AXPC member companies – producers of American energy – are authors of the great American Shale Revolution – a time when domestic energy production transformed our nation’s energy landscape. During this time, the price of most household goods increased significantly, yet energy costs went down due to the domestically produced oil and natural gas unlocked through hydraulic fracturing and horizontal drilling technologies.
To support low and stable energy prices, unleashing American energy production is the answer. It’s also the answer to good-paying American jobs (about 3.2 million across the country), lower global emissions, and greater energy security for our country and our allies.
The Shale Revolution enabled the US to decrease our reliance on foreign imports from a record high of 3.7 billion barrels of oil in 2006 down to 2.2 billion barrels in 2021 – a 41 percent decrease. Thanks to low-cost and reliable natural gas unlocked by the American Shale Revolution, the US now leads the world in reducing greenhouse gas emissions. In addition to meeting growing domestic demand, we are also able to export our surplus of this critical energy resource to growing economies in Africa, Asia, and Europe to help replace higher-emitting fuels.
To ensure this economic, security, and environmental progress continues, the Administration and/or Congress should take the following actions to Unleash American Energy Production:
1. Strengthen our nation’s energy infrastructure: To ensure we can meet growing energy demands, while continuing to reduce emissions, Congress and the Administration should promote infrastructure development and protect and foster US refining capacity.
Limited refining capacity and pipeline capacity in much of the country create inefficiencies and drive-up costs. Streamlining the National Environmental Policy Act (NEPA) process and ending the obstruction of oil and natural gas projects will promote certainty and predictability in the permitting process to spur project investment in energy infrastructure. The NEPA environmental review process should be more efficient and consistent, clearly focused on NEPA’s central goal of improving agency decision making within reasonable timeframes. The permitting obstruction—sometimes from non-pertinent federal agencies—of energy infrastructure projects should end and layers of duplicative regulation and reviews, such as the multiple reviews for greenhouse gas emissions, across federal agencies for the same project (or to control the same sources) should be eliminated.
The inability to move energy within the US forces consumers to depend on foreign natural gas during high demand periods. FERC should not pursue pipeline permitting policies that hinder the ability to build the energy infrastructure needed to access US resources, make energy more expensive for American families, or impede the permitting of new LNG facilities.
2. Allow access to produce on federal lands: Amidst the global backdrop of high energy prices and skyrocketing inflation, the Biden Administration and Congress should find ways to support federal lands production. The US Department of the Interior should hold regular lease sales, as statutorily required by the Mineral Leasing Act. A historic royalty rate increase, coupled with federal acreage reduction and the omnipresent risk of litigation, will further challenge operators from developing federal mineral resources.
3. Encourage LNG exports: The energy landscape is global and US energy exports are important to our country’s role in the market, global security, and our climate leadership in the world. FERC and The US Department of Energy should expeditiously review and approve LNG facilities’ permitting applications, so that natural gas can be transported and exported. In addition to supporting the necessary infrastructure here at home, the Administration should promote utilization of US LNG around the world as a cleaner, more responsible choice to alternative energy sources, and support policies that will encourage building additional import capacity around the globe.
4. Encourage capital investments in American energy production: To show the long-term strategic value of investing in our vital natural resources and US energy security, Congress and the Administration should clearly and unequivocally support domestic production of oil and natural gas.
Our industry is committed to transparency, collaboration, and engagement on climate solutions, but that does not necessarily mean that securities laws are the appropriate context for all climate-related disclosures. The Securities and Exchange Commission should reconsider its burdensome climate disclosure proposal, collaborate with our industry, and build on existing efforts underway to further consistency and comparability of climate-related reporting.
5. Relieve supply chain bottlenecks: The complex and costly process for drilling and completing a new well in the United States takes time and significant resources, even without the challenges we face from supply chain disruptions and labor shortages. There is a great deal of uncertainty right now about everything from storage levels to additional sanctions to how OPEC producers will respond to increased American production. Inflationary costs, labor shortages, and supply chain disruptions are further hindering increased production. In fact, inflationary pressures are leading to 15-20 percent in additional capital spend just to maintain current oil and natural gas production levels and could go even higher. The Biden Administration should rescind steel tariffs that remain on US allies as steel is a critical component of energy production and work with our industry on reducing supply chain bottlenecks.
AXPC member companies are authors of the great American Shale Revolution – a time in which energy costs went down due to domestically produced oil and natural gas that was unlocked through hydraulic fracturing and horizontal drilling technologies. History often teaches us mistakes not to repeat – but it also teaches us valuable lessons about what works. And, in the case of supporting lower energy prices, reducing emissions, and greater energy security – unleashing American energy is the answer.