We’ve been preparing for this day for almost a year. And it’s finally here.
Tomorrow, November 6, is Election Day.
The results of tomorrow’s election will determine a number of things. With the new president will come four years of new policies. And one of those is energy.
The candidates are agreed on one thing. The nation needs a stronger energy policy. But what that means to each is drastically different.
Barack Obama’s Policy
Barack Obama has dubbed his an “all-of-the-above” policy – combining all possible sources of energy to support domestic production.
Though all energy sources are included, some are favored. The “all-of-the-above” policy really seems to be directed toward sources that will help advance the domestic energy sector while still maintaining a concern for greenhouse gas emissions and the environment.
Obama’s policy would particularly target renewable sources like wind. He has already extended a Bush-era tax credit on wind energy, and since the credits are set to expire at the end of this year, he would extend them once more.
He has also shown support for emerging energy companies, setting aside $34.7 billion in loan guarantees through the Department of Energy that target “clean” companies like nuclear, solar and wind, electric vehicles, and biofuels.
The loan guarantee program has come under scrutiny, however, after several solar companies like Solyndra went bankrupt.
Obama has also pushed for energy efficient vehicles, mandating a 54.5 miles-per-gallon fuel standard by 2025.
When it comes to fossil fuels, however, his policies have been heavy on the regulations.
For the most part, the regulations are protective rather than restrictive. In fact, before BP’s Deepwater Horizon rig blowout in 2010, he had been preparing to expand offshore drilling sites.
But the disaster in the Gulf significantly slowed progress with offshore drilling.
The Keystone XL pipeline was another controversial topic. While half of the pipeline was approved, the other half was stalled. The administration said there was not sufficient time to review the pipeline’s impacts.
Coal power has also been slapped with regulations. The EPA passed standards restricting emissions from coal-fired plants, requiring carbon capture and sequestration technology.
Obama’s campaign policy has started to reconsider the use of coal plants, however, with talk about developing “clean coal,” something that has put environmentalist supporters of his coal restrictions on edge.
Mitt Romney’s Policy
Mitt Romney’s energy policy offers more of a focus on the tried and true methods. Unlike Obama, he’s been a strong advocate of coal power throughout his presidential campaign. He plans to completely remove restrictions on greenhouse gas emissions, opening the path for more coal-fired plants.
He hasn’t always been so steadfast in this policy, however; in his term as governor of Massachusetts, he was an advocate for a similar cap-and-trade program to the one President Obama failed to push through the Senate – limiting these emissions.
Similar to the coal program, Romney is aiming to remove the regulations on drilling that Obama plans to implement.
Romney would give the states the power of regulation when it comes to oil and gas drilling, on and offshore. This move could open up much more space for drilling.
And it includes fracking regulations. Romney believes that the states should be in charge of individual regulation of fracking and that the environmental impact should be viewed realistically.
The Christian Science Monitor quotes his 2011 “Believe in American” plan:
“Of critical importance: the environmental impact of fracking should not be considered in the abstract, but rather evaluated in comparison to the impact of utilizing the fuels that natural gas displaces, including coal.”
He has also vowed to approve the controversial Keystone XL pipeline, which is considered critical in oil and natural gas transportation, immediately.
Renewable sources also enter Romney’s plan, though in a less central role than Obama’s. Though he would speed up permitting for renewables like wind just as he would for drilling, Romney has also said that he would allow the wind tax credit to expire, putting it on an even field with other sources.
Unlike Obama, he has failed to address climate change or energy efficiency.
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These energy policies will play just as big of a hand in the election in some states as the economy because for some states, energy is the economy.
North Dakota is the hub of Bakken shale production, with the lowest statewide unemployment rate in the country at 3.0%. In the town of Williston, where many drilling jobs are located, unemployment is under 1%.
Overall, the state has seen an employment increase of 5.6% this year – the highest in the nation.
Meanwhile, West Virginia has a history of coal production, an industry that has been struggling lately. The state had a decrease in employment of -1.3% and has a high unemployment rate of 7.6%.
Both of these states would benefit from Mitt Romney taking office. His promised approval of the Keystone XL pipeline, as well as permit fast tracks for drilling, would provide an additional boost to North Dakota’s economy.
And his advocacy for coal that has led the energy portion of his campaign promises hope for West Virginia, a coal-reliant economy.
But wind states like Colorado and Iowa would likely rather have Obama in office for a second term. If the wind tax credit expires, as it will under Romney, many people in these states would lose their jobs.
Siemens (NYSE: SI) is already cutting 407 wind jobs in Iowa in anticipation for the tax credit expiration. It will also lay off 208 people across Kansas and Florida.
Vestas Wind Systems (CPH: VWS), the world’s largest turbine manufacturer, is also expected to cut 1,600 jobs – mostly in Colorado.
Unemployment is already at 8.0% in Colorado. And the Vestas job cuts are just from one company. The state would suffer to see the tax credit disappear.
This story continues throughout all 50 states. Some would truly benefit from one candidate, and others would see their energy policies buoyed by the other.
Tomorrow will decide all of this. There’s no doubt that whatever happens, the nation’s domestic energy policy will undergo a shift in the next four years.
But what this shift looks like will be entirely dependent on the outcome of this close race.
That’s all for now,
Energy & Capital’s modern energy guru, Brianna digs deep into the industry with accurate and insightful updates into the biggest energy companies and events. She stays up to date with the latest market moves and industry finds, bringing readers a unique view of current energy trends.