Election 2016: A Clear Choice on Energy

This is a timely issue to discuss what the presidential election might mean in the world of energy policy, depending upon who the winner is.

The short answer is that it means a lot. The long answer is more complicated, obviously.

Without question, this is a tipping point election in almost every way. From healthcare and trade to immigration and defense, and yes, to energy, the choice between Republican nominee Donald Trump and Democratic nominee Hillary Clinton will likely determine the direction the country takes for a generation or more. I wouldn’t dare touch on any of those other topics here, but the plans presented by each campaign make the choice on energy very clear.

The Clinton Energy Plan: Building on the Obama Years

Where energy is concerned, the Clinton plan boils down to a simple premise: If you approve of the direction in which President Barack Obama has moved on energy policy over the last eight years, you will love the Clinton plan. Unsurprisingly, Clinton is a true believer in climate change theory and thus endorses all of the priorities that flow from that set of beliefs.

For renewables, that means efforts to increase federal subsidies in tax policy and the Department of Energy, which has thrown billions at a series of doomed-to-fail enterprises during the Obama administration. And it would mean more efforts to implement legislative and regulatory policies that distort markets in favor of wind, solar, corn ethanol and other biofuels.

All such policies are an invisible tax on everyday Americans, given that they have the effect of raising the cost of energy on consumers as the government attempts to artificially make these uncompetitive energy sources competitive with fossil fuels in the marketplace. President Obama has proudly boasted about that being his means to an end in the past, and Clinton endorses the approach.

A Clinton presidency would also mean a continuation of President Obama’s program of implementing massive new command-and-control regulatory plans on the energy sector of the economy, which over the last few years have dramatically raised the costs of producing oil, gas and coal. Prior to his election in 2008, President Obama made no secret of his goal to essentially regulate the coal industry out of existence, and he has been largely successful in that effort. Today it is virtually impossible for anyone to permit new coal-fired power-generating capacity; coal production in the U.S. is on the decline; and tens of thousands of coal-related jobs are being lost. Clinton often tells audiences she plans to complete the job Obama began.

One might say, “Well, that’s good for natural gas, right? After all, most of the retiring coal capacity is being replaced by cleaner-burning natural gas capacity.” That is correct, as far as it goes.
But we all must remember that the progressive Democratic anti-fossil fuel agenda does not end with the destruction of the coal industry. Once it devours the coal industry, oil and natural gas have always been the next items on the menu. Indeed, the Obama administration has already gotten off to a jump-start on the process of overly burdening the oil and gas industry with new regulations on methane, coordinating efforts on endangered species listings with radical anti-development groups, a new ozone standard that no major population center will be able to meet and a massive new EPA power grab under the Clean Water Act.

Finally, Clinton has fully supported the efforts by President Obama to repeal the century-old ability of the oil and gas industry to deduct intangible drilling costs and every other tax treatment that allows the oil and gas industry to be treated the same as every other industry under the tax code.

All of these are policy priorities that Clinton has endorsed and would plan to continue and expand during her term in office. All of these priorities lead inevitably to higher energy costs to consumers.

None of these priorities would be positive for the oil and natural gas industry.

The Trump Energy Plan: A Change in Direction

The Trump energy plan can be best described as an America first, all-of-the-above energy plan. It begins with freeing up producers of America’s abundant natural energy resources to produce them and get them to market. America has in place more reserves of coal, oil and natural gas than any other nation on the planet, and has been the only country to have to work so hard via heavy-handed regulation to prevent their use.

Shale Magazine Oct Column 7.25.2016 Donald Trump Election 2016Trump has promised that upon assuming office he will rescind Obama’s executive orders that have inhibited energy production. His next step would be to instruct EPA, Department of Energy and Department of the Interior appointees to perform a review of heavy-handed regulations put into place during Obama’s final years with an eye toward dismantling those that are arbitrary, ill-considered, duplicative of state regulations or just plain unnecessary. He singles out the infamous Waters of the United States regulation as a prime example of the kind of regulations he would do away with.

Trump promises to encourage TransCanada to renew its permit application for the Keystone XL Pipeline, which President Obama chose to use as a political football to placate his radical anti-development supporters. This is key because Keystone XL would facilitate increased imports from Canada, thus lessening the need to import oil from hostile nations in the Middle East and elsewhere in the world, a key goal of a Trump administration.

Trump also plans to reverse the Obama policy of closing off federal lands and waters to oil and gas development. Today, less than 15 percent of publicly owned lands and waters are open to exploration for these mineral resources — Trump promises to increase that percentage substantially and rapidly.

Finally, the Trump plan would end the federal government’s practice of intentionally distorting the marketplace in vain efforts to pick winners and losers. It promises there would be no more half-billion dollar grants to doomed-to-fail companies like Solyndra. The producers of corn ethanol would find their gravy train of mandates and subsidies in peril. Wind power companies would find it far more difficult, perhaps impossible, to continue obtaining federal waivers allowing them to kill thousands of eagles and other raptors with impunity.

All of these policies would be designed to protect American consumers and make the country far more competitive in the global marketplace — America first in action.

A Clear Choice

The choice in this election could not be more clearly defined where energy policy is concerned. Once one strips away all the rhetoric and misdirection, one is left with a clear choice between diminished domestic energy and growth; between consumers burdened with rising energy costs or benefiting from lower ones; between government command and control and the free market. If you like the way energy policy has been handled the last eight years, then you are going to love a Hillary Clinton presidency. If you don’t, your choice is very, very clear.

 

About the author: David Blackmon has spent 35 years in the oil and natural gas industry in a variety of roles. He has spent the last 20 years engaged in public policy issues at the state and national levels. Contact David Blackmon at david.blackmon@shalemag.com.

 

Photos: Gino Santa Maria/bigstock.com, mikeledray/bigstock.com

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