The Battle Over US Energy Policy and Its Consequences

By Tilak Doshi – Re3-Blogged From WUWT

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 run-up to the Democratic Party presidential primaries and caucuses, 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 centre 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 signalled its shift towards extreme positions on energy and climate issues reflected by the views of Sanders and 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 then 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.

What A Biden Administration Would Wreak

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 during 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.

In his plan to “secure environmental justice and equitable economic opportunity in a clean energy future”, Biden committed to immediately re-join the Paris Agreement if elected president. This could potentially open up the US government to yet another avenue of judicial intervention by its own law courts. For example, the recent UK Court of Appeal decision to block London’s Heathrow airport expansion explicitly cited the Paris Agreement climate targets as the basis to reject government-approved infrastructure plans.

In the age of US-led oil abundance, conventional notions of geopolitical risk and perceptions of energy security have been upended. The surge in US oil and gas production which gathered pace in the past few years with President Trump’s “energy dominance” agenda has made the US less vulnerable to political and social upheavals in the Middle East and has increased its foreign policy leverage in achieving its strategic objectives. It has given the US greater latitude to support allies and sanction rivals. It has made it easier for the US to impose export sanctions on oil-producing adversaries such as Venezuela and Iran without the fear of a resulting spike in global oil prices or on US domestic gasoline prices.

By effectively making the US the “swing” producer in global oil markets, the fracking revolution has weakened the ability of OPEC and Russia to support crude oil prices by restraining output. A Biden presidency which would vacate the role of the US as the world’s leading oil and gas producer would no doubt be welcomed by Russia and the OPEC oil and gas exporters struggling with low energy prices.

Biden vs. Trump: The Odds

A recent Gallup poll, taken over July 1 – 23, asked just over a 1,000 US adults: “What do you think is the most important problem facing this country today?” A plurality, or 30%, chose “coronavirus/diseases” as the most important problem, followed by “the government/poor leadership” (23%), race relations/racism (16%), “unifying the country” (6%), and “crime/violence” (5%). Among economic problems, 9% of the respondents chose the “economy in general”, unemployment, and the wealth gap. Notably, “climate change/environment/pollution” — green issues central to the progressive agenda and embraced by Mr. Biden — came at the very bottom of the list, garnering just 1% support.

Whatever the state of Mr. Biden’s mental acuity, he must be aware of the risks of campaigning on the radical makeover of the US economy in the midst of a pandemic to meet an alleged “climate emergency”. In 2017, failed presidential-hopeful Hillary Clinton claimed her biggest regret was in doubling up on ex-President Obama’s ‘war on coal’ and stating in her campaign trail that “we’re going to put a lot of coal miners and coal companies out of business”. Mr. Biden must hope he will not have such regrets.


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