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The Energy 202: The oil industry thinks it can work with Biden, despite call for 'transition' away from it

with Alexandra Ellerbeck

Joe Biden said he wanted a “transition” away from the oil industry. But the oil industry itself thinks it can still work with the Democratic nominee should he win the White House in today's election.

There is a lot that the American Petroleum Institute, Washington's biggest lobbying group for the U.S. oil and gas industry, does not like about the former vice president's sweeping plan for addressing climate change.  

But on the eve of an election in which Biden is favored to win, Mike Sommers, the head of the trade association, says he sees room to work with a Democratic administration — even as the rise in global temperatures and the oil industry's contributions to it become a bigger concern for the party's voters.

“The campaign has been pretty closed off to outside organizations like API,” Sommers said in an interview Friday. 

But he added: “It'll be different if there is a Biden transition, and we would seek to engage a Biden transition team.” 

A former chief of staff to ex-House speaker John A. Boehner (R-Ohio), Sommers arrived at API in 2018 from the world of GOP politics. During this and previous election cycles, the oil and gas sector donated disproportionately to Republicans. 

Over the past four years, President Trump has modified or rolled back dozen of environmental rules, including several affecting drilling and pipeline construction, and opened hundreds of thousands of acres to oil and gas extraction. Biden, meanwhile, has vowed to end oil and gas leasing on federal lands and to reinstate many of the regulations. 

Still, the oil industry sees two areas where it can work with Biden — sucking up climate-warming emissions and cooling off trade wars.

Sommers hopes a Biden administration, along with Democrats in Congress, will boost tax breaks for companies that capture carbon dioxide before it reaches the air. 

Tax deductions enacted two years ago provide as much as $50 for each ton of the greenhouse gas captured and stored underground. Biden's $2 trillion climate plan calls for even more investment in that nascent technology.

“We were encouraged by that,” Sommers said. That's one area where I think he would see a welcome partner within the oil and gas industry.”

The existing tax credit was slipped into a broader energy bill in 2018 with bipartisan support, but environmentalists disagree whether more money should be put toward carbon capture. 

Sequestering emissions may be necessary to shrink the planet-heating impact of some of the most difficult-to-decarbonize activities, such as steelmaking and cement manufacturing. But oil companies can also shoot that CO2 into their wells to increase pressure and extract even more oil, eventually adding more greenhouse gases to the air when it is burned.

Like many business sectors, the oil industry is frustrated with Trump's antagonism toward even U.S. allies when it comes to international trade. 

One of the economic casualties of Trump's several trade wars were U.S. exports of liquefied natural gas to China. That trade tapered off in 2019, at the height of tensions between the world's two largest economies, before picking back up this year.

The oil sector hopes to gain even more access to Asian and European markets under Biden, should he win. “This industry has been disadvantaged by some of the trade wars that have occurred under President Trump,” Sommers said. “We would be hopeful that a Biden administration would keep this industry in mind as we engage with our trading partners.”

But Biden has been unclear about whether he will support the continued sale of fossil fuels abroad. 

During a CNN town hall last year, Biden said, “I think we should in fact [ban fossil fuel exports], depending on what it is they’re exporting for what they’re replacing.” But more recently, the campaign did not clarify his stance on oil, gas and coal exports when asked by our colleagues Kevin Uhrmacher and Andrew Braford last month.

There is still plenty the oil industry sees wrong with Biden — and it is ready to push back.

Biden's proposal sets a goal of achieving net-zero greenhouse gas emissions by 2050. That's a feat that can only be done by largely curtailing the use of gasoline and other petroleum-based fuels.

During the second and last presidential debate, Biden called rising temperatures “an existential threat to humanity.” U.N. scientists say the world has precious little time to curtail emissions and prevent irreparable harm to ecosystems.

“Would you close down the oil industry?” Trump asked in response.

“Yes. I would transition,” Biden said. “Because the oil industry pollutes, significantly. … Because it has to be replaced by renewable energy.”

Republicans — and even some Democrats from oil-producing areas such as Oklahoma and New Mexico — bashed Biden for the comment, even though it was consistent with his long-standing climate platform. Sommers was among those critics, issuing a statement saying “we aren’t going anywhere.”

