10 Can’t-Miss Election Predictions

[[{“value”:”

ENB Pub Note: This is an excellent article from Robert Bryce’s Substack. I am reaching out to him and will try to record a podcast post on this topic next week. I highly recommend subscribing to Robert’s Substack as he is right on the mark with what is needed in the energy markets.

I have been interested in presidential politics and campaigns all my life. I cannot remember an uglier contest, or one with worse candidates, than the one that will be decided on Tuesday. As I explained in August, in “Five Reasons To Be Bullish On The United States,” I am all-day optimistic about the US. We have key advantages over the rest of the world, including world-class education, relatively good demographics, excellent geography and agriculture, cheap energy, and, more than anything, an enduring Constitution.

But we’re cursed with terrible politics and politicians.

What will happen on election day? The vote will almost certainly be close, like it was four years ago, with the outcome determined by a few thousand votes in a handful of states. Nevertheless, I hope that whoever wins, does so bigly. The last thing the US needs right now is a drawn-out process that gets decided by hanging chads.

Chads or no chads, here are my 10 predictions for this election and what we can expect when it’s over (with three charts). Want a preview? The IRA subsidies are here to stay, and the EPA’s EV mandate is dead regardless of who wins.

1. The vote tally will show, again, the urban-rural divide.

There are many divisions in America, including race, class, and political affiliation. But the most obvious divide, and it’s one I see when I travel for speaking engagements, is the chasm between urban Americans and their rural counterparts. Rural Americans are more conservative and more religious than folks who live in cities. Voting patterns confirm this. In 2020, Trump won about 2,588 counties, while Biden won 551. Next Tuesday’s results will show a similar outcome.

2. If Trump wins, he won’t repeal the alt-energy subsidies in the IRA.

Milton Friedman famously said there’s “nothing more permanent than a temporary government program.” The renowned economist’s line applies to the Inflation Reduction Act, the measure that was passed by a single vote (cast by Kamala Harris). As the Cato Institute’s Travis Fisher pointed out last year, unless the IRA is reformed or repealed, the climate-related subsidies will be permanent and will cost taxpayers staggering amounts of money over the coming decades. In his piece, Fisher cites an analysis by consulting firm Wood Mackenzie, which concluded that the “real money on the table is on the order of trillions of dollars over multiple decades.”

The idea that the US will spend trillions on alt-energy projects while the deficit is soaring ($35.8 trillion and counting) is the definition of fiscal insanity. But Big Business is feasting on the subsidies, and the most powerful trade associations in Washington have pledged to fight to continue the handouts. Thus, there’s little reason to expect Trump will be able to eliminate the IRA subsidies even if he wants to.

In February, Dan Brouillette, who served as Trump’s secretary of energy, and is now CEO of the Edison Electric Institute, the trade association for investor-owned utilities, said EEI (annual revenue: $86.1 million) will be “very aggressive” in protecting key elements of the IRA from repeal. In May, the American Petroleum Institute and the US Chamber of Commerce said they would fight any efforts to kill the IRA’s alt-energy provisions. An official at the Chamber (annual revenue: $210 million) told Politico that the IRA is needed for “energy security, competitiveness, and the business case for the energy transition.” Meanwhile, API (annual revenue: $293 million) wants to keep the hydrogen and carbon capture tax credits.

In August, 18 House Republicans sent a letter to House Speaker Mike Johnson, saying they would oppose cuts to the energy-related measures in the IRA. They said, “Prematurely repealing energy tax credits… would undermine private investments and stop development that is already ongoing.” They continued, “A full repeal would create a worst-case scenario where we would have spent billions of taxpayer dollars and received next to nothing in return.”

The American Clean Power Association (annual revenue: $51 million), which represents the wind and solar sectors, also opposes any changes in the IRA. In May, Jason Grumet, the group’s CEO, said the chances of the IRA “being repealed or changed significantly are small.”

He’s right.

