It’s been a brutal three months for the American oil and gas industry. Oil prices have dropped to their lowest level since 2021, below what most shale companies need for new drilling to be profitable. China recently halted imports of American liquefied natural gas in the latest act of trade retaliation. And as the Trump administration’s tariffs on Mexico and Canada hit materials and equipment, the cost of producing oil and gas in America is rising.
The future looks grim, too: OPEC, the International Energy Agency and Goldman Sachs have all forecast softer oil demand in anticipation of a global economic downturn set off by President Trump’s trade war. The chaos has even eclipsed any gains from Mr. Trump’s industry-friendly regulatory rollbacks and efforts to fast-track approvals for new energy projects. As one industry veteran put it in a recent Dallas Federal Reserve survey of oil and gas executives, “I have never felt more uncertainty about our business in my entire 40-plus-year career.” And this turmoil is no accident; it’s a direct result of Mr. Trump’s economic vandalism.
A weakened American oil and gas industry hands more power to OPEC, leaving U.S. households vulnerable the next time it cuts production and drives up prices. That means American consumers could eventually feel pain at the pump.
As Democrats sharpen their offensive on Mr. Trump, they would be wise to underscore this uncertainty to voters, who want secure prices and energy. Stable energy prices depend on stable policy — and this moment calls for a Democratic agenda that prioritizes both.
Democrats have missed opportunities to stabilize the oil market in the past. When oil prices crashed during the Covid pandemic, threatening shale companies with bankruptcy, party leaders blocked a plan championed by Texas and Oklahoma Democrats to buy oil for the Strategic Petroleum Reserve, calling it a “bailout for big oil.”
By 2021, as oil demand rebounded with the economy, U.S. shale producers were ill equipped to ramp up production and counter OPEC’s production restraint or the looming shock from Russia’s invasion of Ukraine. Ultimately, U.S. consumers paid the price to the tune of $5 a gallon of gasoline. Alongside missteps like these, Democrats’ political gestures like fracking bans have alienated an industry that has helped reduce America’s reliance on oil from countries such as Saudi Arabia and Russia.
Democrats have a tricky line to walk, balancing climate priorities and energy security. But they can chart a new course if they stop treating domestic oil and gas production as a liability.
This doesn’t mean adopting a mindless “drill, baby, drill” mentality; it’s about recognizing that domestic oil and gas companies deliver geopolitical value and economic benefits by keeping the world less reliant on Russia and OPEC. The industry can also help accelerate decarbonization with innovation and financial might.
And admitting this doesn’t have to be at odds with Democrats’ efforts to enforce strong pollution standards and hold bad oil and gas actors accountable. To unlock production across the energy system, stability is crucial to provide a reliable investment environment and clear rules of the road.
An obvious place for Democrats to pursue this is in a robust defense of the Inflation Reduction Act. The sweeping Biden-era law is diversifying and expanding the American energy system — a necessity as American consumers find themselves competing for electricity with manufacturers, data centers and the global market. Without that additional supply, volatility is inevitable.
Yet Republicans are now pushing to repeal up to $400 billion worth of the law’s energy tax credits — a move that would stall energy investment and drive consumer prices still higher. That will give Democrats the chance to make the case that diverse energy sources are the best hedge against price spikes in any single fuel.
And while Mr. Trump kneecaps American oil and gas with tariffs and by encouraging OPEC to produce more, Democrats can instead offer a plan to refill the Strategic Petroleum Reserve. That will give America leverage in global markets while protecting consumers from supply squeezes from foreign producers.
Achieving stability also means fixing outdated permitting laws that stifle energy development of all kinds and undermine the government’s ability to invest in it. While Democrats in Congress may not be able to pass legislation without a majority, it is time for them to offer a platform that reduces the uncertainty that paralyzes the infrastructure critical to achieving climate goals and energy reliability.
While much of this could sound like heresy to today’s Democratic leadership, it would in fact be a course correction: a return to the Obama-era energy playbook that embraced an increase in the production of both American oil and gas and clean energy.
Mr. Trump can wrap chaos in bravado, but his policies have already hurt American producers and undermined our economy. Ultimately they will also hurt consumers.
Democrats can make that plain. They can be the party of reliable energy, robust domestic production and decarbonization — but only if they embrace an agenda that responds to the complexity of the moment with steadiness. The opportunity is there to lead, to grow and to govern in a time when it is so desperately lacking.
Arnab Datta is the managing director of policy implementation at Employ America. He has advised members of Congress from both parties and the Biden White House on energy and economic policy.
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