Red vs. Blue: US Energy Under the Spotlight

By Simon West

From Issue 5, 2024 of Breakbulk Magazine

(5-minute read)


The U.S. elections have turned the spotlight on the nation’s energy sector, with Democrats and Republicans offering contrasting visions on issues ranging from fossil fuels to renewables. But areas of cooperation are set to emerge regardless of who triumphs in November.

Key opportunities for bipartisan collaboration such as the Energy Permitting Reform Act of 2024, a bill put forward by Sen. Joe Manchin, I-W.V. and Sen. John Barrasso, R-Wyo. to speed up approvals for new energy and mineral projects across the U.S., suggest the future of American energy may be shaped as much by common ground as by division.

“Energy and transportation, which we obviously care about in breakbulk and logistics, is a bipartisan concern,” said Marco Poisler, chief operating officer (COO), global energy and capital projects, at UTC Overseas. “It doesn’t really matter who’s on top, we’re all concerned with energy and transportation needs.”

Some sectors such as critical minerals, semiconductors and nuclear power can look forward to ongoing support, no matter who occupies the White House or controls Congress. For other industries, the outlook is less certain.


Offshore Wind Gains

A surefire success story for the Biden-Harris administration has been the buildout – almost from scratch – of offshore wind. By early September, the Interior Department had approved more than 15 gigawatts (GW) of capacity – enough to power 5.25 million homes. The American Clean Power Association (ACP) estimates that 14 GW of offshore wind will have been deployed by the end of the decade, rising to 30 GW by 2033 and 40 GW by 2035.

However, Donald Trump is no supporter of the industry. At a New Jersey rally in May, he reiterated his hostility toward the sector, vowing to shut down offshore wind projects “on day one” if re-elected.

Rachel A. Meidl, a fellow in energy and sustainability at the Center for Energy Studies at Rice University’s Baker Institute for Public Policy, said that regardless of the congressional result (alongside the presidential election, all 435 seats in the House and 34 of the seats in the Senate will be contested), Trump could take executive action to stall further buildout directly or indirectly.

Such action could involve dragging out review processes for alternative energy and electrification projects, halting loans or other incentives and raising prerequisites for the eligibility of projects. Executive powers, which could also include Trump’s appointment of a Republican chairperson of the Federal Energy Regulatory Commission, could be deployed against the electric vehicle (EV) and battery sectors as well, Meidl said.

Kamala Harris, meanwhile, has vowed to continue Biden’s climate legacy and invest in renewables. During the ABC News presidential debate on September 10, the vice president, an early sponsor of the Green New Deal, made no mention of offshore wind, but did stress how the U.S. must invest in “diverse sources of energy” to reduce its dependence on foreign oil. She also hailed clean energy as a driver of manufacturing and jobs.

According to Meidl, a Democratic win would see tax credits and incentives under the Inflation Reduction Act (IRA) – Biden’s acclaimed climate change law that has seen millions pumped into green energy projects – likely extend and expand. “If Republicans win, then amendment, repeal or reduced funding for the IRA is on the cards,” she added.

Offshore wind, though, would still face hurdles, even under a Harris-Walz administration. Colin D’Abreo, VP director of Rhenus Project Logistics said offshore renewables development should be a “top priority” for the next administration, with investment in ports, transmission lines and maintenance facilities deserving “special attention.”

“Currently, the Jones Act presents challenges, as we do not have the proper vessels or tonnage to support this industry,” he said. “In contrast, Europe has a strong offshore sector that generates many job opportunities, not only for the project logistics sector but also for other ancillary fields. The U.S. could adapt these successful strategies from Europe.”

Timothy Axelsson, director offshore wind at U.S. offshore supply chain provider Liberty Green Logistics, told Breakbulk he would like to see a fast tracking of the permitting process at the Bureau of Ocean Energy Management (BOEM), the federal body that oversees leasing and permitting for offshore projects.

Vessel financing, port development, an energy security program and more government initiatives to recruit, train and retain a qualified work force to construct and operate offshore wind farms were also on the director’s “wish list.”


Drill, Baby, Drill

Wind aside, Trump has vowed to boost domestic energy production, slash regulations, streamline permitting and end “market-distorting restrictions” on oil, natural gas and coal. The former president’s policy platform, laid out in the 16-page document “Make America Great Again,” has been approved by the GOP and includes a promise to turn the U.S. into “the dominant energy producer in the world.”

“Republicans will unleash energy production from all sources, including nuclear, to immediately slash inflation and power American homes, cars and factories with reliable, abundant and affordable energy,” the platform says in a chapter on building the “greatest economy in history.”

Rob Benedict, vice president of petrochemicals and midstream at American Fuel and Petrochemical Manufacturers (AFPM), welcomed a further GOP pledge to cancel Biden’s rules to mandate the production of EVs while phasing out gas-burning cars and trucks.

