An oil well in a field in Zachary, Louisiana, Aug. 10, 2024. (Photo by Wes Muller/Louisiana Illuminator)
The energy industry in the Gulf Coast region is expected to continue growing in 2025, but that’s according to forecasts that assume President-elect Donald Trump won’t pursue some of the loftier promises he made to slash energy prices by 50% and dismantle the renewables sector.
Some analysts warn consumer prices could soar if he delivers on his pledge to expand natural gas exports.
One of the most common forecasts from economists and industry insiders is that fossil fuel companies could see some benefit from a Trump presidency over the next four years by way of easier permitting, lax enforcement of environmental laws, or corporate tax breaks. Trump has promised all those things.
On the other hand, they also fear these benefits could come at the expense of clean energy projects, such as solar and offshore wind, which Trump has repeatedly expressed disdain for even though the petrochemical companies he supports own or have large stakes in some of those projects.
David Dismukes, an economist and former director of LSU’s Center for Energy Studies, said he is cautiously optimistic about the Gulf Coast energy economy but noted the harm that could result if Trump delivers on his promise to “drill, baby, drill.”
“They’ll never go back to that,” Dismukes said, referring to oil and gas companies. He explained that the original “drill, baby, drill” initiative over a decade ago led to a glut in supply and a price war with foreign producers that sent some American petroleum companies into bankruptcy.
Erik Milito, president of the National Ocean Industries Association (NOIA), a trade organization for offshore energy producers, agreed with Dismukes’ assessment. The U.S. oil industry has a price floor of around $65 to $70 per barrel, below which it is no longer profitable for most companies to continue drilling, he said.
“There’s been a significant shift towards discipline,” Milito said of oil and gas exploration.
The benchmark grade of crude oil was trading at an average of $70 as of Tuesday and even fell to $65 in September. Nevertheless, Trump has promised repeatedly to expand drilling, bring gasoline prices below $2 per gallon, slash electricity prices by 50%, and increase liquefied natural gas (LNG) exports to sell around the globe.
It is all a part of the incoming president’s plan for “energy dominance,” which is his play on the more commonly known but equally vague term “energy independence.”
Trump’s claims overlook the fact that the U.S. is the world’s largest producer of both crude oil and natural gas and has been for several years, according to data from the U.S. Energy Information Administration (EIA).
“We were energy independent three years ago,” Trump said at a rally in Dayton, Ohio, in May. He claimed President Joe Biden had “closed up the oil,” and he vowed to “turn it around fast” if he won back the White House.
Democrats have contended the opposite is true, claiming the U.S. has been more “energy independent” under Biden than it ever was under Trump.
Define ‘independence’
Politicians often define American energy independence or energy dominance in terms of petroleum imports and exports. They claim the energy industry and, by extension, the nation becomes stronger and independent when oil exports exceed imports.
By that definition, the Democrats win the argument by a wide margin as the U.S. was a net petroleum exporter every year under Biden, while the opposite was true during all but one of Trump’s years, according to EIA data.
But politicians’ definition of energy independence is inaccurate in several ways, some analysts say.
For one, it ignores the other entire half of the market — the clean energy sector composed of nuclear and renewables, which together accounted for roughly 42% of electricity generation in 2024, according to the EIA.
Also, it fails to specify just who or what is gaining “independence” or “dominance.”
Imports and exports rise and fall on a daily basis as refineries constantly shop around for the best crude oil prices available whether from domestic or foreign sources. Oil is a global product traded on a global market. Regardless of where the petroleum is produced, most Americans are still dependent on the same fossil fuel companies year-after-year and don’t always pay less when exports exceed imports.
“The market is going to dictate where oil and gas production goes,” Dismukes said.
Biden froze new offshore oil and gas leasing in 2021 until a federal court ordered they be resumed a year later. Milito said Trump is likely to increase lease sales, although it remains up to companies to bid on them, and development often takes years.
Both Milito and Dismukes said Trump’s best chance for spurring more oil and gas production is in permitting.
Trump has promised to quickly approve permits for LNG export terminals proposed for Louisiana and other energy development projects.
Biden similarly paused U.S. Department of Energy permits for the LNG terminals, which Trump has vowed to approve. However, Tyson Slocum, a consumer advocate on energy issues for the nonprofit Public Citizen, said those permits will still have to go through a Federal Energy Regulatory Commission environmental review. FERC is a bipartisan panel that operates independently of the U.S. Department of Energy and doesn’t take orders from the president.
National security?
Slocum said Trump could attempt to bypass the permitting review process by declaring LNG exports vital to national security. The designation is a war-time power that allows the president to nationalize and control parts of the energy sector.
Trump tried to issue national security designations for coal and nuclear energy during his first term but ultimately backed away from the idea.
Existing LNG capacity is already slated to double within the next four years with already-approved export terminals, so exporting a significantly larger share of U.S. gas production could decrease domestic supply and raise Americans’ electricity prices, Slocum said.
Trump has also pledged to eliminate Biden’s signature policy achievements such as the Inflation Reduction Act and the Bipartisan Infrastructure Law, which have both played a significant part in expanding the clean energy industry and spurring new economic activity in Louisiana and other states. Louisiana alone has secured more than $10 billion worth of federal funding from those policies.
For the first time in Louisiana’s history, clean energy transition investments are outpacing investments in liquefied natural gas.
For the first time in Louisiana’s history, clean energy transition investments are outpacing investments in liquefied natural gas, Dismukes said.
He and other analysts agree that a full congressional repeal of Biden’s laws is highly unlikely because of the massive disruption it would have on businesses.
“I don’t know that there’s any appetite to repeal it whole cloth,” Milito said, adding that he hopes Trump will focus more on leasing and permitting reform and realize the big economic opportunities in offshore wind, which are slated for development off the Louisiana Coast.
“We’re optimistic for our industry moving forward with the next administration,” Milito said. “Our only concern is the wind.”
Tariffs
Complicating matters even further is Trump’s latest pledge to slap tariffs on goods from Canada, Mexico, and China. Nearly 60% of U.S. petroleum imports came from Canada in 2023, according to the EIA.
There is not enough domestic production capacity to replace that amount, according to a statement from American Fuel & Petrochemical Manufacturers President and CEO Chet Thompson.
“American refiners depend on crude oil from Canada and Mexico to produce the affordable, reliable fuels consumers count on every day,” Thompson said. “Therefore, we would hope any future tariffs would exclude these critical feedstocks and refined products.”
This story first appeared in the Louisiana Illuminator, a member with the Phoenix in the nonprofit States Newsroom.
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