Trump's 'Liquid Gold' Plan: Can He Really Make America Rich Again, or Do Oil Giants Hold the Real Power?

As Donald Trump prepares for a potential second term, he has promised to "cut energy prices in half within 12 months" of taking office, primarily through increased domestic oil and gas production. Trump's "liquid gold" plan, as he calls it, aims to tap into the United States' vast oil and gas reserves to boost economic growth and energy independence. However, the power dynamics within the oil industry may limit the extent to which Trump's policies can truly make America rich again.

Trump's plan to increase domestic oil and gas production is not without merit. The United States has the largest proven oil and gas reserves of any country, with 156 billion barrels of oil and 2,500 trillion cubic feet of natural gas as of January 1, 2024 (Rystad Energy). Moreover, the U.S. has led world output for much of the last decade, averaging over 13 million barrels per day in 2023 (U.S. Energy Information Administration). However, experts caution that simply increasing production may not lead to the desired outcome of lower energy prices for consumers.

The global oil market is influenced by several key factors, including global supply and demand dynamics, geopolitical events, and technological advancements. Trump's policies, such as deregulation, expanding drilling on federal lands and offshore, and fast-tracking permitting, could lead to an increase in U.S. oil production. This could help the U.S. maintain its position as the world's top oil producer and potentially boost energy exports. However, increased U.S. production and exports could also influence global oil prices, which are set on a global market subject to global supply and demand and world events.

Major oil companies, such as ExxonMobil, Chevron, and Shell, play a significant role in shaping the global oil market. These companies have their own financial incentives and strategic goals, which may not always align with Trump's policies. For instance, oil companies are increasingly focused on capital discipline and returning cash to shareholders, rather than prioritizing production growth. This shift in focus may limit the extent to which companies respond to Trump's policies, even if those policies aim to boost the oil and gas industry.

Moreover, oil companies operate in a global market where prices are determined by worldwide supply and demand dynamics. Even if Trump's policies aim to increase U.S. production, companies may be hesitant to overproduce and risk lowering prices. This market-driven approach may limit the impact of Trump's policies on the U.S. energy landscape.

Trump's plan to cut energy prices in half within 12 months of taking office is ambitious, but economists and energy experts are skeptical of its feasibility. While increasing the supply of oil and natural gas could bring down prices in the short term, there are several complicating factors to Trump's plan. The price of oil is set on a global market, subject to global supply and demand, and world events. Both U.S. and world producers react to those prices, shying away from producing more if the price is low. Experts interviewed for this article did not see a way for Trump to lower energy prices for consumers by 50% through increased domestic production alone.

In conclusion, Trump's "liquid gold" plan to make America rich again through increased domestic oil and gas production is ambitious but faces significant challenges. The power dynamics within the oil industry, the global nature of the oil market, and the market-driven approach of major oil companies may limit the extent to which Trump's policies can truly make America rich again. While increased domestic production could help the U.S. maintain its position as the world's top oil producer and potentially boost energy exports, the impact on global oil prices and consumer energy prices remains uncertain. As Trump prepares for a potential second term, the success of his energy policies will depend on the complex interplay between domestic and global market forces, as well as the strategic goals and financial incentives of major oil companies.