Biden Energy Plan May Be More Similar to Trump Policy than Expected
by Patti Domm (CNBC) • Former Vice President Joe Biden may have greener goals for U.S. energy, but he will not end or sharply curtail oil and gas fracking, energy experts concur. • His $2 trillion plan would encourage investment in infrastructure, electric vehicles, renewable energy, efficient buildings and in agriculture and conservation. • During the Trump administration, the U.S. became the world’s largest energy producer.
American presidents have long wanted the U.S. to be self-sufficient when it comes to oil, and if former Vice President Joe Biden wins the presidency, he will likely have a similar agenda but with an added emphasis on clean energy.
During the President Donald Trump’s administration, the U.S. has become the world’s largest energy producer, surpassing both Russia and Saudi Arabia in oil production. It also became a net exporter of oil, when including refined products like diesel, jet fuel and gasoline.
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When Obama won the White House in 2008, the U.S. was producing just 5 million barrels a day, and by 2015, production had climbed to 9.5 million barrels before falling off in 2016.
Biden has said he won’t end fracking, a U.S.-developed process oil and gas producers used to get at hard to reach oil.
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But while Biden’s’energy plan includes $2 trillion in clean energy initiatives, it does not extinguish oil and gas production. Analysts said he may increase regulation of the sector, by limiting methane emissions and and he said he will limit fracking on federal land.
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Croft (Helima Croft, head of global commodities strategy at RBC) said the market is focused on this aspect of the election, since if there is a blue wave, oil prices would be boosted by a bigger stimulus package next year, from Democrats versus Republicans.
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She said a Biden administration would likely see natural gas as an important bridge to cleaner fuels and a reduction in coal usage. It may also see natural gas as an important export, giving Europe the option of buying U.S. liquified natural gas in addition to Russian natural gas.
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“After the [presidential] debate, his team was out there saying we’re talking about scaling back subsidies, not fracking.”
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Croft said the net impact of higher regulation could be higher production costs for U.S. producers.
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A Biden win could likely change the relationship with both countries. Russia could be subject to more financial sanctions for a number of issues, including meddling in the U.S. election. Morse (Ed Morse, head of global commodities at Citigroup) said for Saudi Arabia, there’s a chance U.S. support could cool, and it could focus on the Saudi human rights record, including the disappearance of journalist Jamal Khashoggi.
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As for Iran, she expects it to be an early priority for Biden to try to re-enter the Joint Comprehensive Plan of Action, which Trump abandoned. The Obama era agreement allowed for the removal of sanctions on Iran in exchange for an end to its nuclear program, but Trump drew out the agreement calling it one-sided.
Croft said if Biden makes such a move, that will allow for the return of about 1 million barrels a day of Iranian crude by the end of 2021.
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As a Biden administration would push greener fuels, Morse expects one of its first actions would to be to rejoin the Paris Agreement and realign with China, at least on climate change policy.
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Biden would like the U.S. to use 100% clean energy and have zero emissions by 2050 through policies aimed at lower emissions from transportation and limiting methane from oil and gas. His $2 trillion plan would encourage investment in infrastructure, electric vehicles, renewable energy, efficient buildings and in agriculture and conservation.
Analysts said the plan would be paid for by rolling back recent corporate tax cuts and increasing private and state and local investments.
Biden also has a goal of making the U.S. a leader in electric car production.
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“China does manufacture 70% of the world’s solar panels in China, and another 10% outside of China,” he (Daniel Yergin, vice chairman of IHS Markit) said. READ MORE includes VIDEO
TRUMP RUNS IN RURAL AMERICA ON ETHANOL, TAX CUTS, REGULATORY RELIEF (Successful Farming)
US to exit Paris accord whether Trump or Biden wins (The Hill)
Biden win could boost carbon, REC markets (Argus Media)
But it may be President-elect Joe Biden’s promise to take quick action to reduce emissions of methane, the main component of natural gas, that could ultimately help rescue U.S. fossil fuel producers (Poltico’s Morning Enegy)
Excerpt from Successful Farming: Biden says in his campaign platform that he will “promote ethanol and the next generation of biofuels.” Development of cellulosic ethanol, distilled from crop debris, grasses, and woody plants, would put cleaner-burning fuels on the market while helping to mitigate climate change, says his campaign platform.
Direct federal payments to farmers are forecast to exceed $40 billion this year, chiefly through pandemic relief payments and Paycheck Protection Program loans. None of the stopgap programs was created to run into 2021.
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In Dubuque, Trump referred to the trade-war payments, which concluded early this year, and asked rhetorically, “Did anybody get a bad deal? Did anybody, because you’re all wealthy … That’s why you’re all here and that’s why you’re all happy and no other president would have done that.” READ MORE