There would be a doubling down on oil, gas and coal production, whilst at the same time, renewables would be shunned.
One year on then, how much has actually changed when it comes to US energy?
On the surface, there can be few doubts that the direction of travel is different. Out went the environmentalists of the Joe Biden era, to be replaced by the oil and gas execs who came in to run government departments. Of the 111 senior appointees in 2025 (across 9 federal agencies), 43 had worked directly for oil, gas or coal companies.
“The rollback of clean energy incentives looks likely to derail around $20bn worth of renewable energy projects.”
After only 100 days in office, Trump had signed over 100 executive orders reversing many of Biden’s Inflation Reduction Act (IRA) policies, including the cancellation of federal subsidies for Electric Vehicles, the removal of tax credits for solar and wind projects, the scrapping of environmental rules around emission reporting and the withdrawal of the USA from the Paris Climate Agreement (for a second time – the US first pulled out in 2016).
None of this was particularly unexpected, considering Trump’s previous pronouncements around climate change being a “hoax” and more recently, that renewable energy was “pathetic”. Nor was it surprising that in the President’s Big Beautiful Bill (BBB), over $30bn of new federal subsidies were added for oil, gas and coal, whilst rates on federal land exploration leases were reduced from 17% to 12.5%.
At the same time, tax subsidies for low-carbon energy are to be phased out and 3.5m acres of (previously designated) offshore Wind Energy Areas will be withdrawn. The rollback of clean energy incentives looks likely to derail around $20bn worth of renewable energy projects and as a result, the International Energy Agency has almost halved its expectations for how much solar and wind generation will be added by the USA over the next 5 years.
However, energy headlines and energy legislation don’t always reflect what is actually happening on the ground. All the while the cost of renewables – particularly solar – continues to tumble and renewables now make up more than 30% of US electricity generation (12% wind / 12% solar / 8% Hydro) versus 40% for Natural Gas and less than 15% for coal.
The US Energy Information Agency (EIA) has calculated that solar added 12 Gigawatts of capacity in the first half of 2025 and that a further 21GW would be added in the second half of the year. In fact, a slightly contrary development around the removal of future tax benefits has actually been an acceleration of renewable programmes, as energy firms take advantage of the subsidies before they disappear!
Finally, AI and Data Centres are springing up everywhere across the States and in the main, the tech companies are insisting that the power required by these energy monsters must be renewable. Add all of this together and we can see that renewable energy growth in the US might be slowing, but it is far from over. Between now and 2030, 280 Gigawatts of renewable capacity will be added to the US grid versus 85 Gigawatts for gas, 2GW for oil and 1GW for coal!
Turning our attention to oil, we know full well that Trump’s zeal for the industry is absolute. With his “drill baby, drill” mantra there was never any mistaking his intention to try and increase US production. The BBB even had its own Oil and Gas section called the “Big Beautiful Gulf”, where offshore acreage of 80m acres has been made available for exploration. In Trump’s mind, these actions will lead to increased oil production and (as a consequence) reduced gasoline prices for US consumers.
It is true that the second part of this equation has come to pass, but this has nothing to do with US legislation! Oil prices have come down because of over-supply around the world and the reality is that the last thing US producers want to do is add more oil to the mix and push prices further down. US production actually peaked in Dec 24 (13.6m bpd) and has slowly reduced since, with all the signs that the US oil industry is beginning to cut back.
“Renewable energy growth in the US might be slowing, but it is far from over.”
In September, Conoco-Phillips (the 3rd largest US producer) announced it would cut up to 25% of its staff, whilst over the summer, Chevron said that 20% (8,000 employees) of their workforce would be laid off.
Even the mightiest President cannot win against global macro-market trends. Back in 2016, Trump made hefty promises to revitalise the coal industry only to discover that cheap natural gas (from fracking) had effectively killed US coal in a way that no amount of green legislation could ever achieve.
And whilst the anti-renewables legislation of 2025 will undoubtedly slow things up, all the available evidence points to continued and inexorable growth in the area of renewables. At the same time, the oil industry is cutting its cloth accordingly and adopting the far more logical “drill maybe, drill” approach, rather than the President’s preferred “drill baby, drill”. The (45th and) 47th President may have changed the mood music in the foyer, but the dancefloor is still firmly in the hands of #MC_Markets…
www.stabilityfromvolatility.co.uk
Image credit: Portland, iStock/Tatyana Mishchenko
