US ELECTIONS: Presidential race holds diverging futures for commodities, climate

The 2024 presidential election presents the US energy commodities sector with a big dose of uncertainty about the regulatory, tax and climate policies ahead in the next four years.

Former President Donald Trump, the Republican nominee, has promised deregulatory steps that aim to stamp out current President Joe Biden's climate agenda and clear away barriers for energy production. Attempts to revise the large suite of Biden administration rules are likely if Trump wins, with implications across energy commodities.

By contrast, Vice President Kamala Harris, the Democratic nominee, is expected to defend and extend the Biden administration's emphasis on greenhouse gas emissions controls and tax incentives for cleaner energy.

Anna Mosby, a senior research analyst with S&P Global Commodity Insights, said a change in the pace of emissions reductions would be likely under a Trump administration, but "not a change in direction."

"Even during the first Trump presidency, a lot of these emissions cuts still continued to happen," Mosby said in an interview on Oct. 28. "We still saw a lot of climate-related actions coming more from the states than from the federal government."

In a scenario where Harris wins, "I think we largely see a lot of support for the Biden administration policies that were put in place," including important efforts to defend the rules against ample litigation in court and see them finalized, Mosby added.

Trade policy questions loom for the LNG, solar, petrochemicals and other sectors, while the US oil market watches for any shift in sanctions policies. But wholesale reversals are complex undertakings, and tax credits have momentum of their own as individual projects take shape in congressional districts.

The following is a snapshot of potential impacts and vulnerabilities across commodities under either candidate on the ballot Nov. 5.

Power and renewables

Trump: Experts do not expect that Trump would rescind existing offshore wind leases, but they do see federal agencies taking a different approach to ongoing court cases where petitioners are opposing wind farms. If the US Interior Department's Bureau of Ocean Energy Management defers to plaintiffs in these cases, that would slow the offshore wind lease and construction license approval process. A Republican-leaning Federal Energy Regulatory Commission stands to take a different tack on long-term regional electric transmission planning and cost allocation, potentially impacting efforts to connect more renewables to the grid. Offshore wind, solar, pumped storage and electric transmission projects could run into cross-agency permitting challenges as well if Trump moves forward with his intention to pursue sweeping changes to federal employment protections.

Harris: Some market observers point to the considerable momentum toward offshore wind power development built under the Biden administration and the strong role that states play in advancing the industry. A Democratic-led FERC could potentially focus on working through the transmission interconnection queue to accommodate more renewable power generation. A Harris administration would also be in a position to defend the US Environmental Protection Agency's rule requiring 90% carbon capture at new gas-fired generators and existing coal-fired power plants by 2032 — a regulation facing challenges in court.

Nuclear

Nuclear industry officials have marveled in recent years at growing bipartisan support for nuclear energy. There has been support during two administrations now for federal funding for advanced nuclear reactor demonstration projects, a more independent nuclear fuel cycle free from Russian dominance, and regulatory streamlining.

The Inflation Reduction Act included significant credits for existing and new nuclear units, and congressional support for them remains relatively strong. Republicans in Congress are among the biggest supporters of a ban on Russian-enriched uranium passed this year that takes effect fully in 2028.

Energy Transition

Trump: A second Trump administration is expected to withdraw from the Paris Agreement on climate change, and conservative activists are also pushing for a US retreat from the UN Framework Convention on Climate Change. A potential retreat from these key agreements would cut US diplomats from global negotiations related to transitioning away from fossil fuels and potentially cause Europeans to double down on climate policies. A former Trump policy adviser said it is uncertain whether a president could take executive action to leave the Paris Agreement without Senate approval.

Harris: A Harris administration would likely maintain the current US climate policy status quo set by the Biden administration. Harris' running mate, Minnesota Governor Tim Walz, signed a law requiring his state's electric utilities to utilize 100% carbon-free power by 2040, reflecting high prioritization of climate concerns. Momentum in Democratic-controlled states with more aggressive climate policies is unlikely to slow barring significant changes at the federal level.

Gas production

Trump: Trump would likely roll back or loosen US methane capture rules, lowering production costs for drillers. He has also pledged to use executive action to accelerate permits for gas pipelines, which could potentially boost takeaway capacity in key regions. Trump has indicated support for increasing oil production. If the economics support it, added oil output could increase the flow of associated gas into the market. Under a second Trump administration, the Bureau of Ocean Energy Management may also shift its focus onto conventional resources such as offshore oil and natural gas extraction. However, policy action is not likely to move the needle on US gas production in a significant way — in either direction — in the short-term.

