Key Vote YES on H.R. 26

The American Energy Alliance supports H.R. 26 the Protecting American Energy Production Act.

The process of hydraulic fracturing is a key production process for oil and gas development. It should not be subject to arbitrary, unilateral restrictions from a presidential administration. Any restrictions must be determined through the full constitutional legislative process. This legislation ensures that Congress will have its say on any such restrictions.

A YES vote on H.R. 26 is a vote in support of free markets and affordable energy. AEA will include this vote in its American Energy Scorecard.

Can America’s Electric Grid Survive The A.I. Revolution?

Chinese artificial intelligence (AI) company DeepSeek is challenging conclusions about future electricity demand from AI data centers. DeepSeek has produced an AI model that appears to use a smaller amount of energy than U.S. models, which has made some analysts indicate that the surging predictions of electricity demand from AI should be reevaluated. Since AI is set to drive the majority of electricity demand growth in the next decade, lower demand predictions from AI could affect the number of new power plants in the United States.

DeepSeek is owned by the Chinese stock trading firm High-Flyer, and its app appears to have similar functionality as OpenAI’s ChatGPT chatbot. According to DeepSeek, its model uses roughly 10 to 40 times less energy than similar U.S. AI technology, depending on the task. A Nature paper also reported that DeepSeek required about 11 times fewer computing resources than a similar one from Meta. The company also claims it uses about an eighth of the computer chips needed to power other AI systems. It is also cheaper for users, costing some 95% less than OpenAI and its competitors. Some of these claims have yet to be substantiated. Meanwhile, the claims have significantly impacted the stock values of various companies in industries such as tech, AI, energy, and others.

The Lawrence Berkeley National Laboratory has predicted that AI-driven data centers could account for 12 percent of U.S. electricity demand by 2028. However, projections vary depending on assumptions about the underlying technology. For DeepSeek to cause a significant change in future electricity demand, there would have to be a mass switching away from existing AI models, including by major corporations, and they would need to be willing to tie their private data to a Chinese company. Experts have noted that data provided to DeepSeek could be stored and subject to surveillance under Chinese law. Deepseek’s models are also constrained by China’s restrictive policies regarding criticism of the ruling Chinese Communist Party (CCP).

Further, as technology becomes more efficient and requires less energy to run, people want more of it, which keeps overall demand higher than would otherwise be expected. This phenomenon is known as the “Jevon’s Paradox” and is well known in energy circles. And, while DeepSeek’s computer system appears to use less energy than other models, it still uses similar amounts of energy as competitors when the chatbot is queried, which suggests that the energy reductions could be less than expected.

Other major drivers, including U.S. manufacturing and cryptocurrency, will still affect U.S. electricity demand. President Donald Trump’s tariffs could increase U.S. manufacturing and domestic power demand. Biden’s push toward more electrification of appliances and use of electric vehicles that Democratic states still champion is also likely to increase power demand.

A large number of U.S. data center projects are already in the pipeline, so there will continue to be a large number of U.S. data centers tied to new or refurbished nuclear, gas, and renewable generating facilities. For example, a deal between Microsoft and Constellation Energy to reactivate a unit at the Three Mile Island nuclear reactor in Pennsylvania is already in progress. And President Trump is supporting Stargate, whose data centers will be power intensive. The fuel mix that will be used to power these data centers will be dependent upon where they are built, as utility fuel use varies regionally.

Conclusion

President Trump has called DeepSeek a “wake-up call” to the U.S. AI industry. According to his press secretary, his administration is looking into the national security implications of DeepSeek. AI systems have the potential to exacerbate significant national security risks, including enabling the development of weapons of mass destruction, supporting powerful offensive cyber operations, and aiding human rights abuses, such as mass surveillance. While DeepSeek reportedly uses much less energy than its U.S. AI counterparts, many questions remain regarding whether its issuance will result in less power demand from U.S. AI data centers, including whether companies want to use a Chinese product and how it will be used. China has a growing fleet of cheap coal-fired plants with more capacity than the entire generating fleet of the United States, which can help underpin its AI development.


*This article was adapted from content originally published by the Institute for Energy Research.

Trump Acts To Protect Ratepayers From Offshore Wind Boondoggles

President Trump’s executive order on offshore wind, “Temporary Withdrawal of All Areas on the Outer Continental Shelf from Offshore Wind Leasing and Review of the Federal Government’s Leasing and Permitting Practices for Wind Projects,” is just one part of offshore wind’s troubles. According to Carboncredits.com: “over the past two years, the average cost of offshore wind projects has risen by 30% to 40%, reaching $230 per megawatt hour.” While it was already one of the most expensive technologies being considered, its costs have grown even higher than the increase in inflation due to high interest rates and supply chain problems. Unless companies can get higher-priced contracts for their wind energy, they are canceling projects. Norway’s Equinor, a leading developer in renewable energy, recently withdrew from offshore wind projects in Vietnam, Spain, and Portugal, citing unsustainable costs. Similarly, Shell has sold its stakes in projects across Massachusetts, South Korea, Ireland, and France. It has also announced the cancellation of its $1 billion stake in a wind farm off the New Jersey shore.

