The fight against oil

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The pre-election presidential race in the United States is entering the home stretch. The elections, which are scheduled for November 3, are just over two weeks away. Investors are closely watching events overseas, which are instantly recouped in oil and financial quotes. It is worth recalling that the news of Donald Trump’s infection with the coronavirus immediately affected the cost of oil: the price of North Sea Brent fell by almost 5%, and Texas WTI – by 6%. Experts are worried about what will happen to global markets if 74-year-old Trump and his rival, 77-year-old Biden, who contacted him the day before, withdraw from the race, and the elections have to be postponed. But both candidates are in the ranks, or rather, in the struggle, and each continues to give pre-election promises. Conservative versus Democrat, black gold versus green energy. So which of them is more honest and what can change in the global oil and gas market if Joe Biden accepts congratulations on his victory in early November?

One of the most high-profile statements by the Democratic presidential candidate was a pledge to invest $ 2 trillion by 2025 in the development of clean energy sources. And also completely transfer the US fuel and energy complex to “green energy” by 2035. If Biden becomes president, the government will not issue new licenses for the use of hydraulic fracturing technology (thanks to which shale oil is produced), according to his program. However, the ban will affect only public lands, drilling on private land will continue to be allowed.

In addition, the Democrat intends to improve the supply system and supply chains of the United States, including restricting imports from countries such as Russia and China. The politician considers it expedient to increase spending on the purchase of goods and services produced at home by $ 400 billion within four years. To this end, Biden intends to increase taxes, which the current US President lowered in his time.

Trump came to power after Barack Obama with his anti-hydrocarbon strategy and pulled the United States out of the Paris agreement on greenhouse gas emissions, claiming that global warming was invented in China. Today, the conservative never tires of calling the supporters of Joseph Biden out-of-mind Democrats. In July, when Biden presented his “green” strategy, Trump visited Texas, where, at a meeting with oilmen, he said that if he was not elected, “then hopes for good times for the fuel and energy complex will have to be buried.”

Among other things, in his opinion, the United States has to buy oil from Russia because of the actions of the Democrats, who oppose the construction of pipelines in the country.

– New England has the highest energy prices in the United States. Do you know why? Because Governor Cuomo does not allow a pipeline to be laid through the top of New York State so that oil and gas, which we have a lot, can get there, President Trump said.

The topic of pipelines, in principle, is quite acute in the United States. Obama stopped construction of the strategic Keystone XL pipe, and Trump resumed construction in 2017.

Today America remains one of the three world leaders in the production and export of hydrocarbons. While the largest oil producers form alliances and agree to cut production during a pandemic in order to balance the market, the United States is taking advantage of the recovery in prices and continues to send its tankers and gas carriers towards Europe. And all this is bearing fruit: annually, revenues from the export of hydrocarbons amount to approximately $ 280 billion. At least, such an estimate was given by IHS experts a year and a half ago. Yes, you can make allowances for the crisis and the decline in production, but nevertheless the figure is eloquent. And if a few years ago it was generally accepted that US oil revenues account for only 1% of the gross product, now some experts express a different opinion. PricewaterhouseCoopers estimates that the United States oil and gas industry directly and indirectly provides jobs for 10.34 million people, which is equivalent to 5.6% of the country’s total working-age population. And the total contribution of the oil and gas industry to the US economy is $ 1.3 trillion, which is 7.6% of GDP.

It is possible that with Biden’s coming to power, after his first statements and (or) actions against the activities of shale producers, oil quotes will go up. But it is still difficult to imagine that America, together with Biden, will be able to give up up to a trillion in income. And will he be allowed to do this? Populist statements about “green energy” are in trend, but they are unlikely to be followed by radical changes in the US energy policy: too much money is at stake.

So far, Democratic presidential candidate Joseph Biden is 17 percentage points ahead of Republican Donald Trump in popularity among voters, the Guardian poll showed. But there are still two weeks ahead. And it is worth recalling that we observed about the same picture four years ago, when the race was led by Hillary Clinton.

Author – columnist for Izvestia, editor-in-chief of the journal Oil and Gas Vertical

The editorial position may not coincide with the opinion of the author

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