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Mr. President, your commitment to radical climate and economic policy really does astound me.

Dear Mr. Trump,
What can I say? You astound me. You enthrall me. I am, in short, very impressed!
Why? Well, earlier this month, I sent you an open letter in which I confessed that I finally understood your secret plan. It’s true, I wrote, that you campaigned as a scourge of climate activists. You publicly called global warming a “hoax,” a “scam,” and something that you “don’t believe.”
Sure, that’s what you said. But, as I wrote in my letter, you have governed very differently. You are clearly terrified of climate change. Because upon being handed the reins of power, you have executed the extreme environmentalist playbook to a T.
You imposed a 10% tax on Canadian crude oil — which is the dirtiest and most carbon-intensive oil burned by Americans. You levied new fees on single-family-home building materials, putting an end to suburban sprawl. You even threatened to tax cars.
In short, you seemed to declare war on the dirty, polluting, carbon-choked American way of life.
Yet even as I sent that letter, I still had doubts. I even added a note of warning. I said that you are a much more radical environmentalist than I am — that while I want to see carbon emissions fall, I would never take the kind of extreme actions you are.
But since my last note you have plunged on. In the past few days, we’ve gotten new confirmation of just how committed you are to the radical climate agenda. You have taxed oil imports. You have declared war on cars like some kind of radical urbanist. You have hawked Teslas on the White House lawn. Even your diplomatic fights are bearing fruit: Your trade war on Canada has led to cross-border air travel falling by 70%, and your anti-European rhetoric has even started to drive down trans-Atlantic bookings now. Less tourism, fewer flights, less carbon pollution!
Last time, I called you a “Green New Donald.” Clearly that did not go far enough. You are even more opinionated, climate-crusading, and radical than I thought. You are committed to reducing the amount of stuff that Americans use — no matter where we get it from or what it does. You want to decrease the economy’s material intensity.
You, Mr. Trump, are a DEGROWTH DONALD.
And the fossil fuel industry is just starting to catch on to the extent of your fervor.
How do I know? Just look at what the oil industry itself is saying. Every quarter, the Dallas Federal Reserve asks fossil fuel executives about the state of their industry. The most recent survey came out on Wednesday, and in it those leaders do nothing but whine. They hate that you are going much further than President Biden ever went — that you are trying to drag them into bankruptcy.
“The key word to describe 2025 so far is ‘uncertainty’ and as a public company, our investors hate uncertainty. This has led to a marked increase in the implied cost of capital of our business, with public energy stocks down significantly more than oil prices over the last two,” one of them writes.
Well done, Mr. Trump! Democrats like Elizabeth Warren have long sought to raise borrowing costs for oil and gas companies through financial regulation. But you have figured out a way to actually do it with your tariff agenda.
One of the most impressive parts of your energy agenda, Mr. Trump, is that you keep calling for oil to fall to $50 a barrel. (It now trades at $69.) You must know — because you are surrounded by expert oilmen such as Energy Secretary Chris Wright — that such a low price will hand market share to OPEC and cause American oil companies nothing but pain. You must have seen that in the same Fed survey, U.S. drillers said that oil had to go for at least $61 a barrel before they could profitably drill new wells in the Permian Basin.
But you and your advisers plunge on anyway and keep insisting on that magic $50 number! You are heroes. What’s so delightful, Mr. Trump, is that this is clearly starting to irritate the oil executives who helped fund your campaign. Some of them have even started to cut their spending on future oil drilling.
“The threat of $50 oil prices by the administration has caused our firm to reduce its 2025 and 2026 capital expenditures,” writes one of them. “‘Drill, baby, drill’ does not work with $50 per barrel oil. Rigs will get dropped, employment in the oil industry will decrease, and U.S. oil production will decline as it did during COVID-19.”
Another adds: “There cannot be ‘U.S. energy dominance’ and $50 per barrel oil; those two statements are contradictory. At $50-per-barrel oil, we will see U.S. oil production start to decline immediately and likely significantly.”
Perfectly executed, Mr. Trump! They are going to keep it in the ground!!!! You have pulled off the rare rope-a-dope: Your political action groups raised more than $75 million from the oil industry to help get you elected. But now that you’re in office, you’re shutting them in. And the best part is that voters have no idea: Americans continue to think that you support U.S. oil and gas drilling — and they like it.
The most impressive comment from the oil executives, though, is this one: “I have never felt more uncertainty about our business in my entire 40-plus-year career.”
Think about that. This executive has seen the fall of Communism, the Asian crash, 9/11, the Global Financial Crisis, and the pandemic — and all of them pale next to you.