At the airport after the debate in Nashville, Biden said he meant he wanted to end special federal subsidies to oil, gas and coal companies. “We’re not going to get rid of fossil fuels,” Biden said. “We’re going to get rid of subsidies for fossil fuels.”

Even that is disconcerting to API. On the Monday after the debate, Sommers sent a note to congressional offices arguing his industry “does not receive special tax treatment" when compared to other businesses.

“We take advantage of deductions — not subsidies, deductions — that other businesses in the manufacturing world take advantage of," Sommers told The Washington Post. 

The nonpartisan Congressional Budget Office estimated that in 2016 fossil fuels got $4.6 billion in tax preferences. An estimated $10.9 billion that fiscal year went toward supporting wind, solar and other renewable energy.

“Big Oil knows how desperately unpopular subsidies are,” said Lukas Ross, a program manager at Friends of the Earth who tracks the federal budget. “The only option they have is to pretend they don't exist.”

Happy Election Day! Here is a guide to voting in your state — if you haven't done so already.

Election 2020

Biden makes a closing pitch on the environment.

As part of Biden's sell to voters, the candidate released a series of videos showing the impact of climate change on people's lives. 

Three of the videos show how climate change has affected the livelihoods of Americans working in industries such as shellfishing, beekeeping, and fruit farming. One spot highlights the work of a firefighter who is battling climate-fueled blazes.

Another video highlights the work of Brett Issac, the co-founder of Navajo Power, a company working to bring solar power to the Navajo Nation.

Biden has hammered home a message linking climate action to jobs, as E&E News reports. Although there are fewer jobs in wind and solar than in natural gas and coal production, according to the U.S. Energy and Employment Report, the renewable industry has grown dramatically over the past decade.

“Combating climate change means jobs,” the Democratic candidate said at a rally in Florida on Thursday. “We can unleash American ingenuity and manufacturing to build a stronger and more climate-resilient nation, creating millions of new, high-paying union jobs.”

An ad by Sen. John Cornyn (R-Tex.) manipulates a video to accuse his challenger of fully supporting a carbon tax.

“A new attack ad by Sen. John Cornyn, R-Texas, makes use of manipulated video from an interview with Democratic opponent MJ Hegar to make it sound like she fully supports a carbon tax,” the San Antonio Current reports. “In reality, Hegar has campaigned that she'd only support such a measure if it's implemented in a way that doesn't hurt Texas workers.”

The new ad includes a video of Hegar saying, “I support a carbon tax,” but her lips are moving out of sync. In fact, the quote is taken out of a much longer video interview between the Democratic candidate and Rolling Stone magazine, in which she expressed qualified support for a carbon tax if done in a way that would not hurt middle- class jobs. 

“I stand with the league of Conservation Voters and Sierra Club, who support a Carbon Tax but also understand it needs to be done in a way that doesn't just pass the burden on to the middle class and to the lower middle class,” Hegar told Rolling Stone.

The attack ad from the Cornyn campaign:

In a Washington Post average of polling the second half of October in Texas, Cornyn leads Hegar 49 to 44 percent.

Conservation battles

Washington state will manage wolves after they are delisted from the Endangered Species Act.

“The state of Washington will take over management of most wolves within its borders early next year, after the U.S. government announced Thursday that gray wolves in the Lower 48 states would be delisted from the federal Endangered Species Act,” the Associated Press reports.

The state’s Department of Fish and Wildlife and Indian tribes will take oversight of all gray wolves in the state starting Jan. 4. The state and tribes have been managing a growing population of wolves in eastern Washington, where wolves have not been federally listed since 2013.

Many environmentalists expressed concern that the state will side with ranchers over the protection of wolves that eat livestock.

`The state’s relentless killing of wolves in eastern Washington for conflicts with livestock is a totally ineffective method of conflict prevention, and runs counter to sound science,″ said Amaroq Weiss of the Center for Biological Diversity. “Now, with the removal of federal protections from the remainder of the state, we fear the department’s misguided approach will simply expand.”