Energy

4 4 The most optimistic forecasts of the rise of renewable energy still expect oil and natural gas demand to climb for many years (perhaps decades) to come as crude oil prices recover and remain on an apparent upward trajectory. What does all of this mean for unconventional oil and gas producers in the US? What are the near and midterm impacts of global and US policy on the environment even as the timing and scope of such policy remain uncertain and may impact the future landscape of unconventional oil and gas in the long term? What opportunities and paths forward are prevalent as we enter what is (hopefully) the post-COVID world in 2022? THE BIDEN ADMINISTRATION AND US POLITICAL CLIMATE If oil and gas demand continues to rise, and pricing continues to recover, some see the future of US shale hinging on how well it weathers a "greener" future eyed by President Biden's administration. Under Biden, shale production may become more expensive, with the rolling back of tax incentives and possible imposition of tougher environmental regulations. Any such production cost increases could accelerate consolidation if not paired with equally improved commodity pricing. However, in the near and midterms, the Biden Administration's green vision will likely be balanced against the need to repair the US economy and looming 2022 midterm elections. Any action against fossil fuels will have to be balanced against its short-term impact on jobs and its broader impact on an economy still fragile from the pandemic. The 2022 midterm elections threaten to upend the Biden Administration's tenuous grasp on the US Congress, and President Biden may find himself needing to tread carefully around swing-state issues such as fossil fuels. Draconian interventions in shale production seem far from the Biden Administration's political interests at present. Instead, to best ensure Biden's broader legislative priorities of economic recovery through infrastructure and renewables funding, the administration may impose — somewhat paradoxically — a light touch on the fossil fuel industry unless the midterm elections result in sweeping victories for Biden's political party. ADVANTAGES OF US UNCONVENTIONAL OIL AND GAS ASSETS Compared to other types of oil and gas exploration, unconventional US oil and gas development enjoys some advantages in the face of political and/or price volatility that may, over the coming decades, help it to participate in the world's transition to carbon-neutral energy sources. INSIGHTS 08 Energy Transition: Opportunities and Impacts on Unconventional Oil and Gas Development in the United States

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