Establishing Energy Dominance

With U.S. oil & gas production already at record levels, which source will expand more, fossil fuels or renewables?

Domestic oil and gas production is at an all-time high, so an expansion based solely on fossil fuels might not offer the potential for “energy dominance” that U.S. policy seeks. Meanwhile, solar and wind power are, in most cases, cheaper than fossil fuels and growing rapidly. To achieve energy dominance, the U.S. might be better off sticking to an “all of the above” energy approach, especially given the increase in demand attributed to data centers and semiconductor fabrication facilities.

All of the Above

Doug Burgum, the incoming secretary of the interior, embraced an all of the above approach as governor of North Dakota, one of the Great Plains states that has seen wind and solar industries ramp up in recent years, shifting public and political opinion on renewables. Incoming energy secretary Chris Wright is a big fracking proponent but also a supporter of nuclear and geothermal energy.

What renewables might need under a second Trump administration is a rebrand. For one thing, they’re domestic, which limits reliance on energy imports and improves energy security. For another, they create lots of jobs.

“There will be a lot of marketing activities going on, I think, in order to kind of rebrand renewables from a climate tech (into) an energy security, energy dominance viewpoint,” Kennedy Nickerson of Capstone Consulting Group, told NPR.

For his part, Wright favors the terms “new” or “alternative” energies rather than focusing on environmental aspects.

The Solar Energy Industries Association is on board for an all of the above approach, as well, with CEO Abigail Ross Hopper telling NPR that “this is not a time to choose between technologies. This is the time to expand and increase our energy dominance across the portfolio and across the world.”

Production Limits

One factor limiting the amount of fossil fuels the U.S. can produce is that shale basins like Permian and Eagle Ford have matured. There’s only so much more of a production ramp-up they can handle. The Energy Information Administration projects that domestic oil production can increase by about 300,000 barrels per day in 2025 before leveling off next year, with similar limits on natural gas.

That’s not to say the new administration can’t encourage production. It is almost certain to open more federal lands and waters to drilling and to end a freeze on permits for liquefied natural gas exports.

But even if the federal government’s focus is on maximizing production, “drill, baby, drill” doesn’t make oil producers much profit. Policies can encourage production, but they can’t make energy companies drill if it’s not in their economic interest to increase it.

“Even if the Trump administration executes all of these moves, market forces will ultimately dictate future drilling programs and production growth. Energy executives in boardrooms—and their investors—are influenced by global economic conditions, OPEC+ policy decisions, and Asian consumption trends. Lower demand or new OPEC+ supply increases could weigh down prices and forestall investment, no matter how favorable U.S. policy becomes,” Dan Eberhart, CEO of oilfield services company Canary, wrote for Forbes.

A recent lease sale in the Arctic Wildlife National Refuge got zero bids, and a 2021 sale went for $14.4 million before all the leases were canceled, well short of the $2 billion the sales estimated by the 2017 tax bill that mandated them.

Offshore drilling is unpopular, with a Pew Research Poll finding only 48% of Americans in support of it, and prominent Republicans opposed to it in their states as it could negatively impact tourism and fishing.

Power Grid Problems

As more energy is produced, the U.S. will need to expand and improve energy grids to handle increased domestic demand and transmit power faster.

Grid Strategies tallied up $64 billion in ongoing projects in 2023 but found that would only expand the grid by about 15%.

“Economic growth simply can’t exist without improvements to our power grids,” Tyler Duvelius, director of external affairs for the Conservative Energy Network, said. “We can’t achieve energy dominance in this country if we can’t get power to where it needs to go. That’s why there’s a lot of bipartisan agreement around the need for transmission, whether it’s permitting reform or transmission modernization. The power grid doesn’t care about where the electrons come from. It just needs electrons.”

Grid-enhancing technologies like advanced power-flow modeling and controllers and next-generation power cables can speed transmission while reducing costs. That need to meet demand from tech companies going all in on AI and semiconductor manufacturers might persuade key officials that grid expansion is worth it. That could really allow the power to flow and energy dominance to take hold.