Trump is shifting U.S. energy policy: what impact will this have on the world?

U.S. President Donald Trump issued a series of executive orders within hours of his inauguration, aimed at increasing the already record-high oil and gas production in the country and rolling back the climate agenda of former President Joe Biden.

This is reported by RBK-Ukraine referencing Reuters.

Energy Emergency

Trump declared a state of emergency in the energy sector, which is expected to grant him powers to reduce environmental restrictions on energy infrastructure and projects, as well as streamline the permitting process for constructing new transmission and pipeline infrastructure.

"This allows you to do whatever is necessary to tackle this issue," Trump told reporters while signing the order. "And we really do have an emergency situation."

Earlier that same day, he explained the reason for his declaration: "The inflation crisis was triggered by massive overspending and rising energy prices, and that’s why today I will also declare a nationwide energy emergency. Let’s drill, baby, drill."

He had previously stated that the growing demand for electricity from the tech sector, primarily for artificial intelligence needs, necessitates a massive upgrade of the grid.

LNG Permits

Trump ordered the U.S. to resume processing permit applications for new liquefied natural gas (LNG) export projects supplying gas to Asia and Europe, effectively reversing the pause that Biden had instituted at the beginning of 2024 to study the environmental and economic impacts of rapidly expanding exports.

U.S. exports of supercooled fuel set a record in 2023, making the country the world’s largest exporter of this product. However, the pause in issuing new export permits created uncertainty for several projects in development.

Plants in Louisiana awaiting approval include Commonwealth LNG, CP2 Venture Global, Cheniere Energy (LNG.N) expanding its Sabine Pass facility, and Energy Transfer (ET.N), Lake Charles Terminal. In Texas, the second phase of Sempra (SRE.N), the Port Arthur LNG project is awaiting approval.

Goodbye, Paris

Trump ordered the U.S. to withdraw from the Paris Climate Agreement—an international accord aimed at combating climate change—repeating a step he took during his first term.

Trump referred to climate change as a hoax and claimed the agreement puts the United States at a disadvantage compared to geopolitical rivals like China.

"I am immediately withdrawing from the unfair, one-sided Paris Climate Agreement," he stated. "The United States will not sabotage our own industry while China pollutes the planet without consequence."

Offshore Wind

Trump suspended the leasing of new federal wind energy installations until environmental and economic reviews are conducted, stating that windmills are ugly, costly, and harmful to wildlife.

"We are not going to do wind," he said.

A White House press release stated that Trump issued an order suspending the leasing of offshore wind farms in all areas of the U.S. outer continental shelf until the completion of environmental and economic reviews.

This order is expected not to affect existing offshore wind projects in the U.S. being developed by companies such as Orsted, Avangrid, Copenhagen Infrastructure Partners, and Dominion.

Biden had viewed wind energy as a crucial part of his strategy for decarbonizing the energy sector.

Electric Vehicles

Trump criticized electric vehicles by revoking a 2021 order signed by Biden that aimed to ensure that by 2030, half of all new cars sold in the United States would be electric.

Biden's 50% goal, which had no legal force, received support from U.S. and foreign automakers.

In his order, Trump stated that he is halting the distribution of unspent federal funds for vehicle charging stations from a $5 billion fund, called for the repeal of state exemptions from adopting zero-emission vehicle standards by 2035, and indicated that his administration would consider the elimination of tax incentives for electric vehicles.

Drilling

According to the White House, Trump signed an order reversing Biden’s attempts to block oil drilling in the Arctic and along vast areas of the U.S. coastline.

The White House announced that Trump also revoked a 2023 memorandum banning drilling on approximately 16 million acres (6.5 million hectares) in the Arctic.

It remains unclear whether these actions will be enough to attract major drillers, who have avoided the region in recent years due to relatively high development costs.

This month, Biden banned new oil and gas development on the shelf along most U.S. coastlines ahead of Trump taking office.

Restocking Reserves

Trump stated that he intends to refill the strategic reserves "to the top."

This likely refers to the U.S. Strategic Petroleum Reserve—stocks of crude oil established as a buffer against supply disruptions.

Following the invasion of Ukraine, Biden sold over 180 million barrels of crude oil from the reserve, marking a record volume.

The sales helped curb gasoline prices but led to the reserves being reduced to their lowest level in 40 years.

"We will bring prices down, refill our strategic reserves to the top, and export American energy worldwide," Trump said.

He is likely to reach out to Republican lawmakers in the coming weeks to request funding for oil purchases.

Recall that Donald Trump on his first day in office, January 20, signed a series of executive orders concerning energy, immigration policy, national security, and reversing several decisions made by the Biden administration. These documents do not require Congressional approval, allowing for swift implementation.