The administration of president-elect Joe Biden is likely to be pro-clean energy and expected to bring substantial changes in the US oil and gas sector, especially on the unconventional oil and gas production front, which has been criticised in the past by green activists. Hydraulic fracturing or fracking, which rejuvenated the oil and gas production in the US, was one of the key areas of policy debate among the presidential candidates during the elections. While Trump clearly endorsed fracking, Biden was unclear in his statements, which ranged from apparent banning to prohibiting just new oil and gas well permits on the public lands and waters. Any potential ban or efforts to limit fracking can severely impact the unconventional oil and gas industry in the US, which is already reeling under the impact of the Covid-19. To cut emissions, Biden is likely to push for limits on fracking. This possible policy shift has been indicated in a recent GlobalData poll as well, wherein just less than 50% of the respondents believed that there could be limits on fracking in the US.
Further to the high priority of Biden’s administration’s to reduce carbon emissions, there could be restrictions on gas flaring from across the US oil and gas value chain. The US emerged as one of the leading countries in the world for flaring of the associated gas due to growth in unconventional oil production. This rise in flaring has significantly added to the country’s greenhouse gas (GHG) emissions and Biden is more likely to bring policy changes to restrict these emissions. Consequently, a little over a fourth of respondents (27%) voted that there could be restrictions on gas flaring.
Around a quarter of the respondents believed that there could be a ban on oil and gas exports along with curbs on offshore drilling. A steep increase in oil and gas production has enabled the US to emerge as a net exporter of petroleum. Though the Biden administration’s ban on oil and gas exports is a remote possibility, it could help the country to be less dependent on petroleum imports during the transition to renewable energy. The curbs on offshore drilling is another remote possibility, as he plans to reduce emissions and protect the native ecosystems in the Arctic, GoM, and other areas. This was echoed by 12% of the respondents in GlobalData’s poll.