Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--A Red Wave engulfed Washington, D.C. on Election Day when voters picked Donald J. Trump as the 47th president of the U.S. and installed a GOP majority in the Senate. Control of the U.S. House of Representatives remained up for grabs on Wednesday, with the Republicans picking up three seats and about 50 races still undecided.
Trump received about 72 million votes to Vice President Kamala Harris' 67 million, with several million votes still left to tally. Trump won after capturing the so-called Blue Wall states of Pennsylvania, Michigan and Wisconsin, as well as other battleground states, including Georgia and North Carolina. The New York developer, TV personality and former president became only the second person in U.S. history to win non-consecutive terms as president, following Grover Cleveland in the late 19th century.
Republicans flipped at least three seats in the Senate, giving them 52 seats and a majority, with several seats still up for grabs. Republican candidates won races in Montana, West Virginia and Ohio. Several other Senate races, including Pennsylvania and Nevada, remained too close to call on Wednesday. The final tally in those and other states could pad the Republican's majority or trim it, but it won't change the fact that the Senate will be led by Republicans next year.
The election season's last remaining mystery is the House of Representatives, where at mid-day Wednesday Republicans led Democrats by a 204-182 split, with about 49 races not yet called. Until Tuesday's elections, Republicans held a slim majority in "the people's house."
Political pundits in and out of Washington will now play the time-honored guessing game of what the next presidency will bring. Who will the president-elect nominate for his Cabinet secretaries? A GOP majority in the Senate is expected to approve Trump's nominees, including Cabinet secretaries and federal judges. It has been rumored that two of the oldest and more conservative justices on the U.S. Supreme Court may choose to retire during a Trump administration, allowing President Trump to replace them with younger, presumably conservative, justices.
The political chattering class also is abuzz over exactly how many energy and environmental campaign promises Trump will try to fulfil. Coal was not a prominent part of Trump's 2024 campaign, unlike his 2016 run, and the domestic market for thermal coal has dwindled sizably since Trump's first presidential run.
Once inaugurated, Trump may need Congressional support if he tries to claw back billions in unspent federal funds in the Inflation Reduction Act (IRA) that were designed to support renewable energy and electric vehicles. The Congressional Review Act (CRA) allows an incoming president to overturn agency rules that were finalized in the last 60 legislative days of the prior administration. But a good bit of President Joe Biden's energy and environmental agenda, including the IRA, were enacted well outside that 60-day window.
Once Trump is in the White House, his agencies presumably will work to scrap rules that were finalized during the Biden administration regulating power plant emissions, vehicle mileage standards and methane emissions from oil and gas facilities, among others. An agency can seek to temporarily stay implementation of a rule that already has been finalized, but overturning a finalized rule would trigger a new administrative procedure that could take years.
To overturn a finalized rule, a Trump agency would have to go back to the drawing board and find a scientific or public health basis that undermines the scientific and public health rationales used to enact the rule in the first place. Then court challenges would almost inevitably follow.
Further complicating any Trump effort to roll back rules on power plant emissions is a U.S. Supreme Court decision in 2007, Massachusetts v. EPA, where the court said that the agency is compelled to regulate those emissions if the agency determines they endanger public health. In 2022, the IRA that passed Congress and signed by Biden contained several affirmative statements that carbon dioxide (CO2) was a pollutant that could be regulated under the federal Clean Air Act. For more on that, see August 24, 2022, article - U.S. Congress Defines CO2 as Pollutant.
The federal judiciary grew more conservative, particularly around environmental matters, under Trump's first administration. And the U.S. Supreme Court has shown itself willing to overturn its own precedents several times in recent years. Reversing its holding in Massachusetts v. EPA could be the first step to unwinding decades of federal environmental law and regulation.
The Supreme Court took a step down that path in its most recent term when it overturned the deference granted to subject-matter experts in regulatory agencies. The high court's ruling in Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., overturned four decades of federal administrative law. The "Chevron deference" was one of the most-cited cases in federal law. For more on that, see July 1, 2024, article - Supreme Court Overturns Chevron Case, Curtailing Power of Administrative Agencies.
On the climate front, Trump can be expected to withdraw the U.S. from the Paris Agreement, as he did when he became president in 2017. It's unclear how the withdrawal of the U.S. from commitments to reduce CO2 emissions would affect the global trajectory of those emissions. Advanced economies like the U.S. and the European Union already have sharply lowered CO2 emissions. Now, the CO2 ball largely is in China's and India's court, as they are the leading national emitters of that greenhouse gas.
Regarding oil and gas drilling, on the campaign trail Trump said "drill, baby, drill" would be one of the elements of his energy policy. He could try to remove regulations the industry chafes under, but U.S. oil and gas production already are at historic highs. Stronger global demand, rather than less-restrictive regulations, appears to be the key to growing U.S. oil and gas production. Weaker-than-expected global demand for oil and gas are the main reason for low commodity prices.
Wall Street certainly welcomed Trump's election: All the major stock market indexes rose sharply Wednesday morning. The financial community has responded favorably to candidate Trump's pledge to continue the tax cuts he enacted in 2017. But there is a fiscal day of reckoning coming, where rising deficits push up interest rates as the U.S. has to increase its borrowing to close the gap between what comes into the federal purse and what goes out of it. An already unbalanced budget may be thrown further off-kilter if the looming funding crises in Social Security, Medicare and Medicaid are not addressed.
Whatever Trump pledged on the campaign trail, a GOP White House and Senate, and possibly a House of Representatives, will have to grapple with one inconvenient truth: Federal funds to support renewable energy, electric vehicles, semiconductor manufacturing and infrastructure improvement create jobs and are popular in Red and Blue districts. If and how those federal financial commitments can be undone will be one of the storylines coming out of Washington in 2025 and beyond.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
