Joe Biden’s election as U.S. president would bruise the oil industry’s hopes for a swift recovery from this year’s crash, with his proposed new drilling limits threatening to stifle production and leave the country more reliant on foreign supplies.

Even so, as some big producers begin a transition to cleaner energy and a shrunken sector nurses its wounds, the sector’s preference in November’s poll has become less clear-cut.

“A Biden victory will be a shot in the arm for oil’s competitors, putting the federal government’s weight behind the energy transition and low-carbon technologies,” said Amy Myers Jaffe, an energy policy expert and professor at Tufts University. “But a Biden win is the least of the oil industry’s problems right now. Tougher mileage standards don’t mean much if people can’t afford a new car.”

U.S. oil output, which hit a peak of almost 13 million bbl/d last November, has collapsed since the coronavirus pandemic hit global demand and a Saudi-Russian price war sent U.S. oil prices spiraling below zero.

Donald Trump’s election campaign has depicted Biden as a captive of the Democratic party’s left wing who would end an era of American “energy dominance,” which has included a brief period in the past year when the US was a net exporter of oil.

“Joe Biden and the radical left want to crush American energy and crush American energy jobs,” vice-president Mike Pence said this month in a campaign speech in Pennsylvania.

Biden has dismissed claims he would ban fracking, the technology that enabled the shale revolution and made the U.S. the world’s biggest oil and gas producer.

“Fracking has to continue because we need a transition,” the former vice-president said during a recent meeting with voters in Pittsburgh, close to the heart of swing state Pennsylvania’s prolific shale gas industry. There’s “no rationale to eliminate, right now, fracking.”

Biden’s climate plan promises $2 trillion of clean-energy spending over four years but industry groups and analysts have focused on his pledge to ban drilling on federal land.

This accounts for a nearly quarter of US oil output, according to the American Petroleum Institute (API), a Washington lobby group. The API says the ban would increase U.S. oil imports, which exceeded 9 million bbl/d last year, by 20% and cut $700 billion off U.S. gross domestic product by 2030.

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Rising oil and gas exports—approved by the Obama-Biden administration—had “made America a leader in the energy space”, said Frank Macchiarola, a senior vice-president at the API. “We’re concerned about policies that would harm that progress.”

Analysts at S&P Global Platts calculate that Biden’s federal drilling ban—covering offshore drilling as well as some parts of the onshore shale patch—would leave the U.S. producing 2 million bbl/d less oil in 2025.

New Mexico’s fast-growing oil sector would be hit hardest, they say, because so much of its shale acreage is federally controlled.

“If they’re not able to work, they’ll go elsewhere,” said Alexis Johnson, a Republican congressional candidate in New Mexico who worked in the oil sector. The Biden campaign did not respond to requests for comment.

Some analysts are more sanguine about the overall impact of a federal drilling ban on U.S. supply.

Rystad Energy, a research company, said the policy would “hardly have any impact on nationwide oil and gas output in the medium term”, given abundant drilling opportunities on private land from Pennsylvania to Texas.

“Ironically, a ban on new exploration…on federal land might result in increased interest in U.S. onshore development, as many operators with a presence in the Gulf of Mexico, primarily the supermajors, also hold significant onshore positions,” said Artem Abramov, Rystad’s head of shale research.

But the oil sector is hardly unanimous in its support for Trump—the API recently criticised the president’s extension of a drilling ban offshore Florida.

A low point for some shale executives came in July when Trump used a speech in Midland, Texas, to thank Russia and Saudi Arabia for helping him end the price war.

Privately, some executives said Trump had not followed through on pledges to assist their struggling sector—and the price crash, engineered by Saudi Arabia to hurt the U.S. oil sector, was not over.

Another 13 oilfield services companies and six producers have gone bankrupt since Trump’s Midland visit, according to data from law firm Haynes and Boone. Oil sector job losses have now reached about 120,000, according to Rystad.

The sector’s equity performance in the Trump years has also been bleak, losing more than half of its value even while the S&P 500 has risen 46%.

It leaves some in the industry much less concerned about a Biden victory than campaign ads suggest.

Matt Gallagher, CEO of shale producer Parsley Energy Inc., said his company had “thrived under vastly different administrations” and noted that “oil prices often increase when a Democrat is in the White House.”

Biden “is a realist,” said Daniel Yergin, vice-chairman of IHS Markit and author of The New Map.

Only Saudi Arabia and Russia would benefit if Biden oversaw a period of falling U.S. oil production and exports, Yergin said. “I don’t think Biden is going to want to be the president who presides over the most rapid increase in U.S. oil imports in history.”

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