OPINION: The choice of Kamala Harris as Democratic candidate for US vice president has turned energy policy into a key electoral battleground.
Harris has said there is “no question” that she would ban fracking. When she served as California’s attorney general, she had a track record of legal cases against oil industry projects.
The Democratic senator has even threatened to prosecute oil companies for misleading the public on climate change, and industry will see her as a radical running mate for presidential candidate Joe Biden.
She is also a natural target for President Donald Trump as he tries to secure a second term in the November general election.
Two hours after Harris’s nomination last week, Trump was on the attack, saying: “She’s against fracking. She’s against petroleum products.”
Her nomination has certainly caused unease inside parts of an oil and gas sector already battered by Covid-19 and a recent collapse in crude prices.
The industry’s lobby group, the American Petroleum Institute (API), expressed hope that sabre rattling on the way to the White House would not necessarily translate into firm policy.
“The world looks a lot different behind the desk in the Oval Office than it does on the campaign trail,” the API told Bloomberg.
Trump donors inside the oil sector, such as Dan Eberhart of Canary Drilling Services, were more critical, however.
“She (Harris) has a distorted view of capitalism that is interventionist in nature. That's going to result in more government interference, more regulation and more conflicts.”
Analysts at Bloomberg’s own New Energy Finance arm see Harris in a more nuanced way, saying her views on energy and climate would be important but not decisive.
Biden himself has not supported a full ban on fracking across the country but would curtail any new use of the practice on federal land.
The presidential hopeful last month outlined a revolutionary $2 trillion clean energy plan aiming for 100% “clean” power by 2030 and net-zero carbon dioxide emissions by 2050.
Meanwhile, Trump continues to see the oil and gas sector as a key component of his Make America Great Again strategy by providing coronavirus aid and unwinding regulations.
Last week, the Environmental Protection Agency (EPA) finalised rules to loosen controls over emissions of methane, a greenhouse gas that is far more potent than CO2.
The EPA said the move would save the industry up to $850 million, but the Trump initiative has highlighted an oil and gas industry rapidly moving in two directions.
Shell, BP and even ExxonMobil opposed the move while the API and the Independent Petroleum Association of America supported it.
BP, which has recently announced plans to cut oil production by 40% within 10 years, was happy to say it “respectfully disagrees with today’s decision by the (EPA).”
The methane reaction highlights the way many European-based oil majors in particular are keen to allay public and investor concerns about the climate as they are now on their own journey towards a greener future.
Trump messages may still play well with some of his traditional supporters, but he is running into opposition that would not have been expected four years ago when he first stood for presidential office.
Trump is trailing behind Biden in the opinion polls, so the oil and gas industry should be at least prepared for a different US energy environment.
But a Democratic win could also bring less US conflict with China over trade and with Russia around the Nord Stream 2 gas pipeline project.
Harris would be tough for the industry to deal with, but the experienced lawyer would surely bring more consistency and rigour to the White House.
(This is an Upstream opinion article.)