By the end of the second term of President Barack Obama in 2016, US oil production sat at 8.5 million barrels per day (bpd), while prices were historically high above $100 between 2012 and 2014. With the end of the first term of US Republican President Donald Trump, the US oil industry witnessed a boom with US oil production reaching an all-time high of near 13 million bpd at the end of 2019.
Total US shale oil production from all shale plays reached nearly 8 million bpd in 2019, while shale oil production from the Permian Basin approached 5 million bpd in early 2020 before the pandemic.
The Republican administration has pushed for the extension of federal aid to oil and gas companies who have been affected by the historic plunge in oil prices, with help in the form of low-interest government loans to shale oil companies.
Should the Democrats win power, the industry is expecting strict curbs to unconventional oil and gas production in the country.
Democratic presidential candidate Joe Biden chose Senator Kamala Harris as a running mate, which is also potentially unwelcome news for the industry as she has demonstrated hostility towards shale and pledged to limit oil and gas development in federal lands and waters.
Joe Biden has also promised to stop issuing new federal drilling permits, which means that operators can continue to produce only from drilled but incomplete wells in production. This would also entail ending exploration on federal land and imposing a ban on new drilling.
All this poses interesting questions for the future that extend beyond the industry in the US. Any US federal system that impedes growth in US shale could impact the global supply balance when and if demand returns to pre-pandemic levels.