The US energy policy landscape has been a dynamic and often contentious field, shaped by differing political ideologies and economic pressures. As the US grapples with the challenges of climate change and energy independence, the contrasting approaches of the Trump and Biden administrations seem to offer some indication of America's potential path forward under each party. The candidates vying to be leader of the world's largest economy appear to have contrasting views on energy policy, but is that consistent with what we have actually seen? The short answer is no.
In this article we will explore what has actually happened and how the past can help shape our understanding for what is to come. The polarising nature of US politics in recent years has attracted significant attention and this has certainly been seen in US energy policy.
When Donald Trump took office in 2017, the US energy sector was already experiencing significant shifts. In 2017, renewables were the fourth-largest source of electricity generation, trailing behind coal, natural gas, and nuclear power. By the end of 2021, which coincided with Trump's time in office, renewables had surged to become the second-largest source, surpassed only by natural gas, which also expanded rapidly.1 This remarkable growth in renewable energy is somewhat against the prevailing narrative of fossil fuel expansion and environmental deregulation which saw the US leave the Paris Agreement. Despite efforts to also revive the coal industry, the cost competition from renewables and natural gas saw this revival crash and burn.
President Joe Biden's time in office will likely be remembered for his historic climate action policies. His administration has made significant strides in promoting renewable energy, with ambitious goals to decarbonise the US energy grid and reduce greenhouse gas emissions. Under Biden, investments in solar, wind, and other renewable sources have surged, reflecting a clear commitment to combating climate change. As of 2023, renewables represented 28.1% of total US utility scale electricity generation, according to the US EIA.2
However, it is important to note that natural gas production has also hit record highs during Biden's presidency. This dual approach underscores the complexity of transitioning to a low-carbon economy. Vice President Kamala Harris highlighted this point during her debate against Trump, emphasizing that the administration's energy policy seeks to balance immediate energy needs with long-term sustainability goals.
As Kamala Harris runs for president in 2024, her current energy and climate policies reflect a blend of urgency and pragmatism. Harris has consistently acknowledged climate change as a "clear crisis" that requires urgent action. Her efforts to build consensus around this issue have been evident throughout her political career.
As a senator, Harris co-sponsored the Green New Deal resolution, which called for a transition to 100% clean energy by 2030. However, her current platform does not specify a timeline for achieving this goal. Instead, she supports the Inflation Reduction Act passed under the Biden administration, which includes hundreds of billions in tax credits and grants for renewable energy projects. Harris has touted this act as the "most significant climate legislation in history."
During the 2020 primary, Harris called for banning fracking, but she has since moderated her stance, stating that the US can build a clean energy economy "without banning fracking." This shift highlights her emphasis on building consensus on energy policy rather than taking an aggressive approach to phasing out fossil fuels. Her campaign platform also does not call for ending new fossil fuel leases on public lands or eliminating tax breaks for oil and gas companies, despite pressure from some environmental groups.
Strategically, Harris has been careful in her messaging on energy, avoiding specifics that could alienate moderate voters or the fossil fuel industry. Her campaign has reached out to oil industry groups like the American Petroleum Institute, signalling a willingness to engage with the sector. Additionally, Harris has touted the record levels of domestic oil production under the Biden administration, a notable shift from her past positions.
Despite their differing approaches, both the Trump and Biden administrations have shared a common focus on energy leadership and independence. The US continues to prioritise energy security, ensuring that the nation can meet its energy demands without over-reliance on foreign sources. This has meant that, in the short term, fossil fuels remain a crucial component of the energy mix.
The US energy grid has made significant progress in decarbonising, primarily through a substantial shift from coal to natural gas, which emits roughly half the greenhouse gases per unit of power. This transition has been a critical factor in reducing the nation's carbon footprint and moving towards a more sustainable energy future.
Both presidential candidates have highlighted differing approaches to energy policy but given the scale of investment and economic support the Inflation Reduction Acts financing for clean energy, either candidate will face significant hurdles against a large scale repeal.
It is also clear that the narrative and prevailing outcomes haven't always aligned with great accuracy and we must look beyond the headlines and personalities and focus on where capital is mostly likely to flow towards and why. It also bares reminding ourselves that most influence on real economic activity is dictated at state level, not solely by those who sit in the White House.
Over time the market will shift its focus to the most economically viable and cheapest sources of energy which remain wind and solar, followed by natural gas. Energy dynamics have been shifting significantly over the past few decades and we do not expect that to change any time soon.
[1] US Energy Information Administration, 2024, https://www.eia.gov/energyexplained/electricity/electricity-in-the-us-generation-capacity-and-sales.php
[2] US Energy Information Administration, 2024
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