All politicians make promises during campaigns that they have no intention of keeping once they’ve been safely elected to office. President Joe Biden is no exception to that rule, and the domestic natural gas industry is likely to pay the price.
During the campaign, candidate Biden’s rash statements during the 2019 Democratic debates about banning hydraulic fracturing came back to haunt him in the fierce battle with Donald Trump to win the state of Pennsylvania. Pennsylvania is home to the preponderance of Marcellus shale natural gas production, a huge piece of the state’s economy, and that natural gas can’t be produced without the use of fracking.
Throughout the early part of the general election campaign, the Biden camp made repeated efforts to deny its candidate had said what he was captured on video saying on national television, efforts that predictably failed to convince the public. As a result, he traveled to Pennsylvania late in August and, in a memorable appearance in Pittsburgh, made an overt promise that he would not in fact ban fracking, and discussed the importance of the role natural gas would play as a bridge fuel in his administration’s energy plans.
His campaign later rolled out energy plan documents promoting a “Clean Energy Plan” to achieve a national net-zero carbon emissions outcome by 2050 based on “technology-neutral standards.” Those standards could include any zero-emissions source, such ashydroelectric power, geothermal, existing and advanced nuclear, and importantly for the oil and gas industry, carbon capture and storage.
In a report on the “American Jobs Plan” that the Biden/Harris administration rolled out last week, infrastructure project advisory firm ARBO says that “For a campaign whose slogan was Build Back Better, the fact that the title of its supposed major infrastructure plan makes no mention of either building or infrastructure is telling. The plan essentially has morphed into a jobs plan that has limited spending on true infrastructure. The plan also abandons key promises on which President Biden campaigned that would have kept the natural gas industry and pipelines relevant for decades.”
For the oil and gas industry, one key piece of the Biden campaign’s Clean Energy Plan laid out a focus on research investments and tax incentives for “technology that captures carbon and then permanently sequesters or utilizes that captured carbon, which includes lowering the cost of carbon capture retrofits for existing power plants.”
But as ARBO notes, “[t]he only mentions of carbon capture and storage come in two very small projects that involve use of the technology for retrofitting large steel, cement, and chemical production facilities in environmental justice communities and as part of a plan to invest in demonstration projects in various areas including utility-scale energy storage, hydrogen, advanced nuclear, rare earth element separations, floating offshore wind, biofuel/bioproducts, quantum computing, and electric vehicles.”
The campaign plan also pushed a heavy focus on hydrogen-fueled vehicle technology, which would present an opportunity to repurpose existing natural gas and oil pipelines to use for transporting hydrogen around the country. But it’s obvious that the electric vehicles lobby won out on that one, as the Biden bill virtually abandons any focus on hydrogen. As noted by ARBO, “hydrogen, which is a key component of the net-zero plans in the rest of the world, is mentioned only twice in these small programs that include carbon capture and storage.”
Finally, the Biden/Harris campaign promise to push for federal incentives for the repair and/or replacement of natural gas distribution systems to reduce methane emissions and create the blue-collar jobs candidate Biden loved to talk about has also disappeared from the plan the administration has actually rolled out. ARBO points out that “the only methane reduction program is the remaining $16 billion in the energy category for a program to plug oil and gas wells and restore and reclaim abandoned coal, hardrock and uranium mines.”
Overall, what the Biden/Harris “American Jobs Plan” represents is a hard left turn into Green New Deal politics. The campaign promise to pursue a plan consisting of $1.3 trillion in investments to rebuild and repair the nation’s dilapidating roads, bridges and other major infrastructure has been diminished to just $588 billion in an overall plan to spend $2.288 trillion over the next decade.
Essentially, what the administration has done here is include some infrastructure spending as a feature of a bill focused on other priorities, mainly because it knows the term “infrastructure” is popular with the public. For the natural gas industry, the message is clear: if this administration has its way, your business will become extinct in very short order.
Those who were paying close attention could see this outcome on the horizon during the campaign. A great example came during a televised Biden townhall meeting on October 18. In one breath, the future President promised again not to ban hydraulic fracturing. But, as reported by Bloomberg, the warning came when “…in virtually the same breath, he touted his $2 trillion clean-energy plan, which aims to edge natural gas out of the power mix within 15 years.”
As Kevin Book, managing director of Clearview Energy Partners, said following the townhall, “Decarbonization isn’t a debate — it’s a fossil-fuel death sentence. It means a resource is going off the grid. That is the inevitable implication.”
The only question is one of timing.