The 2020 US presidential election is currently at the ballot-counting phase. How will the energy arrangement in the US be impacted after the presidential election? Trump and Biden each holds a different perspective in the issue of energy, where the US President has been implementing an active “rescue of petrochemical industry” since he took office in 2017, and has established subsidies on coal burning and petroleum, as well as opened excavation of petroleum and natural gas, in the hope of achieving energy independency. As for Biden, the US presidential candidate emphasizes on climate change and renewable energy, and has proposed the Green New Deal that is worth US$2 trillion.
During his presidency, Trump had not only alleviated on the regulations of methane, but also permitted drilling in offshore and Artic regions. The production volume of petroleum for the US has surpassed Russia and Saudi Arabia, which include refined products of diesel, aviation kerosene, and gasoline, and the country has also become a net exporter in petroleum.
The production volume of petroleum for the US has reached to the peak of 13.1 million barrels per day in 2020, despite the reduction in the demand for petroleum as the global economy sustained the relevant impact from the COVID-19 pandemic. According to the data from the federal government of the US, the production volume of petroleum for the US had once plummeted to below 10 million barrels per day, though the figure had climbed back to 10.6 million barrels per day over the past 4 weeks.
This particular phenomenon is generated by the ratio in shale gas that has exceeded 20% under the technical development in hydraulic fracturing and horizontal drilling after 2010, and the matured technology has also gradually declined the cost of excavation, which stimulated a simultaneous growth in oil and gas for the US. Trump had even signed an executive order at the end of October this year regarding the protection on hydraulic fracturing as well as the petroleum and natural gas industry.
Trump and Biden are differentiated in terms of the technology of hydraulic fracturing. Despite having repeatedly mentioned about the prohibition of hydraulic fracturing during the presidential debates, Biden decided to go for the cautious route at the end, and commented that the specific method will not be banned as it is the achievement of petroleum and natural gas suppliers from the past, thus it will not be prohibited in critical production states of gas and oil, including Texas, Pennsylvania, Oklahoma, and Ohio.
The extraction of shale gas requires the hydraulic fracturing method, which fractures the lithosphere by a high pressure mixture formed with water, sand, and chemical substances, before natural gas is released, though many worry that this technology runs the risk of polluting the water source, as well as imposing threats to the local ecosystem and the health of the residents. However, even if a lot of US citizens are concerned of environment and climate changes, many depend on the petrochemical industry. As pointed out by analysts, although Biden is not going to restrict the production of petroleum and natural gas, it is possible that he will implement a reinforced industry supervision through restricted methane emission, as well as further limit on extraction using hydraulic fracturing.
The difference regarding the issue on energy between the two candidates lies on the attitude towards green energy. Compared to Trump, who has made several controversial statements pertaining to renewable energy and environmental issues, Biden had proposed a clean energy program in July that is worth US$2 trillion, which offers projects including energy tax exemption and the policy of a zero carbon industry, and hopes to elevate the ratio of clean energy in the fields of traffic, electricity, and construction in order to respond to the concern of climate change, whilst create job opportunities and establish infrastructures. Biden pointed out that this program will create millions of high-paying jobs.
Trump is a supporter of power generation from petroleum and coal firing, though the latter had received more attention during the 2016 US presidential election compared to this year. Trump had promised then to allow miners to return to their jobs, however, the relief and subsidy provided has not prevented US coal-fired power plants from closing down one after another, and the power generation volume has been descending annually, where the figures had depleted from 26.7% and 23.6% in 2018 and 2019 to 16.9% during the first half of the year, equaling a reduction of 10% in the power generation ration within 3 years, which explains Trump’s emphasis on the results of petroleum.
Ethan Zindler, head of Americas at Bloomberg NEF, commented that the campaign events for the 2020 US presidential election lacked the attention on coal firing, which indicates that coal-fired power generation is almost impossible to see a “revitalization”. As major global companies like Apple and Google join the RE100, and demand the supply chain to follow up on the direction accordingly, the importance of renewable energy is self-evident, and the continuous adoption of petroleum and coal-fired power generation will also impact the commercial and social reputation for businesses.
(Cover photo source: pixabay)