Liberating America: Overcoming Energy Scarcity and Inflation

BY GRANT DEVER, Resident Fellow, Foundation for Research on Equal Opportunity


America’s present and future prosperity requires access to an abundance of affordable and reliable energy. The cost of energy directly impacts the competitiveness of American industry, particularly manufacturing and other sectors that are energy intensive. High electricity prices erode the household budgets of American families and reduce their ability to purchase goods and services, save for retirement, or invest in entrepreneurial ventures.

America is fortunate to have not only an abundance of natural resources but also the human and financial capital necessary to use them efficiently and innovatively. It is critical that the United States pursue an energy agenda that will enable all Americans to benefit from the growth of new industry, from the innovations in energy production and transmission, and from an abundance of reliable and affordable power.

Investors throughout the world are seeking opportunities to invest in sectors that are energy intensive. You cannot open a newspaper without reading about semiconductors, artificial intelligence, Bitcoin, hydrogen, defense industries, aerospace engineering, small modular nuclear reactors, or the opportunity to restore critical industries to create more secure supply chains. All these industries require access to electricity and heat at a competitive price. While there are many reasons for businesses to be located in the United States, the global competitiveness and success of any of these companies will be greatly influenced by their energy costs. Greater investment in these industries and demand for the goods and services they provide will lead to far greater demand for energy than in prior years.

A recent report by Grid Strategies estimates that demand for power in the United States is set to grow 0.93 percent annually over the next five years, 81 percent faster than was forecasted a year ago.1 The bulk of this increase is driven by investment in new manufacturing capacity and data centers. If the United States pursues an agenda of energy abundance, demand for electricity could exceed even those lofty predictions as American entrepreneurs build and grow businesses that can outcompete foreign competitors saddled with higher energy costs.

Sadly, that vision is contrary to our nation’s recent experience: the United States has endured anemic growth in electricity demand over the past two decades. Thankfully, gains in energy efficiency were sufficient to offset the minimal new demand with only modest investments in new and updated production.

Although electricity demand may have been stagnant, the supply of new regulations for energy infrastructure projects has continued without pause. For the United States not only to meet projected demand but also to capitalize on opportunities at the cutting edge of technological development, significant regulatory reform is essential. Failure to advance reasonable reforms will impair the competitiveness of American industry, leave the United States vulnerable to geopolitical rivals, discourage investment in domestic industry, and lead to higher prices and greater reliability concerns. The decisions made by lawmakers at this pivotal time in history will determine the trajectory of American prosperity for the coming decades.

The Positive Sum Game of Innovation and Competition

Americans can have access to reliable, affordable power while decreasing our emissions and advancing the United States’ geopolitical strategy. This is no theoretical claim; it is a reality of the Shale Revolution.

In 2020, the president’s Council of Economic Advisers (CEA) found that the gains in productivity since the outset of the Shale Revolution led to lower prices for natural gas, electricity, and oil.2 These cost-cutting innovations save the average family of four $2,500 annually. These savings have been particularly pronounced for the bottom quartile of households, as an estimated 6.8 percent of their income is spent on energy. The CEA also found that the productivity gains during the Shale Revolution reduced the domestic price of natural gas by 63 percent and led to a 45 percent decrease in wholesale electricity prices.

Competition and innovation in this sector directly translated into savings for American families and businesses. In 2005, the Energy Information Administration (EIA) estimated that natural gas production for the lower 48 states would rise to 19 trillion cubic feet by 2018; however, by 2018, American natural gas production had instead risen to 30 trillion cubic feet. This represents an abundance by any measure, and it has been much cheaper than analysts expected. Similarly, the EIA had also estimated that annual carbon dioxide emissions would rise by 16.5 percent from 2006 to 2018; instead, they declined by 12 percent annually! American innovation in the energy sector has led directly to lower electricity costs, lower emissions, and greater economic growth.

While there were initial federal investments in the research and development of shale, this investment played a limited role in the recent wild successes of the natural gas industry. A fair regulator y environment that enabled entrepreneurs and engineers to experiment resulted in increased competition and allowed companies to profit from their success. These are the conditions necessary to spur innovation and fuel American prosperity.

