Author: Przemysław Zaleski

„…Results are more important than the journey…” – Donald Trump, The Way to the Top, 2005, Helion Publishing House

As is tradition, in the fourth week of January, which fell precisely on the 20th day of the aforementioned month, the new, 47th President of the United States was sworn in at a ceremonial ceremony. Within the first hours of his term, politicians from the new US government administration submitted numerous regulations to President Donald Trump that will de facto change the face of American energy policy for at least the next four years. One of the most important campaign slogans of the newly elected White House president was “drill baby drill,” meaning increased production of liquid gold, which Trump includes oil and gas. It’s worth recalling that this is nothing new in US history, as this Republican Party campaign slogan already existed in 2008 and was used by politicians from this party, including former Maryland Governor Michael Steele and US Vice Presidential candidate Sarah Palin. It should therefore be emphasized that declarations regarding increased hydrocarbon production are commonplace within the Republican Party. However, when assessing the changes in the energy sector introduced by the new US administration, another important aspect should be considered: the personality of the president himself.

Donald Trump isn’t a politician who followed a typical career path, winning votes as governor, representative, or congressman. He is undoubtedly closer to the business world than to the American establishment, which he certainly doesn’t respect, judging by the content of his speeches. His biographers also emphasize that he cannot be accused of a lack of determination, especially as he gains applause and popularity. Changes in a significant part of the American economy, especially in the strongly traditional and conservative States, seem to be the perfect “fuel” to reverse some of the trends introduced by Trump’s predecessors.

„…I was elected to represent the people of Pittsburgh, not Paris…” – Statement by Donald Trump, June 1, 2017

When forecasting Trump’s energy doctrine, it’s important to revisit his views on climate policy and the resulting restrictions on industry. Already during his first term in 2017, he decided to withdraw the US from the Paris Agreement, the 2015 international climate protection treaty. This agreement was intended to help implement measures to limit global warming and counteract its effects. According to Trump, the US economy is not responsible for the majority of carbon dioxide emissions, yet it bears the enormous costs of implementing the treaty’s provisions. The US withdrawal from the agreement will formally take a year, but the direction is clear to the entire world – no more restrictions. This approach is confirmed by the new president’s administration’s announcements, as evidenced by key politicians in the new government. Scott Bessent, billionaire owner of the Key Square Group hedge fund, formally proposed in the Senate for the position of Treasury Secretary, advocates for the United States to increase oil production by as much as several million barrels per day. The United States, producing 13.5 million cubic meters of oil annually according to 2024 data from the International Energy Agency (IEA), has become the global leader in gas production for the sixth time. A similar situation exists with the United States’ position as a gas producer, producing 2.8 billion cubic meters per day and leading in exports. In his inaugural address, Donald Trump said: “We will lower prices, replenish our strategic reserves to the very top, and export American energy around the world.” A significant question is the long-term viability of such a policy, because currently, the United States is not only not facing a fuel shortage, but according to American analysts, including Francisco Blanch, head of global commodity and derivatives research at Bank of America, an oversupply will soon become apparent (statement from 2024). This forecast is also confirmed by the policies of the largest competitor in this segment, Saudi Arabia, which, in cooperation with other OPEC plus countries, began reducing production in mid-2024, including OPEC itself, by a total of 2.2 million tons per day to maintain appropriate prices. The two remaining countries importing high volumes of oil, India and China, are being supplied by Russia at significant price reductions (average around 30%) due to sanctions. According to the predictions of analysts such as Francisco Monaldi, chief specialist on Latin American oil markets at the Baker Institute, oil production will increase from 2025 in countries such as Brazil and Guyana, as well as in Canada and Argentina.

A similar situation applies to the second “liquid gold”: gas. According to data from the U.S. Energy Information Administration (EIA), since 2017, the U.S. has been exporting more gas than it imports, and the situation in 2024 is very favorable, as the United States was the world’s largest LNG exporter and is constantly expanding its infrastructure. In 2024, two new LNG export facilities were commissioned for commercial operation—Plaquemines LNG and Corpus Christi LNG Stage 3 (an expansion of the existing Corpus Christi LNG export terminal), which began exporting LNG. Currently, the U.S. exports gas volumes to 40 countries around the world, averaging 12.6 billion cubic feet per day.

„…only losers quit, those who quit are the biggest losers in the world, winners move on, whatever you do, don’t give up…” – Donald Trump, statement from March 2019