3. If Harris wins, the Anti-Industry Industry will have even more power.

For a clue as to how Kamala Harris’s administration will handle energy and climate, look at who’s on her campaign staff. And in particular, consider Camila Thorndike, the campaign’s “climate engagement director.” Thorndike joined the campaign after a stint at Rewiring America, one of the most radical climate groups in the US. Before that, she worked for Senator Bernie Sanders, the socialist senator from Vermont. As I noted here last month, Rewiring America is a dark money NGO that aims to “electrify everything.” The group doesn’t disclose its budget or its funders. Last week, the Wall Street Journal noted that Thorndike tweeted in 2021 about the need for “political and cultural change to overcome the individualism, white supremacy + toxic patriarchy that fossil fuel co’s weaponize against affordable solutions we already have for rapid decarbonization.” Thorndike also has called the hydrocarbon sector “a death cult” that “quietly murders every day.” The Biden administration has embraced the forced electrification agenda that groups like Rewiring America are pushing. If Harris’s campaign hires extremists like Thorndike, it’s evident that the Anti-Industry Industry will have even more power if Harris wins the White House.

4. If Trump wins, the LNG export ban will end immediately.

In January, the Biden Administration announced a “temporary pause” on permits for LNG exports. The move, which was made by Biden’s climate advisor, John Podesta, was made to appease climate activist groups. Although the administration claimed it was based on scientific findings that exported natural gas was worse for the climate than coal, the DOE itself has determined the opposite. Wood Mackenzie estimates that if Trump wins, the first LNG export permits are unlikely to be granted until the second half of 2025.

5. If Trump wins, the offshore wind business will be headed for Davy Jones’s Locker.

Despite the insanely high cost of producing electricity from offshore wind turbines — and the industry’s adverse effects on marine mammals including the critically endangered North Atlantic Right Whale — the Biden Administration and the Bureau of Ocean Energy Management, have given the offshore industry all the permits it needs to install hundreds, or even thousands, of massive turbines on the Eastern Seaboard. Trump has hated offshore wind energy for years. He has said he will kill the offshore projects “on day one” if he is elected. There’s no reason to doubt him.

6. Regardless of who wins, permitting reform is going nowhere.

The Manchin-Barrasso permitting reform bill passed out of the Senate Energy and Natural Resources Committee in July but has not been taken up by Congress. The bill has been endorsed by numerous business groups, including the Chamber of Commerce. Congress could take up the measure during the lame-duck session, but passage seems unlikely regardless of the election outcome. In July, 360 NGOs, led by the dark-money, legal-monkey-wrenching outfit Earthjustice (annual revenue: $126 million), sent a letter to Senate leaders claiming the measure “guts bedrock environmental protections” and will “perpetuate the climate crisis.” Don’t count on Democrats to cross that constituency.

7. The EPA’s EV mandates will be scrapped.

EPA mandate on electric vehicles is a massive overreach by the administrative state. The courts will eventually overturn the mandate. That was true even before the Supreme Court issued its June decision in the Loper Bright v. Raimondo case, which ended Chevron deference. But even without Loper Bright, it’s clear that US automakers simply cannot meet the EPA’s target, or they will be bankrupted in trying to do so. Under the rule, about 70% of the new cars sold in the US by 2032 will have to be fully electric or plug-in hybrids. For comparison, those vehicles made up just 9% of new car sales last year.

The US automakers are already dialing back their EV production because consumers aren’t buying the damn things. As I noted here last week, Ford has already lost about $11 billion on its EV misadventure, including $1.2 billion in the third quarter alone. The religious belief in EVs as a climate cure is colliding head-on with the realities of the marketplace, and that will be true under Trump or Harris. One way or another, the EV mandate is doomed.

