- Trump said Monday that the US is in an energy emergency, pushing his agenda of higher output.
- 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, setting his promise to “drill, baby, drill” in motion with a pledge to issue a raft of executive orders aimed at boosting US oil and gas production.
“We will be a rich nation again, and it is that liquid gold under our feet that will help to do it,” he said in his inaugural address.
White House officials said Trump will sign an executive order that will allow the returning president to accelerate permitting for energy projects including pipelines and power plants.
He is also expected to order vast swaths of Alaska — which is rich in natural resources — opened up for energy exploration and extraction.
Trump on the campaign trail said that “unleashing American energy” — specifically oil and gas — and reversing the Biden administration’s climate rules would lower prices at the pump and be an economic boon. For many Americans concerned about inflation, the message resonated.
On Monday, flanked by CEOs of the largest tech companies, Trump said he would end the Green New Deal and cancel the electric vehicles mandate.
In a statement, the White House said Trump would end leases to wind farms and withdraw once again from the Paris Climate Accord.
Still, delivering on those promises may prove difficult. Economists and energy analysts told Business Insider that oil and gas prices are largely dictated by global factors outside a president’s control. Proponents of President Joe Biden’s signature climate law also warned that unraveling it would undercut a manufacturing boom, predominantly in Republican states, where new factories are churning out solar panels, electric vehicles, and batteries that can reduce planet-warming emissions from fossil fuels.
In addition to fossil fuel production, administration officials said in a statement the orders will aim to boost supplies of non-fuel minerals and that the actions will increase consumer choice for a range of manufactured products.
In the US, about 24% of oil and 11% of natural gas are produced on federal lands and waters, per industry estimates. The vast majority comes from private land owned by individuals and companies. The Biden administration has limited drilling in federal areas like the Gulf of Mexico and Alaska and paused new permits for terminals to export gas overseas.
Groups representing the fossil fuel industry, including the American Petroleum Institute, said those moves cost jobs at home and threaten global energy security. The industry also argues the US needs more oil and gas to meet AI’s skyrocketing demand for around-the-clock power.
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 plenty of oil and gas, and there isn’t an opportunity to unleash a lot of 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 to 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 back all forms of energy, including fossil fuels, nuclear power, and renewables. He said he believed climate change is a “global challenge” that needed to be solved — a shift from some of his past comments denying there was a crisis and criticizing 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 oil majors have been more focused on returning money to shareholders than investing in new projects to boost production, in part because China is experiencing an economic downturn. For decades, China has driven global oil demand as it built new factories and real estate and the country’s wealthier population bought cars. However, the housing market is now in disarray due to millions of unsold apartments and consumers are driving more EVs, crimping demand for oil.
Biden’s climate law is creating jobs
China has managed to rapidly become a leader in renewable energy technology and controls the vast majority of the critical minerals needed for it. The Biden administration sought to catch up, in part by enacting the Inflation Reduction Act. University of Pennsylvania researchers estimated that the law would invest about $1 trillion over the next decade in developing and manufacturing technology like 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 breaks for solar panels, EVs, and heat pumps, which could lower their energy costs over the long term.
Trump has called the law the “green new scam” and promised to terminate it.
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