Biden’s impact on the oil & gas and renewables sector
Agenda for Biden’s first day on the job:
- Fix the economy
- Save the planet
- Stop a pandemic
In July, Biden proposed a massive $2t budget to be spent over 4 years on clean energy sources. This will include:
- Achieving net-zero emissions by 2050 and transforming the US transportation sector towards electricity use.
- Installing a network of electric car charging infrastructure and battery storages across the US.
A Republican Senate, which is in favor of fossil fuels, will look to prevent much of this from seeing the light of day.
The slow path to oil extinction
Biden claimed that he would transition away from oil in favor of renewable energy — a move that will lead to a decrease in oil production, oil demand and likely cost thousands of jobs in the existing sector.
Such a plan could’ve accelerated oils’ path to extinction but a Republican-controlled Senate will likely slow down Biden’s renewable energy plans. Despite Republican resistance, the impact on oil will mostly be negative.
Natural gas, naturally benefits
Natural gas, which is cleaner than oil and coal, has been used as the primary source of electricity in the US. It’ll likely remain the primary source of energy for a while longer as a slower transition towards renewable energy could benefit natural gas producers in the short-term.
Can’t stop the renewable boom… You can only slow it down
According to Pavel Molchanov, an analyst at Raymond James, “it’s pretty clear that Biden’s legislative agenda vis-a-vis climate will go absolutely nowhere in Mitch McConnell’s (Republican) Senate”.
A shift to renewable energy isn’t over but a Republican Senate will look to block much of Biden’s planned spending on green energy.
The renewable sector will likely move forward with or without support, just at a slower pace. In 2019, solar panel installations reached a record high despite Trump, whose policies favored fossil fuel.