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Page added on September 30, 2019

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This energy plan could have a dramatic impact

Alternative Energy

The world energy market has shown over the past few weeks and months that it can easily cope with the collapse of Venezuelan oil exports, the cut-off of most supplies from Iran and even an attack on Saudi Arabia’s key oil export facilities.

It is not, however, prepared for the dramatic change that could occur if the Democratic party wins next November’s US presidential election.

Elizabeth Warren, one of the leading Democratic candidates vying to be the party’s nominee, has shown her serious intent by producing a detailed costed and viable policy plan, prepared by experts, for every issue — including on energy and climate change.

Here are some of the headlines of the energy plan the senator launched at the beginning of September:

• By 2028, 100 per cent zero-carbon pollution for all new commercial and residential buildings

• By 2030, 100 per cent zero emissions for all new light-duty passenger vehicles, medium-duty trucks and all buses

• By 2035, 100 per cent renewable and zero-emission energy in electricity generation, with an interim target of 100 per cent carbon-neutral power by 2030.

The plan, with a promise of $3tn in federal investment, was supplemented by a tweet in which Mrs Warren said:

On my first day as president, I will sign an executive order that puts a total moratorium on all new fossil fuel leases for drilling offshore and on public lands. And I will ban fracking — everywhere.”

Are these objectives to be taken at face value or are they simply campaign rhetoric?

As one of the three leading Democratic contenders — along with Joe Biden and Bernie Sanders — there is every likelihood that Ms Warren’s approach to energy policy will be reflected in the Democratic platform for next year’s election, whoever is the nominee. And, according to the current polls, there is a good chance that the Democrats could win.

President Donald Trump’s approval rate is around only 40 per cent, and his slogan of God, Guns, Coal chimes with only his core supporters. Among the rest of the electorate, climate change and wider environmental concerns are moving up the agenda

So Ms Warren’s policies have a good chance of being adopted. For the energy industry, the impact would be dramatic. The changes she detailed would sharply reduce demand for hydrocarbons (oil, coal and gas) over the next decade. Existing investments in production and infrastructure would be devalued. Resources would be kept in the ground.

Existing business models would be instantly outdated, and valuations undermined. Money would instead flow into the development of renewables and technologies such as electric vehicles. Perhaps most significant of all, fracking would end, halting production of shale oil which is currently running at 8.5m barrels a day of oil and more than 20 trillion cubic feet of natural gas.

None of this would happen without a fight by the industry but theoil and gas companies have little credibility with the public, according to recent polls, and would probably not be able to do much more than slow the process of change.

The impact, of course, would not be limited to the US. Without fracking, the country would cease to be an exporter of oil or gas and in the short term could require more imports. International companies working in the US, particularly those focused on shale oil and gas, would see the value of their investments much diminished.

At the same time, by setting an example and by means of the $100bn Ms Warren is promising to support the export of low-carbon technologies, the move could trigger comparable shifts elsewhere, putting into question the valuations attached to oil, gas and coal assets around the world.

Existing energy businesses may like to think that none of this could actually happen. They are wrong, and anyone investing in businesses with direct interests in the current US energy system should be asking the companies to produce their contingency plans as a matter of urgency.

FT



14 Comments on "This energy plan could have a dramatic impact"

  1. Sissyfuss on Mon, 30th Sep 2019 8:14 am 

    The devil is in the details, as Ross Perot always reminded us. When energy transformation starts to really kick in, the shock to those first entering a new epoch of man’s evolution will cause recoil and remorse at the paucity of modern convenience remaining. The masses will not go calmly into that unlit good night. And they will be much more open to the ravings of lunatics that promise them the moon and Mars. It’s fairy tale thinking to believe that dealing with our overshoot will be an opportunity and not a calamity.

  2. Harquebus on Mon, 30th Sep 2019 4:55 pm 

    Sissyfuss
    The survivors will get tons of free stuff. That’s an opportunity. Hope you are one.
    When the villagers are running from the bear, one doesn’t need to be the fastest runner; only faster than the slowest.
    Most Western villagers today can hardly move, metaphorically that is.
    Cheers.

  3. Duncan Idaho on Mon, 30th Sep 2019 5:01 pm 

    “In a society over-flowing with capital, the cost of capital is not the problem, the lack of real return is the problem.”
    If you are a capitalist–

  4. Kevin Cobley on Mon, 30th Sep 2019 6:08 pm 

    The US is an importer of 7 million barrels per day.

