Trump is transforming the GOP's energy policies — and not all conservatives are happy

Yahoo

4 days ago

Republicans spent four years railing against former President Joe Biden's use of Washington's money and regulatory heft to promote wind farms, solar panels and electric cars.
Now President Donald Trump is wielding the same mighty federal arsenal on behalf of oil, natural gas, coal and nuclear power — and his party is cheering along.
The result is that the GOP is embracing the same style of big government intervention in the energy markets for which they slammed Biden's Inflation Reduction Act — mirroring the ways that Trump has reshaped Republican long-standing orthodoxies on matters such as trade and international alliances.
Trump's aims are worlds apart from Biden's, of course: The administration is offering billions in financial support for energy sources long favored by Republicans while rolling back environmental rules that raised costs for the fossil fuel industry. That's a huge contrast from Biden's effort to steer hundreds of billions of dollars to clean-energy manufacturing in an effort to counter climate change.
But it's also a departure from longtime Republican arguments that free-market forces should steer the future of the U.S. energy supply, and that the federal government's job is to get out of the way.
'They're picking winners and losers. No doubt of that,' said Shuting Pomerleau, director of energy and environmental policy at center-right think tank American Action Forum. 'There has been a convergence of both Democrats and Republicans into the industrial policies propping up the industries or technologies they love with the resources and the legal authorities they have.'
One fresh example is a July 7 executive order from Trump that Interior Secretary Doug Burgum cited to impose tight restrictions on wind and solar projects, to the dismay of moderate Senate Republicans. Trump had promised House conservatives that he would crack down on any federal support for clean energy, despite language in the GOP's recently passed megabill easing the phaseout of tax credits.
The Trump administration's actions threaten a massive chill on private investments in wind, solar and battery companies, and run counter to the global markets' growing embrace of clean energy technologies. But the White House says the changes serve major Trump priorities, such as meeting the growing energy demands of artificial intelligence data centers.
'Under President Trump's leadership, America is dedicated to leading every industry, particularly as the global leader in Artificial Intelligence,' White House spokesperson Harrison Fields said in a statement. 'Advancing A.I. requires substantial energy resources, modern infrastructure, and top-tier technological expertise — America is well-prepared to meet these demands and drive progress forward.'
Trump's willingness to use the levers of government to reward his energy allies began on the first day of his second term. His Inauguration Day executive order declaring an energy emergency called for weakening environmental rules and focusing federal resources to expedite energy production. But its definition of energy sources notably excluded solar and wind.
'We're in by far the most politicized environment for energy I've ever seen or I'm aware of in history, absolutely. Very sad,' said Robert McNally, who is president of the consulting firm Rapidan Energy Group and served in former President George W. Bush's White House. 'But why should energy be different? What isn't highly political these days?'
Trump went further on wind with an executive order that threw up new onerous new hurdles to federal projects, such as by blocking new offshore wind lease sales and halting wind permitting. He doubled down on that with an executive order this month attempting to limit solar and wind developers from accessing federal tax credits, and with the Interior directive requiring Burgum's personal review of wind and solar projects.
Other Trump administration actions have overtly benefited fossil fuel sources. Energy Secretary Chris Wright used authorities under the century-old Federal Power Act to keep an aging coal power plant in Michigan running just eight days before it had been slated to go offline. Michigan ratepayers are now paying to keep it afloat — although Michigan Attorney General Dana Nessel filed a motion against DOE's move, saying retiring the plant was part of a plan to save Michigan ratepayers $150 million in capital expenditures.
Wright later used that same authority to force an oil- and gas-fired power plant outside Philadelphia to continue operating.
'We're expecting more than that. That's the tip of the iceberg,' Devin Hartman, director of energy and environment policy with the conservative think tank R Street Institute. 'The case to subsidize those power plants is really flimsy.'
To the Trump administration and its defenders, its actions are a much-needed course correction. They have pointed to warnings from the North American Electric Reliability Corp., a nonprofit that monitors the power grid for potential blackouts, that regional grid operators face higher risk of supply shortages due to coal and natural gas power plant retirements.
Addressing grid reliability is crucial for a Trump economic agenda that places a huge priority on growing artificial intelligence, which forecasters have said will require vast amounts of electricity. Trump administration officials contend that ending renewable power subsidies and reversing Biden's environmental rules will attract more AI investment by preventing retirement of coal and natural gas power plants.
'The need for power is scaling so fast that if President Trump hadn't been elected president, I think we would already be in trouble,' said Carla Sands, vice chair of the center for energy and environment at the Trump-aligned think tank America First Policy Institute. 'The American regulatory environment had become anti-production, anti-energy, anti-business, and this is changing under President Trump's brilliant leadership.'
An energy and AI summit that Sen. David McCormick (R-Pa.) convened last week in Pittsburgh — which included an appearance by Trump — crystallized the emergence of the president's brand of industrial policy. The administration touted $90 billion in announcements for new AI investments from U.S. tech companies, investment houses and the 'hyperscalers' that build the data centers such as Google, CoreWeave, Blackstone and Brookfield Asset Management.
'The AI revolution will change the way the world works, and we cannot lose. The Trump administration will not let us lose,' Commerce Secretary Howard Lutnick said during the event. 'We need to do clean, beautiful coal. We need to do natural gas. We need to embrace nuclear. We need to embrace it all because we have the power to do it — and if we don't do it, we're fools."
But wind, solar and battery storage projects have been the United States' leading source of new power in recent years, while backlogs for new natural gas turbines, yearslong timelines to build nuclear power plants and the remote chances of greenlighting new coal-fired power plants have stunted growth of those sources. Solar, wind and batteries accounted for 93 percent of all new power added to the grid last year, according to the U.S. Energy Information Administration.
People who identify themselves as traditional small government conservatives expressed wariness of some of Trump's moves. They say the party is using the same heavy-handed tactics to reward favorites for which they criticized Democrats. Republicans have even dialed it up a notch, they said.
Republicans have cast aside the all-of-the-above mindset of the pre-Trump era, said Drew Bond, CEO of conservative climate organization C3 Solutions and an Energy Department adviser in the George W. Bush administration. Now, they preach a 'best of the above' mentality that invites subjective choice over the ebbs and flows of a free market, he said.
'You're sort of seeing a bit of an intellectual compromise, if you will, in order to secure more of an agenda focused on abundance and reliability and affordability,' he said.
Trump and his team have not been shy about that, said Tom Pyle, president of the conservative Institute for Energy Research. Pyle said he doesn't necessarily agree with GOP efforts to tip the scales for specific energy sources, and he opposed a lucrative tax subsidy worth tens of millions of dollars that the Republican megabill contained for coal used in steelmaking. With tariffs, a flurry of executive actions and other steps, Pyle said, Trump has gone far beyond even Biden's use of executive authority to forge his industrial policy.
But, on balance, Pyle said Trump's approach to cutting regulations aligns with Republican orthodoxy — and that means he can stomach the rest for that.
'This is a Republican president who has moved the Republican base and changed what it means to be a Republican,' Pyle said. 'Everyone keeps saying, 'Oh, well, when Trump leaves the scene, things will get back to normal. We'll just be like good old Republicans again.' Well, no. If that's the case, say goodbye to the Electoral College map.'