Natural gas and oil will remain central to meeting our nation's energy needs well into the future -- so says the nonpartisan U.S. Energy Information Administration (EIA) in its 2021 Annual Energy Outlook.
This analysis is critically important given the Biden administration's apparent shift away from the previous administration's focus on building American energy dominance through homegrown natural gas and oil -- seen in President Biden's executive order halting new federal leasing.
EIA's forecast and the Biden administration's energy position are incompatible with each other, raising a simple question: If we aren't allowed access to key federal natural gas and oil reserves, onshore and offshore, where will our energy supply come from?
Halting federal leasing simply doesn't make sense when you think about how far the U.S. has come in recent years, thanks to the increased domestic production of natural gas and oil. We've seen economic growth, increased energy security and lower costs for consumers, just to name a few benefits, all of which are more important than ever before as we work toward economic recovery.
EIA said energy demand will continue to rise, especially as the economy recovers -- an outcome that holds true in each of the report's scenarios. So, we can choose to produce that energy here in the U.S. -- creating reliable, well-paying American jobs and spurring economic growth in the process -- or we can rely on foreign suppliers, a number of whom are not America's friends. Bloomberg reported that an index of Russian energy stocks, including oil giants Rosneft and Lukoil, are already up relative to European oil and gas companies in anticipation of further carbon-reducing policy moves in the U.S.
While the administration's actions currently call for a suspension of new leasing, it looks like the first step toward a permanent ban on natural gas and oil development on federal lands and waters, which studies have already shown would cost nearly 1 million American jobs by 2022 and put $9 billion in revenues paid to government at risk.
Here's what else we know about the consequences of a federal leasing and development ban:
- The U.S. economy would suffer, with GDP declining by a cumulative $700 billion through 2030 and nearly 1 million jobs lost by 2022, with top production-states suffering significant losses. New Mexico, for example, would lose over 62,000 jobs over the next two years.
- Environmental progress would backslide, with coal use increasing by 15 percent by 2030 and carbon dioxide emissions increasing by an average of 58 million metric tons, representing a 5.5-percent increase in the power sector by 2030.
- America's energy security would be at risk, with offshore production decreasing by 68 percent for natural gas and by 44 percent for crude oil by 2030, and U.S. oil imports from foreign sources increasing by 2 million barrels per day. Through 2030, the U.S. would spend $500 billion more on energy from foreign suppliers.
The EIA report is one more reminder that our nation's energy needs are going to grow for the foreseeable future. Halting natural gas and oil leasing on federal lands serves only to forego the benefits that come with meeting these needs with energy produced right here at home.
For more information, visit www.api.org or call (202) 682-8000.
