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Will the Trump Administration Provide Clear Energy Direction?

Constitution Pipeline - MarkindDaniel B. Markind, Esq.
Weir and Partners, LLP

 

Will a new Trump Administration offer some clear energy direction to replace the often  conflicting signals that came from the Obama Administration? Perhaps.

With one week to go before the Donald Trump Presidency, the Obama Administration’s final energy moves remain curious.  Just a few weeks after refusing to finish the Dakota Access Pipeline, the Administration went the other way on Atlantic Sunrise.

Right before the new year, FERC gave the Atlantic Sunrise pipeline long-awaited good news by issuing a favorable Environmental Impact Statement.  Based on that, Williams Partners announced that it anticipates full service by mid-2018.  The EIS is good news for Williams and for anyone in the Mid-Atlantic whose gas supply will be safeguarded by the connection of the Northeast Pennsylvania Marcellus Shale deposits with a major Northeast pipeline.

energy direction

Ernest Moniz

Next, outgoing Energy Secretary Ernest Moniz took credit for the explosion of oil and gas production during the last eight years.   Writing in his exit memo, Moniz stated “(d)ue to early DOE investments and the advances made by U.S. companies, domestic production of crude oil rose from 5 million barrels per day in 2008 to 9.4 million barrels per day in 2015, the highest production rate since 1972.”

Unlike others connected to the Obama Administration, Moniz never has been known as a shale opponent.  However, you would be hard pressed to find many in the industry who will heap too much praise on the DOE during the last eight years, especially with regard to items like the approval of export permits.  The energy world is so large and encompasses so many interests that it is impossible to take a principled stand on issues and expect complete consistency.

Still, the constant back and forth of the DOE and the other federal agencies regarding regulations, moratoria, approval of permits and other items has made it difficult for anyone to get a real read on the overall regulatory environment or on the wisdom of investing billions of dollars in new infrastructure projects (witness Dakota Access).  Clear energy direction from the new Administration will be a welcome change.

That clear energy direction will come at a time of great promise.  In its Annual Energy Outlook for 2017, the U.S. Energy Information Administration predicted that the United States could become “energy independent” by 2026. Indeed by that date we could become a net energy exporter.  What a change from eight years ago, before the shale revolution took place. Aside from the domestic economic implications, the foreign policy possibilities are stunning. An America free from worrying about Saudi Arabia, Nigeria, Venezuela and other foreign suppliers would have a much freer hand in the world, to try to shape (or choose not to shape) world events with less downside risk.

energy direction

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And, the early days of 2017 already show how energy politics shapes world events.  The energy year began in Central Asia when Turkmenistan suspended gas exports to Iran for unpaid bills going back to 2006. Apparently the Turkmens, who are the ethnic ancestors of the modern-day Turkish people in Asia Minor, jacked up prices to Iran during the bitter winter of 2006, resulting in an arrearage of approximately $2B.  Iran, subject to the UN sanctions until 2015, could not pay. Turkmenistan now is taking action.

Both of these states are quite insular and no one really knows why Turkmenistan chose this moment or this action.  It leaves Turkmenistan with only one foreign buyer of its gas, China, and Iran’s northern provinces without gas supply. This seems like a lose-lose for everyone involved, and on that basis are conflicts made.

Finally, a hopeful story from the Middle East.  On numerous occasions I have written about the curious dealings with the Cypriot, Israeli, Noble Energy venture in the Leviathan Basin.   Now the Leviathan may stimulate a settlement of the 40-year old Cypriot conflict.

Since 1975, Cyprus has been divided, with Turkey militarily occupying Northern Cyprus and being the only country to recognize Northern Cyprus as an independent.  The Turkish military occupation has complicated Turkish relations internationally and has limited Cyprus’s ability to develop as a nation.

Thanks to the potential for gas money (estimated at approximately $50B), mercurial Turkish President Recep Erdogan now may cut a deal to end the conflict.  Turkey is heavily reliant on Russian gas, and last year’s event showed that Turkey and Russia have some common interests but also many divergent ones.  Neither party wants to be dependent on the other.  The potential of a gas pipeline from the Leviathan to Turkey may be too much for Erdogan to resist.

