New direction in energy policies
Traditional energy production over renewables
President-elect Trump has stated his intention to reverse many climate efforts from the Biden administration, including withdrawing from the Paris climate accords again. However, there are also plans to allocate funds for solar, wind, and hydroelectric projects. These plans aim to ensure renewable investments do not deter from the dominance of oil, coal, or natural gas.
In a recent press conference, President-elect Trump indicated renewables must complement but not replace the U.S. energy backbone. Critics argue this approach hinders the transition to cleaner energy and continues the country’s reliance on fossil fuels, undermining global efforts to combat climate change.
Resiliency through geopolitical changes
Geopolitical shifts, such as changes in trade policies and tariffs, are significantly impacting energy supply chains. For instance, increased tariffs on Chinese goods could affect the import of renewable energy components like solar panels. Building contingency plans by diversifying sourcing locations and suppliers, increasing inventory levels, and investing in technology for better visibility and predictive analytics can help build a more resilient supply chain and mitigate disruptions.
Labor agreement reached between ILA and USMX
An agreement was reached prior to the expiration of the International Longshoremen’s Association’s (ILA) temporary labor agreement with the U.S. Maritime Alliance (USMX) on January 15, 2025. The potential for a strike had created significant uncertainty for labor operations at U.S. East and Gulf Coast ports. Given that the Port of Houston's top imports include petroleum oils, petroleum distillates, photosensitive devices, and photovoltaic modules, any disruptions to the Gulf Coast would have a substantial impact on the oil and gas sector.
The potential of a strike was a vital reminder to develop and implement contingency plans for all aspects of transportation, including inland moves. Proactively moving containers off terminals before a potential strike can help prevent access issues if the terminal closes, ensuring a more resilient supply chain for critical energy imports.