Donald Trump's call for 'energy dominance' is likely to run into real-world limits
MATTHEW DALY
Updated 6 min read
WASHINGTON (AP) — President-elect Donald Trump is set to create a National Energy Council that he says will establish American “energy dominance” around the world as he seeks to boost U.S. oil and gas drilling and move away from President Joe Biden’s focus on climate change.
The energy council — to be led by North Dakota Gov. Doug Burgum, Trump’s choice to head the Interior Department — will be key in Trump’s pledge to “drill, drill, drill" and sell more oil (CL=F, BZ=F) and other energy sources to allies in Europe and around the globe.
Gov. Doug Burgum, R-ND., speaks during the Republican National Convention on Wednesday, July 17, 2024, in Milwaukee. (AP Photo/J. Scott Applewhite) ·ASSOCIATED PRESS
The new council will be granted sweeping authority over federal agencies involved in energy permitting, production, generation, distribution, regulation and transportation, with a mandate to cut bureaucratic red tape, enhance private sector investments and focus on innovation instead of “totally unnecessary regulation,” Trump said.
But Trump's energy wishes are likely to run into real-world limits. For one, U.S. oil production under Biden is already at record levels. The federal government cannot force companies to drill for more oil, and production increases could lower prices and reduce profits.
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A call for energy dominance — a term Trump also used in his first term as president — "is an opportunity, not a requirement,'' for the oil industry to move forward on drilling projects under terms that are likely to be more favorable to industry than those offered by Biden, said energy analyst Kevin Book.
Whether Trump achieves energy dominance — however he defines it — "comes down to decisions by private companies, based on how they see supply-demand balances in the global marketplace,'' said Book, managing partner at ClearView Energy Partners, a Washington research firm. Don't expect an immediate influx of new oil rigs dotting the national landscape, he said.
President-elect Donald Trump on the campaign trail on Oct. 14, 2024, in Oaks, Pa. (AP Photo/Alex Brandon) ·ASSOCIATED PRESS
Trump's bid to boost oil supplies — and lower U.S. prices — is complicated by his threat this week to impose 25% import tariffs on Canada and Mexico, two of the largest sources of U.S. oil imports. The U.S. oil industry warned the tariffs could raise prices and even harm national security.
“Canada and Mexico are our top energy trading partners, and maintaining the free flow of energy products across our borders is critical for North American energy security and U.S. consumers,” said Scott Lauermann, speaking for the American Petroleum Institute, the oil industry’s top lobbying group.
American Fuel & Petrochemical Manufacturers, which represents U.S. refineries, also opposes potential tariffs, saying in a statement that “American refiners depend on crude oil from Canada and Mexico to produce the affordable, reliable fuels consumers count on every day."
Canada's Prime Minister Justin Trudeau, left, and Mexico's President Claudia Sheinbaum talk during the G20 Summit leaders meeting in Rio de Janeiro, Monday, Nov. 18, 2024. (AP Photo/Eraldo Peres) ·ASSOCIATED PRESS
Scott Segal, a former Bush administration official, said the idea of centering energy decisions at the White House follows an example set by Biden, who named a trio of White House advisers to lead on climate policy. Segal, a partner at the law and policy law firm Bracewell, called Burgum “a steady hand on the tiller” with experience in fossil fuels and renewables.
And unlike Biden’s climate advisers — Gina McCarthy, John Podesta and Ali Zaidi — Burgum will probably take his White House post as a Senate-confirmed Cabinet member, Segal said.
Dustin Meyer, senior vice president of policy, economics and regulatory affairs at the American Petroleum Institute, called the new energy council “a good thing” for the U.S. economy and trade. “Conceptually it makes a lot of sense to have as much coordination as possible,” he said.
Still, “market dynamics will always be the key'' for any potential increase in energy production, Meyer said.
Jonathan Elkind, a senior research scholar at Columbia University’s Center on Global Energy Policy, called energy dominance a “deliberately vague concept,” but said, “It's hard to see how (Trump) can push more oil into an already saturated market."
Trump has promised to bring gasoline prices below $2 a gallon, but experts call that highly unlikely, since crude oil prices would need to drop dramatically to achieve that goal. Gas prices averaged $3.07 nationally as of Wednesday, down from $3.25 a year ago.
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Elkind and other experts said they hope the new energy council will move beyond oil to focus on renewable energy such as wind, solar and geothermal power, as well as nuclear. None of those energy resources produces greenhouse gas emissions that contribute to climate change.
"Failure to focus on climate change as an existential threat to our planet is a huge concern and translates to a very significant loss of American property and American lives,'' said Elkind, a former assistant energy secretary in the Obama administration. He cited federal statistics showing two dozen weather disasters this year that caused more than $1 billion in damage each. A total of 418 people were killed.
Even so, his Nov. 15 announcement of the energy council says he will “expand ALL forms of energy production to grow our Economy and create good-paying jobs.”
That includes renewables, said Safak Yucel, associate professor at Georgetown University’s McDonough School of Business.
"The mandate for the energy council is U.S. dominance globally, but what's more American than American solar and American wind?'' he asked. A report from Ernst & Young last year showed that solar was the cheapest source of new-build electricity in many markets.
FILE - Pumpjacks draw out oil and gas from well heads as wildfire smoke hangs in the air near Calgary, Alberta, Sunday, May 12, 2024. (Jeff McIntosh/The Canadian Press via AP, File) ·ASSOCIATED PRESS
Trump, in his statement, said he wants to dramatically increase baseload power to lower electricity costs, avoid brownouts and “WIN the battle for AI superiority."
In comments to reporters before he was named to the energy post, Burgum cited a similar goal, noting increased demand for electricity from artificial intelligence, commonly known as AI, and fast-growing data centers. “The AI battle affects everything from defense to health care to education to productivity as a country,″ Burgum said.
While Trump mocks the climate law as the “green new scam,” he is unlikely to repeal it, Yucel and other experts said. One reason: Most of its investments and jobs are in Republican congressional districts. GOP members of Congress have urged House Speaker Mike Johnson to retain the law, which passed with only Democratic votes.
“A lot of Southern states are telling Trump, ‘We actually like renewables,'" Yucel said, noting that Republican-led states have added thousands of jobs in recent years in wind, solar and battery power.
If renewables make economic economic sense, he added, "they'll continue.''
