As President-elect Joe Biden and Vice President-elect Kamala Harris take the reins of governing the U.S. following one of the most hotly contested elections in the country’s history, energy sector leaders anticipate the industry will face major changes in operations, regulations and legislation.
“Those who were paying attention throughout the campaign know that Biden did say some things about the energy sector throughout the campaign,” said Chet Thompson, president and CEO of AFPM. “He talked about his intention to gradually transition the United States from oil and gas. With a closely divided Congress, many of those legislative promises will likely remain aspirational. But — and this is a very important ‘but’ that has impact on our industry — he can advance his climate and environmental agenda using his existing authorities.”
Speaking at the YNow2020 online conference in a keynote session titled “The U.S. Refining and Petrochemical Landscape in 2020 and Beyond,” Thompson cited the executive branch’s regulatory power in agencies like the EPA, DOE and DOT.
President-elect Biden pulled no punches in how he stands on these issues in both his campaign speeches as well as on his official transition web pages, Thompson said.
“He has made it clear that he intends to stay aggressive on these issues,” he said.
Thompson interpreted President-elect Biden’s intention to “remain aggressive” by pointing to various issues he expects the Biden administration “to pursue immediately,” or at least within the first year of taking office.
“First, he almost certainly, I would expect before the inaugural parade is over, he will have already signaled his intention to re-enter the United States in the Paris Accord,” Thompson said. “That will soon be followed by developing new greenhouse gas emission targets for the United States, per the Paris Accord.”
Thompson said he believes President-elect Biden seeks to develop those targets ahead of the Glasgow Summit, which is scheduled to take place in late 2021.
“I expect climate to be a consideration among all of his rule-makings,” Thompson continued. “We expect the Biden administration to increase what we call the social cost of carbon, the measurement they use in all of their cost benefit analyses. We would imagine that they will go back to the cost benefit analyses they used during the Obama administration, and that that rule will be factored into all of their ongoing rulings.”
Executive orders and reregulation
Thompson said he also expects President-elect Biden to issue an executive order directing all agencies to pursue a re-regulatory agenda including aggressive fuel economy standards.
“To be sure, reversing the Trump administration’s [corporate average fuel economy] standards will be a high priority,” he said. “I would imagine he will establish limits on the methane emissions from the upstream sector, and he will continue his efforts to decarbonize the power sector.”
According to Thompson, President-elect Biden will also seek to slow down and eventually stop the permitting of oil production on public lands.
“Again, I think that will be a slow transition, but it remains something he’s been committed to throughout his campaign,” he said. “I also expect Biden to focus more on environmental, social and governance issues, and to make permitting of infrastructure projects far more difficult than they are today.”
AFPM is committed to engaging with the Biden/Harris administration, Thompson said.
“We will work hard to ensure that any policy that allows us to continue delivering on our commitment to the duel challenge of providing affordable and reliable energy and petrochemicals that the world needs to thrive, but to do so in an environmentally sustainable way,” he concluded. “While I am certain we will have disagreements along the way, I am confident we will be able to develop a good, strong working relationship rooted in sound science and transparency.”
