Vice President Mike Pence’s Advancing American Freedom Foundation hosted a summit this week in Houston, Texas entitled “Unleashing American Energy: A Summit on American Energy Solutions” where I had the honor of speaking. It was a timely event by one of the most honorable men of our time.
The focus of my remarks was on the importance of expanding economic freedom for providing affordable, dependable power to American families and businesses.
With gas prices on the rise again, consumers can expect to pay 28% more for home heating this winter than they did last year, according to the Energy Information Administration (EIA). Add in inflation and recession forecasts; it’s no surprise that families are stressed and wondering how they will make ends meet.
American consumers are being forced to make hard economic decisions, literally between buying gas or groceries. As Vice President Pence recounted, he recently met a young mother who was having to go to the food bank to feed her family because they had to spend their grocery budget on keeping gas in their car so that her husband could keep his job. It doesn’t have to be this way. It shouldn’t be this way. Frankly, bad energy and climate policies by the Biden Administration are what got us in this position and it’s time for a change.
While fixes are in short supply, policymakers can follow commonsense principles to increase supplies, bolster our energy security, and reduce the economic harm caused by price shocks.
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First, leaders need to recognize the importance of American energy in meeting global and domestic demand. Despite the belief of many progressive politicians, we cannot simply move on from fossil fuels overnight. America currently relies on natural gas and coal for 60% of its electricity generation, and fossil fuels for 90% of its transportation needs. The EIA estimates that fossil fuels will account for 75% of U.S. energy demand in 2050. Furthermore, total global energy demand is expected to grow by 50% in that same timeframe. Consumers are going to need more energy, not less, and American producers can provide it to them.
This makes not only economic sense, but environmental sense as well. The fact of the matter is that American energy is the cleanest in the world. American liquified natural gas is 50% cleaner than Russian natural gas and oil drilled in Wyoming has a carbon footprint half that of Venezuelan crude. In fact, had Europe relied on American LNG rather than Russian, it would have been able to reduce emissions by 72 million metric tons each year, which is equivalent to removing 15.5 million cars from the road. Empowering American energy producers is a win for American consumers, the economy, and the global environment alike.
Second, to achieve energy security we must first institute regulatory certainty. Onerous, ineffective regulations stall the progress of all energy sources in the United States. Environmental reviews under the National Environmental Policy Act (NEPA), which is required for all projects receiving federal funding, take an average of 4.5 years to complete and costs millions of dollars. And while these delays hurt fossil fuels, they disproportionately impact clean energy and transmission projects.
Similarly, regulators need to pick up the pace of approving the license of next-generation technologies such as advanced nuclear reactors. Portland-based Nuscale, which develops small modular reactors, had to wait six years and spend $500 million before its design was approved by the Nuclear Regulatory Commission. A diverse energy portfolio is by definition a more secure one. Before America can diversify its energy sources, it must first get more projects up and running. Permitting and regulatory reform are necessary to bolstering our energy security.
Third, achieving a more secure and affordable energy future requires investing in one through research and development (R&D). Federal and private R&D has helped create and accelerate the deployment of impressive technologies like hydraulic fracturing (fracking), nuclear fission, and electric vehicles. R&D is important as it allows us to diversify our energy supply to protect us from future price shocks caused by global energy disruptions or shortages. Thankfully, the United States is already leading the world in this area. Through the Infrastructure Investment and Jobs Act (IIJA) and the Inflation Reduction Act (IRA), the United States will spend nearly $32 billion in the coming years for clean energy research, development, and demonstration.
According to the International Energy Agency (IEA), the U.S. federal government spent nearly $9.2 billion on energy research, development, and deployment (RD&D) in 2021. Japan, which was number two in IEA’s rankings, spent $2.8 billion. In 2021 America’s private sector also invested a record $105 billion in clean energy assets.
Despite this, the United States can still do more to spur innovation. As C3 Solutions outlined in our Climate and Freedom Agenda, policymakers can take several actions to reduce barriers to research, development and deployment. One simple step that Congress can take is allowing businesses to fully deduct 100% of their research and development expenses. Increasing R&D at home will spur innovation and increase economic competitiveness in America.
Americans need secure, affordable energy and a clean, healthy environment. Policymakers can deliver relief to consumers by embracing America’s role in the global energy market and unleashing next-generation innovation.
Once again, Vice President Pence has it right. It’s time to unleash American energy.