Team Trump is gearing up to make major changes to the U.S. energy sector from day one. Among the top priorities for the new administration are increasing U.S. oil and gas drilling, fast-tracking permits for domestic energy infrastructure, and boosting liquefied natural gas (LNG) exports.
While these proposals align with many of the U.S. oil and gas industry’s long-standing goals, executives at major companies have already suggested that Trump’s presidency won’t immediately lead to a return of aggressive drilling in the shale patch.
A Bold New Energy Plan
President-elect Donald Trump’s transition team is working on a comprehensive energy plan to expand oil and gas drilling on federal lands and offshore areas. This plan also aims to expedite LNG export permits. Sources familiar with the discussions have shared details of the proposal with Reuters.
Trump has long promised to support the oil, gas, and coal industries. During his campaign, he vowed to roll back environmental policies enacted by President Biden, including halting new LNG permits and minimizing offshore oil and gas lease sales. Under Trump, the government is expected to lift the ban on LNG export permits, speed up drilling permits on federal lands and waters, and hold more frequent lease sales. Analysts expect these actions to happen quickly.
Typically, such a significant policy shift would require approval from Congress or federal agencies. However, experts predict that Trump could declare an energy emergency, a move that would allow him to bypass lengthy approval processes and push through parts of the plan via executive orders.
Additionally, Trump is expected to request new funding from Congress to replenish the Strategic Petroleum Reserve (SPR), which was significantly drained when the Biden administration released oil from the reserve to stabilize prices after Russia’s invasion of Ukraine.
Key Appointments Signal Industry Priorities
In a sign of the direction Trump intends to take, he recently nominated Chris Wright, CEO of Liberty Energy, to lead the Department of Energy. Wright is a vocal critic of the energy transition favored by many Western governments, advocating instead for what he calls “energy realism” that prioritizes energy security and affordability over emissions reduction.
Trump has also nominated North Dakota Governor Doug Burgum to be the Interior Secretary and head of a new National Energy Council at the White House. These appointments emphasize America’s leadership in fossil fuel production and exports, signaling that Trump’s administration will focus on boosting the energy sector.
Ed Crooks, Senior Vice President of Wood Mackenzie, noted that both Wright and Burgum share a common goal: increasing the production of all types of energy, including fossil fuels. While they acknowledge the reality of climate change, they argue that the immediate focus should be on ensuring energy security and affordability, rather than reducing emissions. They believe oil and gas will remain central to the global energy mix for the foreseeable future.
Industry’s Shift in Focus
Despite Trump’s promises to prioritize oil and gas, the priorities of the U.S. oil industry have shifted significantly since his first term. The focus is no longer simply on increasing production. U.S. shale producers are drilling, but their main goal is to generate returns for investors, not to expand production at any cost.
The industry has made significant strides in capital discipline and operational efficiency, which has allowed companies to achieve greater production while reducing costs. Now, the primary focus is on generating steady returns for shareholders and ensuring financial stability, particularly in the face of oil price volatility.
ExxonMobil’s Upstream President, Liam Mallon, emphasized this shift at a recent event, stating, “We’re not going to see anybody in ‘drill, baby, drill’ mode.” He added that a major production boost is unlikely, as most companies are more focused on the economics of their operations.
Chevron, another U.S. oil giant, recently announced that its capital expenditures (capex) for 2025 will be lower than those in 2024. The company expects to spend approximately $13 billion on upstream projects next year, with around two-thirds of that amount directed towards its U.S. portfolio. However, its investment in the Permian Basin will be lower than previously planned, with spending expected to fall between $4.5 billion and $5.0 billion. This reduction in spending is aimed at prioritizing free cash flow over production growth.
Conclusion
While the Trump administration’s energy agenda promises significant changes, the oil and gas industry’s priorities have evolved since his first term. The emphasis has shifted from rapid expansion to financial returns and stability. As Trump moves to roll back environmental restrictions and prioritize fossil fuel production, it remains to be seen how the industry will respond, particularly in the face of shifting market conditions and a changing global energy landscape.
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