President-elect Donald Trump vowed to declare a national energy emergency as soon as he takes office on Monday, months after promising voters he would cut electricity and gasoline prices in half during his first year in office.
Last August, Trump told supporters at a rally in Porterville, Michigan: "To achieve rapid reductions in energy costs, I will declare a national emergency so that we can dramatically increase energy production, power generation and supply. "From day one, I'm going to approve new drilling, new pipelines, new refineries, new power plants, new reactors, and we're going to cut red tape."
The president-elect reiterated on December 22 that he intends to "declare a national energy emergency" on his first day in office. He has vowed to issue a series of executive orders reversing Biden administration policies on natural gas exports, drilling and emissions standards.
Trump plans to create a National Energy Board led by North Dakota Gov. Doug Burgum, whom he selected to lead the Interior Department. Burgum said during a Senate hearing on his nomination this week that he expected the commission would be established by an executive order.
It's unclear whether the emergency declaration will be largely symbolic or invoke broader powers beyond the energy executive order Trump is widely expected to issue on Monday. The president-elect's transition team did not respond to a request for comment.
“My expectation is that this will be a verbal declaration of an energy emergency,” said Mike Sommers, president of the American Petroleum Institute, an oil industry lobbying group. “When you bundle executive orders together, that’s the answer to how to deal with an energy emergency.”
Glenn Schwartz, director of energy policy at consulting firm Rapidan Energy, said Trump could invoke several emergency energy-related regulations. Schwartz said federal law generally defines emergencies loosely, giving the president broad discretion to use them as he sees fit.
Schwartz said Trump is likely to face little resistance from the courts because they are unwilling to challenge the president's decisions related to national security.
"The end result is that even if Trump expands his emergency powers in an unprecedented way, it's unclear whether the courts will step in to block any resulting action," the analyst said.
Schwartz told clients in a research note released Thursday that there is clear precedent for Trump invoking emergency powers to boost power generation and expand the nation's fuel supply. Authorities using these powers will waive certain energy-related environmental and pollution rules.
The analyst said Trump may issue fuel exemptions under the Clean Air Act, allowing gasoline that violates federal air quality standards to enter the market. He said presidents often use such exemptions whenever they need to expand the nation's gasoline supply and control prices.
Trump could also invoke the Federal Power Act to order power plants to operate at maximum capacity without adhering to pollution limits, Schwartz said. The Secretary of Energy can invoke the act in times of war or in emergencies caused by sudden increases in demand or power shortages.
Schwartz said the provision has been rarely used since World War II, mostly when extreme weather overwhelms power plants.
PJM Interconnection, the largest U.S. grid operator, has warned of power shortages as coal plants are retired faster than new capacity comes online. PJM operates the power grid in all or parts of 13 mid-Atlantic, Midwestern and Southern states.
The situation is likely to get worse as the technology industry builds energy-hungry data centers to support AI applications and electricity demand increases significantly.
The first Trump administration considered invoking the act in 2018 to order utilities to buy two years of electricity from coal and nuclear plants at risk of closing. The then-government eventually abandoned the idea after facing opposition from industry.
Schwartz said Trump could also opt for a broader regulation that would allow the president to suspend pollution laws for industrial facilities, power plants, refineries, steel mills, chemical plants and other industrial facilities during emergencies.
Schwartz said federal law provides less support for presidents mandating new products. Analysts say Trump can direct federal agencies to conduct expedited environmental reviews of energy projects he supports such as pipelines, but the president cannot use emergency powers to circumvent basic environmental policies such as the National Environmental Policy Act and the Endangered Species Act.
Oil industry lobbyists at the American Petroleum Institute expect Trump to issue a series of energy-related orders as early as Monday.
Summers said the administration is expected to issue an order lifting the Biden team's moratorium on new LNG export facilities. The president-elect may also try to overturn President Biden's recent decision to ban drilling in 625 million acres of federal waters. Trump's authority to do so has been controversial, and such an order would likely end up in court.
"We believe he has the ability to turn this around and we will defend that in court," Summers said.
Summers said the industry expects the president will also direct the Interior Department to increase oil and gas lease sales in the Gulf of Mexico. The Biden administration issued the smallest number of leases in history in a program scheduled to run through 2029.
These decisions are not expected to have any direct impact on production. The United States has been the world's largest oil and natural gas producer for six consecutive years, surpassing Saudi Arabia and Russia. The CEOs of ExxonMobil and Chevron have made clear that production decisions are based on market conditions, not who is in the White House.
"You can lead horses to water, but you can't make them drink," Schwartz said. "He can give them all the resources they need to drill, but I don't see any indication that he can force them to get it out of the ground."
Trump is expected to withdraw the United States from the Paris climate agreement. Executive orders targeting vehicle emissions and fuel economy standards are also expected.
Still, only so much can be done through executive orders, Summers said, and those directives often have to go through a rulemaking process that takes time. He said the oil industry is more focused on pushing for more lasting policy changes in the Republican-controlled Congress.
“There’s not much they can do on day one other than direct federal agencies to fulfill their energy leadership commitments,” Summers said.