Tesla, Inc. TSLA CEO Elon Musk, who is running a company that aims to move humanity toward a sustainable energy future and away from internal combustion engine (ICE) vehicles, batted for the oil and gas industry in an X interview with Republican presidential candidate Donald Trump late Monday.
What Happened: Toward the end of a long-winding interview with Trump on X, a social-media platform Musk owns, the billionaire said, “I don't think we should vilify the oil and gas industry and the people that have worked very hard in those industries to provide the necessary energy to support the economy.”
He described his views toward the industry as “pretty moderate.”
The billionaire suggested there is leeway for the oil and gas industry to co-exist with new-energy ventures as the planet Earth slowly and steadily transitions to sustainable energy. He said the planet can transition to a sustainable energy economy in 50 or 100 years despite the scientific community’s warning that humanity has reached a tipping point as far as climate is concerned. Trump, meanwhile, said he sees a 500-1000-year timeframe to move toward that.
“So it's not like the house is on fire immediately,” the Tesla CEO said, adding “It's probably better to move there faster than slower. But like without vilifying the oil and gas industry and without causing hardship in the short term."
Musk soon did a turncoat by stating that continued use of fossil fuel will make air harder to breathe, potentially causing headaches and nausea. That said, he said, “We still have quite a bit of time…We don't need to rush.”
Trump, for his part, pointed out that it was fossil fuel-powered energy generation that is powering Tesla vehicles. “Can't get away from it at this moment,” he said.
The presidential candidate flagged another threat that is more menacing than climate change. “People talk about global warming, or they talk about climate change, but they never talk about nuclear warming,” he said, flagging it as “an immediate problem.”
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Why It’s Important: Musk endorsed Trump immediately after an unsuccessful assassination attempt at the former president at a Pennsylvania rally. In early May, Trump reportedly sought $1 billion from oil executives, promising a quid-pro-quo of reversing dozens of President Joe Biden's environmental rules and policies and stopping new ones from being enacted.
After hinting at removing federal tax subsidy for electric vehicles on his first day in office, Trump has softened his stance toward them, especially after Musk threw his weight behind him. In a Michigan rally in late July, he praised EVs, stating that he finds them impressive. However, he noted that EVs might not be suitable for everyone, particularly those who need to drive long distances, likely referencing concerns about range and charging infrastructure.
In the past, Musk has echoed a similar sentiment as the one he expressed in the Trump interview. In an ONS conference held in Stavanger, Norway in late 2022, the billionaire clarified that he is not someone who would “demonize” oil and gas because, in his opinion, they are now required for civilization to function.
“I think we actually need more oil and gas, and not less, but simultaneously [should] move as fast as we can to a sustainable energy economy,” he said then.
Backers of the oil and gas industry often point to the risk of the U.S. losing its energy independence if we pivot away from fossil fuels abruptly. The argument could be credible given China’s dominance in alternative energy vehicles. The Energy Information Administration data said in an April report that the U.S. had produced more crude oil than any nation at any time, citing International Energy Statistics.
Stock Reaction: Energy stocks haven’t reacted much to the views expressed by Musk or Trump. Among the exchange-traded funds, in premarket trading:
- United States Oil Fund, LP USO rose 0.37% to $78.92 even as the index futures traded solidly higher.
- The Energy Select Sector SPDR Fund XLE was little changed at $89.85.
- SPDR S&P Oil & Gas Exploration & Production ETF XOP edged down 0.10% to $138.15.
- Exxon Mobil Corporation XOM edged down 0.06% to $118.93.
- Chevron Corporation CVX gained 0.32% to $145.49.
- ConocoPhillips COP edged up 0.23% to $110.28.
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