The executive orders issued by President Trump are poised to have profound implications for both the U.S. and global energy landscapes, analysts at BMI, a unit of Fitch Solutions, stated in a BMI report sent to Rigzone late Tuesday by the Fitch Group.
“Domestically, the emphasis on increasing fossil fuel production will boost U.S. oil and gas production output, providing immediate economic benefits to the oil and gas sector by reducing regulatory barriers and streamlining permits,” the BMI analysts said in the report.
“We expect that these orders will increase oil and gas consumption in the U.S. – domestic production becomes more readily available and potentially more cost competitive,” they added. The analysts went on to note in the report that this intensified focus on fossil fuels poses a risk to the United States’ long-term climate objectives. “By prioritizing fossil fuel infrastructure and rolling back restrictions, the orders may slow down the United States’ energy transition to renewable energy sources,” the BMI analysts said in the report. “Furthermore, it places barriers on wind power development, through the suspension of offshore wind leasing, representing a critical setback for the U.S. renewable energy sector,” they added. “Offshore wind projects, which have been gaining momentum as a cornerstone of clean energy strategies, could face significant delays or cancellations. Such interruptions could impede progress towards diversifying the energy mix and meeting emissions targets, affecting both environmental outcomes and the competitiveness of the U.S. renewable energy industry,” they went on to state.
“An increase in U.S. fossil fuel exports, facilitated by expanded production capacity, could reduce fuel costs, shifting the global energy mix towards higher emissions. This could counteract the progress made by other nations in reducing their carbon footprints and transitioning to cleaner energy sources,” they added.
Standard Chartered Bank Commodities Research Head Paul Horsnell late Tuesday, analysts at Standard Chartered Bank, including Horsnell, said, “we have not yet seen any major surprises in the new administration’s oil and gas policies, except perhaps the extent to which they have been framed as a central core of the entire program”.