London — Oil and natural gas industry executives have given a cautious welcome to the prospect of a Joe Biden presidency in the US, with Occidental Petroleum CEO Vicki Hollub saying the industry will be "OK" provided it pursues a long-term strategy and Total CEO Patrick Pouyanne saying he sees increased US investment opportunities.
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Speaking at Abu Dhabi's virtual ADIPEC conference Nov. 10, Hollub said she did not share fears harbored by some of a clamp-down on the industry, but it was important to "collaborate" with, and educate the new administration on advances in the fracking industry, as well as techniques such as carbon capture.
Biden promoted a $2 trillion clean energy and infrastructure plan as part of his successful presidential campaign, and has also talked of constraining oil and gas activity on federal lands, although as Hollub pointed out he is expected to face resistance in Congress to some of his pledges.
Also, the less focus from the incoming administration, the more time Oxy has to begin working with his staff, she said.
"The transition from the [Trump] administration that's been very, very supportive of the industry to Mr. Biden, who will become president in January, I think is going to be one that will surprise some people," Hollub told the online event, also noting Occidental's role as the world's largest "handler" of carbon dioxide emissions, which it uses to reinject into oil fields to boost recovery rates, including in the US.
"Mr. Biden also has some knowledge of carbon capture, his staff is certainly aware of what that means for us and for the industry, for the world," Hollub said. "I have hopes that as we go forward that the regulations will be things that the industry really is doing already today. I'm not so worried about it. There may be times when our development plans are slowed down a bit by permitting processes that may be a little more bureaucratic, but in the end as long as we have our long-term development plans in place, I think we'll be okay as an industry.
"It gets back to collaboration," Hollub said. "No matter who's in the White House, no matter which party controls the Senate and the House, it's really imperative for us as an industry to collaborate with them, with the regulators and with people in our society to help people understand what fracking really is, how we're doing it so much better today than we have done in the past. I'm not as worried as some people are, it's going to take some work to share that knowledge and to get his staff on board."
Total's Pouyanne took a relaxed stance as he noted earlier in the conference the French company is the US' largest exporter of LNG, as well as holding a controlling interest in California-based renewables company SunPower and stakes in Gulf of Mexico oil fields.
US policy is "mainly driven by the economics," Pouyanne told the event Nov. 9. "Looking at renewables, the US is one of the most mature markets, renewables were developed in Europe, in China and in the US [and] this is a market where we made our first steps in renewables. And we are thinking now to come back and to increase our exposure to the US.
"If there are policies encouraging the transition it's fine," Pouyanne said. "The US will be for us a field of opportunities where we will develop our strategy based on two pillars: natural gas and renewables. So I'm welcoming these policies, but these are long trends and the US economic players... know how to jump to the profitable markets."
Former BP CEO Bob Dudley, who now chairs a consortium called the Oil & Gas Climate Initiative, said Biden would have to strike a balance between calls for a rapid energy transition described as a "Green New Deal," and concerns over affordability, as well as population growth in the wider world.
"I think he understands it, it can't be as fast," Dudley said. "Hopefully he'll talk to many people in the industry about what's possible, what technologies are coming and what can be done. I don't think you can go as far as the Green New Deal in the US because it simply can't afford it and it won't actually deliver the energy, so there's somewhere along that spectrum that I think he'll come to."
Russell Hardy, CEO of trading company Vitol, said he detected a "change of mood" in the US industry, with more European attitudes coming to prevail.
"I think that pushes up the cost of capital in the US," he said. "It gives the American oil market a more European flavor. There will be more ESG (environmental, social and governance) pressure. There will be more shareholder pressure over how businesses conduct themselves, over the way that businesses extract oil and gas."
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