The end of the oil era .. Biden's victory will upset the scales of the energy world

Back in May 2016, when US President Donald Trump was still just an insignificant competitor in the presidential race, he declared that hegemony over the energy field would be a strategic goal in US policy, and as soon as he reached the White House, Trump launched a fierce campaign to abolish regulations. That impeded local production, and sought to open more federal lands and offshore areas for exploration, as well as removing many environmental regulations.

In an article published in the American Foreign Policy newspaper, writer Eduardo Campanella said that in December 2017, a few months after announcing the US withdrawal from the Paris climate agreement, Trump made clear through the National Security Strategy document that the United States would not It can impose its hegemony on the energy sector simultaneously with the fight against global warming, but will instead focus on countering an anti-growth energy agenda that harms the US economy and energy security interests.

If re-elected, Trump will continue his efforts to support the domestic oil industry and remove regulatory restrictions while being keen to maintain some influence over the OPEC + alliance thanks to his strong link with the Saudi leadership, in order to prevent prices from falling below a certain point.

If his Democratic rival, Joe Biden, wins, he is expected to put climate and environment issues at the top of his political agenda by promoting green investments, reorganizing the shale oil industry and returning to the Paris Agreement. Investors are likely to consider his administration’s efforts to conclude a new green deal. It ushered in the end of the energy era dominated by oil, which would lead to a drop in oil prices, which would upend the energy world.

If Biden wins, he will put climate and environment issues at the top of his political agenda by promoting green investment (Reuters)

Energy Industry Rearrangement

Candidates ’divergent climate change strategies reflect the radically different attitudes of Republican and Democratic voters on the issue, and according to a recent Pew survey, the percentage of Americans who believe that global climate change is a major threat to their well-being has grown from 44% in 2009 to 60% in 2019. .

The Democrats are the most concerned about this issue, while the Republicans ’stance towards it has not changed. 9 out of 10 Democrats consider climate change a major threat to the American nation, while 3 out of 10 Republicans believe that this file is harmful to the country's economy.

Given the opinion of his electoral base on this issue, Trump denied global warming, tried to calm the concerns of oil companies and resisted the international community's efforts to control carbon emissions, describing climate change as "an expensive hoax."

According to the Brookings Institution, since 2017 the Trump administration has adopted about 74 regulatory measures that have contributed to the deterioration of the environment, and according to the latest version of the World Economic Outlook issued by the International Monetary Fund, the 1990s were one of the warmest decades, while the years from 2015 to 2019 were the most intense period. Warmest on record, 2019 is the second warmest year on record.

The failure of the United States to commit to reducing carbon emissions dates back to before the Trump presidency, and emissions have decreased significantly only during the past decade, but the gap with European countries remains large, and the gap is likely to widen if Trump wins a second term, as energy dominance will remain Management guidelines.

With the aim of boosting domestic production, the writer believes that Trump will likely try to complete his agenda of deregulation and restricting the right of US states to exceed federal environmental minimum standards. He will also prioritize domestic fossil fuel production at the expense of renewable energy sources, and will allow the creation of new projects. To export liquefied natural gas, Republican control of the Senate is necessary for Trump to achieve his goals and appoint loyal politicians to federal agencies that have a duty to abolish regulatory measures.

Trump will prioritize domestic fossil fuel production at the expense of renewable energy sources (Reuters)

Biden pledges

If Biden wins, one of the milestones that will mark his presidency will be the conclusion of the Green New Deal with the goal of reaching the United States in net zero emissions by 2050.

On the financial front, Biden promised to invest $ 1.7 trillion in projects aimed at removing carbon from the US economy. In particular, Biden encouraged massive investments in solar and wind energy to improve the energy sector’s efficiency and increase the adoption of clean electricity generation.

Biden pledged to revolutionize the rail sector by investing in express trains and making them a better alternative to trucks when it comes to transporting goods.

He also promised to ban issuance of new drilling permits in federal lands and waters.

The fight against climate change will likely become an integral part of Biden's foreign policy, and he has pledged to join the Paris Agreement and not allow countries such as China "to tamper with the system by becoming the preferred destination for greenhouse companies."

Biden also called for a global ban on subsidies for fossil fuels and support for the export of clean energy and climate investment initiatives around the world.

Biden's ability to press for a new green deal depends heavily on Democratic seats in Congress, because implementing his plan requires obtaining a new budget, which in turn needs congressional approval.

Even assuming Democrats win both Congress and the White House, the transition to renewables will take several years to materialize.

Efforts to reorganize the shale oil industry may not lead to a ban on fossil fuel extraction by fracking, and in this regard, Biden stated that "only this type of drilling technology will be banned on federal lands, which represent a small portion of the total oil and gas extraction projects." ".

But it is paradoxically that the establishment of the United States of America a green economy could give the demand for oil in the country a big boost, because oil will remain the approved energy in the implementation of many investment projects, for example, building environmentally friendly infrastructure will require the use of oil-powered equipment.