The Trump Economy

[Tiny]

Originally Posted by Ducbutter

Are you saying that he said that and you were naive enough to believe it?

LOL. Yeah, nobody takes Trump literally and everyone knows he's inclined to exaggeration. I'm as familiar with the industry as you, and we both know the oilfield strongly prefers Trump, everyone from the rookie roustabout to empresarios like Harold Hamm. There are counties in West Texas that are majority Hispanic, and went for Trump by 50 or 60 points. People in the oil belt view the Democratic Party as an existential threat to their livelihood.

[Tiny]

Originally Posted by Ducbutter

Is the administration doing anything to restrict drilling, policy wise? Are there onerous environmental policies being enacted or enforced by the administration that prevent drilling? Did I miss the executive order putting Trump in charge of when and where oil companies drill? Or is this a decision by the major producers to not increase supply and drive prices down further?

Did you think about any of those questions before you clicked submit?

Originally Posted by Ducbutter

That 10% increase in the 25% overall well costs aren't as dramatic as you imply and I'm doubting it plays that large a part in the decision to not drill.

Originally Posted by Ducbutter

So you agree that Trump has done what he can to encourage drilling but the market being what it is has not convinced oil companies to drill more? And that's Trumps fault? Holy shit you are really stretching.
I don't know about you, but I spent a little more than 10 years roughnecking and grew up with a father who was an engineer for oilfield tool manufacturers my whole life so I know that casing costs are around 15-25% of well costs (give or take a couple points). I'm willing to bet I've run more casing than the CEO of Diamond Energy and you combined.

Costs overall are down. Yes, tubular costs are up, but service companies are hurting and have cut prices. Friends who participate in wells told me a year ago that the Permian Basin would see activity fall way off if the price of oil fell to the low 60's. Now they're saying costs have dropped enough that the economics still look passable for what they're drilling.

Biden campaigned on shutting down drilling on federal leases. He started to implement that by stopping the issuance of drilling permits and new leases, and later had to back off because of political considerations and court challenges. That's a really dumb ass thing to do, even IMO if you're a greenie. A large percentage of our natural gas resources are on federal lands and federal offshore. When the Marcellus, Haynesville and associated gas production from the Permian Basin fall off, we'll need to exploit gas resources in the Rockies. And that gas when sold on world markets and in the USA will largely displace coal. Coal is dirtier and emits more carbon per BTU of energy than natural gas. Dumb ass Biden also suspended issuance of permits for new LNG plants, and that suspension stayed in place until Trump took office.

Kamala Harris, Bernie Sanders and Elizabeth Warren all wanted to ban fracking. Bernie and Liz still do. That would as you know force the U.S. back into being a big oil and gas importer, dependent on countries like Saudi Arabia, Venezuela, Russia, and Iran. That would hurt our national security, run up our current account deficit even more, and put Americans out of work.

No wonder the industry prefers Trump.

[royamcr]

The cost to produce oil from new wells is around $65 and the sell price is around $63. There isn't any money in drilling for new oil at the moment. Existing wells cost about $35 so that is most of what is going on right now.

[royamcr]

Originally Posted by Tiny

Costs overall are down. Yes, tubular costs are up, but service companies are hurting and have cut prices. Friends who participate in wells told me a year ago that the Permian Basin would see activity fall way off if the price of oil fell to the low 60's. Now they're saying costs have dropped enough that the economics still look passable for what they're drilling.

Biden campaigned on shutting down drilling on federal leases. He started to implement that by stopping the issuance of drilling permits and new leases, and later had to back off because of political considerations and court challenges. That's a really dumb ass thing to do, even IMO if you're a greenie. A large percentage of our natural gas resources are on federal lands and federal offshore. When the Marcellus, Haynesville and associated gas production from the Permian Basin fall off, we'll need to exploit gas resources in the Rockies. And that gas when sold on world markets and in the USA will largely displace coal. Coal is dirtier and emits more carbon per BTU of energy than natural gas. Dumb ass Biden also suspended issuance of permits for new LNG plants, and that suspension stayed in place until Trump took office.

Kamala Harris, Bernie Sanders and Elizabeth Warren all wanted to ban fracking. Bernie and Liz still do. That would as you know force the U.S. back into being a big oil and gas importer, dependent on countries like Saudi Arabia, Venezuela, Russia, and Iran. That would hurt our national security, run up our current account deficit even more, and put Americans out of work.

No wonder the industry prefers Trump.

Oil producers lose money if they drill in the low 60s when they sell to refiners. Companies like to make a nice profit when they sell their oil. The correct price of oil is around $85ish.

