In­ad­e­quacy of Trump’s en­ergy strat­egy for US ex­posed by trop­i­cal storm Har­vey

Global Times - - Biz Comment - The au­thor is Lau­ren Silva Laughlin, a Reuters Break­ingviews colum­nist. The ar­ti­cle was first pub­lished on Reuters Break­ingviews. bi­zopin­ion@ glob­al­times. com. cn

Trop­i­cal Storm Har­vey is ex­pos­ing flaws in Donald Trump’s en­ergy poli­cies. The president wants to make the US a dom­i­nant fuel ex­porter by pro­mot­ing coal and open­ing up fed­eral lands for oil drilling. But the del­uge in Texas has dis­rupted 16 per­cent of the na­tion’s re­fin­ing ca­pac­ity, ac­cord­ing to Gold­man Sachs research. Tack­ling cli­mate change and hard­en­ing en­ergy in­fra­struc­ture should take pri­or­ity over Trump’s pet projects.

In June, the president set out a goal of boost­ing do­mes­tic pro­duc­tion and end­ing US de­pen­dence on for­eign oil. He cam­paigned on a prom­ise of re­viv­ing the coal in­dus­try, and in April he signed an ex­ec­u­tive or­der to ex­pand drilling off the US’ coasts. In May he pro­posed sell- ing nearly half the US Strate­gic Pe­tro­leum Re­serve, a stock­pile set up in the wake of the 1973- 74 Arab oil em­bargo. Yet oil and gas are plen­ti­ful today thanks in large part to the US rev­o­lu­tion in hy­draulic frac­tur­ing. Those sup­plies do lit­tle good, though, if the in­fra­struc­ture that turns them into fuel isn’t work­ing.

Texas has the na­tion’s largest con­cen­tra­tion of re­finer­ies, and al­though early re­ports sug­gest most fa­cil­ity clo­sures were pre­ven­ta­tive, it’s too early to as­sess any dam­age. The Na­tional Weather Ser­vice projects the storm will linger over the Texas and Louisiana coasts through Fri­day, drop­ping as much as 50 inches of rain in places. Research from Tu­dor Pick­er­ing Holt es­ti­mates up to 30 per­cent of the na­tion’s re­fin­ery ca­pac­ity could be tem­po­rar­ily shut­tered in a worst- case sce­nario.

Re­fin­ing ca­pa­bil­i­ties else­where could take up the slack if trans­porta­tion wasn’t an is­sue. But roads are flooded and pipe­line ca­pac­ity in the re­gion was just build­ing up to meet de­mand. Crude may be stuck in Texas for a cou­ple of weeks, which ex­plains why West Texas In­ter­me­di­ate prices dropped on Mon­day while gaso­line prices spiked 7 per­cent in early trad­ing be­fore par­ing gains. In­vestors are bet­ting that prob­lems will show up at the gas pump, not at the oil well.

As a re­sult of cli­mate change, rain­fall in Texas is in­creas­ing and storms are be­com­ing more in­tense while the sea level is ris­ing by al­most two inches a decade along the state’s Gulf coast, ac­cord­ing to the En­vi­ron­men­tal Pro­tec­tion Agency. Ad­dress­ing that threat, and the vul­ner­a­bil­ity of Texas’s re­fin­ing and trans­porta­tion in­fra­struc­ture, would be a bet­ter way to en­sure the na­tion’s en­ergy se­cu­rity.

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