Ann Arbor (Informed Comment) – On Sunday the NYT revealed that Trump’s staff ran his May, 2016 speech on “America First” by Saudi Arabia and the United Arab Emirates for their input into the energy passages, and actually altered the text based on their editing.
The hollow joke of Trump’s “America first” slogan could not have been better illustrated. Trump ran on keeping multinationals from running roughshod over US interests, but once in office he slashed the taxes of the multinationals and deregulated them, making them more wealthy and powerful than ever before. Chief among the beneficiaries of Trump’s hypocrisy have been Big Oil and its allies, the oil-producing states of the Gulf.
Although Trump was trying to make the auto industry happy by cutting back the Obama goal of 54 miles per gallon by 2025 to 37 m/g, the move inevitably warmed the cockles of Big Oil’s heart (bad metaphor–Big Oil has no heart). As it happened, Gov. Gavin Newsom of California went toe to toe against Trump on this one and appears to have won the battle. The Big Three would have liked lower efficiency standards, but not at the cost of having to build different car models for different states.
The United Arab Emirates and Saudi Arabia have very little going for them other than petroleum, which is actually worthless. That is, as understanding of the catastrophic impacts of our climate emergency sinks in the with public, a rush to electric cars fueled by wind and solar will gain momentum. Leaving Saudi Arabia and the UAE (as well as the Koch brothers and assorted other B-movie villains) high and dry.
In Trump’s censored speech, for all the world as though he was writing for a Saudi newspaper, he did pledge to increase US petroleum production.
That pledge is a double-edged sword for the Oil Gulf. On the one hand, US production from fracked and newly found fields has soared in the past decade. The US will likely produce 13 million barrels per day of petroleum in 2019, while consuming 20.6 million b/d, meaning it has to import 7.6 mn. b/d. US consumption is up a couple million barrels a day from the bad economy of a decade ago, offsetting the 8 mn. barrels per day increase in production in the past decade.
But this emphasis on US petroleum production also commits the world’s largest economy to a petroleum-based economy. Although this policy will likely wreck the planet, it will keep Saudi Arabia and the UAE eating high off the goat for an extra decade or two.
Global oil demand will likely be 101 million barrels a day this year, but that demand will likely soften through the next decade in part because of the rapid rise of electric vehicles, especially in China and very likely in India.
Saudi Arabia and the United Arab Emirates are full of high-powered economists and MBAs who have done the math, and they know that their oil is a stranded asset. The best case scenario is that it lasts until 2050. But the transition could come far more quickly. Having Trump in the White House as a useful petroleum idiot is key to these countries’ hopes for quashing the EV and renewables.
It isn’t very much like putting America first, especially since the most extensive climate emergency impacts will be on the Gulf of Mexico in Trump strongholds like Alabama. But then Saudi Arabia doesn’t want us to say that.