Access to affordable and reliable energy is fundamentally essential to the success and well-being of any society. Affordable energy enhances quality of life by powering essential infrastructure, including hospitals, schools, and transportation systems. Reliable energy sources, including fossil fuels, have fueled global economic growth, driving industrial productivity, supporting modern conveniences, and lifting millions out of poverty. Ensuring a stable and cost-effective energy supply remains crucial for fostering innovation, sustaining economic growth, and advancing social progress.
President Donald Trump has pledged to fight for affordable and reliable energy for the American people, continuing the commitment of his first term. In 2017, President Trump issued an executive order to promote energy independence, directing federal agencies to review, rescind, and potentially replace burdensome regulations obstructing energy development.
When President Joe Biden took office in January 2021, he immediately curbed much of the progress the Trump Administration had made in energy development by actively discouraging the use of certain forms of energy under the pretense of fighting climate change. The associated regulations pursued by the Biden Administration are not only costly but also have been shown to have little or no effect on the climate itself.
America Has Vast Energy Abundance
It is well understood that America is rich in energy resources. Chart 1 depicts oil and gas resources throughout North America as presented in the Institute for Energy Research’s “2024 North American Energy Inventory.”
North America has more than 2 trillion barrels of technically recoverable (can be produced using current technologies) oil (Chart 1) and more than 5.9 quadrillion cubic feet of technically recoverable natural gas, more than two-thirds of which are in the United States. Resources in the United States alone could sustain 2021 oil demand levels for more than 200 years and natural gas demand for more than 130 years.
Appendix Chart 1 contains 2021 estimates produced by the Bureau of Ocean Energy Management of offshore oil and gas, the latest data available. However, all these estimates of technically recoverable oil and gas are based on oil and gas capable of being extracted using current technology. Of course, as markets evolve and more innovative tools and techniques are developed, more oil and gas will be recoverable than now. As a result, this chart’s estimates likely underestimate the supply of recoverable oil and gas in North America.
Regardless, access to affordable and reliable energy will remain fundamentally important. The dramatically expanding use of energy-dependent artificial intelligence is but one example that underscores this reality.
Accessing America’s Abundant Energy: Horizontal Drilling and Hydraulic Fracturing
In the United States, companies extract oil and gas—known as tight oil or shale oil and gas—through a combination of two processes, known as horizontal drilling and hydraulic fracturing.
- Horizontal drilling is an innovative technique in the shale oil and gas extraction process. In this approach, energy companies drill down and subsequently outward. A key advantage of this horizontal drilling is that the process enables producers to expand their search horizons to extract more oil and gas in a quicker and more efficient manner than typical vertical drilling allows. Horizontal drilling also minimizes the visible environmental footprint by significantly reducing the associated surface area footprint of the drilling activities.
- Hydraulic fracturing, referred to informally as fracking, enables producers to extract oil and natural gas locked within rock deposits. Producers drill wells that are on average 7,500 feet below surface level—thousands of feet below drinking water aquifers—injecting water, sand, and chemical additives deep into the ground at high pressure to fracture the associated rock formations. The process releases trapped oil and gas, which is then pumped back up to surface level for extraction.
Hydraulic fracturing and horizontal drilling are imperative to the safe and efficient extraction of recoverable oil and gas in various parts of the country, generating tremendous economic growth and job creation.
Misinformation from environmental activist organizations has demonized fracking and the fossil fuel industry. Although opponents claim the process to be unsafe, arguing that fracking contaminates drinking water, both the Environmental Protection Agency (in a five-year study) and the U.S. Geological Survey recently found that fracking has not adversely affected drinking water.
The Economic Effects of Using U.S. Oil and Gas Resources
To assess the economic effect of capitalizing on the vast oil and gas supply in the United States, we used the Heritage Energy Model (HEM). In particular, we performed a simulation comparing the current policy under the Energy Information Administration’s (EIA’s) current reference case to a policy assuming that the recoverable shale oil and shale gas are 50 percent higher than under the current policy. Although this simulation is not a specific policy simulation per se, it nevertheless highlights the effect of increasing domestic oil and gas production, and regulatory reform could indeed put a 50 percent increase within reach. Altogether, the model finds that through 2050, doing so would result in:
- An overall average gain of more than 5.27 million jobs per year,
- A peak employment gain of more than 6 million jobs,
- A total income gain for a family of four of more than $300,000 with an average annual gain of $12,418, and
- An aggregate gross domestic product (GDP) gain of more than $25 trillion through 2050.
