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What a Biden presidency will mean for U.S. energy policy

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For the first time in 28 years, there will be a change in presidential leadership after one term. 

The election of former Vice President Joe Biden marks a dramatic shift in the U.S. energy policy landscape. Biden ran on an ambitious and progressive policy platform, proposing more than $2 trillion in clean energy, infrastructure and community development investments.

However, Biden’s policy agenda will likely be limited if the U.S. Senate remains in Republican hands. Nevertheless, as both Presidents Obama and Trump demonstrated, there are a number of executive actions that President-elect Biden can pursue on his first day in office, regardless of a divided Congress.

Here are five things that we can expect from the Biden administration on energy policy.

1. Biden will issue a flurry of executive orders to undo regulatory rollbacks by the Trump administration.  

 
As Biden repeatedly stated on the campaign trail, on plans to issue executive orders, many of which will strike down executive orders issued by the Trump administration and restore rules put in place by the Obama administration.   

According to the 9 key elements of Joe Biden’s Plan for a Clean Energy Revolution, those actions will include emissions and drilling limits, such as:   

Requiring aggressive methane pollution limits for new and existing oil and gas operations
Developing rigorous zero-emissions fuel economy standards for new vehicle sales and implementing annual improvements for heavy-duty vehicles
Safeguarding America’s national treasures by permanently protecting the Arctic National Wildlife Refuge and other areas impacted by President Trump’s approach to federal lands and waters
Banning new oil and gas leasing on public lands and waters

While the Biden administration can issue executive orders without the explicit approval of the U.S. Congress, executive orders are not without legal risk. They can be challenged before and struck down by the U.S. Supreme Court. Many experts have written about what the conservative make-up of the Supreme Court might mean for future climate change cases, given that one-third of the justices were appointed by President Trump. 

 

2. Regardless of which party controls the U.S. Senate, cutting carbon emissions will be at the heart of Biden’s clean energy agenda. 

 
If the U.S. Senate is led by Republicans, the Clean Air Act (CAA) will make cutting greenhouse gas emissions one of the most achievable aspects of Biden’s energy policy agenda. 
CAA is a federal law that was created to control air pollution and emissions from both vehicles and facilities. It also established the U.S. Environmental Protection Agency (EPA) as the primary regulating authority within the executive branch. 

Given that Biden has proposed to eliminate all carbon emissions from the power sector by 2035, he will likely have to exert authority under CAA. Experts believe he may explore an updated or adapted version of the Obama administration’s Clean Power Plan, which aimed for a 32 percent emissions reduction in the electric power sector by 2030. 

Yet, as underscored by the U.S. Supreme Court’s decision to strike down the Clean Power Plan in a 5-4 ruling before it even took effect, there may be limits to Biden’s abilities under CAA. 

 

3. The U.S. will not only rejoin the Paris Climate Agreement – it will lead a global climate summit focused on increasing commitments. 

 
Biden has pledged to rejoin the Paris Agreement on the first day of his presidency. The landmark agreement – which was signed by 196 different nations – aims to halt the global temperature rise below 2 degrees Celsius (above pre-industrial levels) and pursue stretch efforts to limit the temperature increase at 1.5 degrees Celsius. 

Despite extensive coverage about the U.S. leaving the Paris Agreement, it did not officially leave until November 4, 2020. Rejoining the Paris Agreement only requires an official letter to the United Nations and will take effect 30 days later. So, if Biden rejoins the pact as expected on Inauguration Day, the U.S. will only have been out of the Paris Agreement for a grand total of three months. However, the U.S. is behind on its commitment: it is only on track for a 17 percent reduction by 2025, despite pledging a 25 percent reduction.

Biden will likely reaffirm the nation’s commitment by also convening a global climate summit with the world’s largest emitters of greenhouse gas emissions in the first 100 days of his presidency. According to his campaign website, he aims to “persuade them to join the United States in making more ambitious national pledges, above and beyond the commitments they have already made.”

 

4. There will be new restrictions on oil and gas production, but it may not be as consequential as his opponents have suggested.   

 
In the second presidential debate, Biden made waves when he stated that he would “transition away from the oil industry.” 

While the comment received a lot of publicity, many industry experts have since downplayed the comments. One reason is the repeated reassurances by Biden and Harris that they would not pursue a ban on hydraulic fracturing, or “fracking,” which has driven down the price of natural gas in the past decade. Furthermore, based on past production data, there are some real questions surrounding the degree and speed by which the president can actually impact oil and gas markets.   

With that said, Biden will likely pursue some policies – beyond methane limits for oil and gas wells – that restrict oil and natural gas production. He has pledged to rescind executive orders issued by President Trump that opened up portions of Bears Ears National Monument, Grand Staircase-Escalante National Monument and the Arctic National Wildlife Refuge to oil exploration. More consequentially, he has proposed a ban on all offshore drilling in federal waters, which currently makes up about 16 percent of total U.S. production. 

 

5. Maybe – just maybe – there is a chance for some bipartisan energy legislation.

 
Conventional wisdom dictates that much of Biden’s policy agenda will be unattainable if Republicans control the U.S. Senate. But, are there truly no potential opportunities for bipartisanship and compromise? After all, President-elect Biden fashions himself as a moderate and served 36 years as a U.S. Senator from Delaware. 

Upcoming negotiations on COVID-19 relief and recovery could offer one potential pathway for energy legislation. There are some early indications of bipartisan support for funding new clean energy technologies, such as carbon capture technology, and grid modernization efforts. Extensions for the solar and wind tax credits are also annual candidates for bipartisan support. 
 
Beyond those legislative provisions and executive orders, the pillars of Biden’s $2 trillion energy and infrastructure proposal are likely off the table without a change in the U.S. Senate.   

Stay tuned to the Direct Energy Business blog as we recap the year’s most significant energy trends and overview what to expect for the energy industry in 2021. 

 

Posted: November 19, 2020

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