The Trump administration will double down on shale. Skeptical of climate change, dismissive of most environmentalist handwringing, the Trump administration will view energy production as a simple win. Look for concerted efforts by regulators to open the taps on energy. Trump, never blind to the appeal of pork barrel spending, is unlikely to close down the renewable gravy train completely — especially the farm-friendly ethanol racket — but we can expect his administration to do as much as possible to encourage new production, new pipelines and new refineries. Regulations and tax policies are likely to be tweaked in ways that support production.
This works very well for core Trump constituencies. It’s not just that Middle America loves low gas prices; producing and refining more oil and natural gas and building a new infrastructure of pipelines and other facilities to move it across the country will create tens of thousands of high paying blue collar jobs. More, the location of America’s energy resources mean that the states that benefit most from an energy production boom will be Trump states: the Middle West, the Sunbelt and the Rocky Mountain states are where most of the energy potential is.
But there’s more. Trump’s popularity at home is likely to depend in large part on whether he can revive blue collar jobs. An energy boom offers the best prospect for growth in manufacturing jobs. Much of America’s new energy bounty comes in the form of natural gas; this has significant implications for America’s future industrial development. Natural gas can be exported, but it has to be liquified first — and that adds significantly to its cost. American manufacturers in energy intensive industries can expect secure supplies of natural gas at lower costs than their competitors in Europe or Asia will pay. That matters to blue collar workers; the energy rich United States is becoming significantly more attractive as a manufacturing site for large, energy (and job) intensive plants.