The oil and gas industry is bracing for a possible November victory by Joseph R. Biden Jr., who is leading in the polls and who officially accepted the Democratic nomination Thursday from Wilmington, DE.

Biden

Although energy policy has taken a backseat to the Covid-19 pandemic and economic hardship facing Americans, climate change has nonetheless garnered more attention this election than in any past cycle.

Biden is calling for aggressive action on climate and an emissions-free power sector by 2035, while President Trump has promised to continue a deregulatory agenda to promote oil and gas infrastructure, and exploration and production (E&P).

While Biden did not mention oil and gas in his acceptance speech to close out the Democratic National Convention, he stressed the urgency of addressing climate change. He framed the environmental crisis as “an opportunity for America to lead the world in clean energy and create millions of new, good paying jobs in the process.”

The Democratic standard bearer has pledged to ban new drilling on federal acreage both onshore and offshore, block the Keystone XL crude oil pipeline, and end fossil fuel subsidies.

With the clock winding down on President Trump’s first term, recent days have seen his administration lift methane regulations for the oil and gas industry, advance lease sales in the Alaska National Wildlife Refuge, and modify the Clean Water Act to expedite environmental review of infrastructure projects.

Pipeline projects in particular face more uncertainty than ever amid a barrage of legal challenges from increasingly savvy and determined environmental groups.

Republicans and the industry, meanwhile, have taken the fight to the crucial swing state of Pennsylvania, Biden’s birthplace and the country’s No. 2 natural gas producer behind Texas.

No Fossil Fuels?

Speaking earlier on Thursday in Old Forge, PA, near Biden’s birthplace of Scranton, the president warned that Biden would ban hydraulic fracturing and “basically get rid of all fossil fuels.” Biden’s energy platform makes no mention of fracturing, which when conducted on privately owned land would be unaffected by a federal drilling moratorium.

Environmental Protection Agency (EPA) Administrator Andrew R. Wheeler also chose Pittsburgh as the site to unveil the sweeping methane rollbacks. He emphasized the role of small independent producers in the Marcellus Shale in providing cheap and abundant gas through horizontal drilling and fracturing, aka fracking.

In a Friday note to clients, analysts at ClearView Energy Partners LLC noted that President Trump’s margin of victory in 2016 in Pennsylvania in the battle against Hillary Clinton “roughly corresponds to direct employment in the energy sectors and energy-intensive metallurgical sectors,” which the president “has sought to preserve with his policies.” Pennsylvania is also the nation’s No. 3 coal producer.

Poll averages on Friday compiled by RealClearPolitics.com showed Biden leading by 5.7 points in Pennsylvania. Modeling by FiveThirtyEight.com indicated a Biden victory in 73 out of 100 sample scenarios as of Friday.

‘Epicenter Of Energy’

The American Petroleum Institute (API) used a bit of public relations jiu jitsu on Thursday, releasing a video collage of past Biden speeches touting the economic and geopolitical benefits of surging domestic natural gas and oil production.

“North America will remain through this century the epicenter of energy,” said then Vice President Biden in 2016. “And by the way, the reason why all these companies are coming home is because to build a plant, natural gas is three times cheaper here than Europe and seven times cheaper than it is in Asia.”

In another speech from 2014 in Oakdale, PA, Biden said, “You all know about the Marcellus Shale, I think you’ve heard of that, right? There’s an energy boom that’s changed the paradigm of manufacturing. It’s cheaper to manufacture in the United States than it is in Europe and/or in Asia.”

The Obama-Biden administration, while unpopular among some domestic fossil energy companies, presided over the resurgence in U.S. oil and gas production, as well as the lifting of a ban on crude oil exports that had been in place since 1975.

In a 2015 speech, Biden hailed “the ascendancy of the Americas as the epicenter of energy production in the world. We have more oil and gas rigs running in the United States than all the rest of the world combined.

“Mexico, Canada and the United States is the new epicenter of energy — not the Arabian Peninsula.”

Energy Execs Weighing In

The election was also a hot topic in second quarter earnings calls held by the country’s leading publicly traded energy names.

“Right now it looks like Biden is leading,” said Pioneer Natural Resources Co. CEO Scott Sheffield during the quarterly earnings call. “It’s obvious, and unless something happens…this country could elect Biden and there will be some significant changes.”

Sheffield continued, “I think most of that will be on federal lands. There is discussion about banning on fracking. I don’t know what the end result will be. But as we have noted, we have zero lands on federal lands, and so should be unaffected. 

“I would expect pipeline infrastructure will be significantly delayed crossing state lines. Again, all of our acreage is in Texas and we move our oil and our gas through the Gulf Coast. So anticipate no issues there.”

Said Diamondback Energy Inc. CEO Travis Stice, “We don’t have a lot of clarity on what the regulatory environment’s going to look like if we fast-forward to an administration change, but what we do know is that it won’t speed up.”

DCP Midstream Partners LP CEO Wouter van Kempen said the firm’s exposure to a federal drilling ban would mainly be in southeastern New Mexico, epicenter of the state’s Permian Basin holdings.

“I think it has been very clear for everyone that if something would happen and you would get a moratorium on fracking on federal lands, you can’t put that in on a retroactive basis,” he said. Therefore, “there is no scenario in which” DCP’s New Mexico customers “cannot continue to develop that for the next 10-plus years or so.”