Nov 5, 2020 - Energy & Environment

Visualizing the checks on Biden's oil plan

Data: BloombergNEF; Chart: Sara Wise/Axios
Data: BloombergNEF; Chart: Sara Wise/Axios

The chart above helps visualize one reason why the oil industry doesn't have reason to completely freak out over emerging election results. It shows, via the research firm BloombergNEF, the amount of U.S. oil production on federally owned vs. private lands.

Why it matters: One of the most aggressive parts of Biden's agenda is ending new drilling permits on federal lands and waters. But as you can see, a large majority of U.S. output is on private lands.

Threat level: That doesn't mean Biden's vow doesn't create plenty of jeopardy for some companies.

  • There's a lot of federal lands output, and the amount of federal vs. private holdings varies by company.
  • Some have a portfolio weighted toward, say, Colorado or the New Mexico side of the Permian Basin, which are heavily federal.
  • However, per multiple reports like this one, companies have been stockpiling federal lands permits as a hedge against a Biden win.

The big picture: More broadly, oil prices climbed yesterday and so did the stock prices of a bunch of U.S. producers.

  • This Bloomberg story lays out the case that one reason oil prices climbed is the market hive mind thinking a divided government means Biden would be "restrained from enacting its most ambitious objectives."
  • “It means that anything that’s more of a left-leaning agenda, whether it’s through taxes, regulations or climate policies, will have a harder time getting passed, at least legislatively," Tamar Essner, director of energy capital markets at Nasdaq, tells Bloomberg.
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