Regulatory Risk For Energy Stocks Is Low Since Americans Are Dying To Drill For Energy

Regulations tend to track political sentiment more than logic, and thus it’s positive news for the future of U.S. domestic energy that there are twice as many American pro-drillers these days as their are anti-drillers.

Pew Research:

Fully 63% support more drilling, while just 31% oppose it. These opinions have changed little since 2008. However, more drilling is not the most popular energy policy in America. Increasing federal funding for research on wind, solar and hydrogen technology is supported by 78% of the country, and spending more on subway, rail and bus systems is backed by 70%. A majority also favours promoting the use of nuclear power (52%).


So there is still substantial interest in alternative energy, which is good, but in the end Americans probably just want cheap energy, produced at home. They are willing to accept a certain degree of environmental trade-off in order to get this.

This makes regulatory risk low for energy stocks in the long-term. While Pew data shows how strong U.S. sentiment is for offshore drilling, we’d imagine that similarly strong sentiment (perhaps slightly less due to ‘not in my backyard’ issues) could be extrapolated to U.S. onshore exploration as well, especially when it comes to natural gas.

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