October 28, 2020
As President Trump and Democratic nominee Joe Biden argue about how their policies would change the future of the oil industry, a handful of states are set to hold elections next week that could do as much or more to shape the nation’s energy future, analysts say according to an October 27, 2020 EnergyWire report.
“There’s going to be no federal policy, they’ll be debating it for at least the next few years,” Tom Sanzillo, finance director at the Institute for Energy Economics and Financial Analysis, said about the impact of next week’s presidential election. “The real work is at the state and local level.”
Here’s a look at four state fights to watch next week that could sway the U.S. oil and gas industry:
Bloomberg and a regulator fight
The oddly named Railroad Commission oversees oil and gas production in Texas, making it one of the most important state regulators in the country. The three commissioners serve six-year terms, with one member elected every two years.
Chrysta Castañeda, the Democrat in the race for this year’s only open seat, raised $3.7 million in the most recent reporting period, including $2.6 million from Bloomberg. The cash has allowed her to run ads statewide.
“Mike Bloomberg’s committed to the environment, and this is the most important environmental race in the country,” Castañeda said in an interview.
If Castañeda wins, it would be a symbolic victory for the Democrats, who haven’t won a statewide election in more than 20 years, and it could lead to long-term policy changes on the three-member commission. The Republican candidate, Jim Wright, beat the incumbent commissioner, Ryan Sitton, in the GOP primary. He’s had to deal with lawsuits accusing him of fraud in an oil field business.
Wright has warned that Democratic policies, including climate change regulations and incentives for green energy, threaten Texas’ oil-dependent economy. He’s advocated for industry-friendly solutions to gas flaring, like pipeline construction and loosened regulations.
A Texas Flip
Texas’ wave of voter turnout, driven in part by young, Black and Latino voters, could carry down to the state Legislature.
About 7.4 million people have cast early ballots, about 82% of the total turnout in 2016 — with a week left before Election Day, according to the U.S. Elections Project, a tracking system run by the University of Florida.
Republicans have controlled both chambers of the Legislature since 2003. But Democrats picked up several Statehouse seats in 2018 and need nine more to take control of the lower chamber. Polls show Trump with a narrow lead over Biden statewide, but Biden is popular in suburban areas where Democrats made their gains in 2018.
A Democratic win of the state House of Representatives could have long-lasting implications.
“You would definitely see the Democrats having a seat at the table instead of being on the menu,” said Brandon Rottinghaus, a political science professor at the University of Houston who watches Texas politics.
Pennsylvania’s government has been divided between Democratic Gov. Tom Wolf and the Republican-controlled Legislature since Wolf was elected in 2014.
Biden is leading in the polls, and early voting is surging in Democratic strongholds like Philadelphia. Early voting shows Democrats with a 3-to-1 advantage over Republicans, according to the U.S. Elections Project. That could give Democrats a chance at capturing either the state House or Senate, said Terry Madonna, who runs the Franklin & Marshall College poll.
That, in turn, would give Wolf more legislative support in his push to control climate-warming emissions from the gas industry and to pass a severance tax on gas production. The GOP-controlled Legislature has voted down Wolf’s gas tax proposal every year since he took office (Energywire, Feb. 18). Pennsylvania is the only major gas-producing state without a tax on production. Instead, the state collects an annual fee on each well, with most of the money going to local communities affected by drilling.
Trump, Biden and fracking
Biden’s pledge to stop fracking on federal property wouldn’t do much to slow down overall U.S. oil production, because most drilling happens on private property. But it could have an outsize effect on states like New Mexico and North Dakota.
New Mexico, the third biggest oil-producing state, gets about half its oil production from federal land, mostly in the Permian Basin. Most of its production growth has come from the boom in hydraulic fracturing, the formal name for fracking.
So far, Biden hasn’t been clear on whether he’d stop leasing property for fracking or whether he’d stop issuing permits for individual oil and gas wells, said Robert McEntyre, a spokesman for the New Mexico Oil and Gas Association.
“A ban on permitting would bring activity on federal lands essentially to a halt,” McEntyre said.
In North Dakota, state officials are seeing a rush to drill on the Fort Berthold Indian Reservation, because of the potential for a change in federal drilling policy.
The reservation produces more than 20% of the oil in the Bakken Shale field, and parts of it are overseen by the Bureau of Indian Affairs as a trustee for the Mandan, Hidatsa and Arikara tribes.
“Everyone who has a federal permit in hand is drilling a well while the drilling is good,” state Department of Mineral Resources Director Lynn Helms said on an Oct. 16 conference call.
What this means to you
State elections in Texas, Pennsylvania, New Mexico and North Dakota could do much to shape the nation’s energy future according to analysts.
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