SOMERSET, KY — Rex Tillerson, the chairman of ExxonMobil, asked by president-elect Donald Trump to serve as secretary of state. Scott Pruitt, the climate-denying, energy-financed attorney general of Oklahoma, nominated for EPA administrator. Rick Perry, former governor of Texas and a board member of Energy Transfer Partners (developer of the Dakota Access Pipeline), nominated to oversee the Energy Department.
The intent in Trump’s brotherhood of black fuels is clear enough — stabilize erratic global markets, push energy prices up, recover assets that were on the way to being stranded, and cash flow again on producing expensive oil, coal, and natural gas.
Ample fossil energy supplies and favorable prices serve as the two central themes of Trump’s pledge to “Make America Great Again.” In service to that goal Trump invited Vladimir Putin, the Russian president, to sit as a sort of cabinet member ex-officio. The Koch brothers, along with the executives of most every other American fossil energy company, cheer from the bench.
Americans of clear mind and useful values are demonstrably nervous. The White House and the executive offices of the world’s fossil fuel companies are powerful forums to exert influence. Can Trump and his fossil fuel allies succeed? Of course they can. I do not, however, believe they will.
I’ve reported extensively since visiting the Indian Himalayas in 2013 on the more powerful global trends that not only are impeding conventional energy development, they have initiated a sweeping transition in production practices, technology, and use. Coal production and consumption is falling in China. The Philippines is closing damaging mines. Civic rebellion is blocking new coal-fired power plants in Bangladesh, and impeding development of oil and natural gas pipelines in the United States.
Solar and wind generating technology is now cheaper than new coal-fired power generation and comparable in cost to natural gas-fueled generation. India is abandoning its mega power program to build mammoth 4,000-megawatt coal-fired power plants. Instead it is pursuing new solar and wind generating installations. South Africa has developed one of the world’s successful clean energy development programs.
Floods, droughts, earthquakes, and fire are causing havoc in the world’s fossil energy regions. And the costs of developing all of the fossil fuels is rising as prices for alternatives drop.
It is these trends that are stranding billions of dollars of resource assets around the world and causing a growing panic in the halls of government, boardrooms, and executive suites. And none are likely to be slowed.
This year, during seven weeks of reporting in South Africa, I learned about another new and powerful trend that is reshaping markets around the world — the pressure that communities and a select group of investigative groups are putting on the world’s big banks to change their lending practices.
The headwinds of transition are whipping through the energy sector. The Trump administration’s effort to stabilize oil prices confronts the elements of the rugged weather — erratic markets, new transportation and efficiency technology, and rapidly rising production costs. He may try to suspend NEPA requirements on big projects. He also could try to withdraw non-profit status from important NGOs, a tactic developed in other nations. But the American president-elect and his allies face powerful civic opposition around the world and in the red rural counties that voted for him. Here in Kentucky, I wrote about a big fight over a natural gas pipeline.
Activists and journalists will have their hands full. All of us could use more help in penetrating the lending world. If you know of folks that have expertise in big infrastructure project financing please let me know. My sense is that following the money in the U.S. and internationally is a seminal piece for safeguarding the future.
Here are the other Circle of Blue posts on finance this year:
Just like the powerful changes in climate that disrupt mines and power plants, the pressure on banking institutions is another of the unambiguous and promising developments to reduce ecological stress around the world. Lending practices for mammoth water-consuming and water-polluting infrastructure projects in energy, mining, and agriculture are scrutinized as never before. In a growing number of cases big investments have been withdrawn from damaging projects. President-elect Trump wants to “Make America Great Again.” He won’t get close with his dangerous and obsolete fossil energy strategy.
— Keith Schneider