appears to be another casualty of the election. With the advent of the new, Trump era, the rhetoric in Washington seems changing - from climate change to energy security and affordability. Vowing to overturn the Obama administration›s Clean Power Plan, ending the «war on coal,» Trump also seems far less concerned about global warming and climate change. He has tweeted, dozens of times, about how he does not accept the scientific evidence that climate change is real. Trump has also vowed to dismantle the Paris Agreement, signed by some 200 countries last December. The agreement set targets to reverse the adverse effects of global warming. The green lobby is definitely in for some hard work. Another impact of the change in guard in Washington could be the $8 billion Keystone XL pipeline project, carrying oil from Western Canada and North Dakota to US Gulf Coast refineries. President Obama refused to give green signal to the project last year. The project may now get a boost from Trump presidency - yet - at a cost. The president-elect is ready to approve the project, provided, the US gets a "big, big chunk of the profits or even ownership rights." The nationalist in Trump was clear in his terms for the pipeline: "I want 25 percent of the profits for the United States and forever. He asserted; TransCanada should not be allowed to send Canadian oil through American land—"through farmland and through cities and wherever the hell they're going" — without paying a hefty price. The message has been clear, "I want a big piece of the deal. Otherwise, I'm not going to approve it." A lot of bargaining seems on the card on the issue. Trump has been extremely critical of the nuclear deal with Iran. While addressing the American Israel Public Affairs Committee in March, Trump underlined in clear terms: "My number-one priority is to dismantle the disastrous deal with Iran." This rhetoric would definitely have negative implications on the enthusiasm of foreign companies looking to invest in Iran›s energy sector. And this has the potential to stutter the upsurge in Iranian output. However, a Trump victory could be followed by a rapprochement with Russia, resulting in the lifting of Treasury sanctions on the Kremlin and a boost to investment in Russian energy assets. Trump policies could carry serious and long-term implications to the global energy scenario. If climate issues are pushed to sidelines, agreed deals are set aside and the existing global energy order is tampered with, the industry could be in for some real, long-term instability and volatility. This is disruptive and none can afford that!
