The US presidential election victory of Democrat Joe Biden will likely ring in many far-flung changes across the complex of oil, petrochemicals and environment sustainability practices, according to S&P Global Platts.
Not only will the US re-engage to join the Paris Climate accord, but also more comprehensive proposals are likely to follow with a target of decarbonizing the power sector by 2035.
The US Environmental Protection Agency (EPA) would likely set tougher-than-federal clean air standards in California which other states can then follow to set their vehicle policy.
A Biden administration may also to review current oil and gas tax provisions, rollback Obama-era methane regulations and even implement tougher regulations on existing oil and gas wells, though he may consider the impact on a struggling industry where demand has been hit due to the pandemic.
But near term impact on US oil and gas supplies are likely to be limited regardless of the election results.
However, the international policy may have a different impact. That as Bien is likely to focus on repairing relationships with Iran, Venezuela, Russia and China. While the latter is the world’s largest energy consumer, the other three rank among the world’s largest oil producers.
“A return of Iranian barrels is more likely under a Biden than a Trump administration. Iran itself remains a headwind under either administration. We do not expect a meaningful return of Iranian oil before 2022 under either Trump or Biden,” says S&P Global Platts.
But a Biden administration can lead to reinvigoration of US LNG projects by bringing Chinese buyers back to the negotiating table, it says, though I’madding that the cost of natural gas could increase under the new dispensation.
Regulatory focus will likely increase o er independent oil and gas producers, which would increase costs by limiting flaring of gas and venting from both fields and pipelines. Natural gas output could also be impacted if drilling of oil and gas fields are limited.
“Policy will shift towards deployment of renewables and batteries at the expense of fossil fuels in power generation,” says S&P.
Single use plastics and recycling would move into the forefront with potential for more regulations on their use. Policies will encourage more recycling.