Why The Oil Industry Doesn't Fear Biden

President-elect Joe Biden has pledged to tackle the climate crisis. Nonetheless, the oil and gas industry is reacting with a surprising amount of optimism.

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On the surface, the oil and gas industry is losing a friend on January 20. Donald Trump, the departing president, gave fossil fuels his loud support. President-elect Biden supports efforts against climate change, yet some in the oil and gas industry are feeling cautiously optimistic. NPR's Camila Domonoske explains why.

CAMILA DOMONOSKE, BYLINE: You might have heard that Biden's win could mean the end of the oil industry. President Trump warned it would. Some climate activists hoped it would. And in the final debate, Biden himself said this.

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JOE BIDEN: I have a transition from the oil industry, yes.

PRESIDENT DONALD TRUMP: Oh, that's a big statement.

BIDEN: I will transition. It is a big statement.

DOMONOSKE: And that would be a big change. Over the last decade, U.S. oil and gas production has boomed. The shale revolution turned the United States into the world's top oil producer. A lot of that remarkable growth happened during the Obama administration, and Trump promoted the jobs and profits that resulted. But emissions from burning oil, gas and coal are the biggest contributors to climate change, which is already starting to have devastating effects around the world. So how could Biden tackle those emissions? Step one might be a ban on new drilling on federal lands.

INSKEEP: On private lands, it's a different story. They do not have the power to just say to somebody in South Texas, you cannot drill anymore.

DOMONOSKE: Rene Santos is with S&P Global Platts. He says that that kind of a ban would be significant, but not the end of the industry. Biden is also expected to restore some environmental regulations, which again won't eliminate oil and gas. The big question mark is what a climate bill might look like.

RENE SANTOS: I personally don't think it's going to be something radical unless, you know, the more liberal side of the Democratic Party gets a lot of influence, which as we see right now, it does not appear to be the case.

DOMONOSKE: Climate activists and scientists have called for ambitious action. That might be impossible to push through Congress if Republicans keep the Senate. So for now, this doesn't seem like a doomsday scenario for oil and gas.

HELIMA CROFT: I don't think it's a wholesale assault on the oil industry. It's just not going to be in favor like it was under President Trump.

DOMONOSKE: Helima Croft is a managing director at RBC Capital Markets. She says that Biden is serious about climate change, but also doesn't plan to do away with fossil fuels.

CROFT: Well, we actually wrote a note over the summer about the Biden energy plan called "Hugging The Midline," and that's not just because I love Pilates. But we really did see this as an effort to sort of thread the needle.

DOMONOSKE: The oil and gas industry sees room for some compromises and negotiations, which might raise the question - what about Biden's big statement about transitioning away from oil and gas? Jen Snyder is a director at ENVERUS, which provides data to oil and gas companies. She says that was hardly breaking news to energy insiders. They know that a global transition is happening.

JEN SNYDER: A move away from fossil fuels is underway at the society level, regardless of the administration.

DOMONOSKE: Biden also said, quote, "We're not getting rid of fossil fuels for a very long time." Snyder argues a president who manages a gradual shift away from oil might actually be better for business.

SNYDER: The gut reaction is that this isn't good news for the industry, but we're actually cautiously positive.

DOMONOSKE: And politics aside, right now oil producers are facing a more immediate struggle. The coronavirus has caused a big drop in oil demand as the global economy slows down. So the most important thing for their bottom line might be getting the pandemic under control.

Camila Domonoske, NPR News.

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