The late Yogi Berra once said, “The future ain’t what it used to be.” The armchair philosopher’s statement was exactly correct when it comes to energy. Over the past four years, the Trump administration advocated for the traditional US energy industry that produces crude oil, natural gas, and coal…
The policy path was nothing new, and the world’s largest economy spent decades trying to achieve energy independence from the Middle East. The discovery of massive natural gas reserves in the Marcellus and Utica shale regions of the US and technological advances in fracking combined with regulatory reforms led to a boom in oil and gas production.
In March 2020, US petroleum output rose to a record 13.1 million barrels per day, surpassing Saudi Arabia and Russia. Natural gas output and technology that liquefies the gas for export created an expanding business where the energy commodity now travels worldwide. In the past, pipeline networks limited natural gas transmission to landlocked areas.
On January 20, 2021, US energy policy will undergo a significant shift towards green energy. On the campaign trail, President-elect Joe Biden made no secret of his plans to decrease fossil fuel production in favor of cleaner and renewable energy sources. His party’s progressive wing wants the incoming commander-in-chief to go even further by banning or dramatically limiting fracking and hydrocarbon production. Traditional energy companies have seen their shares depreciate over the past years. The recent recovery in the leading oil and natural gas company’s shares is likely to be nothing more than a dead cat bounce for the sector. Alternative energy is the path of the future.
A political shift in the US favors clean energy
The incoming President’s political party currently has a majority in the House of Representatives. The Senate’s majority will depend on the January 5 pair of runoff elections in Georgia. If Democrats win both contests, Vice President-elect Harris will have the deciding vote, throwing the majority into the hands of Democrats and shifting the majority leader from Kentucky’s Mitch McConnell to New York’s Chuck Schumer.
The incoming President’s agenda would likely sail through both houses of Congress without the need for compromise, creating an opportunity for far more aggressive environmental initiatives.
Even if Republicans retain control of the Senate, the Biden administration will fulfill its pledge to work towards a cleaner environment to address climate change. The US will rejoin the Paris climate accords, and a stricter approach to regulations will impact energy production.
Limits or bans on fracking could cause crude oil and natural gas output to…
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