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FX.co ★ Biden aims to achieve a 100% eco-friendly power grid by 2035

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Forex Analysis:::2020-12-23T09:38:11

Biden aims to achieve a 100% eco-friendly power grid by 2035

Biden aims to achieve a 100% eco-friendly power grid by 2035

During the election campaign, Joe Biden made it clear that he plans to take drastic actions to combat global warming. However, his ambitious $ 2 trillion climate plan will take time and resources. In the meantime, there are small immediate steps he could take, some of which are much more difficult than they seem.

Since Biden was adamant that he will not ban hydraulic fracturing, he could block oil and gas leases to limit fossil fuel

The president-elect could demand a comprehensive review of the Bureau of Land Management's leasing program, although such could potentially take years, said Katie Bays, an analyst at FiscalNote Markets. Nonetheless, while this is happening, the agency is not allowed to enter into new leases, and the industry cannot appeal or block the move until the inspection is complete.

In 2016, Barack Obama did the same with coal mining, as it would be easier than an outright ban on new Federal leases, since such would likely trigger legal challenges from fossil fuel companies and could slow the implementation of new rules. The move will affect most of the new wells in the Permian basin, one of the most fertile shale fields in the United States.

But Obama's climate policy had one big problem: the regulation of carbon emissions in accordance with the Clean Air Act turned out to be legally controversial. Therefore, even if Biden revived the carbon regulations - although this time, he will focus on natural gas emissions - his efforts could lead to legal delays.

What he could do for the meantime, according to John Coequyt, Global Climate Policy Director at the Sierra Club, is to announce new restrictions on pollutants in power plants (other than carbon), such as particulate matter, sulfur dioxide and nitrogen oxide. About three-quarters of all US power plants, with the exception of those already scheduled for decommissioning, lack some essential components to limit the release of these toxins.

"This will greatly increase the rating of renewable energy sources," Coequyt said.

Meanwhile, the winds off the US coast are powerful enough to power the entire country, and developers seeking to tap into it have announced plans to install more than 29 gigawatts of offshore turbines, equivalent to one-third of the US nuclear fleet. But none of the major projects received government approval.

Biden wants a fully eco-friendly electric grid by 2035, but his plan doesn't specify how he's going to achieve that.

First, this needs to go through the Congress, and even if Democrats controlled both chambers, it would be difficult to develop a single policy supported by each state. To add to that, some States, such California and New York, already have their own goals.

"It's likely to meet unanimous resistance from Republicans and not get unanimous support from Democrats," Timothy Fox, Vice President and Analyst of Clearview said.

At the moment, Biden has been repeatedly called upon to cancel the controversial Dakota Access oil pipeline, but shutting down this operating asset would pose a threat to the bankers who funded the $ 3.8 billion project. Aside from that, it would raise questions on whether future energy projects can be canceled just with the president's decision.

"It would be a big mess," Bays said. "People don't appreciate what's being done to fund projects in general."

Analyst InstaForex
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