Editorial: Industry over politics

US politics have entered their most frenzied regularly occurring phase, a Presidential election year. For oil and gas companies based here or doing business in the country the contrast in possible outcomes is stark.

Hydrocarbon-focused companies with a large US presence have enjoyed 3 years of an aggressively pro-hydrocarbon administration, led by President Donald J. Trump. The continuation of the resulting environment is one possible outcome. The other possible outcome will not be aggressively pro-hydrocarbon and, depending on the nominee, could even bring an actively hydrocarbon-hostile agenda to the White House.

Pres. Trump ran in 2016 on a promise to rescind much of the Federal regulation that had been enacted up to that point and he has largely delivered. Notable regulatory rollbacks thus far include:

• Undoing a 2010 executive order issued by President Barack Obama in the wake of the Macondo oil spill in the Gulf of Mexico to protect marine environments and promote sustainable use of US waters.
• Removing regulations governing water pollution generated by hydraulic fracturing on Indian or Federal lands.
• Lifting the ban on drilling in the Arctic National Wildlife Refuge.

Are voters green?

According to the Pew Research Center, 65% of adults believe stricter environmental laws and regulations are worth the potential economic costs, including 43% of Republicans and those who lean Republican. The degree to which this belief will guide their behavior at the ballot box, however, is open to question.

A December 2019 Gallup poll determined that healthcare, terrorism and national security, gun policy, education, the economy, and immigration all rank ahead of climate change in importance as US adults contemplate their votes. Climate change, however, was also the single most divisive issue included in the poll; 44% of Democrats vs. 8% of Republicans describing it as extremely important and the 36-percentage point difference far exceeding the second widest gap, 27 points on healthcare.

As always, election results will come down to which party does a better job mobilizing its own voters and appealing to independents.

The path to here

While the outcome of this year’s elections will likely affect the US oil and gas industry’s plans one direction or another, it’s important to remember how we got to where we are. Here’s a clue: our current hydrocarbon wealth didn’t emerge because of the actions of either politicians or regulators. The expansion of US crude oil production coincided roughly with the 2008 election of Pres. Obama, promulgator of many of the regulations and executive orders Pres. Trump is busy undoing, and took its only downturn since in 2016.

It would be wrong to suggest a causal relationship related to either date, because there likely is none. But that’s precisely the point. The industry itself was the catalyst of the US shale revolution. It developed the technology to make it happen. And when oil and gas prices collapsed in 2014 it designed new business models and implemented them effectively enough that a few years later, and continuing to this very month, the US was among the top one or two producing countries in the world, shattering its own decades-old output records on a regular basis along the way.

Given this recent experience and the economic benefits that have come with it, we need to continue to provide the industry the freedom to develop in its own image, whether that’s toward alternative energy for some or increased specialization and expansion within the current hydrocarbon-driven framework for others. And both industry and the citizenry need to realize that doing so doesn’t have to come at the expense of the rest of our country’s or planet’s rich bounty.