Nonetheless, the United States is now pursuing a top-down energy policy through the use of mandates and heavy-handed subsidies—like those in the 2022 Inflation Reduction Act (IRA).

The success of every power source in history has been rooted in its clear advantages over the power source it replaced. Coal outcompeted wood because of its greater energy density, availability, and superior industrial applications. Similarly, natural gas has begun to outcompete coal due to the flexibility of the generators, lower fuel extraction costs, and greater efficiency of its power plants. The IRA’s combination of mandates and subsidies has instead distorted investment in the energy sector by trying to pick winners and losers at the obvious expense of reliability and affordability for consumers.

The United States can meet its 21st century energy demands by pursuing federal regulatory reform that encourages greater innovation and competition. The price of electricity can go much lower, and the nation’s electrical grids can again become the envy of the world. America’s overall electrical grid can be a bulwark for the present and an inheritance for our descendants to meet the challenges of their time. Correspondingly, the Shale Revolution can be only the beginning of a grander story of energy abundance and opportunity if lawmakers allow the freedom of entrepreneurs and engineers to compete to discover the best solutions to meet our energy needs. American citizens will have access to new high-paying jobs in the energy and manufacturing sectors. Effective federal regulatory reform will lower energy costs, reduce the cost of living for Americans throughout the country, and increase the competitiveness of American industry.

The Lower Energy Costs Act

At the start of the 2023 congressional session, Republicans put forward H.R. 1, the Lower Energy Costs Act (LECA). A few minor reforms from this bill were included in the 2023 Fiscal Responsibility Act. However, Congress has refused to advance broader permitting and energy regulatory reform, despite bipartisan agreement that our current energy infrastructure and regulations are unsatisfactory. The provisions in the LECA would improve the competitiveness of American industry by streamlining permitting reform, opening access to critical minerals and resources, and removing red tape that prevents the development of critical infrastructure projects.3 All these changes would make it easier to build new energy projects and increase private sector investment in manufacturing capacity without resorting to market-distorting subsidies that fuel debt, bureaucracy, and wasted resources.

The regulatory reforms in H.R. 1 would profoundly impact Americans by lowering their energy costs, creating new jobs, and raising their incomes.4 Analysis from The Heritage Foundation indicates the LECA would reduce the energy costs of the average American household by $795 annually. This would provide significant relief for American consumers and businesses, particularly after the burdensome inflation they experienced in 2022. The Heritage Foundation also estimates that the average household income would increase by $2,850 per year, or nearly four percent. The legislation would fuel new capital investment and industrial growth and create more than 667,000 jobs while raising the median worker’s wages by $564. In aggregate, these regulatory changes would increase GDP by $379 billion per year and reduce the deficit by $369 billion over 10 years. This last advantage is particularly important, as US debt has risen to more than $34 trillion. Interest payments alone are estimated to total $870 billion in 2024 due to continued deficit spending and higher interest rates.5

Oil and Gas Leasing

The United States has an abundance of natural resources, including natural gas and oil. Oil and natural gas are critical to the prosperity of America and the broader world. In 2022, 39.9 percent of all electricity in the United States was generated using natural gas, and another 20.5 percent came from coal and other fossil fuels.6 In certain localities, natural gas constitutes a much larger share of total power generation. For example, 95 percent of all electricity generated in downstate New York, which includes New York City, comes from natural gas. Fossil fuels are necessary to power most cars, and they are vital to trucks, trains, planes, and ships transporting American goods domestically and globally. The price of these commodities is so critical to the well-being of Americans that the Biden administration has temporarily reduced sanctions on Venezuela7 and released oil from the Strategic Petroleum Reserve to expand its available supply.8 Until superior products replace our demand for fossil fuels, federal regulations and operations that unnecessarily prevent the development of new leases for gasoline and oil simply encourage investment abroad—ironically, away from reasonable regulations that minimize harm to workers and the environment.

