Trump’s Policies Are Bad News for His Favorite Industry

Many of these plans, though, seem bizarrely out of touch with what the industry seems to actually want. Take Burgum’s plan to expand drilling in the Gulf. Verite News reporter Tristan Baurick notes that only a fifth of active drilling leases there are currently producing oil, per Bureau of Ocean Energy Management records. Given gloomy price and demand projections, how will selling off more of those leases spur production? “It’s not the regulations that are getting in the way, it’s the economics,” Hugh Daigle, a professor of petroleum engineering at the University of Texas in Austin, told Baurick. “It’s true that there are a bunch of undeveloped leases in the Gulf, and it’ll stay that way if we continue to see low or stagnant oil prices.”

Shares in the oilfield services firm Halliburton plummeted earlier this week as company executives warned about the impact of tariffs and lower oilfield activity on its bottom line. Halliburton Chief Executive Jeff Miller said, on a quarterly earnings call with investor analysts, that customers in North America are “are in the midst of evaluating their activity scenarios, and plans for 2025 activity reductions could mean higher than normal white space for committed fleets and in some cases, the retirement or export of fleets to international markets.” (White spaces refer to periods when the company’s equipment isn’t booked for use.)

One oil and gas executive put it more bluntly, responding to the Federal Reserve Bank of Dallas’s anonymized quarterly survey of the industry, released late last month. “There cannot be ‘U.S. energy dominance’ and $50 per barrel oil; those two statements are contradictory,” the executive wrote. “At $50-per-barrel oil, we will see U.S. oil production start to decline immediately and likely significantly.”