With the final ballots still being counted in five key states, but analysts and a desperate-sounding Donald Trump signalling the imminent end of the U.S. election campaign, Democratic presidential candidate Joe Biden and vice-presidential candidate Kamala Harris unveiled BuildBackBetter.com as the online address for the transition leading up to their inauguration January 20.
As of Thursday evening, the site consisted of a single paragraph in plain text: “The American people will determine who will serve as the next President of the United States. Votes are still being counted in several states around the country. The crises facing the country are severe—from a pandemic to an economic recession, climate change to racial injustice—and the transition team will continue preparing at full speed so that the Biden-Harris Administration can hit the ground running on Day One.”
With the campaign determined not to prejudge the outcome until the electoral vote count officially passed the 270-vote threshold, an avalanche of new coverage still began exploring the implications of a Democratic win for the U.S. fossil industry, the changes in tone and policy that other countries can expect, and the state and local campaigns and ballot initiatives that were also decided Tuesday night.
Click here for our Special Report on climate and the U.S. election.
On the eve of the vote, the American Petroleum Institute maintained it could find common ground with a Biden administration—despite its members’ history of climate denial and disproportionate donations to Republican candidates, Biden’s campaign trail embrace of a transition off fossil fuels, and the experience of being largely shut out of contact with the Democratic campaign. “The campaign has been pretty closed off to outside organizations like API,” said CEO Mike Sommers, who arrived at the Institute in 2018 after a career in Republican politics and a stint as chief of staff to ex-House of Representatives speaker John Boehner (R-OH). But “it’ll be different if there is a Biden transition, and we would seek to engage a Biden transition team.”
“There is a lot that the American Petroleum Institute, Washington’s biggest lobbying group for the U.S. oil and gas industry, does not like about the former vice president’s sweeping plan for addressing climate change,” the Washington Post writes. “Over the past four years, Trump has modified or rolled back dozen of environmental rules, including several affecting drilling and pipeline construction, and opened hundreds of thousands of acres to oil and gas extraction. Biden, meanwhile, has vowed to end oil and gas leasing on federal lands and to reinstate many of the regulations.”
But the fossil lobby sees two areas where it can seek common ground with the administration—tax breaks for carbon capture and storage, and turning down the heat on Trump’s epic trade wars.
On CCS, the U.S. already offers a tax deduction of US$50 per ton for companies that store carbon underground, and Biden’s $2-trillion climate plan calls for more taxpayer support for what the Post aptly calls a “nascent technology”.
“We were encouraged by that,” Sommers said. “That’s one area where I think he would see a welcome partner within the oil and gas industry.”
U.S. fossils, like other industries, have also been “frustrated with Trump’s antagonism toward even U.S. allies when it comes to international trade,” the Post adds, and hopes a Biden win will open the door to fossil exports to Europe and Asia—even though the Democratic candidate has been unclear on whether he would support that kind of activity. “This industry has been disadvantaged by some of the trade wars that have occurred” under Trump, Sommers said. “We would be hopeful that a Biden administration would keep this industry in mind as we engage with our trading partners.”
Then there are the areas of disagreement. The Post says the API is already pushing back on Biden’s recognition that the climate crisis is “an existential threat to humanity,” with Sommers sending a note to congressional offices trying to claim his lavishly-subsidized industry “does not receive special tax treatment” compared to other sectors.
“We take advantage of deductions—not subsidies, deductions—that other businesses in the manufacturing world take advantage of,” he told the Post.
“Big Oil knows how desperately unpopular subsidies are,” responded Friends of the Earth U.S. Program Manager Lukas Ross. “The only option they have is to pretend they don’t exist.”
Citing the non-partisan Congressional Budget Office, the Post says fossils received $4.6 billion in tax preferences in 2016, compared to $10.9 billion for wind, solar, and other renewable energy technologies that can actually supply energy and create jobs without fouling the air and water and frying the planet when used as directed. [That last bit wasn’t in the Post story, but you knew that—Ed.]
