Congress is still debating the fate of the Inflation Reduction Act, but the Trump administration has already torn up energy and climate policies across the federal government. It’s time to step back and try to take stock. How much damage has the Trump administration already done to decarbonization? What’s most worrying? What was going to happen anyway? And what might still be saved?
On this week’s episode of Shift Key, Rob and Jesse go agency by agency to understand the most important changes and try to understand the deeper agenda — including potential points of incoherence or disagreement. Shift Key is hosted by Jesse Jenkins, a professor of energy systems engineering at Princeton University, and Robinson Meyer, Heatmap’s executive editor.
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Here is an excerpt from our conversation:
Robinson Meyer: I think one thing that is also, when you zoom out, is that this is the kind of broader incoherence of their agenda, right? So the U.S. is scheduled to gain a massive addition of new liquefied natural gas export terminals at the end of the Trump term — in the last two years of the Trump term. The Trump administration is quite keen to further expand that expansion and approve another set of terminals that would come on in the late 2020s and early 2030s.
I want to observe a few things about that. I think one thing is that the Trump administration is, to quote a think tank analyst I was talking to recently, is pattern-matching to the late 2010s experience. The U.S. added LNG export capacity during the first Trump administration and gas prices didn’t go up because natural gas production in the U.S. basically scaled with export capacity.
We are going to significantly increase that again. I think we’re basically going to double LNG capacity toward the end of the Trump term. And they are basically assuming that the U.S. will just continue to scale gas extraction capacity at the same time that, presumably, they’re going to expand the power grid’s reliance on natural gas with their power policies. They’re really setting up an environment to be surprised by a natural gas price spike if their supposition is wrong, that the U.S. can’t just expand gas capacity in line with its export capacity.
Jesse Jenkins: Or even if it can expand it, it seems like the market needs higher prices to support that expansion. So maybe we can add enough supply to supply new LNG terminals, but we’ll do so at a higher domestic price because that’s what’s needed to get this production onto the market. Otherwise, it would already be there.
Meyer: And also, globally, natural gas prices are much higher than they are in the U.S. That’s one reason U.S. electricity prices are so cheap. If we build so much LNG that we hook our domestic natural gas market into global LNG markets, then like …
Jenkins: Prices become more volatile.
Meyer: Prices become more volatile, exactly.
Music for Shift Key is by Adam Kromelow.
