Whiplash
Trump has issued a barrage of executive orders. What are the realistic expectations for the energy industry?
“I put a dollar in one of those change machines. Nothing changed.” — George Carlin
Ten days ago, in a piece titled “The Bitter End,” we lamented how the person(s) controlling the Biden administration had the president sign an order effectively banning new offshore oil and gas drilling on vast swaths of territory with the stroke of a pen. (Based on a jaw-dropping interview with US House Speaker Mike Johnson published by The Free Press shortly after our article ran, it is fair to question whether President Biden even knew what he was signing.) The legal basis for the order rested on section 12(a) of the Outer Continental Shelf Lands Act (OCSLA) of 1953, twenty-four words of which were stretched beyond all plausible congressional intent. We closed our missive on an ideological note:
“While those on the left typically support executive action to achieve their objectives by dictate, we close by reminding them that Trump now has four years to comb through the dizzying array of federal statutes to reciprocate to the fullest extent. Unmoored by the need to stand for reelection and schooled by his tumultuous first term, we suspect he will be far more effective in this regard than many are anticipating. While we might find ourselves in agreement with some of Trump’s moves—especially regarding energy policy—we find the entire breakdown in constitutional norms despicable.”
For the struggling wind sector, life comes at you fast. Among the avalanche of executive orders signed by President Trump during his historic first hours back in office was one titled Temporary Withdrawal of All Areas on the Outer Continental Shelf from Offshore Wind Leasing and Review of the Federal Government’s Leasing and Permitting Practices for Wind Projects. See if you spot anything familiar:
“Under the authority granted to me in section 12(a) of the Outer Continental Shelf Lands Act, 43 U.S.C. 1341(a), I hereby withdraw from disposition for wind energy leasing all areas within the Offshore Continental Shelf (OCS) as defined in section 2 of the Outer Continental Shelf Lands Act, 43 U.S.C. 1331. This withdrawal shall go into effect beginning on January 21, 2025, and shall remain in effect until this Presidential Memorandum is revoked…
This withdrawal temporarily prevents consideration of any area in the OCS for any new or renewed wind energy leasing for the purposes of generation of electricity or any other such use derived from the use of wind. This withdrawal does not apply to leasing related to any other purposes such as, but not limited to, oil, gas, minerals, and environmental conservation.”
To be clear, Trump is merely and predictably walking through a door blown wide open by his predecessors, and the same legal barriers that were used to stop him from rescinding former President Obama’s drilling bans during his first term will undoubtedly serve to insulate this blow to the wind sector from judicial reprieve. The progressive environmental left won’t be spinning any new turbines in coastal waters for at least the next four years, if ever. Companies that probably should have never existed but were nonetheless spooled up by the whims of one president have been crushed by those of another, which is probably not the best way to run a country, but this is the reality of the moment.
Ends and means aside, it is undeniable that this is how the country is going to be run for the foreseeable future, and as the mountain of folders on the Resolute desk suggested, there is much to unpack. While the broad strokes of what Trump signed have been widely covered, there is one order that we’ll be watching to determine whether this will deliver meaningful change. Reopening the battle over the state of Alaska’s vast and critically important resources, President Trump signed an order titled Unleashing Alaska’s Extraordinary Resource Potential. Embedded within it is yet another attempt to get a notorious 50-year-old project over the finish line. Whether it actually gets done will be a powerful litmus test.