Joe Biden is president-elect: what now for US oil and gas?
The wait is finally over: Joe Biden has won the contentious 2020 US elections. He will be a very different leader to self-proclaimed ‘oil man’ Donald Trump, that we know, but what exactly can the offshore oil and gas sector expect? We report.
After a tight race that took several, agonisingly long days to deliver a result, Democrat Party leader Joe Biden has been declared the new president-elect of the United States of America.
Former vice president to Barack Obama, Biden is the polar opposite to incumbent leader and self-proclaimed oil man Donald Trump. For this very fact, Biden’s election is expected to shake up the US oil and gas industry, which is already reeling from plunging prices and unprecedented uncertainty due to the Covid-19 pandemic.
Just as his predecessor spent a significant chunk of his time in office overturning Obama-era carbon reduction-targeted policies, such as green-lighting controversial oil pipelines and reversing emission restrictions, Biden is expected to use his first 100 days overriding Trump’s fossil-fuel focused policies with executive orders.
Biden has already stated that one of his first acts will be reinstating the US into the Paris Climate Change Agreement, which Trump pulled the country from when he took power in 2017. However, despite his dramatically different agenda, a Biden presidency may not be all doom and gloom for the US oil and gas sector.
Rolling back reforms
As well as putting climate change
mitigation on the back burner, Trump pushed through notable tax reforms
while in power , including reducing the federal corporate income tax by
14% through the 2017 Tax Cuts and Jobs Act. According to analysis by
Rystad Energy, the effect of this policy was improved liquidity of oil
and gas producers, reducing breakeven prices.
“Taking ExxonMobil’s US operations as a specific example, we estimate that in 2018 the company saved $193m in corporate tax, reducing asset breakeven oil prices by as much as 5.3%,” notes Matthew Wilks, an analyst on the North American shale team at Rystad.
During his term, Trump also established a controversial oil and gas program in the Arctic National Wildlife Reserve in Alaska and replaced Barack Obama’s Clean Power Plan with the Affordable Clean Energy plan, which rolled-back regulations on emissions.
Trump winning, said Ed Crooks, vice chair, Americas, at Wood Mackenzie, would have seen more of the same. However, Biden will see a return to Obama era policies.
This article appeared on the OffshoreTechnology website at https://www.offshore-technology.com/features/joe-biden-is-president-elect-what-now-for-us-oil-and-gas/]]>