Presidential race critical for oil & gas
The Republican incumbent and Democrat candidates have wildly divergent visions of the future of US energy
The US 2020 presidential election looks to offer a clear choice between an incumbent president who has supported the growth of US hydrocarbon production, and several Democrat frontrunner candidates who are more interested in restricting the oil and gas industry with the aim of tackling climate change.
It is hard to find a president who has been more supportive of oil and gas than Trump in the 74 years since World War II. For instance, President Trump has rolled back policies installed by the previous administration including withdrawing from the Paris Agreement on climate change. He has also ended costly regulations on coal.
Trump has made more of America’s natural resources available to industry including the passing of controversial legislation to open the Alaska National Wildlife Refuge (ANWR) to exploration. The Interior Department held 28 onshore oil and gas lease sales in 2018, generating a record $1.1bn in revenue.
Trump claims credit for energy infrastructure development, including approval of the Dakota Access, Keystone XL and New Burgos pipelines. He also signed two executive orders to cut red tape that was holding back construction of new energy infrastructure, and his administration streamlined the permit process for LNG terminals.
Trump has worked to open new export opportunities for American producers
The president claims that oil and gas extraction under has watch has contributed to growth in many states, with total energy production across various sources reaching a record high in 2018. US crude oil output set a record in 2018, spiking 17pc to 10.96mn bl/d, and it has since climbed to over 12mn bl/d, making it the world’s largest oil producer.
Trump has also worked to create new export opportunities for American producers. Accordingly, crude oil exports nearly doubled in 2018, reaching a record 2mn bl/d, and the US has become a net natural gas exporter for the first time since 1957. The EU has agreed to import more LNG from the US, with exports across the Atlantic hitting a new high in March 2019.
The Democrat field of 17 presidential candidates, at an early stage of the primary process as of November 2019, remained fractious. Nevertheless, one thing they all have in common is that they are not amenable to lobbying from the oil and gas industry. The below discusses the policies of the front runners, in descending order of their electoral chances.
Massachusetts senator Elizabeth Warren believes that climate change is accelerating and is championing a radical transformation of the US energy sector. Warren embraces a 10-year action plan originally pitched by a former presidential candidate, governor Jay Inslee of Washington state. Warren has committed to adopt and build on Inslee’s plan, to achieve 100pc clean energy by decarbonising electricity, vehicles and buildings.
Warren would invest $400bn over 10 years in clean energy R&D. Her plan also makes a commitment to generate 10pc of overall electricity needs from renewable sources offshore or on public lands. Warren would use federal power to shift the market by adopting a rule to eliminate all fossil fuel usage in federal buildings by 2025.
Former vice president Joseph Biden has pledged “not to accept contributions from oil, gas and coal corporations or executives”. Accordingly, Biden will invest in a “clean energy future and environmental justice”, paid for by rolling back Trump’s tax incentives for business. Biden says this plan will require federal investment of $1.7trn over the next 10 years, plus additional private-sector, state and local investments, to total more than $5tn.
Bernie Sanders calls climate change a global emergency that requires swift action
Biden says that, as president, he would take “executive actions” to drive his agenda. These include: aggressive methane pollution limits for all operations; “doubling down” on biofuel production; requiring public companies to disclose climate risks and greenhouse gas emissions in their operations; and permanently closing the Arctic National Wildlife Refuge to exploration and production.
Pete Buttigieg, the mayor of South Bend, Indiana, touts himself as ‘The Obama of 2020’. Like Warren and Sanders, Buttigieg would massively transform the energy sector to address climate change. Accordingly, he would implement a ‘Green New Deal’, to make the US a net-zero emissions society by 2050. He would enact a price on carbon, quadruple federal clean energy R&D funding to more than $200bn over 10 years, and build three investment funds to spur clean technology development.
Vermont senator Bernie Sanders calls climate change a global emergency that requires swift action. Sanders compares this “challenge” to President Franklin D Roosevelt “battling a world war on two fronts” during the 1940s. As president, Sanders says he would “boldly embrace the moral imperative of addressing the climate crisis [through a] ‘Green New Deal’.”
Sanders has two specific goals—reaching 100pc renewable energy for electricity and transportation by 2030, and complete decarbonisation of the economy by 2050. Accordingly, Sanders says he will have “a just transition for workers” that would “prioritise the fossil fuel workers who have powered our economy for more than a century”.
Finally, former New York City mayor Michael Bloomberg is a late potential entry into the Democratic field. At the time of writing, he had not officially declared his candidacy. Given his business background, Bloomberg might appear to be less set against oil and gas than other leading Democrat candidates. However, at this stage, it is hard to tell how much difference there is between his stand on energy and that of his rivals.
Kurt Abraham is Editor-in-chief of World Oil
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