The stated policies of Donald Trump, who will be sworn in as the 45th president of the United States on January 20, include US energy independence, further exploitation of domestic oil, gas and coal reserves, encouraging gas demand, reducing regulation and job creation in the industry.
The Keystone XL oil pipeline project from Canada into the US is also more likely to get the green light, after incumbent US President Barack Obama rejected it in November 2015.
With all this in mind, Wood Mackenzie's Perth-based Australasia lead oil and gas analyst Saul Kavonic told Energy News that a more favourable upstream environment, with lower regulatory burden and lower taxes, could encourage more, lower-cost shale and tight oil and gas production, implying lower Henry Hub gas prices.
Indeed, lower taxes might be the way to incentivise investment by an industry constrained by an oil price around $US50/barrel, he said.
"For Australia, any reduction in Henry Hub prices could provide a flow on effect placing downward pressure on LNG spot prices in Asia over the medium term as US LNG cash costs come down," Kavonic said.
As a major LNG exporter, a key factor affecting Australia's energy industry will depend on what a Trump presidency means for US gas production and prices, as this will have a flow-on effect to Asian LNG prices which have enjoyed a recent surge, but which Australia's government said this week was only temporary.
"For the implications of a Trump presidency on Australian industry, much will depend on how policy details and implementation play out, but prima facie there may be a risk of lower LNG spot prices over the medium term if policy encouraging more or lower cost US gas eventuates," Kavonic told Energy News.
"There may also be a longer-term risk or opportunity for more LNG from Australia, depending on if the US adopts a pro-LNG export stance, or more internally focussed gas policy less accommodating of exports."
However, he also cautioned that limited detailed policy proposals available to date leaves a high level of uncertainty at this point in time around the priorities of a Trump administration and any implications they may have for energy markets.
"Longer term, if we see any US-centric focused gas policies that could be a negative for investment in more new US LNG, then this could benefit non-US new volumes such as from Australia, providing additional market for new Australian LNG," Kavonic said.
"On the other hand, if the US takes on a more pro-LNG export stance to facilitate demand, this may provide more competition for future Australian LNG, although for now demand is restraining new US LNG exports rather than Government approvals."
Iran wildcard
As for the question of Iran, Kavonic said any re-assessment of the Obama administration's support for lifting sanctions could materially impact oil markets given Iran's resumption of exports and planned growth.
However, the Iran deal was a global one, so Kavonic also cautioned that there was still a question mark as to the extent a Trump administration would be able to impact the deal unilaterally as far as oil exports are concerned.
"More broadly, a change in stance on global trade agreements will be factor impacting global economic growth and in turn oil demand. Oil prices have a direct flow on impact to Australian LNG contracted prices," he said.
The Paris Agreement on greenhouse gas emissions ratified in December, with the US as a leading signatory, is now expected to meet significant resistance from a Trump administration and Republican Congress.
Kavonic said that the loss of US support could threaten the Paris Agreement's chances of success.
