How will energy markets react to the transition to the next administration? Which industries stand to gain the most under a President Clinton versus a President Trump? During today's OnPoint, Jon Sohn, counsel at Dentons, discusses the critical role energy and climate will play in the next administration.
Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. With me today is Jon Sohn, counsel at Dentons. Jon, thank you for joining me today.
Jon Sohn: Thanks for having me here.
Monica Trauzzi: So let's start off by talking about the third and final debate between Hillary Clinton and Donald Trump. Energy and climate were only obliquely mentioned, though the mentions were interesting I thought. What did you think about Clinton's remarks on building a grid that crosses borders? How feasible is that? Are we on that track?
Jon Sohn: We're definitely on that track. I think it was interesting because the energy issues came up in the context of an attack by candidate Trump on immigration, and he's citing WikiLeaks. So I went back and looked at the quote, and it actually was about energy and the free flow of energy across transmission lines. And there's a lot of momentum already going on in that space. Every day, for instance, we get clean energy from Canada through transmission lines that complements our wind industry, our domestic wind industry in Minnesota, for instance. And the recent North American Energy Summit with all the leaders from Canada, Mexico and the United States set a really ambitious target of getting 50 percent of our continental energy from clean power by 2025. So those are pretty ambitious goals, and to do that on a continental basis you're going to have to have that sort of cross-border collaboration, so I think that's what candidate Clinton was talking about.
Monica Trauzzi: And Clinton also mentioned clean energy and highlighted that it's not just for climate mitigation, but also for economic growth.
Jon Sohn: Right.
Monica Trauzzi: It seems like the economic story was one that we heard a lot more and that played a little more in the debates. Why do you think that is and why do you think we didn't hear more about climate?
Jon Sohn: Well, I'm not exactly sure why we didn't hear more about climate. I know a lot of folks who care about climate changes issues from one perspective or another were expecting it to be a bigger part of the debate. I think the tenor of the debates overall made it difficult to get substantive on anything, and if you think about it, you know, what would the climate change debate in and of itself really have been about? One candidate doesn't believe in the science of man-made climate change; the other candidate believes the overwhelming majority of scientists, that it's a real and present danger, and would not that the Supreme Court has already found that carbon is a pollutant under the Clean Air Act. So I'm not sure how much further the debate could've gone than those two points of view in the amount of time they had.
In terms of the economic argument, I think Hillary Clinton does see her foreign policy and her economic policy in parts through a climate change lens. And so for her to talk about creating more jobs through large-scale national initiatives for solar panels and things like that makes a lot of sense.
Monica Trauzzi: But considering that climate is one of President Obama's chief legacies, is it strange that Clinton didn't at least attempt to bring up the Paris deal or any type of discussion on the policy tools that are in place right now?
Jon Sohn: Yeah. So, I mean, if you think back a few years back when it was early Obama days, cap and trade failed in the Senate, died in the Senate, and the Copenhagen United Nations negotiations collapsed, and a lot of folks around here thought climate change policy was dead. And then, you know, it sort of rose like a phoenix from the ashes under the Obama administration on the international level, on the domestic regulatory level, through executive orders, legal wrangling, across all sorts of sectors — solar, natural gas, carbon itself, HFCs. There was just a recent HFC agreement in Kigali. So it is a cornerstone of the Obama legacy, and I'm not exactly sure why Clinton didn't bring it up more, but there were only a few opportunities to do so. The one main opportunity came through our friend Ken Bone, right, the social media star, when he asked his question about energy transitions and saving jobs as well. And she tried to get into it there, but it's difficult when you've got — the tenor of that conversation was difficult overall.
Monica Trauzzi: Right. Oil and gas will continue to play a major role in the U.S.'s energy mix. What do you think the future of oil markets looks like under each potential administration?
Jon Sohn: Sure. So I think candidate Trump has been very clear in his support for the oil and gas industry, and his — I believe it's called "Make America First" energy plan. And I think what we'd likely see under a Trump plan would be sort of a reverse course on a number of the EPA regulations that impact the industry, particularly the methane emissions regulations that are emerging under the Clean Air Act. That would likely go by the wayside, and I think likely he'd be inclined to see a devolution of oversight of the industry to the state level as opposed to the federal level in a fundamental way, and probably more interested in opening up public lands and offshore opportunities as well.
Mrs. Clinton has talked quite a bit about natural gas as a bridge to future sustainable energy, and I don't see her walking away from the oil and gas industry by any stretch. I do think she'll have a tougher approach at the federal level than Trump would have, using the regulatory powers of the Environmental Protection Agency and the National Environmental Policy Act as key tools to make sure that the full range of considerations occur on oil before projects go forward.
Monica Trauzzi: So they're both considering all options it sounds like in terms of energy, some a little more than others. Which industries do you think stand to gain the most under either administration?
Jon Sohn: Yeah. I mean, I'm not a big fan of picking the winners and losers, but I'll give you my best guess. The — I'd say first of all, for a President Trump, he would — certainly if you were in the oil and gas industry and you believe that your best approach to a sustainable industry over time is a devolution of regulations to the state level, then that would be a winning strategy for you. He also talks about coal, and I think he has, to his credit, done a decent job highlighting the plight of people in coal country and the struggles they face. But I'm reticent to say that that would be a winner just because I think natural market forces of gas versus coal are really what's hurting the coal industry more than any particular regulation right now.
For Mrs. Clinton or President Clinton, I really think solar is out front and center as a big winner for her. She wants to put up half a billion solar panels across the country in her time in office. She's talking about a $60 billion clean energy challenge. And I think energy storage and also existing energy that helps intermittent resources like existing hydro or natural gas will both be winners in her administration.
Monica Trauzzi: All right, about two weeks to go — it'll be interesting to watch.
Jon Sohn: Yeah, hold on tight.
Monica Trauzzi: Thank you for coming on the show.
Jon Sohn: Thank you.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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