IEEJ：November 2020 © IEEJ 2020
Special Bulletin
A Japanese Perspective on the International Energy Landscape (506)November 11, 2020

Importance of U.S. in the Global Energy Situation under the next Administration (1)Ken Koyama, PhD
Chief Economist, Managing Director
The Institute of Energy Economics, Japan
While the U.S. presidential election has yet to be called even one week after voting in an
unusual situation, the United States is dominantly expected to have a new administration. Even atpresent, there are some states for which U.S. media have yet to report the winner in the election.
However, as media reported Joe Biden as the winner in Pennsylvania, one of the battleground statesin the election, on November 7, the Democratic challenger has won a majority of presidential
electors. On the night of the day, Biden declared his victory in a speech in Wilmington, Delaware,vowing to “work to be a president who seeks not to divide but unify."
Usually, a U.S. presidential election is called when a declaration of victory by a candidate
winning a majority of electors is followed by the other candidate’s declaration of defeat. This time,however, President Donald Trump has indicated no readiness to admit his defeat and has retained anattitude of resorting to the court over what he claims to be illegal votes. There is a possibility that instates where the election fails to be called by the deadline, state assemblies or governors could electpresidential electors. Another possibility is that the U.S. House of Representatives could finally electthe president, with one vote given to each state. There are some uncertainties about the final U.S.
presidential election results. In fact, however, the tide is moving towards Biden’s victory and theinauguration of a new administration. Biden’s transition team has named about 500 people to preparea new administration.
Though with some uncertainties left, Biden is growing likely to become the 46th presidentof the United States and form a new administration. Democrats may thus win back the U.S.
executive branch from the Republicans. The United States is the most important and strongest
superpower in the world. Changes in its leader and policies are not only important for the UnitedStates itself but also a grave matter that could dramatically change global political, economic andsecurity environments. This is the same case with the global energy situation and environmental
issues. U.S. energy and environment policies and developments in the U.S. energy market exert
strong influence on the global energy situation. In this and subsequent reports, I would like todiscuss the importance of the United States for the international energy situation in anticipation of a
new U.S. administration’s inauguration and its policies.
First, I would like to reaffirm the importance of the United States for the internationalenergy market based on data. In 2019, the United States featured the world’s second largest primaryenergy consumption after China’s. Its share of global primary energy consumption stood at 16%, farsmaller than 24% for China. Their gap has been widening. But the reality is that the reason China is
the world’s largest energy consumer is that coal accounts for as much as 58% of its energy
consumption. Regarding energy sources other than coal, the whole picture is different. Particularly
important is that the United States is the world’s largest consumer and producer of oil and gas, thelargest and second largest internationally tradable energy goods in the world. Shale revolution
1

IEEJ：November 2020 © IEEJ 2020
progress in recent years has led to rapid growth in U.S. oil and gas production, dramatically boosting
the United States’ international presence and influence regarding the two important energy sources.
The United States also boasts the world’s largest nuclear power generation capacity and output. Itemitted 4.96 billion tons in energy-related CO2 in 2019, accounting for 15% of global CO2 emissions.
The United States is the world’s second largest CO2 emitter after China.
Another reason the United States exerts great influence on the international energy
situation is that it is a superpower boasting dominant positions in international politics and the global
economy and the world’s strongest military power. As most key energy issues are international andsusceptible to international relations and geopolitics, U.S. foreign policies exert grave influence on
global energy and environment issues including international energy security and climate change.
Ideas and policies on energy and environment issues of the leader of the United States having great
influence on global energy markets and the international energy situation naturally attract attention
as one of the most important factors that greatly impact the international energy situation.
Particularly, the replacement of the U.S. leader, a government change and subsequent policy changes
attract global attention naturally.
A Biden administration, if inaugurated, would take energy and environment policies thatwould be far different from those of the Trump administration. Previous U.S. President Barack
Obama’s policies have been reversed by President Trump and would be restored under the Bidenadministration. One of the most attention-attracting changes would be a climate change policy
transition. President Trump has had little interest in climate change countermeasures and withdrew
from the Paris climate change agreement that Obama had tried to achieve. Biden has vowed to comeback to the Paris Agreement. He has also proposed a target of decarbonizing the power sector by2035 and the whole of the United States by 2050, indicating his attitude of proactively tacklingclimate change countermeasures. The Biden administration’s policy message on climate change
would have great impacts, prompting us to pay attention to U.S. energy market changes and thedirection of the United States’ relations with the European Union, China, and Japan regarding
climate change.
Next, the Biden administration’s stance on the shale revolution, which has supported U.S.
economic prosperity and promoted U.S. national power over the past more than 10 years, would be akey matter of concern to the world. President Trump has proactively promoted the shale revolution
and emphasized its “energy dominance” strategy taking advantage of the shale revolution
achievement for the United States’ diplomatic capabilities. Biden for his part has indicated hisattitude of giving considerations to the environmental impact of shale resource development indealing with environmentalists within his Democratic Party. He has also mentioned a potential ban
on drilling and fracking in federal concessions. While any impacts of such measure on the whole ofshale resource development, which I would like to detail in my following reports, are likely to belimited, oil and gas stakeholders in the world are interested in potential policy changes regarding thefuture appointment of relevant cabinet members, shale resource development, and exports.
Also attracting global attention among energy-related foreign policies would be those on
the Middle East including Iran. President Trump has unilaterally withdrawn from the Iran nuclear
deal as one of previous President Obama’s legacies and promoted an anti-Iran policy. As it has been
pointed out that Biden would come back to the Iran nuclear deal, how the United States’ relations
with and sanctions on Iran and oil exports from Iran would change has become a focus of attention.
Developments during the Trump administration period have complicated the Iran issue. Given that2IEEJ：November 2020 © IEEJ 2020
any change in Washington’s relations with Tehran would exert great impacts on the entire Middle
Eastern situation, the Biden administration’s policy regarding Iran would attract much attention.
Regarding foreign policies, the Biden administration’s policy on China would become a decisively
important point for analyzing the entire international situation and have great impacts on theinternational energy situation.
In my coming reports, I would like to detail all the above-mentioned points.

Contact: report@tky.ieej.or.jp
The back issues are available at the following URL
http://eneken.ieej.or.jp/en/special_bulletin.html

3