President Donald Trump’s energy policies could boost the U.S. economy significantly, according to a new report from the White House Council of Economic Advisors. The report suggests that by increasing energy production and reducing regulations, the U.S. GDP could rise by as much as 1.9% over the next decade.
Released on Thursday, the report highlights how Trump’s energy agenda is linked to economic growth. Experts believe that ramping up energy production and easing regulatory burdens could lead to GDP growth of between 0.56% and 1.90% by 2035.
Kush Desai, a spokesman for the White House, emphasized the importance of energy abundance in driving job and wage growth during Trump’s first term. He stated that this energy strategy is crucial for Trump’s second term goals, which include enhancing America’s position in artificial intelligence and revitalizing the industrial sector.
The report also pointed out some challenges in the current U.S. energy system, such as slow government approvals, outdated infrastructure, and reliance on unstable sources for critical minerals. However, it noted that the U.S. has an abundance of natural resources, making it the leading producer of petroleum, natural gas, and nuclear power in 2023.
A recent Department of Energy report warned that blackouts could increase dramatically by 2030 if the U.S. continues to close down reliable power sources without adding new capacity. The Trump administration is keen to boost energy production partly because the growing AI industry consumes a vast amount of electricity. For instance, executing a single ChatGPT prompt can require ten times more energy than a standard Google search.
The International Energy Agency predicts that by 2030, AI data centers in the U.S. will use more electricity than the combined production of aluminum, steel, cement, chemicals, and other energy-intensive goods. This surge in demand for electricity could lead to higher energy prices for consumers. To mitigate this, the report suggests increasing energy production from cost-effective and reliable sources like natural gas.
Currently, combined-cycle natural gas power plants offer the lowest-cost reliable power generation in the U.S., with a cost of about $30 per megawatt-hour. In contrast, renewable energy sources are estimated to cost between $45 and $55 per megawatt-hour, largely due to the additional expenses associated with battery storage.
To ensure a stable energy supply, the Trump administration is also delaying the retirement of nuclear and coal plants and considering reviving some facilities, like Michigan’s Palisades nuclear power plant. Alongside this, the administration is pursuing various deregulatory measures aimed at speeding up energy development, including changes to environmental regulations.
In summary, the report outlines a comprehensive approach to enhancing U.S. energy production and economic growth, emphasizing the need for reliable and affordable energy sources in light of rising demands, particularly from the burgeoning AI sector.