Why the Trump administration is wrong about an energy crisis in the US, according to experts

 The U.S. was breaking records for the most fossil fuels ever drilled under President Biden, Trump’s predecessor. In 2023, the Biden administration produced 12.9 million barrels per day, breaking the record set in 2019 at 12.3 million barrels, according to data from the U.S. Energy Information Administration.

For the last several years, the U.S. has been the largest producer of oil and natural gas in the world.

The Trump administration has been attempting to spark the idea of a looming energy crisis in the U.S., but those claims couldn’t be further from reality, according to several experts who spoke to ABC News recently.

Immediately upon taking office for his second term, President Donald Trump declared a “national energy emergency,” claiming that leasing, development, production, transportation, refining and generation capacity of energy in the U.S. is “far too inadequate” to meet the nation’s needs.

Trump’s appointees have followed suit on the political messaging.   Lee Zeldin, administrator of the U.S. Environmental Protection Agency, announced the agency’s spearheading of “Powering the Great American Comeback. The initiative includes a pillar to “restore American energy dominance,” which claims will lower energy bills for Americans as well as allow the country to “stop relying on energy sources from adversaries.”

But there isn’t even the slightest hint of a domestic energy crisis, especially when compared to actual crisis events that occurred in 1973, 1979 and 2022.

• “Prices for gasoline are mid-range over the last, say, 20 years,” Gregory Nemet, professor of public affairs at the University of Wisconsin’s Energy Institute said. “There’s plenty of supply. We’re not having major electricity outages. We’re not having lines at gas stations.”
• “There’s no crisis or emergency by any conventional standard or use of the word,” Noah Kaufman, a senior researcher at Columbia University’s Center on Global Energy Policy”.

With oil prices remaining steady, the oil and gas industry may not even be incentivized to drill more, the experts said.

As of Tuesday, the price of West Texas Intermediate (WTI) crude oil, the key benchmark for oil prices in the U.S., was about $66 per barrel — “not crazy-high,” Kaufman said.  “And they’re not going to increase drilling if they lose money by doing so.”

The world doesn’t need more oil, despite Trump’s suggestions that the U.S. is not producing nearly enough, the experts said. The U.S. may be the largest exporter of natural gas in the world, but global demand is falling — with countries in Europe and Asia decreasing their use of fossil fuels as renewables such as wind, solar, batteries and electric vehicles, eat away at the demand for fossil fuels.

“It’s cheaper and more energy secure for them to use renewable power,” Nemet said.

Trump’s attempts to bring oil and gas back to the forefront will set the U.S. behind compared to other G2 countries and their climate goals, experts said. China and Europe are rapidly developing renewables as their primary energy.   “We’re doing nothing like that here”.

The Trump administration is “disingenuously” using the rhetoric of an energy crisis to promote fossil fuels, speed the permitting of extraction projects and justify the bypassing of environmental reviews, David Konisky, a professor of environmental politics at Indiana University’s O’Neill School of Public and Environmental Affairs, told ABC News.

The messaging of an energy emergency is also the administration’s attempt to defend its ideological goals of deregulation and reversal of Biden-era efforts to address climate change.

A lot of the momentum for solar, wind and other clean energy sources in recent years came from tax credits and other policies in the Inflation Reduction Act, along with the Bipartisan Infrastructure Law, both passed during the Biden administration. Trump promised during the campaign to rescind all unspent funds from the IRA.

While there may be no shortage of fossil fuels in sight, climate scientists and international communities continue to warn of the climate consequences we are increasingly facing with the worldwide production and consumption of fossil fuels — which remains the primary cause of global heating.

According to a new industry report released this week, the addition of solar energy capacity to the national grid system in 2024 represented the greatest gain from any single energy source (clean and dirty energy combined) in more than two decades – thank you President Biden.

The report, produced by the Solar Energy Industries Association and Wood Mackenzie, a research firm, determined that over 50 gigawatts of new solar generation capacity was added last year to the national grid, far more than any other source of electricity.

The report data was released a day after the Trump appointee U.S. energy secretary, Chris Wright, strongly criticized solar and wind energy on two fronts. Wright, speaking to a room full of fossil fuel stakeholders at CERAWeek, an annual energy conference held in Houston, explained falsely that solar and wind power cannot meet the growing electricity needs of the world, and that their use was driving up energy costs.  Both statements were contrary to the facts. Especially in terms of solar energy’s unprecedented contribution in lowering energy production costs and to lowering ratepayers use costs associated with the clean energy source.

