Biden’s Energy Policy – Part One

Posted: January 27, 2021

Subscribe HERE


Abstract

In his first 48 hours in office, the 46th President of the United States, Joseph Biden Jr. cranked out about 30 executive actions, 14 of which target a broad range of former President Trump’s executive mandates, focusing on themes such as climate change, clean energy, and decarbonization. The chasm between Biden’s agenda and Trump’s legacy is one of the widest in recent decades and nowhere is that contrast more pronounced than on climate change and the environment. Biden comes to power with a sense of urgency about climate change that is unmatched by any previous occupant of the White House, and he is installing people who share his views throughout the government. Biden’s plan for the future of energy in America sets the country down a new path – one aimed at transition and lasting change during his “Clean Energy Revolution” – that will have reaching implications both domestically and abroad. 


Key Points

  • The Biden Presidency will usher in a major policy shift for domestic energy and climate change compared to the previous administration. Biden has coined his plan the “Clean Energy Revolution,” and in the first week of entering office has implemented several executive orders to begin reaching his environmental goals.

  • In the near term, Biden’s plan includes increased regulation on methane emissions for oil and gas operations, more stringent fuel economy standards, enacting legislation to protect the Arctic National Wildlife Refuge and other federal lands, banning new leasing for oil and gas on federal lands, and rejoining the Paris Climate Agreement. The long term implication for these actions will be investment of $400 billion in clean energy over the next 10 years, reducing the U.S. carbon footprint 50% by 2035, increased infrastructure for electric vehicle charging, a net-zero emission target for the agricultural sector, additional disclosure requirements relating to climate-risks for publicly traded companies, and creating 10 million union jobs to implement these climate crisis solutions.

  • The cornerstone of his climate policy is a goal to reach a net-zero emission target in the U.S. by 2050. This will be done though the culmination of several initiatives and executive orders throughout his presidency. The first major executive order Biden enacted was rejoining the Paris Climate Agreement. This move will act as a springboard to implement other climate goals and environmental initiatives promised during his election campaign.

  • Other executive orders that have also been signed include revoking the permit for the Keystone XL pipeline between the U.S. and Canada and a 60-day moratorium on new permits for federal oil and gas operations. 

  • Additional initiatives and executive orders are sure to be implemented as more policies are enacted and the Department of Energy shifts its focus. While the actions taken so far have been focused on meeting campaign promises, they set the stage for future policies and are a barometer for the weight that will be placed on climate change and environmental governance for the next four years.

Introduction 

On January 20, 2021 this great country ushered in a new age after swearing in the 46th President of the United States, Joseph Robinette Biden Jr., President Biden’s plan for the future of energy in America sets the country down a new path – one aimed at transition and lasting change – that will have reaching implications both domestically and abroad. Themes such as climate change, clean energy, and decarbonization dominate Biden’s plan for a “Clean Energy Revolution”, but as is common with most campaign platforms, his plan outlines the “what” but not necessarily the “how”. The chasm between Biden’s agenda and Trump’s legacy is one of the widest in recent decades and nowhere is that contrast more pronounced than on climate change and the environment. Biden comes to power with a sense of urgency about climate change that is unmatched by any previous occupant of the White House, and he is installing people who share his views throughout the government. Just as his predecessor spent a significant chunk of his time in office overturning Obama-era carbon reduction-targeted policies, green-lighting oil and natural gas pipelines, and reversing emission restrictions; Biden is expected to use his first 100 days overriding Trump’s fossil-fuel focused policies with executive orders. That being said, on day one, Biden has already used the full authority of the executive branch to make progress towards his climate strategy. Key changes from the new administration include executive orders to restart climate diplomacy by re-joining the Paris Climate Agreement and several other presidential decrees to begin transitioning the nation away from fossil fuels. 


Key Action’s And Elements Of Biden’s Plan For A Clean Energy Revolution 

Within hours of taking the oath of office as President on Wednesday, Joe Biden had plans to sign more than a dozen executive orders and direct nearly 100 agency actions aimed at unraveling Donald Trump’s environmental policies, as he works to cement the government’s role in safeguarding the nation’s air and water, protecting endangered species, and combating climate change at home and abroad [1]. Before going into too much detail, some of the key actions and elements of President Biden’s energy policy must first be uncovered. While his energy policy is far more extensive than this, including plans on job creation and spending, the following is a summary of the “9 Key Elements of Joe Biden’s Plan For A Clean Energy Revolution” [2]. 

