Analysts Wood Mackenzie have come up with five consequences for the energy sector of Joe Biden’s election as U.S. president.
As the first point, the analysts point to an increase in the number of sea-based wind power installations. The administration of Donald Trump put the brakes on the process of issuing permits for wind turbines and proposed closing the industry on the Atlantic coast between Florida and Virginia. Biden’s administration will act more quickly by offering support to states and companies developing wind energy.
The second point was a prediction on new restrictions on oil and gas production. Wood Mackenzie predicts that Biden will impose no ban on fracking, but could stop allowing leases of federal land-based sites and on the sea shelf.
For land-based sites, the effect will be minimal as most sites are not on federally owned property, but on private land. But the situation is quite different for sea-based sites. Any ban on new leasing would mean that production of oil and gas from sea deposits would be 30 % less than would have been the case had lease sales continued.
The third point cited by the analysts focused on more difficult conditions for infrastructure projects in the oil and gas industry. Any issue of a federal permit would take account of greenhouse gas emissions and the influence on climate change and that would mean new hurdles for companies building pipelines or export facilities.
Wood Mackenzie singled out electric vehicles for their fourth point. Joe Biden intends to impose tougher fuel economy standards and that would help electric car sales. New standards, they said, are expected to lead to an increase in electric car purchases to 4 million by 2030 — about 60 % more than had the previous rules remained unchanged. In any case, even that figure makes up only 1.5 % of all cars expected to be operating on U.S. roads by then – 275 million.
The analysts’ fifth point amounts to an assertion not to expect any rapid easing of sanctions on Iran. Although Biden sharply criticised Trump’s decision to withdraw from the international agreement on Iran’s nuclear programme, it does not necessary follow that he would move quickly to ease the punitive measures. Wood Mackenzie said talks on a possible extension of the accord are unlikely to start before June 2021, after the presidential election in Iran, and there is no guarantee that all sides will come to an agreement.