Florida Governor Ron DeSantis recently unveiled his energy plan, calling for more domestic production of oil, natural gas, and minerals while promising to scrap the Biden administration’s climate policies, which he says are stifling U.S. energy production and benefiting China.
The 2024 presidential hopeful, who is polling second behind former President Donald Trump in the race for the Republican nomination, promises an energy policy to benefit “Midland over Moscow,” “The Marcellus over the Mullahs,” and “the Bakken over Beijing.”
An all-of-the-above energy plan makes sense for a country as rich in natural resources as the United States, but there’s always the risk of national campaigns to throw the baby out with the bathwater.
“The self-imposed handcuffs on oil, gas, and critical minerals extraction will be removed,” DeSantis said at a late-September campaign event in Midland, Texas, the heart of the Permian Basin, the nation’s largest oil-producing basin.
To remove those handcuffs, DeSantis wants to unwind the United State’s current climate commitments, including withdrawing from the 2015 Paris Climate Agreement. Former President Donald Trump exited the Paris Agreement in 2017, a decision incoming President Joe Biden reversed on his first day in the Oval Office.
The whipsaw effect on producers, refiners and consumers can be worse than either policy decision.
I believe the Biden administration has overreached in advancing a rapid transition to an all-electric economy, but not every policy decision is wrong. Correcting course will require a deft hand that can keep what works while ensuring that American families and businesses have access to abundant and affordable energy. The next administration should conduct a full review of the current policies to ensure that abundance, affordability, and American-produced are at the top of the to-do list.
In addition to pulling out of the Paris deal, DeSantis says he would walk back the 2021 Global Methane Pledge to slash emissions globally by at least 30% by 2030 from 2020 levels and strike environmental, social, and governance (ESG) disclosure requirements that have tempered investors’ confidence in traditional energy stocks despite the industry paying record dividends. The domestic oil and gas industry is committed to reducing emissions and minimizing the environmental impact of its activities, so eliminating artificial barriers to investment and access to capital, as the ESG trend has done, is a good start toward achieving our universal environmental goals.
Like Trump’s “Making America Energy Independent Again” agenda, DeSantis leans heavily on pledges to rip up the Biden administration’s policies favoring climate change over energy security and economic growth, including reversing restrictions to oil and gas production on public lands. Energy abundance and affordability should be our highest goals. A wealthy nation is far better positioned to address the challenges of a changing climate than a poor one.
DeSantis promises to “expand federal lease sales and devolve more leasing authority to the states.” The Biden administration has largely constrained new leasing to court-ordered sales or those prescribed in last year’s Inflation Reduction Act. The administration recently canceled leases in Alaska’s National Petroleum Reserve (NPR–A), frustrating the industry and Republicans on Capitol Hill, and released a five-year offshore leasing plan that made no one happy.
DeSantis is pledging to refill the U.S. Strategic Petroleum Reserve (SPR), which Biden tapped before the 2020 election to tame rising gas prices – another example of politics interfering with public policy decisions. DeSantis says he would only use the nation’s emergency oil reserve – the SPR is at its lowest level since the early 1980s – for actual supply disruptions. Given the geopolitical situation in Europe and the revanchment of the Organization of the Petroleum Exporting Countries (OPEC) and its Russian ally, to say nothing of the rise of China, maintaining robust reserves makes sense.
DeSantis promises to revitalize America’s nuclear and automobile industries. DeSantis would repeal Biden’s electric vehicle (EVs) mandates and “support Americans’ right to drive the cars they want.” That doesn’t mean he opposes EVs, but he believes they must be able to compete in the marketplace without government subsidies. DeSantis says he plans to jumpstart critical mineral mining on federal lands and create a strategic reserve of critical minerals to ensure America can compete in the energy transition with China, which controls 90% of the world’s critical minerals.
Streamlining environmental reviews and permitting is another priority for the Florida governor, as is preventing “abusive litigation” by environmental groups that have used the courts to block projects like the Dakota Access and Keystone XL pipelines by filing frivolous lawsuits.
New rules targeting natural gas stoves, furnaces, and appliances would be repealed under DeSantis, giving Americans greater choice in how they want to cook and heat their homes. Such nanny state laws should be repealed wherever they are found because they create hurdles for competition and innovation in the marketplace.
DeSantis likewise promises to repeal Biden’s Clean Energy Plan, which demands a 90% reduction in greenhouse gas emissions by 2035-2040 from power plants – essentially forcing a switch to renewable energy sources like wind and solar despite cost considerations. The country might be better served by a more modest goal that’s attainable and doesn’t scare off investment in the energy resources we need today – and will need for decades to come.
The boldest – and most controversial – part of DeSantis’ agenda is his promise of $2 per gallon retail gasoline prices by 2025, requiring pump prices to fall by about $1.85 from the current national average. That would require a crude oil price of about $55 a barrel, which could hurt U.S. crude oil production by putting too many new prospects below breakeven cost levels for new wells. U.S. refiners may also lack the capacity to deliver gasoline at that price level.
Indeed, gasoline prices haven’t touched the $2 a gallon level since the depths of the pandemic in 2020, when fuel demand collapsed under the weight of government-mandated lockdowns. Such a sharp price drop would also require cooperation from the OPEC cartel, whose member states are cutting supply to boost prices above $100 a barrel. The fix is literally in to keep pump prices high. Our only hope for seeing those prices fall is to increase domestic production. That won’t happen overnight, but we have the resources; we just need the will.
Overall, though, the feeling among American energy executives is that DeSantis is taking positive positions for national security and traditional energy producers.
He prioritizes fossil fuel production, removing regulatory red tape and keeping the government out of industry decision-making over the pace and trajectory of the low-carbon transition.
DeSantis’ energy priorities reflect his concerns about the impact of energy cost inflation on Americans today rather than positioning the United States as a global leader in the fight against climate change. But he’s also looking to take advantage of the economic and jobs opportunities offered by the diversification of the energy sector, focusing on critical minerals mining and a strategic reserve for these strategic resources.
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