This analysis was written as part of a larger research work on potential energy policies of the Trump Administration. Find the full white paper here: Energy Policies Under the Trump Administration
The prodigious development of natural gas during the years of the Obama administration had major ramifications for the domestic energy industry and contributed to the United States’ ascendency as a major international energy supplier. It remains to be seen what effect President Trump’s vastly differing policies and ardent commitment to U.S. energy independence will have on this expanding, lucrative and sometimes controversial resource.
Natural Gas Use and Reserves
Natural gas contributed approximately 30 percent of the electricity used in the U.S. in 2015. Today, natural gas is mostly used for heat and electricity in the U.S., but it is also used for various other purposes in the industrial and commercial sectors, and its applications have been increasing because of its domestic abundance. In the 1990s, the invention of hydraulic fracturing led to the first boom in natural gas production, and since the advent of horizontal drilling it has had a mostly positive trajectory since then.
Over the next two years, the generating capacity of natural gas has been projected to increase by 8 percent, or 36.6 gigawatts. Proven reserves at year-end 2015 were 324 Tcf (trillion cubic feet), and that year 27.31 Tcf was consumed domestically. This consumption reflects the 19 percent increase in natural gas-fired power generation that year.
Following a brief production decline in 2016, 2017 projections for dry natural gas production predict an increase of 0.8 Bcf/d (billion cubic feet per day) to reach a high of 73.1 Bcf/d. In 2018 it is projected to be a staggering 4.0 Bcf/d above the 2017 level. These increases reflect the ease of extraction facilitated by the fracking boom, but also the energy agenda and the projected energy policy implementations of the Trump administration.
President Trump’s Plans for the Natural Gas Industry
President Trump’s campaign promises must inform much of the analysis on this topic because of the short duration of his time in office and his prioritization of other domestic issues.
During his campaign, he advocated for:
- returning to coal technology for power generation, potentially at the expense of natural gas;
- increasing natural gas exports, particularly to Asia and Europe;
- correspondingly increasing the number of natural gas export terminals;
- heavily deregulating the fossil fuel industries;
- and pushing forward with both major pipelines, and natural gas development on federal lands.
Many of these promises have not been a priority of the administration thus far, but some have begun to see realization. President Trump has already signed specific legislation to bring about fossil fuel deregulation and renewed pipeline development. While many current development projects for natural gas-fired power plants had been underway long before the election, the Trump administration has recently made public several natural gas development or export projects. A source in the White House relayed that work is being done on a significant export deal of liquified natural gas (LNG) to India, which would involve Indian investment in US export facilities.
Natural Gas Versus Coal
Coal received a significant amount of focus during the Trump campaign, which won votes from the impoverished coal-mining Appalachian region. Natural gas has long been a contributor to coal’s decline in the American energy mix. The huge increase in proven natural gas reserves and the spread of fracking in the past few years has accelerated coal’s downward trajectory even more.
Compared to coal, natural gas-fired power plants are cheaper to build and operate, they satisfy environmental regulations, have an average lifespan of thirty years, and they are just as reliable as coal-operated ones while being far more flexible and easily tailorable to surges or falls in demand. While there have been debatable advances in clean coal technology, natural gas is still a far cleaner energy source, with half the CO2 emissions of coal. While coal-driven states badly need employment initiatives, there are other options besides coal, and for the health of the American public and environment, they must be taken seriously.
President Trump’s plans to advance legislation to aid in coal extraction will likely draw resources away from far cleaner energy sources, such as solar and wind power, but it could also potentially have a negative impact on natural gas. Natural gas development has been voracious in many staunchly pro-Trump areas that are also shale-rich, like Texas, Florida and portions of West Virginia, Pennsylvania and Ohio. Texas in particular produces more natural gas than any state. These states have invested considerable time and resources in natural gas infrastructure and many new gas-powered plants are being constructed in these areas that will increase capacity even further.
Any deprioritization of natural gas because of efforts to bolster up the failing coal industry, or mishandling of the domestic or international economic strategy for natural gas by the Trump administration could have serious impacts on his support base. The outcry from this population that would likely result from any of these scenarios may further widen the gap between the President’s campaign rhetoric and actual policy implementation. However, the reverse is also true: his support from Appalachia would likely significantly decrease if he withdrew his support from coal. This is one situation where he cannot please all of his constituents. Given the projected demand for natural gas in the world market and the percentage of Americans who support it over coal, it makes far more sense economically for President Trump to read the writing on the wall about the coal industry.
Natural Gas and Clean Power
The switch to natural gas from coal has most likely been the single largest contributor to reductions in CO2 emissions by the U.S. Natural gas was a cornerstone of the Obama administration’s efforts towards switching to cleaner power. Compared to nuclear power, natural gas is less expensive, contentious, and potentially destructive. It also more closely models coal’s baseload and reliability than renewables. Relative to other fossil fuels, natural gas has a higher energy content, which is why it has a lower CO2 to energy ratio.
