Under Obama, Dark Days Seen Ahead For Fossil Fuels
WASHINGTON -(Dow Jones)- Under President-elect Sen. Barack Obama, D-Ill., the fossil fuels industry may face "dark days ahead," while alternative energy sectors are likely to flourish.
Although it will take years to engineer and implement, an Obama administration energy and environment policy marks a tectonic shift for the nation. He would move the U.S. away from petroleum as its primary energy source and towards renewable energy, advanced biofuels, efficiency and low greenhouse-gas-emitting technologies.
Obama won the U.S. presidential race Tuesday evening, sweeping battleground states such as Ohio and Florida.
Sen. Obama's lynchpin policy is a climate change bill that would cap emissions such as carbon dioxide and auction greenhouse gas credits to encourage a fundamental transition away from high emitting industries to low-carbon alternatives. Obama said such a policy would be more aggressive than any other cap-and-trade system proposed.
As part of that policy shift, renewable energy, natural gas, plug-in hybrid vehicles, and advanced electricity transmission are forecast to receive a major boost. Sen. Obama has proposed using $150 billion from the emissions auction to fund such low-carbon alternatives over the next decade.
And to begin cutting emissions, the president-elect is targeting the fossil fuel industry.
Companies such as ExxonMobil (XOM), ConocoPhillips (COP) and Chevron Corp. ( CVX) say they're concerned about returning to policies enacted in the 1970s, including Sen. Obama's proposals for a windfall profits tax and market intervention such as tapping the Strategic Petroleum Reserve.
"It's pretty clear that if we repeat those mistakes again, we're going to see some pretty dark days ahead," said outgoing American Petroleum Institute president Red Cavaney.
Obama shifted his stance on offshore oil and gas drilling in the Outer Continental Shelf under pressure from$145 a barrel oil prices and $4 a gallon gasoline. But he's largely against extensive new domestic petroleum production. Congressional Democrats could reinstate at least parts of a moratorium on such offshore drilling that expired at the end of September.