The U.S. energy landscape has experienced a mixed set of outcomes regarding consumer costs and domestic production, influenced by both global market dynamics and domestic policy shifts. While gasoline prices have seen periods of reduction and subsequent increases due to various factors, electricity costs have generally risen. Policies related to oil and gas production, as well as support for renewable energy and electric vehicles, have undergone changes with projected long-term implications.
The U.S. energy landscape shows a mixed picture: gasoline prices fluctuate, electricity costs generally rise, and policy shifts in oil, gas, renewables, and EVs have long-term implications.
Gasoline Price Trends
Periods of Reduction
Gasoline prices have shown varied trends. An assessment one year after campaign pledges indicated a nationwide decrease of approximately 20% compared to the prior year. Global crude oil prices, influenced by factors such as OPEC+ decisions leading to an oversupply, were identified as the primary driver. Analyst Dan Pickering attributed partial credit for these lower prices to then-President Trump's pressure on OPEC.
U.S. households reportedly saved an average of $177 on gasoline in 2025 compared to 2024, with projections for an additional collective saving of $11 billion in 2026. Future efforts to increase oil production from Venezuela could further contribute to lower global crude prices.
Recent Increases
More recently, gasoline prices have seen an increase, primarily attributed to a conflict in Iran that disrupted crude oil traffic through the Strait of Hormuz, elevating crude oil prices from approximately $70 to $100 per barrel. Seasonal factors, such as the shift to summer gasoline blends and a typical increase in demand, also contributed.
Oil Production and Drilling Activities
Drilling Decline
Despite campaign pledges to increase American energy production, the number of active drilling rigs in the U.S. declined by over 6% year-over-year. This reduction was attributed to low oil prices (under $60 a barrel) making new well drilling unprofitable. The administration's efforts included facilitating new projects and opening more federal lands and waters for leases. Secretary of Energy Chris Wright stated that President Trump has not been a "helper" to the oil and gas industry due to driving down oil prices.
Policy Shifts and Industry Priorities
The American Petroleum Institute (API) indicated that most of its policy priorities for the industry, such as tax policy changes, increased access to drilling in the Gulf, boosted liquefied natural gas (LNG) exports, repeal of car efficiency requirements, and elimination of a methane fee, were completed in 2025. Legislative permitting reform remained uncompleted.
These policy changes are projected to support higher oil demand and lower production costs long-term, partly by slowing the transition to electric vehicles and easing environmental regulations. The administration emphasized increased domestic oil production as a strategy to mitigate supply shocks, with a White House spokesperson indicating that the "energy dominance agenda" prioritizes reliable, affordable, and secure energy sources. However, despite high U.S. oil production, consumers were not fully insulated from global price fluctuations.
Electricity and Natural Gas Costs
Rising Utility Bills
Electricity prices have continued to rise across most states and markets. Wholesale power prices saw significant increases in 2025, exceeding 60% in New York and New England and 45% in the mid-Atlantic. Reports indicate that over 80 million Americans are struggling with utility bills.
Factors contributing to rising costs include an aging power grid, expenses from natural disasters, and increased fuel costs, particularly natural gas. Natural gas prices increased by over 50% from the previous year's annual average, partly due to increased U.S. exports. Utility investments in upgrading aging infrastructure and enhancing system resilience against extreme weather events and wildfires also contributed to rising electricity costs. While the Iran conflict caused natural gas price spikes in Europe and Asia, American markets remained relatively insulated from similar increases directly linked to the conflict.
Policy Impact on Electricity Costs
The administration's electricity policy has focused on reversing previous climate policies, such as mandating that coal-powered plants remain operational, which typically have higher operating costs, rather than directly reducing natural gas costs, improving the grid, or mitigating natural disaster impacts. Investments in nuclear power are also underway, though their impact on costs would be long-term due to extensive approval and construction timelines.
Administrative actions that may lead to increased future electricity bills include ending federal tax credits for solar and wind projects prematurely, canceling over $13 billion in green energy funding, and opposing new wind projects, which has led to legal challenges and discouraged investment. The administration is also rolling back efficiency standards for appliances. President Trump has recently discussed requiring AI data centers to pay a fair share for electricity. The administration's pledge to reduce utility bills remains unfulfilled.
Renewable Energy and Electric Vehicles
EV Policy Rollbacks and Sales Decline
The Trump administration enacted rollbacks on policies designed to promote a diverse energy portfolio, including renewable energy and electric vehicles (EVs). Policies aimed at supporting EVs, such as state-level mandates, federal regulations, and consumer tax credits, were reversed. Consequently, the share of new car sales represented by EVs decreased from around 10% in 2024 to under 6% more recently.
Additionally, fuel economy standards for gasoline-powered vehicles were relaxed, and penalties for non-compliance were eliminated, which allowed automakers greater flexibility to produce larger, less fuel-efficient vehicles like SUVs and trucks.
Challenges and Growth in Renewables
The administration voiced criticism of renewable energy, labeling wind and solar power as "unreliable and unaffordable." Efforts were made to impede or halt permitting for new wind and solar projects, including unsuccessful attempts to stop offshore wind developments already underway.
Despite these challenges, growth in the renewable energy sector has remained robust. Government analysts project a 10% increase in electricity generated by wind farms and large solar plants this year, followed by over 13% next year, surpassing expected growth in natural gas generation. The industry's momentum and increasing adoption of battery storage solutions contributed to this continued expansion. Congress's decision to eliminate tax credits for the renewable energy industry is also expected to increase project costs, which analysts suggest may contribute to higher electricity bills for consumers.
Consumer Interest Amid High Gas Prices
Amid rising crude oil and gasoline costs, consumer interest in electric vehicles increased. Edmunds, a car shopping website, reported a 15% rise in shoppers considering EVs and plug-in hybrids over a two-week period. Analysts indicated that sustained high gasoline prices would be necessary to significantly impact vehicle purchasing trends.
Long-Term Policy Impacts
Delayed Effects and Future Outlook
Shifts in vehicle and energy policies typically have delayed effects due to the time required for new vehicle designs and the long operational lifespan of power plants. Current vehicle efficiency benefits largely stem from stringent fuel economy regulations established in past decades. These earlier policies contributed to the U.S. economy's reduced dependence on gasoline.
In the long term, the administration's policies are anticipated to result in fewer EV sales and a greater prevalence of gas-intensive SUVs and trucks. This could lead to indirect costs for consumers through health and climate impacts, as well as direct financial costs by magnifying the effect of future price increases.
James Coleman of the American Enterprise Institute suggested that removing barriers to new energy investment helps reduce prices, while increasing uncertainty or barriers tends to increase them.