For those who prefer plainer speaking, here’s Peter McNally, analyst at oil industry research firm Third Bridge, on the same topic: "Nobody’s got crazy plans to be drilling at accelerated rates. The futures curve doesn’t actually inspire your typical oil producer in west Texas or Oklahoma to do it."
It’s been all Trump all the time for more than a week already, as the great showman hijacks the world’s media with the shocking news that he’s still going to do exactly what he has been saying he will do as soon as he is inaugurated for months or, in many cases, years.
Much ado about almost nothing new, but the media are lazy, it’s cheap and easy, why not?
We could spend the next few hundred words going through how many of the things Trump explicitly or implicitly promises will not actually come true, because a) the United States is a federal country where the states control many matters, and b) the constitution also limits his power over the Congress and the courts, and c) he is easily distracted.
However, most of his actions will directly affect only Americans.
Let’s focus instead on the Trump policy that is most likely to hurt the interests of the rest of the human race: climate change.
He is pathologically hostile to any attempt to stop or slow global warming, regarding it as a scam and a "Chinese plot".
He particularly hates "windmills" (the aesthete in him feels that they spoil the view). He is pulling the US out of the Paris climate treaty (again) and ending federal government subsidies for electric vehicle sales.
Above all, he has declared a "national energy emergency".
Exactly what that means is unclear, but the remedy will theoretically involve a lot more drilling for oil and gas in the US and growth rather than decline in its use of fossil fuels.
This causes alarm elsewhere, because the US still accounts for 27% of the global economy.
Most people in other countries (and a clear majority of Americans) see the effort to contain global warming as a high priority requiring a concerted international response, and a second US defection from the task feels like a betrayal.
While it is certainly regrettable, it is not all that big a deal in practice.
The US government does not decide which kinds of energy to develop (fossil or non-fossil) and how much to deploy. Government subsidies often play a role in these choices, but the final decisions are usually based on financial considerations — and they do not favour fossil fuels.
For almost any purpose except transportation, non-fossil energy (solar, wind, geothermal, hydro, nuclear) is cheaper than oil or gas. Almost two-thirds of all oil goes into vehicles of various sorts (mostly cars and trucks, but also aircraft and ships) — but that is a sector where overall demand for oil is not growing.
It’s still huge in the US, where less than 10% of new cars are electric, but in China, now a bigger market in terms of sales, ownership and production, market share for electric vehicles is already half and rising fast.
Unsurprisingly, Chinese demand for oil suddenly stalled last year. Most of the rest of Asia will follow, as will Europe.
So regardless of Trump’s rhetoric, US oil companies have no motivation to drill for more oil. On the contrary, they are restricting production and shutting down higher-cost wells in order to keep oil prices and their own profits up.
"Excess capacity" is just a kinder way of saying "stranded assets".
Indeed, there’s a good chance that by the end of Donald Trump’s second term in 2029 the US will be the only major producer still making millions of fossil-fuel cars, and Americans the only people buying them in the millions.
The only threat here is commercial suicide for the US car industry, not the sabotage of the global trend away from fossil fuels.
Most of the damage Trump does will be domestic, but he may trigger trade wars with China, Mexico and Canada. He might even invade Greenland, which would probably wreck both Nato and the United Nations.
However, he didn’t manage to sabotage the global response to climate change (feeble though it was) in his first term, and he won’t do it this time either. He simply doesn’t have the leverage.
Of course, the rest of the world could still screw up on the climate front even without his help.
— Gwynne Dyer is an independent London journalist.
