Harris vs. Trump will define a green power-fossil fuel debate. How far they can go depends on Congress.
11/04/2024 16:05
Vice President Kamala Harris and former President Donald Trump offer a clear contrast on whether the energy debate in the US over the next 4 years will revolve around green power or fossil fuels.
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Vice President Kamala Harris and former President Donald Trump offer a clear contrast on whether the energy debate in the US over the next 4 years will revolve around green power or fossil fuels.
But how much they can follow through on their various promises will come down to how extensive their party’s control of Washington is.
For Trump's plans to roll back the government's role in green energy, the former president would likely need more than a solo victory to fulfill that promise. He would also need a cooperative Congress.
By contrast, a victory by either Harris or Trump could alter the path ahead for fossil fuels, as the president is imbued with more unilateral authorities there, although Harris has promised to take a moderate approach to traditional energy sources.
Either way, Stifel chief Washington policy strategist Brian Gardner offered a warning to investors and industry watchers in a recent note, pointing out that the best time to own green energy stocks was during Trump’s previous term and the best time to own fossil fuel stocks was more recently under Biden.
"This is the cautionary tale that pro-industry policies do not always correlate to stock performance," he wrote.
Harris used her one and only debate face off with Trump to offer a tone on energy issues that hasn't been heard from Democrats as of late.
"My position is that we have got to invest in diverse sources of energy so we reduce our reliance on foreign oil," said Harris, at one point touching on green energy while also underlining the fact that she helped approve new leases for fracking during the Biden administration.
It was immediately described by many as akin to an "all of the above" energy approach that was popular in years past among Democrats from Jimmy Carter to Barack Obama but less so in recent years.
Harris's evolution on the issue is also crucial in the swing state of Pennsylvania, which is heavily reliant on fracking and has looked warily at Harris’s pledges back in 2019 to ban the practice.
As for what she would do in office, experts like Stifel’s Gardner expect that if elected “even though Harris has backed away from positions to crack down on oil and gas, we expect her administration would still aim to boost clean energy over traditional energy.”
Harris has signaled a focus on both, also making sure in September’s debate to note that "we have invested a trillion dollars in a clean energy economy while we have also increased domestic gas production to historic levels."
Tobin Marcus of Wolfe Research added in his own election night preview that while Harris is unlikely to dramatically change government oil and gas lease levels, she could make smaller issues like vehicle emission standards into more of a front-burner issue.
Trump, by contrast, has focused his message in the closing weeks of the campaign on his plans to throw open the doors to oil drilling and even promise that it will bring in a flood of revenue to pay for other priorities.
Oil is "liquid gold," the former president is fond of saying.
What he often overlooks is that the US, under the Biden-Harris administration, is currently drilling more oil than during Trump's term. In fact, the US is currently producing more than any country in history.
Nevertheless, Trump is promising a massive increase in supply and a drop in prices. "We will cut it in half, and that includes your heating, air conditioning, electricity, gasoline for the cars," he told an audience in Wisconsin. "And we'll do it easily. You can hold me to it."
While experts are skeptical that Trump can deliver anything like that, there is little doubt he will seek to expand oil and gas drilling quickly; it’s an area where a president has significant authority to act unilaterally.
Experts also expect Trump to at least try to take a hatchet to the green energy tax credits implemented in recent years by Biden within the 2022 Inflation Reduction Act (IRA). It's something Trump promises campaign audiences nearly every day,
Read more: Trump vs. Harris: 4 ways the next president could impact your bank accounts
In a recent Wall Street Journal interview, billionaire financier John Paulson — a possible Trump Treasury secretary — added that his particular focus if he is installed would be on gutting the IRA and eliminating green energy subsidies.
While such a move could save the US government about $921 billion over the coming decade, Trump and Paulson would almost surely need control of Congress to follow through.
In his guide, Wolfe's Marcus projects that clean energy subsidies under the IRA would be safe in three of his four scenarios. The only scenario that could see a partial rollback is a Republican sweep, with Trump in the White House and Republicans in control of both chambers on Capitol Hill.
By contrast, any flavor of government with Trump in charge would likely lead to more oil lease sales and an end to the current pause on liquid natural gas, Marcus added.
Ben Werschkul is Washington correspondent for Yahoo Finance.
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