In this news, we discuss the Factbox: How a Biden presidency would transform the U.S. energy landscape.
(Reuters) – Democrat Joe Biden won the US presidential election in November, according to several major networks. Here are some of the changes that could occur in US energy policy under his administration:
INTERNATIONAL PETROLEUM SUPPLIES
Biden has shown an interest in multilateral diplomacy similar to previous Democratic administrations. This could mean a possible path for OPEC members Iran and Venezuela to get out of Washington’s sanctions and start pumping again, if the right conditions are met.
In Iran, this path could include a partnership approach between Washington and Europe, similar to an agreement reached under the Obama administration.
In Venezuela, Biden appears likely to continue to favor sanctions to put pressure on President Nicolas Maduro’s regime, but could step up diplomatic efforts to break the deadlock by negotiating a new election or a power-sharing with the opposition.
Outgoing President Donald Trump’s unilateral sanctions against the two countries have taken about 3 million barrels per day of crude oil out of international markets, or just over 3% of global supply.
Biden’s campaign did not detail how it would approach these issues.
LINE TO OPEC
Biden does not have the good rapport that Trump had developed with the de facto head of Saudi Arabia, Crown Prince Mohammed bin Salman. This country is the biggest voice in the Organization of the Petroleum Exporting Countries, which means Biden may not be so closely involved in the group’s production policy. He is also more likely to rely on quiet diplomatic channels to influence OPEC than that of Trump. Twitter centered approach.
Biden’s campaign has yet to detail how it would tackle these issues, but any influence he exerts as president would likely serve the same goal – a moderate oil price. Every American president needs affordable fuel for consumers. And for Biden, the price should be high enough to produce clean energy alternatives competitive fossil fuels to support its ambitious climate plan.
Trump had been more engaged with the Organization of the Petroleum Exporting Countries than most of his predecessors. He sometimes influenced OPEC policy with his tweets and phone calls, arguing for a price of oil low enough for consumers but high enough for drillers.
His sanctions also weakened the influence of the OPEC hawks in Venezuela and Iran within the group, removing two great historical obstacles to a pro-Washington OPEC policy. This power concentrated with the first Saudi producer, with Russia, which is part of the group known as OPEC +.
A GREEN TRANSITION?
A Biden administration would seek to re-enter the Paris Climate Agreement, an international pact negotiated under the Obama administration to fight global warming that Trump has refrained from saying could harm the U.S. economy.
Biden also pledged to reduce U.S. emissions to net zero by 2050, including reducing the energy industry’s emissions to net zero by 2035 – a goal that will be difficult to achieve without a Democratic majority in the Congress.
Biden’s opinion 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 acts fast enough to become a leader in clean energy technology. .
The Trump administration had acted to weaken or eliminate emissions targets, including relaxing vehicle emissions standards by the US Environmental Protection Agency and its cancellation of the Clean Power Plan. former President Barack Obama demanding cuts in the electric power sector. Transport and electricity together account for about half of the country’s greenhouse gas emissions.
While European oil and gas companies like BP BP.L and Royal Dutch Shell RDSa.L have already started to implement strategies for a global energy transition, American majors like Exxon Mobil XOM.N and Chevron CVX.N are remained focused on the traditional energy sector. – politically shielded by Trump’s leadership in Washington.
While Trump has sought to maximize domestic oil and gas production, Biden vowed to ban the issuance of new drilling permits on federal lands and waters in an effort to combat global climate change.
The United States produced nearly 3 million barrels of crude oil per day from federal lands and waters in 2019, as well as 13.2 billion cubic feet per day of natural gas, according to data from the Department of the United States. ‘Interior.
This represents about a quarter of total national oil production and more than an eighth of total gas production in the United States. A federal ban on new permits would mean those numbers tend to zero within a few years.
There would also be an impact on public revenues Federal oil and gas production generated approximately $ 12 billion in public revenue in 2019, split among 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. Democratic state governor Michelle Lujan Grisham told Reuters this spring she would seek a waiver from Biden’s government to allow drilling to continue if elected.
Biden’s camp has been silent about the existence of such a waiver program.
Edited by Richard Valdmanis, Marguerita Choy and Diane Craft
Original © Thomson Reuters