In October 2024, the U.S. produced 13.46 million barrels of oil per day—the most in American history. In 2020, the U.S. became a net exporter of oil for the first time since 1949 and has continued to maintain this status since. Yet, according to one of President Trump’s recent executive orders, the U.S. is in the midst of an energy emergency due to the “insufficient energy production, transportation, refining, and generation” posing an “unusual and extraordinary threat to our Nation’s economy, national security, and foreign policy.” In the executive order, the Trump administration plans to use federal eminent domain laws to target the West Coast, Northeast, and Alaska for streamlined oil and gas production and permitting. Unsurprisingly, this order mainly focuses on building up oil and gas production, completely leaving out renewable energy, and not doing any favors for nuclear energy.
The Trump administration’s stated goal for this energy emergency is to lower energy prices for consumers and allow the U.S. to be energy-independent and dominate the market. It is true that Americans have seen an increase in their utility rates, with a 28.5% increase in price since 2019. But, drilling more oil won’t lower gas prices or energy prices for Americans. Many global factors like geopolitics, wars, and supply and demand in the market control the price of oil and gas. In fact, research firms have signaled that the oil industry may not even have the appetite for this drilling revolution that the Trump administration envisions. Many oil giants like ExxonMobil have admitted that there will not be some explosive growth within the oil and gas industry even if environmental regulations are slashed. Building out many new drilling projects could be expensive, and drilling a large amount of new oil (even if all the crude oil could be refined) would plummet prices in the market, and lower revenues for the industry. Something similar to what the Trump administration is proposing occurred in 2014 when the price of oil collapsed due to massive overproduction in comparison to what the demand was, leading to around 100 American oil companies declaring bankruptcy.
On top of misguided support for the oil and gas industry that clearly does not want or need this policy change, President Trump is beginning a trade war with two of our closest trading partners: Canada and Mexico. This trade war involves levying a 25% tariff on Canadian and Mexican imports, except oil, where there is a 10% tariff for Canadian energy specifically. While these tariffs have been delayed for 30 days because of a deal reached between the two respective governments and the Trump administration, businesses have already started to prepare for the price of goods and oil to rise. These tariffs would have a major impact on Trump’s supposed energy emergency, as they would immediately increase the price of raw materials necessary for energy infrastructure, like steel, lumber, and aluminum. To build out these infrastructure projects, manufacturing companies and banks want to see stability and be able to trust the fact that some aspects of the project will not randomly increase in price. Analysts at Citi Group found these tariffs would instantly increase the price for a ton of steel by $100 to $150. Increased prices for energy products, infrastructure projects for utilities, and cars would all hurt the consumer and prevent infrastructure buildout. It would also increase gas prices and rebound across the agricultural, and transportation industries that rely on Canadian crude.
This fact is especially relevant to New York residents, as the state imports more energy from Canada than any other state, taking in 7.2 terawatt hours of energy in 2024. New York also has a deal with Quebec-Hydro to provide significant clean energy to help with the state's renewable energy goals. The additional costs from the tariffs would cause electricity prices to skyrocket and make New York more reliant on fossil fuels as cleaner, cheaper alternatives across the border would be priced out.
Instead of acting at the behest of the oil and gas industry, the U.S. should continue to pursue an all-of-the-above energy strategy as a measure of national and energy security. According to the Pew Research Center, around 70% of the U.S. supports this strategy of diversifying our energy portfolio. Completely ignoring the power of batteries and advanced nuclear technologies will set the U.S. back in the fight against climate change and the technology battle we are currently losing to China. Having an energy portfolio in America that is not subject to the whims of a global market, like oil, is paramount to securing America’s energy security and prosperity. It should be the goal of any presidential administration to advance all forms of energy development, not just the one with the largest lobby.