Figure 1: Snippet of Joe Biden’s Clean Energy Revolution Plan [2]

Starting on his first day in office, President Biden will attack climate change to spur a clean energy revolution. According to the Intergovernmental Panel on Climate Change, by 2021 there will only be 9 years left to stop the worst consequences of climate change and as a result, Biden will act on climate immediately and ambitiously, because there’s no time to waste [2]. Biden plans to first take actions including requiring aggressive methane pollution limits for new and existing oil and gas operations; developing rigorous new fuel economy standards aimed at ensuring 100% of new sales for light- and medium-duty vehicles will be zero emissions and annual improvements for heavy duty vehicles; preserving America’s natural treasures by permanently protecting the Arctic National Wildlife Refuge and other areas impacted by President Trump’s attack on federal lands and waters; and banning new oil and gas leasing on federal lands and waters [2]. After these actions are taken, the cornerstone of his climate revolution is unveiled as he plans to work with Congress to put the United States on an irreversible path to achieve economy-wide net-zero emissions no later than 2050 [2]. To springboard this plan into action, he plans to rally the world towards urgent climate action by re-joining the Paris Climate Agreement. In addition, he will convene a climate world summit to directly engage the leaders of the world’s major greenhouse gas-emitting nations to persuade them to join the United States in making more ambitious pledges towards protecting the global climate without allowing other nations to game the system by becoming destination economies for polluters [2].

In the long term, Biden plans to invest $400 billion over ten years “as one part of a broad mobilization of public investment” in clean energy and innovation through his new research agency, ARPA-C, focused on accelerating climate technologies [2]. Such actions will encourage the accelerated deployment of clean technologies throughout the economy including setting a target of reducing the carbon footprint of the U.S. building stock 50% by 2035, deploying more than 500,000 new domestic public charging outlets by the end of 2030, and ensuring the U.S. agricultural sector is the first in the world to achieve net-zero emissions [2]. He will then require public companies to disclose climate-related financial risks and the greenhouse gas emissions in their operations and supply chains and work to enact legislation requiring polluters to bear the full cost of their climate pollution [2]. Such actions will hold corporations accountable for pollution and will be the first step in making it a priority for all federal agencies to engage in community-driven approaches to develop solutions for environmental injustices affecting communities of color, low-income communities, and indigenous communities [2]. Lastly, Biden will ensure every federal dollar spent on rebuilding our infrastructure during his administration will be used to prevent, reduce, and withstand the impacts of this climate crisis which will create 10 million good-paying, middle-class, union jobs [2]. He will do this by standing with communities and workers that have risked their lives to produce fossil fuels that made it possible for America to win world wars and become an industrial power, those most impacted by the changing energy market [2]. 

Figure 2: Joe Biden Announcing His Clean Energy Revolution [3] 

While many of Biden’s actions on his inauguration day will become effective later in his term, some of the executive orders will go into effect immediately. Within the first week in office, President Joe Biden signed executive orders to reverse decisions of the previous administration by rejoining the Paris Agreement, revoked a Presidential permit for the Keystone XL pipeline, and issued a temporary moratorium on all oil and natural gas leasing activities in the Arctic National Wildlife Refuge in Alaska as well as any other federal lands and waters [4]. In a briefing with reporters Tuesday evening, January 19th, Biden’s new national climate adviser, Gina McCarthy, said the moves will “begin undoing some of the harmful actions that happened in the previous administration’s watch, so that we can move forward in combating the climate crisis” [4]. In order to grasp the implications of these actions and understand what they mean for the global energy industry, the cornerstone of his climate initiative must first be highlighted. 


Cornerstone Of The Clean Energy Revolution: Economy-Wide Net-Zero By 2050 

While executive orders taken on his first day in office are a springboard to action for Joe Biden’s Clean Energy Revolution, the focal point is his plan to work with Congress to put the United States on an irreversible path for achieving economy-wide net-zero emissions no later than 2050. This will not be a single executive order to be put into place immediately. Instead, it will be a series of executive orders that are a part of the $2 trillion Clean Energy Plan. The unprecedented reach of his executive orders will go well beyond the Obama Administration. It is expected he will demand Congress enact legislation in the “first year of his presidency that: 1) establishes an enforcement mechanism to achieve the 2050 goal that includes milestone targets no later than the end of his first term in 2025, 2) makes a historic investment in clean energy and climate research and innovation, and 3) incentivizes the rapid deployment of clean energy innovations across the economy, especially in communities most impacted by climate change” [3]. Biden insists that failure on these fronts is not an option. 

