As the days go by, uncertainty in the oil sector increases after Joe Biden’s possible victory in the elections. The economic direction of the United States may change if the Democrat, or his party’s initiatives in the Senate, decide to ban or limit fracking.
Over the decades, the country has sought “energy independence” so as not to be dependent on others. Since Donald Trump’s arrival at the White House, the tycoon set out to turn the U.S. into the energy superpower of the world.
“The Golden Age of American energy is underway,” Trump said.
Fracking is a technique for extracting natural gas from unconventional fields. Thanks to this activity, the United States went from a production slowdown for decades to a fuel production explosion, bringing its daily production to almost 10 million barrels.
THE U.S., for the first time since 1973, became the world’s leading producer of hydrocarbons, ahead of Saudi Arabia and Russia thanks to fracking.
But everything indicates that Biden’s plan is to change the course set out by Trump, since Biden proposed a $1.7 billion plan that focuses on clean energy, and green jobs, and aims to make the electricity sector carbon-free by 2035 and with net-zero carbon emissions by 2050.
In addition, the Democrat’s victory comes with a promise that the U.S. will rejoin the Paris Accord, which Biden promises to do in his first day in office. This could raise discontent among those who want to protect traditional jobs in the oil and gas industry.
While Biden insists that he does not want to ban fracking in general, he does want to stop issuing new drilling permits on federal lands, which national agencies say account for about 10% of natural gas production and 7% of oil production.
What will happen in the United States if Biden assumes the presidency with Kamala Harris as his right-hand woman is unknown. Most of Democratic candidates in the party’s primaries defended a ban on fracking on federal land while an initiative promoted by Senator and former presidential candidate Bernie Sanders and Congresswoman Alexandria Ocasio-Cortez, proposed a complete ban.
If the Republican Party does not win the Georgia election in January, Democrats could try to end this practice that has so far generated millions of jobs and economic benefits for Americans.
According to energy analyst and consultant David Blackmon, if Joe Biden becomes the next president of the United States, “the potential impacts for the oil and gas industry in the United States will be numerous and serious”.
“The most immediate impacts of a Biden presidency will come in the form of efforts to increase regulation in the energy industry through the reversal of several of Trump’s executive actions,” the specialist said in his article published in Forbes magazine.
“We can expect the Biden presidency to fulfill its promises to ban fracking on federal lands and waters, which represent a very significant percentage of total U.S. oil and gas production. This can be accomplished by an order from President Biden or his future Secretary of the Interior, although we should also expect Interior to follow through and try to frame it in the form of regulations to make it a more permanent change,” predicts Blackmon.
It should be remembered that Senator Kamala Harris promised to eliminate fracking completely and never retracted that promise during the election campaign.
Banning fracking will not only hit the pockets of Americans because of rising energy and gas prices, but will also destroy jobs in a predominantly labor-intensive industry.
In North Dakota, the demand for jobs due to fracking has been so significant that there are cities like Willinston, for example, where the level of unemployment is below 1%.
According to El Español, there are about 9,000 independent oil and natural gas producers in the United States. “These companies operate in 33 states and employ an average of 12 people. About 91% of U.S. oil wells are owned by independent producers who pump 83% of the country’s crude and 90% of its natural gas,” he reveals.
According to consulting firm IHS, fracking generated more than two million new jobs. IHS studies determined that over the decade this technique will contribute $125 billion to the U.S. Treasury.
An article in The Wall Street Journal noted that “the average price of natural gas was cut in half by fracking. “The same energy that cost us $7 a few years ago can now be paid with $3,” the newspaper explains.
Mercator’s calculations point out that the lower income segment of the population “benefits more from this process than any other group, since their expenditure on this type of energy is five times higher than that of middle- or high-income households.
Fracking: debunking myths
A report by the U.S. Energy Information Agency said that energy-related emissions from CO₂ in the country fell by nearly 2% in 2016.
John Harpole, founder and president of the natural gas research and brokerage firm Mercator Energy, told Colorado Politics that these reductions have allowed the United States to meet international emissions targets, even without officially being a party to climate treaties.
“Production-driven price declines have made natural gas the largest source of fuel for power generation, comprising an average of 33% of U.S. electricity generation,” the article said.
While the fracking-induced shale gas boom has led to nationwide reductions in emissions from CO₂, opponents of the oil and gas industry express concern that the benefits could be negated by methane leakage in the production process.
However, many experts in the field refute these claims by referring to several studies by the Environmental Protection Agency, the Environmental Defense Fund and several universities, which indicate that methane leakage rates during natural gas production are between 1.1 and 1.5% of total gas production, a figure that remains well below the 3.2% rate that would be the threshold for creating climate change effects.
“The combination of private property rights, technological innovation and entrepreneurship is what enabled the shale revolution to take place and achieve a reduction in our national emissions of CO₂,” he said. “This could only happen in the U.S.” Harpole said.