US shale oil producers are scrambling to secure drilling permits on federal land before the presidential election in November as they worry that oilfield activity will be clamped down if Democratic candidate Joe Biden wins the vote. Federal permitting in the Permian Basin is up 80% in June-August. According to analysts, producers are stockpiling permits as a hedge against Biden’s win.
Biden, who is currently ahead of Trump by several points in national polling, has stated that he would not ban hydraulic fracturing outright. However, under his climate plans, permits for new drillings on public lands will be banned. Hydraulic fracturing or fracking has been the centrepiece of the shale revolution that makes the US the world’s largest crude oil producer. However, it raises environmental concerns because it involves injecting high-pressure water, chemicals, and sand into rock to release hydrocarbon.
From January 1 to August 24, producers received 974 drilling permits on federal land in the Permian Basin, compared to 1,068 for all of 2019. In the 90 days to August 24, producers secured 404 permits in the Permian, compared to 225 in the same period last year. The permit stockpiling came despite a weak outlook for oil and gas prices.
