Trump’s energy emergency fails to curb fuel costs

On his first day in the second term, President Donald Trump declared a national energy emergency. He blamed the previous administration’s policies for leaving the country’s energy resources too weak and said that the resulting high prices hurt Americans. To address the problem, the executive order told federal agencies to speed up fossil‑fuel permits and to shore up the power grid with more coal and other fuels. The emergency was declared to address high prices, but the sharp rise in fuel prices today is largely caused by wars in the Middle East, not by the policies Trump criticized.

Impact on power grid

One area Trump targeted was the power grid. The Energy Department issued orders to keep coal plants operating past their planned shutdown dates. The J.H. Campbell plant in Michigan stayed online, costing ratepayers nearly $300 million more for power that was only marginally higher. In Colorado a coal plant that was slated for retirement was kept running despite serious maintenance needs. The orders have increased operating costs for utilities without lowering consumer bills, and an appellate court has begun to block the agency’s authority.

Trump also tried to reverse Biden-era limits on oil and gas development. The administration formed a cabinet committee that waived endangered‑species protections for Gulf of Mexico drilling, clearing the way for BP’s Kaskida project. The Army Corps of Engineers was instructed to fast‑track pipeline permits under the Clean Water Act, and a list of projects was marked with the emergency tag. Although the permits have advanced, the projects are large and long‑term and do not reduce the high prices that Trump warned about.

The most pressing problem remains the shortage of refined fuels. The war in Iran has shut the Strait of Hormuz and destroyed Middle‑Eastern refineries, tightening supply of gasoline and diesel. Prices for gasoline and diesel have climbed above $4 and $6 per gallon, respectively, and the crack spread has reached a multiyear high. U.S. refineries are already operating near capacity and are reluctant to build new plants, so the administration has no tool to increase supply. Without a reduction in global supply disruptions, high fuel costs are unlikely to fall even with the emergency order.