Thought Leadership

2020 Year In Review and Energy Outlook: Disruption and Transition for the Energy Industry

Client Updates

EDITORS: Partner - Jonathan Bobinger; Associate - Bryson Manning
CONTRIBUTORS: Partners - Natalie Alfaro Gonzales; Jim Barkley; Emil Barth; Jason Bennett; Jonathan Bobinger; Michael Bresson; Anne Carpenter; Barbara de Marigny; Michael Didriksen; Matt Donnelly; Courtney Fore; Leslie Hodge; Justin Hoffman; Tom Holmberg; Aileen Hooks; Erin Hopkins; Lewis Jones; Hamish McArdle; Paul Morico; Tom O’Brien; Jon Platt; Jim Prince; Jay Ryan; Tim Taylor; Martin Toulouse; Craig Vogelsang; Travis Wofford; Jeffrey Wood; Counsel - Pete Del Vecchio; Gerry Morton; Senior Associates - Jamie Yarbrough; Jared Meier; Kim Tuthill White; Associates - Sean Aguirre; Kyle Doherty; Inaya Homoud; Senior Advisor - Leigh Hancher


To Our Clients & Friends,

Each year we take the opportunity to review significant developments in the worldwide energy industry for the previous year and offer our views on what these developments may mean for the coming year.

While 2020 in the rearview mirror now as one of the most momentous and unprecedented years in recent memory for virtually every individual, company and industry across the globe, the effects on the energy industry were particularly acute. The outbreak of COVID-19 and its development into a pandemic in early 2020 resulted in seismic developments across the globe. In an attempt to prevent the spread of COVID-19, restrictions were placed on business operations, travel and the overall level of person-to-person interaction. This, in turn, significantly reduced global economic activity and energy consumption and resulted in a dramatic decrease in demand for, and thus the price of, crude oil and many other energy sources. In February of 2020, just when global economic activity began to significantly curtail in response to the virus, a production dispute erupted among several major oil-producing countries and the actions taken as a result thereof exacerbated the decline in crude oil prices. The crisis escalated further in late April of 2020 when concerns about U.S. and global crude oil storage capacity being inadequate to accommodate anticipated surpluses sent the trading price of crude oil negative for the first time ever. The swift decline in worldwide energy consumption and demand resulting from the outbreak of COVID-19, together with the protracted period over which the world attempted to contain its spread, created one of the worst situations imaginable for the energy industry and precipitated a wave of bankruptcies and consolidations, particularly among companies in the upstream, energy services and oil and gas drilling sectors.

Although 2020 was a devastating year for traditional fossil fuel based energy companies, it was a year of profound increasing momentum for the energy transition movement and renewables, with a noticeable shift in the level of traction that matters related to greenhouse gas emissions reduction and the environment were able to garner both in the private and public sectors. The efforts in recent years aimed at the investment community and various other financial intermediaries to reduce exposure to fossil fuels-based energy companies, through changes in lending and capital investment practices, intensified during 2020. Given market conditions for oil & gas, those arguments appeared to gain traction with investors and financial institutions suffering large losses in those sectors. At the same time, there was a strong increase in investor focus on environmental, social and governance (“ESG”) practices and disclosures, as well as investor demand for ESG-focused investments. As a result, large amounts of capital were reallocated towards investments seen as aiding the energy transition, with a dramatic example being the almost 700% increase in Tesla’s stock price during 2020. With this marked change in investor and public sentiment, companies like BP and General Motors also announced fundamental changes to their long term business strategy in an effort to better align with energy transition goals and several governments across the globe announced extremely ambitious initiatives and policies as a means of meeting ambitious greenhouse gas emissions reduction targets, many of which were already seen as being more aspirational in nature. Adding fuel to this investment fire was the proliferation in investor acceptance of, and demand for, initial public offerings of special purpose acquisition companies (“SPACs”), or blank-check companies, whose stated purpose was to raise capital to search for acquisition targets in the energy transition space.

The end of 2020 was just as eventful as the beginning, as Joe Biden’s victory in the November 2020 presidential election and the Democrats’ control of both the house and the senate signaled a change to the relationship domestic fossil fuel companies had enjoyed with the U.S. government over the past four years as a result of Donald Trump’s push for U.S. energy independence.

Looking ahead to 2021, there is a light at the end of the pandemic tunnel, as the distribution of several COVID-19 vaccines has become more widespread and many of the restrictions and measures to stem the spread of the virus have been softened or lifted in varying degrees around the world, resulting in a rebound in oil prices and demand.  Nonetheless, a great deal of uncertainty remains, as new strains of the virus have emerged and U.S. relations with China remain tense. While there has been a recent rebound in commodity prices and demand for fossil fuels, it remains unclear when or whether demand will return to pre-pandemic growth levels. We also expect the momentum gained on the energy transition front to continue in 2021, both legislatively and in the private sector.

Thus far, the Biden Administration has already signaled its commitment to making clean energy reform a priority, and in the first three months of the new administration we have already seen the first appointment in our nation’s history of a new “special presidential envoy for climate,” the U.S.’s reentrance into the Paris Climate Agreement, the allocation of COVID-19 stimulus funds towards investments in clean energy, the roll back of several Trump-era energy policies and an overall increase in regulation for fossil fuel companies. On top of this, in February of 2021, acting chair of the Securities and Exchange Commission (“SEC”), Allison Herren Lee, announced that she was directing the SEC to enhance its focus on climate-related disclosures in public company filings. While we expect the demand for ESG-focused investments to continue in 2021 and beyond, whether that will include the continued stream of SPACs seen in 2020 is difficult to predict. Regardless, we expect companies with a compelling energy transition story to see tailwinds in the market while traditional fossil fuel-related energy companies will continue to seek ways to contribute to the energy transition and reduce their emissions, in order to allay concerns of the investment community and attract capital going forward.

This publication looks a little different this year, as we have converted to an entirely digital format. Each article includes a short synopsis and a link to the longer, more detailed piece. To access the complete collection of articles, click here.  To read individual, more detailed articles – please select from the content list noted in the table below. 

We appreciate the trust that you place in us to handle your legal matters and wish you further success in 2021.


Power & Utilities


Power Regulatory






Oil & Gas Regulatory



Chemicals & Refining







Renewable Regulatory


Renewable Finance



Renewables Tax



Corporate PPAs


Environmental Regulatory


Energy ESG

Baker Botts is an international law firm whose lawyers practice throughout a network of offices around the globe. Based on our experience and knowledge of our clients' industries, we are recognized as a leading firm in the energy, technology and life sciences sectors. Since 1840, we have provided creative and effective legal solutions for our clients while demonstrating an unrelenting commitment to excellence. For more information, please visit

Related Professionals