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Gulf Energy CEO: Yes, Joe Biden really does want to end America’s oil and gas industry

The Biden energy plan has dire consequences for the oil and gas industry and the American economy

John Royall, President & CEO, Gulf Energy Information

John Royall Resized (3)

(Note: This is written for our U.S. readers. If you are outside of the U.S. and have a keen interest in the U.S. election, read on. Please know that for all our readers globally, Gulf Energy Information will promote and defend workers in the oil and gas industry.)

Last Thursday night, former Vice President, Joe Biden, made an astounding mistake for a career politician—he accidentally told the truth.

Most will recall this critical moment in the presidential debate:

Trump: “Would you close down the oil industry?”

Biden: “I would transition from the oil industry, yes.”

Trump: “That’s a big statement.”

Biden: “It is a big statement. Because the oil industry pollutes, significantly…because it has to be replaced by renewable energy over time.”

After the debate, Biden realized his mistake and began to walk back his statement. However, there is too much evidence that what he said on stage is what he intends to in office.

The Biden Plan. Among other items, Biden’s energy plan calls for the elimination of carbon from power generation by 2035. The genesis of the Biden Plan, which can be found on the Democratic Party platform website, is the Biden-Sanders Manifesto of July 20, 2020, which was submitted to the Democrat National Committee by co-Chairs John Kerry and Alexandria Ocasio-Cortez. The plan calls for:

  • Installing 500 MM solar panels, including 8 MM solar roofs and community solar energy systems
  • Installing 60,000 wind turbines
  • Installing 500,000 charging stations along U.S. roads
  • Converting the fleet of 500,000 school buses to zero-emission alternatives within 5 yr
  • Transition 3 MM vehicles in the federal, state and local fleets to zero-emission vehicles
  • Net-zero greenhouse gas emissions for all new buildings by 2030—on the pathway to creating a 100% clean building sector by converting 4 MM buildings
  • Additional regulations for the oil and gas industry to achieve “environmental justice.”

 “The Biden Plan for a Clean Energy Future,” located at, the official campaign website, offers more general and aspirational policies, but in-line with the Green New Deal. Through elimination of natural gas for power, government investment in electric vehicles to push out hydrocarbon fuels and the heavy regulation of fossil fuels, the Biden plan will effectively eliminate natural gas and oil from American energy.

To implement these initiatives, the Biden Energy plan calls for $1.7 T over the first 4 yr of the Biden administration.

3,177 Solyndras. In 2009, Solyndra received $535 MM from the U.S. Department of Energy under a loan guarantee program. Solyndra was to use the money to build solar panels. The company lasted about 2 yr, declaring bankruptcy after 1 yr and closing the business after 2 yr.

Billions, hundreds of billions, trillions of dollars in government contracts under the Biden Energy Plan. Ostensibly good intentions. What could possibly go wrong?

Today, the U.S. enjoys an abundance of inexpensive and plentiful energy largely due to the oil and gas industry. All of us are beneficiaries, as transportation, home heating, power generation and power for the industrial and business sectors are competitive with the industrial world’s lowest costs. Consumers and businesses benefit.

A wholesale makeover of the U.S. energy industry—directed from Washington D.C.—will lead to much higher energy costs for both consumers and industry. Every American will pay much more to heat and power their homes and commuters will pay much more to drive to work. The competitive advantage enjoyed by American industry will disappear.

Just as troubling, is the transfer of decision-making for the energy sector from the market to Washington D.C., where factors other than efficiency will play a role, as with Solyndra. Is the U.S. Energy Department a more efficient arbiter of capital allocation than the market?

Under current policy, Texas has become the leading wind energy producer in the U.S.  Solar farms in the deserts of California are efficient producers of electricity as part of a larger energy network. However, a 5-yr plan administered from Washington D.C. is fraught with too many pitfalls, especially with the elimination of oil and natural gas over a defined time. This will lead to much higher prices and, potentially, even rationing, such was the case in the 1970s.

Look no further than California to see how this will work. The government of California shut down natural gas generating capacity in favor of renewables. This past summer, the state instituted rolling blackouts wherein as many as 3 MM Californians went without power.  Eric Garcetti, mayor of the second largest U.S. city, Los Angeles, regularly goes on television to ask Angelenos to turn off appliances and turn up the thermostat to save electricity, so there’s enough to go around. It is more like Lagos than an American city—with apologies to Lagos. They, at least, try to produce enough electricity for their citizens.

A better way forward is to bring on more renewables where they make economic sense, but to continue to rely on natural gas and oil as the backbone of U.S. energy.

Quit vilifying our industry. After the debate, Biden tried to walk back his remarks. My guess is that his staff knew the magnitude of his error and got the press to line-up on the tarmac for a Biden statement. What he said was not nearly so revealing as the optics during his statement. Biden stepped out of a large SUV and spoke on the tarmac in front of his private jet. Obviously, fossil fuels are powering the Biden campaign, every bit as much as fossil fuels power America.

The U.S. needs the oil and gas industry. It is a very big part of what makes us prosperous as a nation. It is also what allows Americans freedom to travel, to live where they want to live, to enjoy an abundance of not only energy but reasonably priced food and consumer products.  The Biden Plan will lead to a kind of energy poverty that will impoverish U.S. citizens, especially the middle class and poor Americans. Heating, cooling, transportation, manufactured goods and food (i.e., virtually everything) will become much more expensive.

Rather than to be continually criticized by Biden and others who use our products for their own lives and businesses, it would be a much more productive approach to recognize the importance of the products we produce in the oil and gas industry, and to work toward a cleaner usage of fossil fuels as part of a broader energy mix in the future.

Copyright © 2019. All market data is provided by Barchart Solutions. Futures: at least a 10 minute delay. Information is provided 'as is' and solely for informational purposes, not for trading purposes or advice. To see all exchange delays and terms of use, please see disclaimer.

                                  CMEGroup                                     Icelogo


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