President Donald Trump has vowed to “drill baby, drill” during his second term in office, but the boom in oil production he’s promised could hit a few road bumps along the way.
“We will be a rich nation again, and it is that liquid gold under our feet that will help to do it,” Trump shared in his inauguration speech, vowing to tap into the “largest amount of oil and gas of any country on Earth.”
However, in the days since Trump has taken office, many have pointed to the true key holder to the world of oil production, private sector companies that drill for the oil we use every day.
Upon his return to the White House last month, the United States had already hit record highs in oil production under the Biden administration, despite Biden’s vow to cut drilling efforts and focus on renewable energy, according to the U.S. Energy Information Administration.
While Trump may be convincing in his claims, the United States does not have the largest oil and gas reserves on the planet, though it does produce the most oil and gas compared to any other nation on Earth. The Energy Information Administration reports that the U.S. accounts for 22% of the total global oil production.
Even still, oil and gas production in the U.S. may not continue to boom in the years ahead, as a report from Fortune shared that the industry has been preparing for a plateau in production thanks to reserves running low and new digging opportunities becoming harder to find.
Matthew Bernstein, a senior analyst at the energy intelligence company Rystad Energy, shared with Fortune that oil and gas companies have two main goals in mind at this time: returning value to shareholders and preserving resources.
“The sentiment in the industry … is pretty much completely politically agnostic,” Bernstein shared. “The sentiment in terms of what we’re expecting when budgets are released—and based off of what was delivered at the end of last year—is: ‘We’re sticking with our corporate strategy.’”
He added that the patriotic spirit may not be enough to get these companies to change their goals, so Trump’s efforts to push drilling further may fall flat.
“Basically: ‘We’ll take the favorable rhetoric out of Washington, we certainly appreciate that there’s an unabashedly pro-oil and gas administration in the White House’, but that it’s really not going to affect their plans versus what it would have been a couple months ago,” Bernstein added.
This point was echoed during Trump’s first week by Ron Gusek, the president of Liberty Energy.
“What you are seeing is a huge amount of positivity,” Gusek shared with the New York Times. “But it’s too early to say that that’s going to translate into a change in actual activity levels here in North America.”
At the beginning of 2024, Rystad estimated that the U.S. had proven oil reserves of 32 billion barrels. In proven and probable oil reserves, the number sits at 44 billion recoverable barrels. When considering all the potential for U.S. oil production, the company estimates the nation has 156 billion barrels.
According to the Times, much to the dismay of the American consumer, in order for companies to increase production and tap into the “liquid gold” Trump says is beneath our feet, the price for gas and oil will have to go up so they are sure they can turn a profit as production costs are near all-time highs in the U.S.
So, what can Trump do to get companies to increase their drilling?
Trump has already directed the Energy Department to restart permitting reviews of gas-export facilities, which was paused during the Biden administration. He’s also put a pause on new permits for wind projects, which could, in turn, help the fossil fuel industry.
Still, one of the biggest splashes Trump could make would be to open more federal lands for drilling, but even then, some don’t think it would have the effect that Trump wants it to.
“At the end of the day, oil and gas corporations are all about their bottom lines. It is not in the best interest of the oil and gas industry for energy prices or prices at the pump to be low,” the Center for American Progress shared in a report on Trump’s efforts. “The industry will gladly accept administrative actions to bypass environmental review, increase subsidies, and strip competition, but corporations will not produce more oil unless it’s in their financial interest.”