AFTER a contentious election earlier this month, former Vice President, Joe Biden, is now recognized as the next president of the United States. The Biden administration has already announced that it will focus on the environment by reducing U.S. emissions and reintroducing many rules and regulations rolled back during the Trump Administration. This shift could have substantial impacts on global energy markets and could even prove beneficial to countries like Guyana.

As he takes office, Biden is likely to use Executive Orders, or unilateral decrees to change the status quo, to enact restrictions on fossil fuel activity. He has already said that he plans to implement new restrictions on hydraulic fracturing (fracking) in the United States, which could curb the rapid growth of U.S. shale oil exports. These exports have grabbed a significant share of the global market over the past decade, leading to lower oil and natural gas prices. Although the fracking process is not used offshore Guyana, the practice, combined with horizontal drilling, has largely led to the emergence of the United States as one of the largest oil suppliers.

Biden has vowed to join or re-join various international treaties, like the Paris Agreement, a global response to the threat of climate change through the reduction of greenhouse gas emissions. Guyana is already a signatory to the Paris accord and even with our drilling activity, we remain within our commitments.

But, for the U.S., rejoining could lead to additional restrictions on new domestic fossil fuel production. Biden is also viewed as likely to impose strong new limits on offshore drilling in areas like the Arctic and Atlantic coasts.

The shift towards a more heavily regulated environment in the U.S. is likely to have significant impacts on the global oil industry and could push companies to invest elsewhere. Many oil companies, majors and smaller players alike, have invested heavily in U.S. fracking projects over the past few years, but new restrictions on land leasing could push those investment dollars towards other markets like Guyana.

New restrictions on fracking could also tighten future oil and gas supplies, resulting in higher prices and higher demand for Guyana’s oil. The same goes for further production declines in Venezuela and Mexico, which are both grappling with an array of problems in the near term. Analysis has shown that Guyana’s contract stands up well in a variety of price situations, but obviously, higher oil prices would result in substantially more revenue for the country.

In contrast to Colombia, Ecuador, Peru and Venezuela, Guyana boasts high quality “light and sweet” crude oil. As the globe moves toward tougher environmental regulations, demand for this type of oil is increasing since its relative purity makes it easier and less energy intensive to extract, refine and process. This shift has already reduced investor interest in areas like Canada’s tar sands, where heavy oil requires more energy to extract and produces more toxic byproducts. Light and sweet crude wins a higher price on the international market because of this.

Global demand for high quality oil will continue to increase over the next few decades as the industry works to fit into evolving, more environmentally friendly trends. As analysts have noted, demand for this oil is likely to also be driven up further by any global emissions reduction policies, which would make it harder for heavier and more costly oil to compete. Many companies like BP and Shell are in the process of orienting their production towards the lower cost, lower emission sources of oil that are likely to be less impacted by future policy shifts.

The government appears aware of this opportunity for Guyana. Vice President Jagdeo has already stated that Guyana “wants to accelerate production” and develop its resources quickly as the country does not have the time to spare.

According to estimates from the Inter-American Development Bank, peak global oil demand could occur as soon as the next ten to fifteen years. That means Guyana’s window of opportunity is closing. Guyana’s relatively cheaper, more environmentally friendly-to-produce oil coupled with the government’s push to produce oil in a timely manner are critical to making the most of that chance while it’s here.