Trump’s promises are empty when it comes to energy

Will laid-off energy workers get their jobs back? No. Regulations have nothing to do with this bust.

 

On the day after Election Day, the biggest newspaper in the oil and gas patch in northwestern New Mexico ran a story headlined: “Trump win has energy industry leaders hopeful.”

Most of the local industry folks quoted by the Farmington Daily Times said that President-elect Donald Trump would relax regulations on drilling on public land. Meanwhile, over on Facebook, energy workers were ecstatic, convinced that a President Trump would put them back to work almost immediately. 

They should know better.

Trucks and heavy equipment sit idle in Hobbs, in New Mexico’s Permian Basin, where oil and gas production has declined due to low energy prices.
© Roberto E. Rosales/Albuquerque Journal/ZUMA Wire

The San Juan Basin’s energy-reliant communities have been hit especially hard in recent years. The first blow came in 2008, after horizontal drilling and multi-stage hydraulic fracturing opened up huge shale formations in the East. 

Shortly thereafter, oil prices skyrocketed to as high as $150 per barrel, prompting drill rigs to pop up again all over North Dakota’s Bakken formation and, a little later, in the San Juan Basin’s Gallup shale. The fossil fuel mojo was back, until it wasn’t. As global supply increased faster than demand, prices started dropping, and OPEC declined to cut production. In 2014 prices crashed, and the oil boom busted.

It’s a simple equation. When demand outpaces supply, prices increase. When prices get high enough to make drilling profitable, companies invest in development and put people to work. When all that drilling increases supply, prices crash, as do the drill rigs. Today, oil prices are stubbornly stuck below $50 per barrel.

Just one rig is working in the San Juan Basin, and the vast equipment yards in Farmington and Aztec, New Mexico, are crammed full of idle rigs. Thousands of workers have lost their jobs.

President-elect Trump promised to “lift restrictions on … energy reserves” and to dismantle environmental regulations. But will the drill rigs go back up as a result? No. Will laid-off energy workers get their jobs back? No. Regulations have nothing to do with this bust. Commodity booms and busts are driven by supply and demand, not regulations.

The only way to kick-start the faltering industry would be to increase oil and natural gas prices. And the only way to do that is to curtail supply or increase demand — no easy task with a global commodity.

Natural gas supply and demand, and therefore prices, would be somewhat easier to manipulate, since the commodity is regional, not global, meaning we export and import very little of the stuff. A president could boost demand by subsidizing a nationwide fleet of natural gas-burning long-haul trucks, which might make gas drillers happy, but not the oil drillers (since it would displace gasoline-burning trucks). He could ram through liquefied natural gas export-terminal permits, opening up foreign markets to domestic natural gas. If foreign demand was high enough, that might do the trick, but Trump’s promise to kill the Trans-Pacific Partnership would damage, not help, efforts to sell natural gas overseas.

A president could regulate power plant emissions in such a way that encourages utilities to replace coal with natural gas in the electricity generation mix. Oh, wait, that one’s already in the works. It’s called the Clean Power Plan, which Trump has pledged to repeal.

The San Juan Basin is also coal country, so at least the workers at the mines and two massive power plants will get to go back to work, right? Wrong. Coal-burning units at both plants have been shut down. The curtailments came from settlements with the Environmental Protection Agency over Clean Air Act violations, and because California didn’t want to buy coal power anymore. Killing the Clean Power Plan — even eliminating the EPA — won’t restore these plants to their former smog-spewing, coal-burning glory.

While the environment and the people who live near the rigs are getting a break during this bust, the economic pain in the oil patch these days is real, and deep. Individuals who just a few years ago were raking in $80,000 or more per year are struggling to hang on. City, county and state governments have watched revenues plummet. It’s the sort of malaise that breeds resentment and that spurs people to vote for the likes of Trump.

It is maddening and tragic to see these people put so much hope in one person, particularly when that person is clearly so unequipped to deliver on his promises, and  so likely, in the long run, to make their lives more miserable by removing what few social safety nets exist. 

What will they do after Trump has finished rolling back all the regulations, dismantling the rules that keep us safe and our environment healthy, and they still don’t have a job? Who will they blame then?


Jonathan Thompson is a contributing editor at High Country News. He is currently writing a book about the Gold King Mine disaster in Colorado. 

