The Economic Benefits of Unleashing American Energy

Executive Summary

The United States has abundant energy resources and is one of the top energy producers globally. In 2023, it was the world’s leading producer of petroleum, natural gas, and nuclear power. It also holds the largest estimated coal reserves and is the top exporter of dry and liquid natural gas. This abundance of energy and natural resources, paired with economic policies that promote the energy sector’s growth and support competition, can meaningfully contribute to economic growth, consumer welfare, and national security. However, total U.S. energy production has not always reflected this resource wealth. Electricity production, for example, has been fairly stagnant over the past 20 years and the grid needs substantial investment to handle rising power demand and a shift to more intermittent generation sources. As U.S. energy needs increase in the presence of increasing domestic reshoring of manufacturing as well as growing artificial intelligence (AI) and data processing capabilities, the United States needs to expand its energy output while ensuring that its energy goals are met without excessive regulations.

The Trump Administration has made unleashing American energy one of its priorities in a broader agenda aimed at strengthening the economy and bringing down the cost of living. The administration has already taken important actions to support energy dominance, stimulate domestic energy production, and reduce costs. These actions include reforming burdensome regulations, reducing review and approval timelines for permits, resuming federal lease sales for energy development, issuing permits for new Liquefied Natural Gas (LNG) export terminals, supporting advanced nuclear technology development and knowledge transfer, modernizing and securing the electricity grid, and streamlining funding decisions, among others.

We estimate that policies which support American energy dominance could raise GDP by at least 0.56-1.90 percent by 2035, or 0.31-1.23 percent without deregulation effects. Specifically,

• Removing restrictions on commingling in offshore oil reservoirs could increase GDP by 0.03-0.13 percent by 2035
• Increased production from federal lands could increase GDP by 0.025-0.11 percent per year
• Increased LNG exports could raise GDP by at least 0.03 percent by 2035
• Removing excess regulation could increase GDP by 0.25-0.67 percent or more by 2035