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Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

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Why Has President Biden Sidelined Natural Gas?

“Build Back Better” was the slogan that accompanied the Biden administration’s initiative for economic recovery after the pandemic. The actual plan that the administration released was titled the “American Jobs Plan,” and according to some observers, it could threaten the long-term survival chances of the U.S. natural gas industry.

On the campaign trail, Biden once inadvertently perhaps said he would ban fracking. This turned into a faux pas that took repeated assurances from the then-candidate that he would not ban all fracking. After all, Pennsylvania was on the scales—home to the Marcellus shale, one of the biggest natural gas producing regions in the United States.

Now that Biden is in the Oval Office, the focus is on the energy transition away from fossil fuels, which has received a mixed reaction from the oil and gas industry. Such a reaction is understandable—transition plans call for rapid decarbonization, and while the industry has signaled that it is on board with decarbonization as such, it may have an issue with its pace, its implementation, and its cost. But according to an infrastructure advisory firm, the plan, in fact, leaves the natural gas industry out of the transition.

In an analysis of the “American Jobs Plan”, advisory firm ARBO notes several key differences with what Biden and Harris promised on the campaign trails. For instance, the company said, before the elections, Biden promised some substantial investments in repairs and replacements in the gas distribution system of the United States, as well as prioritizing carbon capture and sequestration. He also promised investments in green hydrogen, which would have ensured the relevance of this pipeline network even after the demise of natural gas. The final plan, however, is quite different.

Related Video: How To Love Pipelines and Fear Climate Change

In a fact sheet released by the White House, carbon capture is mentioned just three times, one of which is in the context of decarbonizing large polluters such as the steel- and cement-making industries and chemicals production. The other mention refers to a tax credit aimed at facilitating decarbonization, including through retrofitting power plants with carbon capture and storage facilities. The third and final mention is in the context of a $15-billion allocation for a wide variety of technologies deemed essential for the U.S.’ energy future.

There is, however, no mention of the repairs and replacements to the gas distribution system promised on the campaign trail. Then, Biden said that would create thousands of jobs. Now, the only jobs that the “American Jobs Plan” seems to have found for the oil and gas industry is plugging abandoned oil and gas wells and reclaiming depleted mines. While this is certainly a productive and much-needed activity, well-plugging and mine reclamation is hardly a career with long-term prospects. These jobs will take $16 billion from a total amount of $2.288 trillion to be dedicated to the plan.

“Any federal infrastructure package that envisions a clean energy future must be explicit about the foundational role that natural gas infrastructure will continue to play in enabling emissions reductions while ensuring reliable and affordable energy for all Americans,” said a spokesperson for the Interstate Natural Gas Association of America. “Natural gas infrastructure is built without using taxpayer dollars, and the Biden administration and Congress should acknowledge the importance of promoting continued investment in modernizing and expanding this infrastructure.”

Yet this is not what the Biden administration would like to do. It seems to be firmly focused on bringing on as much renewable power generation capacity online as quickly as possible and reducing the share of gas in the energy mix just as quickly. This is not only worrying for the natural gas industry; it should be worrying for anyone using electricity. Perhaps the Biden administration should take a moment to ask why Warren Buffett recently proposed to build 10 GW of new gas-powered generation capacity and not the same amount in wind or solar.

By Irina Slav for Oilprice.com

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