How Trump's Executive Order Can Change American Energy Policy

Yahoo

31-01-2025

One of President Donald Trump's executive orders from his first week in office called for "unleashing American energy" and making significant changes to US energy policy.
The document makes an about-face on many Biden era programs, tries to block the landmark Inflation Reduction Act, and calls for new fossil fuel pipelines, among other things.
"It is a lot of words, it is not very specific in certain areas," said Louise Bedsworth, executive director at the Center for Law, Energy, and the Environment at the University of California Berkeley.
The message shows a marked departure from the renewable energy push of the Biden era. "It's this ping-pong" in policy priorities, Bedsworth said, which can be very destabilizing to an industry.
But what can this executive order actually do, and how will it affect you as a consumer? Here's what the experts say you should be looking out for.
Many, many things. Experts said these elements stand out:
The order aims to "encourage energy exploration and production on Federal lands and waters." Generally, "energy exploration" refers to digging and drilling for fossil fuels.
It rescinds many of President Joe Biden's executive orders related to climate change.
It terminates "all activities, programs, and operations associated with the American Climate Corps."
It aims to make permitting for fossil fuel pipelines faster and easier.
It immediately pauses all federal funds being sent out through the Inflation Reduction Act.
A lot of these measures rely on federal agencies, and in large part the executive order is asking agency heads to come back in 60 or 90 days with an action plan. So it remains to be seen what will actually change within federal agencies, Bedsworth said.
"It's going to be very challenging to track all those pieces and understand, where did we land?" she said.
Executive orders seem like powerful documents, but they do not have the power to change the law; that would require an act of Congress. So here's a breakdown of what the energy executive order can actually accomplish:
Some of these actions also toe the line of executive power, Bedsworth said, which means, "a lot of this, we'll end up seeing in the courts."
"If nothing else, it creates a lot of uncertainty," Bedsworth said.
The Inflation Reduction Act in particular is home to many consumer-level programs, including the EV tax credit as well as home energy credits, which give big discounts on solar panels and heat pumps.
The executive order can pause funds being distributed by the IRA, but cannot permanently block them without an act of Congress. Plus, many of the incentives for consumers are structured as tax incentives through the IRS, not as direct funding from the government, so they are less likely to be impacted.
Even if the funding streams remain in place, however, there will likely be less government outreach and education to help consumers access them. "You're ultimately going to see a cooling, at a minimum, in the messaging," Bedsworth said.
Of course, none of this stops you as the consumer from going out and buying an EV, for example. "The technology is getting better, the cost is going down, so the ability to own an EV is still there," says Elaina Farnsworth, CEO of SkillFusion, which trains workers to build electric infrastructure.
And if you already purchased clean energy technology last year, like solar panels for your home, and are hoping to claim a tax credit during this year's tax season, you should be safe: Experts say it's unlikely Trump would interfere with the IRS in distributing those tax credits for 2024 purchases.