A tale of two strategies: The race for the White House


As the United States presidential race gains momentum, Smart Energy International examines the potential impact on US energy policy should presidential hopeful Joe Biden win his place in the White House.

The Trump administration made some significant changes to US energy policy in the early days of that administration’s tenure. Large among these was the withdrawal of the United States from the Paris Agreement and a concerted effort to reduce the amount of oil coming out of Iran through the imposition of sanctions.

However, as November looms and the race between the Democrat and Republican candidates starts distilling down to key policy points, the implications of a Democratic win could be significant. As the vice president to President Barack Obama, it is widely believed that presidential hopeful Joe Biden will push for a return to many of the policies put in place by the Obama administration.

This article was originally published in Smart Energy International Issue 4-2020.
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Biden has made his views on new oil and gas developments in federal waters clear and, according to Forbes, “has vowed to support lawsuits by state and local governments to sue oil companies over climate change.”

However, Dan Eberhart, CEO of Canary, a privately-owned oilfield services company, writing in Forbes, says it is from a foreign policy perspective that a Democratic win would have the most impact on global energy markets. Eberhart believes that sanctions imposed by the current administration led the way for US shale producers to gain a significant share of the export market – a share he believes will be significantly threatened by a Biden win. Will this market share be threatened by a Biden presidency?

Or, reintroduce a price war in efforts by Saudi Arabia to gain market share for itself?

Biden’s views on energy, as laid out in his Plan for a Clean Energy Revolution and Environmental Justice would reorient the United States away from fossil energy. Also, in Biden’s Build Back Better plan – designed to address the coronavirus-related recession – Biden promises to “build back better” than what existed before the crisis. The plan is centred on “a national effort aimed at creating the jobs we need to build a modern, sustainable infrastructure now and deliver an equitable clean energy future.” (i)

“A Biden victory could herald a new era for US energy policy,” says Eberhart, “accelerating low-carbon transition efforts while curtailing oil and gas activity.”

“Under Biden, the United States would resume its march toward decarbonisation. Biden has indicated that he intends to set a new tone on climate by rejoining the Paris Agreement on day one while looking to reverse Trump’s moves to relax emission targets for the power sector and transportation.”

Eberhart believes Biden could support a move to net-zero emissions by 2050 (a move already supported by several US cities). It is also possible there will be an increased focus on electric vehicles and the phasing out of internal combustion engines by 2035.

According to the Biden campaign, investment into the clean energy economy will drive millions of jobs, in addition to improving air quality. Biden proposes a $2 trillion investment into some of the following infrastructure such as roads, green spaces and the power grid.

Specifically, this will focus on:Zero emissions public transport: Focus will be on making it easier to pursue the electrification of transport such as trains, school and transit buses, ferries and passenger vehicles. Further, plans are in place for the delivery of a ‘second great railroad revolution’ with a focus on reducing pollution, cutting commute times and increased investment into the electrification of the rail system and the reduction of diesel emissions. Also, investment is planned for infrastructure for pedestrians, cyclists, and users of e-scooters and other micro-mobility vehicles, as well as integrating technologies like machine-learning optimised traffic lights.

A carbon-free power sector by 2035:

The Biden campaign says the power sector “represents the biggest job creation and economic opportunity engine of the 21st century.” Particularly, efforts will focus on investment into energy efficiency, clean energy, electrical systems and line infrastructure as well as investment into new battery storage and transmission infrastructure. This will be supported by tax incentives and reforms which will support energy efficiency and clean energy jobs; the development of innovative financing mechanisms that will encourage private sector investment and the establishment of a technology-agnostic Energy Efficiency and Clean Electricity Standard (EECES).

The EECES aims to reduce electricity bills and electricity pollution and achieve carbon-pollution free energy. Further investment will be directed toward upgrading existing powerlines with new technology, energy storage and increased “research investments and tax incentives for technology that captures carbon and then permanently sequesters or utilizes that captured carbon, which includes lowering the cost of carbon capture retrofits for existing power plants.” Lastly, the focus will be on accessing green hydrogen at the same cost as conventional hydrogen to provide clean fuel sources.

Increasing energy efficiency:

Retrofitting of buildings, homes, warehouses and public buildings and investment into energy-efficient appliances is anticipated to generate over a million jobs. These would be through the manufacture, installation, servicing and maintenance of high-efficiency LED lighting, electric appliances, and advanced heating and cooling systems. Through domestic energy efficiency interventions such as low energy appliances and weatherisation, the impact of high energy bills on low-income homes will be partially mitigated.

