Biden Would Be Good for Oil Sector, Goldman Sachs Says

by James Osborne (Houston Chronicle) With his $2 trillion plan to cut greenhouse gas emissions, Joe Biden might seem a far from ideal president for the Texas oil and gas industry.

But new analysis by Goldman Sachs says that compared with a second term of the Trump administration, a Biden presidency could be a positive for U.S. oil and gas drillers because tougher regulations on hydraulic fracturing would likely reduce production, raising crude prices. READ MORE

Excerpt from Politico's Morning Energy: So far, at least 40 U.S. oil companies have sought bankruptcy protection in 2020, while dozens of others have slashed spending and cut tens of thousands of jobs as the pandemic worsened the downturn that was taking hold of the industry last year. Trump disappointed executives last month by reversing early term pledges and making vast swaths of shoreline off Florida and other states off-limits to drilling, and the administration's aggressive regulatory rollbacks have been so rushed and beset by legal challenges that Democrats may have little trouble reinstating the rules if they reclaim power.

"Three and a half years of rollbacks facing serious litigation ensures a lot of things are 'to-be-decided,'" said Wayne D'Angelo, an energy lawyer and partner at legal firm Kelley Drye, who has represented oil and gas companies and trade associations on federal environmental issues.

More fundamentally, oil and executives told POLITICO, the president doesn't really understand their business — and his famously chaotic White House has set up a system where only a relative handful of favorite energy executives have access to people who can shape policy.

"I don't think it's one of these things where we as an industry get in a room and say, 'Man that was a good four years,'" said one industry executive who requested anonymity. "It was more like 'meh.'"

FRACK TALK: As he crisscrossed Pennsylvania on Monday, Trump had one thing on his mind: Fracking. He portrayed it as an issue of "existential importance" for the state home to the Marcellus Shale, POLITICO's Meridith McGraw reports. "Biden confirmed his plan to abolish the entire U.S. oil industry," Trump said Monday, speaking to supporters in Allentown, Pa., incorrectly describing Biden's stance, which is actually focused on ending federal subsidies for fossil fuel companies, barring new fossil fuel permits on public lands and transitioning to renewable energy sources.

Trump also tweeted Monday afternoon that Biden's comment at last week's debate that he would transition away from oil was "perhaps the most shocking admission ever uttered in the history of presidential debates." In doing so, Trump said Biden "confirmed his plan to ABOLISH the entire U.S. Oil Industry — that means NO fracking, NO jobs, and NO energy for Pennsylvania Families!"

But Trump's full-throated fracking evangelism is not necessarily a message that appeals to the state at large, Meredith reports. A slim majority of Pennsylvania's registered voters opposed fracking in an August CBS poll, and some of the energy firms that rushed to the state in recent years have seen their stocks plummet as the industry struggles. READ MORE

Excerpt from Politico's Morning Energy: JUST WHAT THEY NEEDED: U.S. oil and gas producers have spent years fighting government rules clamping down on emissions of the greenhouse gas methane. Now, a growing number of companies say they think President-elect Joe Biden's promised methane regulations may be just what the industry needs, Pro's Ben Lefebvre reports this morning.

"Certainly you've got a situation where certain industry leaders have come out in support of regulations," said Mark Brownstein, vice president and Environmental Defense Fund, which works with companies to try to track and reduce their methane emissions. "In part it's because they get the global picture. They understand it's no longer tenable to make the claim that gas is a clean, low-carbon resource and then fight against implementing regulations that guarantee that's the case."

But that change of heart doesn't come from a new-found well of environmental consciousness, Ben writes, but rather growing pressure to placate investors who are increasingly worried about sustainability and climate issues, people in the oil and banking industries said.

The industry is fighting to continue tapping the massive U.S. shale reserves that have made gas the fuel of choice for utilities at home, while expanding U.S. exports to foreign markets. But the sharp growth in production that helped natural gas replace coal as the leading fuel for U.S. power in the U.S. has been accompanied by methane emissions that are a far more potent greenhouse gas than carbon dioxide, though they have a shorter lifespan in the atmosphere.

"They need regulations to be explicit," one oil and gas lobbyist said of what the industry is looking for out of the Biden administration. "They need to be able to say [to investors] what they are doing is sustainable gas or whatever you want to call it. And without a federal regulation, that will be tough to do."

Biden has promised to crack down on methane as soon as he is sworn in next month. On his first day in office, he "will take actions including requiring aggressive methane pollution limits for new and existing oil and gas operations," according to his website. The Biden administration will also negotiate with foreign governments to form new, tougher international emission targets. READ MORE