Harris' Fracking Policies Could Shake Up Energy Dividends
Conflicting Stances on Fracking Leave Uncertainty for Oil/Gas Investors
During the 2024 presidential campaign, Kamala Harris stated clearly that she would not ban fracking if elected president. "As president, I will not ban fracking," Harris told CNN's Dana Bash. This provided relief to dividend investors who have benefited from the fracking-driven U.S. oil and gas boom.
However, just a few years earlier in 2019, Harris sang a very different tune, saying bluntly "There's no question I'm in favor of banning fracking." This apparent flip-flop on such a critical issue for the energy sector has left many dividend investors wondering - which stance will President Harris actually take?
Sponsor
Elon Musk: America to run out of energy by 2025? Full Story >>
The Fracking Revolution Fueling Payouts
The implications of Harris' fracking policy could be enormous for dividend stocks and income investors. Hydraulic fracturing has unlocked vast oil and gas reserves from shale formations across America, propelling the United States into a global energy leader.
Fracking now accounts for over half of U.S. crude oil production and two-thirds of natural gas output. This surge in cheap and abundant fossil fuels has turbocharged profits for oil/gas producers, midstream companies, refiners and other energy firms. In turn, it's allowed many to pay steadily rising dividends to shareholders.
Anti-Fracking Rules Could Cut Payouts
If President Harris reverses her recent campaign position and severely restricts fracking through new regulations, it could hammer dividends across the energy sector. Reduced domestic production would crush revenues and earnings for oil and gas companies, likely forcing significant dividend cuts or suspensions to preserve cash.
Even midstream firms like pipeline operators could see lower distributable cash flows if fracking activity plunges. Some renewable energy investments could get a dividend boost from clean energy pushes, but the sudden loss of fossil fuels could disrupt markets and the economy.
Sponsor
Will this energy discovery swing the election? Watch Now >>
Energy Security and Prices At Risk
Beyond dividends, limiting fracking could have severe implications for America's energy independence, prices and national security. After two decades of growth, the U.S. could become heavily reliant on foreign energy imports once again. This risks renewing geopolitical tensions, vulnerability to global supply shocks, and siphoning cashflows to producer nations.
Consumers and businesses would also likely face higher gasoline, heating and electricity prices - both from reduced supply and potentially stifling policies on domestic fossil fuels.
With so much at stake for income investors, markets are fixated on what the Harris administration will actually do on fracking once in office. Any major pivot from the stated position of allowing fracking could destabilize the energy sector, upend profit outlooks, and force companies to cut payouts to shareholders.
After relishing in the dividends of the shale revolution over the past decade, energy investors may be in for a rude awakening on payouts if Harris cracks down on fracking. For income-focused portfolios, the ultimate policy could be a deciding factor in how the sector is positioned.
YOU NEED TO READ THIS NEXT
Will this strange discovery decide the 2024 election?
Energy is life…
And this year, it could also decide the 2024 election.
Hidden in America's forgotten towns, a groundbreaking energy discovery is emerging.
And it could shape the next four years of American life more than the border, tax cuts or gender politics.
This urgent new documentary reveals how this new tech could solve America’s energy crisis, with details on the one company with a virtual monopoly on it.