Wright went onto claim, without foundation or facts, that “Beyond the obvious scale and cost problems, there is simply no physical way wind, solar and batteries could replace the myriad uses of natural gas.” Mr. Wright, was previously chief executive of an oil and gas production company before Trump appointed him to the role of U.S. energy secretary.

Solar energy and battery storage systems have also gained significant market adoption momentum in recent years and may not be easily thwarted, and certainly not by a present administration bent on resurrecting 1950’s energy policy solely based on a fossil fueled economy.

The U.S. Energy Information Administration, which is part of Mr. Wright’s department, said last month that it expected solar and batteries to continue leading new capacity installations to the U.S. electricity grid this year.  Proponents of clean energy celebrated the milestone for solar power as the world moves to increase electricity production to meet the needs of energy-hungry data centers to support the growth of artificial intelligence, and address escalating of global climate impacts.   “There’s substantial agreement that in order to do that, we have to have enough electricity, and there are facts that show that the fastest way to do that and the cheapest way to do that is through the deployment of solar and storage,” Abigail Ross Hopper, president and chief executive of the solar association, said in an interview at CERAWeek.

The Earth is about 4 1/2 billion years old. During that time the planet has experienced 5 major climate-changing events of global proportion, each accompanied by 5 major global extinctions events.

Most people are focused on the noise of their modern daily lives.  Macro subjects like global heating, species losses, wars, and the social and economic impacts of these threats to the status quo are generally left to so-called subject matter experts, that is, until events strike home.

Bloomberg reported early today the potential cost of the Los Angeles area fires (presently destroying large swaths of Southern California) are now projected to range between $135 billion to $150 billion in property and other economic losses.

By comparison, the total damage and economic loss from the unprecedented 2023 Maui wildfires has been estimated to range between $13 billion and $16 billion. These hugh property losses, in each case, do not consider costs measured in personal tragedy to individuals, families, and businesses victimized by ever-increasing and catastrophic events linked to global heating.

While climate change did not play much of a role in this past year’s campaign, Trump’s likely actions in office this time around could be far more significant than in 2017.  Back then, he announced the US would pull out of the Paris climate agreement, the most important UN process to tackle global climate change.  The agreement saw almost all the world’s nations – for the first time,  agreeing to cut the greenhouse gas emissions linked to global heating.

Speaking in his New Year’s message, secretary-general of the United Nations António Guterres said that the world is witnessing a “climate breakdown – in real time”.   

“We must exit this road to ruin. In 2025, countries must put the world on a safer path by dramatically slashing emissions and supporting the transition to a renewable future,” he said, stressing that …“it is essential – and it is possible”.

The new mission of the Trump round-two administration is the same as the first time around, push for a major ramp up of oil and gas exploration and production within the US, fuel a dirty energy market economy based on increasing consumption, roll back environmental protections, defund an emerging clean energy national economy, and impose heavy tariffs on electric vehicles and solar panels coming from China and other import markets Trump does not control.

“You are looking at, overall, a ‘drill baby drill’ philosophy,” Dan Eberhart, chief executive officer of oilfield services company Canary LLC told Bloomberg News.  “You are going to see offshore lease sales, you are going to see pipelines move much quicker, you are going to see fracking on federal lands and a mindset that is focused on advancing big oil profits and removing environmental safeguards.

It is not yet clear if Trump can turn back the clock for coal, oil and gas, or curtail the growth of sustainable energy sources.  For a start he faces both global and domestic opposition – also notably from within his own party, once laughingly referred to as the Gas Oil Pollution party.

President Biden’s singular outstanding accomplishment during his four year term was the passage and implementation of the Inflation Reduction Act (IRA), which ultimately may channel as much as $1 trillion of spending towards a national transition into a sustainable clean energy economy.  To win over largely Republican states, Biden channelled a large portion of IRA funds into several key GOP states and districts, who have since conveniently joined a growing global clean energy economy.

“The result from this election will be seen as a major blow to global climate action,” said Christiana Figueres, the former UN climate chief.   “But it cannot and will not halt the changes under way to decarbonize the economy and meet the goals of the Paris agreement.”

In memory of President Carter … who was ahead of his time:

“No one can embargo the sun,” Carter once said. “No cartel controls the sun. Its energy will not run out. It will not pollute our air or poison our waters. The sun’s power needs only to be collected, stored and used.”

Last year’s Maui fire driven by a changing climate, was a wake up call for many, especially for the state’s Property & Casualty (P&C) insurance providers.

While Hawaii’s insurance market has been relatively stable compared to states like Florida and California, the increasing frequency and severity of climate-related events are already placing upward pressure on insurance rates throughout the industry, leading to higher costs and changes in coverage and availability.

