The United States can insulate itself from energy crises like Europe currently faces in the coming years if it encourages more natural gas production rather than hurts it through overregulation, industry leaders argue.
High natural gas prices are driving a cost of living crisis for many countries in Europe, where a number of governments have passed tax cuts in response and are scrambling to find other ways to ease the burden on consumers.
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The cost of gas in the U.S. has also risen over the last year, bringing up aggregate energy costs with it but overall has remained lower than in Europe, where benchmark prices have at times been tenfold higher or more.
In a letter sent to President Joe Biden on Thursday, top oil and gas lobbying groups asserted the U.S. could face similar energy costs in the coming years "if we are unable to continue growing and modernizing our natural gas system."
"Europe has discouraged natural gas development in recent years and the consequences are now clear — restricting natural gas threatens energy affordability and reliability in the near-term and hinders climate goals in the long-term," wrote the groups, which include the American Petroleum Institute and the American Gas Association.
The industry and Biden have been engaged in a faceoff since he took office, when he immediately put a halt to new oil and gas leasing on federal lands and canceled the Keystone XL crude oil pipeline. The Biden administration has also struggled to state clearly whether it backs natural gas production over the long run. Most recently, climate envoy John Kerry called natural gas a “bridge fuel” but also suggested that the administration wouldn’t favor building infrastructure for it.
But U.S. gas production continues its yearslong upward trend despite Biden's policies and overall posture on reducing fossil fuel use to mitigate climate change.
In the U.S., gas production between January 2010 and January 2020 rose more than 62%, per Energy Information Administration data. Between February 2021, Biden's first month in office, and November, the last month for which data are available, production grew more than 21%.
Imports have also been negligible compared to domestic production and overall consumption over the last decade.
By contrast, data outlined by the EIA on Friday show to what extent gas production in Europe has gone the other way over the last decade.
Natural gas production in the European Union and the U.K. declined by more than 50% between 2010 and 2020 as governments pursued renewable energy sources instead.
Meanwhile, imports of natural gas accounted for over 80% of total gas supplies to the European Union and the U.K. in 2020, up more than 65% a decade earlier. That includes pipeline gas from Norway, Russia, North Africa, and Azerbaijan, and liquefied natural gas imports.
U.S. shipments of liquefied natural gas, including to Europe, have also shot up over the last few months and secured the U.S. as the world's no. 1 LNG exporter.
It's within this market context that the Biden administration finds itself knee-deep in a diplomatic effort to secure alternative gas supplies for European allies over concerns that a Russian invasion of Ukraine could pipeline supplies to the region.
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While Biden and European Commission President Ursula von der Leyen have recognized that LNG “in the short-term can enhance security of supply while we continue to enable the transition to net-zero emissions,” the administration has yet to encourage the kinds of large investments in domestic production that industry leaders are beckoning.