- Trump said on Monday that the US is in an energy emergency, pushing his agenda for higher production.
- The US is already producing and exporting record amounts of oil and gas.
- Ending Biden’s climate rules could slow a manufacturing boom in many Republican states.
President Donald Trump said on Monday he is declaring an energy emergency, putting into motion his “drill, baby, drill” pledge with a promise to issue a series of executive orders aimed at increasing US oil and gas production.
“We will be a rich nation again and it is that liquid gold under our feet that will help make that happen,” he said in his inaugural address.
White House officials said Trump will sign an executive order that will allow the returning president to speed up permitting for energy projects, including pipelines and power plants.
He is also expected to order large swathes of Alaska – which is rich in natural resources – open for exploration and energy extraction.
Trump said during the campaign that “harnessing American energy” — especially oil and gas — and changing the Biden administration’s climate rules would lower prices and be an economic boon. For many Americans worried about inflation, the message resonated.
On Monday, surrounded by the CEOs of the biggest tech companies, Trump said he would end the Green New Deal and rescind the electric vehicle mandate.
In a statement, the White House said Trump would end leases for wind farms and once again withdraw from the Paris Climate Agreement.
However, fulfilling these promises can be difficult. Economists and energy analysts told Business Insider that oil and gas prices are largely driven by global factors beyond a president’s control. Supporters of President Joe Biden’s signature law also warned that dismantling it would dampen a manufacturing boom, mostly in Republican states, where new factories are making solar panels, electric vehicles and batteries that could reduce planet-warming emissions from fossil fuels. fossil.
In addition to fossil fuel production, administration officials said in a statement that the orders will aim to increase supplies of non-fuel minerals and that the actions will increase consumer choice for a variety of manufactured products.
In the US, about 24% of oil and 11% of natural gas is produced on federal lands and waters. according to industry estimates. The vast majority comes from private land owned by individuals and companies. The Biden administration has restricted drilling in federal areas such as the Gulf of Mexico and Alaska and cut off new permits for terminals to export gas overseas.
Groups representing the fossil fuel industry, including the American Petroleum Institute, said the moves cost jobs at home and threaten global energy security. The industry also argues that the US needs more oil and gas to meet AI’s growing demand for around-the-clock energy.
US oil and gas production at record levels
ExxonMobil CEO Darren Woods suggested in November press interviews that the Trump administration would have little effect on production. The industry is already producing a lot of oil and gas and there is no possibility of releasing much production in the near term, he said.
“Certainly we wouldn’t see a change based on a political change, but more on an economic environment,” Woods told CNBC.
Trump’s nominees for two key Cabinet positions said they would restore America’s “energy dominance” during Senate confirmation hearings last week.
Chris Wright, Trump’s nominee to lead the Energy Department, said he would support all forms of energy, including fossil fuels, nuclear power and renewables. He said he believed climate change was a “global challenge” that needed to be solved – a departure from some of his past comments that denied there was a crisis and criticized renewables as “unreliable and costly”. Doug Burgum, Trump’s pick to lead the Interior Department, promised to expand oil and gas drilling on federal lands and waters.
Energy analysts told BI that major oil companies have been more focused on returning cash to shareholders than investing in new projects to boost production, in part because China is experiencing an economic downturn. For decades, China has fueled global oil demand as it built new factories and real estate and the country’s wealthiest population bought cars. However, the housing market is now in turmoil due to millions of unsold apartments and consumers are driving more electric vehicles, reducing demand for diesel.
Biden’s climate law is creating jobs
China has rapidly become a leader in renewable energy technology and controls the vast majority of the critical minerals needed for it. The Biden administration tried to catch up, in part by passing the Inflation Reduction Act. University of Pennsylvania researchers estimated that the law would invest about $1 trillion over the next decade in the development and production of technology such as solar panels, wind turbines, electric cars, batteries and nuclear power.
Since the IRA was enacted in 2022, more than 1,000 manufacturing facilities and 350,000 jobs have been announced. Millions of Americans have also claimed more than $8 billion in tax credits for solar panels, EVs and heat pumps, which can lower their energy costs in the long run.
Trump has called the law “the new green scam” and promised to end it.
