Donald Trump has pledged to cut gasoline and energy prices by more than half in his first year in office, a pledge experts say would destroy the U.S. oil industry and lead to a severe recession.
Trump again promised Monday in a speech in Pennsylvania that would be billed as an economic policy speech that “all energy costs, air conditioning, heat, gasoline, all costs will fall by more than 50 percent in the first 12 months.” “Your bills will be less than half.”
The problem is that energy is bought and sold on a global market, and the only way gasoline can fall from its current $3.40 a gallon to $1.70 a gallon is if the price of crude oil falls from $75 a barrel to $20 or $30 a barrel. And at that low price, U.S. oil producers will not be able to break even.
“That would bankrupt American industry. And before that happens, the entire American industry would go out of business,” said an oil executive with decades of experience who spoke on condition of anonymity to avoid antagonizing Trump and his campaign. “That’s typical Trump. He overstates things without common sense.”
The former president and convicted felon who attempted a coup did not provide details on how he would dramatically lower gas prices, other than the slogan “drill, baby, drill,” which he presents as virtually the sole mechanism for all of his economic policies.
Trump’s campaign did not respond to HuffPost’s questions about whether he actually consulted with oil industry leaders before announcing his cheap energy plan.
Energy industry officials said he would never have done so because any expert would have called his proposal outrageous.
“This kind of thing comes out of political gatherings,” said the oil executive.
President Trump frequently boasted that gasoline prices were under $2 a gallon when he was president, but he failed to mention that the national average price of regular gasoline was lower than that only during the two most intense months of the coronavirus pandemic, when much of the economy was shut down and gasoline demand plummeted.
“We recorded that price as a result of a situation that most people would not want to repeat,” said industry analyst Kevin Book.
The average price during the rest of his term was between $2.08 and $2.90, significantly higher than the two years of Democratic President Barack Obama. When Trump left office, two weeks after the failed coup attempt, the average price per gallon was $2.34.
Matt Randolph, another oil industry executive with more than 30 years of industry experience, frequently posts videos on social media mocking Democratic and Republican politicians who make pro-energy claims.
at video He followed up last week’s post with a previous example of Trump’s half-price promise, in which Randolph mocked Trump’s promise and presented a scenario in which oil industry layoffs would trigger a recession. “This may be one of the dumbest things Donald Trump has ever said,” he concluded.
In an interview with HuffPost, Randolph said the only way to get regular gas to $1.70 a gallon is if crude oil prices fall to $20 a barrel, which would collapse the domestic industry.
“Crude oil at $20 will just destroy new production,” he said, adding that the halt in crude oil production would also hit natural gas production, which is often extracted along with crude oil. “The price of natural gas is going to really skyrocket.”
And since many power plants now burn methane, electricity prices will become much more expensive, undermining the second element of Trump’s promise.
Without a market mechanism to slash prices so drastically, Trump will be left to government action. “The only other way is to give the American consumer a massive subsidy,” Randolph said. “And that won’t work.”
Book, the oil analyst, agreed that he couldn’t imagine a scenario where a gallon of gasoline could cost $1.70 short of a global economic catastrophe. “This is one of those policy proposals that you take seriously, not literally.”