However, while natural gas is a far cleaner option than coal and has many advantages over cleaner renewable technologies, it is still a fossil fuel, and President Trump’s deregulatory policies will remove many of the emissions guidelines that helped to mitigate that fact.
Natural gas consists mostly of methane, along with small amounts of hydrocarbon gas liquids and non hydrocarbon gases. While it is usually refined before being utilized, when natural gas is burned for power it releases CO2. In addition, any leaks from pipelines, plants, or fracking release these gases into the atmosphere, which also contribute to the greenhouse gas effect. The Environmental Defense Fund estimates that 25 percent of anthropogenic global warming can be attributed to methane emissions.
President Trump has expressed skepticism about the fact of climate change multiple times throughout his campaign and presidency. This has corresponded with a deprioritization of renewable energy sources, which will be discussed in further detail later in this report. Natural gas will likely pick up part of the generating capacity previously expected to be satisfied by renewables. Because of President Trump’s stance on climate change, part of the deregulation of natural gas will include withdrawing emissions standards for all power plants, including natural gas-fired ones. This will substantially worsen the environmental impact of using natural gas.
Hydraulic fracturing, or fracking, will also see less scrutiny and regulation under the Trump administration, and be deployed in more areas. This process has been a key contributor to the boom in natural gas, but it has also been proven to contaminate groundwater. Fracking has also been linked to earthquakes in Texas and Oklahoma because of the underground disposal of wastewater from the process. President Trump also plans to withdraw Obama-era guidelines for curbing the enormous methane emissions from natural gas wells, which may speed extraction and lessen costs for natural gas companies, but at the cost of environmental, climate, and air safety degradations.
Energy Security and Over-reliance
A significant portion of President Trump’s energy policies and energy security strategy relates to his interrelated goals of American energy independence and an end to the trade deficit, which has been labeled a national security risk by his administration. Natural gas plays heavily into both of these objectives.
Along with advances in the development of other natural resources, the current status of the natural gas industry means that the Trump administration’s plan to become energy independent, while of questionable judgement, is theoretically possible. However, the resources through which the U.S. may become energy independent must be strategically diversified, and there is a risk of domestic over-reliance on natural gas. The Trump Administration has not had a favorable stance toward renewable energy sources, so natural gas may be saddled with a significant portion of the lost capacity, especially if President Trump changes his stance toward reviving coal. As an example, since the closure of the Vermont Yankee Nuclear Plant in 2016, New England has become extremely dependent on natural gas, and it lacks the support systems and proper infrastructure to function effectively with it, or, more importantly, without it.
As the European Union has born witness to in recent years, an over-reliance on natural gas has drawbacks because of two distinct forms of energy security. Both relate to the ability of a state to reliably meet its energy needs, but one relates to excessive dependence on a foreign power, and the other on effectively evaluating and countering the unique challenges and context of a given resource. Because of fracking and continued development, and the deregulation that the natural gas industry will see under President Trump, this fuel source will continue to be abundant, effective, relatively clean and inexpensive. The U.S. will not find itself in a position where its energy security with regard to natural gas is threatened by a monopoly of the market by another state, as has happened in Europe and may well happen in Asia.
As natural gas becomes more widespread, the issues inherent to its use will become more prevalent as well. Natural gas requires significant infrastructure and pipelines which are often extremely contentious and unpopular. As climate change worsens and the weather becomes commensurately more extreme, there may be significant spikes in usage of natural gas specifically for heat at unexpected times, drawing huge amounts of energy away from power plants and vital electricity generation.
The Trump administration has no plans to rely exclusively on natural gas for the nation’s energy mix, but his deregulatory policies may make gas so cheap that it happens anyway to some extent. There is also a risk that an overdevelopment of natural gas will flood the international market and crash the price of natural gas, to the disadvantage of the U.S. and several other major exporters. Former President Obama went out of his way to ensure a deliberate variety of energy sources, including renewables. Natural gas use and development under the Trump administration requires careful, strategic monitoring and management to ensure that the energy security of the U.S. is not jeopardized.
The Potential of Natural Gas
Natural gas offers a unique compromise to the Trump administration. Its continued development ties strongly to the president’s corporate interests, creates jobs and economic opportunities, and confirms his commitment to fossil fuels. He can distinguish himself from the Obama administration enough to please his supporters, but natural gas is the cleanest of the fossil fuels.
While President Trump is not against natural gas, he must come to terms with the fact that its increased use at the same time as coal’s attempted revival is not compatible, or advisable. A strategic, renewed commitment to safely deploying natural gas instead of coal has to potential to gain the president support and legitimacy from the opposition, as well as from the international, scientific and environmental communities.