Energy has emerged as a centrepiece in the US presidential race between Republican candidate former president Donald Trump and Democratic candidate vice-president Kamala Harris, who have repeatedly fought over whose policies would keep domestic energy prices affordable now and in the future.
Trump has promised a return to the policies he championed during his first presidential term, when he opened vast tracts of federal land to oil and gas leasing, scrapped rules that would support electric vehicles (EVs), and halted any serious attempts for the federal government to respond to climate change. Trump has embraced "drill, baby, drill" as a core policy plank, which he argues will be an elixir to voters frustrated with inflation and high prices.
Vice-president Harris backs an "all-of-the-above" energy policy, her running mate Tim Walz says, and has a further goal to turn the US into a global powerhouse for the types of clean energy manufacturing and EVs that will be needed to make a difference on climate change. But Harris' remark in 2019 that there is "no question I'm in favour of banning fracking" has come to haunt her campaign, despite saying she has dropped that position. Harris says her experience serving as vice-president has shown her that banning fracking was not needed to support a clean energy economy. "As vice-president, I did not ban fracking. As president, I will not ban fracking," she says.
Even so, Trump has tried to sow doubts among voters that Harris is sincere in her new position, which he hopes will cost her in the battleground state of Pennsylvania, a key shale gas producer that accounts for 20pc of US natural gas output. "If she won the election, the day after that election, they'll go back to destroying our country and oil will be dead," Trump says.
But Trump's promises on oil and gas — and his attacks on the policies of the Biden-Harris administration — have at times borne little resemblance to reality. Trump claims that if he had won a second term in 2020, oil production would be "four times, five times higher", translating into US crude production in excess of 50mn b/d, or more than half of global production. Trump also says that, if elected, he would cut the price of energy "in half or more within a year of taking office", double electricity production and bring gasoline prices below $2/USG. He will do this through "a national emergency declaration" that will cause a "massive increase" in energy supply, Trump says, although energy analysts say his promises are technically and economically unachievable.
Trump's oft-repeated claim that US oil and gas production crashed after he left office is also undercut by basic energy statistics, as is his claim that the US has lost the "energy dominance" it had during his term. The US hit record-high production this year, in excess of 13mn b/d of crude and 100bn ft³/d (1 trillion m³/yr) of gas, while US net petroleum exports climbed to a record high of 1.7mn b/d last year.
Regulatory rollback
Trump has campaigned heavily on rolling back regulations and cutting energy prices, which he says will persuade manufacturers to "pack up and move their production to America". For every new regulation, he promises to remove "10 old and burdensome regulations from the books", echoing an earlier "two-for-one" regulatory repeal policy he attempted to enforce during his first term in office.
Trump has shown particular zeal for eliminating policies he sees as part of the "Green New Scam", a blanket term he uses for clean energy spending under President Joe Biden's signature climate legislation, the Inflation Reduction Act, and climate-related regulations. If Trump's first term serves as a guide, he will again seek to repeal regulations that restrict methane emissions from US oil and gas production, weaken CO2 emission limits for power plants and block tailpipe rules that encourage EVs. "I will end the insane EV mandates," Trump says. Faster permitting will be another top priority, Trump says, after his efforts to pass comprehensive permitting legislation collapsed during his first term.
A Harris victory, in contrast, would be key to implementing dozens of climate-related regulations issued under the Biden administration and defending them in court. Expediting federal permitting and "cutting red tape" will also be a priority for a Harris administration, given the impediments it can create for clean energy projects and other infrastructure, according to campaign documents. "No-one can tell me we can't build quickly," Harris says.
Federal oil and gas leasing has plunged under Biden, who was unable to carry out campaign promises to ban new leasing but was still able to limit onshore lease sales to 210,000 acres/yr (850 km²/yr) in 2022-23, down from more than 6mn acres/yr in 2018-19 under Trump. Oil and gas groups say expanded federal leasing, particularly in the US Gulf of Mexico, is a top policy priority.
Trump has vowed to expand federal oil and gas development if he wins, particularly by enabling drilling in Alaska's Arctic National Wildlife Refuge (ANWR), which he opened to leasing in 2017 but has been held up in reviews since Biden took office. "I'll put ANWR back in play," Trump says. Less clear is how Trump would handle offshore leasing, an issue that backfired in his first term when his push for drilling offshore Florida prompted fury from political leaders in the Republican-led state.
Harris has yet to explicitly embrace federal drilling, but she has touted the "record energy production" the US has achieved under the Biden-Harris administration, and supports further growth "so that we never again have to rely on foreign oil", according to campaign documents. A recent bipartisan bill from US senator Joe Manchin suggests there is flexibility from the Democrats on the issue, by offering more federal oil leasing in exchange for fast-tracking electric transmission development.
LNG pause in balance
Biden's decision earlier this year to pause the licensing of newly-built LNG export terminals has fuelled uncertainty for projects such as Venture Global's 28mn t/yr CP2 project in Louisiana. But the pause is only set to last until early 2025, when the US Department of Energy (DOE) will finish work on a study into whether further exports are in the "public interest" based on factors such as climate change and domestic energy prices.
Trump says as soon as he takes office he will approve pending LNG export terminals, which he says are "good for the environment, not bad, and good for our country". Harris has yet to describe her approach to licensing more LNG terminals, the approval of which environmental activists say would be a "climate bomb". But Manchin's permitting bill suggests there is some room for manoeuvre, by requiring the DOE to decide on LNG export licences within 90 days.
Oil industry officials are preparing for a fight to retain the existing corporate tax rate of 21pc enacted under Trump in 2017, as Congress is heading towards a "tax cliff" at the end of 2025 that will cost more than $4 trillion to avert. Harris has called for Congress to raise the corporate tax rate to 28pc, but wants new tax credits for industries such as manufacturing. Trump has proposed a lower corporate tax rate of 15pc only "for those who make their product in America". At the same time, Trump's push for an across-the-board import tariff of up to 20pc has alarmed industry officials, who say such a policy would raise consumer prices and potentially trigger a disruptive trade war.