[txdot-guy]

Originally Posted by Tiny

ERCOT, who manage something like an air traffic control system for the electric grid in Texas, was the culprit. People with midstream gas companies were screaming at ERCOT from the top of their lungs that it had to maintain electric supply to the oilfield and gas plants. And ERCOT ignored them and prioritized residences instead. The dumb asses refused to realize when they shut off the electricity, the compressors and wells would go down, and we'd be truly fucked.

I drove from Dallas to Lubbock by way of Sweetwater right in the thick of the deep freeze, the worst day. That area has a higher concentration of wind generation than anyplace in Texas. There wasn't any wind to speak of on that day. The windmills weren't turning.

If the wind doesn’t blow you don’t get electricity output. The windmills worked as they were designed to.

The natural gas energy infrastructure didn’t.

But that doesn’t have anything to do with whether Trump owns the economy.

I would say however that Trump’s antipathy to windmills and green energy in general has done a disservice to our national energy grid.

Cutting off federal funding for upgrades to our energy infrastructure was a giant mistake. Private industry relies on a robust and effective energy grid.

[royamcr]

Originally Posted by txdot-guy

If the wind doesn’t blow you don’t get electricity output. The windmills worked as they were designed to.

The natural gas energy infrastructure didn’t.

But that doesn’t have anything to do with whether Trump owns the economy.

I would say however that Trump’s antipathy to windmills and green energy in general has done a disservice to our national energy grid.

Cutting off federal funding for upgrades to our energy infrastructure was a giant mistake. Private industry relies on a robust and effective energy grid.

Batteries store wind and solar output when not moving or no sun.

[Tiny]

Originally Posted by royamcr

Oil producers lose money if they drill in the low 60s when they sell to refiners. Companies like to make a nice profit when they sell their oil. The correct price of oil is around $85ish.

Originally Posted by royamcr

The cost to produce oil from new wells is around $65 and the sell price is around $63. There isn't any money in drilling for new oil at the moment. Existing wells cost about $35 so that is most of what is going on right now.

Not true. You probably got your numbers from a May, 2025 survey by the Dallas Fed. The survey asks “What price does your firm need to profitably drill new wells?” “Profitably” means with a rate of return. Furthermore drilling and completion costs continue to come down somewhat and technology continues improving. A friend told me he’s participating in a well with a 4 mile long horizontal lateral.

My friends who continue to participate in new wells aren’t dumb asses. Oil companies generally aren’t run by dumb asses. And they continue to drill. The rig count is 539, down 51 from last year, and some of that decline is because of longer laterals and improvements in frac technology. There’s been a trend for a long time towards fewer rigs, even as production has increased.

And there’s no such thing as a single break even price. Some wells are economic to drill at $20 a barrel and some aren’t at $150. When the price of oil goes down, fewer wells will be drilled in higher tier areas.

Finally the correct price of oil isn’t $85 per barrel. The price is a function of supply and demand. And OPEC plays around with supply in ways that move the price a lot.

The dumb asses aren’t in Houston and Midland. The dumb asses are in Washington D.C. and Sacramento. To circle back on topic, as Ducbutter said, deregulation by Trump helped the energy consumer and the oil and gas industry. Compare the national average electricity and gasoline price to an overregulated blue state like California.

[Tiny]

Originally Posted by royamcr

Batteries store wind and solar output when not moving or no sun.

How much do they cost to purchase and operate per kilowatt hour over their lifetimes? Now, not 20 years in the future.

[Tiny]

Originally Posted by txdot-guy

If the wind doesn’t blow you don’t get electricity output. The windmills worked as they were designed to.

The natural gas energy infrastructure didn’t.

But that doesn’t have anything to do with whether Trump owns the economy.

I would say however that Trump’s antipathy to windmills and green energy in general has done a disservice to our national energy grid.

Cutting off federal funding for upgrades to our energy infrastructure was a giant mistake. Private industry relies on a robust and effective energy grid.

I agree 100% about Trump trying to shut down wind projects, including one that was 80% complete. You’re dead wrong about blaming the deep freeze on the gas industry. The culprit was ERCOT.

[RX792P]

Compare the national average electricity and gasoline price to an overregulated blue state like California.

Trump economy - Compare the national average electricity gasoline price today to last year.

Gas - down slightly
The national average gas price was around $3.20 per gallon as of September 2025, which is down from about $3.27 per gallon a year ago.