In its recent quarterly earnings report, Shell disclosed a $996 million write-off related to an offshore wind farm called Atlantic Shores, for which it no longer sees fruitful returns. The company has been developing the project in a joint venture with the renewables part of the utility company Electricite de France SA (EDF). The joint venture agreed to pay around $780 million to lease an area in a federal offshore wind auction in 2022. Since then, rising interest rates and supply-chain issues have driven up industry costs, making investing harder. While Shell is no longer active in the project, EDF expects the Atlantic Shores project to continue. President Trump wants the New Jersey wind farm to be “dead and gone,” as he sees its power as being expensive and unreliable since it is based on the wind blowing and taxpayer subsidies. The president worked with New Jersey Congressman Jeff Van Drew to draft the executive orders that targeted the offshore wind industry on his first day in office.

Over a year ago, Danish wind developer Ørsted canceled its Ocean Wind 1 and Ocean Wind 2 projects off the New Jersey shore, citing rising interest rates, high inflation, and supply chain bottlenecks. The projects would have added about 2.2 gigawatts of intermittent power to the New Jersey grid. Besides being expensive, offshore wind is also unreliable and needs backup power in the form of expensive batteries or through coal, natural gas, or nuclear generators. Either way, the cost of electricity would escalate. Ørsted was able to write off $4 billion, primarily due to the cancellation of these two large offshore wind projects.

Dominion Energy’s gigantic 2.6-gigawatt, 176 turbine, Coastal Virginia Offshore Wind project is about halfway to its planned completion expected for year-end 2026. The project’s costs have risen by about $900 million (9%) to $10.7 billion.

Chinese Dominance in Wind Energy Manufacture

Another problem for wind energy, as in other parts of a green energy transition, is China’s growing dominance in its manufacturing. China is a global leader in the manufacturing of wind turbines, and European countries are heavily reliant on Chinese-made parts. By the end of 2023, China controlled 43.2% of the world’s installed wind energy capacity, making it a dominant player in the market. The U.K.’s dependence on China for offshore wind supplies has become a growing national security concern for the country, as its former MI6 Director pointed out. Rare earth permanent magnets are a critical component in offshore wind turbine generators. These rare earth magnets are predominantly produced in China, putting Europe’s energy infrastructure and national security at risk. Without a significant shift toward domestic production, which will not be easy as substantial processing is needed to obtain the minerals, Europe’s energy future will be beholden to China. The dependency on China creates a national security challenge as geopolitical tensions over resources could disrupt supply chains. For example, in 2010, China placed a two-month embargo on rare earth metal exports to Japan during a territorial dispute between the two nations, and recently, it banned exports of “dual-use items” related to gallium, germanium, antimony, and superhard materials to the United States.

The United States is Also Dependent on China’s Critical Minerals

China’s dominance in critical minerals is also a problem for the United States as President Biden revoked leases, delayed permits, and labeled fauna and flora endangered,  which canceled and slowed the development of critical mineral mines in the United States. For example, the Biden administration revoked the federal leases for the Twin Metals mine in Minnesota that contains copper, nickel, cobalt, and platinum-group elements and followed that decision by withdrawing more than 225,000 acres of the Superior National Forest from consideration for mining operations for 20 years, thereby ensuring the Twin Metals project’s demise for the foreseeable future.

Another example is that the Biden administration blocked the State of Alaska’s application to build a 211-mile road through northwestern Alaska to reach an area known for its mineral richness. The road-building project is needed to access major copper and zinc deposits needed for transmission lines, wind turbines, and photovoltaic cells. The proposed 211-mile-long Ambler Road was initially approved under the Trump administration, which issued a 50-year right-of-way permit to build the road just days before President Trump left office during his first term. Biden’s action also broke commitments made at statehood in 1959 by denying Alaskans access to resources.

Conclusion

Offshore wind energy is expensive and is getting even more expensive due to supply chain issues and high interest rates. Wind development companies are canceling projects not only in the United States but also around the world. President Trump is not enamored with offshore wind energy due to its cost and unreliability, as it produces energy only when the wind blows. The refrain of intermittent renewable energy supporters that wind facilities are cheaper ignores that they are usually unavailable, requiring backup power to be built and paid for by consumers to accommodate their intermittency. The result is higher prices for consumers and businesses trying to compete globally.

Concerns are also raised as China has become a dominant force in manufacturing wind energy components, which leads to energy security and national security concerns for nations that rely on it. China does not have the oil and gas resource base that the United States has, so it has used the green energy transition to become dominant in supplying the energy needs of Western countries that want to stop using fossil fuels because they supposedly cause climate change.


*This article was adapted from content originally published by the Institute for Energy Research.

