News
07/10/24
Trump, Harris run on competing visions for energy
Washington, 7 October (Argus) — Energy has emerged as a centrepiece in the US
presidential race between Republican candidate former president Donald Trump and
Democratic candidate vice-president Kamala Harris, who have repeatedly fought
over whose policies would keep domestic energy prices affordable now and in the
future. Trump has promised a return to the policies he championed during his
first presidential term, when he opened vast tracts of federal land to oil and
gas leasing, scrapped rules that would support electric vehicles (EVs), and
halted any serious attempts for the federal government to respond to climate
change. Trump has embraced "drill, baby, drill" as a core policy plank, which he
argues will be an elixir to voters frustrated with inflation and high prices.
Vice-president Harris backs an "all-of-the-above" energy policy, her running
mate Tim Walz says, and has a further goal to turn the US into a global
powerhouse for the types of clean energy manufacturing and EVs that will be
needed to make a difference on climate change. But Harris' remark in 2019 that
there is "no question I'm in favour of banning fracking" has come to haunt her
campaign, despite saying she has dropped that position. Harris says her
experience serving as vice-president has shown her that banning fracking was not
needed to support a clean energy economy. "As vice-president, I did not ban
fracking. As president, I will not ban fracking," she says. Even so, Trump has
tried to sow doubts among voters that Harris is sincere in her new position,
which he hopes will cost her in the battleground state of Pennsylvania, a key
shale gas producer that accounts for 20pc of US natural gas output. "If she won
the election, the day after that election, they'll go back to destroying our
country and oil will be dead," Trump says. But Trump's promises on oil and gas —
and his attacks on the policies of the Biden-Harris administration — have at
times borne little resemblance to reality. Trump claims that if he had won a
second term in 2020, oil production would be "four times, five times higher",
translating into US crude production in excess of 50mn b/d, or more than half of
global production. Trump also says that, if elected, he would cut the price of
energy "in half or more within a year of taking office", double electricity
production and bring gasoline prices below $2/USG. He will do this through "a
national emergency declaration" that will cause a "massive increase" in energy
supply, Trump says, although energy analysts say his promises are technically
and economically unachievable. Trump's oft-repeated claim that US oil and gas
production crashed after he left office is also undercut by basic energy
statistics, as is his claim that the US has lost the "energy dominance" it had
during his term. The US hit record-high production this year, in excess of 13mn
b/d of crude and 100bn ft³/d (1 trillion m³/yr) of gas, while US net petroleum
exports climbed to a record high of 1.7mn b/d last year. Regulatory rollback
Trump has campaigned heavily on rolling back regulations and cutting energy
prices, which he says will persuade manufacturers to "pack up and move their
production to America". For every new regulation, he promises to remove "10 old
and burdensome regulations from the books", echoing an earlier "two-for-one"
regulatory repeal policy he attempted to enforce during his first term in
office. Trump has shown particular zeal for eliminating policies he sees as part
of the "Green New Scam", a blanket term he uses for clean energy spending under
President Joe Biden's signature climate legislation, the Inflation Reduction
Act, and climate-related regulations. If Trump's first term serves as a guide,
he will again seek to repeal regulations that restrict methane emissions from US
oil and gas production, weaken CO2 emission limits for power plants and block
tailpipe rules that encourage EVs. "I will end the insane EV mandates," Trump
says. Faster permitting will be another top priority, Trump says, after his
efforts to pass comprehensive permitting legislation collapsed during his first
term. A Harris victory, in contrast, would be key to implementing dozens of
climate-related regulations issued under the Biden administration and defending
them in court. Expediting federal permitting and "cutting red tape" will also be
a priority for a Harris administration, given the impediments it can create for
clean energy projects and other infrastructure, according to campaign documents.
"No-one can tell me we can't build quickly," Harris says. Federal oil and gas
leasing has plunged under Biden, who was unable to carry out campaign promises
to ban new leasing but was still able to limit onshore lease sales to 210,000
acres/yr (850 km²/yr) in 2022-23, down from more than 6mn acres/yr in 2018-19
under Trump. Oil and gas groups say expanded federal leasing, particularly in
the US Gulf of Mexico, is a top policy priority. Trump has vowed to expand
federal oil and gas development if he wins, particularly by enabling drilling in
Alaska's Arctic National Wildlife Refuge (ANWR), which he opened to leasing in
2017 but has been held up in reviews since Biden took office. "I'll put ANWR
back in play," Trump says. Less clear is how Trump would handle offshore
leasing, an issue that backfired in his first term when his push for drilling
offshore Florida prompted fury from political leaders in the Republican-led
state. Harris has yet to explicitly embrace federal drilling, but she has touted
the "record energy production" the US has achieved under the Biden-Harris
administration, and supports further growth "so that we never again have to rely
on foreign oil", according to campaign documents. A recent bipartisan bill from
US senator Joe Manchin suggests there is flexibility from the Democrats on the
issue, by offering more federal oil leasing in exchange for fast-tracking
electric transmission development. LNG pause in balance Biden's decision earlier
this year to pause the licensing of newly-built LNG export terminals has fuelled
uncertainty for projects such as Venture Global's 28mn t/yr CP2 project in
Louisiana. But the pause is only set to last until early 2025, when the US
Department of Energy (DOE) will finish work on a study into whether further
exports are in the "public interest" based on factors such as climate change and
domestic energy prices. Trump says as soon as he takes office he will approve
pending LNG export terminals, which he says are "good for the environment, not
bad, and good for our country". Harris has yet to describe her approach to
licensing more LNG terminals, the approval of which environmental activists say
would be a "climate bomb". But Manchin's permitting bill suggests there is some
room for manoeuvre, by requiring the DOE to decide on LNG export licences within
90 days. Oil industry officials are preparing for a fight to retain the existing
corporate tax rate of 21pc enacted under Trump in 2017, as Congress is heading
towards a "tax cliff" at the end of 2025 that will cost more than $4 trillion to
avert. Harris has called for Congress to raise the corporate tax rate to 28pc,
but wants new tax credits for industries such as manufacturing. Trump has
proposed a lower corporate tax rate of 15pc only "for those who make their
product in America". At the same time, Trump's push for an across-the-board
import tariff of up to 20pc has alarmed industry officials, who say such a
policy would raise consumer prices and potentially trigger a disruptive trade
war. By Chris Knight Send comments and request more information at
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