Electricity - up significantly
The average electricity price in June 2025 was 6.7% above the rate in June 2024, which means that household electricity costs have climbed at more than twice the pace of overall U.S. consumer price inflation over that period.

[RX792P]

Related to Trump economy...or at least to government revenues

In August 2025, the U.S. government made a deal with Nvidia, allowing the company to resume selling certain AI chips to China in exchange for a 15% share of the revenue from those sales.


Yesterday, China’s internet regulator has banned the country’s biggest technology companies from buying Nvidia’s artificial intelligence chips, as Beijing steps up efforts to boost its domestic industry and compete with the US.

[Tiny]

Originally Posted by RX792P

Trump economy - Compare the national average electricity gasoline price today to last year.

Gas - down slightly
The national average gas price was around $3.20 per gallon as of September 2025, which is down from about $3.27 per gallon a year ago.

Electricity - up significantly
The average electricity price in June 2025 was 6.7% above the rate in June 2024, which means that household electricity costs have climbed at more than twice the pace of overall U.S. consumer price inflation over that period.

So this is your response to my tiny challenge? I'll help you out. California electricity prices are about 80% to 100% higher than the national average, and gasoline prices are 40% to 50% higher.

And OK, got it, you all are blaming Trump for lower oil prices, and by extension lower gasoline prices. And you're blaming him for higher electricity prices. All when Trump doesn't have any more control over energy prices than he does over GDP growth.

The nationwide price for gasoline was substantially lower in March through August of this year than it was last year:

https://www.eia.gov/dnav/pet/hist/Le...TE_NUS_DPG&f=M

And that had little to do with Trump's policies. Yes, oil and gas companies will drill more than they would under a Harris presidency, but the lead times are such that that probably hasn't affected prices much. The gasoline price is down because the oil price is down, and the oil price is down largely because OPEC and Saudi Arabia in particular is increasing supply.

The nationwide electricity price was up 5% YoY, from 13.2 cents per kw hour in June, 2024 to 13.88 cents in June, 2025.

https://www.eia.gov/electricity/mont...p?t=epmt_5_6_a

Whoop de do. In the longer term, I expect electricity prices may go up more, after seasonal adjustment. The price of natural gas, which powers more of our power generation capacity than any other source, is up substantially this year, but still very low by world standards. I suspect there's more upside for natural gas prices than downside, which may push up electricity prices. Utilities will have to invest more in aging infrastructure going forward, and that cost will be passed on to consumers.

Anyway, undoubtedly electricity prices would be lower if not for Democrats in Washington, D.C. and the State Houses and their green mandates and restrictions on pipeline construction. Trump's had very little effect on prices during his second term. He's only been in office for 8 months.

Originally Posted by RX792P

Related to Trump economy...or at least to government revenues

In August 2025, the U.S. government made a deal with Nvidia, allowing the company to resume selling certain AI chips to China in exchange for a 15% share of the revenue from those sales.

I'm you're implying that's a bad thing you're probably not going to get much push back. Even economists who are trying to get in good with Trump like Steven Moore and Larry Kudlow would agree with you.

[Jacuzzme]

I’ve read AI plays a big part in electricity costs. Apparently the equipment is ridiculously power hungry and causes demand to skyrocket.

[Tiny]

Originally Posted by Jacuzzme

I’ve read AI plays a big part in electricity costs. Apparently the equipment is ridiculously power hungry and causes demand to skyrocket.

Very true. I missed that one.

[RX792P]

Originally Posted by Tiny

So this is your response to my tiny challenge? I'll help you out. California electricity prices are about 80% to 100% higher than the national average, and gasoline prices are 40% to 50% higher.

And OK, got it, you all are blaming Trump for lower oil prices, and by extension lower gasoline prices. And you're blaming him for higher electricity prices. All when Trump doesn't have any more control over energy prices than he does over GDP growth.

Maybe this relates to the 'Trump lies' thread.
He promised us the following...guess he is so naïve to expect he could actually do it?
But it's Trump's economy now.

“Under my administration, we will be slashing energy and electricity prices by half within 12 months, at a maximum 18 months”

“Starting the day I take the oath of office, I will rapidly drive prices down and we will make America affordable again. We’re going to make it affordable again.”

“We’re going to get your energy prices down. We’re going to get your energy prices down by 50%.”

“Energy is going to bring us back. That means we’re going down and getting gasoline below $2 a gallon, bring down the price of everything from electricity rates to groceries, airfares, and housing costs.”

We're going to get the prices down. We have to get them down. It's too much. Groceries, cars, everything. We're going to get the prices down.

“A vote for Trump means your groceries will be cheaper”