Senate Confirms American Energy Leaders Chris Wright, Lee Zeldin, and Doug Burgum

WASHINGTON DC (2/4/25) – The U.S. Senate has confirmed three key nominees to serve in President Donald Trump’s administration, marking a significant step forward in advancing the administration’s energy and natural resource policies. As part of our American Energy Scorecard, the American Energy Alliance will score the confirmation votes for each nominee.  

Tom Pyle, President of the American Energy Alliance, issued the following statement on the confirmations:

“Today marks a pivotal moment in our efforts to unleash American energy and strengthen our nation’s energy economy. With the confirmation of Chris Wright, Lee Zeldin, and Doug Burgum, experienced and committed leaders now will be at the helm of critical agencies. Under their leadership, we will continue to ensure that the United States remains the world’s energy superpower, providing jobs, security, and economic growth for all Americans.

“For the past four years, the American Energy Alliance has worked to push back against the restrictive policies of the Biden administration. We are excited to see a new team in place that is focused on a comprehensive energy strategy—one that prioritizes affordable, reliable, and abundant energy for the American people. Our team has provided a Blueprint to ensure that these goals remain front and center throughout this administration, ensuring energy policy serves the needs of all Americans.”

Chris Wright Confirmed as Energy Secretary

On Monday, the Senate confirmed Chris Wright as the next Secretary of Energy. With a vote of 59-38, Wright, a seasoned executive in the fracking industry, secured broad bipartisan support, including seven Democrats and one Independent who caucuses with them. As Energy Secretary, Wright will lead the charge to ensure the United States remains a global energy leader and continues to expand its energy production capabilities.

Lee Zeldin Confirmed as EPA Administrator

Last Wednesday, the Senate confirmed former Congressman Lee Zeldin as the 17th Administrator of the Environmental Protection Agency (EPA). Zeldin, who represented New York’s first congressional district in the House of Representatives, was approved with a strong bipartisan vote. He will now oversee the EPA’s efforts to safeguard the nation’s environment while balancing the need for energy production and economic growth. Three Democrats—Senators John Fetterman (D-PA), Ruben Gallego (D-AZ), and Mark Kelly (D-AZ)—joined all 53 Republicans in confirming Zeldin.

Doug Burgum Confirmed as Interior Secretary

Last Thursday, the Senate confirmed Doug Burgum as Secretary of the Interior. The former Governor of North Dakota, who was tapped by President Trump to drive the administration’s energy abundance agenda, received overwhelming Senate support with a 79-18 vote. More than half of Senate Democrats joined all 53 Republicans in backing Burgum’s nomination. As Interior Secretary, Burgum will lead the department’s efforts to expand domestic energy production, manage public lands, and ensure the development of the nation’s natural resources.


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Democrats In California Attack Energy Producers Who Make Fire Fighting Possible


Two Democratic legislators have introduced a bill allowing residents damaged by wildfire to sue oil and gas companies for producing products they say cause global warming. The same companies provide the fuel for the helicopters and planes needed to fight the fires.


Two Democratic lawmakers introduced legislation in California to allow residents who have damages from natural disasters to sue oil and gas companies. The proposed bill claims that the oil industry intentionally deceived the public about the risks of fossil fuels, which they say appear to have intensified storms and wildfires and caused billions of dollars in damage in California. California would be the first U.S. state to allow such lawsuits if approved. According to supporters of the bill, these disasters have driven insurers to raise rates, limit coverage, or pull out entirely from regions susceptible to wildfires and other natural disasters. Of course, there is no mention of the benefits of fossil fuels, including supplying life-saving heat in winter, air conditioning in summer, food on the table, and economic prosperity from supporting industrial activity.

In California, utility companies are liable for damages if their equipment starts a wildfire. Some believe the same idea should apply to oil and gas companies because the products they make available to the public when consumed by the public, emit carbon dioxide that produces global warming and climate change, which they allege leads to catastrophes such as those recently experienced in California. The proposed bill aims to alleviate the financial burdens on victims of these types of disasters and insurance companies by allowing them to sue the oil industry to recover their losses. It would also allow the state’s Fair Access to Insurance Requirements Plan, created for homeowners who could not obtain insurance from the private sector, to sue for damages so the plan does not become insolvent. The plan is primarily funded by policies sold to customers, but insurers are currently required to pay into the fund if it is insolvent or to keep it from going insolvent.

The recent multiple fires that tore through sections of Los Angeles and burned more than 12,000 structures were labeled the most destructive in the modern history of the city of Los Angeles and estimated to be among the costliest natural disasters in U.S. history. California lawmakers voted to spend $2.5 billion to help rebuild the area. President Trump visited the devastation and indicated that the federal government would supply aid as long as California changes its voter ID laws and enacts water reforms.

Oil companies have already survived several climate lawsuits claiming that they have deceived the public regarding the risks of fossil fuels. More lawsuits from U.S. municipalities, eight states, and Washington, D.C., against oil and gas companies over their role in climate change are pending, including one filed by California more than a year ago. The civil lawsuit also seeks the creation of a fund — financed by the companies — to pay for recovery efforts following devastating storms and fires. Another blue state, New York, has a new law mandating that the largest fossil fuel companies deemed responsible for carbon dioxide emissions contribute $3 billion annually to a climate mitigation fund for the next 25 years. The NY legislation will increase consumer energy costs by imposing a punitive fee on fossil fuels that supply roughly 80% of U.S. energy needs.

