Sputnik News Service
US President-elect Donald Trump's promises to revive the United States' energy industry will not drastically affect the global energy market in the short term, even if they become reality, experts told RIA Novosti.
Trump's energy program, as outlined on his website, emphasized approving the controversial Keystone oil pipeline rejected by President Barack Obama, lifting moratorium on energy output and relaxing the regulations on new drilling technologies and saving coal industry.
While Trump promised to bring back many jobs for miners, this promise might be hard to fulfill, as coal costs more than other types of fuel.
“The economy itself speaks for the fact that, if gas costs less than $150 for 1,000 cubic meters [approximately 35,000 cubic feet], it will compete with the US coal,” Valery Nesterov, an analyst with Russia-based investment banking company Sberbank CIB, said.
The analyst added that the US coal-based power stations were out-of-date, but the construction of new ones would be inefficient. According to Nesterov, Trump's plans for coal industry might change after a closer look at the problems the sector is facing.
What worked well as a campaign slogan might not translate easily into an actual policy, experts believe.
“Trump used the popular slogans, like 'let's create oil industry jobs.' I think, this could be part of a presidential campaign. When [Trump] delves into the details, his plans might change,” Nesterov told RIA Novosti.
According to the expert, the United States is on the right track to reach energy independence since the net imports of oil and oil products has seen an 8.8-percent annual decrease since Obama first took office in 2008. “There is no need for Trump to revolutionize the US oil and gas industry … The legislation that regulates oil and gas industry in the United States ensures adequate output,” Nesterov said.
Influence on Global Market
The situation on the global oil market remains volatile despite recent upsurge in prices linked to the hopes for an oil output freeze deal that the Organization of the Petroleum Exporting Countries (OPEC) member states are supposed to finalize on November 30.
“If the oil prices show stable growth, Trump's decision could in the long term lead to the higher supply on the market, constraining it,” Bogdan Zvarich, an analyst at Moscow-based investment company Finam, told RIA Novosti.
Zvarich noted, however, that many companies were not ready to increase investments, especially into new oil or gas deposits, given the current situation on the market.
The expert concluded that Trump's reforms would have minimal influence on the global energy sphere.
Independent expert Dmitry Tratas also expressed doubt that Trump's pledge to do away with the regulations on oil production, particularly oil fields in the shelf, would have any significant impact on the market.
“These proclamations will only influence the market if they grow into a tangible program … It will take a lot of time to make this reality and start producing that oil [from shelf fields],” Tratas said.
The expert added that lifting the restriction was not enough to galvanize the production, rebuilding or renovating the infrastructure would play an important role.
Tratas conceded that the measures geared toward creating more jobs had a healthy chance of being supported by the Congress despite any obstruction from the environmentalists, but in the short term, the market was more likely to be swayed by the outcome of the OPEC summit than any decisions by the new US administration.