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Nick Cunningham

Nick Cunningham

Nick Cunningham is an independent journalist, covering oil and gas, energy and environmental policy, and international politics. He is based in Portland, Oregon. 

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President Inslee: An Oil Major’s Nightmare


A prominent Democratic presidential candidate laid out a plan that offers the most direct threat yet to the oil and gas industry, entitled “Freedom from Fossil Fuels.”

Washington Governor Jay Inslee’s entire presidential campaign centers around climate change and taking on fossil fuels. It’s no surprise then that his ambitious and far-reaching plans strongly target the oil and gas industry.

But the most recent component of his wide-ranging climate platform is perhaps the most notable because while most presidential candidates tend to lay out specifics on how they will scale up clean energy, they often ignore the elephant in the room. U.S. oil and gas is still growing – the EIA expects production to jump by another 70,000 bpd in July – and is expected to break production records for years to come, something that stands completely in conflict with goals of ratcheting down emissions. While most Democratic candidates dance around this point of tension, Inslee confronts it head on.

The “Freedom from Fossil Fuels” plan would hit oil and gas on multiple fronts. First, it would end the “gravy train of government largesse for fossil fuel companies,” as Inslee puts it, consisting of an array of subsidies that are unique to the energy sector and also others that benefit corporations more generally. Some of these include the intangible drilling operation cost, ending last-in first-out accounting for oil and gas, ending deductions for royalty payments to foreign governments, accelerated depreciation, and a series of other arcane accounting and tax benefits. He would also hike royalty rates on federal lands. Related: Middle East Tensions Move Oil Prices Higher

Inslee would initiate a thorough study of how the federal government supports the industry, including how it uses the military to protect shipping lanes, funds land reclamation from abandoned mines, and other hidden subsidies. He would end financial support for overseas oil, gas and coal projects, which the U.S. government does through an array of financing institutions like the Export-Import Bank. He would transform the Department of Energy’s Office of Fossil Energy into the “Office of Industrial Decarbonization,” which would be an iconic way of marking a turning point in U.S. energy policy.

Inslee would push a “climate pollution fee,” which would be like a carbon tax, but would also include methane and other potent greenhouse gas emissions.

Altogether, those measures would significantly increase costs on oil and gas drillers. But, there’s more. Inslee would also end all new permits for drilling on federal land, both onshore and offshore. Sen. Elizabeth Warren and former Texas Rep. Beto O’Rourke have supported similar measures. That pledge alone would send a shiver down the spine of any oil executive.

But Inslee goes even further, seeking a nationwide ban on fracking. He would implement a “climate test” for all new infrastructure, which would likely block the construction of all new oil and gas pipelines.

“We need a President who will stand up to the fossil fuel industry,” Inslee said in a video announcing his plan. “We need to end the subsidies. We need to prevent new leases. And we need to stop the infrastructure that would doom us to being threatened by the climate crisis.”

Needless to say, taken together, Inslee’s proposals would seriously threaten the viability of the oil and gas industry in the United States. Shale drillers are already suffering from poor finances, but Inslee would dramatically raise the cost of doing business, while blocking permitting, infrastructure and even the ability to frack new oil and gas wells. Oh, and he’d ban crude oil exports. It’s safe to say that the current U.S. shale industry would no longer be the same.

Let’s back up and think about what all of this means. Inslee is calling for nothing less than the phasing out of the fossil fuel industry. In fact, he says that explicitly, arguing that his plan will “responsibly phase out oil, gas and coal production, carbon-intensive infrastructure and exports,” which sounds…pretty comprehensive. While most politicians have called for cutting emissions, they have avoided saying definitively that the oil and gas industry needs to be scaled down and eliminated over time.  Related: Saudi Aramco Says It's Ready For Strait Of Hormuz Disruption

“Fossil fuel industries, and their workers, have helped build our nation since the dawn of the industrial age,” Inslee said in his plan. “They have sustained livelihoods and communities. They are an intrinsic part of American society today. But the climate crisis demands that we transform our economy and leave these 19th century energy resources and their pollution behind.”

The disruption to the sector would be profound. Inslee calls for protecting workers and helping them transition. He even cast the transition in a positive light – the switch to clean energy would create millions of new jobs and Inslee’s plan includes measures to strengthen unions and worker protections while also backstopping pensions and health care plans. Funds raised from fees on the industry would be reinvested in impacted communities.

To be sure, Inslee is trailing in the polls, garnering low single digits and far below the top four or five candidates. But, it’s still early. And, even if he fails to gain traction, other candidates will come under pressure to adopt some of his policy proposals. Inslee’s multi-part climate change platform has been dubbed the “gold standard” by environmental groups and by prominent progressive leaders.


The release of Inslee’s plan is also well-timed for maximum impact. The first Democratic presidential debate takes place Wednesday and Thursday night this week, and it is being held in Miami, which is on the front lines of rising sea levels. As such, there may be a particular focus and pressure on what the candidates will do to confront the oil and gas industry.

By Nick Cunningham of Oilprice.com

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