A second Trump administration Part 2: A deep dive into energy and commodities Report

Insight 13 November 2024

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Report summary

The Republican trifecta that emerged in the 2024 US election cycle is set to pivot US energy policy away from net zero. Bit with significant momentum for low-carbon investment following the Inflation Reduction Act (IRA), the impact of the election will vary by sector, commodity and technology. This insight provides deeper dive into how the US energy industry could evolve under a second Trump administration. It covers over 20 technologies, sectors and commodities from across Wood Mackenzie.

Executive summary
Power and renewables
- Power demand: load growth will remain resilient
- US solar: the near-term pipeline is robust and longer dated projects face policy risk
- Offshore wind: deployment risk arises from 2040
- Onshore wind: potential changes to the IRA present downside risk
- Energy storage: exposed to policy changes in the IRA
- Corporate trends: investors will reassess their US wind
- Domestic gas demand: deregulation supports demand growth through 2030
Emerging technologies
- Carbon removal technologies: the 45Q remains safe as other IRA incentives are pressured
- Low-carbon hydrogen: near term momentum slows until 45V guidance emerges
- Nuclear Small Modular Reactors (SMRs): policy and market support to continue
Commodities
- Liquefied Natural Gas (LNG): permitting reform is a good first step to boosting new US LNG supplies
- Oil markets: slower economic growth drives oil global demand and prices lower
- L48 upstream: activity shifts on the margin while net zero goals remain
- US refining: trade tensions benefit traditional refiners while renewable fuels lose steam
- US chemicals: feedstock advantages and potential tariff protections boost competitiveness. Retaliatory trade risk rises.
- Coal: short-term demand uplift but no return to the halcyon days of the past
- Metals: US tariff policies risk pushing metals prices higher
Trade, carbon, and methane
- Trade tariffs: the world should brace itself for more protectionism
- Carbon: state-level compliance markets remain
- Methane regulations: the mandate from the Environmental Protection Agency (EPA) will be challenged
- Environmental Social and Governance (ESG): investors will continue to push for disclosures