Following his defeat of incumbent Donald Trump in the 2020 United States presidential election, many industry analysts have begun examining the consequences of a Joe Biden presidency on the US Energy sector. In its most recent analysis, global energy consultancy group, Wood Mackenzie, posited that Biden has offered American voters a radically different vision of energy policy from President Donald Trump, which has focused on addressing the threat of climate change.
Taking this into account, Ed Crooks, Wood Mackenzie’s Vice-Chair – Americas, posited that Biden will enter the White House with a goal of setting the US on course for net-zero greenhouse gas emissions by 2050 and will take the US back into the Paris climate change agreement which it exited following Trump’s formal notice to the United Nations on November 4, 2019. Crooks was keen to note however that there is a good chance the Republicans will retain control of the Senate, which will limit Biden’s ability to deliver on his agenda.
But even with the federal government constrained, the Wood Mac Vice-Chair said there are likely to be some key changes under a Biden administration. Expounding further, Crooks noted that one can expect a boost for offshore wind. The WoodMac official noted that the Trump administration has slowed the process of approving offshore wind and had proposed to close off a section of the US Atlantic coast from Florida to Virginia. Crooks said that a Biden administration will act faster to support states and companies seeking to develop offshore wind industries.
With respect to restrictions on oil and gas development, Crooks said there will not be a ban on fracking, but noted nonetheless that Biden has pledged to end sales of new leases for oil and gas development on public lands and waters. In the area of onshore development, Crooks noted that the impact would be minimal while in the area of offshore, the effects would be more significant, although they would take some time to become apparent. He said that a ban on new leasing, if permanent, would mean that by 2035 US offshore oil and gas production would be about 30% lower than if lease sales had continued.
As it relates to support for electric vehicles (EVs), the WoodMac Vice-Chair disclosed that Biden plans to impose tighter fuel economy standards, which will help sales of electric cars. By 2030, Crooks said there could be 4 million EVs on US roads as a result of those standards, almost 60% more than if the Trump administration’s rules had taken effect. He was keen to note however that the impact on US fuel demand this decade will be minimal. The official concluded, “Even 4 million EVs represent only about 1.5% of the total of 275 million vehicles we expect on US roads in 2030.”