President Donald Trump has signed an order aimed at protecting the shale oil and gas industry, he said in a tweet.
“Just signed an order to protect fracking and the oil and gas industry. This means JOBS, low energy bills, and continued AMERICAN ENERGY INDEPENDENCE! Sleepy Joe would BAN fracking and destroy American energy jobs! He has NO clue!!” Trump tweeted on Sunday.
The president referred to a memorandum from Saturday, titled “Memorandum on Protecting Jobs, Economic Opportunities, and National Security for All Americans,” in which he mandates the Secretary of Energy to prepare a report on “the economic impacts of prohibiting, or sharply restricting, the use of hydraulic fracturing and other technologies.”
Among these potential impacts, the memorandum lists any job losses, benefits, and economic opportunities “by Americans who work in or are indirectly benefited by the energy industry and other industries (including mining for sand and other minerals),” as well as any increases in energy prices, including gasoline and electricity, and declines in property values.
The memorandum should be completed in 70 days from the signing of the memorandum, Trump said. The president has blasted rival Joe Biden for his energy industry plans if he wins the presidency, accusing him of wanting to destroy the oil industry. He said as much at a recent rally in Pennsylvania, one of a handful of swing states where the energy industry is an essential contributor to GDP.
Biden, on the other hand, has denied that he wantw to ban fracking, except on federal lands, and has focused on the message of removing federal subsidies for the oil and gas industry.
The energy aspect of the two candidates’ platforms is a delicate one. Although polls suggest that most Americans are concerned about climate change, there are Democratic states that rely on oil and gas production for their livelihood.
By Charles Kennedy for Oilprice.com
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But long term, no administration can continue to protect a bankrupt industry by legislation and by providing a life support system financed by US taxpayers.
What could protect the shale industry is crude oil prices above $70 a barrel to offset a breakeven price of $48-$68, sensible production to generate profit for shareholders and investors and following the rules of economics to become viable rather than letting politics with delusional slogans like ‘American energy independence’, ‘the world’s largest oil producer’ and ‘energy dominance’ prevail over sensible economics.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London