The energy sector is becoming increasingly important in the US presidential election. It could be a key factor in deciding the vote in swing states this November.
The winner of the election, whether Kamala Harris or Donald Trump, will likely owe a debt to a significant part of the American energy sector, which includes oil, gas, and renewable energy sources. This relationship will have significant effects on oil producers in the Middle East and organizations like OPEC and OPEC+.
What seemed like a clear energy issue just a few weeks ago—Trump supporting oil and gas, and Harris backing “green” energy—has become more complicated. This change comes after Harris shifted her stance on shale fracking.
Fracking was a major concern for Democrats, who faced challenges in campaigning due to their party’s perceived opposition to new exploration in shale fields. They favored renewable energy instead.
When President Biden took office, he adopted a more pragmatic approach. He allowed and even encouraged the exploration of shale fields. Although Harris initially opposed fracking, she kept her concerns private while serving as vice president.
However, in an August television interview, Harris declared that she and a potential future administration would be open to fracking. “We can increase a clean energy economy without banning fracking,” she stated. This statement did not fully endorse an industry that has made the US the world’s largest oil producer, achieving self-sufficiency in hydrocarbons.
Some voters in swing states, especially Pennsylvania, are skeptical of her change of heart. For many in energy-focused states like Texas and New Mexico, Trump is the candidate they trust more for the future of US oil and gas.
Trump has promised to support the interests of hydrocarbon producers if he wins. He reportedly asked for $1 billion in campaign contributions from them in exchange for this support.
Trump holds an advantage over Harris in various energy-related matters. This includes long-term issues like pipeline permits, which are often opposed by Democratic state officials, and the exports of liquefied natural gas. The Biden administration has also paused the approval of new LNG terminals.
As the campaign intensifies, energy remains a challenging issue for Harris and the Democrats. They struggle to shake off the image of being against oil and gas, which affects hundreds of thousands of voters. Many Americans take pride in the energy sector’s rise to global prominence.
This negative perception was reinforced recently when the Federal Trade Commission (FTC) alleged that John Hess, the founder and CEO of Hess Corporation, was involved in price-fixing schemes with foreign governments to keep oil and gas prices artificially high. This accusation follows a similar complaint against Scott Sheffield of shale leader Pioneer. Republicans claim this is a political witch hunt against business opponents of Biden.
These FTC actions are significant for Gulf countries because the “foreign governments” involved in the alleged conspiracy are OPEC members, with Saudi Arabia as the leading producer and the UAE exerting considerable influence. Although there is still a long way to go before any federal legal action occurs, the possibility of Saudi and Emirati oil officials being subpoenaed for testimony could harm US-Gulf relations.
This situation raises the potential for Nopec legislation (No Oil Producing and Exporting Cartels Act) in the US. American sentiment towards OPEC, often seen as a cartel, is deeply rooted, dating back to the oil crisis of 1973.
Congress has previously passed Nopec legislation that would declare OPEC illegal, which could have serious consequences for both the US and Gulf energy sectors. However, such legislation has never been signed into law by the president. Ironically, Trump was the most vocal supporter of Nopec during his presidency, but Congress never approved it.
Most evidence against Hess and Sheffield appears weak, primarily concerning the management of oil supply during the post-COVID oil crisis in 2020 when the market was oversaturated and prices fell to negative levels.
Some Democrats want to push the FTC to pursue the cases against Hess and Sheffield and revive Nopec legislation if Harris wins next month. To maintain her credibility in energy states and protect US-Middle East trade relations, Harris should immediately end the FTC investigations and reject any Nopec laws under her administration.
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