At the top of Mr. Trump’s energy and environmental agenda will be unraveling Obama administration policies that touch on everything from carbon emissions to water.

Much of the action out of the gate will focus on rolling back regulations. Mr. Trump has said he would withdraw Mr. Obama’s signature policy to address climate change, a rule that cuts power-plant carbon emissions. The rule already has faced legal challenges and has been temporarily blocked by the Supreme Court.

The Trump administration, with the help of the Republican-controlled Congress, also will work toward repealing an Environmental Protection Agency rule bringing more bodies of water under federal jurisdiction. Also targeted for repeal: Interior Department rules that require tougher standards for coal mining near streams and that set new standards for emissions of methane, a potent greenhouse gas, from oil and natural-gas wells on federal lands.

While the Trump administration can’t unilaterally repeal most rules right away, it has several options. The EPA and other agencies can immediately start the process to withdraw regulations, and they can relax compliance requirements over time. Meanwhile, Congress can pass measures nullifying rules that have been completed most recently.

Immediately confronting Mr. Trump is a decision regarding the Dakota Access oil pipeline, which extends from North Dakota to Illinois and is nearly built except for a crossing of a Missouri River reservoir.

Mr. Trump may also have a decision to make on the Keystone XL oil pipeline if its developer, TransCanada Corp., reapplies for a State Department cross-border permit the Obama Administration denied in 2015.

On the campaign trail, Mr. Trump said he would withdraw the U.S. from the global climate agreement signed in Paris in late 2015. He couldn’t immediately pull out of the agreement, but he could begin the process of withdrawing.

Eoin Treacy's view

Here is a link to a PDF of the full article.

I watched the end of the inauguration speech at my club following my Friday morning HIIT class and the facial expressions of the desk staff were a picture of just how much work needs to be done to reunite the country. High energy costs, high healthcare costs, high education costs and no wage growth combined to create the conditions that got Trump elected. He is going to need to deliver on solutions to some of those problems if he is going to receive the second term he wishes. 

Under the last administration the energy sector became more politicised than ever. Despite the fact unconventional oil and gas production have contributed to lower US energy prices and have allowed for exports for the first time in a generation, there is continued angst about the implications for the environment. 

I’m not a climatologist and I don’t claim any special knowledge about weather patterns but I can’t help but recognise the correlation between environmental activism and high energy costs. The high cost of fuel, heating and cooling was one of the primary factors that allowed the argument for anthropomorphic climate change to gain traction. With lower energy prices the traction the argument is receiving has already decreased. That is not comment on whether the claim is true or false but rather an observation on how likely it is to factor into consumer thinking. 

It’s another rainy day in Southern California and it occurs to me that some of the most vocal climate change advocates come from this state. It’s easier to look around at your local environment, which is in an historic drought and conclude that you are living through a major change in the climate that will last forever. If you live in an area where weather has not changed very much you are likely less influenced by these arguments. The California drought has ended in about half the state and if the rain keeps up it will be over in the rest of the state before the end of winter. Right now conservation and efficiency rule the public psyche but in the event that this winter runs to two or three wet seasons that will change. 

President Trump sees energy independence as a realistic goal. The Jevons Paradox suggests that while it is a laudable goal, it is unlikely to remain a sustainable goal because when prices come down demand goes up.  Outright substitition is the only possible avenue to decrease demand. This article from newatlas.com highlights the fact that efficiency gains in the use of raw materials are more than made up for in the growing demand for products as the cost comes down. Here is a section:

Although almost all of those materials had been subject to technological advances made over the years, the researchers couldn't find one instance of true dematerialization. Wool came close, with its use dropping significantly in recent years, but the researchers argue that it isn't a result of improved efficiency of wool products, but the substitution of other materials, like nylon and polyester.

Other materials declined in use for other reasons: things like asbestos and thallium are no longer used widely, but that's more a result of discovered health issues and subsequent government intervention, rather than any advances in technology. The researchers conclude that, as Jevons suggested, technology alone isn't enough to put us on the path to a sustainable future.

If transportation does in fact move towards batteries and electricity production moves towards solar, wind, geothermal and nuclear globally then the demand for oil could decrease. However these are very long-term goals. More likely in the short-term is that supply increases because if the new administration wants to reach energy independence the easiest way would be to remove restrictions on offshore drilling rather than the highly political move to open up the Arctic reserve to drilling. 


Diamond Offshore Drilling and Seadrill remain some of the most depressed energy shares. 

Subsea 7 on the other hand has been rallying for a year and continues to hold a progression of higher reaction lows. 

Transocean may be forming a first step above its base and a sustained move below the trend mean would be required to question that view.