Hawaii’s residents not otherwise sleeping under a coconut tree generally find themselves within one of three residential P&C insurance market categories as; Home Owners, Condominium Owners, or Renters, and as a result, most residents have some form of Property & Casualty insurance coverage, and in many local markets have experienced annual cost increases exceeding inflation over the past several years.

For Hawaii and beyond, long-term premium increases are projected to increase throughout the insurance sector by 5.3% per year through 2040, largely due to increasing climate change impacts.

Locally, P&C insurance companies are a band on the run. Hawaii’s Insurers have so far paid out more than $2.34 billion and more than 10,000 claims as the result from the climate -driven Maui fires, as of June 30, according to the Hawaii Insurance Division.  About $1 billion more in claims is expected, the agency said in a late July update. The August 2023 wildfires that spread across much of Maui killed 102 people and displaced more than 12,000, further validated P&C insurers worst fears of greater financial exposure in an increasingly climate-unstable world.

Even before the Maui fire Hawaii property insurance premiums had been rising year-over-year, a trend likely to continue due to increasing climate related change property claims. While it’s too early to determine the exact impact of the recent Maui wildfires on rates, they are expected to contribute to further rate increases.

Insurance companies are likely to reassess the risks associated with offering coverage in Hawaii, particularly in areas prone to wildfires and other climate-related disasters. This reevaluation is already leading to higher premiums and more selective or limited coverage and coverage value ceilings.  Some insurers are already limiting coverage and/or increasing scrutiny in high-risk areas throughout Hawaii.

No major insurance carriers have announced plans to pull out of the state due to the Maui fires, but the industry as whole with customers in the state are or could reassess their risk exposure in Hawaii at anytime, especially as the industry is transformed by non-historic risk events that previously did not exist.

Cause & Effects

The 2023 Maui wildfires has had a significant impact on Hawaii’s property and casualty (P&C) insurance landscape, affecting rates and underwriting policies.  The Maui wildfires resulted in substantial insurance payouts, with Insurers having already paid $2.34 billion on more than 10,000 claims as of June 30, 2023.  An additional $1 billion in claim payouts is expected bringing the total insured Maui fire loss to an estimated $3.4 billion, and making it Hawaii’s second costliest natural disaster on record.

Significant losses have prompted insurers to reevaluate insured risks with Hawaii based customers, and like California, the threat of some P&C insurers leaving the state remains high a some future time.  In the meantime, insurers are likely to reassess their underwriting policies in Hawaii:

• Some companies may limit coverage or increase scrutiny in high-risk areas.
• At least one company has issued a moratorium on new fire policies in parts of Maui where wildfires are still actively burning.
• Insurers are further reevaluating the risks associated with offering coverage to homeowners in Hawaii.

Despite the aforementioned concerns, Hawaii’s insurance market appears relatively stable:

• No major insurers have announced plans to pull out of the state due to the fires.
• Hawaii’s market has been stable for many years, with availability across various insurance types.
• The state is in a better position compared to states like Florida and California, where more insurance companies are withdrawing.

However, the Hawaii Property Insurance Association (HPIA), which serves as an industry safety net, may struggle to handle an increasing number of homeowners unable to secure private insurance.  HPIA typically charges higher premiums for less coverage, with a maximum coverage limit of $450,000.  State government and insurance regulators are also taking steps to address the situation:

• The state issued a declaration allowing out-of-state adjusters to help process claims.
• The insurance commissioner encouraged insurers to ensure continued coverage for those impacted by the wildfires.
• The Hawaii Insurance Division is monitoring the situation and providing some support to affected policyholders.

While the full impact of the Maui wildfires on Hawaii’s P&C insurance market is still unfolding, it’s likely to result in some rate increases and changes in underwriting policies beyond Maui. However, regulators are presently actively working to maintain insurance availability in support affected Maui residents, but may this effort should be expanded with a statewide view into the near future.

Self-Insure?

Some people are rolling-the-dice and self-insuring or skipping traditional P&C insurance altogether.

A recent study by the Insurance Information Institute, a nonprofit that seeks to educate consumers, found that the number of people foregoing insurance coverage is rising sharply.  “Twelve percent of homeowners are now voluntarily not purchasing home insurance versus 5% before the pandemic, so the rate has more than doubled,” Mark Friedlander, the institute’s director of corporate communications. That comes despite the finding in a survey by the financial adviser firm Bankrate that most Americans don’t have $1,000 set aside for a family emergency.

“How realistic is it for an American family to say, ‘we’re just going to forego insurance and we’ll pay for a loss out of pocket’? Not very.” Friedlander said. “But that’s the kind of trend we’re seeing.”