Biden will change US energy policy and work for the green transition

[yota691]

 

Biden will change US energy policy and work for the green transition

 2020-11-08 00:52

Shafaq News /

(CNBC) economic website published expectations that will occur when Joe Biden takes office as President of the United States of America after winning the US presidential elections on Saturday, as Biden, an advocate of the environment and green energy, will make a change in US energy policy.

International oil supplies

Biden has demonstrated an interest in multilateral diplomacy similar to previous Democratic administrations. That could mean a final path for OPEC members Iran and Venezuela to get out of Washington's sanctions and start pumping again, if the right conditions are met.

In Iran, this path could include a joint approach between Washington and Europe, similar to the deal reached during the Obama administration.

In Venezuela, Biden will likely continue to favor sanctions to put pressure on President Nicolas Maduro’s regime, but he may increase diplomatic efforts to end the impasse by negotiating new elections or sharing power with the opposition.

The unilateral sanctions imposed by outgoing President Donald Trump on the two countries have resulted in the withdrawal of about 3 million barrels per day of crude oil from international markets, just over 3% of global supplies.

A line for OPEC

Biden lacks the intimate relationship Trump developed with Saudi Crown Prince Mohammed bin Salman. This country is the biggest voice in the Organization of the Petroleum Exporting Countries, which means that Biden may not be closely involved in the group's production policy. He is also more likely to rely on quiet diplomatic channels to influence OPEC than Trump is on Twitter.

The Biden campaign has yet to detail how it will deal with these issues, but any influence he might exert as president will likely serve the same goal - a moderate oil price. Any American president needs affordable fuel for consumers. For Biden, the price needs to be high enough to make clean energy alternatives to fossil fuels competitive to support his ambitious climate plan.

Trump was more involved with the Organization of the Petroleum Exporting Countries (OPEC) than most of his predecessors. He sometimes influenced OPEC policy with his tweets and phone calls, calling for an oil price low enough for consumers but high enough for drilling workers.

His sanctions also weakened the influence of OPEC's hawks, Venezuela and Iran, within the group, and removed two major historical obstacles to OPEC's pro-Washington policy. This force has focused with the leading Saudi producer, along with Russia, which is part of the group known as OPEC +.

Green transition

The Biden administration will consider re-entering the Paris climate agreement, an international agreement negotiated during the Obama administration to combat global warming that Trump withdrew from saying it could harm the US economy.

Biden has also pledged to reduce US emissions to net zero by 2050, including by reducing emissions from the energy industry to net zero by 2035 - a goal that would be difficult to achieve without a Democratic majority in Congress.

Biden sees climate change as an existential threat to the planet, and that the transition from fossil fuels could be an economic opportunity if the United States moves quickly enough to become a leader in clean energy technology.

The Trump administration acted to weaken or eliminate emissions targets, including the U.S. Environmental Protection Agency easing vehicle emissions standards and scrapping former President Barack Obama's clean energy plan that required cuts in the electric power industry. Transport and electricity together account for about half of the nation's greenhouse gas emissions.

While oil and gas companies such as the European BP BP.L and Royal Dutch Shell RDSa.L had already begun to implement strategies for global energy transmission, allocates the United States , such as Exxon Mobil , Mobil and Chevron CVX.N

It has remained focused on the conventional energy sector - politically protected by Trump's leadership in Washington.

Federal Drilling

As Trump sought to maximize domestic oil and gas production, Biden promised to ban issuance of new drilling permits on federal land and waters in order to combat global climate change.

The United States produced nearly 3 million barrels of crude oil per day from federal land and water in 2019, along with 13.2 billion cubic feet per day of natural gas, according to Home Office data.

This accounts for about a quarter of total domestic oil production and more than one-eighth of US total gas production. A federal ban on new permits could mean those numbers are trending towards zero over the years.

There will also be an impact on public revenue. Federal oil and gas production produced about $ 12 billion in public revenue in 2019, divided between the US Treasury, states, provinces, tribes, and clean-up funds.

New Mexico, for example, received $ 2.4 billion in payments last year, much of it going into its historically underfunded education system. Michael Logan Gresham, the governor of the Democratic state, told Reuters this spring that she would seek a waiver from the Biden government to allow drilling to continue if elected.

The Biden campaign has been silent about allowing such an exemption program.

