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Q&A: Trump's Energy Independence Executive Order

Washington (Platts)--28 Mar 2017 550 pm EDT/2150 GMT


US President Donald Trump Tuesday signed an executive order rolling back much of the Obama administration's policy efforts to combat climate change.

Here are some answers to questions on Trump's Energy Independence Executive Order:


Q: Will the order boost US oil and natural gas production?


A: Trump Tuesday said the order will repeal "job-killing" restrictions on domestic oil and natural gas, but analysts believe the supply impact of the order will be minimal. The order calls for a review of US limits on fracking on federal lands and methane emissions from oil and gas operations, but those rules were already being undone through court cases and by actions still moving through Congress. Obama-era regulations were always seen as having a marginal impact on oil and gas production as evidenced by the dramatic increase in supply which occurred during Obama's second White House term.

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Q: Does the order repeal the Clean Power Plan?


A: No. It does include steps to rescind the Clean Power Plan, but it cannot legally be undone by executive order. The order is likely the first step in a years-long process which will require a lengthy rulemaking process and will likely face legal challenges from environmentalists and others. Richard Revesz, director of the Institute for Policy Integrity at NYU School of Law, said the issue may not be resolved before the 2020 presidential election.

Related: Find more content about Trump's administration in our news and analysis feature.


Q: Will the order save the US coal industry?


A: Vice President Mike Pence said that Tuesday's order effectively ends the "war on coal," but analysts say the order will do little to bring back the industry. Competition from natural gas and other regulations have forced about 60 GW of older, less-efficient coal-fired power plants to close and low gas prices are expected to continue in the future.


Q: Did the order impact futures prices Tuesday?


A: No. The rule did not factor in futures trading, analysts said. NYMEX May crude settled up 64 cents at $48.37/b and ICE May Brent settled up 58 cents at $51.33 mainly on news that Libya declared force majeure at the Zawiya export terminal after having to shut down a pair of major oil fields for security reasons. NYMEX April natural gas futures contract settled at $3.096/MMBtu, up 4.4 cents from Monday, mainly due to storage outlook.



--Brian Scheid, brian.scheid@spglobal.com

--Jasmin Melvin, jasmin.melvin@spglobal.com

--Edited by Richard Rubin, richard.rubin@spglobal.com




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