On Energy and Climate, the Solution Is Here

Answers to big problems aren’t always complex and difficult to identify. Sometimes they’re relatively simple and right in front of us. This, we believe, is true about the energy crisis that has faced America and the world. 

The solution is here.

American natural gas and oil can significantly address global supply issues that surfaced after the pandemic and were inflamed by Russia’s invasion of Ukraine. These have impacted nations, economies, businesses and families. Over the past many months, the world has learned that more natural gas and oil production, not less, is needed -- now and in the future. 

American energy leadership has never been more critical. Fortunately, the solution is right beneath our feet.

API’s annual State of American Energy event and annual report highlight the policies that can go far in solving our energy challenges at present and for decades to come. With the right set of actions on energy, America can launch a new era of energy leadership with robust natural gas and oil production here at home.

What America should do is plain, though not necessarily easy. The past two years have seen too much confusion and misdirection on energy from Washington, which has tried to drive a version of an “energy transition” -- with aspirational policies dictating market and consumer outcomes -- that is unrealistic and potentially harmful for society. We only need to look to Europe to see what can happen when energy policy isn’t based on reliable, affordable, adaptable energy sources. 

Washington needs a course correction, and API is offering policy solutions to ensure American energy security, economic growth and continued progress toward a lower-carbon future. Think of our plan in three buckets: Make, Move and Improve.

Make

We must make more American energy. Washington can help by lifting developmental restrictions on federal lands and waters, which provide a quarter of total U.S. oil and natural gas production. This could add 395 million barrels of oil equivalent of production through 2035. Increased access to natural gas and oil in federal areas -- offshore and onshore -- is critical for U.S. energy security now and in the long run. 

Failing to implement policies that clearly support new natural gas and oil investment and production to keep pace with projected growing demand could risk returning America to the days of ever-increasing foreign imports. And steadily increasing dependency. We left that behind with the U.S. shale revolution, and we should not go back. The American people agree: Nine in 10 voters support America developing its own energy rather than relying on foreign powers.  

In addition, let’s maintain and strengthen what we have -- a refining sector that’s second to none, providing the fuels and petroleum-based chemical components for the products Americans need every day. We must not weaken our refineries by forcing them to abandon safe, proven processes used to make these products, as EPA has discussed. 

Most importantly, Washington must signal a new commitment to American natural gas and oil -- a recognition that they are integral to America’s energy security and will be for the foreseeable future. Negative rhetoric from the administration, leveled at American energy producers and undermining the capabilities of the world’s leading natural gas and oil producer, must end -- replaced with a spirit of genuine partnership to capitalize on America’s energy abundance. 

Move

America needs more natural gas and oil infrastructure -- pipelines, refineries and other facilities -- to move energy and meet projected growing demand. Unfortunately, red tape and protracted processes kill too many projects before they can be born. 

A recent analysis counted 10 major natural gas and oil infrastructure projects that were canceled or at risk of cancellation because of prolonged, uncertain federal review processes. They reflect tens of billions of dollars in capital expenditures and jobs that could benefit local and regional economies. 

Infrastructure setbacks restrict movement of natural gas and oil from production zones to fuel centers and then to consumers -- and can be tantamount to energy denied to underserved regions of the country, such as New England. 

Additionally, America must continue building its ability to export natural gas and oil to our allies. U.S. exports of liquefied natural gas helped stave off catastrophe in Europe last year and are a big part of America’s global leadership muscle, creating diverse supply opportunities for countries around the world. While exports help America’s friends, they are helping spur new production, jobs and economic benefits in America.

So, let’s continue to have thoughtful and thorough project planning, oversight and review, but let’s do it in ways that include clear timelines for investors and builders. Streamlined processes with time limits will help keep projects from falling into a kind of limbo that hinders new and needed infrastructure.

Improve  

The challenge before all of us -- energy producers, government, citizens -- is meeting the dual challenge of satisfying demand for reliable, affordable energy while also continuing to reduce emissions and protect the environment.

The United Nations projects that world population will grow more than 20% between now and 2050. Energy demand will grow with it, and the complexity is solving for energy demand and emissions reductions at the same time. 

We’re already on it. API’s Climate Action Framework is an energy blueprint to help usher in a lower carbon future. Initiatives including The Environmental Partnership have helped improve technologies and procedures to reduce emissions, while API Energy Excellence focuses on accelerating safety and operational integrity across the industry. Through technologies and innovation -- and our industry’s DNA as a problem-solver -- we are committed to continued progress.

Policy can help. For example, efficient implementation of the Section 45Q tax credit can help spur $77 billion in carbon capture, utilization and storage (CCUS) investment between now and 2035 while increasing CCUS capacity by 250 million tons per annum. We also can improve the Section 45V tax credit to help advance clean hydrogen production. We should have a permitting architecture for low-carbon infrastructure, including pipelines associated with CCUS, that is consistent, timely and predictable to encourage new investment.

At this defining moment in history, America needs to lead on energy by safely developing its own natural gas and oil resources. Asking other countries to produce more is an abdication of America’s unique ability to lead. We need bipartisan policymaking that recognizes energy realities. Chief among them is the leading role natural gas and oil are projected to play for decades to come as other energy sources grow and spread. 

The good news is America has the natural gas and oil to be more energy secure, to power our economy and Americans’ daily lives, and to keep us on the path to a lower carbon future. The challenges are big, but so are the opportunities. The future is ours to shape, but only if we work together. We invite members of Congress, the administration and leaders across the country to join us in rolling up our sleeves to unleash American natural gas and oil.

It starts with this simple realization: The solution is here.

Mike Sommers is President and CEO of the American Petroleum Institute (API).