Oil and gas executives welcomed President Trump’s early moves on energy policy, but many said they did not plan to increase production unless prices rose significantly.
President Trump is swinging American energy policy sharply in favor of fossil fuels, but oil and gas companies say those changes won’t push them to engage in the frenzy of new drilling that Mr. Trump wants.
The oil industry is thrilled by Mr. Trump’s executive orders, which are designed to make life harder for renewable energy companies and easier for oil, gas and pipeline businesses. But on the critical question of whether his policies will lead to more oil and gas production — one of Mr. Trump’s central goals — industry executives say not unless prices rise a lot, something the president says he will not stand for.
Mr. Trump’s aim is to support oil and gas by loosening the rules that govern extracting, transporting and exporting fuels while kneecapping the competition, including wind turbines, electric vehicles and other low-emissions technologies. That’s a powerful market signal, but not enough for companies to “drill, baby, drill.”
“What you are seeing is a huge amount of positivity,” said Ron Gusek, president of Liberty Energy, an oil field services company whose chief executive was picked by Mr. Trump to lead the Energy Department. “But it’s too early to say that that’s going to translate into a change in actual activity levels here in North America.”
For drilling and fracking to pick up substantially, oil and natural gas prices would have to rise, executives say, an outcome that is at odds with Mr. Trump’s goal of stemming inflation by reducing the cost of energy. Oil companies won’t spend money on production, which is already near record levels in the United States, if they are not confident that they can make money from the extra fuel they churn out.
Further complicating the president’s efforts to increase domestic production is that the industry generally is more focused on keeping spending in check than it was during his first term. Wall Street firms used to invest in fracking companies that grew quickly. Now, investors want to back profitable operators.