Trump Is Sabotaging His 'Drill, Baby, Drill' Agenda
When the government picks energy winners, consumers lose.
Since being sworn in, President Donald Trump has made fossil fuels a central component of his energy agenda. The administration has taken steps to expedite oil production on federal lands, reverse regulations imposed by the Biden administration, and slow down renewable energy projects.
"We have more liquid gold under our feet than any nation on Earth and by far. And now I've fully authorized the most talented team ever assembled to go and get it. It's called drill, baby, drill," the president told a joint session of Congress this month.
Trump's affinity for fossil fuels has been met with opposition from a surprising group: American energy producers.
This week, the Federal Reserve Bank of Dallas released its quarterly survey of 130 energy firms in the 11th Federal Reserve District, which includes Texas, northern Louisiana, and southern New Mexico. While the report says that production in the region has increased slightly, it also found that companies are becoming increasingly pessimistic about the year ahead.
"I have never felt more uncertainty about our business in my entire 40-plus-year career," said one survey respondent. Another respondent called "uncertainty" the "key word to describe 2025," adding, "There cannot be 'U.S. energy dominance' and $50 per barrel oil," a stated goal of the Trump administration. (The current cost of oil is about $70 per barrel.) At that price, "We will see U.S. oil production start to decline immediately and likely significantly (1 million barrels per day plus within a couple quarters). This is not 'energy dominance.'"
"The administration's chaos is a disaster for the commodity markets. 'Drill, baby, drill' is nothing short of a myth and populist rallying cry," one comment succinctly said.
It's not just Trump's rhetoric that has the energy industry on edge; it's his trade policies, too. One respondent noted that tariffs "immediately increased the cost of our casing and tubing by 25 percent." Another said, "Washington's tariff policy is injecting uncertainty into the supply chain."
By taking a heavy-handed approach to energy policy, Trump is repeating the mistakes of past presidents, including Joe Biden, who gave green energy projects billions of dollars in federal loans and halted oil and gas drilling on federal lands. And while record gas prices during the Biden administration were a result of global supply chains, the president's rhetoric toward domestic oil producers discouraged investment and didn't help to alleviate costs.
This mistake isn't just made at the federal level. States have also imposed laws mandating that a certain level of energy come from renewable sources or outlawing certain energy technologies outright. In California, renewable energy mandates and a ban on building new nuclear power plants, which are carbon-free, have hurt grid reliability and raised costs for consumers. The state has turned to natural gas peaker plants and electricity imports from other states to supplement its renewable-heavy grid.
Unfortunately, it doesn't seem like Trump's energy favoritism is going away soon. The president is eyeing a revival of coal-fired power plants. "I am authorizing my Administration to immediately begin producing Energy with BEAUTIFUL, CLEAN COAL," he said on Truth Social.
Coal has been declining for years primarily because of economics and the flood of cheaper natural gas to the market (regulations are also responsible). While the U.S. will need to increase power generation to keep up with growing demand, interfering with market forces and keeping energy sources online when they are no longer economically viable will be costly.
No matter the technology, when the government picks energy winners, consumers lose.