Notwithstanding the Petroleum Institute’s upbeat tone, Bloomberg News says a Biden presidency could accelerate a wave of fossil industry bankruptcies. That assessment came from Carlyn Taylor, global co-leader of corporate finance and restructuring at FTI Consulting Inc.
“So far in 2020, there have been 43 bankruptcies by [fossil] energy companies that have over $50 million in liabilities, more than in any full year on record,” the news agency writes. “Energy contractor Pacific Drilling SA filed last week, while oil and gas companies account for about 20% of the $266 billion in distressed U.S. bonds and loans outstanding, up from about 17% at the height of the [pandemic] crisis in March.”
While the transition off fossil fuels is under way, Taylor said, “Biden’s policies are speeding up the transition process, while Trump is trying to slow it down.”
CBC points to the shift from Trump’s energy “dominance” agenda to Biden’s emphasis on a transition, including his promise to cancel the presidential permit for the Keystone XL pipeline. “Things can change,” said James Coleman, an expert on energy law at Southern Methodist University in Dallas. “But certainly he has indicated that he’s hostile to it and that his allies and his voters will expect him to deliver on that promise.”
Bloomberg also carried a tantalizing bit of speculation that a Biden win could bring an end to the contested Dakota Access Pipeline, which is currently operating without a key regulatory permit. “Foes of $3.8B Pipeline Seek Payback If Biden Wins,” the news agency headlined October 30.
Days after taking office, Trump “cleared the way for construction of an oil pipeline in the Midwest that had been the focus of months of opposition by climate activists, celebrities, and Native Americans,” the news agency wrote. “Now opponents of the Dakota Access Pipeline are pressuring Joe Biden to take the extraordinary step of returning the favour should he win the White House. Analysts said they couldn’t recall a president shutting down an operating pipeline before, which is why it’s being viewed as a litmus test of how far he’d go”—Bloomberg said to “appease environmentalists who have supported him,” others might say to restore environmental justice and begin the shift to keeping fossil fuels in the ground.
As the election results gradually became clear through the week, several news stories had business groups embracing the policy gridlock that is widely expected if Biden wins the White House, but a Republican majority holds control of the Senate. The unspoken conclusion: if you’re worried about actions an incoming administration is promising to take, getting nothing done and running out the clock is a victory.
“After weeks of buying and selling stocks on the expectation that Democrats would sweep both the White House and Congress in a ‘blue wave,’ Wall Street investors lost little time in returning to their traditional political posture: Gridlock is good,” the New York Times writes.
“Some investors and executives said that if Mr. Biden won, it would restore civility to the White House and bring more attention to issues like racial injustice,” the paper adds. “At the same time, Republicans in the upper house, led by the majority leader, Mitch McConnell, would be able to block parts of a liberal policy agenda that most worry Wall Street, such as tax increases, health care reform, and closer scrutiny of the power of giant technology companies.”
“We’ll be able to go to bed and not worry about what the president is going to do,” said Michael Novogratz, a Biden supporter and former hedge fund manager. While a Biden win would stabilize trade policy and tone done the divisive rhetoric, “Biden’s not going to be able to raise taxes—you get the Mitch McConnell handcuffs,” he added. “So it’s kind of the best of both worlds.”
Republican control of the Senate “does push away the fear of investors of this highly progressive agenda that they generally don’t support,” said Doug Rivelli, president of New York-based brokerage firm Abel Noser. But more broadly, “the business community in the United States is not unfriendly toward gridlock,” said former Canadian ambassador to the U.S. Frank McKenna, now deputy chair of TD Securities, in an interview with the Globe and Mail. “They often find it better to have government out of their lives than intruding too vigorously.”
With a divide between the White House and the Senate, “those looking at the election as a turning point on climate change, energy sector policy, financial services regulations, taxation, and other issues that have impacts on individual equities or other assets can count on seeing less dramatic change, if indeed any changes are in the wind,” added CIBC World Markets Chief Economist Avery Shenfeld, in a Wednesday morning note to investors.
