- Both presidential candidates have made achieving energy self-sufficiency part of their campaigns.
- The U.S. has become less reliant on foreign oil imports due to the exploitation of domestic shale oil, but it seems unlikely that the U.S. could ever meet all oil needs domestically.
- Both candidates’ energy policy statements reinforce their larger campaign narratives and reflect their respective world views, but neither seems to realistically address the underlying economics of energy independence.
Both presidential candidates have discussed energy independence as a goal for their administrations, though their actual platforms speak more to their broad policy orientations than to any real specifics. We doubt that the United States could be truly energy independent for any sustained period. Given the high costs of U.S. energy production relative to other parts of the world, it’s unclear whether true energy independence would be economically sensible. However, the U.S. shale revolution has fundamentally altered the economics of the global oil market and may keep prices subdued for years to come. Investors looking for opportunities in energy will find them, but they will have to be more selective than in years past.
Both presidential candidates have suggested that the United States needs to obtain, or in some cases, even maintain existing energy independence; though we have not actually attained it. Granted there will always be a certain amount of hyperbole by any candidate when speaking, particularly with statements that are in response to questions or in a debate, as opposed to formally released statements. With large resources of coal and natural gas, not to mention the use of nuclear and hydro-electric power, the United States is already largely energy independent. The obvious exception is in the production and use of crude oil. The United States has greatly increased its production of oil, largely due to advances in drilling techniques and the ability to extract oil from shale -- a process known has “hydro-fracturing” or “fracking.” However, even with the great increase in domestic production, the United States is far from self-sufficient in oil production [Figure1].
Energy policy is an area where the two candidates’ policies vary greatly. It’s not just that their proposed policies are different, but that they are informed by divergent world views. Hillary Clinton’s energy policy is highly influenced by her view on environmental issues, including but not limited to her view on global warming. Her energy policy is basically her environmental one. Donald Trump’s energy policy is defined largely by his aversion to government regulations, as well as his desire for increased U.S. global autonomy [Figure 2].
Unfortunately, neither candidate has been a model of consistency on energy policy. Hillary Clinton has recently been publicly skeptical on fracking, stating in the March 6, 2016 debate with Bernie Sanders, “So by the time we get through all my conditions, I do not think there will be many places in America where fracking will continue to take place.” However, she promoted fracking, and exports of U.S. energy, during her time as Secretary of State and during some of her private sector speeches, the contents of which were released through WikiLeaks. Should she be elected, Clinton would have to somehow reconcile these two inconsistent views.