Biden Presidency Imperils Key Oil Pipelines
There is much media speculation that the incoming administration of President-elect Joe Biden will result in delays or abandonment of new pipeline projects. Pipeline projects will depend less on government’s energy policies and more on the state of the oil and gas industry and market demand. After all, during the Obama administration, oil and gas production rose dramatically, despite the administration’s focus on renewables, energy storage and energy efficiency. Nor has the so-called fossil -friendly Trump administration’s higher tariffs on steel imports favoured new pipeline construction in the United States.
The economic reality is, that the demand for new pipeline capacity was slowing even before the arrival of Covid-19 thanks in part to the changing nature of the U.S. energy market, which has made significant strides away from fossil fuels to low carbon energy such as wind and solar. In addition, the crash in oil and gas prices and Covid - induced subdued demand have combined to focus investor’s attention on the commercial viability of many of the tabled new pipeline projects. In fact, the arrival of President-elect Joe Biden will be an excuse for pipeline investors to cancel many existing doubtfully viable projects like Keystone XL and Dakota access.