“Drill, baby, drill” is taking a back seat in Trump-world policy, while China is boosting its coal output and storing natgas supplies.
There’s fresh evidence that President Trump and his team are willing to sacrifice “drill, baby, drill” in the US for low prices and other policy priorities.
Trump’s Arctic ambitions are torching the most important US asset: trust. The US is squandering this. It risks paying a heavy price for this in the decades to come.
US shale is no longer an elastic swing producer.
Harold Hamm, the legend who invented the Bakken shale boom, announced last month he is halting all drilling in North Dakota.
Trump’s energy agenda faces a trade-off: cheap energy, industry growth, and energy dominance do not fully align. Low oil and gas prices help consumers and exports, but discourage drilling, slowing production growth and complicating US dominance amid global oversupply.
The US power demand boom is running into a hard constraint: gas turbines.
Lead times for new gas plants have stretched to about five years, costs are up nearly 50%, and turbine backlogs are soaring, delaying the flexible baseload capacity needed for AI and data centres.
China ups coal output
Coal output in 2025 increased to 4.83 billion tons in 2025, up 1.2% y/y.
China mines and consumes more than half of the world’s coal supply, as global coal demand is expected to reach a new record high this year, driven by cost and energy security concerns.
China’s LNG demand is expected to remain subdued in 2026 due to increased domestic production, higher LNG and pipeline gas imports from Russia, and high storage levels.
China has reported record-high LNG imports from Russia. With large quantities of LNG coming into the market, this is likely to put even more pressure on prices.
China is planning to offer LNG futures as soon as next month, shifting market influence to China from the West and putting further pressure on the dollar
Climate takes a back seat
Norway’s oil fund has defended its push to water down net zero goals. It has recognised that global warming means that hope of limiting the increase to 1.5C is now ‘unrealistic’ and has raised the goal to 2C.
Egypt signed renewable energy deals worth $1.8 bln as it seeks to expand the share of green sources in its national power mix.
Dr Charles Ellinas, Councilor, Atlantic Council
X: @CharlesEllinas
