Kamala Harris – What Has Been
Democrats are quickly falling in line to endorse Kamala Harris as the next Democratic nominee, and while she was not the face of US energy policy under Biden, her track record as California Attorney General, as US Senator, and from her policies as a 2020 presidential campaigner place Harris to the left of Biden on energy and climate issues. As California AG, Harris sued the Obama-Biden administration in 2016 over an environmental assessment that cleared the way for fracking off the coast of California. She called for a fracking ban during her 2020 presidential campaign, yet once tapped for VP, Harris fell in line with Biden, reaffirming his support for fracking. During the primaries, she also proposed a $10 trillion plan to combat climate change and called for a carbon tax. Harris was one of the original cosponsors of the Green New Deal in 2019, and, while the resolution stalled in Congress, many of its ideas made it into the Inflation Reduction Act.
As Biden’s Vice President, her biggest accomplishment in energy was casting the tie-breaking vote that allowed the passage of the Inflation Reduction Act two years ago, ushering in the largest-ever investment to cut greenhouse gas emissions. A path for greater green ambition over the next four years has already been laid out by the current administration, a path that Kamala will likely follow. This includes emissions regulations for existing natural gas-fired power plants, implementing the IRA methane fee, and a multitude of final rules for IRA tax credits including the clean hydrogen PTC.
A Harris administration would also ensure the continuity of existing IRA provisions that are under attack by Trump, including the EV consumer tax credit. As Harris’ presidential campaign ramps up, we will be watching to see if she reclaims her more progressive climate positions or stays in the Biden energy and climate swim lanes. Regardless, she will be walking a tightrope when underscoring legislative wins like the Bipartisan Infrastructure Law and IRA in hopes of energizing the base of young voters while highlighting domestic energy production levels to gain an electoral advantage in must-win Rust Belt states like PA.
Trump Policy Priorities – Making Fossils Great Again
When President Trump took office in 2017, the abundant American resource endowment was seen as giving the White House a freer hand to pursue key policy objective, whereas for President Biden, the rapid uptake of renewables and the twilight of the age of oil were viewed as delivering a similar policy dividend. At the Republican National Convention in Milwaukee, the refrain of “unleashing America’s energy dominance” remained a fundamental policy objective much like it was 8 years ago, and deregulation in favor of expanding US oil and gas production would likely be core to a Trump energy platform.
However, today’s energy market looks strikingly different than it did in 2017. The US has hit record levels of production, while conflicts in two of the world’s most critical energy regions continue. During his four years in office, the Trump administration went forward with enacting an array of deregulatory efforts, including repealing the Obama-era Clean Power Plan, lifting bans on oil and gas extraction on federal land, and lowering several environmental standards. Should he return to office, many of the Biden administration’s climate-focused moves, particularly methane standards, the LNG export pause, bans on new oil and gas leases on federal land, EV “mandates,” and portions of the IRA, would be likely early targets of the Trump administration.
The IRA is protected from being repealed solely through executive order, as it was passed through Congress, yet the President still has authority to contour the framework of the law through executive agencies (Treasury, DOE, EPA) to make tax credits more difficult to access, freeze any unallocated money, or revise unfinalized rules. Of the $145bln in direct agency spending provided in the IRA, only 41% has been awarded. Any unallocated funds may be paused
indefinitely under a Trump administration, even those that have been announced.
JD Vance – Veep Virtues
Putting Vance, a former venture capitalist, on the ticket suggests a harder lean into the economic policies that got Trump elected in 2016 — tariffs, lower corporate taxes, and fewer regulations. His calls for “broad-based tariffs, especially on goods from China” are in line with Trump’s proposed 10 percent tariff on goods coming into the country, and he has also introduced legislation that would restrict China’s access to US capital markets and exchanges for violation of international finance, trade, and commerce laws.
Vance’s views on key foreign policy issues in the run-up to his nomination debut are also worth watching as a barometer for priorities for a second Trump administration. He was central to the effort to kill off a Ukraine funding bill earlier this year, arguing that military aid for Israel was more pressing for US strategy. Vance has been an ardent supporter of Israel in Congress and is a strong proponent of Saudi normalization with Israel in order to form what he views as a united regional front against Iran.
However, Vance has simultaneously supported some of the hawkish measures taken by the last Trump administration (including the assassination of Qassem Soleimani and leaving JCPOA), indicating the potential return to maximum pressure policies, while also advocating against the use of military force on Iranian soil unless US troops were threatened. Still, it is unclear how much influence he would yield as Vice President, especially if heavyweights such as former Secretary of State Mike Pompeo, an arch Russia foe, return to the cabinet.
Project 2025 – Policy Playbook
The Heritage Foundation’s Project 2025 has come to the forefront as a potential GOP policy playbook, outlining specific policy objectives for the first 180 days of a new Republican administration. We highlighted this document a year ago when considering what policies a Republican administration could usher in when the nominee race was still wide open. Democrats have started to campaign on Project 2025 in an effort to mobilize its base, yet voters are still relatively unaware of its contents. As seen in Figure 5, those that do know about Project 2025 tend to have a less favorable view of it.
Trump has made attempts to distance himself from the blueprint, but its authors served in the first Trump administration and could likely serve in a second one, turning the think tank wish list into an action plan if authors become implementors. The Heritage Foundation held a policy summit at the RNC, showcasing the almost 1,000-page document broken down by agency with detailed plans to expedite the rollback of Biden-era rules and regulations, including plans for the Department of Energy, EPA, Interior, and State Department
The Heritage Foundation calls for a full repeal of the IRA, the end of the DOE's Renewable Energy Office and Loan Program Office, a downsize of the EPA and their ability to use science to regulate emissions, reforms to NEPA, and an increase of oil and gas leasing. It also calls for the 2025 GOP President to withdraw from the World Bank and IMF. As we have noted, a full rollback of IRA would be difficult to achieve as it is law, but money unallocated in the bill by 2025 can be redirected to fund priority areas of the GOP, reducing IRA’s climate-driven priorities.
The document calls China “the most significant danger to American’s security, freedoms and prosperity.” Christopher Miller, former acting Defense Secretary under Trump, writes that burden-sharing should be a central part of the US defense strategy, not only through formal alliances like NATO, but also in the Asia-Pacific where greater threats are emerging. He also calls for nuclear defense modernization and expansion under the next Republican administration in an effort to combat growing nuclear capabilities of China, North Korea, Russia and Iran.
Helima Croft authored “Beyond the Ballot: Existing in the Context…,” published on July 23, 2024. For more information on the full report, please contact your RBC representative.