This week in Geneva leaders of the Greek Cypriots and the Turkish Cypriots presented their proposals for a bi-zonal federation.  Following the meeting, the UN Secretary General said peace was very close.  The Obama Administration largely has been on the sidelines, but what a wonderful going away present it would be for the Obama Administration –  and simultaneously what a great way to exhibit the positive potential for shale gas – than to see Cypriot reconciliation.

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8 thoughts on “Will the Trump Administration Provide Clear Energy Direction?

  1. Gas Energy is still dirty and risky to those of us living next to it and should be quickly replaced by other forms that are really clean and safe.
    This new Administration will put millions of citizens at risk by drilling and developing next to our homes and schools and farms…
    Not something for the Sacrifice Zones to look forward to….

    • It’s time for you to stop blathering about how terrible gas development is and get down to specifics about “other forms [of energy] that are really clean and safe”. You’ve had years to work this out, but Jacobson’s, McKibben’s, et. al. plans are a little vague on important details.

      Who will be building the industrial scale wind and solar “farms” needed and how will they be funded?

      Where will you put hundreds of square miles of solar panels and 4,000 terrestrial wind turbines in just NY? Their plans call for 1200 sq. miles of land to be cleared. How does that not qualify as “Sacrifice Zones”?

      When will this get done? Coumo’s state of the state address wants 90 MW (15 x 6 MW turbines) of offshore capacity; when? Deepwater One says they won’t have them operational before 2022 at the earliest. Of course, you’ll need 5,000 more in 2,920 days from then to meet the 50% by 2030 goal.

      How will you meet the 37% reduction in total energy use by 2040? If you don’t, you will have to increase the number wind turbines and square miles of solar by up to 50%. Got a Plan “B”?

      Could it be you are a closet Trump supporter and prefer mining and burning coal to clean local gas?

  2. Vera
    This country has been drilling for oil and gas for well over 100 years. Why suddenly is less evasive technology that allows more recovery more dangerous? Compare to all other industries in the USA the oil & gas industry has a six-sigma record in safety-production measurements. Please explain your statement and back them up with facts

    • Vic, The Gas Industry has committed their “Waterloo”,

      by coming to the Northeast and constructing/drilling next to our homes with 300′, 500′ , which are the minimums since 2008 and 2010 and on our school properties like in Elk Lake Schools,
      and on numerous farms….
      This is their big mistake….by exposing the Residents so closely to industrial activity and the harms that have ensured are well documented by our DEP and EPA and ATSDR….I’ve sent links to these documents in previous statements on this site…
      and I don’t have to answer your comment; you made it and you can answer it and show facts and documentation….
      Also I have OSHA documents showing the over-exposure to silica dust to the workers on the Fracking sites in my county of up to 6 times the allowable limits of exposure;
      Halliburton and Baker Hughes have been fined and given violations for exposing the workers to such risks….in my county….

        • Having a majority doth not make one right…..

          and Tom, can you show facts or proof of your
          statement which just sounds like a personal opinion….

          Belittle all you like….you still can’t get Fracked….
          have to buy one of our Fracked landowners out and enjoy the Fracking first hand here in Pa…..
          instead of waiting for NY to welcome Fracking in….
          I know Sellers who would accommodate you….
          and I notice, you’re still advertising that chunk of Pa. land in Springville…
          213 acres and he can’t manage to get rid of it….!
          why aren’t you guys getting a conglomerate of NY buyers together and jump on this piece….
          you might make some big money and finally
          be rich…..!
          and then you can ride around in your big Trucks
          and blow diesel smoke in my face when I’m
          walking my dog and taking some pics of the
          industrial pads next to our homes…while you’re
          smoking a Big Cigar…

          • Vera big diesel trucks don’t blow smoke anymore like they used because EPA regulations and new technology has made them run cleaner.

      • You haven’t answerd my question, you pointed out I believe inconvienances only, nothing permanant. The over exposure to silica dust is not because of the process but because workers sometime work outside the safety requirments and OSHA catches and fine management, but even that is trivial. I have spent time on the beach and watched tens of thousand play in silica dust fron 1 year of age to 90. It is just sand. I HAVE BEEN TO ELK LAKE SCHOOL (sorry about the caps) asked if the drilling was done while the kids were there and was assured drilling didnt take place during school hours. In fact every one I talked with said they had individule aggreements where applicable and the companies were fine with conforming to their schedules,

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