Harris: Despite her 2019 support for a ban on fracking, Harris has tacked toward the center on natural gas and has said she would not ban fracking if president. However, Harris would likely keep or modestly expand US methane capture rules, potentially impacting the break-even price upstream operators need to see to produce more.

Midstream natural gas

Trump: Trump has promised to eliminate permitting hurdles for natural gas pipelines and issue a national emergency declaration aiming to make way for more production. Trump is expected to reverse Biden's actions affecting infrastructure, including on climate considerations. Overall, though, environmental laws and a likely litigation limit what executive action can do. Much depends on the makeup of Congress and potential permitting reform. And developing gas pipelines out of the US Northeast could still prove challenging given states' roles.

Harris: Harris has spoken in favor of permitting reform in general terms, but how that applies to new fossil fuel infrastructure is an open question. Biden administration initiatives on permitting often have emphasized streamlining processes for projects such as renewables and electric transmission that reduce emissions. If elected, Harris may have to balance pressures from midstream gas project opponents against demands for more gas facilities to serve datacenters and support electric reliability.

LNG

Trump: Trump has promised to approve LNG projects and end the US Energy Department's pause on issuing key export permits as a "day one" priority. Observers expect a second Trump administration would mean more project approvals, but accelerated permitting could open projects up to legal and regulatory risks. During Trump's presidency, a trade dispute with China restricted flows to that country's massive market and slowed related commercial negotiations. Loosening methane emissions rules could disadvantage US exporters facing other markets' demands for emissions cuts.

Harris: Harris is also expected to resume LNG export approvals if the Democratic candidate wins the election, although there could be additional scrutiny or new criteria applied to permitting reviews. Harris has blasted Trump's plan to impose tariffs and said she supports diverse energy investments. Harris has not laid out a detailed gas policy, leaving observers wondering about her approach. DOE officials under the Biden administration have said the pause will be over by early 2025. Some expect Harris could limit development financing for fossil fuel infrastructure, including gas import and distribution facilities overseas.

Oil production

Trump: A second Trump administration would likely aim to increase US oil production by rolling back environmental regulations and expanding offshore and federal lands leasing opportunities. Still, producers may not respond with significant increases in output. Oil companies prioritize profitability and shareholder returns, maintaining modest production growth despite more available drilling opportunities. Global market dynamics and producer discipline would remain the primary drivers of US output, so major production spikes are unlikely.

Harris: Harris would likely continue the Biden administration's approach geared toward both reducing emissions and managing oil supply. She may aim to tighten regulations on methane emissions, but political and economic constraints would limit her ability to influence oil production. The US would still see incremental production growth due to ongoing efficiency improvements, with Harris maintaining some federal leasing while pushing for cleaner energy investments.

Oil sanctions

Trump: As president, Trump pursued a maximum-pressure oil sanctions policy that helped drive down Iranian crude output. If reelected, he could try to reverse Tehran's production gains in 2023 and 2024. Trump might also return to strict oil sanctions on Venezuela, though there is less consensus around this strategy. Trump's approach to sanctions on Russia is also unclear and may be contingent on a peace agreement with Ukraine.

Harris: If Harris is elected, she may continue many of Biden's oil sanctions policies. Biden has maintained crude sanctions on Iran, but the nation's crude output has risen in light of a tanker fleet that has eluded tracking. Harris also might be more open to engaging in diplomacy with Iran. Biden's approach to Venezuela has been to allow company-specific licenses to operate in the oil sector. Regarding Russia, Harris might impose more sanctions to hurt the Kremlin's war coffers, especially if the European Union takes similar steps.

Trade

Trump: During Trump's presidency, he levied tariffs on solar modules and other imports, which continued under the Biden administration. On the campaign trail, Trump has floated a 60% tariff on imported Chinese goods and up to 20% tariffs on goods imported from all other countries. His "America First" agenda focuses on domestic manufacturing, although some economists and manufacturers say his proposals could trigger supply chain disruptions and higher prices. Tariffs on Chinese imports from Trump's first term have already impacted 75% of the chemical industry, which is dependent on China for many intermediates. A Trump return to the White House also carries the risk of trade disputes.

Harris: Harris would likely continue existing tariffs on items like solar cells, lithium-ion batteries and electric vehicles. Her "America Forward" strategy includes de-risking from China, multilateral trade agreements, and scaling up domestic manufacturing and jobs through legislation and tax incentives. Harris proposes a tax credit to target investment and job creation to help the US compete in key industries, her campaign says. She has called Trump's broad tariffs a "sales tax" on Americans.

