OPINION: The storming of the Capitol should be the last dramatic curtain call on the Donald Trump era — at least, let's hope.
For all the benefits of having a firm oil and gas supporter in the White House, the downside of this volatile populist was on show last week.
Whatever happens in the last few days of his presidency, the influence of Trump and his rowdy supporters will not go away.
The ideas have currency for a sizeable proportion of the US population — and not just those who benefit from his fossil fuel policies.
But the US business world needs stability and respect for democratic norms. Trump’s successor Joe Biden is likely to bring less rule by tweeting and a dialling down of the China trade wars, but also some difficulties for oil and gas in an agenda that favours green energy.
The Democratic leader has won control of the Senate as well as the House of Representatives, but only by wafer-thin margins.
Victory in the two Senate run-off races in Georgia strengthens Biden’s lawmaking powers — but not by much. It therefore gives significant power to conservative and fossil fuel-friendly Democrats such as Senator Joe Manchin.
The West Virginia representative has made clear already his opposition to changing a filibuster rule that currently means a good number of Republicans would have to support major pieces of legislation passing through the Senate.
So, Biden’s promises of a clean energy revolution that could unhinge the oil and gas sector may be more rhetoric than reality.
The current 50:50 balance of power in the Senate means a national carbon tax or a national clean energy standard may have to wait, as the Financial Times argues.
Upstream has spelled out before that Trump’s climate denial and resistance to decarbonisation were the arguments of a false prophet.
US government and industry policies must aim to cut carbon emissions and slow global warming even though this puts a brake on some oil and gas expansion.
Rejoining Paris Agreement
The incoming administration has promised to kick-start this change by rejoining the UN’s Paris Climate Agreement.
Biden talked on the presidential campaign trail of $2 trillion being spent on his green energy revolution, but this may be hard to achieve.
Nominating a political heavyweight such as John Kerry to be international climate envoy and talented Rhode Island governor Gina Raimondo to be commerce secretary shows Biden means business, but of a practical kind.
Raimondo is a pragmatic politician who has made clear she wants capitalism to work better, certainly not to tear it down, as Bloomberg notes.
She will be tasked to make the US an “exporter of 21st century products and leader in the clean energy economy".
She will also be required to work with the Office of the US Trade Representative on potential plans to introduce tariffs on carbon-intensive goods arriving from outside the country.
Other major appointments involve people such as Marty Walsh, mayor of Boston, who is charged with overseeing training and other programmes to help create well-paid jobs in clean energy.
There are now obviously questions about what will happen to projects such as the Keystone XL pipeline plus federal oil and gas leases.
Oil companies cautious
Failure of Trump’s drilling licence sale in the Arctic National Wildlife Refuge to draw oil majors' interest showed oil companies are already cautious.
Meanwhile, on the other side of the Atlantic, Norway has just announced plans for a $240 per tonne carbon tax in 2030.
Change is here. It is going to be a bumpy ride for oil and gas, but is nonetheless a journey that has to happen.
(This is an Upstream opinion article.)