The declaration of a National Energy Emergency by a new President is a unique situation for US presidents. In the 1970s, President Jimmy Carter granted individual states, through special authorizations for governors, the right to suspend certain environmental regulations, although with the emphasis on using this authority “cautiously, with due diligence, and only as a last resort.” Donald Trump’s decisions are expected to be more controversial – his thinking on this topic is much broader and means lifting all administrative barriers. According to statements by members of the new US administration, the declaration of a “national energy emergency” is intended to unlock a range of various powers that will enable the development of broad industrial sectors, including coal, oil, and gas production. This is expected to create new jobs. In practice, the so-called “muzzle” is expected to be lifted and the US president himself granted sweeping powers. It’s possible that the role of important federal agencies like the EPA (The Environmental Protection Agency) or the DOE (U.S. Department of Energy – the U.S. government department responsible for energy and nuclear materials safety) will be limited. According to Trump’s announcement, he intends primarily to abolish a number of regulations and laws that have previously restricted the implementation of energy projects: from pipelines to transmission lines, power plants, and oil and gas drilling. Regulations restricting trade in coal, oil, and gas would also be abolished, thanks to easier access to new export permits and the reversal of the Biden administration’s decisions. The process of granting concessions for fossil fuel extraction on government (federal) lands and on offshore plots (offshore drilling) will be simplified. Christopher Wright, president and co-owner of the energy company Liberty Energy, who has already received recommendations for the position of Secretary of Energy, is expected to be the decisive person in charge of the planned changes.

„…The United States will not sabotage our own industries while China pollutes with impunity” – Donald Trump, December 2024

Immediately after being sworn in, President Donald Trump signed an executive order halting all spending on the so-called “Green New Deal” initiatives. This effectively halted financial support under the “Inflation Reduction Act” provisions previously enacted by former President Joe Biden, which guaranteed special funds, programs, and other incentives to accelerate the transition to a clean energy economy. In the executive order, titled “Unleashing American Energy,” Trump himself required all US government agencies to review the processes and programs for grants, loans, contracts, and other financial payments, and also suspended the disbursement of funds, including discretionary programs and other activities supporting electric vehicles. Interestingly, despite his close relationship with Elon Musk, the new president withdrew support for electric cars and the executive order that established a goal (albeit nonbinding) that half of all new vehicles sold in the US be electric by 2030. It’s important to note, however, that at the state level, tax breaks for consumers and manufacturers, as well as the lifting of strict federal emission standards and mandates for electric vehicles, cannot be reversed solely by an act of the President of the United States. In practice, this requires lengthy regulatory action, congressional legislation, or even Supreme Court intervention. These declarations are a publicity stunt, as Donald Trump wants to curry favor with his voters. Regardless, he will pursue this solution, as he said during his inauguration: “We will reverse the electric vehicle mandate, saving our automotive industry and keeping my sacred promise to our wonderful American automotive workers.” Another nod to the segment of society that finds the “Green Deal” and its effectiveness absurd is the promise to end policies that “limit consumer choice” regarding consumer goods such as showerheads, gas stoves, and dishwashers.

In summary, the first actions taken by the Donald Trump administration indicate that his energy policy will focus on several key pillars:

1. Changing legal regulations aimed at removing barriers related to environmental protection and energy.
2. Promoting industries in the energy sector related to traditional solutions, such as oil, gas and coal extraction, while also supporting heavy industry such as steel mills, mines, power plants, steel plants, and the automotive industry.
3. Withdrawal from the broadly understood green deal and the costs associated with its implementation, even at the expense of environmental protection and delays in the implementation of modern ecological technologies;
4. Focusing on activities that support the sale of American hydrocarbons while simultaneously blocking those countries and companies that may weaken exports.

Will Europe come to terms with this situation?

This question is difficult to answer today, but it certainly cannot be ignored without a specific plan of action. Political scientist Professor Stephen Walt of Harvard Kennedy School, who as the author of the balance of threat theory made a significant contribution to the theory of neorealism, described the so-called “Alliance Theory” in his book “The Origins of Alliances.” According to this theory, if a country dominates the rest of the world, one can either accept it or try to balance its power by building coalitions. Europe may seek ways to cooperate with rising economic powers such as China or India, but from a geopolitical perspective, cooperation with them is currently difficult. Furthermore, cooperation with major oil and gas producers other than the US, such as Saudi Arabia, Brazil, or Canada, may be met with an appropriate response from Trump, especially in the area of ​​military security.

Europe must realize that Trump, with his main campaign slogan of “America First,” is focused on strengthening its own economy and building its wealth. If Europe sticks to its current energy policy, nobly imposing more and more climate-related obligations on itself, it will cease to be economically competitive. Comparing energy prices between the US and Europe, they are already half as much, favoring the US. Directing energy production support toward renewable sources, such as wind farms or photovoltaic panels, without ensuring stable power sources, could lead to further energy price increases in the future. A possible response could be to abandon the development of renewable energy sources in poorer countries and use the US example to abandon the Green Deal. Europe must understand that the new US administration aims not only to guarantee low energy prices and energy independence but also to achieve global energy dominance. European industry is becoming increasingly less competitive due to the burden of CO2 emissions, and is also less innovative than in the US. By withdrawing the US from climate policy, Trump has weakened global climate mobilization, especially among emerging and developing countries. Europe is becoming increasingly isolated with its climate ambitions, thus losing its position and political influence. The deepening of the green energy transformation in Europe following Trump’s decision appears to be a decision that, instead of increasing energy security, only weakens it, and the associated costs may become unbearable in the future for both industry and citizens of the 27 European Union member states.

Author: Przemysław Zaleski, Senior Fellow, Casimir Pulaski Foundation