Bloomberg

Days before being elected the 47th US president, Donald Trump made a bold promise that he’d slash energy prices by 50%.

“I’ll get those guys drilling,” he told supporters in Greenville, North Carolina. “If they drill themselves out of business, I don’t give a damn.”

US shale executives largely backed Trump in the election, but they may take a different view of production prospects.

During the past five years, they’ve departed from the “drill, baby, drill” days of the 2010s, when they burned through $350 billion of investor cash and sparked two price wars with OPEC that resulted in dozens of bankruptcies.

Earnings conference calls are now filled with talk of capital discipline, efficiency gains and returns to shareholders — not ambitions for booming output.

Chevron Corp., one of the biggest operators in the Permian Basin, will likely ease growth in the coming years to “open up the free cash flow there,” Chief Executive Officer Mike Wirth said this month.

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The other problem is physical capability. The US is already pumping 13.5 million barrels a day, more than any other nation in history and up almost 30% in four years. Simply replacing wells’ annual decline is a challenge, meaning the era when America could add more than 1 million barrels a day in the space of a year looks to be over.

“Everyone has benefited from lower capex, more cash flow and being more productive,” said Greg Halter, who helps manage $4 billion as director of research at Carnegie Investment Counsel. “Will the so-called animal spirits start to roar again? Who knows? But I think they’re going to stay disciplined, mostly.”

Analysts do expect modest production growth in 2025, meaning Trump will almost certainly be able to claim a fresh record under his watch. And with demand flagging in China, combined with ample supply, prices are forecast to weaken in coming years.

So Trump may well declare victory on the cost of energy. But it won’t be because US shale companies unleash a flood of new supply, or drill themselves out of business.

–Kevin Crowley, Bloomberg News

Chart of the day

This year’s United Nations climate talks were never going to be easy. The world is in the midst of two major wars. COP29, as the summit is known, is being held in Azerbaijan, a petrostate with little to show in the way of climate negotiations. The overriding objective is an issue no one enjoys talking about — money — at a time when rich countries are grappling with inflation, tight budgets and rising populism. And with Trump’s reelection, the almost 200 nations meeting this week must consider how to avoid catastrophic climate change without help from the world’s biggest economy.