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Candidates have different views on transition from oil to renewable energy sources.

Rystad Energy held a 30-minute webinar on Wednesday about how the energy industry will be affected by the United States presidential election on Nov. 3 between Republican incumbent Donald Trump and Democrat challenger Joe Biden.

Manash Goswami, the company’s vice president of analytics, hosted the webinar, and Artem Abramov, a company partner and head of shale research, provided insights.

“The stakes are clearly quite high,” Goswami said.

One big question focused on fracking. Could the U.S. government enforce a ban given the country’s landholding rights? If there is a federal ban, activity there would migrate from federal land to state and private leases, Abramov said.

Many new horizontal drill federal permits have been issued in New Mexico and in the DJ basin in Colorado and Wyoming. Some have been approved, but not yet drilled.

If Biden wins, Abramov pointed to some things to be addressed. Biden wants to stop subsidies for the oil and gas industry, and noted how some regulations are more than 100 years old. If some tax incentives are removed, there could be an immediate impact on corporate companies.

A larger portion of oil and gas activity might become less commercial. The industry could see a rollback of full U.S. Environmental Protection Agency regulations, which were canceled by Trump during his administration, Abramov said. If Biden wins, the relationship between the U.S. and China could improve, and the trade war may come to a halt. Oil price is the real driver of activity in the U.S., not so much who the president is.

As far as the Keystone Pipeline, the oil pipeline system in Canada and the U.S., Abramov said, “[it] really depends on what type of demand the U.S would like to have in the long term. Right now it is beneficial to bring more Canadian crudes, help U.S. reduce imports even further and allows for expansion of domestic oil.”

If Trump is reelected, Abramov hit on how Trump talked more about coal in 2016 and not oil and gas. Coal was displaced in power generation systems because of attractive oil and gas prices, and Trump switched his focus to oil and gas in 2018.

Federal tax cuts did generate “a few billion” for drilling, and the industry had significant deferred tax liabilities. Trump’s macro policy was hard to predict, Abramov said, because of the tariffs, which increased steel prices and launched the trade war with China. He said if Trump wins, he does not see any degradation in the existing environment for the oil and gas industry.

“I wouldn’t speculate too much on what new things might happen,” Abramov said. “I would say any unexpected decisions regarding foreign policy would have the most impact among the domestic oil and gas industry.”

Long term, it definitely matters if there is a presidential change. With a Biden administration, there will be a faster energy transition process and a faster transition to renewables. Biden wants to double the wind capacity in the country.

Regardless of who wins, Abramov feels that some larger companies are transitioning more to renewable energy. If Biden wins, that transition could be faster.