Expanding domestic natural gas, oil and coal production, combined with relaxing Obama energy oversight, likely will send commodity prices lower through 2018 if President Trump is able to keep his pledge to “unleash an energy revolution,” according to analysts.

President Trump has vowed to reverse the Obama administration’s regulatory efforts and reduce “all barriers to responsible energy production.” The plans include reforming the corporate tax code to boost investments and output, while a border adjustment tax would increase exports and punish imports for all commodities.

The administration also is eyeing measures to increase domestic gas, oil and coal production, while easing vehicle fuel economy standards to boost demand. Reportedly, the president also wants the United States to back out of international climate change policies, revoke the Obama administration’s Clean Power Plan (CPP) and reduce/remove mandated renewable fuels standards.

“Under almost all proposals, oil and natural gas prices could suffer,” said BofA Merrill Lynch Global Research analysts led by Sabine Schels. “Domestic crude oil and natural gas production clearly stand to gain from some of the micro energy policy proposals, such as cutting the regulatory burden, cutting corporate taxes, promoting production and exports, a streamlined permitting process for pipelines or access to restricted federal land and waters.”

U.S. crude output already is rising, without any help from the new administration, as prices have inched higher and global output has fallen under an agreement by the Organization of the Petroleum Exporting Countries.

Domestic crude oil increased by an estimated 191,000 b/d in January, the highest monthly increase since May 2015, which, along with President Trump’s comments about easing restrictions on oil drilling, “collectively weighed on prices and sentiment,” said Societe Generale analysts.

Limiting fuel economy standards in vehicles and curbing the Renewable Fuels Standard may boost gasoline demand, but the “impact may take longer to play out than the impact on production and could be significantly smaller in magnitude,” Schels said.

All else being equal, “domestic and global crude oil prices should suffer from the proposals, while domestic and global natural gas prices should also fall from increased U.S. output.”

Specifically for natural gas, the proposed border tax could be enacted and then reciprocated by Mexico, sparking a wider trade war, which “could severely hurt exporters of U.S. natural gas and drive down prices at the Henry Hub.”

Tensions between the United States and Mexico, sparked by the president’s call for Mexico to pay for a border wall, could lead to a trade war, according to Societe Generale. If that were to occur, it would “further dampen prices, since Mexico is the largest importer of U.S. natural gas, with 2016 exports exceeding 4 Bcf/d,” analysts said.

The United States today is sending a record amount of gas south of the border, about 5% of annual gas production via pipeline. Pipeline exports recently reaching 4.0 Bcf/d, up from 1.7 Bcf/d in 2012. Mexico also is the largest importer of liquefied natural gas from the United States, having taken 11 cargoes from the Sabine Pass Terminal since August, Schels said.

“Left alone, the energy ties between the two countries are set to strengthen, with new gas pipelines equivalent to 3.5 Bcf/d coming onstream over the next 10 months. A reduction in gas exports to Mexico could thus clearly hurt Henry Hub.”

A slowdown in trade overall could hurt Mexican gross domestic product growth “and in turn slow down demand for U.S. natural gas south of the border,” Schels said.

And if there is increased coal demand, for instance, if states are allowed to subsidize coal plants or relax the CPP mandates, that it turn would be a positive for coal prices — and the expense of natural gas.

There’s a Catch-22 for coal, too. If President Trump were to decide to stimulate coal production by subsidizing the coal miners directly, that in turn would be a negative on coal prices, according to analysts.

Net, domestic oil and gas production would gain from the administration’s proposals, such as streamlining the pipeline permitting process or granting access to restricted federal land and waters. Limiting vehicle fuel economy standards and curbing the Renewable Fuels Standard also may boost gasoline demand, but the impact would take longer.

The administration’s wish list for the energy industry may not play out as the president envisions.

“Many of Trump’s policies are unknown at this point and yet to be formed in detail,so it is perhaps too early to draw strong conclusions on how they may impact investment decisions and energy prices,” Schels said. “On the surface, they suggest lower costs of production and potentially enhanced efficiencies and productivity, just accelerating a trend rather than reversing the needle.

“In reality though, it is questionable how much will really be achieved, given that thanks to shale, the sector is already booming and oil and gas upstream production took off years ago.”

For oil, the biggest hurdles to growth, such as reversing key pipelines and obtaining export licenses, already have been dealt with in recent years. Regarding coal, “it is widely understood that the renewable-energy industry is a far bigger employer than the coal mining industry.”

According to the Department of Energy, more than 200,000 people are employed by the solar industry, with 100,000-plus employed by the wind industry — while there are only about 66,000 coal mining jobs, analysts said.

“Many states may oppose a large return in coal production even if Obama’s Clean Power Plan gets revoked.”