234
international treaty was negotiated under the Obama administration to combat
global warming, but Trump withdrew it, saying the deal would hurt the US economy. Biden has also promised to reduce US emissions to zero by 2050, which
includes targeting zero emissions by 2035. It would be difficult to achieve such a
goal without a Democratic majority in Congress (www.cnn.com 2020a, b). Biden
argues that climate change is a threat to the planet and that the transition from fossil
fuels to green energy could be an economic opportunity, provided the United States
moves fast enough to become a leader in clean energy technology (www.eenews.
net 2020).
Oil and Gas Drilling in Federal Lands
Trump sought to maximize domestic oil and gas production, but Biden promised to
ban new drilling permits on federal land and waters to combat climate change.
According to the US Department of the Interior, the country produced about three
million barrels of oil and 13.2 billion cubic feet of natural gas per day from federal
lands and waters last year. This figure is equivalent to a quarter of the total oil production and more than one-eighth of gas production. A federal ban on new licenses
would mean zero for the next few years. It will also affect public revenues. Federal
oil and gas production generated about $12 billion in public revenue in 2019, which
was split among the Treasury Department, states, cities, tribes, and clearing funds
(www.reuters.com 2020a, b, c, d, e, f, g, h, i).
Biden’s election victory adds to the obstacles that the US oil and gas industry
faces as demand falls amid the Covid-19 pandemic. The democratically elected
president is expected to ban new drilling permits on federal land through an executive order. His move to tackle the industry’s pollution will run counter to the Trump
administration’s efforts to ease environmental regulations and likely increase the
cost of producing, transporting, and processing hydrocarbons. Biden’s target for a
100% clean grid by 2035 may reduce the share of gas in electricity generation and
reduce its demand for gasoline and diesel to increase sales of electric vehicles.
Certainly, Biden’s proposal to limit production on federal land may have a positive
effect on prices because it limits supply development (www.woodmac.com 2020a,
b). Expenditures on economic recovery will also boost demand for fossil fuels in the
short term. The US President-elect’s climate program does not mention liquefied
natural gas. However, the construction of LNG pipelines and terminals in the United
States, which has emerged as a major exporter of LNG in recent years, may be successful if Biden succeeds in forming a Democratic-majority Federal Energy
Regulatory Commission to oversee the construction of energy infrastructure. US
LNG exporters may benefit in some way in the Biden administration. If the Biden
government succeeds in reducing US shale pollution, it will attract buyers sensitive
to climate change in Europe. Improving relations with China will also give American
exporters greater access to the world’s largest market (https://www.worldoil.com/
magazine/2020/december-2020/features/in-the-bidenharris-presidency-any-fracing-ban-is-least-of-the-industry-s-worries 2020).
6 Trump Energy Diplomacy
international treaty was negotiated under the Obama administration to combat
global warming, but Trump withdrew it, saying the deal would hurt the US economy. Biden has also promised to reduce US emissions to zero by 2050, which
includes targeting zero emissions by 2035. It would be difficult to achieve such a
goal without a Democratic majority in Congress (www.cnn.com 2020a, b). Biden
argues that climate change is a threat to the planet and that the transition from fossil
fuels to green energy could be an economic opportunity, provided the United States
moves fast enough to become a leader in clean energy technology (www.eenews.
net 2020).
Oil and Gas Drilling in Federal Lands
Trump sought to maximize domestic oil and gas production, but Biden promised to
ban new drilling permits on federal land and waters to combat climate change.
According to the US Department of the Interior, the country produced about three
million barrels of oil and 13.2 billion cubic feet of natural gas per day from federal
lands and waters last year. This figure is equivalent to a quarter of the total oil production and more than one-eighth of gas production. A federal ban on new licenses
would mean zero for the next few years. It will also affect public revenues. Federal
oil and gas production generated about $12 billion in public revenue in 2019, which
was split among the Treasury Department, states, cities, tribes, and clearing funds
(www.reuters.com 2020a, b, c, d, e, f, g, h, i).
Biden’s election victory adds to the obstacles that the US oil and gas industry
faces as demand falls amid the Covid-19 pandemic. The democratically elected
president is expected to ban new drilling permits on federal land through an executive order. His move to tackle the industry’s pollution will run counter to the Trump
administration’s efforts to ease environmental regulations and likely increase the
cost of producing, transporting, and processing hydrocarbons. Biden’s target for a
100% clean grid by 2035 may reduce the share of gas in electricity generation and
reduce its demand for gasoline and diesel to increase sales of electric vehicles.
Certainly, Biden’s proposal to limit production on federal land may have a positive
effect on prices because it limits supply development (www.woodmac.com 2020a,
b). Expenditures on economic recovery will also boost demand for fossil fuels in the
short term. The US President-elect’s climate program does not mention liquefied
natural gas. However, the construction of LNG pipelines and terminals in the United
States, which has emerged as a major exporter of LNG in recent years, may be successful if Biden succeeds in forming a Democratic-majority Federal Energy
Regulatory Commission to oversee the construction of energy infrastructure. US
LNG exporters may benefit in some way in the Biden administration. If the Biden
government succeeds in reducing US shale pollution, it will attract buyers sensitive
to climate change in Europe. Improving relations with China will also give American
exporters greater access to the world’s largest market (https://www.worldoil.com/
magazine/2020/december-2020/features/in-the-bidenharris-presidency-any-fracing-ban-is-least-of-the-industry-s-worries 2020).
6 Trump Energy Diplomacy