Joe Biden has made it crystal clear that the U.S. will once again lead the battle against climate change if he is elected president in November. He has been less forthright about his plans for the U.S. oil and gas industry, by all appearances to avoid alienating the Progressive wing within his own Democratic Party.

This has opened the door for Biden’s critics to paint him as anti-fracking, suggesting the end of the U.S. Shale Revolution, but his actual position appears far more pragmatic.

A Biden presidency would likely have a substantial impact on global energy consumption and energy mix in the medium to longer term, as it would energize improvements in energy efficiency and the energy transition in the U.S. and elsewhere. But it is likely to have a smaller relative impact on U.S. oil and gas production. All the same, the potential impact of his proposed policies on both fronts are likely to be diluted somewhat by post-COVID financial, economic and employment constraints, as well as the superpower rivalry between the U.S. and China and related foreign policy issues.

The first part of this four-part series will explore Biden’s plan to combat the climate emergency. The second part will identify his probable policies for the U.S. oil and gas industry. Part three will quantify the impacts of these on global energy consumption, energy mix and U.S. oil and gas production through 2035, while providing plausible prices for these two commodities. The final part of this series will look at the potential impact of a Biden presidency on the Canadian oil and gas industry, including his plan to cancel the Keystone XL crude pipeline project.

Clean energy revolution

Biden was widely viewed as a moderate on energy and the environment among the challengers for the presidential nomination for the Democratic Party, but since becoming its presumptive nominee in April he has has jumped onto the climate change bandwagon with both feet. He is now claiming “there is no greater challenge facing our country and our world,” and has outlined a plan for a Clean Energy Revolution in the U.S. to “lead the world in addressing the climate emergency.”

The goal of Biden’s plan is to achieve a 100 per cent clean energy economy and net-zero emissions in the U.S. no later than 2050. A key component to meet this goal is a legally-binding enforcement mechanism, including an interim target, no later than 2025 — the end of his first term as president — based on the twin principles that polluters bear the full cost of carbon pollution and emission reductions are economy wide, not just a few sectors.

That being said, Biden’s plan for a Clean Energy Revolution appears to have its sights set on the transportation sector in particular, as it has been the fastest growing source of U.S. greenhouse gas (GHG) emissions in recent years and is not amendable to carbon capture and storage. To reduce emissions from this sector, he is planning to preserve and implement the existing Clean Air Act, and develop “rigorous new fuel economy standards” to ensure 100 per cent electrification of all new light and medium-duty vehicles and annual improvements for heavy duty vehicles.

To support this effort, Biden is planning to restore the full electric vehicle tax credit — up to US$7,500 per vehicle — and have the federal government support state and municipal efforts to add 500,000 new public charging outlets by the end of 2030.

In addition, a Biden administration would double down on efforts to develop advanced biofuels, as they may be the only way to cut aviation emissions — which now account for almost two per cent of the global total — and is hoping to “spark the second great railroad revolution” in the U.S., making it the “cleanest, safest, and fastest rail system in the world” for both passengers and freight.

Green New Deal

At the same time, Biden believes the Green New Deal is a “crucial framework” for achieving America’s Clean Energy Revolution. His version may not be as grandiose as those espoused by some of his Democratic Party colleagues, such as Congresswoman Alexandria Ocasio-Cortez and Senator Ed Markey, since it does not include a social welfare component. But it is based on the same basic principles: successfully countering climate change will require an effort of epic proportions; and the environment and U.S. economy “are completely and totally connected.”

Biden views the climate emergency as a “huge opportunity” to revitalize the U.S. energy sector, boost economic growth and job creation, and “re-claim the mantle as the world’s clean energy leader and top exporter.” To regain America’s technological lead in the area, he is proposing the federal government spend US$400 billion over 10 years, the largest public sector investment in clean energy research and innovation in history.

The U.S. government, in collaboration with universities and the private sector, did similar following World War II to spur American innovation more generally, leading to rapid economic and job growth, which in turn helped to build a strong middle class in the country.

Biden claims there are already more than three million people employed either directly or indirectly in the clean energy economy in the U.S., with the potential for far more in the future. Employment opportunities include developing and manufacturing new cutting edge clean energy technologies, but also through adoption of these technologies by American households and industries supported by “groundbreaking investments in clean and resilient infrastructure and communities.”

For example, Biden is planning to improve the energy efficiency of American buildings and reduce their carbon footprint by 50 per cent by 2035 by drastically tightening building standards and providing incentives for deep retrofits, as well as increasing appliance electrification, efficiency and on-site clean power generation.

The provision of cleaner and more resilient infrastructure and communities will create a new class of well-paying jobs in areas such coastal restoration, resilient infrastructure design, and natural solutions to combat climate change such as tree planting in both rural and urban areas.

International leadership

Since the U.S. accounts for only 15 per cent of global GHG emissions, Biden recognizes that “climate change is a global challenge that requires decisive action from every country around the world.” To lead this effort, as the Obama-Biden administration did to achieve the 2015 Paris Climate Accord, he is planning to have the U.S. re-enter this agreement on his first day as president and then push governments around the world to increase their national emission reduction pledges as America does the same.

To support this effort, Biden is planning the following for his first 100 days in office: convene a global summit to allow him to directly challenge foreign leaders to do their part; push for an enforceable global agreement to reduce emissions from international shipping and aviation; and call for total compliance to the Kigali Amendment to the Montreal Protocol to curb the global use of hydrofluorocarbons, an especially potent GHG.

In addition, a Biden administration will “name and shame global climate outlaws,” in a similar manner as the U.S. State Department ranks countries’ records on human trafficking and human rights, and stop China — by far the largest emitter in the world —from subsidizing coal exports and outsourcing carbon pollution through its massive Belt and Road Initiative.

Paying the piper

The Biden team has estimated the cost of the Clean Energy Revolution to the U.S. government to be US$1.7 trillion over the next 10 years, with the private sector and state and municipal governments having to fork in an additional US$3.3 trillion. The total cost of more than US$5 trillion represents 2.3 per cent of America’s pre-pandemic economy on an annual basis. Biden is planning to cover the federal government’s share by rolling back Trump era tax cuts, closing loopholes in the U.S. tax code for the rich, and ending all subsidies for fossil fuels.