President Trump is promising a ‘golden age’ for America, with a focus on fossil fuels. This could have positive financial implications in Wyoming, where fossil fuels are the backbone of the state’s economy. But, because of supply and demand could mean a ‘net wash’ in state revenue.
You might remember from Trump’s inauguration he said, “I will also declare a national energy emergency, we will drill, baby, drill.”
Over the last couple weeks, Trump’s executive actions have made it easier to do so – including curtailing environmental protections and repealing Biden-era restrictions on fossil fuels.
“He's all about if we can drill it, let's drill it,” said Dylan Bainer, a principal economist for Wyoming’s Economic Analysis division. “In terms of revenue, more drilling is definitely a good thing.”
The oil and natural gas industry is the top contributor to Wyoming’s gross domestic product (GDP), including $2.42 billion going to state and local governments in 2023, according to the Wyoming Petroleum Association of Wyoming.
“With more drilling and more workers, that could lead to more restaurant activity, lodging, hotel revenue,” said Bainer. “Also, some more revenue from equipment that people might need for that drilling and some more construction.”
Another possibility of Trump’s policy changes? Bainer said likely lower prices at the pump.
“I think that's kind of what he's going for is we just drill and really increase that supply of oil and natural gas, so that we can lower those prices,” Bainer said.
While that’s nice for consumers’ wallets, Bainer said it could be different for Wyoming’s revenues down the road. Simply because of the rules of supply and demand.
“Lower oil prices, low natural gas prices lead to lower state revenues, lower tax revenues. It kind of has an offsetting effect in terms of Wyoming's revenue,” he said. “If that price goes down as a result of more supply than we could see, maybe a wash in terms of net revenue change.”
At the end of last year the U.S. was already producing more oil than any other country, ever.
Bainer said regardless, he expects coal to generally still decline nationwide, including in Wyoming.
“I think obviously oil and natural gas are still a major part in the energy production for the U.S. and the world as well,” Bainer said. “But I think in general, I'd be surprised to see as time goes on if we didn't start leaning more and more towards clean energy as a country.”
Last year, solar and wind slightly outpaced coal for supplying power in the U.S, according to Rhodium Group, which analyzes data on climate, energy and the environment. Natural gas is the largest provider of power to the U.S.
Experts say Trump’s executive orders will test presidential power boundaries of which he can block a shift to renewable energy sources. Additionally, Wyoming lawmakers are moving forward a resolution that formally props up fossil fuel projects over wind and solar.
