But this vastly overstates a president’s power to control the cost of a commodity traded on a world market. Although a president’s actions — including Biden’s climate policies — can nudge the price of oil, the effect is marginal at best, experts say.
“The scale of the global oil market,” said Pavel Molchanov, an oil analyst at Raymond James, “is so massive that it would be extremely unlikely for any single political decision, anywhere in the world, to materially affect oil prices.”
Simply put, neither Biden nor President Trump have a secret lever at the Resolute Desk that makes the price of oil go drastically up or down.
The idea of a forthcoming gas price spike is fueled by Trump himself as a piece of his broader criticism of the Democrat’s plan for tackling climate change. “If Biden got in, you’d be paying $7, $8, $9,” Trump said the day before Election Day at a rally in Grand Rapids, Mich. “Then they’d say, ‘Get rid of your car.’ ”
As Trump likes to brag, gas prices — currently a little above $2 a gallon nationally — indeed have been down during the last year of his term.
But that’s because the coronavirus pandemic has devastated demand for oil as people everywhere fly and drive less often. Although prices recovered a bit over the summer, things got so bad in April that the price per barrel of West Texas Intermediate crude briefly went negative for the first time ever.
Biden wants a “transition” away from oil. But that will have a mixed effect on the petroleum prices.
The former vice president is planning to reorient the government toward cutting greenhouse gas emissions and moving toward cleaner sources of energy.
One way he will do that is through tighter rules on leaks of methane from wells and restrictions on drilling on federal lands. Those new regulations may squeeze oil supply and lift gas prices. “Perhaps in a couple of years, depending on Biden’s policy, there could be more an impact than there will be when he takes office,” said Patrick DeHaan, an oil analyst at GasBuddy.com.
But other potential moves by Biden — such as cranking up requirements on automakers to make more fuel-efficient vehicles or boosting incentives to buy electric cars — probably will reduce demand for gasoline and put downward pressure on prices.
Jim Burkhard, head of crude oil research at IHS Markit, said fuel-economy standards are “a very powerful force” in reducing demand. “It doesn’t have an impact overnight or in a year, but it has a cumulative impact over time.”
The Biden administration’s stance toward Iran could result in incrementally lower gas prices.
The former vice president has said he wants to ease tensions with the U.S. nemesis by potentially returning to a nuclear weapons deal brokered under his old boss, President Barack Obama.
Lifting economic sanctions against the country could have the side effect of uncorking more Middle Eastern crude oil into the world market, potentially reducing prices, Molchanov said.
“But in the grand scheme of things, the impact on the price that drivers see at the pump would be barely measurable: a few pennies per gallon, in either direction,” he added. “All of this pales in comparison to the impact of the pandemic.”
There is one key way Biden can have a pretty big impact on the price at the pump: getting the coronavirus under control.
The wide distribution of an effective vaccine would make people feel safe to return to their normal, energy-consuming routines commuting to work and flying cross-country again.
“Forget the energy transition issues,” Burkhard said. “Containing covid in 2021, if the Biden administration is able to do that successfully — that would boost oil demand, and therefore that would boost oil prices.”
Power plays
Biden’s response to climate change will span government agencies.
“President-elect Joe Biden is poised to embed action on climate change across the breadth of the federal government, from the departments of Agriculture to Treasury to State — expanding it beyond environmental agencies to speed U.S. efforts to mitigate global warming and to acknowledge that the problem touches many aspects of American life,” our colleagues Juliet Eilperin and Annie Linskey report. “The far-reaching strategy is aimed at making significant cuts in greenhouse gas emissions even without congressional action, by maximizing executive authority.”
A team of former Obama administration officials recently presented Biden’s transition team with a 300-page blueprint for how the incoming administration can restructure the government to address climate change. The blueprint calls for creating a White House National Climate Council, establishing a “carbon bank” under the USDA that could pay farmers to store carbon in their soils and lands, and leveraging the Treasury Department’s tax, budget and regulatory policies to promote carbon reductions.
Former mayor Mike Bloomberg published an op-ed on Wednesday arguing for a similar “whole-government” approach in which “some of the most important steps” would “have nothing to do with the Environmental Protection Agency.”
“Even if Biden carries out a broad suite of policies aimed at curbing America’s carbon footprint, it may fall short of averting dangerous planetary warming,” Eilperin and Linskey write. “A recent analysis by the Climate Action Tracker shows that if the president-elect’s plan is fully realized it would shave 0.1 degree C off global temperature rise by 2100.”
Progressive groups call for a new White House climate office and push Cabinet hopefuls.
The Sunrise Movement and Justice Democrats launched a petition advocating for the new office, which would coordinate interagency efforts on climate across the government. The groups also called for Biden to appoint leaders from the left wing of the party, including Rep. Deb Haaland (D-N.M.) for interior secretary, Sen. Elizabeth Warren (D-Miss.) for treasury secretary and Attorney General of Minnesota Keith Ellison for U.S. attorney general.