H.R. 1 would allow for greater opportunities to lease oil and gas on federal lands but would also provide increased congressional visibility into auctions and granted permits. The LECA would reduce the timeline for leasing permits and stop excessive litigation that delays permit approvals. The Department of the Interior (DOI) would be compelled to resume lease sales on federal onshore lands and hold at least four lease sales per year in states with eligible lands. The DOI would also be required to hold a minimum of two oil and gas lease sales per year in the Gulf of Mexico and in the Alaskan region of the Outer Continental Shelf. These reforms to federal land leasing would increase oil and gas production, encourage investment in critical energy infrastructure, and lower energy costs for American consumers and businesses—which, in turn, would fuel greater capital investment and industrial growth.

National Environmental Protection Act Reform

The National Environmental Protection Act (NEPA) requires federal agencies to analyze the potential environmental impacts of a project before issuing a permit. This most often requires the creation of an Environmental Impact Statement (EIS) and an Environmental Assessment (EA). These reports are used to assess the ecological impacts of a proposed project. In practice, NEPA has become a bureaucratic barrier to desirable and necessary infrastructure and energy projects: NEPA has significantly raised the costs of innumerable projects and discouraged many firms from even pursuing permits. In 2016, an average NEPA process consumed more than five years. Timelines like these deter investment in large projects with significant upfront capital expenditures; extraordinary delays, particularly as interest rates rise, can destroy a project’s budget. Moreover, when projects are completed, they are more expensive than they need to be, forcing consumers and businesses to pay more for goods and services.

NEPA does more harm than good, killing industry innovation to pursue ambitious projects that spur economic growth. NEPA even reduces investment in, and hinders the development of, projects that would decrease pollution, reduce aggregate land use, or promote other clear environmental benefits. Simply stated, NEPA is a barrier to the development of renewables, new nuclear power, geothermal power, high voltage transmission projects, and other energy infrastructure opportunities that would promote capital investment and industrial growth through lower energy costs.

Since H.R. 1 was put forward, some of its provisions were enacted into law under the 2023 Fiscal Responsibility Act (FRA).9 One win is that EIS and EA lengths are capped. In 2018, the median length of a final EIS was 447 pages. Today, the reports in most circumstances are capped at 150 pages, but in exceptional cases, they cannot exceed 300 pages. The FRA also requires a head agency to be designated if multiple federal agencies participate in the NEPA process for a given project, sets a deadline for them to respond, and mandates reporting to Congress to improve transparency of the process. While these changes were a small step forward, they highlight the potential for greater regulatory reform that can ensure Americans have access to the robust and safe energy infrastructure they need to prosper.

The remaining NEPA- centric provisions in the LECA would help to further streamline these processes. Under the LECA, certain low-impact activities, and activities in previously studied areas on public lands, would not be considered “major federal actions” and therefore no longer require NEPA review. This would make it much easier for businesses to conduct maintenance of existing projects and to seek new opportunities on lands that have already been assessed, reducing unnecessary paperwork and bureaucracy. The LECA would also impose a 120 – day deadline for agencies to initiate litigation under NEPA authority. Additionally, it sets a one-year limit for NEPA review of EAs and a two-year limit to review EISs. These improvements would significantly reduce project risk by creating a measure of project certainty within NEPA processes. Clear deadlines will allow project managers to plan better and allocate scarce resources.

NEPA is difficult to understand. Its processes are bureaucratic and fixated on project minutiae. Process complexity has increased dramatically over time in ways that materially harm Americans: deterred and deferred investment in critical energy infrastructure raises costs for everyone. These simple reforms to NEPA have the potential to unlock new opportunities for nuclear power, geothermal energy, oil and gas renewables, and hydropower.

Without NEPA reform, an abundance of reliable electricity at affordable prices cannot happen.

A Resilient, Critical Mineral Supply Chain

The United States needs reliable access to critical minerals that are essential to the development and maintenance of America’s power systems. Critical minerals are vital for the manufacturing of everyday goods like cellphones, computers, and automobiles. These materials are also necessary for the production and maintenance of military technologies. The COVID-19 pandemic, the Ukraine war, and the present disruptions to international trade in the Middle East have combined to expose noteworthy vulnerabilities in our nation’s supply chains. The possibility that the United States could be cut off from access to critical minerals, and thus associated processing and refining capacities, is a threat to public health, the economy, and national security.

