Energy will not decide the us presidential election, now just five weeks away. but the us presidential election will decide a lot about energy. our first note explores how.

Data drill today offers another way of measuring the crashs impact on north americas oil and gas business this year: soaring impairments. endnote looks at yesterdays big m&a news: devon energys all-share takeover of wpx energy, creating a big hitter in us shale especially the permians delaware basin. we spoke to both ceos.

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The us election is five weeks away and the countrys energy sector hangs in the balance. donald trump and joe biden offer outcomes for hydrocarbons and green energy that are poles apart.

The policy gurus at washingtons clearview energypartners have weighed in. energy gives america yet another way to be divided, said kevin book, managing director at clearview. mostly the red states produce fossil fuels and the blue states reduce them.

These are some of the main issues facing the sector on november 3.

The average american cares about oil to the extent it affects him or her at the pump. low gasoline prices this year go a long way to explaining the positions taken by each of the candidates:

Some americans drill wells, but most drive cars, said mr book.

Even though they might be small in number, americans who drill wells could decide the election.

For now, the less said by mr biden on oil, the better. he has listened, says one senior us oil executive, to the advice of another former vice-president, aaron burr at least as relayed in the musical hamilton.

Mr bidens climate plans are the most ambitious of any presidential candidate in history. but even if he wins the election (and brings the house of representatives and the senate with him and scraps the senates legislative filibuster, too) implementing them will be far from simple.

His biggest problem: fossil fuel state democrats.

Of the 47 senators who caucus with democrats today, seven have meaningful home-state economic linkages to fossil energy production, according to clearview. and two of them michael bennet in colorado and joe manchin in west virginia are likely to prove immovable on carbon taxation proposals or sweeping climate legislation that could damage their states oil and gas industries.

In other words, even if everything comes up biden, much will depend on how congressional races shape up.

One clean energy plan that a biden administration might find simpler to push through would be strict emissions standards aimed at shifting the country towards electric vehicles.

That, clearview reckons, could cause outrage in red states, where people drive more, for longer distances, often in oil-guzzling trucks.

In fact, practically every state that either has or is considering a clean car programme is blue... with drivers travelling shorter average distances and where trucks are less common. (the only red state with a clean car programme is pennsylvania which polling says is leaning democrat again anyway.)

Biden administration efforts to green the nations auto industry, in short, may stir resentment but probably only in republican heartlands.

As far as relations with other countries go, in terms of energy at least, there is not much daylight between the two candidates.

Both talk tough on china. mr trumps phase 1 deal has increased chinese imports of us energy, but they are way behind target and he could still scrap it before the election in a show of force. mr bidens comments on china suggest he might do the same. he seems poised to decouple before he is even officially in the couple, said mr book.

On energy interests involving russia too, both would likely tread a similar path, according to clearview, with the question being more one of magnitude than direction. irrespective of who wins, more sanctions on nord stream 2 are likely.

One key foreign policy divergence is on iran. a biden administration would see the us return to the nuclear pact, which saw iran cut its nuclear stockpile before mr trump abandoned the deal in 2018. the reimposition of us sanctions has pushed down iranian oil production by as much as 2.4m barrels a day. lifting them would restore much supply to an already oversupplied market.

Energy might not be the main issue on voters minds when they go to the polls in a few weeks time. but the outcome will determine the future of us energy for years to come.

(myles mccormick)

Bar chart of impairments on property, plant and equipment showing write-offs by us producers are heading for 2015 levels

Oil and gas impairments look set to outstrip levels seen at the height of the last crash. numbers crunched by evaluate energy show more than $80bn worth of writedowns on property, plant and equipment by us producers in the first half of the year. that compares to about $135bn in 2015.

Companies had much further to fall last time, with total asset values north of $1tn at the end of 2014, compared with $940bn this time around. even so, many companies have held out on slashing their long-term price outlook. expect the impairment toll to push towards 2015 levels spelling bad news for their borrowing plans.

They found it hard to get capital after the first price crash when their asset values were worth so much more, said mark young, an evaluate analyst. the amount of capital available to producers that are borrowing against the value of their assets is now likely to fall, he suggested.

Es spoke to devon energys chief executive dave hager and his counterpart at wpx energy, rick muncrief, after they announced their $12bn deal yesterday. what are the key points?

The deal hedges devons exposure to a possible biden federal leasing ban. mr hager doubted a change of us president would make much difference. even so, everyone had done a wonderful job sewing up permits now, in case a biden administration bans new leasing on federal lands. and credit suisse analysts said the deal would reduce the new devon energys federal acreage exposure to 35 per cent versus 55 per cent now.

Go big in the permian. the new company will rival eog resources, concho resources and pioneer natural resources for sheer shale size. we are in a new peer group and i think thats a great thing, said mr muncrief. mr hagen talked of building a dominant position of 400,000 acres in the permians prolific delaware basin. in this period of the downturn for the industry, scale matters, mr hagen said.

Slow growth is the new growth-at-all-costs. the merger prioritises free cash flow generation over production growth, with output to rise a maximum 5 per cent a year, said devon. free cash flow will pay for higher dividends, debt reduction and share repurchases music to investors ears. mr muncrief said the new devon would show some leadership in disciplined investing. william janela at credit suisse called it: a clear endorsement of the new e&p business model. the market liked it too: the companies share prices soared on monday (having fallen by two-thirds this year).

Who will merge next? oil-price volatility, us election risk and other headwinds are still slowing m&a activity, say analysts. but the depth and quality of inventory available in the permian means it will be at the forefront of more consolidation, said andrew dittmar at enverus. mr janela said the most attractive consolidation targets were cimarex energy, concho resources, pioneer and parsley energy the new devons competitors.