California is trying to convince insurers to continue doing business in the state by giving them more latitude to raise premiums in exchange for issuing more policies in high-risk areas. Seven of the top 12 insurance companies doing business in California in 2023 either paused or restricted new business in the state after assessing that the state was ill-prepared to prevent and respond to wildfires and that its cap on rates exposed the companies to too much risk, given those conditions. The state now allows insurers to consider climate change when setting their prices and will soon allow them to pass on reinsurance costs to California consumers.

California Misplaces Its Priorities

As Los Angeles burned from the wildfires, Newsom’s administration was working on a mission to protect a supposedly endangered form of trout. The state employs about 5,300 workers in conservation and wildlife protection vs. 570 in the fire agency’s wildland management — a 9 to 1 dichotomy. Weeks before the fires, the 110-year-old Santa Cruz Wharf collapsed into the ocean because the California Coastal Commission had delayed repairs so that they would not interfere with seagulls’ mating season. In 2017, the California Department of Fish and Wildlife implemented a policy requiring owners whose pets or livestock have been attacked by mountain lions first to try nonlethal means of deterrence. Only after the third attack could they obtain a permit to kill the predator.

California chose to protect the 3-inch delta smelts rather than allowing water available to farmers and for other uses. According to the Wall Street Journal, “runoff from mountains in Northern California feeds into the Sacramento-San Joaquin Delta, which is connected to the San Francisco Bay. Pumps at the south push water to farms in California’s Central Valley and Southern California cities — but because smelt sometimes gets trapped in the pumps, federal and state governments have restricted how hard they can run,” allowing billions of gallons of water to flow into the Pacific Ocean. The smelt population, however, has continued to decline due to nonnative predator fish and other delta dwellers that outcompete it for food. The smelt appeared to have gone extinct in 2020, but in 2021, more than 12,000 smelts were released into the delta, perpetuating the excuse to limit water flows to farmers.

These problems began with the passage of the 1992 Central Valley Project Improvement Act (CVPIA), a federal law championed by green NGOs which began to shift the focus of the federal and state water management projects from moving water from north to south to dumping water into the Pacific in the Northern part of the state.

Conclusion

California lawmakers are considering allowing residents affected by natural disasters to sue oil companies under the guise that they have not exposed the risks of fossil fuels to climate change. This is a continuation of blaming everyone but themselves for the devastating wildfires that have hit the L.A. area. It appears that California has continually put protecting animals ahead of humans as a species of supposedly endangered trout was being studied for protection by the Newsom administration, which employs many more workers in conservation and wildlife protection than in wildland management during the L.A. wildfires. The state’s top-heavy government permitting system also dissuades residents from clearing their land of fire-prone brush buildup.  And, while the fires burned, the fire hydrants in the affected area of L.A. were empty, as were the reservoirs, so the wildfires could not be easily contained. President Trump has repeatedly argued that California officials could have boosted water flow to Los Angeles from the northern part of the state by pumping more of the resource. Two Democrat legislators, however, prefer to sue oil and gas companies that provide the fuel for the helicopters and planes that are needed to fight the fires.


*This article was adapted from content originally published by the Institute for Energy Research.

The Unregulated Podcast #215: The Swifty Thing is Unconscionable

On this episode of The Unregulated Podcast Tom Pyle and Mike McKenna cover the greatest opening week of all time and the latest shake ups Trump World is bringing to the world of energy.

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The Continued Slowdown in EV Sales

In August, we noted that the growth in EVs had greatly slowed. But that only looked at sales data through July.  But now we have full-year sales data for 2024, and the slowdown doesn’t look better.

In August, we noted that battery electric plus plug-in hybrid vehicle sales had dramatically increased in recent years. In 2017, these vehicles only made up 1.1% of total light-duty vehicle sales, but those sales dramatically increased until 2023, when they made up 9.4% of light-duty vehicle sales.

We also noted that sales had apparently leveled off, but at the time, we didn’t have full-year sales data for 2024. Now we do, and the picture for EV sales data doesn’t look any better. For 2024, battery electric plus plug-in hybrid vehicles accounted for 9.9% of light-duty vehicle sales.

Source: Argonne National Laboratory

As a percentage of light-duty vehicle sales, EV sales increased by 109% in 2021, 55% in 2022, 39% in 2023, and EV sales only increased by 5% in 2024. EV sales grew, but not at a rate that suggests EVs will dominate light-duty vehicle sales.

