Thursday, March 4

Biden makes the transition to clean energy the key to his economic policy


“Never waste a crisis.” The entire policy of the President of the United States is based on those four words, Joe Biden. The crisis is, obviously, Covid-19, with its legacy of deaths -more than those suffered by the country in World War II-, recession -the biggest drop in GDP since the Great Depression of the 1930s-, and deficit public – the largest since World War II – that has transformed America.

And what the White House doesn’t want to waste is the opportunity to reorganize the American economy around one point: the transition to renewable energy and the achievement of a ‘zero emissions’ economy by 2050. Biden, the gray man, the candidate who prevailed simply because he neither excited nor scared anyone, the only one who prevailed Donald Trump By shutting up when the other insulted him by calling him Joe “the sleeper”, he wants to use the coronavirus crisis to transform the energy model of the world’s leading economy.

It is a huge change. The United States is the largest oil producer and the fourteenth by reserves; the third largest producer of coal and the first by reserves (including by far the most profitable deposits in the world in Wyoming and Montana); and, again, the first in natural gas production, where it is the third in reserves. Nature has blessed the US with unimaginable amounts of fossil fuels in Europe, and the country’s entrepreneurial spirit and its ability to apply new technologies, such as controversial ‘fracking’ in oil and gas extraction, have done the rest. The oil age did not begin in Pennsylvania 160 years ago by chance, but by that combination of technology, entrepreneurship and natural wealth. If the US gives up fossil fuels, it is abandoning one of its competitive advantages in the world economy.

But Biden is a politician with nearly five decades of experience. That means two things. One, that the world’s change towards a ‘decarbonized’ environment – that is, without fossil energies – is unstoppable. And two, that, sustainability can give you many political victories. For now, it is his great asset on the left flank. With the transition to renewables, the president can control the Democratic left, dominated by two politicians with a desire to bypass party discipline, prone to coups on social media, and who, in addition, have tremendous popularity among the politicians. young voters: the socialist senator Bernie Sanders, and his ‘heir’, the representative Alexandria Ocasio-Cortez.

Both lead a minority sector of the Democratic Party, but in clear growth, which has made the fight against climate change one of its great electoral strengths, especially with the concept of ‘Green New Deal‘, the’ Green New Deal ‘. It is a slogan that connects with the ‘New Deal’ with which Franklin D. Roosevelt pulled the US out of the Great Depression, and nobody knows exactly what it means, except to achieve a United States in which, through public investment, ‘zero emissions’ are achieved.

Although Biden has rejected the ‘Green New Deal’, he is going to use energy politics to please the left. When Probably next month. The White House hopes to announce a $ 3 trillion program in March (almost 2.5 billion euros) between public spending and tax exemptions for the recovery of the US economy after Covid-19. And that stimulus plan rests on one leg: the transition to renewable energy, the development of electric vehicles, and the expansion of, for now minimal, public transportation in the United States. The objectives are clear: achieve ‘zero emissions’ in US electricity generation by 2035 and in the economy as a whole in 2050. The latter is a date that lies halfway between that of the EU, 2035, and that of China, 2060.

In total Biden plans to invest 2 trillion dollars (1.66 trillion euros) in energy sustainability. It is, however, a tricky figure, because there is room for all kinds of policies: from improving the isolation of public schools to make them more energy efficient, to research to make nuclear reactors cheaper. Still, its objectives are clear. Energy is the key to its economic policy.

Biden’s appointments have already made his priorities more than clear. “There is not a single centrist“, declared to the newspaper ‘Financial Times’ Kevin Book, the director of ClearView Energy Parners, a consulting firm specializing in energy, when, just 48 hours after arriving at the White House, the president appointed 19 senior officials from regulatory agencies in the sector. Five weeks earlier, the president had announced the nomination for the post of Secretary of Energy to the former governor of Michigan, Jennifer Granholm. The fact of electing the former head of the state in which Detroit is located, the ‘motor city’ in which they are based General Motors, Ford y Chrysler (although the latter is actually Italian-French), it shows its intention to advance in the ‘electrification’ of the American automobile fleet.

Granholm’s is not an isolated case. The chairman of the White House Council of Economic Advisers is Brian Deese, one of the negotiators of the Paris Agreement who signed Barack Obama, from which Donald Trump left, and to which Biden returned the same day he took office, and who returns to the Government after having been director of Sustainable Investment in the largest fund manager in the world, BlackRock.

Finally, the nominee for Secretary of the Interior is Deb Haaland, the first indigenous person to hold a position in the cabinet of the president of the United States in the history of that country, and a defender of the fact that mining, oil, or gas exploration should not be carried out in publicly owned lands. In fact, on the same January 20 that he entered the White House, Biden temporarily suspended a series of oil operations in Alaska and Utah, and I annulled the permission for the construction of the XL, a 526-kilometer-long section of the massive Keystone pipeline network that will transport oil from Canada’s Alberta tar sands to refineries and ports in the Gulf of Mexico and to cities on the US East Coast. The president has also ordered a cancellation of the permits to carry out ‘fracking’ operations on publicly owned land, which represents approximately 25% of the country’s surface. It is not as harsh a measure as it sounds, because companies are not interested in expanding their operations with the price of a barrel at $ 60. But it is a clear sign of where regulation and administrative processes are going to go in the next four years.

These moves, moreover, are targeting a market that has already ditched coal, is losing enthusiasm for oil, and has seen its enthusiasm for gas cool.

The most obvious case is that of the first of these sources of energy. In 2008, 20% of America’s electricity generation came from coal. In 2019, only 11%, and the extraction of coal only generated 54,000 direct jobs in the country. They were less than the number of employees in nail salons. And then came Covid-19, which has hit the sectors that are more intensive in labor, such as mining. Last June, for the first time in history, coal fell to fourth place in terms of energy source in electricity generation, after natural gas, renewables and nuclear. However, natural gas and oil have not increased their participation in the US energy mix since, paradoxically, the Obama presidency. If in 1980, the oil companies accumulated no less than 28% of the value of the companies in the Standard and Poor’s index of the US Stock Exchange – which groups together the largest companies in the country – today the percentage is 2%. There is no clearer way to say that fossil energies have lost the confidence of big money.

Perhaps the most obvious example is that of the petroleum state par excellence, Texas, that, if it were an independent country, it would be the fifteenth world producer of that energy source. 80% of the increase in electric generation in Texas in the last five years has been due to renewables. The City Council of the second largest city in the state, San Antonio, receives all its electricity supply from a wind farm from the company Anvangrid, owned by the Spanish Iberdrola. Biden, therefore, has everything in his favor for his bet on renewables.

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