Democrats are eager to push the brakes on inflation ahead of November’s midterm elections. The Biden-Harris administration negotiated with Senator Joe Manchin (D-WV) last week to push the Inflation Reduction Act of 2022, a bill focused on corporate tax reform, prescription drug pricing reform, and U.S. energy production.
Rob Thummel, managing director and senior portfolio manager at TortoiseEcofin, believes the legislation can serve to fight climate change.
“Politicians have started to figure out that in order to get this climate challenge solved, decarbonize the world, we need an all of the above approach. We need more wind, more solar. We also need more U.S. natural gas to decarbonize the rest of the world,” Thummel told Yahoo Finance Live.
The U.S. has actively been expanding its natural gas and petroleum production. According to the U.S. Energy Information Administration’s (EIA) Annual Energy Outlook 2022, U.S. crude oil production is expected to return to pre-pandemic levels next year, and natural gas production will surge 17% by 2050.
Renewables, like wind and solar, are also gaining traction. In 2021, U.S. clean energy companies received more than $105 billion in private investment, an 11% increase from 2020.
“This is eye-opening for everything and should be really encouraging to everybody who is concerned about U.S. energy. As a superpower, it alleviates all of those concerns because the U.S. will be able to produce more energy and less carbon, not only domestically, but globally as well,” Thummel added.
Thummel also attributes decreases in carbon emissions to natural gas production.
“If you think about what’s happened, you know, from a carbon – decarbonization perspective, U.S. carbon emissions have declined since 2015 by double digits. A lot of that is because of increased use of natural gas,” Thummel explained.
Fewer CO2 emissions are entering the atmosphere. The U.S. Environmental Protection Agency (EPA) documented an 11% reduction in carbon emissions from 2019 to 2020 – emissions in 2020 were also 21% lower than 2005 levels.
Thummel and his team are bullish on energy for the remainder of the year.
“The energy sector’s pretty essential, right? It’s one of the last things to experience declines in demand. Demand for energy is fairly inelastic,” Thummel said.
Energy stocks have rallied the market in 2022. The S&P 500 Energy (Sector) (^GSPE) is up 41% year-to-date and the EIA’s Short-Term Energy Outlook forecasts record energy demand in 2022 and 2023.
Yaseen Shah is a writer at Yahoo Finance. Follow him on Twitter @yaseennshah22
Read the latest cryptocurrency and bitcoin news from Yahoo Finance
Read the latest financial and business news from Yahoo Finance
Follow Yahoo Finance on Twitter, Instagram, YouTube, Facebook, Flipboard, and LinkedIn
Source: Read Full Article