Energy markets are in turmoil. Prices have been crushed, energy producers are under stress, and consumers are enjoying a bonanza of savings. In the midst of this turmoil, the elections are on the horizon. The stage is set for 2016-17 to be transformative years for the energy industry. But what kind of transformation will it be? Well, it depends. On lots of things. Prices. Supply/demand. OPEC/no-OPEC. And of course, the outcome of U.S. elections. The elections, and the positions (or lack thereof) taken by candidates during the campaign will be bellwethers of the market the industry will face over the next two years and beyond. Today in Brace for Impact - of the 2016 Elections on Energy Policies, Politics and Markets we set the stage for a new kind of conference being hosted by RBN, Sutherland, and Goldwyn Global Strategies on May 10th in Houston. Warning, today’s blog is an advertorial for the conference.
If you have been following the RBN blogosphere for a while, you know that we generally try to steer clear of the three “p’s” – politics, policy and punditry, instead confining our blogs to the somewhat less controversial domain of energy market behavior. There may be just as much uncertainty in energy markets as there is with the three p’s, but at least the behavior of markets is usually based at least in part on facts. And our comfort zone at RBN is based on a solid grasp of those facts. But this nice, neat distinction runs into trouble when politics drives policy, and that policy drives government action that affects energy markets.
You don’t need to look very hard to find persuasive examples – lifting of Iranian sanctions, commitments to Paris COP21, lifting of crude export restrictions, Obama Administration methane emissions regulations, and of course Keystone XL. And these are just a few. There is no doubt that the upcoming elections will have a significant influence on these issues and many more. In other words, after the elections the energy markets may very well have a quite different set of ground rules to deal with in terms of government policy and initiatives. But how different? Well of course, it depends on who wins. And at this stage of the game we can’t even venture a guess as to what might happen on November 8th. But fortunately we are associated with a number of folks who have a deep understanding of how those policies and initiatives are likely to shake out – DEPENDING on who wins. Given the significance of the upcoming elections, that is phenomenally important for us all to understand.