Trump has the potential to reshape USAID to endorse fossil fuels

The Trump administration’s deconstruction of the U.S. Agency for International Development (USAID) may mark the beginning of a wider strategy that leverages foreign aid to bolster fossil fuels.

Since assuming office, President Donald Trump has implemented a 90-day halt on most foreign aid, ended diversity, equity and inclusion (DEI) initiatives, and tasked Tesla CEO Elon Musk with reducing federal agencies and staff. These actions align with Project 2025, a policy guide crafted by the Heritage Foundation in collaboration with over 100 conservative groups.

However, the administration’s efforts to completely dismantle USAID, led by unelected billionaire Musk, exceed what Project 2025 initially suggested. Musk has publicly stated his intention to effectively “feed USAID into the woodchipper,” and the Trump administration has made moves to merge the agency with the State Department. A federal judge recently placed a temporary halt on the administration’s plan to put thousands of the agency’s employees on leave.

It’s not clear if Musk and the Heritage Foundation share a unified vision, and neither party has responded to requests for comment. Yet, Project 2025 provides an understanding of what Trump’s allies hope to achieve with U.S. foreign aid: promoting fossil fuels and eliminating regulations in foreign countries that American industry finds restrictive.

The conservative plan suggests shrinking the agency’s work, reversing its climate policies and ending programs aimed at mitigating global warming. It advocates for anti-labor union reforms in Latin America, criticizes USAID for discontinuing support for “clean fossil fuels” in Africa, and proposes using taxpayer money to “promote private-sector solutions to the world’s true development problems.”

Project 2025’s blueprint asserts, “USAID should cease its war on fossil fuels in the developing world and support the responsible management of oil and gas reserves as the quickest way to end severe poverty and the need for open-ended foreign aid.”

A State Department spokesperson did not directly answer questions about its plans for USAID, only stating that Secretary of State Marco Rubio will review all foreign assistance programs to ensure they are efficient and align with Trump’s America First agenda. Any questions about USAID were redirected to the statement on its website about personnel cuts.

The executive order that initiated the 90-day aid freeze instructs Rubio and other agency heads, along with the director of the Office of Management and Budget, to decide which programs to terminate or modify. Newly confirmed OMB head, Russell Vought, was a key architect of Project 2025.

During the Biden administration, USAID assumed a larger role in addressing climate change through resilience and renewable energy projects, although only a small portion of its budget was allocated to this issue.

If it remains intact under Trump, USAID could potentially become a body solely responsible for providing global food and humanitarian assistance, with the promotion of international fossil fuels delegated to other agencies.

For instance, the U.S. International Development Finance Corp., which provides private sector funding for development in lower- and middle-income countries, could be expanded to support bilateral efforts on fossil fuel projects, suggests Karen Mathiasen, a project director at the Center for Global Development.

The Department of Energy’s Office of International Affairs has also been strengthened after receiving additional funding and staff during Trump’s first term. The office collaborates with other governmental bodies to advance U.S. energy goals. Energy Secretary Chris Wright, an ex-fracking executive, has suggested that global energy poverty could be partially alleviated by increasing U.S. fossil fuel exports.

Kurt Donnelly, former deputy assistant secretary of State for energy diplomacy under Trump, remarked, “I can see the Trump people just repurposing aid to be some sort of pro-energy promotion kind of thing.”

While Donnelly agrees that providing less developed countries with reliable energy access is commendable, he criticizes the underlying goal of this plan if it simply involves selling them oil and natural gas, particularly if they are expected to buy from the U.S.

The role of Musk in this transformation has garnered significant attention. Aid has traditionally been a “tool of foreign policy,” says Max Primorac, who authored the Project 2025 chapter on USAID and is a senior research fellow at the Heritage Foundation. Primorac, who also served as a senior USAID official under Trump, did not respond to requests for comment but shared his views with POLITICO’s E&E News last year.

He argued that it’s contradictory to discuss alleviating poverty through foreign aid while adopting climate policies that exacerbate poverty by preventing investment in their own oil and gas technologies and industries, which could finance their own social services, create wealth, jobs, and foster greater sovereignty.

Some Republican lawmakers echo these sentiments. During Rubio’s confirmation hearing for secretary of State, Wyoming Sen. John Barrasso asked the nominee if he was committed to ensuring the State Department promoted all forms of energy worldwide, including oil, gas, and coal.

Rubio responded, “In fact, it should be a centerpiece … of our economic diplomacy.”

Rubio has appointed Peter Marocco, who heads the Office of Foreign Assistance at State, to serve as acting deputy administrator of USAID. The conservative movement’s vision for USAID involves increasing funding to local faith-based organizations while drastically reducing financial support to international NGOs.

However, former officials argue that turning the agency into a vehicle for achieving Trump’s vision of American energy dominance overlooks changing market trends.

Gillian Caldwell, the former chief climate officer at USAID under Biden, said, “USAID isn’t pursuing its own agenda on renewable energy versus fossil fuels. We’re responding to a demand signal from partner governments around the world, almost all of whom are operating in a scenario in which the price of solar has dropped by 85 percent and the price of wind has dropped by 50 percent.”

The Trump administration’s efforts to overhaul USAID have been overshadowed by Musk’s involvement. Musk and his so-called Department of Government Efficiency have been granted unprecedented access to government infrastructure and have moved swiftly—and potentially unlawfully—to eliminate programs and personnel across the government.

Congressional Republicans have largely remained silent despite concerns that Musk’s actions violate Congress’ constitutional power of the purse. However, lawsuits are beginning to emerge, and Sen. Susan Collins, the Maine Republican who chairs the Senate Appropriations Committee, recently stated that Musk has overstepped his boundaries.

Democrats have labeled the attempts to close USAID as corrupt, cruel, and unconstitutional.

Sen. Chris Van Hollen (D-Md) stated at a recent rally outside the Capitol, “Getting rid of [USAID] makes us all less safe. It is also downright illegal.”

There are even some conservative critics who express concern about the Trump administration’s heavy-handed approach to shrinking the government.

Jessica Riedl, an economist at the conservative Manhattan Institute with over two decades of experience identifying government waste, pointed out that neither Musk nor Trump has the authority to simply eliminate agencies or programs that have been funded by Congress.

Riedl stated, “I am sympathetic to the idea that there is significant waste and unnecessary expenditures in the federal budget, but the way to cut spending is to go through Congress and pass laws either rescinding or preventing the future appropriations of these programs. The president can’t unilaterally cancel spending that has been approved by Congress and signed into law.”

The Trump administration’s attempt to dismantle USAID has also sparked fears that without experts in place to manage foreign assistance, there will be increased opportunities for fraud, waste, and abuse, according to Chris Milligan, a former USAID counselor during Trump’s first term.

Milligan warned, “Handing billions of dollars to a department that doesn’t have the right experience is not going to protect taxpayers’ money, is not going to make America safe and is not going to be effective for our foreign policy.”

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