Trump and American Energy

Seven weeks have passed since Trump was inaugurated to serve his second term as president of the United States. In that short period, it seems like there have already been four years’ worth of executive orders, changes, and rollbacks. It’s hard to track all the changes (likely by design), and even harder to separate the meaningful from the symbolic. Many of the current administration’s policies have far-reaching implications for our ability to meet the challenge of climate change. To separate signal from noise, let’s analyze the predicted impacts on the future of U.S. energy and their implications for our climate goals.

The outlook for renewable energy over the next four years is mixed, with some potential upside and many pitfalls. The U.S. and the rest of the developed world are in the midst of a generational increase in demand for electricity. Energy demand in the U.S. is projected to grow 15.8 percent by 2029. To put this in perspective, the last time energy demand grew at this pace was in the 1980s. This growth is primarily driven by the technology sector, particularly energy demands for data centers (both for AI and more traditional cloud services). Unlike many other industrial power needs that can be flexible based on grid requirements, data centers need consistent power for operations. Power companies are looking at an “all of the above” energy strategy to meet these needs. Most of the new generation capacity will likely come from renewables, primarily solar combined with battery storage.

Roosevelt Natural Gas Generating Station Photo by Alex Simpson on Unsplash

Fossil Fuels

Currently, the majority of the Trump administration’s policies have been aimed at supporting the fossil fuel industry rather than penalizing renewable energy. As is a common theme of the Trump administration, these policies and outcomes are fraught with significant uncertainty. While the administration is working to reduce the permitting burden of drilling on federal lands, there is no indication extraction companies have an interest in increased U.S. production. Oil prices are relatively low, and a trade war initiated by tariffs threatens to hurt U.S. exports of fossil fuels. While the Trump administration has heralded the return of natural gas, they are bumping up against real-world supply chain issues.

Natural Gas
Currently, producers of utility-scale natural gas turbines are not scheduling any deliveries before 2029. The reality of these shortages is playing out now in Texas. The Lone Star State, well known for its conservative politics, is at the forefront of the nation’s energy transition. Over the past four years, Texas has increased its energy generation capacity by 35 percent, and almost all of that increase (92 percent) came from renewable energy. In response, Texas lawmakers have sought to increase the deployment of natural gas using generous subsidies from the $5 billion Texas Energy Fund. Despite a flood of initial interest last summer, 20 percent of applicants have withdrawn from consideration or have been rejected, many citing current timelines for natural gas deployment.

Coal
Twenty years ago, coal-fired power plants made up over 50 percent of U.S. generation capacity. Today, that number is below 20 percent. A combination of increased regulations and costs associated with coal generation have crushed the industry. The first Trump administration aimed to increase the use of coal for electric generation through regulatory rollbacks and increased extraction on federal land. Despite these regulatory rollbacks, economic factors—especially competition from cheaper natural gas and renewable sources—drove coal plant closures even higher during Trump’s first term than during Obama’s second term. While it is extremely unlikely any new coal power plants will be built in the U.S. during the current administration, Trump officials, including Interior Secretary Doug Burgum, would like to use emergency authorities to help existing plants remain operational and possibly restart closed plants. Given what came of the first Trump administration’s efforts, we would be wise to approach these plans with healthy skepticism.

Russellville Nuclear Power Plant courtesy of Georgfotoart via wikimedia

Zero Carbon Energy

Nuclear
With significant increases in natural gas deployment off the table as an option to meet ballooning energy demands, that leaves traditional renewables (wind, solar, and hydro), nuclear, and the dreaded worst-case scenario, coal. Nuclear, even more than natural gas, still has very long construction timelines. The Vogtle Energy Generating plant in Georgia is the only new nuclear generating facility in the US to be brought online over the past 30 years. While this facility represents a significant increase in U.S. zero-carbon energy capacity, it was over seven years behind schedule and more than $18 billion over budget. While small modular nuclear reactors aim to address the long timeline and high budget of building nuclear reactors, none have been deployed in the U.S. and realistically they are still years away from significantly contributing to our growing energy demands.

Renewables
So where does this leave renewables? Unfortunately, it isn’t all sunshine and blustery days. Even before the Trump presidency, the industry was struggling. This struggle has been reflected by declining stock prices, a decrease in the number of new ventures, and even some established companies shutting down. According to Climate Power, 64 clean energy projects are threatened, delayed, or cancelled as a result of the Trump administration’s policies or signaling to industry. Some of this is attributed to a period of over-exuberant investment in green technology between 2021 and 2022. Many companies were overvalued, and the returns anticipated by investors never materialized; as a result, investors are pulling back from the sector. This, paired with deep uncertainty about what actions the current administration will take regarding renewable energy, has resulted in stagnation across the clean energy industries.

Image by Markus Distelrath from Pixabay

It’s no secret the Trump administration is critical of renewable energy and especially the Inflation Reduction Act (IRA), President Biden’s signature legislative achievement aimed at speeding the transition to a carbon-free economy. What’s less clear is how impactful the Trump administration’s actions will be on that transition. While the president is critical of the IRA, many of its provisions have some bipartisan support. Recently, twenty-one House Republicans sent a letter to Speaker Johnson asking for the IRA’s energy tax credits to be maintained. Twenty-one might not seem significant, but given Republicans’ fragile four-seat majority in the House, it becomes more meaningful. Despite this support, Johnson has said IRA repeal will be “between a scalpel and a sledgehammer.” In other words, if Republican leadership can keep its members in line, the IRA will be significantly pared back.

Beyond targeting tax cuts, the Trump administration is taking a cue from Democratic strategies and weaponizing the federal permit system. Clean energy projects requiring federal permits are in serious jeopardy. Offshore wind projects, in particular, have largely gone dormant since Trump’s inauguration. Federal officials are either outright denying permits or refusing to meet with applicants. This uncertainty has created what Heatmap News refers to as a “green freeze” on the clean energy economy.

Yet, despite current political headwinds, solar deployment in the U.S. continues to break records. In 2024, the U.S. added 50 gigawatts of solar generation capacity, the largest generation capacity from a single source added to the U.S. grid in over two decades. Projections for 2025 remain optimistic: the U.S. Energy Information Administration projects that 81% of new power generation will be solar and battery, with an additional 12% from wind.

Solar wafer factory image courtesy of Oregon Department of Transportation via wikimedia

What It Means for the Future

Fortunately, the actions of the U.S. do not dictate the rest of the world’s actions. Currently, U.S. emissions represent 12 percent of global emissions. Given the first seven weeks of Trump’s administration, we have no reason to believe federal policy will aid the energy transition. But this won’t stop the transition globally. China currently dominates the clean energy economy in production and deployment. In 2024 alone, China deployed 357 gigawatts of solar and wind—the equivalent of building 357 nuclear plants in one year. Additionally, China manufactures 60% of mass-produced clean energy technologies (solar PV, wind systems, batteries). The irony is that many of these technologies were pioneered by U.S. companies. The future of energy production will be carbon-free. The only question is how long it will take. By failing to support renewable energy at home, the U.S. isn’t stopping the transition; instead, it is ceding the future energy economy to geopolitical competitors.