By John R. McMenamin
Edited by: Alexandra Pultz
Donald J. Trump was inaugurated for a second term in office on January 20, 2025. This incoming term brings a promise to invest in the American energy industry. Has the time come to consider investing in American energy? What does it mean to invest in American energy?
President Trump has expressed his desire to reinstitute the Keystone XL Project—an oil pipeline that would transport crude oil from Alberta, Canada to U.S. refineries. This project was first proposed in 2008, but ultimately plans were terminated in 2015. Trump has claimed that he will re-initiate the pipeline plans while in office, but is the completion of this project still realistic or needed?
Donald Trump has decided to change President Biden’s offshore drilling ban upon his entry into office. Investing in American energy and oil is to invest money in domestic companies that are involved in the energy and oil industry. Investing in American companies can potentially create more jobs for national companies as well as expanding the power infrastructure for the United States. American Oil companies that are smaller and explorative, such as ConocoPhillips, might see growth with new ocean-drilling opportunities, benefiting shareholders. That said, investors should be aware of the potential risks in the increase of domestic oil production that could potentially prove detrimental to the stock price of oil companies. There are both positive and negative effects of investing in the American energy industry.
However, demand via the need for energy in Europe due to Ukraine’s oil blockade might boost stock prices through increased oil exports. Large U.S. Oil companies, namely ExxonMobil, are likely to take advantage of these new opportunities in Europe due to their growth initiatives.
Many American corporations are also pulling out of sustainability pledges which could continue to fuel larger oil and natural gas consumption, increasing prices. The intricate dynamics of determining energy prices leave investors to consider how increased oil production and potentially higher demand impacts American energy stock prices. Skepticism further remains on whether Trump will keep his word and deliver on these promises due to domestic regulatory challenges.
Investing in energy is a nuanced practice influenced by politics and market forces. The next four years could prove pivotal for the future of American natural resources for both the good and bad. The time has come to reevaluate your portfolios and consider the potential risks and rewards of investing in American energy. As the energy investments in the United States increase, there is much focus on whether or not you should be investing too. Like every investment, your decision of whether to invest or not should be your own choice based on research and personal choices. You have the power to take control of your own investments!
