Trump’s ‘Drill, Baby, Drill’ Promise: Where Are the New Oil Rigs?

BREAKING NEWS: Federal Oil and Gas Lease Reforms Spark Enthusiasm and Caution Among Energy Investors

Washington D.C. – New legislative changes aimed at boosting domestic oil and gas production are generating a complex mix of optimism and apprehension within the energy sector. The recently enacted “One Big Lovely Bill Act” introduces notable reforms, including a mandate for at least four onshore and two offshore lease sales annually. Moreover, the act reduces the minimum royalty rate for federal leases from 16.67% to 12.5% and reinstates speculative leasing, a practice that allows for leasing of under-demanded lands at reduced rates, wich had been suspended in 2022.

This legislative push comes as agencies like the Department of Energy, the Environmental Protection Agency, and the Department of the Interior, which oversees federal land auctions, prepare for increased leasing activity. The Department of the interior, in particular, is reportedly gearing up to offer more oil and gas leases on federal lands.

Kevin Book, managing director of research at ClearView Energy Partners, a firm providing analyses for energy companies and investors, noted the dual sentiment: “There’s a lot of enthusiasm for a window of prospect to make investments. But there’s also a lot of caution about wanting to make sure that if there’s regulatory reforms, they’re going to stick.” This sentiment highlights a key concern for investors: the long-term stability and certainty of the regulatory environment.

The American Petroleum Institute, a leading U.S. oil and gas industry group, welcomed the changes. A spokesperson stated, “Pro-energy policies play a critical role in strengthening domestic production. The new tax legislation unlocks opportunities for safe, responsible advancement in critical resource basins to deliver the affordable, reliable fuel Americans rely on.” This outlook emphasizes the role of policy in supporting energy security and affordability.

However,the reforms also raise environmental and economic questions. According to Sarah Rowland-Shea of American Progress, the reallocation of federal royalties, with approximately half going to states and localities where drilling occurs, could have a substantial impact on the budgets of these communities. Conversely, she pointed out that drilling on public lands can lead to air pollution, increased noise, potential spills or leaks, and habitat fragmentation, impacting both human communities and wildlife.

Evergreen Insights:

This development underscores a recurring theme in energy policy: the balancing act between energy production,economic development,and environmental stewardship. The push for increased domestic production often centers on energy security and affordability, as highlighted by the American Petroleum Institute. However, as noted by American Progress, the potential environmental impacts and the distribution of economic benefits are critical considerations that shape public and political discourse.

The caution expressed by industry analysts like Kevin Book points to the importance of policy stability. For long-term investments in the energy sector, predictable regulatory frameworks are paramount. Changes in policy, whether to encourage or restrict development, can create uncertainty that influences investment decisions.

Furthermore, the role of federal lands in energy production is a continuously debated issue.These lands represent a significant resource, and decisions regarding thier leasing and development have far-reaching consequences for local economies, national energy supply, and the environment. The distribution of royalties directly impacts the fiscal health of states and local communities, making revenue generation a key driver in these discussions. The ongoing tension between economic incentives for drilling and environmental concerns is likely to remain a central aspect of energy policy debates for the foreseeable future.

To what extent did deregulation during the Trump administration contribute to increases in US oil production, beyond the existing trends of the shale revolution?

The Campaign Rhetoric vs.Reality of US Oil Production

During his 2016 and 2020 presidential campaigns, Donald Trump repeatedly championed a policy of energy independence, famously declaring “Drill, Baby, Drill!” This resonated with voters in key energy-producing states and promised a resurgence in domestic oil production, job creation in the oil and gas industry, and lower energy prices for Americans. But as of August 3, 2025, where are the promised fleets of new oil rigs? The reality is far more nuanced than the campaign slogans suggested.

A Surge… Initially: The Early Years of the Trump Administration

The initial years of the Trump administration did see a meaningful increase in US oil production. This wasn’t solely due to policy changes, though. Several factors converged:

Shale Revolution: The ongoing technological advancements in hydraulic fracturing (fracking) and horizontal drilling were already driving production increases before Trump took office. The Permian Basin in Texas and New Mexico, the Bakken Formation in North Dakota, and the Marcellus and Utica Shales in the Appalachian region were key areas.

Deregulation Efforts: The Trump administration actively pursued deregulation in the oil and gas sector, rolling back environmental regulations related to methane emissions, wastewater disposal, and drilling permits. These actions aimed to reduce the cost and time associated with oil exploration and oil drilling.

Opening Federal Lands: Efforts were made to open up more federal lands and offshore areas to oil and gas leasing, including portions of the Arctic National Wildlife Refuge (ANWR).

These factors combined to push crude oil production to record highs, briefly exceeding 13 million barrels per day in early 2020. However, this momentum was short-lived.

The Pandemic and Beyond: A Dramatic Shift in the Energy Landscape

The COVID-19 pandemic in 2020 triggered a historic collapse in oil demand.Global lockdowns and travel restrictions led to a massive surplus of crude oil, causing prices to plummet – even briefly turning negative. This forced oil companies to drastically cut back on drilling activity, laying off workers, and shelving new projects.

Rig Count Decline: The number of active oil rigs in the US plummeted from over 670 in early 2020 to below 200 by May of the same year. While the rig count has recovered somewhat, it remains significantly below pre-pandemic levels.

Investment Shifts: The pandemic also accelerated a broader trend: a shift in energy investment away from fossil fuels and towards renewable energy sources like solar, wind, and battery storage. Investors, increasingly concerned about climate change and the long-term viability of oil and gas, began to prioritize enduring energy projects.

Biden Administration Policies: The Biden administration reversed many of the Trump-era deregulation policies,pausing new oil and gas leases on federal lands and emphasizing the transition to a clean energy economy.

where Are the New Rigs? A look at Current Drilling Activity (August 2025)

As of August 2025, the promise of a drilling boom remains largely unfulfilled. While oil prices have rebounded from their pandemic lows, they haven’t reached levels that incentivize a massive expansion of drilling operations.

Here’s a breakdown of current activity:

Permian Basin Dominance: The Permian Basin continues to be the primary driver of US oil production, accounting for over 60% of total output. However, even here, growth has been tempered by supply chain constraints, labor shortages, and investor caution.

Offshore drilling Stalled: Despite efforts to open up offshore areas, significant new offshore drilling projects have been slow to materialize. Environmental concerns, legal challenges, and the high cost of deepwater drilling have all contributed to this stagnation.

ANWR Controversy: Drilling in the Arctic National Wildlife Refuge remains highly controversial and has faced significant legal hurdles, delaying any substantial oil exploration or oil extraction activities.

Focus on Efficiency: Rather of adding a large number of new rigs, oil companies are increasingly focused on improving the efficiency of existing wells and maximizing production from proven reserves. Enhanced oil recovery techniques are gaining traction.

The Impact of Geopolitical Events & Global Oil Markets

Recent geopolitical events,such as the ongoing conflict in Ukraine and tensions in the Middle East,have significantly impacted global oil markets. These events have created price volatility and underscored the importance of energy security.

Strategic Petroleum Reserve (SPR): The US has utilized its *Strategic