As the US has emerged as the world’s leading oil and gas producer, the energy and climate policies adopted by the next US administration will profoundly influence global economic and geopolitical affairs.
With the US presidential elections less than 90 days away, US energy policy – which includes government regulations dealing with climate change – has emerged as one of the core issues. This is not only because the Democratic Party, in seeking to unseat incumbent President Trump, has itself elevated energy and climate change policies to its highest priority. Energy is the lifeblood of the modern economy – the “master resource” that affects the production and use of all other resources – and hence US energy policy will affect the livelihood of all Americans. And as the US has emerged as the world’s leading oil and gas producer over the past decade, the energy and climate policies adopted by the next US administration will also profoundly influence global economic and geopolitical affairs.
The Radical Democrats and The Vacillating Mr. Biden
In the the Democratic Party presidential primaries, nearly everyone of the more than 20 major nominees supported first-term congresswoman Alexandria Ocasio-Cortez’s “Green New Deal” which was her radical grand plan to save the planet from a presumed 12-year deadline to global extinction. On April 8, 2020, former Vice President Joe Biden became the presumptive Democratic nominee after Senator Bernie Sanders, the only other major candidate left, suspended his campaign and endorsed Mr. Biden a few days later. Rather than making the traditional move back to the center after he secured the nomination, Mr. Biden has continued to move left especially on energy policy.
In May, it was announced that Rep. Alexandria Ocasio-Cortez will co-chair Joe Biden climate policy council as Biden took steps to “unify” the party with the Bernie Sander’s wing of radical progressives. In June, the Democratic National Committee signaled its shift towards extreme positions on energy and climate issues reflected by the views of Sanders and Ocasio-Cortez. The DNC Council on the Environment and Climate Crisis, stacked with progressive climate activists, pressed Mr. Biden to back “bold and urgent action to address the climate crisis.” The DNC 14-page plan calls for expenditures of up to $16 trillion over the next decade to speed the country away from fossil fuels. It includes getting to “near-zero” emissions by 2040, banning fracking, ending the sale of gasoline and diesel cars by 2030, denying federal permits for new fossil fuel infrastructure projects, ensuring 100% clean renewable energy by 2030 in electricity generation, buildings, and transportation, and re-imposing the ban on US crude oil exports and sharply curtailing exports of natural gas.
The DNC proposal more closely resembles Sanders’ climate plan in policies and scope than Mr. Biden’s, which called for a $1.7 trillion in climate spending over the next decade. Mr. Biden later announced a new plan in mid-July to spend $2 trillion over four years to significantly escalate the use of clean energy in the transportation, electricity and building sectors with a range of sweeping proposals to tackle climate change. Mr. Biden has vacillated, asserting “no new fracking” in his debate Bernie Sanders in March but backtracking in July in an interview in Pennsylvania where he said that he “wouldn’t put fracking on the chopping block” in response to a question about losing oil and gas jobs.
Contradictory policy promises by politicians appealing to different constituencies in the election trail are nothing new. Once elections are won, pragmatism is expected to prevail as the real consequences of policy decisions become apparent. Furthermore, the US president’s powers to effect change are bound by constitutional limits. Even if the Democrats manage to flip the Senate while keeping the House, moderates from both parties in oil and gas-producing states such as Colorado, New Mexico, North Dakota, Oklahoma and Texas would be fearful of destroying jobs and tax-revenues while recovering from the devastating pandemic-induced lockdowns.
While oil, natural gas and coal accounted for over 83% of total energy used in the US in 2019, wind, solar and new biofuels accounted for a paltry 6%. Punting for “green jobs” that have yet to materialize and which would depend on massive government subsidies may sound uplifting in election campaigns focused on young environmentalists but are a poor substitute for economic performance in the real world.
Yet, it is clear that Mr. Biden, if elected, would be bound to undo most if not all of President Trump’s initiatives in energy and environmental affairs. As promised, he would take executive and regulatory actions aimed at ending fracking and oil and gas drilling activity in federal lands. A politicized Environmental Protection Agency – following the Obama administration’s modus operandi – would discourage the fossil fuels sector in countless ways through administrative and regulatory choke-holds. The blocking of oil and gas pipelines and other fossil fuel infrastructure would be enabled by activist environmentalists launching legal suits, as in the recent case of the Dakota Access Pipeline.