  5. Robert Inget on Mon, 30th Sep 2019 7:11 pm 

    US-China trade war may soon become a currency war, strategist warns
    Published time: 30 Jun, 2019 05:02
    Edited time: 1 Jul, 2019 12:15
    RT

    US-China trade war may soon become a currency war, strategist warns

    Washington could trigger a currency war in “two to three years” once it shifts away from the trade war with China, according to Christian Gattiker, head of research at Julius Baer Group.
    He told CNBC that the US Federal Reserve has been yielding to pressure from the White House with a policy which could shape the dollar’s future.

    “[The Fed] moved 180 degrees from being in auto-pilot, tightening mode to cutting rates and easing monetary policy, so I think there is a certain pressure on,” Gattiker said.

    US Fed cuts rates like an alcoholic who always drinks no matter what – RT’s Keiser Report
    The expert strategist added that the current geopolitical environment was creating new objectives for the Fed, including the maintenance of an “orderly economic environment.”

    “With its new mandate, [the Fed] is entitled to yield to this pressure, even in the greater scheme of things with the trade war. So, I think a weaker dollar is warranted, from a US perspective,” he said. “We might actually be turning from a trade war situation to a currency war situation in the next two to three years.”

    Among other causes, a currency war begins when a country deliberately depreciates the value of its domestic currency in order to stimulate its own economy.

    (forget two or three years, RT)
    You and China are busy under-mining the buck
    rat now.

    While we are busy trying to lock up the crook you helped get elected, you Russia are making great progress creating massive oil shortages with economy killer fuel prices to boot.

  6. ANAL REAPER on Mon, 30th Sep 2019 8:18 pm 

    Pochahantas will never win. Even if she does she won’t accomplish those goals without crashing the economy.

  7. JuanP garbage on Mon, 30th Sep 2019 8:35 pm 

    ANAL REAPER said Pochahantas will never win. Even if she does she w…

  8. Davy Garbage on Tue, 1st Oct 2019 12:30 am 

    Davy on Mon, 30th Sep 2019 8:35 pm

  9. Cloggie on Tue, 1st Oct 2019 12:57 am 

    Warren following the good EU example.

  10. Robert Inget on Tue, 1st Oct 2019 9:22 am 

    “Few weeks ago, I thought a US concession was inconceivable, but now I am not so sure, I think there is a chance that Trump will blink by offering the Iranians limited relief on the sanctions in return for negotiations. I think the oil market is already reflecting such an outcome.

    But, Trump is unpredictable and for reasons beyond Iran’s comprehension, he may change tact and opt for military action. I think the impeachment process against him may tempt him to increase tension in the Gulf to divert attention.
    This last line of argument is cynical, but I would not discount domestic politics from Trump’s Iran calculations. We also should not forget about Israel’s role in all of this. Israel is not supportive of renewed negotiations, a lengthy negotiations process may outlast Trump and I don’t think Israel has confidence that a democrat will maintain a tough negotiations stance against Iran.

    Israel can’t risk Iran having a nuclear weapon, no country would want another to hold a gun to its head and especially so Israel. I believe Israel wants Trump to destroy Iran’s nuclear program militarily and if he were not to do so, we may witness something unimaginable, a formal alliance between Israel and Saudi Arabia to take on Iran just like when the US allied with the USSR to take on Germany.

    The world without the US protective umbrella is an unpredictable place, and the Iran dilemma will keep us guessing for a long time.

    (not my words)

  11. Duncan Idaho on Tue, 1st Oct 2019 11:26 am 

    The Fat Boy is not going to attack Iran, as it has been explained to him a world wide depression would start immediately.
    Even a 6 times bankrupt scammer from Queens can understand that.

  12. supremacist muzzie jerk on Tue, 1st Oct 2019 11:32 am 

    duncan SAW SAWS pbuh swt
    don’t you think it’s unfair that republicons are peaceniks? this only embolden the enemy and the burden is left to a lib to clean up – to go to war. war is mandated on muzzies. whitey supertard founding fathers SAW SAWS pbuh swt got the message from muzzie ambassator in britian and so the isolatist supertards founders SAW SAWS pbuh swt startted the barbary war against muzzie pirates. today we dhimmis dare not say muzzie pirates we say “somalian pirates”
    ps: anonturd SAW SAWS pbuh swt, supertard is having a good day don’t you pop in and say something nasty to run his day.

  13. supremacist muzzie jerk on Tue, 1st Oct 2019 11:38 am 

    Duncan, I suck cock by choice because supertard saws pbuh designated it as a saws saw right. Muzzie are butt pirates and I like that too

  14. jmm.peters on Wed, 2nd Oct 2019 11:28 am 

    goed plan…

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