The Trump administration appointed a climate skeptic to a key climate program.
“David Legates, a controversial figure who joined the National Oceanic and Atmospheric Administration (NOAA) in September, will move into a new slot as head of the U.S. Global Change Research Program as early as Thursday, according to two people familiar with the move who spoke on the condition of anonymity because they were not authorized to discuss it publicly,” our colleagues Andrew Freedman, Jason Samenow and Brady Dennis report.
Legates has claimed that excess carbon is good for plants and that global warming is harmless. The meteorologist has long criticized existing climate models, despite studies showing that they have a good record of predicting temperature changes.
“The shift would put Legates in position at least to influence the authors chosen to craft the National Climate Assessment, a congressionally mandated report that periodically examines climate change damage and includes projections for the United States, down to regional and local levels,” they report.
Legates may not stay in for long. As a political appointee, he can be replaced by the next administration. Some environmentalists worry that he may skew the next assessment by recruiting authors who will play down climate change, while others expressed doubt that Legates would have much impact given the short window until the Biden administration is set to take over.
Staff from global consulting firm FTI masqueraded as grassroots activists to drive influence campaigns for big oil.
A number of initiatives that appeared to amplify local voices on energy issues were actually part of a larger corporate influence campaign designed and staffed by FTI consulting, the New York Times reports. A group called Texans for Natural Gas, an organization known as the Arctic Energy Center and the Main Street Investors Coalition all purported to represent local interests but were in fact directed in significant part by FTI.
“An examination of FTI’s work provides an anatomy of the oil industry’s efforts to influence public opinion in the face of increasing political pressure over climate change, an issue likely to grow in prominence, given President-elect Joseph R. Biden Jr.’s pledge to pursue bolder climate regulations. The campaigns often obscure the industry’s role, portraying pro-petroleum groups as grass-roots movements,” the New York Times reports.
Based on interviews with a dozen former FTI employees and a review of hundreds of internal documents, the New York Times determined that the organization was involved in at least 15 influence campaigns promoting fossil fuel interests. FTI monitored environmental activists online, and in one case, create a fake Facebook persona to track protesters.
FTI has also promoted messages contrary to the scientific consensus on the role of fossil fuels in global warming, downplaying for instance, the magnitude of methane emissions.
Energy transitions
San Francisco bans natural gas in buildings.
“The San Francisco Board of Supervisors voted unanimously Tuesday to ban natural gas in new buildings, legislation that will apply to more than 54,000 homes and 32 million square feet of commercial space in the city’s development pipeline,” the San Francisco Chronicle reports.
San Francisco has already banned natural gas in any new city-owned buildings. The new order will extend to any buildings that apply for a building permit after June 30. Supporters say the measure will improve indoor air quality, increase building safety and reduce emissions.
“Natural gas accounts for roughly 40% of San Francisco’s overall emissions of greenhouse gases and 80% of building emissions,” the Chronicle reports.
Investors expect Biden’s win to accelerate a shift to renewables.
“One of the best ways to make money on Wall Street recently has been to bet against the fossil-fuel industry and buy renewable stocks,” the Wall Street Journal reports.
Now, some top investors are saying that they expect this pattern to accelerate as a Biden administration, as the administration tightens regulations and issues executive orders limiting new drilling on public lands. At the same time, big investors have moved assets away from fossil fuel producers and many small investors have poured money into sustainable funds.
“I think we are going to have a much more rapid transition to a net-zero [carbon] economy than most people expect,” Robert Litterman, a former Goldman Sachs Group Inc. investor, told the Wall Street Journal. Litterman is now working on a strategy with Kepos Capital to profit off the transition to renewables.
Thermometer
Climate change is driving hurricanes to stay stronger as they pass over land.
Hurricane Michael, which bulldozed the Florida Panhandle as a Category 5 storm in October 2018, remained dangerously intense even as it made its way over land, producing hurricane-force wind gusts 140 miles inland.
“Now a new study, published Wednesday in the journal Nature, shows that storms such as Michael that extend their damaging path far inland are becoming more likely to occur as ocean temperatures increase in response to human-caused global warming,” our colleagues Andrew Freedman and Chris Mooney report.
The study, which looked at hurricanes in the North Atlantic between 1967 and 2018, found that they were decreasing in intensity at a slower rate now compared to 50 years ago. Computer models suggest that warming oceans due to climate change are leading storms to pick up more moisture that they can feed on even as they move inland.
Meanwhile, Eta is threatening Florida.
On Wednesday, Eta briefly became a hurricane west of the Florida Peninsula, making it the latest-forming hurricane in the Gulf of Mexico in 35 years. The long-lived system continued churning northeast as a Tropical Storm on Wednesday afternoon and is expected to make landfall north of Tampa Bay.
