Global energy demand is expected to nearly double by 2050, providing a major geopolitical opportunity for energy-rich nations like the US. As countries across the world develop, their residents will increasingly expect the energy-intensive amenities that we in the West take for granted: clean drinking water, air conditioning, transportation infrastructure, reliable healthcare services, and more. Through a combination of liquified natural gas (LNG) and clean energy resources, the United States can meet the growing global demand for less carbon-intensive sources of energy while positioning itself for energy leadership in this decade.
Currently, China is deploying massive amounts of capital to secure global supplies of energy and mineral resources. Through the $1 trillion Belt and Road Initiative, China is financing billions of dollars in international energy and mineral infrastructure. Today, 60% of critical mineral supplies and over half of solar, wind, and electric vehicle manufacturing capacity are controlled by the Chinese state.
America must respond with clean energy dynamism and displace China as the global leader in energy deployment. American energy leadership will meet our responsibility to provide prosperity for our citizens while also fostering the economic development and stability of other nations. By tackling the climate challenge with abundant clean energy, America can mitigate the effects of climate change while supporting its energy industry.
An energy leadership approach must be focused on fostering the domestic supply of exportable energy resources. Brian Deese, a climate advisor to Vice President Kamala Harris, recently proposed a “Clean Energy Marshall Plan” where American finance would support international demand for domestic clean energy projects. However, international energy policy that only focuses on fostering demand for American goods is insufficient. To truly lead in energy, America must embrace supply-side priorities that support innovation and make it easier to build and export energy resources in America.
Three policy paths are crucial for international energy and climate leadership: investing in the research, development, and demonstration (RD&D) of innovative American clean energy technology; streamlining permitting for domestic energy development; and promoting exports of American energy resources and technology.
RD&D for American clean energy
The foundation of the American energy advantage is innovation. Energy leadership must involve developing new resources and new technologies to use existing resources. From Edison’s lightbulb patent in 1880 to the shale revolution of the 2000s and 2010s, the U.S. has led the world in innovation to provide its citizens with clean, reliable, and affordable energy. We cannot give up the lead.
The private sector can effectively scale up established technology, but often lacks the incentive to perform riskier research, development, and demonstration (RD&D) for unproven tech. The federal government is well-equipped to provide these incentives, and the U.S. Department of Energy (DOE) has a suite of competitive grants to help new technologies get off the ground. DOE is the largest funder of research for physical sciences and applied energy RD&D, and it works with the private sector to ensure that innovative technologies reach commercialization.
These efforts meet domestic energy needs and strengthen the U.S.’s international strategic position. Take the shale revolution of the past two decades. In the 1970s, the U.S. was reeling under the Arab Oil Embargo. Throughout the ‘80s and ‘90s, entrepreneur George Mitchell worked closely with DOE-funded researchers to develop hydraulic fracking technology and locate Appalachian shale deposits rich in natural gas. The technology reached commercial maturity by the turn of the millennium, and led to unprecedented energy abundance in the U.S., dramatic reductions in carbon emissions, and an energy-independent America on the world stage. American natural gas exports will allow developing countries to decarbonize as their energy needs increase while providing a strategic lynchpin for American-led competition with Russia and China.
Domestic energy and mineral development
American innovation counts for nothing unless new technologies can be implemented at scale. Supply-side policy like permitting reform will reduce American energy costs and emissions while also freeing energy resources for export. Currently, it takes 4.5 years on average for federal agencies to complete an environmental impact statement (EIS) under NEPA, which touches nearly every major project with a federal nexus. The average cost of a NEPA EIS is over $4 million.
Long review times and high regulatory costs increase American energy prices and emissions. Delays in new energy infrastructure naturally suppress energy supply, increasing costs. On top of that, 96% of new power plant capacity is from clean sources like nuclear, solar, wind, and batteries, suggesting that regulatory delays are depressing clean energy uniquely. If new clean energy sources cannot be built and connected to the grid, increased energy demand will be met by sources that can easily increase production: coal and natural gas.
Permitting delays also decrease the amount of energy resources that America can export, particularly natural gas. As natural gas is diverted to existing power plants to meet energy demand, less can be exported abroad. Decreasing delays and costs of new infrastructure will allow clean energy to meet demand, freeing more domestic natural gas for export.
Facilitating energy exports
However, to provide larger amounts of energy resources like natural gas, minerals, nuclear, and renewables to the world, the government cannot hinder commodity export.
Recent policies have delayed America’s ability to export domestic energy. President Joe Biden’s natural gas export pause (now overturned by the courts) suspended approval for new liquefied natural gas facilities. This step not only compromised America’s ability to provide energy for allies, but it may have also prolonged global emissions. A major driver of America’s 21% emission reduction from 2005-2020 was natural gas replacing coal. By increasing international supply of American natural gas, we could replicate this process around the world, especially as industry reduces methane leaks and innovates low-carbon electricity production technologies. Reducing regulatory burdens can help achieve this goal.
Streamlining regulation will also increase American supplies of minerals necessary for clean energy development. It takes about 29 years to open a new mine in the U.S. — only Zambia has longer timelines. This process costs billions of dollars, and mine developers are often threatened by prolonged litigation. Rather than reduce labor standards for international American mining projects, as Deese suggests, streamlining domestic mineral production is a better approach to energy leadership. Lower permitting timelines and costs will allow the U.S. to export our vast mineral resources, reviving rural economies and supporting international clean energy development.
Finally, reducing regulatory burdens on domestic clean energy manufacturing will foster innovation and build supply chains, particularly for small modular reactors (SMRs). Currently, standards from the Nuclear Regulatory Commission make it extremely difficult to innovate cheaper production mechanisms for SMRs. Reducing unnecessary regulatory steps will allow companies to innovate manufacturing cost reductions, paving the way for mass production of SMRs for international export.
Conclusion
As energy demand grows worldwide, America must lead the world in the innovation, construction, and export of clean energy resources. American energy dominance will rebuff competition from adversarial nations, strengthen U.S. soft power in developing countries, and help address the climate challenge. Financing international demand is insufficient — supply-side policies that foster innovation and remove regulations that prevent resource development and export must guide American energy policy.