In a world where consumers’ preferences reigned, this slowdown in EV sales wouldn’t matter. However, because the Biden administration tried to mandate EVs, EV sales really matter (at least until the Trump administration can end Biden’s EV mandates).  The Biden-Harris administration tried to mandate EV sales in multiple ways, but maybe the most important is EPA’s carbon dioxide emissions standards for light-duty vehicles. Below are EPA’s projected penetration rates of battery-electric vehicles plus plug-in hybrids (Table 75 here). It shows that by 2027, if companies complied with the rule, it would require that battery electric and plug-in hybrids make up 32% of all light-duty vehicle sales and, by 2032, 68% of all light-duty vehicle sales.

Source: EPA

The graphic below shows one possible path for EVs to reach 32% of sales by 2027—an increase in EV sales of 36% every year from 2023 to 2027.  Now we have the full-year sales data for 2024; EV sales only grew by 0.5%—nowhere close to the needed 36%.

Source: Data sourced from Argonne National Laboratory & EPA

There was never a legitimate path to achieve Biden’s EV mandate without forcing millions of American families to buy EVs when they would prefer gas-powered vehicles.  Now is the time for the Trump administration to roll back the mandate and allow American families to buy the vehicles that work best for their situations, not the vehicles environmental activists want to force people to buy.


*This piece was originally published by the Institute for Energy Research.

Key Votes YES on Energy Policy Nominees

The American Energy Alliance supports the nominations of Lee Zeldin for EPA Administrator, Doug Burgum for Secretary of the Interior, and Chris Wright for Secretary of Energy. All of these leaders share a vision for energy dominance and economic growth. Their dedication to prioritizing domestic energy production and addressing regulatory burdens will serve to spur job creation and strengthen our economy. 

One of the largest hurdles to affordable, reliable energy is our burdensome regulatory framework. Lee Zeldin understands the challenges that come with trying to innovate in a space that discourages practical solutions. His leadership at the EPA will bring the fresh perspective that is so desperately needed.

With his expertise and leadership, Chris Wright is the right person for the job. Over the past decade, Wright has led the way making the moral case for energy development, recognizing the link between economic growth and environmental progress. He is a champion for reliable, affordable energy and the role it plays in ensuring American prosperity and improving people’s lives in the developing world. His approach challenges conventional thinking while remaining firmly rooted in real-world solutions.

Doug Burgum hails from one of the largest energy-producing states in the country and knows what it takes to get the job done. As Governor of North Dakota, he has overseen one of America’s great energy growth stories and his perspective will be valuable as we work to grow American energy production. 

A YES vote on each of these nominations is a vote in support of free markets and affordable energy. AEA will include these votes it in its American Energy Scorecard.

Global Energy Markets Respond To Trump’s Energy First Agenda

The Energy Information Administration (EIA), in its January Short-Term Energy Outlook, is forecasting global oil prices (Brent crude oil) in 2025 to average $74 per barrel, falling to $66 per barrel in 2026. That is down from an average of $81 per barrel in 2024, or 8% lower in 2025 and 11% lower in 2026. The EIA forecast contrasts with Citibank’s lower price forecast for this year of $67 a barrel, which it raised from a previous forecast of $62 per barrel due to geopolitical risks centered on Russia and Iran. According to Reuters, Citi said the timing and nature of President Trump’s actions regarding Iran and Russia could be defining features of the oil market and pricing during 2025. The lower oil price forecasts result in lower expected gasoline prices, which EIA sees averaging $3.00 per gallon in 2026. Under Citi’s oil price forecast, that level will be reached sooner.

The lower expected oil price forecast is due to the expectation that global oil production will grow more than global oil demand. EIA expects strong growth in oil production outside of OPEC+ and an increase in oil production by OPEC+, but less than the group stated in its most recent production target to avoid significant inventory builds. This results in a significant surplus of oil production capacity in OPEC, as depicted in the graph below.

Source: EIA

Growth in global oil production over the last two years has been led primarily by countries in North and South America, especially the United States, Canada, Guyana, and Brazil, which have increased their total liquid production by 1.1 million barrels per day in 2024. EIA expects that they will increase their production by an additional 1.0 million barrels per day in 2025 and 0.9 million barrels per day in 2026. EIA expects total global production of liquid fuels to increase by 1.8 million barrels per day in 2025 and 1.5 million barrels per day in 2026. Argentina is also a nation to watch, as its oil production is increasing rapidly under business-friendly President Javier Milei. They are soon expected to surpass Colombia in production in South America.

Source: EIA

EIA expects global oil consumption growth to be less than the pre-pandemic trend. Global consumption of liquid fuels is expected to increase by 1.3 million barrels per day in 2025 and 1.1 million barrels per day in 2026, driven by consumption growth in non-OECD countries, particularly in Asia, where India is now expected to be the leading source of global oil demand growth. Citi’s lower oil price forecast in 2025 than EIA’s forecast is based on an oil supply surplus of 0.8 million barrels per day, larger than EIA’s expected surplus of 0.5 million barrels per day. China is reducing some of its demand for oil by mandating purchases of electric vehicles, for which they control global supply chains.

