Setback for renewables as fossil fuels may make comeback under Trump

Clean Energy initiatives and investment which were promoted by outgoing US President Barack Obama could take a major hit with Republican, Donald Trump, becoming the 45th President of the United States of America. In a report by S&P Global compiling the campaign statements of Trump indicate that fossil fuel would be the focal point of energy regulations and policies of the US hereafter.

"While Trump has given few concrete details about his energy plans, his statements during the campaign indicate he would likely adopt policies that attempt to expand fossil fuel production, ease regulations on industry and roll back President Barack Obama's clean air policies," said the agency in a public statement.

Trump has promised to either dismantle or overhaul the Environmental Protection Agency and roll back Obama administration regulations to curb coal industry pollution. Trump is also expected to try to scrap the Clean Power Plan. He has on several occasions questioned the widely held scientific consensus that human activity is causing climate change.

Trump's possible efforts to end incentives for alternative energy development would boost near-term demand for fossil fuels. For example, a potential cut in the Investment Tax Credit to 10% from the current 30% would slash solar installation demand by 60%, according to S&P Global Market Intelligence.

Trump has promised to open all federal lands and waters to fossil fuel production, in contrast to Hillary Clinton, who had called for new, stricter limits on oil and gas production on public lands and indicated she wanted US offshore production confined to only the Gulf of Mexico.

Analysts say it is impossible to determine just how much of an impact a Trump administration may have on domestic supply because of a number of shifting factors, particularly prices. But Trump, widely seen as a far bigger supporter of the oil and natural gas industry, will likely rebuff any environmentalist attempts to curb domestic fossil fuel production and will likely give US producers access to far more on- and offshore plays than Clinton would have.

Trump would likely quash efforts to institutionalise new greenhouse gas performance standards for petroleum refineries and may push to weaken future fuel economy standards for light-duty vehicles.

"At the same time, oil demand is driven by a country's gross domestic product and will likely be defined by economic factors largely outside the new president's control," said Stewart Glickman, head of energy equity research for S&P Global Market Intelligence. In spite of any policy changes, if GDP goes up, people will likely drive more and demand will increase, he said.