by Deon Daugherty, Senior Editor
While the rhetoric heats up and candidates vow to lure more voters into the arena of presidential politics, one part of the race for the White House will likely see a clear decline: money donated by energy companies that are fighting their own financial battles.
Historically low oil prices – currently resting below $30 per barrel – have led the vast majority of oil and gas companies to cut back on their key expenses: projects, equipment and people. For those in the oil patch to open their companies’ coffers to politicians – even when the U.S. presidency is at stake – appears to be a longshot.
Cal Jillson, a leading political expert and professor of political science at Southern Methodist University in Dallas, told me in recent weeks that a retrenchment among those in the oil patch is all but inevitable.
“A lot of people who were flying high four or five years ago are now fighting to survive,” he said.
However, the handful of companies with strong balance sheets won’t completely abandon the process, he said. They’ll naturally remain active, contributing to the super pacs behind folks like the junior senator from Texas, Ted Cruz, or the upstart GOP senator from Florida, Marco Rubio.
But although a lot can happen during the next few months, it’s unlikely that oil prices will rebound to a level that moves the needle for political donations, he said.
“Establishing a new normal – not $110, but somewhere in $60s – will happen slowly, over the course of a couple of years, as opposed to the next several months,” Jillson explained. “Generally, economic impacts affect politics with a six-month lag. If oil prices, or economic growth in general, begin to tick up, people don’t believe it initially. They’re not ready to bank on it.”
And with production in the Texas shales still pumping out hydrocarbons and the prospect of other global production increases, a pick-up in prices – and public faith that they will stabilize – remains unlikely, he said.
“I expect oil and gas will play a role [in the election] as a part of the public’s concern with the economy, but I don’t think it will be a central role or a significant part,” as it has in the past, he said.