The election is over, and Obama is in. Emotions are up in the air and so are expectations. What exactly can we expect from Obama as far as the future of natural gas goes?
The answer isn’t simple. Opinions about Obama’s plans and intentions are widespread. Some critics and analysts have said Obama will be great for natural gas others say drillers and consumers have a rough four years ahead.
During Obama’s first four years, the United States unseated Russia as the world’s top natural gas producer, and oil output last month hit a 17-year high. The gains were because of advances in fracking and horizontal drilling— not policy decisions.
The oil and natural gas industry is ready to move forward to bring about increased domestic oil and gas production, more jobs and economic growth. Now that the election is over, the president can turn his focus to pressing issues in the natural gas industry. Some of the steps Obama could take to advance the natural gas industry include:
- Approve the full Keystone XL pipeline, immediately putting thousands of Americans to work while strengthening an energy partnership with Canada.
- Make decisions about restrictions and regulations on hydraulic fracturing. Currently there are at least 10 federal agencies reviewing or considering restrictions or new regulations on hydraulic fracturing. If he wants to lighten proposed regulations, the president could curb EPA plans to impose regulations that could cost businesses hundreds of billions of dollars.
- He could reduce the red tape by streamlining federal permitting processes for onshore and offshore energy development.
- Revisit his administration’s offshore drilling plan and include more areas off America’s coasts for development. Currently, more than 85 percent of the outer continental shelf remains closed to energy exploration.
Uncertainty Under Obama
On the one side are the analysts who say that Obama could tighen regulations early in his second term. They say this would raise costs for energy companies.
These analysts predict the president will take far longer to decide whether the U.S. should export its shale oil and gas bounty. The same analysts fear that environmental concerns will cloud Obama’s judgement in moving forward to revitalize the economy and spur job growth with natural gas production.
Support For Obama
Analysts on the other side say that Obama will help natural gas boom.
They say that despite fears of regulatory overload, in the end, there is only so much regulation that is likely to occur at the national level. The 2005 Energy Policy Act essentially gave most regulatory responsibility to individual states, and it will probably remain there.
These analysts believe that gas production is likely to soar, especially as gas use grows in transportation, industry, and electric generation. They are keeping in mind the potential for LNG exports, as numerous license requests have already been tendered.
As far as Pennsylvania and Marcellus Shale go, analysts are predicting continued, rapid growth under the Obama administration. In fact a new ASDReports study found that production could increase more than seven-fold from 2011 levels, from just over 1,000 billion cubic feet equivalent (bcfe) in 2011 to almost 5,000 bcfe in 2015, before finally leveling off at over 7,600 bcfe in 2020.
Gas Isn’t Going Away
No matter who is in charge or what decisions leaders make, drilling will continue, and more decisions will arise as to how to produce domestic shale gas in the most efficient, clean, and safe manner.