Source: EIA 

EIA expects U.S. oil production to increase to 13.5 million barrels per day in 2025, higher than the record in 2024 of 13.2 million barrels per day, and then average 13.6 million barrels per day in 2026 as oil operators slow production due to lower expected oil prices. Operators are expected to reduce the number of active drilling rigs as oil prices fall. EIA expects WTI prices to average $62 per barrel in 2026, down from $70 per barrel in 2025. The Permian region’s share of U.S. oil production is expected to continue to increase, accounting for more than 50% of all U.S. oil production in 2026. This increase is expected to be offset by contraction in other regions’ production.

Uncertainty Over OPEC+ Oil Production 

OPEC+ producers agreed to their first round of reduced oil production targets and additional voluntary production cuts in April 2023 due to growing global oil inventories and falling oil prices that year. The latest agreement in December 2024 shifted the timeline for relaxing some of these cuts into 2026. Based on the expectation that oil production will continue to grow outside of OPEC+, it is uncertain whether OPEC+ members will continue adhering to lower production targets while countries outside of the group increase production and put downward pressure on oil prices. If the production cuts see diminishing returns relative to their impacts on oil prices and export revenue, the potential for dissent within OPEC+ could increase, leading some members to increase production unilaterally.

Geopolitical instability continues to pose a risk to oil production from various OPEC+ nations. Although oil shipments from the Middle East have not been directly impacted by conflict so far, ongoing tensions and recent unrest in Syria could escalate the threat to supply. Furthermore, upcoming policy actions by G7 countries, particularly concerning sanctions on OPEC+ members like Russia — such as the latest sanctions imposed — introduce additional unpredictability into the OPEC+ outlook.

Conclusion

The EIA and Citibank are both forecasting lower oil prices this year, resulting in lower gasoline prices. EIA expects oil production from non-OPEC and OPEC+ producers to increase in 2025 and 2026 and outpace demand increases, resulting in lower prices. Citi expects a larger supply glut than does EIA in 2025, resulting in a lower oil price forecast. There are significant uncertainties embedded in both forecasts from the geopolitical situation in the Middle East and the Russia-Ukraine war with the associated sanctions that could easily change the forecast, which is why EIA updates its short-term forecast monthly.


*This article was adapted from content originally published by the Institute for Energy Research.

IER Unveils Blueprint For Unleashing American Energy

As the Trump administration settles into a their first week in office the Institute for Energy Research, AEA’s sister organization, released The American Energy Blueprint. This report serves as a comprehensive set of policy recommendations to guide the new Trump administration’s approach to energy policy.

The American Energy Blueprint outlines key reforms in areas such as federal land and water use, expanding consumer choice, reducing subsidies, curbing government spending and taxation, streamlining regulations, and modernizing the permitting process.

The full Blueprint is available for download here, and can be viewed below:


Federal Lands and Waters

The Biden administration launched an unprecedented attack on energy development on federal lands. From restricting land use to slowing or halting permitting approvals and raising fees, the administration did seemingly everything to make energy development on federal lands more difficult and more expensive as part of its pledge to “end fossil fuels.” The Trump administration should take swift action to reverse these actions and Congress should update statutes to ensure such abuse cannot happen again in the future.

Source: Bureau of Land Management

Administrative Actions:

  • Reverse restrictive Biden actions in ANWR and NPR-A, and revoke other Alaska land-use limitations on energy and minerals. Alaska is over twice the size of Texas; two-thirds of it is federally owned and 86% of it is inaccessible by road.
  • Reverse the illegal denial of an access road to Alaska’s Ambler Mining District, one of the U.S.’s most potentially prolific sources of valuable rare earth minerals.
  • Bureau of Ocean Energy Management should proceed with Lease Sale 262 in 2025, as planned, and create a new, more comprehensive Outer Continental Shelf (OCS) five-year leasing program, including at least two lease sales per year in the Gulf of Mexico (GOM). With the current OCS five-year leasing program under litigation, the administration should request a voluntary remand to resolve all pending petitions.
  • Release a new offshore leasing plan.
  • Approve permits for new mines.
  • Executive order to reconsider all Biden administration decisions on land withdrawals from energy or mining leasing.
  • Reverse the Biden actions requiring higher fees and costs for production in certain areas.
  • Review, reverse, and shrink Biden Obama-era national monument designations.

Additional resources from IER:

Legislative Actions:

  • Turn mismanaged federal lands over to the states and look for opportunities to privatize them.
  • Antiquities Act reform: Require monument designations to be approved by Congress, not by a unilateral presidential act.
  • Repeal Inflation Reduction Act (IRA) provisions increasing costs of production on federal lands.

Additional resources from IER:


Consumer Choice

The American people have the right to choose the consumer products that best fit their needs and budgets. However, the Biden administration aggressively sought to restrict the types of durable goods, such as cars and appliances, that are available for sale. This burdens consumers with higher costs and often forces them to purchase inferior products. The new administration must quickly withdraw these rules that unlawfully restrict consumer choice, while Congress should work diligently to repeal or reform the underlying legislation that enabled the abusive rulemaking.

