Trump’s win: a vote for energy security

With a resounding victory in the Presidential election, President Trump will look to fast-track American fossil fuel production when he takes office on 20 January 2025, reversing many of the clean energy policies of the Biden Administration. Based on his track record from his first term and “America First” campaign promises, Mr Trump will look to ratchet up US oil and gas production, lift the moratorium on LNG permitting, hold more offshore oil and gas lease sales, cut regulatory tape, and pull America out of the Paris Agreement. Mr Trump’s win was a vote for energy security, economic security and border security.

Investors and industry reacted positively to the news of Mr Trump’s win. The Dow Jones Industrial Index, S&P 500 and NASDAQ climbed to record finishes the day after the election, and the value of the US dollar surged.

Shares of offshore oil and gas drilling contractors and marine transportation companies Noble Corp, SEACOR Marine, Tidewater, Transocean, Valaris and others, all posted healthy gains in the immediate wake of the election results.

Producers, refiners and distributors of oil and gas were elated. Mike Sommers, president and chief executive of the organisation that represents them, the American Petroleum Institute, said of the election: “Energy was on the ballot, and voters sent a clear signal that they want choices, not mandates, and an all-of-the-above approach that harnesses our nation’s resources and builds on the successes of his first term.”

Member organisations for the US offshore energy industry were pleased as well. Calling Gulf of Mexico oil and gas industry “a cornerstone” of the nation’s energy profile, National Ocean Industries Association (NOIA) Erik Milito also pointed out the area’s vast potential for carbon sequestration and the role it could play in reducing CO2 and greenhouse has (GHG) emissions from hard-to-abate industries.

And while Mr Trump has promised to stop offshore wind on “day one” in office, the economic benefits generated by offshore wind projects may give him a moment of pause. States, of course, will still be able to move ahead with their own plans for offshore wind.

“Energy was on the ballot”

Oceantic Network president and chief executive Liz Burdock noted that during Mr Trump’s first time in office, three federal offshore wind lease sales produced US$456M for the federal treasury, and kickstarted the momentum that resulted in thousands of new jobs and US$40Bn in new investment in manufacturing, seafaring, shipbuilding, port infrastructure, transmission planning, and workforce development.

“With President Trump in office, we have the opportunity to harness even more investment and measurable economic benefits for communities across the country,” she said.

Harnessing more investment in natural resources — whether it is oil and gas, wind, waves or solar — is something policy makers in other countries should strongly consider, particularly in a world of increasing geopolitical tensions; energy security needs to be top of mind.

Norway, for example, continues to attract investment in its oil and gas resources while promoting the transition to renewables and cleaner energy.

By contrast, the UK’s move to extend its windfall tax on North Sea oil producers’ profits to 2030 will hurt investment and production in the region. “Windfall taxes extended on oil and gas producers when no windfall exists deter the very investment that we need across our energy transition,” said Offshore Energy UK chief executive David Whitehouse.

Let’s hope that Mr Trump retains the tax credits incentivising investments in carbon capture, utilisation and storage and lowering GHG emissions from oil and gas enacted under the Inflation Reduction Act (IRA) — President Biden’s signature piece of legislation. This will underpin the Gulf of Mexico’s lower carbon intensity oil production, set the table for blue and green fuel production, and progress an all-of-the-above energy strategy.