Through a combination of good fortune and human ingenuity, the U.S. energy industry has undergone a remarkable transformation over the last several years, catapulting the nation to the pinnacle of global energy production. However, a constellation of three- and four-letter agencies originally only meant to apply guardrails to that progress are now acting to stymie it, largely at the behest of political considerations.
Thanks to innovations in horizontal drilling and hydraulic fracturing, the United States is now the world’s largest oil and natural gas producer. This shift has unlocked an abundance of energy that has not only redounded to the benefit of American consumers but also to our allies abroad.
Between just 2017-2023, the U.S. astonishingly went from being a net importer of natural gas to the world’s largest exporter for the first time, bolstering America’s economic recovery from the COVID pandemic and offering a critical lifeline to European countries reeling from Russia’s invasion of Ukraine.
Despite this American success story, President Joe Biden recently directed the Department of Energy to “pause” new approvals of liquefied natural gas export projects until the DOE can sufficiently scrutinize new applications for their climate impacts.
The move, which has predictably drawn international criticism and is already prompting our allies to shop elsewhere for fuel, is a transparent election-year sop to climate activists. And it’s just the latest in a long line of decisions under the current administration to undermine American energy production and security.
In the domestic power sector, the Biden administration’s Environmental Protection Agency has proposed new greenhouse gas emissions standards for power plants that, if adopted, would force the nation’s coal and gas-fired generating stations to either dramatically reduce their output or implement costly and unproven technologies such as green hydrogen and carbon capture to stay open.
The affected power plants, which together still produce more than 60% of the country’s annual electricity, already face threats of early closure due to existing state and federal climate policies. These potential closures have led the nation’s grid watchdog to repeatedly sound the alarm over looming grid reliability risks in their absence.
Despite warnings from the nation’s major utility organizations and largest grid operators that EPA’s rule would turbocharge those risks by setting infeasible timelines and technological constraints on the production of reliable electricity, the rule remains under active consideration.
Even beyond the realm of hydrocarbon production, agencies such as the Nuclear Regulatory Commission continue to stifle an American renaissance in alternative forms of reliable, domestically produced power.
While NRC sclerosis certainly predates Biden’s tenure in office — in the agency’s near 50-year history, it has only successfully overseen one new reactor from early licensing to commercial operation — its consequences are most acutely felt in the current context of global energy insecurity and demand for carbon-free resources.
The U.S. produces more nuclear energy than any other country, but its existing reactor fleet is rapidly aging and under threat from heavily subsidized renewables. Meanwhile, America’s geopolitical rivals Russia and China have seized the opportunity to take a commanding lead in the global development of new nuclear power plants.
Dozens of U.S. companies are currently trying to compete to supply the country and the rest of the world with the next generation of advanced nuclear reactors, but the most mature of these designs have thus far failed to clear the NRC’s byzantine regulatory apparatus.
The startup Oklo, for instance, had its application to build a microreactor unceremoniously denied by the agency over “information gaps” in 2022 after nearly two years of review. NuScale, the only company to date to get a small modular reactor design approved by the NRC, did so last year after more than $500 million in regulatory compliance costs and more than 2 million labor hours to fulfill the agency’s information requests before construction on one of its reactors can even begin.
Plainly put, the regulatory status quo has become untenable, and U.S. policymakers must do better. The country can no longer afford to allow energy regulation to continue down the road of agency mission creep and special interest capture, nor can it tolerate regulators that actively impede innovation at the expense of the country’s status relative to our rivals.
Any effort to truly restore and enhance American energy dominance on the world’s stage must prioritize regulatory reform above all else so that our producers are given the stability and room to innovate and do what they do better than anywhere else.
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Jake Fogleman is a policy analyst specializing in energy and environmental policy at the Independence Institute, a Colorado-based think tank.