Chart 2 provides the model simulation’s predicted impact in terms of employment. As Chart 2 shows, through 2050, there are tremendous employment gains as a result of increasing domestic oil and gas production: average employment gains of more than 4.9 million jobs with a peak employment gain of more than 6 million jobs. The reason for these gains is multifold. First are the opportunities directly for those working on the fracking—the workers, engineers, managers, and data scientists associated with the extraction. Fracking projects also provide opportunities for local businesses, including hotels, motels, restaurants, and laundromats. Most fundamentally, however, as discussed, access to affordable and reliable energy reduces the cost of doing business, thereby reducing operational expenses for businesses, leaving more resources for investing in labor and more capital at their disposal.
Increasing access to affordable energy increases productivity. That is, the increase in available energy does not simply increase the number of jobs, it makes employment across the economy more productive. The result is not just more workers but more workers with higher incomes. Chart 3 quantifies the model simulation results in terms of changes in per capita GDP.
As Chart 3 illustrates, the changes in income for a family of four are significant: Through 2050, these gains average more than $12,000 annually, amounting to over $320,000 for a family of four. In terms of aggregate GDP, the gains are immense, amounting to more than $1 trillion annually and more than $25 trillion through 2050. These results are a manifestation of the vibrant economy that results from tapping the vast U.S. oil and gas supply.
Climate Effects
Critics contend that the fossil fuels drawn on from fracking will emit greenhouse gases and thus exacerbate the ongoing natural climate change. It is useful to evaluate the actual temperature effects of such policies. To do so, we used the Model for the Assessment of Greenhouse Gas-Induced Climate Change (MAGICC)—also used by the Intergovernmental Panel on Climate Change (IPCC)—to assess the impact of the associated increase in carbon dioxide (CO2) emissions.
Our HEM simulation results indicate that CO2 emissions would increase under the scenario of expanded domestic oil and gas production to no more than 10 percent with respect to current projections. Thus, we used MAGICC to simulate temperature forecasts through 2100 based on current emissions scenarios, comparing these projections to a hypothetical scenario involving approximately a 10 percent annual increase in CO2 emissions. Our results are contained in Chart 4 under a variety of assumptions about climate sensitivity, namely, the Earth’s temperature response to a doubling of CO2 emissions. These assumptions, varying between 2 degrees Celsius and 5 degrees Celsius, encompass the IPCC’s “very likely” range of potential climate sensitivities.
As seen in Chart 4, even under a 5.00 degree sensitivity, there is no more than a 0.03 degree increase in global temperature. As a result, it is clear that using the vast oil and gas resources here in the United States will have little or no impact on global temperature.
The Vital Need for Energy Abundance
Even under worst-case-scenario assumptions, the danger of climate change pales in comparison to the danger of energy scarcity. Energy scarcity threatens resilient access to food, water, health care, and other necessities of life. Environmental protection, like human advancement, can only happen with energy abundance. Energy abundance must be a national priority.
Today, America’s position as a dominant producer of oil and gas is threatened by misguided government policies that have restricted oil and gas production on federal lands and federally controlled offshore areas and attempted to stifle oil and gas production on private land through overregulation.
Another major obstacle facing America’s energy production is the federal process for permitting major infrastructure projects. The U.S. permitting and environmental review process for major infrastructure projects is the most expensive, lengthy, and unpredictable worldwide. Multiple federal agencies each issue separate permits, delaying projects and introducing high cost and legal uncertainty. Capital availability shrinks, and the cost of capital rises under this risk, harming U.S. competitiveness—especially compared to China’s quick, lower-cost infrastructure deployment.
Over many decades, Congress has created a “hydra-headed” system that requires a dozen or more permits for each major infrastructure project, creating uncoordinated, overlapping reviews. Congress has added layers of permit requirements without mandating interagency coordination or predictable deadlines. There is more than enough capital in the private economy to fund all the investments we need for energy abundance, but federal red tape creates often-prohibitive risk for investors, a risk that significantly raises the cost of capital for those projects that do get built.
Policy Recommendations for Policymakers
Policymakers now have an opportunity to leverage America’s vast oil and gas resources to make affordable and reliable energy available to all. The Administration should work with Congress and state policymakers to:
Open Access to Energy Exploration of Federal Waters and Lands. All federal lands and waters that are not part of the national park system or congressionally designated as off-limits should be open to exploration and production for all of America’s natural resources. Congress should require the Department of the Interior (DOI) to conduct lease sales rather than develop five-year planning programs if a commercial interest exists. The lease plans do not reflect dynamic market conditions that affect companies’ decisions to explore and develop offshore resources. Congress and the Administration should overhaul the leasing process that ensures access to safely develop energy off America’s coasts.