One news report in Canada had investors betting against fossil stocks in the immediate run-up to the vote. “I do think Biden would promote a more interventionist policy into the economy, favouring renewable energy, so demand for Canadian energy could be challenged,” Rob Romero, portfolio manager at Connective Capital, told Reuters. “For example, gas and liquids pipeline projects would receive less support, and enforcement of environmental regulation would be increased.”
Biden’s shift in emphasis would be good news for renewable energy development in Canada, says Josha McNab, the Pembina Institute’s national director of policy and strategy. “Action on climate change would be a centrepiece of a Democratic administration and a key component of economic recovery from the COVID-19 pandemic,” she writes, in a post originally published by The Hill Times. And “that would be good news for climate action, and for Canada. Joe Biden’s commitments on climate, and his commitment to an equitable, just recovery, wouldn’t just bring the U.S. into alignment with Canada and the international community, it would raise the bar and increase the pace, creating both competition and opportunities for Canada.”
McNab sees Biden driving a climate transition in five ways: by putting equity at the forefront; renewing momentum toward net-zero emissions; creating new market opportunities (and more competitive expectation) for Canadian electricity exports, clean technologies, and low-carbon goods and services; reinstating or increasing restrictions on industrial methane emissions; and increasing ambition on clean energy, with his promise of a “carbon pollution-free power sector by 2035”.
“Regardless of the outcome of the election, the Canada-U.S. relationship on energy will have its complications,” she writes. “But Canada and the U.S. would at least be poised to row together toward a prosperous, more equitable, net-zero economy, at a faster pace,” beginning with the reality that “Biden’s climate plan is his economic plan, and vice versa. With growth comes greater ability to improve access to affordable, clean energy, address disparities, and create opportunities for workers in contracting industries. Alignment with our neighbour and biggest trading partner will put a more inclusive, low-carbon recovery within closer reach.”
Several Canadian news outlets struck a similar tone, with Toronto Star columnist Gillian Steward citing climate policy as “one of the biggest shifts in the U.S./Canada relationship” under Biden, and observers telling The Canadian Press that a more rational climate policy in the U.S. could remove competitive stress for Canadian exporters.
“It all depends on what the policies are that you put in place,” said Gary Mar, a former Alberta cabinet minister and Petroleum Services Association CEO now heading the Calgary-based Canada West Foundation. “Canadian companies are already paying carbon taxes. And so if their competition in the United States was compelled to do the same thing, then it would make it a more level playing field for Canadians to enter into the marketplace.”
Eurasia Group Vice-Chair Gerald Butts, a former principal secretary to Prime Minister Justin Trudeau, said Biden’s plan would put pressure on Canada and the rest of the world toward faster action on climate change. That shift opens up a “big opportunity to grow the Canadian clean energy and cleantech footprint in the United States,” he told CP. “It tilts the scales toward renewable energy and decarbonization in the United States in a way that no potential president has ever attempted to put his or her thumb on the scale.”
Butts added that “we’ve got a lot of hydropower, we’ve got a lot of nuclear power, we’ve got a lot of low- to zero-emissions electricity here. And that’s a real opportunity.”
No national election in the United States is complete without a flurry of election campaigns and ballot initiatives at the state and local levels. InsideClimate News has a summary of the action, pointing to an “undercurrent of support for clean energy” despite the dominant influence of the pandemic and the presidential race. Utility Dive summarizes state and city initiatives in Nevada, New Mexico, Denver and Boulder, Colorado, and Columbus , Ohio, Vox columnist David Roberts has more on Nevada voters’ decision to “seal renewable energy goals in their state constitution”, and Bloomberg recounts Democrats’ failure to win a seat on the influential Texas Railroad Commission, which curiously has an outsized role in (de)regulating oil and gas operations in the state.
Voters supported transit-related ballot measures in Austin and backed right-to-repair measures in Massachusetts. Coal baron Don Blankenship, who did time in prison for his role in the deadly Upper Big Branch mine explosion in 2010, managed to get on the presidential ballot in the crucial swing state of Michigan and siphon votes away from his political patron, Donald Trump.