Americans elected Donald Trump due in part to his America-first views. His vision is to reinvigorate the nation's economy to provide jobs and a better standard of living for all. Fueling that vision is an America-first energy plan, which will rely heavily on the country's vast shale resources that the energy industry unlocked with fracking. Here's how that plan could affect fracking stocks.

Image source: Getty Images.

The America-first energy plan

Trump's vision for America is that we would be energy independent. To get there, he wants to do three things directly related to the fracking industry:

  1. Unleash the country's shale oil and gas reserves, including opening up more federal lands for leasing.
  2. Encourage the use of natural gas to reduce emissions, save money, and increase economic output.
  3. Rescind regulations that are holding back energy production. 

This platform represents a tremendous opportunity for the fracking industry because it should drive demand for domestically produced energy while also cutting costs and opening up new doors. 

Image source: Getty Images.

Drilling down into the opportunity for frackers

One of Trump's goals is to unlock more of America's vast shale resources, some of which are currently untapped because they are on federal lands. In a speech he gave earlier this year at the Shale Insight Event, Trump said:

Producing more American energy is a central part of my plan to Making America Wealthy Again -- especially for the poorest Americans. America is sitting on a treasure trove of untapped energy -- some $50 trillion in shale energy, oil reserves and natural gas on federal lands, in addition to hundreds of years of coal energy reserves. It's all upside: more jobs, more revenues, more wealth, higher wages, and lower energy prices.

Under his plan, he would open the door for exploration companies to lease and explore for oil and gas on more federal land. That is a fairly substantial opportunity given that oil and gas companies currently have leases on only 10% of onshore federal lands. Trump's plan would solve two problems for the industry according to Harold Hamm, the CEO of oil fracking pioneer Continental Resources (CLR). In a recent interview, Hamm said that permitting on government-owned lands out west is "almost nonexistent" and that it "takes years sometimes to get permits." Meanwhile, under Trump, more land would be open for exploration and the permitting process would speed up.

The opening of additional federal land for exploration would not only benefit Continental but other leading explorers including oil fracking giant EOG Resources (EOG -1.80%). EOG Resources was one of the early leaders in the development of the Eagle Ford shale in Texas, where it is currently the top acreage holder and producer. Meanwhile, EOG Resources' exploration focus led it to discover for four new shale plays in the Rockies. The company currently has several exploration teams focused on uncovering new energy resources in the U.S. and would likely be interested in exploring some of the areas Trump opens up.

Image source: Getty Images.

Trump also said that he wants to encourage natural gas demand to reduce emissions and energy costs while increasing economic output. One potential demand driver could be to switch more 18-wheelers, buses, and other large vehicle fleets from diesel to natural gas. According to natural gas fueling company Clean Energy Fuels (CLNE 3.14%), the transportation industry in American consumes half of the country's gasoline and diesel, which contributes to our carbon problem. However, by switching America's transportation fleet from diesel to natural gas, we could cut these emissions by 30% while saving $1.50 per gallon of fuel on average.

Furthermore, that switch could increase economic output in several ways. Not only would Clean Energy Fuels need to build more natural gas stations, but leading natural gas producers like Chesapeake Energy (CHKA.Q) would need to drill more gas wells to match the increase in demand. Under Chesapeake Energy's current forecast, the company plans to grow its production by 5% to 15% annually through 2020. However, increasing demand under Trump's plan could enable Chesapeake to boost production at an even faster rate in the future.

Image source: Clean Energy Fuels.

The final point of Trump's plan is to ease the regulatory burden on the energy industry. Doing so would, according to the Institute for Energy Research:

  • Increase GDP by more than $100 billion annually.
  • Add over 500,000 new jobs annually.
  • Increase annual wages by more than $30 billion over the next seven years.
  • Increase federal, state, and local tax revenues by almost $6 trillion over four decades.
  • Increase total economic activity by more than $20 trillion over the next 40 years.

The lifting of certain regulatory burdens would benefit oil and gas producers by cutting their costs, which could enable them to drill more wells. That would flow down to oil-field service companies such as Halliburton (HAL -2.94%) by providing it with more work. The increased workload would enable Halliburton to not only hire back some of the 32,000 jobs it has had to cut during the oil market downturn but hire more workers as America's energy output grows.

Investor takeaway

Donald Trump's presidency should be good for America's fracking industry. By driving the country toward energy independence, he would encourage the nation to use more domestically produced energy. That means drilling and fracking more wells, which would fuel volume growth at producers and more work for service providers while trickling down to more jobs and wealth for the rest of America.