The Fuse

Energy Issues on the Periphery of First Presidential Debate

by Matt Piotrowski | September 27, 2016

As expected, energy policy remained mostly on the periphery in the first presidential debate between former Secretary of State Hillary Clinton and business mogul Donald Trump. The focus shifted from the economy and trade to race relations to national security, with the candidates’ personalities, character, and temperament dominating the discussion and post-debate coverage. With the country enjoying a period of energy abundance and low prices at the pump, voters aren’t as concerned about what’s happening in the global oil market. This is a sharp contrast from the past two presidential elections when consumers were contending with $4 per gallon gasoline and the country’s reliance on foreign imports for petroleum needs were higher.

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Still, since energy matters are closely connected to the economy, foreign policy, and the environment, it’s worth looking at what both Trump and Clinton stated about topics such as climate, clean energy sector jobs, the Iranian nuclear deal, and ISIS to analyze the broader energy implications.

Climate change

Early in the debate, Clinton criticized Trump for denying that climate change is occurring and that he labeled it as a “hoax” perpetuated by the Chinese to undermine American manufacturing. Clinton stated, “I think it’s real, the science is real, and I think it’s important that we grip this and deal with it both home, and abroad.”

Trump, interrupting Clinton, denied that he said climate change is a hoax, but fact-checkers have pointed out his tweets over the years that shows he’s consistently done just that.

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Clinton did not provide substantive details about how she would go about meeting her climate goals, whether she would push for a carbon tax or take executive measures to clamp down on the fossil fuel industry. She did, however, throw her full support behind alternative energy sources, mentioning solar in particular. During the conversation about the economy, she cited “clean, renewable energy” as a major source of job growth and articulated her goals of half a billion solar panels and modernization of the electricity grid.

Clinton did not provide substantive details about how she would go about meeting her climate goals, whether she would push for a carbon tax or take executive measures to clamp down on the fossil fuel industry.

Trump shot back, arguing that the U.S. has squandered opportunities with solar in the past (which was a reference to the failed Department of Energy investment in Solyndra in 2011) and that it couldn’t afford such investments now because the national debt is bloated at $20 trillion.

Expect more talk about climate change in the coming debates next month and on the campaign trail as Clinton and Trump will use it as a “wedge” issue. “Wedge issues are the coin of the realm in the world of political symbolism,” wrote Kevin Book of Clearview Energy Partners in a note, “and neither candidate initiated a detailed discussion of climate policy.” Both candidates will likely use their positions on climate change to discredit the other and boost enthusiasm among voters from their base since it is such a polarized issue.

Foreign policy

The last third of the debate had the theme of “Securing America,” which focused on national security threats and foreign policy. During this portion, there were striking differences between the two candidates, with Trump doubling down on his isolationist philosophy and Clinton expressing her willingness to work with allies and defending the Obama administration’s deal with Iran. “When I became Secretary of State, Iran was weeks away from having enough nuclear material to form a bomb,” Clinton said. “They mastered the nuclear fuel cycle under the Bush Administration. They had built covert facilities, stocked them, and centrifuges were whirling away….My successor John Kerry and President Obama got a deal that put a lid on Iran’s nuclear program without firing a single shot.”

Trump has repeatedly criticized the deal, calling it “one of the worst deals ever made by any country in history,” and said he would rip it up if he were to win the election. In order to reverse course on the deal with Iran, Trump would have to convince U.S. allies to agree to do the same, a very tough task. If that were to happen, which is very unrealistic unless Tehran is found to stray from the agreement, another embargo would likely be imposed on the country’s oil exports, which have soared since early this year.

Besides Iran, they battled over how to combat the terrorist organization ISIS. Trump repeated his claim that the group would never have formed if the U.S. had “taken the oil” from Iraq during the invasion last decade. As pointed out by Matthew M. Reed in a piece for The Fuse, the idea of taking Iraq’s oil brings up so many legal, practical, and moral hurdles that it’s unachievable. Moreover, the oil fields of Iraq are not where ISIS generates its revenues. “If Trump thinks that taking oil from Iraq a decade ago would have prevented ISIS from capturing it later, he is wrong,” Reed wrote. “The vast majority of ISIS-controlled oil sits across the border in Syria, where for a time the group produced tens of thousands of barrels every day.”

Contrasts in domestic oil & gas policy

One interesting development during this election that has gone mostly under the radar is the fossil fuel industry being very shy about giving money to the Republican presidential candidate.

One interesting development during this election that has gone mostly under the radar is the fossil fuel industry being very shy about giving money to the Republican presidential candidate. So far, the oil and gas industry has donated just under $290,000 to Trump, less than half of what it has given Clinton, according to the Center for Responsive Politics. This is ironic since Trump has called for opening up federal lands to production and nixing regulations on drilling activities such as hydraulic fracturing. Moreover, Clinton has stated that she proposes more regulations on fracking, although she overestimates presidential authority in this area, as most power resides in the states and local communities.

The industry could be donating more to Clinton because it believes she will ultimately be the candidate who wins and companies want to win favor from her before she takes office. Despite the flip-flop from the industry, it’s not indicative of any structural shift. The donations to Clinton are still relatively small—Republican primary candidate Jeb Bush raised almost $10 million from oil and gas companies. At the Republican National Convention, the party received big donations from oil companies Pilot Corp. and Marathon Corp., as well as the trade group American Petroleum Institute. Trump hasn’t been completely neglected by the industry, of course—Harold Hamm of independent Continental Resources, one of his biggest supporters and possible energy secretary should he win, spoke at the Republican convention and has repeatedly campaigned for him.

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A tight race

Pundits overwhelmingly declared Clinton the winner of the debate because of her poise during the back and forth and Trump’s erratic responses and clear frustration when criticized by either the moderator Lester Holt of NBC or his opponent. It’s uncertain, however, whether the debate will shift the fundamentals of the race. National polls are virtually tied and most swing states are in play. There are still two more debates. It’s anybody’s race.

 

 

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