Whilst most of the world is beginning a transition away from fossil fuels to renewable sources of energy, the USA, under Trump’s stewardship, is on an entirely different path. Trump has already reopened a number of coal mines and in an announcement recently he expressed his desire to reopen much of the US coastline to exploring and drilling for oil. That announcement included the Arctic waters around Alaska, but not the more tropical waters around Florida. Somewhere that just happens to have a coastal Trump property…
Throughout his presidency, Trump has shown very little care for the environment. Economic growth has been prioritised over environmental protection and social development. Whilst the stock market has grown to record levels since Trump became president, the damage he is doing environmentally and socially is catching up with him and will continue to do so.
Why Will Trump Fail In His Push For Fossil Fuels?
There are a number of reasons why Trump will fail in his attempts to push for increasing oil production. The cost of producing energy from fossil fuels is becoming increasingly expensive for a number of reasons. Alongside that, the rapid fall in the price of energy production from renewable resources is now making it cheaper than using fossil fuels, and that fall in price shows no sign in reducing (the cost of solar dropped 25% in 2017 alone). Trump’s exclusion of waters around Florida, according to Sierra Club, is most likely illegal, and a number of legal challenges are expected from many other coastal states that do not want oil being drilled off their coastlines.
Falling Cost of Renewables
About a year ago, a report by the World Economic Forum found that developing new renewable power capacity is cheaper than developing new fossil fuel capacity. This tipping point means that it is much more cost-effective for businesses to invest in renewable energy.
Combine the falling cost of renewables with the rising cost of oil clearly shows the direction that global energy supply is heading. In the UK, the cost of oil and petrol is subsidised by the Government, keeping it competitive with falling costs of renewables that are rarely subsidised. Without that subsidy, renewables would look even more attractive.
Trump may have pulled the USA out of the Paris Agreement, but the rest of the world is still committed to limiting warming to 2℃. Data from ‘Carbon Tracker’ suggests that if some of the major fossil fuel companies continue to invest in ‘unneeded’ projects, they could collectively lose trillions of US dollars which would have a devastating impact on the US, and global, economy. Those that are smarter are beginning to invest in renewable energy projects.
Under Trump’s plans, oil drilling could take place off the coast of every coastal state in the US. The reason originally given was was due to Florida’s reliance on tourism for its local economy, but what separates Florida from, say, California?
Short Answer: Mar-a-Lago and a possible future Republican Senator.
Given the number of visits Trump has made to his Florida property, the last thing he’d want is a number of oil rigs drilling for oil off its coastlines. The value of the property would dramatically reduce the risk of oil spills that come with ocean drilling. Trump just wants to make money during his presidency, not lose it.
Also, after the initial announcement that didn’t exempt any State, Ryan Zinke, Trump’s Interior Secretary, met with Republican Senator-hopeful Rick Scott. It was after this meeting that the U-turn on Florida was made. Scott plans to challenge the current Democrat Senator of Florida in 2018 and many believe that this was nothing more than a publicity stunt to boost his chances of a successful campaign.
Whatever Trump’s reasoning though, there are a number of legal challenges being readied to stop any chance of offshore drilling happening in a number of states and it could be very costly for the President should any of them succeed.
As a man who prides himself on being a very good businessman, ignoring the developing changes in the cost of renewables against fossil fuels and the cost of developing new projects is an argument to the contrary. The economic cost of continuing to prop-up a loss-making industry and limit investment in renewable technology will backfire, and Trump’s aim of helping his friends in the oil and gas industry will end up costing the US taxpayer billions of dollars.