President Donald Trump enters office as U.S. oil and gas production breaks records and gasoline prices hit three-year lows.
But that didn’t stop the new president from declaring a “national energy emergency” Monday evening in a bid to boost fossil fuels.
“We will drill, baby, drill,” Trump said in his inauguration speech, adding, “We will be a rich nation again, and it is that liquid gold under our feet that will help to do it.”
The order is part of the Trump administration’s sweeping plans to “unleash American energy, which includes executive orders to boost energy production in Alaska, freeze funds from the climate and infrastructure laws and get rid of all regulations that “impose undue burdens” on energy production and use.
Trump is the first president to try to unlock additional executive powers through an “energy emergency.” Monday’s order offers essentially one justification: the Biden administration.
President Joe Biden’s environmental and climate policies, it says, have led to a “precariously inadequate and intermittent energy supply” along with an “unreliable grid” that would grow worse as energy demand increases.
“The policies of the previous administration have driven our Nation into a national emergency,” Trump’s order said. “Without immediate remedy, this situation will dramatically deteriorate in the near future.”
It’s unclear how the Trump administration can increase oil and gas production to lower prices when it’s against many companies’ economic interests to do so. But the order does suggest the use of presidential wartime powers under the Defense Production Act as a way to ramp up production.
Critics said Trump is citing a nonexistent problem in order to impose his own solution — namely, getting rid of former President Joe Biden’s climate policies and pleasing oil company executives.
“There is no energy emergency. There is a climate emergency. The United States is producing more oil and gas than any country in history,” Natural Resources Defense Council President Manish Bapna said, adding, “The nation is producing more clean power than ever.”
The oil and gas industry, however, applauded Trump’s pledge to roll back climate regulations.
“Misguided, irrational energy policies are done,” said Jeff Eshelman, president of the Independent Petroleum Association of America. “The new Administration recognizes the importance of American energy dominance at home and abroad.”
In his speech, Trump didn’t use the words, “energy dominance.” But he also didn’t say a word about renewable energy — and stayed clear of the “all of the above” rhetoric once embraced by both Republican and Democratic elected officials. Trump has made his disdain for renewable energy clear. Among the planned executive orders announced by the White House was one to end leasing to wind farms that “degrade our natural landscapes.”
The speech signaled a sharp departure from Biden’s “all of government” focus on addressing climate change. Trump’s promise to “export American energy all over the world” took aim at Biden’s pause on new permits for exporting liquefied natural gas. The president’s talk of filling up strategic reserves was a direct slap at Biden’s 2022 efforts to keep gasoline prices low by releasing oil from the Strategic Petroleum Reserve.
And while Biden championed tax breaks and funding to grow the clean energy manufacturing industry, Trump tied the country’s manufacturing goals to fossil fuels. He pledged to end the “Green New Deal,” the nickname he’s given Biden’s $1.6 trillion investment in clean energy and climate programs.
“We have something that no other manufacturing nation will ever have: the largest amount of oil and gas of any country on Earth, and we are going to use it,” Trump said.
The United States does not have the largest amount of oil and gas of any country in the world, though it is producing more oil and exporting more gas than any other nation. Saudi Arabia has the biggest proved reserves at 106 billion barrels, followed by Russia and Canada. The United States is fourth, with a fraction of Saudi Arabia’s store at 32 billion barrels.
The U.S. oil and gas industry has rebuilt itself in recent years by tapping shale and other tight formations. But geologists say Saudi Arabia has kept tapping its vast conventional reserves, without turning to “unconventional” production like shale drilling.
While the oil and gas industry has embraced Trump’s plan to strip away environmental regulations, it hasn’t joined in his call for increased production or lower prices. Investors have made it clear to oil producers that they should focus on profitability rather than production volume — and that means they’re not interested in lowering prices.
