From the Editor: Drill baby, drill? [Global Gas Perspectives]
Since he announced his bid for a second term as US President, Donald Trump’s rallying cry of “drill baby, drill!” was his go-to response when asked what his second administration’s energy policy might look like.
While “drill baby, drill!” might resonate with Trump’s right-wing base, it’s unlikely to hold much sway in oil and gas boardrooms in Houston, where the focus remains on fiscal discipline and a return of profits to shareholders.
That business plan worked quite well under President Joe Biden’s Democrats, a period which saw natural gas production increase to 41.3 trillion ft3 in 2023 from 37.3 trillion ft3 in 2021 and LNG exports climb to 4.3 trillion ft3 in 2023 from 3.6 trillion ft3 in 2021.
That’s unlikely to change when Trump 2.0 enters the White House on January 20, 2025, with control not only of the Senate (53-47) but also of the House of Representatives, although the balance of power in the lower chamber has yet to be decided.
Control of both houses will give Trump an advantage not enjoyed by the Biden/Harris administration, which worked with a slim majority in the Senate (51-49) but was handcuffed by the GOP’s control of the House (220-212).
Still, Biden was able to push through much of his environmentally centric economic and energy platforms, including bringing in the oddly-named Inflation Reduction Act (the IRA had little to do with reducing inflation but much to do with attempting to boost renewable energy).
Late in the campaign, in an address to the Economic Club of New York, Trump vowed to rescind unspent IRA funds and “terminate the Green New Deal, which I call the Green New Scam.”
Repealing IRA a hard sell
But the IRA has already brought significant clean energy investments to the economies of traditionally red states and contributed to new industries – carbon capture and storage, hydrogen among them – across the US. Most recently – on November 20, in fact – the US Department of Energy (DoE) awarded US$2.2bn in federal cost share funding to the Gulf Coast Hydrogen Hub and the Midwest Hydrogen Hub, which together could create more than 55,000 jobs.
And although Trump has a slim majority in the Senate, he lacks the “supermajority” of 60 seats needed to push through a full repeal of the IRA. That will leave him only with the ability to tinker around the edges of the IRA, dismantling those portions that he views as giving renewables an unfair advantage over oil and gas.
Where Trump might have a more positive impact for oil and gas is in his promise to make it easier to drill on federal onshore and offshore lands, repeal Environmental Protection Agency (EPA) methane fees and end the Department of Energy’s review of new non-FTA LNG export permits, which Biden ordered to get a better handle on the climate and economic impacts of new LNG projects.
In Biden’s first year as president, his administration approved only 407 new leases on federal lands both onshore and offshore, while in 2023, the number fell to a paltry 144.
Trump has promised, as part of his “drill baby, drill” energy policy, to open federal lands to more oil and gas drilling as a way to increase already record high US oil and gas production. But again, such promises might be hard to fulfill, given the vast array of environmental laws enacted in the US over the last 50 years to protect places like the Arctic National Wildlife Refuge (a place favoured by Trump for more drilling).
Marshall McCrea, co-CEO of Energy Transfer, which operates natural gas pipelines and is developing the 16.5mn tonnes/year Lake Charles LNG project in Louisiana, says Trump 2.0 will ensure that “rational, reasonable people” are running the country.
One of those will be Chris Wright, founder and CEO of Denver-based oilfield services firm Liberty Energy and a strong supporter of Trump’s efforts to boost US oil and gas production. Wright also shares Trump’s disdain for global cooperation on fighting climate change (the president-elect has already promised to pull the US – again – out of the Paris Agreement) and has compared Biden’s environmental efforts to Soviet-era communism.
Wright will also sit on the newly formed National Energy Council, which Trump said will bring together all departments and agencies involved in US energy to “drive US energy dominance, which will drive down inflation, win the AI arms race with China (and others) and expand American diplomatic power to end wars all across the world.”
Drill more, produce more, export more and end all wars. That’s a lot to ask for in 1,400 days.