The US already produces more oil and gas than any other country in the world.
On the first day of his Presidency, Donald Trump declared an “energy emergency”.
It is part of a raft of measures to boost America’s already colossal fossil fuel production, backed up by claims that the country needs to tackle high energy prices and prepare for increased demand from “the next generation of technology”. There was no mention of energy shortages caused by increasingly intense extreme weather events.
The US has never declared a national energy emergency before, only local ones under then-President Jimmy Carter in the 1970s due to fossil fuel shortages.
But the US is not currently facing a shortage of fossil fuels. It is, in fact, producing more than any other country on Earth. Despite some regulations from the previous administration aimed at curtailing this, production is still increasing slightly.
The goal is to bring energy prices down for consumers. During his campaign, Trump promised to cut energy prices by 50 per cent - an improbable target according to analysts.
He believes that expanding oil and gas production can do this but his plans come at the cost of the global climate and America’s natural environment.
What will Trump’s energy emergency mean for fossil fuels?
The declaration of an energy emergency will allow the Trump administration to fast-track permits for new fossil fuel infrastructure.
“President Trump is choosing to begin his term pandering to the fossil fuel industry and its allies,” says Dr Rachel Cleetus, policy director and lead economist for the Climate and Energy Programme at the Union of Concerned Scientists.
The oil and gas industry gave an estimated $75 million (€72 million) to Trump’s presidential campaign, the Republican National Committee and affiliated committees, according to an analysis by the New York Times.
Dr Cleetus adds that the President and his “anti-science” cabinet are “hellbent on boosting fossil fuel industry profits at the expense of people and the planet”.
The President claims the US power grid will struggle to cope with the expected demand from next-generation tech like data centres. Data centres currently consume roughly 4 per cent of electricity in the US and up to 10 per cent in some states. The International Energy Agency (IEA) estimates that electricity consumption from data centres worldwide could double by 2026.
This declaration means “you can do whatever you have to do to get out of that problem,” he said on Monday.
In his inaugural address, Trump highlighted the “liquid gold” beneath American’s feet. “We have something 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,” he said.
An order to ‘Unleash American Energy’ signed by the President says that “burdensome and ideologically motivated regulations” have prevented these resources from being developed. It says this has “limited the generation of reliable and affordable electricity, reduced job creation, and inflicted high energy costs upon our citizens”.
Despite claims his predecessor’s policies had stymied fossil fuel production, the US is already producing near-record amounts of oil and gas. In 2023, the country produced more crude oil than any other country for the sixth year in a row.
Trump also lifted a 2024 pause from the Biden administration on approvals for applications to export natural gas facilities. A recent White House analysis found that expanding exports any further could trigger price hikes for American consumers and harm the economy, climate and environment.
Yet another executive order aims to boost the development of Alaska’s “extraordinary” natural resources, reversing environmental protections that limit oil and gas extraction, logging, and other development projects across the state.
An auction for leases to drill oil and gas in the pristine wilderness of the Arctic National Wildlife Refuge in early January ended without a single bidder - the second in four years that has failed to attract interest from fossil fuel companies.
Many other executive orders, pledges and policies are also part of this barrage of pro-fossil fuel actions aimed at fulfilling Trump's promise to "drill, baby, drill".
Will Trump’s energy emergency actually cut energy prices in half?
Trump claims policies to pro-fossil fuel policies will cause energy prices to drop for American consumers. While more oil and gas is likely to bring down these costs, cutting energy prices in half would almost certainly leave oil companies unable to make a profit, something they are unlikely to accept.
Economists say that the minimum price per barrel of oil at which companies can drill and still make a profit is around $45 to $50 (€38 to €48). Currently, the price of a barrel of oil is around $75 (€72.50) meaning halving it would put it well below this threshold.
If increased drilling causes oil and gas prices to drop, fossil fuel companies are then discouraged from drilling as it isn’t profitable. Lack of supply drives prices back up. Other countries are also likely to cut their production, reducing overall supply and increasing prices to keep the market stable. It is a boom and bust cycle the fossil fuel industry is all too familiar with.
Another of Trump’s policies, to boost exports of liquified natural gas, could also push prices up if countries in Europe or Asia are willing to pay more for the fuel, according to a recent White House study.
At the consumer level, energy prices are also determined by far more than just the cost of fossil fuels. Costs related to distribution and transmission make up around 40 per cent of the final price. In short, more fuel won’t add more capacity to the US electricity grid or fix energy infrastructure.
"The President’s job is to protect the people, not corporate interests," says the president of nonprofit organisation Earthjustice, Abigail Dillen.
"The flurry of executive orders today will increase industry profits but don’t lower costs for people or dig us out of the many crises we face as a country."
To put Trump’s goal of 50 per cent in context, a drop in energy costs of 19 per cent in 2020, from reduced energy consumption and oil prices falling, required the massive global upheaval of the COVID-19 pandemic.
And regardless of how Trump decides to deregulate the industry, how much oil and where it is drilled is still very much based on the whims of the companies drilling it.
Euronews