• Saturday, Jun 25, 2022
  • Last Update : 04:24 pm

Factbox: How a Biden presidency would transform the US energy landscape

  • Published at 08:54 am November 8th, 2020
A flare burns off excess gas
File photo: A flare burns off excess gas from a gas plant in the Permian Basin in Loving County, Texas, US, November 25, 2019 Reuters

Biden lacks the chummy rapport that Trump had developed with Saudi Arabia’s defacto leader Crown Prince Mohammed bin Salman

Democrat Joe Biden has won the November US presidential election, according to several major networks. Here are some of the changes that could occur in US energy policy under his administration:

International oil supplies

Biden has shown an interest in multilateral diplomacy similar to previous Democratic administrations. That could mean an eventual path for Opec members Iran and Venezuela to get out from under Washington’s sanctions and start pumping again, if the right conditions are met.

In Iran, that path could include a partnered approach between Washington and Europe, similar to a deal struck under Obama’s administration.

In Venezuela, Biden appears likely to continue to favor sanctions to pressure the regime of President Nicolas Maduro, but could increase diplomatic efforts to end the impasse by negotiating a new election or power-sharing with the opposition.

Outgoing President Donald Trump’s unilateral sanctions on the two countries have taken around 3 million barrels per day of crude oil off international markets, a little more than 3% of world supply.

Biden’s campaign has not detailed how it would approach these issues.

Line to Opec

Biden lacks the chummy rapport that Trump had developed with Saudi Arabia’s defacto leader Crown Prince Mohammed bin Salman. That country is the biggest voice in the Organization of the Petroleum Exporting Countries, meaning Biden may not engage as closely on the group’s production policy. He is also more likely to rely on quiet diplomatic channels for influencing Opec than Trump’s Twitter-centered approach.

Biden’s campaign has not yet detailed how it would approach these issues, but any influence he would wield as president would likely be in service of the same goal - a moderate oil price. Any US president needs affordable fuel for consumers. And for Biden, the price would need to be high enough to make clean energy alternatives to fossil fuels competitive in support of his ambitious climate plan.

Also read - No more bullying: Fresh start to US-Mexico relations eyed under Biden

Trump had been more engaged with the Organization of the Petroleum Exporting Countries than most of his predecessors. He has sometimes influenced Opec policy with his tweets and phone calls, arguing for an oil price low enough for consumers but high enough for drillers.

His sanctions also weakened the influence of Opec hawks Venezuela and Iran within the group, removing two big historical hurdles to a pro-Washington Opec policy. That concentrated power with leading producer Saudi Arabia, along with Russia, part of the group known as Opec+.

A green transition?

A Biden administration would look to re-enter the Paris Climate Agreement, an international pact negotiated during the Obama administration to fight global warming that Trump pulled away from saying it could hurt the US economy.

Biden has also vowed to bring US emissions down to net zero by 2050, including by bringing emissions from the power industry to net zero by 2035 - a goal that will be tricky to accomplish without a Democratic majority in Congress.

Biden’s view is that climate change is an existential threat to the planet, and that a transition from fossil fuels can be an economic opportunity if the United States moves fast enough to become a leader in the clean energy technology.

Trump’s administration had acted to weaken or eliminate emissions targets, including the US Environmental Protection Agency’s softening of vehicle emissions standards, and its rescinding of former President Barack Obama’s Clean Power Plan requiring cuts from the electric power industry. Transport and electricity together make up around half the country’s greenhouse gas emissions.

While European oil and gas companies like BP and Royal Dutch Shell have already begun implementing strategies for a global energy transition, US majors like Exxon Mobil and Chevron have remained focused on the traditional energy business - sheltered politically by Trump's leadership in Washington.

Federal drilling

While Trump had sought to maximize domestic oil and gas production, Biden has promised to ban issuance of new drilling permits on federal lands and waters in order to fight global climate change.

The United States produced nearly 3 million barrels of crude oil per day from federal lands and waters in 2019, along with 13.2 billion cubic feet per day of natural gas, according to Interior Department data.

That amounts to about a quarter of total domestic oil output and more than an eighth of total US production of gas. A federal ban on new permits would mean those numbers trend toward zero over a matter of years.

There would also be an impact on public revenue federal oil and gas production produced about $12 billion in public revenue in 2019, divided between the US Treasury, states and counties, tribes, and cleanup funds.

New Mexico, for example, received $2.4 billion in disbursements last year, much of it going to its historically underfunded education system. The state’s Democratic Governor Michelle Lujan Grisham told Reuters this spring she would seek a waiver from Biden’s government to allow continued drilling if he was elected.

Biden’s camp has been mum on whether such a waiver program would exist.

Facebook 50
blogger sharing button blogger
buffer sharing button buffer
diaspora sharing button diaspora
digg sharing button digg
douban sharing button douban
email sharing button email
evernote sharing button evernote
flipboard sharing button flipboard
pocket sharing button getpocket
github sharing button github
gmail sharing button gmail
googlebookmarks sharing button googlebookmarks
hackernews sharing button hackernews
instapaper sharing button instapaper
line sharing button line
linkedin sharing button linkedin
livejournal sharing button livejournal
mailru sharing button mailru
medium sharing button medium
meneame sharing button meneame
messenger sharing button messenger
odnoklassniki sharing button odnoklassniki
pinterest sharing button pinterest
print sharing button print
qzone sharing button qzone
reddit sharing button reddit
refind sharing button refind
renren sharing button renren
skype sharing button skype
snapchat sharing button snapchat
surfingbird sharing button surfingbird
telegram sharing button telegram
tumblr sharing button tumblr
twitter sharing button twitter
vk sharing button vk
wechat sharing button wechat
weibo sharing button weibo
whatsapp sharing button whatsapp
wordpress sharing button wordpress
xing sharing button xing
yahoomail sharing button yahoomail