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Changes for the US energy system under Bidens new rules

2022-07-18
By Mohamed Zaki

During election, the energy system is always a topic for candidates. The Biden administration made a clear ground on how they are going to manage this system and have already began to do so after just taking office. The priorities of administrations have always sought to have their impact on the way the energy system functions, but is it that much of an impact as the demand, prices, and technological breakthroughs? 

Since the 1950s to this day, energy sources have gone through constant change. For instance, in the beginning Oil and Coal were dominating the market. Oil still has a strong presence, but Coal has been decreasing and being taken over by Gas, because of its ability to transport much faster and cheaper and Gas plants are more efficient, have a lower cost of investment and maintenance. 

More recently there has been an increase in production from Nuclear, Wind, Biofuels, Hydro-Electric and Solar. These shifts are largely driven by prices and technological advances, rather than by political decision. 

For instance, the GW Bush administration, which was friendly with fossil fuels, considered with a decline in the share of energy supplied by oil due to its spike in price. But after new drilling methods were discovered, a decline in prices were taken advantage over the Obama and Trump administration. 

From what has been learned historically, the market and technology are more important in determining the shape and evolution of the energy system than political decisions. Non the less, they still have their impact through taxes and regulations, that end un impacting the producers. 

The energy system is characterized by continuity and evolution, rather than a revolution. So maybe the best thing to do know in this administration is should sit down with the energy and mine industries and have a talk. Go over their objectives and priorities, where are they standing off and how are they going to reach them (in realistic terms). Because being prepared for changes in the market will be key to the economy and their people. 

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