Reverse Federal Regulations on Oil and Gas Production. Locals working in conjunction with state and local officials have a significantly better sense of their locality than bureaucrats in Washington, DC. The federal government should empower state governments to identify—and, if necessary, reform—regulations and the permitting process for drilling. The federal government should also rescind all methane regulations for oil and gas activities. These burdensome regulations drive costs higher for no climate benefit.
Allow States to Manage Drilling on Federal Lands. Federal lands can reap significant benefits from fracking, including local economic gains described above. Historically, the mean period for the federal government to process an application for a permit to drill (APD) has lasted for months, whereas states can process an APD in days or weeks. The DOI should reduce the APD time frames to that of states.
Another potential solution—which would require congressional action—is to reintroduce and pass the Federal Land Freedom Act from the 118th Congress, allowing states to regulate energy development on federal land.
Continue to Allow Fracking on Private Lands. Property rights are a cornerstone of American values, granting individuals the freedom to make decisions about their own land. Landowners should have the ability to contract with private companies to engage in fracking activities on their property. With robust enforcement of property rights and reasonable regulations implemented at the state and local levels, it is possible to balance resource extraction with environmental stewardship. Broad bans on fracking imposed by states undermine these rights and should be avoided.
Prohibit Taxes or Regulations on Greenhouse Gas Emissions. Prior Heritage Foundation research has demonstrated that any carbon tax or climate change regulations will constrict access to affordable and reliable energy, thereby raising energy costs and reducing employment prospects and income across the board. These policies, under the auspice of protecting the climate, would have little or no impact on global temperatures. These regulations should be rescinded, and Congress should clarify that the Clean Air Act was never intended to regulate CO2 and other greenhouse gas emissions.
Reform Federal Infrastructure Permitting and the National Environmental Policy Act (NEPA). The NEPA mandates federal agencies to conduct detailed environmental impact reviews for numerous projects, including energy development on public lands. However, the NEPA process is often hindered by delays arising from multiple sources. Federally, these challenges include inconsistent interpretations of NEPA mandates, poor interagency collaboration, procedural inefficiencies, and outdated guidelines that fail to reflect evolving conditions.
Streamline the NEPA Process. Policymakers should streamline the NEPA processes to empower White House officials with delegated presidential directive authority and coordinate a “whole-of-government” effort. Policymakers should require agencies to create general and programmatic permits and categorical exclusions for low-conflict areas (such as existing transmission corridors). Policymakers should also strengthen the Federal Permitting Improvement Steering Council (FPISC) by merging the roles of its executive director with an associate or deputy role at the White House Council on Environmental Quality (CEQ).
Rescind and Reissue CEQ Regulation. Policymakers should rescind the CEQ’s regulation of NEPA and reissue it as a presidential directive or CEQ memorandum for agency heads. Agency compliance would still be mandatory as with any executive order, but this conversion would make clear that the CEQ has no authority under NEPA or any other law to create judicially enforceable rights and obligations beyond what is in the statutory text of NEPA. Policymakers should invite independent agencies (such as the Federal Energy Regulatory Commission and the Nuclear Regulatory Commission) to sign memoranda of understanding agreeing to follow these directives.
Expedite the Process for Nationally Important Projects. Policymakers should create a one-stop-shop, single-permit process and portal, with a decision guaranteed within two years of a complete application. Policymakers should allow project sponsors to pay a substantial fee for certification as a “nationally important infrastructure” designation, triggering the expedited process.
Pursue Litigation and NEPA Reforms. Congress should tighten standing and require courts to weigh the public interest more heavily when considering injunctions that would delay projects. Congress should require plaintiffs to post a bond for preliminary injunctions to compensate for wasted taxpayer resources and losses to project proponents when the agency ultimately prevails on the merits. Policymakers should adopt a “substantial performance” standard so that minor errors in NEPA documents do not stall permits. Policymakers should clarify “major federal action” and “reasonably foreseeable” impacts to limit agencies to analyzing effects within their jurisdiction. They should also create a public tracking portal for all pre-application and ongoing project applications.
Conclusion
America has a vast supply of oil and gas. Capitalizing on this supply will have tremendous economic benefits, creating hundreds of thousands of jobs and making families across the country more prosperous in the process. Policymakers should pursue policies to unlock these resources.
Kevin D. Dayaratna, PhD, is Acting Director, Chief Statistician, and Senior Research Fellow in the Center for Data Analysis at The Heritage Foundation. Austin Gae is a Research Associate, and Mario Loyola is Senior Research Fellow for Environmental Policy and Regulation, in the Center for Energy, Climate, and Environment at The Heritage Foundation.
Reprinted with Permission from Heritage.org – By Kevin D. Dayaratna, PhD, Austin Gae and Mario Loyola
The opinions expressed by columnists are their own and do not necessarily represent the views of AMAC or AMAC Action.