US Election: What a Trump or Harris win could mean for LNG, renewables, EVs and energy policy

• Both candidates vow to support domestic energy production
• Analysts suggest Inflation Reduction Act unlikely to be repealed regardless of election outcome
• Trump victory could jeopardise LNG trade with China

The energy transition in the US seems unlikely to stall if Donald Trump wins the presidential election on 5 November, but LNG trade could suffer if new tariffs on China are imposed.

Both presidential candidates, current Democrat Vice-President Kamala Harris and former Republican President Donald Trump, have said that boosting domestic energy production, including oil and gas, will be a priority should they win.

Harris’ official campaign website states that the US has been a net exporter of oil every single month for the last three years and that the gap between the amount of energy America produces and the amount of energy it consumes has never been greater.

At the same time, her policy plan notes that emissions from the power sector is declining.

“Today, U.S. energy production across a diverse set of sources, including natural gas and renewable technologies, is at historic levels, and the Vice President remains committed to supporting U.S. energy production growth so that we never again have to rely on foreign oil,” it says. 

Meanwhile, Trump’s campaign website also mentions nuclear power, while pledging that Republicans will “increase energy production across the board”, streamline permitting, and end what it calls market-distorting restrictions on oil, natural gas and coal. 

“Republicans will unleash Energy Production from all sources, including nuclear, to immediately slash Inflation and power American homes, cars, and factories with reliable, abundant, and affordable Energy,” it says. 

A research noted released by Rystad in October said that, despite Donald Trump’s strong vocal support for the oil and gas industry, it is uncertain whether a second Trump administration could actually increase US shale production above its current trajectory. 

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“The industry's shift towards prioritizing shareholder returns and long-term growth through acquisitions, has led to a more disciplined approach to investment,” Rystad said. “This means that even if prices rise, companies are unlikely to significantly increase spending, as production has somewhat decoupled from the oil and gas price. As a result, the traditional link between high prices and increased drilling activity has been weakened, with companies instead focusing on maintaining capital discipline and maximising returns.”

Green transition: IRA unlikely to be repealed 

Analysts say the green transition in the US looks likely to continue regardless of who becomes the next President. Yet support for EVs, power grid modernisation and offshore wind could wane under Trump particularly if there is a Republican sweep of Congress. 

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A research note published by ING Bank in September said Biden’s IRA is unlikely to be repealed and that it will continue to facilitate the development of clean energy in the US, for example through tax credits.

“In a nutshell, incentives for electric vehicles (EVs) and various clean energy loan programmes are at high risk of being scaled back under a Trump presidency, while incentives for technologies such as hydrogen and carbon capture and storage (CCS) would be less impacted. Renewable energy can get continued tax credits, though efforts toward grid modernisation would be weakened with Trump in the White House,” ING's note said. 

Meanwhile, Jason Bordoff, founding director of the Center on Global Energy Policy at Columbia University’s School of International and Public Affairs, said in a recent blog that the EV tax credit, along with support for renewable energy, may be the most vulnerable parts of the IRA should Trump win, given his past statements and also a potential need to find revenue to pay for a tax cut extension.

“At the same time, Trump would likely be unable to repeal the IRA without congressional support although could tighten interpretation of Treasury Department guidance to make tax credits hard to access. Moreover, the job growth and investment resulting from the IRA in domestic manufacturing of clean energy technologies like solar and electric vehicle batteries has been overwhelmingly beneficial to Republican-leaning states […],” Bordoff said. 

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Greg Matlock, global energy and resources industry tax leader at Ernst & Young, has also made the point that many projects that qualify for tax credits under IRA are in Republican-led districts. 

“As such, many Republicans, particularly from the Midwest, support IRA credits for biodiesel, alternative fuels, and carbon capture use and sequestration. Similarly, the Gulf Coast has many decarbonisation-related projects that will likely qualify under Section 45Q (carbon capture use and sequestration), as well as blue hydrogen projects,” Matlock said in a Q&A posted on EY’s website. 

LNG trade with China could suffer

As for US LNG exports, there is a risk that Trump’s trade policies vis-a-vis China could have a negative impact.

Since 2021, Chinese buyers have signed mostly long-term contracts to purchase 27.4 mtpa of US LNG, wrote Erica Downs, a senior research scholar at the Center on Global Energy Policy at Columbia University SIPA, in a recent blog. 

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However, Trump’s “more than 60 percent” proposed tariff on all Chinese imports, if implemented, could disrupt US–China LNG trade entirely, if Beijing were to respond in a way that mirrors its response to the tariffs Trump imposed on Chinese imports in 2018 and 2019, Downs noted.

One US-based industry observer speaking to Gas Matters Today noted that during the Trump tenure in 2017-2021, Chinese importers stopped signing long-term LNG contracts with US suppliers.

“If Trump wins, we may see some issues with LNG exports to China because of tariffs which he imposed last time around. And given that new LNG supply is coming in 2025-2026 from Qatar, this can have some repercussions for US producers. With all the tariff talk on Trump's end, Harris may actually be an ‘easier’ president for LNG exports,” the observer said.

If Harris wins, there could be more support for clean technologies like CCS, however a scale back on oil and gas production is not expected. 

“If she wants the economy to keep going and win the next term, she needs domestic energy sector to prosper, including fossil fuels,” the source said.

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Meanwhile, a second US-based industry observer said the temporary pause on US LNG export permits introduced by the Biden administration was expected to be lifted regardless of the election outcome. 

“The pause will disappear regardless, but likely with some conditions if Harris wins,” he said.

“This could be new new conditions to reduce emissions at LNG facilities, or something related to environmental justice. Conditions could also include limits on LNG exports if domestic natural gas prices rise above a certain level.” - AW
 

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