Wall Street sees Biden win speeding U.S. shift to clean energy

Despite the Trump administration’s oil-and-gas friendly policies, including its push to open up public lands for exploration and slashing of environmental protections, the shift faraway from fossil fuels is already well underway.

BlackRock BLK, +1.90%, the world’s largest asset manager, on Monday underscored how a possible White House win by former vice chairman Joe Biden and Democrats taking control of the Senate could accelerate the move by the U.S. toward cleaner power sources.

But first, here’s their chart showing how coal already has been declined since early 2000, in terms of powering the U.S. electricity grid.
Coal’s diminished role since 2000 BlackRock Investment Institute, U.S. Energy Information Administration

It also shows that the share of electricity generated by renewable sources rose to 17% in 2019 from 10% in 2010.

“A Democratic sweep could accelerate the decarbonization of the facility sector, by extending and expanding tax credits for renewable power sources and other zero-carbon industrial sources like carbon sequestration,” wrote a BlackRock Investment Institute team led by Mike Pyle, global chief investment strategist.

Specifically, they noted Biden’s near $2 trillion Green New Deal proposal aims to significantly slash emissions within the transport sector and to retrofit commercial and municipal buildings to extend their energy efficiency by 2050.

Even without a united “blue” government in power, Pyle’s team still sees plenty that would happen under a Biden win on the regulatory front, including crack downs on drilling and pipeline permits that would hamper U.S. shale supply and increase oil prices, particularly once demand returns because the U.S. overcomes the COVID-19 pandemic.

“Yet any spike in oil prices might not be sustained given the prospect of an accelerating shift to wash energy within the transport sector,” the BlackRock team wrote.

Oil futures rose Monday, with the U.S. benchmark West Texas Intermediate crude for November delivery CLX20, +0.15% adding $2.17, or 5.9%, to settle at $39.22 a barrel on the ny Mercantile Exchange, following losses within the past two sessions.

But with oil prices trading below $40 a barrel, it remains unclear what percentage U.S. shale companies can survive over the end of the day , even with pandemic-era support.

Embattled U.S. oil-and-gas companies have borrowed a record $100 billion within the bond market since the Federal Reserve System announced its plans to shop for corporate debt for the primary time in history to offset pandemic shocks, consistent with a report from BailoutWatch and two other nonprofits.

“Some companies won’t have survived had the Fed did not restore market liquidity,” consistent with the report.

As the presidential race enters its final weeks, it is also worth noting that investors have grown increasing comfortable depending on companies promising to be a part of a more climate-friendly future.

Electric car maker Tesla Inc. TSLA, +2.55% shares closed up 408.8% on the year so far Monday.

Mark Haefele, chief investment officer at UBS Global Wealth Management, acknowledged that Florida-based solar and wind generation generator NextEra Energy NEE, +2.39% nearly surpassed ExxonMobil‘s XOM, +2.30% stock exchange value on Friday to become the most important U.S. energy company.

NextEra shares settled 18.9% higher on the year so far Monday, giving it a $141 billion market capitalisation , consistent with FactSet data. Exxon shares were 51.7% lower for an equivalent period, putting it at a rather higher $142.7 billion market cap.

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