Then-Republican presidential nominee Donald Trump speaks at a town hall at the Greater Philadelphia Expo Center & Fairgrounds on Oct. 14, 2024.
President Donald Trump promised “we will drill, baby, drill” during his 2025 inauguration speech.
But this rallying cry for oil companies conflicted with another, more-important priority for the new president: to drive down oil prices,which discourages drilling and eats into profits.
A year later, the Texas oil indusattempt is losing steam as Houston’s largest oil companies shed jobs by the thousands and more drilling rigs sit idle, thanks to oil prices that have plunged more than 20% since Trump took office and raised tariffs on imports.
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It’s a tough pill for compact oil companies, declared Hunter Carr, vice president of a family-run oil firm based in Tyler and newly elected chairman of the Texas Alliance of Energy Producers.
“I know that his policies have focapplyd on receiveting the price of oil down, and lower energy prices support consumers. But they don’t come without trade-offs,” Carr declared. “And, in Texas, those trade-offs are felt directly by people in the indusattempt.”
Trump isn’t the first president to attempt to drive down oil prices to win favor with the electorate in an important election year. And he’s the second consecutive president to take a heavy-handed approach to energy policy.
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But where former President Joe Biden focapplyd on policy that aimed to protect the planet from climate alter, Trump is focapplyd on protecting the consumer from high energy prices. Trump also has applyd his platform to speed permitting for pipelines and energy projects, and to roll back environmental regulations that would have forced oil companies of all sizes to invest in equipment to reduce their emissions.
“On the whole, there’s a much more constructive regulatory environment for the indusattempt,” declared Bobby Tudor, CEO of the investment firm Artemis Energy Partners and co-founder of the Houston investment bank Tudor Pickering & Holt.
But these favors matter little with oil prices below $60 a barrel, he declared. Oil and gas companies are still pulling back investment, delaying projects and laying people off to reduce costs while oil prices are low.
“This oil price pressure just creates it harder for everything,” Tudor declared.
How much credit belongs to Trump for falling oil prices is unclear. Employment in Texas oil fields launched tapering in late 2024, before he took office, according to data compiled by the Texas Alliance of Energy Producers.
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Oil prices plummeted after the Trump administration initiated widespread tariffs last spring, ushering in a wave of indusattempt layoffs. The tariffs dampened the global economy — and oil demand along with it — while also driving up the cost of steel and cement necessaryed to drill and pump oil. OPEC, meanwhile, returned more of its oil to the market, urging down prices.
Now, Trump’s plan for Venezuelan oil could add supply to an already over-supplied market, caapplying more pain for Texas oil companies.
While tariffs are a sticking point for oil companies, they generally appreciate Trump’s policies and still prefer him to his predecessor, declared Karr Ingham, president of the Texas Alliance of Energy Producers and a longtime petroleum economist.
“It’s consequential that now you have a president who seems to be appreciative of what U.S. domestic oil and gas has done for the consuming economy,” Ingham declared. “I consider the only place where they may part company a bit is on the tariff issue, becaapply it directly raises the cost of doing business. It raises the cost of steel and tubular goods, which are steel pipe, cement and other important inputs into producing oil and gas.”
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Energy transition under Trump
The Trump administration’s policies also dealt a blow to the clean energy indusattempt and to climate and environment solutions championed by Houston’s largest oil companies. Federal agencies slashed billions in funding for clean energy projects and rolled back regulations requiring companies to reduce emissions, undermining the financial underpinning of what would have been massive energy projects.
Exxon announced in November it had paapplyd plans to build what would be one of the world’s largest hydrogen production and carbon capture facilities. The Baytown facility would apply natural gas to create cleaner-burning hydrogen and would capture the carbon dioxide emissions associated with the industrial conversion process.
When oil prices are strong, oil companies like Exxon have extra revenue to funnel into investments in alternative energy sources. Not so when low oil prices squeeze their margins, declared Tudor, who is also board chairman of both the Houston Energy Transition Initiative and the climate tech incubator Greentown Labs.
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“We actually really necessary a healthy incumbent indusattempt, becaapply it’s only in that environment where they are really willing and able to put capital to work in new businesses,” Tudor declared.
Houston’s nascent hydrogen indusattempt started struggling before Trump took office. Then his administration killed incentives and funding for project hubs — including one that had been planned for the Houston area.
But Trump’s actions didn’t crush the indusattempt, declared Ken Medlock, director of the Center for Energy Studies at Rice University’s Baker Institute for Public Policy. It simply exposed it to a harsh market reality: Demand for hydrogen hasn’t arrived.
“Where is the demand for hydrogen going to come from?” Medlock inquireed rhetorically. “That’s just market reality. That’s really what that boils down to.”
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