As of 2022, China is responsible for 63 percent of total rare earth mineral mining, 85 percent of processing, and 92 percent of rare earth magnet production.10 China also controls most of the market for processing and refining cobalt, lithium, rare earths, and other critical minerals.11 A bipartisan bill introduced in the Senate included the following:

. . . in 2022, the United States was 100 percent import reliant for 12 out of 50 critical minerals and more than 50 percent import reliant for an additional 31 critical mineral commodities classified as “critical” by the United States Geological Survey, and the People’s Republic of China was the top producing nation for 30 of those 50 critical minerals . . .12

The United States has the natural resources and the talent to onshore the mining, processing, and refining of these minerals.

The LECA would help to support domestic mining by streamlining the mining permitting process for critical minerals on federal lands. It would amend the 2015 Fixing America’s Surface Transportation Act to include mining as a covered activity. This would create a single point of contact in the federal bureaucracy for a project undergoing a NEPA review, establish clear timelines to reduce project uncertainty, and require concurrent review for projects in which various agencies participate in the process. It would also reduce legal uncertainty by limiting the NEPA-related litigation to specific circumstances in which a project poses an “imminent and substantial environmental harm.”13 Last, the LECA would designate uranium as a critical mineral, creating new opportunities in the American nuclear industry.

These regulatory changes will encourage investment not only in mining but also in processing and refining. To decrease our critical mineral dependence, the United States needs to develop certain refining and processing capacities to match Chinese capabilities, particularly the refinement of rare earth elements, lithium, cobalt, and graphite. Taken together, these changes would create new opportunities for American companies to explore, mine, refine, and process critical minerals. In turn, improved access and unencumbered development opportunities will promote significant industrial investment in manufacturing chips, cellphones, computers, and automobiles. All Americans would benefit.

The American Nuclear Renaissance

The electrical grid in the United States has struggled under the weight of onerous, top-down policy. Texas, New York, and California, states that disproportionately rely on intermittent energy sources, have experienced rolling blackouts and disastrous grid failures. In 2021, Winter Storm Uri led to hundreds of deaths and the near total failure of the Texas grid. In 2022, Winter Storm Elliott caused a nearly catastrophic failure of New York City’s local natural gas distribution network.14 In the heat of 2023, California averted severe rolling blackouts because an abundant snowfall the prior winter enabled above-average output from the state’s hydroelectric power plants. What is the root cause of these parallel problems? These three states do not have adequate reliable baseload power, so they routinely risk operating with thin or negative margins during extreme weather events.

American nuclear power can help to solve the growing reliability crisis. The fundamental physics behind nuclear power should enable power plants to compete alongside natural gas and coal. While the most recent builds in the United States have been expensive, building a nuclear power plant does not have to be. The first nuclear plants built in the United States were built with overnight capital costs of $1,000 per kilowatt capacity and generated electricity for less than three cents per kilowatt hour, in 2020 dollars.15 Recently, the South Korean energy company, KEPCO, built a new nuclear power plant for $2,000 per kilowatt of capacity, which is cheaper than a combined cycle natural gas plant with carbon capture and storage.16 The problem is not with the technology but with a regulatory environment that has led to industry stagnation. Since the creation of the Nuclear Regulatory Commission (NRC) in 1974, only two new nuclear reactors have gone from the start of the permitting process to successful operation. That is a half century of failure to deliver a regulatory framework that enables the American nuclear industry to provide an abundance of safe, affordable, and reliable power for the American people. The costs of this failure are obscured yet all around us in the form of grid unreliability, higher energy costs, and lower economic growth.

Today, numerous advanced nuclear reactor companies are developing designs and seeking approval from the NRC. However, other American-led companies have instead sought opportunities abroad in order to avoid the United States’ hostile regulatory environment. The United States should be leading in the development of these cutting- edge technologies. American- led companies choosing to start operation abroad rather than at home is a clear signal that serious reform is necessary. The House Subcommittee on Energy, Climate, and Grid Security has considered several bills that would help to address the self-limiting regulatory burdens within the American nuclear power industry. Many of these bills, including each of the bills described in the following paragraphs, were included in the Atomic Energy Advancement Act, which passed the House of Representatives on February 28 of this year.

