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Democratic primary stances on energy seen affecting climate for LNG exports

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Democratic primary stances on energy seen affecting climate for LNG exports

Highlights

Questions raised about future limits on fossil exports

Climate seen high among Democratic primary voter concerns

Washington — The shift in national Democratic Party politics on energy and climate could dampen the appetite for US LNG exports and future approvals of export terminals, several energy policy professionals suggested Monday at an Atlantic Council forum in Washington.

Charles Hernick, director of policy and advocacy at Citizens for Responsible Energy Solutions, cautioned against waving off ambitious Democratic clean-energy proposals as a feature of primary politics that is likely to be moderated in the general election.

"We live in an era where candidates and elected officials are being held to ... campaign promises in an unprecedented way," he said.

Already, he said, the promise to ban hydraulic fracturing or limit it on public lands by some candidates "has dampened markets, has dampened enthusiasm, and has raised questions about what is the proper US role in something like liquefied natural gas and where are those exports going to be headed," said Hernick, previously a Republican candidate for the US House of Representatives. Moreover, Democratic proposals that rely on a high level of federal government spending and upend states' role in determining the energy mix have the potential to "crowd in or crowd out" investment in the energy sector, he said.

Export policies

Amos Hochstein, senior vice president at Tellurian and former State Department official, offered that the direct impact on the fossil fuel industry may be relatively muted if the US were to limit drilling on federal land, because of where most drilling occurs.

"It will have a greater impact on exports, on people willing to trust whether or not you're starting to touch things" like banning LNG exports or reinstate the embargo on crude oil exports removed during the Obama administration, he said.

These areas may be contentious among Democrats, he added. "How they're discussed and how we move forward on those will have a great impact."

For now, the energy sector generally views the current debate through a lens that understands that this is a primary, he said, with the idea that some of the low-carbon goals are "unrealistic" and may not survive, he said. The industry probably cares more about where shareholder pressures are headed than the political landscape in the Democratic primary, he said.

100-day plans

Christy Goldfuss, senior vice president at Center for American Progress and a former White House Counsel on Environmental Quality official, nonetheless, found it "impossible to imagine" that some action on climate would not be part of a 100-day plan of any incoming Democratic president, though what that may look like is uncertain. The group's polling in early primary states, done earlier this year, had shown that climate for the first time ranks as high as health care, in some cases higher, among Democratic primary voter concerns, she said.

What is consistent about candidates on the left is an embrace of net-zero carbon emissions by 2050, "an extraordinarily fast timeline" in comparison to Obama administration goals, and in terms of tackling hard-to-decarbonize sectors, she said.

Sarah Hunt, co-founder of the Joseph Rainey Center for Public Policy, cautioned that primary conversations on climate plans "strike at the heart of the very voters that [Democrats are] trying to reach and their pocket books." She worried that "eventually they're going to be brute-smacked with the reality of general election politics" and the potential that conversations about big spending and socialism can generate fear with a certain part of the electorate.

Regardless of electoral politics, she contended, "we need a plan that can win Republican votes in the House and Senate even if you have a trifecta for the Democrats."

-- Maya Weber, maya.weber@spglobal.com

-- Edited by Rocco Canonica, newsdesk@spglobal.com