With Joe Biden closing in on an Electoral College victory, energy executives are weighing the potential impact of a president who supports shifting away from fossil fuels.
While utilities that already embrace clean energy don’t see much impact, oil and natural gas suppliers are girding for a bigger threat. Some executives predict that a newly elected Biden may announce moves to please supporters on the left, such as halting drilling in the Arctic National Wildlife Refuge or shutting down the controversial Dakota Access Pipeline. The Democrat also plans to eliminate greenhouse gases from the power sector by 2035 and has pledged to bar new fracking on areas overseen by the U.S. Bureau of Land Management.
As Biden inched closer to victory by taking the lead Friday in the battleground states of Pennsylvania and Georgia, here’s what energy executives are saying:
“We are realistic that with a Biden win, doing business on BLM land will become more difficult,” Marathon Chief Executive Officer Lee Tillman said during a call with analysts Thursday.
“Under a new administration, there will be new regulations that will have to be addressed,” Tillman said. “States like New Mexico have a vested interest in having a viable oil and gas industry.”
Pioneer Natural Resources
The “biggest issue” is if Biden decides to halt drilling on Federal land by not issuing more leases,” Pioneer CEO Scott Sheffield said on Bloomberg TV. That would have a “significant effect” on U.S. Oil production over the long term, particularly on the New Mexico side of the Permian Basin and in the Gulf of Mexico, he said.
For pipeline companies, the results may be mixed. While Biden would likely make it harder to get permits for new projects, those who already have extensive networks and access to major oil and gas basins stand to gain, according to Marshall McCrea, co-CEO of Energy Transfer.
“We feel pretty good about that aspect of them winning,” McCrea said on an earnings call Wednesday.
The election will have less impact on utilities. While President Donald Trump has been rolling back environmental protections to aid fossil fuel companies, the changes aren’t having much impact on the market forces driving power providers toward clean energy.
“We are on an unwavering and industry-leading path to net-zero emissions,” Dominion CEO Tom Farrell said on an earnings call Thursday.
The rise of renewables will continue regardless of who wins the presidential race, said Michael Webber, chief science and technology officer for Engie SA, the French unity giant that develops wind and solar projects in the U.S. Prices for wind and solar will continue to fall, while both consumers and commercial electricity users are choosing to get electricity from renewable sources.
He expects Biden to quickly make some major steps to slow fossil-fuel development that would appeal to environmental supporters. These could include closing the Arctic National Wildlife Refuge to drilling or blocking the Dakota Access Pipeline, he said.
“No matter who wins, Biden or Trump, we see the United States as a growth market for renewables,” Webber said in an interview. “The market has spoken and consumers want it.”