At the same time that these oil leaders are whining, you have plunged ahead with your tariffs on cars. These new fees are so complicated that many automakers are still working out exactly what they will mean for their supply chains. (More uncertainty! You dazzle me.)
But one thing is clear: They are going to raise the cost of new vehicles. “You're going to see price increases,” Ivan Drury, the director of insights at automotive research site Edmunds, told USA Today. “Virtually nothing goes unscathed.”
One analyst at Goldman Sachs even predicted that soon the average monthly price for a new vehicle could rise by $90. He said the tariffs are so unbelievably disruptive that there is no way they could become permanent. The hit to auto demand has already caused the steelmaker Cleveland Cliffs to lay off more than 600 steelworkers.
Mr. Trump, you really do impress me. I do worry about your popularity, though. I mean, are you trying to cause mass layoffs across the auto sector? If you keep this up, you might put the Democrats back in office — and you know what will happen then. I mean, last year, the U.S. produced more oil than any other country in history. I know you don’t want to see that happen again.
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Rob talks about the removal of Venezuela’s Nicolás Maduro with Commodity Context’s Rory Johnston.
Over the weekend, the U.S. military entered Venezuela and captured its president, Nicolás Maduro, and his wife. Maduro will now face drug and gun charges in New York, and some members of the Trump administration have described the operation as a law enforcement mission.
President Donald Trump has taken a different tack. He has justified the operation by asserting that America is going to “take over” Venezuela’s oil reserves, even suggesting that oil companies might foot the bill for the broader occupation and rebuilding effort. Trump officials have told oil companies that the U.S. might not help them recover lost assets unless they fund the American effort now, according to Politico.
Such a move seems openly imperialistic, ill-advised, and unethical — to say the least. But is it even possible? On this week’s episode of Shift Key, Rob talks to Rory Johnston, a Toronto-based oil markets analyst and the founder of Commodity Context. They discuss the current status of the Venezuelan oil industry, what a rebuilding effort would cost, and whether a reopened Venezuelan oil industry could change U.S. energy politics — or even, as some fear, bring about a new age of cheap fossil fuels.
Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap, and Jesse Jenkins, a professor of energy systems engineering at Princeton University. Jesse is off this week.
Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, or wherever you get your podcasts.
You can also add the show’s RSS feed to your podcast app to follow us directly.
Here is an excerpt from our conversation:
Robinson Meyer: First of all, does Venezuela have the world’s largest hydrocarbon reserves — like, proven hydrocarbon reserves? And number two, let’s say that Trump has made some backdoor deal with the existing regime, that these existing issues are ironed ou to actually use those reserves. What kind of investment are we talking about on that end?
Rory Johnston: The mucky answer to this largest reserve question is, there’s lots of debate. I will say there’s a reasonable claim that at one point Venezuela — Venezuela has a lot of oil. Let’s just say it that way: Venezuela has a lot of oil, particularly the Orinoco Belt, which, again, similar to the oil sands we’re talking about —
Meyer: This is the Orinoco flow. We’re going to call this the Orinoco flow question.
Johnston: Yeah, exactly, that. Similar to the Canadian oil sands, we’re talking about more than a trillion barrels of oil in place, the actual resource in the ground. But then from there you get to this question of what is technically recoverable. Then from there, what is economically recoverable? The explosion in, again, both Venezuelan and Canadian reserve estimates occurred during that massive boom in oil prices in the mid-2000s. And that created the justification for booking those as reserves rather than just resources.
So I think that there is ample — in the same way, like, Russia and the United States don’t actually have super impressive-looking reserves on paper, but they do a lot with them, and I think in actuality that matters a lot more than the amount of technical reserves you have in the ground. Because as we’ve seen, Venezuela hasn’t been able to do much with those reserves.
So in order to, how to actually get that operating, this is where we get back to the — we’re talking tens, hundreds of billions of dollars, and a lot of time. And these companies are not going to do that without seeing a track record of whatever government replaces the current. The current vice president, his acting president — which I should also note, vice president and oil minister, which I think is particularly relevant here — so I think there’s lots that needs to happen. But companies are not going to trip over themselves to expose themselves to this risk. We still don’t know what the future is going to look like for Venezuela.
Mentioned:
The 4 Things Standing Between the U.S. and Venezuela’s Oil
Trump admin sends tough private message to oil companies on Venezuela
Previously on Shift Key: The Trump Policy That Would Be Really Bad for Oil Companies
This episode of Shift Key is sponsored by …
Heatmap Pro brings all of our research, reporting, and insights down to the local level. The software platform tracks all local opposition to clean energy and data centers, forecasts community sentiment, and guides data-driven engagement campaigns. Book a demo today to see the premier intelligence platform for project permitting and community engagement.
