When President Biden was sworn into office a year ago, he pledged that the US would reengage with allies and trading partners in Europe and lead the global battle against climate change.
The US now finds itself at a critical inflection point, where domestic politics threaten the progress that has been made internationally. The collision of high gas prices at home and abroad, a lack of energy security across Europe, and the impacts of climate change only reinforce the continued importance of 1) the responsible development of our domestic energy resources and 2) American energy exports to allies and trading partners.
When it comes to climate, the benefits of American energy are unparalleled. US oil and natural gas operations adhere to the highest level of environmental regulations in the world. Liquified natural gas (LNG) produced in the US is the cleanest, most reliable LNG in the world. By exporting this low emitting fuel to our friends in Europe, we provide a reliable energy source that supports the net-zero by 2050 goals that many European nations have set.
We saw this US commitment on display globally when a massive delegation attended COP26 in Scotland and reiterated its commitment to tackling climate change. And former Secretary of State John Kerry, the US Special Envoy on Climate, has traveled the world seeking commitments from global partners to reduce CO2 emissions to mitigate the worst of climate change.
By avoiding costly policies that can increase the cost of energy here in America, we can continue the reliable flow of US natural gas to Europe making good on our climate commitments, and we can do this in a way that continues to deliver natural gas domestically in an affordable way. Afterall, the US was the top exporter of natural gas in December and projected to be through 2022.
The US produces enough natural gas to meet domestic needs while also providing reliable energy to allies and trading partners. For example, in October 2021, the United States consumed about 2.2 trillion cubic feet of natural gas, or just under 70 percent of the total natural gas produced domestically. Meanwhile, total natural gas exports – those sent via pipeline and as LNG – accounted for about 17 percent of total US natural gas production. Further, despite record-breaking US LNG export volumes in 2021, LNG exports only accounted for about 9.5 percent of the total natural gas produced through October. In fact, the US produced more natural gas than what it consumed and exported combined in 2021 – meaning there was a surplus to store in anticipation of future demand needs.
On the crude oil side of the equation, the US is a global leader in production, with the ability to produce even more if given the ability and opportunity to responsibly explore new frontiers and safely develop what we know exists.
Yet, in an attempt to address higher gasoline prices for Americans, the Biden Administration announced four separate releases from the Strategic Petroleum Reserve and has called on OPEC and Russia to produce more oil – actions that had little impact on the price-at-the-pump, but demonstrate a recognition by the Administration that something needs to be done to help alleviate the rising energy costs Americans face each day. Calling on other countries to increase production, while advancing policies at home that restrict or curtail oil production, fails to appreciate the ingenuity of American energy producers and their ability to help alleviate the pressures at the pump.
Contrary to the President’s recognition that more energy supply is better for Americans, some in Congress are attempting to limit domestic energy development and make it more expensive with new taxes and fees, while also calling on the federal government to slow the approval of LNG export facilities, with some even demanding unprecedented market intervention and a reduction of exports from existing facilities. In addition to exacerbating the climate and pricing issues at hand, a policy move such as this would contradict the Biden Administration’s climate commitments and would be a sharp rebuttal to the President’s claim that the US is re-engaging with the world, instead suggesting that Washington is turning its back on our allies in Europe.
Across the EU, governments are facing unprecedented upward pressure on energy prices. In Kazakhstan, increases in fuel prices have led to widespread protests and civic unrest. In Moldova, the West leaning government had been attempting to distance itself from Moscow, but has been forced to declare a state of emergency after Gazprom increased prices and reduced supply to the nation. Even the United Kingdom is warning of a national crisis due to rising fuel costs. And Germany and France – countries that have taken a hostile view towards natural gas and are actively working to retire its use in meeting their domestic energy needs – are now recognizing the need for reliable energy sources and the limitations of alternative fuels in this time of critical need. What’s happening in the EU is a telltale sign of why energy diversification and an “all of the above” energy strategy is the best path for the US to meet our energy needs.
Because of energy policy decisions made over the past few years and years of declining coal use, the EU has seen an 11 percent increase in coal demand in 2021, further proving the need to continue reliable energy exports from the US. Just last month, France brought online fuel oil plants to meet its domestic energy needs, illustrating how dire the situation has become in the country.
At this critical moment, as our allies look for partners to combat global climate change and seek out long-term, reliable partners to meet their domestic energy needs, they need to have confidence that America will deliver environmental gains and reliable energy. The women and men of the US oil and natural gas industry are prepared and well positioned to deliver on this commitment, but we need the Biden Administration to make good on its commitments too. The domestic oil and natural gas industry creates good-paying, family sustaining jobs, and spurs immense investment along the supply chain supporting union jobs and creating opportunities for small businesses across America.
Through consistent energy policies that capitalize on the countless benefits of American production, the Administration has a real opportunity to send a clear message to Americans at home and our trading partners in Europe that we will make good on our commitments and ensure energy security, reliability, and affordability.