The missing link in the US energy advantage: Connecting supply to demand

Recent geopolitical volatility in the Middle East has underscored just how quickly global energy markets can tighten, and how acutely Americans feel those shifts. The disruption to the Strait of Hormuz—one of the world’s most critical energy choke points—is a reminder that energy security depends not just on supply but on the ability to move it. 

Even before the latest conflict, rising energy costs were shaping both kitchen table conversations and political debates. During New Jersey’s statewide elections last November, 87 percent of voters said electricity costs are a problem. A national survey in February of this year found that nearly half of Americans believe that data centers, which require significant amounts of power, are emerging as a major political issue. Energy affordability is now front and center for voters.

The challenge is not supply. The United States is the largest energy producer in the world and is producing oil and natural gas at record highs. In fact, even during the largest energy disruption in a generation, in parts of the Permian Basin, production is so strong that natural gas prices have at times dipped below zero—with producers paying others to take it off their hands.

If supply is not the problem, is demand? Analysts point to artificial intelligence, data centers, and other sectors for ramping up electricity needs. But growing energy demand is a sign of economic strength, not a problem to be constrained. We have entered the Demand Decade—a period in which surging power needs driven by technology, industry, and national ambition should be met with confidence, not anxiety.

The real constraint is our inability to build the infrastructure that connects supply to demand. As Texas and North Dakota broke production records last year, the West Coast imported more than 400 million barrels of oil and upward of 127 million barrels of gasoline, diesel, jet fuel and other petroleum products from as far away as South America and Asia. And instead of sourcing abundant, affordable natural gas (LNG) from the Appalachian basin, every winter, parts of New England import more expensive liquefied natural gas from the Caribbean. 

The main culprit is our broken federal permitting system—an outdated, unworkable maze of bureaucratic barriers and litigation risks that thwart new projects at every stage.

It took more than a year longer to permit and build the 303-mile Mountain Valley Pipeline than the eight years it took to land a man on the Moon—240,000 miles away. And this is not just a pipeline problem. All energy sources face the same cycle of overlapping reviews, duplicative permits, and prolonged legal challenges.

If we don’t fix our permitting system, meeting growing energy demand will be difficult and the consequences will reverberate across our economy. The United States will risk losing its lead in technologies that will define the future—like artificial intelligence and advanced manufacturing—if we are not able to power them. Other countries are moving aggressively to build the infrastructure they need to compete. We can’t afford to stand still.

The consequences will extend beyond our borders. Our ability to export oil, fuels, and LNG advances core national interests, strengthens our allies, and helps stabilize the global market. US LNG has become a critical input for economies all over the world, but our ability to deliver it will depend on export infrastructure that can match demand. That stabilizing role has never been more important than it is today.

There is a clear solution—and a rare opportunity for both parties to work together. Comprehensive, technology-neutral permitting reform—made durable through bipartisan legislation—would turn this weakness into a strength. 

By passing bipartisan, comprehensive permitting reform, Congress can stop the carousel of endless reviews by forcing regulators to set firm and enforceable deadlines. They can reduce frivolous lawsuits by establishing clear guidelines for legal challenges. And they can streamline the permit-review process by updating old statutes with much needed clarity. 

Members of both parties support permitting reform. It’s time to get it done. Americans haven’t faced an energy moment this consequential in a generation, and every month of delay is a month our competitors build while we debate—and a month American families pay more than they should. The solution is within reach—if Congress chooses to act.

Supply is abundant and demand is growing. Permitting reform is the missing link.

The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

Image: Lengths of pipe wait to be laid in the ground along the under-construction Mountain Valley Pipeline near Elliston, Virginia, US, September 29, 2019. Picture taken September 29, 2019. REUTERS/Charles Mostoller