As President Donald Trump embarks on his second term in the White House, he has not been shy about his plans for the energy industry. He made clear his concerns regarding outgoing President Biden’s Inflation Reduction Act, which included tax subsidies for green energy initiatives. Trump’s position on these energy projects, such as offshore wind, has the budding industry collectively holding its breath – and its investments.
The incoming Administration’s vow to cancel offshore wind follows a weary back-and-forth pattern that has crept up in recent years between presidential terms. Biden set the mold during his tenure by temporarily suspending new liquefied natural gas (LNG) export projects around this time last year, introducing uncertainty into the industry. Filling the mold again by taking action against offshore wind appears reactionary instead of contemplative.
Perhaps, though, there should be a pause in any kneejerk reaction. Placing moratoriums, suspensions, or cancellations without convincing cause or reason are exactly the actions the current Administration has implemented. Policymakers should not continually repeat this behavior without first conducting careful examination and analysis that substantiate decisions.
The pattern of policy reversals between administrations pokes holes in an industry that needs stability to meet its goals, and it adds capital risks and costs for investors. Providing American consumers with affordable, reliable energy sources, ensuring domestic energy security, and reinforcing national security far outweigh partisanship and political agendas. We need to support all forms of energy – fossil fuel, nuclear, and green alike.
An inescapable fact is that demand for electricity is rising at an exponential rate. Technological innovations like data centers powering artificial intelligence require power levels at an unprecedented scale. Beyond new technology, Americans continue to need more and more energy for their everyday lives. Demand will continue to rise, and we cannot afford for the U.S. grid to remain stagnant. That means more energy needs to be added to the mix.
To meet these demands effectively, it is necessary to depoliticize the energy sector and let market forces guide innovation and production. We need to put all options on the table and allow consumers to choose their preferred energy sources based on price or preference.
The reality is that all forms of energy have risks and benefits. A cost-benefit analysis should be conducted to weigh the advantages against monetary and environmental expenses. Are we harnessing sufficient energy to substantiate their production and implementation? Are there other energy options that would be more prudent? Such decisions should be based on complete and thorough analyses rather than a pen stroke.
Over the past decade, policymakers have had their hands too entrenched in the energy industry, subsidizing their chosen winners while blocking those they deem losers. Political agendas have created a “one step forward, two steps back” dance that is not conducive to attracting investment needed to meet growing energy demands.
By reducing governmental interference, ending subsidies, and fostering a competitive market landscape with all energy sources, we can ensure that consumers benefit from diverse choices and lower costs. This approach supports business growth while aligning with national interests in achieving sustainable energy independence. As leadership in DC navigates this complex landscape, prioritizing market-driven solutions over political agendas will be key to meeting future energy needs.
In summary, thoughtful examination ought to precede executive action. The new Administration can differentiate itself from the current one by being more deliberate and gathering facts and relevant data before making determinations. Delay the executive order until a sufficient review has been conducted.
Steve Pociask is with the American Consumer Institute, a nonprofit education and research organization. For more information about the Institute, visit www.TheAmericanConsumer.Org or follow us on Twitter (X) @ConsumerPal.