The NRC must collect fees from applicants applying for new designs to help offset the cost of the agency. In practice, this has significantly reduced the number of applicants seeking approval, as the agency charges $300 per hour to review applications. NuScale, the only company to receive approval for their small modular reactor design, spent $500 million to prepare its application.17 Despite approval receipt, NuScale remains years away from an operational, revenue-generating power plant. There are two pieces of legislation under consideration within the House to help reduce these types of burdens.

The first, the Advanced Reactor Fee Reduction Act, would reduce the fees that a company pursuing an advanced nuclear reactor license must pay—and the fees the NRC must collect. It would encourage companies to engage in pre-application activities to save both company and agency resources while expediting the overall process. The second, the Advanced Nuclear Reactor Prize Act, would likewise support companies in pursuing new designs by covering the fees of the companies that are first to be licensed to begin operations in one or more of several different types of advanced reactors. These prizes will encourage more companies to apply and work to be the first in a category, rather than waiting for others to pave the way in the hope that the process becomes more efficient over time. Awarded prizes would, of course, help companies raise further capital and achieve profitability faster.

The House has also proposed two acts aimed at making approvals more efficient and giving the NRC the resources that it needs to achieve its mission. First, the Nuclear Licensing Efficiency Act would require the NRC to provide efficient, timely, and predictable reviews and proceedings for licensing and, at facilities where there is already an existing nuclear reactor, rely on information from the prior application, where appropriate, to streamline the approval of a second reactor at the same site. This change would particularly facilitate the growth of small modular reactors, as they are intended to be geographically aggregated to ease future scaling simply by adding more reactors. Second, the Modernize Nuclear Reactor Environmental Reviews Act would direct the NRC to submit a report and conduct rulemaking changes to facilitate efficient and timely environmental reviews for nuclear power plants. Under NEPA, this should help to accelerate the deployment of new reactors once they receive all the necessary permits and approvals from the NRC. However, as noted earlier, NEPA processes have proven prohibitive in the past. Reports and rulemaking that will expedite these processes could reduce uncertainty for investors and entrepreneurs.

One of the obstacles the NRC faces, even if it streamlines and refines its processes, is the small pool of talent it has to draw from. The stagnation of the nuclear industry has led to fewer young people joining the nuclear workforce. Further, many talented nuclear engineers are now of retirement age; at the NRC, around 24 percent of the workforce is 61 or older. The agency is currently growing, but it has historically struggled to attract and retain the quantity and quality of talent it will need to support a true American nuclear renaissance.18 A fifth House bill, the Strengthening the NRC Workforce Act of 2023, would authorize an exception to the Office of Personnel Management’s competitive hiring process for the NRC. It would allow the agency to recruit individuals more efficiently when there is a severe shortage of candidates to fill a critical NRC position, and it would allow the NRC to pay its people more, hire outside experts and consultants, and authorize bonuses. The NRC must have the tools to hire the experts it needs to conduct rigorous analyses of proposed designs and approve successful applications in a timely and predictable manner.

Many coal plants were shut down due to subsidies and regulations that distorted the energy market in favor of their competition. The shuttering of a power plant has devastating impacts on the local community, as people lose their jobs, the tax base shrinks, and electricity can become more expensive and less reliable. Nuclear energy development can revitalize areas where coal plants have been shuttered. Toward that end, the Nuclear for Brownfields Site Preparation Act would require the NRC to expedite necessary licensing and regulatory procedures to simplify the development of nuclear facilities at retired fossil fuel sites. These sites can be an ideal location for small modular reactors that can benefit from the existing infrastructure. Finally, the Advanced Nuclear Deployment Act would require the NRC to facilitate regulatory approval procedures for microreactors, which are anticipated to be used to provide reliable energy and promote economic growth in rural areas.19

The Path Forward

The demand for new technologies and cost-competitive heat and electricity will continue to rise, regardless of our nation’s policies. America’s existing energy infrastructure and critical mineral processing and refining capacities are insufficient to meet our present and future needs. To meet those demands, lawmakers must pursue relaxed permitting and other regulatory reform. The Lower Energy Costs Act and the House’s several nuclear energy bills serve as examples of effective reforms that will increase private sector investment, fuel economic growth, and reduce the deficit. Policy makers should embrace free-market principles to liberate the American energy sector.

