For President Trump, lower energy prices haven’t been just a nice bit of relief for American consumers. They’ve been a signature bragging right, proof of concept for his administration’s whole approach to the economy and to America’s position in the world, as well as a valuable counterexample to the higher overall costs that his tariffs brought about.
“Nobody can believe when they see the kind of numbers, especially energy,” he said during his recent State of the Union address. “When they see energy going down to numbers like that, they cannot believe it. It’s like another big tax cut.” A few days later, he boasted about those numbers in Corpus Christi, Texas, where Energy Secretary Chris Wright actually pumped gas.
The focus is back on energy prices at the moment, but unfortunately for the administration — and American consumers — those prices have now gone in the opposite direction thanks to the war in Iran. Gas prices declined by about 6 percent during the year after Mr. Trump’s inauguration, but by early last week, those successes had been erased: Average gas prices rose last week from $2.98 to $3.41, one of the largest weekly increases ever recorded.
Jet fuel costs are surging too, with major U.S. airlines reporting that they’ll probably need to raise ticket prices soon. Crude oil prices jumped more than 40 percent after the conflict began. Last week alone saw the largest weekly price rise in 35 years, about twice as large as the effect when Russia, a significant oil producer in its own right, mounted its full-scale invasion of Ukraine.
Amid all the fighting, traffic through the Strait of Hormuz, where 20 percent of the world’s crude oil and natural gas usually passes, has basically halted; prices have already surpassed $100 a barrel, twice what the president has frequently cited as his goal and as a key to tackling inflation. Prices came down a bit this week, but the market is betting on a disruptive and sustained period of volatility.
The administration is reportedly scrambling for ways to get gas prices back down. Mr. Trump has said the war will end quickly, but even if it does, prices are likely to remain high for some time. Economists call it “rockets and feathers”: When there are big increases in the cost of crude oil, consumer prices shoot up like a rocket, but when wholesale costs go down, the cost of a tank of gas falls slowly, like feathers.
If it seems confounding that a president would start a war that’s guaranteed to raise the prices he had repeatedly vowed to lower, well, it’s not the first time, because the Trump administration was already doing battle against the single surest path to cheaper energy: renewables.
Renewables, such as wind and solar power, aren’t just good for the environment. They also promise lower monthly bills at a moment when the new A.I. economy is producing a huge increase in the demand for electricity. Mr. Trump, however, dismisses these industries as “con jobs,” insisting that wind turbines drive whales crazy, kill birds and cause cancer, and that solar power destroys farmers’ livelihoods. “We’re going to try and have a policy where no windmills are being built,” he vowed shortly before his inauguration.
To take just one example: A 65-turbine wind farm near Rhode Island that could power approximately 350,000 homes was nearly complete when the administration halted construction. A federal court recently allowed the project to resume, but even so, the forecast for the United States growth in renewable power capacity has been halved in the last year. Everyone will feel the effects.
Paradoxically, the new war against Iran may make the old war on renewables less politically attractive. We have long known that American dependence on oil is a national security threat, but the events of this past week make the point undeniable: Energy sources that our adversaries can blockade, or that require naval escorts and expensive insurance to deliver, are not reliable. Solar and wind power, on the other hand, generate power cheaply on U.S. soil.
The president has mocked countries that invest in these technologies. He’s even said windmills are for “stupid people” and “losers.” He’s wrong; they are a clear strategy for winning in the exact game he has staked his reputation on. He should be nurturing the industry, and prioritizing the domestic production of rare earths that this nation imports from China. There’s far more at stake than energy prices, but if we’re serious about bringing them down, let’s hope for a swift resolution to the war in Iran — and the war on renewables, too.
Natasha Sarin, a contributing Opinion writer, is a professor at Yale Law School and the president of the Budget Lab at Yale. She served in the Treasury Department during the Biden administration.
Source photograph by Brandon Bell via Getty Images.
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