It thrills his followers while outraging his opponents. You can see why US president Donald Trump loves the phrase “drill, baby, drill”.
Trump wants to release the liquid gold beneath US bedrock to tackle an energy emergency. But private enterprise controls most of the oil and may not share his enthusiasm for turning on the taps.
Oil prices have been weak, trading at about $75 a barrel this week but that’s a price at which the majors, which own much of US production, can still make money.
However, they are unlikely to risk it slipping too far below that, an inevitable consequence of boosting production, as this risks hitting profits and cash flows.
Even were they to step up production, that would take time, and companies could fear they will end up bringing extra oil on stream just as the regime in Washington changes to a less fossil-fuel-friendly chief executive.
One policy that would suit US producers is Trump’s pledge to get tough on Iran, which ships oil mostly to far eastern countries that tend not to support western sanctions. Were he to follow through, it could hinder Iranian production.
North American producers could step in to plug some of the resulting gaps in demand but that would just move output from one place to another without really adding to it.
Neither is Trump’s decision to reverse former president Joe Biden’s moratorium on permits for new liquefied natural gas (LNG) plants going to have an immediate impact.
Production is still poised to increase to 200 million tonnes a year from 90 on the back of licences issued before Biden’s restraint, while any that the new administration greenlights will not be ready to produce before 2030.
During his campaign, Trump promised voters he would halve energy bills within a year if elected. His pleas/threats to Opec this week to cut prices show he’s keen to follow through on this, at least when it comes to fossil fuels.
But that demands more production, something he cannot really control. It might not be too long before “drill, baby, drill” sounds like an empty promise.
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