How will a Biden win curb oil drilling in the USA and super-charge renewables?
The future for alternative energy sources and its effect upon the market for non-destructive testing (NDT) services could end up being reshaped by Joe Biden’s victory. Biden has pledged to speed up the transition from fossil fuels, slash emissions and curb climate change.
The material quoted below is from an article in Energy New Media, by Gerson Freitas Jr, Amy Stillman, Michael Hirtzer and Joe Ryan, 8 November 2020:
Biden’s electoral win adds to the hurdles facing the oil and gas industry, already hammered by a crash in demand amid the pandemic. His move to clamp down on the industry’s emissions would reverse the Trump administration’s relaxation of environmental regulation and likely increase the cost of producing, transporting and processing hydrocarbons. Biden’s target for a 100% clean electricity grid by 2035 could squeeze natural gas’s share of power generation and his aim to boost electric vehicles sales would erode demand for gasoline and diesel. […] Stimulus spending to revive the economy could boost demand for fossil fuels in the shorter term.
Biden’s presidency could super-charge growth of clean electricity in America. During the campaign, he has said that he is aiming to eliminate carbon emissions from the power sector by 2035. Investor interest in green stocks and technologies has surged recently. [There is] mounting homeowner demand for rooftop solar and batteries amid blackouts from hurricanes and wildfire risk and a growing appetite for environmental, social and governance (ESG) investments. Wind and solar power are already the cheapest electrical sources in many markets.
Biden’s victory is likely to accelerate the decline of coal. Demand has slumped as utilities continue to shift to cheaper and cleaner natural gas and renewables, and Biden’s call for a carbon-free electricity grid within 15 years will leave little room for the dirtiest fossil fuel. Trump vowed during the 2016 campaign to revive the industry and, once in office, he rolled back numerous environmental regulations to aid miners. But his efforts did little to counter a decline that’s been driven by inexorable market forces.
A Biden victory could mean a halt to the Environmental Protection Agency’s granting of refinery waivers for the US Renewable Fuel Standard, which in turn could help stabilize prices and demand for fuels made from corn and soybeans. The RFS also will reset for biofuel use in 2023, meaning the EPA will help decide how much ethanol and biodiesel are mixed into petroleum-based fuels in the US. Biden could keep blending targets near current
levels or raise them to prevent plants from shutting down, even as his administration looks to transition away from an oil-based vehicle
fleet.
An article by Jonathon Iverson, posted in Alaska State Tax Notes, looks at the challenges that Alaska, and particularly the state’s oil & gas industry, has faced in 2020 thanks to the COVID-19 pandemic, low oil prices and the threat of a major increase to Alaska’s oil and gas production tax:
The state of Alaska is highly dependent on its oil and gas industry for tax revenues. The state’s budget has taken a hit from the combination of the increase in fuel supply caused by the Saudi-Russian price war and the reduction in demand due to the pandemic, which has led to a drop in oil prices as well as forcing oil and gas producers to cut production and lay off workers.
A group has proposed the Fair Share Act initiative, which, if passed, would change existing laws to significantly increase production taxes on oil produced by Alaska’s largest fields. “The initiative is a substantial threat to the Alaska oil and gas industry and would be detrimental to the economics of large oil fields in Alaska,” according to Iverson.
The NDT service segment has taken a huge hit from COVID-19: large numbers of NDT technicians have been furloughed and the NDT service providers face lost market share and lost income. The larger service companies will survive, but the smaller companies are facing a grim future. The non-destructive evaluation industry has to be flexible and provide the services that complement a changing market.
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