E&P Execs Level Scathing Criticism at Trump's Drill Baby Drill 'Myth'

E&P executives pushed back at the Trump administration’s “drill, baby, drill” mantra in a new Dallas Fed survey: “’Drill, baby, drill,’ does not work with [$50/bbl] oil,” one executive said.

Chris

Mathews

Hart Energy

Wed, 03/26/2025 - 03:48 PM

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E&P Execs Level Scathing Criticism at Trump's Dill Baby Drill 'Myth'

E&P executives pushed back on the Trump administration’s energy policy and “drill, baby, drill” mantra in the first-quarter Dallas Fed Energy Survey. (Source: AI generated illustration, Shutterstock.com)

After showering Trump with donations leading up to the election, oil and gas companies are fuming at some of the new administration’s policies—including executives who are fretting over uncertainty caused by tariffs.

Trump launched rallying cries of “energy dominance” and “drill, baby, drill” on the campaign trail.

In mid-February, the Trump administration announced the formation of the National Energy Dominance Council (NEDC) within the executive office of the president to streamline big energy projects. The administration also has a stated goal of lowering energy costs for Americans.

But U.S. producers are worried about oil prices falling, potentially as low as $50/bbl.

“There cannot be "U.S. energy dominance" and [$50/bbl] oil; those two statements are contradictory,” one anonymous executive responded to the first-quarter Dallas Fed Energy Survey published March 26.

“The U.S. oil cost curve is in a different place than it was five years ago; [$70/bbl] is the new [$50/bbl],” the executive continued.

The Federal Reserve Bank of Dallas’ quarterly energy survey is a broad measurement of sentiments across a large swath of the U.S. oil and gas sector.

The first-quarter 2025 survey aggregates responses from 130 energy firms, including 88 E&Ps and 42 oilfield services companies. Data was collected between March 12 and March 20.

Uncertainty everywhere

The Dallas Fed’s first-quarter survey was rife with comments about uncertainty on the energy sector’s direction.

“The only certainty right now is uncertainty,” one executive responded.

Trade and tariff uncertainty are making planning difficult, executives said. Domestic steel prices have risen “over 30% in one month in anticipation of tariffs,” one said.

The Trump administration’s tariffs “immediately increased the cost of our casing and tubing by 25%, even though our inventory costs our pipe brokers less,” said another.

“Tariff policy is impossible for us to predict and doesn't have a clear goal,” said a third. “We want more stability.”

Drill, baby, drill?

The Trump administration wants producers to “drill, baby, drill” their way to output growth.

But producers are more hesitant to step up their drilling, preferring to send excess cash back to shareholders through stock buybacks and dividends.

And with U.S. output at record levels, the ability to grow production further faces economic and geologic challenges.

Executives pushed back on Trump’s “drill, baby, drill” message, saying:

“‘Drill, baby, drill’ is nothing short of a myth and populist rallying cry;”
“‘Drill, baby, drill’ does not work with [$50/bbl] oil. Rigs will get dropped, employment in the oil industry will decrease, and U.S. oil production will decline as it did during COVID-19;”
“At [$50/bbl] oil, we will see U.S. oil production start to decline immediately and likely significantly ([1 MMbbl/d-plus] within a couple quarters);” and
“The rhetoric from the current administration is not helpful. If the oil price continues to drop, we will shut in production and do quick drilling.”

To stimulate increased drilling activity, “oil prices need to be in the [$75-80/bbl] range,” another executive said.

WTI oil prices dropped below $70/bbl in early March due to tariff uncertainty and OPEC’s announcement that it planned to increase output by 138,000 bbl/d in April—the cartel’s first production increase since 2022.

WTI strip prices average $67/bbl over the next 12 months, according to CME Group data. Dallas Fed survey respondents expect WTI to average $68/bbl by year-end 2025.

Gas a bright spot

Amid the violent whirlwind of price volatility and regulatory uncertainty, natural gas sticks out as a bright spot in producers’ portfolios.

Producers are fired up about gas as commodity prices rise and demand grows to fuel LNG exports. AI power demands and increasing domestic manufacturing also give tailwinds to natural gas prices, executives told the Dallas Fed.

“Natural gas is very positive,” one executive said.

Henry Hub future prices average $4.40/Mcf over the next 12 months, per CME Group data; 24-month strip is $4.31/Mcf.

“Companies with natural-gas-weighted assets will spend more money in 2025 developing their assets, but oil-weighted companies will decrease capital spending with the current pressure on oil pricing for 2025,” another said.

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Chris Mathews

Chris is the Senior Reporter of Shale and A&D at Hart Energy. He covers the North American upstream shale energy industry and the acquisition and divestiture deal markets.

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