Music for Shift Key is by Adam Kromelow.
And that’s before we start talking about the tens of billions of dollars of investment required.
Donald Trump could not have been more clear about his intentions. Venezuelan president Nicolas Maduro may be sitting in New York’s Metropolitan Detention Center on drugs and weapons charges, but the United States removed him from power — at least in part — because the Trump administration wants oil. And it wants American companies to get it.
“We’re going to have our very large United States oil companies, the biggest anywhere in the world, go in, spend billions of dollars, fix the badly broken infrastructure, the oil infrastructure, and start making money for the country,” Trump said over the weekend in a press conference following Maduro’s removal from Venezuela.
The country’s claimed crude oil reserves are the largest in the world, according to OPEC data, standing at just over 300 billion barrels, compared to around 45 billion in the United States and 267 billion in Saudi Arabia.
But having reserves and exploiting them are very different things. Before oil producers can start pumping, both the Venezuelan government and the U.S. oil companies will have to traverse several geopolitical and financial steps. Some of these could take weeks; others may take years. The entire process will cost tens of billions of dollars, if not more, at a time when oil prices are low. And American oil companies may well be leery about investing in a country with a long history of instability when it comes to foreign investment.
Venezuela produced over 3 million barrels per day though the 1960s until the late 1990s. Then came nationalization, decades of underinvestment, and harsh sanctions imposed in Trump’s first term to pressure the Maduro government, and most recently, a U.S. naval blockade imposed in December. As of last year, production had fallen to around a million barrels per day.
About 120,000 barrels per day winds up at U.S. Gulf Coast refineries built to process its heavy sour crude, courtesy of a rare license to operate granted to Chevron. (Chevron shares were up in early trading Monday morning.) But “for the most part, the Venezuela oil story has been a small amount of production all going to China,” Greg Brew, an analyst at the Eurasia Group, told me.
To get a sense of where Venezuela’s oil production capacity sits in the international context, Texas alone has produced more oil every year since 2018 than Venezuela’s all-time peak production of 3.7 million barrels per day in 1970. Canada, which produces a comparably heavy and sour crude, produced over 5 million barrels per day in 2025.
The immediate question is whether the United States will lift its blockade and allow oil to flow more freely. Venezuela’s monthly exports dropped dramatically in December to 19 million barrels, down from 27 million the month before, according to S&P Global Commodities data.
“If that happens,” oil analyst Rory Johnston told me about the potential to lift the blockade, “those barrels will still largely go to China.”
But even that is in question.
When asked on Face the Nation how the United States would “run” Venezuela, as Trump indicated, without an active military presence in the country, Secretary of State Marco Rubio indicated that the blockade would be a key pressure point. “That’s the sort of control the president is pointing to,” he said. The blockade “remains in place,” Rubio added, “and that’s a tremendous amount of leverage that will continue to be in place until we see changes.”
Even if the blockade were lifted, the next question over the medium to long term would be the lifting of U.S. sanctions, which have been in effect on Venezuela’s oil industry in their harshest form since 2019. With very few exceptions, these have prevented U.S. and other large oil companies from getting further involved with the country.
Sanctions are “why American companies either can’t or won’t buy Venezuela oil, and that keeps other buyers from not buying it as well,” Brew told me. “That’s another source of downward pressure on Venezuela oil exports.”
Even after it’s no longer literally illegal to work with Venezuela, however, there’s still the logistical and financial questions of long-term investments in Venezuela’s oil sector.
Venezuela would have to repair its connections to the international financial system, which have been strained by its defaults on tens of billions of debt. It would also likely have to overhaul its own laws around foreign investment in its oil industry that favor its state oil company PDVSA, according to Luisa Palacios, a former chairperson of Citgo, the (for now) majority-Venezuelan-owned energy company. Only then would U.S. oil companies likely have a plausible case to re-invest.
The next question is whether that investment would be worth it.
“Foreign companies are looking for an improvement in governance, the restoration of the rule of law, and an easing of U.S. oil sanctions,” Palacios wrote in a blog post for the Columbia Center on Global Energy Policy. “If the Venezuelan government were to commit to these reforms in a serious way (and the United States was therefore prepared to remove sanctions), an increase in oil production of 500,000 b/d-1 million b/d within a 2-year horizon, while optimistic, seems plausible” — though nowhere near the country’s 3.7 million-barrel peak.
Jefferies analyst Alejando Anibal Demichelis came to a similar conclusion in a note to clients, adding that “further increases beyond that level could be much more complex and costly.”
