On Trump’s energy policy: Big players are bad news for energy policy

My commentary, “Trump’s policy may undermine pro-growth intentions,” appears in the October 2016 issue of Nature Energy. Here is one of my favorite parts:

Trump’s emphasis on energy independence, in North Dakota and elsewhere, has been common among both Republicans and Democrats. President Richard Nixon declared energy independence a priority in an effort to blame the Organization of the Petroleum Exporting Countries (OPEC) for the energy crisis the United States faced in 1973. Each president since Nixon has endorsed the concept. Nixon’s scapegoating of OPEC, while politically successful, was ironic because energy shortages and gasoline lines were the result of oil price controls Nixon himself had ordered.

The last line included footnotes to Peter Grossman’s U.S. Energy Policy and the Pursuit of Failure and Michael Graetz’s The End of Energy.

Overall, I concluded that Trump’s energy policy rhetoric fits comfortably within the GOP camp: he favors U.S. energy production including coal and hydraulic fracturing for oil and gas, endorses energy independence as a theme, encourages deregulation — especially when the EPA is the target — and opposes President Obama’s climate policies. Rhetoric is not action, however.

In office Trump’s egocentric approach to leadership likely would increase uncertainty in ways damaging to all industries involved in long term investment planning, of which the oil and gas development business and electric power industry are prime examples. Trump’s expressed willingness to subvert trade policy for short-term political gains would especially impair international oil markets. An undisciplined “big player” is bad economic news generally speaking, and that result will frustrate Trump’s stated goal of boosting the U.S. energy economy.

(On “big players” I cite — and recommend highly — Roger Koppl’s underappreciated work Big Players and the Economic Theory of Expectations).

My contribution is part of a special section on “Energy and the U.S. Election” in the issue of Nature Energy. See the editor’s introduction here, “Torn in the USA.”

UPDATE: I’ve revised the first link above so as to provide ungated access to the piece and inserted a link to the full special section. The full citation and permanent URL for my piece is as follows: Giberson, M. “Trump’s policy may undermine pro-growth intentions,” Nature Energy, Vol. 1, No. 10 (October 2016) http://dx.doi.org/10.1038/nenergy.2016.156.

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