People have shown so much concern as regards the fate of the oil and gas industry in the next American administration. Due to Joe Biden’s leanings toward renewable energy, many people wrongly think his assuming office will swiftly put an end to the oil and gas business. Well, they thought wrong.
There is no disputing the fact that the world is gradually evolving in all facets, and energy is not left out in that global evolution. The world is currently dominated by non-renewable energy, and it will—in time—inevitably be abandoned for an environmentally-friendly energy source—renewable energy.
The truth is, since energy transition is inevitable, it is not going to be so abrupt. Biden cannot—when he becomes the next US president—wake up one day and abruptly halt oil production in the US. This transition process is bound to be gradual and will take decades for it to fully materialise.
If Biden wins the election and decides to make unfavourable policies against non-renewable energy, he might turn the American economy into an economic backwater. America runs a capitalist economy, and since the government creates policies, American capitalists still have some level of influence in the policy-making process. This is because policies made against business owners will harm production and subsequently stifle the American economy.
The truth is many business owners will relocate to other countries where government policies favour them, produce and ship their products to different parts of the world, US inclusive. We can vividly recall sometimes in the past when a sitting US president hiked the tax rate for the wealthy and the result was devastating. These American businesses moved to Asia and established themselves; and soon enough, the American government was fretting over China becoming the largest exporter in the world. and The reason—as you all know—isn’t far-fetched: Cheap labour and favorable policies. The sole aim of setting up a business is to make profit; and so, whatever geographical zone helps you realise that goal is where you are more likely to situate your business.
The global energy transition is a definite possibility, and we have seen it sweep across some parts of Europe and America with more countries in those parts of the world opting for these cleaner energies such as wind, sun, water, etc. It’s indeed a good thing because using such energy will mitigate carbon emission and slow the pace of global warming which has been brought about by high use of fossil fuels. In the world’s quest for a cleaner environment, many countries have begun to invest hugely in renewable energy. The UK’s prime minister, Boris Johnson, in his quest to curb the use of fossil fuel, proposed an investment of 2 billion pounds into cycling infrastructure which will help cut down carbon emission, enable cleaner atmosphere, and improve people’s health.
We envisage that, in the next couple of decades, renewable energy would have grown tremendously and possibly trump non-renewable energy by a huge margin irrespective of whether the sitting president is pro-oil or not. Nevertheless, it is bound to be a gradual process and it will certainly come to pass.