Candidates Differ On Energy Policy
One of the clearest policy differences between the two presidential candidates emerged during the second debate, when President Donald Trump challenged claims that challenger Joe Biden would “end” fracking (hydraulic fracturing). Trump has been a strong supporter of fracking and the energy independence it has brought the United States.
Biden’s position on fracking has changed, reflecting a significant shift on energy policy in his party in just a few years. Biden as president would not have the authority to “ban” fracking; that would be up to Congress and the states. What he could do, and what he has promised to do, is to prohibit fracking on federally controlled lands and waters. “I will not ban fracking, I said no fracking on federal land,” he told several local TV stations in Pennsylvania, a state that has seen a fracking renaissance and is important for both sides to win.
The American Petroleum Institute (API) posted a report in September pointing out that energy produced on federal lands and waters plays a “critical role in America’s energy revolution,” accounting for 12 percent of U.S. natural gas production and nearly a quarter of U.S. oil production. If a future president halted all energy production on federal lands and waters, U.S. oil imports from foreign sources could increase by up to 2 million barrels per day, API claimed. U.S gross domestic product could decline by $700 billion by 2030; and U.S. households could spend up to $19 billion more on energy by 2030.
Another report issued last December by the U.S. Chamber of Commerce’s Global Energy Institute estimates that a ban on fracking in 2021 could lead to the loss of 5.9 million jobs in seven states, including about 600,000 in Pennsylvania alone.
Biden’s energy plan, posted on his campaign website, calls for the Green New Deal and a “complete” transition to “clean, renewable” energy sources by 2050. He promises to “sign a series of new executive orders with unprecedented reach that go well beyond the Obama-Biden administration platform and put us on the right track.” To reach that 2050 goal requires changes everyone agrees would be wrenching.
Biden also says he will “end subsidies” for carbon-based energy. This claim is harder to evaluate, because what carbon critics consider “subsidies” include tax breaks and incentives considered normal in other industries. For instance, drillers are allowed to deduct up to 100 percent of non-recoverable “intangible drilling costs”—i.e., the cost of drilling an unproductive well. The goal is to mitigate some of the risks of private energy investment, to help incentivize activity that ultimately benefits the public.
Anti-carbon activists call incentives like these “subsidies” partly to counter the argument that renewables can’t survive in the market without subsidies. They also want to discourage private investors from investing in energy companies. Their avowed goal is to completely move away from all forms of carbon energy as quickly as possible by raising its price. They would put shackles on the market, instead of letting markets adjust gradually to energy transitions.
Our industry has a proud tradition of working well and cooperatively with both parties on water infrastructure issues. The interests of the energy industry don’t always align perfectly with those of the towing and barge industry—on the Jones Act, for instance. But our industry has always been closely tied to energy. Coal was the top waterborne cargo for more than a hundred years. Barges are key in serving the oil and gas industry.
How energy transitions are managed, and at what pace, will make a huge difference to people’s livelihoods and economic well-being. New York’s fracking ban has significantly raised energy costs in New England compared to the rest of the country. Moving too fast nationally would raise energy prices and deliver more shocks to an economy that has already suffered from COVID-19 and international trade realignments.
It’s clear that differences in energy policy and goals between the two parties would have drastically different consequences for our industry.