Source: The American Action Forum

Administrative Actions:

  • Reconsider and repeal the EPA’s tailpipe emissions rules for all vehicle classes.
  • Reconsider and repeal the 2027-2032 CAFE standards.
  • Revoke the California waiver: revoke the ACC I waiver and deny the ACC 2 waiver (or CRA).
  • Deny or withdraw other unlawful California waivers that have been requested or granted (trains, trucks).
  • Reconsider the Biden administration’s excessive appliance standards on gas stoves, home heating, furnaces, dishwashers, and other appliances. Consider creating new product classes to ensure that important appliance features have not been lost through the imposition of over-strict regulations.
  • Executive Order: Ban any agency action that prohibits or substantially limits energy by targeting any one particular source, absent direction from Congress.

Additional Resources From IER:

Legislative Actions:

  • Repeal the Corporate Average Fuel Economy Standards.
  • Repeal the Renewable Fuel Standards.
  • Repeal Appliance Efficiency Standards.

Additional Resources From IER:


Subsidies and Spending

The Biden administration, with the help of Congress, engaged in an unprecedented spending binge in the energy policy space. Subsidies were created en masse for favored products and energy sources, slush funds were created to subsidize left-wing activism, spending prioritized political activism over scientific research, and tax rules were bent to hand out even more money than Congress authorized. These actions are exploding deficits and distorting energy markets, creating a death spiral of subsidization that threatens their resiliency. Where possible, the administration should halt this spending by agency action, and Congress must follow up by repealing the trillions of dollars of subsidies that were passed, particularly in the misnamed Inflation Reduction Act.

Administrative Actions: 

  • Replace Treasury guidance for IRA credits to enforce the content requirements passed by Congress.
  • Halt and review all of the Department of Energy loan programs.
  • Revoke and rescind the U.S. International Climate Finance Plan.
  • Halt funding for Department of Energy awards that were not “awarded” by the inauguration.
  • Halt all climate bank contributions.
  • Halt green group slush funds and environmental justice initiatives that were created during the last administration.
  • End the American Climate Corps.
  • Review all power purchasing agreements the federal government has negotiated under the Biden administration and review to ensure federal facilities are not paying above market rates.
  • Executive order: Provide guidance on research funding. RCP 8.5 or similar extreme scenarios should not be used in projects that receive federal research dollars.
  • Executive order: All federally funded research must be made available free to the public and underlying data and models must be made available for review.
  • Review Treasury and IRS guidance on repowering rules for renewable tax credits.
  • Eliminate the Department of Energy Clean Energy Corps and other agency Climate Corps initiatives (American Climate Corps).
  • Conduct an audit and oversight of money distributed by the Biden administration to political and activist groups.
  • Direct the Energy Information Administration to update and publish the discontinued report: Federal Financial Interventions and Subsidies in Energy.

Additional Resources From IER:

Legislative Actions: 

  • Repeal Inflation Reduction Act’s tax credits.
  • Provide guidance to the Federal Reserve to clarify that integrating climate scenarios into their analysis is outside of the Institution’s mandate.
  • Clawback the IIJA and Chips and Science spending (EV charging, research spending, etc).

Additional Resources From IER:


Taxes and Regulation

The Biden administration regularly bragged about taking an “all-of-government” approach to controlling energy policy through every possible regulatory avenue. The new administration must take a similar “all-of-government” approach to reversing the legacy of damage and market distortion.

Source: QuantGov

Administrative Actions:

  • Withdraw from the Paris Agreement under the United Nations Framework Convention on Climate Change.
  • Withdraw the EPA’s methane rule.
  • Withdraw the EPA’s power plant rules.
  • Provide Jones Act waivers for the transportation of liquified natural gas.
  • Review the EPA’s National Ambient Air Quality Standards (especially ozone).
  • Ensure that the global effects of a rule, regulation, or action are reported separately from its domestic costs and benefits.
  • Revoke Executive Order 14030 of May 20, 2021, on climate-related financial risk.
  • Make clear that the SEC, Treasury, Comptroller of Currency, CFTC, or any other financial regulator may not take action to discriminate against the production or use of any energy source, or take other climate-related actions, without express direction from Congress.
  • Revoke all executive orders establishing an environmental justice framework in the federal government.
  • Withdraw Biden administration’s social cost of carbon.
    • Or reform to use a 7% discount rate.
  • Review and reconsider the EPA’s endangerment finding for carbon dioxide emissions.
  • Withdraw Biden CEQ NEPA regulations.
  • Take regulatory action to match the Waters of United States definition outlined in the Sackett decision.
  • Executive order directing all agencies to eliminate any environmental justice requirements from any regulations, contract tendering, employment, etc.
  • Executive order eliminating all energy and climate mandates in federal procurement and contracting.
  • Repeal the EPA’s “good neighbor” rule that threatens energy infrastructure. Since the rule is currently under litigation, it should be suspended while the agency works to repeal it.
  • Withdraw Biden A-4 circular update.
  • Withdraw from Biden methane pledge.
  • Review endangerment findings for CO2.
  • Withdraw the Department of Labor rule on ESG investing with retirement accounts.
  • Executive order: Review EPA greenhouse gas reporting program.
  • Review the Commodity Futures Trading Commission’s “Green Guide” classification of carbon credits.
  • Executive order: Suspend all agency climate action plans pending reviews and cost-benefit analysis.
  • Exempt crude oil, natural gas, and energy-intensive critical supply chain inputs from across-the-board tariffs to maintain the administration’s goal of preserving American energy dominance.
  • Extend all existing petitions and expedite any future petitions for Section 232 tariff exclusions for products critical to the oil and natural gas industry that cannot be sourced domestically to meet the required procurement specifications.

