Energy Trump promised U.S. dominance. Instead, energy companies are faltering. Oil and gas firms are reeling, and major renewables projects are getting shelved as Trump’s policies rattle energy investors and executives. May 10, 2025 at 8:00 a.m. EDTYesterday at 8:00 a.m. EDT

 

An oil pumpjack in a field with wind turbines in Close City, Texas, on April 9. More than three months into the Trump administration, oil prices and production are in decline. (Brandon Bell/Getty Images)

By Evan Halper

President Donald Trump promised to unleash an energy renaissance that would lock in U.S. dominance over oil and gas. But that is not how things are working out for America’s drillers, fracking firms and equipment suppliers, including the company founded by Trump’s own energy secretary.

The market value of Liberty Energy has fallen by nearly half since its former CEO, Chris Wright, joined Trump’s Cabinet. The company reports it is among many in the industry struggling with the challenges heightened by Trump’s agenda, including “tariff impacts, geopolitical tensions, and oil supply concerns.”

Three months into the new administration, the price of U.S. oil has plunged to below the drilling profitability threshold of about $65 per barrel and the industry is ailing. At the same time, the U.S. energy economy is being further destabilized by White House attacks on clean power. It is a stark reversal from last year, when the United States was rocketing ahead on clean energy projects, pushed by government, and oil industry executives were brimming with optimism amid record production.

Companies are opting not to add new wells out of fear they will lose money. The number of active rigs in Texas is lower now than it has been since the nation was climbing out of the pandemic. The president’s tariffs are meanwhile driving up costs in U.S. oil fields, leaving firms hesitant to invest in expanding production.

“It is truly affecting everybody,” said T. Grant Johnson, president of Lone Star Production Company, an oil exploration firm in Texas. “There was a lot of talk of, ‘drill baby, drill.’ But these companies are not going to drill if the economics aren’t there. All this fear and uncertainty is causing people to be far more cautious.”

He warns the challenges threaten political blowback for Trump.

“If this pain runs too long and spills into the midterm elections, it could become very uncomfortable for the people who got us here,” said Johnson, who chairs the Texas Independent Producers and Royalty Owners Association. “And this would all be for naught.”

The administration blames market swings disconnected from Trump’s policies. Wright predicted in an interview that the president’s plans ultimately will increase U.S. energy dominance and bring the industry prosperity.

“Prices are going to spike up and they’re going to spike down in the short term,” Wright said. “That’s based on sentiment and perceptions and guesses. You know, that’s not what the administration has anything to do with. We’re changing policy.”

But many oil executives say Trump’s actions are a major reason production is going down, not up. Demand is dropping amid economic anxieties triggered by Trump’s trade war. Soaring prices for steel and rig parts are chilling investment. And a surge in pumping by OPEC+ nations — which analysts say is happening in large part because Trump demanded it in his pursuit of lower gasoline prices — has created a market glut.

Energy Secretary Chris Wright speaks to reporters outside the West Wing at the White House on March 19. (Jabin Botsford/The Washington Post)

Gas prices remain roughly what they were in October despite Trump’s gutting of oil-field environmental rules. The U.S. is no less reliant on foreign oil today than it was when Joe Biden left office.

Oil is not the only corner of the energy industry struggling. The president’s policies imperil major clean power projects designed to help address the very energy shortages that moved Trump to declare a national energy emergency. Trump’s order to halt all regulatory approvals for wind farms on his first day in office is causing projects to be delayed and abandoned. Offshore wind projects were hit particularly hard because the administration controls approvals in federal coastal waters.

Trump also froze billions of dollars in grants to other clean energy projects, leading to the cancellation of planned factories in the U.S. that would manufacture solar cells and industrial-scale batteries that store solar and wind power. They are components data center builders say are crucial to providing the needed power to beat China in artificial intelligence development.

Wright says current wind and solar technologies are not up to the job of meeting U.S. needs, arguing they don’t provide power around-the-clock, and storing the energy they create with giant batteries is costly.

“Americans saw relatively high energy prices in the last four years, particularly in states that were doubling down on expensive, intermittent, government-subsidized energy sources,” he said. Trump “got elected to say, ‘We’re going to stop that nonsense. We’re going to bring common sense back to energy policy.'”

Wind turbine technician Terrill Stowe stands on the nacelle, which houses the gear box and generator of a wind turbine, on the campus of Mesalands Community College in Tucumcari, New Mexico. (Andrew Marszal/AFP via Getty Images)

While the clean power sector was bracing for a hostile White House, fossil fuel companies are feeling rattled. The president had signaled many of the actions on the campaign trail, including a vow to push gas prices below $2 per gallon, but there was an expectation among executives that he would temper his moves to limit disruption. He didn’t.

