Unveiling the Financial Advantages of Unleashing U.S. Energy Resources
The United States, as one of the world's top energy producers in 2023, is poised to expand its energy output to meet the growing demands of domestic reshoring of manufacturing and the increasing need for AI and data processing capabilities. Over the past two decades, electricity production in the U.S. has remained stagnant, and the grid requires substantial investment to handle rising power demand and a shift to more intermittent sources.
According to a report by the White House Council of Economic Advisers, revitalizing domestic production of oil, natural gas, coal, and nuclear energy, coupled with regulatory reform and infrastructure investment, could raise the country's GDP by as much as 1.9% by 2035. This growth projection is based on policies such as resuming federal oil, gas, and coal leasing with regular lease sales and reduced royalties, replenishing the Strategic Petroleum Reserve, increasing LNG exports to replace foreign gas dependence, and modernizing electrical grids.
Deregulation plays a critical role in this growth strategy. Executive orders aim to remove "excess regulations," streamline permitting, and mandate sunset clauses on outdated energy regulations, thereby reducing barriers to production and infrastructure development. This supports economic growth and energy affordability.
Increased LNG exports and domestic energy production not only provide national security benefits but also offer consumer advantages. These benefits underpin the GDP gains, creating jobs and stimulating investment in energy and adjacent sectors. The broad estimated range (0.56% to 1.9%) reflects different modelling assumptions about the extent of policy implementation and market responses. The higher end (1.9%) aligns with aggressive policy deployment emphasizing all resource types and regulatory streamlining.
The Trump Administration has prioritized unleashing American energy as part of an economic strengthening and cost-of-living reduction agenda. The U.S. holds the largest estimated coal reserves and is the top exporter of dry and liquid natural gas. In addition, the administration has supported advanced nuclear technology development and knowledge transfer, modernized and secured the electricity grid, and streamlined funding decisions.
Actions taken by the administration to support energy dominance, stimulate domestic energy production, and reduce costs include reforming regulations, reducing permit approval timelines, resuming federal lease sales for energy development, and issuing permits for new Liquefied Natural Gas (LNG) export terminals.
As the United States continues to lead in petroleum, natural gas, and nuclear power production, these policies are expected to boost production, exports, and reduce regulatory costs, potentially increasing U.S. GDP by up to nearly 2% by 2035.
Technology and finance sectors could significantly benefit from the revitalized energy production in the U.S., given the increasing need for advanced AI and data processing capabilities, as well as the potential growth in domestic energy exports. The expansion of energy output, especially in the form of liquefied natural gas (LNG), could lead to substantial financial gains in the energy industry by providing competitive prices for consumers and stimulating investment in related sectors.
