Natural gas producers such as Exxon Mobil Corp. (XOM) spent millions of dollars this year trying to defeat Democrats, such as President Barack Obama. His re-election may end up being a boon for them.
While Obama will continue with a series of environmental regulations that would curb the production and use of coal, his policies promise to boost demand for natural gas in vehicles andpower plants and facilitate domestic oil and gas output to levels not seen in more than two decades.
“Facts are stubborn things and they often defy people’s ideology,” John Hanger, a special counsel at Eckert Seamans Cherin & Mellott, LLC in Harrisburg, Pennsylvania, and the former top environmental regulator in that state, said in an interview. Obama’s “policies on the demand side are most favorable.”
The re-election of Obama and continuation of Republican control of the House of Representatives opens the possibility for legislation to boost demand for gas, including incentives for natural-gas vehicles, Hanger said. Republicans may also limit actions the administration could take to regulate hydraulic fracturing or curb production on federal lands.
Coal is likely the biggest loser, while wind, solar and biofuel producers are set to gain. An expiring production tax credit for wind power is now more likely to be extended, said Denise Bode, chief executive officer of the American Wind Energy Association.
Read more at Bloomberg. By Mark Drajem and Bradley Olson.