By Okafor Joseph Afam
November 7, 2024

In a historic political comeback, former President Donald J. Trump has won the U.S. presidential election, reclaiming the White House after a fiercely contested race. Early Wednesday morning, Trump became only the second president in American history to secure a non-consecutive second term, following in the footsteps of Grover Cleveland. Cleveland, a Democrat, first won in 1884, lost in 1888, and returned victoriously in 1892. Trump’s path mirrors this pattern, having first won in 2016, lost in 2020, and come back for a second term in 2024.

By late Wednesday, Trump had secured 295 Electoral College votes—25 more than the required 270—with additional states still finalizing counts. Alongside Trump’s victory, Republicans regained control of the Senate, with at least 52 seats confirmed, while the House of Representatives appeared likely to have a slim Republican majority, pending final results.

A Shift Back to Pro-Energy Policies

Trump’s return to office signals a likely shift in U.S. energy policy, with a renewed emphasis on oil, gas, and natural resource development. A key component of his agenda will be to promote energy independence through increased domestic drilling, especially in the shale fields. Nonetheless, industry operators are expected to approach this increase cautiously. Issues such as high costs, regulatory constraints, and fiscal discipline among operators may slow the immediate ramp-up in drilling.

A significant priority for Trump is expected to be the replenishment of the Strategic Petroleum Reserve (SPR). The reserve, depleted by the Biden administration to help stabilize fuel prices, will likely be refilled as a national security measure under Trump.

Federal Lands and Offshore Drilling

The Biden administration’s restrictions on energy exploration on federal lands have drawn criticism from the energy sector. Under Trump, these limitations are expected to be reversed, facilitating expanded leasing and drilling on federal land. Offshore lease sales, which have been limited to just three opportunities in the Gulf of Mexico from 2024 to 2029, may also see a revitalization. The reduction in available permits on federal land has been another point of contention; an updated Bureau of Land Management (BLM) count in February 2023 reduced the previously reported permits by 27%, sparking industry concerns.

Support for Natural Gas and LNG Exports

The incoming administration is expected to champion the expansion of natural gas production and exports, particularly from the Marcellus and Utica shale regions. Regulatory restrictions and stalled pipeline projects have curbed growth in these regions, limiting access to LNG export markets. Trump’s administration is anticipated to address these bottlenecks, enabling the construction of new pipelines and increasing gas flows to domestic and international markets.

The LNG sector has faced additional regulatory challenges under the Biden administration, including a “temporary pause” on export licenses. Although the pause was stayed by a federal judge in July, the regulatory uncertainty has hampered industry confidence. Trump’s administration will likely prioritize removing these obstacles to support growth in LNG exports.

Rollback of the Inflation Reduction Act

The Inflation Reduction Act (IRA), with its provisions for clean energy incentives and regulatory requirements, has impacted the traditional energy sector. Trump has signaled intentions to repeal parts of the IRA, particularly those targeting fossil fuel emissions and supporting electric vehicle subsidies. With a cooperative Congress, the new administration could work to dismantle sections of the IRA that directly affect the energy industry, including subsidies for hydrogen and carbon capture.

Environmental Regulations and Methane Rules

Lastly, Trump’s administration is expected to ease environmental regulations, particularly those concerning methane emissions and reporting requirements imposed by the Environmental Protection Agency (EPA). Industry leaders view these requirements as burdensome and economically restrictive. Although it may take time to unwind some of these regulatory frameworks, the administration’s long-term goal will likely be a reduced regulatory footprint for the energy industry.

In summary, Trump’s win foreshadows a return to a more traditional energy policy favoring fossil fuels, which he believes are integral to national security and economic stability. His administration will likely prioritize unshackling the energy industry from environmental and regulatory constraints, while reasserting U.S. energy independence on the world stage.