 

[yota691]

Biden's victory puts Saudi oil in trouble ... OPEC will miss "friend Trump"

 

Biden's victory could return two million Iranian barrels to the world market. France Press

Reports Economy News - Baghdad Sources close to the Organization of Petroleum Exporting Countries (OPEC) said that key members of the organization fear renewed tensions within what is known as the "OPEC +" coalition, which includes alongside the organization's countries major producers from outside, under Joe Biden's presidency of the United States, and that they will miss the president Donald Trump, who switched from criticizing the organization to helping it implement massive, unprecedented cuts to oil production. Biden may make changes in diplomatic relations with three major OPEC member states, namely Saudi Arabia, the organization's largest producer, and Iran and Venezuela that are subject to sanctions, as well as with Russia, the main non-OPEC producer, which is the largest producer of crude among the countries allied with the organization, in Framework for what has become known as the "OPEC +" group. The strict application of US sanctions on Iran and Venezuela has withheld millions of barrels of oil from the market, and if Biden decides to ease measures on either country in the coming years, increasing production may make it more difficult to match supply with demand by OPEC. Biden says he prefers multilateral diplomacy to unilateral sanctions imposed by Trump, but that may not mean sanctions relief soon. During his campaign, Biden said he would return to the 2015 nuclear deal with Iran if Tehran recommitted to it. Trump withdrew from the agreement in May 2018, to reimpose sanctions that have reduced Iran's oil exports. Some in OPEC fear that the return of Iranian supplies will increase the supply glut unless it is matched by cuts elsewhere, and they have concerns about Moscow's continued participation in "OPEC +". An OPEC source said before the election results became known, "Iran's sanctions may be reassessed and then they will return to the market, and then the supply glut will return and the current reduction agreement will be at risk." "There is also a risk that Russia will withdraw from the OPEC + agreement, which means the collapse of the agreement, as it was Trump who convinced Moscow to participate," the source added, according to Reuters. Biden says of Russia that it is the source of the most dangerous global threat facing Washington. During his campaign, he pledged to reassess relations with Saudi Arabia. Last April, Trump participated in talks that led to an agreement under which the Organization of the Petroleum Exporting Countries and Saudi Arabia cooperated with allied producers led by Russia to make an unprecedented massive reduction in oil supply in light of the outbreak of the Corona virus that hit demand. Trump intervened and put political pressure on Saudi Arabia and Russia to end the conflict that sparked a price war that resulted in plans for both countries to increase production, while the pandemic was leading to restrictions on travel, and then on the demand for fuel. The result was an unprecedented global agreement to reduce the oil supply by about 20 million barrels per day, equivalent to about 20%. OPEC + alone agreed to cut 9.7 million barrels per day. For Trump, the drive was to raise global oil prices and prevent bankruptcies and hundreds of thousands of jobs lost in the US energy industry ahead of the election. Trump is a longtime supporter of the oil and gas industry, and his administration has scrapped environmental regulations and rejected the prevailing scientific opinion regarding global warming from emissions. Earlier in his presidency, Trump criticized OPEC's efforts to raise prices and urged members to pump more. An anti-OPEC bill known as "NOPEC" - it was first proposed years ago - was not passed despite gaining some momentum in his early presidency. "Trump has become our friend after the historic shift in attitudes ... from NOPEC to the art of the deal," said a senior OPEC source from an ally of the United States, referring to the "OPEC + agreement" concluded in April and a famous book authored by Trump published in 1987. Trump has established a close relationship with the de facto ruler of Saudi Arabia, the largest producer in OPEC, Crown Prince Mohammed bin Salman, whose country relies on American weapons and protection in the face of regional competitors such as Iran. The "OPEC +" alliance began to support oil prices since 2017, and any developments threatening the future of the alliance may weaken the market, which will have dire consequences for OPEC, other producers, governments and dealers. Trump has engaged in OPEC affairs more actively than any of his predecessors, as he regularly tweets commenting on production decisions and oil price movements, while Biden is expected to keep a distance from the organization. "I see that Biden will be more dependent on specialized advice from his advisers, and he will not resort to the detailed management like Trump," said Chakib Khelil, former Algerian oil minister and former OPEC president, adding, "Biden will not have the warm relationship with Putin that appears to be for Trump." But despite Biden’s statements about US-Saudi relations, it is unlikely to turn a new page. Gulf and diplomatic sources told Reuters that Biden's victory would not undermine decades-old alliances. A source familiar with Iran's oil policy welcomed Biden's victory but doubted he would quickly lift sanctions. This would give OPEC + members ample time to amend their agreement to clear the way for more Iranian oil. "Even if the sanctions on Iran are lifted, it will take from two to four months for Iranian oil exports to return to pre-sanctions levels for technical reasons ... Therefore, OPEC + has enough time to agree on a new production ceiling," he said.

Number of observations 63,   date of addendum 11/09/2020

[nannab]

Well we are all in for an interesting ride.

Thank you Yota  

 

 

 And a very HAPPY BiRTHDAY TO YOU ❤️

Young fella