The Republican Party’s pledge to support the U.S. shale oil and gas industry would bolster the sector, while another Democratic president could produce more drilling delays, IHS Vice Chairman Daniel Yergin said Friday.
While U.S. exploration and production companies can generally obtain a drilling license within 30 days from state agencies, it can take several months to get permission to operate on federal land, he said.
“I think you would see a stronger industry” if it was easier to obtain federal permission, Yergin told CNBC’s “Squawk Box.” “What we’re hearing from the Democrats is that they really want more regulation.”
“It would slow things down,” he said.
The Obama administration has announced regulations to cap methane emissions from new and modified oil and gas wells and stricter controls on federal lands for hydraulic fracturing, the technology that has fueled the U.S. shale boom, citing concerns over climate change and public health. The energy industry has roundly criticized those measures.
To be sure, more drilling on federal land may have simply contributed to lower oil prices by adding to a glut of crude, thereby dialing up the pain on hard-hit U.S. drillers, Again Capital partner John Kilduff previously told “Squawk Box.”
Indeed, U.S. production is bound to continue falling as crude markets rebalance, Yergin said. The country’s output slipped to 8.9 million barrels per day in April from a 45-year high of nearly 9.7 million bpd a year earlier.
The fact remains a wide gulf exists between Democrats and Republicans in terms of energy policy. Presumptive Democratic presidential nominee Hillary Clinton has vowed to enforce or extend policies that would slash U.S. oil consumption by a third and generate a third of domestic electricity from renewable sources by 2027.
Yergin noted, however, that the outright ban on hydraulic fracturing proposed by Clinton’s rival-turned-supporter Sen. Bernie Sanders of Vermont did not make it into the Democrat’s 2016 platform.
Meanwhile, Republican presidential candidate Donald Trump is considering nominating Oklahoma oil and gas mogul Harold Hamm to be energy secretary if elected to the White House, Reuters reported Thursday, citing four sources close to Trump’s campaign.
The chief executive of Continental Resources would be the first U.S. energy secretary drawn directly from the oil and gas industry since the cabinet position was created in 1977, a move that would jolt environmental advocates but bolster Trump’s pro-drilling energy platform.
Yergin said the nomination would provide for an “interesting” confirmation hearing on Capitol Hill. The Republicans currently hold both houses of Congress, but Democrats are seen as having a shot at taking the Senate.