As governors in a slew of upper midwestern states are held to account for their inability to correctly manage their state’s election and protect the system from fraud, the oil and gas industry has problems of its own, some of which will assuredly get more complicated under a Biden administration. …snip…
While there are many versed in the realm of Covid recovery theory, such uncertainties create a landscape such that no economist, futurist, or medium can reliably describe how or when the market will fully recover.
While communities across the U.S. respond in a variety of ways, some with an eye toward liberty and economic recovery, others with an eye toward tyranny and shutdowns (think Seattle and the entire state of California), the O&G industry is based on a global market.
As such, it won’t be until the economies in Europe, Asia, Africa and the U.S. are fully open and recovered that the O&G industry can again fully stretch out into a comfortable stride.
If a healthy oil and gas industry is akin to trail running, this current market has been more like running straight up a mountain while holding a martini carrying an F-150 or Dodge Ram 1500 on its back. It has been exceptionally difficult, and we aren’t up the mountain yet.
So where is the industry left under a Biden administration? Let’s look at several areas:
Paris Climate Accord: A Biden administration will immediately re-enter the Paris Climate Accord. By all accounts, this will be done via an executive order signed on inauguration day.
Legislative gaming is of course ahead, led by the thousand-year-old House speaker, Nancy Pelosi. The Democrats will pass loads of “green” legislation to support the accord’s climate goals.
However, because of American natural gas development, the U.S. has already delivered levels below those outlined in the accord.
Natural gas is an exceptionally clean-burning fuel that has helped reduce emissions and lead to U.S. energy independence.
The accord and all legislation framed around it will represent classic political symbolism over substance.
Regardless, the Republican-controlled Senate, hopefully secured by upcoming Georgia run-offs, will largely keep legislation pertaining to the accord at bay.
Federal Land: Obviously, permits for drilling on federal land are legitimately threatened under a Biden administration. According to industry experts, about seven percent of domestic assets are located on federal land.
The threat of “ending fracking” was promised during both of Biden’s debate appearances and his limited interactions with young children and sycophant media at ice cream stops during his Weekend at Bernies-themed campaign.
Producers that hold active permits will be permitted to carry on, but no new permits will be issued. That leaves only conventional drilling on federal land, which reduces the potential value of said wells.
Even if producers find that they have sound legal ground on which to challenge the administration on this change, fighting the government is like tussling with a special forces operator: they have more than one method of neutralizing their target.
The bottom line is that the day-to-day interaction with a Biden administration-led Bureau of Land Management will create added grief and discord for producers, presumably leading to higher lease operating expenses and certainly lower returns on investment on assets on federal land.
Regulatory Environment: The favorite tool of Democrats is regulation. Regulations always cost industry money.
Industry leadership understands that the strongest headwinds under a Biden administration will be new regulatory mandates and tightened regulations that will start coming fast and furious for upstream, midstream, and downstream sub-sectors. Regulations are to a Democrat what corn is to bourbon.
There will be plenty of both in the oil plays across the U.S. under a Biden administration. Regulations currently cost the industry between $3-$5 per barrel. That is a direct pass-through to the consumer.
The variables depend on the size of a company, their lobbying efforts, and whether reporting is done in-house or with outside consultants.
The bottom line is that regulation is expensive and considered a barrier to business. Under a Biden administration, there will be more of it.
So What’s Next? While each individual business and all industry sub-sectors have already been modeling how a Biden administration might affect their respective asset portfolios and businesses, it is essential the industry also prepare.
While experts at finding, producing, transporting, refining, and marketing O&G and related products, the industry lacks self-awareness about how the world sees it as an industry.
The industry has stood largely silent in the face of the solar and wind crowd framing what we do as treacherous and ruinous of the environment and the planet.
The energy industry has abandoned its own narrative to those who seek its demise. In the face of an administration that will fight every day to denigrate, damage, and dismantle the O&G industry, we must define ourselves to the country and to the world.
Oil and gas must develop their own brand. We must constantly remind the country that, without the work we do, the geopolitical landscape from which the economy and country benefit would look more like Dresden, 1945, and less like HGTV’s “Fixer Upper.”
Read rest at The Pipeline
G’day John. You probably read about it on this site some time ago, the BBC will no longer allow dissenting opinions to be aired concerning “Global Warming” – aka “Catastrophic Anthropologic Climate Change.” Not just the BBC, but all major media have adopted a similar stance. You’re right, the public at large is not aware of what is going on. That applies especially to youngsters who have yet to be exposed to the real world of “work for a living” and “taxes”.
I believe that after two years of ‘democratic’ government (if that actually happens), there will be a ‘Red Tsunami’ in the 2022 elections, followed by the ‘blues’ really having the “Blues”. Just imagine all of the House Committees being chaired by Republicans – what a field day – who do we investigate first?
Democracy as you know demands Participation. The American people are nothing if not Participatory. However it is difficult to participate if you don’t know what’s going on. In my Opinion this is the case. They’re pretty much in the dark. Not sure however how much of the BS they believe. What’s Your take?
What makes you say that? In my opinion the climate alarmism is all just total horse shit. So much of it has no basis in Science. They say that California’s fires are historically the worst. This “history”however only goes back 60 years. How does anyone accept this? Pre European settlement As much as 10 to 14% of California was on fire.The summers were all not just red sun but Dark Sky.
Biden like most all Liberal Democrats is a Globalists him and his kind want America as part of the North American(Soviet)Union
I’m thinking when electricity becomes less reliable & much more expensive, like Germany, California & Ontario, American consumers will start to “wake up.” Throw in higher fuel prices over the next four years as we begin to import (again) much more foreign oil and the natives will become “restless.” That won’t translate favorably for the Democrats with the electorate. REALITY will overwhelm “Green Dreams”…
There’s mid-term elections in two years. Remembering what happened in 2010 – mid-point of his first term for the previous occupant of the White House – I have a hunch that 2022 will be similar. That will lead to the White House occupant (possibly Biden but more likely Harris) resorting to Executive Orders – undoubtedly upsetting even more of the electorate.
I would like to believe that the US of A can survive two years of unadulterated “democracy” and emerge on the other side even stronger than before – and get back to being a Republic.
Check the US Constitution – the words “democracy’ and ‘democratic’ do not appear anywhere in that document. However it does promise “a republican form of government” to the States.
Democracy as you know demands Participation. The American people are nothing if not Participatory. However it is difficult to participate if you don’t know what’s going on. In my Opinion this is the case. They’re pretty much in the dark. Not sure however how much of the BS they believe. What’s Your take?
Yes. It will be interesting to see how the Biden first term plays out. I think Trump will be missed. If Biden’s green energy Policies are implemented he’ll bankrupt the country. The stated goals of the climate alarmists however are largely mythological. The justification is also. The cost will be real however.
What about geo-engineering?
A little bit of sulfate aerosol in the stratosphere would do the trick and we can keep our fossil fuels.
That would work if the real issue is the warming.
Is it?
https://tambonthongchai.com/2020/08/28/geo-engineering-climate-change/
Biden is a typical Liberal Socialists and Globalists who needs to be exposed to all Americans are the Fanatic he is