Figure 3: Checkpoints For President Biden’s Push For Net-Zero [11]

Interestingly enough, many aspects of Biden’s initiative are probably more aligned than misaligned about the future of energy with the progress of the oil and gas industry. Countless companies in both the private and public sectors, including many in the oil and gas industry, in addition to a growing number of countries, have committed to net-zero emissions in the next few decades. Not only have many of these moves been welcomed by the global petroleum industry, but they are claimed to be necessary as the future of this planet depends on actions taken today. The thing is, this ambitious strategy would cost the domestic upstream oil and gas industry greatly while propelling green energy segments forward, changing the energy landscape [10]. Either way, many in the oil and gas industry are preparing to stand alongside the nation’s new President to combat the perils of climate change, regardless of the potential implications against their industry. 


Executive Order #1 on Climate: The Paris Agreement 

President Biden’s sparring with President Trump over the oil industry has so far included the Keystone XL pipeline project, ANWR drilling rights, banning oil and gas drilling on all federal land, and the Paris Climate Agreement. Of these, only one had the honor of being involved in President Biden’s first executive action on climate change. The Paris Agreement is a legally binding international treaty on climate change whose goal is to limit global warming to well below 2 (preferably to 1.5) degrees Celsius, compared to pre-industrial levels [5]. To achieve this long-term temperature goal, countries aim to reach global peaking of greenhouse gas emissions as soon as possible to achieve a climate neutral world by mid-century. The Paris Agreement is a landmark in the multilateral climate change process because, for the first time, a binding agreement brought all nations into a common cause to undertake ambitious efforts to combat climate change and adapt to its effects [9]. The Agreement was adopted by 196 Parties at COP 21 in Paris, on December 12, 2015 and entered into force on the 4th of November, 2016 [5]. Interestingly enough, on November 8th, 2016, Donald Trump was elected the 45th President of the United States. Shortly after taking office in January 2017, Trump took action to leave the Paris Agreement. In fact, on June 1, 2017, United States President Donald Trump announced that the U.S. would cease all participation in the 2015 Paris Agreement on climate change mitigation, and begin negotiations to re-enter the agreement “on terms that are fair to the United States, its businesses, its workers, its people, and its taxpayers,” or form a new agreement [6]. The U.S. officially withdrew from the accord to limit climate-warming greenhouse gas emissions late last year, after beginning the process in 2017, but is the only country of the nearly 200 signatories that has withdrawn. This decision was reversed just hours after President Joe Biden entered office when he formally signed an executive order to have the United States rejoin the Paris Climate Agreement. 

Figure 4: Paris Climate Agreement Executive Order [7] 

“I, Joseph R. Biden Jr., President of the United States of America, having seen and considered the Paris Agreement, done at Paris on December 12, 2015, do hereby accept the said Agreement and every article and clause thereof on behalf of the United States of America” [7]. So why is this important? It is Biden’s first step as commander and chief on his Clean Energy Revolution. Although it will take 30 days for the U.S. to officially rejoin the agreement, it is the perfect springboard for fulfilling campaign promises, but meeting its targets is going to be a tall order. The U.S. is the second-largest producer of carbon emissions, behind China, and has contributed more to global climate change over time than any other country [8]. As a candidate, Biden made a bold pledge to cut all greenhouse gas emissions from the nation’s electric sector by 2035 and to make the country carbon-neutral by 2050, the cornerstone of his Clean Energy Revolution – which would surpass the targets set forth by the agreement. 

Carbon-neutrality by 2050 in and of itself will be difficult, but cutting greenhouse gas emissions from the nation’s electric sector by 2035 is an even bigger mountain to climb. But, there is another sector that Biden’s administration plans to focus on – the transportation sector. Transportation sources of carbon emissions are going to be hard to curtail since transportation overtook electricity generation as the largest source of greenhouse gas emissions in the U.S. in 2017. Biden’s plan to reduce greenhouse gas emissions from transportation – the fastest growing source of U.S. climate pollution – is to preserve and implement the existing Clean Air Act. This will occur by developing rigorous new fuel economy standards aimed at ensuring 100% of new sales for light- and medium-duty vehicles will be electrified along with annual emissions improvements for heavy duty vehicles [3]. In addition, his administration plans to utilize the Federal government procurement system – which spends $500 billion every year – to drive towards 100% clean energy and zero-emissions vehicles [3]. One upside is that the sale of more electric vehicles means additional demand for electricity. Carbon emissions from electricity generation have been decreasing as the last decade and has seen many coal plants retired in lieu of natural gas power plants as utilities ramped up reliance on renewable energy sources like wind and solar [9]. Electric vehicles today make up less than 2% of new cars and SUVs sold each year in the United States, but sales will grow as the cost of battery-powered cars decreases, even without government incentives. Still, Biden’s move to rejoin the Paris Climate Agreement signals to the world that the U.S. is serious about addressing climate change again. United Nations Secretary General Antonio Guterres welcomed the American re-entry into the climate agreement by stating: “we look forward to the leadership of [the] United States in accelerating global efforts towards net zero” [8]. The next major U.N. climate summit will take place in Glasgow, Scotland in November when countries in the agreement will give updated emissions targets for the next decade. 


