Thanks to a remarkable oil and gas boom, the United States has achieved the long-sought goal of energy self-sufficiency: we now produce more oil and refined products, natural gas and coal than we consume. In particular, horizontal drilling and hydraulic fracturing — fracking — have transformed the United States from the world’s largest importer of oil into a net exporter of oil and gas.
This kind of physical energy security is a blessing when conflict disrupts global energy trade. Europe’s frantic race to free itself from Russian energy illustrates how deeply problematic it can be not to have it.
Yet look at the prices at the pump and you’ll see why we can’t navigate our way to true energy security. That’s why the Senate must finalize legislation now that will harness the full power of America’s energy arsenal to defeat Vladimir Putin, reduce energy costs, protect our economy from the next energy crisis, and address the critical threat of climate change.
Oil, coal and, increasingly, natural gas are globally traded commodities, leaving the US economy dangerously exposed to the vagaries and volatility of energy prices. The decisions of a single autocrat halfway around the world can skyrocket the cost of filling the reservoir in Des Moines or Denver. Every $10 per barrel increase in the price of oil is nearly $200 million per day the US household and business tax and soaring energy costs are the main drivers of inflation, threatening to push the US economy back into recession.
These threats to America’s economic security will persist as long as our households, businesses and industry remain dependent on fossil fuels. Only by reducing our consumption of oil and gas can we insulate the US economy from fossil fuel price shocks.
Pump prices are now at their highest level since 2008. Back then, the United States imported more than half of our oil and U.S. natural gas production was just starting to come off a plateau. four decades. Wind and solar power were expensive, provided less than 2% of America’s electricity, and couldn’t, it seemed, scale to meet the moment. And only 100 of Tesla’s original Roadsters rolled off the production line.
In this context, it is almost understandable to think that even more drilling is America’s only path to energy security. But in the years since, the energy landscape has fundamentally changed. Even as oil and gas production boomed, supportive public policies at home and around the world increased wind and solar energy, reducing costs by 72% for wind and 90% for solar since 2009. These once expensive alternative energy technologies are now the cheapest and fastest growing sources of electricity available today.
Lithium-ion battery costs have also fallen as fast as solar power, and all major automakers are now racing to deliver affordable, mainstream electric vehicles to all consumer segments, including pickup trucks and SUVs. always popular.
It is true that to help our European allies (including Ukraine), cut off Russia’s largest source of foreign exchange, and starve the Kremlin’s war effort, the United States must export as much liquefied natural gas, oil and coal as possible. Yet this is only the beginning of a new approach to energy security. Congress must also pass a bold investment package to expand renewable electricity, preserve existing nuclear power plants, catalyze new hydrogen, carbon capture and advanced nuclear industries, help American households and businesses adopt electricity and efficient electric heating and increase the energy productivity of American industries.
The House of Representatives has already passed such an energy investment package as part of the Build Back Better Act, but it is stalled in the Senate. The REPEAT project, which I lead, modeled the energy provisions of this bill. If passed, we estimate that by 2028, US oil consumption could drop nearly 500 million barrels per year and natural gas consumption could decline by two trillion cubic feet. At current energy prices, this represents approximately $70 billion in annual savings for American homes and businesses, making the American economy much more energy secure.
We also see that these investments in energy security would put the United States within reach of the country’s commitment to reduce greenhouse gas emissions to 50% of peak levels by 2030, facing another urgent threat to national and global security.
Senator Joe Manchin of West Virginia was a key part of the energy package of the Build Back Better Act passed by the House, but he also seems to recognize that Mr. Putin’s attack on Ukraine changes the context of the energy legislation. “This is, in many ways, an energy war,” Mr. Manchin rightly said at the start of the conflict, and he has since convened talks to try to hammer out a deal to address the “our nation’s climate and energy security needs,” according to a spokesperson. But with summer recess on the horizon and the midterm campaign heating up, the sands are running out of the hourglass for Congress to act. The only viable strategy is to simultaneously increase domestic fossil fuel production while reducing oil and gas consumption at home through investments in clean energy, efficiency and electrification. This strategy would allow the United States to increase exports to our allies abroad much faster than a “drill, baby drill” approach alone. In fact, the REPEAT project estimates that by 2028, this strategy could increase US exports enough (from 2021 levels) to completely replace Russia’s oil and natural gas supplies to Europe. Rising production and falling demand will also open a second front to drive down global energy prices, which would not be the case by focusing solely on supply.
Along with carbon capture and storage tax credits and new efforts to eliminate unnecessary and polluting methane leaks in the oil and gas supply chain — two measures Mr. Manchin supports — states United States can ensure that our energy exports are the cleanest in the world, a crucial step in remaining globally competitive in a carbon-conscious world.
Finally, tax credits and loans for advanced energy manufacturing and the production of critical components and materials can secure the supply of technologies that will be the foundation of energy security in the 21st century.
Faced with a new energy crisis, we cannot afford to ignore America’s continuing economic vulnerability. It’s time to do whatever it takes to deliver true energy security for the economy, citizens, and American allies.