POLICY
Much is at Stake in the Upcoming National Elections By: Jack Belcher and Brent Greenfield
54
SHALE MAGAZINE JULY/AUGUST 2020
The outcome of the upcoming presidential and congressional races and the public policies to follow will have a profound impact on industry’s ability to recover and maintain its dominance as the world leader in both oil and natural gas
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W
e all know that a lot is at stake in this year’s national elections. The U.S. presidency and Congress are up for grabs. Early polls suggest that President Trump is vulnerable in his race against Joe Biden to seek a second term. The slim Republican margin in the U.S. Senate is also at stake. It is still far too early to make any predictions, but the state of the economy, the pandemic and social unrest will all likely play a role in the election outcome. As to the U.S. oil and gas industry, it is only July and the sector has already endured its most tumultuous year ever. Looking ahead, the outcome of the upcoming presidential and congressional races and the public policies to follow will have a profound impact on the industry’s ability to recover and maintain its dominance as the world leader in both oil and natural gas. The Democratic presidential primary process that will lead to the official nomination of Joe Biden as the party’s candidate this summer was mired in rhetoric and policy proposals that were extremely anti-fossil energy, including bans on federal oil and gas leasing, fossil energy exports and hydraulic fracturing, as well as a zero-emission energy target for 2035. For his part, Biden stated that we must be willing to sacrifice oil and gas jobs in order to transition to a green economy. On one hand, presidential candidates tend to soften their positions on issues once they have achieved the nomination and begin to court more centrist voters. While that may well be the case again this year, there are clear indications that Biden’s views on energy may remain hardened, as evidenced by his choice of Alexandria Ocasio-Cortez to co-chair his climate change task force. Let’s explore some of the potential impacts if Biden does not moderate on energy and goes on to win in November. First, no longer would industry be able to depend on presidential leadership to promote U.S. oil and gas production and exports. Instead, expect a Biden administration to flex its muscle and voice to reduce fossil energy production and to use and promote a climate change agenda. Although Biden later reversed his stated promise to impose a ban on “new fracking,” Biden would likely be surrounded by energy and environmental policy advisors who, for the most part, oppose hydraulic fracturing. If the Democrats were to take the U.S. Senate and hold on to the House, a Biden administration would also be likely to support the statutory exemption for the regulation of hydraulic fracturing under the Safe Drinking Water Act. Even without a Democratic majority to work within Congress, more stringent environmental regulations should be expected, many of which would likely be detrimental to shale operations and fossil energy more broadly. Specific areas for more stringent regulation would likely address areas including water management and disposal standards, vehicle
