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Trump victory upends US energy, climate policy

09 Nov 2016 07:17 GMT
Trump victory upends US energy, climate policy

Washington, 9 November (Argus) — Donald Trump's apparent victory in the US presidential election will alter the trajectory of US energy and climate policy.

Trump, who is poised to best former US secretary of state Hillary Clinton to win the White House, has vowed to uproot the legacy President Barack Obama has spent nearly eight years assembling.

Trump has promised to gut the Clean Power Plan for reducing CO2 emissions from power generation, Obama's signature effort to address climate change. And he has vowed to pull the US out of the Paris agreement to cut greenhouse gases.

Trump's victory also could add new uncertainty to global oil markets. He has insisted he will tear up the nuclear agreement with Iran and has raised questions about the US commitment to provide military protection for Saudi Arabia.

Clinton did not immediately concede the race early today, but she appears to have no realistic electoral path to victory.

Republicans also retained control of the US Senate and US House of Representatives, setting up the potential for a surge of legislative action on energy and environmental issues. Trump will also make a nomination to fill the seat on the US Supreme Court left vacant after the death of the late justice Antonin Scalia.

Clinton had laid out a strategy that would have continued Obama's efforts to wean the US off its dependence on fossil fuels.

Trump plans to roll back federal regulations on energy producers and create what he calls an "America first" energy policy.

He wants to open large amounts of federal land to oil and gas development and coal mining. He wants to revamp a permitting process he says has become a "disaster" for energy infrastructure and promises to lift Obama's moratorium on leasing additional public land to coal mining.

Even with his industry-friendly campaign proposals, Trump has been somewhat of a wildcard for the energy sector. He said he would approve the 830,000 b/d Keystone XL crude pipeline but says the US should get a "significant piece of the profits" from the project.

Trump also has promised to dismantle the Dodd-Frank financial overhaul.

The US coal industry has viewed a Trump presidency as a reprieve from years of increasing regulation under Obama. But the coal industry also has suffered from intense competition from natural gas. And Trump promises to support continued shale exploration, as the US is poised to emerge as a net exporter in 2017.

Internationally, the US election results poses questions about the US role in the Middle East, Europe and Asia-Pacific.

But Trump's victory raises questions about international trade flows because of his strong anti-trade stance. The Trans-Pacific Partnership is an immediate casualty, giving an opening to China to pursue its own region-wide free trade agreement in the Asia-Pacific region.

Trump has promised to take a strong stance against perceived trade manipulation by China. But he also has suggested pressuring Japan and other US allies in the Asia-Pacific to pay for the continued US military support, an obligation that may force those countries closer to Beijing's orbit.

Russia and its President Vladimir Putin may view the election as a major geopolitical boon as Trump alone among the US politicians promised improved relations with Moscow, including closer cooperation to combat extremist group Isis in Syria. But Trump's views of the Middle East and Muslims may complicate US efforts to displace Isis from northern Iraq and Syria, since they depend on the cooperation of local security forces.

Ukraine could lose an important ally in Washington, and EU and Nato members will face calls for picking up a larger share of military alliance roles that also could force them toward a greater accommodation with Moscow. The Transatlantic Trade and Investment partnership free trade deal between the EU and US could also be complicated by Trump's win.

And US-Mexico relations could take an immediate hit, with the Mexican peso tanking in after-hours foreign exchange markets.