President-elect Donald Trump reacts during a MAGA victory rally at Capital One Arena in Washington, DC, on January 19, 2025, the day before his inauguration ceremony.
Jim Watson | Afp | Getty Images
President-elect Donald Trump will declare a national energy emergency after his inauguration on Monday to lower energy costs, a White House official told reporters.
The national energy emergency “will unlock a number of different authorities” to produce more natural resources, the official said, without giving specifics on which authorities Trump would use. The president-elect has promised to cut energy costs in half within the first year of his administration.
“The national energy emergency is essential because we are in an AI race with China, and our ability to produce domestic American energy is so essential that we can produce the electricity and energy needed to stay at the global forefront of technology, ” an official told reporters.
Trump is also set to sign an executive order specifically to release power generation in Alaska, the official said, without giving specifics.
“Alaska is so critical to our national security, given its geostrategic location, and is a crucial location from which we can export LNG not only to other parts of the United States, but also to our friends and allies in the region of Asia Pacific. said the official.
The United States has been the world’s largest producer of crude oil for years, overtaking Saudi Arabia and Russia. The CEOs of Exxon and Chevron have said oil and gas production levels are based on market conditions and are unlikely to rise significantly in response to who is in the White House.
“There’s still some upside,” Chevron CEO Mike Wirth told CNBC’s Brian Sullivan in a Jan. 8 interview. “But maybe not the growth at the rate we’ve seen over the last few years, as especially some of these new shale plays start to mature,” Wirth said.
Exxon CEO Darren Woods told CNBC that U.S. shale production has not faced “external constraints” under the Biden administration.
“Certainly we wouldn’t see a change based on a political change, but more on an economic environment,” Woods said in a Nov. 1 interview before Trump’s election victory. “I don’t think there’s anyone out there who is developing a business strategy to respond to a political agenda,” he said.
There are areas in the Gulf of Mexico that have not been opened because of federal permits, Woods said at the time. The Biden administration had planned the fewest oil and gas lease sales in history in a five-year program that runs through 2029.
“This, in the longer term, could open up potential sources of supply,” Woods said of the increase in rental sales.
There are several emergency statutes that Trump could use to increase supplies of gasoline and electricity, said Glenn Schwartz, director of energy policy at consulting firm Rapidan Energy. Emergencies are often loosely defined under federal law, giving the president broad discretion to use them as he sees fit, Schwartz said.
And Trump is likely to face little pushback from the courts because they are reluctant to challenge presidential determinations related to national security, Schwartz said.
“What you end up with is that even if Trump were to expand his emergency powers in unprecedented ways, it’s not clear that the courts would step in to stop any of these resulting actions,” the analyst said.
Still, there is little the president can do to force more oil and gas production, Schwartz said.
“You can lead a horse to water, but you can’t make it drink,” said the analyst. “He can give them all the resources they need to be able to drill, but I haven’t seen anything that suggests he can force them to get it out of the ground.”
