Watching Government: Energy in the 2016 elections

Energy issues have not been discussed much in the 2016 US presidential campaigns. That doesn't necessarily mean the November election's outcome won't have significant policy consequences, two speakers suggested at a June 9 US Energy Association event.

They seemingly started from opposite viewpoints. David Bailey retired as ExxonMobil Corp.'s climate policy manager in 2012 after coming into the oil and gas business in 1989 as human resources director for Mobil Corp.'s UK businesses. David Bookbinder is an environmental lawyer who has handled lawsuits for the Sierra Club and similar organizations as well as the natural gas industry.

Both are principals in a consulting firm, Element VI. It is based in Middleburg, Va., outside Washington, DC, and tries to provide answers about climate change and carbon policies.

Oil and gas methane emissions could be interesting because the social cost of carbon may be due for judicial review in federal district court for the District of Columbia, Bookbinder said. "It, and possibly the US Supreme Court, will decide whether it's legitimate," he said. "Hang on, because we're in for a wild ride."

Bailey said, "The social cost of carbon will affect every decision governments make about fossil fuels. Companies will need to prepare for longer timelines. Longer term, regardless of what the US does, the rest of the world will become more carbon-constrained. In rich, emerging economies like Qatar, there will be more transformational initiatives."

Policy changes take time, both speakers emphasized. "We think it could be faster, but not necessarily at the rates under the Paris accords," said Bailey. "But the process will create new challenges for fossil fuel industries and opportunities for competitors, especially if it is pursued through a regulatory agenda."

EPA may be a key

Could the presidential election's outcome influence the policy change's pace? The US Environmental Protection Agency could be the key. Its regulations could reach a point where fossil fuel industries might find a carbon tax preferable because it provides more certainty and regulatory clarity, Bookbinder said.

Similarly, EPA under a Donald J. Trump presidency might be ordered to slow the process down by extending implementation deadlines, he added. "Many members of the House and Senate privately support it, but publicly oppose it," Bookbinder said. Hillary Clinton may try to restrict hydraulic fracturing, but won't likely try to eliminate it because the gas it produces backs out coal, he said.

"The Paris agreement provided ammunition for environmental activists, but depressed oil and gas prices have had a bigger impact," Bailey said. "Leave-it-in-the-ground may become more prevalent. But if it begins occurring in developing countries, they'll be at the mercy of the Organization of Petroleum Exporting Countries."