I’m probably about to write way too many words as preface for what I really came here to post. It's a known failing of mine.
The tariffs announced this week are the dumbest, most asinine, most magnificently reckless, etc. economic/foreign-policy move in this nation’s history and the methodology by which they were derived is possibly even more intellectually bankrupt and incandescently stupid. I am trying to rein myself in a bit but Roget himself doesn’t have enough words for what I think about all this.
I’ve been happily signed up to the Heatmap organization’s newsletter for a while now. They cover the renewable energy transition primarily. Yesterday they sent a full length article about the potential
effects of the tariffs on the Oil and Gas industry. If you follow that link you may need to create an account to read the whole thing but don’t feel obligated: one of the benefits of me writing so much is that you shouldn’t have to!
Trump's energy policy, like all the others, is completely incoherent. He wants to empower O&G again by opening up land for drilling again and fast tracking permits. Drill, baby, drill! The earlier tariffs on steel have increased the cost of new tubular stock (liner casing and drill stems) by about 30% already. This is not the end of the world since all of those get reused quite extensively from well to well. Still a pain point.
But! He also wants oil prices to be cheap for consumers. To that end apparently he's been pushing OPEC to increase production and according to the newsletter, "early Thursday morning, the oil cartel OPEC+ announced that it would boost oil production by 411,000 barrels a day next month — far more than expected — which will essentially compress three months of supply increases into one." Now, I have absolutely NOTHING to base this on but I'm interpreting this as some malicious compliance.

Who knows, though!
Anyway, oil futures for West Texas Intermediate dropped from $71.71 to $61.99 by the close of yesterday. 14% in two days is an unusually large drop, shall we say. In general terms, new wells are cheapest to drill in the Permian Basin and while every well is different, the break-even oil price these days is mid-$60's.
These new tariffs, if they precipitate a global recession as pretty much any working economist who hasn't drunk themselves into sweet oblivion by now expects, will cause aggregate demand of all sorts to crater which would likely cause compounding effects for energy demand. I guess that's another way to make it cheap for consumers! But nobody's going to want to drill any new wells. Oops!
I grew up in Midland, Texas, the heart of the Permian Basin and worked for a local O&G company for eight years earlier in my career. The people I worked with and went to church with and bumped into at the grocery store (HEB, buddy! Wooo!) pretty much all fell into whatever stereotype you're thinking of now. In general the only other political misfits I encountered were those of us who did a lot of community theater but even there the Majority had a near majority. I maintain my Facebook account only to keep a last, tenuous connection to that crew years after getting yeeted out into the world. I don't add new friends (not that I make many these days, but still) and I really hate that damn app most of the time.
If I were a little less conflict-averse and a little more willing to torch some bridges, this is what I'd be posting there, so instead, I offer it to y'all:
Thoughts and prayers for my family and friends in Midland
As much as I love and miss everyone, you dumb motherfuckers voted for everything that is now about to happen to you. It's okay, you can tell yourselves you didn't know what you were doing. A lot of us knew exactly what could happen, though.
If you think the busts of 2009 and 2014 were bad, just wait. Those were just run-of-the-mill market corrections that we all think we're accustomed to. This time you've been deliberately shoved off the financial cliff by His Royal Orange Highness who then immediately fucked off to go golfing for a long weekend.
Every one of you ought to be calling and raising unholy Hell with Pfluger, Cornyn and Cruz every single day. It's literally your only hope.
And next time, try voting for someone who actually gives a shit about you.
And don't forget to look into Enhanced Geothermal Energy, it might be the way you get to keep your jobs for the next little while.
Scorn and hisses!
P.