Midland Daily News (gift link):
President Donald Trump’s “Big Beautiful” budget bill has passed the U.S. House, but it will be weeks before the Senate acts on any changes.
One thing is clear, the administration and the Republican Congress are aggressively working to sabotage clean energy, ignoring science and the urgency of climate change, and plunging ahead to accelerate fossil fuel extraction and attendant pollution.
You might think this would mean champagne and celebration among oil and gas tycoons — but you would be wrong.
In an anonymous survey conducted by the Dallas Federal Reserve in March, executives expressed disappointment and pessimism about the industry and the administration.
Among the comments from the oil barons:
- “Trade and tariff uncertainty are making planning difficult.”
- “The administration’s chaos is a disaster for the commodity markets.”
- “I have never felt more uncertainty about our business in my entire 40-plus-year career.”
- One major shale oil player told Bloomberg News that the industry could be facing “a bloodbath.”
The sad joke is that, like so much else in the Trump administration’s current economic performance, the approach to energy is so chaotic, incoherent, and uncoordinated, that those industries are suffering right along with everyone else.
Herky-jerky tariff threats and walkbacks — and a budget bill that explodes the deficit to give tax cuts to billionaires — are spooking the bond market, bumping up interest rates. Higher interest will make construction of any energy facility more expensive, especially those with longer timelines, like gas generation plants, export terminals, pipelines, and perhaps especially, nuclear power, which the administration claims to support, but which has historically long construction times.
The Washington Post reports that “gutting pollution rules, eliminating climate policies and rolling back endangered species protections, all in the name of energy production” — are being more than offset by the market disruptions happening everywhere else.
While uncertainty keeps businesses from hiring, planning and borrowing, the threat of recession has increased, dropping oil prices to below break-even, and oil rigs counts are declining in response.
Producers are looking at 50 percent tariffs on steel and aluminum, which are a big part of their expenses, as well as many drilling components coming from China, which, as of this writing, is subject to 30 percent tariffs — but who can keep up?
OPEC nations have announced production increases, apparently to take advantage of current US weakness, pushing prices down even further.
As oil production falls off, so does fossil, or “natural” gas, a large fraction of which is produced as a byproduct of oil drilling. But the administration, with former fracking executive Chris Wright in charge of the Department of Energy, is going full speed ahead on exporting even more.
That means, with liquified natural gas (LNG) exports set to double by 2028, US consumers will not only be dealing with with a supply crunch, but competing with Europeans and Asians willing to pay two, five, or ten times more for that same gas.
“Drill Baby drill” is an empty slogan if it means oil companies lose money on each well and consumers pay more for heat, electricity, and the products made from them.
The Financial Times warned that the decade long boom in shale gas may be ending, and Wood Mackenzie recently forecast fossil gas prices to nearly double by 2035, meaning not only higher heating costs, but higher cost for electric power — and everything manufactured with that power.
One key indicator — Liberty Energy, the fracking services firm founded by Wright, the new DOE boss, has lost almost half its value since Trump was sworn in almost six months ago.
At the same time, forecasts call for increased energy consumption for data centers, AI, electric vehicles and air conditioning demand rising on a warming planet.
To meet that demand, the options are more energy efficiency or increased production from gas, solar, wind, or nuclear.
Project 2025 fossil fuel fanatics in power are rolling back efficiency programs, throwing roadblocks in the way of renewables, seeking to cut incentives and raise zoning barriers to solar, wind, and battery projects.
Meanwhile, supply chain issues mean no new gas turbines will be available until at least 2030. New nuclear projects will not make a substantial difference until well into the next decade.
Without a course change, instead of the “energy dominance” that the new administration promised, we are rushing headlong into shortages, soaring prices, and lost jobs, while killing any chances to compete with China and Europe for leadership in the industries that will be critical in the coming decades. And, of course, making the prospect of preserving a livable planet for the next thousand generations of human (and other) beings, exponentially more difficult.
How’s that for winning?