U.S. Markets closed

The 2020 Elections Could Be A Turning Point For Oil & Gas

Nick Cunningham

Under the next president, U.S. oil and gas companies could lose access to fracking on federal lands.

Democratic presidential candidate Elizabeth Warren has proposed a ban on new drilling on public lands if she becomes president, a stark contrast with the current administration.

Under President Trump, the government has rolled out the red carpet to drillers. In 2018, the U.S. approved almost 40 percent more oil and gas permits on public lands than the year before, according to Reuters. However, much of the increase came as a result of an automated system that was put into place in the waning days of the Obama administration, which cleared a backlog of permits.

But that only further highlights the magnitude of what Senator Warren is proposing. Both Obama and Trump favored more drilling on public lands; Warren wants to put that to an end.

Where Trump differed from Obama has been the systematic gutting of environmental regulations and the push to open up areas for drilling wherever possible. Trump proposed opening up offshore drilling up and down America’s coastline, including the Atlantic and Arctic Oceans, and the Eastern Gulf of Mexico that has long been off limits. That plan has run into trouble, both from courts and from politicians in coastal states, including, notably, from Republicans . For instance, Florida’s Republican Governor Ron DeSantis, a Trump ally, just denounced the administration’s plans to open up Florida’s coastline to drilling.

Related: ‘High’ Oil Prices Are Already Dampening Demand

Warren wants to go in an entirely different direction. “The Trump administration is busy selling off our public lands to the oil, gas and coal industries for pennies on the dollar?—?expanding fossil fuel extraction that destroys pristine sites across the country while pouring an accelerant on our climate crisis,” Sen. Warren stated . “That’s why on my first day as president, I will sign an executive order that says no more drilling?—?a total moratorium on all new fossil fuel leases, including for drilling offshore and on public lands.”

The “pennies on the dollar” phrase is a reference to the Trump administration’s efforts to lower royalties that oil, gas and coal companies have to pay to exploit public lands. A federal court just rejected the administration’s effort at repealing a policy put in place by Obama’s Interior Department that was designed to close loopholes that had allowed energy companies to avoid making payments. The court ruled that Trump’s repeal was “arbitrary and capricious.”

In contrast, Sen. Warren wants to use public lands for renewable energy, aiming to generate 10 percent of U.S. electricity from clean energy on federal land. She also said that she would reinstate tighter regulations on methane, something that Trump has sought to water down.

America’s public lands belong to all of us. We should start acting like it. That means expanding access, ending fossil fuel extraction, more renewables, and maintaining and improving public lands. Together, we can protect our public lands for generations to come.


It’s still early in the presidential campaign and with nearly two dozen Democratic candidates, it’s not clear that Sen. Warren will emerge at the front of the pack. But she has rolled out a litany of progressive policies that have forced other candidates to take similar stances, and her public lands proposal has laid down a marker that could become something of a baseline in the primary race.

Related: The World’s Most Unorthodox Oil Nation

As a result, the gulf between Trump and his rivals is arguably wider than at any point in the past. There were significant differences between the Obama and Bush administrations, to be sure, but the gap between the parties is growing wider. On the one hand, Trump offers unhindered support for the oil and gas industry. On the other, many – though not all – of the Democratic candidates favor increasing restrictions on drilling. Sen. Warren’s proposal goes the furthest to date – a plan to shut off new drilling on federal lands.

While the oil and gas industry, in many ways, has never had it so good, at least in the United States, the regulatory reprieve under Trump could be just that – an interlude, or a hiatus. The Obama administration implemented significant – though incremental and incomplete – regulations on oil and gas drilling. The next president could take that a step further. Over the long-run, the worsening climate crisis will likely ensure the federal regulatory ratchet moves in a tighter direction.

There are signs that the oil and gas industry already understands this. Remarkably, many of the largest oil companies are coming around in support of tighter limits on methane. Shareholder pressure is also on the rise. Renewable energy and electric vehicles pose a growing threat to oil and gas interests. Even at the IHS CERAWeek Conference in March, many oil executives displayed anxiety about the threat of climate change and renewable energy.

The trend towards clean energy is inevitable and likely unstoppable. But Sen. Warren’s proposal would greatly accelerate that transition.

By Nick Cunningham of Oilprice.com

More Top Reads From Oilprice.com: