Energy CEOs Seek Clarity on U.S. Energy Policy Ahead of Elections

Energy company executives are calling for greater clarity and consistency in US energy policy to support ongoing and future investments.

The Biden administration’s actions, such as the temporary pause on LNG exports, have created uncertainty in the industry.
The upcoming presidential election further adds to the uncertainty, as the two candidates have differing views on energy policy and climate change.

Energy companies are increasingly calling on the U.S. government for greater consistency in the energy policy to sustain the tidal wave of funding that has been seen in the last couple of years. In October, Mike Wirth, the CEO of the U.S. oil major Chevron, called for more consistency in the U.S. energy policy. Wirth stated, “What really matters is consistent and coherent energy policy.” Wirth added, “Affordable and reliable energy is essential to keeping inflation at a level that economies can handle – and that’s why we need investments, and we need stable policy to encourage that investment.”

In the lead-up to the presidential election, Wirth emphasized that energy is a critical part of the global economy and suggested that if supplies are limited due to political actions, it could trigger inflationary reactions worldwide. He also said that the world is highly reliant on the U.S. market, and energy companies want to be certain when making long-term investments. Wirth said that he wants a candidate who believes in free markets, competition, and “the economic vitality of this country” to be voted into office, regardless of the party they represent.
In September, several U.S. energy leaders complained about the lack of clarity and consistency in U.S. policies for natural gas during Gastech 2024, held in Houston. Several executives from oil and gas companies criticised the Biden administration for going back and forth on decisions over natural gas exploration, production, and exports.

Lorenzo Simonelli, the CEO of Baker Hughes, stated, “It would appear we do not have a cohesive, collective decision on how policy should be rolled out and also the sustainability of that policy for sustainable energy development.” Meanwhile, Ryan Lance, the CEO of ConocoPhillips, was critical of the government’s pause on new U.S. LNG permits. Lance said, “You gotta stop this crazy LNG pause from going forward. We absolutely need permitting reform, and we need more infrastructure.”

Chevron has diversified its investments to develop clean energy projects but continues to back the expansion of natural gas, viewing it as a transitional fuel that will be critical to U.S. energy security for years to come. This is the case for several U.S. oil majors who plan to continue expanding their natural gas sectors, while also investing in clean energy and decarbonisation efforts. However, recent actions from the Biden administration have cast uncertainty over the industry.

In January, the Biden administration announced a temporary pause on pending decisions on exports of LNG to non-FTA countries, calling on the Department of Energy (DoE) to draw up a new analysis on the potential impact of these exports. The government stated, “The current economic and environmental analyses DoE uses to underpin its LNG export authorisations are roughly five years old and no longer adequately account for considerations like potential energy cost increases for American consumers and manufacturers beyond current authorisations or the latest assessment of the impact of greenhouse gas emissions.” However, this pause was lifted by a federal court in July when a judge deemed the freeze to be “completely without reason or logic.”

This is not the first time the Biden administration has cast uncertainty over the industry. During his first month in office in 2021, President Biden announced a halt on new oil and natural gas leases on public lands and waters, and a thorough review of existing permits for fossil fuel development. This move supported the announcement of a series of executive orders that prioritised climate change.

The current lack of political clarity seems to stem mainly from the fact that the U.S. cannot agree on the future of its natural gas industry. While most major fossil fuel companies and several politicians view natural gas as a transition fuel that will be needed to fill the global energy demand gap in the green transition, others view the proposed gas expansion as unnecessary. Several energy experts believe that if the current gas project pipeline is developed, it could lead to an oversupply of the fossil fuel in the face of the rapid expansion of renewable energy projects. However, in light of the international energy insecurity faced following sanctions on Russian gas, which led to global shortages, others disagree.

While the oil and gas industry has faced uncertainty over the future of U.S. natural gas under the Biden administration, if Donald Trump gets elected for a second time he has promised to gut the climate subsidies outlined in the IRA and other federal policies. Despite the broad support for the continued production of fossil fuels from the oil and gas industry, several companies have invested billions in green energy and clean tech projects since the introduction of the IRA, and the potential scrapping of financial incentives and rollback of climate initiatives could put this investment under threat.

In the lead-up to the presidential elections, the leading two political candidates – Harris and Trump – both threaten the consistency of U.S. energy policy. While Harris would likely follow in Biden’s footsteps when it comes to decisions on natural gas, Trump is expected to significantly roll back climate subsidies and clean energy initiatives if elected. Meanwhile, several leaders from the energy industry have made it clear that clarity and consistency in U.S. energy policy are vital to the country’s, and the world’s, energy security.