'It just kneecaps ya': Oil execs say Trump's plan will 'backfire' as it derails drilling

Despite Donald Trump's exhortation to "drill baby drill," oil industry executives are throwing up their hands at the president giving them free rein to forge ahead while at the same time making it unprofitable to do so.

The problem? Tariffs that have made buying needed equipment too expensive, as well as the threat of a looming recession, which would decrease demand.

According to a report from NPR, in the energy-rich Permian Basin, the remaining drilling companies were optimistic about Trump's re-election, but then came his trade war and the reality of higher costs that have discouraged new drilling.

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According to Sean Dugan, president of Dugan Production, "Your polypipe, which is what these pipelines are made out of now. That all comes from the Asian markets," and that has become a major obstacle.

The report notes, "Dugan says he wakes up every morning and checks the news on tariffs. He used to spend about $80,000 on a load of pipes that come from South Korea. Now, he figures it could be up to $120,000. His company was one of the few locally to avoid mass layoffs at the start of the pandemic in 2020 when oil prices tanked."

"It just kneecaps ya when all this uncertainty and volatility is in the air," he explained.

George Sharpe, investment manager for Merrion Oil and Gas, agrees, and citing a possible recession conceded, "You know, drill baby drill and lower oil prices are not simpatico," before adding, "I think the whole tariff thing is going to backfire on Trump."

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