Donald the Deadbeat Does Diesel

There’s a strong whiff of desperation coming off the Republican Party these days, and it smells a lot like diesel fumes. All indications are that the G.O.P. is headed for a huge defeat in the midterms, and soaring prices of fuel — especially diesel — are a significant factor in the party’s dim prospects.

Now Trump is considering an export ban of American diesel in order to temporarily reduce domestic diesel prices. As of this morning, it’s unclear whether this will actually happen. But I think a diesel export ban is highly likely, and not just because it would be one of the few Hail Mary plays left for an epically corrupt president who must greatly fear the prospect of facing Democrats with subpoena power and criminal referrals.

Beyond that, a sudden ban on diesel exports would, in effect, be a broken promise — a de facto breach of multiple contracts. It would be a betrayal of energy companies that invested in refining capacity. More important, it would be a breach of trust with America’s allies, especially anyone who bought into Trump’s vision of an America-centered energy future.

And breaking trust, breaching contracts, is a very Trumpian thing to do. As a businessman, he was famous for stiffing contractors, refusing to pay them for their work or demanding that they settle for partial payment. His tariff policies involve, at their core, breaking decades’ worth of solemn international agreements. His track record on domestic policy has been one broken promise after another.

Before I get to the breach of contract aspect, a word about the short-term economics of a diesel export ban.

Jared Bernstein has a really clear explanation of why such a ban would do little to help most Americans with affordability problems. Much of it comes down to regional differences. U.S. diesel exports come from the Gulf Coast, and cutting off those exports would indeed temporarily reduce diesel prices in and around Texas, while driving prices up in the rest of the world. But in this case “the rest of the world” includes much of the United States. Both the Northeast and the West Coast buy much of their diesel (and heating oil, which is a closely related commodity) from other countries, so a ban on U.S. exports, by driving up world prices, would actually make energy more expensive in some parts of the country.

Also, refineries normally produce gasoline along with diesel, so if an export ban causes them to cut overall refining, gasoline prices might well go up.

Beyond these short-term considerations, think about the signals a diesel export ban would send.

During the 2024 campaign, “Drill, baby, drill” was one of Trump’s favorite slogans. In effect, he promised to provide a favorable political environment for the fossil fuel industry, which he claimed would cut energy prices in half within 18 months. (How’s that going?) But now even the oil industry knows that it can’t count on being able to sell its products, that Trump may suddenly, with no notice, cut it off from major markets whenever he thinks that might be to his short-term political advantage.

OK, nobody is going to shed tears for the U.S. oil and gas industry, which gave 88 percent of its donations to Republicans in the last election and has profited hugely from the effects of the Iran War. But even unlikable industries should be able to count on some consistency in government policy, rather than depending on the whims of a president motivated solely by ephemeral political considerations.

More important, think about what Trump is in effect saying to the world as a whole.

As I and many others have written, one key aspect of today’s geopolitics has been a competition between two visions of the world’s energy future. One vision centers on “electrotech” — electrification of cars and much else, powered by sun and wind. Given current trends, an electrotech world would be one largely dominated by Chinese production of solar panels, batteries and more.

The other vision involves continuing reliance on fossil fuels, with the United States — thanks to fracking — as a key supplier. The United States is, in effect, saying to the world, “never mind those wind farms and electric vehicles, keep installing gas turbines and using internal combustion — and don’t worry about where the fuel will come from, we can and will supply it. Trust us!”

Now the world knows that we can’t, in fact, be trusted as an energy supplier — that we may suddenly cut off fossil fuel exports whenever doing so might yield even temporary domestic political advantage.

So a diesel export ban would probably do little to assuage U.S. concerns about affordability. It would create uncertainty that deters business investment, in energy and other industries. And it would further weaken America’s hand in its geopolitical rivalry with China over energy.

In short, a ban would be a really bad idea. Which is why it’s probably going to happen.

MUSICAL CODA

Nothing to do with topic, but an old favorite.