Elections easily turn based on issues that candidates have little to zero power to influence. U.S. presidents’ ability to influence the price of gasoline is limited, and yet extraordinary fuel costs – whether high or low – generally find a place in campaign materials, and pollsters use it as a guide for turnout.
What’s more, voter approval is largely based on personal economy and who is perceived to be in charge.
For most of the last 50 years, the industry’s performance when the federal government is in the hands of Republicans and Democrats produces what may be a counterintuitive result. By and large, oil and gas fares stronger with Democrats in office.
“We're producing a million more barrels of oil a day now than when Joe Biden took office,” former U.S. Senator Byron Dorgan, who represented North Dakota as a Democrat in Congress for 30 years, told Hart Energy. “We use in the United States about 20 million barrels of oil a day, and my sense is that we're going to need to continue using oil and gas for a good number of years.”
Philosophically and in practice, Democrat wants to limit growth in the oil and gas industry, University of Houston Energy Fellow and economics lecturer Ed Hirs said.
“If you start limiting things, you tend to actually promote higher prices,” he told Hart Energy. “In the oil patch, they can talk all they want about regulatory costs and those items. I'll take $5 a barrel of regulation if I can get my $20 a barrel of revenue back.”
But the more things change, the more they stay the same.
A decade ago, industry sentiment toward then-sitting President Barack Obama was best described as “visceral disdain, beyond dislike,” the late John Hofmeister, former president of Shell USA, told Steve LeVine at Quartz.
“[Obama is] basically viewed as a know-nothing, empty suit by the industry, using whatever language he needs to so that people think he’s engaged and doing something. In meetings with energy executives that I have all the time, it doesn’t take much to get people to a level of angst about Obama that some spit and some just curse,” Hofmeister said.
During the 2012 election cycle, the industry and its advocates’ support for Republican candidates accounted for 89% of the $42.6 million spent that year, according to the Center for Responsive Politics, a watchdog group that has since merged with OpenSecrets.org.
“In the oil patch, they can talk all they want about regulatory costs and those items. I'll take $5 a barrel of regulation if I can get my $20 a barrel of revenue back.” – Ed Hirs, University of Houston
Oil prices increased more than 35% during Obama’s tenure. In 2015, his administration – in conjunction with a Republican-controlled Congress – repealed the ban on U.S. oil exports in place for more than 40 years.
Nevertheless, the industry displayed a similar recoil when Obama’s former running mate ran for president against businessman Donald Trump, according to polling of Texas Oil and Gas Association members.
Hirs pointed out that in the special interest group’s survey, 76% of its membership feared a Joe Biden presidency more than an ongoing oversupply of oil.
When Trump took office on Jan. 20, 2017, oil listed as WTI traded for $52.33/bbl.
At the conclusion of his single, four-year term, the price was nine cents down, trading for $53.24/bbl on Jan. 20, 2021.
Oil prices popped and dropped between 2017 and 2021. Importantly, his term included the historic collapse on April 19, 2020, when WTI plummeted to minus -$37.63/bbl during the early weeks of the COVID-19 pandemic.
As such, it was a global catastrophe that was really calling the shots. The leanings of American politicians were largely irrelevant.
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2022-12-01 - Today's featured Forty Under 40 honoree is Jeremy Gottlieb, co-founder and president of Houston's ComboCurve.