Are lower gasoline prices a good thing or a bad thing? It depends on whom you ask. With US President-elect Donald Trump to take office on Jan 20, some Canadian experts have expressed concerns about the future of US energy policy.
During his campaign, Trump talked about his commitment to boosting US domestic oil and gas production.
The American Petroleum Institute released a new policy road map for the incoming administration and next the Congress on Nov 12.
It includes restarting permitting for liquid natural gas exports, opening up more land for drilling for oil, and repealing or relaxing environmental regulations.
“We should expect expanded US production to reduce oil and gas prices globally,” Ross McKitrick, professor of economics at the University of Guelph, told China Daily.
“Lower prices could benefit consumers but might also discourage investments in renewable energy; carbon dioxide emissions are likely to grow unless natural gas displaces coal use in some regions,” he added.
On the regulatory front, McKitrick sees potential risks for Canada if the US focuses on developing oil and gas at the expense of climate policies.
“If US trading partners like Canada impose stricter greenhouse gas regulations, we would risk losing competitiveness in trade,” he said.
He emphasized the need for policy reforms, saying, “Canada’s Emission Reduction Plan is too costly and restrictive. We need bold leadership to balance economic interests with sustainability goals.
“If Trump succeeds in getting oil and gas prices down, it will undermine the economics of wind and solar energy,” he added.
McKitrick also noted that many countries would keep subsidizing green energy, yet this shift by the US might slow down global progress.
From an international perspective, McKitrick said: “If the US pulls out of the Paris Agreement, … It would serve to undermine global climate action and perhaps embolden other countries to ease up on their commitments. The EU may slow its embrace of green energy, partly due to the high costs of wind and solar, and this trend could accelerate with US policy changes.”
Warren Mabee, director of the School of Policy Studies at Queen’s University, focused on the broader market dynamics.
“A decline in international pricing for oil and gas products could make it more difficult for renewables to be adopted. Similarly, reduced US funding for renewable technology might stall global progress,” Mabee told China Daily.
He noted the potential for innovation in bioenergy and clean technology. “Diversifying our energy mix and expanding international trade partnerships could increase our innovation potential,” he said, citing bioenergy as one such promising field.
Mabee said that US energy policy might reshape global trade dynamics. “By ramping up domestic production, the US may decrease its reliance on international markets and, in turn, diminish the bargaining power of energy-exporting countries,” he said.
That could influence other countries to recast their respective energy policies, thus slowing the pace of the spread of renewable technologies worldwide.
“North America’s energy market is undergoing major reorganization; we need a better read on where our resources can be best invested,” he noted.
“It means thinking carefully about how we invest in new technologies and making sure our policy landscape is designed to support these investments to deliver maximum benefit,” he said.
gaoyang@chinadailyusa.com