Inflation Reduction Act

Trump: Trump has vowed to reverse what he dubs the "green new scam" — his moniker for the Inflation Reduction Act, the 2022 legislation with $370 billion in energy and climate funding likely to drive investment in clean energy sources. Incentives for technologies that help traditional energy sources cut emissions are less likely to face GOP action. A sweeping repeal of the bill's tax incentives also appears unlikely; many of the benefiting energy projects are in Republican congressional districts. Any IRA reversal efforts could be tied to extending Trump's 2017 tax overhaul.

Harris: Harris would likely focus on implementing and protecting the IRA's incentives for clean energy production and investment. Much of the direct spending in the $370 billion for energy and climate remained uncommitted as of early fall 2024, leaving work to be done for entities such as DOE's Loan Programs Office in issuing funding awards. If Harris wins, clean energy groups could push for marginal tweaks to the IRA's technology-neutral clean electricity production tax credit set to phase in beginning in 2025.

Electric vehicles

Trump: Trump tends to frame electric vehicle-friendly policies as harmful to the US auto industry and has floated the idea of rescinding the Biden-Harris administration's $7,500 EV tax credit. Doing so would slow the penetration of EVs in the passenger vehicle market, Commodity Insights analysts say. Trump has also alluded to opening the market up to the production of Chinese vehicles in the US to boost domestic jobs. The Republican 2024 platform released in July states that the GOP intends to "revive the US auto industry" by reversing "harmful regulations" and "preventing the importation of Chinese vehicles."

Harris: Harris cast the tie-breaking vote to pass the Inflation Reduction Act, which created EV manufacturing and market tax incentives. Billions of dollars have since been invested in domestic EV and battery factories, the overwhelming majority of which are in Republican-leaning and swing states. Harris proposes new tax credits, including for the auto and clean energy sectors. Harris would likely maintain or expand EV tax credits, S&P Global Mobility says. But in response to Trump's criticism of her "EV mandate," Harris told a rally in October, "Contrary to what my opponent is suggesting, I will never tell you what kind of car you have to drive."

Critical minerals

Trump: Trump reopened Minnesota's Superior National Forest to mining, clearing the way for developing a large copper-nickel mine there, although the Biden administration placed a 20-year mining moratorium in the region. Trump also issued an executive order declaring a national emergency over the country's dependence on China and backing domestic mining and critical minerals activity. Trump has distanced himself from the Project 2025 plan from the Heritage Foundation that several of his past and current associates formulated. The plan includes the elimination of the US Energy Department's Loan Programs Office, which offers billions of dollars to potential critical minerals producers and processors.

Harris: Under Harris, critical minerals could get a demand-side boost. She plans to invoke the Defense Production Act to help build supply chains that are more resilient and less reliant on China, which currently dominates the mining and processing of several critical minerals vital to defense, technology, the energy transition and more. Her administration would look to build out a stockpile of and to incentivize the production of critical minerals. However, mining companies often view Democratic administrations as more stringent on environmental considerations when permitting new projects.

Petrochemicals

Trump: A second Trump presidency would depart from the Biden administration's chemicals management and environmental policies. Trump has vowed to dismantle climate initiatives and slash the budgets of regulatory oversight agencies, including the EPA. Some of the Biden administration's sizable investment initiatives are earmarked for chemical makers and would boost demand for certain specialty chemicals. These incentives could be on the chopping block under a Trump presidency.

Harris: Harris is expected to maintain the strict interpretation of Toxic Substances Control Act reform, which some observers see as preferable to the disruption and loss of public confidence a deregulatory agenda could create. Harris has also emphasized the importance of green technologies and infrastructure that would drive demand for sustainable chemicals.

Coal

Trump: Under Trump, climate change would likely take a back seat in energy discussions, opening the door to regulatory changes that could help the industry — even if they do not reverse the shrinking US sector's broader fortunes. Trump previously took action to reverse greenhouse gas emission rules and stream protections; paused a federal study on mountaintop removal; and pursued other policies favorable to coal mining. Still, coal production and employment fell under Trump's previous term in the face of more competitive economics for natural gas and renewable power sources.

Harris: Harris has said climate change represents an existential threat, which is unlikely to translate to lighter regulations for the industry. Proposed environmental laws issued by Biden's Environmental Protection Agency restricting power generation facilities' greenhouse gas emissions will likely continue to make coal less competitive. Harris' support for initiatives to invest in clean energy assets also does not bode well for an aging coal-fired fleet already struggling to compete.

S&P Global Commodity Insights reporters Jared Anderson, Jeremy Beaman, Rebecca Coons, Kirsten Errick, Bill Freebairn, Zack Hale, Garrett Herring, Taylor Kuykendall, Jasmin Melvin, Corey Paul, J Robinson, Maya Weber, Daniel Weeks, Kate Winston and Eric Wolff contributed to this article.