US ELECTIONS: Host of Energy Issues Settled, But Counting Continues for President
By Meghan Gordon, Jasmin Melvin and Maya Weber
November 4, 2020 - The winner of the White House and control of the US Senate remained unknown early Nov. 4 as mail-in ballots continued to be counted, but implications for energy and commodity markets unfolded in local and state races across the country.
Election officials in key battleground states Wisconsin, Michigan and Pennsylvania said they needed more time to process ballots.
While Democrats picked up a Senate seat in Colorado, the party lost tight races in Alabama, Iowa and South Carolina.
In statewide ballot measures, Texas voters appeared to reject tougher limits on natural gas flaring, New Mexicans were set to revamp utility oversight, and Louisiana voters sought to tie oil and gas wells' property taxes to production.
The future of US energy and climate policy hangs on the races for president and about a dozen tightly contested US Senate seats.
President Donald Trump would continue a deregulatory push that emphasizes the country's abundant fossil fuel resources if elected to a second term.
Democratic challenger Joe Biden would embrace a shift to clean energy through climate policy, tougher environmental regulations and restrictions on federal oil and gas permitting.
Control of the Senate will determine how far a Biden administration could get on this green energy agenda, while Trump's policies lean more toward administrative actions and fending off court challenges. Democrats need to pick up a net four seats to take over the Senate.
The preliminary results showed a lack of a Democratic "blue wave to easily sweep in national US climate policy," said Amy Myers Jaffe, research professor and managing director of the Climate Policy Lab at Tufts University's Fletcher School.
Jaffe pointed to Florida and Texas as two states hard-hit by severe weather events that nevertheless reaffirmed support for Republicans, which oppose climate legislation.
Tight Senate Races
US Senator Joni Ernst, Republican-Iowa, held onto her seat after a tight race that tested her support of biofuel makers and knowledge of commodity prices.
In her first term, Ernst played a key role in White House negotiations over the US biofuel mandate, defending the Renewable Fuel Standard on behalf of biofuel makers as oil refiners pushed for exceptions and lower blending requirements.
Ernst promised to vote against any climate legislation like California's recent goal to end new sales of gasoline-powered passenger vehicles by 2035. She said it amounted to "outlawing fossil fuels, ethanol and biodiesel in a matter of 15 years."
Democrats were able to flip one seat in the US Senate early on, with former two-term Colorado governor John Hickenlooper, who backed regulations seen as favorable by the oil and gas industry as well as environmental groups, defeating incumbent first-term Republican Senator Cory Gardner.
Colorado, an oil and gas-producing state, has grown increasingly concerned with climate change. While state oil output grew under Hickenlooper's two terms as governor, he has taken a strong stance on the need to advance efforts to combat climate change. The newly elected senator has backed climate initiatives that include addressing methane emissions, introducing a carbon tax and revisiting the social cost of carbon, which was revised downward by the Trump administration.
States With Climate Focus
Gubernatorial races that have been called offered few surprises. States that have been vocal about leading on climate change in the absence of federal policy or experienced economic wins from renewable energy in the state retained their Democratic incumbents.
For instance, Democratic incumbent Jay Inslee held onto his seat as governor of the state of Washington. Climate policy will remain a priority in his third term, with the state on a path to a carbon-neutral electric grid by 2030 and 100% renewable energy by 2045.
And North Carolina's Democratic Governor Roy Cooper will get a second term to continue efforts to harden infrastructure against extreme weather and cut carbon emissions in the politically conservative South. His plan to address climate change and transition to a clean energy economy looks to accelerate coal plant retirements, expand renewable energy growth and reform utility regulation and rate setting. North Carolina already ranks second among US states in solar energy capacity.
Cooper's reelection does not bode well for the oil and gas lobby. He has opposed drilling off the North Carolina coast. And while his position on pipelines and fracking has wavered in the past, more recently he has taken a more critical view of gas pipeline projects routed through the state.
Fossil Fuel-Friendly States
States dependent on fossil fuels that remain significant players in coal production, on the other hand, held onto their Republican leaders.
As expected, fossil fuel advocate Eric Holcomb, the incumbent Republican governor of Indiana, won reelection. Neither climate change nor the environment made his top-five list of priorities as Indiana ranks seventh among US states in coal production and second in coal consumption. In 2019, coal fueled 59% of Indiana's net power generation, according to the US Energy Information Administration. Renewables accounted for just 7% of the state's generation in 2019.
New Hampshire's Republican Governor Chris Sununu secured a third term in office, defeating a Democratic challenger who planned to take a more proactive stance on mitigating climate change. Sununu, though no longer touting the GOP line of climate skepticism, has rejected regional initiatives to cut greenhouse gas emissions, making New Hampshire a regional outlier among New England states that have otherwise committed to more ambitious climate goals.
Sununu's approach to climate policy has put an emphasis on keeping costs down. He has opposed various renewable energy proposals from lawmakers and more ambitious emissions-reduction goals, asserting they would raise electricity rates for low-income families and businesses. He, however, has been a vocal proponent of offshore wind development.
North Dakota's Republican Governor Doug Burgum easily won a second term as the state grapples with an economic downturn brought on by the oil price drop and weak global demand.
North Dakota is the No. 2 oil-producing state after Texas, but it fell to the third spot behind New Mexico in May and June when producers rushed to shut in wells in response to low prices.
As of August, North Dakota's oil output has recovered to 1.16 million b/d, the highest since April, but state regulators continue to predict that another sharp downturn lies ahead after all easy-to-restart wells return to production. A lack of new drilling will bring on the next downturn as natural declines outpace new production.