Two New Studies Illustrate Our Energy Transition Money Pit

A study released last week by big energy consultancy Wood Mackenzie says a Republican, i.e., Trump win in November’s elections could ‘decelerate [the] energy transition,’ and result in a reduction of ‘energy investment’ of $1 trillion.

Anticipating a possible Trump victory, Wood-Mac’s study includes what it calls a “delayed transition” scenario, in addition to a “base case” assuming current policy trends, and a “net zero” case that assumes an acceleration of more and more debt-funded “green” subsidies at the federal level. The firm estimates its net zero scenario requires overall US energy investments of $11.8 trillion in the coming 26 years, compared to $7.7 trillion in its base case and $6.7 trillion in the delayed transition case.

“This election cycle will really influence the pace of energy investment, both in the next five years and through 2050. Investments in low carbon supply need to be made in the near term to realize longer-dated decarbonization targets,” David Brown, director of Wood Mackenzie’s Energy Transition Research, said in a release.

None of this should be surprising to anyone who has been paying attention. It is no secret that Donald Trump has a dim view of many of the subsidy provisions for so-called “green” energy and EVs that were included in the Orwellian-named Inflation Reduction Act. In Wood-Mac’s release, Brown speculates that “It is not likely that the IRA will be fully repealed. However, a second Trump presidency would likely issue executive orders that would abandon the 2035 net zero target for the power sector, establish softer emissions goals from the EPA, and issue tax credit regulations that could favor blue hydrogen.”

Obviously, less subsidy money flowing out of Washington, DC will result in less overall investment in the chosen rent-seeking industries favored by the Biden administration. Certainly, Brown is correct to say a full repeal of the IRA is unlikely – really, politically impossible is more accurate. But a second Trump administration would have myriad means of cutting back on money outflows from the federal Treasury via the same executive branch means Biden has used more often than any other previous president to saddle the nation with his radical agenda.