Publications: Notes at the Margin

The Hoax of US Energy Dominance (December 1, 2025)

 

President Trump touts US energy dominance at every opportunity. Along with removing burdensome regulations and promoting increased oil and gas leasing of federal lands and waters, he and his administration have done everything possible to realize this end, including creating an “Energy Dominance Council,” coercing former US allies to purchase our natural gas, and investing in energy development projects through the US Export-Import Bank.[1]

 

President Trump’s supporters have embraced the chimerical goal of perpetual US energy dominance, particularly those in the fossil-fuel industries. They have been conned. The US cannot dominate the global energy market because it controls but a limited share of worldwide productive capacity and is the highest-cost producer. The only reason it has “dominance” today, at least in the president’s mind, is by the grace of lower-cost oil and gas producers such as Saudi Arabia and Qatar that have restrained output and made room for US exports.

 

To find a real example of market dominance, one must look to China, which controls the markets for rare-earth metals and, more importantly, rare-earth magnets. It does so by being the world’s low-cost producer. By keeping prices down, the country makes it difficult, if not impossible, for competitors in other nations to enter. This dominance also gives Chinese manufacturers of products such as electric vehicles and wind turbines, and potentially jet engines and aircraft, substantial advantages over competitors outside China.

 

While the US has relied on a combination of political coercion and subservience to bolster its energy exports and revenue, China has used its pricing power to become the real-world “poster child” of market dominance.

 

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