Petroleum industry executives and energy analysts who spent much of the last four years warning about under investment in the global oil and gas development have changed their tune with President Donald Trump’s return to the White House.
A flurry of Trump’s Day 1 executive orders intended to ease environmental permitting bottlenecks and boost U.S. fossil fuel production have the potential to redirect vast flows of money away from clean energy and toward traditional investments in oil and gas, analysts said.
“I would say it’s historic,” said Robert McNally, who tracks energy markets as the president of the Rapidan Energy Group and served as an energy adviser to President George W. Bush. “It will vastly improve the investment environment. It’ll reduce uncertainty and risk for the companies investing in the oil and gas sector.”
Trump’s orders are likely to have limited impact on their own, analysts said. Many will require congressional action or months, if not years, of painstaking regulatory procedure to implement. Legal challenges from environmentalists and congressional Democrats are nearly certain.
But taken together, they represent a powerful signal to global energy markets, which have witnessed a shift away from investments in oil and gas production toward clean energy technologies in recent years. Global investment in solar generation alone was $500 billion in 2024, nearly matching the $570 billion spent on oil and gas production, according to the International Energy Agency.
Spending on oil and gas production has fallen from a peak of almost $900 billion in 2014. The decline has come even as global demand has hit record levels.
That has prompted calls from oil industry leaders for more spending on new projects to keep pace with the world’s thirst for fossil fuels. In 2023, the secretary general of the Organization of the Petroleum Exporting Countries told CNN the lack of investment in oil was “dangerous” for energy security.
Trump’s orders are unlikely to lead to a sudden surge in U.S. oil and gas production, which is already at record levels. In a note to clients, Rystad Energy predicted oil producers are likely to prioritize profits over growth and noted the “speed of permit approvals has not been a material roadblock” to drilling on federal lands in New Mexico’s prolific oil fields in recent years.
But clean energy advocates worry Trump’s orders represent an opening act that could tilt global capital markets in favor of traditional fossil fuels.
“The vast majority of the dollars that are flowing into these projects, that are flowing into these programs, are private dollars. And so what the vibes that the market sees and operates on determine where those dollars flow,” said Harrison Godfrey, managing director at Advanced Energy Economy, a trade group.
“If you change the vibes and you shift the market, you depress those projects, even if, at the end of the day, the actual technical legal effect is much more limited than what the market does.”
Trump’s orders cover the gamut of energy and climate policy. There is the directive to restart permitting reviews for liquefied natural gas export terminals and reopen the Arctic National Wildlife Refuge to oil drilling. There is the declaration of a national energy emergency, and a call for more oil, gas, coal, hydro and nuclear power to meet it. And there is the order to “immediately pause” spending under the Inflation Reduction Act, former President Joe Biden’s signature climate law, and a call to review the “continued applicability” of the Supreme Court’s endangerment finding for greenhouse gases, the legal underpinning for U.S. climate regulations.
Some orders face significant legal hurdles, and will likely require congressional Republicans to use their narrow majorities to pass legislation to realize Trump’s objectives.
In a note to clients, Morgan Stanley said it believes Trump “cannot stop the disbursement of funds and allocation of tax credits under the IRA. We expect legal challenges to be filed, and would expect courts to agree with these challenges and overturn this element of the Trump Executive Order.”
Uphill battle for clean energy
But where oil and gas companies spent the past four years playing defense under Biden, it is the clean energy industry that now finds itself under siege.
In a first day memorandum, Trump directed the government to halt new leases and permits for wind projects. He also called on the Interior Department secretary to review projects with existing permits to see if terminating or amending their approvals is necessary.
Offshore wind is particularly vulnerable to presidential whims because nearly all projects are planned in federal waters. Developers have sought to avoid a direct confrontation with Trump, an outspoken wind critic, and instead touted their investments in U.S. ports and shipbuilding as a way to support his agenda. Equinor, Orsted and Vineyard Offshore all said in separate statements Wednesday they were reviewing the memorandum’s impact.
Dominion Energy alluded in a statement Wednesday to public support for a massive wind project it is building off Virginia from the state’s Republican governor, Glenn Youngkin. The Richmond-based utility said it is halfway complete with construction of the 2,600 megawatt Coastal Virginia Offshore Wind project, calling it an important part of its “all of the above” energy strategy.
“Bipartisan leaders agree it has been an economic boom for Virginia, creating thousands of jobs and stimulating billions in economic growth, while providing consumers with reliable and affordable energy,” Dominion spokesperson Jeremy Slayton wrote in an email. “We’re confident CVOW will be completed on-time, and that Virginia’s clean energy transition will continue with bipartisan support for many years to come.”
Trump’s decision to target energy sources like wind may backfire, said Michael Webber, a professor who studies energy markets at the University of Texas Austin. He pointed to Texas as an example, noting the state had met its economy’s growing electricity needs in recent years by building a combination of wind, solar, battery storage and natural gas projects.
“The Texas example shows that if you make it easy to build and you invest in a diverse range of options for energy, then your energy systems robustness will improve yet emissions and costs will stay down,” Webber said.
“The thing I worry about with the flurry of day one activities from the Trump administration is giving us fewer opportunities to invest in diverse energy options.”
Correction: An earlier version of this story incorrectly spelled Robert McNally’s name.