“We’re encouraged that his policy platform includes strengthening U.S. energy and manufacturing and that it specifically calls for eliminating government vehicle mandates, which would apply to both EPA’s tailpipe regulation – a policy that will effectively ban most new gas-powered cars by 2032 – and California’s full ban on sales of new gas and traditional hybrid vehicles by 2035,” Benedict told Breakbulk.

But the executive expressed concern about Trump’s position on tariffs. During the campaign trail, the former president has proposed a 10% hike on all US imports paired with a 60% tariff on imports from China. Harris, on the other hand, would likely stick with the government’s “targeted tariffs” policy on specific Chinese goods.

“Global petrochemical demand is rising, and American manufacturers are poised to help meet that demand,” Benedict said. “We don’t want to see aggressive tariffs spur retaliatory policies that raise costs, blockade access to global markets or otherwise jeopardize our opportunity for global petrochemical leadership. The refining and petrochemical industries, and our markets, are global. We need policies that promote free and fair trade and allow us to make the most of our advantages.”

Brian Putallaz, a member of Breakbulk’s Global Shipper Network, noted that neither Republicans nor Democrats appeared to be advocating for reduced trade barriers. “Whether it be via tax incentives or via tariffs, I foresee a continued push in the increase of local content and domestic manufacturing requirements, regardless of who wins the White House,” he said.

Trump, meanwhile, has lambasted Kamala Harris for her alleged opposition to fossil fuels. “If she wins the election… oil will be dead,” the former president said during the ABC News debate.

The Democratic candidate has distanced herself from previous comments she made about hydraulic fracturing, or fracking, the controversial drilling technique that deploys a high-pressure mix of water, sand and chemicals to unlock shale oil and gas. Fracking is big business in the battleground state of Pennsylvania, a major producer of natural gas.

“I will not ban fracking. In fact, I was the tie-breaking vote on the Inflation Reduction Act, which opened new leases for fracking,” Harris said during the debate, before reminding listeners that U.S. hydrocarbon production under her and Biden had surged to record levels – thanks in part to fracking – despite the administration’s focus on fighting climate change.

The vice president has also kept tight-lipped on the temporary “pause” on approvals of liquified natural gas (LNG) exports to non-free trade agreement (FTA) countries.

The Biden administration announced the freeze in January on climate grounds, although a court in July put the measure on hold while a legal challenge by Republican states played out in front of federal authorities. Detractors believe such a pause is unconstitutional, hurts local economies and deters investment in new facilities.


A Call for “Certainty”

Matt Armstrong, vice president of global government and regulatory affairs at energy technology company Baker Hughes, said the next administration must focus on reducing the unpredictability of all long-lead, strategic energy projects.

“We should start by prioritizing the resumption of U.S. LNG export approvals by the Department of Energy, affirming supply-side policies that embrace the country’s natural resources and accelerate geothermal, hydrogen and carbon capture infrastructure and cutting red-tape to assure these projects can actually get built, along with the transmission lines, pipelines and storage infrastructure needed to meet growing global energy demand while meeting our net-zero commitments,” he said in an email.

Long-term stability could hinge on the readiness of policymakers to reach across the aisle. The divisive and often fractious state of U.S. politics over the last decade did not prevent the required support in 2021 of a US$1 trillion bipartisan infrastructure deal – a sign of the willingness of lawmakers to collaborate when it comes to strategic, national interest.

D’Abreo said the law had had a “particularly positive impact” on logistics, especially in the heavy cargo transportation segment. “We have seen significant improvements in bridge infrastructure, which have facilitated faster permit approvals by reducing the need for extensive bridge engineering analyses,” the executive said.

“Enhanced road infrastructure has also contributed to smoother and more efficient transportation. The improvements in roadways and bridges allow us to take on more ambitious projects, which in turn creates additional opportunities for logistics.”

The bipartisan Manchin-Barrasso energy permitting bill, meanwhile, has already been approved by the Senate Energy and Natural Resources Committee and has dropped in the full Senate for debate. Proponents say the bill would streamline the application process for energy permits, guarantee a minimum number of lease sales per year, end Biden’s ban on LNG exports, bring down prices and create domestic jobs.

Justin Williams, vice president of communications at the National Ocean Industries Council (NOIC), a non-profit representing the U.S. offshore sector, said the provisions in the bill including those for offshore crude and gas lease sales, already enjoy bipartisan support.

“The legislation provides future certainty,” Williams said. “It ensures that the next administration, regardless of candidate or party, follows policies recognizing the vital contributions of all forms of domestic energy to America’s prosperity. Advancing smart domestic energy policies is not just an industry concern; it’s an American issue that benefits every citizen.”


Breakbulk Americas 2024 is happening on Oct. 15-17 in Houston.

PHOTO CREDIT: Rhenus Logistics