Oil Companies Embrace Trump, but Not ‘Drill, Baby, Drill’

President Trump is swinging American energy policy sharply in favor of fossil fuels, but oil and gas companies say those changes won’t push them to engage in the frenzy of new drilling that Mr. Trump wants.

The oil industry is thrilled by Mr. Trump’s executive orders, which are designed to make life harder for renewable energy companies and easier for oil, gas and pipeline businesses. But on the critical question of whether his policies will lead to more oil and gas production — one of Mr. Trump’s central goals — industry executives say not unless prices rise a lot, something the president says he will not stand for.

Mr. Trump’s aim is to support oil and gas by loosening the rules that govern extracting, transporting and exporting fuels while kneecapping the competition, including wind turbines, electric vehicles and other low-emissions technologies. That’s a powerful market signal, but not enough for companies to “drill, baby, drill.”

“What you are seeing is a huge amount of positivity,” said Ron Gusek, president of Liberty Energy, an oil field services company whose chief executive was picked by Mr. Trump to lead the Energy Department. “But it’s too early to say that that’s going to translate into a change in actual activity levels here in North America.”

For drilling and fracking to pick up substantially, oil and natural gas prices would have to rise, executives say, an outcome that is at odds with Mr. Trump’s goal of stemming inflation by reducing the cost of energy. Oil companies won’t spend money on production, which is already near record levels in the United States, if they are not confident that they can make money from the extra fuel they churn out.

Further complicating the president’s efforts to increase domestic production is that the industry generally is more focused on keeping spending in check than it was during his first term. Wall Street firms used to invest in fracking companies that grew quickly. Now, investors want to back profitable operators.

An index of U.S. oil and gas companies lost about 3 percent of its value last week as oil prices slid below $75 a barrel. The index lost additional ground on Monday as oil prices slid below $73 a barrel. Natural gas prices, which often rise in the winter, have surged recently as much of the country contended with very cold weather.

That said, there are early signs that the market is responding to some of Mr. Trump’s statements and orders.

Prospective customers have expressed more interest in inking long-term deals for U.S. gas exports since Mr. Trump was elected, said Ben Dell, a managing partner of the energy investment firm Kimmeridge.

“People want to be early and in the forefront of signing up for U.S. products to try and stave off potential tariff threats,” said Mr. Dell, whose firm has a majority stake in Commonwealth LNG, which is awaiting federal approval for a proposed gas-export plant on the Gulf Coast.

Mr. Trump’s declaration of a national energy emergency — paired with other executive orders — amounts to a promise to test the limits of presidential power to ensure demand for fossil fuels remains robust. It’s a sharp reversal from his predecessor’s agenda, which aimed to push the nation away from fuels that are primarily responsible for climate change.

On his first day in office, Mr. Trump instructed the Energy Department to restart permitting reviews of gas-export facilities, a process that President Joseph R. Biden had paused, though a federal judge later ordered the administration to lift that pause. The president has also threatened to place tariffs on a wide range of trading partners, including Canada and Mexico, which are close allies of the United States. (Depending on how they take shape, such levies could be extremely disruptive to the oil and gas industry, a highly global industry that relies on imported materials and fuels.)

The results of Mr. Trump’s pro-fossil fuel agenda will become clear over months and years. If anything, the past decade is a reminder that presidents can do only so much to prop up or stymie different sources of the energy.

U.S. oil and gas production rose to record heights under Mr. Biden, even as he sought to push the country toward cleaner alternatives. Mr. Trump’s efforts to support “clean, beautiful coal” during his first term were no match for cheap natural gas that ultimately outcompeted coal in the market. U.S. coal consumption fell more than a third during Mr. Trump’s first term, federal data show.

The executive orders Mr. Trump signed last week lay out a road map for making it easier and cheaper to produce oil and gas — and harder and more expensive to build equipment that would help people reduce their use of fossil fuels.

He ordered federal agencies to stop issuing leases and permits for all new wind projects pending a new environmental review. The Interior Department then placed a 60-day freeze on authorizing new solar arrays and other renewable energy projects on public lands.

In another executive order, Mr. Trump defined energy to include oil, coal, natural gas, nuclear, geothermal and hydropower — pointedly excluding wind turbines and solar panels. He also told agencies to stop distributing money that Congress had set aside for products like the installation of fast charging stations along highways. Legal experts have said that presidents cannot stop congressionally authorized spending.

But some green energy investors are already pulling back. After Mr. Trump won November’s election, RWE, a German firm, announced that it would slash spending on U.S. offshore wind development, saying that the risks for new projects there had increased.

Within oil and gas, companies are particularly encouraged by Mr. Trump’s pledge to make it easier to build pipelines, though doing so is likely to take years because Congress would need to pass new legislation and opponents most likely will seek to block projects by challenging them in court.

Today, it is especially tricky to build pipelines that cross state lines. Companies have all but given up on building long-distance pipelines in the Northeast after earlier projects faced substantial litigation, as well as opposition from state and local officials.

As a result, companies can move only so much natural gas out of Appalachia, one of the country’s most prolific gas regions, constraining production in states like Pennsylvania and depressing prices locally. Several hundred miles away, in places like Boston, gas is generally much more expensive.

“What we’re going to have our sights focused on is very long-term, durable permitting reform that allows us to get things built here in the U.S. in a responsible manner,” said Alan Armstrong, chief executive of Williams, one of the country’s largest natural gas pipeline operators.

Brad Plumer contributed reporting.