'America First' Energy Plan Challenges Free Market Realities While Barack Obama's energy policy focused on renewable power and climate change, President Trump is focused on extracting fossil fuels. Among big changes, some predict higher prices at the pump.
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'America First' Energy Plan Challenges Free Market Realities

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'America First' Energy Plan Challenges Free Market Realities

'America First' Energy Plan Challenges Free Market Realities

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ROBERT SIEGEL, HOST:

President Trump wants to dramatically change U.S. energy policy. Gone is the focus on climate change and renewables. Now the priority is fossil fuels and the jobs they provide, but as NPR's Jeff Brady explains, that may challenge some free market realities.

JEFF BRADY, BYLINE: Read Donald Trump's America First Energy Plan, and it sounds a lot like his speeches.

(SOUNDBITE OF ARCHIVED RECORDING)

PRESIDENT DONALD TRUMP: We'll unleash the full power of American energy, ending the job-killing restrictions on shale, oil, natural gas and clean, beautiful coal. And we're going to put our coal miners back to work.

BRADY: That kind of talk has the fossil fuel industry and its friends very happy.

TOM PYLE: Well, I certainly see this as a refreshing reset.

BRADY: Tom Pyle is president of the American Energy Alliance. He served as an adviser on the Trump transition team. Pyle says President Obama tipped the scales too far in favor of renewable energy.

PYLE: The previous administration has basically through the regulatory process been hostile to coal, oil, natural gas production in this country.

BRADY: Check out Trump's plan on the White House website, and there are big promises. It says getting rid of things like Obama's Climate Action Plan would boost wages by more than $30 billion over the next seven years. That's based on a report from the Conservative Institute for Energy Research. But that report talks about something completely different. It claims the wage boost would come not from fewer regulations but from more drilling and in places that are now off limits. Still, the president has been busy rolling back Obama's environmental legacy.

(SOUNDBITE OF ARCHIVED RECORDING)

TRUMP: The regulatory process in this country has become a tangled-up mess.

BRADY: Four days after taking the oath of office, Trump directed his administration to speed approval of new oil pipelines, including the Keystone XL and the Dakota Access. Trump also promises to help the beleaguered coal industry. That could be difficult, says Christina Simeone with the Kleinman Center for Energy Policy at the University of Pennsylvania. She says coal-fired power plants around the country are switching to natural gas mostly because it's cheaper.

CHRISTINA SIMEONE: In competitive markets, natural gas is winning. That's why we've seen a decline in coal. It's because natural gas is out-competing coal in a variety of metrics.

BRADY: Simeone says helping coal could hurt natural gas. Trump promises to help them both. To do that, he and congressional leaders are considering something Republicans don't usually support - interfering with market forces.

PHILIP VERLEGER: What we're seeing now is discussion of either import fees or border taxes.

BRADY: Energy economist Philip Verleger says the aim is to protect domestic fossil fuel companies from foreign competition. Remember, it's called the America First Energy Plan. Verleger says it's already having an effect.

VERLEGER: Drilling for oil and gas has picked up remarkably. The pickup is not explained by the current price level but rather by the expectation that any investment made now will be profitable because the administration will protect producers.

BRADY: That protection, the taxes and fees could lead to higher oil prices. That'd be good for U.S. oil companies, but Verleger says it would lead to something a lot of Americans won't like - higher prices at their local gas station. Jeff Brady, NPR News.

(SOUNDBITE OF MARTIN SIMPSON SONG, "THIS WORLD IS A TROUBLE AND A TRIAL")

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