OPINION: For all the fear and excitement created late last year in the run-up to the US presidential election over the future of oil, realpolitik is now settling in.

Joe Biden won the White House with a green agenda but has moved quickly to a more pragmatic approach to fossil fuels.

This is partly because his majority in the Senate is wafer thin and he needs to build a consensus around some energy policies.

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But it is also a desire to avoid legal challenges if he rips up, for instance, pipeline projects that have been through major environmental assessments.

Rocky road to greener energy

Biden has already tasted defeat in a Louisiana court over his banning of oil and gas lease sales on US public land.

He may now think the move away from hydrocarbons needs more time than previously understood to avoid deep economic and political fissures.

The Democratic president is certainly under fire from both sides of the wire: oil states claim he is endangering national energy security; while environmentalists accuse him of being “inconsistent”.

The green beef follows the Biden administration's defending of his predecessor Donald Trump's go-ahead for the Line 3 pipeline expansion in Minnesota.

Pipeline plan kyboshed

At the same time, Biden said he would be scrutinising the environmental impact of the Line 5 pipeline in Michigan.

A deathblow was formally delivered on 9 June to the giant $8 billion Keystone XL transport link, much to the delight of green campaigners.

Infrastructure plan: US President Joe Biden, with a bipartisan group of senators, outside the White House on 24 June Photo: AP/SCANPIX

Operator TC Energy and the government of Alberta, Canada scrapped the project following Biden’s refusal earlier this year to provide a permit to build the US leg of the project.

But the White House has declined to shut down another controversial project, the Dakota Access pipeline, while a new environmental review takes place there.

Analysts say Biden is coming under serious pressure from a key constituency of his support — labour groups — worried about the impact of project delays or cancellations on jobs.

He promised in the election hustings to invest billions in a green revolution that would create new jobs to counter any negative impacts.

Huge infrastructure plan

In recent days, Biden has been struggling to win bipartisan consensus on his landmark $1 trillion infrastructure plan.

A scaled-back version brought a deal on 24 June only for discord to break out when Biden suggested he himself would veto it unless it was tied to an even bigger investment package to help American families as some Democratic senators want.

By last weekend the president was desperately rowing back on the second demand claiming he had created the wrong impression.

The public relations setback only emphasised the scale of difficulties for Biden in trying to reconcile the different wings of his party — as well as the need to win support from some opposition Republicans — if he wants to move ahead with bipartisan law making.

Some Democrats fear some spending to tackle the climate crisis is being sacrificed to bring round opposition support.

Strategic petroleum reserve

Meanwhile, Republicans want to avoid any tax hike for wealthier individuals to pay for the spending pledges.

One potential source of new cash is the strategic petroleum reserve created as a buffer in the past against future shortages.

With Brent crude prices hovering around the $75 per barrel mark in recent weeks, some of this reserve could be drawn down lucratively without too much political heat.

The US political stand-off between green energy and black oil is turning more into an uneasy compromise, if not yet open co-operation.

(This is an Upstream opinion article.)