The tariffs Trump imposed have forced up the price of certain parts crucial to pulling oil from the ground. Drilling components from China that previously cost nearly $6,500 before Trump took office are going up to more than $15,000, according to Cape Tryon, an industry consulting firm.

“Bracing for a crisis” is how research firm Wood Mackenzie characterizes the state of the oil industry. Bryan Sheffield, a major investor in shale oil, told Bloomberg recently that his sector could be facing a “bloodbath.”

The tone was similarly ominous in an anonymous survey of 130 fossil fuel and related companies published by the Federal Reserve Bank of Dallas in late March.

“The administration’s chaos is a disaster for the commodity markets,” one company responded, calling the “drill, baby, drill” mantra a myth and the tariff policy unpredictable.

“I have never felt more uncertainty about our business in my entire 40-plus-year career” another wrote. Another comment was even more blunt: “This is not ‘energy dominance.’”

The administration is making no apologies, taking credit for gas prices that average around $3.16 per gallon of regular nationwide. The price at the pump does not reflect the surge of drilling Trump promised, analysts say, but a challenging economy that leaves the U.S. energy industry in a precarious place.

“Those gas prices are not going to make the economy blossom if they are low because of broader economic weakness,” said Kevin Book, managing director at ClearView Energy Partners, a research firm. “It is not all about the price. It is also a matter of why the price is low.”

Customers pump gas at a Shell station in Miami on April 10. (Joe Raedle/Getty Images)

Book said that any gains the industry made through all the regulatory changes Trump ordered – including gutting pollution rules, eliminating climate policies and rolling back endangered species protections — are being more than offset by the market disruptions his policies are magnifying.

The mood in West Texas, said D. Kirk Edwards, an oil and gas executive and former chair of the Permian Basin Petroleum Association, is eerily like it was when the pandemic first hit, when oil prices plunged and companies stopped drilling.

“I think we are going to see within 30 to 60 days a lot of the rigs running today idled,” he said. “Most people are in shock at how this can happen with a Republican administration.”

Edwards says he is surprised by how aggressively Trump is pursuing tariffs that are creating pain for the industry, including boosting steel and aluminum tariffs to 25 percent. “Everybody was curious about the idea of using them as a negotiating tool,” he said. “I don’t think anybody in our industry thought steel products going into oil and gas wells would be such a big part of it.”

Mark Waters says sales at his Odessa, Texas, tools business, which he describes as a “Home Depot for the oilfields,” are down about 10 percent. He does not regret voting for Trump, saying he is willing to take a personal hit to support the president’s agenda.

But he said it is ironic that over the decades he has made a lot more money when the party he despises is in power.

“The oil business has thrived under Democratic leadership despite them being true haters of all things fossil,” Waters said. “For whatever reason, I made millions of dollars under Clinton. Then I made even more under Obama and Biden. I have never had a solid explanation.”

His business outlook for the coming months under Trump?

“Hopefully it won’t be catastrophic,” Waters said.

Developers of big wind and solar projects are finding themselves stymied in other ways, often by administration policies they say undermine Trump’s stated goal of abundant domestic energy.

Last month, the administration imperiled even previously approved wind projects – which the industry had considered safe – when Interior Secretary Doug Burgum halted work on Empire Wind off the coast of New York, saying the permitting had been rushed.

Pro-wind groups said the decision could have a chilling effect on further renewables development as investors worry the administration could stop projects — which can cost billions of dollars — at any time. Trump’s antipathy for wind is boosting efforts by lawmakers in red states seeking to create new hurdles for projects.

Threatened are offshore wind projects that could generate at least 25 gigawatts of power that were already permitted or far along in the process, enough to power millions of homes annually. Those projects are primarily in development on the East Coast from Virginia to Massachusetts and would serve some of the biggest American cities, where energy demand and electric bills are on the rise.

In Texas, the national leader for wind energy, the state legislature has advanced four bills that would introduce new challenges for renewables, particularly wind, said Olivier Beaufils, lead analyst for the central U.S. at market analytics firm Aurora Energy Research.

Texas historically has been a free market allowing energy companies to build whatever makes financial sense, he said, but that’s starting to change.

“There is a national context that is also giving some steam to people that just don’t like wind,” Beaufils said of the Texas bills.

Jake Spring contributed to this report.