Will the Shift from Renewable Energy to Oil and Gas Result in Cheaper Energy Prices?
There is clearly a shift in the Trump Administration’s energy policy from renewable energy to foster and sustain more fossil fuel energy. This shift is being promoted by the auctioning of government oil and gas leases.
Public Land Leases
The Interior Department announced in late March that in the first 3 months of 2025, the federal government brought in nearly $40 million in revenue from oil and gas lease sales on public land.
The leases have a one-decade lifespan and as long thereafter as they produce oil and gas in paying quantities.
The U.S. will hold an oil and gas lease sale in the Gulf of Mexico, as planned by the Biden administration. A proposed notice for the auction will be published in June. The Biden administration had planned for 3 Gulf leases (permitting production and drilling rights), a historically low number that angered the oil and gas industry and drilling states.
The Energy Shift
It is likely that the Trump Administration will expand the number of leases from the 3 proposed by the Biden Administration. Doug Burgum, who heads Trump’s energy council, said that “unleashing U.S. energy will lower gasoline and grocery store prices while boosting national security.” Consistent with the shift in energy policy, the Trump administration removed the U.S. from the Paris Agreement on climate change and aims to slash regulations on planet warming emissions from oil, gas, and coal operations.
Different Outcome?
Will this energy policy shift result in cheaper energy prices for the consumer? Some speculate that many oil companies operating in the Gulf of Mexico will likely continue to do what they’ve done for years, which is sit on hundreds of untapped oil leases on millions of acres. The market is saturated with oil, making energy companies reluctant to spend more money drilling because the added product will likely push prices down, cutting into profits. As stated by Exxon Mobil CEO Darren Woods in the previously cited LA Illuminator article, “So, I don’t know that there’s an opportunity to unleash a lot of production in the near term, because most operators in the U.S. are [already] optimizing their productions today.”
Leases have been sold too quickly and cheaply in recent decades, according to a 2021 report by the U.S. Department of the Interior, which oversees BOEM. This fast and loose approach “shortchanges taxpayers” and encourages speculators to purchase leases with the intent of waiting for increases in resource prices, adding assets to their balance sheets, or even reselling leases as profit rather than attempting to produce oil or gas.
Others argue that if you want to slash energy prices, then renewable energy is the way to go, but we are shipping overseas. Shipping LNG overseas contributes to higher electricity and natural gas prices in the U.S., according to a recent U.S. Department of Energy report.
Only time will tell what the future holds for energy prices. Hopefully we will not have a Horizon Deepwater disaster in the meantime.
The Environmental Law team at Norris McLaughlin, P.A., is monitoring the evolving laws that are affecting businesses, projects, and individuals. Our team is ready to assist if you encounter environmental trouble. To learn more about this post or any other environmental matter, please feel free to contact me at mpschroeck@norris-law.com.
About the Author- Law of the Land
Monica Perez Schroeck works with clients on environmental and land use issues, including those associated with site remediation, environmental due diligence, solid waste disposal, clean air and water regulations, insurance coverage, and environmental health and safety compliance. She regularly provides strategic counsel to clients on matters involving federal and state environmental statutes, such as the New Jersey Spill Compensation and Control Act, the Industrial Site Recovery Act, the Safe Drinking Water and Toxic Enforcement Act of 1985, the Resource Conservation and Recovery Act, the Coastal Area Facility Review Act, and Environmental Justice compliance. Schroeck has also worked on several Superfund litigation matters in various federal jurisdictions, representing clients in administrative claims before state and federal agencies including the New Jersey Department of Environmental Protection and the U.S. Environmental Protection Agency.