Energy Surplus Ahead? Trump to Boost Oil & Gas Production, Halt EV Credits Upon Taking Office, and Tesla Still a Winner
1min read Donald Trump's transition team is preparing an extensive energy package to be unveiled within days of his inauguration, according to Reuters. The package aims to approve export permits for new liquefied natural gas (LNG) projects and increase oil drilling both off the U.S. coast and on federal lands, according to sources familiar with the plans.
The energy agenda closely aligns with Trump's campaign promises, ensuring that oil and gas production will be a central focus alongside immigration in his initial agenda.
Trump also plans to repeal key climate legislation and regulations enacted by his Democratic predecessor. This includes eliminating tax credits for electric vehicles and new clean power plant standards designed to phase out coal and natural gas, the sources said.
In pre-market trading, oil and LNG stocks saw slight increases, with ExxonMobil, Chevron, and Occidental Petroleum (OXY) rising over 0.24%. Traditional auto stocks also gained, with Ford and GM rising 0.8% and 1%, respectively. Notably, Tesla jumped more than 2% before the bell.
An early priority for Trump would be lifting President Joe Biden's election-year pause on new export permits for LNG and swiftly approving pending permits, the sources said. Trump would also expedite drilling permits on federal lands and quickly reopen five-year drilling plans off the U.S. coast to include more lease sales.
Trump would seek to approve the Keystone Pipeline, a project that became an environmental flashpoint and was halted after Biden canceled a key permit on his first day in office. However, any company looking to revive the multibillion-dollar effort to transport Canadian crude oil to the U.S. would need to start from scratch, as easements have been returned to landowners.
The American people can bank on President Trump using his executive power on day one to deliver on the promises he made to them on the campaign trail, said Karoline Leavitt, Trump's transition spokesperson, in a statement.
In addition, many analysts believe that the absence of tax credits for EVs will be a win for Tesla, even if Trump may not support the electric vehicle industry. Dan Ives, an analyst at Wedbush, suggested that Tesla would benefit by enhancing its scalability and market reach. This dynamic could give Tesla a clear competitive advantage in a non-EV subsidy environment, especially with likely higher tariffs on Chinese imports that would deter cheaper Chinese electric vehicles.