Primary season doesn’t begin for another 4 months, and the general election is still more than a year out. Undoubtedly, no lead is safe, but the Democratic ticket has seen far fewer of the swings that have characterized the GOP’s curious circus. Despite her recent troubles, Hillary Clinton is still the most sure bet to win the Democratic nod—though her chances in the general election are anything but.
Issues like immigration and Planned Parenthood are polarizing with little middle ground. Energy policies however, allow for a greater deal of personalization as the candidates try to appeal to both their base and, more importantly, undecided moderates.
Former Secretary of State Clinton’s energy leanings are believed to differ little from those of her former boss, President Obama—and, while she may trend more to the left, we can expect a similar degree of vacillation. In that regard, her recent, though long-awaited and somewhat contradictory, declaration opposing the Keystone XL pipeline is hardly surprising. For what it’s worth, the pipeline, which is neither an environmental catastrophe nor the savior of the workingman, has long been lost to a broader debate surrounding North America’s energy renaissance—more specifically, the direction it should take.
With her pipeline politics cleared up, Clinton hopes to refocus attention on the United States’ complete energy system, or put another way, everything but Keystone XL. If elected president, Clinton will aim to modernize both policies and infrastructure with an eye toward decarbonization.
Reduced oil consumption plays a huge role in Clinton’s energy strategy, but her views on production are harder to ascertain. With the Senate, Clinton supported legislation to expand offshore drilling in the Gulf of Mexico. Later, as Secretary of State, Clinton completed a deal with Mexico that opened some 1.5 million Gulf acres to U.S. companies. Her current plan indicates a willingness to further develop America’s public lands. However, in the Arctic, her stance on drilling is, and has been, unequivocally no—a position bolstered by Shell’s recent failures in the Chukchi Sea.
As it concerns hydraulic fracturing and the larger natural gas boom, Clinton is generally supportive, though she will avoid trumpeting the fuel as anything other than a bridge to renewable energies.
Midstream, oil and gas companies can expect a stricter regulatory environment, with greater attention placed on rail and pipeline safety. Further, Clinton will work to redefine “crude oil” as it relates to the tax code. The current definition, which exempts oil sands from an 8-cent-per-barrel spill mitigation tax, cost the US an estimated $41 million in additional tax revenues on Canadian imports in 2014. While exporters may face a more difficult path to market, they can take solace in the fact that Clinton is open to lifting the 40-year-old ban on U.S. crude exports, though not without concessions.
Internationally, Clinton’s use of energy as a foreign policy tool will be interesting to watch. In her role with the State Department, she pushed energy as a diplomatic weapon against monopolistic suppliers and promoted hydraulic fracturing across Eastern Europe. With limited shale success thus far in Europe, Clinton may opt to broaden US LNG export plays. Moreover, as a candidate in 2008, she expressed a desire to go after OPEC for perceived antitrust and WTO violations—an attitude that has added relevancy as the cartel works to squeeze American producers in today’s low oil price environment.
On clean energy—the centerpiece of her energy strategy—Clinton is quite ambitious. Her renewable vision is broadly based on two goals: expand solar capacity to 140 gigawatts (GW) by the end of 2020; and, generate enough renewable energy to power every home in America within 10 years of taking office. Currently, solar generation capacity in the U.S. is roughly 22 GW and renewable energy as a whole accounts for nearly 10 percent of total primary consumption in the residential sector.
To accomplish this, Clinton will, firstly, fight efforts to dismantle Obama’s Clean Power Plan. Furthermore, she will work to build on regional emissions trading schemes, with particular attention given to the creation of a North American Climate Compact with Canada and Mexico—something akin to Kyoto, though more focused and with stricter accountability measures.
Regarding financing, Clinton plans to establish a National Infrastructure Bank. The bank, using public and private capital, and along with her Clean Energy Challenge grants, will target investments in critically important infrastructure (read: grid) and green technologies.
In relation to her fellow candidates, Clinton is squarely in the middle. She’s out-greened on the left by Vermont Senator Bernie Sanders and former Maryland Governor Martin O’Malley. And, on the right, her stance on man-made climate change contrasts strongly with nearly the entire 15-deep field. While we can expect more of the same under a Clinton presidency, her policies and ideologies suggest a bit more of the same.
First published at Oilprice.com