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What could a Biden administration mean for the US GoM and Alaska?

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14 July 2020

What could a Biden administration mean for the US GoM and Alaska?

Report summary

With the US presidential election fast approaching, we take a look at what a Democratic win could mean for the US oil and gas industry. We have analysed four possible scenarios of increasing severity to fully assess the ramifications from Joe Biden's promise to ban “new oil and gas permitting on public lands and waters”. The impact could be enormous. At the least restrictive end, we estimate a ban on new exploration lease sales would result in over 6 billion boe of prospective resources lost, over US$75 billion of capex not spent, and government revenues close to US$50 billion lighter. At the most extreme end of the scale, a total ban on future production from public lands and waters, would lead to over 25 billion boe of resources left in the ground. In the GoM, this would be catastrophic with production of over 2 million boe/d shut in and several operators put out of business. In Alaska, hopes of reversing the past trend of decades of production decline would be destroyed.

Table of contents

  • Executive Summary
  • Introduction
  • What actions do these commitments imply for the GoM and Alaska?
    • Each step towards tighter restrictions wipes out tens of billions of dollars of capex, forfeiting billions of barrels of production
    • Most value for companies lies in existing discoveries, but government revenue relies as much on future exploration as on discovered resources
    • Scenarios 1 & 2: Preventing exploration ultimately squeezes the life out of the sector in US GoM and Alaska
    • Scenario 3: No new development wells immediately impacts production in US GoM
    • Scenario 4: a shut-in of production in the US GoM could wipe out $340 billion of revenue over 10 years
    • Effects of a ban on development drilling in Alaska
    • Scenario 3: No permits for new development wells would end hopes of increasing Alaskan production
    • Scenario 4: shutting in production on Alaskan federal lands has minimal incremental impact
  • Summary and Conclusions

Tables and charts

This report includes 10 images and tables including:

  • Impact of four scenarios on capital expenditure
  • Impact of four scenarios on cumulative resources
  • Impact of four scenarios on post-tax value
  • Impact of four scenarios on government revenue
  • US GoM production: impact of four scenarios
  • Impact of scenarios 3 & 4 on the US GoM over 10 years: scale of lost opportunity
  • Alaska's Jurisdiction
  • Alaska production: impact of four scenarios
  • Impact of scenarios 3 & 4 on Alaska over 10 years: scale of lost opportunity

What's included

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    What could a Biden administration mean for the US GoM and Alaska.xlsx

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    What could a Biden administration mean for the US GoM and Alaska

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