This fall, Pennsylvanians will cast their ballots for Senate, governor, and other key races. As the costs of energy and most items have continued to tick up, the stakes couldn’t be higher.
To put it simply, the global energy crisis is caused by demand outpacing available supply. Other factors – Vladimir Putin’s reduction of energy exports to Europe and supply-chain bottlenecks – have surely played a role in the supply crunch as well. Yet, here at home, U.S. energy policy has further constrained natural gas and oil production, despite the obvious need for more affordable, reliable energy.
To date, the White House has paused new federal natural gas and oil leasing; held no quarterly onshore lease sales, which are required by law, in all of 2021 or in two of this year’s first three quarters; canceled pipeline infrastructure; and signaled uncertainty to Wall Street about the future of natural gas and oil as part of the U.S. energy mix. The president also ordered another release from the Strategic Petroleum Reserve (SPR) – this time, 15 million barrels of oil, a relatively small amount compared to U.S. consumption of more than 20 million barrels per day. Now, the SPR stands at its lowest level since 1984. Together, these policy missteps have had a chilling effect on investment in the natural gas and oil sector at a time when it’s most needed and fail to address the supply-demand imbalance in the long term.
Take, for example, prices at the pump.
Fuel prices have fluctuated greatly over the past several months, reaching highs not seen in 14 years and making energy companies an easy political target for the White House. But the fact is that petroleum prices are determined by market forces of supply and demand, not individual companies, and the price of crude oil is the primary determinant of the price we pay at the pump.
That hasn’t stopped the Biden administration from pointing fingers at the industry, however.
While the White House calls for companies to “bring down prices,” it bypasses American-made natural gas and oil and instead looks to unstable regions of the world for energy. The latest move by OPEC+, which cut crude oil output by 2 million barrels a day, rebuffing the Biden administration’s pressure to produce more, is a stark reminder of the risk involved in relying on other countries for our energy supply.
American energy leadership and security is certainly on the minds of Pennsylvanians.
According to polling conducted earlier this year by Morning Consult, the vast majority of Pennsylvania voters across both parties – nearly 9 in 10 – say that producing natural gas and oil here in the U.S. could help lower energy costs for American consumers and small businesses, while strengthening U.S. national security. What’s more, 8 in 10 voters agree that the current energy crisis in Europe shows what can happen when nations depend on energy production from foreign sources with agendas of their own.
As the energy crisis deepens, due in part to poor federal policy decisions, the administration should create a pathway for American producers to tap into domestic energy resources, rather than seek out unpredictable foreign nations to meet the rising demand. Hindering U.S. natural gas and oil, which provide nearly 70% of the nation’s energy, is a misguided strategy that has inflicted pain on the American consumer.
Harnessing the power of U.S. natural gas has helped to insulate Pennsylvania consumers from the dramatic price spikes seen in New England and Europe prompted by supply constraints and Russian aggression.
Since 2000, U.S. proved reserves of natural gas have increased nearly every year due to advancements in natural gas exploration and production technologies. To unlock its potential, though, we need smart and consistent policy support, including strengthening domestic pipeline networks and energy export facilities, that will ensure both American consumers and our allies abroad have access to reliable natural gas.
A study conducted by Rystad Energy found that while U.S. liquified natural gas (LNG) is already flowing to Europe at record levels, significantly more will be required to fully rebalance European gas markets. Without Russian pipeline gas, Europe’s demand for LNG is projected to increase 150 percent from 2021 to 2040. The decisions European and U.S. policymakers make today will affect Europe’s ability to rebalance its natural gas market with dependable, affordable energy in the years ahead. This rebalancing is also important to U.S. markets and the economy.
Unlike many factors that affect markets, including geopolitical instability, Washington’s policy uncertainly can be addressed directly. And unleashing American energy starts with predictable regulations, efficient permitting, and policies that support an all-of-the-above energy strategy.
In June, the American Petroleum Institute announced ten policy solutions needed right now to lift the nation, and the world, out of the current energy crisis. Policymakers must support energy investment, create new access, and keep regulation from unnecessarily restricting energy growth.
American-made energy is the key to addressing the global energy crisis – not only for providing reliable, affordable energy but also for exporting environmental progress. U.S. natural gas and oil is produced under some of the strictest safety and environmental standards in the world.
In Pennsylvania, the second-largest producer of natural gas in the U.S., voters understand what’s at stake: nearly 500,000 in-state jobs supported by natural gas and oil, billions in economic impact, abundant and affordable American energy, and energy security.
The solution to the growing energy crisis is right here at home. What are we waiting for?
Stephanie Catarino Wissman is executive director of the American Petroleum Institute Pennsylvania
Author: Stephanie Catarino Wissman
Publication: Real Clear Energy