High Country News Classifieds
  • WYOMING CLIMATE ORGANIZER
    Job Title: Wyoming Climate Coordinator Reports to: Energy and Climate Policy Director Type of Work: Full-time, hourly, but willing to consider part-time Classification: Non-exempt Start...
  • DEVELOPMENT DIRECTOR
    Colorado West Land Trust seeks a Director of Development to lead the organization's fundraising efforts. Western Colorado is home to Colorado's fruit and wine industry,...
  • DIRECTOR - COLORADO WILD PUBLIC LANDS
    NON-PROFIT DIRECTOR If you are looking for meaningful work, this is the opportunity to join a small and exciting nonprofit organization led by an engaged...
  • EDITORIAL INTERN - INDIGENOUS AFFAIRS DESK
    High Country News is seeking an intern to serve on its award-winning Indigenous Affairs Desk. The Indigenous Affairs Intern will dive deep into important stories...
  • COMING TO TUCSON?
    Popular vacation house, everything furnished. Two bedroom, one bath, large enclosed yards. Dog-friendly. Contact Lee at [email protected] or 520-791-9246.
  • ENVIRONMENTAL AND CONSTRUCTION GEOPHYSICS
    We characterize contaminated sites, identify buried drums, tanks, debris and also locate groundwater.
  • NATURAL RESOURCE CONSERVATION MANAGER
    Central Colorado Conservancy is an accredited land trust and community-based conservation organization based in Salida, CO. Our mission is to protect the land, waters and...
  • ESCAPE THE CROWDS AND EMBRACE NATURE: AFFORDABLE RETREAT, JUST AN HOUR FROM GLACIER NATIONAL PARK AND BOB MARSHALL WILDERNESS!
    Welcome to your new tranquil oasis in Montana. This beautiful 2-bedroom home FSBO is just an hour's drive to the east entrance of Glacier National...
  • DEVELOPMENT DIRECTOR
    Areas of Responsibility: The Development Director collaborates with the Executive Director, other HEAL Utah staff, board, and supporters to continue building one of Utah's most...
  • DIGITAL ENGAGEMENT SPECIALIST
    Position Summary Western Resource Advocates (WRA) is hiring an organized and creative Digital Engagement Specialist to join our Marketing and Communications Team. The Digital Engagement...
  • 92 ACRE EASTERN WASHINGTON GEM
    Welcome to Lost Creek Sanctuary... a true hidden gem in the heart of the Palouse. 1900 square feet, the main house is warm and charming,...
  • WEEKLY NEWSPAPER FOR SALE
    Vibrant, financially successful 1,100 print run, community-focused subscription newspaper in beautiful Pacific Northwest Washington seeks owner/s. It is time to retire. Now, your Norman Rockwell-like...
  • STAFF ATTORNEY - WILDLANDS AND WILDLIFE PROGRAM
    Job Opening Announcement: Wildlands and Wildlife Program Staff Attorney Reports to: Wildlands and Wildlife Program Director Location: Pacific Northwest, ideally in Eugene, Oregon, Portland, Oregon,...
  • HEAD OF PROJECT MANAGEMENT
    The Head of Project Management will oversee our project execution to ensure that we are providing our partners around the world with the field data...
  • LEGAL DIRECTOR
    Trustees for Alaska is the only nonprofit environmental law firm founded and based in Alaska. We are seeking a Legal Director, full-time based in Anchorage....
  • EXECUTIVE DIRECTOR
    The Fund for People in Parks seeks leader to identify, develop, fund, and facilitate high-impact projects in western National Parks. Remote position with some travel....
  • GRASSROOTS REGIONAL COORDINATOR
    Great Old Broads for Wilderness is a women-led national grassroots organization that engages and inspires activism to preserve and protect wilderness and wild lands. The...
  • GRASSROOTS ADVOCACY MANAGER
    Great Old Broads for Wilderness is a women-led national grassroots organization that engages and inspires activism to preserve and protect wilderness and wild lands. Position...
  • GRASSROOTS LEADERSHIP DIRECTOR
    The Grassroots Leadership (Director) oversees the training, guidance, and support of volunteer Broadband Leaders. (Broadbands are women-led grassroots chapters, with 40+ across the country.) They...
  • FOCUS GROUP PARTICIPANT NEEDED
    We would like to invite you to participate in a 60-minute focus group to help us enhance the New Mexico Courts website (https://www.inside.nmcourts.gov/). Our aim...