CNN Business | Matt Egan | October 17, 2019
Elizabeth Warren doesn't just pose a threat to Wall Street. Her rising 2020 polling numbers are also striking fear in the heart of Big Oil.
Warren, currently the odds-on favorite to be the Democratic presidential nominee, wants to ban fracking "everywhere." And the Massachusetts senator pledged to immediately sign an executive order to stop all new offshore drilling leases. Both steps go further than her main rival, former Vice President Joe Biden.
Warren's aggressive plan for fighting the climate crisis could have profound consequences for the oil and gas industry. Although an outright fracking ban seems unlikely to get through Congress and the courts, such a move would halt America's historic shale oil boom in its tracks, drive up gasoline prices, threaten good-paying jobs and make the nation more dependent on foreign oil.
"It would vaporize the oil and gas boom in the United States," said Bob McNally, president of Rapidan Energy Group, a consulting firm that advises energy companies and investors. "There is palpable concern in the oil and gas industry."
Wall Street analysts are already warning shareholders about the potential hit to the share prices of oil companies, which remain widely held in portfolios despite the climate crisis.
"We think the greatest risk to energy companies would occur if Democratic candidate Elizabeth Warren wins," RBC Capital Markets wrote in a report published on Monday. The firm said it would be "very bearish" for a wide range of oil companies, including drillers such as Pioneer Natural Resources (PXD), oilfield service firms and even integrated companies like ExxonMobil (XOM) and Chevron (CVX).
Warren's campaign declined to comment. But the candidate has defended her aggressive stance by arguing the world doesn't have the luxury of playing it safe.
"Taking bold action to confront the climate crisis is as important — and as urgent — as anything else the next president will face. We cannot wait," Warren wrote in a Medium post last month.
The best-case scenario for the oil industry could be the reelection of President Donald Trump, a climate skeptic who has actively supported the fossil fuel industry by slashing environmental regulations and promoting energy exports.