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Oil, Coal Seen As Winners With Donald Trump Victory

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The Wall Street Journal

“The Paris Agreement from a U.S. perspective is a dead agreement walking.”

Donald Trump’s surprise victory fanned expectations in the energy industry that he would clear the path for new pipelines, end U.S. participation in global climate change pacts and undo environmental regulations to boost American coal mining.

The prospect that the president-elect would roll back years of Obama administration policies buoyed investors in fossil fuels companies Wednesday—while sending shares of top wind and solar power firms tumbling.

The S&P 500 Energy Sector Index was up about 1.5% overall midday to 517.28.

Scott Sheffield, chief executive of Pioneer Natural Resources Co., said Mr. Trump’s victory will perk up the country’s stagnant drilling boom by making it easier to build pipelines that unlock areas rich in oil and gas, such as the Marcellus Shale formation in Pennsylvania and Ohio.

“His message about creating jobs is why he broke the blue wall” and attracted votes from Democrats in some states, Mr. Sheffield said.

Shares in Energy Transfer Equity L.P., the Dallas-based pipeline company building the hotly contested Dakota Access Pipeline, jumped 18% to $16.52 amid hopes that Mr. Trump will give a green light to the project.

The 1,170-mile pipeline linking the North Dakota oil fields and Texas has become mired in protests and extra environmental reviews by the U.S. Army Corps of Engineers because of its route across the Missouri River and lands considered culturally sensitive to the Standing Rock Sioux tribe.

An Energy Transfer spokeswoman said Wednesday that the company expects the pipeline to begin moving oil in the first quarter of 2017.

During the campaign, Mr. Trump invited TransCanada Corp., the Calgary-based company that proposed the transcontinental Keystone XL pipeline linking Canada’s oil sands to the Texas Gulf Coast, to reapply to build that project, which was rejected by the Obama administration in 2015 after seven years in regulatory limbo.

“TransCanada remains fully committed to building Keystone XL,” said company spokesman Mark Cooper. “We are evaluating ways to engage the new administration on the benefits, the jobs and the tax revenues this project brings to the table.”

Green energy companies fared less favorably as investors braced for Mr. Trump to reverse Mr. Obama’s renewable power and climate policies.

Shares of SunPower Corp. fell 14% to $6.32, while SolarCity Corp. was off 5% to $19.75, and Vivint Solar Inc. nearly 9% off at $2.92. Other clean-energy stocks were also trading lower, including Tesla Motors Inc., whose shares dropped 4% to $186.58, and wind farm developer Pattern Energy Group Inc., which was down nearly 7% to $19.66 in midafternoon trade.

Still, some rooftop solar executives voiced optimism, saying green power enjoys support from a bipartisan majority of consumers. “We do not see this election as changing its course,” Ed Fenster, chairman and co-founder of San Francisco-based Sunrun Inc., whose shares fell 6% to $4.69.

Mr. Trump’s election immediately called into question whether the U.S. will stay committed to an agreement to combat climate change signed by nearly 200 nations last year in Paris. Mr. Trump, who has called climate change a hoax, has said he would cancel the accord, and cut off U.S. aid to a $100 billion global fund to help poorer nations address climate change.

“Climate change policy is going to come to a screeching halt,” said Robert McNally, president of energy-advisory firm the Rapidan Group and a former adviser to President George W. Bush. “The Paris Agreement from a U.S. perspective is a dead agreement walking.”

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