As US President Donald Trump took office for his second term, experts suggest the new US president is inclined to leverage oil and gas production to gain geopolitical advantages.
‘President Trump is more apt to want to use our oil and gas production for sort of geopolitical advantage,’ Samantha Gross, the director of Energy Security and Climate Initiative at Washington-based Brookings Institution, told Anadolu.
Noting how US LNG helped Europe out during the ongoing cut off of Russian pipeline natural gas supply, she said: ‘The US would have been less able to put the oil price cap on Russian oil exports and now additional sanctions on parts of the Russian shadow fleet.’
‘That would have been a lot harder for us to do without our oil and gas production,’ she explained.
According to Gross, the US is already ‘taking advantage of it geostrategically,’ she said, adding Trump wants to ‘do this a little more directly.’
‘He has gone to the Europeans, for instance, and said that he will put sanctions on European goods if they don’t buy more oil and gas,’ she recalled.
Last month, Trump said in a post on Truth Social: ‘I told the European Union that they must make up their tremendous deficit with the United States by the large scale purchase of our oil and gas. Otherwise, it is TARIFFS all the way!!!’
‘He wants to use it as a bargaining chip or a source of leverage,’ Gross added. ‘That’s different than what you’re seeing today with us sort of taking advantage of being a large producer to be able to do certain things.’
-Stricter sanctions implementation on Iran
The world will witness ‘a strong emphasis in pushing fossil fuel production, particularly through deregulation and opening up federal lands,’ she said.
However, she said that the president and his administration don’t have many mechanisms by which they can increase US fossil fuel production.
Sara Vakhshouri, a senior research fellow at Oxford Institute for Energy Studies echoed Gross’ remarks saying Trump’s ‘drill, baby, drill’ motto would potentially boosting US shale production.
‘However, post-COVID, shale investors have shown greater capital discipline, indicating that oil prices and profitability will largely drive rig count and production growth,’ Vakhshouri added.
On the supply side, she said: ‘Trump might implement stricter sanctions implementation on Iran to cut its oil exports significantly.’
US natural gas production is likely to continue its growth, supported as part of the clean energy transition, Vakhshouri explained.
‘Additionally, Trump is expected to push for nuclear power expansion to meet rising electricity demands, especially for data centers and AI,’ she noted.
Gross explained that the US oil industry consists of private, widely dispersed companies, emphasizing that oil and gas firms make independent decisions driven by costs and price expectations, which significantly limits the president’s ability to influence production levels.
Republicans have claimed that Biden slowed oil production in the US. According to the latest official figures, US oil production last October was 13.5 million barrels per day (bpd), up from from 11.1 bpd in January 2021, the last month of Trump’s first term in office.
As Trump also announced that the US will withdraw from the Paris Agreement, Gross said that the country will very much pull back on its role as a leader in international climate negotiations and action.
But on a positive note, Gross added: ‘The US subnationals, States and cities and US businesses continue to work with partners abroad on decarbonization to continue to work towards offering products that are low carbon.’
-Renewable investments face uncertainty under Trump policies
Gross thinks that although Trump may not be much interested in clean energy investments, the US economy is going to continue to invest in renewables.
The Inflation Reduction Act, a landmark climate law from the Biden administration, is unlikely to be repealed by Trump despite his intentions, she added.
Many investments backed by the law are in Republican-led districts, where much of the industrial base is located, and permitting is often easier under Republican governors, Gross explained.
‘But the upside of that is I think the law is politically durable because now that it’s in place and now that investments are being made, you see Congress people not wanting to rollback investments that are taking place for their constituents,’ she said.
Vakhshouri agreed with Gross and said: ‘While his administration may place less emphasis on incentives supporting the green transition, many US companies are already on a path toward cleaner energy practices, driven by market forces and long-term sustainability goals.’
Referring to Trump’s statement, ‘We are going to have a policy where no windmills are being built,’ Gross highlighted that many energy investments, such as solar installations, are spearheaded by private businesses pursuing economic opportunities, initiatives that even the Trump administration is unlikely to hinder.
While new emissions reduction policies may be unlikely, existing measures will continue to drive emissions downward, albeit not as significantly as hoped, she noted.
In his inauguration address, Trump announced plans for sweeping changes in energy policy. He pledged tax cuts for the fossil fuel industry and vowed to support energy production by opening public lands for development.
Trump also declared his intention to withdraw the US from the Paris Climate Agreement once again and reverse environmental policies reinstated under the Biden administration.
‘With my actions today, we will end the Green New Deal and we will revoke the electric vehicle mandate,’ Trump said, signaling plans to roll back regulations that limit vehicle emissions and compel manufacturers to produce more electric and hybrid models.
Additionally, Trump announced his intent to push Congress to repeal significant portions of the $369 billion Inflation Reduction Act, which includes incentives for clean energy projects and electric vehicles.