To get from here to there would require extensive investment in an environment where oil is plentiful and cheap. Oil prices saw their largest one-year decline last year since the onset of COVID in 2020.
“This is a moment where there’s oversupply,” Johnston told me. “Prices are down. It’s not the moment that you’re like, I’m going to go on a lark and invest in Venezuela.”
Venezuela will need that confidence to generate the necessary investments. The country’s oil industry “desperately needs more operational and financial support,” according to analysts at the consultancy Wood Mackenzie, which has estimated that it would require some $15 billion to $20 billion of investment over a decade to get production from existing operations to increase by 500,000 barrels per day.
Within six months to a year, Brew told me, “the volume of exports that could realistically be expected to increase is 200,000 to 400,000 barrels a day.” And that figure assumes “the stars align” in terms of the blockade, sanctions relief, and investment.
The “best case scenario,” Brew told me, is that tens of billions of dollars of U.S. investment flows into Venezuela as the blockade is lifted, sanctions are removed, and Venezuela reforms its laws to allow more foreign investment.
“Even there, I think realistically, it takes two years to get production from 1 million to 2 million barrels a day, and it costs a lot of money in a period amidst price conditions that are expected to be fairly soft,” he said.
As a rough guideline for what’s feasible over the long term, Iraq’s oil production rose from about 2 million barrels per day in 2002 to 4.7 million barrels by the end of the next decade, according to Wood Mackenzie. But that was at a time when oil prices were generally rising.
In any case, more oil is more oil, and it’s hard to see how Venezuela’s exports could get much lower. Industry analysts largely concluded that the operation to remove Maduro and put the United States in the driver’s seat would exert at least a mild downward pressure on oil prices.
But do major American oil companies want to get involved in the first place? “We’ve been expropriated from Venezuela two different times,” ExxonMobil chief executive Darren Woods told Bloomberg last year. Both Exxon and ConocoPhillips left the country in 2007 rather than accept new contracts with Venezuela’s state-owned oil company.
Brew is pessimistic. “I don’t see much of an upside in the short term,” he told me. That’s because the potential profits from reinvesting could be meager. When Maduro came to power in 2013, U.S. oil prices were over $90 a barrel, compared to around $60 today.
“But apart from commercial incentives, there is the incentive of, Okay the president wants us to do this. We can do it,” Brew said, but he cautioned, “I don’t think he’s in a position to leverage major US oil companies to go into Venezuela, simply by his own personal inclinations,” Brew said. “They’re going to need to see it make commercial sense. And right now it simply doesn’t.”
On Venezuela’s oil, South Korean nuclear, and Berlin militants’ grid attack
Current conditions: Juneau, Alaska, is blanketed under a record 80 inches of snow, equal to six-and-a-half feet • A heat wave stretching across southern Australia is sending temperatures as high as 104 degrees Fahrenheit • Arctic air prompted Ireland’s weather service to put out a nationwide warning as temperatures plunge below freezing.
When The Wall Street Journal asked Chevron CEO Mike Wirth about his oil giant’s investments in Venezuela back in November, he said, “We play a long game.” Then came President Donald Trump’s Saturday morning raid on Caracas, which ended in the arrest of Venezuelan President Nicolas Maduro and appeared to bring the country’s vast crude resources under the U.S.’s political influence. Unlike the light crude pumped out of the ground in places like the Permian Basin in western Texas, Venezuela’s oil is mostly heavy crude. That makes it particularly desirable to American refineries along the Gulf Coast, which can juice more profit out of making fuels from heavy crude than from lighter grades. Still, don’t expect America’s No. 2 oil producer to declare victory just yet. Shares in Chevron inched up by just a few percentage points over the weekend.
“Saturday’s operation didn’t hinge on nuanced assessments of crude grades or the U.S. refining sector’s appetite for heavy supply,” according to Landon Derentz, the energy chief on the White House’s National Security Council during Trump’s first term. In a blog post for the Atlantic Council, where he now serves as the think tank’s vice president of energy and infrastructure, Derentz called it “misguided” to claim that the military intervention was predicated on access to oil. “Venezuelan oil supply is unlikely to move global energy markets meaningfully in the near term. For now, the country remains under an oil embargo imposed by the Trump administration. Even under optimistic assumptions, it will take years to rehabilitate the country’s energy sector and achieve a sizable increase in oil exports.” Oil access was an “enabler” for Trump’s policy of hemispheric domination, he wrote, “not the prize” in itself. And as Heatmap’s Matthew Zeitlin wrote in June, when the U.S. and Israel bombed Iran, oil prices shrugged off the possibility of prolonged geopolitical crisis crippling the shipment of fuel.
