Energy landscape may or may not change after U.S. elections but look out for LNG: SA Election Forum

The landscape of U.S. Energy will more or less be the same if Kamala Harris wins the presidential race in November, but a repeat of a Donald Trump presidency could possibly benefit the sector, according to Laura Starks, founder and CEO of Stark Energy Economics.

Speaking at Seeking Alpha’s Election 2024 virtual event from Houston, Texas, Stark said she thinks Harris will continue to stick to the policies currently implemented by the Biden administration.

“If she wins, we can expect more of the same… There’s been a lot of emphasis on renewables, but there’s also been a lot of efforts to transition away from hydrocarbon, both as a supply and as a demand,” said Stark on Wednesday during a conversation with Seeking Alpha’s senior podcast producer, Daniel Snyder.

However, a reelection of Trump could mean less regulation and more emphasis on supply. Stark said the former president would “definitely lift the pause” and permit liquefied natural gas exports, which she claims has been a huge problem both for the U.S. and buyers abroad.

Adding further on LNG, Stark said the current regulation has been pushed in the direction of limiting supply, and notably pointed out that there were no offshore Gulf of Mexico lease auctions this year for the first time ever.

“You can’t just shut it; you can’t kind of turn it off and on. The LNG projects and offshore drilling and international drilling—it’s a far more expensive and capital-intensive business,” she said.

She said while the U.S. has an LNG pause in place with some countries, it helped fill the gap for Europe in the midst of the Russia-Ukraine war and, looking ahead, suggested that Asia would be the bigger source of LNG demand due to the region’s reliance on coal and its long-term industrial growth.

Love for the tough

Stark said she likes natural gas companies “just because they’ve been beaten up so much.”

“I think the natural gas producers, the Coterra Energy, you know, the Expand Energy, those folks, within electricity, people have glommed onto utilities. There are some excellent sort of all of the above utilities, like OG&E, are pretty good. And then it may be some transmission companies like Williams or Kinder.”

Devon Energy (DVN), Cheniere Energy (LNG), Coterra Energy (CTRA), and Expand Energy (post Chesapeake-Southwestern merger) are some of her favorite picks for natural gas stocks.

On the subject of fracking, she thinks Trump would be more favorable towards the homegrown method and would continue to encourage the work that was being done. She didn’t feel the same way about Harris.

“With Harris, there are different views. I mean, she’s said different things, so I’m not really sure where she is on that. Of course, because everybody’s pushing Pennsylvania and fracking is important in Pennsylvania, you know, there are points where she’s kind of come around and saying, Well, yeah, it’s important, and I won’t stop it. I, frankly, am still mystified. I’m not sure what her position is because she’s embraced both sides.”

On the issue of carbon capture, while still emphasizing its importance, Stark has “trouble getting excited” about it and said only large companies like Exxon, who can benefit from incentives and favorable government policies, have invested in those kinds of projects. “It feels like it’s been kind of overhyped.”

• Here are some energy-focused exchange-traded funds of interest: (NYSEARCA:XLE), (AMLP), (VDE), (XOP), (OIH), and (IXC).
• These are some oil-focused ETFs: (USO), (UCO), (DBO), (OILK), and (USL).
• And some natural gas-focused ETFs: (UNG), (BOIL), (UNL), and (KOLD).

For investors looking to track the elections through market instruments, here are some politically driven Republican and Democratic exchange-traded funds:

• God Bless America ETF (YALL)
• American Conservative Values ETF (ACVF)
• Point Bridge America First ETF (MAGA)
• Democratic Large Cap Core ETF (DEMZ)
• Unusual Whales Subversive Democratic ETF (NANC)
• Unusual Whales Subversive Republican ETF (KRUZ)

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Readers interested in investing topics tied to the upcoming election can read coverage from Seeking Alpha’s Investing Forum: Election 2024 event; please visit this page.