Voters in the 2016 U.S. presidential election will be presented with two distinct views on energy policy, according to Daniel Yergin, vice chair of IHS Cambridge Energy Research Associates and a Pulitzer Prize-winning author.
Speaking at the Canada 2020 Global Energy Outlook for 2016 in Ottawa on Monday, Yergin commented on the race between presumptive Democratic nominee Hillary Clinton and presumptive Republican nominee Donald Trump.
“It’s interesting that the Republican nominee isn’t a Republican and Bernie Sanders isn’t a Democrat—he’s a socialist,” Yergin remarked. “We’re having an unusual time in American politics.”
Jim Carr, Canada’s minister of natural resources, asked Yergin about what effect the election’s outcome would have on relations between the U.S. and Canada, as well as U.S. energy policy.
“Obviously, we know what Secretary Clinton’s energy policies will be, and they will be very congruent with what you’ve seen from the Obama administration,” Yergin said. “She’s been buffeted in this primary campaign.”
He commented on the energy policy speech Trump gave during the Williston Basin Petroleum Conference in Bismarck on May 26 and noted that the Republican candidate’s policies “would be very different from what the current policies are.”
“One of the things that people are puzzled by are when he said he would approve the Keystone XL pipeline, but would want a bigger share of the profits,” he said of Trump’s speech. “You had to think about what that means.”
While Yergin would make no predictions on the direction of world oil prices, he said that in the view of IHS, the oil market recovery has begun because the supply has been lowered and the demand has increased. The organization expects $50 a barrel oil by the third quarter of this year.
Over the next decade, Yergin noted that the global oil demand is expected to increase by 5-6 million barrels per day, adding that it’s a question of where the oil will come from to meet the demand.
In forecasting the global energy outlook, Yergin said IHS considers three potential scenarios, the first of which is called “rivalry,” a continuation and an intensification of the competition across the energy spectrum.
“And in that, the world looks rather what it looks like today with the shift more towards renewables and greater efficiency,” he said.
The least desirable scenario is called “vertigo,” which Yergin described as persistent poor economic performance with little productivity or growth and increasing volatility. The third IHS scenario is known as “autonomy,” which he said leads to greater energy technology innovation.
“You get the kind of miracle that Bill Gates calls for in energy, and you get a lot more distributed energy,” he explained. “Electric cars take on a bigger role and so forth. That’s when the world starts to look different.”
In Yergin’s view, the pace of innovation will pick up between 2040 and 2050 with advances in electrical storage capacity representing an important technological breakthrough.
“These things take time,” he advised, noting that the wind and solar industries were born in the 1970s. “It took until the last decade or so until they really began to become competitive and get to scale. The work on shale gas began in the early 1980s. It wasn’t until 2003 or 2004 that you had the breakthrough.”
Future innovations could also alter the global energy landscape, Yergin said.
“I’m pretty sure there are things people are working on today that we don’t see and could surprise us,” he said.