The rejections keep piling up. Last week in Iowa, the Jackson County Zoning Commission voted 5 to 2 in favor of prohibiting the construction of wind turbines within five miles on either side of roads that are part of state-designated scenic drives in the county. According to an October 30 article in the Bellevue Herald-Leader, this includes the “Grant Wood Scenic Byway, the 68-mile route from the Mississippi River to Highway 64 through the county. The setback also includes the county’s portion of the Iowa Great River Road, which parallels the Mississippi River.” In September, in Georgia, the Houston County Commission voted unanimously to reject a special use permit for a proposed 4,700-acre solar farm due, in part, to concerns for a local population of black bears. As noted by the Macon Telegraph, the vote on the project came “after a nearly two-hour public hearing in a crowded room used mostly for jury selection,” and the “sole person to speak in favor of the solar farm” was a representative from the solar company. Yesterday, I updated the Renewable Rejection Database. The tally is now 745 rejections or restrictions since 2015, with 102 this year alone.

9. Regardless of who wins, the reliability of the US electric grid will keep declining.

Regulators have been warning about the declining reliability of the electric grid for years. Among the most recent, and ominous, warnings came in July, when FERC Commissioner Mark Christie told members of the US House Subcommittee on Energy Climate, and Grid Security:

The United States is heading for potentially catastrophic consequences in terms of the reliability of our electric power system. I am not trying to be melodramatic in using a term such as “catastrophic,” but because it is accurate to describe a rapidly growing threat of extensive and regular power outages as potentially catastrophic…The core threat is two-fold: On the power supply side, dispatchable generating resources, even with many years of useful life remaining, are retiring far too quickly and in quantities that threaten our ability to keep the lights on. The supply problem is not the addition of intermittent resources such as wind and solar, but the far too rapid subtraction of dispatchable resources, especially coal and gas. Further, the nation’s largest regional grid operators have made crystal clear that the Environmental Protection Agency power-plant regulations, which have now been finalized, will make this already dire situation much worse by forcibly accelerating the retirement of the vast majority of the remaining coal fleet and making it extremely difficult, if not virtually impossible, to build the new combined-cycle natural gas generation units that will be essential as baseload generation resources to meet the rising demand for power.

Christie’s warning is only the latest in a long series of warnings that have been made by FERC, the North American Electric Reliability Corporation, and grid operators about the grid’s declining reliability due to bad policy and the premature closure of dispatchable coal and gas plants. Furthermore, nearly all of the incentives and mandates promulgated over the past few years are encouraging the addition of more weather-dependent generation to the electric grid.

That’s the wrong way to go.

If we face more extreme weather due to climate change — hotter, colder, and more extreme for longer — the last thing we should do is make the electric grid more dependent on the weather. Unfortunately, despite the many warnings, that’s precisely what we are doing.

10. Regulatory uncertainty and project delays will persist in the electric sector for many years to come.

Despite the ongoing warnings about reliability, the utility sector continues to face a myriad of uncertainties due to ongoing litigation over the EPA’s rules, as well as state and local permitting issues. Those battles will continue regardless of who wins on Tuesday. The latest uncertainty came in mid-October when the US Supreme Court rejected a request by the electric utilities to issue a stay on the EPA’s power plant regulations, which Christie mentioned in his July testimony. Further, electric utilities are facing a wave of litigation from NGOs who are hellbent on stopping the construction of new gas pipelines to fuel the gas-fired capacity needed to replace the retiring coal-fired plants. And speaking of regulatory delays, don’t expect a quick buildout of the high-voltage electric grid, either. For proof of that, consider the latest development in the Grain Belt Express, a proposed 780-mile high-voltage transmission project that was first proposed in 2010. That $7 billion 500-kV project, owned by Invenergy, a company controlled by Canadian firm CDPQ, was delayed again in August, when an Illinois appeals court overturned the state’s approval of the project. The only thing certain about the US electric grid is that more uncertainty and delays lie ahead. Plan accordingly.

Be sure to vote, y’all. – Source: Robert Bryce, Substack

Is Oil and Gas An Investment for You?

The post 10 Can’t-Miss Election Predictions appeared first on Energy News Beat.

“}]]

Energy News Beat