In describing the nation’s mythical past and future as a global energy superpower, President Trump argued in his State of the Union Speech Tuesday night that, as a result of his leadership, America has never been so successful as an oil and natural gas producer and has little to worry about as long as it stays the fossil-fuel course.
Perhaps in another era, Trump’s portrayal of his own role in the United States’ fracking prowess could be dismissed as typical political hyperbole.
But amid the climate crisis, and in light of the perilous path ahead for the planet if the U.S. continues to ignore it, his version of the energy picture has left Democrats and climate activists demanding closer scrutiny. Recent developments suggest that the risks of what Sen. Sheldon Whitehouse (D-R.I.) calls Trump’s “willful blindness” on climate have become apparent to Wall Street, other world leaders, and—according to recent polls—likely voters of both parties.
Now “Energy Independent,” America Still Needs Foreign Export Markets
“America is now energy independent,” Trump said in his address to the joint session of a deeply divided Congress. But his Energy Department’s own figures show that the U.S. is importing some 9 million barrels of oil per day, or 45 percent of the 20 million barrels a day the nation consumes. By contrast, when the Arab oil embargo pummeled the U.S. economy in 1973, the nation was only importing 6.2 million barrels per day, or just 37 percent of its oil.
In fact, the U.S. energy sector has become dependent on other nations in another way—the oil and gas industry is relying on Trump to continue to smooth its path to greater exports, as it did in the newly negotiated North American free trade agreement. Without access to those foreign markets, oil and gas prices would be too low for U.S. producers to turn a profit.
Producers also have relied on Trump to help cut their costs through deregulation. And indeed, embedded in Trump’s boasts about energy production was a defense of his relentless policy of eliminating environmental protections—more than 60 major actions to relieve industry of government requirements to cut greenhouse gases or protect land, air, or water, according to the Brookings Institution, a center-left think tank,
“Thanks to our bold regulatory reduction campaign, the United States has become the number one producer of oil and natural gas anywhere in the world, by far,” Trump said.
Energy Department figures show that the run-up in oil and gas production actually began under President Barack Obama, even while he was instituting the environmental protections that Trump has worked to dismantle. The U.S. surpassed the rest of the world in natural gas production in 2011 and in raw energy content by 2014. The milestone that Trump factually can take credit for is the 17 percent increase in oil production in 2018 that lifted the U.S. to an all-time record and past Saudi Arabia as the world’s largest petroleum producer.
Whether the boom is sustainable is another question. Wall Street, for one, has its doubts.
Last month, the world’s largest asset manager, BlackRock, stunned the business world when it announced it planned to put climate change at the center of its investment strategies, including divesting from companies that generated at least a quarter of their profit from thermal coal.
And for the first time, climate-related issues dominated the top-five most urgent risks facing the global economy, the World Economic Forum’s annual risk report found.
Those announcements only added to growing concerns among financial analysts that the oil and gas industry is no longer a sound investment, though if and when the fossil fuel sector declines remains to be seen. When ExxonMobil announced last week that its shares had hit a 10-year low, some analysts gave the company an unusual neutral rating rather than encouraging people to buy while the stock is low. Jim Cramer, the blustery former hedge fund manager and CNBC analyst, caught the incipient mood with a widely circulated rant that fossil fuels were “just done.”
“The honest truth is I don’t think I can help you make money in the oil and gas stocks anymore,” Cramer said.
One Trillion Trees a Sign of White House Concern
Trump gave only a hint that he is aware of the forces that Cramer and Wall Street are watching. As in his previous State of the Union addresses, he did not mention “climate change.” But he did reprise the promise he made at the World Economic Forum in Davos to join an initiative to plant one trillion trees. It seemed a subtle sign of the White House’s recognition of the potential vulnerability Trump faces on his environmental record.
A more obvious sign of concern was an unusual, lengthy statement released by Trump’s Environmental Protection Agency administrator, former coal lobbyist Andrew Wheeler, after the speech. Wheeler touted Trump’s environmental record, including the replacement of the Obama Clean Power Plan with a weak alternative that “will reduce CO2 while allowing energy generation at an affordable price.”
But with the first results in the 2020 presidential race now coming in, it seems clear that at least Democratic voters are intently focused on the costs of continued inaction on climate. In Iowa, where climate change was second only to health care as a key issue for voters, unabashed climate hawk Bernie Sanders took the popular vote, while Pete Buttagieg—the moderate who has crafted a rural-focused climate plan and opposes pipeline expansion—led in the delegate count. The coming months will tell whether Trump will be able to navigate the swelling public alarm on climate change in the meager vessel of his energy dominance narrative and the pledge of a trillion trees.