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Scenarios for energy after the 2020 U.S. election: win-lose

Scenarios-for-energy-after-the-2020-U.S.-election

There are several win-lose scenarios for the U.S. energy sector after the presidential race. According to a Market Watch analysis, whether a Republican or a Democrat win in the White House, neither party will bring a win-win for the industry.

If Donald Trump wins:

A Donald Trump victory would likely translate into a continued issuance of permits for drilling activities in federal lands. Also, it would mean more resounding support for additional midstream infrastructure, according to analysts.

Besides, experts don’t expect a substantial change regarding U.S. foreign policy with Iran. In that regard, economic sanctions would continue.

Furthermore, if the U.S. continues as a net exporter of crude and refined products, it isn’t necessarily good for the economy overall.

However, some industry people signaled the benefits of oil and gas activities acquired.

Possibly of your interest: Sempra and Cheniere extend their LNG export licenses by 2050

Beth Sewell, Quantum Gas & Power Services, Inc. CEO, said Market Watch Mr. Trump reduced costly regulations regarding energy as promised in 2016.

According to her, the nation became a net energy exporter for the first time in decades during the Trump administration.

The abundance of supply made retail prices more stable, allowing average customers to benefit from reasonably-priced energy, Sewell added.

However, prices keep changing. On the New York Mercantile Exchange, prices for the West Texas Intermediate crude have declined by more than 38% since Tuesday. Besides, on the global Brent benchmark, crude fall by 40%

Biden’s scenarios for energy

If Joe Biden becomes president, that may lead to a new stage in American energy policies. In that sense, the former vice president would not issue permits or stimulus for drilling activities as Trump did.

However, given the plans Biden has for achieving an energy transition, many companies have already protected their permits by 2025.

 Also, under Biden, analysts expect stricter legislation regarding midstream projects and environmental reviews to appear. Nevertheless, experts believe this could lead to a delay in projects’ timelines and deadlines.

In that sense, experts observe that a Biden win would not automatically translate into a fracking ban. On the contrary, several industry people think such a measure would severely affect the economy and employment in a lot of states.

Possibly of your interest: Biden on fracking: bans are not the answer, so he would invest $2 trillion in the energy transition

Regarding the pandemic, analysts expect Biden to impose more business shutdowns. For them, that would affect the current decrease in demand and fuel consumption and positively impact measures to refrain the pandemic’s spread.

Also, experts think Mr. Biden may decide to enforce the Joint Comprehensive Plan of Action (Iran Nuclear Deal) again after Trump’s withdrawal. Possible cooperation scenarios may appear.

If the U.S. rejoins the deal, that could put more pressure on oil prices through Iranian output.

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