Happy Is The Oilman

Once again, Donald Trump has been elected president of the United States, and when I think of his full speed ahead-style promises to keep the fossil fuels industry strong and thriving, I feel happy, relieved, and optimistic for what’s to come. In other words, I’m not mad about his impending presidency, and you shouldn’t be either.

Before I delve in, let me say I don’t think Trump will usher in any major changes in the oil and gas industry. After all, under President Joe Biden our country has become the world’s largest producer thanks in part to major drilling in Texas and New Mexico’s Permian Basin. In terms of renewables’ growth, private businesses will likely continue investing in clean energy technologies and several states aren’t likely to scrap their clean energy initiatives no matter what direction the federal government takes. Nevertheless, there’s likely to be drops in federal renewable energy spending. 

As for what changes we can expect, Trump has promised to expand drilling on public lands and reopen offshore oil and gas leases, potentially spiking oilfield development and reducing energy costs. Additionally, I foresee oil companies being freed of the pressure to embrace renewable energy sources and will instead be supported by Trump’s campaign promise to boost more of America’s “liquid gold.” 

I’m not alone in this view. In fact, the day after Trump’s victory, the American energy sector of the S&P 500 jumped four percent, in contrast to declines in renewable energy companies, including First Solar’s stock, which dropped more than 10 percent. (Forbes: “How Trump’s Victory Will Impact The Energy Sector” Nov. 6, 2024)

Now that the immediate impact has been felt, I’m looking forward to more private investment from Wall Street and other big capital market movers and shakers eager to invest in traditional fossil fuels rather than being pushed to back renewables despite not always seeing healthy returns. Though Trump can’t do much to boost production immediately, more pro-fossil fuel industry policies will allow more capital to flow into oil & gas projects that deliver superior returns, ensuring a strong domestic industry that generates tax revenue and employment opportunities while also increasing gas production to export to other countries.

Other moves I’m looking for Trump to make include:

• getting America out of the Paris climate agreement;
• ensuring the federal government is less obstructionist when it comes to leasing of oil and gas government lands;
• canceling fuel economy rules forcing automobile companies to push electric vehicle sales.

While working the campaign trail, President-Elect Trump criticized green technologies like wind turbines and solar panels, which, in my view, can’t be used to power a modern lifestyle. I also agree with his promise to end the offshore wind industry on his first day in office. He’s argued the program is too expensive and presents an environmental threat.

His position may have factored into British Petroleum’s recent decision to sell its offshore wind businesses. What’s more, recent offshore lease sales have failed, garnering low bids or none. It’s not surprising; after all, wind projects require larger upfront capital expenditures than their fossil fuel counterparts. With current higher interest rates, projects with high upfront costs like renewables are bad investments.

Though many folks might not understand the financial ins and outs of energy investments, they do understand financial pain at the gas pump. During this last election cycle, Trump’s enthusiasm for the fossil fuel industry may have won him votes with people equating high oil production to low gasoline prices.

And no one can argue that Americans and the rest of the world craves energy to power our homes, our cars, our electronics and our modern lifestyle, the scale of which can only be accommodated by fossil fuels, which have long proven reliable and steady.