In my final newsletter of 2025, I told you about Trump’s December 22 order to halt construction on all offshore wind projects in the U.S., including those that had hitherto been spared the administration’s “total war on wind,” on supposed national security grounds. Last week, Orsted filed a court order to challenge Trump’s suspension of its lease, calling the move illegal. The Danish wind giant has been here before. Trump first yanked the permits for Revolution Wind, a joint venture between Orsted and the private equity-owned Skyborn Renewables, back in August, when construction was nearly 80% complete. Orsted fought back. By the end of September, a federal judge lifted Trump’s stop-work order. And as I reported exclusively in this newsletter at the time, New England trade unions signed an historic agreement guaranteeing organized labor jobs in maintaining offshore turbines.
Orsted isn’t the only developer pushing back. On Friday, Bloomberg reported that Norwegian developer Equinor was “engaging with U.S. authorities over security concerns.” Even if Trump’s latest push is overturned in court, the move will come at costs. During an appearance on Bloomberg TV last month, Connecticut Governor Ned Lamont warned that the delay in building new turbines was “blowing a hole in our efforts to bring down the price of electricity.” At least one key turbine-equipment manufacturer remains bullish on the future of wind. The Financial Times reported that German hardware producer Siemens Energy had fended off calls from activist investors to spin out its wind division.
The Department of Energy asked Santa for more coal last month. On the day before Christmas Eve, the agency ordered two coal-fired plants in Indiana to postpone retirement. The orders directing the R.M. Schahfer and F.B. Culley generating stations to continue operating past their closure dates at the end of December mark what E&E News clocked as the third and fourth times, respectively, that the Trump administration has used its emergency powers to prevent coal plants from shutting down. “Keeping these coal plants online has the potential to save lives and is just common sense,” Secretary of Energy Chris Wright said in a statement. “Americans deserve reliable power regardless of whether the wind is blowing or the sun is shining during extreme winter conditions.” While it’s true that coal plants boast a higher capacity factor than many cleaner generating sources, that depends on the units actually running. As Matthew wrote in November, American coal plants keep breaking down.
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South Korea’s nuclear regulator approved a license for the long-delayed Saeul-3 reactor in Busan. The country emerged in recent years as the democratic world’s leading nuclear exporter after successfully building the United Arab Emirates’ first plant largely on time and on budget. But in 2017, then-President Moon Jae-in of the center-left Democratic Party adopted a national plan to dismantle the nuclear industry, prompting delays on Saeul-3. His conservative successor, Yoon Suk Yeol, reversed the phaseout policy. Since President Lee Jae Myung won back the Blue House for the Democrats last year, questions have swirled over whether his administration would revive the anti-nuclear effort. The Nuclear Safety and Security Commission’s decision last week to license the new reactor, a state-of-the-art APR1400 like the ones the Korea Hydro & Nuclear Power built in Abu Dhabi, marked nearly 10 years since the Saeul-3 received its initial construction permit, according to The Chosun Ilbo, the country’s newspaper of record.
All the new reactors underway across North America, Europe, South Korea, and Japan, combined would still fall far short of what China is building. In its latest tally, the trade publication NucNet pegged the total number of reactors under construction in People’s Republic at 35.

A left-wing militant group whose 2024 arson attack halted production at the Tesla Gigafactory in Germany has claimed responsibility for setting fire Sunday to equipment near high-voltage power in Berlin. The attack, which the head of Germany’s Senate called an act of “terrorism,” triggered a blackout across more than 35,000 households and nearly 2,000 businesses in the German capital that could last days, Der Tagesspiegel reported. In a 2,500-word manifesto that The Guardian confirmed with police, the Vulkangruppe, or Volcano Group, condemned a “greed for energy” produced from fossil fuels, calling the attack an “act of self-defense and international solidarity with all those who protect the earth and life.” A previous arson attack by the same group knocked out power in southeastern Berlin for nearly three days in September, marking the longest outage since World War II.
A parched stretch of farmland is set to produce something new: Solar power. The board of California’s Westlands Water District that serves the San Joaquin Valley has adopted a plan that would add 21 gigawatts of solar power on land fallowed by water shortages. The infrastructure strategy document called for a “major land-repurposing initiative” across the nation’s largest agricultural water district, which spans 1,000 miles and provides freshwater to 700 farms near Fresno. Legislation passed in California’s big climate package last fall (Heatmap’s Emily Pontecorvo has a good writeup here) gave water districts the power to develop, construct, and own solar generation, batteries, and transmission facilities.