Election reflection: Bioeconomy Buys, Sells and Holds for the next four years

Time for some US election reflection. It’s a consequential election for the United States, and also for the developed world. We’ve asked around and here’s what we’ve heard.

Sell this stock. Ukraine, the SAF Grand Challenge, EV mandates; swim lanes across the Rio Grande; rapprochement with the EU; diversity, equity and inclusion offices in federal government; tax rate increases; rule by mandarins of the Environmental Protection Agency; federal carbon prices; swift new tax code rulings from the Department of the Treasury.

Buy this stock: Protection for solar, EV tech, fair trade investigations; tariff wars; rapprochement with Russia; hydrogen technology; state-level bioeconomy lobbying; Farm Bill; carbon intensity reduction; corn; the internal combustion engine; waste fats, oils and greases; more access to federal forest land; rule by mandarins of the Office of Management and Budget.

Hold this stock: the Biden Executive Order on Advancing the Bioeconomy; the Global Biofuels Alliance; rapprochement with China; SAF and marine fuels adoption; the Renewable Fuel Standard; the California Low Carbon Fuel Standard; loan guarantees; forest residues; Section 45 tax credits. 

Tone. During the Biden Administration, the rhetoric for bioeconomy projects shifted from domestic energy production volumes to carbon reduction volumes. For marine and aviation, that emphasis will continue, but elsewhere there will be a revival of rhetoric around domestic energy sufficiency and, with that, energy volumes.

Timing. During the new Trump Administration, if 2016 is any indicator, expect slow action at the federal level, a lot of “Acting” federal officials reluctant to take major steps; not much pressure from Congress on the bioeconomy excepting projects that bring short-term groovies such as jobs or row crop demand stimulation. 

Mysteries. Control of the US House of Representatives. As of this moment, the Associated Press has not called 38 races for the House and it’s likely but not certain we’ll see a Red Sweep and Republican control of the House, Senate and White House. As we have seen from the last two years, a narrow majority in the House does not make it easily governable.

The Bottom Line

As the Zen master says, we’ll see. First of all, the House is still (somewhat) up for grabs. Plus, there’s the Two Trump Paths. This could be a straightforward Trump Administration playbook of isolationism, protectionism, nativism, low taxes, government hallways emptied of regulators. Or, it could be a revenge tour. 

For Democrats, hard thinking ahead. The brand’s not connecting, turnout was light. A new mix is needed, and the party better look at trade.

Be interesting how the lame duck session goes. It’s the last meaningful opportunity for the forces of the left for four long years. GOP legislator support will come at a high-price, since they will take control of the Senate and White House in the New Year, and likely retain the House. Some farm-state legislators or GOP moderates may see tactical opportunities for projects or programs of local or regional benefit, and Democrats will be motivated negotiators.