Research and development and clean energy innovation into battery storage, negative emission technologies, green hydrogen and advanced nuclear.

A major focus of Biden’s commitment to increase federal procurement by $400 billion in his fi rst term will be purchasing the key clean energy inputs like batteries and electric vehicles. Specifi c focus will be on clean energy, clean transportation, clean industrial processes, and clean materials. Through the creation of an Advanced Research Projects Agency on Climate, the plan calls for:

• grid-scale storage at one-tenth the cost of lithium-ion batteries

• smaller, safer and more cost-effective advanced nuclear reactors

• zero net energy buildings at zero net cost

• the utilisation of carbon-free hydrogen, produced via renewable energy at a lower cost than from shale gas, utilising next-generation electrolysers

• investing in carbon capture technology and direct air capture systems and retrofitting existing industrial and power plant exhausts and exploring permanent sequestration options Accelerating innovation in supply-chain resilience specifically to build critical clean energy supply chains in the United States

• Investing in national laboratories, high-performance computing capabilities, and the design and construction of other critical infrastructure at national laboratories.

Securing environmental justice:

This by aiming to provide disadvantaged communities 40% of the overall benefi ts of spending in the areas of clean energy and energy effi ciency deployment; clean transit and transportation. The creation of a data-driven climate and economic justice screening tool will help agencies and the private sector identify disadvantaged communities. Polluters will be held accountable under the environmental justice policy plan through the establishment of a new Environmental and Climate Justice Division within the Justice Department.

The elements of the policy that support environmental justice will bolster policies such as the widespread adoption of electric cars, the construction of a national electric-vehicle charging network, the development of low-carbon aviation and shipping technology; and strengthening infrastructure to withstand the effects of climate change. (ii)

Underpinning all of these policy plans is a desire to ensure infrastructure resilient to climate threats, fl oods and fi res. At the same time, they should provide low-income and at-risk communities with ways in which to formulate an economic turnaround.

Will fossil fuels trump renewables?

Incumbent Donal Trump’s election platform will run on the ‘America fi rst’ platform. His energy plans will continue to focus on energy dominance. This favours all fuel types, including fossil fuels. In addition, the withdrawal from the Paris Agreement will be finalised, and energy policy which focuses on emissions reductions and climate change will likely be sacrifi ced in favour of economic recovery at all costs.

The Trump administration has already invested significant effort in developing COVID-19 stimulus packages for the oil and gas sector.

Trump has promised to never “let the great US oil and gas industry down.”

In terms of future policy, little appears on the official campaign website with regards to future plans (iii). However, the site does provide insight into promises Trump has delivered on, including an Executive Order to expand offshore oil and gas drilling and aggressively increase exports of energy resources to the global market which “allowed financing for coal and fossil energy projects.”

“President Trump has approved the infrastructure and provided the resources needed to unleash oil and gas production in the US. The administration approved the Keystone XL and Dakota Access pipelines, supporting an estimated total of 42,000 jobs and $2 billion in wages… The Trump administration reversed President Obama’s moratorium on new leases for oil and gas development on federal lands.”

Trump has repealed the Obama Clean Power Plan (CPP) and proposed what is said to be a more cost-effective Affordable Clean Energy Rule. “According to NERA Economic Consulting, the CPP would have increased electricity rates by as much as 14%, costing American households up to $79 billion. The Affordable Clean Energy Rule will reduce greenhouse gasses, empower states, promote energy independence, and facilitate economic growth and job creation.

“In addition to the Clean Power Plan, the Trump administration has rescinded many costly Obama-Era regulations.” (iv)

The EPA [Environmental Protection Agency] has rescinded President Obama’s methane emissions rule that would cost American energy developers an estimated $530 million annually. The EPA is reviewing a rule that – if rescinded – would relax costly fuel standards and save $340 billion in regulatory costs.

At a crossroads?

Of course, putting a policy in place is one thing – delivering on it is another. The realities of life in the White House are significantly different to garnering the votes to get in. Some if not all of these policies will likely be watered down as political realities take hold: the need for support and horse-trading require compromising and may result in Biden giving ground on some points in order to achieve an overall objective.

While research would indicate that a majority of the citizens of the United States support greater climate action and believe the government should be doing more, the proof of this pudding will be seen on election day 2020.

i https://joebiden.com/clean-energy/
ii Joebiden.com
iii https://www.donaldjtrump.com/
iv https://www.promiseskept.com/
v https://www.brookings.edu/wp-content/ uploads/2019/07/Energy-paper-4-Energytransitions-USA-S-Gross.pdf