Donald Trump’s rhetoric on fossil fuels generates an energy boom
Global progress towards what the Biden administration hailed as the energy transition to a net-zero future has been largely derailed and, as The Wall Street Journal reported on Monday in the US, developments in the US-dominated Western hemisphere increasingly are shaping global energy markets.
The result won’t be exactly what Trump expected. More new oil and gas production is likely to come from Canada, Guyana, Argentina and Brazil than from the US. Nevertheless, the geopolitics of energy are shifting in Washington’s direction even as fossil fuels appear poised to play a larger role than green climate campaigners hoped.
From the Arctic Circle to Tierra del Fuego, politicians of all stripes have embraced the Trumpian rallying cry of “drill, baby, drill”.
In Argentina, President Javier Milei’s pro-market government is accelerating the development of shale reserves that some compare favourably with North America’s Permian Basin.
Argentina has the potential to outproduce some members of OPEC and investments in the pipelines and processing facilities necessary to transform the country into a major exporter are proceeding rapidly.
In Guyana, offshore rigs are beginning to produce large quantities of oil, with exports up 54 per cent in 2024 to almost 600,000 barrels a day, and are expected nearly to triple by 2030, when daily output capacity is expected to reach about 1.7 million barrels.
The new oil wealth has made Guyana’s economy one of the fastest growing in the world.
Even the hemispheric left is embracing oil and gas.
Brazil’s socialist President Luiz Inacio Lula da Silva is doing everything he can to promote fossil-fuel growth in his country. State-owned oil company Petrobras is projected to increase production by a third, reaching a billion barrels a year by 2030.
The goal is to make Brazil the world’s fourth largest oil producer, and to do that the left-leaning government is willing to open areas near the mouth of the Amazon for drilling.
There is even a worthwhile Canadian initiative as virtuous Liberals hold their noses and embrace fossil-fuel production.
Canada is already among the world’s top five producers of oil and gas, but this isn’t enough for Prime Minister Mark Carney.
Resistance from indigenous groups and environmentalist campaigners has derailed pipeline projects and oilfield developments. Canada is producing less oil and gas than it could and is more reliant on exporting fossil fuels to the US than it wants to be in the Age of Trump.
The green lobby remains strong in Canada and Carney wants to reduce emissions from Alberta’s oil sands via carbon capture. But Canada will likely be producing and exporting more oil and gas for more time than previously expected.
Work on a pipeline capable of transporting a million barrels of oil a day to a remote port in northern British Columbia could be part of the plan.
All this is happening without Latin America’s traditional fossil-fuel behemoths.
Oil and gas production in Venezuela and Mexico is inhibited by nationalist shibboleths and corruption. If either country ever comes to its senses, hemispheric production would rise even further. With or without Venezuela and Mexico, the Western hemisphere is moving into a new era of fossil-fuel production.
Argentina, Brazil, Canada, Guyana and the US are all raising their games, and newcomers such as Suriname (where rich offshore oil discoveries have attracted investor interest) will further boost hemispheric production.
This surge will reduce the power of the OPEC cartel and shield world energy markets from turmoil in the Middle East.
It also will create headaches for Vladimir Putin, and strengthen the underpinnings of American security in an ever-changing world.
The hemispheric energy boom also will delay any global transition away from fossil fuels. Even as it presses forward with ambitious new drilling plans, Brazil is hosting this year’s UN environmental conference, COP30. Lula’s hand-picked representative at the conference shocked climate change campaigners recently when he argued that Brazil’s drill-baby-drill policies could be part of the energy transition.
For now prices, not politics, will limit hemispheric production. It costs less to pump oil out of the ground in Saudi Arabia than to frack for it in Patagonia.
Price wars may slow the new production, but they won’t stop it. Energy abundance is headed our way.
Trump wanted to derail the push against fossil fuels and enhance America’s influence in world energy markets.
With unexpected support from Canada, Argentina, Guyana and Brazil, his chances of success look good.
The Wall Street Journal
More Coverage
EU readies for US trade fight
The EU thought it was on the verge of a deal with the US to keep tariffs in check. Now it is readying a counter-attack.
Why Israel’s chaotic food program in Gaza has turned so deadly
A visit to one distribution site shows how a system designed to squeeze out the UN and Hamas continues to draw hungry Palestinians into deadly encounters.
Of all the goals US President Donald Trump has set in his norm-shattering second term, the goal of restoring what he calls America’s “energy dominance” may be the closest to realisation.