Conclusion

While Biden’s environmental push on day one far surpasses that of any previous president, only time will show how much of his agenda he can actually finish — and how successfully he can rebuild the nation’s image around the world, particularly when it comes to leading on climate action. While Biden has called climate change “the number one issue facing humanity”, it is not necessarily a view held throughout the United States [8]. Across the U.S. there are certain individuals and groups who view the inauguration of Joe Biden as the next President of the United States as “setting the stage for a policy agenda that openly and proudly demonizes the affordable, reliable energy resources we all rely upon” [4]. Their argument is plain and simple: even if the world met its targets for renewable energy, half of global energy would still come from oil and gas. Furthermore, if half the global energy comes from oil and gas, it should be sourced from the United States, where it is produced in arguably the most environmentally responsible, affordable way. But these individuals are only looking at half the coin. While President Biden is certainly encouraging a shift away from fossil fuels, he is not proposing a total ban on hydrocarbon based energy. Instead, President Biden is proposing an accelerated trajectory for the energy transition. That being said, individuals who support climate activism must also be open to the opposing viewpoint as well. “From Paris to Keystone to protecting gray wolves, these huge first moves from President Biden show he’s serious about stopping the climate and extinction crises caused by fossil fuels,” Kieran Suckling, executive director of the Center for Biological Diversity, said in a statement. “These strong steps must be the start of a furious race to avert catastrophe” [8]. A focus on climate change is certainly necessary, but to vilify our current energy sources is foolish. The oil and gas industry is firmly committed to being part of the transition to the next generation of energy sourcing. Climate change is a serious issue and the industry has an opportunity to be a leader in managing greenhouse gas emissions while balancing the need for safe, reliable, and economic energy. While the cornerstone of his Clean Energy Revolution to achieve economy-wide net-zero by 2050 is a bold task, his decision to rejoin the Paris Climate Agreement is the perfect springboard to action. More changes to the energy landscape are sure to come in the Biden administration’s first hundred days. Be sure to tune in next week for an investigation into President Biden’s second executive order on climate change: “Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis” and what that could mean for the fossil fuel industry.  


References

[1] https://joebiden.com/clean-energy/ 

[2] https://joebiden.com/9-key-elements-of-joe-bidens-plan-for-a-clean-energy-revolution/ 

[3] https://joebiden.com/climate-plan/ 

[4] https://www.washingtonpost.com/climate-environment/2021/01/20/biden-climate-change-inauguration/ 

[5] https://unfccc.int/process-and-meetings/the-paris-agreement/the-paris-agreement

[6] https://www.whitehouse.gov/briefings-statements/statement-president-trump-paris-climate-accord/ 

[7] https://www.whitehouse.gov/briefing-room/statements-releases/2021/01/20/paris-climate-agreement/ 

[8] https://www.npr.org/sections/inauguration-day-live-updates/2021/01/20/958923821/biden-moves-to-have-u-s-rejoin-climate-accord 

[9] https://www.washingtonpost.com/politics/2020/12/22/biden-fossil-energy-oil-gas-companies/

[10] https://www.offshore-technology.com/features/joe-biden-is-president-elect-what-now-for-us-oil-and-gas/ 

[11] https://www.nomuraconnects.com/focused-thinking-posts/biden-gears-up-the-us-auto-industry-to-get-back-on-a-more-sustainable-track/ 

Send Us a Message

Rare Petro Logo

1224 Washington Ave,
Suite 10
Golden, CO 80401

(720) 772-7371

contactus@rarepetro.com

Rare Petro Logo

Subscribe!

Oil & Gas News Pulse

Newsletter

You have Successfully Subscribed!