In stark contrast to the Republican match up in September, energy and climate change related policy was freely discussed during the first Democratic presidential debate. For energy industry participants, the question becomes: how will climate policies affect the kinds of projects that get built and financed if a Democrat becomes President? The takeaway after surveying the positions of the candidates presented on Tuesday night is that Americans would be building a great deal of new energy infrastructure.
Martin O’Malley: Former Maryland Governor O’Malley advocated for a green energy revolution, and put forward a plan to move the country to a 100% clean electric grid by 2050. He claims that his clean energy plan would create 5 million jobs along the way. Stressing the fact that he was the only candidate to set forth a compressive energy plan, Mr. O’Malley took issue with President Obama’s current “all of the above” strategy. In particular, Mr. O’Malley’s plan would ease financing for solar and wind energy project development by extending tax incentives through the Investment Tax Credit (ITC). His plan also calls for stricter rules to curb greenhouse gas emissions and to encourage energy efficiency. Although hawkish on clean energy, Mr. O’Malley did not address the recent domestic oil and natural gas boom. He also did not address the country’s transition towards 100% clean energy while maintaining base load and peaking.
Jim Webb: Former Virginia Senator Jim Webb was the outlier pro coal candidate on the slate who also supports offshore drilling and the Keystone XL oil pipeline. He touted his Senate record as an “all of the above” energy policy legislator, and highlighted his introduction of alternative energy legislation. Mr. Webb also pledged his strong support for nuclear energy as both clean and safe.
Senator Bernie Sanders: Senator Bernie Sanders challenged Mr. Webb on the issue of nuclear energy as “safe,” but wants to act aggressively on the climate change front. Although, Mr. Sanders did not promote a plan for the nation’s energy future, he advanced a bill in July in the Senate that would make solar energy more accessible to low income families. The Sander’s bill would allocate $200 million of Department of Energy loans to offset the upfront costs of installing solar facilities.
Hillary Clinton: Former Secretary of State Hillary Clinton did not address energy policy, but seems comfortable following an “all of the above” strategy. She is a defender of the Clean Power Plan. According to Mrs. Clinton’s “climate change fact sheet,” she would extend the ITC and expand installed solar capacity to 140 gigawatts by the end of 2020, a 700% increase from current levels. Mrs. Clinton’s plan lacks a strategy on the natural gas shale boom occurring in America, but she just may be holding back discussing her complete energy policy as she did with her decision to oppose the Keystone XL oil pipeline.
Lincoln Chaffee: Former Rhode Island Governor Lincoln Chaffee stated that he consistently has taken on the coal lobby during his time in the Senate and named the lobby the enemy he is most proud of combating. Although he didn’t have an opportunity to comment on energy policy, his campaign website states that he always has opposed the Keystone XL oil pipeline, as well as drilling in the Artic region.
Energy and climate change issues will remain a priority topic for the Democratic candidates on the campaign trail and it will be interesting to watch the role these issues play in future debates. Both parties appear to support building more energy infrastructure. However, they seem to diverge on the types of projects that would be promoted, with Republicans leaning towards building oil and gas pipelines with varying stances on renewables while Democrats favor solar energy development. Although the primary season has just begun and it is early in the election cycle, participants in the energy sector should be mindful of how the candidates’ energy policies may impact their business model.