Additional Resources From IER:

Legislative Actions:

  • Repeal the methane tax.
  • Pass the REINS Act.
  • Reform NRC, and appoint commissioners, so that new nuclear generation has a regulatory path consistent with development, not obstruction.
  • Reduce the corporate tax rate below 20%.
  • FOIA reform:
    • Reform the Foreseeable Harm Standard – Federal agencies often cite the “deliberative process” privilege to redact substantial information from public records. Congress can improve this standard by mandating that agencies consider specific factors when evaluating potential harm from disclosure.
    • Ensure systematic preservation and searches of text messages, emails, calendars, and other communications.
    • Subject government contractors to FOIA when they are engaged in public functions.
    • Prevent infinite delays by consults.

Additional resources from IER:


Permitting Reform

It is far too expensive and time-consuming to build just about anything in America, but energy infrastructure and development are particularly difficult. The Biden administration exacerbated this by throwing up every administrative hurdle they could conceive. Reversing the Biden administration’s actions is immediately necessary, but Congress must also undertake some serious work to reform the statutes that govern the permitting process.

Source: Office of former Speaker Kevin McCarthy

Administrative Actions: 

  • Appoint FERC commissioners that will withdraw the proposed pipeline rule and transmission rule.
  • Resume permitting approvals for LNG exports.
  • The Army Corps of Engineers should complete its environmental review for the Line 5 project in Michigan and grant the project a permit to proceed.
  • Review permitting requirements for new and expanding refineries.
  • Reform the water permitting process to make clear that state input cannot be an automatic veto.

Additional Resources From IER:

Legislative Actions: 

  • National Environmental Policy Act (NEPA) reform:
    • Repeal the Biden administration’s NEPA Phase 1 and Phase 2 rulemakings and replace them with updated guidance consistent with economic growth and the rule of law.
    • Recognize that the White House Council on Environmental Quality (CEQ) does not have the statutory authority to create binding NEPA regulations for other federal agencies.
      • Rescind CEQ’s NEPA regulations wholesale and rely on the individual agencies to individually promulgate NEPA regulations as may be required.
    • The consideration of the Social Cost of Carbon analysis is inappropriate and should not be used in the development of environmental documents under NEPA.
    • Remove controlled burns on federal lands from the list of major federal actions for NEPA.
  • Endangered Species Act (ESA) reform:
    • Clarify that habitat modification is not the “taking” of a species under the ESA. The ESA defines “take” to mean “harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect, or to attempt to engage in any such conduct.” That should be the definition and not adverse habitat modification. ESA should be for species protection, not to control land use.
    • The Fish and Wildlife Service should repeal the FWS-NMFS regulations on “foreseeable future” (Section 4), “critical habitat” (Section 7), and the blanket application of the Section 4(d) rule.
  • Eliminate the need for cross-border permitting for pipelines.
  • Litigation reform (standing, payment of court fees).
  • Review permitting requirements for new/expanding refineries.
  • Reform the water permitting process to make clear state input cannot be an automatic veto.
  • Revoke Interior Secretary Order 3398 reinstating American Energy Dominance as a national goal.

Additional Resources From IER:


Conclusion

IER’s recommendations are grounded in several core principles:

Free Markets: History has demonstrated that private property rights, market competition, and the rule of law are essential to providing affordable energy, enhancing living standards, and fostering a cleaner environment.

Objective Science: Public policy, especially in the realm of environmental issues, should be driven by objective, evidence-based science, rather than emotional appeals or speculative scenarios that often lead to counterproductive government interventions.

Public Policy Tradeoffs: Policies that aim to address market failures in the energy sector must also account for the potential for government failure. It is critical to recognize that government actions, influenced by politics and bureaucracy, rarely mirror the idealized outcomes envisioned by policy advocates.

Efficient Outcomes: Policy decisions should consider the interests of energy consumers, producers, and taxpayers in a balanced and efficient manner, seeking outcomes that benefit all stakeholders.

Impartial and Unbiased: Government policies should be transparent, simple, and technology-neutral. This approach will encourage investment in the energy sector and drive innovation

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Prepared by Kenny Stein, Vice President of Policy | [email protected]

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Download The Full American Energy Blueprint Here

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