However, the supreme barrier to the growth of America’s energy industry is excessive regulation. The United States has the natural resources, financial capital, and human talent to create a future of affordable, dependable, and abundant energy. Entrepreneurs and engineers have repeatedly proven themselves capable to solve the tough technical and business problems necessary to drive down the cost of energy, increase the competitiveness of American manufacturing, and significantly improve the quality of life for all Americans. The federal government needs to get out of the way.

Why would America’s leaders wish to crush American industry, leave American families vulnerable to energy inflation and severe weather events, and further our country’s dependence on our international geopolitical rivals—and even enemies? Now is the time for decisive action by our lawmakers to rein in the federal bureaucracy and create a regulatory framework that will allow businesses to compete and innovate to liberate Americans from the suffering of energy scarcity. The United States must pursue energy policies that will lower energy costs, spur economic growth, and preserve our national security.

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1 John D. Wilson and Zach Zimmerman, The Era of Flat Power Demand Is Over, Grid Strategies (December 2023),

2 Economic Report of the President: Together with the Annual Report of the Council of Economic Advisers, The White House (February 2020),

3 George P. Bush, David Winter, Grant Dever, “An Analysis of the Lower Energy Costs Act,” The Foundation for Research on Equal Opportunity, March 29, 2023,

4 Parker Sheppard, Richard Stern, and Kevin Dayaratna, “Policies in the Lower Energy Costs Act Will Lower Energy Costs and Increase GDP,” the Heritage Foundation, March 20, 2023,

5 “What Is the National Debt Costing Us?,” The Peter G. Peterson Foundation, February 9, 2024,

6 “U.S. Energy Information Administration, ‘Electricity in the United States,’” June 30, 2023, http;//

7 Ben Lefebvre, “Biden Eases Sanctions on Venezuelan Oil and Republicans Howl,” Politico, October 18, 2023,

8 Housley Carr, “Empty Spaces—The Strategic Petroleum Reserve Is Slowly Being Refilled. How Much Is Enough?,” RBN Energy LLC, December 21, 2023,

9 Grant Dever, “The Debt Limit Deal Shows Promise of Bipartisan Energy Reforms,” OPPBlog, July 20, 2023, deal-shows-promise-of-bipartisan-energy-policies/.

10 Xianbin Yao, “China Is Moving Rapidly Up the Rare Earth Value Chain,” Marsh McLennan, August 7, 2022, moving-rapidly-up-the-rare-earth-value-chain/#:~:text= Although%20it%20has%20only%20about,rare%20earth%20permanent%20magnets%20manufactured.

11 “Fact Sheet: Securing a Made in America Supply Chain for Critical Minerals,” The White House, February 22, 2022, in-america-supply-chain-for-critical-minerals/.

12 Intergovernmental Critical Minerals Task Force Act, bill/1871/text.

13 H.R. 1 – 118th Congress (2023-2024): Lower Energy Costs Act, H.R. 1, 118th Cong. (2023),

14 “Bone-Chilling,” Robert Bryce (blog), November 25, 2023,

15 Jack Devanney, “Nuclear Is Too Expensive,” Gordian Knot News, December 11, 2022,

16 Statista Research Development, “Planned Base Overnight Costs of New Electricity Generating Stations in the United States in 2023, by Major Technology,” Statista, October 26, 2023,

17 World Nuclear News, “NuScale SMR recieves US design certification approval,” September 1, 2020,

18 American Nuclear Sociey, “A One-on-One with NRC Chair Christopher Hanson,” YouTube, September 29, 2023, v=ThPIfFqeKRQ&t=20.

19 Office of Nuclear Energy, “The Big Potential for Nuclear Microreactors,” US Department of Energy, August 7, 2019,