The shale oil and gas sector will face challenges under the new U.S. presidential administration even if more aggressive steps on climate are held in check, a fossil fuel industry advocate said at a Marcellus and Utica midstream industry conference.
"Pipelines will be under attack," said Thomas Pyle, president of pro-fossil energy groups Institute for Energy Research and American Energy Alliance. "This is a major problem. Greens know that they cannot keep it in the ground, but they can keep it from moving around, and that is exactly what they'll focus on."
Early on in Congress, there will probably be a strong push toward "massive climate-related spending" in an infrastructure package, Pyle said.
Even assuming the Senate does not flip from Republican control to the Democrats, Majority Leader Mitch McConnell, R-Ky., will likely be "pressured by big business and trade associations to go along," Pyle suggested, expecting "plenty of giveaways" to be rolled in for wind, solar, renewables, electric vehicles and the like.
In remarks at the DUG East and Marcellus-Utica Midstream Virtual Conference on Dec. 2, Pyle said President-elect Joe Biden's climate actions and any ambitious energy policy changes would be checked by weak support in Congress and a need to worry about midterm election blowback.
"What we can expect from the administration, first and foremost, will be COVID, COVID, COVID," Pyle said.
Administrative actions
Rather than moving sweeping legislation, Biden is likely to pursue administrative actions with implications for the sector, Pyle said. "Expect Biden to reinstate some version of Obama's Climate Action Plan," rejoin the Paris Agreement, rescind Trump executive orders, and pursue regulatory reforms including changes to the National Environmental Policy Act, he said.
Pyle said the Biden administration would likely pluck "low-hanging fruit" with efforts to slow production on federal lands, slow-walk permits or impose a moratorium on new leases. In his view, the industry should expect Biden to use the Clean Air Act, Clean Water Act, Endangered Species Act and other laws to try to limit the ability to produce or make it significantly more expensive to do so.
Contrary to some political pundits, Pyle expected to see some progressives, such as U.S. Sen. Bernie Sanders, I-Vt., or Sen. Elizabeth Warren, D-Mass., picked for key administration roles.
But Pyle viewed Biden as more limited than President Barack Obama by time, the courts — especially with the new makeup of the U.S. Supreme Court — and by the Senate.
Challenges to bipartisan action
By Pyle's account, environmental groups have become the money and the muscle in the Democratic party, presenting a "real challenge for any kind of meaningful bipartisan support" for fossil fuel industries, with the possible exception of funding for research projects such as carbon capture.
"No matter what you do that they ask of you, it will never be enough," Pyle said. "The ultimate goal is a takeover of our energy markets by the government."
Despite an increased focus on climate within the Democratic Party, there remains a tug of war over the reach of that policy. Some Democrats and environmental groups back technologies and spending that are helpful to the fossil fuel sector, such as credits for carbon capture and sequestration, said Collin Rees of Oil Change International, an advocacy group trying to move society toward clean energy.
While more liberal segments are gaining in strength, they are still at a pretty low level, Rees said. He said groups like his are more likely to be paying defense on issues like carbon capture in Congress, and instead they are looking to push for policy shifts from the Biden administration.
Maya Weber is a reporter with S&P Global Platts. S&P Global Market Intelligence and S&P Global Platts are owned by S&P Global Inc.